HOUSTON , Oct. 29, 2020 /PRNewswire/ — Cabot Oil & Gas Corporation (NYSE: COG) (” Cabot ” or the “Company”) today reported financial and operating results for the third quarter of 2020.
“2020 has proven to be the most challenging year for natural gas prices in the last 25 years, resulting from a multi-year trend of overcapitalization of both oil and natural gas assets across our industry,” stated Dan O. Dinges , Chairman, President and Chief Executive Officer. “However, we are optimistic about the path forward as our industry as a whole has begun to adopt a similar philosophy on disciplined capital allocation that has been paramount to Cabot’s strategy for years, which is centered on delivering strong corporate returns, generating free cash flow, returning capital to shareholders, and maintaining a strong balance sheet. We believe this capital discipline, along with rebounding demand largely driven by exports, will continue to move natural gas supply and demand toward a more sustainable balance, allowing Cabot to deliver a significant expansion of free cash flow in 2021 and beyond, while also increasing our return on and of capital.”
Third Quarter 2020 Financial Results
Third quarter 2020 daily production was 2,406 million cubic feet equivalent (Mmcfe) per day (100 percent natural gas). During the third quarter of 2020, the Company drilled 13.0 net wells, completed 18.1 net wells, and placed 28.2 net wells on production.
Third quarter 2020 natural gas price realizations, including the impact of derivatives, were $1.57 per thousand cubic feet (Mcf), a decrease of 26 percent compared to the prior-year period. Excluding the impact of derivatives, third quarter 2020 natural gas price realizations were $1.51 per Mcf, representing a $0.47 discount to NYMEX settlement prices compared to a $0.34 discount in the prior-year period. Third quarter 2020 operating expenses (including interest expense) were $1.41 per thousand cubic feet equivalent (Mcfe), an improvement of one percent compared to the prior-year period.
Third quarter 2020 net loss was $15.0 million , or $0.04 per share, compared to net income of $90.4 million , or $0.22 per share, in the prior-year period. Third quarter 2020 adjusted net income (non-GAAP) was $37.3 million , or $0.09 per share, compared to $119.7 million , or $0.29 per share, in the prior-year period. Third quarter 2020 EBITDAX (non-GAAP) was $163.7 million , compared to $283.6 million in the prior-year period.
Third quarter 2020 net cash provided by operating activities was $129.1 million , compared to $270.9 million in the prior-year period. Third quarter 2020 discretionary cash flow (non-GAAP) was $146.9 million , compared to $275.5 million in the prior-year period. Third quarter 2020 free cash flow (non-GAAP) was ($0.3) million , compared to $72.4 million in the prior-year period. “Despite lower realized prices and the corresponding impact of strategic price-related curtailments on our production volumes, Cabot was able to deliver a free cash breakeven program during the third quarter,” commented Dinges. “Based on the current NYMEX futures, we expect to generate between $125 and $150 million of free cash flow during the fourth quarter, resulting in our fifth consecutive year of positive free cash flow generation, despite the expectation for the lowest average annual NYMEX natural gas price on record since 1995.”
Cabot incurred a total of $128.4 million of capital expenditures in the third quarter of 2020 including $119.2 million of drilling and facilities capital, $2.0 million of leasehold acquisition capital, and $7.2 million of other capital.
See the supplemental tables at the end of this press release for a reconciliation of non-GAAP measures including adjusted net income, discretionary cash flow, EBITDAX, free cash flow, net debt to adjusted capitalization ratio, and return on capital employed (ROCE).
Year-to-Date 2020 Financial Results
Daily equivalent production for the nine-month period ended September 30, 2020 was 2,333 Mmcfe per day (100 percent natural gas). During the nine-month period ended September 30, 2020 , the Company drilled 49.2 net wells, completed 62.3 net wells, and placed 62.2 net wells on production.
Natural gas price realizations, including the impact of derivatives, were $1.60 per Mcf for the nine-month period ended September 30, 2020 , a decrease of 38 percent compared to the prior-year period. For the nine-month period ended September 30, 2020 , operating expenses (including interest expense) were $1.44 per Mcfe.
For the nine-month period ended September 30, 2020 , net income was $69.3 million , or $0.17 per share, compared to $534.1 million , or $1.27 per share, in the prior-year period. Adjusted net income (non-GAAP) was $109.3 million , or $0.27 per…
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