CABOT OIL & GAS CORP (Form: 10-Q, Received: 07/25/2014 11:40:23)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2014

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission file number 1-10447

CABOT OIL & GAS CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE		04-3072771
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Three Memorial City Plaza

840 Gessner Road, Suite 1400, Houston, Texas 77024

(Address of principal executive offices including ZIP code)

(281) 589-4600

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x		Accelerated filer o

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of July 21, 2014, there were 417,294,125 shares of Common Stock, Par Value $.10 Per Share, outstanding.

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CABOT OIL & GAS CORPORATION

INDEX TO FINANCIAL STATEMENTS

		Page
Part I. Financial Information

Item 1.	Financial Statements

Condensed Consolidated Balance Sheet at June 30, 2014 and December 31, 2013		3

Condensed Consolidated Statement of Operations for the Three and Six Months Ended June 30, 2014 and 2013		4

Condensed Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013		5

Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2014 and 2013		6

Notes to the Condensed Consolidated Financial Statements		7

Report of Independent Registered Public Accounting Firm on Review of Interim Financial Information		19

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30

Item 4.	Controls and Procedures	31

Part II. Other Information

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 6.	Exhibits	32

Signatures		33

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

CABOT OIL & GAS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

	June 30,			December 31,
(In thousands, except share amounts)	2014			2013
ASSETS
Current assets
Cash and cash equivalents	$	45,610		$	23,400
Restricted cash	—			28,094
Accounts receivable, net	212,100			222,476
Inventories	11,914			17,468
Deferred income taxes	32,947			81,855
Other current assets	3,525			5,606
Total current assets	306,096			378,899
Properties and equipment, net (Successful efforts method)	4,825,524			4,546,227
Equity method investments	49,854			26,892
Other assets	27,448			29,062
	$	5,208,922		$	4,981,080

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	255,681		$	288,801
Accrued liabilities	59,734			73,601
Derivative instruments	38,493			13,912
Income taxes payable	8,239			31,591
Total current liabilities	362,147			407,905
Postretirement benefits	35,212			33,554
Long-term debt	1,193,000			1,147,000
Deferred income taxes	1,101,326			1,067,912
Asset retirement obligation	77,459			73,853
Other liabilities	37,839			46,254
Total liabilities	2,806,983			2,776,478

Commitments and contingencies

Stockholders’ equity
Common stock:
Authorized — 960,000,000 and 480,000,000 shares of $0.10 par value in 2014 and 2013, respectively
Issued — 422,911,309 and 422,014,681 shares in 2014 and 2013, respectively	42,291			42,201
Additional paid-in capital	723,218			710,940
Retained earnings	1,836,577			1,627,805
Accumulated other comprehensive income (loss)	(32,164		)	(8,361		)
Less treasury stock, at cost:
5,618,166 shares in 2014 and 2013	(167,983		)	(167,983		)
Total stockholders’ equity	2,401,939			2,204,602
	$	5,208,922		$	4,981,080

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CABOT OIL & GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
(In thousands, except per share amounts)	2014			2013		2014			2013
OPERATING REVENUES
Natural gas	$	437,761		$	368,391	$	870,571		$	662,184
Crude oil and condensate	86,341			70,226		145,485			135,881
Gain (loss) on derivative instruments	(2,329		)	—		(2,329		)	—
Brokered natural gas	8,140			8,244		21,293			19,137
Other	3,274			2,819		7,970			5,763
	533,187			449,680		1,042,990			822,965
OPERATING EXPENSES
Direct operations	35,605			36,978		71,439			68,475
Transportation and gathering	83,976			52,648		161,741			98,869
Brokered natural gas	7,031			6,704		18,891			15,093
Taxes other than income	12,816			11,364		25,860			23,051
Exploration	4,676			4,529		11,150			8,553
Depreciation, depletion and amortization	157,563			151,389		304,981			300,042
General and administrative	20,127			21,608		41,763			57,312
	321,794			285,220		635,825			571,395
Earnings (loss) on equity method investments	756			290		756			336
Gain (loss) on sale of assets	(1,496		)	276		(2,781		)	180
INCOME FROM OPERATIONS	210,653			165,026		405,140			252,086
Interest expense	16,334			16,991		32,891			33,292
Income before income taxes	194,319			148,035		372,249			218,794
Income tax expense	75,899			58,921		146,798			86,856
NET INCOME	$	118,420		$	89,114	$	225,451		$	131,938

Earnings per share
Basic	$	0.28		$	0.21	$	0.54		$	0.32
Diluted	$	0.28		$	0.21	$	0.54		$	0.31

Weighted-average common shares outstanding
Basic	417,291			420,698		417,097			420,500
Diluted	419,092			423,490		418,742			422,984

Dividends per common share	$	0.02		$	0.01	$	0.04		$	0.02

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CABOT OIL & GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
(In thousands)	2014		2013			2014			2013
Net income	$	118,420	$	89,114		$	225,451		$	131,938

Other comprehensive income (loss), net of taxes:
Reclassification adjustment for settled cash flow hedge contracts (1)	13,807		(1,105		)	56,372			(10,430		)
Changes in fair value of cash flow hedge contracts (2)	—		69,839			(80,175		)	32,864
Postretirement benefits:
Amortization of net loss (3)	—		124			—			249
Total other comprehensive income (loss)	13,807		68,858			(23,803		)	22,683

Comprehensive income (loss)	$	132,227	$	157,972		$	201,648		$	154,621

(1) Net of income taxes of $(9,149) and $717 for the three months ended June 30, 2014 and 2013, respectively, and $(37,359) and $6,762 for the six months ended June 30, 2014 and 2013, respectively.

(2) Net of income taxes of $(45,274) for the three months ended June 30, 2013 and $53,135 and $(21,303) for the six months ended June 30, 2014 and 2013, respectively.

(3) Net of income taxes of $(81) and $(161) for the three and six months ended June 30, 2013, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CABOT OIL & GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

	Six Months Ended June 30,
(In thousands)	2014			2013

CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	225,451		$	131,938
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization	304,981			300,042
Deferred income tax expense	118,453			69,662
(Gain) loss on sale of assets	2,781			(180		)
Exploration expense	2,154			806
Unrealized (gain) loss on derivative instruments	(12,933		)	—
Amortization of debt issuance costs	2,252			1,842
Stock-based compensation and other	8,689			27,355
Changes in assets and liabilities:
Accounts receivable, net	9,588			(32,551		)
Income taxes	(23,352		)	(4,971		)
Inventories	5,554			(4,103		)
Other current assets	15			(2,733		)
Accounts payable and accrued liabilities	(39,084		)	9,661
Other assets and liabilities	753			547
Stock-based compensation tax benefit	(20,354		)	(7,348		)
Net cash provided by operating activities	584,948			489,967

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(617,613		)	(524,056		)
Proceeds from sale of assets	(755		)	906
Restricted cash	28,094			—
Investment in equity method investments	(22,230		)	(4,250		)
Net cash used in investing activities	(612,504		)	(527,400		)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from debt	611,000			325,000
Repayments of debt	(565,000		)	(270,000		)
Dividends paid	(16,679		)	(8,407		)
Stock-based compensation tax benefit	20,354			7,348
Other	91			33
Net cash provided by financing activities	49,766			53,974

Net increase in cash and cash equivalents	22,210			16,541
Cash and cash equivalents, beginning of period	23,400			30,736
Cash and cash equivalents, end of period	$	45,610		$	47,277

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CABOT OIL & GAS CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Financial Statement Presentation

During interim periods, Cabot Oil & Gas Corporation (the Company) follows the same accounting policies disclosed in its Annual Report on Form 10-K for the year ended December 31, 2013 (Form 10-K) filed with the Securities and Exchange Commission (SEC). The interim financial statements should be read in conjunction with the notes to the consolidated financial statements and information presented in the Form 10-K. In management’s opinion, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair statement. The results for any interim period are not necessarily indicative of the expected results for the entire year.

Certain reclassifications have been made to prior year statements to conform with the current year presentation. These reclassifications have no impact on previously reported net income.

With respect to the unaudited financial information of the Company as of June 30, 2014 and for the three and six months ended June 30, 2014 and 2013, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated July 25, 2014 appearing herein states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited financial information because that report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The guidance is effective for interim and annual periods beginning on or after December 15, 2014. The Company does not expect the adoption of this guidance to have a material impact on its financial position or results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, issued as a new Topic, Accounting Standards Codification Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective beginning in fiscal year 2017 and can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the effect that adopting this guidance will have on its financial position, results of operations or cash flows.

2. Properties and Equipment, Net

Properties and equipment, net are comprised of the following:

	June 30,			December 31,
(In thousands)	2014			2013

Proved oil and gas properties	$	6,954,493		$	6,362,570
Unproved oil and gas properties	352,182			375,428
Gathering and pipeline systems	240,201			239,958
Land, buildings and other equipment	101,026			94,243
	7,647,902			7,072,199
Accumulated depreciation, depletion and amortization	(2,822,378		)	(2,525,972		)
	$	4,825,524		$	4,546,227

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At June 30, 2014, the Company did not have any projects that had exploratory well costs that were capitalized for a period of greater than one year after drilling.

3 . Equity Method Investments

For further information regarding the Company’s equity method investments, refer to Note 4 of the Notes to the Consolidated Financial Statements in the Form 10-K.

Meade Pipeline Co LLC

In February 2014, the Company acquired a 20% equity interest in Meade Pipeline Co LLC (Meade). Meade was formed to participate in the development and construction of a 177-mile pipeline (Central Penn Line) that will transport natural gas from Susquehanna County, Pennsylvania to an interconnect with Transcontinental Gas Pipe Line Company, LLC’s (Transco) mainline in Lancaster County, Pennsylvania. The new pipeline will be constructed and operated by Transco and will be owned by Transco and Meade in proportion to their respective ownership percentages of approximately 61% and 39%, respectively. Under the terms of the Meade LLC agreement, the Company agreed to invest its proportionate share of Meade’s anticipated costs associated with the new pipeline of $149 million, which is expected to occur over the next three to four years. The expected in-service date for the new pipeline is scheduled for the second half of 2017. During 2014, the Company made contributions of approximately $1.2 million to Meade.

4. Debt and Credit Agreements

The Company’s debt and credit agreements consisted of the following:

	June 30,		December 31,
(In thousands)	2014		2013
Long-Term Debt
7.33% weighted-average fixed rate notes	$	20,000	$	20,000
6.51% weighted-average fixed rate notes	425,000		425,000
9.78% notes	67,000		67,000
5.58% weighted-average fixed rate notes	175,000		175,000
Revolving Credit facility	506,000		460,000
	$	1,193,000	$	1,147,000

Effective April 15, 2014, the lenders under the Company’s revolving credit facility approved an increase in the Company’s borrowing base from $2.3 billion to $3.1 billion as part of the annual redetermination under the terms of the revolving credit facility agreement. The commitments under the revolving credit facility remain unchanged at $1.4 billion. At June 30, 2014, the Company had $506.0 million of borrowings outstanding under its revolving credit facility at a weighted-average interest rate of 1.9% and $893.0 million available for future borrowings.

The Company was in compliance with all restrictive financial covenants for both the revolving credit facility and fixed rate notes as of June 30, 2014.

5. Derivative Instruments and Hedging Activities

The Company periodically enters into commodity derivatives to manage its exposure to price fluctuations on natural gas and crude oil production. The Company’s credit agreement restricts the ability of the Company to enter into commodity derivatives other than to hedge or mitigate risks to which the Company has actual or projected exposure or as permitted under the Company’s risk management policies and where such derivatives do not subject the Company to material speculative risks. All of the Company’s derivatives are used for risk management purposes and are not held for trading purposes.

Effective April 1, 2014, the Company elected to discontinue hedge accounting for its commodity derivatives on a prospective basis. Through March 31, 2014, the Company elected to designate its commodity derivatives as cash flow hedges for accounting purposes. Accordingly, the change in the fair value of derivatives designated as hedges that are effective is recorded to accumulated other comprehensive income (loss) in stockholders’ equity in the Condensed Consolidated Balance Sheet. The ineffective portion of the change in the fair value of derivatives designated as hedges and the change in fair value of realized cash settlements of derivatives not designated as hedges are recorded as a component of operating revenues in gain (loss) on derivative instruments in the Condensed Consolidated Statement of Operations.

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As a result of discontinuing hedge accounting, the unrealized loss included in accumulated other comprehensive income (loss) as of April 1, 2014 of $73.4 million ($44.2 million net of tax) was frozen and will be reclassified into natural gas and crude oil revenues in the Statement of Operations in future periods as the underlying hedge transactions occur. As of June 30, 2014, the Company expects to reclassify $30.4 million in after-tax losses associated with its commodity derivatives from accumulated other comprehensive income (loss) to natural gas and crude oil revenues in the Condensed Consolidated Statement of Operations over the next six months.

As of June 30, 2014, the Company had the following outstanding commodity derivatives:

Collars

Swaps

Floor

Ceiling

Type of Contract

Volume

Contract Period

Range

Weighted-Average

Range

Weighted-Average

Weighted- Average

Natural gas

169.8

Bcf

Jul. 2014 - Dec. 2014

$3.60-$4.37

4.13

$4.22-$4.80

4.51

Natural gas

53.6

Bcf

Jul. 2014 - Dec. 2014

4.05

Crude oil

368.0

Mbbl

Jul. 2014 - Dec. 2014

97.00

Natural gas prices are stated per Mcf and crude oil prices are stated per barrel.

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet

		Fair Values of Derivative Instruments
		Derivative Assets				Derivative Liabilities
		June 30,		December 31,		June 30,		December 31,
(In thousands)	Balance Sheet Location	2014		2013		2014		2013
Derivatives Designated as Hedges
Commodity contracts	Other current assets	$	—	$	3,019	$	—	$	—
Commodity contracts	Derivative instruments (current liabilites)	—		—		—		13,912
Derivatives Not Designated as Hedges
Commodity contracts	Other current assets	954		—		—		—
Commodity contracts	Derivative instruments (current liabilites)	—		—		38,493		—
		$	954	$	3,019	$	38,493	$	13,912

Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet

	June 30,			December 31,
(In thousands)	2014			2013
Derivative Assets
Gross amounts of recognized assets	$	13,312		$	13,792
Gross amounts offset in the statement of financial position	(12,358		)	(10,773		)
Net amounts of assets presented in the statement of financial position	954			3,019
Gross amounts of financial instruments not offset in the statement of financial position	—			373
Net amount	$	954		$	3,392

Derivative Liabilities
Gross amounts of recognized liabilities	$	50,851		$	24,685
Gross amounts offset in the statement of financial position	(12,358		)	(10,773		)
Net amounts of liabilities presented in the statement of financial position	38,493			13,912
Gross amounts of financial instruments not offset in the statement of financial position	490			—
Net amount	$	38,983		$	13,912

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Effect of Derivative Instruments on Accumulated Other Comprehensive Income (Loss)

The amount of gain (loss) recognized in accumulated other comprehensive income (loss) on derivatives (effective portion) is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2014		2013		2014			2013
Commodity contracts	$	—	$	115,113	$	(133,310	)	$	54,167

The amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion) is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2014 (1)			2013			2014 (1)			2013
Natural gas revenues	$	(22,320	)	$	(272	)	$	(92,877	)	$	13,056
Crude oil and condensate revenues	(636		)	2,094			(854		)	4,136
	$	(22,956	)	$	1,822		$	(93,731	)	$	17,192

(1) The Company ceased hedge accounting effective April 1, 2014. For the three and six months ended June 30, 2014, approximately $23.0 million related to amounts previously frozen in accumulated other comprehensive income (loss) were reclassified into income.

Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

The amount of gain (loss) recognized in the Condensed Consolidated Statement of Operations on derivative instruments is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2014			2013			2014			2013
Derivatives Designated as Hedges
Realized
Natural gas	$	—		$	(272	)	$	(70,557	)	$	13,056
Crude oil and condensate	—			2,094			(218		)	4,136
	$	—		$	1,822		$	(70,775	)	$	17,192
Derivatives Not Designated as Hedges
Realized
Natural gas	$	(22,320	)	$	—		$	(22,320	)	$	—
Crude oil and condensate	(636		)	—			(636		)	—
Gain (loss) on derivative instruments	(15,262		)	—			(15,262		)	—
Unrealized
Gain (loss) on derivative instruments	12,933			—			12,933			—
	$	(25,285	)	$	—		$	(25,285	)	$	—

	$	(25,285	)	$	1,822		$	(96,060	)	$	17,192

For the three and six months ended June 30, 2014 and 2013, respectively, there was no ineffectiveness recorded in the Condensed Consolidated Statement of Operations related to derivative instruments designated as hedges.

Additional Disclosures about Derivative Instruments and Hedging Activities

The use of derivative instruments involves the risk that the counterparties will be unable to meet their obligations under the agreements. The Company enters into derivative contracts with multiple counterparties in order to limit its exposure to individual counterparties. The Company also has netting arrangements with each of its counterparties that allow it to offset assets and liabilities from separate derivative contracts with that counterparty.

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Certain counterparties to the Company’s derivative instruments are also lenders under its revolving credit facility. The Company’s revolving credit facility and derivative instruments contain certain cross default and acceleration provisions that may require immediate payment of its derivative liabilities in certain situations.

6. Fair Value Measurements

The Company follows the authoritative guidance for measuring fair value of assets and liabilities in its financial statements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). This guidance also established a formal fair value hierarchy based on the inputs used to measure fair value. The hierarchy gives the highest priority to Level 1 measurements and the lowest priority to Level 3 measurements. The Company has classified its assets and liabilities into these levels depending upon the data relied on to determine the fair values. For further information regarding the fair value hierarchy, refer to Note 7 of the Notes to the Consolidated Financial Statements in the Form 10-K.

Non-Financial Assets and Liabilities

The Company discloses or recognizes its non-financial assets and liabilities, such as impairments of oil and gas properties and other assets, at fair value on a nonrecurring basis. As none of the Company’s non-financial assets and liabilities were impaired as of June 30, 2014 and 2013 and no other assets or liabilities were required to be recognized at fair value on a non-recurring basis, additional disclosures were not provided.

The estimated fair value of the Company’s asset retirement obligation at inception is determined by utilizing the income approach by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state, to the undiscounted expected abandonment cash flows. Given the unobservable nature of the inputs, the measurement of the asset retirement obligation was classified as Level 3 in the fair value hierarchy.

Financial Assets and Liabilities

The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:

(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		June 30, 2014
Assets
Deferred compensation plan	$	13,152	$	—	$	—	$	13,152
Derivative contracts	—		—		13,312		13,312
Total assets	$	13,152	$	—	$	13,312	$	26,464

Liabilities
Deferred compensation plan	$	31,388	$	—	$	—	$	31,388
Derivative contracts	—		10,624		40,227		50,851
Total liabilities	$	31,388	$	10,624	$	40,227	$	82,239

(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2013
Assets
Deferred compensation plan	$	12,507	$	—	$	—	$	12,507
Derivative contracts	—		—		13,792		13,792
Total assets	$	12,507	$	—	$	13,792	$	26,299

Liabilities
Deferred compensation plan	$	33,211	$	—	$	—	$	33,211
Derivative contracts	—		6,983		17,702		24,685
Total liabilities	$	33,211	$	6,983	$	17,702	$	57,896

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The Company’s investments associated with its deferred compensation plan consist of mutual funds and deferred shares of the Company’s common stock that are publicly traded and for which market prices are readily available.

The derivative instruments were measured based on quotes from the Company’s counterparties. Such quotes have been derived using an income approach that considers various inputs including current market and contractual prices for the underlying instruments, quoted forward prices for natural gas and crude oil, basis differentials, volatility factors and interest rates, such as a LIBOR curve for a similar length of time as the derivative contract term as applicable. Estimates are verified using relevant NYMEX futures contracts and/or are compared to multiple quotes obtained from counterparties for reasonableness. The determination of the fair values presented above also incorporates a credit adjustment for non-performance risk. The Company measured the non-performance risk of its counterparties by reviewing credit default swap spreads for the various financial institutions with which it has derivative transactions, while non-performance risk of the Company is evaluated using a market credit spread provided by the Company’s bank.

The most significant unobservable inputs relative to the Company’s Level 3 derivative contracts are basis differentials and volatility factors. An increase (decrease) in these unobservable inputs would result in an increase (decrease) in fair value, respectively. The Company does not have access to the specific assumptions used in its counterparties’ valuation models. Consequently, additional disclosures regarding significant Level 3 unobservable inputs were not provided.

The following table sets forth a reconciliation of changes in the fair value of net financial assets (liabilities) classified as Level 3 in the fair value hierarchy:

	Six Months Ended
	June 30,
(In thousands)	2014			2013
Balance at beginning of period	$	(3,910	)	$	41,159
Total gains (losses) (realized or unrealized):
Realized and unrealized gains (losses) included in earnings	(77,935		)	13,056
Included in other comprehensive income	(38,412		)	42,719
Settlements	93,342			(13,056		)
Transfers in and/or out of level 3	—			—
Balance at end of period	$	(26,915	)	$	83,878

Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period	$	15,407		$	—

There were no transfers between Level 1 and Level 2 measurements for the three and six months ended June 30, 2014 and 2013.

Fair Value of Other Financial Instruments

The estimated fair value of financial instruments is the amount at which the instrument could be exchanged currently between willing parties. The carrying amounts reported in the Condensed Consolidated Balance Sheet for cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturities of these instruments.

The Company uses available market data and valuation methodologies to estimate the fair value of debt. The fair value of long-term debt is the estimated amount the Company would have to pay a third party to assume the debt, including a credit spread for the difference between the issue rate and the period end market rate. The credit spread is the Company’s default or repayment risk. The credit spread (premium or discount) is determined by comparing the Company’s fixed-rate notes and revolving credit facility to new issuances (secured and unsecured) and secondary trades of similar size and credit statistics for both public and private debt. The fair value of all fixed-rate notes and the revolving credit facility is based on interest rates currently available to the Company. The Company’s long-term debt is valued using an income approach and classified as Level 3 in the fair value hierarchy due to the unobservable nature of the inputs.

The carrying amounts and fair values of long-term debt are as follows:

	June 30, 2014				December 31, 2013
(In thousands)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	1,193,000	$	1,297,569	$	1,147,000	$	1,224,273

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7. Asset Retirement Obligation

Activity related to the Company’s asset retirement obligation is as follows:

(In thousands)	Six Months Ended June 30, 2014
Balance at beginning of period	$	75,853
Liabilities incurred	2,517
Liabilities settled	(36		)
Liabilities divested	(899		)
Accretion expense	2,024
Balance at end of period	$	79,459

As of both June 30, 2014 and December 31, 2013, approximately $2.0 million is included in accrued liabilities in the Condensed Consolidated Balance Sheet, which represents the current portion of the Company’s asset retirement obligation.

8. Commitments and Contingencies

Contractual Obligations

The Company has various contractual obligations in the normal course of its operations. Except for certain new and amended transportation agreements described below, there have been no material changes to the Company’s contractual obligations described under “Transportation and Gathering Agreements”, “Drilling Rig Commitments” and “Lease Commitments” as disclosed in Note 9 in the Notes to Consolidated Financial Statements included in the Form 10-K.

Transportation and Gathering Agreements

During the first six months of 2014, the Company entered into or amended certain natural gas transportation agreements associated with the Company’s production in Pennsylvania. These agreements increased the Company’s future aggregate obligations under its transportation commitments by approximately $184.3 million over the next 10 years compared to those amounts disclosed in Note 9 in the Notes to Consolidated Financial Statements included in the Form 10-K.

Legal Matters

The Company is a defendant in various legal proceedings arising in the normal course of business. All known liabilities are accrued when management determines they are probable based on its best estimate of the potential loss. While the outcome and impact of these legal proceedings on the Company cannot be predicted with certainty, management believes that the resolution of these proceedings will not have a material effect on the Company’s financial position, results of operations or cash flows.

Contingency Reserves

When deemed necessary, the Company establishes reserves for certain legal proceedings. The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible that the Company could incur additional losses with respect to those matters in which reserves have been established. The Company believes that any such amount above the amounts accrued is not material to the Condensed Consolidated Financial Statements. Future changes in facts and circumstances not currently foreseeable could result in the actual liability exceeding the estimated ranges of loss and amounts accrued.

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9. Postretirement Benefits

The components of net periodic benefit costs, included in general and administrative expense in the Condensed Consolidated Statement of Operations, were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2014		2013		2014		2013
Service cost	$	456	$	415	$	912	$	830
Interest cost	407		395		814		790
Amortization of net loss	—		205		—		410
	$	863	$	1,015	$	1,726	$	2,030

The guidance for retirement benefits provides that the net actuarial loss is not amortized if it is less than 10% of the postretirement obligation. Accordingly, the Company does not expect to amortize its net actuarial loss from accumulated other comprehensive income (loss) during 2014.

10. Stock-based Compensation

General

Stock-based compensation expense during the first six months of 2014 and 2013 was $9.4 million and $28.7 million, respectively, and is included in general and administrative expense in the Condensed Consolidated Statement of Operations. Stock-based compensation expense in the second quarter of 2014 and 2013 was $6.3 million and $10.0 million, respectively.

During the first six months of 2014 and 2013, the Company realized a $20.4 million and $7.3 million tax benefit, respectively, related to the federal tax deduction in excess of book compensation cost for employee stock-based compensation. The Company is able to recognize this tax benefit only to the extent it reduces the Company’s income taxes payable.

Restricted Stock Awards

During the first six months of 2014, 46,000 restricted stock awards were granted to employees with a weighted-average grant date per share value of $34.96. The fair value of restricted stock grants is based on the average of the high and low stock price on the grant date. The Company used an annual forfeiture rate assumption of 5.0% for purposes of recognizing stock-based compensation expense for restricted stock awards.

Restricted Stock Units

During the first six months of 2014, 34,071 restricted stock units were granted to non-employee directors of the Company with a weighted-average grant date per unit value of $38.97. The fair value of these units is measured based on the average of the high and low stock price on grant date and compensation expense is recorded immediately. These units immediately vest and are issued when the director ceases to be a director of the Company.

Performance Share Awards

The performance period for the awards granted in 2014 commenced on January 1, 2014 and ends on December 31, 2016. The Company used an annual forfeiture rate assumption ranging from 0% to 5% for purposes of recognizing stock-based compensation expense for its performance share awards. Refer to Note 13 of the Notes to the Consolidated Financial Statements in the Form 10-K for further description of the various types of performance share awards and the applicable award terms.

Performance Share Awards Based on Internal Performance Metrics

The fair value of performance award grants based on internal performance metrics is based on the average of the high and low stock price on the grant date and represents the right to receive up to 100% of the award in shares of common stock.

Employee Performance Share Awards. During the first six months of 2014, 241,130 Employee Performance Share Awards were granted at a grant date per share value of $39.43. The performance metrics are set by the Company’s Compensation Committee and are based on the Company’s average production, average finding costs and average reserve replacement over a three-year performance period. Based on the Company’s probability assessment at June 30, 2014, it is considered probable that the criteria for the performance awards based on performance conditions will be met.

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Hybrid Performance Share Awards. During the first six months of 2014, 123,257 Hybrid Performance Share Awards were granted at a grant date per share value of $39.43, which is based on the average of the high and low stock price on the grant date. The 2014 awards vest 25% on each of the first and second anniversary dates and 50% on the third anniversary, provided that the Company has $100 million or more of operating cash flow for the year preceding the vesting date, as set by the Company’s Compensation Committee. If the Company does not meet the performance metric for the applicable period, then the portion of the performance shares that would have been issued on that anniversary date will be forfeited. Based on the Company’s probability assessment at June 30, 2014, it is considered probable that the criteria for the performance awards based on performance conditions will be met.

Performance Share Awards Based on Market Conditions

These awards have both an equity and liability component, with the right to receive up to the first 100% of the award in shares of common stock and the right to receive up to an additional 100% of the value of the award in excess of the equity component in cash. The equity portion of these awards is valued on the grant date and is not marked to market, while the liability portion of the awards is valued as of the end of each reporting period on a mark-to-market basis. The Company calculates the fair value of the equity and liability portions of the awards using a Monte Carlo simulation model.

TSR Performance Share Awards. During the first six months of 2014, 184,885 TSR Performance Share Awards were granted and are earned, or not earned, based on the comparative performance of the Company’s common stock measured against fourteen other companies in the Company’s peer group over a three-year performance period.

The following assumptions were used to determine the grant date fair value of the equity component (February 20, 2014) and the period-end fair value of the liability component of the TSR Performance Share Awards:

	Grant Date		June 30, 2014
Fair value per performance share award	$	32.04	$5.94 - $21.77
Assumptions:
Stock price volatility	41.3%		29.7% - 102.7%
Risk free rate of return	0.7%		0.1% - 0.7%
Expected dividend yield	0.2%		0.2%

Supplemental Employee Incentive Plan

The Company recognized stock-based compensation expense of $1.6 million and $1.7 million for the three months ended June 30, 2014 and 2013, respectively, and $3.1 million and $5.1 million for the six months ended June 30, 2014 and 2013, respectively, related to the Supplemental Employee Incentive Plan (the Plan), which is included in general and administrative expense in the Condensed Consolidated Statement of Operations. Refer to Note 13 of the Notes to the Consolidated Financial Statements in the Form 10-K for additional information on the provisions of the Plan.

The following assumptions were used determine the period-end fair value of the Supplemental Employee Incentive Plan IV liability using a Monte Carlo model:

		June 30,
		2014
Stock price volatility		36.0%
Risk free rate of return		1.0%
Annual salary increase rate		4.0%
Annual turnover rate		4.6%

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11. Earnings per Common Share

Basic EPS is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS is similarly calculated except that the common shares outstanding for the period is increased using the treasury stock method to reflect the potential dilution that could occur if outstanding stock appreciation rights were exercised and stock awards were vested at the end of the applicable period.

