<SEC-DOCUMENT>0001104659-17-063572.txt : 20171227
<SEC-HEADER>0001104659-17-063572.hdr.sgml : 20171227
<ACCEPTANCE-DATETIME>20171024162603
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001104659-17-063572
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20171024

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CABOT OIL & GAS CORP
		CENTRAL INDEX KEY:			0000858470
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				043072771
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		840 GESSNER ROAD, SUITE 1400
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77024
		BUSINESS PHONE:		2815894600

	MAIL ADDRESS:	
		STREET 1:		840 GESSNER ROAD, SUITE 1400
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77024
</SEC-HEADER>
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">October&nbsp;24, 2017</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Brad Skinner<br> Senior Assistant Chief Accountant</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Office of Natural Resources<br> United States Securities and Exchange Commission<br> Division of Corporation Finance<br> 100 F Street, N.E.<br> Mail Stop 4628<br> Washington, D.C. 20549</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Re:</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Cabot Oil&nbsp;&amp; Gas Corporation</p>
<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form&nbsp;10-K for the Fiscal Year Ended December&nbsp;31, 2016</font></p>
<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Filed February&nbsp;27, 2017</font></p>
<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">File No.&nbsp;1-10447</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dear Mr.&nbsp;Skinner:</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are responding to the comment received from the Staff of the Division of Corporation Finance of the Securities and Exchange Commission by letter dated September&nbsp;26, 2017 regarding our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2016. For your convenience, our response is prefaced by the Staff&#146;s corresponding comment in italicized text.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Form&nbsp;10-K for the Fiscal Year Ended December&nbsp;31, 2016</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Financial Statements, page&nbsp;57</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Notes to the Consolidated Financial Statements, page&nbsp;63</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Note 3. Properties and Equipment, Net, page&nbsp;70</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Impairment</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>We note the $435.6 impairment charge recorded during the fourth quarter of 2016. Expand your disclosure to describe, in reasonable detail, the facts and circumstances leading to the impairment and to disclose the method or methods for determining fair value. See FASB ASC paragraph 360-10-50-2.</i></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response</font></u></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We believe we have described the impairment of our West Virginia and Virginia assets in reasonable detail in accordance with ASC 360-10-50-2 based on facts and circumstances that existed as of December&nbsp;31, 2016.&#160; During the fourth quarter of 2016, as a result of entering into negotiations with a third party to sell these assets, we determined that it was more likely than not that we would dispose of these assets significantly earlier than their expected useful life and</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">therefore performed an impairment test.&#160; As of December&nbsp;31, 2016, we had not yet committed to a plan of sale or finalized the terms of a purchase and sale agreement.&#160; Because key commercially sensitive terms were still under negotiation, we believed at the time that more extensive disclosure of this potential transaction would put us at a competitive disadvantage in the event that negotiations were unsuccessful and we desired to enter into discussions with a different potential buyer in the future.&#160; As disclosed in our second quarter 2017 Form&nbsp;10-Q, we executed a purchase and sale agreement with a different potential buyer and committed to sell these assets in the second quarter of 2017 and classified these assets as held for sale in our second quarter 2017 Form&nbsp;10-Q.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We believe that our 2016 Form&nbsp;10-K describes the impairment in the fourth quarter of 2016 in reasonable detail given the facts and circumstances that existed at the time the disclosure was made and our second quarter 2017 Form&nbsp;10-Q disclosure provides sufficient additional information regarding the impairment of our West Virginia and Virginia assets.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Describe for us, in reasonable detail, the material facts, circumstances and assumptions you considered in determining the amount and timing of the impairment charge recorded in the fourth quarter of 2016, and explain to us how those facts, circumstances and assumptions compared to those as of December&nbsp;31, 2015. Additionally, explain to us how the amount and timing of the fourth quarter charge is consistent with disclosure in your December&nbsp;31, 2015 10-K and September&nbsp;30, 2016 which indicated, in part, that you &#147;do not believe that further impairment of our oil and gas properties is reasonably likely to occur in the near future&#148;.</i></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response</font></u></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As of December&nbsp;31, 2015, we tested all of our assets, including our fields located in West Virginia and Virginia, for impairment as a result of a substantial decline in oil and natural gas prices.&#160; As a result of our step one assessment, no impairment of our West Virginia and Virginia assets was indicated.&#160; The result of this assessment was based on our expectation at the time of the assessment that we would continue to own and operate these fields through their expected useful life as we did not have any plans to dispose of our West Virginia and Virginia assets as of December&nbsp;31, 2015.&#160; Through September&nbsp;30, 2016, we continued to evaluate these properties for events or changes in circumstances that would have indicated the carrying amount of these assets would not be recoverable, concluding that there were none.&#160; In the fourth quarter of 2016, although oil and natural gas prices had improved since late 2015, we performed an impairment test of our West Virginia and Virginia fields because we had then determined that it was more likely than not that we would dispose of these assets significantly earlier than their remaining expected useful life.&#160;&#160; As a result of our step one assessment, which was based on a probability weighted assessment that considered the anticipated disposition of these assets earlier than their remaining expected useful life, we determined that these assets were impaired which resulted in an impairment charge of $435.6 million.&#160; The fair value of these assets was based on a market</font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">approach that considered the agreed upon purchase price contained in an agreement that was being negotiated with a potential buyer during the fourth quarter of 2016.&#160; Subsequent to the end of the 2016, we executed a purchase and sale agreement with a different third party and committed to sell these assets in the second quarter of 2017and classified these assets as held for sale in our second quarter 2017 Form&nbsp;10-Q.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our disclosure in the 2015 Form&nbsp;10-K and third quarter 2016 Form&nbsp;10-Q relative to our belief that further impairment of our oil and gas properties was not reasonably likely to occur in the near future was made in the context of future significant declines in oil and natural gas prices and the expectation at the time that we would own and operate these assets through the end of their economic lives. The impairment charge taken in the fourth quarter of 2016 was a result of a proposed sale of the impaired assets for which the sales process began in the fourth quarter of 2016.&#160; Based on these facts, we believe that the disclosure of potential future impairments due to significant price declines was appropriate.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">******</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If you have any questions or require additional information, you may contact Scott C. Schroeder at (281) 589-4993 or the undersigned at (281) 589-4848.</font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sincerely,</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Todd M. Roemer</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Todd M. Roemer</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Principal Accounting   Officer</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Vice President and   Controller</font></p>    </td>   </tr>  </table>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">cc:</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Ms.&nbsp;Diane Fritz, United States Securities and Exchange Commission</p>
<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Scott C. Schroeder, Cabot Oil&nbsp;&amp; Gas Corporation</font></p>
<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ms.&nbsp;Deidre L. Shearer, Cabot Oil&nbsp;&amp; Gas Corporation</font></p>
<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;J. David Kirkland,&nbsp;Jr., Baker Botts L.L.P.</font></p>
<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Andrew J. Ericksen, Baker Botts L.L.P.</font></p>
<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Douglas T. Parker, PricewaterhouseCoopers LLP</font></p>
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