10-Q

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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	CTRA	New 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 filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller 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
Part I. Financial Information
Item 1.	Financial Statements
Condensed Consolidated Balance Sheet (Unaudited) at March 31, 2022 and December 31, 2021		3
Condensed Consolidated Statement of Operations (Unaudited) for the Three Months Ended March 31, 2022 and 2021		4
Condensed Consolidated Statement of Cash Flows (Unaudited) for the Three Months Ended March 31, 2022 and 2021		5
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) for the Three Months Ended March 31, 2022 and 2021		6
Notes to the Condensed Consolidated Financial Statements (Unaudited)		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	31
Part II. Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 6.	Exhibits	35
Signatures		37

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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 cash	10		10
Accounts receivable, net	1,094		1,037
Inventories	41		39
Other current assets	5		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 debt	25		—
Accrued liabilities	209		260
Income taxes payable	153		29
Interest payable	26		25
Derivative instruments	372		159
Total current liabilities	1,659		1,220
Long-term debt, net	3,090		3,125
Deferred income taxes	3,138		3,101
Asset retirement obligations	262		259
Other liabilities	410		407
Total liabilities	8,559		8,112
Commitments and contingencies
Cimarex redeemable preferred stock	50		50
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	89		89
Additional paid-in capital	10,927		10,911
Retained earnings	2,715		2,563
Accumulated other comprehensive income	5		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.

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COTERRA ENERGY INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

	Three Months Ended  March 31,
(In millions, except per share amounts)	2022		2021
OPERATING REVENUES
Natural gas	$	1,111	$	473
Oil	699		—
NGL	245		—
Loss on derivative instruments	(391)		(13)
Other	15		—
	1,679		460
OPERATING EXPENSES
Direct operations	100		17
Transportation, processing and gathering	233		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, net	21		12
Income before income taxes	778		163
Income tax expense	170		37
NET INCOME	$	608	$	126
Earnings per share
Basic	$	0.75	$	0.32
Diluted	$	0.74	$	0.31
Weighted-average common shares outstanding
Basic	810		399
Diluted	814		402

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

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COTERRA ENERGY INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

	Three Months Ended  March 31,
(In millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	608	$	126
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization	360		94
Deferred income tax expense	36		12
Gain on sale of assets	(2)		—
Loss on derivative instruments	391		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 other	20		11
Changes in assets and liabilities:
Accounts receivable, net	(57)		17
Income taxes	124		24
Inventories	(2)		(1)
Other current assets	2		1
Accounts payable and accrued liabilities	21		4
Interest payable	1		(13)
Other assets and liabilities	1		(2)
Net cash provided by operating activities	1,322		290
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(271)		(123)
Proceeds from sale of assets	2		—
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 exercises	6		—
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 cash	411		33
Cash, cash equivalents and restricted cash, beginning of period	1,046		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.

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COTERRA ENERGY INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)

(In millions, except per share amounts)	Common Shares	Common Stock Par		Treasury Shares	Treasury Stock		Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Total
Balance at December 31, 2021	893	$	89	79	$	(1,826)	$	10,911	$	1	$	2,563	$	11,738
Net income	—	—		—	—		—		—		608		608
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, 2022	893	$	89	87	$	(2,018)	$	10,927	$	5	$	2,715	$	11,718

(In millions, except per share amounts)	Common Shares	Common Stock Par		Treasury Shares	Treasury Stock		Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Total
Balance at December 31, 2020	478	$	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, 2021	478	$	48	79	$	(1,823)	$	1,808	$	2	$	2,271	$	2,306

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

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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 income	79
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 gathering	402		395
Land, buildings and other equipment	140		140
Finance lease right-of-use asset	24		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.

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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
			Floor				Ceiling
Type of Contract	Volume (Mmbtu)	Contract Period	Range ($/Mmbtu)		Weighted-Average ($/Mmbtu)		Range ($/Mmbtu)		Weighted-Average ($/Mmbtu)
Natural gas (NYMEX)	74,900,000	Apr. 2022 - Oct. 2022	$3.00 - $4.50		$	3.61	$4.07 - $6.68		$	5.12
Natural gas (Perm EP)(1)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.85 - $2.90		$	2.88
Natural gas (Perm EP)(1)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.50	$	—	$	3.15
Natural gas (PEPL)(2)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.81 - $2.91		$	2.86
Natural gas (PEPL)(2)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.60	$	—	$	3.27
Natural gas (Waha)(3)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.82 - $2.89		$	2.86
Natural gas (Waha)(3)	1,830,000	Apr. 2022 - Sep. 2022	$	—	$	2.40	$	—	$	2.77
Natural gas (Waha)(3)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.50	$	—	$	3.12
Natural gas (NYMEX)	71,500,000	Apr. 2022 - Dec 2022	$3.50 - $4.25		$	3.84	$4.75 - $6.60		$	5.39
Natural gas (NYMEX)	52,850,000	Nov 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
			Floor				Ceiling			Basis Swaps		Roll Swaps
Type of Contract	Volume (Mbbl)	Contract Period	Range ($/Bbl)		Weighted-Average ($/Bbl)		Range ($/Bbl)	Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)
Crude oil (WTI)	819	Apr. 2022-Jun. 2022	$35.00 - $37.50		$	36.11	$48.38 - $51.10	$	49.97
Crude oil (WTI)	1,830	Apr. 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)	728	Apr. 2022-Jun. 2022								$	0.25
Crude oil (WTI Midland)(1)	1,281	Apr. 2022-Sep. 2022								$	0.38
Crude oil (WTI Midland)(1)	2,200	Apr. 2022-Dec. 2022								$	0.05
Crude oil (WTI)	364	Apr. 2022-Jun. 2022										$	(0.20)
Crude oil (WTI)	1,281	Apr. 2022-Sep. 2022										$	0.10

________________________________________________________

(1)The index price is WTI Midland as quoted by Argus Americas Crude.

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Subsequent event. In April 2022, the Company entered into the following financial commodity derivatives:

			Swaps
Type of Contract	Volume (Mmbtu)	Contract Period	Weighted-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
			Floor				Ceiling			Basis Swaps
Type of Contract	Volume (Mbbl)	Contract Period	Range ($/Bbl)		Weighted-Average ($/Bbl)		Range ($/Bbl)	Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)
Crude oil (WTI)	920	Oct. 2022 - Dec. 2022	$	—	$	65.00	$136.25 - $145.25	$	140.49
Crude oil (WTI)	1,810	Jan. 2023 - Jun 2023	$	—	$	65.00	$116.30 - $118.30	$	117.47
Crude oil (WTI Midland)(1)	920	Oct. 2022 - Dec. 2022								$	0.64
Crude oil (WTI Midland)(1)	1,810	Jan. 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 Assets				Derivative Liabilities
(In millions)	Balance Sheet Location	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Commodity contracts	Derivative 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 sheet	372		159
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	58		35
Net amount	$	314	$	194

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Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

	Three Months Ended  March 31,
(In millions)	2022		2021
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)	2022		2021
Balance at beginning of period	$	(152)	$	24
Total gain (loss) included in earnings	(391)		(13)
Settlement (gain) loss	171		(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.

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The carrying amount and estimated fair value of debt is as follows:

	March 31, 2022				December 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 incurred	3
Liabilities settled	(1)
Liabilities divested	(2)
Accretion expense	2
Balance at end of period	265
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.

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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.

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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)	2022		2021
Natural gas	$	1,111	$	473
Oil	699		—
NGL	245		—
Other	15		—
	$	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.

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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 Date			March 31, 2022
Fair value per performance share award	$	17.89		$	14.81
Assumptions:
Stock price volatility	42.3		%	43.7		%
Risk-free rate of return	1.60		%	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.

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The following is a calculation of basic and diluted earnings per share:

	Three Months Ended  March 31,
(In millions except per share amounts)	2022		2021
Income (Numerator)
Net income	$	608	$	126
Less: dividends attributable to participating securities	(2)		—
Less: Cimarex redeemable preferred stock dividends	(1)		—
Net income available to common stockholders	$	605	$	126
Shares (Denominator)
Weighted-average shares - Basic	810		399
Dilution effect of stock awards at end of period	4		3
Weighted-average shares - Diluted	814		402
Earnings per share:
Basic	$	0.75	$	0.32
Diluted	$	0.74	$	0.31

The following is a calculation of weighted-average shares excluded from diluted EPS due to anti-dilutive effect:

	Three Months Ended  March 31,
(In millions)	2022	2021
Weighted-average stock awards excluded from diluted EPS due to the anti-dilutive effect calculated using the treasury stock method	1	1

13. Related Party Transactions

From time to time, Helmerich & Payne, Inc. (“H&P”) provides contract drilling services to the Company. The Company incurred drilling costs of approximately $3 million related to these services during the three months ended March 31, 2022.

Hans Helmerich, a director of the Company, is the Chairman of the Board of Directors of H&P.

14. Restructuring Costs

In connection with the Merger, the Company incurred certain merger-related restructuring costs that are primarily related to workforce reductions and the associated employee severance benefits that were triggered by the Merger. The Company recognized $24 million of restructuring expenses during 2022 related to the accrual of employee-related severance and termination benefits associated with the expected termination of certain Cimarex employees.

The following table summarizes the Company’s restructuring liabilities:

(In millions)	Three Months Ended March 31, 2022
Balance at beginning of period	$	43
Additions related to merger integration	24
Reductions related to merger integration payments	(3)
Balance at end of period	$	64

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15. Additional Balance Sheet Information

Certain balance sheet amounts are comprised of the following:

(In millions)	March 31, 2022		December 31, 2021
Accounts receivable, net
Trade accounts	$	1,004	$	922
Joint interest accounts	70		83
Other accounts	22		34
	1,096		1,039
Allowance for doubtful accounts	(2)		(2)
	$	1,094	$	1,037
Other assets
Deferred compensation plan	$	46	$	47
Debt issuance costs	4		5
Operating lease right-of-use assets	308		317
Other accounts	26		20
	$	384	$	389
Accounts payable
Trade accounts	$	41	$	94
Royalty and other owners	393		315
Accrued transportation	90		96
Accrued capital costs	149		88
Taxes other than income	77		60
Accrued lease operating costs	29		29
Other accounts	95		65
	$	874	$	747
Accrued liabilities
Employee benefits	$	92	$	124
Taxes other than income	13		13
Operating lease liabilities	71		69
Financing lease liabilities	6		14
Other accounts	27		40
	$	209	$	260
Other liabilities
Deferred compensation plan	$	60	$	56
Postretirement benefits	28		33
Operating lease liabilities	237		248
Financing lease liabilities	15		7
Other accounts	70		63
	$	410	$	407

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following review of operations of Coterra Energy Inc. (“Coterra,” “our,” “we” and “us”) for the three month periods ended March 31, 2022 and 2021 should be read in conjunction with our Condensed Consolidated Financial Statements and the Notes included in this Quarterly Report on Form 10-Q (this “Form 10-Q”) and with the Consolidated Financial Statements, Notes and Management’s Discussion and Analysis included in our Annual Report on Form 10-K for the year ended December 31, 2021 (our “Form 10-K”).

OVERVIEW

Cimarex Merger

On October 1, 2021, we 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.

Certain financial and operational information set forth herein does not include the activity of Cimarex for periods prior to the closing of the Merger.

Financial and Operating Overview

Financial and operating results for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 reflect the following:

•Equivalent production increased 22.7 MMBOE from 34.0 MMBOE, or 381.1 MBOEPD, in 2021 to 56.7 MMBOE, or 629.9 MBOEPD in 2022.

•Natural gas production increased 50.6 Bcf from 205.8 Bcf, or 2,287 Mmcf per day, in the 2021 period to 256.4 Bcf, or 2,850 Mmcf per day, in the 2022 period. The increase was attributable to production during the first quarter of 2022 from properties acquired in the Merger, which significantly expanded our operations, partially offset by lower production related to the timing of our drilling and completion activities in the Marcellus Shale in 2022.

•Oil production increased 8 Mmbbl from prior year. The increase was attributable to production from properties acquired in the Merger.

•NGL production increased 7 Mmbbl from prior year. The increase was attributable to production from properties acquired in the Merger.

•Average realized natural gas price was $4.17 per Mcf, $1.86 higher than the $2.31 per Mcf realized in the corresponding period of the prior year.

•Average realized oil and NGL prices for the first quarter of 2022 were $76.15 and $37.87 per Bbl, respectively.

•Total capital expenditures were $326 million compared to $124 million in the corresponding period of the prior year. The increase in capital expenditures was attributable to our expanded operations after the Merger.