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(In thousands)	2014	2013	2014	2013
Weighted-average shares - basic	417,291	420,698	417,097	420,500
Dilution effect of stock appreciation rights and stock awards at end of period	1,801	2,792	1,645	2,484
Weighted-average shares - diluted	419,092	423,490	418,742	422,984

Weighted-average stock awards and shares excluded from diluted earnings per share due to the anti-dilutive effect	2	2	409	574

12. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component, net of tax, were as follows:

(In thousands)	Net Gain (Loss) on Cash Flow Hedges			Postretirement Benefits			Total
Balance at December 31, 2013	$	(6,551	)	$	(1,810	)	$	(8,361	)
Other comprehensive income before reclassifications	(80,175		)	—			(80,175		)
Amounts reclassified from accumulated other comprehensive income	56,372			—			56,372
Net current-period other comprehensive income	(23,803		)	—			(23,803		)
Balance at June 30, 2014	$	(30,354	)	$	(1,810	)	$	(32,164	)

Amounts reclassified from accumulated other comprehensive income (loss) into the Condensed Consolidated Statement of Operations were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,						Affected Line Item in the Condensed
(In thousands)	2014			2013			2014			2013			Consolidated Statement of Operations
Net gain (loss) on cash flow hedges
Commodity contracts	$	(22,320	)	$	(272	)	$	(92,877	)	$	13,056		Natural gas revenues
Commodity contracts	(636		)	2,094			(854		)	4,136			Crude oil and condensate revenues

Postretirement benefits
Amortization of net loss	—			(205		)	—			(410		)	General and administrative expense
	(22,956		)	1,617			(93,731		)	16,782			Total before tax
	9,149			(636		)	37,359			(6,601		)	Tax benefit (expense)
Total reclassifications for the period	$	(13,807	)	$	981		$	(56,372	)	$	10,181		Net of tax

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13. ADDITIONAL BALANCE SHEET INFORMATION

Certain balance sheet amounts are comprised of the following:

	June 30,			December 31,
(In thousands)	2014			2013

Accounts receivable, net
Trade accounts	$	211,559		$	215,361
Joint interest billing	1,886			7,261
Income taxes receivable	—			922
Other accounts	208			746
	213,653			224,290
Allowance for doubtful accounts	(1,553		)	(1,814		)
	$	212,100		$	222,476
Inventories
Natural gas in storage	$	2,810		$	9,056
Tubular goods and well equipment	8,889			8,396
Other accounts	215			16
	$	11,914		$	17,468
Other current assets
Prepaid balances and other	2,571			2,587
Derivative instruments	954			3,019
	$	3,525		$	5,606
Other assets
Deferred compensation plan	$	13,152		$	12,507
Debt issuance cost	14,225			16,476
Other accounts	71			79
	$	27,448		$	29,062
Accounts payable
Trade accounts	$	43,789		$	26,023
Natural gas purchases	3,424			2,052
Royalty and other owners	79,274			79,150
Accrued capital costs	114,283			146,899
Taxes other than income	9,586			13,677
Drilling advances	107			14,093
Producer gas imbalances	69			69
Other accounts	5,149			6,838
	$	255,681		$	288,801
Accrued liabilities
Employee benefits	$	26,699		$	43,599
Taxes other than income	10,013			6,894
Interest payable	20,049			20,211
Other accounts	2,973			2,897
	$	59,734		$	73,601
Other liabilities
Deferred compensation plan	$	31,388		$	33,211
Other accounts	6,451			13,043
	$	37,839		$	46,254

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14. CAPITAL STOCK

Incentive Plans

On May 1, 2014, the Company’s shareholders approved the 2014 Incentive Plan, which replaced the 2004 Incentive Plan that expired on April 29, 2014. Under the 2014 Incentive Plan, incentive and non-statutory stock options, stock appreciation rights (SARs), stock awards, cash awards and performance awards may be granted to key employees, consultants and officers of the Company. Non-employee directors of the Company may be granted discretionary awards under the 2014 Incentive Plan consisting of stock options or stock awards. A total of 18 million shares of common stock may be issued under the 2014 Incentive Plan. Under the 2014 Incentive Plan, no more than 10 million shares may be issued pursuant to incentive stock options. No additional awards may be granted under the 2014 Incentive Plan on or after May 1, 2024.

No additional awards will be granted under any of the Company’s prior plans, including the 2004 Incentive Plan. Awards outstanding under the 2004 Incentive Plan will remain outstanding in accordance with their original terms and conditions.

Increase in Authorized Shares

In May 2014, the Company’s shareholders approved an increase in the authorized number of shares of common stock from 480 million to 960 million shares.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Cabot Oil & Gas Corporation:

We have reviewed the accompanying condensed consolidated balance sheet of Cabot Oil & Gas Corporation and its subsidiaries (the “Company”) as of June 30, 2014, and the related condensed consolidated statements of operations and of comprehensive income for the three and six month periods ended June 30, 2014 and 2013 and the condensed consolidated statement of cash flows for the six month periods ended June 30, 2014 and 2013. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2013, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and of cash flows for the year then ended (not presented herein), and in our report dated February 28, 2014, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet information as of December 31, 2013, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

July 25, 2014

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following review of operations for the three and six month periods ended June 30, 2014 and 2013 should be read in conjunction with our Condensed Consolidated Financial Statements and the Notes included in this Form 10-Q and with the Consolidated Financial Statements, Notes and Management’s Discussion and Analysis included in the Cabot Oil & Gas Corporation Annual Report on Form 10-K for the year ended December 31, 2013 (Form 10-K).

Overview

On an equivalent basis, our production for the six months ended June 30, 2014 increased by 34% compared to the six months ended June 30, 2013. For the six months ended June 30, 2014, we produced 247.5 Bcfe, or 1,367.3 Mmcfe per day, compared to 184.5 Bcfe, or 1,019.6 Mmcfe per day, for the six months ended June 30, 2013. Natural gas production increased by 61.8 Bcf, or 35%, to 237.6 Bcf for the first six months of 2014 compared to 175.8 Bcf for the first six months of 2013. This increase was primarily the result of higher production in the Marcellus Shale associated with our drilling program. Partially offsetting the production increase in the Marcellus Shale were decreases in production in west Texas and Oklahoma due to certain non-core asset dispositions in the fourth quarter of 2013 and normal production declines in Texas and West Virginia. Crude oil/condensate/NGL production increased by 193 Mbbls, or 13%, to 1,647 Mbbls in the first six months of 2014 from 1,454 Mbbls in the first six months of 2013. This increase was due to higher production resulting from our oil-focused drilling program in south Texas, partially offset by lower production associated with certain non-core asset dispositions in Oklahoma in the fourth quarter of 2013.

Our financial results depend on many factors, particularly the price of natural gas and crude oil and our ability to market our production on economically attractive terms. Our average realized natural gas price for the first six months of 2014 was $3.60 per Mcf, 5% lower than the $3.77 per Mcf price realized in the first six months of 2013. Our average realized crude oil price for the first six months of 2014 was $98.39 per Bbl, 4% lower than the $102.65 per Bbl price realized in the first six months of 2013. These realized prices include realized gains and losses resulting from commodity derivatives. For information about the impact of these derivatives on realized prices, refer to “Results of Operations” below.

Commodity prices are determined by many factors that are outside of our control. Historically, commodity prices have been volatile, and we expect them to remain volatile. Commodity prices are affected by changes in market supply and demand, which are impacted by overall economic activity, weather, pipeline capacity constraints, inventory storage levels, basis differentials and other factors. As a result, we cannot accurately predict future natural gas, crude oil and NGL prices and, therefore, we cannot determine with any degree of certainty what effect increases or decreases will have on our capital program, production volumes or future revenues. In addition to production volumes and commodity prices, finding and developing sufficient amounts of natural gas and crude oil reserves at economical costs are critical to our long-term success.

Effective April 1, 2014, we elected to discontinue hedge accounting on a prospective basis. Subsequent to April 1, 2014, our derivative instruments are accounted for on a mark-to-market basis with changes in fair value recognized currently in operating revenues in the Condensed Consolidated Statement of Operations. As a result of these mark-to-market adjustments, we will likely experience volatility in our earnings from time to time due to commodity price volatility. Refer to “Impact of Derivative Instruments on Operating Revenues” below and Note 5 to the Condensed Consolidated Financial Statements for more information.

During the first six months of 2014, we drilled 76 gross wells (62.0 net) with a success rate of 100% compared to 83 gross wells (69.7 net) with a success rate of 96% for the comparable period of the prior year. Our total capital and exploration expenditures were $594.0 million for the six months ended June 30, 2014 compared to $554.1 million for the six months ended June 30, 2013. The increase in capital spending was the result of our Marcellus Shale horizontal drilling program in northeast Pennsylvania and our drilling program in the Eagle Ford Shale in south Texas. We allocate our planned program for capital and exploration expenditures among our various operating areas based on return expectations, availability of services and human resources. Our 2014 drilling program includes $1.375 billion to $1.475 billion in capital and exploration expenditures and is expected to be funded by operating cash flow, existing cash and, if required, borrowings under our revolving credit facility. We will continue to assess the natural gas and crude oil price environment along with our liquidity position and may increase or decrease our capital and exploration expenditures accordingly.

Financial Condition

Capital Resources and Liquidity

Our primary sources of cash for the six months ended June 30, 2014 were from funds generated from the sale of natural gas and crude oil production and net borrowings under our revolving credit facility. These cash flows were primarily used to fund our capital and exploration expenditures and payment of dividends. See below for additional discussion and analysis of cash flow.

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Operating cash flow fluctuations are substantially driven by commodity prices and changes in our production volumes and operating expenses. Prices for natural gas and crude oil have historically been volatile, including seasonal influences and demand; however, the impact of other risks and uncertainties, as described in our Form 10-K and other filings with the Securities and Exchange Commission, have also influenced prices throughout the recent years. In addition, fluctuations in cash flow may result in an increase or decrease in our capital and exploration expenditures. See “Results of Operations” for a review of the impact of prices and volumes on revenues.

Our working capital is also substantially influenced by the variables discussed above. From time to time, our working capital will reflect a surplus, while at other times it will reflect a deficit. This fluctuation is not unusual. We believe we have adequate availability under our revolving credit facility and liquidity available to meet our working capital requirements.

	Six Months Ended
	June 30,
(In thousands)	2014			2013
Cash flows provided by operating activities	$	584,948		$	489,967
Cash flows used in investing activities	(612,504		)	(527,400		)
Cash flows provided by financing activities	49,766			53,974
Net increase in cash and cash equivalents	$	22,210		$	16,541

Operating Activities . Net cash provided by operating activities in the first six months of 2014 increased by $95.0 million over the first six months of 2013. This increase was primarily due to higher operating revenues partially offset by higher operating expenses (excluding non-cash expenses) and a decrease in working capital and other assets and liabilities. The increase in operating revenues was primarily due to an increase in equivalent production, partially offset by the decrease in realized natural gas and crude oil prices. Equivalent production volumes increased by 34% for the six months ended June 30, 2014 compared to the six months ended June 30, 2013 primarily as a result of higher natural gas production. Average realized natural gas prices decreased by 5% and average realized crude oil prices decreased by 4% for the first six months of 2014 compared to the first six months of 2013.

See “Results of Operations” for additional information relative to commodity price, production and operating expense fluctuations. We are unable to predict future commodity prices and, as a result, cannot provide any assurance about future levels of net cash provided by operating activities. Realized prices may decline in future periods.

Investing Activities . Cash flows used in investing activities increased by $85.1 million for the first six months of 2014 compared to the first six months of 2013. The increase was due to $93.6 million of higher capital expenditures and an increase of $18.0 million in capital contributions associated with our equity method investments. Partially offsetting the increases was a $28.1 million decrease in restricted cash related to the release of funds by our qualified intermediary due to a lapse in the statutory holding period and funding of oil and gas lease acquisitions during the first six months of 2014 associated with like-kind exchange transactions pursuant to Section 1031 of the Internal Revenue Code.

Financing Activities . Cash flows provided by financing activities decreased by $4.2 million for the first six months of 2014 compared to the first six months of 2013. This decrease was primarily due to $9.0 million of lower net borrowings and an $8.3 million increase in dividend payments, partially offset by an increase of $13.0 million in tax benefits associated with our stock-based compensation.

Effective April 15, 2014, the lenders under our revolving credit facility approved an increase in our borrowing base from $2.3 billion to $3.1 billion as part of the annual redetermination under the terms of the revolving credit facility agreement. The commitments under the revolving credit facility remain unchanged at $1.4 billion. At June 30, 2014, we had $506.0 million of borrowings outstanding under our revolving credit facility at a weighted-average interest rate of 1.9% and $893.0 million available for future borrowings. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for further details.

We strive to manage our debt at a level below the available credit line in order to maintain borrowing capacity. Our revolving credit facility includes a covenant limiting our total debt. Management believes that, with internally generated cash flow, existing cash on hand and availability under our revolving credit facility, we have the capacity to finance our spending plans and maintain our strong financial position.

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Capitalization

Information about our capitalization is as follows:

	June 30,		December 31,
(Dollars in thousands)	2014		2013
Debt (1)	$	1,193,000	$	1,147,000
Stockholders’ equity	2,401,939		2,204,602
Total capitalization	$	3,594,939	$	3,351,602

Debt to capitalization	33%		34%

Cash and cash equivalents	$	45,610	$	23,400

(1) Includes $506.0 million and $460.0 million of borrowings outstanding under our revolving credit facility at June 30, 2014 and December 31, 2013, respectively.

During the six months ended June 30, 2014, we paid dividends of $16.7 million ($0.04 per share) on our common stock. A regular dividend has been declared for each quarter since we became a public company in 1990.

Capital and Exploration Expenditures

On an annual basis, we generally fund most of our capital and exploration expenditures, excluding any significant property acquisitions, with cash generated from operations and, when necessary, borrowings under our revolving credit facility. We budget these expenditures based on our projected cash flows for the year.

The following table presents major components of our capital and exploration expenditures:

	Six Months Ended
	June 30,
(In thousands)	2014		2013
Capital expenditures
Drilling and facilities	$	547,980	$	501,331
Leasehold acquisitions	26,584		39,047
Pipeline and gathering	227		263
Other	8,043		4,879
	582,834		545,520
Exploration expense	11,150		8,553
Total	$	593,984	$	554,073

For the full year of 2014, we plan to drill approximately 155 to 175 gross wells (150 to 170 net). In 2014, we plan to spend between $1.375 billion and $1.475 billion in total capital and exploration expenditures (excluding expected contributions to our equity method investments of approximately $38.9 million). See “Overview” for additional information regarding the current year drilling program. We will continue to assess the natural gas and crude oil price environment and our liquidity position and may increase or decrease our capital and exploration expenditures accordingly.

