Coterra Energy Reports Strong Q1 2025 Performance Amid Production Gains

Coterra Energy Inc.  (CTRA) announced its first-quarter 2025 adjusted earnings per share of 78 cents, exceeding the Zacks Consensus Estimate of 76 cents. This marks an improvement over last year’s 50 cents per share, largely due to robust operational performance, especially in daily oil equivalent and natural gas production volumes.

The oil and gas exploration and production company recorded operating revenues of $1.9 billion, falling short of the Zacks Consensus Estimate by $37 million due to weaker oil price realizations. Nevertheless, this figure represents a significant uptick from the previous year’s revenue of $1.4 billion, attributed to rising output volumes.

Coterra Energy Inc. Price, Consensus and EPS Surprise

Coterra Energy Inc. price-consensus-eps-surprise-chart | Coterra Energy Inc. Quote

On May 5, 2025, Coterra’s board of directors declared a quarterly dividend of 22 cents per share for common shareholders of record as of May 15. This payout, equivalent to a 3.4% annualized yield, will be issued on May 29.

In addition to dividends, the Houston-based independent oil and gas firm actively repurchased shares during the quarter, acquiring 0.9 million shares for $24 million at an average price of $27.54 per share. As of March 31, 2025, CTRA has $1.1 billion remaining under its $2 billion share repurchase authorization.

Total shareholder returns during the quarter reached $192 million, consisting of $168 million in declared dividends and $24 million in share repurchases. Furthermore, the company focused on debt reduction, repaying approximately $250 million.

Coterra Energy follows a shareholder return strategy that allocates 50% of its annual free cash flow to shareholders through dividends and repurchases. For 2025, after base dividends, the company is prioritizing debt reduction, anticipating the retirement of $750 million in term loans maturing in 2027 and 2028.

In April 2025, CTRA added two Marcellus rigs, which are expected to remain in operation into the second half of 2025. During this time, the company plans to reduce Permian activity from 10 rigs to seven. The company also completed acquisitions of Franklin Mountain Energy and Avant Natural Resources during the quarter.

CTRA’s Production & Price Realizations

Coterra’s average daily production for the first quarter increased by 8.8% to 746.8 thousand barrels of oil equivalent (Mboe) from 686.1 Mboe the previous year. This figure also surpassed the Zacks Consensus Estimate of 740 Mboe. Natural gas production rose by 2.8% year-over-year to 3,043.8 million cubic feet (Mmcf) per day, exceeding the estimate of 2,914 Mmcf.

In terms of specific production types, oil production increased by 37.8% to 141.2 thousand barrels (MBbl) per day, though it fell short of the Zacks Consensus Estimate of 144 MBbl. Conversely, natural gas liquids (NGL) production grew by 8.9% to 98.3 MBbl per day but also missed the estimate of 111 MBbl.

Regarding pricing, the average sales price for crude oil was $69.73 per barrel, down 7.2% from the previous year’s price of $75.16, slightly missing the Zacks estimate of $70 per barrel.

The average realized price for natural gas was $3.28 per thousand cubic feet, compared to $2 during the same period last year, just surpassing the consensus estimate of $3.25. Additionally, the average realized NGL price was $23.23 per barrel, up from $21.09, exceeding the estimate of $22.47 per barrel.

CTRA’s Q1 Costs & Expenses

In the quarter, Coterra reported an average unit cost increase to $18.55 per barrel of oil equivalent, up from $15.94 a year ago. This increase was driven by total operating expenses of $1.202 billion, a 21.2% rise compared to $992 million in the previous year.

CTRA’s Financial Position

Coterra’s cash flow from operations rose by 33.6% to $1.1 billion, while cash capital expenditure for drilling and development reached $472 million. The company’s free cash flow for the quarter was $663 million.

As of March 31, 2025, Coterra held $186 million in cash and cash equivalents, with no outstanding debt on its $2 billion revolving credit facility, bringing total liquidity to approximately $2.2 billion. Long-term net debt stood at $4.3 billion, resulting in a debt-to-capitalization ratio of 23.1%.

CTRA’s Guidance for Q2 & 2025

Coterra has adjusted its full-year 2025 capital expenditures range from $2.1-$2.4 billion to a new range of $2-$2.3 billion. After completing recent acquisitions, the company ended the first quarter with 13 rigs in the Permian and plans to reduce this to seven rigs in the second half of the year.

For the second quarter, CTRA expects total equivalent production between 710 to 760 thousand barrels of oil equivalent per day, with oil production projected at 147 to 157 thousand barrels per day and natural gas production between 2,700 and 2,850 MMcfpd. Anticipated capital expenditures for the upcoming quarter are set between $575 to $650 million.

Looking ahead, Coterra estimates discretionary cash flow (non-GAAP) to be approximately $4.3 billion and free cash flow (non-GAAP) around $2.1 billion for 2025, based on commodity price assumptions of about $63 per barrel for WTI (West Texas Intermediate) and $3.70 per mmbtu (metric million British thermal unit) for Henry Hub.

CTRA currently holds a Zacks Rank #3 (Hold).

Important earnings at a Glance

While we have discussed CTRA’s first-quarter results in detail, let us take a look at three other key reports in this space.

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