•Drilled 54 gross wells (41.4 net) with a success rate of 100 percent compared to 28 gross wells (25.1 net) with a success rate of 100 percent for the corresponding period of the prior year. Wells drilled represents wells drilled to total depth during the period.

•Completed 38 gross wells (20.9 net) in 2022 compared to 14 gross wells (13.0 net) in the corresponding period of 2021. Wells completed includes wells completed during the period, regardless of when they were drilled.

•Average rig count during 2022 was approximately 6.0, 2.6 and 2.0 rigs in the Permian Basin, Marcellus Shale and Anadarko Basin, respectively, compared to an average rig count of approximately 3.0 rigs in the Marcellus Shale during the corresponding period of 2021 prior to the Merger.

•Paid dividends on our common stock of $0.56 per share, including $0.15 per share for regular quarterly dividend and $0.41 per share for a variable dividend in February 2022.

Impact of the COVID-19 Pandemic

The ongoing coronavirus (“COVID-19”) outbreak has caused widespread illness and significant loss of life, leading governments across the world to impose severely stringent limitations on movement and human interaction. Since the outbreak

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of the COVID-19 pandemic, we have implemented safety and preventative measures and developed response plans intended to minimize unnecessary risk of exposure and prevent infection among our employees and the communities in which we operate. We intend to continue to monitor developments affecting our workforce, our customers, our suppliers, our service providers and the communities in which we operate, including any significant resurgence in COVID-19 transmission and infection, and we will take such precautions as we believe are warranted should the need arise. Our efforts to respond to the challenges presented by the ongoing pandemic, as well as certain operational decisions we previously implemented, such as our maintenance capital program, have helped to minimize the impact, and any resulting disruptions, of the pandemic to our business and operations.

The long-term impact that the COVID-19 pandemic will have on our business, cash flows, liquidity, financial condition and results of operations will depend on future developments, including, among others, the duration, ultimate geographic spread and severity of the virus and its variants, the global availability and efficacy of treatments and vaccines and boosters and the acceptance of such treatments and vaccines by a significant portion of the population, any significant resurgence in virus transmission and infection in regions that have experienced improvements, the extent and duration of governmental and other measures implemented to try to slow the spread of the virus (whether through a continuation of existing measures or the re-imposition of prior measures), and other actions by governmental authorities, customers, suppliers and other third parties.

Market Conditions and Commodity Prices

Our financial results depend on many factors, particularly commodity prices and our ability to market our production on economically attractive terms. Commodity prices are affected by many factors outside of our control, including changes in market supply and demand, which are impacted by pipeline capacity constraints, inventory storage levels, basis differentials, weather conditions and other factors. Our realized prices are also further impacted by our hedging activities.

In recent months, the conflict between Russia and Ukraine has driven oil and natural gas prices up significantly, in part because of sanctions by the European Union, the United Kingdom and the U.S. on imports of oil and gas from Russia, and is expected to have further global economic consequences, including disruptions of the global supply chain and energy markets. Recent Russian actions have further contributed to global uncertainties for the future, causing even higher oil and natural gas prices. The ultimate impact of the war in Ukraine will depend on future developments and the timing and extent to which normal economic and operating conditions resume.

However, continuing political and social attention to the issue of global climate change has resulted in both existing and pending national, regional, and local legislation and regulatory measures to limit or reduce emissions of greenhouse gases, such as mandates for renewable energy.

The trend in oil and natural gas regulation has been to increase regulatory restrictions and limitations on such activities. Any changes in, or more stringent enforcement of, these laws and regulations may result in delays or restrictions in permitting or development of projects or more stringent or costly construction, drilling, water management or completion activities or waste handling, storage, transport, remediation, or disposal emission or discharge requirements which could have an adverse effect on our financial results.

Our revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prevailing commodity prices, particularly oil and natural gas prices. Material declines in commodity prices could have a material adverse effect on our operating results, financial condition, liquidity and ability to obtain financing. Lower commodity prices also may reduce the amount of oil, natural gas, and NGLs that we can produce economically. In addition, in periods of low commodity prices, we may elect to curtail a portion of our production from time to time. Historically, commodity prices have been volatile, with prices sometimes fluctuating widely, and they may remain volatile. As a result, we cannot accurately predict future commodity prices and, therefore, cannot determine with any degree of certainty what effect increases or decreases in these prices will have on our capital program, production volumes or revenues. In addition to commodity prices and production volumes, finding and developing sufficient amounts of oil and natural gas reserves at economical costs are critical to our long-term success. Certain of our capital expenditures and expenses are affected by general inflation and we expect costs for the remainder of 2022 to continue to increase.

We account for our derivative instruments on a mark-to-market basis, with changes in fair value recognized in operating revenues in the Condensed Consolidated Statement of Operations. As a result of these mark-to-market adjustments associated with our derivative instruments, we will experience volatility in our earnings due to commodity price volatility. Refer to “Results of Operations” below and Note 5 of the Notes to the Condensed Consolidated Financial Statements for more information.

NYMEX oil and natural gas futures prices have strengthened since the reduction of pandemic-related restrictions and recent OPEC+ cooperation. Improving oil and natural gas futures prices in part reflect market expectations of limited U.S. supply growth from publicly traded companies as a result of capital investment discipline and a focus on delivering free cash

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flow returns to stockholders. In addition, natural gas prices have benefited from strong worldwide liquefied natural gas (“LNG”) demand, including as a result of buyers shifting from Russian gas due to the Ukraine invasion, and sustained higher U.S. exports, lower associated gas growth from oil drilling and improved U.S. economic activity. Oil price futures have improved coinciding with recovering global economic activity, lower supply from major oil producing countries, OPEC+ cooperation and moderating inventory levels.

Although the current outlook on oil and natural gas prices is generally favorable and our operations have not been significantly impacted in the short-term, in the event further disruptions occur and continue for an extended period of time, our operations could be adversely impacted, commodity prices could decline and our costs may increase. Although we are unable to predict future commodity prices, at current oil, natural gas and NGL price levels, we do not believe that an impairment of our oil and gas properties is reasonably likely to occur in the near future; however, in the event that commodity prices significantly decline from current levels, our management would evaluate the recoverability of the carrying value of our oil and gas properties.

For information about the impact of realized commodity prices on our revenues, refer to “Results of Operations” below.

Outlook

Our 2022 capital program is expected to be approximately $1.4 billion to $1.5 billion, which includes $1.2 billion to $1.3 billion for drilling and completion activities. We expect to fund these capital expenditures with our operating cash flow and, if required, cash on hand.

In 2021, we drilled 114 gross wells (99.9 net) and completed 132 gross wells (108.3 net), of which 14 gross wells (13.0 net) were drilled but uncompleted in prior years. For the first three months of 2022, our capital program focused on the Permian Basin, Marcellus Shale and Anadarko Basin, where we drilled 41.4 net wells and completed 20.9 net wells. Our capital program for the remainder of 2022 will focus on execution of our 2022 plan, which remains in line with the full-year guidance released in February. We allocate our planned program for capital expenditures based on market conditions, return on capital and free cash flow expectations and availability of services and human resources. We will continue to assess the oil and natural gas price environment and may adjust our capital expenditures accordingly.

FINANCIAL CONDITION

Liquidity and Capital Resources

We strive to maintain an adequate liquidity level to address commodity price volatility and risk. Our primary sources of liquidity are (1) cash on hand, (2) net cash provided by operating activities and (3) available borrowing capacity under our revolving credit facility.

Our liquidity requirements consist primarily of (1) capital expenditures, (2) payment of contractual obligations, including debt maturity and interest payments, (3) working capital requirements, (4) dividend payments and (5) share repurchases. See below for additional discussion and analysis of our cash flows. We believe that, with operating cash flow, cash on hand and availability under our revolving credit facility, we have the ability to finance our spending plans over the next twelve months and, based on current expectations, for the long term.

At March 31, 2022, we had no borrowings outstanding under our revolving credit facility and our unused commitments were $1.5 billion. We also have unrestricted cash on hand of $1.4 billion as of March 31, 2022.

Our revolving credit facility includes a covenant limiting our borrowing capacity based on our leverage ratio. Refer to Note 4 of the Notes to the Consolidated Financial Statements, “Debt and Credit Agreements,” in our Form 10-K for further details regarding our leverage ratio.

Our debt is currently rated as investment grade by the three leading rating agencies. In determining our debt ratings, the agencies consider a number of qualitative and quantitative items including, but not limited to, current commodity prices, our liquidity position, our asset quality and reserve mix, debt levels, cost structure and growth plans. Credit ratings are not recommendations to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. There are no “rating triggers” in any of our debt agreements that would accelerate the scheduled maturities should our debt rating fall below a certain level. However, a change in our debt rating could impact our interest rate on any borrowings under our revolving credit facility and our ability to economically access debt markets in the future and could trigger the requirement to post credit support under various agreements, which could reduce the borrowing capacity under our revolving credit facility.

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Our investments are generally funded with cash flow provided by operating activities together with cash on hand, bank borrowings, sales of non-strategic assets, and, from time to time, private or public financing based on our monitoring of capital markets and our balance sheet. We also may use a combination of these sources of funds to refinance or retire our outstanding debt through privately negotiated transactions, open market repurchases, redemptions, exchanges, tender offers or otherwise, but we have no obligation to do so.

At March 31, 2022, we were in compliance with all financial and other covenants applicable to our revolving credit facility and senior notes. Refer to our Form 10-K for further discussion of our restrictive financial covenants.

Cash Flows

Our cash flows from operating activities, investing activities and financing activities were as follows:

	Three Months Ended  March 31,
(In millions)	2022		2021
Cash flows provided by operating activities	$	1,322	$	290
Cash flows used in investing activities	(269)		(123)
Cash flows used in financing activities	(642)		(134)
Net increase in cash, cash equivalents and restricted cash	$	411	$	33

Operating Activities. Operating cash flow fluctuations are substantially driven by changes in commodity prices, production volumes and operating expenses. Commodity prices have historically been volatile, primarily as a result of supply and demand for oil and natural gas, pipeline infrastructure constraints, basis differentials, inventory storage levels, seasonal influences and geopolitical, economic and other factors. In addition, fluctuations in cash flow may result in an increase or decrease in our capital expenditures.

On October 1, 2021, we and Cimarex completed the Merger. Although we expect to achieve certain general and administrative expense synergies over the long-term through cost savings, in the near-term we will continue to incur certain Merger-related costs, which in total are expected to range from $100 million to $110 million. These payments will primarily relate to workforce reductions and the associated employee severance benefits.

Our working capital is substantially influenced by the variables discussed above and fluctuates based on the timing and amount of borrowings and repayments under our revolving credit facility, repayments of debt, the timing of cash collections and payments on our trade accounts receivable and payable, respectively, payment of dividends, repurchases of our securities and changes in the fair value of our commodity derivative activity. From time to time, our working capital will reflect a deficit, while at other times it will reflect a surplus. This fluctuation is not unusual. At March 31, 2022 and December 31, 2021, we had a working capital surplus of $938 million and $916 million, respectively. We believe we have adequate liquidity and availability under our revolving credit facility to meet our working capital requirements over the next 12 months.

Net cash provided by operating activities for the three months ended March 31, 2022 increased by $1.0 billion compared to the same period in 2021. This increase was primarily due to higher natural gas, oil and NGL revenue, partially offset by higher operating expenses, higher cash paid on derivative settlements and higher changes in working capital and other assets and liabilities. The increase in natural gas, oil and NGL revenue was primarily due to our expanded operations after the Merger and an 81 percent increase in realized natural gas prices from the three months ended March 31, 2021 to the three months ended March 31, 2022.

Refer to “Results of Operations” below for additional information relative to commodity price, production and operating expense fluctuations. We are unable to predict future commodity prices and, as a result, cannot provide any assurance about future levels of net cash provided by operating activities.

Investing Activities. Cash flows used in investing activities increased by $146 million for the first three months of 2022 compared to the first three months of 2021. The increase was primarily due to $148 million of higher capital expenditures as a result of our expanded operations after the Merger.

Financing Activities. Cash flows used in financing activities increased by $508 million for the first three months of 2022 compared to the first three months of 2021. This increase was primarily due to higher dividend payments of $416.0 million as a result of the increase in our base dividend rate from $0.10 per share in April 2021 to $0.15 per share in February 2022, the payment of a variable dividend of $0.41 per share in February 2022 and additional shares issued in October 2021 as consideration in the Merger. The increase in cash flows from financing activities was also due to share repurchases of

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$184 million during the first three months of 2022. These increases were partially offset by lower repayments of debt of $88 million.

