Financial Data and Key Metrics Changes - Coterra Energy reported total production averaging 669 MBoepd per day, with oil averaging 112.3 MBo per day and natural gas averaging 2.68 Bcf per day, all slightly above guidance [16][18] - Net income for the quarter was $252 million or $0.34 per share, with adjusted net income of $233 million or $0.32 per share [18] - Total unit costs during the quarter were $8.73 per BOE, near the midpoint of the annual guidance range of $7.45 to $9.55 per BOE [18] - Discretionary cash flow for the quarter was $670 million, and free cash flow was $277 million after cash capital expenditures of $393 million [20] - The company ended the quarter with a net debt to LTM EBITDA ratio of 0.3 times and approximately $2.8 billion of liquidity [20] Business Line Data and Key Metrics Changes - In the Permian, Coterra brought online 24 net wells, including 16 Net Bone Spring wells and 8 net Windham Row wells [17] - In the Anadarko, five net wells were brought online in the liquids-rich area, while seven net wells were brought online in the Marcellus [17] - The company increased its full-year 2024 oil production guidance to between 107 and 108 MBoepd, up approximately 0.5% from previous guidance [23] Market Data and Key Metrics Changes - Coterra remains constructive on natural gas markets, anticipating a tighter supply-demand picture in 2025 due to growing LNG exports and increased electrical generation demand [10][11] - The company has curtailed and shut in volumes in the Marcellus until natural gas prices improve significantly [10][41] Company Strategy and Development Direction - Coterra emphasizes disciplined capital allocation over production goals, focusing on top-tier operational teams and asset quality [12][14] - The company is exploring opportunities to diversify its natural gas marketing portfolio through LNG sales agreements, enhancing price exposure to international markets [11][30] - Coterra plans to maintain flexibility in capital allocation while pursuing organic oil growth [5][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the oil markets and indicated that they are prepared to adjust capital allocation based on market conditions [46][49] - The company is optimistic about the long-term gas markets but is currently cautious due to oversupply [10][43] - Management highlighted the importance of operational efficiency and continuous improvement as key drivers of future performance [66][67] Other Important Information - Coterra repurchased 4.3 million shares for $111 million during the quarter, returning $265 million to shareholders, which is 96% of free cash flow [25][26] - The company announced a base dividend of $0.21 per share for the third quarter, annualizing to $0.84 per share [25] Q&A Session All Questions and Answers Question: Why would Coterra not continue to simul-frac in 2025? - Management indicated that they are monitoring oil markets and want to maintain flexibility for potential recovery in gas markets [46] Question: How does Coterra view capital allocation across its assets? - Management explained that they estimate cash flow based on commodity prices and activity, maintaining a return of capital commitment [49] Question: How do returns from the Harkey Shale compare to the upper Wolfcamp? - Management stated that the Harkey is outstanding but slightly less than the upper Wolfcamp, with strong results from both intervals [55] Question: What are the implications of potential setback rules in New Mexico? - Management believes the concerns are overblown and does not expect significant regulatory changes that would impact operations [58][60] Question: What are the drivers of capital efficiency improvements? - Management noted that two-thirds of the efficiency gains are from operational timing, with the remainder from productivity improvements [65][66] Question: How does Coterra manage curtailments in the Marcellus? - Management stated that curtailments are managed on a field level, considering all gas volumes equally once capital is spent [104]

