CTRA - Earnings call 4 2023 | Coterra Energy Inc.

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coterra Energy Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Dan Guffey, Vice President, Finance, Planning and Investor Relations. ahead. go Please

Daniel Guffey

an Good and Energy's operator. and thank for Vice Young, Operations. will you Outlook CEO of Jorden, Thank President; President and and Quarter morning, Blake and Coterra Shane include remarks prepared Fourth Call. Vice Earnings from Full joining Tom Conference Chairman, President you, Executive Today's and overview CFO; Year XXXX Senior XXXX Sirgo,

your take Following our during Q&A session. we prepared questions our will remarks,

statements today's As our we call, based a forward-looking on expectations. make on reminder, current will

Additionally, our comments measures. some will of reference financial non-GAAP

to Forward-looking most were disclaimers statements release both on and as other our website. can in comparable well and measures as financial which reconciliations investor presentation, found of the GAAP updated earnings directly be provided our

the to I'll over that, Tom. With turn call

Thomas Jorden

of the that welcome equivalent include oil, quarter natural night. here, Dan, through guide. released on are had you BOE barrels or walk Thank call. us results on which and fourth Shane below an excellent guidance above all the oil you, we our of coming who by the and to Coterra end capital the our will last as gas shown you specifics and joining high of in

the finished hitting in in oil we guide. the capital XXXX, with XX% volumes midpoint year year-over-year full X% year-over-year growth while year and For BOE growth of our

returns. importantly, we generated excellent More

on initiatives. great reduction continue the and progress made emissions environmental We on also our to push envelope

billion to XXXX, $X.XX look ahead is to between As capital and we projected be billion. total $X.XX

of as it is and our Given XX% the investment prudent we a for level commensurate think revenue, approximately flow. of cash projected this prices commodity outlook invests that

and Marcellus. investments in and our retrench basins grow Anadarko will in the Permian We the

our $XXX XXXX investments Marcellus to million reducing XXXX. in over are We compared by

cycles, long, also the Mark Twain will commodity come learned in do not way. last pre-labeled although with typically no cat said other a they by that they how Through by something the have down man swings we learned do long can a he tail learn that, carrying that not last.

and us on returns means and program. patient. always that have this on to We our Experience disciplined back case, our focus should throttling activity. Marcellus that be tells production In never or on learned be

optimistic XX- of remain LNG coming recovery for in online export provides with the the cold The We the XXXX XXXX weather significant for the XX-month macro. reasonable to on gas and coupled gas. outlook new at highly end of of possibility impact hope early capacity natural price

us will should with our with that experience price, it. program However, we we capital never underwrite underwrite our although hopes tells future strip the

see of volumes which a gas growth plan gas, we in If be fully accelerate our year, natural reposition to in significant of Missing We in our capital watch the and signs gas and in recovery the the recovery much in will contingency XXXX. patient for in program XXXX half XXXX. the participating better of our XXXX latter for in is Marcellus our in in X% shrinking volume months recovery the result that project than the natural slowdown downside. We macro. a Marcellus will the range gas in the us would includes Marcellus few

We watch act. be will ready and to

to and returns In Permian where Anadarko inventory excellent. are the meantime, deep will our we the in pivot our

around All of premier poised ready in both ahead a have is out-year are are Permian and reposition however, business activity activity We differentiating the of excited the we warrant. conditions ability program to XXXX, X to increasing redirect acceleration strengths tremendous assets for one should Anadarko. be of us in and units, This and Coterra. and

outlook. update also an provided We on X-year our

excellence. deep, plan capital we a an and in of for inventory, digits for displays $X.XX oil to current $X.XX in This annual clearly of expected low operational an annual outlook conditions. X% the improving leverages to continue outlook is CapEx XXXX growth. growth our billion. cadence Which to average high-quality generate plus XXXX new with ability confidence Our single Coterra is our have This billion efficiency the achievable to BOE has demonstrates under and

