Company Profile

Coterra Energy Inc. Price & Performance (CTRA)

Stock Performance

Updated May 9, 8:00 PM UTC

Coterra Energy Inc.

$23.39USD

+$0.27 (+1.17%)

Prev Close

$23.12

Market Cap

$17.85B

Day Range

$23.08 - $23.46

Open

$23.41

P/E Ratio

13.7

52W Range

$22.30 - $29.95

24H Volume

$108.11M

Dividend Yield

3.63%

EPS

1.71

Latest News

Strategic Shifts Define Coterra Energy's 2025 Capital Plan Amid Volatile Markets
May 5, 2025
Coterra Energy is rebalancing its 2025 capital strategy, cutting Permian investment by 30% and adding rigs in the Marcellus to boost natural gas output. The company’s revised capital budget, set between $2.0 and $2.3 billion, aims to support free cash flow and maintain dividend payouts despite ongoing oil price headwinds.12
Quarterly Results Highlight Coterra’s Operational Flexibility and Debt Reduction Focus
May 6, 2025
Coterra Energy reported first-quarter net income of $516 million, exceeding oil and natural gas production guidance. The company paid down $250 million in term loans and now holds $750 million in outstanding term debt, reinforcing its commitment to deleveraging and maintaining a strong balance sheet through uncertain commodity cycles.13
Drilling Activity Declines as Coterra Prioritizes Capital Discipline in Q1 2025
May 8, 2025
Coterra drilled 43 wells in Q1 2025, down 51% from the prior year, reflecting a strategic pullback in the Permian. The company will operate seven Permian rigs in the year’s second half, while ramping up Marcellus activity, leveraging flexible contracts to swiftly adapt to shifting market conditions.24

What's Happening

Peers

Earnings

Report Date

May 5, 2025

Reported Revenue

924M

Miss -54.45%

Avg 1d Change

5.39%

Report Period

Q1 2025

Reported EPS

0.8

Beat +2.56%

Implied Move 1d

3.86%

Transcript

10m 2s

Thank you, Kayla. Good morning and thank you for joining Coterra Energy's first quarter twenty twenty five earnings conference call. Today's prepared remarks will include an overview from Tom Jordan, Chairman, CEO and President Jane Young, Executive Vice President and CFO and Blake Sergo, Senior Vice President of Operations. Michael Dushazer, Senior Vice President of Business Units is also in the room. Following our prepared remarks, we will take your questions during our Q and A session. As a reminder, on today's call, we will make forward looking statements based on our current expectations Additionally, some of our comments will reference non GAAP financial measures. Forward looking statements and other disclaimers as well as reconciliations to the most directly comparable GAAP financial measures were provided in our earnings release and updated investor presentation. Both of which can be found on our website. With that, I'll turn the call over to Tom.

10m 56s

Thank you, Dan, and thank you for all of you who are joining us on this call. Coterra had an excellent first quarter. We delivered oil production near the high end of our guidance and natural gas production net exceeded the high end of our guidance. CapEx came in near the low end of our guidance. Furthermore, we generated excellent financial results returned a substantial portion of our free cash to our owners and retired $250,000,000 of our term loans. We closed on the Franklin Mountain and Avant acquisitions and immediately launched into the job of integrating these high quality assets into our operations. We are pleased to report that we have identified and captured significant operational efficiencies are bringing these new assets into emissions performance consistent with Coterra standards and have seen well performance on recent flowbacks that exceeds our expectations. Shane and Blake will provide more detail on our financial and operational results and outlook. We hope that you will note that the opening slide in our updated investor deck discusses who is Coterra, and why own Coterra. We think that the recent volatility in the commodity markets uncertainty over the impact of tariffs, and fears of recession strengthened the core thesis of why Coterra.

12m 15s

Simply put, we were built for this. Coterra is an arc, not a party boat. Our diversified revenue, low cost oil and natural gas supply, technology driven organization, economic focus and financial discipline make us tailor made to ride out this storm and thrive in it. Slide four in our deck illustrates the resiliency of our cash flow under various oil and natural gas price scenarios None of us can predict the future. Nonetheless, Coterra is a company that can generate significant free cash flow through the cycles generate outstanding returns and modest growth with a low reinvestment reinvestment rate and maintain a pristine balance sheet. This is a testament to our organization, our assets and our culture. Why Coterra? The question answers itself in times like these. Commodity downdrafts are a part of our business. They do not come pre labeled with how long they will last nor how severe they will be. Our experience tells us that in times like these, it is better to on the side of caution. We have more concern regarding the oil outlook rather than the outlook for natural gas. Consequently, we are modestly pulling back some activity in the Permian Basin and incrementally adding activity in the Marcellus Shale.

13m 38s

In aggregate, these moves will reduce our projected 2025 CapEx by $100,000,000 We have plans on the shelf to make further moves up or down if we see material changes in our outlook. Our team continues to put tremendous effort into planned iterations and we are ready for a wide range of potential scenarios. In particular, the net $100,000,000 reduction in 2025 CapEx is a combination of $150,000,000 of reductions in the Permian coupled with $50,000,000 of increases in the Marcellus. We have contingency plans that would allow us to make additional cuts from the Permian if oil prices continue to weaken. We could redeploy to highly profitable gas opportunities advanced debt retirement pursue opportunistic buybacks, or bank the savings. Shane will comment further on this. We have described our approach to capital allocation and planning as the difference between a rifle shot and a guided missile. Once the trigger is pulled the rifle shot is unchangeable. The guided can be adjusted and repositioned along the way. In the case of our current macro environment, we not only have a guided missile, but we have a moving and unpredictable target. This screams for flexibility. With low cost of supply oil and natural gas assets robust drilling returns, few long term vendor commitments and a culture that is adaptive we will guide our way through 2025 and beyond.

15m 13s

We are committed to debt reduction in 2025 particularly pertaining to the $1,000,000,000 term loan that we executed in conjunction with our recent acquisition. As we have said, we never lose a moment's sleep worrying about our debt being too low. We have seen our peers go through existential crises during significant downdrafts and we are committed to make sure that Coterra can sail through any storm and emerge stronger because of it. Finally, I want to make a few remarks about our recently completed Wyndham Rail project want project. To recap, the Windom Row infill project contains 73 total wells. 51 Wolfcamp wells and 22 Harkie wells. Our results on the Wolfcamp wells have been outstanding. While completing the Harkey wells, however, we noticed abnormally high water production on a handful of wells. We have strong evidence to suggest that this is due to behind pipe water flow from shallower zones. We have drilled hard key wells throughout our assets in New Mexico and Texas and have only observed this phenomenon in the eastern portion of our Culberson County acreage block. It is not a reservoir nor a spacing issue. This is also not a co development or overfill issue.

