Cabot Oil & Gas Corporation Announces Second-Quarter 2018 Results, Expands Share Repurchase Program Authorization
HOUSTON, July 27, 2018 /PRNewswire/ -- Cabot Oil & Gas Corporation (NYSE: COG) ("Cabot" or the "Company") today reported financial and operating results for the second-quarter of 2018 and provided an update on its share repurchase program and its exploration program.
Second-Quarter 2018 Highlights
-- Daily equivalent production of 1,895 million cubic feet equivalent
(Mmcfe) per day
-- Net income of $42.4 million (or $0.09 per share); adjusted net income
(non-GAAP) of $57.9 million (or $0.13 per share)
-- Net cash provided by operating activities of $273.9 million;
discretionary cash flow (non-GAAP) of $196.5 million
-- Returned $239.6 million of capital to shareholders through dividends and
share repurchases
-- Improved operating expenses per unit by eight percent relative to the
prior-year comparable quarter
See the supplemental tables at the end of this press release for a reconciliation of non-GAAP measures including adjusted net income, EBITDAX, discretionary cash flow, free cash flow, and net debt to adjusted capitalization ratio.
"We continued to demonstrate our commitment to returning capital to shareholders by actively repurchasing shares throughout the quarter, highlighting our belief that Cabot's current share price is below our intrinsic value," stated Dan O. Dinges, Chairman, President and Chief Executive Officer. "We generated modest sequential production growth during the quarter driven by the in-service of new infrastructure projects in June; however, we are excited about delivering significant returns-focused production growth during the second-half of the year coinciding with the anticipated in-service of the Atlantic Sunrise pipeline project in the second-half of August. Despite generating a free cash flow deficit in the second-quarter due to lower price realizations and the funding of the majority of the remaining capital associated with our equity investment in Atlantic Sunrise, we expect to return to positive free cash flow generation in the third and fourth quarters."
Share Repurchase Program Update
During the second-quarter of 2018, Cabot repurchased 11.6 million shares at a weighted-average share price of $23.54, including 1.6 million shares that were previously reported in the first-quarter 2018 earnings release. Year-to-date the Company has repurchased 20.0 million shares at a weighted-average share price of $24.09. Since reactivating the share repurchase program in the second-quarter of 2017, Cabot has reduced its shares outstanding by over five percent to 441.2 million shares.
Additionally, the Board of Directors has authorized an increase in the Company's share repurchase program by 20.0 million shares, bringing the current remaining authorization to 30.1 million shares (or approximately seven percent of its current shares outstanding). All purchases will be made in accordance with applicable securities laws from time to time in open market or private transactions, depending on market conditions, and may be discontinued at any time. Based on the closing share price on July 26, 2018, the program implies approximately $745 million of additional share repurchases. "Given our strong balance sheet and our outlook for continued free cash flow expansion, we believe we can execute on this expanded share repurchase program while continuing to reinvest in returns-focused growth in the Marcellus Shale" noted Dinges.
Exploration Program Update
During the second-quarter of 2018, Cabot recorded exploratory dry hole costs of $51.1 million associated with one of its two exploratory operating areas. Based on the data gathered to date, the Company has decided to cease capital allocation to this area. Cabot continues to test its second exploratory area and plans to provide an update on this area on the third-quarter 2018 earnings call. "Since we announced our plans to test two exploratory areas in April 2017, we have stressed that there is an exceptionally high hurdle internally for capital allocation given the best-in-class economics from our Marcellus Shale assets," commented Dinges. "We remain committed to being disciplined with our capital allocation and if new projects fail to generate competitive full-cycle returns, then we will not allocate additional capital to them going forward."
Second-Quarter 2018 Financial Results
Second-quarter 2018 daily equivalent production was 1,895 Mmcfe per day (100 percent natural gas), a sequential increase of four percent relative to the first-quarter of 2018 when adjusting for the Eagle Ford Shale divestiture that closed in February 2018.
Second-quarter 2018 net income was $42.4 million, or $0.09 per share, compared to net income of $21.5 million, or $0.05 per share, in the prior-year period. Second-quarter 2018 adjusted net income (non-GAAP) was $57.9 million, or $0.13 per share, compared to adjusted net income of $64.0 million, or $0.14 per share, in the prior-year period. Second-quarter 2018 EBITDAX (non-GAAP) was $232.1 million, compared to $274.4 million in the prior-year period.