plans As our always, with we changing continuously conditions. adjust

Coterra in As remarkable guided we to have organization. us. safety. to missile serve to previously dedication, the unwavering as commitment wanted and closing, set with an all operational example They rocket of said, excellence. environments for fire. In planning a acknowledge is They at a I our an perseverance not field pace They work hostile

stands The best-in-class We pristine investment nimbly innovation, known changing development conditions. Coterra rigorous adapt the want a economic of decision to assets market to excellence, be sheet, and for and technology brand to for analysis. ability discipline leading-edge outstanding operational and balance

perfect. not are We

and great However, our a push learn assets sheet great from having farther always organization, to us and progress allows mistakes, and balance make great ourselves continuous harder. a

Shane. will I that, the With turn over call to

Shannon Young

areas: And for everyone, you, today's focus fourth first X our provide guidance and for full discuss you, us will So the full capital XXXX and Tom. call. First, year thank quarter XXXX. will I'll year I results. thank I for on quarter joining and production morning, Then, highlights This on

Next, X-year I production XXXX will XXXX. provide a outlook for through and new capital and updated

discuss I'll our debt Finally, maturity return this shareholder later our and program year.

averaging guidance, quarter (sic) oil averaged X.XX TIL day, natural of and our per timing total MBO to well per strong during end with quarter. the production Bcf during the came performance day. day driven fourth Turning ] XXX and performance by production of X.XX the XXX.X high in per above All averaging streams Fourth [ acceleration gas quarter. MBOE

the high guidance. Marcellus, the Permian, Specifically, turn-in in guidance, the of XX during net XX and above midpoint lines quarter of the slightly XX totaled the end including wells, near in

or $X.XX $X.X adjusted quarter, oil which were and we hedge generated During sales. per share. BOE. per LOE, million the midpoint BOE, per were $XXX the $XXX $X.XX annual of of taxes million during totaled net of of $X.XX to by per share billion, production the including quarter, income $X.XX cash near XX% G&A Total fourth or of $X.XX our free transportation, quarter, costs and approximately net the range revenues NGL guidance income In workover, reported and

fourth million. just of cash was $XX below million was guidance the $XXX million, capital flow quarter $XXX flow during expenditures after was gains and our end the million, cash in Incurred expenditures totaled cash million. free range. low the capital Discretionary $XXX hedge quarter totaled $XXX Cash

was at XXXX, For Total the This produced beats equivalent by outstanding full of end exceeded MBOE day. results. high year combination guidance, and Coterra our of well per coming XXX well February better-than-expected outperformance the a productivity. initial timing driven production expected on in

initial over X%. was at capital day, by in midpoint Capital our per the $X.X coming year MBO end business were of relentless a right exceeding on by at costs of production each for as Oil XX.X result of units. focus guidance the of billion teams our range, the our high guidance in

year, initial Cash operating guidance midpoint. below the cost our per for totaled BOE slightly $X.XX per unit

Looking XXXX. to ahead

XXXX, of day. expect and quarter and to average first oil be between MBOE the natural be XXX per During gas between X.XX we XX production to day XX XXX and day, MBO between total per Bcf and to per X.XX

and quarter average We as to any pulled the volume timing XXXX. into that forward fourth during the lowest of of have TIL Primarily anticipate quarter quarter production result first XXXX. some oil a for

be in the and incurred Regarding million investment, $XXX to first expect $XXX quarter we capital between million.

than $X.XX expect at $X.XX billion spend. XXXX midpoint capital billion or between XXXX, to we For the incurred lower XX% the year and capital our full be

program XXXX the capital Our Permian Basins and in increase more decrease will Anadarko significantly XX% to allocation than and liquids-rich by modestly Marcellus. capital the

day MBOE and XXXX year for than at production is X.X% We oil in was average we to important expect in production day. gains XX XXXX. XXX expected note X% or the achieved be between have be was to midpoint XXX MBO in at is incorporated into to the between per midpoint X.X per per XXXX. Natural XXX gas between XXXX gas higher and the oil total guidance. day X.XX and than to Bcf efficiency that Approximately lower our It and

Reflecting X-year on our new outlook.

