Coterra Energy (CTRA) Q4 Results - Feb 23

[dan_s]

HOUSTON, Feb. 23, 2022 /PRNewswire/ -- Coterra Energy Inc. (NYSE: CTRA) ("Coterra" or the "Company") today reported fourth-quarter and full-year 2021 financial and operating results. On October 1, 2021, Coterra announced that the merger involving the Company, which was formerly named Cabot Oil & Gas Corporation ("Cabot"), and Cimarex Energy Co. ("Cimarex"), was completed (the "Merger"). Fourth-quarter 2021 results discussed within this release represent Coterra. Full-year 2021 results include nine months of legacy Cabot results from January 1 to September 30, plus three months of Coterra beginning October 1, unless noted otherwise.

Net income for fourth-quarter 2021 totaled $939 million, or $1.16 per share. Adjusted net income (non-GAAP) for fourth-quarter 2021, excluding non-recurring items, was $670 million, or $0.83 per share. < Compares to my forecast of $809.2 million or $0.99 per share.
Net income for full-year 2021 totaled $1,158 million, or $2.30 per share. Adjusted net income (non-GAAP) for full-year 2021, excluding non-recurring items, was $1,132 million, or $2.25 per share.

Fourth-Quarter 2021 Highlights

Generated cash flow from operating activities of $953 million.

Discretionary cash flow totaled $1,026 million (non-GAAP). < Compares to my forecast of $1,305.8 million.

Generated free cash flow of $758 million (non-GAAP).

Delivered total equivalent production of 686 MBoepd. < Compares to my Q4 production forecast of 685,000 MBoepd.

Exited the year with zero routine high-pressure flaring across Coterra's three core operating regions.

Shareholder Return Highlights

On February 23, 2022, Coterra's Board of Directors (the "Board") approved a 20 percent increase to the annual base common dividend from $0.50 per share to $0.60 per share ($0.15 per share, per quarter).

On February 23, 2022, the Board also approved an incremental $0.41 per share variable dividend payment based on fourth-quarter 2021 free cash flow (non-GAAP) generation.

The approved base plus variable quarterly dividend equals $0.56 per share ($0.15 base, $0.41 variable), and will be paid on March 17, 2022 to holders of record on March 7, 2022.

Separately, the Company announced a share repurchase program of its common stock with a $1.25 billion authorization, representing approximately 7 percent of the Company's market capitalization as of market close on February 22, 2022.

2022 Outlook

Total capital investment in 2022 expected to be between $1,400 and $1,500 million, with approximately 88 percent allocated towards drilling and completion operations.

2022 capital investment is less than 35 percent of projected cash flow from operating activities at recent strip prices.

Projecting 2022 free cash flow (non-GAAP) of approximately $3 billion at recent strip prices.

Guiding to combined company 4 and 10 percent annual oil volume growth and approximately 3 percent total equivalent production decline.

Thomas E. Jorden, Chief Executive Officer and President, commented, "Coterra's initial quarter as a combined company generated solid results and we are excited to communicate our 2022 plans. We look to remain disciplined in 2022, with plans to reinvest less than 35 percent of our projected cash flow from operating activities, at the recent strip. While all three regions provide ample and competitive opportunities for investment, in light of inflation, service availability and prevailing commodity prices, we made a tactical decision to allocate incremental capital toward our oil assets. This decision was driven by our focus on optimizing free cash flow generation and returns to shareholders, with the added benefit of providing a more balanced revenue profile between liquids and natural gas."

"Today we also proudly announce the next phase of our shareholder return strategy, both by increasing our base common dividend and initiating a $1.25 billion share repurchase program. We remain committed to returning 50 percent plus of quarterly free cash flow through our base plus variable dividend framework and using share repurchases as a supplemental shareholder return method."
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I will be travelling Feb 24 to Mar 1, so it will be late next week before I can take a hard look at this one.