16m 27s

The evidence points to this being a near wellbore mechanical issue. We think that it is fixable and we have well remediation solutions underway. We are very encouraged by the results that we have seen thus far. While we work through wellbore remediation, we are pausing Harki Development In This Local Area. It Doesn't Make Any Sense For Us To Continue Drill And Complete Harkley wells in this immediate area until we are fully satisfied that we have solved the issue. We expect to correct the issue during the second quarter and restore these hard wells to production. We believe the go forward production forecast for the affected wells is conservative providing potential upside for the remainder of the year. With this pause in local Harkie development, we are pivoting to our highly productive Wolf Wolfcamp. Ironically, this will increase our capital efficiency. Our full year production guide remains unchanged with our capital guide decreasing slightly. We have never managed our company with short term production goals. We focus on full cycle value creation, underwritten by sound science Objective Data and tough and disciplined decision making. This is the winning formula for long term value creation. With that, I'll turn the call over to Shane and Blake to discuss our results and outlook in greater detail.

17m 51s

Thank you, Tom.

17m 53s

Thank you everyone for joining us today on this morning's call.

17m 57s

Today, I'd like to cover three topics.

17m 59s

First, I'll summarize the highlights of our first quarter financial results, Then I'll provide an update on our guidance, including the second quarter as well as full year 2025 Finally, I'll provide an update on our balance sheet and cash flow priorities for the remainder of the year.

18m 15s

Turning to our strong performance during the first quarter. First quarter's performance included just over two months results from our recently acquired assets from Franklin Mountain and Avant. We are pleased with the rapid integration of these assets and their contributions have been in line to slightly better than our expectations. During the first quarter, Coterra's oil production came in about 2% above the midpoint of our guidance.

18m 39s

With BOEs near and natural gas above the high end of the guidance ranges.

18m 44s

Net turn in lines during the quarter were 37 in the Permian, below the guidance midpoint of 40 and the Marcellus was at zero as expected.

18m 54s

Pre hedge revenues came in at 2,000,000,000 up from $1,400,000,000 in the fourth quarter of twenty twenty four. A 45% and forty five percent of revenues came from natural gas, up significantly from prior quarter due to strong production production and a 64% increase in natural gas price realization.

19m 13s

Cash operating cost per unit totaled $9.97 per BOE inclusive of about $0.21 per BOE of non recurring costs related to the transaction.

19m 23s

We reported net income of $516,000,000 or $0.68 per share.

19m 29s

And adjusted net income of $6.00 $8,000,000 or $0.80 per share. Incurred capital expenditures in the first quarter were 4% below the midpoint of our guidance range, with lower than expected drilling and midstream costs.

19m 43s

Discretionary cash flow for the quarter was $1,135,000,000 up significantly from $776,000,000 in the prior quarter and free cash flow was $663,000,000 after cash capital expenditures. Looking ahead to the second quarter and full year 2025, Second quarter results will reflect a full quarter's contribution from the recent acquisitions. During the second quarter of twenty twenty five, we expect total production to average between seven ten and seven sixty MBOE per day. Oil is expected to be between one hundred and forty seven and one hundred fifty seven MBO per day and natural gas is expected to be between two point seven and two point eight five Bcf per day. These guidance ranges reflect updates in the Culberson HARTI program. Including the deferment of a few projects as we begin to shift to an to additional Upper Wolfcamp development in Culberson Cap. The net result of these changes is a reduction in oil production by 5,000 barrels per day in the second quarter relative to our February expectation. Despite these second quarter changes, we are maintaining the midpoint of our 2025 annual oil production guidance. In the second quarter, we expect incurred capital to be between $575,000,000 and $650,000,000 which should be the highest quarter for the year as we will have increased sales in all three business units.

21m 17s

Coterra was built to respond to market signals.

21m 21s

And we have both the ability and willingness to adapt to changing conditions.

21m 26s

For the full year 2025, we are optimizing our investment allocation while lowering the capital range by $100,000,000 We now expect incurred capital to be between 2,000,000,000 and $2,300,000,000 for the year and over 4% reduction from February guidance.

21m 44s

Given a continued constructive outlook for natural gas, we are maintaining the second rig in the Marcellus into the second half of twenty twenty five. As previously noted, this adds $50,000,000 to the 2025 program. Should we choose to keep the second rig working for the full year, this could result in an incremental $50,000,000 added to the program late in 2025. While still staying within our revised guidance range. In addition, due to softness in crude pricing, we are slowing development and reducing Permian activity by $150,000,000 If warranted, we have the flexibility to make additional adjustments to our investments later in the year that would take total investment towards the lower end of our guidance range. For 2025, while lowering capital, we are maintaining our oil midpoint guidance. And increasing the midpoint of production guidance for MBOEs and natural gas. Which highlights the capital efficiency of our diverse drilling opportunities.

22m 47s

Simultaneously, we are tightening the range for NBOEs oil and natural gas. NBOEs are now expected to be between seven twenty and seven seventy NBOEs day for the year. Oil is expected to be between one hundred and fifty five one hundred and sixty MBO per day for the year with significant increases in each subsequent quarter.

23m 11s

Natural gas is expected to be between two point seven two five and two point eight seven five Bcf per day.

23m 18s

Delivering over one Tcf of gas on an annualized basis and providing significant leverage to higher natural gas prices.

23m 28s

Having only a partial full quarter contribution from the new Permian assets impacts full year 2025 production by a little over four MBoe per day relative to if the transactions have closed on 01/01/2025. In this environment, the benefits of our diverse and balanced commodity mix become increasingly evident. On Page four of the new slide deck we published last night, we illustrate the durability of our free cash flow across multiple commodity price files. Coterra is positioned to thrive and maintain reinvestment rate of around 50% of cash flow in a variety of commodity price scenarios.

24m 9s

And ranges of oil to gas price ratios. Regarding our three year outlook, we maintain our conviction in our ability to deliver consistent profitable growth to our shareholders. As we've stated before, our deep project inventory can deliver 5% or greater oil volume growth 0% to 5% BOE growth over this period by investing between 2.1 and $2,400,000,000 of capital per year.

24m 38s

If we choose to do so.

24m 40s

Even with the changes to our 2025 that we announced today. These growth rates reflect legacy Coterra organic growth in 2025 include our recent acquisitions for 2026 and 2027 growth. This outlook delivers increasing capital efficiency, and is designed to afford Coterra the flexibility to reallocate capital between our business units as market conditions change. We believe this outlook has an attractive, repeatable level of and generates meaningful free cash flow to underpin both our shareholder returns and our deleveraging goals. Turning to shareholder returns and the balance sheet. Yesterday, we announced a $0.22 per share dividend for the quarter. This remains one of the highest yielding base dividends in the industry at over 3.4%. And we remain committed to reviewing increasing the base dividend on an annual cadence. During the first quarter, we repaid $250,000,000 of our outstanding term loans that were used as part of the financing of our recent acquisitions. We ended the quarter with an undrawn $2,000,000,000 credit facility and a cash balance of $186,000,000 for total liquidity of $2,200,000,000 expect to continue to prioritize deleveraging.