Second-quarter 2018 net cash provided by operating activities was $273.9 million, compared to $260.6 million in the prior-year period. Second-quarter 2018 discretionary cash flow (non-GAAP) was $196.5 million, compared to $255.7 million in the prior-year period.
Second-quarter 2018 natural gas price realizations, including the impact of derivatives, were $2.15 per thousand cubic feet (Mcf), a decrease of 10 percent compared to the prior-year period. Excluding the impact of derivatives, second-quarter 2018 natural gas price realizations were $2.11 per Mcf, representing a $0.68 discount to NYMEX settlement prices compared to a $0.80 discount in the prior-year comparable quarter.
Second-quarter 2018 operating expenses (including financing) decreased to $1.85 per thousand cubic feet equivalent (Mcfe), an eight percent improvement compared to the prior-year period. Excluding the impact of exploratory dry hole costs associated with one of Cabot's exploration areas and non-cash interest expense related to income tax reserves, the Company's operating expenses per Mcfe improved by 24 percent compared to the prior-year period and four percent sequentially compared to the first-quarter of 2018.
Cabot incurred a total of $162.6 million of capital expenditures in the second-quarter of 2018 including $155.7 million of drilling and facilities capital; $4.0 million of leasehold acquisition capital; and $2.9 million of other capital. Additionally, the Company contributed $27.5 million to its equity method pipeline investments in the second-quarter of 2018. See the supplemental table at the end of this press release reconciling the capital expenditures during the second-quarter of 2018.
Year-To-Date 2018 Financial Results
Daily equivalent production for the six-month period ended June 30, 2018 was 1,890 Mmcfe per day (99 percent natural gas).
For the six-month period ended June 30, 2018, net income was $159.7 million, or $0.35 per share, compared to net income of $127.2 million, or $0.27 per share, for the six-month period ended June 30, 2017. Adjusted net income (non-GAAP) was $186.4 million, or $0.41 per share, compared to adjusted net income of $153.1 million, or $0.33 per share, for the six-month period ended June 30, 2017. EBITDAX (non-GAAP) for the six-month period ended June 30, 2018 was $510.7 million, compared to $580.7 million for the six-month period ended June 30, 2017.
For the six-month period ended June 30, 2018, net cash provided by operating activities was $546.7 million, compared to $529.9 million for the six-month period ended June 30, 2017. Discretionary cash flow (non-GAAP) for the six-months ended June 30, 2018 was $476.8 million, compared to $528.7 million for the six-month period ended June 30, 2017.
Natural gas price realizations, including the impact of derivatives, were $2.29 per Mcf for the six-month period ended June 30, 2018, a decrease of nine percent compared to the six-month period ended June 30, 2017.
For the six-month period ended June 30, 2018, operating expenses (including financing) decreased to $1.72 per Mcfe, a 14 percent improvement compared to the prior-year period. Excluding the impact of exploratory dry hole costs associated with one of Cabot's exploration areas and non-cash interest expense related to income tax reserves, the Company's operating expenses per Mcfe improved by 23 percent compared to the prior-year period.
Cabot incurred a total of $329.9 million of capital expenditures during the six-month period ended June 30, 2018 including $313.9 million of drilling and facilities capital; $11.3 million of leasehold acquisition capital; and $4.7 million of other capital. Additionally, the Company contributed $62.9 million to its equity method pipeline investments during the six-month period ended June 30, 2018.
Marcellus Shale Operational Highlights
During the second-quarter of 2018, the Company averaged 1,891 million cubic feet (Mmcf) per day of net Marcellus production, an increase of four percent sequentially compared to the first-quarter of 2018. During the third-quarter of 2018, the Company plans to place 37.0 net wells on production in conjunction with the anticipated in-service of the Atlantic Sunrise pipeline project during the second-half of August 2018.
Cabot is currently operating three rigs and two completion crews in the Marcellus Shale.
Financial Position and Liquidity
As of June 30, 2018, Cabot had total debt of $1.5 billion and cash on hand of $741.0 million. The Company's net debt-to-adjusted capitalization ratio and net debt-to-trailing twelve months EBITDAX ratio were 26.6 percent and 0.8x, respectively, compared to 29.2 percent and 1.0x as of December 31, 2017. The Company currently has no debt outstanding under the credit facility, resulting in approximately $2.4 billion of liquidity.
