Good morning, and welcome to the Cabot Oil & Gas Corporation Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Dan Dinges, Chairman, President and CEO. Please go ahead. Dan O. Dinges - Cabot Oil & Gas Corp.: Thank you, Drew, and good morning to all. Thank you for joining us today for Cabot's third quarter 2017 earnings call. With me today are the members of the Cabot's executive team that are usually here. Before we get started, I'd like to highlight that on this call we will make forward-looking statements based on current expectations. Also, some of our comments may refer to non-GAAP financial measures, forward-looking statements, and other disclaimers as well as reconciliations to the most directly comparable GAAP financial measures are provided in this morning's earnings release. For third quarter, Cabot demonstrated its continued focus on disciplined capital allocation by generating positive free cash flow for the sixth consecutive quarter, while delivering 12% equivalent production growth. Operating cash flow increased by 79% year-over-year, driven by our production growth, coupled with a 60% increase in cash margins. While natural gas price realizations increased 16% year-over-year, it should come as no surprise that the third quarter realizations were weaker sequentially due to lower NYMEX price and wider differentials. The widening of differentials in the third quarter has been seen in Appalachia over the last few years and highlights the need for the long-anticipated in-service of new long-haul infrastructure and in-basin demand projects. Our expectation is that our price realizations will only improve moving forward, giving the in-service of numerous infrastructure projects over the next few quarters. Year-to-date,…

We will now begin the question-and-answer session. The first question comes from Bob Morris of Citi. Please go ahead.

Thank you, and nice quarter, Dan. My first question is... Dan O. Dinges - Cabot Oil & Gas Corp.: Thanks, Bob.

...when you talk about the curtailments on an uneconomic basis, what net-back price becomes uneconomic? Is it $2.50, $2, or how do you think about that and how much could you curtail, that everything then is getting that price? Dan O. Dinges - Cabot Oil & Gas Corp.: Well, we have an economic price that covers our cost of capital close to a $1. But we have seen, in some of the gas we move in the daily market, which is not a large percentage of our gas, but we move gas in the daily market, and that's some of the gas that we remove. And we saw gas that was below $1 on the realizations over several weekends and periods of time that were low-demand periods, and that is the gas volumes that we'd like to not move.

Okay, that's good. And my second question, $2.5 billion is a lot of free cash flow. You've got options between, you can buy back up to 20% of your stock, you can pay a meaningful or S&P type dividend on the shares. How do you think about those two options in reallocating or returning that capital to the shareholder? And obviously, the share buybacks depend on the stock price, but at close to current levels, how do you think about the options between share buybacks and dividend increase? Dan O. Dinges - Cabot Oil & Gas Corp.: Well, we recently, as you're aware, increased our dividend 150%. We also bought back a nice tranche of shares in the second quarter. We do have an authorization still on the shelf to buy back shares. When you compare those two, we will, I think, look at both of them as an avenue to give back money to shareholders. On the dividend, we are moving towards a much more certainty attached to our free cash flow generation, now that we have the approval of infrastructure going in the ground. With that infrastructure in the ground and gas moving through additional outlets and also seeing the basis compress in the – and on the three pipes that we currently sell into, we're going to have a significant level of confidence of an ongoing continuous improvement in the realizations. And with that, that gives us a little bit more confidence on just the dividend side of our give-back. In the meantime, however, though, we have had, as you are aware, $0.5 billion or so of cash on our balance sheet, and we have continued to rationalize our portfolio and we looked at the buybacks with some of that cash. So, to say it a little bit more succinctly, once we get the infrastructure in place, we know we're going to be generating a significant level of free cash. And with that, we'll then make decisions between the share buybacks and the dividends and look at that as prudently as we can.

All right. Either way, it's an enviable position to be in. Congratulations. Thanks. Dan O. Dinges - Cabot Oil & Gas Corp.: Thanks, Bob.

The next question comes from Michael Glick of JPMorgan. Please go ahead.

Hey, guys. Not to beat a... Dan O. Dinges - Cabot Oil & Gas Corp.: Hi, Michael.

...dead horse here, but just have one question really on the stock buyback. I mean, on our model, which appears to be in the right ZIP code, based on the outlook you provided, you're trading at a 7%, or actually probably 6% free cash flow yield after today's recent move. I mean, there seem few similar opportunities when we think about the broader non-E&P, of course, market. Just in that context, how do you think about buybacks? Dan O. Dinges - Cabot Oil & Gas Corp.: Well – and I'd like to hear your comment also, Michael. We look at that as a unique position for an E&P company. Free cash flow yield of not only that, but we think we can increase that free cash flow yield. If you compare that free cash flow yield to other industries out there and you look at our multiples, I would like to see what the Street thinks the value is of an E&P company that does deliver that type of yield. And if we get the reaction from the Street and they value that free cash flow yield in a way that we think merits the valuation per share of Cabot stock, then buying back shares is not going to be as big of interest to us because we're going to see it in stock price appreciation. But to date, even though we think that is very visible on that yield and improving as we go forward, I haven't seen the comparison of the Street giving us the credit in our current share price.