Capitalization

Information about our capitalization is as follows:

(In millions)	March 31, 2022			December 31, 2021
Debt (1)	$	3,115		$	3,125
Stockholders' equity	11,718			11,738
Total capitalization	$	14,833		$	14,863
Debt to total capitalization	21		%	21		%
Cash and cash equivalents	$	1,447		$	1,036

________________________________________________________

(1)Includes $25 million of current portion of long-term debt at March 31, 2022. There were no borrowings outstanding under our revolving credit facility as of March 31, 2022 and December 31, 2021.

Share repurchases. Under our authorized share repurchase program approved in February 2022, we repurchased 8 million shares of our common stock for $192 million during the first three months of 2022. We did not repurchase any shares of our common stock during the first three months of 2021.

Dividends. During the first three months of 2022, we paid dividends of $456 million, which included a quarterly dividend on our common stock of $0.15 per share and a variable dividend of $0.41 per share, and a dividend of $23.125 per share on Cimarex’s redeemable preferred stock. During the first three months of 2021, we paid dividends of $40 million ($0.10 per share) on our common stock.

In May 2022, our Board of Directors approved a quarterly base dividend of $0.15 per share and a variable dividend of $0.45 per share, resulting in a total base-plus-variable dividend of $0.60 per share on our common stock.

Capital and Exploration Expenditures

On an annual basis, we generally fund most of our capital expenditures, excluding any significant property acquisitions, with cash generated from operations, and, if required, borrowings under our revolving credit facility. We budget these expenditures based on our projected cash flows for the year.

The following table presents major components of our capital and exploration expenditures:

	Three Months Ended  March 31,
(In millions)	2022		2021
Capital expenditures:
Drilling and facilities	$	314	$	123
Leasehold acquisitions	1		1
Pipeline and gathering	8		—
Other	3		—
	326		124
Exploration expenditures(1)	6		3
	$	332	$	127

________________________________________________________

(1)There were no exploratory dry hole costs for the first three months of 2022 and 2021.

For the first three months of 2022, our capital program was focused on the Permian Basin, Marcellus Shale and Anadarko Basin, where we drilled 41.4 net wells and completed 20.9 net wells. We expect our 2022 capital program to be approximately $1.4 billion to $1.5 billion and will focus on the Permian Basin, where we are currently running six rigs and two completion crews, and the Marcellus Shale, where we are currently running two rigs and plan to run one to two completion crews. Refer to “Outlook” for additional information regarding the current year drilling program. We will continue to assess the commodity price environment and may adjust our capital expenditures accordingly. 

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Contractual Obligations

We have various contractual obligations in the normal course of our operations. There have been no material changes to our contractual obligations described under “Transportation and Gathering Agreements” and “Lease Commitments” as disclosed in Note 8 of the Notes to the Consolidated Financial Statements and the obligations described under “Contractual Obligations” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Refer to our Form 10-K for further discussion of our critical accounting policies.

RESULTS OF OPERATIONS

First Three Months of 2022 and 2021 Compared

Operating Revenues

	Three Months Ended March 31,				Variance
(In millions)	2022		2021		Amount		Percent
Operating Revenues
Natural gas	$	1,111	$	473	$	638	135	%
Oil	699		—		699		100	%
NGL	245		—		245		100	%
Loss on derivative instruments	(391)		(13)		(378)		(2,908)	%
Other	15		—		15		100	%
	1,679		460		1,219		265	%

Production Revenues

Our production revenues are derived from the sale of our oil, natural gas and NGL production. Our 2022 production revenues were substantially higher due to the Merger, which significantly expanded our operations to include the Permian and Anadarko Basins. Increases and decreases in our revenues, profitability and future production growth are highly dependent on the commodity prices we receive. Commodity prices are market driven and we expect that future prices will continue to fluctuate due to supply and demand factors, the availability of transportation, seasonality and geopolitical, economic and other factors.

Natural Gas Revenues

	Three Months Ended March 31,				Variance				Increase (Decrease) (In millions)
	2022		2021		Amount		Percent
Price variance ($/Mcf)	$	4.33	$	2.30	$	2.03	89	%	$	522
Volume variance (Bcf)	256.4		205.8		50.6		25	%	116
									$	638

Natural gas revenues increased $638 million primarily due to significantly higher natural gas prices and production. The increase in production was primarily related to properties acquired in the Merger, which significantly expanded our operations, partially offset by lower production related to the timing of our drilling and completion activities in the Marcellus Shale in the first three months of 2022.

Oil Revenues

Oil revenues increased $699 million due to our expanded operations after the Merger.

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NGL Revenues

NGL revenues increased $245 million due to our expanded operations after the Merger.

Loss on Derivative Instruments

Net gains and losses on our derivative instruments are a function of fluctuations in the underlying commodity index prices as compared to the contracted prices and the monthly cash settlements (if any) of the instruments. We have elected not to designate our derivatives as hedging instruments for accounting purposes and, therefore, we do not apply hedge accounting treatment to our derivative instruments. Consequently, changes in the fair value of our derivative instruments and cash settlements on the instruments are included as a component of operating revenues as either a net gain or loss on derivative instruments. Cash settlements of our contracts are included in cash flows from operating activities in our statements of cash flows. The following table presents the components of “Loss on derivative instruments” for the periods indicated:

	Three Months Ended  March 31,
(In millions)	2022		2021
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)

Operating Costs and Expenses

Costs associated with producing oil and natural gas are substantial. Among other factors, some of these costs vary with commodity prices, some trend with the volume and commodity mix of production, some are a function of the number of wells we own, some depend on the prices charged by service companies, and some fluctuate based on a combination of the foregoing. Our operating costs and expenses in 2022 were substantially increased due to the Merger, which significantly expanded our operations to include the Permian and Anadarko Basins. In addition, our costs for services, labor and supplies have recently increased due to increased demand for those items and supply chain disruptions related to the COVID-19 pandemic and inflation.

The following table reflects our operating costs and expenses for the years indicated and a discussion of the operating costs and expenses follows.

	Three Months Ended March 31,				Variance				Per BOE
(In millions, except per BOE)	2022		2021		Amount		Percent		2022		2021
Operating Expenses
Direct operations	$	100	$	17	$	83	488	%	$	1.76	$	0.50
Transportation, processing and gathering	233		137		96		70	%	4.11		3.99
Taxes other than income	76		5		71		1,420	%	1.34		0.15
Exploration	6		3		3		100	%	0.11		0.09
Depreciation, depletion and amortization	360		94		266		283	%	6.35		2.74
General and administrative	107		29		78		269	%	1.89		0.84
	$	882	$	285	$	597	209	%

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Direct Operations

Direct operations expense generally consists of costs for labor, equipment, maintenance, saltwater disposal, compression, power, treating and miscellaneous other costs (lease operating expense). Direct operations expense also includes well workover activity necessary to maintain production from existing wells. Direct operations expense consisted of lease operating expense and workover expense as follows:

	Three Months Ended March 31,						Per BOE
(In millions, except per BOE)	2022		2021		Variance		2022		2021
Direct Operating Expense
Lease operating expense	$	82	$	15	$	67	$	1.44	$	0.44
Workover expense	18		2		16		0.32		0.06
	$	100	$	17	$	83	$	1.76	$	0.50

Lease operating and workover expense increased primarily due to our expanded operations after the Merger, along with a slight increase in workover expense in the Marcellus Shale.

Transportation, Processing and Gathering

Transportation, processing and gathering costs principally consist of expenditures to prepare and transport production from the wellhead, including gathering, fuel, compression and processing costs. Gathering costs also include costs associated with operating our gas gathering infrastructure, including operating and maintenance expenses. Costs vary by operating area and will fluctuate with increases or decreases in production volumes, contractual fees, and changes in fuel and compression costs.

Transportation, processing and gathering increased $96 million primarily due to our expanded operations after the Merger, along with a slight increase in gathering charges in the Marcellus Shale.

Taxes Other Than Income

Taxes other than income consist of production (or severance) taxes, drilling impact fees, ad valorem taxes and other taxes. State and local taxing authorities assess these taxes, with production taxes being based on the volume or value of production, drilling impact fees being based on drilling activities and prevailing natural gas prices and ad valorem taxes being based on the value of properties. The following table presents taxes other than income for the periods indicated:

	Three Months Ended March 31,
(In millions)	2022			2021			Variance
Taxes Other than Income
Production	$	63		$	—		$	63
Drilling impact fees	7			5			2
Ad valorem	6			—			6
	$	76		$	5		$	71
Taxes other than income as a percentage of production revenue	3.7		%	1.1		%

Taxes other than income increased $71 million. Production taxes represented the majority of our taxes other than income, which increased primarily due to higher production related to properties acquired in the Merger and higher commodity prices. Drilling impact fees increased primarily due to higher natural gas prices.

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Depreciation, Depletion and Amortization

Depreciation, depletion and amortization (“DD&A”) expense consisted of the following for the periods indicated:

	Three Months Ended March 31,						Per BOE
(In millions, except per BOE)	2022		2021		Variance		2022			2021
DD&A Expense
Depletion	$	339	$	91	$	248	$	5.98		$	2.68
Depreciation	19		2		17		0.33			0.03
Accretion of ARO	2		1		1		0.04			0.03
	$	360	$	94	$	266	$	6.35	4.16	$	2.74

Depletion of our producing properties is computed on a field basis using the units-of-production method under the successful efforts method of accounting. The economic life of each producing property depends upon the estimated proved reserves for that property, which in turn depend upon the assumed realized sales price for future production. Therefore, fluctuations in oil and gas prices will impact the level of proved developed and proved reserves used in the calculation. Higher prices generally have the effect of increasing reserves, which reduces depletion expense. Conversely, lower prices generally have the effect of decreasing reserves, which increases depletion expense. The cost of replacing production also impacts our depletion expense. In addition, changes in estimates of reserve quantities, estimates of operating and future development costs, reclassifications of properties from unproved to proved and impairments of oil and gas properties will also impact depletion expense. Our depletion expense increased $248 million due to increased production and a higher depletion rate of $5.98 per BOE for the three months ended March 31, 2022, both of which are attributable to a significant increase in the value of the oil and gas properties acquired on the closing date of the Merger, compared to $2.68 per BOE for the three months ended March 31, 2021.

Fixed assets consist primarily of gas gathering facilities, water infrastructure, buildings, vehicles, aircraft, furniture and fixtures and computer equipment and software. These items are recorded at cost and are depreciated on the straight-line method based on expected lives of the individual assets, which range from three to 30 years. Also included in our depreciation expense is the depreciation of the right-of-use asset associated with our finance lease gathering system. The increase in depreciation expense during the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 is primarily due to increased depreciation on our gathering and facilities acquired in the Merger.

General and Administrative

General and administrative (“G&A”) expense consists primarily of salaries and related benefits, stock-based compensation, office rent, legal and consulting fees, systems costs and other administrative costs incurred. Our G&A expense is reported net of amounts reimbursed to us by working interest owners of the oil and gas properties we operate. The table below reflects our G&A expense for the periods indicated:

	Three Months Ended March 31,
(In millions)	2022		2021		Variance
G&A Expense
General and administrative expense	$	53	$	17	$	36
Stock-based compensation expense	23		12		11
Merger-related expense	31		—		31
	$	107	$	29	$	78

General and administrative expense increased $78 million primarily due to the Merger, which significantly expanded our headcount and office-related expenses.

Periodic stock-based compensation expense will fluctuate based on the grant date fair value of awards, the number of awards, the requisite service period of the awards, estimated employee forfeitures, and the timing of the awards. Stock-based compensation expense increased $11 million primarily due to the issuance of additional shares as consideration in the Merger and increased headcount.

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Merger-related expenses increased $31 million primarily due to $7 million of Merger integration costs and $24 million of employee-related     severance and termination benefits associated with the expected termination of certain Cimarex employees, which is being accrued over the expected transition period.

Interest Expense, net

Interest expense increased $9 million primarily due to the incremental interest expense, net of premium amortization associated with the debt assumed in the Merger of $2.2 billion. This increase was partially offset by lower interest expense due to the repayment of $88 million of our 5.58% weighted-average private placement senior notes, which matured in January 2021, and the repayment of $100 million of our 3.65% weighted-average private placement senior notes, which matured in September 2021.

Income Tax Expense

	Three Months Ended March 31,
(In millions)	2022			2021			Variance
Income Tax Expense
Current tax expense	$	134		$	25		$	109
Deferred tax expense	36			12			24
	$	170		$	37		$	133
Combined federal and state effective income tax rate	22		%	22		%

Income tax expense increased $133 million due to higher pre-tax income attributable to higher commodity prices and our expanded operations following the Merger.

