Coterra Energy (NYSE: CTRA ) is an oil and gas production company with a broad range of assets. The company owns a large position in the Marcellus shale as well as the Permian and Anadarko basins. As a result, the companyI am a Licensed Professional Engineer who works in the Nuclear Power industry. I use my professional working knowledge of the power/energy industries to aid in evaluating potential equities worthy of long-term investment. I invest in income producing equities and rental real estate properti ...

Coterra Energy (CTRA) delivered a mixed yet promising fourth-quarter 2024 performance, beating earnings estimates but missing revenue projections. The U.S. oil and gas producer reported adjusted EPS of 47 cents, surpassing the Zacks Consensus Estimate of 41 cents, thanks to stronger-than-expected production volumes. However, revenues came in at $1.4 billion, missing expectations by $6 million and marking a 12.6% decline year over year. Despite this, the company increased its quarterly dividend by 5% to 22 c ...

Coterra Energy Inc. (CTRA) reported fourth-quarter 2024 adjusted earnings per share of 47 cents, which beat the Zacks Consensus Estimate of 41 cents. This was largely attributed to stronger-than-expected operational performance, particularly in daily oil and natural gas production volumes. However, the bottom line declined from the year-ago quarter’s 49 cents. The year-over-year underperformance was due to weaker oil, natural gas and NGL realizations and a 4.9% increase in operating expenses.This oil and ga ...

Financial Data and Key Metrics Changes - Coterra Energy achieved production levels above the high end of guidance for oil and natural gas, with capital expenditures near the low end of guidance [7][16] - The company returned 61% of free cash flow in Q4 2024 through dividends and share buybacks, totaling 89% for the full year [7][31] - Net income for Q4 was $297 million or $0.40 per share, with adjusted net income at $358 million or $0.49 per share [18] - Total equivalent production for 2024 was 677 MBOE per day, exceeding guidance by 4% and showing a 13% year-over-year organic growth in oil production [19][20] - Capital costs for 2024 were $1.76 billion, representing a 16% decrease year-over-year [21] Business Line Data and Key Metrics Changes - The company saw outperformance in new wells in both the Permian and Marcellus regions, with total production for Q4 exceeding guidance by over 3% [16][17] - Incurred capital in Q4 was just above the low end of guidance, driven by lower completion and post-completion costs [18] - The 2025 capital plan includes significant investments in oil while maintaining flexibility to adjust based on market conditions [10][24] Market Data and Key Metrics Changes - Coterra expects total production in 2025 to average between 710 and 770 MBOE per day, with oil production projected to be 152 to 168 MBO per day, a 47% increase year-over-year at the midpoint [26] - Natural gas production is expected to remain relatively flat year-over-year, between 2.675 and 2.875 BCF per day [26] - The company is closely monitoring gas markets and is prepared to accelerate its Marcellus program if positive conditions persist [9][10] Company Strategy and Development Direction - Coterra's strategy focuses on capital efficiency, profitable growth, and maintaining flexibility in capital allocation across its operating regions [13][29] - The company successfully closed the Franklin Mountain and Avant acquisitions, integrating these assets to optimize operational efficiency [11] - The updated three-year outlook anticipates 5% or greater oil volume growth and aims for a capital investment of $2.1 to $2.4 billion per year [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver solid results in 2025, driven by strong operational performance and capital discipline [34] - The outlook for gas markets appears constructive, with management prepared to adjust activity levels based on market conditions [66][67] - The company aims to maintain a strong balance sheet and prioritize deleveraging while returning a significant portion of free cash flow to shareholders [32][33] Other Important Information - Coterra announced a $0.22 per share dividend for Q4, increasing the annual base dividend by 5% to $0.88 per share [30] - The company repurchased 17 million shares for $464 million in 2024, returning 89% of free cash flow through repurchases and dividends [31] Q&A Session Summary Question: Key lessons learned from the Wyndham Row project - Management noted excellent reservoir performance and plans to continue co-developing wells based on positive results [54][56] Question: Clarification on 2025 guidance and production from acquired assets - Management confirmed that production guidance remains consistent despite the partial month of January production from acquired assets [59][60] Question: Restarting rigs in the Marcellus and conditions for increasing capital - Management indicated that returns from the Marcellus program are now competitive, and they are prepared to increase activity based on market conditions [64][66] Question: Future acquisition strategy post-Franklin Mountain - Management emphasized a focus on opportunistic acquisitions that align with the company's asset mix and value creation goals [70][72] Question: Capital efficiencies in the Marcellus and future run rates - Management expects to return to a run rate of 2 BCF per day in the Marcellus by mid to late 2026, contingent on market conditions [76][79] Question: Opportunities in power generation and midstream interests - Management is engaged in discussions regarding power generation opportunities, particularly in the Permian basin [82][123] Question: Growth capital allocation in a constructive gas market - Management stated that capital allocation will be based on return on investment, with flexibility to adjust based on market conditions [134][135]

