With shares gaining by approximately 8% on Monday, Cabot Oil & Gas Corporation (COG) begins the week as one of the top-performing Zacks #1 Rank companies. COG is certainly gaining a good deal of ground today thanks to the big news that Exxon Mobil (XOM) is buying XTO Energy (XTO).

Exxon’s acquisition today is seen on the Street as a bet on natural gas from one of the biggest and most respected figures in the energy industry. Natural gas is cleaner and easier to reach than other alternatives, and many see it as an important step forward for an industry in search of alternatives.

Now, other natural gas companies are likely to be courted by the major oil juggernauts. There’s not doubt COG is benefiting from this attention today, but the company had a lot of things going for it even before this announcement.

Cabot Oil & Gas was recently upgraded to “Outperform” by Zacks Equity Research, citing the company’s “impressive exposure to the high-return Marcellus and Haynesville Shale plays, as well as its above-average production growth.”

The company was also able to surpass the Zacks Consensus Estimate in its third-quarter report.

Cabot Oil & Gas is a leading independent natural gas producer, with its entire resource base located in the continental U.S. It is part of the oil – US exploration/production industry. There are only 2 other companies from this space on today’s Zacks #1 Rank List: Arena Resources, Inc. (ARD) and Stone Energy Corporation (SGY).

Earnings Estimates for Cabot Oil & Gas

Earnings estimates for this year have been pretty steady for Cabot Oil & Gas over the past 30 days, but remain above levels from 2 months ago in response to its third-quarter report. At the moment, the Zacks Consensus Estimate is at $1.55 per share for 2009, up 3.3% from $1.50 60 days ago. There are 7 covering analysts for this year.

Meanwhile, the Zacks Consensus Estimate for next year has gained sharply in 2 months by 15.3%. Analysts now expect $1.13 per share for the year, up from 98 cents in the timeframe.

Third-Quarter Report

Cabot Oil & Gas earned 38 cents per share in its third quarter, which fell short of the year-ago result at 58 cents but edged past the Zacks Consensus Estimate by a penny, or 2.7%.

The company has now surpassed the Zacks Consensus Estimate for 3 consecutive quarters.

Overall production volumes advanced more than 5% year over year to 25.5 billion cubic feet equivalent (Bcfe).

In addition to the Marcellus/Haynesville shales and above-average production growth, other positives to the Cabot story, according to Zacks Equity Research Incorporatedlude natural gas prices, its relatively low risk profile and longer reserve lines.

Zacks Investment Research

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