$X.XX new yesterday, for delivers time volume capital-efficient did growth believe growth project billion XXXX to consistent last shareholders. units year. afford outlook capital between capital between this our year, through inventory Coterra is XXXX. that X%-plus for we to plan that of this our per conditions our designed anticipate deliver oil announced is reallocate BOE flexibility robust profitable our the business can X-year we period and We as a and As growth with increased efficiency investing change. this X% $X.XX over X% reflects capital This by market billion to We

flow reinvestment delivers and incorporates free cash underpin level meaningful This shareholder an returns. to of outlook appropriate

dividends in remain we This X%. to of an share $X.XX responsibly to on a industry quarter, for Management well $X.XX annual one at dividend base returns. dividend announced to the base on share. increasing our Moving Board yielding cadence. the Last base committed highest the annual base shareholder and remains fourth dividend by X% night, increasing per over the per the

our During we prices free XX continued returning the cash XXXX, and average or XX% year of We of share healthy a despite $XXX of price approximately shareholder execute by and shares relatively lower cash at per returned flow, repurchasing $XX In commodity on million million its an program return to for share. Coterra total, of through annual billion. dividend more our remain free flow committed flow program. our strategy to repurchase combination cash during shareholders just to a XX% of or over base $X

XXXX our notes. to On

September. to maturity. In and this delivered analyze low and our summary, time, refinancing affording facility of $XXX and high-quality at approximately At With cash of believe We regard quarter $X.X have liquidity Coterra's same the X.Xx, year-end, with billion at operationally have XXXX opportunities had both results, continued markets. we our credit our between team financially. us leverage to monitor strong maturity coming to we million the options another active access many undrawn regarding we

are provide a that, [indiscernible] will first beyond. With hand the and of Blake detail and foundation color believe Blake? We on set for operations. solid XXXX, over to a which additional we full will the year poised our I to call XXXX for strong

Blake Sirgo

quarter Thanks, $XXX Shane. million, coming shuffling expenditures in infrastructure I lower update. the a capital nonoperated efficiency and expenditures few cost on below spend, by capital our low capital guidance. of timing This The was and projects. gains, driven operational lower-than-expected morning, an of Fourth accrued end discuss our provide and reduced CapEx the just totaled will

year CapEx field beat. Coterra execution As QX our annual the the a at to of 'XX guide. pulled contributed QX midpoint $X.XXX the of which production finished at billion into noted, total few our QX, in strong TILs

safely always are if on cows, we more always the We accomplished not do XX are ways quarters operational and of the on teams for not oil our means they existence, This quarter in XXth with for units quarter for straight own. was ideas, operations sacred our strive and less. Coterra, Coterra's looking excellence. At our integrity hunt to business even guidance. or operational accomplish excellence marks and while who our operating new This thanks to delivering tolerate across

XXXX, enter we plan less. In a Permian, to As more XX XXXX. in wells turn continues we XX over These we that to which are down line in is XXXX, to are do XX% delivering planning Permian, for foot the will frac running wells which a XX% approximately drilling have we records. performing down and In per near are of X efficiency rigs, currently dollar all-time are at year-over-year. $X,XXX, or crews X

with contracts are as cost Our gain savings offer coupled new we frac to Coterra in increased that efficiency. efficiencies

at with our Across a economies drill are project the activity XX% our moves, footprint, highlighted County, development our of to assets simulfrac, we historical maximize lower Culberson well than we prosecuting co-mingle in we scale, units to rig by Upper taking is X our expect facilities program. Row we deliver bear. to Combine XX-well across advantage cost this scale to frac minimize grid-powered This spacing row time-outs. and X% concentrating Permian and targeting of large our with able are first in where wells contiguous electric each bring this are to these Wolfcamp. By at Windham

an asset continues find and of new engine gear. that engine efficiency, a Our capital is Permian to