Contractual Obligations

We have various contractual obligations in the normal course of our operations. Except for certain new and amended transportation agreements described in Note 8 to the Condensed Consolidated Financial Statements included in this Form 10-Q, there have been no material changes to our contractual obligations described under “Transportation and Gathering Agreements”, “Drilling Rig Commitments” and “Lease Commitments” as disclosed in Note 9 in the Notes to Consolidated Financial Statements and the obligations described under “Contractual Obligations” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K.

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Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. See our Form 10-K for further discussion of our critical accounting policies.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The guidance is effective for interim and annual periods beginning on or after December 15, 2014. We do not expect the adoption of this guidance to have a material impact on our financial position or results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, issued as a new Topic, Accounting Standards Codification Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective beginning in fiscal year 2017 and can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the effect that adopting this guidance will have on our financial position, results of operations or cash flows.

Accounting for Derivative Instruments and Hedging Activities

Effective April 1, 2014, we elected to discontinue hedge accounting for our commodity derivatives on a prospective basis. Through March 31, 2014, we elected to designate our commodity derivatives as cash flow hedges for accounting purposes. Accordingly, the change in the fair value of derivatives designated as hedges that were effective was recorded to accumulated other comprehensive income (loss) in stockholders’ equity in the Condensed Consolidated Balance Sheet. The ineffective portion of the change in the fair value of derivatives designated as hedges and the change in fair value and realized cash settlements of derivatives not designated as hedges are recorded as a component of operating revenues in gain (loss) on derivative instruments in the Condensed Consolidated Statement of Operations.

Results of Operations

Second Quarters of 2014 and 2013 Compared

We reported net income in the second quarter of 2014 of $118.4 million, or $0.28 per share, compared to $89.1 million, or $0.21 per share, in the second quarter of 2013. The increase in net income was due to an increase in operating revenues, partially offset by higher operating expenses and income taxes.

Revenue, Price and Volume Variances

Our revenues vary from year to year as a result of changes in realized commodity prices and production volumes. Below is a discussion of revenue, price and volume variances.

	Three Months Ended June 30,					Variance
Revenue Variances (In thousands)	2014			2013		Amount			Percent
Natural gas	$	437,761		$	368,391	$	69,370		19%
Crude oil and condensate	86,341			70,226		16,115			23%
Gain (loss) on derivative instruments	(2,329		)	—		(2,329		)	(100%	)
Brokered natural gas	8,140			8,244		(104		)	(1%	)
Other	3,274			2,819		455			16%
	$	533,187		$	449,680	$	83,507		19%

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	Three Months Ended June 30,				Variance					Increase (Decrease)
	2014		2013		Amount			Percent		(In thousands)
Price Variances
Natural gas (1)	$	3.59	$	4.06	$	(0.47	)	(12%	)	$	(57,463	)
Crude oil and condensate (2)	$	99.36	$	101.39	$	(2.03	)	(2%	)	(1,770		)
Total										$	(59,233	)
Volume Variances
Natural gas (Bcf)	121.8		90.7		31.1			34%		$	126,833
Crude oil and condensate (Mbbl)	869		693		176			25%		17,885
Total										$	144,718

(1) These prices include the realized impact of derivative instrument settlements, which decreased the price by $0.18 per Mcf in 2014. There was no impact on the realized price from derivative instrument settlements in 2013.

(2) These prices include the realized impact of derivative instrument settlements, which decreased the price by $0.73 per Bbl in 2014 and increased the price by $3.02 per Bbl in 2013.

Natural Gas Revenues

The increase in natural gas revenues of $69.4 million is due to higher production, partially offset by lower realized natural gas prices. The increase in production was a result of our Marcellus Shale drilling program, partially offset by a decrease in production in Oklahoma and west Texas as a result of certain non-core asset dispositions in the fourth quarter of 2013 and lower production in Texas and West Virginia due to normal production declines.

Crude Oil and Condensate Revenues

The increase in crude oil and condensate revenues of $16.1 million is due to higher production associated with our oil-focused drilling program in south Texas, partially offset by lower production associated with certain non-core asset dispositions in Oklahoma in the fourth quarter of 2013 and lower realized crude oil prices.

Gain (Loss) on Derivative Instruments

Effective April 1, 2014, we elected to discontinue hedge accounting on a prospective basis. Subsequent to April 1, 2014, our derivative instruments were accounted for on a mark-to-market basis with changes in fair value recognized currently in operating revenues in the Condensed Consolidated Statement of Operations. Gain (loss) on derivative instruments includes a $15.3 million loss related to the change in fair value of realized cash settlements of derivative instruments previously frozen in accumulated other comprehensive income (loss) and a $12.9 million unrealized mark-to-market gain on our commodity derivative instruments.

Impact of Derivative Instruments on Operating Revenues

The following table reflects the realized and unrealized impact of our derivative instruments:

	Three Months Ended June 30,
(In thousands)	2014			2013
Realized
Natural gas	$	(22,320	)	$	(272	)
Crude oil and condensate	(636		)	2,094
Gain (loss) on derivative instruments	(15,262		)	—
	$	(38,218	)	$	1,822
Unrealized
Gain (loss) on derivative instruments	12,933			—
	$	(25,285	)	$	1,822

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Brokered Natural Gas Revenue and Cost

	Three Months Ended June 30,				Variance					Price and Volume Variances
	2014		2013		Amount			Percent		(In thousands)
Brokered Natural Gas Sales
Sales price ($/Mcf)	$	4.96	$	4.81	$	0.15		3%		$	242
Volume brokered (Mmcf)	x	1,642	x	1,714	(72		)	(4%	)	(346		)
Brokered natural gas (In thousands)	$	8,140	$	8,244						$	(104	)

Brokered Natural Gas Purchases
Purchase price ($/Mcf)	$	4.28	$	3.91	$	0.37		9%		$	(609	)
Volume brokered (Mmcf)	x	1,642	x	1,714	(72		)	(4%	)	282
Brokered natural gas (In thousands)	$	7,031	$	6,704						$	(327	)

Brokered natural gas margin (In thousands)	$	1,109	$	1,540						$	(431	)

The $0.4 million decrease in brokered natural gas margin is a result of an increase in purchase price that outpaced the increase in sales price and lower brokered volumes.

Operating and Other Expenses

	Three Months Ended June 30,						Variance
(In thousands)	2014			2013			Amount			Percent
Operating and Other Expenses
Direct operations	$	35,605		$	36,978		$	(1,373	)	(4%	)
Transportation and gathering	83,976			52,648			31,328			60%
Brokered natural gas	7,031			6,704			327			5%
Taxes other than income	12,816			11,364			1,452			13%
Exploration	4,676			4,529			147			3%
Depreciation, depletion and amortization	157,563			151,389			6,174			4%
General and administrative	20,127			21,608			(1,481		)	(7%	)
Total operating expense	$	321,794		$	285,220		$	36,574		13%

(Earnings) loss on equity method investments	$	(756	)	$	(290	)	$	466		161%
(Gain) loss on sale of assets	1,496			(276		)	(1,772		)	(642%	)
Interest expense	16,334			16,991			(657		)	(4%	)
Income tax expense	75,899			58,921			16,978			29%

Total costs and expenses from operations increased by $36.6 million, or 13%, in the second quarter of 2014 compared to the same period of 2013. The primary reasons for this fluctuation are as follows:

· Direct operations decreased $1.4 million largely due to lower costs associated with certain non-core assets in Oklahoma and west Texas that were sold in the fourth quarter of 2013. Partially offsetting these decreases were higher operating costs as a result of higher production and an increase in costs associated with oil processing and related fuel charges as a result of more stringent oil pipeline quality requirements in south Texas.

· Transportation and gathering increased $31.3 million due to higher throughput as a result of higher production, slightly higher transportation rates and the commencement of various transportation and gathering agreements in late 2013 and during the first half of 2014.

· Brokered natural gas increased $0.3 million. See the preceding table titled “ Brokered Natural Gas Revenue and Cost ” for further analysis.

· Taxes other than income increased $1.5 million due to $1.2 million higher production taxes and $0.6 million higher drilling impact fees associated with our Marcellus Shale drilling activities. Production taxes increased due to higher oil

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production in south Texas, partially offset by lower taxes associated with certain non-core assets in Oklahoma and west Texas that were sold in the fourth quarter of 2013.

· Depreciation, depletion and amortization increased $6.2 million, of which $48.6 million was due to higher equivalent production volumes, offset by $38.5 million due to a lower DD&A rate of $1.20 per Mcfe for the second quarter of 2014 compared to $1.50 per Mcfe for the second quarter of 2013. The lower DD&A rate was primarily due to lower costs of reserve additions associated with our Marcellus drilling program and the impact of the disposition of higher rate fields in Oklahoma and west Texas in the fourth quarter of 2013. In addition, amortization of unproved properties decreased $4.0 million in the second quarter of 2014 due to a decrease in amortization rates as a result of favorable results from our drilling program in Pennsylvania.

· General and administrative decreased $1.5 million due to lower stock-based compensation expense of $3.7 million associated with the mark-to-market of our liability-based performance awards due to changes in our stock price during 2014 compared to 2013, partially offset by increases in professional fees and other expenses.

Gain (Loss) on Sale of Assets

An aggregate loss of $1.5 million was recognized in the second quarter of 2014, primarily due to certain post-closing adjustments related to the sale of certain of our proved oil and gas properties in Oklahoma and the sale of heavy-duty equipment. There were no significant gains or losses on sale of assets recognized in the second quarter of 2013.

Interest Expense

Interest expense decreased $0.7 million primarily due to the repayment of $75.0 million of our 7.33% weighted-average fixed rate notes in July 2013 and a slightly lower weighted-average effective interest rate on our revolving credit facility borrowings of approximately 2.1% during the second quarter of 2014 compared to approximately 2.2% during the second quarter of 2013. These decreases are partially offset by an increase in weighted-average borrowings under our revolving credit facility based on daily balances of approximately $574.2 million during the second quarter of 2014 compared to approximately $405.7 million during the second quarter of 2013.

Income Tax Expense

Income tax expense increased $17.0 million due to higher pretax income, partially offset by a lower effective tax rate. The effective tax rate for the second quarter of 2014 and 2013 was 39.1% and 39.8%, respectively.

First Six Months of 2014 and 2013 Compared

We reported net income in the first six months of 2014 of $225.5 million, or $0.54 per share, compared to $131.9 million, or $0.32 per share, in the first six months of 2013. The increase in net income was due to an increase in operating revenues, partially offset by higher operating expenses and income taxes.

Revenue, Price and Volume Variances

Below is a discussion of revenue, price and volume variances.

	Six Months Ended June 30,					Variance
Revenue Variances (In thousands)	2014			2013		Amount			Percent
Natural gas	$	870,571		$	662,184	$	208,387		31%
Crude oil and condensate	145,485			135,881		9,604			7%
Gain (loss) on derivative instruments	(2,329		)	—		(2,329		)	(100%	)
Brokered natural gas	21,293			19,137		2,156			11%
Other	7,970			5,763		2,207			38%
	$	1,042,990		$	822,965	$	220,025		27%

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	Six Months Ended June 30,				Variance					Increase (Decrease)
	2014		2013		Amount			Percent		(In thousands)
Price Variances
Natural gas (1)	$	3.66	$	3.77	$	(0.11	)	(3%	)	$	(26,136	)
Crude oil and condensate (2)	$	98.70	$	102.65	$	(3.95	)	(4%	)	(5,819		)
Total										$	(31,955	)
Volume Variances
Natural gas (Bcf)	237.6		175.8		61.8			35%		$	234,523
Crude oil and condensate (Mbbl)	1,474		1,324		150			11%		15,423
Total										$	249,946

(1) These prices include the realized impact of derivative instrument settlements, which decreased the price by $0.39 per Mcf in 2014 and increased the price by $0.07 per Mcf in 2013.

(2) These prices include the realized impact of derivative instrument settlements, which decreased the price by $0.58 per Bbl in 2014 and increased the price by $3.12 per Bbl in 2013.

Natural Gas Revenues

The increase in natural gas revenues of $208.4 million is due to higher production, partially offset by lower realized natural gas prices. The increase in production was a result of our Marcellus Shale drilling program, partially offset by a decrease in production in Oklahoma and west Texas as a result of certain non-core asset dispositions in the fourth quarter of 2013 and lower production in Texas and West Virginia due to normal production declines.

Crude Oil and Condensate Revenues

The increase in crude oil and condensate revenues of $9.6 million is due to higher production associated with our oil-focused drilling program in south Texas, partially offset by lower production associated with certain non-core asset dispositions in Oklahoma in the fourth quarter of 2013 and lower realized crude oil prices.

Gain (Loss) on Derivative Instruments

Impact of Derivative Instruments on Operating Revenues

The following table reflects the realized and unrealized impact of our derivative instruments:

	Six Months Ended June 30,
(In thousands)	2014			2013
Realized
Natural gas	$	(92,877	)	$	13,056
Crude oil and condensate	(854		)	4,136
Gain (loss) on derivative instruments	(15,262		)	—
	$	(108,993	)	$	17,192
Unrealized
Gain (loss) on derivative instruments	12,933			—
	$	(96,060	)	$	17,192

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Brokered Natural Gas Revenue and Cost

										Price and
	Six Months Ended June 30,				Variance					Volume Variances
	2014		2013		Amount			Percent		(In thousands)
Brokered Natural Gas Sales
Sales price ($/Mcf)	$	4.92	$	4.00	$	0.92		23%		$	3,968
Volume brokered (Mmcf)	x	4,328	x	4,781	(453		)	(9%	)	(1,812		)
Brokered natural gas (In thousands)	$	21,293	$	19,137						$	2,156

Brokered Natural Gas Purchases
Purchase price ($/Mcf)	$	4.36	$	3.16	$	1.20		38%		$	(5,228	)
Volume brokered (Mmcf)	x	4,328	x	4,781	(453		)	(9%	)	1,430
Brokered natural gas (In thousands)	$	18,891	$	15,093						$	(3,798	)

Brokered natural gas margin (In thousands)	$	2,402	$	4,044						$	(1,642	)

The $1.6 million decrease in brokered natural gas margin is a result of an increase in purchase price that outpaced the increase in sales price and lower brokered volumes.

Operating and Other Expenses

	Six Months Ended June 30,						Variance
(In thousands)	2014			2013			Amount			Percent
Operating and Other Expenses
Direct operations	$	71,439		$	68,475		$	2,964		4%
Transportation and gathering	161,741			98,869			62,872			64%
Brokered natural gas	18,891			15,093			3,798			25%
Taxes other than income	25,860			23,051			2,809			12%
Exploration	11,150			8,553			2,597			30%
Depreciation, depletion and amortization	304,981			300,042			4,939			2%
General and administrative	41,763			57,312			(15,549		)	(27%	)
Total operating expense	$	635,825		$	571,395		$	64,430		11%

(Earnings) loss on equity method investments	$	(756	)	$	(336	)	$	420		125%
(Gain) loss on sale of assets	2,781			(180		)	(2,961		)	(1,645%	)
Interest expense	32,891			33,292			(401		)	(1%	)
Income tax expense	146,798			86,856			59,942			69%

Total costs and expenses from operations increased by $64.4 million, or 11%, in the first six months of 2014 compared to the same period of 2013. The primary reasons for this fluctuation are as follows:

· Direct operations increased $3.0 million largely due to higher operating costs as a result of higher production and an increase in costs associated with oil processing and related fuel charges as a result of more stringent oil pipeline quality requirements in south Texas. Partially offsetting these increases were lower costs associated with certain non-core assets in Oklahoma and west Texas that were sold in the fourth quarter of 2013.

