0000858470-22-000018.txt : 20220503 0000858470-22-000018.hdr.sgml : 20220503 20220503163112 ACCESSION NUMBER: 0000858470-22-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 81 CONFORMED PERIOD OF REPORT: 20220331 FILED AS OF DATE: 20220503 DATE AS OF CHANGE: 20220503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Coterra Energy Inc. CENTRAL INDEX KEY: 0000858470 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 043072771 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10447 FILM NUMBER: 22887514 BUSINESS ADDRESS: STREET 1: 840 GESSNER ROAD, SUITE 1400 CITY: HOUSTON STATE: TX ZIP: 77024 BUSINESS PHONE: 2815894600 MAIL ADDRESS: STREET 1: 840 GESSNER ROAD, SUITE 1400 CITY: HOUSTON STATE: TX ZIP: 77024 FORMER COMPANY: FORMER CONFORMED NAME: CABOT OIL & GAS CORP DATE OF NAME CHANGE: 19920703 10-Q 1 cog-20220331.htm 10-Q cog-20220331
000085847012-312022Q1FALSEP2Yhttp://fasb.org/us-gaap/2021-01-31#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrent00008584702022-01-012022-03-3100008584702022-05-02xbrli:shares00008584702022-03-31iso4217:USD00008584702021-12-31iso4217:USDxbrli:shares0000858470us-gaap:NaturalGasProductionMember2022-01-012022-03-310000858470us-gaap:NaturalGasProductionMember2021-01-012021-03-310000858470us-gaap:OilAndCondensateMember2022-01-012022-03-310000858470us-gaap:OilAndCondensateMember2021-01-012021-03-310000858470srt:NaturalGasLiquidsReservesMember2022-01-012022-03-310000858470srt:NaturalGasLiquidsReservesMember2021-01-012021-03-3100008584702021-01-012021-03-310000858470cog:OtherRevenuesMember2022-01-012022-03-310000858470cog:OtherRevenuesMember2021-01-012021-03-3100008584702020-12-3100008584702021-03-310000858470us-gaap:CommonStockMember2021-12-310000858470us-gaap:TreasuryStockMember2021-12-310000858470us-gaap:AdditionalPaidInCapitalMember2021-12-310000858470us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000858470us-gaap:RetainedEarningsMember2021-12-310000858470us-gaap:RetainedEarningsMember2022-01-012022-03-310000858470us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310000858470us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000858470us-gaap:CommonStockMember2022-03-310000858470us-gaap:TreasuryStockMember2022-03-310000858470us-gaap:AdditionalPaidInCapitalMember2022-03-310000858470us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000858470us-gaap:RetainedEarningsMember2022-03-310000858470us-gaap:CommonStockMember2020-12-310000858470us-gaap:TreasuryStockMember2020-12-310000858470us-gaap:AdditionalPaidInCapitalMember2020-12-310000858470us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000858470us-gaap:RetainedEarningsMember2020-12-310000858470us-gaap:RetainedEarningsMember2021-01-012021-03-310000858470us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310000858470us-gaap:CommonStockMember2021-03-310000858470us-gaap:TreasuryStockMember2021-03-310000858470us-gaap:AdditionalPaidInCapitalMember2021-03-310000858470us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310000858470us-gaap:RetainedEarningsMember2021-03-310000858470cog:CimarexMember2021-01-012021-03-310000858470cog:ProvedOilAndGasPropertiesMember2022-03-310000858470cog:ProvedOilAndGasPropertiesMember2021-12-310000858470cog:UnprovedOilAndGasPropertiesMember2022-03-310000858470cog:UnprovedOilAndGasPropertiesMember2021-12-310000858470cog:PipelinesAndGatheringMember2022-03-310000858470cog:PipelinesAndGatheringMember2021-12-310000858470cog:LandBuildingsAndOtherEquipmentMember2022-03-310000858470cog:LandBuildingsAndOtherEquipmentMember2021-12-310000858470cog:SixPointFiveOnePercentageWeightedAveragePrivatePlacementSeniorNotesMember2022-03-31xbrli:pure0000858470cog:SixPointFiveOnePercentageWeightedAveragePrivatePlacementSeniorNotesMember2021-12-310000858470cog:FivePointFiveEightPercentageWeightedAveragePrivatePlacementSeniorNotesMember2022-03-310000858470cog:FivePointFiveEightPercentageWeightedAveragePrivatePlacementSeniorNotesMember2021-12-310000858470cog:ThreePointSixtyFivePercentageWeightedAveragePrivatePlacementSeniorNotesMember2022-03-310000858470cog:ThreePointSixtyFivePercentageWeightedAveragePrivatePlacementSeniorNotesMember2021-12-310000858470cog:FourPointThreeSevenFivePercentageSeniorNotesDueJune12024Member2022-03-310000858470cog:FourPointThreeSevenFivePercentageSeniorNotesDueJune12024Member2021-12-310000858470cog:ThreePointNineZeroPercentageSeniorNotesDueMay152027Member2022-03-310000858470cog:ThreePointNineZeroPercentageSeniorNotesDueMay152027Member2021-12-310000858470cog:FourPointThreeSevenFivePercentageSeniorNotesDueMarch152029Member2022-03-310000858470cog:FourPointThreeSevenFivePercentageSeniorNotesDueMarch152029Member2021-12-310000858470us-gaap:LineOfCreditMember2022-03-310000858470us-gaap:LineOfCreditMember2021-12-310000858470us-gaap:LineOfCreditMember2022-03-310000858470cog:NaturalGasContractOneMember2022-01-012022-03-31utr:MMBTU0000858470cog:NaturalGasContractOneMembersrt:MinimumMember2022-03-31iso4217:USDutr:MMBTU0000858470srt:MaximumMembercog:NaturalGasContractOneMember2022-03-310000858470cog:NaturalGasContractOneMember2022-03-310000858470cog:NaturalGasContractPermEPOneMember2022-01-012022-03-310000858470cog:NaturalGasContractPermEPOneMember2022-03-310000858470cog:NaturalGasContractPermEPOneMembersrt:MinimumMember2022-03-310000858470srt:MaximumMembercog:NaturalGasContractPermEPOneMember2022-03-310000858470cog:NaturalGasContractPermEPTwoMember2022-01-012022-03-310000858470cog:NaturalGasContractPermEPTwoMember2022-03-310000858470cog:NaturalGasContractPanhandleEasternPipeLineOneMember2022-01-012022-03-310000858470cog:NaturalGasContractPanhandleEasternPipeLineOneMember2022-03-310000858470cog:NaturalGasContractPanhandleEasternPipeLineOneMembersrt:MinimumMember2022-03-310000858470cog:NaturalGasContractPanhandleEasternPipeLineOneMembersrt:MaximumMember2022-03-310000858470cog:NaturalGasContractPanhandleEasternPipeLineTwoMember2022-01-012022-03-310000858470cog:NaturalGasContractPanhandleEasternPipeLineTwoMember2022-03-310000858470cog:NaturalGasContractWahaOneMember2022-01-012022-03-310000858470cog:NaturalGasContractWahaOneMember2022-03-310000858470cog:NaturalGasContractWahaOneMembersrt:MinimumMember2022-03-310000858470srt:MaximumMembercog:NaturalGasContractWahaOneMember2022-03-310000858470cog:NaturalGasContractWahaTwoMember2022-01-012022-03-310000858470cog:NaturalGasContractWahaTwoMember2022-03-310000858470cog:NaturalGasContractWahaThreeMember2022-01-012022-03-310000858470cog:NaturalGasContractWahaThreeMember2022-03-310000858470cog:NaturalGasContractTwoMember2022-01-012022-03-310000858470cog:NaturalGasContractTwoMembersrt:MinimumMember2022-03-310000858470srt:MaximumMembercog:NaturalGasContractTwoMember2022-03-310000858470cog:NaturalGasContractTwoMember2022-03-310000858470cog:NaturalGasContractThreeMember2022-01-012022-03-310000858470cog:NaturalGasContractThreeMembersrt:MinimumMember2022-03-310000858470srt:MaximumMembercog:NaturalGasContractThreeMember2022-03-310000858470cog:NaturalGasContractThreeMember2022-03-310000858470us-gaap:SubsequentEventMembercog:CrudeOilContractWTIOneMember2022-04-012022-05-05utr:MBbls0000858470us-gaap:SubsequentEventMembersrt:MinimumMembercog:CrudeOilContractWTIOneMember2022-05-05iso4217:USDutr:MBbls0000858470srt:MaximumMemberus-gaap:SubsequentEventMembercog:CrudeOilContractWTIOneMember2022-05-050000858470us-gaap:SubsequentEventMembercog:CrudeOilContractWTIOneMember2022-05-050000858470cog:CrudeOilContractWTITwoMemberus-gaap:SubsequentEventMember2022-04-012022-05-050000858470cog:CrudeOilContractWTITwoMemberus-gaap:SubsequentEventMember2022-05-050000858470cog:CrudeOilContractWTITwoMemberus-gaap:SubsequentEventMembersrt:MinimumMember2022-05-050000858470cog:CrudeOilContractWTITwoMembersrt:MaximumMemberus-gaap:SubsequentEventMember2022-05-050000858470cog:CrudeOilContractWTIThreeMemberus-gaap:SubsequentEventMember2022-04-012022-05-050000858470cog:CrudeOilContractWTIThreeMemberus-gaap:SubsequentEventMember2022-05-050000858470cog:CrudeOilContractWTIThreeMemberus-gaap:SubsequentEventMembersrt:MinimumMember2022-05-050000858470srt:MaximumMembercog:CrudeOilContractWTIThreeMemberus-gaap:SubsequentEventMember2022-05-050000858470us-gaap:SubsequentEventMembercog:CrudeOilContractWTIMidlandOneMember2022-04-012022-05-050000858470us-gaap:SubsequentEventMemberus-gaap:BasisSwapMembercog:CrudeOilContractWTIMidlandOneMember2022-05-050000858470cog:CrudeOilContractWTIMidlandTwoMemberus-gaap:SubsequentEventMember2022-04-012022-05-050000858470cog:CrudeOilContractWTIMidlandTwoMemberus-gaap:SubsequentEventMemberus-gaap:BasisSwapMember2022-05-050000858470cog:CrudeOilContractWTIMidlandThreeMemberus-gaap:SubsequentEventMember2022-04-012022-05-050000858470cog:CrudeOilContractWTIMidlandThreeMemberus-gaap:SubsequentEventMemberus-gaap:BasisSwapMember2022-05-050000858470cog:CrudeOilContractWTIFourMemberus-gaap:SubsequentEventMember2022-04-012022-05-050000858470cog:RollSwapMembercog:CrudeOilContractWTIFourMemberus-gaap:SubsequentEventMember2022-05-050000858470cog:CrudeOilContractWTIFiveMemberus-gaap:SubsequentEventMember2022-04-012022-05-050000858470cog:RollSwapMembercog:CrudeOilContractWTIFiveMemberus-gaap:SubsequentEventMember2022-05-050000858470cog:NaturalGasContractWahaThreeMemberus-gaap:SubsequentEventMember2022-04-012022-05-030000858470cog:NaturalGasContractWahaThreeMemberus-gaap:SubsequentEventMember2022-05-030000858470cog:CrudeOilContractWTISixMemberus-gaap:SubsequentEventMember2022-04-012022-05-030000858470cog:CrudeOilContractWTISixMemberus-gaap:SubsequentEventMember2022-05-030000858470cog:CrudeOilContractWTISixMemberus-gaap:SubsequentEventMembersrt:MinimumMember2022-05-030000858470srt:MaximumMembercog:CrudeOilContractWTISixMemberus-gaap:SubsequentEventMember2022-05-030000858470cog:CrudeOilContractWTISevenMemberus-gaap:SubsequentEventMember2022-04-012022-05-030000858470cog:CrudeOilContractWTISevenMemberus-gaap:SubsequentEventMember2022-05-030000858470cog:CrudeOilContractWTISevenMemberus-gaap:SubsequentEventMembersrt:MinimumMember2022-05-030000858470cog:CrudeOilContractWTISevenMembersrt:MaximumMemberus-gaap:SubsequentEventMember2022-05-030000858470cog:CrudeOilContractWTIMidlandFourMemberus-gaap:SubsequentEventMember2022-04-012022-05-030000858470cog:RollSwapMembercog:CrudeOilContractWTIMidlandFourMemberus-gaap:SubsequentEventMember2022-05-030000858470cog:CrudeOilContractWTIMidlandFiveMemberus-gaap:SubsequentEventMember2022-04-012022-05-030000858470cog:RollSwapMembercog:CrudeOilContractWTIMidlandFiveMemberus-gaap:SubsequentEventMember2022-05-030000858470cog:DerivativeInstrumentsCurrentMemberus-gaap:CommodityContractMemberus-gaap:NondesignatedMember2022-03-310000858470cog:DerivativeInstrumentsCurrentMemberus-gaap:CommodityContractMemberus-gaap:NondesignatedMember2021-12-310000858470us-gaap:CommodityContractMemberus-gaap:NondesignatedMember2022-03-310000858470us-gaap:CommodityContractMemberus-gaap:NondesignatedMember2021-12-310000858470cog:GasContractsMember2022-01-012022-03-310000858470cog:GasContractsMember2021-01-012021-03-310000858470cog:OilContractsMember2022-01-012022-03-310000858470cog:OilContractsMember2021-01-012021-03-310000858470us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-03-310000858470us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-03-310000858470us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-03-310000858470us-gaap:FairValueMeasurementsRecurringMember2022-03-310000858470us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310000858470us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310000858470us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310000858470us-gaap:FairValueMeasurementsRecurringMember2021-12-31cog:impaired_asset_and_liability0000858470us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-03-310000858470us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310000858470us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310000858470us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-3100008584702021-07-012022-03-3100008584702021-07-01srt:MinimumMember2022-03-310000858470srt:MaximumMember2021-07-012022-03-3100008584702021-01-012021-12-3100008584702022-02-012022-02-2800008584702022-02-280000858470us-gaap:SubsequentEventMember2022-04-012022-05-050000858470us-gaap:SubsequentEventMember2022-05-050000858470us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2022-01-012022-03-310000858470us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2022-01-012022-03-310000858470srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2022-01-012022-03-310000858470us-gaap:PerformanceSharesMember2022-01-012022-03-310000858470cog:MarketBasedPerformanceShareAwardsMember2022-01-012022-03-310000858470cog:TSRPerformanceSharesMember2022-01-012022-03-310000858470cog:TSRPerformanceSharesMember2022-02-282022-02-280000858470cog:TreasuryStockMethodMember2022-01-012022-03-310000858470cog:TreasuryStockMethodMember2021-01-012021-03-310000858470us-gaap:EmployeeSeveranceMember2022-01-012022-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
10-Q
      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2022
OR
       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission file number 1-10447
COTERRA ENERGY INC.
(Exact name of registrant as specified in its charter)
Delaware 04-3072771
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)
Three Memorial City Plaza
840 Gessner Road, Suite 1400, Houston, Texas 77024
(Address of principal executive offices, including ZIP code)
(281) 589-4600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.10 per shareCTRANew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of May 2, 2022, there were 805,805,159 shares of Common Stock, Par Value $0.10 Per Share, outstanding.