X and In X are the lower running our to with rig crew and frac we activity. go frac currently X Marcellus, rigs to plans

and handling teams frac XXXX to lower diligently facility increased ops costs. cost worked through efficiencies, Our improved Marcellus our lower water in structure

limits part our These and of on our minimize X-mile with D&C new activity. gains into now our as cost XXXX pushing and to down spend laterals throttle also lateral we are We X length help program. go us

will to macro remains crew. Anadarko, includes are to we off-ramps, us if Our XXXX and the conditions which Marcellus X rigs and X running multiple program currently flexible adjust and warranted. In changing frac on-ramps allow

executing with and year Our Anadarko team a had great drilling frac times improved efficiencies.

made paired Our XX our results, assets, Anadarko X XX with turn-in returns. across expect lines XXXX continue well has strong to our of capital stout to program execution, focused which competitor projects includes Consistency liquids-rich at yield assets we for strong will on Coterra. allocation a

back on and incremental XXXX. fruit efficiencies team operational to seek continued with Tom. out it in focus that, in excellence to we And XXXX. And bear the I'll to unrelenting expect Our execute turn

Thomas Jorden

Shane Thank you, and Blake.

continued Coterra discussing and We deliver our our plans. are XXXX for pleased interest be in outlook. We'll on with our goals and execution outlined XXXX to your our expect We look and in results in questions. forward now to appreciate open

Operator

from question Mizuho [Operator come Kumar will the Instructions] Our with first Securities. of line Nitin

Nitin Kumar

the year that was there? gas showcases a guess could you're some on prices. you're to as Coterra. idea But gas Congrats you Basin a people response capital of thought us think kind process in lot strong that basin and start a walk through capital really to of Marcellus cutting of at want the But there. the I Anadarko allocating incremental the the I activity in just behind allocation,

Thomas Jorden

Nitin. upfront, in know a to people is tremendous think we my them pretty of disappoint with answer probably and I'll basin opportunity. that lot I'd of I thinking Thanks, great like Anadarko of the a because Anadarko it's I'll way lot say with think because keep ways, simple. a

on that great on things have much XXXX. just And for a windage how about return length projects the I've Anadarko showing being addition the outstanding in to repeatability capital repeatability. challenge a function was capital allocation was at file. in showed talked some repeatability you do of and price our team in team One of

other function outstanding. their we that, Had just say are their And The is anything would so back done of we the activity. them pulled returns increased on just really have continuing level. plug than allocation activity or throttled letting a the continue that. I'll

Anadarko. also the increased see moving Permian forward one we we're was just coming -- a is Anadarko that's and some because in peers the that have have we so everywhere. that reallocating forward say of And returns it with $XXX also are little I'll between under million great we things And the challenging that activity.

a we that in capital embedded outside of expect so is allocation. And on our call Anadarko some the and operated larger in that

it's So decision. our and allocation a very have, love really, problem to pleased that we're with we

Nitin Kumar

Great. industry pretty consolidation pace. And continues a frantic Tom, then, at

around new lines, have neighbors around As the you. lease look you maybe the you neighbor or same

thoughts for scale M&A from Your on out. on Coterra here

certainly going of opportunities, a thoughts forward. I'd to on You M&A but have love plethora organic hear your

Thomas Jorden

thank for you Nitin, that.

our a ourselves, space", elements Coterra combinations, have. the But very we that. of have of first for simple. or reformulated Street would And look everybody a and owners. And foremost, we the breaking is a Our create at of we everybody should criteria E&P there the that's look, I it When company. to "flash, combined share potential we ask that says, want because Journal course, rather share are, looking of must what else think story at weekend Wall in value a lot

owners. have it consolidation for very, very come the Coterra But that. that So I'll about leave there offer haven't on that curious at We is remain deeply just opportunities what high. any have been ourselves and we could browbeat really gone. bar

Operator

will Arun with the Your of Jayaram from next come line JPMorgan. question

Arun Jayaram

year? looking was Delaware in I'm highlighting could to your I color 'XX 'XX. what expectations wondering, where deck, you Coterra maybe Basin results and the at to provide we did wondering well XXXX your you you're last that was peers if in expectations in XX compare around I productivity from relative for from of to on could productivity kind if the Slide some

Blake Sirgo

is that. Blake. that of really take we slide. this range Arun, give on that Yes, That's kind why I'll

multiyear frame, really a a but assets. mix by things. of our Permian time As over consistent. pretty that's And about a past, vary The we've our the different rotation it's somewhat lot program year-to-year, can talked in is throughout driven

expect say fall that on good And just so 'XX band and I'd deliver to another within well we'd year productivity.