Financial Performance & Capital Allocation - Coterra expects to reinvest 50-70% of cash flow at mid-cycle prices[6, 21] - The company is committed to returning a minimum of 50% of annual Free Cash Flow (FCF) to shareholders through base dividends and buybacks[6] - Coterra has a $20 billion share repurchase authorization, with $12 billion remaining as of September 30, 2024[6] - The annualized 3Q24 declared dividend is $084 per share, a 5% year-over-year increase, resulting in a 35% yield based on the share price as of October 30, 2024[6] - Coterra returned 100% of Year-To-Date 2024 FCF to shareholders via declared base dividends and buybacks[6] Production & Operations - The company anticipates a 5%+ oil Compound Annual Growth Rate (CAGR) over 2024-2026, with 0-5% BOE CAGR[6] - Coterra expects 2024 capital expenditures to be down 14% year-over-year at the mid-point, driven by deflation, Permian efficiencies, and lower Marcellus activity, while expecting 12% year-over-year oil volume growth[6] - The company has secured new LNG contracts to diversify its gas portfolio, with 200 mmcfd tied to international pricing and 550 mmcfd participating in the LNG market, representing approximately 7% and 20% of 2024 estimated gas volumes, respectively[9, 10] Asset Portfolio - Coterra estimates ~$25 billion, or ~95%, of its capital expenditure opportunities are expected to generate a 13x PVI10 or better[12] - The company's Permian asset has a mid-point D&C CapEx of $1050 million, targeting 80-90 net wells online with an average lateral length of 9600 feet[36] - Coterra's Marcellus asset has a mid-point D&C CapEx of $300 million, targeting 10-12 net wells online[7, 57]

分组1 - Coterra Energy reported quarterly earnings of $0.32 per share, missing the Zacks Consensus Estimate of $0.34 per share, and down from $0.50 per share a year ago, representing an earnings surprise of -5.88% [1] - Cabot reported revenues of $1.36 billion for the quarter ended September 2024, matching year-ago revenues and surpassing the Zacks Consensus Estimate by 2.68%, having topped consensus revenue estimates three times over the last four quarters [2][4] - The stock of Cabot has underperformed the market, losing about 5.5% since the beginning of the year compared to the S&P 500's gain of 21.9% [3] 分组2 - The current consensus EPS estimate for Cabot for the coming quarter is $0.43 on $1.4 billion in revenues, and for the current fiscal year, it is $1.64 on $5.44 billion in revenues [7] - The Zacks Industry Rank for Oil and Gas - Exploration and Production - United States is currently in the bottom 10% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8] - Gulfport Energy is expected to report quarterly earnings of $2.96 per share, reflecting a year-over-year change of +327.7%, with revenues expected to be $279.57 million, up 4.8% from the year-ago quarter [9][10]

Coterra Energy Third-Quarter 2024 Financial and Operating Results [Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) Coterra reported strong Q3 2024 results, exceeding production and lowering capital expenditures, while announcing a **$0.21** dividend and new LNG agreements - CEO Tom Jorden highlighted the company's strong performance, improving capital efficiency, and strategic diversification into international LNG pricing through three new agreements[3](index=3&type=chunk)[4](index=4&type=chunk) - Q3 2024 performance exceeded expectations, with total **BOE**, natural gas, and oil production all beating the high-end of guidance, while capital expenditures came in below the low-end[5](index=5&type=chunk) - The company increased its full-year 2024 production guidance and lowered its capital expenditure guidance by **$50 million** at the mid-point to **$1.75-$1.85 billion**[6](index=6&type=chunk)[7](index=7&type=chunk) - Signed three new LNG agreements to sell a total of **200 MMcfpd** of natural gas indexed to international prices, with sales beginning in 2027 and 2028[8](index=8&type=chunk) - Shareholder returns for Q3 2024 totaled **96% of Free Cash Flow**, including a declared base dividend and **$111 million** in share repurchases. The company has returned **100%** of its year-to-date Free Cash Flow to