· Transportation and gathering increased $62.9 million due to higher throughput as a result of higher production, slightly higher transportation rates and the commencement of various transportation and gathering agreements in late 2013 and during the first half of 2014.

· Brokered natural gas increased $3.8 million. See the preceding table titled “ Brokered Natural Gas Revenue and Cost ” for further analysis.

· Taxes other than income increased $2.8 million due to $2.6 million higher drilling impact fees associated with our Marcellus Shale drilling activities and $1.6 million higher production taxes. Production taxes increased due to higher oil

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production in south Texas, offset by lower taxes associated with certain non-core assets in Oklahoma and west Texas that were sold in the fourth quarter of 2013. These increases are partially offset by a $1.2 million decrease in ad valorem taxes.

· Exploration expense increased $2.6 million as a result of higher exploratory dry hole costs of $1.4 million and higher geophysical and geological and other expenses.

· Depreciation, depletion and amortization increased $4.9 million, of which $96.3 million was due to higher equivalent production volumes, offset by $86.2 million due to a lower DD&A rate of $1.18 per Mcfe for the first six months of 2014 compared to $1.53 per Mcfe for the first six months of 2013. The lower DD&A rate was primarily due to lower cost of reserve additions associated with our Marcellus drilling program and the impact of the disposition of higher rate fields in Oklahoma and west Texas in the fourth quarter of 2013. In addition, amortization of unproved properties decreased $5.5 million in the first six months in 2014 due to a decrease in amortization rates as a result of favorable results from our drilling program in Pennsylvania.

· General and administrative decreased $15.5 million due to lower stock-based compensation expense of $19.3 million associated with the mark-to-market of our liability-based performance awards and our supplemental employee incentive plan due to changes in our stock price during 2014 compared to 2013 and lower professional fees. There were no material increases in general and administrative costs during the period.

Gain (Loss) on Sale of Assets

An aggregate loss of $2.8 million was recognized in the first six months of 2014, primarily due to certain post-closing adjustments related to the sale of our proved oil and gas properties in Oklahoma and the sale of heavy-duty equipment. There were no significant gains or losses on sale of assets recognized in the first six months of 2013.

Interest Expense

Interest expense decreased $0.4 million primarily due to the repayment of $75.0 million of our 7.33% weighted-average fixed rate notes in July 2013 and a slightly lower weighted-average effective interest rate on our revolving credit facility borrowings of approximately 2.2% during the first six months of 2014 compared to approximately 2.3% during the first six months of 2013. These decreases are partially offset by an increase in weighted-average borrowings under our revolving credit facility based on daily balances of approximately $565.2 million during the first six months of 2014 compared to approximately $383.8 million during the first six months of 2013.

Income Tax Expense

Income tax expense increased $59.9 million due to higher pretax income, partially offset by a slightly lower effective tax rate. The effective tax rate for the first six months of 2014 and 2013 was 39.4% and 39.7%, respectively.

Forward-Looking Information

The statements regarding future financial and operating performance and results, strategic pursuits and goals, market prices, future hedging and risk management activities, and other statements that are not historical facts contained in this report are forward-looking statements. The words “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “budget,” “plan,” “forecast,” “predict,” “may,” “should,” “could,” “will” and similar expressions are also intended to identify forward-looking statements. Such statements involve risks and uncertainties, including, but not limited to, market factors, market prices (including geographic basis differentials) of natural gas and crude oil, results of future drilling and marketing activity, future production and costs, legislative and regulatory initiatives, electronic, cyber or physical security breaches and other factors detailed herein and in our other Securities and Exchange Commission filings. See “Risk Factors” in Item 1A of the Form 10-K for additional information about these risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk

Our primary market risk is exposure to natural gas and crude oil prices. Realized prices are mainly driven by worldwide prices for crude oil and spot market prices for North American natural gas production. Commodity prices can be volatile and unpredictable.

Derivative Instruments and Risk Management Activities

Our risk management strategy is designed to reduce the risk of price volatility for our production in the natural gas and crude oil markets through the use of commodity derivatives. A committee that consists of members of senior management oversees our risk management activities. Our commodity derivatives generally cover a portion of our production and only provides partial price protection by limiting the benefit to us of increases in prices, while protecting us in the event of price declines. Further, if our counterparties defaulted, this protection might be limited as we might not receive the benefits of our commodity derivatives. Please read the discussion below as well as Note 6 of the Notes to the Consolidated Financial Statements in our Form 10-K for a more detailed discussion of our derivative and risk management activities.

Periodically, we enter into commodity derivatives, including collar and swap agreements, to protect against exposure to price declines related to our natural gas and crude oil production. Our credit agreement restricts our ability to enter into commodity derivatives other than to hedge or mitigate risks to which we have actual or projected exposure or as permitted under our risk management policies and not subjecting us to material speculative risks. All of our derivatives are used for risk management purposes and are not held for trading purposes. Under the collar agreements, if the index price rises above the ceiling price, we pay the counterparty. If the index price falls below the floor price, the counterparty pays us. Under the swap agreements, we receive a fixed price on a notional quantity of natural gas or crude oil in exchange for paying a variable price based on a market-based index, such as the NYMEX gas and crude oil futures.

As of June 30, 2014, we had the following outstanding commodity derivatives:

				Collars						Swaps		Estimated Fair
				Floor			Ceiling					Value Asset
Type of Contract	Volume		Contract Period	Range	Weighted- Average		Range	Weighted- Average		Weighted- Average		(Liability) (In thousands)
Natural gas	169.8	Bcf	Jul. 2014 - Dec. 2014	$3.60-$4.37	$	4.13	$4.22-$4.80	$	4.51			$	(34,607	)
Natural gas	53.6	Bcf	Jul. 2014 - Dec. 2014							$	4.05	(791		)
Crude oil	368.0	Mbbl	Jul. 2014 - Dec. 2014							$	97.00	(2,271		)
												$	(37,669	)

Natural gas prices are stated per Mcf and crude oil prices are stated per barrel.

The amounts set forth under the estimated fair value asset (liability) column in the table above represent our total unrealized derivative position at June 30, 2014 and exclude the impact of non-performance risk. Non-performance risk is primarily evaluated by reviewing credit default swap spreads for the various financial institutions in which we have derivative transactions, while our non-performance risk is evaluated using a market credit spread provided by one of our banks.

During the first six months of 2014, natural gas collars with floor prices ranging from $3.60 to $4.37 per Mcf and ceiling prices ranging from $4.22 to $4.80 per Mcf covered 167.0 Bcf, or 70%, of natural gas production at an average price of $4.38 per Mcf. Natural gas swaps covered 46.7 Mcf, or 20% of natural gas production at an average price of $4.08 per Mcf. Crude oil swaps covered 244 Mbbl, or 17% of crude oil production at an average price of $97.00 per Bbl.

We are exposed to market risk on commodity derivative instruments to the extent of changes in market prices of natural gas and crude oil. However, the market risk exposure on these derivative contracts is generally offset by the gain or loss recognized upon the ultimate sale of the commodity. Although notional contract amounts are used to express the volume of natural gas agreements, the amounts that can be subject to credit risk in the event of non-performance by third parties are substantially smaller. We do not anticipate any material impact on our financial results due to non-performance by third parties. Our primary derivative contract counterparties are Bank of America, Bank of Montreal, Goldman Sachs, ING Capital Markets, JPMorgan, and Morgan Stanley.

The preceding paragraphs contain forward-looking information concerning future production and projected gains and losses, which may be impacted both by production and by changes in the future commodity prices. See “Forward-Looking Information” for further details.

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Fair Market Value of Other Financial Instruments

The estimated fair value of other financial instruments is the amount at which the instrument could be exchanged currently between willing parties. The carrying amounts reported in the Condensed Consolidated Balance Sheet for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term maturities of these instruments.

The fair value of long-term debt is the estimated amount we would have to pay a third party to assume the debt, including a credit spread for the difference between the issue rate and the period end market rate. The credit spread is our default or repayment risk. The credit spread (premium or discount) is determined by comparing our fixed-rate notes and revolving credit facility to new issuances (secured and unsecured) and secondary trades of similar size and credit statistics for both public and private debt. The fair value of all of the fixed-rate notes and the revolving credit facility is based on interest rates currently available to us.

We use available market data and valuation methodologies to estimate the fair value of debt. The carrying amounts and fair values of long-term debt are as follows:

	June 30, 2014				December 31, 2013
(In thousands)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	1,193,000	$	1,297,569	$	1,147,000	$	1,224,273

ITEM 4. Controls and Procedures

As of the end of the current reported period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective, in all material respects, with respect to the recording, processing, summarizing and reporting, within the time periods specified in the Commission’s rules and forms, of information required to be disclosed by us in the reports that we file or submit under the Exchange Act.

There were no changes in our internal control over financial reporting that occurred during the second quarter of 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

Legal Matters

The information set forth under the heading “Legal Matters” in Note 8 of the Notes to Condensed Consolidated Financial Statements included in Item 1 of Part I of this quarterly report is incorporated by reference in response to this item.

Environmental Matters

From time to time we receive notices of violation from governmental and regulatory authorities in areas in which we operate relating to alleged violations of environmental statutes or the rules and regulations promulgated thereunder. While we cannot predict with certainty whether these notices of violation will result in fines and/or penalties, if fines and/or penalties are imposed, they may result in monetary sanctions individually or in the aggregate in excess of $100,000.

ITEM 1A. Risk Factors

For additional information about the risk factors that affect us, see Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Our Board of Directors has authorized a share repurchase program under which we may purchase shares of common stock in the open market or in negotiated transactions. There is no expiration date associated with the authorization. During the six months ended June 30, 2014, we did not repurchase any shares of our common stock. All purchases executed to date have been through open

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market transactions. The maximum number of remaining shares that may be purchased under the plan as of June 30, 2014 was 14,371,834.

ITEM 6. Exhibits

Exhibit Number		Description

3.1		Restated Certificate of Incorporation (incorporated by reference in the Current Report on Form 8-K of the Company filed January 21, 2010).

3.2		Certificate of Amendment to Restated Certificate of Incorporation (incorporated by reference to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2012).

3.3		Certificate of Amendment of Restated Certificate of Incorporation, dated as of May 1, 2014.

10.1		2014 Incentive Plan.

10.2		Form of Award Agreements under the 2014 Incentive Plan.

		(a) 2014 Form of Non-Employee Director Restricted Stock Unit Award Agreement.

15.1		Awareness letter of PricewaterhouseCoopers LLP.

31.1		302 Certification - Chairman, President and Chief Executive Officer.

31.2		302 Certification — Senior Vice President, Chief Financial Officer and Treasurer.

32.1		906 Certification.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CABOT OIL & GAS CORPORATION
	(Registrant)

July 25, 2014	By:	/S/ DAN O. DINGES
		Dan O. Dinges
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

July 25, 2014	By:	/S/ SCOTT C. SCHROEDER
		Scott C. Schroeder
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)

July 25, 2014	By:	/S/ TODD M. ROEMER
		Todd M. Roemer
		Controller
		(Principal Accounting Officer)

Exhibit 3.3

CERTIFICATE OF AMENDMENT

RESTATED CERTIFICATE OF INCORPORATION

Cabot Oil & Gas Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby adopts this Certificate of Amendment (this “Certificate of Amendment”), which amends its Restated Certificate of Incorporation, as heretofore amended (the “Certificate of Incorporation”), as described below, and does hereby further certify that:

FIRST: The Board of Directors of the Corporation duly adopted a resolution proposing and declaring advisable the amendment to the Certificate of Incorporation described herein, and the Corporation’s stockholders duly adopted such amendment, all in accordance with the provisions of Section 242 of the DGCL.

SECOND: The first sentence of Article IV of the Certificate of Incorporation is amended and restated to read in its entirety as follows:

The aggregate number of shares of all classes of stock which the Company shall have authority to issue is 965,000,000, divided into 5,000,000 shares of Preferred Stock, par value $.10 per share (“Preferred Stock”), and 960,000,000 shares of Common Stock, par value $.10 per share (the “Common Stock”).

IN WITNESS WHEREOF, this Certificate of Amendment has been executed by an authorized officer of the Corporation as of this 1st day of May, 2014.

CABOT OIL & GAS CORPORATION


By:	/s/ Deidre Shearer
	Name:	Deidre Shearer
	Title:		Corporate Secretary

Exhibit 10.1

CABOT OIL & GAS CORPORATION

2014 INCENTIVE PLAN

(As Established Effective as of May 1, 2014)

1. Objectives . The Cabot Oil & Gas Corporation 2014 Incentive Plan (the “Plan”) is designed to attract and retain nonemployee directors, employees and consultants and reward them for making contributions to the success of Cabot Oil & Gas Corporation and its Subsidiaries (as hereinafter defined). These objectives are to be accomplished by making awards under the Plan and thereby providing Participants (as hereinafter defined) with a proprietary interest in the growth and performance of the Company.

2. Definitions . As used herein, the terms set forth below shall have the following respective meanings:

“Award” means an Employee Award, a Director Award, or a Consultant Award.

“Award Agreement” means the document (in written or electronic form) communicating the terms, conditions and limitations applicable to an Award. The Committee may, in its discretion, require that the Participant execute such Award Agreement, or may provide for procedures through which Award Agreements are made effective without execution. Any Participant who is granted an Award and who does not affirmatively reject the applicable Award Agreement shall be deemed to have accepted the terms of Award as embodied in the Award Agreement.

“Board” means the Board of Directors of the Company.

“Cash Award” means an Award denominated in cash.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means such committee of the Board as is designated by the Board to administer the Plan, provided that such committee is comprised entirely of Nonemployee Directors.

“Common Stock” means the Common Stock, par value $.10 per share, of the Company.

“Company” means Cabot Oil & Gas Corporation, a Delaware corporation, or any successor thereto.

“Consultant” means a person other than an Employee or a Nonemployee Director providing bona fide services to the Company or any of its Subsidiaries as a consultant or advisor, as applicable, provided that such person is a natural person and that such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for any securities of the Company.

“Consultant Award” means the grant of any Nonqualified Stock Option, SAR, Stock Award, Performance Award or Cash Award, whether granted singly, in combination or in tandem, to a Consultant pursuant to such applicable terms, conditions and limitations as may be established in order to fulfill the objectives of the Plan.