Arun Jayaram

understand And you year-over-year comparison delivered to per basis? you trend productivity to 'XX? thoughts on what on in just trying think a Just how could foot

Blake Sirgo

but of year. I'd I with definitely the would some strong some allocations, There's say very room there for upside expect another similar.

Operator

from Bank Leggate next Doug with of Your of America. question comes line the

Kaleinoheaokealaula Akamine

Doug. actually is for This Kalein

The activity I you're to adapting the price. in thing Marcellus, to response is first want hit where

free analysis. begin assuming what shift understand higher? price to static, the trying on to strip. is scenario I'm the flow hub guess at I breakeven activity And Is So basis 'XX Marcellus' cash does

Thomas Jorden

this basis but sustained close that to ratio. a it's function of number. look capital, to we before price, I cost. I it really a a debating looking And Kalei, can't carefully what internally. ratio would We've look at shifts by we're received at think I fixed we receive oil to would really give optimistic the oil But see price a really that's somewhere that will Tom. is we'd going been see gas a would really really we're but know really a weighted that also for. kind our less you LNG like a I we're firm that price, what function exports. to in that's say the -- criteria And I to about $X, we would But market be a of talk molecule, the which above next price. really resets average sales see XX:X, to or like say the with we the is price neighborhood when meet of lot of gas. And of

Kaleinoheaokealaula Akamine

being My remember is seem Tom. the quite that on complex. I Anadarko. that, appreciate geology follow-up I to there the

more last in if wondering reengage So what on the the to year can to capital expand you team you give confidence accomplished program.

Thomas Jorden

to the understand pressure variation talking we this that our the complex catch oil/gas and understand you the And important got and and we've have calibration most the we what's But I'll the drilling a variation, challenges. portfolio. Well, stratigraphic lot section, understand of we've tested call about myself we ratio spend is geology. don't, if complex or geology across I of is rest

think highly calibrated. we're So I

geological at development a issue complex geology So really got feel we that that you've bigger early phases is the than look, the confident and when calibration, of understand we overprint.

Operator

the Deckelbaum of with TD David Cowen. comes question next from Your line

David Deckelbaum

curious more just shifting into the was into obviously, or, it's I could bit just Lower go a high year guess, I -- if is more Marcellus. the program you this grading

I think and year. Can back considerations inventory And million X.X that last over is Bcf management now comes averaging where like Bcf XXX -- a this to multiyear inventory going that versus a that it's range environment. management in lower day. shift lower mix if up, upper in there? you're of your there I guess emphasizing in Marcellus that about a to the sort is But more about assume X.X it. guess, have time? it talk wondering changed outlook, how I on the versus you looking you of thoughts production lower if And just nuance more multiyear side bit seems price Is be the your of the there's

Thomas Jorden

Our thoughts really haven't changed.

about As I the Lower in said we've reduced -- a repeat we talked past. what inventory just would We've the Marcellus. in

I X Lower level probably depending about X our think on the maybe to to on how talking Marcellus, point, -- X- if activity. inventory we were at X-year we'd be this of heavy a

our we're exploiting opened an really, that and up system lowered longer field of area after we're productive as there's of of some But it's really available Our capacity. But rock. than there think is function to that's the additional investment. that's function getting we to now and gathering have the also be out us really glad to this where inventory what's we we really of And us. a our that

Lower for be a time. long Marcellus drilling So in long, we'll

significant a formation is So really the be by it's which in. a Lower drilling of when strongly quote our years. But to -- for we part number program inventory going of overprint numbers, we're

David Deckelbaum

to in, Row to the was are are we through some year? of that Windham see iterating of baked multiyear X.X embedded expectation that that sort this 'XX. Or of early Row project percent growth year similar process the Just that Windham also many I now? size an Permian in still there of Is into guide? of baking would a there multiyear every oil from the guess, large-scale know a are curious you I kind cadence learnings X-plus kind projects on for How sort outlook the that years.

