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 ...

Shares of natural gas-focused producer Coterra Energy (CTRA) slipped to a 52-week low of $22.79 per share on Sept. 6, before closing a tad higher at $23.49. Year to date, Coterra Energy has lost more than 10% of its value compared with the sector's decrease of 0.7%. Meanwhile, the S&P 500 Index has risen 13.3% over the same timeframe. The company has also fared worse than its peers like Range Resources (RRC) and Antero Resources (AR) . YTD Price Comparison Image Source: Zacks Investment Research What's Drag ...

Core Insights - Coterra Energy has demonstrated strong operational performance, beating expectations in seven out of the last eight quarters, with notable capital efficiencies and well performance exceeding initial expectations [2][3][5] - The company maintains a diversified business model, with over 70% of its production being natural gas, while oil and natural gas liquids (NGLs) contribute significantly to revenue [5][6][27] - Coterra emphasizes the importance of creating shareholder value through capital allocation, focusing on both M&A opportunities and share buybacks, while maintaining a strong balance sheet [7][9][13] Operational Performance - The operational team at Coterra has fostered a culture of collaboration and best practices, leading to consistent operational cadence and performance [2][3] - The company has successfully implemented simul-frac techniques, which have accelerated project timelines and improved well performance [5][30] Business Model and Market Position - Coterra's diversified revenue streams allow for consistent cash flow, even amidst volatile commodity prices, with cash flow only changing by about 12% despite significant price swings [6][21] - The company trades at a discount compared to pure gas companies and larger exploration and production (E&P) firms, indicating potential for market revaluation as operational excellence is established [4][5] Capital Allocation Strategy - Coterra prioritizes returning cash to shareholders through dividends and share buybacks, with a commitment to maintaining a strong dividend yield [13][14] - The company evaluates M&A opportunities based on the potential to create value for shareholders, emphasizing quality assets and the importance of capital allocation [7][8][10] Future Outlook - Coterra is focused on long-term growth through financial performance rather than production growth, with capital investments typically ranging from 50% to 70% of cash flow [16][17] - The company is well-positioned to adapt to market changes, with a robust inventory and a focus on environmental excellence, including emissions-free facilities and methane detection initiatives [37][38]

Coterra Energy Inc. (NYSE:CTRA) Barclays 38th Annual CEO Energy-Power Conference September 4, 2024 1:15 PM ET Company Participants Thomas Jorden - Chairman & CEO Conference Call Participants Wei Jiang - Barclays Wei Jiang Moving on to our next conversation. I'm really delighted to have Tom Jorden, Chairman, CEO of Coterra Energy to be here for our next fireside chat. Tom, thank you for being here. Thomas Jorden You’re welcome. Wei Jiang It's always great to you -- it's always a treat. Well, from my lens, ...

The U.S. Energy Department's weekly inventory release showed that natural gas supplies increased more than expected. The bearish inventory numbers, together with supply and weather headwinds, affected natural gas futures, which settled with a loss week over week. As a matter of fact, the commodity is currently trading around the lowly $2 level. Considering that the space remains highly susceptible to unpredictable temperature patterns that impact prices and market stability, at this time, we advise investor ...

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The U.S. Energy Department's weekly inventory release showed that natural gas supplies logged an untimely storage withdrawal. The bullish inventory numbers notwithstanding, futures settled with a slight loss week over week in the face of supply and weather headwinds. As a matter of fact, the commodity is currently trading around the lowly $2 level. Considering that the space remains highly susceptible to unpredictable temperature patterns that impact prices and market stability, at this time we advise inves ...

Core Viewpoint - Coterra Energy Inc. reported weaker-than-expected earnings and revenues for the second quarter of 2024, primarily due to lower natural gas prices and increased operating expenses Financial Performance - Adjusted earnings per share for Q2 2024 were 35 cents, missing the Zacks Consensus Estimate of 40 cents and down from 38 cents in the same quarter last year [1] - Operating revenues were $1.3 billion, missing the consensus estimate by $75 million but up 7.3% from $1.2 billion year-over-year, driven by higher oil revenues [2] - Cash flow from operations decreased by 13.6% to $558 million, while free cash flow for the quarter was $246 million [9] Shareholder Returns - The board approved a quarterly base dividend of 21 cents per share, payable on August 29, 2024 [2] - Total shareholder returns for the quarter amounted to $295 million, including $155 million in dividends and $140 million in share repurchases [4] Production and Price Realizations - Average daily production increased by 0.6% year-over-year to 669.2 thousand barrels of oil equivalent (Mboe), exceeding the consensus estimate of 652 Mboe [5] - Oil production rose by 11.9% to 107.2 thousand barrels per day, while natural gas production fell by 4.3% to 2,779.8 million cubic feet per day [6] - The average realized price for crude oil was $79.37 per barrel, a 10.4% increase from $71.88 a year ago [6] Costs and Expenses - Average unit cost rose to $16.26 per barrel of oil equivalent from $15.15 the previous year, driven by a 12.2% increase in depreciation expenses [8] - Total operating expenses increased to $976 million from $909 million year-over-year [8] Guidance - Coterra reaffirmed its capital expenditure budget at $1.75 billion to $1.95 billion and increased its oil production estimate to 105.5-108.5 thousand barrels per day [10] - For Q3 2024, the company anticipates production of 620-650 MBoepd and capital expenditures of $450-$530 million [11] - The company expects $3.2 billion in discretionary cash flow and $1.3 billion in free cash flow for the year [11] Financial Position - As of June 30, 2024, Coterra had $1.1 billion in cash and cash equivalents and long-term debt of $2.1 billion, resulting in a debt-to-capitalization ratio of 16.9% [9]