CTRA - Earnings call transcript Q3 2024

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Operator

Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coterra Energy Third Quarter 2024 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Dan Guffey, Vice President of Finance, Investor Relations and Treasurer. ahead. go Please

Daniel Guffey

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

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

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

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

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

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

Thomas Jorden

morning. welcome all are Dan, you and you, Thank to call of who this joining our

our night, excellent saw last you had quarter. Coterra As third from an release

volumes we our end and oil, the below the end of of came coming guidance capital equivalent our guidance of full and gas guidance the high year. for oil raised in in with production Furthermore, capital guidance above our lowered our low for Our barrel range.

of We year our another. financial capital our will you which quality growing to differentiated organic is operational be possible and third in through asset and consecutive growth. Shane by to results related and expect one are efficiency, made detail. oil Blake XXXX our This walk delivering some

for earnings and a have part many outstanding, XX Windham upcoming in a our presentation Culberson project program been for on expect County. to Row years. projects Blake nutshell, few come. also years our an a our you lists Slide our Culberson will results update give similar in future of In to be we projects

predictable. are and we confirmed all have has along. highly These Row well projects stated Windham what calibrated Our

granular Although flexibility. optionality we expect, are hold we prepared you significant would and be on XXXX as to plans, not

growth. quarterly reinvestment As ongoing framework discipline XXXX, to this within and of in regular We would our in if a through an result we continue of cadence capital rate. it conservative County example, our could were oil achieve fracking Culberson simul increase capital efficiency an and

to pleased to New also on in recent are some More Blake. that presentation. our from highlight our come of results We Mexico earnings

remain justify extent and gas in currently natural drilling prices completion to would the Marcellus on or that we our markets, have have not incremental the Marcellus. completion activity recovered drilling Although constructive assets. activity on no We current

and volumes more Additionally, natural shut-in a and until exports, prospect gas LNG Promises electrical supply-demand meantime, beyond. suggests of weather we the returns gas superior growing and pivoted and generation tighter them on we'll Northeast. have we spot other of our in increased investments, winter so deliver see gas demand XXXX. we materially we continue generating curtail to the that prices a picture constructive in in assets natural have are market. combination to do natural better In the and to The for XXXX

marketing notice sales multiyear in also we our may further of price international gas result the portfolio our diversify into earnings illustrated recently have our entered handful presentation. agreements by that of to to Slide X agreements are gaining exposure effort You These as natural markets. by a LNG

further explore to details opportunities continuing these lines. are this. on We Blake will provide along

by manage repeatedly not capital production company we As disciplined goals. we said, have by allocation, our

coupled and of this we sheet. Slide can fortress our inventory which low consistently leading-edge many so natural our do doing shows our a the come. on because provides can supply. of deliver capabilities our robustness We snapshot balance with assets assets of top-tier rates that reinvestment cost capital have with luxury the of low and cycles. returns corporate a assets, have underwrites The years return many, oil gas for to operational of through we These our program X, shareholder-friendly

simple. is business the to approach Our

of portfolio Build decisions. it. Through offer assets over and It's a At allocation financial a top-tier capital that and a live continuous progress that let guide data, Coterra, it improvement. focus top-tier team simple, develop maintained sound creation geographic comfort. operational analysis value team, by a we and commodity all, top-tier diversity its and relentless subsurface on

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

Shannon Young

Thank and to call. I'll making thank today's join on This us you, on Tom, for morning, you, everyone, focus areas. X time

fourth I'll provide including credit well provide then as our quarter finished the of an update production summarize for from First, for results, and perspective, full we quarter year a the capital quarter I'll guide. liquidity financial third highlights and where guidance the the XXXX as

Finally, I'll return shareholder provide highlights program. our our on progress continued from

third the performance during our to Turning quarter. strong

driven of as operated volumes net strong our high well In to online the and performance. per XXX.X above natural end and slightly the X we Third averaged guidance. by timing well of MBoe XXX Permian, quarter as total end the oil averaging of day guidance. XX Bcf averaging All net X.XX per in high came gas day with wells production non-operated well MBO XX near brought per day. XX

includes across wells Bone net This and the Row wells we online area. Culberson In X brought Windham net X our and XX in net wells Eddy updip Anadarko, Lea Counties County. Spring in liquids-rich

brought While mid-September. net wells in we the online X in Marcellus,

income or or the During $X.XX share net we the Accrued the during totaled during $XXX of were Near the cost midpoint NGL guidance million approximately BOE. income LOE, annual Marcellus hedge revenues $X.XX [ the our and third Total of $XXX including also quarter, per infrastructure In of which decision to taxes $XXX per XX% quarter, unit share. capital. spent $XX million, range and per the in we guidance totaled $X.XX third to drop on quarter midstream SWD of reported And in and below our as generated quarter $X.XX were quarter, quarter range made sales. G&A gains and of rig. end million were the million. less low the per $X.XX prehedge transportation, by of early expenditures adjusted net billion, capital Cash BOE. our production $X.X ] oil the

