4Q24 Earnings Presentation February 24, 2025 2 Disclaimer Cautionary Statement Regarding Forward-Looking Information Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Except to the extent required by applicable law, Coterra does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these ...

Core Insights - Coterra Energy reported a revenue of $1.4 billion for the quarter ended December 2024, reflecting a 12.6% decrease year-over-year, with an EPS of $0.49 compared to $0.52 in the same quarter last year [1] - The reported revenue met the Zacks Consensus Estimate, but the EPS exceeded expectations by 16.67% [1] Financial Performance - Coterra's revenue of $1.4 billion was in line with the Zacks Consensus Estimate, showing a surprise of -0.40% [1] - The company achieved an EPS surprise of +16.67%, with the consensus EPS estimate being $0.42 [1] Production Volumes - Total daily equivalent production was 681.5 MBOE/d, surpassing the eight-analyst average estimate of 653.62 MBOE/d [4] - Natural gas liquids production was 105.4 MBbl, slightly below the average estimate of 106.67 MBbl [4] - Natural gas production reached 2,778.9 MMcf/d, exceeding the average estimate of 2,623.03 MMcf/d [4] - Oil production was 113 MBbl/d, above the seven-analyst average estimate of 110.38 MBbl/d [4] Average Sales Prices - The average sales price for natural gas (excluding hedges) was $2.02 per thousand cubic feet, higher than the average estimate of $1.97 [4] - The average sales price for NGL (including hedges) was $20.94 per barrel, compared to the estimated $20.18 [4] - The average sales price for oil (including hedges) was $68.7 per barrel, slightly below the average estimate of $68.89 [4] - The average sales price for oil (excluding hedges) was $68.57 per barrel, compared to the estimated $68.77 [4] Operating Revenues - Operating revenues from oil were reported at $713 million, slightly below the estimated $715.22 million, representing a year-over-year decline of 3.9% [4] - Operating revenues from natural gas were $516 million, exceeding the estimated $482.11 million, but reflecting a year-over-year decrease of 6.7% [4] - Operating revenues from NGL were $203 million, below the estimated $215.37 million, but showing a year-over-year increase of 20.8% [4] - Operating revenues from other sources were $14 million, significantly lower than the estimated $20.50 million, indicating a year-over-year decline of 56.3% [4]

分组1 - Coterra Energy reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, but down from $0.52 per share a year ago, representing an earnings surprise of 16.67% [1] - Over the last four quarters, Coterra has surpassed consensus EPS estimates two times, while Cabot reported revenues of $1.4 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.40% [2] - Cabot shares have increased approximately 10.2% since the beginning of the year, outperforming the S&P 500's gain of 2.2% [3] 分组2 - The earnings outlook for Cabot is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend for estimate revisions for Cabot is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The current consensus EPS estimate for Cabot is $0.78 on $1.87 billion in revenues for the upcoming quarter and $3.32 on $7.87 billion in revenues for the current fiscal year [7] 分组3 - The outlook for the oil and gas industry can significantly impact stock performance, with the Zacks Industry Rank for Oil and Gas - Exploration and Production - United States currently in the top 20% of over 250 Zacks industries [8] - Chord Energy Corporation is expected to report quarterly earnings of $2.75 per share, reflecting a year-over-year change of -47.6%, with revenues anticipated to be $1.1 billion, up 14.4% from the year-ago quarter [9][10]

