Cabot Oil & Gas (COG) delivered strong Q3 results with positive free cash flow despite lower gas prices compared to last year. But in the context of declining natural gas futures, the shale gas producer announced the possibility of a reduced 2020 capital program to hold its production flat and generate positive free cash flow.
This plan confirms Cabot is a prudently-managed low-cost company. But considering gas futures, its valuation doesn't offer any margin of safety.
Free cash flow at low gas prices
During Q3, Cabot's production reached 2,399 Mmcfe/d, up 18% year