of year-end. have quarter well through very the We running positioned capital September. after quarter $XXX million. and to after cash We Discretionary rig flow had million for during flow sheet $XXX $XXX cash ended originally expenditures liquidity was was LTM and free million of balance EBITDA cash planned net X.Xx perspective. Having retiring billion dollar debt to $XXX a approximately debt third a maturity $X.X ratio the million from the

ahead XXXX. Looking of remainder the to

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

that volumes is not a a the approximately operations. fourth well the the completing quarter, fourth TIL combination timing of This product frac our expect down was during cadence during in a In oil X% having of as part of quarter. as we Windham of the activity other to be words, of quarter-over-quarter limited simul-frac natural the Anadarko portion Row as

we Given approximately gas be to quarter-over-quarter. our down expect volumes, curtailed X% natural

We continue fundamentals to optionality the to maintain respond gas a to month-to-month to monitor basis. signals on

total capital quarter expect $XXX we between million. the in be million $XXX investment, to fourth and expenditures Regarding

original midpoint and our range for XXXX guidance up Yesterday, year. increased and up from February. we our MBO at XXX full X% X.X% guidance guidance approximately the year our released in XXX August from the oil to day per production between

up BOE gas ranges, our guidance the We and also production year guide. XXXX both full natural at the midpoint X% tightened August from

with end capital efficiency. along capital $X.XX our by guide full for $XX are lowering the capital spend. we $XXX This what at lower XXXX high million the our today, midpoint is $X.XX the to Coterra's change, XXXX. see we year and meaningful midpoint at improvement billion increased on This billion reflects million continued Based at to in XX% production, than

now program modestly in to the year-over-year. basins Permian capital while and Marcellus liquids-rich approximately decreasing XX% XXXX capital Our Anadarko allocation increases by the

shareholder to Moving on returns.

in own shares to for $XX.XX shares and quarter, see million attractive share. During we repurchased an $XXX million our average the per price value third continued at of X.X

base $X.XX dividend our $X.XX we annualizes group remains night, quarter, the the of one over highest share for dividends the which also per yielding at announced X%. to base Last This peer third a year. share for of per

David Deckelbaum

remain shareholders program. flow our XX% repurchase of to of to XXX% cash In shareholders the base a committed returning Year-to-date, annual $XXX of share dividend total, have Or free to through strategy in our our our healthy we XX% free more returned to we flow quarter. returned free flow. million cash of of our We combination shareholders. cash during or

In summary, results. the third quarter financial again delivered operational excellent and

will us a with regard activity position heading and strong where for schedule fourth XXXX significant quarter maintain start allocation. into to Our flexibility we capital

to hand that, With Blake. the Blake? I'll call over

Blake Sirgo

Thanks, Shane.

morning, with overviews new plan I of quarter update, cost Our our Anadarko Permian LNG activity along cover was to another quarter activity. Coterra. Marcellus at third and and This active agreements,

deals are almost sales LNG from portfolio. linked Permian, with has no XXXX X European lifting netback our U.S. first These and Coterra be risk of marketing This quarter, indexes LNG sales Gulf team MVP Anadarko JKM, Marcellus. and and landscape are commitments directly These sourced agreements of and these XXXX. survey that executed Coast. represent currently The Asian along TTF per find agreements our and the sold the in MMBtu existing by from the FID gas split will and under enhance work best day in deals facilities gas to sales as markets our to XXX,XXX years counter-parties commitments evenly and cargoes between operating Coterra

LNG to gas in we with for are combine agreements to ECF of strong When water deals with XXXX. our per the partner existing on Point, of counterparties. these Coterra have deal will day at Cove Coterra over established these That with Lastly, is years excited many come. half starting

step another multi-basin Coterra and outstanding and the to is currently running posted future our pricing continue to and This quarter crews Permian, portfolio our for frac team leverage rigs premium drilling X maximize as are of we another results. ops our X revenues. we diversify gas In

production above While projects a our several increased bump in with we our of a see nice sooner our where Permian we Leading to non-operated our expected end operated with high did than came coming expected. guidance. beat production efficiencies, in in

to and due for the Shane portion forecasting simul-frac a limited QX from during reduction activity, volumes QX. Row we planned are Windham noted, frac for As Anadarko to of in a transition zipper-frac

that However, I am below when strong. initial a Windham forward sharing of Row ahead update look and XX is to schedule, look Row are final wells pleased all production to online. results We next cost report quarter Windham

year. a has portfolio XXXX, Row for had Coterra rest a also the been banner Windham the project of Permian While has in critical

our lengths new are we results as is seeing as stages. between on zipper a frac paired program. Mexico cost times wells strong is pumping our operations our competitive completion to program compared in ago. by New hours day up on with great Mexico This XX% and Spring up drilling accomplished and feet Bone our per a per a drilling in This well initiative well year been transition and structure having focused increasing Our reducing year some pad lateral with has XX% New focusing frac

