Group 1 - Coterra Energy (NYSE: CTRA) exceeded production expectations in Q3 2024, with production levels above the high-end of its guidance [2] - The company has achieved faster cycle times, which have contributed to reduced well costs [2] - Capital expenditures (capex) for Coterra Energy have come in lower due to these efficiencies [2]

Core Viewpoint - Coterra Energy Inc. reported weaker-than-expected third-quarter 2024 earnings, primarily due to lower oil and natural gas prices and increased operating expenses compared to the previous year [1][2]. Financial Performance - Adjusted earnings per share for Q3 2024 were 30 cents, missing the Zacks Consensus Estimate of 35 cents and down from 47 cents in the same quarter last year [1]. - Operating revenues totaled $1.4 billion, falling short of the Zacks Consensus Estimate by $11 million but showing a slight increase of 0.2% year-over-year [2]. - Total shareholder returns for the quarter reached $265 million, comprising $154 million in declared dividends and $111 million in share repurchases [3]. Production and Pricing - Average daily production decreased by 0.2% year-over-year to 670.3 thousand barrels of oil equivalent (Mboe), exceeding the Zacks Consensus Estimate of 642 Mboe [5]. - Natural gas production fell by 7.6% to 2,682 million cubic feet (Mmcf) per day, while oil production increased by 22.2% to 112.2 thousand barrels (MBbl) per day [6]. - The average realized price for crude oil was $73.96 per barrel, an 8.5% decrease from $80.84 a year ago [6]. Costs and Expenses - Total operating expenses rose to $1,035 million, up from $939 million in the previous year, with average unit costs increasing to $16.96 per barrel of oil equivalent from $15.15 [8]. - Cash flow from operations decreased by 0.4% to $755 million, while cash capital expenditures for drilling and development amounted to $393 million [9]. Financial Position - As of September 30, 2024, Coterra Energy had $843 million in cash and cash equivalents and long-term debt of $2.1 billion, resulting in a debt-to-capitalization ratio of 13.7% [10]. Guidance - The company anticipates a capital expenditure budget between $1.75 billion and $1.85 billion for 2024, with expected discretionary cash flow of approximately $2.9 billion and free cash flow of about $1.1 billion [11]. - For Q4 2024, Coterra expects total equivalent production in the range of 660-690 Mboe per day and oil production between 107-108 MBopd [12].

