Coterra Energy Inc. (NYSE: CTRA) (“Coterra” or the
“Company”) today reported first-quarter 2024 financial and
operating results and declared a quarterly dividend of $0.21 per
share. Additionally, the Company provided second-quarter production
and capital guidance and updated full-year 2024 guidance.
Key Takeaways & Updates
- For the first quarter of 2024, total barrels of oil equivalent
(BOE) production beat the mid-point and oil production beat the
high-end of guidance, and incurred capital expenditures (non-GAAP)
came in below the low-end of guidance.
- Increasing full-year 2024 oil guidance 2.5% from initial
guidance, driven by strong well performance and faster cycle times.
Maintaining full-year 2024 BOE and incurred capital expenditure
(non-GAAP) guidance.
- For the first quarter of 2024, shareholder returns totaled
approximately 90% of Free Cash Flow (non-GAAP), inclusive of our
quarterly base dividend and $150 million of share repurchases
during the quarter (cash basis, excluding 1% excise tax). The
Company remains committed to returning 50% or greater of its annual
Free Cash Flow (non-GAAP) to shareholders.
- Issued $500 million aggregate principal amount of senior
unsecured notes due 2034, with a coupon of 5.60% per annum. Coterra
intends to use the net proceeds from the offering, together with
cash on hand, to fund the repayment of the $575 million outstanding
principal amount, and any other amounts due thereon, of its 3.67%
Series L Senior Notes due September 18, 2024.
Tom Jorden, Chairman, CEO and President of Coterra, noted,
"Coterra continues to deliver outstanding operational and financial
results driven by the company's high-quality asset portfolio and
top-tier operating team. Coterra continues to fire on all
cylinders, and shifting our near-term capital program to focus on
oil and liquids-rich plays remains prudent. However, the Company
maintains optionality to take advantage of a structural change in
the natural gas macro as LNG exports grow and electricity demand
increases. One of our core principles at Coterra is maintaining
flexibility and our low-cost, diversified asset portfolio provides
ample opportunity to generate consistent, profitable growth through
the cycles."
First-Quarter 2024 Highlights
- Net Income (GAAP) totaled $352 million, or $0.47 per share.
Adjusted Net Income (non-GAAP) was $383 million, or $0.51 per
share.
- Cash Flow From Operating Activities (GAAP) totaled $856
million. Discretionary Cash Flow (non-GAAP) totaled $797
million.
- Cash paid for capital expenditures for drilling, completion and
other fixed asset additions (GAAP) totaled $457 million. Incurred
capital expenditures from drilling, completion and other fixed
asset additions (non-GAAP) totaled $450 million, below the low end
of our guidance range of $460 to $540 million, due to timing.
- Free Cash Flow (non-GAAP) totaled $340 million.
- Unit operating cost (reflecting costs from direct operations,
transportation, production taxes and G&A) totaled $8.68 per
BOE, within our annual guidance range of $7.45 to $9.55 per
BOE.
- Total equivalent production of 686 MBoepd (thousand barrels of
oil equivalent per day), was near the high end of guidance (660 to
690 MBoepd), driven by improved cycle times and strong well
performance in all three of our regions.
- Oil production averaged 102.5 MBopd (thousand barrels of oil
per day), exceeding the high end of guidance (95 to 99 MBopd).
- Natural gas production averaged 2,960 MMcfpd (million cubic
feet per day), exceeding the high end of guidance (2,850 to 2,950
MMcfpd).
- NGLs production averaged 90.2 MBoepd.
- Realized average prices:
- Oil was $75.16 per Bbl (barrel), excluding the effect of
commodity derivatives, and $75.00 per Bbl, including the effect of
commodity derivatives
- Natural Gas was $2.00 per Mcf (thousand cubic feet), excluding
the effect of commodity derivatives, and $2.10 per Mcf, including
the effect of commodity derivatives
- NGLs were $21.09 per Bbl
Shareholder Return Highlights
- Common Dividend: On May 1, 2024, Coterra's Board of
Directors (the "Board") approved a quarterly base dividend of $0.21
per share, equating to a 3.1% annualized yield, based on the
Company's $26.91 closing share price on May 1, 2024. The dividend
will be paid on May 30, 2024 to holders of record on May 16,
2024.