COTERRA ENERGY INC.
INDEX TO FINANCIAL STATEMENTS
  Page
 
   
 
   
   
   
   
   
   
   
   
 
   
   
   
  
2

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
COTERRA ENERGY INC.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In millions, except per share amounts)March 31,
2022
December 31,
2021
ASSETS  
Current assets  
Cash and cash equivalents$1,447 $1,036 
Restricted cash10 10 
Accounts receivable, net1,094 1,037 
Inventories 41 39 
Other current assets5 14 
Total current assets 2,597 2,136 
Properties and equipment, net (Successful efforts method) 17,346 17,375 
Other assets 384 389 
$20,327 $19,900 
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY  
Current liabilities  
Accounts payable $874 $747 
Current portion of long-term debt25  
Accrued liabilities 209 260 
Income taxes payable153 29 
Interest payable26 25 
Derivative instruments372 159 
Total current liabilities 1,659 1,220 
Long-term debt, net3,090 3,125 
Deferred income taxes 3,138 3,101 
Asset retirement obligations262 259 
Other liabilities 410 407 
Total liabilities8,559 8,112 
Commitments and contingencies
Cimarex redeemable preferred stock5050
Stockholders' equity
Common stock:  
Authorized — 1,800,000,000 shares of $0.10 par value in 2022 and 2021, respectively
  
Issued — 893,450,009 shares and 892,612,010 shares in 2022 and 2021, respectively
8989
Additional paid-in capital 10,927 10,911 
Retained earnings 2,715 2,563 
Accumulated other comprehensive income5 1 
Less treasury stock, at cost:  
86,710,998 shares and 79,082,385 shares in 2022 and 2021, respectively
(2,018)(1,826)
Total stockholders' equity 11,718 11,738 
 $20,327 $19,900 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

COTERRA ENERGY INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
 Three Months Ended 
March 31,
(In millions, except per share amounts)20222021
OPERATING REVENUES  
Natural gas $1,111 $473 
Oil699  
NGL245  
Loss on derivative instruments(391)(13)
Other 15  
 1,679 460 
OPERATING EXPENSES  
Direct operations100 17 
Transportation, processing and gathering233 137 
Taxes other than income 76 5 
Exploration 6 3 
Depreciation, depletion and amortization 360 94 
General and administrative 107 29 
 882 285 
Gain on sale of assets 2  
INCOME FROM OPERATIONS 799 175 
Interest expense, net21 12 
Income before income taxes 778 163 
Income tax expense170 37 
NET INCOME$608 $126 
Earnings per share  
Basic $0.75 $0.32 
Diluted$0.74 $0.31 
Weighted-average common shares outstanding   
Basic810 399 
Diluted 814 402 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