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Coterra Energy Inc. as of September 30, 2024, including the balance sheet, statement of operations, cash flows, and stockholders' equity, along with detailed notes [Condensed Consolidated Balance Sheet](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Total assets decreased slightly to **$20,130 million** from **$20,420 million** at year-end 2023, primarily due to a decrease in current assets, while total liabilities also decreased to **$7,080 million** from **$7,370 million**, mainly from debt repayment Condensed Consolidated Balance Sheet (Unaudited) | (In millions) | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total current assets** | $1,735 | $2,015 | | **Properties and equipment, net** | $17,941 | $17,933 | | **Total Assets** | **$20,126** | **$20,415** | | **Total current liabilities** | $1,080 | $1,660 | | **Long-term debt** | $2,066 | $1,586 | | **Total Liabilities** | **$7,084** | **$7,368** | | **Total stockholders' equity** | **$13,034** | **$13,039** | [Condensed Consolidated Statement of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) For the third quarter of 2024, net income was **$252 million**, a decrease from **$323 million** in Q3 2023, and for the nine months ended September 30, 2024, net income was **$824 million**, down from **$1,210 million** in the same period of 2023, primarily due to lower natural gas revenue and higher operating expenses Statement of Operations Highlights (Unaudited) | (In millions, except per share) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $1,359 | $1,356 | $4,063 | $4,318 | | **Income from Operations** | $327 | $424 | $1,063 | $1,577 | | **Net Income** | **$252** | **$323** | **$824** | **$1,209** | | **Diluted EPS** | **$0.34** | **$0.42** | **$1.10** | **$1.58** | [Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash from operating activities decreased to **$2,170 million** from **$2,900 million** in the prior year period, mainly due to lower net income, while cash used in investing activities decreased to **$1,330 million**, and cash used in financing activities decreased to **$959 million** Statement of Cash Flows Highlights (Unaudited, Nine Months Ended Sep 30) | (In millions) | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $2,169 | $2,898 | | **Net cash used in investing activities** | $(1,327) | $(1,589) | | **Net cash used in financing activities** | $(959) | $(1,136) | | **Net (decrease) increase in cash** | $(117) | $173 | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on key financial items, including the issuance of **$500 million** in 5.60% senior notes, the amendment of the revolving credit agreement to **$2,000 million**, the repurchase of **15 million shares** for **$404 million**, and the maintenance of a **$0.21 per share** quarterly dividend - In March 2024, the Company issued **$500 million** of 5.60% senior notes due 2034[27](index=27&type=chunk) - In September 2024, the Company amended its revolving credit agreement, increasing aggregate commitments from **$1,500 million to $2,000 million** and extending the maturity to September 2029[23](index=23&type=chunk) - During the first nine months of 2024, the Company repurchased and retired **15 million shares for $404 million**. As of September 30, 2024, **$1,200 million** remained under the current share repurchase program[58](index=58&type=chunk) - The company increased its base quarterly dividend to **$0.21 per share** in February 2024. Total dividends paid in the first nine months of 2024 were **$474 million**[57](index=57&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a decrease in net income and operating cash flow for the first nine months of 2024 compared to 2023, primarily due to lower natural gas prices, and outlines the **$1,750-$1,850 million** 2024 capital program funded by operating cash flow [Financial and Operating Overview](index=20&type=section&id=Financial%20and%20Operating%20Overview) For the nine months ended September 30, 2024, net income fell to **$824 million** from **$1,200 million** year-over-year, and operating cash flow decreased to **$2,200 million** from **$2,900 million**, while equivalent production increased to **184.9 MMBoe** from **179.3 MMBoe**, despite a **35%** drop in average realized natural gas price Nine-Month Financial & Operating Comparison (2024 vs 2023) | Metric | Nine Months 2024 | Nine Months 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | $824 million | $1,209 million | -32% | | Diluted EPS | $1.11 | $1.59 | -30% | | Net Cash from Operations | $2.2 billion | $2.9 billion | -24% | | Equivalent Production (MMBoe) | 184.9 | 179.3 | +3% | | Avg. Realized Oil Price ($/Bbl) | $76.17 | $75.64 | +1% | | Avg. Realized Gas Price ($/Mcf) | $1.65 | $2.53 | -35% | [Market Conditions and Outlook](index=21&type=section&id=Market%20Conditions%20and%20Outlook) Natural gas prices have trended lower in 2024 compared to 2023 due to strong production and weak demand, leading Coterra to strategically curtail approximately **275 MMcf per day** of gross production in the Marcellus Shale, with the 2024 full-year capital program projected at **$1,750 million to $1,850 million** - Strategically curtailed an estimated **275 MMcf per day** of gross production in the Marcellus Shale during 2024 in response to weak natural gas prices[87](index=87&type=chunk) - The 2024 full-year capital program is projected to be approximately **$1,750 million to $1,850 million**, with about **64%** allocated to the Permian Basin[91](index=91&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$843 million** in cash and **$2,000 million** in unused commitments under its revolving credit facility as of September 30, 2024, with the debt-to-total capitalization ratio remaining stable at **14%** - As of September 30, 2024, the company had **$843 million** in cash and **$2,000 million** of unused commitments under its revolving credit agreement[96](index=96&type=chunk) Capitalization Summary | (In millions) | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total debt | $2,066 | $2,161 | | Stockholders' equity | $13,034 | $13,039 | | **Total capitalization** | **$15,100** | **$15,200** | | **Debt to total capitalization** | **14%** | **14%** | [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q3 2024 revenues were flat year-over-year at **$1,360 million**, as a **12%** increase in oil revenue was offset by a **33%** decrease in natural gas revenue, while for the first nine months, total revenues fell **6%** to **$4,060 million** due to a **31%** drop in average realized natural gas prices Q3 Production and Sales Price Comparison (2024 vs 2023) | Metric | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Oil Production (MMBbl) | 10.3 | 8.5 | +21% | | Natural Gas Production (Bcf) | 246.7 | 267.1 | -8% | | Avg. Oil Price ($/Bbl) | $74.04 | $80.80 | -8% | | Avg. Gas Price ($/Mcf) | $1.30 | $1.80 | -28% | Nine-Month Operating Expenses per BOE (2024 vs 2023) | Expense Category | 2024 ($/BOE) | 2023 ($/BOE) | | :--- | :--- | :--- | | Direct operations | $2.60 | $2.24 | | Gathering, processing & transport | $3.98 | $4.07 | | DD&A | $7.32 | $6.61 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is commodity price volatility for its oil, natural gas, and NGL production, which it mitigates using financial derivatives like collars and swaps, with outstanding hedges for production through Q1 2026 - The company's most significant market risk is the pricing of its oil, natural gas, and NGL production. It utilizes derivative instruments like collars and swaps to manage this risk[162](index=162&type=chunk)[163](index=163&type=chunk) Outstanding Natural Gas Hedges (as of Sep 30, 2024) | Period | Type | Volume (MMBtu) | Avg. Floor ($/MMBtu) | Avg. Ceiling ($/MMBtu) | | :--- | :--- | :--- | :--- | :--- | | Q4 2024 | Collars | 34,990,000 | $2.75 | $4.46 | | 2025 | Collars | 146,000,000 | $2.88 | $4.76 (avg) | | Q1 2026 | Collars | 27,000,000 | $2.75 | $7.66 | [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the third quarter of 2024 - The CEO and CFO concluded that the Company's disclosure controls and procedures are effective as of September 30, 2024[175](index=175&type=chunk) - No material changes in internal control over financial reporting occurred during the third quarter of 2024[176](index=176&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that a securities class action lawsuit was settled in principle, with a final order entered on October 29, 2024, and also received two Notices of Violation from the EPA in 2023 regarding alleged Clean Air Act violations, which are pending resolution - A securities class action lawsuit was settled, with the court entering a final order of dismissal with prejudice on October 29, 2024. Most of the settlement will be paid by insurance carriers[49](index=49&type=chunk) - The company received Notices of Violation from the EPA in June and August 2023 alleging Clean Air Act violations in Texas and New Mexico. The company is engaged in discussions with the EPA to resolve the allegations[180](index=180&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the company's Annual Report on Form 10-K, indicating no material changes to those previously disclosed risks - There have been no material changes to the risk factors previously disclosed in the company's Form 10-K[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of 2024, Coterra repurchased **4.275 million shares** of its common stock at an average price of approximately **$25.26 per share**, for a total cost of about **$108 million**, under the **$2,000 million** share repurchase program authorized in February 2023 Issuer Purchases of Equity Securities (Q3 2024) | Period | Total Shares Purchased (thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | July 2024 | 2,073 | $26.53 | | August 2024 | 1,597 | $24.11 | | September 2024 | 605 | $23.15 | | **Total** | **4,275** | **-** | [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the third quarter of 2024 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended September 30, 2024[184](index=184&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, debt agreements, and officer certifications as required by the Sarbanes-Oxley Act (Sections 302 and 906)

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]