- Share Repurchases: During the quarter, the Company
repurchased 5.6 million shares for $150 million (cash basis,
excluding 1% excise tax) at a weighted-average price of
approximately $26.94 per share, leaving $1.4 billion remaining as
of March 31, 2024 on its $2.0 billion share repurchase
authorization.
- Total Shareholder Return: During the quarter, total
shareholder returns amounted to $307 million, comprised of $157
million of declared dividends and $150 million of share repurchases
(cash basis, excluding 1% excise tax).
- Reiterate Shareholder Return Strategy: Coterra is
committed to returning 50% or greater of annual Free Cash Flow
(non-GAAP) to shareholders through its $0.84 per share annual
dividend and share repurchases.
Guidance Updates:
- Reiterating 2024 incurred capital expenditures (non-GAAP) of
$1.75 to $1.95 billion.
- Increasing 2024 oil production guidance to 102 to 107 MBopd, up
2.5% at the mid-point versus prior guidance.
- Expect second-quarter 2024 total equivalent production of 625
to 655 MBoepd, oil production of 103 to 107 MBopd, natural gas
production of 2,600 to 2,700 MMcfpd, and incurred capital
expenditures (non-GAAP) of $470 to $550 million.
- Estimate 2024 Discretionary Cash Flow (non-GAAP) of
approximately $3.1 billion and 2024 Free Cash Flow (non-GAAP) of
approximately $1.3 billion, at $79/bbl WTI and $2.35/mmbtu average
NYMEX assumptions.
- For more details on annual and second quarter 2024 guidance,
see 2024 Guidance Section in the tables below.
Strong Financial Position
During the quarter, Coterra issued new $500 million senior
unsecured notes due 2034. As of March 31, 2024, Coterra had total
debt outstanding of $2.651 billion, of which $575 million is due in
September 2024. The Company exited the quarter with a cash and cash
equivalents of $1.289 billion, $250 million in short-term
investments, and no debt outstanding under its $1.5 billion
revolving credit facility, resulting in total liquidity of
approximately $3.039 billion. Coterra intends to use the net
proceeds from the recent debt offering, together with cash on hand,
to fund the repayment of the $575 million notes due September 18,
2024. Coterra's net debt to trailing twelve-month EBITDAX ratio
(non-GAAP) at March 31, 2024 was 0.3x.
See “Supplemental non-GAAP Financial Measures” below for
descriptions of the above non-GAAP measures as well as
reconciliations of these measures to the associated GAAP
measures.
Committed to Sustainability and ESG Leadership
Coterra is committed to environmental stewardship, sustainable
practices, and strong corporate governance. The Company's
sustainability report can be found under "ESG" on
www.coterra.com.
First-Quarter 2024 Conference Call
Coterra will host a conference call tomorrow, Friday, May 3,
2024, at 8:00 AM CT (9:00 AM ET), to discuss first-quarter 2024
financial and operating results.
Conference Call Information
Date: May 3, 2024
Time: 8:00 AM CT / 9:00 AM ET
Dial-in (for callers in the U.S. and Canada): (888) 550-5424
International dial-in: (646) 960-0819
Conference ID: 3813676
The live audio webcast and related earnings presentation can be
accessed on the "Events & Presentations" page under the
"Investors" section of the Company's website at www.coterra.com.
The webcast will be archived and available at the same location
after the conclusion of the live event.