Blake Sirgo

Blake. this about develop a it's know to distinct David, row maximize really wells now, Yes, units just we that our to row are to expect these them kind that that is I These over unit section, bread chosen We're scary I'll spacing of But of a are efficiencies. one. have to is we XX really Upper drill we've and stringing year. this developed single years. And a talk Right important standard do Wolfcamp units from I mean, designs think together. X XX-well to every just project development. remember, I the it's Culberson butter. many with to take these almost our in X-mile X per

to the crew can trouble, have wargame our of but kind rig projects large our We because well means to good in simulfrac efficient first everything eighth modeled and to don't well Our and That's the out of our on And logistics developments conservative come. work expect Culberson, completion operate has of the frac could project. row multi-well pipe, many more that's time. part this This we trouble, have demand frac if crew for years keep electric It own deal with That risks we past. all and the this water we're We so we allows building upbuild the system not a us we expect and part it front operation timing, to our of our application at We've all to we water sand has any ops while operate is I'd it's than teams any pads. our produced in abundant now. of pivot our of project. of in worked pits through water really just it go any with of these plenty up means that sourcing. really make hard think sooner SWD lot this really crew. less sure execution there. why a to have these rows on. in get These projects picked to That

Operator

line comes question from Dingmann with Neal Your Truist. next the of

Neal Dingmann

My spend to maybe BOE just assumptions years? X% costs? just Or just well help on the first Has assume on me a wondering, question -- just involved productivity well go-forward X% that is wondering, well do improved I'm in ensued include what's with and you productivity, did flat and assumptions? these I'm those the on lower those CAGR.

Thomas Jorden

We don't project future having them. advancements achieved of in advance

will allocation. I achieve but to don't get that. to number. try the trying it's results to we that input, over say wide fair calibrate is think teams crazy, we we I on one solid -- We'd to We push that's assumed is a then it. that, more I flow, mean, achieve we not capital don't anybody production and surprise multiyear projections XX% very this them, one, call. shareholder cash drive where get part by to operational allows the say, like most them to generate? way. that the place the I'm a is okay, to don't our of with about and we want how promised. that us hopefully, put recent that's our We results. capital, And And outlook is, the last of a cash efficiencies. time. promises. And much to output to not that of production what flow manage does we better. it production in to But returns We of what and just want invest, at not skis And XX%, to We the then process good, say typically we on our we've going that rather best our think look model do here's of we give our talk

Neal Dingmann

that that Or -- along ultimate an be just talks wondering, is you're basis just is what second line. peak just prices, say it -- are just to same fair slide going driver. it the with maybe have of what's at to and that's wondering, And production. that that you a seen the Tom. gas look just I'm going on I'm maybe production? forecasting the point, Great maybe about

Thomas Jorden

than to Yes. prices future. It Within our but look to gas to ready for our it's to ourselves we up current that uncertain we at X they That's if contingency years. and it's work really assume have back year plans as next get not go. from this would anything growth on recover, guide, other be say fair capital set projection will. the We nice an plan, over plans we not have hope the a our shelf,

Operator

Our next Scialla question Stephens. of Michael come will from the line with

Michael Scialla

the Just wanted than obviously the in back looks the shares? ask the return then towards in more of on about leaning year. the the when you capital had base Why buying also and ask for dividend you quarter, you about bump more that the fourth that, bump your in with the your dividend decision target been buybacks the like to wanted to even slowed But bump dividend rather a I it share bit. to when base dividend. pull above way back the little variable