Forward-Looking Information

The statements regarding future financial and operating performance and results, the anticipated effects of, and certain other matters related to, the Merger involving Cimarex, strategic pursuits and goals, market prices, future hedging and risk management activities, and other statements that are not historical facts contained in this report are forward-looking statements. The words “expect”, “project”, “estimate”, “believe”, “anticipate”, “intend”, ‘budget”, “plan”, “forecast”, “target”, “predict”, “potential”, “possible”, “may”, “should”, “could”, “would”, “will”, strategy”, “outlook” and similar expressions are also intended to identify forward-looking statements. We can provide no assurance that the forward-looking statements contained in this report will occur as expected, and actual results may differ materially from those included in this report. Forward-looking statements are based on current expectations and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those included in this report. These risks and uncertainties include, without limitation, the continuing effects of the COVID-19 pandemic and the impact thereof on our business, financial condition and results of operations and the economy as a whole, the risk that our and Cimarex’s businesses will not be integrated successfully, the risk that the cost savings and any other synergies from the Merger may not be fully realized or may take longer to realize than expected, the availability of cash on hand and other sources of liquidity to fund our capital expenditures, actions by, or disputes among or between, members of OPEC+, market factors, market prices (including geographic basis differentials) of oil and natural gas, impacts of inflation, labor shortages and economic disruption, including as a result of pandemics and geopolitical disruptions such as the war in Ukraine, results of future drilling and marketing activity, future production and costs, legislative and regulatory initiatives, electronic, cyber or physical security breaches and other factors detailed herein and in our other Securities and Exchange Commission (“SEC”) filings. Refer to “Risk Factors” in Item 1A of Part I of our Form 10-K and in Item 1A of Part II of this Form 10-Q for additional information about these risks and uncertainties. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Except to the extent required by applicable law, we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Investors should note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the Investors section of our website (www.coterra.com) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of, and is not incorporated into, this report.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we are subject to a variety of risks, including market risks associated with changes in commodity prices and interest rate movements on outstanding debt. The following quantitative and qualitative information is provided about financial instruments to which we were party to as of March 31, 2022 and from which we may incur future gains or losses from changes in commodity prices or interest rates.

Commodity Price Risk

Our most significant market risk exposure is pricing applicable to our oil, natural gas and NGL production. Realized prices are mainly driven by the worldwide price for oil and spot market prices for North American natural gas and NGL production. These prices have been volatile and unpredictable. To mitigate the volatility in commodity prices, we may enter into derivative instruments to hedge a portion of our production.

Derivative Instruments and Risk Management Activities

Our risk management strategy is designed to reduce the risk of commodity price volatility for our production in the oil and natural gas markets through the use of financial commodity derivatives. A committee that consists of members of senior management oversees our risk management activities. Our financial commodity derivatives generally cover a portion of our production and, while protecting us in the event of price declines, limit the benefit to us in the event of price increases. Further, if any of our counterparties defaulted, this protection might be limited as we might not receive the full benefit of our financial commodity derivatives. Please read the discussion below as well as Note 5 of the Notes to the Consolidated Financial Statements in our Form 10-K for a more detailed discussion of our derivatives.

Periodically, we enter into financial commodity derivatives, including collar, swap, roll differential swap and basis swap agreements, to protect against exposure to commodity price declines related to our oil and natural gas production. Our credit agreement restricts our ability to enter into financial commodity derivatives other than to hedge or mitigate risks to which we have actual or projected exposure or as permitted under our risk management policies and that do not subject us to material speculative risks. All of our financial derivatives are used for risk management purposes and are not held for trading purposes. Under the collar agreements, if the index price rises above the ceiling price, we pay the counterparty. If the index price falls below the floor price, the counterparty pays us. Under the swap agreements, we receive a fixed price on a notional quantity of natural gas in exchange for paying a variable price based on a market-based index.

As of March 31, 2022, we had the following outstanding financial commodity derivatives:

			Collars								Estimated Fair Value Asset (Liability) (In millions)
			Floor				Ceiling
Type of Contract	Volume (Mmbtu)	Contract Period	Range ($/Mmbtu)		Weighted-Average ($/Mmbtu)		Range ($/Mmbtu)		Weighted-Average ($/Mmbtu)
Natural gas (NYMEX)	74,900,000	Apr. 2022 - Oct. 2022	$3.00 - $4.50		$	3.61	$4.07 - $6.68		$	5.12	$	(74)
Natural gas (Perm EP)(1)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.85 - $2.90		$	2.88	(3)
Natural gas (Perm EP)(1)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.50	$	—	$	3.15	(10)
Natural gas (PEPL)(2)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.81 - $2.91		$	2.86	(4)
Natural gas (PEPL)(2)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.60	$	—	$	3.27	(11)
Natural gas (Waha)(3)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.82 - $2.89		$	2.86	(3)
Natural gas (Waha)(3)	1,830,000	Apr. 2022 - Sep. 2022	$	—	$	2.40	$	—	$	2.77	(4)
Natural gas (Waha)(3)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.50	$	—	$	3.12	(9)
Natural gas (NYMEX)	71,500,000	Apr. 2022 - Dec 2022	$3.50 - $4.25		$	3.84	$4.75 - $6.60		$	5.39	(59)
Natural gas (NYMEX)	52,850,000	Nov 2022 - Mar 2023	$4.00 - $4.75		$	4.46	$7.00 - $10.10		$	8.37	(15)
											$	(192)

________________________________________________________

(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.

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(3)The index price is Waha West Texas Natural Gas Index (“Waha”) as quoted in Platt’s Inside FERC.

			Collars							Swaps				Estimated Fair Value Asset (Liability) (In millions)
			Floor				Ceiling			Basis Swaps		Roll Swaps
Type of  Contract	Volume (Mbbl)	Contract Period	Range  ($/Bbl)		Weighted-Average ($/Bbl)		Range ($/Bbl)	Weighted- Average ($/Bbl)		Weighted- Average ($/Bbl)		Weighted- Average ($/Bbl)
Crude oil (WTI)	819	Apr. 2022-Jun. 2022	$35.00 - $37.50		$	36.11	$48.38 - $51.10	$	49.97					$	(39)
Crude oil (WTI)	1,830	Apr. 2022-Sep. 2022	$	—	$	40.00	$47.55 - $50.89	$	49.19					(85)
Crude oil (WTI)	2,200	Apr. 2022-Dec. 2022	$	—	$	57.00	$72.20 - $72.80	$	72.43					(50)
Crude oil (WTI Midland)(1)	728	Apr. 2022-Jun. 2022								$	0.25			—
Crude oil (WTI Midland)(1)	1,281	Apr. 2022-Sep. 2022								$	0.38			(1)
Crude oil (WTI Midland)(1)	2,200	Apr. 2022-Dec. 2022								$	0.05			(2)
Crude oil (WTI)	364	Apr. 2022-Jun. 2022										$	(0.20)	(1)
Crude oil (WTI)	1,281	Apr. 2022-Sep. 2022										$	0.10	(2)
														$	(180)

___________________________________________________

(1)The index price is WTI Midland as quoted by Argus Americas Crude.

The amounts set forth in the table above represent our total unrealized derivative position at March 31, 2022 and exclude the impact of non-performance risk. Non-performance risk is considered in the fair value of our derivative instruments that are recorded in our Condensed Consolidated Financial Statements and is primarily evaluated by reviewing credit default swap spreads for the various financial institutions with which we have derivative contracts, while our non-performance risk is evaluated using a market credit spread provided by several of our banks.

Subsequent event. In April 2022, we entered into the following financial commodity derivatives:

			Swaps
Type of Contract	Volume (Mmbtu)	Contract Period	Weighted-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
			Floor				Ceiling			Basis Swaps
Type of Contract	Volume (Mbbl)	Contract Period	Range ($/Bbl)		Weighted-Average ($/Bbl)		Range ($/Bbl)	Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)
Crude oil (WTI)	920	Oct. 2022 - Dec. 2022	$	—	$	65.00	$136.25 - $145.25	$	140.49
Crude oil (WTI)	1,810	Jan. 2023 - Jun 2023	$	—	$	65.00	$116.30 - $118.30	$	117.47
Crude oil (WTI Midland)(1)	920	Oct. 2022 - Dec. 2022								$	0.64
Crude oil (WTI Midland)(1)	1,810	Jan. 2023 - Jun 2023								$	0.64

________________________________________________________

(1)The index price is WTI Midland as quoted by Argus Americas Crude.

A significant portion of our expected oil and natural gas production for 2022 and beyond is currently unhedged and directly exposed to the volatility in oil and natural gas prices, whether favorable or unfavorable.

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During the first three months of 2022, oil collars with floor prices ranging from $35.00 to $57.00 per Bbl and ceiling prices ranging from $45.15 to $72.80 per Bbl covered 3.1 Mmbbls, or 41 percent, of oil production at a weighted-average price of $54.06 per Bbl. Oil basis swaps covered 2.7 Mmbbls, or 36 percent, of oil production at a weighted-average price of $0.20 per Bbl. Oil roll differential swaps covered 1.4 Mmbbls, or 19 percent, of oil production at a weighted-average price of $(0.07) per Bbl.

During the first three months of 2022, natural gas collars with floor prices ranging from $1.70 to $4.75 per Mmbtu and ceiling prices ranging from $2.10 to $10.32 per Mmbtu covered 55.1 Bcf, or 22 percent of natural gas production at a weighted-average price of $4.06 per Mmbtu.

We are exposed to market risk on financial commodity derivative instruments to the extent of changes in market prices of oil and natural gas. However, the market risk exposure on these derivative contracts is generally offset by the gain or loss recognized upon the ultimate sale of the commodity. Although notional contract amounts are used to express the volume of oil and natural gas agreements, the amounts that can be subject to credit risk in the event of non-performance by third parties are substantially smaller. Our counterparties are primarily commercial banks and financial service institutions that our management believes present minimal credit risk and our derivative contracts are with multiple counterparties to minimize our exposure to any individual counterparty. We perform both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. We have not incurred any losses related to non-performance risk of our counterparties and we do not anticipate any material impact on our financial results due to non-performance by third parties. However, we cannot be certain that we will not experience such losses in the future.

The preceding paragraphs contain forward-looking information concerning future production and projected gains and losses, which may be impacted by both production and changes in the future commodity prices. Refer to “Forward-Looking Information” for further details.

Interest Rate Risk

At March 31, 2022, we had total debt of $3.1 billion (with a principal amount of $2.9 billion). All of our outstanding debt is based on fixed interest rates and, as a result, we do not have significant exposure to movements in market interest rates with respect to such debt. Our revolving credit facility provides for variable interest rate borrowings; however, we did not have any borrowings outstanding as of March 31, 2022 and, therefore, no related exposure to interest rate risk.

Fair Value of Other Financial Instruments

The estimated fair value of other financial instruments is the amount at which the instrument could be exchanged currently between willing parties. The carrying amounts reported in the Condensed Consolidated Balance Sheet for cash, cash equivalents and restricted cash approximate fair value due to the short-term maturities of these instruments.

The fair value of our senior notes is based on quoted market prices. We use available market data and valuation methodologies to estimate the fair value of our private placement senior notes. The fair value of the private placement senior notes is the estimated amount we 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 our default or repayment risk. The credit spread (premium or discount) is determined by comparing our 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 us.

The carrying amount and fair value of debt is as follow:

	March 31, 2022				December 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

ITEM 4. Controls and Procedures

As of March 31, 2022, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934 (the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief

31

Financial Officer concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance with respect to the recording, processing, summarizing and reporting, within the time periods specified in the Commission’s rules and forms, of information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

During the quarter ended December 31, 2021, the Company completed its Merger with Cimarex. As part of the ongoing integration of the acquired business, the Company is in the process of incorporating the controls and related procedures of Cimarex. Other than incorporating Cimarex’s controls, there were no changes in internal control over financial reporting that occurred during the first quarter of 2022 that have materially affected, or are reasonably likely to have a material effect on, the Company’s internal control over financial reporting.

32

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

Legal Matters

The information set forth under the heading “Legal Matters” in Note 8 of the Notes to Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q is incorporated by reference in response to this item.

Environmental Matters

From time to time, we receive notices of violation from governmental and regulatory authorities in areas in which we operate relating to alleged violations of environmental statutes or the rules and regulations promulgated thereunder. Although we cannot predict with certainty whether these notices of violation will result in fines and/or penalties, if fines and/or penalties are imposed, they may result in monetary sanctions, individually or in the aggregate, in excess of $300,000.