brought wells along Lea New comparable project section Sand county to on Spring in back While success result Coterra to see New a across and in wells the seeing our things the results well County, as X Second in ] we are results XXXX, expand developments [ Bone This in result, New A in are to has across dose had great come Mexico, great position. First underscoring assets. per we new Eckes the going highlighting per Wolfcamp the our track Mexico [ value where liquids-rich ] us at our we with recent Spring several initial Bone our available we are is X learning are program we our Wolfcamp. Mexico still Upper

average Driven [ service costs year-over-year. expected to Permian XX% foot last gains down costs. be cost foot. $XX.XX Permian moderately our year, foot, per lower and was XXXX the Turning is to Permian our per efficiency over XXXX, $X,XXX ] In by dollar well per

leading projected further costs or and define below than XX% with forward, As performance no X% We and leading edge our edge current look foot, efficiencies market gains. per we XXXX. as to $X,XXX are lower rates deflation

the on These a our when well actual our facilities not cost full based share each date spent which dollar including capital and year we we cost type in costs curves, frac reflect reminder, are As include project. on directly flowback. all-in per which and are completion, foot, total drilling,

performance While of the and are always to looking driving sole our with we at cost cost is Coterra. metric more less, proud not do

capital it every cooperation Coterra. use is of our frac our maximum Our reservoir investment design goal net is value. we In team, present engineers spacing cost, efficiency generate not to Total return the lens be just and the low is to machine with well at and only development. learning iterate on maximize to value

One top-tier an deck, costs, component see which of Delaware of and newly costs evolving is you As can productivity are this ensure Page of competitive to on landscape. rigorous ever-changing burdened of regulatory constantly XX the our compliance reported combination the with the released our our in Basin. well analysis result facilities, are fully

the Our our tank Coterra Innovations to XX% communities unwavering last today, like our brownfield greatly of of production And are emission all new compared tankless facilities. fugitive standards is emissions. has of This design reduces battery ensure of been we Permian over new risk almost standard design tankless X operational part our around most developing assets eliminates over our a this through battery our flowing years. and battery operate. greenfield XX% implementing the excellence designs comprise this in to are responsibly the the of in where projects. devices we and of oil

drilling or to severely pricing activity. in as markets, are the X currently we Northeast depressed the at frac In response Marcellus, a

methods our continuous produced without platform. Marcellus transport flexibility team relying Coterra obtain our This capital thoughtful developing activity. creative allowed frac portfolio X and Going and what capital without operations has across is allowed the not dispose and has improved activity the possible for efficiency of new we on multi-basin water full strategy to us in to price be would to water

with the Our first round are Marcellus projects and drilling completion strong lower execution from Demic our complete teams. of Township in

to forward months. bringing in Northeast gas the online We pending look improvement these in wells pricing. coming an

to part portfolio local the represents our net planned with sales the Marcellus curtailment pricing. of are directly Northeast in in tied our gross per MMBtu volume We and per XXX,XXX This month-to-month for XXX,XXX MMBtu continuing month day shut day a November. of a

We to We gas our decision time. monitor at make and continue X remain a markets. constructive curtailment on will pricing long-term month

the X gain in its and continue efficiency demand several With strong allowed multi-commodity projects on focus be plentiful minimize until the has However, third a wells In pent-up completed is online cycle run activity full catches in off problems. Coterra quarter. multi-basin, can together consistency supply, to up continue in and stacking rig leverage allocators coming to expect paying continue Operational we of completion Keeping with rig and to returns. running you Anadarko, with the portfolio to disciplined us and XXXX. a to Anadarko, X capital. well

headwinds, has gas liquids Despite the the stream returns. in economics natural well production revenue buoyed and Anadarko

of Lastly, I'd up excellent our X XXXX. commend business and as in set us to the operating execution a units all for teams like continue great they trend

to it With Tom. back that, I'll turn

Thomas Jorden

Thank you, Shane and Blake.

we'd we've got behind your As us. And delighted questions. you great be can that, to take see, momentum with a

Operator

question [Operator Instructions] We'll Leggett take Doug our first from at Wolfe Research.

Douglas George Blyth Leggate

XXXX? intriguing morning, you a we everyone. quite your it hear not simul-frac Tom, Thank our if materially you, just Gosh, continue good Why in prepared improve boots remarks, would your efficiency little XXXX, will to in say was simul-frac, in mouth continue capital decided you to to with bit.

