Cara Community Oilers: Cabot Oil & Gas

Cabot Oil & Gas (NYSE: COG) reviewed 10-30-2020 (edited 11-02)

Market Cap: $8.5 Billion (USD)   Share Price: $17.74 (USD)

Shares outstanding: 477,535,499

Cash & cash equivalents: $117 THOUSAND (USD) as of 30 Sep 2020 (Original article stated 117 Million)

Debt:  $1.05 Billion (USD) as of 30 Sep 2020

Insiders: 2%        Institutional: 766 hold approx. 98%


Investor Presentations:

CEO & Chairman: Dan Dinges      HQs: Houston, TX, USA

Cabot Oil & Gas is a hydrocarbons exploration company operating across 173,000 net acres in the dry gas window of the Marcellus Shale in northeastern Pennsylvania

The company reported Q3 2020 daily production of 2,406 MM CFE per day with a realized cash price (including hedges) of $1.57 per MCFE vs operating costs of $1.41 per MCFE

Cabot reported revenues of $291.04 M in Q3, down -32.2% Y/Y

Non-GAAP earnings were US$.04 per share, GAAP earnings were a loss of -US$0.10 per share

Free cash flow was negative at -US$0.3 Mil compared with US$$72.4 Mil in the previous year

Cabot’s metrics are difficult to evaluate due to the differential in price in the Marcellus as compared with Henry Hub

It is also distant from what is perceived as “demand strength” along the Gulf Coast with access and cost advantage and where infrastructure is situated to take advantage

Bottom line:

  • Balance sheet shows problem with the short-term cash position
  • Since early March, there has been a +35+% increase in nat gas NYMEX futures for 2022 to the current levels that are above $3, which would result in a material expansion of net income, free cash flow, and return on capital employed next year
  • Entering the Fall and Winter “drawdown” season may help short-term, but longer-term outlooks for nat gas are much more difficult to predict
  • An abundance of product, but an absence of pipeline capacity, hurts Cabot
  • No position, but have added COG to the study list

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