What happened

Shares of Cabot Oil & Gas (NYSE:COG) declined more than 10% by 1:30 p.m. EDT on Friday. Fueling the natural gas driller's sell-off were its second-quarter results and outlook for the rest of the year.

So what

Cabot Oil & Gas delivered solid second-quarter results overall. It generated $150.6 million, or $0.36 per share, of adjusted net income during the period. That was an improvement from the year-ago quarter when it produced $57.9 million, or $0.13 per share, of adjusted net income and beat the analyst consensus estimate by $0.03 per share. Fueling the company's better-than-expected result was the combination of a 24% increase in natural gas production and a 24% drop in operating expenses.

Drilling rig with the setting sun behind it.

Image source: Getty Images.

However, Cabot Oil & Gas adjusted its 2019 operating plan, raising its capital expense budget from $800 million up to a range of $800 million-$820 million. Meanwhile, it cut its production growth outlook from a 20% increase from last year's average to between 16% to 18%. The company made the change to its operating plan after it had "a unique opportunity" to acquire land near one of its locations.

Now what

While Cabot Oil & Gas delivered solid second-quarter results, it is spending more money yet producing less growth this year. That didn't sit well with investors, even though it's mainly due to an acquisition.

Cabot, however, remains committed to creating value for its investors, as is evident in the increase in its share repurchase program. The company plans to buy back another 25 million shares, boosting its current authorization to 31.5 million. That's enough to retire another 8% of its outstanding stock, which is impressive considering it has repurchased more than 10% of its shares since the second quarter of 2017.

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