Group 1: Coterra Energy Financial Performance - For the quarter ended December 2024, Coterra Energy reported revenue of $1.4 billion, down 12.6% year-over-year [1] - EPS for the quarter was $0.49, compared to $0.52 in the same quarter last year [1] - The reported revenue was a surprise of -0.40% compared to the Zacks Consensus Estimate of $1.4 billion, while the EPS surprise was +16.67% against a consensus estimate of $0.42 [1] Group 2: Key Metrics and Comparisons - Total daily equivalent production was 681.5 MBOE/d, exceeding the 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, surpassing the average estimate of 2,623.03 MMcf/d [4] - Oil production was 113 MBbl/d, compared to the average estimate of 110.38 MBbl/d [4] Group 3: Average Sales Prices and Operating Revenues - Average sales price for NGL (excluding hedges) was $20.94/Bbl, higher than the average estimate of $20.18/Bbl [4] - Average sales price for natural gas was $2.02 per thousand cubic feet, compared to the average estimate of $1.97 [4] - Operating revenues for oil were $713 million, slightly below the average estimate of $715.22 million, representing a year-over-year change of -3.9% [4] - Operating revenues for natural gas were $516 million, exceeding the estimated $482.11 million, but showing a -6.7% change year-over-year [4] - Operating revenues for NGL were $203 million, below the average estimate of $215.37 million, but reflecting a +20.8% change year-over-year [4] - Operating revenues for other categories were $14 million, compared to the average estimate of $20.50 million, indicating a year-over-year change of -56.3% [4]

