Coterra Energy Inc. · NYSE:CTRA
Coterra Energy — Q4 2024 Earnings Presentation
40 slides from Coterra Energy's earnings presentation, Feb 25, 2025
Slide 1: 4Q24 Earnings Presentation
4Q24 Earnings Presentation February 24, 2025
Slide 2: Disclaimer
Disclaimer Cautionary Statement Regarding Forward-Looking Information This presentation 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.
Slide 3: Disciplined 2025 Capital Program, Free Cash Flow, and Production Growth
Disciplined 2025 Capital Program, Free Cash Flow, and Production Growth 2025e Capex estimated at $2.25B | Reinvestment Rate <50% | Free Cash Flow estimated at $2.7B, up >120% y/y Strong 2024 Results | beat the high-end of 4Q24 & FY24 production and low-end of capex guidance Delivering on Acquisition
Slide 4: Beat High-End of 4Q24 and 2024 Production Guidance
Beat High-End of 4Q24 and 2024 Production Guidance Higher production & lower capex driving improved capital efficiency 4Q24 2024 Oil guidance 106.0 - 110.0 November guid. 107.0 - 108.0 mbod actual 113.0 actual 108.8 Gas guidance 2,530 - 2,660 November guid. 2,735 - 2,775 mmcfd actual 2,779 actual 2,
Slide 5: 2025 Capital Flat to November Preview
2025 Capital Flat to November Preview Consistent 3 crews in the Permian; restarting activity in the Marcellus 2025e Capex Summary Capex Walk From November 2024 Preview Permian Basin D&C: ~$1,570mm $2,250 Down from preview by ~$70mm, driven by cost and service deflation, acquisition synergies Marcell
Slide 6: 2025: Top-Tier Capital Efficiency Paired with Industry-Leading Growth
2025: Top-Tier Capital Efficiency Paired with Industry-Leading Growth Coterra has one of the highest growth rates with best-in-class capital efficiency 2025e Operational and Financial Outlook 2025e Capital Efficiency and 2026e Production Growth 2025e capital efficiency (capex per 20:3:1 boe) average
Slide 7: Delivering on Capital Discipline and Strong Development Program
Delivering on Capital Discipline and Strong Development Program Highest 2026e production growth while maintaining low reinvestment rate Conservative reinvestment rate 2022-2025e Low reinvestment & high production growth oil-weighted peers gas-weighted peers CTRA gas peer average oil peer average 202
Slide 8: Committed to Capital Discipline & Free Cash Flow Generation
Committed to Capital Discipline & Free Cash Flow Generation Expect to reinvest ~50-70% of cash flow at mid-cycle prices $ billions on y-axis | benchmark prices on x-axis capex as % of DCF Operating within cash flow with capex $6 that is sustainable at various prices, even after base dividend commitm
Slide 9: Committed to Returning Value
Committed to Returning Value $ billions | Percentages shown are shareholder returns as percentage of FCF 2024 FCF $1.2bn 2025e FCF $2.7bn • Based on our current outlook, Coterra Returned 89% of FCF to shareholders see appendix for commodity price assumptions expects to return 50% or more of with div
Slide 10: Permian Well Cost Reductions Expected in 2025, Driven by Ops Efficiencies
Permian Well Cost Reductions Expected in 2025, Driven by Ops Efficiencies $ per foot cost estimates Permian reduction driven by operational efficiencies Synergies on our newly acquired Lea County asset Reduced $ per foot on acquired $1,020 $1,090 assets by ~10% with design optimization & lower servi
Slide 11: 3-Year Outlook: Optionality Across Diversified Portfolio
3-Year Outlook: Optionality Across Diversified Portfolio Oil production Gas production Total equivalent production mbbld bcfd mboed $2.1-2.4 billion 200 3,500 900 Expected average capex range for 2025-2027 180 800 3,000 160 700 710 - 770 152 - 168 2,500 2,675 - 2,875 140 600 5%+ annual 120 2,000 500
Slide 12: Long Runway of High-Quality Inventory
Long Runway of High-Quality Inventory Benchmark price assumptions of $75/bbl and $3.75/mmbtu ~$31 billion of Economic Capex Opportunities Implied Inventory Duration1 estimated capex by PVI10 bucket: estimated total footage by asset area: estimates can fluctuate based on assumptions around well spaci
Slide 13: Prioritizing Financial Flexibility
Prioritizing Financial Flexibility .0x History of Conservative Net Leverage Liquidity & Debt Maturity Profile WTI HH $mm and average rates senior notes $1bn term loan interest rates for senior notes .0x 6000 0.07 0 $8.00 $94 0 $7.00 0 $6.64 $78 $76 $6.00 0.06 0.0x 5000 Undrawn 5.9% $65 $68 0 $5.00 $
Slide 14: Differentiated by Operational Excellence & Capital Discipline