ITEM 1A. Risk Factors

The below risk factor updates a risk factor, and should be read in conjunction with the other risk factors, previously discussed in Part I, Item 1A of our Form 10-K. Additional risks and uncertainties, including risks and uncertainties not presently known to us, or that we currently deem immaterial, could also have an adverse effect on our business, financial condition or results of operations.

Commodity prices fluctuate widely, and low prices for an extended period would likely have a material adverse impact on our business.

Our revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prices we receive for the oil, natural gas and NGLs that we sell. Lower commodity prices may reduce the amount of oil, natural gas and NGLs that we can produce economically. Historically, commodity prices have been volatile, with prices fluctuating widely, and they are likely to continue to be volatile. For example, the WTI oil prices in 2021 ranged from a high of $84.65 to a low of $47.62 per Bbl and NYMEX natural gas prices in 2021 ranged from a high of $23.86 (during Winter Storm Uri) to a low of $2.43 per Mmbtu. Any substantial or extended decline in future commodity prices would have a material adverse effect on our future business, financial condition, results of operations, cash flows, liquidity or ability to finance planned capital expenditures and commitments. Furthermore, substantial, extended decreases in commodity prices may cause us to delay or postpone a significant portion of our exploration and development projects or may render such projects uneconomic, which may result in significant downward adjustments to our estimated proved reserves and could negatively impact our ability to borrow and cost of capital and our ability to access capital markets, increase our costs under our revolving credit facility and limit our ability to execute aspects of our business plans. Refer to “Future commodity price declines may result in write-downs of the carrying amount of our oil and gas properties, which could materially and adversely affect our results of operations” in our Form 10-K under Part I, Item IA.

Wide fluctuations in commodity prices may result from relatively minor changes in the supply of and demand for oil, natural gas and NGLs, market uncertainty and a variety of additional factors that are beyond our control. These factors include but are not limited to the following:

•the levels and location of oil, natural gas and NGLs supply and demand and expectations regarding supply and demand, including the potential long-term impact of an abundance of natural gas from shale (such as that produced from our Marcellus Shale properties) on the global natural gas supply;

•the level of consumer demand for oil, natural gas and NGLs, which has been significantly impacted by the COVID-19 pandemic, particularly during 2020;

•weather conditions and seasonal trends;

•political, economic or health conditions in oil, natural gas and NGL producing regions, including the Middle East, Africa, South America and the U.S., including for example, the impacts of local or international pandemics and disasters or events such as the global COVID-19 pandemic;

•geopolitical risks and sanctions, including as a result of the war in Ukraine and other actions that may impact demand and supply chains;

•the ability and willingness of the members of OPEC+ to agree to and maintain oil price and production controls;

•the price level and quantities of foreign imports;

•actions of governmental authorities;

•the availability, proximity and capacity of gathering, transportation, processing and/or refining facilities in regional or local areas;

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•inventory storage levels and the cost and availability of storage and transportation of oil, natural gas and NGLs;

•the nature and extent of domestic and foreign governmental regulations and taxation, including environmental and climate change regulation;

•the price, availability and acceptance of alternative fuels;

•technological advances affecting energy consumption;

•speculation by investors in oil, natural gas and NGLs;

•variations between product prices at sales points and applicable index prices; and

•overall economic conditions, including the value of the U.S. dollar relative to other major currencies.

These factors and the volatile nature of the energy markets make it impossible to predict future commodity prices. If commodity prices decline significantly for a sustained period of time, the lower prices may cause us to reduce our planned drilling program or adversely affect our ability to make planned expenditures, raise additional capital or meet our financial obligations.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Share repurchase activity during the quarter ended March 31, 2022 was as follows:

Period	Total Number of Shares Purchased (In thousands)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (In thousands) (1)	Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (In millions) (2)
January 2022	—	$	—	—	$	1,250
February 2022	149	$	22.39	149	$	1,247
March 2022 (3)	7,804	$	24.26	7,804	$	1,058
Total	7,953			7,953

________________________________________________________

(1)In February 2022, our Board of Directors terminated the previously authorized share repurchase program and authorized a new share repurchase program, which was announced on February 24, 2022. This new share repurchase program authorizes us to purchase up to $1.25 billion of our common stock in privately negotiated transactions or in the open market, including under plans complying with Rule 10b5-1 under the Exchange Act. We purchased 8.0 million common shares for $192 million during the quarter ended March 31, 2022.

(2)As of March 31, 2022, we can purchase up to $1.1 billion of shares under the repurchase program.

(3)Includes 325,000 shares that were purchased for $8 million prior to March 31, 2022 and settled in April 2022.

34

ITEM 6. Exhibits

Index to Exhibits

Exhibit Number	Description
3.1	Restated Certificate of Incorporation of Coterra Energy Inc. (incorporated herein by reference to Exhibit 3.3 of Coterra's Current Report on Form 8-K filed with the SEC on October 1, 2021).
3.2	Amended and Restated Bylaws of Coterra Energy Inc. (incorporated herein by reference to Exhibit 3.4 of Coterra’s Current Report on Form 8-K filed with the SEC on October 1, 2021).
4.1	Certificate of Designations to 8 1⁄8% Series A Cumulative Perpetual Convertible Preferred Stock of Cimarex Energy Co. (incorporated herein by reference to Exhibit 4.3 of Coterra’s Annual Report on Form 10-K filed with the SEC on March 1, 2022).
4.2	Amendment to Certificate of Designations to 8 1/8% Series A Cumulative Perpetual Convertible Preferred Stock of Cimarex Energy Co. (incorporated herein by reference to Exhibit 4.4 of Coterra’s Annual Report on Form 10-K filed with the SEC on March 1, 2022).
4.3	Amendment to Certificate of Designations to 8 1/8% Series A Cumulative Perpetual Convertible Preferred Stock of Cimarex Energy Co.
10.1*	Coterra Energy Inc. 2014 Incentive Plan (incorporated herein by reference to Exhibit 10.1 of Coterra’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2014)
	(a) Form of Restricted Stock Unit Award Agreement (legacy Cabot officers);
	(b) Form of Performance Share Award Agreement (legacy Cabot officers).
10.2*	Cimarex Energy Co. Amended and Restated 2019 Equity Incentive Plan (incorporated herein by reference to Exhibit 4.4 of Coterra’s Registration Statement on S-8 (Reg. No. 33-260230) filed with the SEC on October 14, 2021).
	(a) Form of Restricted Stock Unit Award Agreement (legacy Cimarex continuing officers);
	(b) Form of Restricted Stock Unit Award Agreement (legacy Cimarex transitioning officers);
	(c) Form of Performance Share Award Agreement (legacy Cimarex continuing officers);
	(d) Form of Performance Share Award Agreement
31.1	302 Certification — Chairman, President and Chief Executive Officer.
31.2	302 Certification — Executive Vice President and Chief Financial Officer.
32.1	906 Certification.
101.INS	Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.

35

Exhibit Number	Description
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

_______________________________________________________________________________.

*Compensatory plan, contract or arrangement.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	COTERRA ENERGY INC.
	(Registrant)
May 3, 2022	By:	/s/ THOMAS E. JORDEN
		Thomas E. Jorden
		Chief Executive Officer and President
		(Principal Executive Officer)
May 3, 2022	By:	/s/ SCOTT C. SCHROEDER
		Scott C. Schroeder
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)
May 3, 2022	By:	/s/ TODD M. ROEMER
		Todd M. Roemer
		Vice President and Chief Accounting Officer
		(Principal Accounting Officer)

37

EX-4.3

Exhibit 4.3 

CIMAREX ENERGY CO.
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATIONS
OF
8 1∕8% SERIES A CUMULATIVE PERPETUAL CONVERTIBLE PREFERRED STOCK

Cimarex Energy Co. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:

FIRST: The Corporation desires to amend its Certificate of Designations of 8 1∕8% Series A Cumulative Perpetual Convertible Preferred Stock (as currently in effect, the “Certificate of Designations”) as follows:

1.                   The first sentence of Article 9, Section (a) of the Certificate of Designations is hereby amended and restated in its entirety as follows:

“(a) Each Holder shall have the right at any time, at its option, to convert, subject to the terms and provisions of this Section 9, each of such Holder’s shares of Series A Preferred Stock into (i) the Cash Consideration, to the fullest extent permitted by law, and (ii) 34.10078 shares of fully paid and nonassessable shares of Coterra Common Stock, subject to adjustment as provided in this Section 9 (the “Conversion Rate”).

2.                   The following is hereby added to Article 9, Section (d) as subsection (ix) thereof:

“Notwithstanding anything to the contrary in this Article 9, references in this Certificate of Designations (including without limitation this Section 9(d)) to the Corporation and the Common Stock shall be deemed to be references to Coterra and the Coterra Common Stock, respectively, to the extent necessary to provide the Holders anti-dilution adjustments and other adjustments equivalent to those in effect as of immediately prior to the effective time of the Coterra Merger.”

3.                   The following definitions are hereby added as Sections (r), (s) and (t) to Article 2 of the Certificate of Designations:

“(r) “Coterra” means Coterra Energy Inc., a Delaware corporation, formerly known as Cabot Oil & Gas Corporation.”

“(s) “Coterra Common Stock” means the common stock, par value $0.10 per share, of Coterra.”

“(t) “Coterra Merger” means the merger of Double C Merger Sub, Inc., a wholly owned subsidiary of Coterra, with and into the Corporation, which was consummated on October 1, 2021.”

4.                   Article 2, Sections (r), (s), (t), (u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd), (ee), (ff), (gg), (hh), (ii), (jj), (kk), (ll), (mm), (nn), (oo), (pp), (qq), (rr), (ss), (tt), (uu), (vv), (ww), (xx), (yy), (zz), (aaa), (bbb), (ccc), (ddd), (eee), (fff), (ggg), (hhh), (iii) and (jjj) are hereby relabeled as Sections (u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd), (ee), (ff), (gg), (hh), (ii), (jj), (kk), (ll), (mm), (nn), (oo), (pp), (qq), (rr), (ss), (tt), (uu), (vv), (ww), (xx), (yy), (zz), (aaa), (bbb), (ccc), (ddd), (eee), (fff), (ggg), (hhh), (iii), (jjj), (kkk), (lll) and (mmm), respectively.

SECOND: This Certificate of Amendment was duly adopted in accordance with the applicable provisions of Section 242 of the DGCL.

THIRD: This Certificate of Amendment shall become effective at immediately upon filing on October 1, 2021.

EXCEPT AS AMENDED ABOVE, the Certificate of Designations shall remain in full force and effect.

[Signature page follows]

IN WITNESS WHEREOF, the Corporation has executed this Certificate of Amendment to Certificate of Designations of 8 1∕8% Series A Cumulative Perpetual Convertible Preferred Stock on this 1st day of October, 2021.

CIMAREX ENERGY CO.

/s/ Scott C. Schroeder

Scott C. Schroeder

Executive Vice President and Chief Financial Officer

EX-10.1(A)

14ERA22O

14ERA22E

01/31/2025

COTERRA ENERGY INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

    This Restricted Stock Unit Award Agreement (the “Agreement”), made and entered into by and between Coterra Energy Inc. (the “Company”), with its principal office at 840 Gessner Road, Suite 1400, Houston, Texas 77024 and [ Participant Name ], (the “Employee”), is dated as of [ grant date ]. (the “Date of Grant”).

    This Agreement is expressly subject to the terms and provisions of the Company’s 2014 Incentive Plan (the “Plan”). In the event there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. All undefined capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Plan.

1.Grant of Restricted Stock Units. As an additional incentive and inducement to the Employee to remain in the employment of the Company, Cimarex Energy Co., or either of their Subsidiaries, and to devote his or her best efforts to the business and affairs of the Company, the Company hereby awards to the Employee Restricted Stock Units representing the right to receive [ number of shares granted ] shares of Company common stock, par value $.10 per share (the “Common Stock”), subject to the terms and conditions hereinafter set forth (the “Restricted Stock Units”).

2.Terms of Grant. Subject to the terms and provisions of this Agreement, the Restricted Stock Units shall vest 100% on January 31, 2025 (“Vesting Date”), provided, however, that the Employee remain continuously employed by the Company or a Subsidiary from the Date of Grant through and including the Vesting Date. Any fractional shares shall be rounded up to the next whole share (not to exceed the total number of Restricted Stock Units granted under this Agreement). The period from the Date of Grant until the Vesting Date shall be referred to herein as the “Period of Restrictions.” During the Period of Restrictions, the Restricted Stock Units shall be subject to the transfer restrictions described in this Agreement.

