Coterra Stock Earnings Reports

Coterra reported a strong Q3 2025 with production (oil, gas, BOE) modestly above guidance and record NGL volumes. Key operational highlights include successful integration of the Franklin Mountain/Avant (Lea County) acquisitions with realized ~10% drilling cost reductions and projected LOE savings up to ~15% (plus potential additional power-related savings from microgrids). The company raised its full-year production midpoint to ~777 MBoe/d and increased gas guidance, while keeping full-year capex at about $2.3 billion. Q4 activity will be steady (9 rigs Permian, 1 Marcellus rig, 1 Anadarko), with oil expected to exit Q4 around 175 MBoe/d. Management provided a soft 2026 view calling for modestly lower capex year-over-year but reiterated flexibility to increase investment if markets warrant. Financially, Q3 discretionary cash flow was $1.15 billion and free cash flow $533 million (benefiting from negative current taxes); Coterra expects roughly $2 billion of FCF for 2025 (~+60% vs 2024). Balance-sheet priorities remain deleveraging (term loan repayments of $600M YTD) while opportunistically reintroducing buybacks and maintaining a $0.22/share quarterly dividend (~3.5% yield). Marketing has secured long-term gas commitments (~30% of gas production tied to various LNG, power and local deals) but management emphasizes patience on growth decisions given macro/commodity uncertainties. Risks/near-term catalysts: commodity price volatility, Waha basis weakness, ongoing integration execution, and a public activist letter from Kimmeridge (company disputes parts of it but is open to engagement).