Balance sheet position
Any long investor in Cabot Oil & Gas (COG) is likely in such a position on account of the company’s strong balance sheet. According to its 3Q16 earnings release, COG had total debt of $1.5 billion at the end of 3Q16. Its cash on hand at the end of 3Q16 was $501 million.
COG has ~$1.7 billion currently available under its $1.8 billion revolving credit facility. This translates into a liquidity of $2.2 billion.
Cabot’s net debt-to-adjusted capitalization ratio was 26.2% in 3Q16, compared to 50.1% at the end of 2015. The company’s net debt-to-trailing-12-month EBITDA (earnings before interest, tax, depreciation, and amortization) ratio was 1.9x in the quarter, compared to 2.5x at the end of 2015. As the graph above indicates, COG has no debt maturities until 2018.
In the following part of this series, we’ll discuss analysts’ recommendations for COG.