3.Issuance of Shares. If the Employee has been continuously employed by the Company or a Subsidiary through the Vesting Date (except as provided in Section 4 or Section 6), then the Company shall issue to the Employee the number of shares of Common Stock equal to the number of Restricted Stock Units, after being reduced by the number of shares of Common Stock with a Fair Market Value equal to the amount the Company is required by any governmental authority to withhold for tax purposes with respect to the vesting of the Restricted Stock Units.

4.Termination of Employment. Except as otherwise provided in this Section 4 or Section 6, if the Employee’s employment with the Company or a Subsidiary terminates for any reason prior to the Vesting Date, the Restricted Stock Units shall be immediately forfeited unless otherwise determined by the Committee. In the case of termination of employment by retirement (as defined in the Company’s Employee Handbook as of the date of this Agreement), the Restricted Stock Units shall not be so forfeited and shall otherwise be payable as set forth herein as if such employment continued through the end of the Vesting Date. Notwithstanding the foregoing, in the case of a termination of employment by retirement the Employee must be an employee of the Company or one of its Subsidiaries on September 2nd of the year the Restricted Stock Units are granted in order to continue vesting in the Restricted Stock Units. The foregoing notwithstanding, in the case of the Employee’s termination of employment by reason of death or disability the Restricted Stock Units shall become fully vested.

5.Voting Rights and Dividend Equivalents. During the Period of Restrictions, the Employee may not exercise voting rights with respect to the Restricted Stock Units. When the

Active 60279244 2.docx

Company delivers the shares of Common Stock pursuant to Section 3, Section 4 or Section 6, the Company shall also pay to the Employee an amount in cash equal to the dividends that would have been paid on each share of Common Stock underlying the Restricted Stock Units had such share been outstanding from the date of grant until the Vesting Date. The dividend equivalent payment pursuant to this Section 5 shall be paid without interest or earnings and will be subject to the payment of applicable withholding taxes. No dividend equivalent payments will be made with respect to Restricted Stock Units that do not vest pursuant to this Agreement

6.Change in Control. Upon either of a Change in Control (as defined below) or the Company’s ceasing to have publicly traded Common Stock as a result of a business combination or other extraordinary transaction, in each case prior to the Vesting Date, the Employee shall have earned 100% of the Restricted Stock Units. If the Company ceases to have publicly traded Common Stock, then instead of any share of Common Stock that would otherwise be issued there shall instead be paid an amount of cash equal to the value of the consideration received by the shareholder of the Company in respect of a share of Common Stock in connection with the Change in Control or business combination or other extraordinary transaction.

    A “Change in Control” shall mean:

(I)    The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (1) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (I), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or (iv) any acquisition by any entity pursuant to a transaction which complies with clauses (1), (2) and (3) of subsection (III) of this definition; or

(II)Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(III)    Consummation of (1) a reorganization, merger or consolidation involving the Company or involving the issuance of shares of common stock of the Company, (2) an acquisition by the Company, directly or through one or more subsidiaries, of another entity or (3) a sale or other disposition of all or

- 2 -

substantially all of the assets of the Company (any such transaction described in the immediately preceding clause (1), (2) or (3) being a “Business Combination”) in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common equity of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (3) at least a majority of the members of the board of directors of the corporation, or the similar managing body of a non-corporate entity, resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(IV)Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, other than a liquidation or dissolution in connection with a transaction to which subsection (III) applies.

7.Transferability. The Restricted Stock Units are not transferable by the Employee, whether voluntarily, involuntarily or by operation of law or otherwise during the Period of Restrictions, except as provided in the Plan. If any assignment, pledge, transfer, or other disposition, voluntary or involuntary, of the Restricted Stock Units shall be made, or if any attachment, execution, garnishment, or lien shall be issued against or placed upon the Restricted Stock Units, then the Employees’ right to the Restricted Stock Units shall immediately cease and terminate.

8.Employment at Will. This Agreement is not an employment agreement. Nothing contained herein shall be construed as creating any employment relationship other than one at will.

9.Assignment. This Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Employee and the successors and assigns of the Company. In no event shall Restricted Stock Units granted hereunder be voluntarily or involuntarily sold, pledged, assigned or transferred by the Employee other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.

- 3 -

10.Governing Law. This Agreement shall be governed by the laws of the State of Delaware, without giving effect to conflict of law rules or principles. Any action or proceeding seeking to enforce any provision of or based on any right arising out of this Agreement may be brought against the Employee or the Company only in the courts of the State of Delaware or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and the Employee and the Company consent to the jurisdiction of such courts (and of the appropriate appellate courts) in any action or proceeding and waives any objection to venue laid herein.

11.Shareholder Status. The Employee shall have no rights of a shareholder with respect to the shares of Common Stock potentially deliverable pursuant to this Agreement unless and until such time as the ownership of such shares of Common Stock has been transferred to the Employee.

12.Section 409A. The Restricted Shares granted under this Agreement are intended to comply with or be exempt from Section 409A, and ambiguous provisions of this Agreement, if any, shall be construed and interpreted in a manner consistent with such intent. This Agreement shall not be amended in a manner that would cause this Agreement or any amounts payable under this Agreement to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement. If any provision of this Agreement would result in the imposition of an additional tax under Section 409A, that provision will be reformed to avoid imposition of the additional tax. If the Employee is a “specified employee” as defined in Section 409A on the date on which the Employee has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Restricted Shares settled on account of a separation from service that are deferred compensation subject to Section 409A shall be paid or settled on the earliest of (1) the fifteenth business day following the expiration of six months from the Employee’s separation from service, (2) the date of the Employee’s death, or (3) such earlier date as complies with the requirements of Section 409A. For purposes of Section 409A, each payment under this Agreement shall be deemed to be a separate payment.

13.Miscellaneous.

(a)This Agreement shall not confer upon the Employee any right to continuation of employment by the Company, Cimarex or either of their Subsidiaries; nor shall this Agreement interfere in any way with the Company’s, Cimarex’s or either of their Subsidiaries’ right to terminate his or her employment at any time.

(b)With the approval of the Board of Directors, the Committee may terminate, amend or modify the Plan; provided, however, that no such termination, amendment or modification of the Plan may in any material way adversely affect the Employee’s rights under this Agreement.

(c)This Agreement shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

- 4 -

This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

    IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed as of the date hereof.

COTERRA ENERGY INC.

/s/ Christopher H. Clason    

By:    Christopher H. Clason

Title:    Senior Vice President and

    Chief Human Resources Officer

Employee:

    [ Participant Name ]

- 5 -

EX-10.1(B)

14EPS22O

01/31/2025

COTERRA ENERGY INC.
PERFORMANCE SHARE AWARD AGREEMENT

This Performance Award Agreement (the “Agreement”), made and entered into by and between Coterra Energy Inc. (the “Company”) with its principal office at 840 Gessner Road, Suite 1400, Houston, Texas 77024 and [ Participant Name ], (the “Employee”), is dated as of [ grant date ].

As an additional incentive and inducement to the Employee to remain in the employment of the Company, and to devote his or her best efforts to the business and affairs of the Company, the Company hereby awards to the Employee a Performance Award of [ number of shares granted ] performance shares (the “Performance Shares”) upon the terms and conditions hereinafter set forth.

This Agreement is expressly subject to the terms and provisions of the Company’s 2014 Incentive Plan (the “Plan”). In the event there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. All undefined capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Plan.

1.Performance Period. The performance period for the Performance Shares subject to this Agreement shall be the period beginning February 1, 2022 and ending January 31, 2025 (the “Performance Period”).

2.Terms of Award. Each Performance Share represents the right to receive, after the end of the Performance Period and based on the Company’s performance, the aggregate of from 0% to 200% of the Fair Market Value of a share of Coterra Energy Inc. Common Stock, par value $.10/share (“Common Stock”), payable in shares of Common Stock and, if applicable, cash. The number of shares of Common Stock and amount of cash, if any, to be issued or paid with respect to a Performance Share at the end of the Performance Period shall be determined based upon the Company’s achievement of performance criteria established by the Compensation Committee (the “Committee”) of the Board of Directors for the Performance Period as set forth below (the “Performance Criteria”). Each Performance Share shall be payable up to 100% in Common Stock of the Company and, to the extent that the percentage of a Performance Share earned at the end of the Performance Period exceeds 100%, in cash equal to the Fair Market Value of a share of Common Stock. Cash will also be paid in lieu of the issuance of fractional shares of Common Stock.

The Performance Criteria that determine the number of shares of Common Stock (and cash, if applicable) of the Company issued or paid per Performance Share (the “Performance Shares Earned”) is the relative Total Shareholder Return (as defined below) on the Company’s Common Stock as compared to the Total Shareholder Return on the common equity of each company in the Peer Group (as defined below). “Total Shareholder Return (“TSR”)” shall be expressed as the percentage increase in the average daily closing share price for the last month of the Performance Period plus total dividends paid over the Performance Period on a cumulative, reinvested basis, over the average daily closing share price for the first month of the Performance Period. The “Peer Group” is the group of companies set forth on Exhibit A hereto. If during the Performance Period any member of the Peer Group ceases to exist or ceases to have publicly traded common stock as the result of a business combination or other transaction, the Committee may select a replacement company, which shall be included in the Peer Group as of February 1, 2022 instead of the replaced member. If during the Performance Period any member of the Peer Group (i) declares bankruptcy, or (ii) is delisted and ceases to be traded on a national securities exchange, then it will remain in the Performance Peer Group and shall be ranked with any similarly-situated company in last place for purposes of this Section 2.

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After the end of the Performance Period, the companies in the Peer Group will be arranged by their respective TSR (highest to lowest), excluding the Company. The Company’s percentile rank will be interpolated between the company with the next highest TSR and the company with the next lowest TSR, based on the differential between the Company’s TSR and the TSR of such companies. The Performance Shares Earned for such period, and the Common Stock issued and cash paid with respect to each Performance Share, shall be determined using the following scale:

Payout Level	Relative TSR Performance (Percentile Rank v. Peers)	Performance Shares Earned
Maximum	≥90th percentile	200%
Target	55th percentile	100%
Threshold	≥30th percentile	50%
<Threshold	<30th percentile	0%

Notwithstanding the foregoing, if the Company’s TSR for the Performance Period is negative, then the Performance Shares Earned, as calculated in the above table, shall not exceed 100% of the Performance Shares, regardless of the Company’s actual percentile ranking in the Peer Group. For example: If (a) Company TSR for the Performance Period is -14% and (b) Company relative TSR performance is in the 75th percentile the Performance Shares Earned would be capped at 100%.

3.Certification and Issuance of Shares. No later than the thirtieth business day following the close of the Performance Period, the Committee shall determine, in writing, the extent to which the Performance Criteria have been met and the amount to be distributed with respect to a Performance Share as provided in Section 2 hereof and the Company shall issue or pay to the Employee the appropriate number of shares of Common Stock and cash as soon as administratively practicable following such Committee determination, but in no event later than March 15, 2025, provided the Employee has been continuously employed with the Company or one of its Subsidiaries during the Performance Period (except as provided in Section 4, Section 6 and Section 7). The Committee has sole and absolute authority and discretion to determine the amount to be distributed with respect to Performance Shares. The determination of the Committee shall be binding and conclusive on the Employee. Notwithstanding anything in this Agreement to the contrary, the Employee shall not be entitled to any Common Stock or cash with respect to the Performance Shares unless and until the Committee determines and certifies the extent to which the Performance Criteria have been met. The number of shares issued shall be reduced by the number of shares of Common Stock equal to the amount the Company is required by any governmental authority to withhold for tax purposes with respect to the payment of the Performance Shares.

4.Termination of Employment. Except as otherwise provided in this Section 4, Section 6 or Section 7, if the Employee’s employment is terminated for any reason prior to the completion of the Performance Period, the Performance Shares shall be immediately forfeited unless otherwise determined by the Committee. In the case of termination of employment by

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retirement (as defined in the Company’s Employee Handbook as of the date of this Agreement), the Performance Shares shall not be so forfeited and shall otherwise be payable as set forth herein as if such employment continued through the end of the Performance Period. Notwithstanding the foregoing, in the case of a termination of employment by retirement the Employee must be an employee of the Company or one of its Subsidiaries on September 2nd of the year the Performance Shares are granted in order to continue vesting in the Performance Shares. In the case of the termination of employment by reason of death or disability, the Performance Period shall be deemed complete and the Employee shall be deemed to have earned the Performance Shares as calculated in Section 2 above, based on the Company’s relative placement in the Peer Group as of the last day of the month in which the death or disability occurred, without any proration by reason of the shortened Performance Period.