shareholders[9](index=9&type=chunk) [Third-Quarter 2024 Performance](index=3&type=section&id=Third-Quarter%202024%20Performance) Coterra generated **$252 million** GAAP Net Income and **$277 million** Free Cash Flow in Q3 2024, with total equivalent production of **669 MBoepd** exceeding guidance by **3%** Q3 2024 Financial Highlights | Metric | Value | | :--- | :--- | | Net Income (GAAP) | $252 million | | Adjusted Net Income (non-GAAP) | $233 million | | Earnings Per Share (GAAP) | $0.34 | | Adjusted EPS (non-GAAP) | $0.32 | | Cash Flow From Operating Activities | $755 million | | Free Cash Flow (non-GAAP) | $277 million | | Capital Expenditures (non-GAAP) | $418 million | Q3 2024 Production vs. Guidance | Production | Q3 2024 Actual | Guidance High-End | Variance | | :--- | :--- | :--- | :--- | | Total Equivalent (MBoepd) | 669 | 650 | +3% | | Oil (MBopd) | 112.3 | 111 | +1% | | Natural Gas (MMcfpd) | 2,682 | 2,630 | +2% | Q3 2024 Realized Average Prices | Commodity | Price (Excluding Derivatives) | Price (Including Derivatives) | | :--- | :--- | :--- | | Oil (per Bbl) | $74.04 | $74.18 | | Natural Gas (per Mcf) | $1.30 | $1.41 | | NGLs (per Bbl) | $18.42 | $18.42 | [Shareholder Returns and Capital Allocation](index=4&type=section&id=Shareholder%20Returns%20and%20Capital%20Allocation) The company declared a **$0.21** quarterly dividend and repurchased **$111 million** in shares, totaling **$265 million** in Q3 shareholder returns, maintaining its commitment to return **50% or more** of annual Free Cash Flow - The Board of Directors approved a quarterly base dividend of **$0.21 per share**, representing a **3.5%** annualized yield based on the October 30, 2024 closing price[14](index=14&type=chunk) - Repurchased **4.3 million shares** for **$111 million** during Q3, with **$1.2 billion** remaining on the share repurchase authorization as of September 30, 2024[15](index=15&type=chunk) - Total shareholder returns in Q3 amounted to **$265 million**, comprising **$154 million** in declared dividends and **$111 million** in share repurchases[16](index=16&type=chunk) - Reiterated its strategy to return **50% or greater** of annual Free Cash Flow (non-GAAP) to shareholders, noting that **100%** of year-to-date Free Cash Flow has been returned[16](index=16&type=chunk) [Financial Position](index=5&type=section&id=Financial%20Position) As of September 30, 2024, Coterra maintained a strong balance sheet with **$2.066 billion** total debt and approximately **$2.843 billion** total liquidity, including **$843 million** cash Key Balance Sheet and Liquidity Metrics (as of Sept 30, 2024) | Metric | Value | | :--- | :--- | | Total Debt Outstanding | $2.066 billion | | Cash and Cash Equivalents | $843 million | | Revolving Credit Facility | $2.0 billion (undrawn) | | Total Liquidity | ~$2.843 billion | | Net Debt to TTM EBITDAX Ratio | 0.3x | - During the quarter, Coterra repaid **$575 million** of senior notes that matured and expanded its credit facility to **$2.0 billion** from **$1.5 billion**[19](index=19&type=chunk) [Business Outlook and Guidance](index=4&type=section&id=Business%20Outlook%20and%20Guidance) Coterra updated its full-year 2024 guidance, lowering capital expenditures by **$50 million** while increasing production forecasts, and provided Q4 2024 projections Updated Full-Year 2024 Guidance | Metric | Prior Guidance (Mid-point) | Updated Guidance (Mid-point) | Change | | :--- | :--- | :--- | :--- | | Capital Expenditures | $1.85 billion | $1.80 billion | -$50 million | | Total Production (MBoepd) | 660 | 668 | +1% | | Oil Production (MBopd) | 107 | 107.5 | +0.5 MBopd | | Gas Production (MMcfpd) | 2,725 | 2,755 | +1% | Fourth-Quarter 2024 Guidance | Metric | Q4 2024 Guidance Range | | :--- | :--- | | Total Production (MBoepd) | 630 - 660 | | Oil Production (MBopd) | 106 - 110 | | Natural Gas Production (MMcfpd) | 2,530 - 2,660 | | Capital Expenditures (non-GAAP) | $410 - $500 million | - The company estimates 2024 Discretionary Cash Flow of approximately **$2.9 billion** and Free Cash Flow of approximately **$1.1 billion**, based on WTI at **$75.58/bbl** and NYMEX