Coterra Energy Reports Decrease in Net Income

Coterra Energy Inc. has recently released its 10-Q report, providing insights into its financial and operating performance for the three and nine months ended September 30, 2024. The company, an independent oil and gas player, operates in the United States, with properties in the Marcellus Shale, Permian Basin, and Anadarko Basin. Coterra Energy sells its natural gas to various customers, including industrial clients, local distribution companies, and major energy firms. The company's net income decreased from $323 million in 2023 to $252 million in 2024 for the three-month period, while net cash provided by operating activities decreased by $3 million over the same period. Equivalent production remained flat at 61.6 MMBoe in 2024, with oil production increasing, natural gas production decreasing, and NGL volumes increasing. The average realized prices for oil, natural gas, and NGLs all experienced declines in 2024 compared to 2023. Coterra Energy's total capital expenditures for drilling, completion, and other fixed assets were $418 million in 2024, down from $542 million in the corresponding period of the prior year. For the nine months ended September 30, 2024, the company's net income decreased from $1.2 billion in 2023 to $824 million in 2024, while net cash provided by operating activities decreased by $729 million. Equivalent production increased to 184.9 MMBoe in 2024 from 179.3 MMBoe in 2023. The average realized prices for oil, natural gas, and NGLs also showed mixed results in 2024 compared to 2023. Coterra Energy issued $500 million aggregate principal amount of 5.60% senior notes due March 15, 2034, and amended its revolving credit agreement to increase aggregate commitments from $1.5 billion to $2.0 billion. The company also increased its quarterly base dividend from $0.20 per share to $0.21 per share in February 2024 and repurchased 15 million shares for $404 million. Coterra Energy's financial results are influenced by commodity prices, and the company strategically curtailed its production in the Marcellus Shale during 2024 in response to weak natural gas prices. The company expects commodity price volatility to continue, driven by geopolitical disruptions and changes in legislation and regulations related to climate change. Coterra Energy's 2024 full-year capital program is expected to be approximately $1.75 billion to $1.85 billion, funded by operating cash flow. As of September 30, 2024, the company had no borrowings outstanding under its revolving credit agreement, with unused commitments of $2.0 billion and unrestricted cash on hand of $843 million. Coterra Energy believes it has adequate liquidity and availability under its revolving credit agreement to meet its working capital requirements over the next 12 months. Operating cash flow fluctuations are driven by changes in commodity prices, production volumes, and operating expenses. The company's net cash provided by operating activities for the nine months ended September 30, 2024 decreased due to lower natural gas prices and production, an increase in operating costs, a decrease in cash received on derivative settlements, and a net reduction in working capital. Cash flows used in investing and financing activities also showed changes compared to the prior year. The market has reacted to these announcements by moving the company's shares -5.1% to a price of $22.71. For more information, read the company's full 10-Q submission here.