Gotcha. Thank you for those comments. Dan O. Dinges - Cabot Oil & Gas Corp.: Thanks, Michael.

The next question comes from David Deckelbaum of KeyBanc. Please go ahead.

Morning, Dan and everyone. Dan O. Dinges - Cabot Oil & Gas Corp.: Hey, David.

Thanks for taking my questions. Dan O. Dinges - Cabot Oil & Gas Corp.: You bet.

Just looking at the program as a great multiyear outlook, it looks like approximately that you'll be filling the capacity so far that you've identified by about the fourth quarter of 2019. One, am I thinking about that correctly? And then two, I guess, as we think about filling visible capacity right now, you talked about being opportunistic. Do you view the communication today around the free cash at sort of $1 billion cumulative through the next three years as kind of the floor that you'd like to deliver to the market? And how do you square that with – once you start filling capacity and you witness potential improvements in local basis, how do you sort of blend the desire to deliver that free cash while also weighing potentially accelerating beyond the plan you laid out now? Dan O. Dinges - Cabot Oil & Gas Corp.: I'll just make a comment, then I'll turn it over to Scott, let him make a comment, also. But on the capacity side, we are entirely comfortable with the production growth that we've indicated. It is our plan, as we discussed in the past, David, to certainly fill the new infrastructure with some of the existing gas that we're producing today and also have incremental volumes that go into filling the Atlantic Sunrise and those two power plants. We do expect the uplift that you've referenced in the differential on the existing pipes. However, if in fact the area rationalization by other operators out there would move into the space and try to backfill where Cabot has moved gas off of those three pipes and on to new – into new markets, if there's backfilling and rationalization by the – or the lack of rationalization by other operators out there, then Cabot is not going to give up a great deal of its market share. We will be there and us being the lowest-cost producer up there, we will certainly protect our market share. I'll turn comment over to Scott also. Scott C. Schroeder - Cabot Oil & Gas Corp.: David, the thing I would add is on your first comment. As we laid out in the text and in the press release, we have kind of a dual track going on for the Marcellus program, based on market conditions. You are factually correct in one of those scenarios that we could fill that new capacity by the end of the decade, end of December kind of 2019. The other bookend on that is kind of the end of December 2020. That's kind of the bookend timeframe that we're looking at in this plan that we laid out with the cash flow and things like that.

Thanks, Scott. And then I guess, looking at the program right now, you have Eagle Ford volume growing with a pretty minimal amount of capital. It sounds like you've seen some improvements there on the operational side, maybe on the completion side as well. How do you view that asset now as a source of funds versus a development opportunity? And I guess, thinking about the life cycle of that asset, are we closer to perhaps pruning that now and looking at it as a source of funds or is that something that's years away? Dan O. Dinges - Cabot Oil & Gas Corp.: Well, we've always looked at the Eagle Ford as a good alternative to allocating some of our capital. And we continue to improve our efficiencies and our completion results out there in the field. When you look at, though, the impact of the Eagle Ford on Cabot, as far as it being a use of proceeds, we don't look at that as a large use of proceeds with our plan of allocating the capital to the Marcellus, also with our plan of giving money back to the shareholder, and we do anticipate that with success in our two exploratory areas, that the Eagle Ford is – that fits into our capital allocation today. But if it does not rank within our hierarchy of where we like to allocate capital in the future, then the Eagle Ford, as we have said in the past, is an asset that we would look at to help fund our new ventures.

Thanks for color, Dan, Scott, and everyone. Appreciate it. Dan O. Dinges - Cabot Oil & Gas Corp.: Thanks, David.

