Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Differentials All The Difference For Cabot Oil & Gas

There are a lot of numbers supporting an argument that Cabot Oil & Gas (NYSE:COG) is one of, if not the, best dry gas producers in the country. The company has shown exceptional capital productivity, as well as low lifting and finding & development costs. Add that to some top-notch acreage in the Marcellus, and Cabot has delivered top-notch adjusted production growth and returns on employed capital.

That's not what is driving the shares right now, though. All of the positives at Cabot seem to be taking a back seat to worries that production growth in the Marcellus will overwhelm takeaway capacity and force Cabot to accept weak differentials. This is most definitely a risk, as every...

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