26m 2s

And in the current environment, we expect to fully repay $1,000,000,000 term loan during 2025. As a result and as previously noted, share repurchases will be back end weighted in the second half of twenty twenty five. We are focused on quickly getting our leverage back to home. To around 0.5 times net debt to EBITDA. Coterra is committed to maintaining a fortress balance sheet that is strong in all phases of the commodity cycles enables us to take advantage of market opportunities and protects our shareholder return goals. In summary, Coterra's team delivered a quarter of high quality results. Both operationally and financially. And across all three business units. These results show that we've hit the ground running in 2025 For the remainder of the year, we expect expect strong quarterly oil production increases substantial free cash flow generation and rapid deleveraging. With that, I'll hand the call over to Blake to provide additional color and details on our operations. Blake? Thanks, Shane. The first quarter of twenty twenty five was marked by the integration of our new Delaware app assets into our Permian operations program. Our teams have been hard at work applying our best practices to these assets and we are already seeing wins in the field.

27m 22s

Our D and C team has been able to lower our dollar per foot by 10% from the previous operators by bringing our program efficiencies to bear. Initial productivity from these new assets is beating our expectations. We are iterating on well spacing and frac design to further improve capital efficiency. Our production and midstream teams are focused on minimizing downtime, and as such have realized a substantial drop in flared volumes across the assets. We also see significant opportunities to optimize the infrastructure and midstream assets across our Northern Delaware position. We Our updated Permian plan calls for a reduction in activity we respond to headwinds in the oil market. We now plan to run seven rigs in the second half of twenty twenty five down from our original guidance of 10 rigs. These changes in activity reduced CapEx in the Permian by $150,000,000 We maintained significant flexibility across our rig and frac fleets and have additional off ramps available to us throughout the year.

28m 28s

In Culberson County, we have finished completing our Windom Row Harkie well. As Tom mentioned, we have encountered some mechanical issues on Wyndham Row resulting in mixed results for our Harkie wells. We have collected data that indicates a lack of adequate cement on certain wellbores, which has allowed water from our shallow disposal zone to find its way into portions of the Upper Bone Spring interval. This has led to increased water production on roughly half of our Harkey wells on Wyndham Row. And made it difficult for the affected wells to draw down reservoir pressure and produce the expected oil volume. We have kicked off a workover program to remediate these wells and our early results are encouraging. This remediation campaign will continue over the next several months and we will be closely monitoring the production response from these wells. While we are working through these remediation efforts, we will focus our row developments on the Upper Wolfcamp. The 51 Upper Wolfcamp wells brought on in Wyndham Row look very strong, and continue to meet or exceed expectations. Our Permian team's ability to quickly adjust to the Upper Wolfcamp and continue our efficient operations is commendable. Their great work has allowed us to maintain our full year 2025 oil guide and improve our capital efficiency.

29m 46s

Importantly, we expect the efficiency gains captured on Wyndham Row will continue on future developments. In our next two Row developments in Culberson, the Barber Row and Bowler Row, we will focus on Upper Wolfcamp development. Which has been the bread and butter of our Culberson project over the last decade. We expect no change to spacing or productivity in our Wolfcamp program. As you can see in our investor deck, by shifting more capital to the Upper Wolfcamp, our Permian asset productivity is expected to increase 2025 and over the next few years. Coupling this increased productivity with lower capital spend, we are seeing improving capital efficiency. Switching to our natural gas assets. Coterra is happy to be back to work in the Marcellus with two rigs that began drilling in April and the recent completion of our Jeffers Farm project. Gas macro conditions in Northeast storage volumes continue to support a robust 2025 and 2026 strip. And as such, we are electing to add $50,000,000 to the Marcellus program. Should conditions warrant, we hold a second on ramp later this year that could add an incremental $50,000,000 to the program. Our Marcellus team continues to improve capital efficiency with our full year 2025 Marcellus dollar per foot expected to come in at $800 per foot.

31m 12s

A 22% reduction from 2024. This improved cost structure comes on the back of a four mile lateral program as well as reduced D and C service costs and water transfer costs. This plan picks up a frac crew later in 2025 and allows us to complete several great projects just in time for winter twenty twenty five and into 2026. In the Anadarko, we are executing on a strong 2025 program with a competitive cost structure and new three mile projects. Strong well performance and lower costs paired with a premium local gas market are continuing to make this asset an attractive place for Coterra to invest. We are excited to report that we have begun flowing back one of the largest natural gas development in the Anadarko and expect to discuss results later this year. Coterra has an organization, asset portfolio and balance sheet that is positioned for success in periods of volatility. Our ability to redirect capital and optimize for the current environment is a key strength of the company. Our teams remain as focused as ever. We are executing on our new assets in the Permian while improving their capital We are reducing and reallocating activity in response to pressures in the crude market and taking advantage of structural natural gas macro tailwinds.

32m 35s

We will remain nimble and focused on creating long term value for our shareholders. With that, I'll turn it back to Tom.

32m 43s

Thank you, and we're delighted to take your questions.

32m 59s

Our first question comes from the line of Doug Leggett with Wolfe Research. Your line is open.

33m 5s

Thanks everybody. Thanks for taking my questions. So guys, obviously there's a lot of attention on this hierarchy shale issue. So I think Blake you've given a fairly thorough explanation as to what happened. I just wanna put a a bow on this. So basically, this was a cementing issue. It sounds like.

33m 27s

That sounds like it's temporary. It doesn't sound like it's getting any, you know, read through. But what does it mean for your view of inventory debts as you think about your future development plans. My follow-up is on the change obviously, the change in activity somewhat transitory, I guess, given everything that's going on. But you did just lay out a three year plan a couple of months ago that laid out five plus percent oil growth. So I'm curious how does the thinking on that change and the associated capital that goes along with And I'll leave it there. Thank you.

34m 2s

Yes, Doug. I'm going start it and then Blake will add any comments. A lot of elements to that question. I'll take them in reverse order. We are three year plan is intact. We don't see any meaningful change to our three year plan. I'll also say we don't think this impacts our long term inventory. We think this is a local mechanical issue that's fully solvable. We have a couple of remediation steps underway. It's one that as Blake said, we think is associated with some shallow saltwater disposal that is somewhat unique to the Eastern Culberson County. But, you know, I'm gonna just also say, Doug, we're a we're a science driven organization. And much as I'd love to say we walk on water, we occasionally have operational problems. And when we saw this, we said, look, we need to understand this fully. So we shut this down while we studied it further. We ran a we collected a lot of data but we said we really need to understand this before we move forward with this program. We've got that data in hand. We think we understand the phenomena and we we're going to tell you what we know and tell you what we don't know.

35m 15s

But right now, we're pretty optimistic that this is a mechanical operation that is solvable with a combination of a revised pipe design and cementing program. Blake, you want to comment on that? Yeah. I'll just I'll just say Doug, coming into Wyndham Row, we had drilled and completed over 30 successful Harkey wells in Culberson County. We use same wellbore designs and cementing jobs we always have. We thought we were well calibrated. Sometimes the oilfield still surprises us. And so that's what we're dealing with here. It's not a ubiquitous issue. We have several wells performing just fine. Our teams are hard at work solving this. We have other tools in the toolkit. Have different cement jobs. We have different wellbore designs. We're deploying all those right now. And we will figure out the optimal solution And we will fix this, and we will move forward.

