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4Q21 Results and 2022 Outlook – Coterra Energy

Coterra Energy · Feb 23, 2022 · 23 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 1
    4Q21 Results and 2022 Outlook February 23, 2022
  2. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 2
    Key Messages Committed to Capital Discipline and Return of Capital INITIATING 1.25 BILLION SHARE BUYBACK PROGRAM Regional and Revenue Diversification Represents 7% of current market capitalization1 Supplemental to 50%+ quarterly…
  3. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 3
    Initiating 1.25 Billion Share Repurchase Program Authorization represents 7% of outstanding shares1 Buyback program to be driven by relative and intrinsic value opportunities Timing and volume of share repurchases will be determined…
  4. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 4
    Committed to Shareholder Returns Increasing base common dividend 20%, share buyback program offers incremental returns Previous Quarterly Calculation UPDATED Quarterly Calculation Discretionary Cash Flow 1 Discretionary Cash Flow…
  5. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 5
    Leading Returns Across Sectors CAPACITY TO INCREASE 10% Does not include potential dividend payout 50% of FCF1 or share buybacks 8% 8% 2022e Dividend Yield 6% 4% 2% 0% CTRA 2 Peers Energy Utilities Real Consumer…
  6. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 6
    Balance Sheet Strength Top-Tier Balance Sheet Liquidity & Debt Maturity Profile (mm) Leverage target: 1.0x at mid-cycle prices 2,536 Current combined leverage ratio: 0.65x No meaningful maturities until 2024 1,325 750 500 Ample…
  7. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 7
    4Q21 Core Performance 4Q21 Operational & Financial Results Highlights Commodity price uplift supported strong cash flow generation (mm, unless noted) Increasing common base dividend 20% to 0.60 per share Total Production (MBoepd) 686…
  8. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 8
    Variable Dividend Payment Calculation Paying 48% of CFFO or 60% of 4Q21 FCF (non-GAAP) Shareholder Returns 4Q21 Quarterly Dividend Calculation, payable 1Q22 Since October 1, Coterra has declared cash returns of 1.360 per share per…
  9. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 9
    2022 Outlook 2022e Cash Flow and Uses of Cash1,2 Key Takeaways Return of Capital 4.4 bn Initiating 1.25 bn share repurchase program Increasing annual base common dividend 20% to 0.60/sh (0.15/sh, quarterly) Returning 50%+ of FCF2…
  10. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 10
    2022 Program Region Capital Allocation Average Program Lateral Length & Total Capital Expenditures Drilling & Completion Anticipated Net TILs 50 - 60 Anadarko SWD & Infra Basin 9 Other 75 - 84 Marcellus Shale 1,400…
  11. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 11
    Permian Basin Overview CTRA Acreage Position 2022 Outlook Currently running 6 rigs & 2 completion crews Drilling & completion budget: 49% of 2022 total CTRA D&C budget 2022e TILs Expect to average 6 rigs and 2 completion crews…
  12. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 12
    Offsetting Inflationary Environment Development Projects Growing Operated Permian Well Costs, Frac End1 More wells per pad: steady increase in Permian Basin Offsetting inflation with operational efficiencies and development size larger…
  13. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 13
    Capital Efficiency Supported by Upspaced Developments Recent developments continue to track total section recovery of legacy developments 2021 Culberson County, Texas Development Projects: Fewer wells per section drives increased…
  14. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 14
    Owned & Operated Permian Infrastructure Provides operational efficiencies, cost savings, and can mitigate environmental impact Saltwater Disposal System Electric Grid Gas Gathering System Saltwater disposal (SWD) system services…
  15. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 15
    Marcellus Shale Overview 2022 Outlook CTRA Acreage Position Drilling & completion budget: 44% of 2022 total CTRA D&C budget Currently running 3 rigs & 1 completion crew Capital up 5% from 2021, per foot up 7% - 17% y-o-y Activity: 2.5…
  16. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 16
    Marcellus Margin Expansion Expanding Operating Margins Strong operating FCF2 (/Mcf) Opex Cash Margin Expect to generate 1.7 bn of operating FCF 3.75 in 2022 at recent strip Margin expansion 2.98 30% margin increase from 2021…
  17. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 17
    Anadarko Basin Overview 2019 2020 2021 CTRA Acreage Position Reduced Anadarko Strategic acreage swaps; Sold non-core acreage; development capital; focused on acreage delineated Lone Rock with Currently running 2 rigs allocation to…
  18. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 18
    Committed to Reducing Emissions Zero routine high-pressure flaring across Coterra operations Methane Emissions Intensity Methane Intensity Reduction: Key Drivers Methane Emissions (MT CH4) / Gross Annual Production (MBoe) Continued…
  19. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 19
    Appendix
  20. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 20
    2022 Outlook As of February 23, 2022 1Q22 2022 Marcellus Natural Gas Price Exposure by Index Guidance Guidance Index 1Q22e 2022e Production Total production (MBoepd) 610 - 630 600 - 635 NYMEX (less 0.35) 36% 36% Gas production…
  21. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 21
    Reconciliation of Discretionary Cash Flow and Free Cash Flow Non-GAAP reconciliation Supplemental Non-GAAP Financial Measures (Unaudited)We report our financial results in accordance with accounting principles generally accepted in the…
  22. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 22
    EBITDAX, Net Debt and Net Debt to EBITDAX Non-GAAP reconciliation EBITDAX Net Debt and Net Debt to EBITDAX EBITDAX is defined as net income plus interest expense, other expense, income tax expense Net Debt is calculated by subtracting…
  23. 4Q21 Results and 2022 Outlook – Coterra Energy – slide 23
    Hedge Position As of February 23, 2022 2022 Q1 Q2 Q3 Q4 Total Oil 1 Explanatory Notes WTI oil collars Volume (Bbl/d) 34,000 27,000 18,000 8,000 21,668 1 WTI Weighted avg. floor 41.94 43.74 47.56 57.00 45.08 refers to West Texas…

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