at **$2.22/mmbtu**[17](index=17&type=chunk) [Operational and Financial Data](index=8&type=section&id=Operational%20and%20Financial%20Data) This section provides detailed operational and financial tables, including production, prices, well activity, unit costs, derivatives, and consolidated financial statements [Operational Data](index=8&type=section&id=Operational%20Data) This subsection details Q3 2024 production volumes by commodity, average sales prices, well drilling activity, and unit operating costs compared to Q3 2023 Q3 2024 vs Q3 2023 Daily Production Volumes | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | **Total Company** | | | | Natural Gas (MMcf/day) | 2,682.0 | 2,903.2 | | Oil (MBbl/day) | 112.3 | 91.9 | | NGL (MBbl/day) | 109.7 | 94.5 | | Daily Equivalent (MBoepd) | 669.1 | 670.3 | Q3 2024 vs Q3 2023 Average Sales Prices (Excluding Hedges) | Commodity | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Natural Gas ($/Mcf) | $1.30 | $1.80 | | Oil ($/Bbl) | $74.04 | $80.80 | | NGL ($/Bbl) | $18.42 | $19.52 | - In Q3 2024, the company drilled **36.2 net wells** and turned **35.5 net wells** to sales, compared to **50.5** and **45.7**, respectively, in Q3 2023[28](index=28&type=chunk) - Unit Operating Cost was **$8.73 per BOE** in Q3 2024, an increase from **$7.99 per BOE** in Q3 2023, primarily driven by higher direct operations costs[29](index=29&type=chunk) [Derivatives Information](index=11&type=section&id=Derivatives%20Information) This section outlines the company's outstanding financial commodity derivatives, including oil and natural gas collars and basis swaps, extending into 2026 - As of September 30, 2024, the company had outstanding financial commodity derivatives, including oil and natural gas collars and basis swaps, for the remainder of 2024, all of 2025, and the first quarter of 2026[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - In October 2024, the company added new WTI oil collars and basis swaps for Q4 2024 and for all quarters of 2025[37](index=37&type=chunk) [Condensed Consolidated Financial Statements](index=13&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated Income Statement, Balance Sheet, and Cash Flow Statement for Q3 2024 and comparative periods Condensed Statement of Operations (Q3 2024 vs Q3 2023) | (In millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Operating Revenues | $1,359 | $1,356 | | Income from Operations | $327 | $424 | | Net Income | $252 | $323 | | Earnings per Share - Basic | $0.34 | $0.43 | Condensed Balance Sheet Highlights | (In millions) | Sept 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $843 | $956 | | Total Assets | $20,126 | $20,415 | | Long-term debt, net | $2,066 | $1,586 | | Total Stockholders' Equity | $13,034 | $13,039 | Condensed Statement of Cash Flows (Q3 2024 vs Q3 2023) | (In millions) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $755 | $758 | | Net cash used in investing activities | $(139) | $(541) | | Net cash used in financing activities | $(847) | $(211) | [Supplemental Non-GAAP Financial Measures](index=16&type=section&id=Supplemental%20Non-GAAP%20Financial%20Measures) This section provides reconciliations of non-GAAP financial measures, including Adjusted Net Income, Free Cash Flow, and Adjusted EBITDAX for Q3 2024 Reconciliation to Adjusted Net Income (Q3 2024) | (In millions) | Value | | :--- | :--- | | Net Income (GAAP) | $252 | | Adjustments (derivatives, stock comp, etc.) | $(19) | | **Adjusted Net Income (non-GAAP)** | **$233** | Reconciliation to Free Cash Flow (Q3 2024) | (In millions) | Value | | :--- | :--- | | Cash flow from operating activities | $755 | | Changes in assets and liabilities | $(85) | | **Discretionary Cash Flow** | **$670** | | Cash paid for capital expenditures | $(393) | | **Free Cash Flow** | **$277** | Reconciliation to Adjusted EBITDAX (Q3 2024) | (In millions) | Value | | :--- | :--- | | Net Income (GAAP) | $252 | | Adjustments (Interest, Taxes, DD&A, etc.) | $534 | | **Adjusted EBITDAX (non-GAAP)** | **$786** |