“Director” means an individual serving as a member of the Board.

“Director Award” means the grant of any Nonqualified Stock Option or Stock Award, whether granted singly, in combination, or in tandem, to a Nonemployee Director pursuant to such applicable terms, conditions, and limitations as may be established in order to fulfill the objectives of the Plan.

“Employee” means any person who is receiving remuneration for personal services (or could be receiving remuneration except for an authorized leave of absence) as an employee of the Company or any of its Subsidiaries.

“Employee Award” means the grant of any form of Stock Option, Stock Appreciation Right, Stock Award, Performance Award or Cash Award, whether granted singly, in combination or in tandem, to an Employee pursuant to any applicable terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of the Plan.

“Fair Market Value” of a share of Common Stock means, as of a particular date, (i)(A) if the shares of Common Stock are listed on a national securities exchange, the last reported sales price per share of the Common Stock on the consolidated transaction reporting system for the principal national securities exchange on which shares of Common Stock are listed on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported, or, at the discretion of the Committee, the price prevailing on the exchange at the time of exercise or other relevant event (as determined under procedures established by the Committee), (B) if the shares of Common Stock are not so listed but are quoted by the NASDAQ Global Select Market, the last reported sales price per share of Common Stock reported on the consolidated transaction reporting system for the NASDAQ Global Select Market, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported or, at the discretion of the Committee, the price prevailing on the NASDAQ Global Select Market at the time of exercise or other relevant event, (C) if the shares of Common Stock are not so listed or quoted, the average of the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be available, as reported by the NASDAQ Global Select Market, or, if not reported by the NASDAQ Global Select Market, by the OTC Market Group, or (D) if the shares of Common Stock are not publicly traded, the most recent value determined by an independent appraiser appointed by the Company for such purpose, or (ii) if applicable, the price per share as determined in accordance with the procedures of a third party administrator retained by the Company to administer the Plan and as approved by the Committee.

“Incentive Stock Option” or “ISO” means a Stock Option that is intended to comply with Section 422 of the Code.

“Nonemployee Director” means an individual serving as a member of the Board who is not an Employee.

“Nonqualified Stock Option” means a Stock Option that is not an Incentive Stock Option.

“Participant” means an Employee, Nonemployee Director, or Consultant to whom an Award has been made under this Plan.

“Performance Award” means an Award made pursuant to this Plan that is subject to the attainment in the future of one or more Performance Goals.

“Performance Goal” means one or more standards established by the Committee to determine in whole or in part whether a Performance Award shall be earned.

“Prior Plan” means the Cabot Oil & Gas Corporation 2004 Incentive Plan, and any other stock incentive plans of the Company under which awards are outstanding or under which shares have been reserved but not yet used.

“Qualified Performance Award” means a Performance Award made to a Participant who is an Employee that is intended to qualify as qualified performance-based compensation under Section 162(m) of the Code, as described in Paragraph 7(a)(v)(B) of the Plan.

“Restricted Stock” means Common Stock that is restricted or subject to forfeiture provisions.

“Restricted Stock Unit” means a Stock Unit that is restricted or subject to forfeiture provisions.

“Restriction Period” means a period of time beginning as of the date of grant of an Award of Restricted Stock or Restricted Stock Units and ending as of the date upon which the Common Stock subject to such Award is no longer restricted or subject to forfeiture provisions.

“Stock Award” means an Award consisting of Common Stock or Stock Units, including the award of Restricted Stock or Restricted Stock Units.

“Stock Appreciation Right” or “SAR” means the right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value or other specified valuation of a number of shares of Common Stock on the date the stock appreciation right is exercised over a specific strike price, in each case as determined by the Committee.

“Stock Based Awards Limitations” means the limitations applied to any awards granted hereunder as described in Paragraphs 7(b)(i) and (ii) and Paragraph 8(b) of the Plan.

“Stock Option” means a right to purchase a specified number of shares of Common Stock at a specified exercise price, which right may be an Incentive Stock Option or a Nonqualified Stock Option.

“Stock Unit” means a unit evidencing the right to receive in specified circumstances one share of Common Stock (as determined by the Committee or the Board), which, in the discretion of the Committee, may be restricted or subject to forfeiture provisions.

“Subsidiary” means (i) in the case of a corporation, any corporation of which the Company directly or indirectly owns shares representing 50% or more of the combined voting power of the shares of all classes or series of capital stock of such corporation which have the right to vote generally on matters submitted to a vote of the stockholders of such corporation, (ii) in the case of a partnership or other business entity not organized as a corporation, any such business entity of which the Company directly or indirectly owns 50% or more of the voting, capital or profits interests (whether in the form of partnership interests, membership interests or otherwise), and (iii) any other corporation, partnership or other entity that is a “subsidiary” of the Company within the meaning of Rule 405 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

3. Eligibility .

(a) Employees. Employees and individuals who have agreed to become Employees are eligible for an Employee Award under this Plan.

(b) Directors. Nonemployee Directors are eligible for the grant of Director Awards under this Plan.

4. Common Stock Available for Awards . Subject to the provisions of Paragraph 15 hereof, there shall be available for Awards granted wholly or partly in Common Stock (including rights or options which may be exercised for or settled in Common Stock) during the term of this Plan an aggregate of 18,000,000 shares of Common Stock. No more than 10,000,000 shares of Common Stock will be used for Incentive Stock Options. The Board and the appropriate officers of the Company are authorized to take from time to time whatever actions are necessary, and to file required documents with governmental authorities and stock exchanges and transaction reporting systems, to make shares of Common Stock available for issuance pursuant to Awards. Common Stock related to Awards under this Plan that are forfeited or terminated, expire unexercised, are settled in cash in lieu of Stock or in a manner such that all or some of the shares covered by an Award are not issued to a Participant, or are exchanged for Awards that do not involve Common Stock, shall immediately become available for Awards hereunder. If the purchase price of any Award granted under the Plan is satisfied by tendering

shares of Common Stock to the Company, or if the tax withholding obligation resulting from the settlement of any such Option or other Award is satisfied by tendering or withholding shares of Common Stock, only the number of shares of Common Stock issued net of the shares of Common Stock tendered or withheld shall be deemed delivered for purposes of determining usage of shares against the maximum number of shares of Common Stock available for delivery under the Plan or any sub limit set forth above. Shares of Common Stock delivered under the Plan as an Award or in settlement of an Award issued or made (a) upon the assumption, substitution, conversion or replacement of outstanding awards under a plan or arrangement of an entity acquired in a merger or other acquisition or (b) as a post-transaction grant under such a plan or arrangement of an acquired entity shall not reduce or be counted against the maximum number of shares of Common Stock available for delivery under the Plan, to the extent that the exemption for transactions in connection with mergers and acquisitions from the stockholder approval requirements of the New York Stock Exchange for equity compensation plans applies. The Committee may from time to time adopt and observe such rules and procedures concerning the counting of shares against the Plan maximum or any sub limit as it may deem appropriate, including rules more restrictive than those set forth above to the extent necessary to satisfy the requirements of any national stock exchange on which the Common Stock is listed or any applicable regulatory requirement.

5. Administration .

(a) This Plan shall be administered by the Committee except as otherwise provided herein.

(b) Subject to the provisions hereof, the Committee shall have full and exclusive power and authority to administer this Plan and to take all actions that are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The Committee shall also have full and exclusive power to interpret this Plan and to adopt such rules, regulations and guidelines for carrying out this Plan as it may deem necessary or proper. The Committee may, in its discretion, provide for the extension of the exercisability of an Employee Award or Consultant Award, accelerate the vesting or exercisability of an Employee Award or Consultant Award, eliminate or make less restrictive any restrictions applicable to an Employee Award or Consultant Award, waive any restriction or other provision of this Plan (insofar as such provision related to Employee Awards or Consultant Awards) or an Employee Award or Consultant Award or otherwise amend or modify an Employee Award or Consultant Award in any manner that is either (i) not materially adverse to the Participant to whom such an Employee Award or Consultant Award was granted or (ii) consented to by such Participant. Notwithstanding anything herein to the contrary, except as expressly provided by the adjustment provisions of Paragraph 15, without the approval of the Company’s stockholders, Stock Options and SARs issued under the Plan will not be (i) repriced, replaced, or regranted through cancellation or by decreasing the exercise price of a previously granted Stock Option or SAR or (ii) canceled in exchange for cash or other Awards or Stock Options or SARs with an exercise price that is less than the exercise price of the original Stock Options or SARs . The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems

necessary or desirable to further the Plan purposes. Any decision of the Committee in the interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. No member of the Committee or officer of the Company to whom it has delegated authority in accordance with the provisions of Paragraph 6 of this Plan shall be liable for anything done or omitted to be done by him or her, by any member of the Committee or by any officer of the Company in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or as expressly provided by statute. The Committee shall establish the vesting schedule, if any, for each Award.

(c) The Board shall have the same powers, duties, and authority to administer the Plan with respect to Director Awards as the Committee retains with respect to Employee Awards and Consultant Awards.

6. Delegation of Authority . Following the authorization of a pool of cash or shares of Common Stock to be available for Awards, the Board or the Committee may authorize the Chief Executive Officer and/or another executive officer of the Company, if and to the extent permitted by applicable law, rule or regulation, or a subcommittee of members of the Board, to grant individual Employee Awards from such pool pursuant to such conditions or limitations as the Board or the Committee may establish. The Board or Committee may also delegate to the Chief Executive Officer and to other employees of the Company its administrative duties under this Plan (excluding its granting authority) pursuant to such conditions or limitations as the Committee may establish. The Board or Committee may engage or authorize the engagement of a third party administrator to carry out administrative functions under the Plan.

7. Employee Awards and Consultant Awards .

(a) The Committee (or other committee to whom such authority is delegated under Paragraph 6 above) shall determine the type or types of Employee Awards to be made under this Plan and shall designate from time to time Employees who are to be recipients of such Awards. Each Employee Award made hereunder may, in the discretion of the Committee, be embodied in an Award Agreement, which shall contain such terms, conditions, performance requirements and limitations as shall be determined by the Committee in its sole discretion and shall, if required by the Committee, be signed by the Participant to whom the Employee Award is granted and signed for and on behalf of the Company. Employee Awards may consist of those listed in this Paragraph 7 and may be granted singly, in combination or in tandem. Employee Awards may also be granted in combination or in tandem with, in replacement of (subject to Paragraph 12), or as alternatives to, grants or rights under this Plan or any other employee plan of the Company or any of its Subsidiaries, including the plan of any acquired entity. An Employee Award may provide for the grant or issuance of additional, replacement or alternative Employee Awards upon the occurrence of specified events. All or part of an Employee Award may be subject to conditions established by the Committee, which may include, but are not limited to, continuous service with the Company and its Subsidiaries, achievement of specific business objectives, items referenced to in clause (v) below, and other comparable measurements of performance.

(i) Stock Option . An Employee Award may consist of a right to purchase a specified number of shares of Common Stock at a specified price that is not less than the greater of (i) the Fair Market Value of the Common Stock on the date of grant and (ii) the par value of the Common Stock on the date of grant. A Stock Option may be in the form of an Incentive Stock Option or a Nonqualified Stock Option. The term of the Stock Option shall extend no more than 10 years after the date of grant; provided, however , if the term of a Nonqualified Stock Option (but not an Incentive Stock Option) expires when trading in the Common Stock is prohibited by law or the Company’s insider trading policy, then the term of such Nonqualified Stock Option shall expire on the 30th day after the expiration of such prohibition. Unless otherwise provided in the applicable Award Agreement, upon the expiration of the term of a Stock Option (as extended, if applicable, by the previous sentence) if the Stock Option remains unexercised and the exercise price is less than the Fair Market Value of a share of Common Stock, then the Stock Option shall automatically be exercised by means of a cashless exercise method approved by the Committee. Stock Options may not include provisions that “reload” the Stock Option upon exercise. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any Stock Options awarded to Employees pursuant to this Plan, including the exercise price, the term of the Stock Options, the number of shares subject to the Stock Option and the date or dates upon which they become exercisable, shall be determined by the Committee.

(ii) Stock Appreciation Right . An Employee Award may consist of a right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value or other specified valuation of a specified number of shares of Common Stock on the date the Stock Appreciation Right is exercised over a specified strike price (which may be no less than the Fair Market Value of the Common Stock on the date of grant) as set forth in the applicable Award Agreement. The holder of a tandem SAR may elect to exercise either the option or the SAR, but not both. The exercise period for an SAR shall extend no more than 10 years after the date of grant; provided, however , if the term of an SAR expires when trading in the Common Stock is prohibited by law or the Company’s insider trading policy, then the term of such SAR shall expire on the 30th day after the expiration of such prohibition. Unless otherwise provided in the applicable Award Agreement, upon the expiration of the term of a SAR (as extended, if applicable, by the previous sentence) if the SAR remains unexercised and the exercise price is less than the Fair Market Value of a share of Common Stock then the SAR will be automatically exercised. SARs may not include provisions that “reload” the SAR upon exercise. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any SARs awarded to Employees pursuant to this Plan, including the exercise price, the term of any SARs and the date or dates upon which they become exercisable, shall be determined by the Committee.

(iii) Stock Award . An Employee Award may be in the form of a Stock Award. The terms, conditions and limitations applicable to any Stock Awards

granted pursuant to this Plan shall be determined by the Committee, subject to the limitations set forth below.

(iv) Cash Award . An Employee Award may be in the form of a Cash Award. The terms, conditions and limitations applicable to any Cash Awards granted pursuant to this Plan shall be determined by the Committee.

(v) Performance Award . Without limiting the type or number of Awards that may be made under the other provisions of this Plan, an Award may be in the form of a Performance Award. The terms, conditions and limitations applicable to any Performance Awards granted to Participants pursuant to this Plan shall be determined by the Committee, subject to the limitations set forth below. The Committee shall set Performance Goals in its discretion which, depending on the extent to which they are met, will determine the value and/or amount of Performance Awards that will be paid out to the Participant and/or the portion of an Award that may be exercised.

(A) Nonqualified Performance Awards . Performance Awards granted to Employees that are not intended to qualify as qualified performance-based compensation under Section 162(m) of the Code, or that are Stock Options or SARs, shall be based on achievement of such goals and be subject to such terms, conditions and restrictions as the Committee or its delegate shall determine.