Thomas Jorden

markets. on if I we're markets. that But Well, in will very asking markets. would see we answer plans do we're place portfolio, I question, have Doug. a say we to all have We're in watching recovery is a contingency constructive oil that gas wanting the of saying great ourselves. and we're that also

So we what today, the we today, make call do to we not, the had if if to but we had call do. make that's which

ship. have teed where to We just to and we until rock-solid go, to flexibility commitment to make the that ready steer and the up we -- had going point really up, program a like we're we maintain --

Douglas George Blyth Leggate

this guess X-year production 'XX of a your again assets? a capital then, touched this perhaps never guess what Because your indicated seems capital, puts beating just guidance, allocation. walk roll capital tricky And about been but I probably it significantly us -- you got that us options plan, to could how it's maintain the has you've it seems guess you at is if original may I of point? to better guidance. again. early guess I this me broader I the you'll you've X optionality, the with Tom, And drop growth lot your across your follow-up are of Marcellus I takes relative kind if I on and is to It out wonder the think allocation the optionality which question, oil on really issue the through

Thomas Jorden

Well, us heard what say. just Doug, repeat I you've

is an of First commodity forecast what will and invest. process, make of capital the want much an then and -- given and thing results we our of prices do iterative top decide to how activity maintain and return cash estimate be want a line commitment. flow it's And we're to we we we

in we our band. the XX% [ cost our cost asset in with in Cronin our and of well down been we And that typically can $XX situation still that. of currently to we're to returns of looks see ] be. get . And on projects -- to would look return best and on we're be XX% what many structure the where that at that end will that then us. drive in lower severe prices, capital sure and low performance still make and advance probably our on of what of low a price So We've sub-$XX a our were end we and end that we efficiency, are, capital we some also ], oil attractive see downside will if and We'll to [ pricing calculate get of would we production the capital. that

sale. at we the that a capital maintains the let we rate cash further think that and or of and an check is do return If discipline, draconian and output, capital, pricing growth upon based within really most So flow about throttle want are we back we're we to reinvestment our that our that feel we ship and above confident well cost downside against draconian forward throttle do is that downside.

Operator

JPMorgan. to at Jayaram next I'll Arun move

Arun Jayaram

us shale Harkey could about bit and going a the the little how with capital talk competing the a was County on and implications the in your of the that? from for perhaps Tom Permian, and and returns interval First Upper for Bone I wondering of Bone if sense team, are results comparing give Lea second Wolfcamp the you just in implications

Thomas Jorden

areas where averaging and said, Wolfcamp. is course, And First slightly why of the from the but the seeing of Look, section always Yes. based is as that's really less above the basin-wide are, answer. but Harkey Second also And basin. difficult. Depends in say results that we're than Bone, Upper Harkey the we nice outstanding, particular some, then some Bone on would we you

it's question or delighted to A-grade A++, a all just them. these look, A+ So -- returns of and A are have

Arun Jayaram

Fair a enough. wondering potential is the was community about if risk state some New you setback large employer Tom, in New talk raised player in around legislature. could Mexico. I Coterra rules regulatory just of Mexico the of was recently the that

Coterra nature. are if wondering you situation them? about risks potential was think I understanding I preliminary these pretty if could in see to you But the talk your and

Thomas Jorden

in expect committee be always Yes. I think a that the mean, to setback the a studies. There's on. don't There's very nutshell, was ago issues discussions materially that week overblown. legislative implemented. story were I going media We in always

the and we is of very environmental comes like revenue setback said, be state that environment. oil both state to rule regulatory on XX% think or a revenue. responsible New revenue. Mexico, very compliance. feet Mexico That New they and damaging just hold fire, emissions our to and gas a the about XX% from would

of tough place mean, to from a have operate, in some I the this, is time. that say environment democracy. months the and time things to go back don't our with you're of rule in We look not it's know at the standards. crop to is easiest serious at made talk. and in regulatory I'll lord, time, any going that setback the really that the campaign, just to been national X it's we risk the media good think a But all X Mexico proposals up or these but some industry political have New this fair

Operator

at Kumar Mizuho. Nitin to go we'll Next,

Nitin Kumar

oil lot efficiencies capital prepared production the remarks, XX% higher seen, for talked you a about CapEx. obviously, your XX% that In less you've

faster efficiencies. mentioned drilling or wells You

are as this Could incremental You I are and a 'XX at and the believe better what well. mentioned of to sustainable OBO trying we I'm get a get And real breakout these drivers capital into little some of bit is beyond? really what productivity how efficiency?