36m 5s

Okay guys. Thanks for your answers.

36m 12s

And your next question comes from the line of Betty Jiang with Barclays. Your line is open. Hi, good morning. Thank you for taking my question. I appreciate all the color on Harki earlier, but I do think it's important just to flush out sort of the the potential impact to the future development. So if you are focusing on the future roles just on Wolfcamp, are you going back to the Harkie on those roles? And does that have any impact on the mix of wells if we look out into 2026?

36m 48s

Yeah. Betty, 2026 is yeah. A long ways away. You know, our our expectation, I'll just say this, is that we remediate this issue and we get back to restoring our Harkie program as it was before we paused. Now, we've talked in the past that we really think co development is preferable to over [indiscernible] But the time elapsed between when the Wolfcamp comes on production and when the Harki comes on production is a critical variable. And as we currently see it, we think we'll be back to completing and drilling these Harki wells in months not years and that the overfill effect will not be significant. So we this is a mechanical issue. But not a strategic issue in terms of how we're going to prosecute. We don't think we've lost inventory. We think we've just appropriately paused while we figure this out. And come back with an approach that allow us to develop these Harki wells prudently and without this water. But Blake, do you want to comment on that?

37m 52s

I mean, would just echo what Tom said there. I mean, we think this is a prudent step adjust our mechanical process on how we construct wellbores, steaming wellbores, whatever the optimal solution is. In the meantime, we'll be executing Upper Wolfcamp program have a long history in the Upper Wolfcamp and Wyndham Row has been very excellent performance. We expect that to continue. Meanwhile, all our row efficiencies are fracking, our electric crew, everything continues as is. So a capital efficiency standpoint, it's actually slightly better in the near term just because of the productivity of the Upper Wolfcamp. But we are still very focused on solving the Harkie and getting back to the original program if possible and vetting that out.

38m 39s

I really appreciate that. And then just on the production guide, the full year guidance would imply a fairly big ramp from second quarter maybe to the mid-170s. Level in 4Q. Could you just help us get more comfort on the trajectory the timing of the wells, what type of risking is being done? Within that guide? Thanks.

39m 4s

Yeah, Betty. Jane here. I'll speak to that again. And so look, I think you're right and these all hold together. In terms of the quarterly guidance versus the annual guidance etcetera. And we do anticipate seeing substantial sequential step ups in production through the course of the year. And if you look at the Till guidance that we provide for the second quarter, you'll see it's it's meaningfully up from where we were in the first quarter, which will lead to very strong third and fourth quarter production.

39m 40s

And your next question comes from the line of Nitin Kumar with Mizuho. Your line is open.

39m 46s

Hi, good morning guys. Thanks for taking my question. Tom, I want to start off a little bit broader. You mentioned in your opening remarks about the rifle shot and the guided missile.

40m

You and one of your peers today have cut activity in response to the current uncertainty. You know, the current administration ran on a agenda of drill baby drill. So I'm just trying to understand, from from your perspective, how long do you think this this weak environment could continue? You know, between the demand that has been destroyed a little bit and then the supply that's coming on?

40m 30s

Is that all you I I just want I just want to hear your view on the world. No. No. I'll I'll I'll you know, you you asked and and and you know, this is this is not just my view, but I think the view of Coterra. I'll just say this, we're a little over one hundred days into this new administration and good lord there's been a tremendous amount of volatility introduced whether we're talking about in the oil markets or tariffs our relations around the world. All of these converge on forecast for our oil price. The President is trying to do a lot of difficult things up front, and the White House is in a hurry. We have some sympathy for that sense of urgency. But I'll just say this, I think the White House has been fairly consistent that they want low oil prices. That that is a bit of a turbocharge to the economy. And we're expecting that to continue. We think that certainly a lot of what's going on with OPEC is perhaps all tied together in concert with what's happening in The Middle East broadly. In some of these conflicts. And so we're prepared for this to last a while.

41m 52s

We're hopeful that these tariffs get resolved and that the threat of recession is lifted. But our experience tells us that we can't run our program on hope and we better be prudent and make adjustments accordingly. The thing we're very grateful for is that this isn't a situation that shuts our capital program down. It just redirects it. And we have some really attractive gas opportunities we could pivot to. So we are battening down the hatches expecting this to last for a while in answer to your question.

42m 28s

Great. And then and thanks for taking the shot at that. I know it's a difficult question. My second question is around cash returns and maybe Shane can take it, but you've talked about returning at least 50% or more of free cash flow. Obviously, buybacks were second half weighted. You talked a little bit about the balance sheet. If commodity prices do weaken from here, how do you prioritize between buybacks and debt reduction?

43m 1s

Yes. No, I appreciate the And we look forward to plan and roll that back in February. We talked about sort of the ability to do it all. And since then prices come in a little bit if you look at Page 10 in our deck today where we talk about free cash flow and how much it is, We still have the ability to do it all, so to speak. But to be really clear, in 2025, our priority is going to be debt repayments. And we're we're not going to compromise that. That doesn't mean that there's not going to be repurchase We can be opportunistic. We will be back end weighted. But if you look at 2024, we returned 9090% of cash flow to shareholders. 2023, we returned 76% of cash flow to shareholders were we able to do that? Because we had low leverage. And we believe that having low leverage is an enabler we're dead set focused on protecting our long term shareholder return objectives. And we think the best way to do that is to reduce debt.

44m 6s

Your next question comes from the line of Arun Jayaram with JP Morgan. Your line is open.

44m 13s

Yes, good morning. I just wanted to get an update on the Barbara Row.

44m 19s

And how does the the the issues that you've experienced on on the hierarchy program impact the development program there. I believe the original plan was to do 20 Wolfcamp wells and eight Harkie wells What is the status perhaps of those eight Harkie wells that was in the original plan?

44m 38s

Arun, it's Michael. Yes, you're correct. We have 20 Wolfcamp wells and eight Harkie. We were we have completed two of the Harkie wells. And there are six additional Harkey wells that we're going to duck currently. And we will update you on those as we move forward. But at this point they've been removed from the current frac schedule. And we'll proceed with the Wolfcamp completions.

44m 59s

Yes. And I was just going to add on to that that given the state of of those, those do come back into the program. They're going be highly capital efficient just given that that a portion of that capital has already been put into the ground.

45m 13s

Got it. Got it. That's helpful. And just maybe just a thought on how does the reduction in your rig count in the Permian, how is that impacting your thoughts on the three year program? Obviously, as Betty mentioned, second half run rate for oil will be higher just given the shift to the Wolfcamp from the Harkie. But how does that help us square away the reduction in CapEx on the Permian and just maintaining that three year program?

