-=Cabot Oil & Gas (COG) reported earnings on Fri 27 Oct 2017 (b/o)

Cabot Oil & Gas misses by $0.01, misses on revs; narrows FY17 production; guides FY18; sets three year Marcellus outlook 

• Reports Q3 (Sep) earnings of $0.07 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus of $0.08; revenues rose 24.2% year/year to $385.4 mln vs the $400.85 mln Capital IQ Consensus.
• Equivalent production for the third quarter of 2017 was 169.5 billion cubic feet equivalent (Bcfe), consisting of 161.2 billion cubic feet (Bcf) of natural gas, 1,268.0 thousand barrels (Mbbls) of crude oil and condensate, and 124.7 Mbbls of natural gas liquids (NGLs). Natural gas production for the third quarter was at the low end of the Company's guidance range due to longer than anticipated downtime at third-party compressor stations and a delay in placing a seven-well pad on production due to weather-related pipeline construction delays. NGLs production was below the Company's guidance range due to downtime at a third-party processing plant in the Eagle Ford that was impacted by Hurricane Harvey.
• Cash flow from operating activities for the third quarter of 2017 was $189.1 million, compared to $105.4 million for the third quarter of 2016
• Cabot has provided fourth quarter 2017 net production guidance of 1,775 to 1,850 Mmcf per day for natural gas (which reflects the divestiture of the West Virginia properties that closed in the third quarter); 13,250 to 14,250 Bbls per day for crude oil and condensate; and 1,350 to 1,450 Bbls per day for NGLs. "Our wider natural gas production guidance for the fourth quarter reflects the potential for price-related curtailments in the Marcellus due to the unfavorable prices we have witnessed in the daily cash market during the month of October," noted Dinges.
• Based on the fourth quarter guidance, the Company has tightened its 2017 daily production growth guidance range to 9 - 11 (from +8-12%). The Company has also reaffirmed its total 2017 program spending of $845 million.
• The Company has initiated its 2018 daily production growth guidance range at 15 to 20 percent (17 to 22 percent pro forma for the West Virginia divestiture). This production growth is based on a capital budget range of $1.025 to $1.150 billion.
• Based on the Company's current three-year plan in the Marcellus Shale, Cabot anticipates delivering a three-year Marcellus production compounded annual growth rate (CAGR) from 2017 to 2020 of 20+ percent and a three-year Marcellus discretionary cash flow CAGR of 25+ percent assuming current strip prices (which implies an average realized natural gas price of ~$2.50 per Mcf during this period). Based on this plan, Cabot's Marcellus asset would generate approximately $2.5 billion of cumulative pre-tax free cash flow from 2018 to 2020 while averaging between $750 and $850 million of annual Marcellus capital expenditures over this period. This plan is subject to market conditions and infrastructure timing and only includes the benefit of our future infrastructure projects that are currently under construction (Atlantic Sunrise pipeline project, Moxie Freedom power generation plant, Lackawanna Energy Center power generation plant, and Tennessee Gas Pipeline's Orion Project).