Core Viewpoint - Coterra Energy Inc. is expected to report third-quarter results on October 31, with a consensus estimate of a profit of 37 cents per share and revenues of $1.3 billion, reflecting challenges due to low natural gas prices and a strategic shift towards oil-rich assets [1][4]. Financial Performance - In the previous quarter, Coterra Energy reported adjusted earnings per share of 37 cents, missing the consensus estimate of 40 cents, and revenues of $1.3 billion, which was 5.6% below expectations [3]. - The Zacks Consensus Estimate for the second-quarter earnings indicates a 26% year-over-year drop, while revenues are expected to decline by 2.4% from the previous year [3]. Market Factors - Natural gas prices have significantly decreased, impacting Coterra's revenue streams, with a projected realization of $1.31 per thousand cubic feet, a 27% drop from the previous year [4][5]. - The company's natural gas volume for the third quarter is estimated at 2,574 million cubic feet per day, down from 2,903 million cubic feet per day in the same quarter last year, with natural gas accounting for approximately 70% of total output [4]. Strategic Adjustments - Coterra is shifting focus towards oil-rich assets in the Delaware Basin, which is expected to help capitalize on higher oil prices, with crude output projected at 110 thousand barrels per day, a 20% increase from the previous year [5]. Earnings Expectations - The Earnings ESP for Coterra Energy is -5.48%, indicating uncertainty in beating estimates for the upcoming quarter, and the company currently holds a Zacks Rank of 4 (Sell) [6][7].

Company Overview - Coterra Energy (CTRA) is expected to report a year-over-year decline in earnings due to lower revenues for the quarter ended September 2024, with earnings anticipated to be $0.37 per share, reflecting a -26% change from the previous year [1][2] - Revenues for Coterra are projected to be $1.32 billion, down 2.4% from the same quarter last year [2] Earnings Estimates and Revisions - The consensus EPS estimate for Coterra has been revised 3.07% lower over the last 30 days, indicating a reassessment by analysts [3] - A positive Earnings ESP (Expected Surprise Prediction) is a strong predictor of an earnings beat, particularly when combined with a favorable Zacks Rank [5] Industry Context - Antero Resources (AR), another player in the oil and gas exploration and production sector, is expected to report a loss of $0.04 per share for the same quarter, indicating a -150% year-over-year change, with revenues expected to be $1.04 billion, down 7.4% [9] - The consensus EPS estimate for Antero Resources has been revised down by 18.5% over the last 30 days, and it currently has an Earnings ESP of -8.89% combined with a Zacks Rank of 5 (Strong Sell) [9]

Industry Overview - The U.S. Energy Department reported a higher-than-expected increase in natural gas supplies, with stockpiles rising by 82 billion cubic feet (Bcf) for the week ended Oct. 4, surpassing analysts' expectations of a 72 Bcf addition [3] - Total natural gas stocks reached 3,629 Bcf, which is 124 Bcf (3.5%) above the 2023 level and 176 Bcf (5.1%) higher than the five-year average [4] - Natural gas prices fell by 7.8% to close at $2.632 on the New York Mercantile Exchange, marking the second consecutive weekly loss [5] Company Analysis - Coterra Energy is an independent upstream operator focused on natural gas exploration and production, with significant assets in the Marcellus Shale, producing an average of 2,779.8 million cubic feet daily [8] - Coterra has a market valuation of approximately $18.4 billion and has experienced a 14.8% decline in stock price over the past year [9] - EQT Corporation is the largest natural gas producer in the U.S., with over 90% of its production coming from natural gas, primarily in the Appalachian Basin [10] - EQT has consistently beaten earnings estimates, with a trailing four-quarter earnings surprise of about 108.5%, although its shares have also decreased by 14% in the past year [11] Investment Recommendations - Investors are advised to focus on resilient stocks like Coterra Energy and EQT Corporation due to the ongoing volatility in the natural gas market [2][7] - Higher-risk options such as Comstock Resources should be approached with caution, as the company has seen downward revisions in earnings estimates [12]

