Coterra(CTRA)2025-05-06 21:24Financial Performance - Net income increased by $164 million from $352 million in 2024 to $516 million in 2025, representing a 46.5% increase[88] - Net cash provided by operating activities rose by $288 million, from $856 million in 2024 to $1.1 billion in 2025, a 33.6% increase[88] - Total operating revenues for the first quarter of 2025 were $1,904 million, a 33% increase from $1,433 million in 2024[123] - Natural gas revenues rose by $360 million, primarily due to a 64% increase in average sales price to $3.28 per Mcf[128] - Total dividends declared for Q1 2025 were $170 million, compared to $160 million in Q1 2024[110] Production Metrics - Equivalent production increased by 4.8 MMBoe, from 62.4 MMBoe in 2024 to 67.2 MMBoe in 2025, a 7.7% increase[88] - Oil production increased by 3.4 MMBbl, from 9.3 MMBbl in 2024 to 12.7 MMBbl in 2025, a 36.6% increase[88] - Oil production increased by 37% to 12.7 million barrels in Q1 2025 from 9.3 million barrels in Q1 2024[126] - The average daily production of oil increased by 38% to 141.2 MBbl in Q1 2025 compared to 102.5 MBbl in Q1 2024[126] Capital Expenditures - Total capital expenditures increased to $552 million in 2025 from $450 million in 2024, a 22.8% increase[88] - Capital expenditures for the first quarter of 2025 totaled $599 million, up from $456 million in the same period of 2024[113] - The company expects a full year capital program in the range of $2.0 billion to $2.3 billion for 2025[95] - The company expects its full-year 2025 capital program to be approximately $2.0 billion to $2.3 billion[114] Acquisitions and Dividends - The company closed two acquisitions in January 2025 for a total consideration of $3.2 billion in cash and stock[88] - The quarterly base dividend was increased from $0.21 per share to $0.22 per share in February 2025[88] Operating Expenses - Operating expenses for Q1 2025 totaled $1,202 million, a 21% increase from $992 million in Q1 2024[133] - Direct operations expenses rose to $216 million, up 38% from $156 million in Q1 2024, primarily due to higher production levels and costs in the Permian Basin[134] - Gathering, processing, and transportation costs increased by $32 million, driven by higher production and transportation rates in the Permian and Anadarko Basins[136] - Taxes other than income rose by $22 million to $96 million, with production taxes increasing due to higher production volumes in the Permian and Anadarko Basins[138] - Depreciation, depletion, and amortization (DD&A) expenses increased by $74 million to $506 million, primarily due to a higher depletion rate and increased production[139] - General and administrative expenses increased by $17 million to $92 million, largely due to acquisition and transition costs associated with the FME and Avant acquisitions[142] Debt and Interest - As of March 31, 2025, the company had total debt of $4.3 billion, with $3.5 billion under fixed-rate debt instruments[159] - Interest expense surged by $34 million to $53 million, mainly due to new debt issued to fund the FME and Avant acquisitions[144] - A hypothetical 100 basis point increase in the average interest rate under the term loan would increase interest expense by approximately $2 million for the three months ended March 31, 2025[161] - The fair value of the company's long-term debt as of March 31, 2025, was estimated at $4.159 billion[164] Commodity Price Volatility - The company anticipates continued volatility in commodity prices and may utilize derivative instruments to hedge a portion of its production[151] - The company has a significant portion of its expected oil and natural gas production for 2025 and beyond currently unhedged and exposed to price volatility[155] Derivative Instruments - The company has outstanding oil collars covering 5.0 MMBbls, or 40% of oil production, at a weighted-average price of $69.12 per Bbl[156] - Natural gas collars covered 55.5 Mcf, or 20% of natural gas production, at a weighted-average price of $3.68 per MMBtu[157] - The company entered into financial commodity derivatives in April 2025, including NYMEX gas collars with a volume of 9,150,000 MMBtu and a weighted average ceiling of $5.21 per MMBtu[155] - Oil swaps covered 1.7 MMBbls, or 13% of oil production, at a weighted-average price of $69.18 per Bbl[156] - The company has not incurred any losses related to non-performance risk of counterparties in its derivative contracts[158]