Coterra Energy Shifts Focus Amid Natural Gas Downturn

U.S. oil and gas producer Coterra Energy (NYSE: CTRA) has faced a steep decline in revenues and profits over the past two years, driven by weaker commodity prices. The company, which generates revenue primarily from crude oil, natural gas liquids (NGLs), and natural gas, saw its revenues plummet by -35% year-over-year in 2023. Net income took an even sharper hit, plunging -60%.

In response to a pronounced slump in natural gas prices, Coterra has redirected its resources toward oil-heavy basins such as the Permian and Anadarko, reducing focus on the natural gas-focused Marcellus Shale. This strategic pivot has resulted in lower natural gas production and a shrinking share of revenues derived from natural gas.

Analyst estimates from Visible Alpha indicate a shift in Coterra’s revenue composition. Natural gas, which once dominated the company’s earnings, is expected to account for 31% of total revenues in 2024, down from 39% in 2023 and a striking 60% in 2022. Furthermore, natural gas production is forecast to decline by -4% in 2024, while crude oil and NGL output is projected to rise by +12%. In the years ahead, analysts expect the company revenue mix from natural gas to improve, driven by stabilized prices and increased production.