COTERRA ENERGY INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 Three Months Ended 
March 31,
(In millions)20222021
CASH FLOWS FROM OPERATING ACTIVITIES  
  Net income $608 $126 
  Adjustments to reconcile net income to cash provided by operating activities:  
Depreciation, depletion and amortization360 94 
Deferred income tax expense36 12 
Gain on sale of assets(2) 
Loss on derivative instruments391 13 
Net cash (paid) received in settlement of derivative instruments(171)3 
Amortization of premium and debt issuance costs(10)1 
Stock-based compensation and other20 11 
  Changes in assets and liabilities:  
Accounts receivable, net(57)17 
Income taxes124 24 
Inventories(2)(1)
Other current assets2 1 
Accounts payable and accrued liabilities21 4 
Interest payable1 (13)
Other assets and liabilities1 (2)
Net cash provided by operating activities1,322 290 
CASH FLOWS FROM INVESTING ACTIVITIES  
Capital expenditures(271)(123)
Proceeds from sale of assets2  
Net cash used in investing activities(269)(123)
CASH FLOWS FROM FINANCING ACTIVITIES  
Repayments of debt (88)
Repayments of finance leases(2) 
Share repurchases(184) 
Dividends paid(456)(40)
Cash received for stock option exercises6  
Tax withholdings on vesting of stock awards(6)(6)
Net cash used in financing activities(642)(134)
Net increase in cash, cash equivalents and restricted cash411 33 
Cash, cash equivalents and restricted cash, beginning of period1,046 152 
Cash, cash equivalents and restricted cash, end of period$1,457 $185 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

COTERRA ENERGY INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
(In millions, except per share amounts)Common SharesCommon Stock ParTreasury SharesTreasury StockPaid-In CapitalAccumulated Other Comprehensive IncomeRetained EarningsTotal
Balance at December 31, 2021893 $89 79 $(1,826)$10,911 $1 $2,563 $11,738 
Net income— — — — — — 608608
Exercise of stock options— — — — 6 — — 6 
Stock amortization and vesting— — — — 10 — — 10 
Share repurchases— — 8 (192)— — — (192)
Cash dividends:
Common stock at $0.56 per share
— — — — — — (455)(455)
Preferred stock at $20.3125 per share
— — — — — — (1)(1)
Other comprehensive income— — — — — 4 — 4 
Balance at March 31, 2022893 $89 87 $(2,018)$10,927 $5 $2,715 $11,718 

(In millions, except per share amounts)Common SharesCommon Stock ParTreasury SharesTreasury StockPaid-In CapitalAccumulated Other Comprehensive IncomeRetained EarningsTotal
Balance at December 31, 2020478 $48 79 $(1,823)$1,804 $2 $2,185 $2,216 
Net income— — — — — — 126 126 
Stock amortization and vesting— — — — 4 — — 4 
Cash dividends at $0.10 per share
— — — — — — (40)(40)
Balance at March 31, 2021478 $48 79 $(1,823)$1,808 $2 $2,271 $2,306 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6


COTERRA ENERGY INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Financial Statement Presentation
During interim periods, Coterra Energy Inc. (the “Company”) follows the same accounting policies disclosed in its Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”) filed with the Securities and Exchange Commission (“SEC”), except for any new accounting pronouncements adopted during the period. The interim financial statements should be read in conjunction with the notes to the consolidated financial statements and information presented in the Form 10-K. In management’s opinion, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair statement. The results for any interim period are not necessarily indicative of the results that may be expected for the entire year.
Certain reclassifications have been made to prior year statements to conform with the current year presentation. These reclassifications have no impact on previously reported stockholders' equity, net income or cash flows.
2. Acquisitions
Cimarex Energy Co.
On October 1, 2021, the Company completed a merger transaction (the “Merger”) with Cimarex Energy Co. (“Cimarex”). Cimarex is an oil and gas exploration and production company with operations in Texas, New Mexico and Oklahoma.
Purchase Price Allocation
The transaction was accounted for using the acquisition method of accounting. Under the acquisition method of accounting, the assets, liabilities and mezzanine equity of Cimarex and its subsidiaries were recorded at their respective fair values as of the effective date of the Merger. The purchase price allocation was based on preliminary estimates and assumptions, which are subject to change for up to one year after October 1, 2021, the effective date of the Merger, as the Company finalizes the valuations of the assets acquired, liabilities assumed and the related tax balances as of the effective date of the Merger. Determining the fair value of the assets and liabilities of Cimarex requires judgment and certain assumptions to be made. The most significant fair value estimates related to the valuation of Cimarex's oil and gas properties and certain other fixed assets, long-term debt and derivative instruments. Oil and gas properties and certain fixed assets were valued using an income and market approach utilizing Level 3 inputs including internally generated production and development data and estimated price and cost estimates. Long-term debt was valued using a market approach utilizing Level 1 inputs including observable market prices on the underlying debt instruments. Derivative liabilities were based on Level 3 inputs consistent with the Company’s other commodity derivative instruments. There were no adjustments to the purchase price allocation during the three months ended March 31, 2022.
Unaudited Pro Forma Financial Information
The results of Cimarex’s operations have been included in the Company’s consolidated financial statements since October 1, 2021, the effective date of the Merger. The following supplemental pro forma information for the three months ended March 31, 2021 has been prepared to give effect to the Cimarex acquisition as if it had occurred on January 1, 2021. The information below reflects pro forma adjustments based on available information and certain assumptions that Coterra believes are factual and supportable. The pro forma results of operations do not include any cost savings or other synergies that may result from the acquisition or any estimated costs that have been or will be incurred by Coterra to integrate the Cimarex assets.
The pro forma information is not necessarily indicative of the results that might have occurred had the transaction actually taken place on January 1, 2021 and is not intended to be a projection of future results. Future results may vary significantly
7

from the results reflected in the following pro forma information because of normal production declines, changes in commodity prices, future acquisitions and divestitures, future development and exploration activities and other factors.
(In millions, except per share information)Three Months Ended 
March 31, 2021
Pro forma revenue$978 
Pro forma net income79 
Pro forma basic earnings per share$0.10 
Pro forma diluted earnings per share$0.10 

