Latest news with #Coterra
CNBC
16-05-2025
- Business
- CNBC
Cramer would not sell Meta Platforms on WSJ report: 'I still like it very much'
Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. ET. Here's a recap of Friday's key moments. 1. The stock market is higher on Friday and pacing for a five-day winning streak. The S & P 500 is on track to gain more than 4% this week. Interest rates are finally on the descent, with the 10-year Treasury yield floating around 4.4%. "We're in such a dynamic time when things are changing constantly day over day," said Jeff Marks, director of portfolio analysis for the Club. The S & P 500 Oscillator moved further into overbought territory, which signals the market could be due for a pullback. 2. The CEO of Coterra Energy spoke with Jim Cramer on "Mad Money" Thursday . "I feel very good about it because they're switching a little more to natural gas," Jim said, explaining that while he doesn't want to own an oil-and-gas stock, company leaning more toward gas is preferable. Coterra recently faced some operational issues that Jorden reiterated would be resolved soon and said were not related to inventory. Despite the reassurance, Jim said, "I can't get behind the [oil stock] group." Jeff highlighted the latest oil industry woes as factors going against Coterra. 3. Meta shares are down again Friday after dipping Thursday following a report in The Wall Street Journal that it is delaying the roll out of its flagship AI language model called "Behemoth." Separately, analysts at Loop Capital raised their price target on the company to $888 from $695, and increased their forecast for a better-than-expected second quarter. "There are so many irons in the fire for Meta, I would not sell on this," advised Jim. "I still like it very much." 4 . Stocks covered in Friday's rapid fire at the end of the video were: Applied Materials , Cava , and Take-Two Interactive . (Jim Cramer's Charitable Trust is long . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
CNBC
15-05-2025
- Business
- CNBC
What we need to hear from Coterra's CEO after the energy company's stumbles
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Market update: Stocks are rising on Thursday, with the S & P 500 heading toward its fourth consecutive gain and the Nasdaq Composite aiming for a seventh straight positive session. The gains come despite a sluggish start to the session. Better-than-expected earnings from major companies like Cisco Systems , Walmart , and Deere boosted sentiment. Additionally, a sharp drop in the 10-year Treasury yield may be providing some relief to stocks, easing concerns that had started to grow during its recent climb toward 4.5%. (Higher bond yields generally lead to higher interest rates on mortgages, car loans and credit cards, which can lower consumer spending and business investment — and lead to slower economic growth). Still, we trimmed our Eaton position this morning to raise a little extra cash, reflecting our hesitance to put new money to work at current levels due to the market's comeback over the past few weeks and ongoing overbought conditions. Investors need answers: Coterra Energy CEO Tom Jorden will join Jim on "Mad Money" later for an interview. This comes about a week after the company reported first-quarter earnings that had a lot of hair on it, causing the stock to drop 9% the next day. While it was encouraging to see Coterra adjust its capital allocation budget to favor natural gas production over oil — reflecting current commodity price dynamics — the market reacted sharply to operational issues. Specifically, the company reported higher-than-expected water volumes at some wells in the Harkey area of the Permian Basin. Coterra has become such a consistent operator, so it was very surprising to see a stumble like this. In addition, investors were disappointed by the lack of planned share buybacks for the remainder of the year, as management is prioritizing debt reduction. The company needs to clear the air on this Harkey incident and deliver a quick resolution, as the market tends to punish exploration and production firms like Coterra when there are doubts about the quality of their inventory. Up next: Coming up after the closing bell Thursday are earnings from Take-Two Interactive , Applied Materials , and Cava . There are no major earning releases on Friday . On the data side, we'll see April housing starts and building permits, import price data, and May University of Michigan consumer sentiment and inflation expectations. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. A pump jack operates near a gas turbine power plant in the Permian Basin oil field outside of Odessa, Texas, U.S. February 18, 2025. Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.
Economic Times
12-05-2025
- Business
- Economic Times
Why are US natural gas prices rising, and what does it mean for American families?
