Coterra Energy (NYSE:CTRA) is a US-based natural gas play headquartered in Houston, Texas. The company was formed in 1990 as Cabot Oil & Gas Company, a subsidiary of then-parent Cabot Corporation, and it went public later that same year. The spin-off concentrated Cabot Corporation’s energy assets into a single, stand-alone company so it could focus on the core business of chemical and specialty materials production.
By 1991 Cabot Oil & Gas Company was a 100% publicly-owned company with diversified energy operations. Over the years the company made several major acquisitions and divestitures that concentrated its assets in the natural gas exploration, production and sales business. The company’s proven reserves at the end of 2021 topped 2.89 billion barrels of crude oil equivalents which were 85% natural gas and about 8% natural gas liquids and other natural gas products. Only 7% of the reserves were crude oil.
The company acquired Cimarex Energy in 2021 resulting in the name change to Coterra Energy. Cimarex Energy is a specialist in shale oil & natural gas with operations in Texas and Oklahoma so was a natural fit for the company. Today, Coterra Energy operates as an independent oil and gas company focused on natural gas and natural gas liquids in the continental United States. Total revenue in 2021 topped $3.45 billion, the company employs about 935 people, and it is a member of the S&P 500.
Coterra’s largest holding is in the Permian Basin at approximately 234,000 multi-zone acres. The company’s 2nd largest holding is in the Marcellus Shale. It is approximately 177,000 acres situated in the dry gas window. The dry gas window produces the highest grade natural gas that has minimal liquids dissolved into it. Holdings in the Anadarko Basis top 182,000 acres and primarily in the Woodford Shale formation. Coterra also provides services to the natural gas industry in Texas. Coterra’s downstream operations are limited to industrial and bulk customers including natural gas distribution companies, top-tier energy companies, pipelines and public utilities.
Coterra’s Energy’s goal is to provide sustainable returns to its shareholders through a diversified business model. The company's diversified exposure to natural gas, natural gas liquids and crude is intended to help it weather ups and downs in the energy cycle. Portfolio quality is also key to the strategy by providing lower-cost-to-capture resources with higher resale prices. Returns are delivered in the form of dividends which have been paid every quarter since 2007. The company also aims to maintain a strong balance sheet as part of its strategy.
As part of the company’s commitment to sustainability and a lower-carbon future, it invests heavily in new technology. Technology currently in place allows for nearly 100% recycling of water used in production and exploration activities, no flaring except for safety reasons and the electrification of assets whenever possible. Natural gas is critical to the global shift toward greener energy because it is the most efficient use of hydrocarbons.