3. Properties and Equipment, Net
Properties and equipment, net are comprised of the following:
(In millions)March 31,
2022
December 31,
2021
Proved oil and gas properties$15,653 $15,340 
Unproved oil and gas properties 5,317 5,316 
Pipelines and gathering402 395 
Land, buildings and other equipment 140 140 
Finance lease right-of-use asset24 20 
21,536 21,211 
Accumulated depreciation, depletion and amortization(4,190)(3,836)
 $17,346 $17,375 
Capitalized Exploratory Well Costs
As of March 31, 2022, the Company did not have any projects with exploratory well costs capitalized for a period of greater than one year after drilling.
4. Debt and Credit Agreements
The Company’s debt and credit agreements consisted of the following:
(In millions)March 31,
2022
December 31,
2021
Total debt
6.51% weighted-average private placement senior notes
$37 $37 
5.58% weighted-average private placement senior notes (1)
87 87 
3.65% weighted-average private placement senior notes
825 825 
4.375% senior notes due June 1, 2024
750 750 
3.90% senior notes due May 15, 2027
750 750 
4.375% senior notes due March 15, 2029
500 500 
Revolving credit facility  
Net premium (discount)175 185 
Unamortized debt issuance costs(9)(9)
$3,115 $3,125 
________________________________________________________
(1) Includes $25 million of current portion of long-term debt at March 31, 2022 due in January 2023.
At March 31, 2022, the Company was in compliance with all financial and other covenants for both its revolving credit facility and senior notes.
8

Revolving Credit Agreement
At March 31, 2022, the Company had no borrowings outstanding under its revolving credit facility and unused commitments of $1.5 billion.
5. Derivative Instruments
As of March 31, 2022, the Company had the following outstanding financial commodity derivatives:
Collars
   FloorCeiling
Type of ContractVolume (Mmbtu)Contract PeriodRange
($/Mmbtu)
Weighted-Average
($/Mmbtu)
Range
($/Mmbtu)
Weighted-Average
($/Mmbtu)
Natural gas (NYMEX)74,900,000Apr. 2022 - Oct. 2022
$3.00 - $4.50
$3.61 
$4.07 - $6.68
$5.12 
Natural gas (Perm EP)(1)
1,820,000Apr. 2022 - Jun. 2022$ $2.40 
$2.85 - $2.90
$2.88 
Natural gas (Perm EP)(1)
5,500,000Apr. 2022 - Dec. 2022$ $2.50 $ $3.15 
Natural gas (PEPL)(2)
1,820,000Apr. 2022 - Jun. 2022$ $2.40 
$2.81 - $2.91
$2.86 
Natural gas (PEPL)(2)
5,500,000Apr. 2022 - Dec. 2022$ $2.60 $ $3.27 
Natural gas (Waha)(3)
1,820,000Apr. 2022 - Jun. 2022$ $2.40 
$2.82 - $2.89
$2.86 
Natural gas (Waha)(3)
1,830,000Apr. 2022 - Sep. 2022$ $2.40 $ $2.77 
Natural gas (Waha)(3)
5,500,000Apr. 2022 - Dec. 2022$ $2.50 $ $3.12 
Natural gas (NYMEX)71,500,000Apr. 2022 - Dec 2022
$3.50 - $4.25
$3.84 
$4.75 - $6.60
$5.39 
Natural gas (NYMEX)52,850,000Nov 2022 - Mar 2023
$4.00 - $4.75
$4.46 
$7.00 - $10.10
$8.37 
________________________________________________________
(1)The index price is El Paso Natural Gas Company, Permian Basin Index (“Perm EP”) as quoted in Platt’s Inside FERC.
(2)The index price is Panhandle Eastern Pipe Line, Tex/OK Mid-Continent Index (“PEPL”) as quoted in Platt’s Inside FERC.
(3)The index price is Waha West Texas Natural Gas Index (“Waha”) as quoted in Platt’s Inside FERC.
Collars
FloorCeilingBasis SwapsRoll Swaps
Type of ContractVolume (Mbbl)Contract PeriodRange
($/Bbl)
Weighted-Average
($/Bbl)
Range
($/Bbl)
Weighted-Average
($/Bbl)
Weighted-Average
($/Bbl)
Weighted-Average
($/Bbl)
Crude oil (WTI)819Apr. 2022-Jun. 2022
$35.00 - $37.50
$36.11 
$48.38 - $51.10
$49.97 
Crude oil (WTI)1,830Apr. 2022-Sep. 2022$ $40.00 
$47.55 - $50.89
$49.19 
Crude oil (WTI)2,200
Apr. 2022-Dec. 2022
$ $57.00 
$72.20 - $72.80
$72.43 
Crude oil (WTI Midland)(1)
728Apr. 2022-Jun. 2022$0.25 
Crude oil (WTI Midland)(1)
1,281
Apr. 2022-Sep. 2022
$0.38 
Crude oil (WTI Midland)(1)
2,200Apr. 2022-Dec. 2022$0.05 
Crude oil (WTI)364Apr. 2022-Jun. 2022$(0.20)
Crude oil (WTI)1,281Apr. 2022-Sep. 2022$0.10 
________________________________________________________
(1)The index price is WTI Midland as quoted by Argus Americas Crude.
9

Subsequent event. In April 2022, the Company entered into the following financial commodity derivatives:
   Swaps
Type of ContractVolume (Mmbtu)Contract PeriodWeighted-Average
($/Mmbtu)
Natural gas (Waha)(1)
9,200,000 May 2022 - Oct 2022$4.77 
________________________________________________________
(1)The index price is Waha West Texas Natural Gas Index (“Waha”) as quoted in Platt’s Inside FERC.

Collars
FloorCeilingBasis Swaps
Type of ContractVolume (Mbbl)Contract PeriodRange
($/Bbl)
Weighted-Average
($/Bbl)
Range
($/Bbl)
Weighted-Average
($/Bbl)
Weighted-Average
($/Bbl)
Crude oil (WTI)920Oct. 2022 - Dec. 2022$ $65.00 
$136.25 - $145.25
$140.49 
Crude oil (WTI)1,810Jan. 2023 - Jun 2023$ $65.00 
$116.30 - $118.30
$117.47 
Crude oil (WTI Midland)(1)
920Oct. 2022 - Dec. 2022$0.64 
Crude oil (WTI Midland)(1)
1,810Jan. 2023 - Jun 2023$0.64 
________________________________________________________
(1)The index price is WTI Midland as quoted by Argus Americas Crude.