About Coterra Energy
Coterra is a premier exploration and production company based in
Houston, Texas with operations focused in the Permian Basin,
Marcellus Shale, and Anadarko Basin. We strive to be a leading
energy producer, delivering sustainable returns through the
efficient and responsible development of our diversified asset
base. Learn more about us at www.coterra.com.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains certain forward-looking statements
within the meaning of federal securities laws. Forward-looking
statements are not statements of historical fact and reflect
Coterra's current views about future events. Such forward-looking
statements include, but are not limited to, statements about
returns to shareholders, enhanced shareholder value, reserves
estimates, future financial and operating performance, and goals
and commitment to sustainability and ESG leadership, strategic
pursuits and goals, including with respect to the publication of
Coterra’s Sustainability Report, and other statements that are not
historical facts contained in this press release. The words
"expect," "project," "estimate," "believe," "anticipate," "intend,"
"budget," "plan," "predict," "potential," "possible," "may,"
"should," "could," "would," "will," "strategy," "outlook", "guide"
and similar expressions are also intended to identify
forward-looking statements. We can provide no assurance that the
forward-looking statements contained in this press release will
occur as projected and actual results may differ materially from
those projected. Forward-looking statements are based on current
expectations, estimates and assumptions that involve a number of
risks and uncertainties that could cause actual results to differ
materially from those projected. These risks and uncertainties
include, without limitation, the volatility in commodity prices for
crude oil and natural gas; cost increases; the effect of future
regulatory or legislative actions; the impact of public health
crises, including pandemics (such as the coronavirus pandemic) and
epidemics and any related governmental policies or actions on
Coterra’s business, financial condition and results of operations;
actions by, or disputes among or between, the Organization of
Petroleum Exporting Countries and other producer countries; market
factors; market prices (including geographic basis differentials)
of oil and natural gas; impacts of inflation; labor shortages and
economic disruption (including as a result of the pandemic or
geopolitical disruptions such as the war in Ukraine or conflict in
the Middle East); determination of reserves estimates, adjustments
or revisions, including factors impacting such determination such
as commodity prices, well performance, operating expenses and
completion of Coterra’s annual PUD reserves process, as well as the
impact on our financial statements resulting therefrom; the
presence or recoverability of estimated reserves; the ability to
replace reserves; environmental risks; drilling and operating
risks; exploration and development risks; competition; the ability
of management to execute its plans to meet its goals; and other
risks inherent in Coterra's businesses. In addition, the
declaration and payment of any future dividends, whether regular
base quarterly dividends, variable dividends or special dividends,
will depend on Coterra's financial results, cash requirements,
future prospects and other factors deemed relevant by Coterra's
Board. While the list of factors presented here is considered
representative, no such list should be considered to be a complete
statement of all potential risks and uncertainties. Should one or
more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual outcomes may vary
materially from those indicated. For additional information about
other factors that could cause actual results to differ materially
from those described in the forward-looking statements, please
refer to Coterra's annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K and other filings with
the SEC, which are available on Coterra's website at
www.coterra.com.
Forward-looking statements are based on the estimates and
