Coterra(CTRA) - 2024 Q4 - Annual Results

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$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$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$0.22 per share for Q4 2024, resulting in an annualized dividend of $0.88 per share, equating to a 3.1$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$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$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]