The next question comes from Charles Meade of Johnson Rice. Please go ahead. Charles A. Meade - Johnson Rice & Co. LLC: Good morning, Dan, to you and your whole team there. Dan O. Dinges - Cabot Oil & Gas Corp.: Hey, Charles. How are you? Charles A. Meade - Johnson Rice & Co. LLC: I'm doing well, thank you. I wanted to shift gears, perhaps, to the short-term and just touch on that. I know you spoke earlier about what's going on with local basis and about how it's not uncommon in 3Q, and we certainly see that with historical results that 3Q as the widest basis, but can you talk a bit about what dynamics you're seeing this year that may be different from years past? And do that with an eye of what we should expect for November and December? Dan O. Dinges - Cabot Oil & Gas Corp.: Okay. I'll just make a brief comment and turn over to Jeff to comment on the market. What we've seen has been fairly consistent with what we've seen. Certainly, the timing of the disconnect, and we roll into this period of time, and what we've seen in the past certainly affects, Jeff, mitigation of some of the impact by us selling volumes through October on the summer months. So, Jeff, would you like to fill in some of the blanks? Jeffrey W. Hutton - Cabot Oil & Gas Corp.: Yeah. Charles, there's a lot of similarities between this summer and last summer in terms of mild summers and low demand, storage being at pretty much the same levels, and a lot of gas on the market. I think one unique characteristic this year is probably more pipeline maintenance than we've seen in years past, or at least it…

The next question comes from Drew Venker of Morgan Stanley. Please go ahead. Drew E. Venker - Morgan Stanley & Co. LLC: Hi. Good morning, everyone. Dan O. Dinges - Cabot Oil & Gas Corp.: Hello, Drew. Drew E. Venker - Morgan Stanley & Co. LLC: Hi, Dan. I was hoping you could talk a little bit more about the exploration plays, and if you have success there, how you think about that in terms of funding. You said, in your prepared remarks, that they would be absent (30:35) any cash flow at the asset level, but how do you think about at the corporate level? Would you still be generating free cash flow? Or any more color you can provide on how you guys would progress with that program would be helpful. Dan O. Dinges - Cabot Oil & Gas Corp.: Yeah. On the free cash flow, we do expect to generate – with the funding of our exploration effort, we do expect to generate free cash flow at the corporate level. When you look at our effort out there right now, we do have a drilling rig active on one of the areas, and we'll be moving to having a drilling rig on the other area. Characteristic of what we've done in the past on exploration plays, we're not going to comment on results at this point in time. Information that we have seen, we're encouraged to continue to move forward with collecting data and evaluating the area. And we have our fingers crossed and we're cautiously optimistic that we'll be able to demonstrate that the areas that we are focused in will compete for incremental capital. And we do fully intend to fund it and still, at the corporate level, be able to generate free cash flow.…

The next question comes from Holly Stewart of Scotia Howard Weil. Please go ahead.

Good morning, gentlemen. Dan O. Dinges - Cabot Oil & Gas Corp.: Hello, Holly.

Dan, you touched on both your thoughts on the Eagle Ford and then kind of the Haynesville. I'm curious if you could remind us of your ownership percentage in Atlantic Sunrise and maybe thoughts around what to do with that asset since we have shovels in the ground at this point. Dan O. Dinges - Cabot Oil & Gas Corp.: Yes, I'll let Jeff cover that infrastructure. Jeffrey W. Hutton - Cabot Oil & Gas Corp.: Yeah. So, Holly, Atlantic Sunrise is the name of the project, okay? It's actually an extension of Transco's Pipeline System. So, from a project perspective, in other words, for the new greenfield pipeline, our equity investment there is approximately $150 million.

Okay. And Jeff, any comments on keeping that in the portfolio? Jeffrey W. Hutton - Cabot Oil & Gas Corp.: Yeah, absolutely. Right now, we're keeping the equity investment in the project, but that's always a discussion item here at Cabot. Dan O. Dinges - Cabot Oil & Gas Corp.: Holly, one of the things that we – the decision we made in having an equity piece to start out with as we wanted to be involved and be able to have a good understanding and seat at the table as we go through the permitting process, regulatory process, and a full understanding of any implications we have with delays, how we might be able to navigate the heightened enthusiasm by the activists to stop infrastructure. We just wanted to understand that process a little bit better, and so, that was the reason we're in the investment. It obviously is an offset to our investment with our ability to secure some of the transportation charge back to us as an equity owner. But as far as it being a holding that we feel like that we need to have forever, we're not compelled for that. It goes back to our decision about use of proceeds and what we might do at any particular time with those proceeds if we wanted to monetize.

Sure. I'm sure it'd be an asset there'd be a lot of pipeline companies would like to have. Dan O. Dinges - Cabot Oil & Gas Corp.: Yes, I agree.

And then maybe just one for Scott, with the, call it, $0.5 billion of cash on the balance sheet, you got the maturity coming up in 2018. Any thoughts on how to proceed with that? Scott C. Schroeder - Cabot Oil & Gas Corp.: Right now, Holly, we're looking at all options. Obviously, we could refinance it. We do believe we're real close to being kind of BBB, BBB-plus in the marketplace. We're not rated at this point in time, so we're internally having that discussion. But keep in mind, with the $500 million, the maturity is $300 million, we can always simply just pay it off because we have a completely undrawn $1.8 billion revolver. So, it doesn't hurt any of our efforts either way we go.

