Tom Shepstone
Natural Gas NOW

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The latest financials from Cabot Oil & Gas offer a sharp rebuke and savage debunking of DeSmog Blog’s recent attempt to project a shale revolution collapse.

Talk about poor timing! DeSmog Blog, a radical purveyor of anti-gas propaganda, founded by a felon convicted of illegal gambling schemes, burst forth with this bit of self-serving prognostication a couple of weeks ago:

The so-called shale revolution, the fracking miracle, may have resulted in record oil and gas production in North America, but the real miracle — in which shale companies make money fracking that oil and gas — has yet to occur.

The North American natural gas industry is facing a crisis with an oversupplied market and producers that are losing money. Those producers desperately need higher natural gas prices.

That was a distinctly bad bet, as Cabot Oil & Gas just proved.

Yes, Cabot & Oil Gas just announced “the best year of its nearly three-decade public company history.” You can read all about it here and here, but let me hit the key points debunking DeSmog:

• Return on average capital employed increased from 7.3% in 2017 to 15.9% in 2018
• Total year-end debt decreased $1.52 billion in 2017 to $1.23 billion in 2018
• Adjusted net income increased from $ 244.5 million 2017 to $531.2 million in 2018
• Adjusted earnings per share increased from $0.53 in 2017 to $ 1.19 in 2018
• Natural gas production increased from 655.6 Bcf in 2017 to 729.9 Bcf in 2018
• Average costs per unit ($/Mcfe) decreased $ 2.02 in 2017 to $ 1.76 in 2018
• Wells drilled increased from 91 in 2017 to 97 in 2018
• Proved reserves rose 19% to 11.6 trillion cubic feet equivalent (Tcfe)
• Cabot retired $304 million of senior notes at maturity, resulting in annualized interest expense savings of $21.8 million
• Cabot returned approximately $1.0 billion of capital to shareholders through dividends and share repurchases, including a 40% increase in the quarterly dividend per share and an 8% reduction in shares outstanding

I offer these points in the spirit of DeSmog founder John Lefebvre’s justification for pursuing a music career after getting out of jail. As he said then, “it doesn’t matter if no one asked you the question, you still get to answer.” That’s exactly it. He didn’t ask, but we get to answer anyway. Perhaps we’ll also be answering more unasked questions, as other companies release their results, but Cabot’s results are, by themselves, enough to debunk DeSmog, don’y you think?