Higher realized commodity prices (after the impact of commodity hedges) offset the slight decline in equivalent production providing Cabot with a slight increase in quarterly revenue as in the comparable 2003 quarter. Specifically, the Company realized $5.21 per Mcf, a 15 percent increase over the comparable period in 2003. Oil prices were comparable with last year's first quarter with a $30.99 per barrel realization in 2004 versus $30.88 per barrel for the first quarter of 2003.
Natural gas production rose between comparable periods, driven by a 1 Bcf Gulf Coast increase. In total, equivalent production for the quarter was 20.9 Bcfe (consistent with the Company's published guidance) down slightly from the 21.9 Bcfe in the first quarter of last year. Overall production was lower due to reduced capital investment in our West Region for 2002 and 2003 and the previously disclosed decline in production (predominately oil) from the CL&F properties in south Louisiana.
Dan O. Dinges, Chairman, President and Chief Executive Officer said: "With our drilling success in the first quarter, we anticipate a positive impact on our production expectations for the remainder of the year. Presently we have nine successful wells waiting for completion and/or facilities in our Gulf Coast region. Because of this success, we increased our 2004 capital program $10 million to $217 million for investments in facilities related to the recent discoveries and for the increasing cost of steel."
Dinges added: "With our improved balance sheet, Cabot re-initiated its stock buyback program. In early April the Company repurchased 46,200 shares at a weighted average cost of $30.79 per share. In light of the recent reserve valuations surrounding asset acquisition opportunities, we believe our own stock is a better investment."
Overall for the quarter, expenses were in line with expectations. The largest increase occurred in exploration expense where the Company made a sizeable investment in seismic for its Gulf Coast region. This data covers South Louisiana and offshore. Additionally, direct operations and DD&A expense increased $1.2 million and $1.0 million respectively.
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