(B) Qualified Performance Awards . Performance Awards granted to Employees under the Plan that are intended to qualify as Qualified Performance Awards shall be paid, vested or otherwise deliverable solely on account of the attainment of one or more pre-established, objective Performance Goals established by the Committee prior to the earlier to occur of (x) 90 days after the commencement of the period of service to which the Performance Goal relates and (y) the lapse of 25% of the period of service (as scheduled in good faith at the time the goal is established), and in any event while the outcome is substantially uncertain. A Performance Goal is objective if a third party having knowledge of the relevant facts could determine whether the goal is met. Such a Performance Goal may be based on one or more business criteria that apply to the Employee, one or more business units, divisions or geographic regions of the Company, the Company as a whole, or, if desired by the Committee, by comparison to a peer group of companies, and shall include one or more of the following: revenue, net income, net income per share, stock price, market share, earnings per share, other earnings measures, return on equity, return on assets, return on net assets, costs, stockholder value, EBIT, EBITDA, funds from operations, cash flow, cash flow from operations, increase in cash flow, increase in cash flow from operations, increase in cash flow return, net cash flow, net cash flow before financing activities, other cash flow measures, economic value added, total stockholder return, return on capital, return on invested capital, return on investment, operating income, operating margin, after-tax operating income, debt reduction, internal rate of return, capital efficiency, reserve additions, proceeds from dispositions, production volumes, increase in production, reserve replacement

measures, finding and development costs, total market value, petroleum reserve measures and safety and environmental performance measures. Unless otherwise stated, such a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). In interpreting Plan provisions applicable to Performance Goals and Qualified Performance Awards, it is the intent of the Plan to conform with the standards of Section 162(m) of the Code and Treasury Regulation § 1.162-27(e)(2)(i), as to grants to those Employees whose compensation is, or is likely to be, subject to Section 162(m) or the Code, and the Committee in establishing such goals and interpreting the Plan shall be guided by such provisions. Prior to the payment of any compensation based on the achievement of Performance Goals applicable to Qualified Performance Awards, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied. For this purpose, approved minutes of the Committee meeting in which the certification is made shall be treated as such written certification. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any Qualified Performance Awards made pursuant to this Plan shall be determined by the Committee. The Committee may provide in any such Performance Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary items as described in FASB ASC Topic No. 360 and/or nonrecurring, unusual or special items as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders, Form 10-K or Form 10-Q for the applicable period, (f) acquisitions or divestitures, (g) foreign exchange gains and losses and (h) settlement of hedging activities. The amount of cash or shares payable or vested pursuant to Awards that are intended to be Qualified Performance Awards may not be adjusted upward; provided, however, that the Committee may retain the discretion to adjust the amount of cash or shares payable or vested pursuant to such Qualified Performance Awards downward, either on a formula or discretionary basis or any combination, as the Committee determines.

(b) Notwithstanding anything to the contrary contained in this Plan, the following limitations shall apply to any Awards made hereunder:

(i) no Participant may be granted, during any calendar year, Awards consisting of Stock Options or Stock Appreciation Rights (including Stock Options and SARs that are granted as Performance Awards) that are exercisable for more than 5,000,000 shares of Common Stock;

(ii) no Participant may be granted, during any calendar year, Stock Awards (including Stock Awards that are granted as Performance Awards)

covering or relating to more than 2,000,000 shares of Common Stock (the limitation set forth in this clause (ii), together with the limitation set forth in clause (i) above,

(iii) no Participant may be granted Employee Awards consisting of cash (including Cash Awards that are granted as Performance Awards) in respect of any calendar year having a value determined on the date of grant in excess of $20,000,000.

A Participant may be granted Awards in combination such that portions of the Award are subject to differing limitations set out in the clauses of this Paragraph 7(b), in which event each portion of the combination Award is subject only to a single appropriate limitation in clauses (i), (ii) or (iii). For example, if a Participant is granted a Performance Award that is in part a Stock Award and in part a Cash Award, then the Stock Award shall be subject only to the limitation in clause (ii) and the Cash Award shall be subject only to the limitation in clause (iii).

(c) Subject to Paragraph 7(d), the Committee shall have the sole responsibility and authority to determine the type or types of Consultant Awards to be made under this Plan and the terms, conditions and limitations applicable to such Awards.

(d) Stock Awards, other than those awards which are subject to specific grant limitations under the Plan, shall be in lieu of, and have a Fair Market Value on the date of grant equal to, other compensation that the Company would otherwise have awarded to the Participant.

8. Director Awards .

(a) The Board may grant Director Awards to Nonemployee Directors of the Company from time to time in accordance with this Paragraph 8. Director Awards may consist of those listed in this Paragraph 8 and may be granted singly, in combination or in tandem. Each Director Award may, in the discretion of the Board, be embodied in an Award Agreement, which shall contain such terms, conditions and limitations as shall be determined by the Board in its sole discretion and, if required by the Board, shall be signed by the Participant to whom the Director Award is granted and signed for and on behalf of the Company.

(i) Stock Options . A Director Award may consist of a right to purchase a specified number of shares of Common Stock at a specified price that is not less than the greater of (i) the Fair Market Value of the Common Stock on the date of grant and (ii) the par value of the Common Stock on the date of grant. A Stock Option granted as a Director Award may not be in the form of an Incentive Stock Option. The term of the Stock Option shall extend no more than 10 years after the date of grant; provided, however , if the term of a Stock Option expires when trading in the Common Stock is prohibited by law or the Company’s insider trading policy, then the term of such Stock Option shall expire on the 30th day after the expiration of such prohibition. Unless otherwise

provided in the applicable Award Agreement, upon the expiration of the term of a Stock Option (as extended, if applicable, by the previous sentence) if the Stock Option remains unexercised and the exercise price is less than the Fair Market Value of a share of Common Stock, then the Stock Option shall automatically be exercised by means of a cashless exercise method approved by the Committee. Stock Options may not include provisions that “reload” the Stock Option upon exercise. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any Stock Options awarded to Nonemployee Directors pursuant to this Plan, including the strike price, the term of the Stock Options, the number of share subject to the Stock Option (subject to Paragraph 8(b)) and the date or dates upon which they become exercisable, shall be determined by the Board.

(ii) Stock Awards . A Director Award may be in the form of a Stock Award. Any terms, conditions and limitations applicable to any Stock Awards granted to a Nonemployee Director pursuant to this Plan, including but not limited to rights to dividend equivalents, shall be determined by the Board.

(b) No Participant may be granted, during any calendar year, Director Awards consisting of Stock Awards or Stock Options covering or relating to more than 84,000 shares of Common Stock.

(c) At the discretion of the Board, Director Awards may be settled by a cash payment in an amount that the Board shall determine in its sole discretion is equal to the fair market value of such Director Awards.

9. Payment of Awards .

(a) General . Payment of Awards may be made in the form of cash or Common Stock or combinations thereof and may include such restrictions as the Committee shall determine, including in the case of Common Stock, restrictions on transfer and forfeiture provisions. If such payment is made in the form of Restricted Stock, the Committee shall specify whether the underlying shares are to be issued at the beginning or end of the Restriction Period. In the event that shares of Restricted Stock are to be issued at the beginning of the Restriction Period, the certificates evidencing such shares (to the extent that such shares are so evidenced) shall contain appropriate legends and restrictions that describe the terms and conditions of the restrictions applicable thereto. In the event that shares of Restricted Stock are to be issued at the end of the Restriction Period, the right to receive such shares shall be evidenced by book entry registration or in such other manner as the Committee may determine.

(b) Deferral . With the approval of the Committee, amounts payable in respect of Awards may be deferred, either in the form of installments or a future lump sum payment. The Committee may permit selected Participants to elect to defer payments of some or all types of Awards in accordance with procedures established by the Committee or the Board. Any deferred payment, whether elected by the Participant or specified by the Award Agreement or by the Committee, may be forfeited if and to the extent that the Award Agreement so provides.

(c) Dividends, Earnings and Interest . Dividends or dividend equivalent rights may be extended to and made part of any Stock Award, subject to such terms, conditions and restrictions as the Committee may establish; provided , however , that no such dividends or dividend equivalents shall be paid with respect to unvested Stock Awards, including Stock Awards subject to Performance Goals, but may, in the discretion of the Committee, be accrued and paid to the Participant at the time that such Stock Award vests. The Committee may also establish rules and procedures for the crediting of interest or other earnings on deferred cash payments. Dividends and/or dividend equivalents shall not be paid with respect to any Stock Options or SARs.

(d) Substitution of Awards . Subject to Paragraphs 12 and 15, at the discretion of the Committee, a Participant who is an Employee or Consultant may be offered an election to substitute an Employee Award or Consultant Award for another Employee Award or Consultant Award or Employee Awards or Consultant Awards of the same or different type.

(e) Cash-out of Awards . At the discretion of the Committee, an Award that is a Stock Option or Stock Appreciation Right may be settled by a cash payment equal to the difference between the Fair Market Value per share of Common Stock on the date of exercise and the exercise price of the Award, multiplied by the number of shares with respect to which the Award is exercised.

10. Stock Option Exercise . The price at which shares of Common Stock may be purchased under a Stock Option shall be paid in full at the time of exercise in cash or, if permitted by the Committee and elected by the optionee, the optionee may purchase such shares by means of tendering Common Stock or surrendering another Award, including Restricted Stock, valued at Fair Market Value on the date of exercise, or any combination thereof.

The Committee shall determine acceptable methods for Participants who are Employees or Consultants to tender Common Stock or other Employee Awards or Consultant Awards to exercise a Stock Option as it deems appropriate. If permitted by the Committee, payment may be made by successive exercises by the Participant or by a net exercise or cashless exercise procedures. The Committee may provide for procedures to permit the exercise or purchase of such Awards by use of the proceeds to be received from the sale of Common Stock issuable pursuant to an Award. The Committee may adopt additional rules and procedures regarding the exercise of Options from time to time, provided that such rules and procedures are not inconsistent with the provisions of this Paragraph 10.

An optionee desiring to pay the exercise price of a Stock Option by tendering Common Stock using the method of attestation may, subject to any such conditions and in compliance with any such procedures as the Committee may adopt, do so by attesting to the ownership of Common Stock of the requisite value in which case the Company shall issue or otherwise deliver to the optionee upon such exercise a number of shares of Common Stock subject to the Stock Option equal to the result obtained by dividing (a) the excess of the aggregate Fair Market Value of the shares of Common Stock subject to the Stock Option for which the Stock Option (or portion thereof) is being exercised over the exercise price payable in respect of such exercise by

(b) the Fair Market Value per share of Common Stock subject to the Stock Option, and the optionee may retain the shares of Common Stock the ownership of which is attested.

11. Taxes . The Company or its designated third party administrator shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery or vesting of cash or shares of Common Stock under this Plan, an appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment of taxes or other amounts required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes; provided, however , that, unless otherwise determined by the Committee in response to a change in accounting rules, the number of shares of Common Stock withheld for payment of required withholding taxes must equal no more than the required minimum withholding taxes. The Committee may also permit withholding to be satisfied by the transfer to the Company of shares of Common Stock theretofore owned by the holder of the Employee Award with respect to which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value when the tax withholding is required to be made.

12. Amendment, Modification, Suspension or Termination . The Board may amend, modify, suspend or terminate this Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law except that (i) no amendment or alteration that would materially and adversely affect the rights of any Participant under any Award previously granted to such Participant shall be made without such Participant’s consent and (ii) no amendment or alteration shall be effective prior to approval by the Company’s stockholders to the extent such approval is required by applicable legal requirements or applicable requirements of the securities exchange on which the Company’s Common Stock is listed. Notwithstanding anything herein to the contrary, except as expressly provided by the adjustment provisions of Paragraph 15, without the approval of the Company’s stockholders, Stock Options and SARs issued under the Plan will not be (i) repriced, replaced, or regranted through cancellation or by decreasing the exercise price of a previously granted Stock Option or SAR or (ii) canceled in exchange for cash or other Awards or Stock Options or SARs with an exercise price that is less than the exercise price of the original Stock Options or SARs .

13. Termination of Employment . Upon the termination of employment by a Participant, any unexercised, deferred or unpaid Awards shall be treated as provided in the specific Award Agreement evidencing the Award. In the event of such a termination, the Committee may, in its discretion, provide for the extension of the exercisability of an Award, accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any restrictions contained in an Award, waive any restriction or other provision of this Plan or an Award or otherwise amend or modify the Award in any manner that is either (i) not materially adverse to such Participant or (ii) consented to by such Participant.

14. Assignability . Unless otherwise determined by the Committee and provided in the Award Agreement or the terms of an Award, no Award or any other benefit under this Plan shall be assignable or otherwise transferable except by will, by beneficiary designation or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act, or the

rules thereunder. In the event that a beneficiary designation conflicts with an assignment by will, the beneficiary designation will prevail. The Committee may prescribe and include in applicable Award Agreements or the terms of an Award other restrictions on transfer. Any attempted assignment of an Award or any other benefit under this Plan in violation of this Paragraph 14 shall be null and void.

15. Adjustments .

(a) The existence of outstanding Awards shall not affect in any manner the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on a parity with or junior to the Common Stock) or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding of any kind, whether or not of a character similar to that of the acts or proceedings enumerated above.

(b) In the event of any subdivision or consolidation of outstanding shares of Common Stock, declaration of a dividend payable in shares of Common Stock or other stock split, then (i) the number of shares of Common Stock reserved under this Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Paragraph 4, (ii) the number of shares of Common Stock covered by outstanding Awards in the form of Common Stock or units denominated in Common Stock, (iii) the exercise price or other price in respect of such Awards, (iv) the appropriate Fair Market Value and other price determinations for such Awards, and (v) the Stock Based Awards Limitations shall each be proportionately adjusted by the Committee as appropriate to reflect such transaction. In the event of any other recapitalization or capital reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting the Common Stock or any distribution to holders of Common Stock of securities or property (including cash dividends that the Committee determines are not in the ordinary course of business but excluding normal cash dividends or dividends payable in Common Stock), the Committee shall make appropriate adjustments to (i) the number of shares of Common Stock reserved under this Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Paragraph 4, (ii) the number and kind of shares of Common Stock covered by outstanding Awards in the form of Common Stock or units denominated in Common Stock, (iii) the exercise price or other price in respect of such Awards, (iv) the appropriate Fair Market Value and other price determinations for such Awards, and (v) the Stock Based Awards Limitations to reflect such transaction; provided that such adjustments shall only be such as are necessary to maintain the proportionate interest of the holders of the Awards and preserve, without increasing, the value of such Awards.

(c) In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Committee may make such adjustments to Awards or other provisions for the disposition of Awards as it deems

equitable, and shall be authorized, in its discretion, (i) to provide for the substitution of a new Award or other arrangement (which, if applicable, may be exercisable for such property or stock as the Committee determines) for an Award or the assumption of the Award, regardless of whether in a transaction to which Section 424(a) of the Code applies, (ii) to provide, prior to the transaction, for the acceleration of the vesting and exercisability of, or lapse of restrictions with respect to, the Award and, if the transaction is a cash merger, provide for the termination of any portion of the Award that remains unexercised at the time of such transaction, or (iii) to cancel any such Awards and to deliver to the Participants cash in an amount that the Committee shall determine in its sole discretion is equal to the Fair Market Value of such Awards on the date of such event, which in the case of Stock Options or SARs shall be the excess (if any) of the Fair Market Value of Common Stock on such date over the exercise or strike price of such Award.

(d) No adjustment or substitution pursuant to this Paragraph 15 shall be made in a manner that results in noncompliance with the requirements of Section 409A of the Code, to the extent applicable.

