GICS Sector : Energy
Coterra Energy Inc., an independent oil and gas company, engages in the development, exploration and production of oil, natural gas, and natural gas liquids in the United States.It primarily focuses on the Marcellus Shale with approximately 177,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania.The company also holds Permian Basin properties with approximately 306,000 net acres; and Anadarko Basin properties located in Oklahoma with approximately 182,000 net acres.
Coterra Energy reported a robust financial performance in the third quarter of 2025, with pre-hedge oil and gas revenues reaching $1.7 billion, driven by production volumes that exceeded expectations. The company's oil, natural gas, and BOE production came in approximately 2.5% above the midpoint of guidance. The actual EPS was $0.41, slightly below estimates of $0.43. Despite this, the company's financial performance was strong, with incurred capital of $658 million and free cash flow of $533 million for the quarter.
Publication Date: Nov -09
The company achieved significant operational milestones, including a 10% reduction in total well costs and a 5% reduction in lease operating expenses, resulting in approximately $8 million in annual savings. The integration of Lea County assets has been successful, with significant uplifts in asset performance and cost reductions. As noted by Michael Deshazer, "the company realized a 10% reduction in total well costs," highlighting the effectiveness of their operational strategies.
Coterra increased its annual MBoe per day production guidance to 777 at the midpoint, a 5% increase from initial guidance. The company expects capital to be modestly down year-over-year in 2026 while maintaining production parameters. With a deep inventory of oil assets and one of the lowest breakeven portfolios in its sector, Coterra is well-positioned for continued growth.
Analyzing Coterra's valuation metrics, we see a P/E Ratio of 12.32, a P/B Ratio of 1.16, and an EV/EBITDA of 5.44. The company's ROE stands at 11.09%, and ROIC is 8.17%. The Net Debt / EBITDA ratio is 0.86, indicating a relatively healthy debt position. With analysts estimating revenue growth at 7.0% for next year, the current valuation appears reasonable.
Coterra remains committed to maintaining a top-tier balance sheet and is focused on deleveraging and opportunistic buybacks. The company expects to generate substantial free cash flow, around $2 billion in 2025, and plans to return roughly 94% of free cash flow through a mix of dividend and buybacks. With a strong operational performance and a solid financial position, Coterra is poised for continued success.
Coterra Energy: Unloved And Misunderstood
Nov -28
17 Capital Partners LLC Sells 4,951 Shares of Coterra Energy Inc. $CTRA
Nov -20
Connor Clark & Lunn Investment Management Ltd. Buys 31,136 Shares of Coterra Energy Inc. $CTRA
Nov -17
ABN Amro Investment Solutions Makes New $5.73 Million Investment in Coterra Energy Inc. $CTRA
Nov -14
Coterra Energy: Flexible Multi-Basin Oil And Gas Producer With Strong Free Cash Flow Generation
Nov -14
Coterra Q3 Earnings Miss Estimates, Revenues Beat, Expenses Rise Y/Y
Nov -05
Coterra Energy Inc. (CTRA) Q3 2025 Earnings Call Transcript
Nov -05
Coterra Energy Inc (CTRA) Q3 2025 Earnings Call Highlights: Strong Production and Strategic Debt Reduction
Nov -04
Coterra Energy Inc.'s 5.5% growth in oil production is driven by increased drilling activities in the Permian Basin, improved operational efficiency, and enhanced oil recovery techniques. Additionally, the company's strategic acquisitions and divestitures have optimized its asset portfolio, leading to higher production volumes and better cost management.
Coterra Energy Inc.'s 5.0% natural gas growth is driven by increasing demand from power generation and industrial sectors, coupled with strategic acquisitions and operational efficiencies. Additionally, the company's focus on low-cost production and hedging strategies have enabled it to capitalize on favorable market conditions, further supporting growth.
Coterra Energy Inc.'s 4.8% growth in Natural Gas Liquids is driven by increasing demand from petrochemicals and refining industries, coupled with the company's strategic acreage position in the Permian Basin, allowing for efficient production and transportation. Additionally, Coterra's focus on operational excellence and cost discipline enables the company to capitalize on favorable market conditions.
Coterra Energy's 3.5% gain on derivative instruments is driven by favorable crude oil and natural gas price movements, coupled with effective hedging strategies. Additionally, the company's diversified asset base and strategic commodity pricing have contributed to this growth. Furthermore, Coterra's ability to optimize its production and risk management practices has also positively impacted its derivative instruments.
Coterra Energy's 4.2% growth driven by increased oil prices, efficient operations, and strategic acquisitions. The company's focus on Permian Basin, a region with high oil reserves, contributes to its growth. Additionally, Coterra's cost-saving initiatives and divestment of non-core assets have improved its financial performance, enabling the company to invest in high-return projects and drive growth.
Coterra Energy Inc. produces high-quality crude oil from its operations in the Permian Basin and other regions.
Coterra Energy Inc. extracts natural gas from its wells, which is then processed and sold to customers.
Coterra Energy Inc. produces NGLs, including ethane, propane, and butane, as a byproduct of natural gas processing.
Coterra Energy Inc. provides oilfield services, including drilling, completion, and production services, to support its operations.
Coterra Energy Inc. operates in the oil and gas industry, which has a moderate threat of substitutes. While there are alternative energy sources, the demand for oil and gas is still high, and the company's products are widely used.
Coterra Energy Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are essential to its customers' operations, giving Coterra Energy Inc. an upper hand in negotiations.
Coterra Energy Inc. relies on a few key suppliers for its operations, which gives those suppliers some bargaining power. However, the company's size and scale of operations also give it some negotiating power.
The oil and gas industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to join the market, reducing the threat of new entrants to Coterra Energy Inc.
The oil and gas industry is highly competitive, with many established players competing for market share. Coterra Energy Inc. faces intense competition from other companies, which can lead to pricing pressure and reduced margins.
| Value | |
|---|---|
| Debt Weight | 14.89% |
| Debt Cost | 3.95% |
| Equity Weight | 85.11% |
| Equity Cost | 4.97% |
| WACC | 4.82% |
| Leverage | 17.50% |
Value: 6.9
Growth: 4.4
Quality: 6.9
Yield: 9.0
Momentum: 4.5
Volatility: 7.7
1-Year Total Return ->
Value: 5.0
Growth: 3.7
Quality: 9.0
Yield: 10.0
Momentum: 1.5
Volatility: 9.3
1-Year Total Return ->
Value: 9.3
Growth: 6.2
Quality: 6.2
Yield: 10.0
Momentum: 1.0
Volatility: 3.0
1-Year Total Return ->
Value: 2.7
Growth: 3.7
Quality: 5.6
Yield: 10.0
Momentum: 2.0
Volatility: 8.7
1-Year Total Return ->
Value: 7.7
Growth: 4.6
Quality: 6.0
Yield: 7.0
Momentum: 3.0
Volatility: 4.3
1-Year Total Return ->
Value: 7.4
Growth: 4.1
Quality: 5.2
Yield: 5.0
Momentum: 4.0
Volatility: 5.0
1-Year Total Return ->