5.Dividend Equivalents. At the same time that the Company delivers the shares of Common Stock pursuant to Section 3, Section 4 or Section 7, the Company shall also pay to the Employee an amount in cash equal to the dividends that would have been paid on each share of Common Stock underlying the Performance Shares Earned had such share been outstanding from the date of grant until the date shares and cash, if applicable, are delivered to the Employee. The dividend equivalent payment pursuant to this Section 5 shall be paid without interest or earnings and will be subject to the payment of applicable withholding taxes. No dividend equivalent payments will be made with respect to Performance Shares that do not vest pursuant to this Agreement.

6.Confidential Information and Non-Competition. In consideration of (i) the Company disclosing and providing access to Confidential Information, as more fully described in Section 6(a) below, (ii) the grant by the Company of the Performance Shares to provide an economic incentive to Employee to use Employee’s best efforts during his/her employment with the Company to advance the business and goodwill of the Company and in order to protect the Company’s interests in its Confidential Information and goodwill after the date hereof, and (iii) other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Employee, intending to be legally bound, hereby agrees as follows:

    (a)    Employee hereby covenants and agrees that at all times during his or her employment with the Company and for a period of eighteen (18) months after a termination of the Employee’s employment by reason of retirement as provided in Section 4, he or she will not, without the prior written consent of the Company’s chief legal officer, either directly or indirectly, for himself/herself or on behalf of or in conjunction with any other person, company, partnership, corporation or other entity, engage in any activities prohibited in the following subsections (1) through (3) of this Section 6(a):

(1)    Employee shall not assist or directly or indirectly provide services, whether as a partner, employee, consultant, officer, director, manager, agent, associate, investor, or otherwise, to any person or entity which is at the time of such assistance or provision a “Competitor” of the Company. For purposes of this Section 6, the term “Competitor” means any person or entity that is engaged in the exploration and production of oil, gas or other hydrocarbons, the transportation thereof, any other midstream activities or the provision of oilfield services in any state or county/parish thereof in which the Company conducts business and/or has established business plans to conduct business activities within the twelve-month period preceding Employee’s termination.

(2)    In order to assist Employee with his or her duties, the Company shall continue to provide the Employee with access to confidential and proprietary information and other confidential information which is either information not known by actual or potential competitors, customers and third parties of the

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Company or is proprietary information of the Company (“Confidential Information”). Such Confidential Information shall include all non-public information the Employee acquired as a result of his or her positions with the Company that might be of any value to a competitor of the Company. Examples of such Confidential Information include, without limitation, non-public information about the Company’s customers, suppliers, and potential acquisition targets; its business operations, structure and methods of operation; its services and pricing; its processes, machines and inventions; it research and know-how; its business planning and strategies; information maintained in its computer systems; devices, processes, compilations of information and records; and future business plans. Employee agrees that such Confidential Information remains confidential even if committed to the Employee’s memory. Employee agrees not to use, divulge, or furnish or make accessible to any third party, company, corporation or other organization (including but not limited to customers, competitors, or governmental agencies), without the Company’s prior written consent, any Confidential Information of the Company, except as necessary in performing his or her duties on behalf of the Company during his or her employment with the Company. The Employee’s obligations under this Section will not apply to the extent that (i) the disclosure of Confidential Information is required by applicable law; provided that, prior to disclosing such Confidential Information, to the fullest extent practicable Employee must notify the Company thereof, which notice will include the basis upon which Employee believes the information is required to be disclosed, or (ii) information otherwise determined to be Confidential Information is or becomes generally available to the public or to persons generally knowledgeable in the Company’s industry without violation of this Agreement by Employee.

(3)    Employee agrees that whenever the Employee’s employment with the Company ends for any reason, (i) all documents containing or referring to the Company’s Confidential Information as may be in the Employee’s possession, or over which the Employee may have control, and all other property of the Company provided to Employee by the Company during the course of Employee’s employment with the Company will be returned to the Company immediately, with no request being required; and (ii) all Company computer and computer-related equipment and software, and all Company property, files, records, documents, drawings, specifications, lists, equipment and similar items relating to the business of the Company, whether prepared by the Employee or otherwise, coming into the Employee’s possession or control during the course of his or her employment shall remain the exclusive property of the Company, and shall be delivered by the Employee to the Company immediately, with no request being required.

    (b)    Employee specifically recognizes and affirms that each of the covenants contained in Section 6(a)(1) through (3) of this Agreement is a material and important term of this Agreement which has induced the Company to provide for the award of Performance Shares granted hereunder, the disclosure of the Confidential Information referenced herein, and the other promises made by the Company herein, and the Employee further agrees that in the event that he or she retires and thereafter (A) the Company determines that Employee has breached any term of Section 6(a) (1) through (3) or (B) all or any part of Section 6(a) is held or found invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in any action between the Employee and the Company, in addition to any other remedies at law or in equity the Company may have available to it, the Employee shall lose the right to receive Performance Shares and any unvested Performance Shares shall be deemed forfeited effective as of the date (A) the Company determines that Employee has breached any

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term of Section 6(a) or (B) all or any part of Section 6(a) is held or found invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in an action between the Employee and the Company.

    (c)    The Employee and the Company agree that the restrictions set forth in Section 6(a) are reasonable, including the geographic area, duration as to time, and scope of activities restrained. The Employee further agrees that if any covenant contained in Section 6(a) is found by a court of competent jurisdiction to contain limitations as to time, geographical area, or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interest of the Company, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time, geographical area, and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of the Company and to enforce the covenants as reformed.

    (d)    The covenants on the part of Employee in this Section 6 are considered independent of any other agreement, and the fact that the Employee has a claim against the Company, whether predicated upon this Agreement or otherwise, is not a defense to enforcement of this Section 6.

7.Change in Control. Upon either of a Change in Control (as defined below) or the Company's ceasing to have publicly traded Common Stock as a result of a business combination or other extraordinary transaction (either to be known as a “Corporate Event”), in each case prior to the completion of the Performance Period, the Performance Period shall be deemed complete and the Employee shall have earned the Performance Shares as calculated in Section 2 above based on Company Relative Placement as of the last day of the month prior to the month in which the Corporate Event occurred, without any proration by reason of the shortened Performance Period.

    Total Shareholder Return at termination of the Performance Period shall be the greater of (i) the result determined under Section 2 above or (ii) the result determined under Section 2 above substituting for the Company average stock price for the last month of the Performance Period the value of consideration per share of such Common Stock received by a shareholder of the Company in connection with the Corporate Event (the “Deemed Share Value”).

    If the Corporate Event also meets the requirements of Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended and the related regulations and guidance (collectively, “Section 409A”), then the shares of Common Stock and cash earned (if any) shall be issued to the Employee as provided in Section 3, except that if the Company ceases to have publicly traded Common Stock, then, instead of any share of Common Stock that would otherwise be issued, there shall instead be paid a single lump-sum payment of cash in the amount equal to the aggregate of the Deemed Share Value for each full and fractional share to which the Employee is entitled.

    In all other cases, any benefits to which the Employee becomes entitled by operation of this Section 7 shall be payable (i) on the date on which payment would otherwise have been made had the Performance Period ended as originally scheduled pursuant to Section 1 and (ii) in the form of a single lump-sum payment. Unless the Committee directs otherwise in advance of the Corporate Event, the payment shall be made in cash and shall be in an amount equal to the sum of (1) the aggregate of the Deemed Share Value on the date of the Corporate Event for each full and fractional share to which the Employee is entitled, plus (2) interest compounded monthly from the date of the Corporate Event to the date of payment at the prime interest rate set forth in the Wall Street Journal (or, if such publication ceases to exist, a published interest rate from a source approved by the Committee, in its sole discretion), as adjusted from time to time.

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A “Change in Control” shall mean:

(I)The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (1) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (I), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or (iv) any acquisition by any entity pursuant to a transaction which complies with clauses (1), (2) and (3) of subsection (III) of this definition; or

(II)Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(III)Consummation of (A) a reorganization, merger or consolidation involving the Company or involving the issuance of shares of common stock of the Company, (B) an acquisition by the Company, directly or through one or more subsidiaries, of another entity or (C) a sale or other disposition of all or substantially all of the assets of the Company (any such transaction described in the immediately preceding clause (A), (B) or (C) being a “Business Combination”), in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common equity of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (3) at least a majority of the members of the board of directors of the corporation, or the similar managing body of a non-corporate entity, resulting from such

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Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(IV)Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, other than a liquidation or dissolution in connection with a transaction to which subsection (III) applies.

8.Employment at Will. This Agreement is not an employment agreement. Nothing contained herein shall be construed as creating any employment relationship other than one at will.

9.Assignment. This Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Employee and the successors and assigns of the Company. In no event shall Performance Shares granted hereunder be voluntarily or involuntarily sold, pledged, assigned or transferred by the Employee other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.

10.Governing Law. This Agreement shall be governed by the laws of the State of Delaware, without giving effect to conflict of law rules or principles. Any action or proceeding seeking to enforce any provision of or based on any right arising out of this Agreement may be brought against the Employee or the Company only in the courts of the State of Delaware or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and the Employee and the Company consent to the jurisdiction of such courts (and of the appropriate appellate courts) in any action or proceeding and waives any objection to venue laid herein.

11.Shareholder Status. The Employee shall have no rights of a shareholder with respect to the shares of Common Stock potentially deliverable pursuant to this Agreement unless and until such time as the ownership of such shares of Common Stock has been transferred to the Employee.

12.Controlling Agreement. This Agreement shall supersede and control over any other agreement between the Company and the Employee, whether entered previously or entered subsequent to the date hereof, related to Performance Shares awarded hereunder.

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13.Section 409A. The Performance Shares granted under this Agreement are intended to comply with or be exempt from Section 409A, and ambiguous provisions of this Agreement, if any, shall be construed and interpreted in a manner consistent with such intent. This Agreement shall not be amended in a manner that would cause this Agreement or any amounts payable under this Agreement to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement. If any provision of this Agreement would result in the imposition of an additional tax under Section 409A, that provision will be reformed to avoid imposition of the additional tax. If the Employee is a “specified employee” as defined in Section 409A on the date on which the Employee has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Performance Shares settled on account of a separation from service that are deferred compensation subject to Section 409A shall be paid or settled on the earliest of (1) the fifteenth business day following the expiration of six months from the Employee’s separation from service, (2) the date of the Employee’s death, or (3) such earlier date as complies with the requirements of Section 409A. For purposes of Section 409A, each payment under this Agreement shall be deemed to be a separate payment.

14.Miscellaneous.

(a)With the approval of the Board of Directors, the Committee may terminate, amend or modify the Plan; provided, however, that no such termination, amendment or modification of the Plan may in any material way adversely affect the Employee’s rights under this Agreement.

(b)This Agreement shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(c)This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed as of the date hereof.

COTERRA ENERGY INC.

/s/ Christopher H. Clason    

By:    Christopher H. Clason

Title:    Senior Vice President and

    Chief Human Resources Officer

Employee:

    [ Participant Name ]

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EXHIBIT A
PEER GROUP

ANTERO RESOURCES CORPORATION

APA CORPORATION

CHESAPEAKE ENERGY CORPORATION

CONTINENTAL RESOURCES, INC.

DEVON ENERGY CORPORATION

DIAMONDBACK ENERGY, INC.

EOG RESOURCES, INC.

EQT CORPORATION

HESS CORPORATION

MARATHON OIL CORPORATION

OCCIDENTAL PETROLEUM CORPORATION

OVINTIV INC.

PIONEER NATURAL RESOURCES COMPANY

S&P 500 INDUSTRIALS

SPDR S&P OIL & GAS EXPLORATION & PRODUCTION

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EX-10.2(A)

19XFMU22C

01/31/2025

COTERRA ENERGY INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

    This Restricted Stock Unit Award Agreement (the “Agreement”), made and entered into by and between Coterra Energy Inc. (the “Company”), with its principal office at 840 Gessner Road, Suite 1400, Houston, Texas 77024 and [ Participant Name ], (the “Employee”), is dated as of [ grant date ] (the “Date of Grant”).

    This Agreement is expressly subject to the terms and provisions of the Company’s Cimarex Energy Co. Amended and Restated 2019 Equity Incentive Plan (the “Plan”). In the event there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. All undefined capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Plan.

1.Grant of Restricted Stock Units. As an additional incentive and inducement to the Employee to remain in the employment of the Company, Cimarex Energy Co., or either of their Subsidiaries, and to devote his or her best efforts to the business and affairs of the Company, the Company hereby awards to the Employee Restricted Stock Units representing the right to receive [ number of shares granted ] shares of Company common stock, par value $.10 per share (the “Common Stock”), in accordance with Section 6.1.4 of the Plan, subject to the terms and conditions hereinafter set forth (the “Restricted Stock Units”).