opinions of management at the time the statements are made. Except
to the extent required by applicable law, Coterra does not
undertake any obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place
undue reliance on these forward-looking statements that speak only
as of the date hereof.
Operational Data
The tables below provide a summary of production volumes, price
realizations and operational activity by region and units costs for
the Company for the periods indicated:
Three Months Ended
March 31,
2024
2023
PRODUCTION VOLUMES
Marcellus Shale
Natural gas (Mmcf/day)
2,310.8
2,134.4
Daily equivalent production (MBoepd)
385.1
355.7
Permian Basin
Natural gas (Mmcf/day)
486.7
427.2
Oil (MBbl/day)
97.0
84.3
NGL (MBbl/day)
70.1
64.1
Daily equivalent production (MBoepd)
248.2
219.6
Anadarko Basin
Natural gas (Mmcf/day)
161.2
194.3
Oil (MBbl/day)
5.5
7.9
NGL (MBbl/day)
20.1
19.3
Daily equivalent production (MBoepd)
52.4
59.6
Total Company
Natural gas (Mmcf/day)
2,960.1
2,756.6
Oil (MBbl/day)
102.5
92.2
NGL (MBbl/day)
90.2
83.4
Daily equivalent production (MBoepd)
686.1
635.0
AVERAGE SALES PRICE (excluding
hedges)
Marcellus Shale
Natural gas ($/Mcf)
$
2.20
$
3.71
Permian Basin
Natural gas ($/Mcf)
$
1.02
$
1.40
Oil ($/Bbl)
$
75.18
$
73.96
NGL ($/Bbl)
$
20.53
$
22.46
Anadarko Basin
Natural gas ($/Mcf)
$
2.10
$
3.14
Oil ($/Bbl)
$
74.78
$
74.75
NGL ($/Bbl)
$
23.05
$
27.63
Total Company
Natural gas ($/Mcf)
$
2.00
$
3.31
Oil ($/Bbl)
$
75.16
$
74.03
NGL ($/Bbl)
$
21.09
$
23.66
Three Months Ended
March 31,
2024
2023
AVERAGE SALES PRICE (including
hedges)
Total Company
Natural gas ($/Mcf)
$
2.10
$
3.72
Oil ($/Bbl)
$
75.00
$
74.09
NGL ($/Bbl)
$
21.09
$
23.66
Three Months Ended
March 31,
2024
2023
WELLS DRILLED(1)
Gross wells
Marcellus Shale
14
20
Permian Basin
48
39
Anadarko Basin
8
6
70
65
Net wells
Marcellus Shale
13.0
20.0
Permian Basin
23.2
16.6
Anadarko Basin
6.7
3.3
42.9
39.9
TURN IN LINES
Gross wells
Marcellus Shale
11
25
Permian Basin
42
45
Anadarko Basin
5
4
58
74
Net wells
Marcellus Shale
11.0
25.0
Permian Basin
21.9
23.1
Anadarko Basin
0.1
0.1
33.0
48.2
AVERAGE RIG COUNTS
Marcellus Shale
2.0
3.0
Permian Basin
8.0
6.0
Anadarko Basin
2.0
1.0
Three Months Ended
March 31,
2024
2023
AVERAGE UNIT COSTS ($/Boe)(2)
Direct operations
$
2.50
$
2.34
Gathering, processing and
transportation
4.00
4.13
Taxes other than income
1.19
1.50
General and administrative (excluding
stock-based compensation and severance expense)
0.99
0.93
Unit Operating Cost
$
8.68
$
8.90
Depreciation, depletion and
amortization
6.92
6.45
Exploration
0.07
0.07
Stock-based compensation
0.22
0.28
Severance expense
—
0.12
Interest expense, net
0.06
0.09
$
15.94
$
15.91
_______________________________________________________________________________
(1)
Wells drilled represents wells drilled to
total depth during the period.
(2)
Total unit costs may differ from the sum
of the individual costs due to rounding.
Derivatives Information
As of March 31, 2024, the Company had the following outstanding
financial commodity derivatives:
2024
Natural Gas
Second Quarter
Third Quarter
Fourth Quarter
NYMEX collars
Volume (MMBtu)
44,590,000
45,080,000
16,690,000
Weighted average floor ($/MMBtu)
$
2.70
$
2.75
$
2.75
Weighted average ceiling ($/MMBtu)
$
3.87
$
3.94
$
4.23
2025
Natural Gas
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
NYMEX collars
Volume (MMBtu)
9,000,000
9,100,000
9,200,000
9,200,000
Weighted average floor ($/MMBtu)
$
3.25
$
3.25
$
3.25
$
3.25
Weighted average ceiling ($/MMBtu)
$
4.79
$
4.79
$
4.79
$
4.79
2024
Oil
Second Quarter
Third Quarter
Fourth Quarter
WTI oil collars
Volume (MBbl)
3,185
2,760
2,760
Weighted average floor ($/Bbl)
$
67.57
$
65.00
$
65.00
Weighted average ceiling ($/Bbl)
$
90.47
$
87.17
$
87.17
WTI Midland oil basis swaps
Volume (MBbl)
3,185
2,760
2,760
Weighted average differential ($/Bbl)
$
1.15
$
1.14
$
1.14
In April 2024, the Company entered into the following financial
commodity derivatives:
2024
Oil
Second Quarter
Third Quarter
Fourth Quarter
WTI oil collars
Volume (MBbl)
—
460
460
Weighted average floor ($/Bbl)
$
—
$
65.00
$
65.00
Weighted average ceiling ($/Bbl)
$
—
$
86.02
$
86.02
2025
Oil