16. Restrictions . No Common Stock or other form of payment shall be issued with respect to any Award unless the Company shall be satisfied based on the advice of its counsel that such issuance will be in compliance with applicable federal and state securities laws. Certificates evidencing shares of Common Stock delivered under this Plan (to the extent that such shares are evidenced) may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any securities exchange or transaction reporting system upon which the Common Stock is then listed or to which it is admitted for quotation and any applicable federal or state securities law. The Committee may cause a legend or legends to be placed upon any such certificates to make appropriate reference to such restrictions.

17. Unfunded Plan . This Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants under this Plan, any such accounts shall be used merely as a bookkeeping convenience, including bookkeeping accounts established by a third party administrator retained by the Company to administer the Plan. The Company shall not be required to segregate any assets for purposes of this Plan or Awards hereunder, nor shall the Company nor the Board nor the Committee be deemed to be a trustee of any benefit under this Plan. Any liability or obligation of the Company to any Participant with respect to a an Award under this Plan shall be based solely upon any contractual obligations that may be created by this Plan and any Award Agreement or terms of the Award, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor the Board nor the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan.

18. Right to Continued Service or Employment . Nothing in the Plan or an Award Agreement shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment or other service relationship at any time, or confer upon any Participant any right to continue in the capacity in which he or she is employed or otherwise serves the Company.

19. Successors . All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

20. Governing Law . This Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Delaware.

21. Effective Date and Term of Plan . The Plan will be submitted to the stockholders of the Company for approval at the 2014 annual meeting of the stockholders and, if approved, shall be effective as of the date of such approval. No Award shall be made under the Plan ten years or more after such approval. As of the date of stockholder approval of this Plan, no further awards shall be made under the Prior Plans, provided, however, that any and all outstanding awards granted under the Prior Plans shall continue to be outstanding and shall be subject to the appropriate terms of the Prior Plan under which such award was granted and as are in effect as of the date this Plan is effective.

22. Clawback . To the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise determined by the Committee, Awards and amounts paid or payable pursuant to or with respect to Awards shall be subject to the provisions of any clawback policy implemented by the Company, which clawback policy may provide for forfeiture, repurchase and/or recoupment of Awards and amounts paid or payable pursuant to or with respect to Awards. Notwithstanding any provision of this Plan or any Award Agreement to the contrary, the Company reserves the right, without the consent of any Participant, to adopt any such clawback policies and procedures, including such policies and procedures applicable to this Plan or any Award Agreement with retroactive effect.

23. Section 409A .

(a) Awards made under this Plan are intended to comply with or be exempt from Section 409A of the Code, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. No payment, benefit or consideration shall be substituted for an Award if such action would result in the imposition of taxes under Section 409A of the Code. Notwithstanding anything in this Plan to the contrary, if any Plan provision or Award under this Plan would result in the imposition of an additional tax under Section 409A of the Code, that Plan provision or Award shall be reformed, to the extent permissible under Section 409A of the Code, to avoid imposition of the additional tax, and no such action shall be deemed to adversely affect the Participant’s rights to an Award.

(b) Unless the Committee provides otherwise in an Award Agreement, each Restricted Stock Unit (including a Restricted Stock Unit that is a Performance Award) or Cash Award (or portion thereof if the Award is subject to a vesting schedule) shall be settled no later than the 15th day of the third month after the end of the first calendar year in which the Award (or such portion thereof) is no longer subject to a “substantial risk of

forfeiture” within the meaning of Section 409A of the Code. If the Committee determines that a Restricted Stock Unit (including a Restricted Stock Unit that is a Performance Award) or Cash Award is intended to be subject to Section 409A of the Code, the applicable Award Agreement shall include terms that are designed to satisfy the requirements of Section 409A of the Code.

(c) If the Participant is identified by the Company as a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date on which the Participant has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Award payable or settled on account of a separation from service that is deferred compensation subject to Section 409A of the Code shall be paid or settled on the earliest of (1) the first business day following the expiration of six months from the Participant’s separation from service, (2) the date of the Participant’s death, or (3) such earlier date as complies with the requirements of Section 409A of the Code.

Exhibit 10.2

CABOT OIL & GAS CORPORATION
NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS AGREEMENT (“Agreement”), made as of [ grant date ] (the “Grant Date”), evidences an award by CABOT OIL & GAS CORPORATION, a Delaware corporation (the “Company”), to [ Participant Name ] (the “Grantee”), a non-employee director of the Company, pursuant to the Cabot Oil & Gas Corporation 2014 Incentive Plan (the “Plan”). Capitalized terms used and not otherwise defined herein shall have the meaning ascribed thereto in the Plan.

1. Grant of Restricted Stock Units . Effective as of the Grant Date, pursuant to Paragraph 8(a)(ii) of the Plan, the Company has awarded to the Grantee Restricted Stock Units representing a total of [ number of shares granted ] shares of Common Stock, subject to the conditions and restrictions set forth below and in the Plan (the “Restricted Stock Units”).

2. Restrictions . The Restricted Stock Units granted hereunder to the Grantee may not be sold, assigned, transferred, pledged or otherwise encumbered unless and until the date that the Grantee obtains the rights of a Stockholder as described in Section 9 of this Agreement. The Grantee shall have a vested right to all of the Restricted Stock Units as of the Grant Date; provided, however, that Common Stock to which such Restricted Stock Units relate shall not be deliverable to the Grantee until the date that the Grantee ceases to be a director of the Board of Directors of the Company and has a separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Code’) with respect to such Restricted Stock Units (the “Termination Date”).

3. Dividend Credits . During the period of time between the Grant Date and the date on which Grantee receives a distribution of the shares of Common Stock related to the Restricted Stock Units awarded hereunder, the Award of Restricted Stock Units hereunder shall be evidenced by book entry registration. As of each date that dividends are paid with respect to Common Stock (the “Dividend Payment Date”), the Grantee shall have an amount credited to his account equal to the amount of the dividend paid per share of Common Stock as of such Dividend Payment Date multiplied by the number of Restricted Stock Units credited to the Grantee’s account immediately prior to such Dividend Payment Date. Such amount shall be paid to the Grantee on the 15th business day following the Dividend Payment Date.

4. Beneficiary Designations . The Grantee shall file with the Secretary of the Company on such form as may be prescribed by the Company, a designation of one or more beneficiaries and, if desired, one or more contingent beneficiaries (each referred to herein as a “Beneficiary”) to whom shares of Common Stock otherwise due the Grantee under the terms of this Agreement shall be distributed in the event of the death of the Grantee. The Grantee shall have the right to change the Beneficiary or Beneficiaries from time to time; provided, however, that any change shall not become effective until received in writing by the Secretary of the Company. If any designated Beneficiary survives the Grantee but dies after the Grantee’s death, any remaining benefits due such deceased Beneficiary under this Agreement shall be distributed to the personal representative or executor of the deceased Beneficiary’s estate. If there is no effective Beneficiary designation on file at the time of the Grantee’s death, or if the designated Beneficiary or Beneficiaries have all predeceased such Grantee, the payment of any remaining

benefits under this Agreement shall be made to the personal representative or executor of the Grantee’s estate. If one or more but not all the Beneficiaries have predeceased such Grantee, the benefits under this Agreement shall be paid according to the Grantee’s instructions in his designation of Beneficiaries. If the Grantee has not given instructions, or if the instructions are not clear, the benefits under this Agreement which would have been paid to the deceased Beneficiary or Beneficiaries will be paid to the personal representative or executor of Grantee’s estate.

5. Nonalienation of Benefits . Except as contemplated by Section 4 above, no right or benefit under this Agreement shall be subject to transfer, anticipation, alienation, sale, assignment, pledge, encumbrance or charge, whether voluntary, involuntary or by operation of law, and any attempt to transfer, anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities or torts of the .person entitled to such benefits. If the Grantee or the Grantee’s Beneficiary hereunder shall become bankrupt or attempt to transfer, anticipate, alienate, assign, sell, pledge, encumber or charge any right or benefit hereunder, other than as contemplated by Section 4 above, or if any creditor shall attempt to subject the same to a writ of garnishment, attachment, execution, sequestration or any other form of process or involuntary lien or seizure, then such right or benefit shall cease and terminate.

6. Prerequisites to Benefits . Neither the Grantee, nor any person claiming through the Grantee, shall have any right or interest in Restricted Stock Units awarded hereunder or the shares of Common Stock related thereto, unless and until all the terms, conditions and provisions of this Agreement and the Plan which affect the Grantee or such other person shall have been complied with as specified herein.

7. Payment . Upon satisfaction of all the terms, conditions and provisions of this Agreement and the Plan, a Restricted Stock Unit credited to the Grantee’s account shall be payable to the Grantee in the form of one share of Common Stock on the 15th business day following the Termination Date; provided, however, that if, on the Termination Date, Grantee is treated by the Company as a “specified employee” within the meaning of Section 409A of the Code, then any such payment shall be made on the 15th business day following the earlier of (i) the expiration of six months from the Termination Date or (ii) the Grantee’s death (“409A Payment Date”) but, in any event, no later than the last day of the calendar year in which the 409A Payment Date occurs.

8. Restrictions on Delivery of Shares . The Company shall not be obligated to deliver any shares of Common Stock if counsel to the Company determines that such issuance or delivery would violate any applicable law or any rule or regulation of any governmental authority or any rule or regulation of, or agreement of the Company with, any securities exchange or association upon which the Common Stock is listed or quoted. If necessary to comply with any such law, rule, regulation or agreement, the Company shall in no event be obligated to take any affirmative action in order to cause the delivery of shares of Common Stock.

9. Rights as a Stockholder . The Grantee (or Beneficiary) shall have no rights as a stockholder with respect to the shares of Common Stock represented by the Restricted

Stock Units unless and until all the terms, conditions and provisions of this Agreement and the Plan which affect the Grantee or such other person shall have been complied with as specified herein, and certificates evidencing such shares are delivered to the Grantee pursuant to Section 7 hereof.

10. Adjustments . As provided in Paragraph 15 (Adjustments) of the Plan, certain adjustments may be made to the Restricted Stock Units upon the occurrence of events or circumstances described in Paragraph 15 of the Plan.

11. Notice . Unless the Company notifies the Grantee in writing of a different procedure, any notice or other communication to the Company with respect to this Agreement shall be in writing and shall be:

(a) delivered personally to the following address:

Cabot Oil & Gas Corporation

c/o Corporate Secretary

840 Gessner Rd., Suite 1400

Houston, Texas 77024

(b) sent by first class mail, postage prepaid and addressed as follows:

Cabot Oil & Gas Corporation

c/o Corporate Secretary

840 Gessner Rd., Suite 1400

Houston, Texas 77024

Any notice or other communication to the Grantee with respect to this Agreement shall be in writing and shall be delivered personally, or shall be sent by first class mail, postage prepaid, to Grantee’s address as listed in the records of the Company on the Grant Date, unless the Company has received written notification from the Grantee of a change of address.

12. Amendment . Without the consent of the Grantee, this Agreement may be amended or supplemented (i) to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or (ii) to add to the covenants and agreements of the Company for the benefit of Grantee or to add to the rights of the Grantee or to surrender any right or power reserved to or conferred upon the Company in this Agreement, subject, however, to any required approval of the Company’s stockholders and, provided, in each case, that such changes or corrections shall not adversely affect the rights of Grantee with respect to the Award evidenced hereby without the Grantee’s consent, or (iii) to make such other changes as the Company, upon advice of counsel, determines are necessary or advisable because of the adoption or promulgation of, or change in or of the interpretation of, any law or governmental rule or regulation, including any applicable federal or state securities laws.

13. Grantee Service . Nothing contained in this Agreement, and no action of the Company or the Committee with respect hereto, shall confer or be construed to confer on the Grantee any right to continue as a director of the Company or any Subsidiary.

14. Governing Law . This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware.

15. Section 409A Compliance. The following provisions shall apply to this Agreement, notwithstanding any provision to the contrary:

(a) This Agreement is intended to comply with Section 409A of the Code and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A.

(b) This Agreement shall not be amended or terminated in a manner that would cause the Agreement or any amounts payable under the Agreement to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement.

(c) The Company shall neither cause nor permit any payment, benefit or consideration to be substituted for a benefit that is payable under this Agreement if such action would result in the failure of any amount that is subject to Section 409A to comply with the applicable requirements of Section 409A.

(d) The Company shall neither cause nor permit any adjustments to any equity interest to be made in a manner that would result in the equity interest’s becoming subject to Section 409A unless, after such adjustment, the equity interest is in compliance with the requirements of Section 409A to the extent applicable.

(e) For purposes of Section 409A, each payment under this Agreement shall be deemed to be a separate payment.

16. Construction . References in this Agreement to “this Agreement” and the words “herein,” “hereof,” “hereunder” and similar terms include all Exhibits and Schedules appended hereto, including the Plan. This Agreement is entered into, and the Award evidenced hereby is granted, pursuant to the Plan. The headings of the Sections of this Agreement have been included for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.

17. Relationship to the Plan . In addition to the terms and conditions described in this Agreement, grants of Restricted Stock Units are subject to all other applicable provisions of the Plan. The decisions of the Committee with respect to questions arising as to the interpretation of the Plan, or this Agreement and as to finding of fact, shall be final, conclusive and binding.

CABOT OIL & GAS CORPORATION


By:	/s/ Scott C. Schroeder
Name:		Scott C. Schroeder
Title:		Executive Vice President,
		Chief Financial Officer
		& Treasurer


By:
		[ Participant Name ]

EXHIBIT 15.1

July 25, 2014

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We are aware that our report dated July 25, 2014 on our review of interim financial information of Cabot Oil & Gas Corporation (the “Company”) for the three and six month periods ended June 30, 2014 and 2013, and included in the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2014, is incorporated by reference in its Registration Statements on Form S-3 (File Nos. 333-68350 and 333-83819) and Form S-8 (File Nos. 333-37632, 033-53723, 033-35476, 333-92264, 333-123166, 333-135365 and 333-195642).

Very truly yours,

/s/ PricewaterhouseCoopers LLP

EXHIBIT 31.1

CERTIFICATIONS

I, Dan O. Dinges, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cabot Oil & Gas Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2014

	/S/ DAN O. DINGES
	Dan O. Dinges
	Chairman, President and
	Chief Executive Officer

EXHIBIT 31.2

I, Scott C. Schroeder, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cabot Oil & Gas Corporation;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2014

	/S/ SCOTT C. SCHROEDER
	Scott C. Schroeder
	Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT 32.1

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) (the “Act”), each of the undersigned, Dan O. Dinges, Chief Executive Officer of Cabot Oil & Gas Corporation, a Delaware corporation (the “Company”), and Scott C. Schroeder, Chief Financial Officer of the Company, hereby certify that, to his knowledge:

(1) the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 25, 2014

	/S/ DAN O. DINGES
	Dan O. Dinges
	Chief Executive Officer

	/S/ SCOTT C. SCHROEDER
	Scott C. Schroeder
	Chief Financial Officer