Shannon Young

We in I the the were that of Listen, Yes. winter we over think a X those trying quarter, the cautious. and carry whether on active gauge Mike, take were And little Shane we materialize. into but buyback, would kind questions. I'll here. get some we as to of bit market remained it a year-end. cash didn't, during decided weather to

be on around billion, looks be what bit puts soft good more gas So aggressive build you in XXXX $X a a up in buyback. it to could us why balance saw which the really like cash market that's to shape in the

bit So a was would little say. that, element a there I timing to of

the flow our On on the base excessive. feels on also dividend, increasing listen, X% in addition lift, to good the an shareholders remain committed an to pretty to free annual cadence, commitment plus dividend of a but responsibly not overly basis, cash like to deliver XX% annual we annual

we'll makes it next get to sense So an into we expect annual cadence. X% would we're it, to do Again, continue if year, bump. we on when evaluate happy with And it. it the do to

Operator

Your line the Citigroup. with of from Scott Gruber next question comes

Scott Gruber

a $X,XXX to your program, your you've foot. been For able development Delaware push sublet down to road cost

down pad thinking reengage in meaningfully think be you to to size, $X,XXX figure? cost able structure down you push work or you'll play? As actions do Are in Anadarko, electrifying operations about to you that the other any

Blake Sirgo

happy This one. that our across But and same the at of to a learnings Anadarko time, Yes, basins. further, push than efficiencies basin lot the there's the share Blake. is a I'm Permian. Yes. do is our take always we we room different think to

ran So activity. they And XXXX, really, saw get And consistent deeper. a The it. so can be our what come costs our higher we've is better drilling crews consistent in did And drilling at and Anadarko our always they more in from we It's team more it's pressure. what line. we down difficult. seen do, got real program

the absolutely the Permian. taking to and we opportunities enlarge advantage, already efficiencies of economies of same of see we But get They're projects more saw take if we'll a scale, lot those. pad in advantage

Scott Gruber

material of with activity? on cost to Do that had you think Got activity your to Marcellus. X%, of several actions on service especially savings guys And it. X% see about additional Marcellus the you'll estimate an you in seeing the but obviously and be service the we're take cost, in deflation able remaining costs reduce stuck in now operators top

Blake Sirgo

drive with culture of return have we by who out. providers that making and we same We'll at us, and need plays strategic does share advantage market very, how excellence The providers into very so. make really when We've service our downswings. a so time, to I it premium lightly with gone that's is But and see and how design, also. service typically, sure mean, any take safety work hope 'XX we services can I down. contracted, for important very to our available, drive our our the more We're become sure we've contracts. -- the pricing been

closely. be there's So And we'll working movement of we'll to with market, continued take in them if the there advantage it. be

Thomas Jorden

But be lost. I don't that want point to

to commitments. of allocation years because reasons light of a hard really long-term over flexibility in very set our amount the of worked One have couple we have last of partners vendor we the a such capital is and great

another. to services do in So to a we of and one pivot from have really our basin drilling lot completion both flexibility

Operator

comes of with Kevin question the line from Energy Pickering next MacCurdy Your Partners.

Kevin MacCurdy

say, X-year the I First, want we outlook. to appreciate

peer XXXX? XXXX and of multiyear group My one and as question scenario, assuming your in is few that when the allocation at what that you're in And level provide Are capital to on outlook. confidence under Marcellus in you first companies detailed think a out? the a the inventory XXXX similar flatten to with your in I outlook. start does

Thomas Jorden

no. fluid, underpins a The not that a that assuming We're said, model answer, is of level is but reallocated Kevin, allocation. Yes. it's the number. That similar

Kevin MacCurdy

would XXXX the a happens you do you how you and And the long spoke X-year XXXX, bullish and about scenario, about what CapEx? Marcellus? in if I overall contingency over Okay. have that reallocate that you Or a Permian XXXX, thinking in plan back market about gas Anadarko to think increase from know term. under but capital we do just the your