Production and Guidance - For Q4 2024, total barrels of oil equivalent (BOE) production exceeded guidance by over 3%, with total production reaching 682 MBoepd, surpassing the high end of guidance of 630 to 660 MBoepd[3] - 2025 total BOE production is projected to increase approximately 9% year-over-year, with oil volumes expected to rise by about 47%[9] - Full-year 2025 guidance for total equivalent production is projected between 710 MBoed and 770 MBoed, compared to 660 MBoed to 675 MBoed in 2024[70] - First quarter 2025 guidance for total equivalent production is projected between 710 MBoed and 750 MBoed, compared to 630 MBoed to 660 MBoed in the fourth quarter of 2024[71] - Net wells turned in line for the Permian Basin are expected to increase from 80 in 2024 to between 150 and 165 in 2025[70] Financial Performance - The company reported a net income of $297 million, or $0.40 per share, and adjusted net income of $358 million, or $0.49 per share for Q4 2024[8] - The company experienced a net income of $297 million for the quarter ended December 31, 2024, compared to $416 million in the same quarter of 2023, reflecting a decrease of approximately 29%[42] - Net income decreased to $1,121 million in 2024 from $1,625 million in 2023, a decline of 31%[67] - Adjusted net income for Q4 2024 was $358 million, compared to $387 million in Q4 2023, indicating a decrease of 7.5%[52] - Adjusted EBITDAX for Q4 2024 was $896 million, down 10.5% from $1,001 million in Q4 2023[61] - Adjusted EBITDAX for the twelve months ended December 31, 2024, was $3,414 million, down from $3,928 million in 2023[67] Capital Expenditures and Investments - Capital expenditures for Q4 2024 totaled $417 million, near the low end of the guidance range of $410 to $500 million[8] - The company expects 2025 capital expenditures to be between $2.1 billion and $2.4 billion, reflecting a 28% year-over-year increase at the midpoint[9] - Capital expenditures for drilling, completion, and other fixed asset additions totaled $425 million in Q4 2024, down from $468 million in Q4 2023[58] - Incurred capital expenditures for 2025 are expected to range from $2,100 million to $2,400 million, up from $1,750 million to $1,850 million in 2024[70] Shareholder Returns - Coterra announced a 5% dividend increase to $0.22 per share for Q4 2024, resulting in an annualized dividend of $0.88 per share, equating to a 3.1% yield[3] - Coterra's total shareholder returns for 2024 amounted to $1,086 million, representing 89% of the full-year Free Cash Flow[14] Debt and Liquidity - The company maintains a cash balance of $2.0 billion and total liquidity of approximately $5.0 billion, with a net debt to trailing twelve-month EBITDAX ratio of 0.4x[15] - Total long-term debt, net (excluding current maturities) rose to $3,535 million in 2024, compared to $1,586 million in 2023[45] - Total debt increased to $3,535 million in 2024 from $2,161 million in 2023, representing a 63.5% increase[64] - The company’s total debt to total capitalization ratio is a key measure for assessing leverage, with net debt calculated by subtracting cash and cash equivalents from total debt[62] - Total debt to total capitalization ratio rose to 21.2% in 2024 from 14.2% in 2023[64] - Net debt to adjusted capitalization ratio increased to 10.2% in 2024 from 8.5% in 2023[64] Production Costs and Prices - Average unit operating cost increased to $8.89/Boe in Q4 2024 from $8.41/Boe in Q4 2023, representing an increase of approximately 5.7%[32] - Coterra's total unit costs for Q4 2024 were $17.31/Boe, up from $16.00/Boe in Q4 2023, reflecting an increase of approximately 7.9%[32] - Average sales price for oil in Q4 2024 was $68.57/Bbl, down from $77.10/Bbl in Q4 2023, indicating a decline of approximately 11.9%[30] - Average sales price for natural gas (excluding hedges) in Q4 2024 was $2.02/Mcf, a slight decrease from $2.03/Mcf in Q4 2023[30] Production Volumes - In Q4 2024, total natural gas production was 2,778.9 Mmcf/day, down from 2,970.0 Mmcf/day in Q4 2023, representing a decrease of approximately 6.4%[29] - Oil production in Q4 2024 was 113.0 MBbl/day, an increase from 104.7 MBbl/day in Q4 2023, reflecting a growth of about 4.4%[29] - The average daily equivalent production for the company in Q4 2024 was 681.5 MBoepd, slightly down from 697.4 MBoepd in Q4 2023, a decrease of about 2.7%[29] - The company reported a total of 313 wells drilled for the full year 2024, up from 264 wells in 2023, an increase of approximately 18.6%[30] - The company drilled 74 gross wells in Q4 2024, compared to 66 gross wells in Q4 2023, marking an increase of about 12.1%[30] - The company’s average rig count in the Permian Basin was 8.7 in Q4 2024, compared to 7.0 in Q4 2023, indicating an increase of about 24.4%[30] Cash Flow - Total cash flow from operating activities for the twelve months ended December 31, 2024, was $2,795 million, down 23.6% from $3,658 million in 2023[56] - Discretionary cash flow for Q4 2024 was $776 million, compared to $881 million in Q4 2023, reflecting a decrease of 11.9%[56] - Free cash flow for the twelve months ended December 31, 2024, was $1,214 million, a decline of 8.9% from $1,332 million in 2023[56] - The net increase in cash, cash equivalents, and restricted cash for Q4 2024 was $1,429 million, significantly higher than $109 million in Q4 2023[47] Derivative Instruments - The company reported a gain (loss) on derivative instruments of $(51) million for the quarter ended December 31, 2024, compared to a gain of $101 million in the same quarter of 2023[42] - The weighted average floor price for NYMEX collars in the first quarter of 2026 is projected to be $2.75 per MMBtu, with a ceiling of $7.66 per MMBtu[37] - The weighted average price for WTI oil swaps in 2025 is set at $69.18 per Bbl for all quarters[36] - The weighted average ceiling price for NYMEX collars in the fourth quarter of 2025 is projected to be $5.55 per MMBtu[37]

