While Coterra Energy, the company that came out of the merger between Cabot Oil & gas Corporation and Cimarex Energy Co., reported strong fourth quarter and full-year 2021 financial and operating results, leadership plans to keep a tight rein on exploration projects in 2022.
Other energy companies are doing the same even with oil prices at $100 a barrel due to Russia’s attack on Ukraine and Coterra, a firm with extensive operations in Oklahoma, is doing the same.
“We look to remain disciplined in 2022, with plans to reinvest less than 35 percent of our projected cash flow from operating activities,” said Thomas E. Jorden, Chief Executive Officer and President.
“This decision was driven by our focus on optimizing free cash flow generation and returns to shareholders, with the added benefit of providing a more balanced revenue profile between liquids and natural gas.”
Jorden said the company’s regions of exploration offer competitive opportunities and a tactical decision was made to allocate incremental capital toward its oil assets.
“This decision was driven by our focus on optimizing free cash flow generation and returns to shareholders, with the added benefit of providing a more balanced revenue profile between liquids and natural gas.”
Net income for fourth-quarter 2021 totaled $939 million, or $1.16 per share. Adjusted net income (non-GAAP) for fourth-quarter 2021, excluding non-recurring items, was $670 million, or $0.83 per share.
Net income for full-year 2021 totaled $1,158 million, or $2.30 per share. Adjusted net income (non-GAAP) for full-year 2021, excluding non-recurring items, was $1,132 million, or $2.25 per share.
Coterra’s 2022 capital investment will be close to $1.5 billion and about 88% will be spent on drilling and completion operations. But cap-ex is also less than 35% of projected cash flow from operating activities. Still, the company projects 2022 free cash flow will be nearly $3 billion based on recent strip prices.
As a result of the financial decisions, Coterra leadership anticipates a 4% to 10% increase in annual oil volume with a nearly 3% total equivalent production decline.
Fourth-quarter 2021 total equivalent production averaged 686 thousand barrels of oil equivalent per day (MBoepd). Oil production averaged 88.6 thousand barrels per day (MBopd) in the fourth quarter and natural gas production averaged 3,123 million cubic feet per day (MMcfpd).
Full-year 2021 total equivalent production averaged 457.8 MBoepd. Oil production averaged 22.3 MBopd and natural gas production averaged 2,496 MMcfpd. Combined full-year 2021 total equivalent production averaged 634 MBoepd, including average oil production of 77.9 MBopd and natural gas production of 2,927 MMcfpd.
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