Triton

Another 2.88 Tcf has been added to Canadian hopes for overseas sales of liquefied natural gas (LNG) over the next quarter-century, swelling the industry total to 158.08 Tcf.

Driven by increased production in its Gulf Coast assets and a strong hedging position, Cabot Oil & Gas Corp., headquartered in Houston, reported record third quarter results including net income of $10.7 million, or $0.35 per share, and discretionary cash flow of $63.6 million, or $2.08 per share, before certain selected items. The selected items include a net expense of $0.6 million after tax related to an impairment of long-lived assets and a small adjustment for SFAS 133 (Accounting for Derivative Instruments and Hedging Activities), partially offset by a severance tax refund. These results compare to last year’s third quarter profits of $6.1 million, or $0.21 per share, and discretionary cash flow of $29.4 million, or $1.01 per share. Contributing to the record results were increased production and strong prices realized from a hedge position in effect through the end of October 2001. Total production of 22,246 MMcfe during the third quarter was nearly 30% higher than in the corresponding period last year (17,102 MMcfe), and nearly 25% over the second quarter of 2001 (17,739 MMcfe). Most of the increase came from production in the Gulf Coast region, driven mainly by drilling success in South Louisiana, along with volumes from the Cody Co. merger that were consolidated beginning in August. Of the 5.1 Bcfe increase in production since the comparable quarter last year, 2.3 Bcfe came from organic growth within Cabot’s drilling program, giving the company a 13.6% increase from drilling over last year’s third quarter. Also, organic growth in production versus the second quarter of 2001 was 9.6%. For the quarter, average realized natural gas prices increased 30% primarily as a result of certain hedge positions, while oil prices declined 16% over the prior year period, with Cabot realizing an average price of $3.77/Mcf and $24.99/bbl in the third quarter of 2001. Nearly 45% of third quarter gas production was hedged, according to CEO Ray Seegmiller. For complete financial information, visit the web site at www.cabotog.com.