Cabot Oil & Gas stock performance
After Cabot Oil & Gas’s (COG) 3Q17 earnings release on October 27, 2017, its stock rose 8.5% the same day. Since the beginning of the year, Cabot Oil & Gas stock has risen ~20.0%.
Cabot Oil & Gas stock rose despite missing earnings and revenue estimates, as we discussed in Part 1. The earnings and revenue were higher on a YoY (year-over-year) basis, which might have caused the stock to increase. The revenues and earnings growth YoY was mainly driven by higher production levels and higher realized prices—resulting from energy prices in 3Q17 versus 3Q16.
Cabot Oil & Gas’s average realized price for natural gas (UNG), including hedges, rose from $1.75 per thousand cubic feet in 3Q16 to $2.03 per thousand cubic feet in 3Q17. Its average realized price for crude oil (USO) (UCO), including hedges, rose from $40.13 per barrel in 3Q16 to $45.53 per barrel in 3Q17. Its average realized price for natural gas liquids rose from $12.64 per barrel in 3Q16 to $17.04 per barrel in 3Q17.
Cabot Oil & Gas versus XLE and SPY
As you can see in the above graph, Cabot Oil & Gas’s performance has been mirroring natural gas (UNG) and crude oil prices most of the year. However, Cabot Oil & Gas has had better returns compared to natural gas and crude oil since the beginning of the year. Crude oil prices have risen 3.0% since the beginning of the year, while natural gas prices have fallen ~17.3% during the same period.
To learn more about how Cabot Oil & Gas performed in 3Q17, read the previous part of this series.
Another factor that could be driving the stock
In its 3Q17 earnings release, Cabot Oil & Gas’s management announced that the final approval was received for Williams Partners’ (WPZ) Atlantic Sunrise project. The project has been under review for almost two years. Cabot Oil & Gas holds equity investments in the Atlantic Sunrise pipelines. To learn more, read Why Atlantic, Constitution Are Crucial to COG’s Marcellus Growth. You can also read Key Upcoming Projects in the Marcellus Shale.