Core Viewpoint - Coterra Energy (CTRA) has shown strong year-to-date performance, outperforming its peers in the Oils-Energy sector, which has implications for investors looking for opportunities in this industry [1][4]. Company Performance - Coterra Energy has gained approximately 12.3% year-to-date, while the average gain for stocks in the Oils-Energy group is about 5.5%, indicating superior performance [4]. - The Zacks Consensus Estimate for CTRA's full-year earnings has increased by 9.2% over the past three months, reflecting improved analyst sentiment and earnings outlook [3]. Industry Context - Coterra Energy is part of the Oil and Gas - Exploration and Production - United States industry, which consists of 34 stocks and currently ranks 49 in the Zacks Industry Rank. This industry has experienced an average loss of 12.6% year-to-date, further highlighting CTRA's strong performance relative to its peers [6]. - The Oils-Energy sector, which includes 247 individual stocks, holds a Zacks Sector Rank of 7, indicating a moderate strength compared to other sectors [2].

Core Insights - Coterra Energy (CTRA) is expected to report quarterly earnings of $0.42 per share, a decline of 19.2% year-over-year, with revenues forecasted at $1.4 billion, down 12.3% from the previous year [1] Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised upward by 11.7%, indicating analysts' reassessment of their initial forecasts [2] - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3] Revenue Projections - Analysts project 'Operating revenues- Oil' to reach $715.22 million, reflecting a decrease of 3.6% year-over-year [5] - 'Operating revenues- Natural gas' is expected to be $482.11 million, indicating a decline of 12.8% from the prior year [5] - 'Operating revenues- NGL' is forecasted at $215.37 million, showing an increase of 28.2% compared to the same quarter last year [5] - 'Operating revenues- Other' is estimated to be $20.50 million, down 35.9% year-over-year [6] Production Volumes - Total company production volumes are expected to reach 653.62 million barrels of oil equivalent per day, down from 697.4 MBOE/d a year ago [6] - Natural gas production volumes are projected at 2,623.03 million cubic feet per day, compared to 2,970 MMcf/d in the previous year [7] - Oil production volumes are estimated at 110.38 million barrels per day, up from 104.7 MBbl/d in the same quarter last year [7] Pricing Expectations - The average sales price for NGL is expected to be $20.18 per barrel, compared to $18.66 per barrel in the same quarter last year [8] - The average sales price for oil, excluding hedges, is projected to be $68.77 per barrel, down from $77.1 per barrel a year ago [8] Stock Performance - Over the past month, shares of Cabot have returned -6.6%, while the Zacks S&P 500 composite has increased by 4.7% [8] - CTRA currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near future [8]

Core Viewpoint - Coterra Energy is expected to report a decline in earnings and revenues for the fourth quarter of 2024, with strategic acquisitions and operational efficiencies positioning the company for long-term growth despite current challenges [1][2][8]. Financial Performance - The Zacks Consensus Estimate for Q4 2024 earnings per share (EPS) is 42 cents, reflecting a 19.2% decline year-over-year, while revenues are projected at $1.4 billion, indicating a 12.3% decrease [1][2]. - For the full year 2024, the revenue estimate stands at $5.5 billion, down 7.4% year-over-year, and the EPS estimate is $1.60, representing a contraction of approximately 29.2% [3]. Earnings Estimates - The current quarter's EPS estimate has been revised downward by one cent over the past 30 days, with a year-over-year growth estimate of -19.23% [2][4]. - The consensus for crude volume in Q4 is pegged at 110 thousand barrels per day, slightly up from 105 thousand barrels per day in the previous year [10]. Strategic Acquisitions - Coterra's acquisition of Franklin Mountain Energy and Avant Natural Resources for $3.95 billion enhances its position in the Permian Basin, allowing for longer, more efficient wells and reduced costs [8]. - The strategic shift towards oil-rich assets in the Delaware Basin is expected to capitalize on robust oil prices, with oil volumes surpassing guidance in the previous quarter [9]. Market Performance - Coterra's stock has risen 16% over the past six months, outperforming the S&P 500's 10% gain and reflecting growing investor confidence due to strategic expansion and operational execution [11]. - The company has a Zacks Value Score of B, with competitive valuation metrics such as an EV/EBITDA ratio and a price/earnings ratio around 9X forward earnings [14]. Future Outlook - Coterra is positioned for long-term growth with strategic acquisitions and operational efficiency, generating over $1 billion in free cash flow recently and maintaining a low debt-to-capitalization ratio of 13.7% [16]. - The company has secured NGL export contracts to Europe and Asia from 2027 to 2038, providing revenue diversification and stability against domestic market fluctuations [16][17].