45m 47s

Yes. So I can take that. So first, we've reduced on in the Permian $150,000,000 $120,000,000 D and C. So it's we've gone from 10,000,000 to 7 in the second half of the year. So it does not alter the overall outlook over the three year window. We believe within parameters that we've set out which is 2,100,000,000.0 to $2,400,000,000 of capital over the next three years, each year over the next three years that we still got the ability to do 5% plus oil volume growth and 0% to 5% BOE growth over that period. Even with the changes that we've talked about today to the second half of twenty twenty five.

46m 35s

And your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.

46m 41s

Yes. Thanks for all the color here. Tom, we've talked a lot about oil today. Just curious on your perspective on natural gas. You are taking restarting two rigs here in the Marcellus.

46m 55s

Can you talk about what your priorities are for the Marcellus plan for the balance of the year?

47m

And how that ties into your macro view for gas?

47m 5s

Yes. Thank you for that. I just want to remind the listener we produce just a hair under three Bcf a day of natural gas. So the increase in natural gas outlook is wonderful, but the increase in natural gas prices is a remarkable turbocharge to our cash flow and provides the kind of resiliency we've talked about. We are getting back to work in the Marcellus. We've made tremendous progress redesigning our Marcellus program. We've talked about that on past calls, but the net result is a more efficient way to handle water. The flexibility to be able to go to zero activity or full steam ahead, longer laterals and it's just been a remarkable redesign. That's also resulted in much lower cost structure. So go forward, I anticipate our Marcellus program to be back to a growth profile. And how aggressively we grow is a function of all the moving parts that we've talked about in this call. But we really encouraged by the economic and reservoir performance of our natural gas assets both in the Marcellus and in the Anadarko.

48m 15s

And then Tom, mean, it's a couple years now, but there has been discussion points about the depth of the natural gas portfolio as you've drilled out a lot of Northeast PA Maybe you can respond to that viewpoint about depth of inventory. Do you feel like you have the organic position that you want here Now that you've done the Franklin Mountain deal on the oil side, does it make sense to think about gas M and A? Just your perspective in addressing that debate that's out there.

48m 46s

Well, think about that throughout our portfolio. I mean, you ask me if we have enough inventory, you know, my answer to that is determined about a decade ago. It's gonna be no.

48m 59s

I'm an explorationist at heart. But as we show on slide 11, we have about a dozen years of inventory at our current run rate. And that production base that underpins that, that's inventory with that production base, we're really nicely positioned But we're we're always want to be opportunistic, whether it's oil, natural gas, or what have you. We're built to last and I think we're going to be a survivor here. So inventory is important to us. Think we're we don't have a problem to solve, but we're going to be opportunistic. That's not to telegraph that [indiscernible] like I say we we've really solid plans and and there's not a problem to solve there.

49m 52s

And your next question comes from the line of David Deckelbaum with TD Cowen. Your line is open.

50m

Thanks for taking the questions guys.

50m 3s

Maybe just I wanted a clarification on just the ramp in the second half of the year. With the Wolfcamp wells coming online. Does the guidance presume that that 5,000 barrel a day impact in the second quarter from the Harkie wells. Does that come back as a 5,000 barrel a day contribution into 3Q and 4Q?

50m 26s

Yeah.

50m 27s

David Shane here. Yeah. No. It it doesn't. It doesn't assume that it comes back. Obviously, Blake walked through all the things the team is doing to get us to a different outcome, a better outcome than that. But the assumption that we're talking about in terms of the substantial sequential step ups that we see in production in the back half of the year does not at all rely on those volumes coming back.

50m 51s

Yes. We've taken as I said in the opening remarks, we've taken a very conservative approach. We think we're going to bring those volumes back. But our current plan we've just taken them out and we're looking at a fairly significant production growth ramp during the course of the year.

51m 11s

And we're we're confident hopeful, and our technical analysis tells us that this problem is fixable and that a lot of those volumes are coming back.

51m 27s

And just my second question, you you guys highlighted the flexibility that you have with your asset base.

51m 34s

And talked about, I think, the 15 to one oil to gas price ratio.

51m 40s

Currently at strip pricing and you're still seeing sort of the coincident 50% plowback in terms of CapEx, But as you enter in the next couple of years, I think you guys reiterated the three year outlook.

51m 54s

But if you go back to that guided missile analogy, if that oil to gas price ratio holds as we enter into next year, should we presume that there's more reallocation from oil to gas weighted [indiscernible] Well, what you ought to presume is that we get up every day and make the best financial decisions in the interest of our shareholders that we we think is prudent. And to we I'm hesitant to even use the word three year plan. It's a three year outlook of what we could execute if current conditions were to hold. And if current conditions don't hold, I think it's our responsibility, not just opportunity, but our responsibility to say to our owners that we will readjust as conditions warrant. So the beauty of it is we have amazing flexibility. Mean, we look across our landscape right now, we could barrel ahead at $50 oil and continue to invest in our oil assets and the returns are not bad. I mean they're certainly better than if we rewind not too many years ago with anything we were experiencing. But we're making these steps because we're concerned about future weakening in oil prices. And so it's remarkable position to be able to say look, we could invest in oil, we could invest in gas, we've got the NGL revenue.

53m 22s

And everywhere we look in our portfolio, we have opportunity and not barriers. We're just trying to adjust to the to the macro condition as we think is appropriate. And that's what we're going to continue to do.

53m 37s

And your next question comes from the line of Scott Gruber with CD Capital. Your line is open.

53m 45s

Yes. Good morning. Just wanted to to come back [indiscernible] You know, you you said with the cement remediation, you're you're working to bring those those volumes back, but it's not in guidance. So what's the reasonable expectation for when those volumes could come back if the remediation work is successful?

54m 9s

Yeah. We're we don't have a, you know, a firm timeline on that, just due to the nature of the workovers. Know, it These workovers will take months. It's a pretty big campaign to work through all the wells. Like we discussed, have multiple things. We're trying to make sure we get good isolation. So it's months out, not weeks out.

54m 29s

Got it.

54m 31s

And, appreciate you guys, you know, are constantly looking to adjust given changes in prevailing conditions. But [indiscernible] you know, just about kind of early thoughts on on what would happen to the twenty sixth as if oil follows the curve here in the the high fifties, Do you end up maintaining seven active rigs in the Permian? And if you if you maintain seven, kind of what does that mean for Permian TILs?

55m 1s

In '26 and and Permian production?

55m 5s

Yeah. Let me say that if oil were hovering around 60 you said high 50 50s, low 60s, We have the opportunity to make investments in our oil assets. I mean, it's not like that program is shut down. It's not a question of what the number is. It's a question of why the number is. Is it does it move up a little bit? Because OPEC decided to pause their their, you know, reinstate their curtailments for a quarter and that it could happen again three months down the road. Or does it happen because this tariff situation is resolved? We're back to normal trade relations, the world economy is growing and demand increases, I mean, there's all kinds of moving parts here. Right now, we're pausing our oil program pausing, I say we're relaxing slightly. Because we're concerned that oil prices could further weaken. I hope we're wrong on that, but our experience tells us that when you see these events, and you see the possibility be prepared for the worst case scenario. And that's kind of where we are I hope we're overreacting on several of these issues, but that's you're of being conservative and that's probably fair.