Thomas Jorden

Well, left nice question. that me I for at always conditions. best you've Because, it's say a very with current our look wide opening

our But the hope the to we in the flow recovery increasing react investment have in there's here. way hope gas current flexibility our and expect, we because would any said to change. I that goes XX%, none when we'll But capital. we significant around if And outlooks which our of that up. we within fairway, look of is conditions XX% macro, probably at no in -- So don't outlook had cash enshrined

Operator

come question Ati will line Modak next of with Goldman the Our Sachs. from

Ati Modak

the signs we market seeing the Permian? in 'XX? surprise And in Just view curious we're work how that? to better environment setup a you how gas risk for in Are suggest rationalization way share. macro of that the What's do through supplier for sufficient of you gas the our associated

Shannon Young

the some point. challenging incredibly been this we historical look so start very It's on spot more that it's it's at the numbers the sort played the to storage the has many enough of end that. other of And as at several picture is expected. to sort of winter the it's I'll side probably winter off unclear here. great resilient, high unclear it's marketplace. Shane it's But that have today. than discipline we to and next us basis. -- could Look, on see and a way pretty It's weather and it's on broad-based at for the Yes. enough, in date out, outlook hear weeks. Look, as a Production the

in turn planning gas, manage you react. our if see it XXXX on turn, we to sheet. budgeting, and the that be cautious that our does But and does we're see way you in So prepared balance it when and we'll certainly

Ati Modak

this hear growth time a factors annual on X-year way. What expect should this period? that over the baked in incremental a bit, different but that outlook outlook of stable relatively in front Great. And on terms on can then to CapEx. your into you've this maybe is you Curious gains. what about little we you talked growth efficiency from approach I

Blake Sirgo

in don't incremental efficiency any bake gains. We

build all part program. in stress through program. our And So We then of of our sure extensively we we our kind gains them into them test to our recent make and by forecasting. those real going most take they're

efficiencies, continue our of And while none will projections. our so into expectation to these is drive built teams that's

Operator

with the question Meade line from Rice. Johnson Our final of Charles will come

Charles Meade

questions Marcellus. I have X on the

X from decrement rig to seems in rigs You've versus, smaller and maybe addressed make versus look you crew 'XX that I run but the in $XXX it. like CapEx more the at one just is we it X CapEx. decrement crew, went If want in million some And in 'XX. you the activity X of look this, than to half at of to decrement at frac a frac

are And that that so picture? other what complete the pieces

Thomas Jorden

year that with the things we we One pads the is, X waiting see to of be finish will completed.

setting a lot up in we're 'XX. 'XX So what is doing of

have up plan. to cycle -- have multiyear any on a like you showing everybody ours first not like it's times projects year really in always the CapEx. With have and outlook else's, So

a last completed. that And we function we being benefit that's of So of currently what a this year next do lot did is is year year. of what happens what

annual but snapshot the capital versus incomplete. on is fairly interesting, production So

Charles Meade

other And one sense. Right. That then makes question. maybe

I but gas production 'XX, grow Marcellus XX% 'XX. for You that decline in X, Slide for What's that for 'XX? scenario natural incline assumption a price underlying the you have where you slight in in again on showed it's your believe slide, then -- actually and

Thomas Jorden

assumptions. mean a price mean, we $XX $XX $XX lots we run I'm & we $X.XX, We permutations the of $X.XX. forecast, then I we have now. looking as run of probably a there. our we smorgasbord a have and based of & -- at our a price say would this analysis. on & models we define our I have foundational strip economic files of I a would fairway I that But strip. Well, from learn run -- really is the we $X.XX. have say kind set

Operator

remarks. any the now I'll call turn back Jorden closing Tom over to for

Thomas Jorden

joining us. thank very We continuing to much Well, for to deliver. forward look you

about interest I we Coterra, talking we hope to you've results and from love them. deliver learned intend As your and appreciate really

you thank So much. so

Operator

today. does for this joining. conference Everyone, conclude our you all Thank call for

may You disconnect. now

Coterra Energy (CTRA) 23 Feb 242023 Q4 Earnings call transcript