Thomas Jorden

operations. back because to Coterra and throttle stable want were have outperformance Blake our going have it volumes of would turn of operations. the And cost luxury X and field with Blake, I'm sheet efficiency Yes. balance for but one jumps things lead our our to make cash the at we our to in. comment And on we I of us to actually Part to flow, efficiencies very of something. over oil of loss it if stable to is

cadence. simul-frac whether crew or current So operational running a full our it's time

a efficiencies. have We function a is I'm our to savings this oil of going at operation organization you. and But over that where point growth from turn Blake, cost really to our

Blake Sirgo

truth time. -- operational faster. have beats honest, Yes. all well, not it's things. if how faster the our do that's Thanks,. on said, on some to really But as performance nutshell of the I good a look it's had 'XX be a Tom It's timing, decompose and X/X to really nice we we from productivity ground look results coming all say we question, and it And so focus X/X. going these to back do and we super really are to like consistency, in because other that's constantly about I'd easy at always coming our take But beats date, going really our improving

we And that way. so those to try bucket

question. Your other on. We're can always question, just that this how go long asking

Our Coterra we best be excellence. good We want what operational everything means at Which do. we're today doing standard enough. is to is not at the

'XX. keep they we'd and It lost I always year a on told our like meat envelope, be ago, in you have But if would surprised here not ways. lot teams won't bone. challenged find teams the our feels the be today, push if I find constantly more left so a to And of are that there's new ways finding me to

Unknown Executive

with we of Then to time continued And is that for sort the this around year. was XX-XX answer last in with of My that really that as that's the that and in able achieve last outperformance the to really pump X. this Blake talks team X/X increase asked has guidance what's terms that simul-frac and up hours the about weighted the XXXX. the to between were been closer into year year that, year, in we had sense skewed question X/X,

Nitin Kumar

costs notice going to which, savings from with efficiencies. I remember more the call imagine will that goes but as development. of Culberson high per I the couldn't County I'm $XXX Great. was expected it I correctly, the help foot, stick and on. you happen the well costs at are end road if

So two, again, wanted then talked yet. sort foot? not being is to fully $XXX I how of if just per committed And about that simul-frac to repeatable you see just

not simul-frac project, savings be a the pad you on what or were lose? to would a use you If would

Thomas Jorden

what Well, Don't We're year, we plans. that's clear And simul-frac. be give literally said. on million I to XXXX anything means. $XX prepared it granular to a about or with want that what than confuse not would us take, be that on other to cost

So Blake, don't quarter. we'll plan next But you. our release why XXXX

Blake Sirgo

Yes.

you say high end well read are savings Row. really saying at are think our projected well. I on that It's of into I would gone really, the we we in. Windham comfortable

being that type we the repeated over we developments you and chose And Culberson, program, forward if to laid forecasting row out over. that would in so other pursue cost of see see we've costs go coming,

things. that's really those between the so And tie X

as but at what that of fracking back Culberson, would get a we about our that, can look could what right gains far I facilities There's As We back probably in other $XX to as per if off zipper and least and few infrastructure as that's also that like? foot. That's games. lose now. simul-frac close went

Operator

move at Dingmann to Truist Securities. Neal We'll next

Neal Dingmann

larger the first maybe My if to by Basin after question your run future is adding there? you order would at that specifically, a say year, of next there, in steadier lease on or total your are consider so, plans And on all bolting all year position? you any Anadarko program patches would limited

Thomas Jorden

acquire the bolt-on long and Neil, Well, current and inventory existing a question, our of we inventory reasonable that. to We some capacity Anadarko and investment, Anadarko we've But could at capital rate in frame. with would got if real in your time in for assets Basin. our yes, competed they deep consider definitely additional

Neal Dingmann

continue growth earlier, sort sort E&P Okay. sense. to average do the just wondering, pay you then, just higher higher production percent payout Tom, continue predicated a than to bit is were that production is continuing nicely in just I'm E&P. flow generate, a again, you'll as returns, And I'd free That year both what to out the say, average of and broadly cash shareholder specifically environment makes moving to Or on like be anticipate those future bit this? you saying next just of on sides? the higher

Shannon Young

in a way Neil, XX% buybacks and about I'll maybe with starting the base plus. start we the returns mean is off shareholder aggregate, on that a I little think bit. of

be the dear. that, buyback. What options think beyond hold we as buyback that really about And on So And And that the believe that think I X actions, attractive? things. talked outside and about One, of are with to case we to focusing have the by our what's the things. year. we've all is intrinsic we value? clearly, Above in X other there's buybacks, regard and

still Two, we earlier cash liquidity. an came quarters position? next enough in as X bit lean leverage year, in billion about into talked in not the to But program. $XXX. if $X.X gives area. year this we the Today, what Do profile potentially $X slowly a and about to that buyback does we X the billion our go we program. what's ability then low as looks pulling down into really that of or have and down is quarter, with but the and just cash like, flow buyback And the and as active liquidity leaning we've And free that we're around us little three, more over that support want been

Operator

Bank to your move next Kalei Kalei line is of Akamine, America. Akamine We'll open. at

Kaleinoheaokealaula Akamine

a it's the was first simul-frac. I My on one the on XX, capital And operations part ]. that. over a is Slide big [ the of frac breakdown nice that about edge the of are is question Sorry mute. that shows Rosay efficiency. leading

you those would So have any harder? do thoughts Or disruptive fracs that to wondering think guys that even on pushing the you be program too built?