Market Technicals and Supply Constraints Live Events Weather-Driven Demand 'Trumpflation' and Tariffs on Energy Imports Impact on American Families What Comes Next? FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel With US natural gas prices up more than 14 percent over the past month, many American families are poised to see their utility bills rise by up to $30 a month as higher fuel and power‐sector costs get passed through to gas prices have risen from around $3.47 to nearly $3.80 per million British thermal units (MMBtu) in the last few days, driven by tighter supplies, technical buying, a brief outage at a key LNG export plant, and forecasts for hotter-than-normal summer and economic policies of the Trump administration, particularly new tariffs on energy imports under his first 100 days, are adding an extra layer of cost pressure and translating into higher heating and electricity bills for families and small businesses across the natural gas futures broke above the 50-day exponential moving average (about $3.47/MMBtu), many traders jumped back in, betting on further gains above resistance at $3.72/ major US producers like Diamondback and Coterra announced cuts to rig counts and capital spending in the Permian Basin, setting the stage for slower output growth later this National Weather Service and private forecasters predict above-normal cooling degree days across the Lower 48 through mid-May, signaling an earlier start to air-conditioning season. That additional power-sector demand tightens balances and lifts natural gas his first 100 days, President Trump has imposed a 10 percent tariff on Canadian energy exports, including natural gas, intended to 'minimize disruptive effects,' but adding cost to U.S. imports. Goldman Sachs warns these tariffs could push core inflation up to 3.8 percent by year-end, reversing recent gains toward the Fed's 2 percent note grocery and energy prices are already outpacing wage growth for many a middle-class family in Cleveland that relies on natural gas for both heating and cooking, a $0.30 rise per MMBtu can translate into an extra $20–$30 on next month's bill. Small manufacturers in the Midwest, who use gas-fired furnaces, report tightening margins and are already planning modest price increases for their EIA(Energy Information Administration) now projects the Henry Hub spot price to average $4.19/MMBtu in 2025, up nearly 90 percent over last year, before climbing further to $4.47/MMBtu in 2026 as LNG exports and seasonal power demand grow. If the summer heat wave deepens, or if geopolitical tensions flare further, we could see another leg up in consumers, that means keeping an eye on usage, exploring efficiency upgrades, and budgeting for potentially higher energy bills in the months as technical traders fuel short-term rallies, real-world factors outages at major export terminals, summer cooling demand, and new tariffs, are the main drivers tightening the US natural gas market.: Be mindful of your natural gas consumption, especially during peak demand periods.: Consider investing in energy-efficient appliances and insulation to reduce heating and cooling costs.: Plan your monthly expenses to accommodate potential increases in utility solutions include diversifying energy sources, investing in renewable energy, and improving energy efficiency across sectors. Policy decisions at the federal and state levels will play a crucial role in shaping the future of energy prices.
Time of India
12-05-2025
- Business
- Time of India
Why are US natural gas prices rising, and what does it mean for American families?
With US natural gas prices up more than 14 percent over the past month, many American families are poised to see their utility bills rise by up to $30 a month as higher fuel and power‐sector costs get passed through to consumers. #Operation Sindoor The damage done at Pak bases as India strikes to avenge Pahalgam Why Pakistan pleaded to end hostilities Kashmir's Pahalgam sparks Karachi's nightmare Natural gas prices have risen from around $3.47 to nearly $3.80 per million British thermal units (MMBtu) in the last few days, driven by tighter supplies, technical buying, a brief outage at a key LNG export plant, and forecasts for hotter-than-normal summer weather. Geopolitical and economic policies of the Trump administration, particularly new tariffs on energy imports under his first 100 days, are adding an extra layer of cost pressure and translating into higher heating and electricity bills for families and small businesses across the country. Market Technicals and Supply Constraints When natural gas futures broke above the 50-day exponential moving average (about $3.47/MMBtu), many traders jumped back in, betting on further gains above resistance at $3.72/MMBtu. Live Events Meanwhile, major US producers like Diamondback and Coterra announced cuts to rig counts and capital spending in the Permian Basin, setting the stage for slower output growth later this year. Weather-Driven Demand The National Weather Service and private forecasters predict above-normal cooling degree days across the Lower 48 through mid-May, signaling an earlier start to air-conditioning season. That additional power-sector demand tightens balances and lifts natural gas prices. 'Trumpflation' and Tariffs on Energy Imports In his first 100 days, President Trump has imposed a 10 percent tariff on Canadian energy exports, including natural gas, intended to 'minimize disruptive effects,' but adding cost to U.S. imports. Goldman Sachs warns these tariffs could push core inflation up to 3.8 percent by year-end, reversing recent gains toward the Fed's 2 percent goal. Critics note grocery and energy prices are already outpacing wage growth for many households. Impact on American Families For a middle-class family in Cleveland that relies on natural gas for both heating and cooking, a $0.30 rise per MMBtu can translate into an extra $20–$30 on next month's bill. Small manufacturers in the Midwest, who use gas-fired furnaces, report tightening margins and are already planning modest price increases for their customers. What Comes Next? The EIA(Energy Information Administration) now projects the Henry Hub spot price to average $4.19/MMBtu in 2025, up nearly 90 percent over last year, before climbing further to $4.47/MMBtu in 2026 as LNG exports and seasonal power demand grow. If the summer heat wave deepens, or if geopolitical tensions flare further, we could see another leg up in prices. For consumers, that means keeping an eye on usage, exploring efficiency upgrades, and budgeting for potentially higher energy bills in the months ahead. Even as technical traders fuel short-term rallies, real-world factors outages at major export terminals, summer cooling demand, and new tariffs, are the main drivers tightening the US natural gas market. FAQs What can I do to manage higher natural gas bills? Monitor Usage : Be mindful of your natural gas consumption, especially during peak demand periods. Efficiency Upgrades : Consider investing in energy-efficient appliances and insulation to reduce heating and cooling costs. Budgeting : Plan your monthly expenses to accommodate potential increases in utility bills. Are there any long-term solutions to stabilize natural gas prices? Long-term solutions include diversifying energy sources, investing in renewable energy, and improving energy efficiency across sectors. Policy decisions at the federal and state levels will play a crucial role in shaping the future of energy prices.