Industry Overview - The U.S. Energy Department reported a lower-than-expected increase in natural gas supplies, with stockpiles rising by 55 billion cubic feet (Bcf) for the week ended Sept. 27, compared to analysts' expectations of a 57 Bcf addition [3] - Total natural gas stocks reached 3,547 Bcf, which is 127 Bcf (3.7%) above the 2023 level and 190 Bcf (5.7%) higher than the five-year average [4] - Natural gas prices fell to $2.85 per million British thermal units (MMBtu), marking a 1.7% decrease, the first loss in six weeks, driven by weak demand forecasts due to mild temperatures [5] Company Analysis - Coterra Energy (CTRA) is an independent upstream operator with significant assets in the Marcellus Shale, producing an average of 2,779.8 million cubic feet daily in the June quarter [8] - Coterra has a market valuation of approximately $18.4 billion and has experienced a 12.4% decline over the past year, with mixed earnings performance against Zacks Consensus Estimates [9] - Cheniere Energy (LNG) holds a competitive advantage as the first company to receive regulatory approval for LNG exports from its Sabine Pass terminal, with a trailing four-quarter earnings surprise of about 55.9% [10] - Cheniere's shares have increased by 12.7% over the past year, indicating a positive market response despite the overall industry volatility [10] Risk Assessment - Comstock Resources (CRK) is identified as a higher-risk option, with significant downward revisions in earnings estimates by analysts, reflecting concerns about its near-term performance [11]

Industry Overview - The U.S. Energy Department reported a larger-than-expected increase in natural gas supplies, with stockpiles rising by 58 billion cubic feet (Bcf) for the week ended Sept. 13, slightly above the analysts' guidance of 57 Bcf [3] - Total natural gas stocks reached 3,445 Bcf, which is 194 Bcf (6%) above the 2023 level and 274 Bcf (8.6%) higher than the five-year average [4] - Natural gas prices increased by 5.4% to $2.434 per million British thermal units (MMBtu) despite the bearish inventory data, marking the fourth consecutive weekly rise [6] Demand and Supply Dynamics - Daily natural gas consumption decreased to 95.4 Bcf from 96.6 Bcf in the previous week, primarily due to weak residential/commercial usage and reduced deliveries to U.S. LNG export facilities [5] - Strong production and high stockpiles continue to pressure natural gas prices, with companies like APA Corporation and EQT Corporation scaling back drilling activities due to low price realizations [7] - U.S. LNG exports remain robust, supported by environmental policies and Europe's efforts to reduce reliance on Russian gas, indicating strong demand as winter approaches [9] Company Analysis - Range Resources (RRC) is highlighted as a resilient stock, with a large contiguous acreage position providing over 30 years of low-breakeven, high-return inventory, producing an average of 2,152.9 million cubic feet equivalent daily in Q2 2024 [13][14] - Coterra Energy (CTRA) is also noted for its stability, producing an average of 2,779.8 million cubic feet daily from its assets in the Marcellus Shale, with a market valuation of around $17.5 billion [15][16] - Comstock Resources (CRK) is considered a higher-risk option, with downward revisions in EPS estimates by 30% for the current quarter and 12% for the fiscal year, reflecting negative sentiment around natural gas [16][17]

The U.S. Energy Department's latest inventory report revealed another smaller-than-expected build in natural gas supplies, giving futures a modest lift. Prices edged up slightly week over week, but the commodity is still down around 8% year to date. Natural gas faces persistent headwinds, with the market highly sensitive to erratic weather patterns that sway prices and disrupt stability. For now, investors should keep their eyes on resilient stocks like Range Resources (RRC) and Coterra Energy (CTRA) , whil ...