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] - Free cash flow in Q4 2024 was $351 million, with total equivalent production for the year at 677 MBOE per day, exceeding guidance by 4% [19][20] - The company reported net income of $297 million or $0.40 per share, and adjusted net income of $358 million or $0.49 per share [18] Business Line Data and Key Metrics Changes - Oil production for 2024 grew organically by 13% year over year, while natural gas production was in line with the high end of guidance [20][21] - Coterra's capital costs for 2024 were $1.76 billion, representing a 16% decrease year over year, indicating improved capital efficiency [21] - The company plans to run a consistent and highly capital-efficient program across its three operating regions in 2025, with flexibility to adjust based on market conditions [9][10] Market Data and Key Metrics Changes - The company expects total production for 2025 to average between 710 and 770 MBOE per day, with oil production projected to be 47% higher year over year at the midpoint of guidance [26] - Natural gas production is expected to remain relatively flat year over year, with a target of 2.675 to 2.875 BCF per day [26] - Coterra 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 updated three-year outlook positions the company for industry-leading profitable growth and capital efficiency, with a focus on maximizing return on capital [13][28] - The company emphasizes flexibility in capital allocation, allowing for adjustments based on market conditions and operational efficiencies [10][29] - Coterra is committed to maintaining a strong balance sheet and prioritizing deleveraging, with plans to repay $1 billion of term loans in 2025 [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and financial results for 2024, with expectations for solid results in Q1 2025 [34][52] - The company is optimistic about the gas market outlook, citing improved storage conditions and LNG demand as potential drivers for growth [66][67] - Management remains cautious about making decisions based on market conditions, emphasizing a disciplined approach to capital allocation [67][68] Other Important Information - Coterra returned 89% of free cash flow in 2024 through dividends and share buybacks, with a commitment to reviewing annual increases in the base dividend [31][30] - The company successfully integrated newly acquired Permian assets and is focused on optimizing capital and operational efficiency [11][22] - Coterra's 2025 capital plan includes significant investments in both oil and natural gas, with a focus on maintaining flexibility to respond to market changes [10][24] Q&A Session Summary Question: Key lessons learned from the Wyndham Row project - Management highlighted excellent reservoir performance and plans to continue co-developing wells based on positive results [56][57] Question: Clarification on 2025 guidance and production from acquired assets - Management confirmed that production guidance remains intact despite the partial month of January production from acquired assets [60] Question: Restarting rigs in the Marcellus and conditions for increasing capital - Management indicated that competitive returns and improved market conditions are driving the decision to restart activity in the Marcellus [66][68] Question: Future acquisition strategy post-Franklin Mountain acquisition - Management stated that acquisitions will be opportunistic and based on favorable entry prices, with no current plans for aggressive acquisition strategies [70][72] Question: Expectations for Marcellus run rate and capital efficiency - Management anticipates returning to a run rate of 2 BCF per day in the Marcellus by mid to late 2026, contingent on market conditions [79] Question: Opportunities in power generation and midstream interests - Management confirmed active discussions regarding power generation opportunities, particularly in the Permian basin [82][121] Question: Growth potential in the Marcellus and Anadarko - Management expressed hope for growth in both basins if gas prices remain favorable, emphasizing a focus on returns over growth [115][116]

Financial Data and Key Metrics Changes - In Q1, net income was $16.5 million or $0.32 per diluted share, down from $38.2 million or $0.76 per diluted share in the prior year quarter [6] - Revenues totaled $250.4 million compared to $305.9 million in the prior year quarter, reflecting a decrease [6][7] - Pre-tax income was $21.9 million, down from $51.2 million in the same quarter last year, with a pre-tax profit margin of 8.7% compared to 16.7% previously [6][8] - SG&A expenses increased by 29% to $36 million, primarily due to a 30% increase in employee count [8] Business Line Data and Key Metrics Changes - The company sold 2,333 lots in the quarter with an average sales price of $105,500 [7] - The owned lot position increased by 23% year-over-year, and community count rose by 25% [5] - The gross profit margin for the quarter was 22%, slightly down from 23.8% in the prior year quarter [8] Market Data and Key Metrics Changes - Demand for finished lots remains solid, with owned lots under contract doubling from a year ago [4] - The company’s total lot position increased by 29% to 106,000 lots, with 64% owned and 36% controlled through purchase contracts [13] - The backlog of contracted lots is expected to generate approximately $2.2 billion in future revenue [14] Company Strategy and Development Direction - The company is focused on investing in land acquisition and development, with a planned investment of approximately $2 billion in fiscal 2025 [12] - The strategic goal is to double market share to 5% over the intermediate term [19] - The company aims to maintain a disciplined approach to capital investment while enhancing long-term value [19] Management's Comments on Operating Environment and Future Outlook - Management noted that while home inventories have increased, affordable housing supply remains limited, with favorable demographics supporting housing demand [8] - The company expects Q1 to be the lowest delivery quarter of the fiscal year, with higher revenues anticipated in the second half [18] - Management expressed confidence in the company’s position to gain market share in the fragmented lot development industry [19] Other Important Information - The company ended the quarter with $645 million in liquidity, including $132 million in cash [14] - The corporate credit rating was upgraded from B+ to BB- [14] - The company’s capital structure provides operational flexibility and positions it to take advantage of attractive opportunities [15] Q&A Session Summary Question: Can you provide more detail on the stabilization of costs in land development? - Management indicated that development costs have stabilized over the past 12 months, with no significant price increases observed [23] Question: How do you expect employee count growth to impact cost leverage in the next year or two? - Management expects SG&A expenses to moderate for the remainder of the year, anticipating high single-digit growth [26] Question: What drove the higher revenue per lot this quarter? - The increase was attributed to a specific infill project with significant lot prices that skewed the average sales price upward [28] Question: How has builder demand been trending year to date? - Builder demand remains strong, particularly for new communities, with existing communities also seeing solid demand [32] Question: Can you elaborate on the cadence of deliveries for the rest of the year? - Management noted that Q1 is typically the lowest delivery quarter, with a majority of deliveries expected in the second half of the year [34]