Coterra(CTRA) - 2025 Q1 - Quarterly Results

Production and Operational Performance - For Q1 2025, total BOE production was 747 MBoepd, exceeding guidance of 710 to 750 MBoepd[4] - Total production volumes for the Company increased to 3,043.8 Mmcf/day in Q1 2025, up from 2,960.1 Mmcf/day in Q1 2024, representing a growth of approximately 2.8%[20] - The average daily equivalent production in the Permian Basin increased to 303.4 MBoepd in Q1 2025, up from 248.2 MBoepd in Q1 2024, representing a growth of 22.3%[20] - The Company drilled a total of 75 gross wells in Q1 2025, compared to 70 gross wells in Q1 2024, reflecting a 7.1% increase in drilling activity[21] - The average operated rig count in the Permian Basin increased to 11.7 in Q1 2025, compared to 8.0 in Q1 2024, showing a 46.3% increase in operational capacity[21] Financial Performance - Net Income for Q1 2025 was $516 million, or$0.68 per share, while Adjusted Net Income was $608 million, or$0.80 per share[7] - Operating revenues increased to $1,904 million in Q1 2025, up 32.8$1,433 million in Q1 2024[27] - Net income for Q1 2025 was $516 million, representing a 46.5$352 million in Q1 2024[27] - Earnings per share (EPS) rose to $0.68 in Q1 2025, up 44.7$0.47 in Q1 2024[27] - Cash flow from operating activities was $1,144 million in Q1 2025, a 33.6$856 million in Q1 2024[44] - Free cash flow reached $663 million in Q1 2025, compared to$340 million in Q1 2024, indicating a significant increase[44] - Adjusted EBITDAX for Q1 2025 was $1,337 million, up 45.8$917 million in Q1 2024[48] Capital Expenditures and Budget - Coterra is lowering its 2025 capital budget range to $2.0 to$2.3 billion, down from $2.1 to$2.4 billion, due to reduced oil-directed activity[11] - Capital expenditures for drilling and completion were $472 million in Q1 2025, slightly higher than$457 million in Q1 2024[31] - Capital expenditures for 2025 are projected to be between $2,000 million and$2,300 million, with a midpoint of $2,150 million[63] Debt and Equity - Coterra's total debt outstanding as of March 31, 2025, was$4.25 billion, with a Net Debt to trailing twelve-month Adjusted Pro Forma EBITDAX ratio of 0.9x[10] - Long-term debt increased to $4,280 million as of March 31, 2025, compared to$3,535 million at the end of 2024[29] - The total debt to total capitalization ratio is 23.1% as of March 31, 2025, up from 21.2% as of December 31, 2024[54] - Net debt increased to $4,094 million as of March 31, 2025, compared to$1,497 million as of December 31, 2024, indicating a significant increase in leverage[57] - Stockholders' equity rose to $14,224 million as of March 31, 2025, up from$13,122 million at the end of 2024[29] Shareholder Returns - The company expects 2025 Free Cash Flow to total $2.1 billion, which will be used for dividends, debt reduction, and share repurchases[7] - The company declared a quarterly dividend of$0.22 per share, equating to a 3.4% annualized yield based on a closing share price of $25.67[11] - Coterra expects to return 50$24 million during the quarter, leaving $1.1 billion remaining on its share repurchase authorization[11] Price and Market Outlook - Average sales price for natural gas (excluding hedges) rose to$3.28/Mcf in Q1 2025, compared to $2.00/Mcf in Q1 2024, marking a significant increase of 64$69.73/Bbl in Q1 2025 from $75.16/Bbl in Q1 2024, a decline of about 7.2$61.79/Bbl for Q2 2025, indicating a strategic hedging position to mitigate price volatility[25] - The Company has entered into financial commodity derivatives for natural gas with a weighted average ceiling price of $5.75/MMBtu for Q4 2026, reflecting proactive risk management[26] - The company has updated its guidance for WTI prices to$63 per barrel and Henry Hub prices to $3.70 per mmbtu for 2025[63] Future Projections - The company expects total equivalent production for 2025 to range from 720 MBoed to 770 MBoed, with a midpoint of 745 MBoed[63] - The company anticipates discretionary cash flow of$5.0 billion for 2025, with a free cash flow forecast of $2.7 billion[63] - The net debt to Adjusted EBITDAX ratio is projected to be 0.9x for the trailing twelve months ended March 31, 2025, compared to 0.4x for the trailing twelve months ended December 31, 2024[60] - The company plans to turn in line 150 to 165 net wells in the Permian Basin for 2025, with no changes in the Marcellus Shale and Anadarko Basin[63]