Closing of Haynesville Shale Divestiture
Subsequent to the end of the second-quarter, the Company closed on the previously announced sale of its oil and gas properties in the Haynesville Shale for net proceeds of $29.2 million, which included a $5.0 million deposit that was received in the fourth-quarter of 2017. These properties accounted for approximately 3.0 Mmcfe per day (95 percent natural gas) of net production during the second-quarter of 2018.
Third-Quarter and Full-Year 2018 Guidance Update
Cabot has provided third-quarter 2018 net production guidance of 2,100 to 2,200 Mmcfe per day. The Company has also updated its 2018 daily production growth guidance range from 10 - 15 percent to 10 - 12 percent and increased its full-year capital budget by $10 million to $960 million to reflect additional spending associated with its equity ownership in the Atlantic Sunrise pipeline project. "Due to our year-to-date actual volumes being slightly lower than originally budgeted, primarily resulting from delays in third-party compressor stations in the first-quarter and downtime on Transco and Millennium during the second-quarter, we have lowered the midpoint of our annual production growth guidance range by 1.5 percent," said Dinges. "However, we still anticipate that our 2018 exit production rate in the Marcellus will be approximately 35 percent higher than the 2017 exit rate."
For further disclosure on Cabot's natural gas pricing exposure by index and cost guidance, please see the current Guidance slide in the Investor Relations section of the Company's website.
Conference Call Webcast
A conference call is scheduled for Friday, July 27, 2018, at 9:30 a.m. Eastern Time to discuss second-quarter 2018 financial and operating results. To access the live audio webcast, please visit the Investor Relations section of the Company's website. A replay of the call will also be available on the Company's website.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent natural gas producer with its entire resource base located in the continental United States. For additional information, visit the Company's website at www.cabotog.com.
This press release includes forward?looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements regarding future financial and operating performance and results, strategic pursuits and goals, market prices, future hedging and risk management activities, and other statements that are not historical facts contained in this report are forward-looking statements. The words "expect", "project", "estimate", "believe", "anticipate", "intend", "budget", "plan", "forecast", "outlook", "predict", "may", "should", "could", "will" and similar expressions are also intended to identify forward-looking statements. Such statements involve risks and uncertainties, including, but not limited to, market factors, market prices (including geographic basis differentials) of natural gas and crude oil, results of future drilling and marketing activity, future production and costs, legislative and regulatory initiatives, electronic, cyber or physical security breaches and other factors detailed herein and in our other Securities and Exchange Commission (SEC) filings. See "Risk Factors" in Item 1A of the Form 10-K and subsequent public filings for additional information about these risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not undertake any obligation to correct or update any forward-looking statement, whether as the result of new information, future events or otherwise, except as required by applicable law.
FOR MORE INFORMATION CONTACT
Matt Kerin (281) 589-4642
OPERATING DATA
Quarter Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
PRODUCTION VOLUMES
Natural gas (Bcf) 172.4 166.2 337.0 330.0
Crude oil and
condensate (Mbbl) - 1,014.0 754.0 1,934.6
Natural gas liquids
(NGLs) (Mbbl) - 132.4 75.1 255.9
Equivalent production
(Bcfe) 172.4 173.1 342.0 343.1
Daily equivalent
production (Mmcfe/
day) 1,895 1,902 1,890 1,896
AVERAGE SALES PRICE
Natural gas, including
hedges ($/Mcf) $2.15 $2.38 $2.29 $2.51
Natural gas, excluding
hedges ($/Mcf) $2.11 $2.38 $2.30 $2.51
Crude oil and
condensate, including
hedges ($/Bbl) $ - $44.96 $63.68 $45.80
Crude oil and
condensate, excluding
hedges ($/Bbl) $ - $44.03 $64.68 $45.29
NGL ($/Bbl) $ - $16.59 $21.49 $18.58
AVERAGE UNIT COSTS
($/Mcfe)
Direct operations $0.09 $0.16 $0.10 $0.15
Transportation and
gathering 0.66 0.70 0.66 0.71
Taxes other than income 0.03 0.05 0.04 0.05
Exploration 0.32 0.02 0.17 0.03
Depreciation, depletion
and amortization 0.49 0.83 0.49 0.81
General and
administrative
(excluding stock-
based compensation) 0.09 0.08 0.10 0.09
Stock-based
compensation 0.03 0.06 0.03 0.05
Interest expense 0.14 0.12 0.13 0.12
---- ---- ---- ----
$1.85 $2.02 $1.72 $2.01
===== ===== ===== =====
WELLS DRILLED (1)
Gross 24 27 39 48
Net 24.0 21.1 39.0 42.1
WELLS COMPLETED (1)
Gross 23 26 34 51
Net 23.0 24.0 34.0 48.0
(1) Wells drilled
represents wells drilled to
total depth during the