56m 28s

Your next question comes from the line of Josh Silverstein with UBS. Your line is open.

56m 35s

Thanks. Good morning, guys. So you're moving some CapEx over to the Marcellus I'm wondering if there's any sort of limit into how much more capital you want to put there. Maybe is there not enough pipeline capacity for volumes to grow? Or is there some sort of trigger you're looking for to continue to push that additional $50,000,000 over?

56m 56s

No, there's really not a significant limit. But the the the constitution pipeline has been in the news lately. And I just want to remind the listener that Constitution is originally configured, originates in our field in Northeast Pennsylvania and goes into the New England market. And we're watching and participating in that conversation seriously. And we would if that were to go, the expectation is that we would make a commitment to deliver long term volumes into that line. And so that's kind of coloring what we want to do at this point in time. We think that issue will resolve itself here in the next few months. But we're looking at that as a potential future opportunity for in the Marcellus All right. And then just on pricing side, you guys already have some power exposure. I think it's high single digits for the Marcellus. Given that you guys already have this, I'm curious if you can give us kind of a backdrop as to maybe if you would add some more a little bit more about what's happening within that power pricing for the Marcellus for you guys?

58m 8s

Yes, Josh, this is Blake. We're always looking for more power pricing. Two deals we have in Marcellus are excellent deals. They've paid very well over time. They're difficult to replicate. And so I think that's really the challenge we've been after We're really interested in particularly greenfield projects where we can capture upfront the long term power strip that we're hoping to get into our gas portfolio. There are a few opportunities in the Marcellus, but we're looking at quite a few opportunities in the Permian as well. I think the market is waking up to the disadvantaged Waha molecule and that it's a great place to generate electron. And so we're looking at many different ways to participate in that.

58m 54s

And your next question comes from the line of Kelly Ackermine with Bank of America. Your line is open.

59m 7s

What?

59m 7s

And Collie, your line is open.

59m 11s

Sorry, I was on mute. I've got a different question on the HARC here. Kinda looking beyond the water issue, where the wall is long enough to get a read on the productivity and how it compares to the Wolfcamp? Yes.

59m 26s

We you know, what what what we see in the hierarchy that one of the things that gives us high degree of confidence that this problem is solvable in that it's not on every well. We've got a couple of drilling spacing units that look like they're performing just fine and making oil volumes that are within a reasonable boundary of expectations. So this yes, we think the laterals are long enough. As I said in my opening remarks, we are highly confident that this is not a reservoir issue per se and it's not a spacing issue, it's not an overfill versus co development issue. It's a mechanical issue near Wilbur. Fixable near Wellbore. And that's our we have an overwhelming bounty of evidence suggesting that. But we're a company that's we focus on results and we want to see the results of these remediations and we will communicate that along the way.

1h 28s

Thanks, Tom. For the follow-up, following up on one of the earlier questions here. If this is the new program, if this is program is a new template kind of point forward, can you give us a sense of what the run rate capital and the oil plateau could look like? And if oil were to decline, would you still expect wet gas production to increase?

1h 50s

Yes. I'll say we don't expect oil to decline. But if I'm understanding your question properly, [indiscernible] we see a good runway as our three year plan had outlined of reasonable growth in our assets broadly. Stan, you want to comment Well, I mean, if I understand the question correctly, I mean, I think, you know, if we were to stay on this path into the future, you know, we would go well through the end of this in terms of the opportunity set that have there. Even if it was this path.

1h 1m 28s

Yeah. We're we're not you know, we're we're holding to our three year plan as outlined with the changes that we've discussed in this call. You know, wanna be really clear with everybody on that. We've We've got a very fulsome model that shows that that three year plan is [indiscernible] And your next question comes from the line of Matt Portillo with TPH. Your line is open.

1h 1m 54s

Good morning, all.

1h 1m 56s

Tom, maybe just a question around maintenance capital. Given the outlook for the second half of twenty twenty five with production, potentially in the mid-170ish range. Could you give us an update on what you think you might need to spend to hold oil volumes flat over a multiyear period? Just trying to get a sense of your maintenance capital program.

1h 2m 18s

Yes. I'm going let Michael take that one.

1h 2m 21s

Yes. I appreciate the question. So as we're looking at the current program for 2025, and looking into the out years, we've discussed, our three year plan has oil growth. So obviously, the capital levels that we're currently at can be be shed. We can remove capital to maintain that oil production. We also have oil growth coming from both the Anadarko and the Permian in most of our plans. So it's important to think about that combination because we're funding in both programs. But in general, now, we see our oil growth We have to think about where are we going to keep the oil production flat at And right now, we look at our our 2025 volume of 160,000 barrels a day, if we were to keep that flat, we would be somewhere around 1,500,000,000.0 to $1,600,000,000 between the Anadarko and the Permian. Obviously, the Marcellus capital is disconnected from any of that oil growth because it doesn't produce any oil.

1h 3m 24s

And Mike, you said that'd be for a multiyear period at which you could hold it flat not just a single one year hold?

1h 3m 30s

That's correct. Yes. So that would be if we were to just go to a maintenance capital for a you know, kind of three year period.

1h 3m 38s

Perfect. And then just a follow-up question. I know your programs are extremely flexible. I was curious how you're thinking about the returns in the Anadarko in a strip price environment versus the Permian program? And is there an opportunity heading into 2026 if we stay at strip that you could further high grade your development between the two basins?

1h 4m 1s

Well, we high grade our development all the time. So the yes, have an opportunity. But it's really a function of that oil gas ratio and also NGLs, natural gas liquids. We've got some really nice Anadarko projects for which gas and natural gas liquids are combined to make the dominant revenue source. So it's a function of the oil gas ratio. We've talked about when we're down 15 to one and lower it starts getting to be a pretty serious horse race among all three of our basins.

1h 4m 40s

And your next question comes from the line of Derrick Whitfield with Texas Capital. Your line is open.

1h 4m 45s

Good morning all and thanks for your time. [indiscernible] slight twist on David's earlier question referencing Slide four. This forward oil to gas ratio were to persist, would change your view on the areas and intervals you develop in the Delaware over your three year forecast?

1h 5m 4s

And I'm primarily thinking of Culbersman.

1h 5m 6s

With this question.

1h 5m 9s

I mean, I don't think it really changes where we go in the Delaware. All four of our operating areas Eddie, Lee, Reeves and Culberson County have really nice competitive environments. Now Culberson tends to be a little gassier, which actually is good for our operating cost and our productivity. But if we had a little stronger Waha price, that might have an impact. But as we look out at the strip, I don't think that'll really be a significant flex of capital within the Permian.

1h 5m 49s

Great. And as my follow-up, regarding your contingency planning comments in your prepared remarks, what price do you see as the next tipping point in all activity assuming current service costs? And that's to assume if we were going lower in price clearly.

1h 6m 4s

I think if we were seriously looking at a price below [indiscernible] And your next question comes from the line of Kevin McCurdy with Pickering Energy Partners. Your line is open.