CNBC
06-05-2025
- Business
- CNBC
These are the 3 things driving Coterra's sell-off — and how we're viewing the stock now
Coterra Energy is cutting back on its oil drilling in response to sagging crude prices and spending more on natural gas production — but that move, announced alongside first-quarter results, is being overshadowed by some operational concerns and leading to a stock sell-off Tuesday. Revenue in the first quarter increased 33% year over year to $1.9 billion, short of the $1.97 billion consensus estimate, according to LSEG. Adjusted earnings per share of 80 cents in the three months ended March 31 matched expectations, LSEG data showed. On an annual basis, adjusted EPS increased 56.9%. Free cash flow of $663 million topped estimates of $596 million, according to FactSet. Bottom line We have long coveted Coterra's mix of oil and natural gas assets because it gives the company flexibility to respond to inherently volatile commodity prices. Our biggest takeaway from Coterra's late Monday release and Tuesday morning conference call: That flexibility is being put to serious use in the current unfavorable oil market. But even if we support that move in principle, some operational issues in a certain part of the company's Texas acreage are getting a lot of attention and are likely among the biggest drivers of the steep 8.5% stock decline. CTRA YTD mountain Coterra YTD While executives did a good job explaining their plan to fix the issue on Tuesday's earnings call — and making it clear that they do not believe it is a structural problem with the quality of inventory — we're not in a hurry to step in and take advantage of this sell-off. Coterra is still worth owning as our only oil-and-gas play, providing a solid dividend payout, acting as a geopolitical hedge and offering some exposure to long-term trends that could drive increased natural gas demand such as artificial intelligence computing and growing U.S. exports of liquified natural gas. But in the near term, the stock may struggle to gain traction. We're reiterating our hold-equivalent 2 rating , but lowering our price target to $28. Commentary There are three main themes from Coterra's earnings report — and none of them really have to do with the actual first-quarter results, which, as the chart above shows, were mixed. Not that bad, but also not exceptional. 1. Macro landscape The first area of discussion is around the macro landscape and Coterra's decision to spend less on oil. Coterra and its American oil-producing brethren are confronting a difficult setup, thanks to a steep decline in crude prices over the past month that has brought West Texas Intermediate crude , the U.S. oil benchmark, to four-year lows below $58 a barrel . At the start of April, WTI traded above $71 a barrel. There are two main reasons for the pullback: President Donald Trump 's intensified trade war has fueled concerns about a global economic slowdown — a bad thing for oil demand if it comes to fruition. At the same time, the group of eight oil-producing nations known as OPEC+ has announced a series of surprisingly aggressive moves to bring more supply to the market in the coming months. The most recent of those decisions was announced over the weekend. While Saudi Arabia-led OPEC+ might typically be expected to curtail output in the face of potential demand destruction, the opposite is happening. A variety of factors could be motivating OPEC+'s counterinitiative actions, including internal politics within the oil cartel, analysts say. But for our purposes here, what matters most is that anything that materially weakens the outlook for crude prices — whether it's trade-related recession fears, OPEC+ or both — makes Coterra's job of profitably drilling for oil harder to do. Not impossible, but the company and its peers make a whole lot more money when WTI is $75 a barrel than they do at $55. And so, the new set of facts requires them to reconsider what the best use of money is and adjust accordingly if something else is better for their investors. Coterra's new plan to reduce oil-focused spending is a sensible one in the near term, and it is made possible by its presence in both the oil-rich Permian Basin in western Texas and Southeastern New Mexico and the natural gas-heavy Marcellus Shale in Pennsylvania and other parts of the Appalachian region. Coterra also has wells in the Anadarko Basin that spans the Texas Panhandle and western Oklahoma, but its planned activity there this year is not changing. In the Permian, though, Coterra now plans to average just seven rigs in the second half of 2025, down from the 10-rig plan announced in late February. Rigs are the machinery used to drill a well. As such, its planned Permian capital investments this year are coming down by $150 million. Meanwhile, Coterra restarted activity in the Marcellus in April with two rigs, as previously projected. But the company said it now expects to keep both rigs running into the second half of the year, lifting its capital spending in the region by an additional $50 million. Another $50 million could be added to those plans if Coterra decides to keep its second rig running through year-end, though executives said that decision will be made in the third quarter. On Tuesday's earnings call, CEO Tom Jorden said he's hopeful that the tariff situation is resolved and the "threat of recession is lifted," but he stressed that "we can't run our program on hope." "Right now, we're relaxing slightly [on oil spending] because we're