Yeah. Great. Thanks, guys. Dan O. Dinges - Cabot Oil & Gas Corp.: Thanks, Holly.

The next question comes from Jeffrey Campbell of Tuohy Brothers. Please go ahead.

Good morning. Dan O. Dinges - Cabot Oil & Gas Corp.: Hello, Jeffrey.

We've had a lot of big picture questions. So, I'm going to ask a couple of more narrow ones. In the last quarter press release, you guys said that the fourth gen well completions were exceeding 4.4 Bcf for 1,000-foot lateral. In this press release, you said that the additional wells are supporting 4.4 Bcf of 1,000-feet lateral. Sounds a little bit more equivocal. I just wondered if I'm parsing the language too finely. Dan O. Dinges - Cabot Oil & Gas Corp.: No, when we look at our production curves and we look at the modeling and the curve fits, Jeffrey, we like to see a longer term on the curve fits. And all we're saying with our statement is that everything we're seeing right now is consistent with our expectations. And if we do have improvements over and above that 4.4 Bcf fit – curve fit, we'll do what we've done in the past, and that is recognize that after we have more data and – in a longer term on the wells to be able to continue to support that. There was also a reference in one of the write-ups about our Gen 4 and Gen 5 and I'll take this time, if I could, Jeffrey, to just reference that. Our Gen 5 that we're trying to tweak out there is we have full expectations that we will equal and maybe, hopefully, exceed our production of 4.4 Bs per 1,000 foot of lateral with our Gen 5. And our comment was designed to indicate that we think we can maybe achieve that by our tweaking of the completion technique, but also maybe save a little bit of capital by how we're tweaking the completion technique without a compromise, whatsoever, to the production expectation that we have for Gen 5.

Now, well, you just proved that amongst your many other talents that you're psychic, because that was exactly the next question I was going to ask was what was color on that. So, basically, what you're saying, just if I can paraphrase it, is that the fifth gen stuff that you're working on now should not show any degradation in production, but you're hoping to be able to cut some costs and, therefore, improve the returns? Dan O. Dinges - Cabot Oil & Gas Corp.: Exactly right.

Perfect. Thank you. I appreciate the color. Dan O. Dinges - Cabot Oil & Gas Corp.: Thank you, Jeffrey.

The next question comes from Brian Singer of Goldman Sachs. Please go ahead. Brian Singer - Goldman Sachs & Co. LLC: Thank you. Good morning. Dan O. Dinges - Cabot Oil & Gas Corp.: Hello, Brian. Brian Singer - Goldman Sachs & Co. LLC: To follow up on the topic of the fifth generation wells, can you add a little bit more color on what you're doing on the completion tweaks to lower the costs? And then on a more bigger picture basis on the comment that fifth generation is more – or at least so far is more about cost reduction in terms of the drivers of efficiency gains than necessarily greater EURs per 1,000 feet, do you think we're in the later innings of productivity gains in terms of well productivity in Marcellus? Dan O. Dinges - Cabot Oil & Gas Corp.: Yeah. Good questions. On the last (40:34) comment, we've been asked that probably, so starting three or four years ago, and we continue to make – we, as an industry, continue to make strides to deliver improved results from our completion. So, we're going to continue to be able to try to improve our completions, and – excuse me, and in that regard, we in fact have a couple of beta tests going on right now for our Gen 6 completions. So, stand by on the results of that. When you look at the difference between Gen 4 and Gen 5, one of the changes we made is that Gen 4 has got tighter on the stage spacing. In Gen 5, we went wider – back wider again on the stage spacing, but we had improved or increased the clusters in the Gen 5 from the 4. Additionally, the fluid pumped in the Gen 4 is…

The next question comes from Michael Hall of Heikkinen Energy Advisors. Please go ahead.

Yeah. Thanks. I just want to follow on a little bit on the free cash flow. At the corporate level, kind of trying to make sure we're calibrating right. What would you say the drag is on free cash flow for other items outside of exploration at the corporate level for things like overhead? And you already hit on taxes – trying to zero in. Scott C. Schroeder - Cabot Oil & Gas Corp.: Michael, the easiest way is just look at the guidance for G&A and financing costs.

And you've held those flat throughout the quarter? Scott C. Schroeder - Cabot Oil & Gas Corp.: Held those flat, because we are not people-heavy in this organization.