1h 6m 21s

Hey, good morning.

1h 6m 23s

Looking out to the back half of 2025, what is the rate do to your DUC backlog by the end of the year? And do you have to manage that operationally as you enter into 2026?

1h 6m 36s

Hey, Kevin. This is Michael.

1h 6m 39s

No, we move into 2025 with a nice DUC inventory So even as we're swapping out some Park E into Wolfcamp, we're not seeing any major issues on our frac lines. Obviously, rig count is long term related to our frac fleet count. And so dropping down to seven rigs, if that were to remain unchanged, holding the third frac crew consistently would be difficult. That is shown in our deck that there might be more spot work late in the year if if we hold that seven rigs. But that's not a problem for us operationally. We think that there's ample capacity in the frac market right now and so that's not necessarily a driving force for us.

1h 7m 23s

Kevin, we do a lot of planning and included in those plans is to look at what our DUC inventory looks like both not only in terms of wells, but number of projects, number of pads and both of those are really important in terms of operational flexibility. And so that that's a real important planning. I don't know if you want to call it an input or but it's an important planning consideration. And then in the MBU, our decks are configured often to hit winter pricing. And so it's just a point of active consideration. Wherever we are.

1h 8m 3s

Appreciate that. And as a follow-up, just a clarification on the free cash flow for the remainder of the year, the uses of cash flow, should say.

1h 8m 11s

Will you pay off the term loan first and then buy back shares? Or can you do them concurrently? And are we reading it right that the 50% shareholder return is a multiyear goal and you may not get there in 2025?

1h 8m 25s

Thank you.

1h 8m 26s

Yeah. So look, just as we've done the last couple of quarters, we can and likely will continue to do both in a parallel way. It's what's the weighting, as one front end loaded one back end loaded? I know that we necessarily have to make a choice one or the other as we go along. There's a lot of different considerations that go into the timing and amount of those buybacks. But no, we've not shut down the buyback program by any means. So we'll continue to be opportunistic we get through the rest of the year. But we'll also be focused on what does the cash flow profile look like for the rest of the year as well. And certainly, yeah, if you look back over time, as I said earlier in response to a question, we've historically been well above 50%. Again, we've been 90%. We've been in the mid-70s at various points in time. Were we able to be there? We were able to be there because we had low leverage. And so we think getting these getting the notes paid down early on really helps facilitate stability of shareholder returns for long term.

1h 9m 40s

And I would now like to turn the call back over to Tom Jordan.

1h 9m 44s

I want to thank everybody for a series of great questions. I'll just say in closing, personally I'm deeply proud of the way our organization has responded to not only this volatile time, but also this operational issue we're facing. I think we're on the right track. We have a solid plan and we're going to perform surprise to the upside. But thank you very much for your attention this morning.

1h 10m 10s

This concludes today's conference call. You may now disconnect.

Key Insights

Coterra delivered strong Q1 2025 results, with oil production near the high end of guidance, natural gas production exceeding guidance, CapEx near the low end, and $250M in term loan repayments; recent acquisitions (Franklin Mountain and Avant) are integrating well and outperforming expectations.
The company is reducing projected 2025 CapEx by $100M (Permian down $150M, Marcellus up $50M) in response to oil market uncertainty, while maintaining full-year oil production guidance and increasing natural gas production guidance.
Operational issues with Harkie wells in Culberson County (mechanical/cementing problem causing high water production) are being addressed; Wolfcamp wells are performing strongly, and the company expects to remediate Harkie wells in Q2 with potential upside to production if resolved.
For Q2 2025, total production is guided at 710–760 MBOE/d (oil: 147–157 MBO/d; gas: 2.7–2.85 Bcf/d); full-year 2025 CapEx is now $2.0–$2.3B (down 4% from prior guidance), with a three-year outlook of 5%+ oil growth and 0–5% BOE growth annually on $2.1–$2.4B/year capital.
Coterra remains committed to rapid deleveraging (targeting full repayment of $1B term loan in 2025), maintaining a strong balance sheet, and returning capital to shareholders (Q1 dividend $0.22/share, >3.4% yield); share repurchases will be back-end weighted in 2025 after debt reduction.

Recent Transcripts

Cotera delivered strong Q1 results, raised capital efficiency, and reaffirmed 3-year growth outlook.

Coterra Energy delivered strong Q4 and 2024 results with high returns, capital efficiency, and major acquisitions.

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$1.5B	$3.4B	$9.1B	$5.7B	$5.5B
Cost of Revenue	$1B	$1.5B	$3.1B	$3.2B	$3.5B
Gross Profit	$431M	$1.9B	$6B	$2.5B	$2B
Gross Profit %	29%	56%	66%	44%	37%
R&D Expenses	$0	$0	$0	$0	$0

2020

2021

2022

2023

2024

Revenue

$1.5B

$3.4B

$9.1B

$5.7B

$5.5B

Cost of Revenue

$1B

$1.5B

$3.1B

$3.2B

$3.5B

Gross Profit

$431M

$1.9B

$6B

$2.5B

$2B

Gross Profit %

29%

56%

66%

44%

37%

R&D Expenses

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$201M	$1.2B	$4.1B	$1.6B	$1.1B
Dep. & Amort.	$330M	$693M	$1.6B	$1.6B	$1.8B
Def. Tax	$72M	$126M	$235M	$74M	-$145M
Stock Comp.	$40M	$52M	$73M	$59M	$61M
Chg. in WC	$93M	-$144M	-$186M	$237M	$0

2020

2021

2022

2023

2024

Net Income

$201M

$1.2B

$4.1B

$1.6B

$1.1B

Dep. & Amort.

$330M

$693M

$1.6B

$1.8B

Def. Tax

$72M

$126M

$235M

$74M

-$145M

Stock Comp.

$40M

$52M

$73M

$59M

$61M

Chg. in WC

$93M

-$144M

-$186M

$237M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$140M	$1B	$673M	$956M	$2B
ST Investments	$0	$0	$0	$0	$0
Cash & ST Inv.	$140M	$1B	$673M	$956M	$2B
Receivables	$221M	$1B	$1.3B	$894M	$971M
Inventory	$15M	$39M	$63M	$59M	$46M

2020

2021

2022

2023

2024

Cash

$140M

$1B

$673M

$956M

$2B

ST Investments

Cash & ST Inv.

$140M

$1B

$673M

$956M

$2B

Receivables

$221M

$1B

$1.3B

$894M

$971M

Inventory

$15M

$39M

$63M

$59M

$46M

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. · See all tickers.

Overview
Latest News
Earnings
Income Statement
Cash Flow
Balance Sheet
Related

Coterra Energy Inc. Stock Price: Quote, Forecast, Splits & News (CTRA)

Earnings

Report Date

May 5, 2025

Reported Revenue

924M

Miss -54.45%

Avg 1d Change

5.39%

Report Period

Q1 2025

Reported EPS

0.8

Beat +2.56%

Implied Move 1d

3.86%

Transcript

10m 2s

10m 56s

12m 15s

13m 38s

15m 13s

16m 27s

17m 51s

Thank you, Tom.