Blake Sirgo

pressures. we Kalie. pretty at simul-frac you, good scared Basin talked everything. pretty the in a assets The we look of high before, not question, that's and we've Delaware anything. or mean I -- are pumping most No, at tell deep about -- can We're our as I

really so versus higher there's and you're saving simul-frac carefully balance understanding have can or to at faster, your very you really going you And downtime a projected just potentially your real money, but into an cost think simul-frac and between and even savings, you're cost. walk the that

those know always But so we've in money. always going we'll really simul-frac think County. cost forward. demonstrated to position at it's Culberson And We in savings, good We've anything really and look we the if what are we're we got think studying a things. go those save

Kaleinoheaokealaula Akamine

Our understanding simul-fracs. of that is waterwise you a set that Are water kind enabler big up to program? pursue access of is

Blake Sirgo

anywhere. Corson control are and we In water our Reeves these We Yes. deliver on-demand systems. live systems And SWD County, anytime completely. can

We power also control our grids.

around. all deploy to that move we're we horsepower so And water need to the able

would that not So issue. be an

Kaleinoheaokealaula Akamine

about LNG. question is second My

to all for is JKM the is cost fixed new think pipelines, I value this? illustrate going familiar how us. a kind buyer synthetic it work? have are on contract that which to does isn't we're understanding that looking kind to you a some help the FTE less For Our netbacks your arrangement, way Can or the of the example, of

Blake Sirgo

out What Kalie, taking are level, Yes, The as We've can these to how these path high from physical at say directly to on I a those you. wish wellhead we different gas things getting sales kind of our each we're as deals. could indexes. disclose foreign tied put these for X is I'll I there. much we're on

they're these if your you all focus, on were as and contracts question variability little you I'll much global so can't Our today. was gas can as current were enforced foreign these same netback rising different prices, deals. say enforced with wish I improve? sales Unfortunately, that. a deals, realizations that would to just they try indexes. we're way. though, I achieved At these I quote able -- tell the to we to falling gas how And and be would possible true minimize -- really

Kaleinoheaokealaula Akamine

Yes.

Okay. to That hedging and -- strategy. maybe gas turn just

but thinking your in hedging little go about Obviously, environment? bit environment? I'm -- where next around just the You you year. discuss just big current bit the hedges current to just guys how the you're on quarter, your in on gas here the side added curious can prices a updated thoughts the debate gas hedging in a about

Unknown Executive

with probably broadly that XX%, at off it be would XX% generally start comments the up as some absolutely. try at hedging XX% apply low high Yes, end. around I'll to to end, the

that then hedges the are roughly thinking other physical we've in position end team got to I of that with out sort financial commodities. months, with next of Blake today constantly and marketing volumes hedge about would and a strategy hedges as the build and XX In deals beyond But blended even particular, his layer the of some a and trade we terms sit small same the XX% parties. both on for production gas, of houses we expected say, we up, begin of in you that bit see may and at really well, that's little time, portfolio's direct today. as are On users where

and our so of roughly XX% that another represents volumes. And --

into we bit in XXXX. next months, So XX months you see as sit for XX XX% hovering us kind of plus little the combination, today, maybe around a

Operator

Matt next Portillo go TPH. at We'll to

Matthew Portillo

questions for had me. the off in you gas starting strong high-level In quarter-over-quarter. growth Two volume Permian. very Maybe first, QX,

if a quarters? bit as online, constraints gas the able we expecting uplift are with gas you flow look additional expand forward drivers had then that. in be And the assurance, to any on might little you coming -- of year-to-date? Mateborne behind curious very because you Just or your

Blake Sirgo

than this were Yes, that real really Blake. there. the gas only on QX thinking I'll from there some one. surprises there's Matt, going GOR production a story operational some overprint we Permian not the is upside, little take gas, in is stronger No wells. to

Matterhorn had That's flow #X flow prices and and coming flow as team. assurance second. whole far marketing online, the MCF As this for assurance we've first We time. our

of hasn't at but do that have assurance settled been piece our is a flow we a portfolio So Waha. concern, it

little something And so get X excited nothing if be -- north a to maybe would else, we're of great.

Matthew Portillo

Marcellus. Perfect. then maybe turning the And to

with the to think Just to wells XXXX. we the pick think activity should shut When a of the in QX back you ], rig you moment, curious we might year? back on the comment the to be we as is volume you've which activity bring you see to specific push impact the XX kind up lack the and time then guess, how and 'XX of into pick drilling from able time the plan completion up on, to might about wells. volumes endemic, I kind if a next them at [ dewater frame, got of decide those when them do about And you to if

Blake Sirgo

yes, to part strategy. wells of Well, them. we on are is the opening our first, -- dewater the That

and I in molecule the we've once wells, think capital look and note, Marcellus to same. we of spend, the every is it's important drilled gas the completed at

so manage And as We way really how differentiate field, is look TILs curtailment we we to that. a at wells. base cost-effective that the do and most don't between the

we're month-to-month do So month-to-month. We're my is script, curtailments. those. like and this will up our exposure playing And water as decisions moves in this said down, Northeast making on I we

as pounded As Tom far we to -- rig has volume, of all into us.

off-ramps. and we build That's our on-ramps have program. We how capital

the in on-ramps have we Marcellus. so And

to will prices be there we gas of respond, we advantage So should take it.