period. Wells completed
includes wells completed
during the period,
regardless of when they
were drilled.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
(In thousands, except per
share amounts) 2018 2017 2018 2017
------------------------- ---- ---- ---- ----
OPERATING REVENUES
Natural gas $364,660 $395,328 $776,768 $828,770
Crude oil and condensate - 44,625 48,722 87,616
Gain (loss) on derivative
instruments (3,668) 13,805 1,909 47,190
Brokered natural gas 92,576 4,037 97,526 8,732
Other (121) 2,662 1,749 5,994
---- ----- ----- -----
453,447 460,457 926,674 978,302
OPERATING EXPENSES
Direct operations 15,657 27,262 35,727 51,903
Transportation and
gathering 114,189 120,544 226,314 244,018
Brokered natural gas 80,082 3,419 85,032 7,465
Taxes other than income 5,392 8,310 12,582 17,368
Exploration 54,500 3,959 58,117 10,157
Depreciation, depletion
and amortization 84,910 144,322 167,038 279,422
Impairment of oil and gas
properties and other
assets - 68,555 - 68,555
General and administrative
(excluding stock-based
compensation) 15,533 13,882 34,146 29,331
Stock-based
compensation(1) 5,695 10,075 11,142 18,328
----- ------ ------ ------
375,958 400,328 630,098 726,547
Loss on equity method
investments (4) (1,286) (998) (2,569)
Gain (loss) on sale of
assets 544 (1,403) (40,505) (1,626)
--- ------ ------- ------
INCOME FROM OPERATIONS 78,029 57,440 255,073 247,560
Interest expense, net 23,328 20,619 43,386 41,390
Other (income) expense 118 (315) 232 109
--- ---
Income before income taxes 54,583 37,136 211,455 206,061
Income tax expense 12,152 15,609 51,793 78,814
------ ------ ------ ------
NET INCOME $42,431 $21,527 $159,662 $127,247
======= ======= ======== ========
Earnings per share - Basic $0.09 $0.05 $0.35 $0.27
Weighted-average common
shares outstanding 451,055 464,768 455,361 465,057
(1) Includes the impact of
the Company's performance share
awards and restricted stock.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands) June 30, December 31,
2018 2017
--- ---- ----
ASSETS
Current assets $987,413 $764,957
Properties and equipment, net
(Successful efforts method) 3,225,493 3,072,204
Assets held for sale 6,828 778,855
Other assets 176,976 111,328
$4,396,710 $4,727,344
========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities $590,744 $630,050
Long-term debt, net (excluding
current maturities) 1,218,572 1,217,891
Deferred income taxes 293,927 227,030
Liabilities held for sale 1,867 15,748
Other liabilities 137,426 112,720
Stockholders' equity 2,154,174 2,523,905
--------- ---------
$4,396,710 $4,727,344
========== ==========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
(In thousands) 2018 2017 2018 2017
------------- ---- ---- ---- ----
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net income $42,431 $21,527 $159,662 $127,247
Deferred income
tax expense 2,689 20,104 66,976 73,394
Impairment of oil
and gas
properties and
other assets - 68,555 - 68,555
(Gain) loss on
sale of assets (544) 1,403 40,505 1,626
Exploratory dry
hole cost 51,145 - 51,085 2,842
(Gain) loss on
derivative
instruments 3,668 (13,805) (1,909) (47,190)
Net cash received
(paid) in
settlement of
derivative
instruments 5,819 1,204 (20,312) (319)
Income charges not
requiring cash 91,289 156,719 180,790 302,573
Changes in assets
and liabilities 77,403 4,861 69,863 1,218
------ ----- ------ -----
Net cash provided
by operating
activities 273,900 260,568 546,660 529,946
------- ------- ------- -------
CASH FLOWS FROM
INVESTING
ACTIVITIES
Capital
expenditures (231,014) (184,949) (387,271) (393,333)
Proceeds from sale
of assets 323 1,101 646,868 1,475
Investment in
equity method
investments (27,487) (5,884) (62,905) (13,626)
------- ------ ------- -------
Net cash provided
by (used in)
investing
activities (258,178) (189,732) 196,692 (405,484)
-------- -------- ------- --------
CASH FLOWS FROM
FINANCING
ACTIVITIES
Treasury stock
repurchases (212,520) (68,255) (419,654) (68,255)
Dividends paid (27,071) (23,276) (54,718) (32,582)
Tax withholdings
on vesting of
stock awards (65) (258) (8,033) (5,672)
Other - 2 - 39
--- --- --- ---
Net cash used in
financing
activities (239,656) (91,787) (482,405) (106,470)
-------- ------- -------- --------
Net increase
(decrease) in
cash and cash
equivalents $(223,934) $(20,951) $260,947 $17,992
========= ======== ======== =======
Explanation and Reconciliation of Non-GAAP Financial Measures
We report our financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, we believe certain non-GAAP performance measures may provide financial statement users with additional meaningful comparisons between current results, the results of our peers and of prior periods. In addition, we believe these measures are used by analysts and others in the valuation, rating and investment recommendations of companies within the oil and natural gas exploration and production industry. See the reconciliations throughout this release of GAAP financial measures to non-GAAP financial measures for the periods indicated.
