Cabot Oil & Gas (COG) Q1 Earnings & Sales Top on Production
Cabot Oil & Gas Corporation COG reported first-quarter 2018 earnings per share – adjusted for special items – of 28 cents, surpassing the Zacks Consensus Estimate of 26 cents. Moreover, the figure compared favorably with earnings of 19 cents in the year-earlier quarter. The result was favored by better than expected volumes and lower expenses.
The company’s quarterly revenues of $473.2 million outpaced the Zacks Consensus Estimate of $463 million. However, the reported figure was below the prior-year quarter’s revenues of $517.8 million, primarily due to lower gas prices.
Cabot Oil & Gas Corporation Price, Consensus and EPS Surprise
Cabot Oil & Gas Corporation Price, Consensus and EPS Surprise | Cabot Oil & Gas Corporation Quote
Volume Analysis
In the quarter under review, Cabot’s overall production totaled 169.6 billion cubic feet equivalent (Bcfe) – 97.1% gas – marginally lower than the prior-year quarter volume of 170.1 Bcfe. Natural gas output was 164.6 Bcf, slightly higher than 163.8 Bcf in the previous year. Liquids production came in at 829.1 thousand barrels (MBbl) lower than year-ago quarter’s 1,044.5 MBbl. Notably, production at all three categories surpassed the company’s first-quarter guidance.
Net production from the company’s Marcellus Shale in the first quarter totaled at 1,822 million cubic feet (Mmcf) per day. At present, the company has three rigs and two completion crews operating in the prolific Marcellus Shale.
Realized Prices
The average realized natural gas price fell to $2.44 from the year-ago quarter to $2.64 per thousand cubic feet. The metric missed our expectation of $2.50 per Mcf. Meanwhile, average crude/condensate price realization rose to $63.61 per barrel from $46.73 per barrel. This metric surpassed the Zacks Consensus Estimate of $56 per barrel. Natural gas liquids fetched $23.75 per barrel as against $20.71 a year back.
Costs & Expenses
Total operating expenses came in at 22.1% lower than the first quarter of 2017, declining to $254.1 million. While transportation and gathering costs were down 9.2% year over year to $112.1 million, depreciation, depletion and amortization expenses decreased 39.2% from the year-ago period to $82.1 million.
Drilling Statistics, Capital Expenditures & Balance Sheet
Cabot drilled 15 net wells and completed 11 during the quarter. While operating cash flows were $272.8 million (up 1.3% year over year), capital expenditures totaled $156.3 million (down 25%). As of Mar 31, 2018, the company had cash and cash equivalents of $ 964.9 million and long-term debt (including current portion) of $1,522.2 million, with a debt-to-capitalization ratio of 38.7%.
Share Repurchase Program
Through the first quarter, the company bought back 8.3 million shares, at a weighted average share price of $24.85.
Guidance
For the second quarter, Cabot Oil and Gas expects net production to be in the range of 1,850-1,900 million cubic feet equivalent a day.
For 2018, the company reiterated its daily production growth guidance of 10-15%. It plans has a capital budget of $950 million for the year.
Zacks Rank and Stocks to Consider
Houston, TX-based Cabot Oil and Gas currently carries a Zacks Rank #3 (Hold).
Investors interested in the Energy sector can opt for some better-ranked stocks in the same space like EOG Resources, Inc. EOG, Oasis Midstream Partners LP OMP and CNOOC Limited CEO. While EOG Resources sports a Zacks Rank #1 (Strong Buy), Oasis Midstream and CNOOC carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based EOG Resources is an upstream energy company. For 2018, the bottom line is likely to be up 34.1%. In the last four reported quarters, the company delivered a positive average surprise of 25.7%.
Houston, TX-based Oasis Midstream is an integrated energy partnership. The company’s revenues for 2018 are anticipated to improve 29.3% from the prior-year quarter, while its earnings are expected to increase 337.2%.
Hong Kong-based CNOOC is an integrated energy company. The company’s top line for 2018 is anticipated to improve 49% year over year, while its bottom line is expected to increase 82.8%.
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