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Why Did Cabot Oil and Gas’s Revenue Fall in 1Q16?

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Revenue growth: EQT, NBL, COG, and AR

EQT (EQT), Cabot Oil and Gas (COG), and Noble Energy (NBL) all recorded lower 1Q16 revenues compared to 1Q15. On the other hand, Antero Resources’s (AR) revenue grew in 1Q16 versus 1Q15.

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Antero Resources reported revenue increase

Antero Resources (AR) reported a revenue growth of ~17% in 1Q16 compared to 1Q15. The increase in revenues was primarily due to its favorable hedges and its higher production volumes.

Antero Resources’s liquids production contributed 23% of its gas-equivalent volumes in 1Q16 versus 16% in 1Q15. Additionally, its liquids production contributed 25% to total revenues, as compared to 22% in 1Q15.

EQT and Noble Energy’s revenues fell by ~20% and 8%, respectively, in 1Q16 versus 1Q15. The lower revenue on both counts was due to lower realized prices.

Note that all of the above companies were hedged in 2015 and are hedged in 2016 as well. Many other upstream companies are also hedged in 2016 to protect their cash flows. These companies include Chesapeake Energy (CHK) and Newfield Exploration (NFX).

COG’s revenues fell the most

Cabot Oil and Gas’s (COG) revenues fell by ~44% between 1Q15 and 1Q16. Apart from lower realized prices, the fact that Cabot’s production actually declined in 1Q16 was another key reason behind the revenue drop.

COG’s production-curtailing efforts have been driving this production decline. We’ll talk more about this later in this series.

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