We have also included herein certain forward-looking non-GAAP financial measures. Due to the forward-looking nature of these non-GAAP financial measures, we cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in capital. Accordingly, we are unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Reconciling items in future periods could be significant.
Reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings Per Share
Adjusted Net Income and Adjusted Earnings per Share are presented based on our belief that these non-GAAP measures enable a user of the financial information to understand the impact of these items on reported results. Additionally, this presentation provides a beneficial comparison to similarly adjusted measurements of prior periods. Adjusted Net Income and Adjusted Earnings per Share are not measures of financial performance under GAAP and should not be considered as alternatives to net income and earnings per share, as defined by GAAP.
Quarter Ended Six Months Ended
June 30, June 30,
(In thousands, except per
share amounts) 2018 2017 2018 2017
------------------------- ---- ---- ---- ----
As reported - net income $42,431 $21,527 $159,662 $127,247
Reversal of selected
items:
Impairment of oil and gas
properties and other
assets - 68,555 - 68,555
(Gain) loss on sale of
assets (544) 1,403 40,505 1,626
(Gain) loss on derivative
instruments(1) 9,487 (12,601) (22,221) (47,509)
Stock-based compensation
expense 5,695 10,075 11,142 18,328
Severance expense 28 - 28 -
Interest expense related
to income tax reserves 5,517 - 5,517 -
Tax effect on selected
items (4,751) (24,916) (8,232) (15,150)
------ ------- ------ -------
Adjusted net income $57,863 $64,043 $186,401 $153,097
======= ======= ======== ========
As reported -earnings
per share $0.09 $0.05 $0.35 $0.27
Per share impact of
selected items 0.04 0.09 0.06 0.06
---- ---- ---- ----
Adjusted earnings per
share $0.13 $0.14 $0.41 $0.33
===== ===== =====
Weighted-average common
shares outstanding 451,055 464,768 455,361 465,057
(1) This amount represents
the non-cash mark-to-market
changes of our commodity
derivative instruments recorded
in (gain) loss on derivative
instruments in the Condensed
Consolidated Statement of
Operations.
Discretionary Cash Flow and Free Cash Flow Calculation and Reconciliation
Discretionary Cash Flow is defined as net cash provided by operating activities excluding changes in assets and liabilities. Discretionary Cash Flow is widely accepted as a financial indicator of an oil and gas company's ability to generate cash which is used to internally fund exploration and development activities, pay dividends and service debt. Discretionary Cash Flow is presented based on our belief that this non-GAAP measure is useful information to investors when comparing our cash flows with the cash flows of other companies that use the full cost method of accounting for oil and gas producing activities or have different financing and capital structures or tax rates. Discretionary Cash Flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating activities, as defined by GAAP, or as a measure of liquidity, or an alternative to net income.
Free Cash Flow is defined as Discretionary Cash Flow (defined above) less capital expenditures and investment in equity method investments. Free Cash Flow is an indicator of a company's ability to generate cash flow after spending the money required to maintain or expand its asset base. Free Cash Flow is presented based on our belief that this non-GAAP measure is useful information to investors when comparing our cash flows with the cash flows of other companies. Free Cash Flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating activities, as defined by GAAP, or as a measure of liquidity, or an alternative to net income.