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet
  Derivative AssetsDerivative Liabilities
(In millions)Balance Sheet LocationMarch 31,
2022
December 31,
2021
March 31,
2022
December 31,
2021
Commodity contractsDerivative instruments (current)$ $7 $372 $159 
$ $7 $372 $159 
Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet
(In millions)March 31,
2022
December 31,
2021
Derivative assets  
Gross amounts of recognized assets$ $27 
Gross amounts offset in the condensed consolidated balance sheet (20)
Net amounts of assets presented in the condensed consolidated balance sheet 7 
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet  
Net amount$ $7 
Derivative liabilities   
Gross amounts of recognized liabilities$372 $179 
Gross amounts offset in the condensed consolidated balance sheet (20)
Net amounts of liabilities presented in the condensed consolidated balance sheet372 159 
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet58 35 
Net amount$314 $194 
10

Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
 Three Months Ended 
March 31,
(In millions)20222021
Cash received (paid) on settlement of derivative instruments  
Gas Contracts$(42)$3 
Oil Contracts(129) 
Non-cash loss on derivative instruments  
Gas Contracts(182)(16)
Oil Contracts(38) 
 $(391)$(13)
6. Fair Value Measurements
The Company follows the authoritative guidance for measuring fair value of assets and liabilities in its financial statements. For further information regarding the fair value hierarchy, refer to Note 1 of the Notes to the Consolidated Financial Statements in the Form 10-K.
Financial Assets and Liabilities
The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:
(In millions)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Balance at  
March 31, 2022
Assets    
Deferred compensation plan$46 $ $ $46 
Derivative instruments    
$46 $ $ $46 
Liabilities   
Deferred compensation plan$60 $ $ $60 
Derivative instruments  372 372 
$60 $ $372 $432 
(In millions)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Balance at  
December 31, 2021
Assets    
Deferred compensation plan$47 $ $ $47 
Derivative instruments  27 27 
$47 $ $27 $74 
Liabilities   
Deferred compensation plan$56 $ $ $56 
Derivative instruments  179 179 
$56 $ $179 $235 
The Company's investments associated with its deferred compensation plan consist of mutual funds and deferred shares of the Company's common stock that are publicly traded and for which market prices are readily available.
The derivative instruments were measured based on quotes from the Company's counterparties or internal models. Such quotes and models have been derived using an income approach that considers various inputs, including current market and contractual prices for the underlying instruments, quoted forward commodity prices, basis differentials, volatility factors and interest rates for a similar length of time as the derivative contract term as applicable. Estimates are derived from or verified using relevant NYMEX futures contracts and are compared to multiple quotes obtained from counterparties or other third
11

parties for reasonableness. The determination of the fair values presented above also incorporates a credit adjustment for non-performance risk. The Company measured the non-performance risk of its counterparties by reviewing credit default swap spreads for the various financial institutions with which it has derivative transactions while non-performance risk of the Company is evaluated using market credit spreads provided by several of the Company's banks. The Company has not incurred any losses related to non-performance risk of its counterparties and does not anticipate any material impact on its financial results due to non-performance by third parties.
The most significant unobservable inputs relative to the Company's Level 3 derivative contracts are basis differentials and volatility factors. An increase (decrease) in these unobservable inputs would result in an increase (decrease) in fair value, respectively. The Company does not have access to the specific assumptions used in its counterparties’ valuation models. Consequently, additional disclosures regarding significant Level 3 unobservable inputs were not provided.
The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy:
Three Months Ended 
March 31,
(In millions)20222021
Balance at beginning of period$(152)$24 
Total gain (loss) included in earnings(391)(13)
Settlement (gain) loss171 (3)
Transfers in and/or out of Level 3  
Balance at end of period$(372)$8 
Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period$(291)$(6)
Non-Financial Assets and Liabilities
The Company discloses or recognizes its non-financial assets and liabilities, such as impairments or acquisitions, at fair value on a nonrecurring basis. As none of the Company’s other non-financial assets and liabilities were measured at fair value as of March 31, 2022, additional disclosures were not required.
The estimated fair value of the Company’s asset retirement obligations at inception is determined by utilizing the income approach by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state to the undiscounted expected abandonment cash flows. Given the unobservable nature of the inputs, the measurement of the asset retirement obligations was classified as Level 3 in the fair value hierarchy.
Fair Value of Other Financial Instruments
The estimated fair value of other financial instruments is the amount at which the instruments could be exchanged currently between willing parties. The carrying amounts reported in the Condensed Consolidated Balance Sheet for cash and cash equivalents and restricted cash approximate fair value, due to the short-term maturities of these instruments. Cash and cash equivalents and restricted cash are classified as Level 1 in the fair value hierarchy and the remaining financial instruments are classified as Level 2.
The fair value of the Company’s 4.375% senior notes due June 1, 2024, 3.90% senior notes due May 15, 2027 and 4.375% senior notes due March 15, 2029 is based on quoted market prices, which is classified as Level 1 in the fair value hierarchy. The Company uses available market data and valuation methodologies to estimate the fair value of its private placement senior notes. The fair value of the private placement senior notes is the estimated amount the Company would have to pay a third party to assume the debt, including a credit spread for the difference between the issue rate and the period end market rate. The credit spread is the Company’s default or repayment risk. The credit spread (premium or discount) is determined by comparing the Company’s senior notes and revolving credit facility to new issuances (secured and unsecured) and secondary trades of similar size and credit statistics for both public and private debt. The fair value of the private placement senior notes is based on interest rates currently available to the Company. The Company’s private placement senior notes are valued using an income approach and are classified as Level 3 in the fair value hierarchy.
12

The carrying amount and estimated fair value of debt is as follows:
 March 31, 2022December 31, 2021
(In millions)Carrying
Amount
Estimated Fair
Value
Carrying
Amount
Estimated Fair
Value
Long-term debt$3,115 $2,999 $3,125 $3,163 
Current maturities(25)(25)  
Long-term debt, excluding current maturities$3,090 $2,974 $3,125 $3,163 