17m 53s

Thank you everyone for joining us today on this morning's call.

17m 57s

Today, I'd like to cover three topics.

17m 59s

18m 15s

18m 39s

With BOEs near and natural gas above the high end of the guidance ranges.

18m 44s

Net turn in lines during the quarter were 37 in the Permian, below the guidance midpoint of 40 and the Marcellus was at zero as expected.

18m 54s

19m 13s

Cash operating cost per unit totaled $9.97 per BOE inclusive of about $0.21 per BOE of non recurring costs related to the transaction.

19m 23s

We reported net income of $516,000,000 or $0.68 per share.

19m 29s

19m 43s

21m 17s

Coterra was built to respond to market signals.

21m 21s

And we have both the ability and willingness to adapt to changing conditions.

21m 26s

21m 44s

22m 47s

23m 11s

Natural gas is expected to be between two point seven two five and two point eight seven five Bcf per day.

23m 18s

Delivering over one Tcf of gas on an annualized basis and providing significant leverage to higher natural gas prices.

23m 28s

24m 9s

24m 38s

If we choose to do so.

24m 40s

26m 2s

27m 22s

28m 28s

29m 46s

31m 12s

32m 35s

We will remain nimble and focused on creating long term value for our shareholders. With that, I'll turn it back to Tom.

32m 43s

Thank you, and we're delighted to take your questions.

32m 59s

Our first question comes from the line of Doug Leggett with Wolfe Research. Your line is open.

33m 5s

33m 27s

34m 2s

35m 15s

36m 5s

Okay guys. Thanks for your answers.

36m 12s

36m 48s

37m 52s

38m 39s

39m 4s

39m 40s

And your next question comes from the line of Nitin Kumar with Mizuho. Your line is open.

39m 46s

Hi, good morning guys. Thanks for taking my question. Tom, I want to start off a little bit broader. You mentioned in your opening remarks about the rifle shot and the guided missile.

40m

40m 30s

41m 52s

42m 28s

43m 1s

44m 6s

Your next question comes from the line of Arun Jayaram with JP Morgan. Your line is open.

44m 13s

Yes, good morning. I just wanted to get an update on the Barbara Row.

44m 19s

44m 38s

44m 59s

45m 13s

45m 47s

46m 35s

And your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.

46m 41s

Yes. Thanks for all the color here. Tom, we've talked a lot about oil today. Just curious on your perspective on natural gas. You are taking restarting two rigs here in the Marcellus.

46m 55s

Can you talk about what your priorities are for the Marcellus plan for the balance of the year?

47m

And how that ties into your macro view for gas?

47m 5s

48m 15s

48m 46s

Well, think about that throughout our portfolio. I mean, you ask me if we have enough inventory, you know, my answer to that is determined about a decade ago. It's gonna be no.

48m 59s

49m 52s

And your next question comes from the line of David Deckelbaum with TD Cowen. Your line is open.

50m

Thanks for taking the questions guys.

50m 3s

50m 26s

Yeah.

50m 27s

50m 51s

51m 11s

And we're we're confident hopeful, and our technical analysis tells us that this problem is fixable and that a lot of those volumes are coming back.

51m 27s

And just my second question, you you guys highlighted the flexibility that you have with your asset base.

51m 34s

And talked about, I think, the 15 to one oil to gas price ratio.

51m 40s

51m 54s

53m 22s

53m 37s

And your next question comes from the line of Scott Gruber with CD Capital. Your line is open.

53m 45s

54m 9s

54m 29s

Got it.

54m 31s

55m 1s

In '26 and and Permian production?

55m 5s

56m 28s

Your next question comes from the line of Josh Silverstein with UBS. Your line is open.

56m 35s

56m 56s

58m 8s

58m 54s

And your next question comes from the line of Kelly Ackermine with Bank of America. Your line is open.

59m 7s

What?

59m 7s

And Collie, your line is open.

59m 11s

59m 26s

1h 28s

1h 50s

1h 1m 28s

1h 1m 54s

Good morning, all.

1h 1m 56s

1h 2m 18s

Yes. I'm going let Michael take that one.

1h 2m 21s

1h 3m 24s

And Mike, you said that'd be for a multiyear period at which you could hold it flat not just a single one year hold?

1h 3m 30s

That's correct. Yes. So that would be if we were to just go to a maintenance capital for a you know, kind of three year period.

1h 3m 38s

1h 4m 1s

1h 4m 40s

And your next question comes from the line of Derrick Whitfield with Texas Capital. Your line is open.

1h 4m 45s

1h 5m 4s

And I'm primarily thinking of Culbersman.

1h 5m 6s

With this question.

1h 5m 9s

1h 5m 49s

1h 6m 4s

I think if we were seriously looking at a price below [indiscernible] And your next question comes from the line of Kevin McCurdy with Pickering Energy Partners. Your line is open.

1h 6m 21s

Hey, good morning.

1h 6m 23s

Looking out to the back half of 2025, what is the rate do to your DUC backlog by the end of the year? And do you have to manage that operationally as you enter into 2026?

1h 6m 36s

Hey, Kevin. This is Michael.

1h 6m 39s

1h 7m 23s

1h 8m 3s

Appreciate that. And as a follow-up, just a clarification on the free cash flow for the remainder of the year, the uses of cash flow, should say.

1h 8m 11s

1h 8m 25s

Thank you.

1h 8m 26s

1h 9m 40s

And I would now like to turn the call back over to Tom Jordan.

1h 9m 44s

1h 10m 10s

This concludes today's conference call. You may now disconnect.

Key Insights

Coterra delivered strong Q1 2025 results, with oil production near the high end of guidance, natural gas production exceeding guidance, CapEx near the low end, and $250M in term loan repayments; recent acquisitions (Franklin Mountain and Avant) are integrating well and outperforming expectations.
The company is reducing projected 2025 CapEx by $100M (Permian down $150M, Marcellus up $50M) in response to oil market uncertainty, while maintaining full-year oil production guidance and increasing natural gas production guidance.
Operational issues with Harkie wells in Culberson County (mechanical/cementing problem causing high water production) are being addressed; Wolfcamp wells are performing strongly, and the company expects to remediate Harkie wells in Q2 with potential upside to production if resolved.
For Q2 2025, total production is guided at 710–760 MBOE/d (oil: 147–157 MBO/d; gas: 2.7–2.85 Bcf/d); full-year 2025 CapEx is now $2.0–$2.3B (down 4% from prior guidance), with a three-year outlook of 5%+ oil growth and 0–5% BOE growth annually on $2.1–$2.4B/year capital.
Coterra remains committed to rapid deleveraging (targeting full repayment of $1B term loan in 2025), maintaining a strong balance sheet, and returning capital to shareholders (Q1 dividend $0.22/share, >3.4% yield); share repurchases will be back-end weighted in 2025 after debt reduction.

Coterra Energy Inc. Price & Performance (CTRA)

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