Coterra Energy (CTRA) Update - Nov 21

[dan_s]

Transaction Overview
•On November 13, 2024, Coterra Energy (“Coterra”) announced that it has entered into an agreement with Franklin Mountain Energy and Avant Natural Resources to acquire Delaware Basin Assets for $3.95 Bn
• $2.95 Bn of total cash consideration
• $1 Bn for 40.9 MM Coterra common shares to Franklin Mountain Energy and Avant Natural Resources
• Effective as of October 1, 2024
• Expected to close by the end of Q1 2025, subject to necessary approvals

Asset Overview*
• Located in Lea Co., and Eddy Co., NM
•Covers 49,000 net acres
• Holds ~85% net operated WI
• ~$2.6 billion of PDP PV10 (effective as of 1-Oct-2024)
• ~65 MBoepd (69% oil, 31% gas) of total net production (2025E)
• Includes ~475 net Permian locations, primarily targeting Bone Spring, Harkey, Avalon, and the emerging oily Lower Wolfcamp/Penn Shale
• Also includes ~125 miles of pipeline and infrastructure (expected to enhance netbacks and economics across existing acreage and the new focus area)

Implied Metrics*
• TTV: $3.95 Bn
• $ / Boepd: $60,769
• $ / Net Acre: $80,612
• $ / Upside Acre: $27,551

[dan_s]

Thirteen analysts have updated their price targets to $31 to $38 since the deal was announced. 12 of 13 rate CTRA a BUY.

CTRA closes at $27.44 on November 21.