Financial Performance and Returns - Coterra Energy increased its annual base dividend by 40% to $0.84 per share, returning over $3.5 billion to stockholders through dividends [41]. - In 2024, Coterra repurchased 17 million shares for $464 million at an average price of $26.35 per share, with $1.1 billion remaining for future repurchases [41]. - The company aims to return 50% or more of its annual free cash flow to stockholders through dividends and share repurchases [41]. - The company invested 63% of its cash flow from operations in capital programs in 2024, expecting to invest approximately 50% in 2025 [43]. - Future dividends and stock repurchases are uncertain and will depend on the company's financial condition, results of operations, and other relevant considerations [193]. - The company has previously paid cash dividends and conducted stock repurchases, but future actions will be at the discretion of its Board of Directors [193]. Capital Expenditures and Investments - The company plans to invest approximately $2.1 billion to $2.4 billion in its 2025 capital program, a 28% increase from $1.8 billion in 2024 [46]. - Coterra expects to turn in line 175 to 205 total net wells in 2025, with 70% of capital expenditures allocated to the Permian Basin [46]. - The company borrowed $1.0 billion under a term loan to partially fund the FME and Avant acquisitions that closed in January 2025 [44]. - The company invested $1,057 million in drilling and completion capital in the Permian Basin during 2024 [53]. Production and Reserves - In 2024, the company achieved net production of 262 MBoe per day from the Permian Basin, accounting for 39% of total equivalent production [52]. - Proved developed oil reserves increased to 189,275 MBbl in 2024, while proved undeveloped reserves rose to 80,720 MBbl [66]. - Average daily oil production in 2024 was 109 MBbl, with net oil production averaging 101 MBbl per day, representing 93% of total company oil production [68]. - As of December 31, 2024, the company held approximately 297,000 net acres in the Permian Basin and 186,000 net acres in the Marcellus Shale [52][55]. - The company reported a total of 1,162.6 producing net wells in the Permian Basin and 1,135.1 producing net wells in the Marcellus Shale as of December 31, 2024 [52][55]. Acquisitions - The company closed the acquisition of Franklin Mountain Energy for $2.5 billion, including $1.7 billion in cash and 28,190,682 shares of common stock [48]. - The acquisition of certain interests in oil and gas properties from Avant was completed for a cash consideration of $1.5 billion [49]. Environmental and Regulatory Compliance - Coterra's 2024 Sustainability Report highlights its commitment to environmentally sustainable operations and reducing methane emissions [45]. - The company operates under extensive federal, state, and local environmental regulations, which can change and impact business operations significantly [96]. - The company is subject to liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for hazardous substance releases, which could lead to significant cleanup costs [99]. - The Oil Pollution Act imposes strict liability for oil spill damages, requiring the company to maintain financial responsibility for environmental cleanup [100]. - Compliance with the Clean Water Act is essential, with potential sanctions for non-compliance that could halt operations [104]. - The company must adhere to the Clean Air Act, which requires permits for emissions and could lead to increased operational costs if regulations become more stringent [105]. - The company is monitoring greenhouse gas regulations, as future laws could materially affect operations and financial condition [116]. - The company is increasingly relying on recycling produced water to mitigate operational impacts from water sourcing and disposal regulations [112]. Workforce and Safety - As of December 31, 2024, Coterra had 915 employees, with 589 salaried and 326 hourly workers [118]. - Coterra's compensation programs are designed to be competitive with industry peers and reward superior performance, including performance bonuses and retirement benefits [122]. - The company emphasizes a strong safety culture, with programs that empower employees to stop work if dangerous conditions are suspected [124]. - Coterra's health and safety programs are built on a foundation that emphasizes personal safety and includes a comprehensive EHS management system [124]. Risks and Challenges - The company faces risks from fluctuating commodity prices, which can materially impact revenues and financial condition [130]. - The company may incur substantial costs related to the removal or remediation of hazardous wastes due to stricter regulations over time [97]. - The company faces potential operational restrictions due to the Endangered Species Act, which may increase costs and delay drilling activities [101]. - The company is at risk of defaulting on debt agreements if commodity prices decline, which could reduce revenues, cash flow, and earnings [160]. - Cybersecurity risks are increasing, with potential impacts on operations and financial performance due to data breaches or system disruptions [154]. - The company faces intense competition in the oil and natural gas industry, with many competitors having substantially greater financial and technical resources [190]. Market and Economic Factors - The ability to sell oil, natural gas, and NGL production is contingent on adequate gathering, transportation, and processing services, with potential revenue impacts if these services are unavailable [142]. - Significant basis differentials in 2024, particularly in the Permian Basin, have led to negative spot market pricing, affecting operations and cash flows [143]. - The company believes it has satisfactory title to all producing properties and leases, adhering to industry standards [80]. - The company utilizes financial derivative instruments, such as collars and swaps, to manage commodity price risk, but these can limit benefits from price increases [161]. - Changes in derivatives market regulations and reduced liquidity could increase costs and limit the availability of derivatives, affecting the company's financial stability [162]. Strategic Outlook - Coterra's future performance is highly dependent on its ability to find or acquire additional economically recoverable oil and natural gas reserves [138]. - The company faces challenges in capital allocation and resource management, which may adversely affect its financial condition and growth rate [141]. - The integration of acquired businesses may divert management's attention and resources, posing challenges to operational efficiency [146]. - The company anticipates that competition for experienced technical personnel will remain intense, which could impact its ability to attract and retain talent [189].

Coterra Energy Inc. (NYSE:CTRA) Q4 2024 Earnings Conference Call February 25, 2025 10:00 AM ET Company Participants Dan Guffey - Vice President, Finance, Investor Relations and Treasury Tom Jorden - Chairman, President and CEO Shane Young - Executive Vice President and CFO Blake Sirgo - Senior Vice President, Operations Michael Deshazer - Senior Vice President, Business Units Conference Call Participants Arun Jayaram - JPMorgan Neil Mehta - Goldman Sachs Nitin Kumar - Mizuho Neal Dingmann - Truist Securitie ...

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]