7. Asset Retirement Obligations
Activity related to the Company’s asset retirement obligations is as follows:
(In millions)Three Months Ended 
March 31, 2022
Balance at beginning of period$263 
Liabilities incurred3 
Liabilities settled (1)
Liabilities divested(2)
Accretion expense2 
Balance at end of period265 
Less: current asset retirement obligations(3)
Noncurrent asset retirement obligations$262 
8. Commitments and Contingencies
Contractual Obligations
The Company has various contractual obligations in the normal course of its operations. There have been no material changes to the Company’s contractual obligations described under “Transportation, Processing and Gathering Agreements” and “Lease Commitments” as disclosed in Note 8 of the Notes to Consolidated Financial Statements in the Form 10-K.
Legal Matters
Pennsylvania Office of Attorney General Matter
On June 16, 2020, the Office of Attorney General of the Commonwealth of Pennsylvania informed the Company that it will pursue certain misdemeanor and felony charges in a Susquehanna County Magisterial District Court against the Company related to alleged violations of the Pennsylvania Clean Streams Law, which prohibits discharge of industrial wastes. The Company is vigorously defending itself against such charges; however, the proceedings could result in fines or penalties against the Company. At this time, it is not possible to estimate the amount of any fines or penalties, or the range of such fines or penalties, that are reasonably possible in this case.
Securities Litigation
In October 2020, a class action lawsuit styled Delaware County Emp. Ret. Sys. v. Cabot Oil and Gas Corp., et. al. (U.S. District Court, Middle District of Pennsylvania), was filed against the Company, Dan O. Dinges, its then Chief Executive Officer, and Scott C. Schroeder, its Chief Financial Officer, alleging that the Company made misleading statements in its periodic filings with the SEC in violation of Section 10(b) and Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The plaintiffs allege misstatements in the Company’s public filings and disclosures over a number of years relating to its potential liability for alleged environmental violations in Pennsylvania. The plaintiffs allege that such misstatements caused a decline in the price of the Company’s common stock when it disclosed in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 two notices of violations from the Pennsylvania Department of Environmental Protection and an additional decline when it disclosed on June 15, 2020 the criminal charges brought by the Office of the Attorney General of the Commonwealth of Pennsylvania related to alleged violations of the Pennsylvania Clean Streams Law, which prohibits discharge of industrial wastes. The court appointed Delaware County Employees Retirement System to represent the purported class on February 3, 2021. In April 2021, the complaint was amended to include Phillip L. Stalnaker, the Company’s then Senior Vice President of Operations, as a defendant. The plaintiffs seek monetary damages, interest and attorney’s fees.
13

Also in October 2020, a stockholder derivative action styled Ezell v. Dinges, et. al. (U.S. District Court, Middle District of Pennsylvania) was filed against the Company, Messrs. Dinges and Schroeder and the Board of Directors of the Company serving at that time, for alleged securities violations under Section 10(b) and Section 21D of the Exchange Act arising from the same alleged misleading statements that form the basis of the class action lawsuit described above. In addition to the Exchange Act claims, the derivative actions also allege claims based on breaches of fiduciary duty and statutory contribution theories. In December 2020, the Ezell case was consolidated with a second derivative case filed in the U.S. District Court, Middle District of Pennsylvania with similar allegations. In January 2021, a third derivative case was filed in the U.S. District Court, Middle District of Pennsylvania with substantially similar allegations and it too was consolidated with the Ezell case in February 2021.
On February 25, 2021, the Company filed a motion to transfer the class action lawsuit to the U.S. District Court for the Southern District of Texas, in Houston, Texas, where its headquarters are located. On June 11, 2021, the Company filed a motion to dismiss the class action lawsuit on the basis that the plaintiffs’ allegations do not meet the requirements for pleading a claim under Section 10(b) or Section 20 of the Exchange Act. On June 22, 2021, the motion to transfer the class action lawsuit to the Southern District of Texas was granted. Pursuant to the prior agreement of the parties, the consolidated derivative case discussed in the preceding paragraph was also transferred to the Southern District of Texas on July 12, 2021. Subsequently, an additional stockholder derivative action styled Treppel Family Trust U/A 08/18/18 Lawrence A. Treppel and Geri D. Treppel for the benefit of Geri D. Treppel and Larry A. Treppel v. Dinges, et al. (U.S. District Court, Southern District of Texas, Houston Division), asserting substantially similar Delaware common law claims as in the existing derivative cases, was filed in the Southern District of Texas and consolidated with the existing consolidated derivative cases. On January 12, 2022, the U.S. District Court for the Southern District of Texas granted the Company’s motion to dismiss the class action lawsuit but allowed the plaintiffs to file an amended complaint. The class action plaintiffs filed their amended complaint on February 11, 2022. The Company filed a motion to dismiss the amended class action complaint on March 10, 2022, to which the class action plaintiffs filed an opposition on April 13, 2022. On April 1, 2022, the U.S. District Court for the Southern District of Texas granted the Company’s motion to dismiss the consolidated derivative case but allowed the plaintiffs to file an amended complaint. The Company intends to vigorously defend the class action and derivative lawsuits.
In November 2020, the Company received a stockholder demand for inspection of books and records under Section 220 of the General Corporation Law of the State of Delaware (“Section 220 Demand”). The Section 220 Demand seeks broad categories of documents reviewed by the Board of Directors and minutes of meetings of the Board of Directors pertaining to alleged environmental violations in Pennsylvania, as well as documents relating to any board of directors conflicts of interest, dating from January 1, 2015 to the present. The Company also received three other similar requests from other stockholders in February and June 2021. On May 17, 2021, the Company was served with a complaint filed in the Court of Chancery of the State of Delaware by the stockholder making the February 2021 Section 220 Demand to compel the production of books and records requested. After making an agreed books and records production, the Section 220 complaint was voluntarily dismissed effective September 21, 2021. The Company also provided substantially the same books and records production in response to the other three Section 220 requests described above. It is possible that one or more additional stockholder suits could be filed pertaining to the subject matter of the Section 220 Demands and the class and derivative actions described above.
Other Legal Matters
The Company is a defendant in various other legal proceedings arising in the normal course of business. All known liabilities are accrued when management determines they are probable based on its best estimate of the potential loss. While the outcome and impact of these legal proceedings on the Company cannot be predicted with certainty, management believes that the resolution of these proceedings will not have a material effect on the Company’s financial position, results of operations or cash flows.
Contingency Reserves
When deemed necessary, the Company establishes reserves for certain legal proceedings. The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible that the Company could incur additional losses with respect to those matters for which reserves have been established. The Company believes that any such amount above the amounts accrued would not be material to the Condensed Consolidated Financial Statements. Future changes in facts and circumstances not currently known or foreseeable could result in the actual liability exceeding the estimated ranges of loss and amounts accrued.
14