Sure. Okay. And then when do you think you might be willing to announce some sort of more formalized plan around what the path towards redistributing more of the cash to shareholders would be? Is that something by midyear next year you think you could be willing to do, or what's the thought process on that currently? Dan O. Dinges - Cabot Oil & Gas Corp.: Yeah, I think that would be a reasonable expectation, Michael, that as we get some clarity on a couple of our new initiatives that we have moving forward and then get our arms around how we would allocate cash to those areas. And also, if in fact we have a monetization in the mix, we would also have clarity on value created from that. So, I would think that would be a reasonable expectation.

Okay. Perfect. Appreciate it. Thanks, guys. Congrats. Dan O. Dinges - Cabot Oil & Gas Corp.: Thanks, Michael.

The next question comes from Paul Grigel of Macquarie. Please go ahead. Paul Grigel - Macquarie Capital (USA), Inc.: Hi. Good morning. You noted in today's release the double-digit corporate returns into 2018, and you've noted in recent presentations the increased focus on ROCE as a metric for using or for evaluating the business. Is there thoughts on making that more of an explicit goal for management, given the rather unique position you are in relative to peers? Dan O. Dinges - Cabot Oil & Gas Corp.: Well, I'll let Scott answer that in a second. Just for a specific goal for management, we have always had financial goals as part of management's effort to achieve. And I think you can see by the results and the decision we make on how we allocate capital, how we handle our growth profile versus value creation and getting margins and returns as being our primary focus versus growth, Paul, we've always had return on capital employed as our metric that management looks at. I'll let Scott make a comment. Scott C. Schroeder - Cabot Oil & Gas Corp.: Yeah. So, the short answer is yes. It is becoming a – as Dan said, it has been a focus. We have not worn it on our sleeves. As we've watched this industry and been around this industry, Dan's been through six cycles, I've been through five, as have many in this table, we've watched this. Obviously, the returns focus is gaining more momentum now, as it should, and we fully embrace that. The key thing now in terms of we know how we calculate it internally, we just don't want to – we want to make sure there's no unintended consequences if you roll out specifics. Because, as you know, we are –…

The next question comes from Biju Perincheril of Susquehanna. Please go ahead.

Thanks. Good morning. Dan, I was wondering on the Gen 5 completions in the Marcellus if you could give us an idea of the magnitude of savings you are targeting, and also if there's something – the approach you're taking here is something that's transferable to the Eagle Ford? Dan O. Dinges - Cabot Oil & Gas Corp.: We are, of course, gathering as we continue to get more completions with the Gen 5. We're hoping to get around and we have seen plus or minus 10% on the saving side with the Gen 5. And I think that would be a reasonable expectation, going forward. And what we do in the Eagle Ford and Marcellus – I have both guys at the table with me, Phil Stalnaker and Steve Lindeman, that are responsible for the operations in our two respective areas and they've been working with each other for, I don't know, 50 years, I think. But they communicate well on what their teams are doing to enhance efficiency. So, we do have cross polinization and data transfer to each group.

Great. I mean, I'm sure you guys are having those conversations on how to apply this. I was wondering from those conversations, do you think Eagle Ford, from a geologic perspective, this could be a transferable technology? Dan O. Dinges - Cabot Oil & Gas Corp.: Well, we have our own – it's hard to answer that, specifically. If you're asking that is the exact changes and exact spacing going from a Gen 4 in the Marcellus to a Gen 5 in the Marcellus, is that going to transfer to the Eagle Ford? And is the fluid pumped in a Gen 4 Marcellus to a Gen 5 Marcellus, is that the exact fluid that we pump going to transfer to the Eagle Ford? The answer to that is no. But the concept of being able to save money with the spacing changes in the Marcellus and the transfer of fluid pumped and the more clusters per stage by having a little wider spacing, we do take all of that in consideration in the tweaking that's going on in the Eagle Ford.

Got it. That's helpful. And just to confirm the potential savings from Gen 5, none of those numbers are incorporated into the 2018, 2019 guidance you've provided, right? Dan O. Dinges - Cabot Oil & Gas Corp.: We wanted to – we want to get the – we want to see the results before we do a lot of that incorporation.

Got it. Thanks. Dan O. Dinges - Cabot Oil & Gas Corp.: Yeah, you bet.

This concludes our question-and-answer session. I would like to turn the conference back over to Dan Dinges for any closing remarks. Dan O. Dinges - Cabot Oil & Gas Corp.: Thank you, Drew, and thank you all for the questions. I do firmly believe that Cabot is one of the most well-positioned company and somewhat unique in that we are already generating free cash flow positive results and our portfolio returns, I think, places us at the top of the class. So, appreciate the interest and we look forward to our call after the end of the year. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.