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Coterra Energy (CTRA) due to lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Coterra Energy is expected to report quarterly earnings of $0.42 per share, reflecting a year-over-year decrease of 19.2% [3]. - Revenue projections stand at $1.4 billion, which is a 12.2% decline from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 11.67% higher in the last 30 days, indicating a reassessment by analysts [4]. - The revisions may not uniformly reflect the direction of all analysts' estimates [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model compares the Most Accurate Estimate to the Zacks Consensus Estimate, suggesting that recent estimate revisions may provide more accurate insights [5][6]. - A positive Earnings ESP reading is a strong indicator of an earnings beat, especially when combined with a favorable Zacks Rank [8]. Historical Performance - Coterra Energy's past performance shows that it has only beaten consensus EPS estimates once in the last four quarters [13]. - The company's surprise history indicates a tendency to miss expectations, as seen in the last reported quarter where it fell short by 5.88% [12]. Conclusion - While Coterra Energy is positioned as a potential earnings-beat candidate, other factors should also be considered before making investment decisions [16].

Industry Overview - The fourth-quarter 2024 earnings season for the Oil – Energy sector is underway, with S&P 500 energy companies projected to see a year-over-year earnings decline of 24.8%, despite a revenue increase of 2.1% [1] - Reported earnings so far are 33% lower than the same period last year, consistent with prior forecasts, following a 22.9% EPS drop in Q3, indicating ongoing challenges due to fluctuating commodity prices [1] Oil and Gas Prices - Crude oil prices have significantly decreased in Q4 2024 compared to the previous year, with average WTI prices falling from $85.64, $77.69, and $71.90 per barrel in Q4 2023 to $71.99, $69.95, and $70.12 per barrel in 2024, reflecting weaker demand and increased supply [2] - Natural gas prices exhibited mixed trends, with the U.S. Henry Hub averaging $2.20 in October, $2.12 in November, and rebounding to $3.01 in December 2024, showing some resilience in gas demand despite lower prices earlier in the quarter [3] Earnings Potential of Specific Stocks - Despite the overall weak earnings outlook for Q4, Magnolia Oil & Gas (MGY), Occidental Petroleum (OXY), and Coterra Energy (CTRA) are identified as stocks likely to outperform expectations [4] - All three companies possess a Zacks Momentum Score of A or B and a Zacks Rank of 3 (Hold), with positive Earnings ESP, indicating a high probability of earnings beats [5][6] Company Profiles - **Magnolia Oil & Gas**: An independent exploration and production operator focused on growth through acquisitions and active drilling, with strong unit metrics and financial health. It has an Earnings ESP of +1.73% and is set to release earnings on Feb. 18 [7][8] - **Coterra Energy**: An independent upstream operator primarily engaged in natural gas exploration and production, with a significant portion of its production coming from the Marcellus Shale. It has an Earnings ESP of +0.10% and is scheduled to release earnings on Feb. 24 [8][9] - **Occidental Petroleum**: An integrated oil and gas company with diverse operations, including basic chemicals and petrochemicals. It has an Earnings ESP of +3.00% and is also set to release earnings on Feb. 18 [10][11]

Group 1 - Coterra Energy's stock closed at $28.54, reflecting a +0.25% change from the previous trading day, outperforming the S&P 500's daily gain of 0.03% [1] - The stock has decreased by 0.49% over the past month, underperforming the Oils-Energy sector's gain of 0.76% and the S&P 500's gain of 4.19% [1] Group 2 - Coterra Energy is expected to release its earnings on February 24, 2025, with a predicted EPS of $0.42, indicating a 19.23% decline year-over-year, and revenue forecasted at $1.4 billion, down 12.13% from the prior-year quarter [2] Group 3 - Recent shifts in analyst projections for Coterra Energy should be monitored, as positive estimate revisions indicate analyst optimism regarding the company's business and profitability [3] - The Zacks Rank system, which incorporates estimate changes, provides actionable ratings, with 1 stocks historically delivering an average annual return of +25% since 1988 [4][5] Group 4 - Coterra Energy's current Forward P/E ratio is 8.58, which is lower than the industry average of 9.37, indicating a valuation discount [6] - The company's PEG ratio is currently 0.55, compared to the industry average of 1.33, suggesting favorable growth prospects relative to its valuation [7] Group 5 - The Oil and Gas - Exploration and Production - United States industry, which includes Coterra Energy, has a Zacks Industry Rank of 52, placing it in the top 21% of over 250 industries [7][8]