Operator

our Capital Leo take Mariani next ROTH at Partners. question from We'll

Leo Mariani

discussion efficiency on I to capital here. around the ask just wanted a follow-up

and nice So has obviously, certainly been is in trend which your gone have volumes your a up. here to see coming 'XX, down

year. the be of I over on of next which the next going But the be a X-year should time you that out this these and have CapEx lot efficiencies. update we the years? lower know few kind to you'll based I are the X-year assume end a is So at point the thinking to recurring presumably early there, in biased outlook outlook

Blake Sirgo

answer in Blake. go. this them are just bake would realizing is -- I as Leo, I would Yes. repeatable, that with, we we yes, and we are efficiencies the

we to if disclose would to of we that And same any not also so better. that's guide yet. what look X-year dependent we're it choose ready that XXXX, do in on today, highly updated and But

Thomas Jorden

Yes.

add Let other are that. in completion efficiencies. to There me just elements drilling

that we investments midstream have make. We

our have laying less on operated what drilling capital We had was program. down to some of infrastructure support due we And our reduction Marcellus this we part outside on investments. year activity water that our to planned spent meant

But always we're and greater to points connect and capital a yes, can't the just parts In moving straight this. X achieving greater efficiencies. lot So a there's in of you line general, draw future.

Leo Mariani

strategy. Okay. just in for thought just more you little thorough shape. sure. At point sheet That's wanted in terrific balance is a off of I And on to debt another chunk helpful Obviously, here. bit time, then the M&A to get paid this

So capital Are your terms does sort of free as you're at flow, out how of M&A that? into kind cash of in play a to looking kind there. still you of of thinking much allocating about of deals number kind

lot in And for a maybe think you mention kind the did flow? the you deal could seeing other could are brand Mid-Con there's also deal over still you You possible. time? deals do that of that fit But folks of be

Thomas Jorden

Mid-Con would about just -- about question Yes. me my creation answer of fair broad. bolt-on. on is I to Look, let we flying see we to really said Context would spent how lot smart of ground. a I talking in little quarter, us deal cause a position that time opening was our what too stretch. consider last want to and a close M&A it, the on amount of talked what the value a just We I as remarks,

in has regrets. said that leaned been also don't taken marketplace. we've We've our shots have been aggressive. in pretty goal, So forward. on we the Market We've and viewpoint, any has market pricing fairly been active

we that's would We of that's program. just think. to But an a I'm of area going theoretical. Well, felt focus operating an stick -- capital-efficient we we area saw to were an and of comfortable do we'd pistol. rock, our really a to would probably give [indiscernible] you from become We'd terms to no, stretch. in doesn't that another very place we focus could ours. not stretching. say ask have we that best what asset area if is out. just build something on, that us, you in build do what idea could anything a we for question And going consider to it's cause that if neck our I could we an really high-quality very If how So do answer didn't want new us it's had fit really environment a

Operator

Johnson Rice. next at move We'll Charles Meade to

Charles Meade

at on seems I those XQ. a or gas Shane the an was about way brought have into explore tell said I just maybe you back Tom, But comments your you back bit then go them bit you of back, you to a want order go in the to X think But I odds a little in. to talking earlier believe your Can crews look TILs how a questioner how Yes. and a surface, us to you rest TILs Blake, for better shut curtailment. it look guys want it exercise how and how it's online made -- to? I volumes optionality month-to-month Coterra you would at -- are rigs, you least chose basis, going I the how if the sequencing completion Blake When managing you a little try & you the more you know but point you that XQ looks of the about optionality and your results, on to whether it that and activity. it Marcellus, more to team gas understand you're at bit more at to as approach I have there.

Blake Sirgo

Yes. get hard. the It's wells. math is this dewater to driven. to new Look, need I -- curtailments We make operationally that. all

to those back won't hold curtailment. we so And part of be our

at every sunk capital we the ground same. the has once molecule look been said, As I in the

will on shutting managing field It production. a And these base month-to-month. curtailments will in that include back we're some wells. so level include pinching new And

So be how first. curtailment. increased to Obviously, market first gas the would through is we curtailments respond the an would Lifting

is another be call. That compression would speed identified. after the quick. The We then way To we projects production. really shovel-ready for D&C. increase have to getting and really phone some ready go, have waiting up And team We great back can programs.

to now. be miss really front if loose participate them that's respond. what those important, willing times, But fully cut the end if cycle. down we not it's I we'll has signals, the really multiple to we're -- return So right think doing the Tom we we'll to see And able of and as said we're in