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
WTI oil collars
Volume (MBbl)
900
910
—
—
Weighted average floor ($/Bbl)
$
65.00
$
65.00
$
—
$
—
Weighted average ceiling ($/Bbl)
$
84.21
$
84.21
$
—
$
—
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
(In millions,
except per share amounts)
2024
2023
OPERATING REVENUES
Natural gas
$
538
$
822
Oil
701
615
NGL
173
177
Gain on derivative instruments
—
138
Other
21
25
1,433
1,777
OPERATING EXPENSES
Direct operations
156
134
Gathering, processing and
transportation
250
236
Taxes other than income
74
86
Exploration
5
4
Depreciation, depletion and
amortization
432
369
General and administrative (excluding
stock-based compensation and severance expense)
62
53
Stock-based compensation
13
16
Severance expense
—
7
992
905
(Loss) gain on sale of assets
(1
)
5
INCOME FROM OPERATIONS
440
877
Interest expense
19
17
Interest income
(16
)
(12
)
Income before income taxes
437
872
Income tax expense
85
195
NET INCOME
$
352
$
677
Earnings per share - Basic
$
0.47
$
0.88
Weighted-average common shares
outstanding
750
764
CONDENSED CONSOLIDATED BALANCE
SHEET (Unaudited)
(In
millions)
March 31, 2024
December 31,
2023
ASSETS
Cash and cash equivalents
$
1,289
$
956
Short-term investments
250
-
Current assets
1,011
1,059
Properties and equipment, net (successful
efforts method)
17,959
17,933
Other assets
444
467
$
20,953
$
20,415
LIABILITIES, REDEEMABLE PREFERRED STOCK
AND STOCKHOLDERS' EQUITY
Current liabilities
$
1,134
$
1,085
Current portion of long-term debt
575
575
Long-term debt, net (excluding current
maturities)
2,076
1,586
Deferred income taxes
3,391
3,413
Other long term liabilities
680
709
Cimarex redeemable preferred stock
8
8
Stockholders’ equity
13,089
13,039
$
20,953
$
20,415
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
(In
millions)
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income
$
352
$
677
Depreciation, depletion and
amortization
432
369
Deferred income tax expense
(22
)
23
(Gain) loss on sale of assets
1
(5
)
Gain on derivative instruments
—
(138
)
Net cash received in settlement of
derivative instruments
26
100
Stock-based compensation and other
12
17
Income charges not requiring cash
(4
)
(4
)
Changes in assets and liabilities
59
455
Net cash provided by operating
activities
856
1,494
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures for drilling,
completion and other fixed asset additions
(457
)
(483
)
Capital expenditures for leasehold and
property acquisitions
(1
)
(1
)
Purchases of short-term investments
(250
)
—
Proceeds from sale of assets
—
5
Net cash used in investing activities
(708
)
(479
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net proceeds from debt
499
—
Repayment of finance leases
(1
)
(2
)
Common stock repurchases
(150
)
(268
)
Dividends paid
(158
)
(436
)
Tax withholding on vesting of stock
awards
—
(1
)
Capitalized debt issuance costs
(5
)
(7
)
Cash paid for conversion of redeemable
preferred stock
—
(1
)
Net cash provided by (used in) financing
activities
185
(715
)
Net increase in cash, cash equivalents and
restricted cash
$
333
$
300
Reconciliation of Incurred Capital
Expenditures
Incurred capital expenditures is defined as capital expenditures
for drilling, completion and other fixed asset additions less
changes in accrued capital costs.
Three Months Ended
March 31,
(In
millions)
2024
2023
Cash paid for capital expenditures for
drilling, completion and other fixed asset additions (GAAP)
$
457
$
483
Change in accrued capital costs
(7
)
85
Incurred capital expenditures for
drilling, completion and other fixed asset additions (non-GAAP)
$
450
$
568
Supplemental Non-GAAP Financial Measures
(Unaudited)
We report our financial results in accordance with accounting
principles generally accepted in the United States (GAAP). However,
we believe certain non-GAAP performance measures may provide
financial statement users with additional meaningful comparisons
between current results and results of prior periods. In addition,
we believe these measures are used by analysts and others in the
valuation, rating and investment recommendations of companies
within the oil and natural gas exploration and production industry.
