Coterra Energy has reported a rise in first-quarter earnings but announced a downward revision to its capital expenditure plans for the rest of the year, citing ongoing macroeconomic uncertainty and pressures on oil prices. The Houston-based shale producer posted a net income of $516 million for the first quarter, translating to 68 cents per share, up from $352 million, or 47 cents per share, during the same period last year. The company’s strong financial performance was supported by increased production, particularly from the Permian and Anadarko basins, although this was partially tempered by softer realized oil prices.
The average oil production in the first quarter reached 141,200 barrels per day, contributing to a total production figure of 746,800 barrels of oil equivalent per day, an increase from 686,100 boepd recorded a year earlier. However, the average realized oil price stood at $69.73 per barrel, which marked a 7% decline year-over-year and underscored the broader challenges facing the energy sector.
In response to economic volatility and potential disruptions tied to international trade tensions and new tariffs under President Donald Trump’s administration, Coterra has decided to scale back its investment plans. The company adjusted its 2025 capital expenditure guidance to a range of $2.0 billion to $2.3 billion, compared to its previous forecast of $2.1 billion to $2.4 billion. This move aligns with a broader trend within the U.S. energy industry, as other major players like Diamondback Energy have also reduced their budgets and production outlooks in anticipation of slower global demand growth.
Coterra’s revised strategy includes cutting the number of active rigs in the Permian Basin from ten to seven during the second half of the year. The company stated that this reduction in oil-directed activity is intended to preserve capital and enhance free cash flow without compromising its production forecasts. CEO Tom Jorden emphasized the importance of cautious capital management in light of industry-wide economic headwinds, signaling a conservative approach aimed at long-term financial resilience.
Following the announcement, Coterra’s shares slipped by 1.5% in after-hours trading, reflecting investor concern over future spending and market dynamics. Despite the positive quarterly earnings, the company’s shift in capital strategy highlights the uncertainty gripping the energy sector as it navigates volatile prices and complex geopolitical developments.
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