9. Revenue Recognition
Disaggregation of Revenue
The following table presents revenues from contracts with customers disaggregated by product:
Three Months Ended March 31,
(In millions)20222021
Natural gas$1,111 $473 
Oil699  
NGL245  
Other15  
$2,070 $473 
All of the Company’s revenues from contracts with customers represent products transferred at a point in time as control is transferred to the customer and generated in the United States of America.
Transaction Price Allocated to Remaining Performance Obligations
A significant number of the Company’s product sales contracts are short-term in nature, with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.
As of March 31, 2022, the Company had $7.6 billion of unsatisfied performance obligations related to natural gas sales that have a fixed pricing component and a contract term greater than one year. The Company expects to recognize these obligations over periods ranging from two to 16 years.
Contract Balances
Receivables from contracts with customers are recorded when the right to consideration becomes unconditional, which is generally when control of the product has been transferred to the customer. Receivables from contracts with customers were $1,004 million and $922 million as of March 31, 2022 and December 31, 2021, respectively, and are reported in accounts receivable, net on the Condensed Consolidated Balance Sheet. As of March 31, 2022, the Company has no assets or liabilities related to its revenue contracts, including no upfront payments or rights to deficiency payments.
10. Capital Stock
Dividends
Common Stock
In February 2022, the Company’s Board of Directors approved an increase in the quarterly base dividend on the Company's common stock from $0.125 per share to $0.15 per share. Also on that date, the Board of Directors approved a variable dividend of $0.41 per share, resulting in a base-plus-variable dividend of $0.56 per share on the Company’s common stock.
Subsequent Event. In May 2022, the Company’s Board of Directors approved the quarterly base dividend of $0.15 per share and a variable dividend of $0.45 per share, resulting in a base-plus-variable dividend of $0.60 per share on the Company’s common stock.
Treasury Stock
In February 2022, the Company’s Board of Directors terminated the previously authorized share repurchase program and authorized a new share repurchase program. This new share repurchase program authorizes the Company to purchase up to $1.25 billion of the Company’s common stock in the open market or in negotiated transactions.
During the three months ended March 31, 2022, the Company repurchased 8 million shares for $192 million under the new share repurchase program, including repurchases of $8 million that were purchased prior to March 31, 2022 and settled in April 2022. As of March 31, 2022, 87 million shares were held as treasury stock, with $1.1 billion remaining under the Company’s current share repurchase program.
15

11. Stock-Based Compensation
General
The Company grants certain stock-based compensation awards, including restricted stock awards, restricted stock units, performance share awards and stock options. Stock-based compensation expense associated with these awards was $23 million and $12 million in the first quarters of 2022 and 2021, respectively. Stock-based compensation expense is included in general and administrative expense in the Condensed Consolidated Statement of Operations.
Refer to Note 13 of the Notes to the Consolidated Financial Statements in the Form 10-K for further description of the various types of stock-based compensation awards and the applicable award terms.
Restricted Stock Units
During the first three months of 2022, the Company granted 1,222,705 restricted stock units with a weighted average grant date value of $23.33 per unit. The fair value of restricted stock unit grants is based on the closing stock price on the grant date. Restricted stock units generally vest either at the end of a three-year service period or on a graded or graduated vesting basis at each anniversary date over a three or four year service period. The Company used an annual forfeiture rate assumption of zero to five percent for purposes of recognizing stock-based compensation expense for its restricted stock units.
Performance Share Awards
The performance period for the awards granted by the Company during the first three months of 2022 commenced on February 1, 2022 and ends on January 31, 2025. The Company used an annual forfeiture rate assumption of zero percent for purposes of recognizing stock-based compensation expense for its performance share awards.
Performance Share Awards Based on Market Conditions
These awards have both an equity and liability component, with the right to receive up to the first 100 percent of the award in shares of common stock and the right to receive up to an additional 100 percent of the value of the award in excess of the equity component in cash. The equity portion of these awards is valued on the grant date and is not marked to market, while the liability portion of the awards is valued as of the end of each reporting period on a mark-to-market basis. The Company calculates the fair value of the equity and liability portions of the awards using a Monte Carlo simulation model.
TSR Performance Share Awards. During the first three months of 2022, the Company granted 1,161,599 performance share awards (the “TSR Performance Share Awards”) which are earned, or not earned, based on the comparative performance of the Company’s common stock measured against a predetermined group of companies in the Company’s peer group and certain industry-related indices over a three-year performance period. The 2022 TSR Performance Share Awards include a feature that will reduce the potential cash component of the award if the actual performance is negative over the three-year period and the base calculation indicates an above-target payout.
The following assumptions were used to determine the grant date fair value of the equity component on February 28, 2022 and the period-end fair value of the liability component of the TSR Performance Share Awards:
 Grant DateMarch 31,
2022
Fair value per performance share award $17.89 $14.81 
Assumptions:   
     Stock price volatility42.3 %43.7 %
     Risk-free rate of return1.60 %2.41 %
12. Earnings per Common Share
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS is similarly calculated, except that the common shares outstanding for the period is increased using the treasury stock method to reflect the potential dilution that could occur if outstanding stock awards were vested at the end of the applicable period. Anti-dilutive shares represent potentially dilutive securities that are excluded from the computation of diluted income or loss per share as their impact would be anti-dilutive.
16

The following is a calculation of basic and diluted earnings per share:
Three Months Ended 
March 31,
(In millions except per share amounts)20222021
Income (Numerator)
Net income$608 $126 
Less: dividends attributable to participating securities(2) 
Less: Cimarex redeemable preferred stock dividends(1)