Differentiated by Operational Excellence & Capital Discipline Advantaged Assets Operate Responsibly Disciplined Investment Return Value and Operations • Published Sustainability Report • Expect to reinvest 50-70% of • Based on our current outlook, in August 2024 cash flow at mid-cycle prices Coterra
Slide 15: Permian Asset Overview – 2025 Operational Outlook
Permian Asset Overview – 2025 Operational Outlook $1,570 million Mid-point D&C CapEx 10,400' $960 150-165 Avg. Lateral Avg. Well Cost Net Wells Length1 per Foot1 Online 1) Based on 2025e operated, completed wells. Note: Spend for a well is incurred over a period of 6-12 months, which does not necess
Slide 16: Permian Asset Overview
Permian Asset Overview Targeting Prolific Wolfcamp & Bone Spring Notable Projects Coterra Acreage Culberson County, TX Southern Lea County, NM Windham Row Phase 2 Forge + Land of Enchantment Project 16 gross Harkey wells, overfill 16 gross 1st & 2nd Bone Spring wells 50% working interest 83% working
Slide 17: 2025 Permian Development Program
2025 Permian Development Program 2025e mid-point D&C capex in $ millions 2025e net wells online 150-165 $1,570 Total Permian Lea County Culberson County Reeves County Eddy County Total Permian Lea County Culberson County Reeves County Eddy County Leading edge Primary target Wolfcamp A & Co-develop W
Slide 18: Top-Tier Delaware Producer with Competitive D&C Well Costs
Top-Tier Delaware Producer with Competitive D&C Well Costs Delaware Productivity1 Recent Delaware D&C Well Costs per Foot2 cumulative 2-stream at 20:1 conversion ratio, boe per lateral foot major peer operator 2022-2024 CTRA 2022-2024 CTRA 2025e-2027e Facilities & post-completion 50 Drilling & compl
Slide 19: Midstream/Power Capability in our Permian Assets
Midstream/Power Capability in our Permian Assets Culberson and NM Lea County TX Cost Savings Reeves Counties Bolt-on Acquisition Saltwater Disposal • Over 300 miles of pipeline, reduces surface storage • ~120 miles of pipeline 30-60% per barrel & potential spills cost savings Allows for substantial
Slide 20: Successful Windham Row Project Phase 1 Now Fully Online
Successful Windham Row Project Phase 1 Now Fully Online Continuing to implement row developments in Culberson County Original Simul-frac 50% of the ~$874/ft average Final wells 3-month Expectations wells as an initial test across the project online in 1Q25 production Final Simul-frac’ed 80% of ~$864
Slide 21: Marcellus Asset Overview – 2025 Operational Outlook
Marcellus Asset Overview – 2025 Operational Outlook $250 million Mid-point D&C CapEx 19,000’ $700 Avg. Lateral Avg. Well Length for Upper1 Cost per Foot1 10-15 14,500’ Net Wells $860 Online Avg. Lateral Avg. Well ~30% Upper & Length for Lower1 Cost per Foot1 ~70% Lower 1) Based on 2025e operated, co
Slide 22: Marcellus Asset Overview
Marcellus Asset Overview Highly capital efficient: ~$450mm annual capex spend maintains ~2 bcfd production levels Susquehanna County acreage leverages highly productive Reduction in well costs YoY driven by significantly longer Marcellus Coterra Acreage laterals $1,020 2025 wells are planned for les
Slide 23: Anadarko Asset Overview – 2025 Operational Outlook
Anadarko Asset Overview – 2025 Operational Outlook $230 million Mid-point D&C CapEx 11,170' $1,070 15-25 Avg. Lateral Avg. Well Cost Net Wells Length1 per Foot1 Online 1) Based on 2025e operated, completed wells. Note: Spend for a well is incurred over a period of 6-10 months, which does not necessa
Slide 24: Anadarko Asset Overview
Anadarko Asset Overview Anadarko sub-regions Coterra Acreage Major 2025 Anadarko projects Project Estimated 60-month production Online Well count Area name mix at 6:1 oil 3% Downdip (Primarily NGL 8.9 net 40% 2Q 2025 Roberts Woodford, (9 gross) gas 1 gross 57% Meramec) DOWNDIP Gas & NGL-Weighted UPD
Slide 25: Recent Anadarko Projects are Outperforming Legacy Offsets
Recent Anadarko Projects are Outperforming Legacy Offsets Wider spacing, longer laterals, and lower well costs are driving improved productivity & higher returns days online vs cumulative boe per lateral foot Updip (oil weighted) Downdip (gas & NGL weighted) YoY cost savings driven by longer Leota/C
Slide 26: Executive Compensation Tied to Emissions Reduction Metrics
Executive Compensation Tied to Emissions Reduction Metrics 20% of total short-term incentive potential Climate Targets Greenhouse Gas Emissions Intensity In 2024, four climate metrics were included in Coterra’s executive short-term incentive targets. MT CO2e / Gross Mboe Produced These four targets
Slide 27: Emissions Reductions Efforts