See the reconciliations below that compare GAAP financial measures
to non-GAAP financial measures for the periods indicated.
We have also included herein certain forward-looking non-GAAP
financial measures. Due to the forward-looking nature of these
non-GAAP financial measures, we cannot reliably predict certain of
the necessary components of the most directly comparable
forward-looking GAAP measures, such as changes in assets and
liabilities (including future impairments) and cash paid for
certain capital expenditures. Accordingly, we are unable to present
a quantitative reconciliation of such forward-looking non-GAAP
financial measures to their most directly comparable
forward-looking GAAP financial measures. Reconciling items in
future periods could be significant.
Reconciliation of Net Income to Adjusted Net
Income and Adjusted Earnings Per Share
Adjusted Net Income and Adjusted Earnings per Share are
presented based on our management's belief that these non-GAAP
measures enable a user of financial information to understand the
impact of identified adjustments on reported results. Adjusted Net
Income is defined as net income plus gain and loss on sale of
assets, non-cash gain and loss on derivative instruments,
stock-based compensation expense, severance expense, and tax effect
on selected items. Adjusted Earnings per Share is defined as
Adjusted Net Income divided by weighted-average common shares
outstanding. Additionally, we believe these measures provide
beneficial comparisons to similarly adjusted measurements of prior
periods and use these measures for that purpose. Adjusted Net
Income and Adjusted Earnings per Share are not measures of
financial performance under GAAP and should not be considered as
alternatives to net income and earnings per share, as defined by
GAAP.
Three Months Ended
March 31,
(In millions,
except per share amounts)
2024
2023
As reported - net income
$
352
$
677
Reversal of selected items:
(Gain) loss on sale of assets
1
(5
)
(Gain) loss on derivative
instruments(1)
26
(38
)
Stock-based compensation expense
13
16
Severance expense
—
7
Tax effect on selected items
(9
)
4
Adjusted net income
$
383
$
661
As reported - earnings per share
$
0.47
$
0.88
Per share impact of selected items
0.04
(0.01
)
Adjusted earnings per share
$
0.51
$
0.87
Weighted-average common shares
outstanding
750
764
_______________________________________________________________________________
(1)
This amount represents the non-cash
mark-to-market changes of our commodity derivative instruments
recorded in Gain (loss) on derivative instruments in the Condensed
Consolidated Statement of Operations.
Reconciliation of Discretionary Cash Flow and Free Cash
Flow
Discretionary Cash Flow is defined as cash flow from operating
activities excluding changes in assets and liabilities.
Discretionary Cash Flow is widely accepted as a financial indicator
of an oil and gas company’s ability to generate available cash to
internally fund exploration and development activities, return
capital to shareholders through dividends and share repurchases,
and service debt and is used by our management for that purpose.
Discretionary Cash Flow is presented based on our management’s
belief that this non-GAAP measure is useful information to
investors when comparing our cash flows with the cash flows of
other companies that use the full cost method of accounting for oil
and gas producing activities or have different financing and
capital structures or tax rates. Discretionary Cash Flow is not a
measure of financial performance under GAAP and should not be
considered as an alternative to cash flows from operating
activities or net income, as defined by GAAP, or as a measure of
liquidity.
Free Cash Flow is defined as Discretionary Cash Flow less cash
paid for capital expenditures. Free Cash Flow is an indicator of a
company’s ability to generate cash flow after spending the money
required to maintain or expand its asset base, and is used by our
management for that purpose. Free Cash Flow is presented based on
our management’s belief that this non-GAAP measure is useful
information to investors when comparing our cash flows with the
cash flows of other companies. Free Cash Flow is not a measure of
financial performance under GAAP and should not be considered as an
alternative to cash flows from operating activities or net income,
as defined by GAAP, or as a measure of liquidity.