Quarter Ended Six Months Ended
June 30, June 30,
(In thousands) 2018 2017 2018 2017
------------- ---- ---- ---- ----
Net cash provided
by operating
activities $273,900 $260,568 $546,660 $529,946
Changes in assets
and liabilities (77,403) (4,861) (69,863) (1,218)
------- ------ ------- ------
Discretionary cash
flow 196,497 255,707 476,797 528,728
Capital
expenditures (231,014) (184,949) (387,271) (393,333)
Investment in
equity method
investments (27,487) (5,884) (62,905) (13,626)
------- ------ ------- -------
Free cash flow $(62,004) $64,874 $26,621 $121,769
======== ======= ======= ========
EBITDAX Calculation and Reconciliation
EBITDAX is defined as net income plus loss on debt extinguishment, interest expense, other expense, income tax expense, depreciation, depletion and amortization (including impairments), exploration expense, gain and loss on sale of assets, non-cash gain and loss on derivative instruments, loss on equity method investments and stock-based compensation expense. EBITDAX is presented based on our belief that this non-GAAP measure is useful information to investors when evaluating our ability to internally fund exploration and development activities and to service or incur debt without regard to financial or capital structure. EBITDAX is not a measure of financial performance under GAAP and should not be considered as alternative to cash flows from operating activities or net income, as defined by GAAP, or as a measure of liquidity.
Quarter Ended Six Months Ended
June 30, June 30,
(In thousands) 2018 2017 2018 2017
------------- ---- ---- ---- ----
Net income $42,431 $21,527 $159,662 $127,247
Plus (less):
Interest expense, net 23,328 20,619 43,386 41,390
Other (income) expense 118 (315) 232 109
Income tax expense 12,152 15,609 51,793 78,814
Depreciation, depletion
and amortization 84,910 144,322 167,038 279,422
Impairment of oil and gas
properties and other
assets - 68,555 - 68,555
Exploration 54,500 3,959 58,117 10,157
(Gain) loss on sale of
assets (544) 1,403 40,505 1,626
Non-cash (gain) loss on
derivative instruments 9,487 (12,601) (22,221) (47,509)
Loss on equity method
investments 4 1,286 998 2,569
Stock-based compensation 5,695 10,075 11,142 18,328
----- ------ ------ ------
EBITDAX $232,081 $274,439 $510,652 $580,708
======== ======== ======== ========
Net Debt Reconciliation
The total debt to total capitalization ratio is calculated by dividing total debt by the sum of total debt and total stockholders' equity. This ratio is a measurement which is presented in our annual and interim filings and we believe this ratio is useful to investors in determining our leverage. Net Debt is calculated by subtracting cash and cash equivalents from total debt. Net Debt and the Net Debt to Total Capitalization ratio are non-GAAP measures which we believe are also useful to investors since we have the ability to and may decide to use a portion of our cash and cash equivalents to retire debt. Additionally, as we may incur additional expenditures without increasing debt, it is appropriate to apply cash and cash equivalents to debt in calculating the Net Debt to Total Capitalization ratio.
(In thousands) June 30, December 31,
2018 2017
--- ---- ----
Current portion
of long-term
debt $304,000 $304,000
Long-term
debt, net 1,218,572 1,217,891
--------- ---------
Total debt $1,522,572 $1,521,891
Stockholders'
equity 2,154,174 2,523,905
--------- ---------
Total
capitalization $3,676,746 $4,045,796
Total debt $1,522,572 $1,521,891
Less: Cash and
cash
equivalents (740,994) (480,047)
-------- --------
Net debt $781,578 $1,041,844
Net debt $781,578 $1,041,844
Stockholders'
equity 2,154,174 2,523,905
--------- ---------
Total adjusted
capitalization $2,935,752 $3,565,749
Total debt to
total
capitalization
ratio 41.4% 37.6%
Less: Impact of
cash and cash
equivalents 14.8% 8.4%
---- ---
Net debt to
adjusted
capitalization
ratio 26.6% 29.2%
Capital Expenditures
Quarter Ended Six Months Ended
June 30, June 30,
(In thousands) 2018 2017 2018 2017
------------- ---- ---- ---- ----
Cash paid for
capital
expenditures $231,014 $184,949 $387,271 $393,333
Change in accrued
capital costs (17,308) 10,103 (6,275) 16,798
Exploratory dry
hole cost (51,145) - (51,085) (2,842)
------- --- ------- ------
Capital
expenditures $162,561 $195,052 $329,911 $407,289
======== ======== ======== ========
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SOURCE Cabot Oil & Gas Corporation