Charles Meade

guys and helpful, compression brings Bone follow-up, you your particularly is That And the Delaware, pretty Lee you to the on road then it. curious going And projects I'm Got your results. with back seem projects. County can the the project Row -- that Windham a working well to now? versus the size right of us that there XX sense choose would you're of you pleased give

Blake Sirgo

have all Windham Yes. the able across X the our could at The That's to joint control Basin. Culberson development our We Chevron, WIL, with capitalize operate Delaware we're complete how Row area efficiencies. those infrastructure duplicate on contiguous -- and flexibility It's unique we I and to County. to -- midstream wish that's we own we where townships. together, that's really

Mexico, infrastructure. pay maximize just have of New we the on stacked great sharing per the can wells benches, we still unique to co-mingling some will all are So say Coerson. pad. because really get We really I all can and the and roads efficiencies in

row, a a in it's is and almost going just frankly, of more prosecuting ] been lot back we're it vertical a [ developments for but after efficiencies horizontal road than So of decade. little a a benches, seeing we've now

Operator

at next Cheng question Our from Paul comes Scotiabank.

Paul Cheng

franchise you that so little and market physical molecule flexibility? ship and own not LNG I sales flexibility or sales clarify your from do just [indiscernible] the a you're contracts, talking that it When just buy don't want you delivering is to bit. the about and have the instead that a the have

Shannon Young

These echo tied to Unfortunately, again. on kind deals deals. Paul, give of foreign listed. indexes Yes. sales directly I I netback the can't color are that these just we've

Paul Cheng

pricing I the that normal And is the Waha after think gas sufficient get be even gas price we what in just the still mean, Okay. to we that curious Waha Waha, really red. it? guys you startup, -- see Metehan me for will we

So guys have just curious mind? in that, I mean, you do what

Blake Sirgo

the solution final will gas seeing it for growth but it's from think The I Waha. no after higher we gas growth means help Permian year year. are is for by in growth oil sure, separating the

forward. seeing moving announced You're and already being projects new

to growing to on gas Waha going there. how concern at focused Permian improve options and pricing continue a be we to is just really so And our portfolio manage all for we're looking and

Operator

Next, . to Grade at Drake we'll move Goldman Sachs.

Unknown Analyst

average I was lateral outlook foot smaller acreage cost for you are additions about just lengths wondering, increase that And any can opportunities the do you your help per see improvement on further for across how that thinking portfolio? front?

Blake Sirgo

Frankly, day, much to based Is going blocking Yes, the the now every the Really, get see Grant, it our today like form of that the on lots traditions. to acreage all Basin, constantly had there our Delaware longer trades. our lateral cost We've acreage and we to and AFE on within [indiscernible]. for does current done if Basin. currency goes see right have that is day. blocking in of we Yes, but this opportunities smaller current market we're realm put per is in is programs out to foot tackling this the team all into the up pretty some efficiencies cost our go-forward as these we participate, you -- have in Blake. Permian, and There's of rates.

Unknown Analyst

question, meet natural to selectivity latest incremental for That's producers demand I really helpful. the are from from the demand? I guess, view a thoughts was just And your gas increased then on could wondering for required speak power call you this your bit over to my time. on what if next

Shannon Young

gas-fired we this we of big and decade, look we Shane think little and birth that probably greater that on in up. how could conversations yes, the is a in big and bit when that I end But there that room to a XX% of big Look, that. where But XX% opinions of a ultimately I'll wide that as maybe -- as that study, of there's a gas that, -- through a feeling at, exactly the the it's that than could a and that's the here. to a ultimately something power be on take the have call there's see XX% driver, got it power. And Brad, probably rest it's is, like of comes we reliability kind of variety come have look natural dispatchability. demand materials that going incremental to it

So to -- itself into We manifests so gas can't it and we're really materialize excited see it. that prices. wait about

Thomas Jorden

to power frame and gas. of required don't the than the as in look might try at must incremental quote have we a in this other higher that terms it. be will power come this which available and ideological the of be I demand anybody can natural amount no from the of in this And the investment We economic as number viewpoints well slightly outcome. in or time Shane study there's natural no for solution that -- will required that There's solution gas power for than other the reliability bulk --

the the demand. So projection, even to clear don't for incremental much if very we supply. you're gas natural of at constructive demand be it need low end very, will And

Operator

turn remarks. And I Tom the that for now closing Jorden back concludes our session. will over Q&A to conference

Thomas Jorden

our to to cadence, be our and operational interest, just clear returns questions transparent your continue thank to all your communication continue I in with of your long-term everybody Coterra. the to want and support intend We Well, come aspects. market of strategy top-tier hopefully and for

much. very you thank So

Operator

Thank call. conference today's you for concludes this And participation. your

You may disconnect. now

Coterra Energy (CTRA) 1 Nov 242024 Q3 Earnings call transcript