Three Months Ended
March 31,
(In
millions)
2024
2023
Cash flow from operating activities
$
856
$
1,494
Changes in assets and liabilities
(59
)
(455
)
Discretionary cash flow
797
1,039
Cash paid for capital expenditures for
drilling, completion and other fixed asset additions
(457
)
(483
)
Free cash flow
$
340
$
556
Reconciliation of Adjusted EBITDAX
Adjusted EBITDAX is defined as net income plus interest expense,
interest income, income tax expense, depreciation, depletion, and
amortization (including impairments), exploration expense, gain and
loss on sale of assets, non-cash gain and loss on derivative
instruments, stock-based compensation expense, and severance
expense. Adjusted EBITDAX is presented on our management’s belief
that this non-GAAP measure is useful information to investors when
evaluating our ability to internally fund exploration and
development activities and to service or incur debt without regard
to financial or capital structure. Our management uses Adjusted
EBITDAX for that purpose. Adjusted EBITDAX is not a measure of
financial performance under GAAP and should not be considered as an
alternative to cash flows from operating activities or net income,
as defined by GAAP, or as a measure of liquidity.
Three Months Ended
March 31,
(In
millions)
2024
2023
Net income
$
352
$
677
Plus (less):
Interest expense
19
17
Interest income
(16
)
(12
)
Income tax expense
85
195
Depreciation, depletion and
amortization
432
369
Exploration
5
4
(Gain) loss on sale of assets
1
(5
)
Non-cash (gain) loss on derivative
instruments
26
(38
)
Severance expense
—
7
Stock-based compensation
13
16
Adjusted EBITDAX
$
917
$
1,230
Trailing Twelve Months
Ended
(In
millions)
March 31, 2024
December 31,
2023
Net income
$
1,300
$
1,625
Plus (less):
Interest expense
75
73
Interest income
(51
)
(47
)
Income tax expense
393
503
Depreciation, depletion and
amortization
1,704
1,641
Exploration
21
20
(Gain) loss on sale of assets
(6
)
(12
)
Non-cash loss on derivative
instruments
119
54
Severance expense
4
12
Stock-based compensation
56
59
Adjusted EBITDAX (trailing twelve
months)
$
3,615
$
3,928
Reconciliation of Net Debt
The total debt to total capitalization ratio is calculated by
dividing total debt by the sum of total debt and total
stockholders’ equity. This ratio is a measurement which is
presented in our annual and interim filings and our management
believes this ratio is useful to investors in assessing our
leverage. Net Debt is calculated by subtracting cash and cash
equivalents and short-term investments from total debt. The Net
Debt to Adjusted Capitalization ratio is calculated by dividing Net
Debt by the sum of Net Debt and total stockholders’ equity. Net
Debt and the Net Debt to Adjusted Capitalization ratio are non-GAAP
measures which our management believes are also useful to investors
when assessing our leverage since we have the ability to and may
decide to use a portion of our cash and cash equivalents and
short-term investments to retire debt. Our management uses these
measures for that purpose. Additionally, as our planned
expenditures are not expected to result in additional debt, our
management believes it is appropriate to apply cash and cash
equivalents and short-term investments to reduce debt in
calculating the Net Debt to Adjusted Capitalization ratio.
(In
millions)
March 31, 2024
December 31,
2023
Current portion of long-term debt
$
575
$
575
Long-term debt, net
2,076
1,586
Total debt
2,651
2,161
Stockholders’ equity
13,089
13,039
Total capitalization
$
15,740
$
15,200
Total debt
$
2,651
$
2,161
Less: Cash and cash equivalents
(1,289
)
(956
)
Less: Short-term investments
(250
)
—
Net debt
$
1,112
$
1,205
Net debt
$
1,112
$
1,205
Stockholders’ equity
13,089
13,039
Total adjusted capitalization
$
14,201
$
14,244
Total debt to total capitalization
ratio
16.8
%
14.2
%
Less: Impact of cash and cash
equivalents
9.0
%
5.7
%
Net debt to adjusted capitalization
ratio
7.8
%
8.5
%
Reconciliation of Net Debt to Adjusted
EBITDAX
Total debt to net income is defined as total debt divided by net
income. Net debt to Adjusted EBITDAX is defined as net debt divided
by trailing twelve month Adjusted EBITDAX. Net debt to Adjusted
EBITDAX is a non-GAAP measure which our management believes is
useful to investors when assessing our credit position and
leverage.
