Coterra Energy (CTRA) Q4 Results - Feb 25

[dan_s]

Yesterday Coterra Energy Inc. (NYSE: CTRA) (“Coterra” or the “Company”) reported fourth-quarter and full-year 2024 results, provided first-quarter and full-year 2025 guidance, and released a new three-year outlook for 2025 through 2027.

Fourth-Quarter 2024 Highlights

Net Income (GAAP) totaled $297 million, or $0.40 per share. Adjusted Net Income (non-GAAP) was $358 million, or $0.49 per share. < Adjusted Net Income crushed my forecast of $274 million.

Cash Flow From Operating Activities (GAAP) totaled $626 million. Discretionary Cash Flow (non-GAAP) totaled $776 million. < Beat my CF forecast of $762 million.

Cash paid for capital expenditures for drilling, completion and other fixed asset additions (GAAP) totaled $425 million. Capital expenditures for drilling, completion and other fixed asset additions (non-GAAP) totaled $417 million, near the low end of our guidance range of $410 to $500 million.

Free Cash Flow (non-GAAP) totaled $351 million. < I was expecting FCF to be around $300 million.

Unit operating cost (reflecting costs from direct operations, transportation, production taxes, and G&A) totaled $8.89 per BOE (barrel of oil equivalent), near the mid-point of our annual guidance range of $7.45 to $9.55 per BOE.

Total equivalent production of 682 MBoepd (thousand barrels of oil equivalent per day), exceeded the high end of guidance (630 to 660 MBoepd), driven by improved cycle times and strong well performance. < Coterra regularly beats their production guidance. My Q4 forecast was based on 655,000 Boepd. Higher production and higher realized NGL prices are the primary reasons why Net Income exceeded my forecast.

Oil production averaged 113.0 MBopd (thousand barrels of oil per day), exceeding the high end of guidance (106 to 110 MBopd).
Natural gas production averaged 2,779 MMcfpd (million cubic feet per day), exceeding the high end of guidance (2,530 to 2,660 MMcfpd).
Natural Gas Liquids (NGLs) production averaged 105.4 MBoepd.

Realized average prices:
Oil was $68.57 per barrel (Bbl), excluding the effect of commodity derivatives, and $68.70 per Bbl, including the effect of commodity derivatives.
Natural Gas was $2.02 per Mcf (thousand cubic feet), excluding the effect of commodity derivatives, and $2.04 per Mcf, including the effect of commodity derivatives.
NGLs were $20.94 per BOE.

[dan_s]

I have updated my forecast/valuation model and I have increased by current valuation to $39.50.

This "Gasser" is going to report significantly higher production in Q1 and Q2 2025 thanks to a timely Delaware Basin acquisition that closed 1-28-2025.

Higher natural gas and NGL prices could double the Company's operating cash flow YOY.

TipRanks: "In the last 3 months, 19 ranked analysts set 12-month price targets for CTRA. The average price target among the analysts is $35.22." < 6 of the analysts updated their price target today to $31 to $40, with an average price target of $35.20.

CTRA closed today at $27.38