concerned that oil prices could further weaken. I hope we're wrong on that," Jorden said. "But our experience tells us that when you see these events – and you see the possibility – be prepared for the worst-case scenario." The net effect of these changes is Coterra's total capital expenditure projections for 2025 came down by $100 million at the midpoint of its new guidance range — and yet the company's total production guidance was actually nudged higher for the year, driven entirely by more natural gas output. Expecting more total production on less spending is a reflection of Coterra's ability to be a capital-efficient operator. That is a positive in the short run. However, investors might be questioning what these changes mean to Coterra's production levels in 2026 and 2027, analysts at Mizuho Securities wrote before Tuesday's earnings call, considering last quarter the company provided three-year outlook that included annual average oil growth of at least 5%. Executives fielded a number of questions on the three-year plans, but they repeatedly said it remained intact. "We're holding to our three-year plan as outlined with the changes that we've discussed in this call. We want to be really clear with everybody on that," Jorden said. 2. Free cash flow Another big theme: Coterra's free cash flow outlook for this year was cut by 22% to $2.1 billion — and while lower commodity price assumptions outside its control is a big driver of the revision, investors might be worried this will limit the amount of share repurchases this year, particularly if oil prices get even weaker. The company's commitment has been to return at least half of its free cash flow to shareholders via dividend payouts and stock buybacks. But in 2025, in particular, executives have prioritized paying down debt — tied to its two Permian-focused acquisitions that closed earlier this year — over buybacks. "We still have the ability to do it all, so to speak, but to be really clear, in 2025, our priority is going to be debt repayment. We're not going to compromise that," CFO Shane Young said on the call. "That doesn't mean that there's not going to be repurchases. ... But if you look at 2024, we returned 90% of cash flow to shareholders. [In 2023], we returned 76% of cash flow to shareholders. Why were we able to do that? Because we had low leverage. And we believe that having low leverage is an enabler, and we're dead-set focused on protecting our long-term shareholder return objectives, and we think the best way to do that is to reduce debt." 3. Operational issues The final major theme — and likely a major culprit for the stock reaction — is operational issues plaguing some of Coterra's operations in Culberson County, Texas, which is part of the Permian. At the highest level, some of the wells in an area called Harkey were producing higher-than-normal water volumes, so the company paused development there to work through the issue. At this time, Jorden said Coterra is "pretty optimistic that this is a mechanical operation that is solvable with a combination of revised pipe design and cementing program," rather than something strategically wrong with the land that threatens the quality of inventory. "As we currently see it, we think we'll be back to completing and drilling these Harkey wells in months, not years," Jorden said. 2025 guidance Here's where Coterra's full-year guidance stands after the numerous aforementioned revisions: Estimated discretionary cash flow of $4.3 billion based on WTI crude prices of $63 a barrel and natural gas prices of $3.70 per metric million British thermal unit, or mmbtu. That's below Wall Street expectations of $4.62, according to FactSet, and previous guidance of $5 billion, which factored in higher prices for both commodities. Estimated free cash flow of $2.1 billion based on the commodity price assumptions used in the discretionary cash flow guide. That is down from $2.7 billion previously. Estimated capital expenditure budget of $2 billion to $2.3 billion, down by $100 million on both ends of the range. That results in a new midpoint of $2.15 billion compared with the prior guide of $2.25 billion. Seven rigs in operation in the Permian in the second half of the year, lower than the previous plan to operate 10 rigs. Expected 2025 total equivalent production of 720 to 770 Mboe/d. The 745 midpoint of the range — up from 740 in its previous guidance — is slightly below the FactSet consensus forecast of 757 Mboe/d, which stands for total oil equivalent of a thousand barrels per day. Expected oil production in the range of 155 to 165 Mbo/d, which stands for a thousand of barrels of oil per day. The midpoint of the range is unchanged at 160 Mbo/d, despite modestly lowering the top end of the range and slightly increasing the bottom end. The FactSet consensus is for 163.6 Mbo/d. Expected natural gas production in the range of 2,725 to 2,875 MMcf/d, resulting in a new midpoint of 2,800, up from 2,775. That is below the consensus of 2,837 MMcf/d, according to FactSet. (Jim Cramer's Charitable Trust is long CTRA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. An oil pumpjack is shown near the Callon Petroleum vicinity on March 27, 2024 in Monahans, Texas. Coterra Energy is cutting back on its oil drilling in response to sagging crude prices and spending more on natural gas production — but that move, announced alongside first-quarter results, is being overshadowed by some operational concerns and leading to a stock sell-off Tuesday.