(In
millions)
March 31, 2024
December 31,
2023
Total debt
$
2,651
$
2,161
Net income
1,300
1,625
Total debt to net income ratio
2.0 x
1.3 x
Net debt (as defined above)
$
1,112
$
1,205
Adjusted EBITDAX (Trailing twelve
months)
3,615
3,928
Net debt to Adjusted EBITDAX
0.3 x
0.3 x
2024 Guidance
The tables below present full-year and second quarter 2024
guidance.
Full Year Guidance
2024 Guidance
(February)
Updated 2024 Guidance
Low Mid High
Low Mid High
Total Equivalent Production (MBoed)
635 - 655 - 675
Gas (Mmcf/day)
2,650 - 2,725 - 2,800
Oil (MBbl/day)
99.0 - 102.0 - 105.0
102.0 - 104.5 - 107.0
Net wells turned in line
Marcellus Shale
37 - 40 - 43
Permian Basin
75 - 83 - 90
Anadarko Basin
20 - 23 - 25
Incurred capital expenditures ($ in
millions)
Total Company
$1,750 - $1,850 - $1,950
Drilling and completion
Marcellus Shale
$350- $375 -$400
Permian Basin
$945 - $1,000 - $1,055
Anadarko Basin
$270 - $290 - $320
Midstream, saltwater disposal and
infrastructure
$185 - $185 - $185
Commodity price assumptions:
WTI ($ per bbl)
$75
$79
Henry Hub ($ per mmbtu)
$2.51
$2.35
Cash Flow & Investment ($ in
billions)
Discretionary Cash Flow
$3.1
$3.1
Incurred Capital Expenditures
$1.75 - $1.85 - $1.95
Free Cash Flow (DCF - cash capex)
$1.3
$1.3
$ per boe, unless noted:
Lease operating expense + workovers +
region office
$2.15 - $2.50 - $2.85
Gathering, processing, &
transportation
$3.50 - $4.00 - $4.50
Taxes other than income
$1.00 - $1.10 - $1.20
General & administrative (1)
$0.80 - $0.90 - $1.00
Unit Operating Cost
$7.45 - $8.50 - $9.55
_______________________________________________________________________________
(1)
Excludes stock-based compensation and
severance expense
Quarterly Guidance
First Quarter 2024
Guidance
First Quarter 2024
Actual
Second Quarter 2024
Guidance
Low Mid High
Low Mid High
Total Equivalent Production (MBoed)
660 - 675 - 690
686
625 - 640 - 655
Gas (Mmcf/day)
2,850 - 2,900 - 2,950
2,960
2,600 - 2,650 - 2,700
Oil (MBbl/day)
95.0 - 97.0 - 99.0
102.5
103.0 - 105.0 - 107.0
Net wells turned in line
Marcellus Shale
20 - 23 - 26
11
0 - 0 - 0
Permian Basin
15 - 21 - 27
23
15 - 23 - 30
Anadarko Basin
0 - 0 - 0
0
7 - 10 - 13
Incurred capital expenditures ($ in
millions)
Total Company
$460 - $500 - $540
$450
$470 - $510 - $550
Drilling and completion
Marcellus Shale
$130
Permian Basin
$209
Anadarko Basin
$73
Midstream, saltwater disposal and
infrastructure
$38
Commodity price assumptions:
WTI ($ per bbl)
$75
$77
$82
Henry Hub ($ per mmbtu)
$2.55
$2.25
$1.76
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502158335/en/
Investor Contact Daniel Guffey - Vice President of
Finance, IR & Treasury 281.589.4875
Hannah Stuckey - Investor Relations Manager
281.589.4983
Grafico Azioni Coterra Energy (NYSE:CTRA)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Coterra Energy (NYSE:CTRA)
Storico
Da Gen 2024 a Gen 2025