Emissions Reductions Efforts • Electrifying compressors, fracs, & drilling rigs • Utilizing Vapor Recovery Units to maximize Greenhouse typically reduces net Scope 1 + Scope 2 emissions Flared revenue and minimize flaring Gas from those sources by 25-45%, depending on the Emissions • Centralizing fl
Slide 28: Upstream Greenhouse Gas Intensity vs. Peers & Industry
Upstream Greenhouse Gas Intensity vs. Peers & Industry GHG Intensity (MT CO2e / Gross Mboe) We analyze our upstream emissions on a standalone basis to compare our performance against our peers1, as our peer group has varying levels of operations within the upstream and midstream segments. The follow
Slide 29: Appendix
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Slide 30: High-Quality, Long-Life, Diversified Asset Portfolio
High-Quality, Long-Life, Diversified Asset Portfolio 4Q24 Commodity Splits natural gas oil NGL Multi-Basin Portfolio provides commodity 15% diversification and capital ANADARKO allocation optionality ~181,000 net acres 4Q24 Production: 72 MBoe/d, 50% Liquids MARCELLUS 17% Production 6:1 2025e D&C Ca
Slide 31: Diversifying Gas Portfolio with New LNG Contracts
Diversifying Gas Portfolio with New LNG Contracts Reducing in-basin price exposure & diversifying toward European and Asian markets with expanding LNG portfolio Contracted Production Pricing LNG Volumes From Index 50 mmcfd Marcellus TTF TTF (NETHERLANDS) NBP (U.K.) 2028 – 2038 LNG terminal in Louisi
Slide 32: Diversified Gas Marketing Portfolio
Diversified Gas Marketing Portfolio 2025 Estimated Natural Gas Sales Markets 2021-2025e Natural Gas Price Realization Range1 % of Henry Hub1 Zone 6 NNY (premium to in-basin) NYMEX pricing mitigates 2021-2024 range for total company 2025e total company 2025e Marcellus 22% regional price exposure 105%
Slide 33: Oil Sales Primarily at Midland
Oil Sales Primarily at Midland 2025 Estimated Oil Sales Markets Strong Oil Price Realizations % of WTI1 Midland Cushing ~10% 100% 98% 98% 98% 98% Almost all of our oil volumes are sold at Midland pricing, which has traded closely against WTI in recent years due to Permian’s sufficient oil takeaway &
Slide 34: 2025 Hedge Position
2025 Hedge Position 2025e gas volumes ~35% hedged 2025e oil volumes >40% hedged $2.87/MMBtu & $4.54/MMBtu ~$62/bbl & ~$79/bbl weighted average floor & ceiling price on collars weighted average floor & ceiling price on collars financial hedges ~$69/bbl 22% weighted average on swaps hedged 2,775 mmcfd
Slide 35: Guidance & Actuals
Guidance & Actuals 2024 Guidance 2024 Actual 2025 Guidance (November) Updated 2025 Guidance 4Q24 Guidance 4Q24 Actual 1Q25 Guidance Low Mid High Low Mid High Low Mid High Low Mid High Low Mid High Total Production (mboed) 660 - 668 - 675 677 720 - 740 - 760 710 - 740 - 770 630 - 645 - 660 682 710 -
Slide 36: Expected 2025 Operational Cadence
Expected 2025 Operational Cadence Subject to change Rig Activity spot work / not full-time in the quarter Crew Activity spot work / not full-time in the quarter 1Q25 2Q25 3Q25 4Q25 1Q25 2Q25 3Q25 4Q25 Permian 10 full-year rigs Permian 3 full-year crews Anadarko 1 partial-year crew Marcellus 1 partia
Slide 37: Production Profile
Production Profile 110 600 2,400 Permian 105 500 Marcellus 2,300 100 95 400 2,200 90 85 300 2,100 80 200 2,000 75 70 100 1,900 65 60 - 1,800 4Q23A 1Q24A 2Q24A 3Q24A 4Q24A Oil mbbld 97 97 100 103 104 1,700 NGL mboed 77 70 78 83 78 4Q23A 1Q24A 2Q24A 3Q24A 4Q24A Gas mmcfd (right axis) 482 487 484 531 5
Slide 38: Expense Guidance & Actuals
Expense Guidance & Actuals 2024 Guidance 2024 Actual 2025 Guidance 1Q24 Actual 2Q24 Actual 3Q24 Actual 4Q24 Actual $ per boe, unless noted: Lease operating expense + workovers + region office $2.15 - $2.50 - $2.85 $2.66 $2.50 - $3.05 - $3.60 $2.50 $2.62 $2.69 $2.83 Gathering, processing, & transport
Slide 39: Non-GAAP Reconciliations & Definitions
Non-GAAP Reconciliations & Definitions Supplemental Non-GAAP Financial Measures (Unaudited): We report our financial results in accordance with Three Months Ended: 31-Dec Twelve Months Ended: Dec 31 Dec 31 accounting principles generally accepted in the United States (GAAP). However, we believe cert
Slide 40: Non-GAAP Reconciliations & Definitions
Non-GAAP Reconciliations & Definitions EBITDAX Twelve Months Ended: December 31 ($ in millions) 2024 2023 2022 2021 2020 2019 2018 EBITDAX is defined as net income plus interest expense, other expense, income tax expense and benefit, Coterra Combined Cabot + Cimarex depreciation, depletion, and amor