2.Terms of Grant. Subject to the terms and provisions of this Agreement, the Restricted Stock Units shall vest 100% on January 31, 2025 (“Vesting Date”), provided, however, that the Employee remain continuously employed by the Company or a Subsidiary from the Date of Grant through and including the Vesting Date. Any fractional shares shall be rounded up to the next whole share (not to exceed the total number of Restricted Stock Units granted under this Agreement). The period from the Date of Grant until the Vesting Date shall be referred to herein as the “Period of Restrictions.” During the Period of Restrictions, the Restricted Stock Units shall be subject to the transfer restrictions described in this Agreement.

3.Issuance of Shares. If the Employee has been continuously employed by the Company or a Subsidiary through the Vesting Date (except as provided in Section 4 or Section 6), then the Company shall issue to the Employee the number of shares of Common Stock equal to the number of Restricted Stock Units, after being reduced by the number of shares of Common Stock with a Fair Market Value equal to the amount the Company is required by any governmental authority to withhold for tax purposes with respect to the vesting of the Restricted Stock Units.

4.Termination of Employment. Except as otherwise provided in this Section 4 or Section 6, if the Employee’s employment with the Company or a Subsidiary terminates for any reason prior to the Vesting Date, the Restricted Stock Units shall be immediately forfeited unless otherwise determined by the Committee. The foregoing notwithstanding, in the case of the Employee’s termination of employment by reason of death or disability the Restricted Stock Units shall not be so forfeited and shall become fully vested.

5.Voting Rights and Dividend Equivalents. During the Period of Restrictions, the Employee may not exercise voting rights with respect to the Restricted Stock Units. When the Company delivers the shares of Common Stock pursuant to Section 3, Section 4 or Section 6, the Company shall also pay to the Employee an amount in cash equal to the dividends that would have been paid on each share of Common Stock underlying the Restricted Stock Units had such share been outstanding from the date of grant until the Vesting Date. The dividend equivalent payment pursuant to this Section 5 shall be paid without interest or earnings and will be subject

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to the payment of applicable withholding taxes. No dividend equivalent payments will be made with respect to Restricted Stock Units that do not vest pursuant to this Agreement

6.Change in Control. Upon the occurrence of a Change in Control, the Restricted Stock Units will be fully vested and freely transferable, except that you shall not make any sale or transfer that would conflict with or violate any of the provisions of the Securities Act of 1933 or applicable state securities laws or the Company’s insider trading policy. The Committee may also provide for the assumption or substitution of the Restricted Stock Units by the surviving entity on terms comparable to the terms of this Agreement and may make any other provision for the Restricted Stock Units as the Committee, in its sole discretion, deems appropriate.

7.Transferability. The Restricted Stock Units are not transferable by the Employee, whether voluntarily, involuntarily or by operation of law or otherwise during the Period of Restrictions, except as provided in the Plan. If any assignment, pledge, transfer, or other disposition, voluntary or involuntary, of the Restricted Stock Units shall be made, or if any attachment, execution, garnishment, or lien shall be issued against or placed upon the Restricted Stock Units, then the Employees’ right to the Restricted Stock Units shall immediately cease and terminate.

8.Employment at Will. This Agreement is not an employment agreement. Nothing contained herein shall be construed as creating any employment relationship other than one at will.

9.Assignment. This Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Employee and the successors and assigns of the Company. In no event shall Restricted Stock Units granted hereunder be voluntarily or involuntarily sold, pledged, assigned or transferred by the Employee other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.

10.Governing Law. This Agreement shall be governed by the laws of the State of Delaware, without giving effect to conflict of law rules or principles. Any action or proceeding seeking to enforce any provision of or based on any right arising out of this Agreement may be brought against the Employee or the Company only in the courts of the State of Delaware or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and the Employee and the Company consent to the jurisdiction of such courts (and of the appropriate appellate courts) in any action or proceeding and waives any objection to venue laid herein.

11.Shareholder Status. The Employee shall have no rights of a shareholder with respect to the shares of Common Stock potentially deliverable pursuant to this Agreement unless and until such time as the ownership of such shares of Common Stock has been transferred to the Employee.

12.Section 409A. The Restricted Shares granted under this Agreement are intended to comply with or be exempt from Section 409A, and ambiguous provisions of this Agreement, if any, shall be construed and interpreted in a manner consistent with such intent. This Agreement shall not be amended in a manner that would cause this Agreement or any amounts payable under this Agreement to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement. If any provision of this Agreement would result in the imposition of an additional tax under Section 409A, that provision will be reformed to avoid imposition of the additional tax. If the Employee is a “specified employee” as defined in Section 409A on the date on which the

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Employee has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Restricted Shares settled on account of a separation from service that are deferred compensation subject to Section 409A shall be paid or settled on the earliest of (1) the fifteenth business day following the expiration of six months from the Employee’s separation from service, (2) the date of the Employee’s death, or (3) such earlier date as complies with the requirements of Section 409A. For purposes of Section 409A, each payment under this Agreement shall be deemed to be a separate payment.

13.Miscellaneous.

(a)This Agreement shall not confer upon the Employee any right to continuation of employment by the Company, Cimarex or either of their Subsidiaries; nor shall this Agreement interfere in any way with the Company’s, Cimarex’s or either of their Subsidiaries’ right to terminate his or her employment at any time.

(b)With the approval of the Board of Directors, the Committee may terminate, amend or modify the Plan; provided, however, that no such termination, amendment or modification of the Plan may in any material way adversely affect the Employee’s rights under this Agreement.

(c)This Agreement shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

    IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed as of the date hereof.

COTERRA ENERGY INC.

/s/ Christopher H. Clason    

By:    Christopher H. Clason

Title:    Senior Vice President and

    Chief Human Resources Officer

Employee:

    [ Participant Name ]

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EX-10.2(B)

19XPRU22T

01/31/2025

COTERRA ENERGY INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

    This Restricted Stock Unit Award Agreement (the “Agreement”), made and entered into by and between Coterra Energy Inc. (the “Company”), with its principal office at 840 Gessner Road, Suite 1400, Houston, Texas 77024 and [ Participant Name ], (the “Employee”), is dated as of [ grant date ] (the “Date of Grant”).

    This Agreement is expressly subject to the terms and provisions of the Company’s Cimarex Energy Co. Amended and Restated 2019 Equity Incentive Plan (the “Plan”). In the event there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. All undefined capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Plan.

1.Grant of Restricted Stock Units. As an additional incentive and inducement to the Employee to remain in the employment of the Company, Cimarex Energy Co., or either of their Subsidiaries, and to devote his or her best efforts to the business and affairs of the Company, the Company hereby awards to the Employee Restricted Stock Units representing the right to receive [ number of shares granted ] shares of Company common stock, par value $.10 per share (the “Common Stock”), in accordance with Section 6.1.4 of the Plan, subject to the terms and conditions hereinafter set forth (the “Restricted Stock Units”).

2.Terms of Grant. Subject to the terms and provisions of this Agreement, the Restricted Stock Units shall vest 100% on January 31, 2025 (“Vesting Date”), provided, however, that the Employee remain continuously employed by the Company or a Subsidiary from the Date of Grant through and including the Vesting Date. Any fractional shares shall be rounded up to the next whole share (not to exceed the total number of Restricted Stock Units granted under this Agreement). The period from the Date of Grant until the Vesting Date shall be referred to herein as the “Period of Restrictions.” During the Period of Restrictions, the Restricted Stock Units shall be subject to the transfer restrictions described in this Agreement.

3.Issuance of Shares. If the Employee has been continuously employed by the Company or a Subsidiary through the Vesting Date (except as provided in Section 4 or Section 6), then the Company shall issue to the Employee the number of shares of Common Stock equal to the number of Restricted Stock Units, after being reduced by the number of shares of Common Stock with a Fair Market Value equal to the amount the Company is required by any governmental authority to withhold for tax purposes with respect to the vesting of the Restricted Stock Units.

4.Termination of Employment. Except as otherwise provided in this Section 4 or Section 6, if the Employee’s employment with the Company or a Subsidiary terminates for any reason other than death or disability prior to the Vesting Date, a pro-rata portion of the Restricted Stock Units determined by dividing the number of days remaining from the date of termination until the Vesting Date by the total number of days from the Date of Grant to the Vesting Date shall be immediately forfeited, unless otherwise determined by the Committee, and the remaining Restricted Stock Units shall become fully vested. The foregoing notwithstanding, in the case of the Employee’s termination of employment by reason of death or disability the Restricted Stock Units shall not be so forfeited and shall become fully vested.

5.Voting Rights and Dividend Equivalents. During the Period of Restrictions, the Employee may not exercise voting rights with respect to the Restricted Stock Units. During the Period of Restrictions, when the Company pays dividends on shares of Common Stock, the Company shall also pay, or cause Cimarex to pay, to the Employee an amount in cash equal to

Active 60279244 2.docx

the dividends that would have been paid on each Restricted Stock Unit set forth in Section 1. The dividend equivalent payment pursuant to this Section 5 shall be paid without interest or earnings and will be subject to the payment of applicable withholding taxes.

6.Change in Control. Upon the occurrence of a Change in Control, the Restricted Stock Units will be fully vested and freely transferable, except that you shall not make any sale or transfer that would conflict with or violate any of the provisions of the Securities Act of 1933 or applicable state securities laws or the Company's insider trading policy. The Committee may also provide for the assumption or substitution of the Restricted Stock Units by the surviving entity on terms comparable to the terms of this Agreement and may make any other provision for the Restricted Stock Units as the Committee, in its sole discretion, deems appropriate.

7.Transferability. The Restricted Stock Units are not transferable by the Employee, whether voluntarily, involuntarily or by operation of law or otherwise during the Period of Restrictions, except as provided in the Plan. If any assignment, pledge, transfer, or other disposition, voluntary or involuntary, of the Restricted Stock Units shall be made, or if any attachment, execution, garnishment, or lien shall be issued against or placed upon the Restricted Stock Units, then the Employees’ right to the Restricted Stock Units shall immediately cease and terminate.

8.Employment at Will. This Agreement is not an employment agreement. Nothing contained herein shall be construed as creating any employment relationship other than one at will.

9.Assignment. This Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Employee and the successors and assigns of the Company. In no event shall Restricted Stock Units granted hereunder be voluntarily or involuntarily sold, pledged, assigned or transferred by the Employee other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.

10.Governing Law. This Agreement shall be governed by the laws of the State of Delaware, without giving effect to conflict of law rules or principles. Any action or proceeding seeking to enforce any provision of or based on any right arising out of this Agreement may be brought against the Employee or the Company only in the courts of the State of Delaware or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and the Employee and the Company consent to the jurisdiction of such courts (and of the appropriate appellate courts) in any action or proceeding and waives any objection to venue laid herein.

11.Shareholder Status. The Employee shall have no rights of a shareholder with respect to the shares of Common Stock potentially deliverable pursuant to this Agreement unless and until such time as the ownership of such shares of Common Stock has been transferred to the Employee.

12.Section 409A. The Restricted Shares granted under this Agreement are intended to comply with or be exempt from Section 409A, and ambiguous provisions of this Agreement, if any, shall be construed and interpreted in a manner consistent with such intent. This Agreement shall not be amended in a manner that would cause this Agreement or any amounts payable under this Agreement to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement. If any provision of this Agreement would result in the imposition of an additional tax under Section 409A, that provision will be reformed to avoid imposition of the additional tax.

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If the Employee is a “specified employee” as defined in Section 409A on the date on which the Employee has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Restricted Shares settled on account of a separation from service that are deferred compensation subject to Section 409A shall be paid or settled on the earliest of (1) the fifteenth business day following the expiration of six months from the Employee’s separation from service, (2) the date of the Employee’s death, or (3) such earlier date as complies with the requirements of Section 409A. For purposes of Section 409A, each payment under this Agreement shall be deemed to be a separate payment.

13.Miscellaneous.

(a)This Agreement shall not confer upon the Employee any right to continuation of employment by the Company, Cimarex or either of their Subsidiaries; nor shall this Agreement interfere in any way with the Company’s, Cimarex’s or either of their Subsidiaries’ right to terminate his or her employment at any time.

(b)With the approval of the Board of Directors, the Committee may terminate, amend or modify the Plan; provided, however, that no such termination, amendment or modification of the Plan may in any material way adversely affect the Employee’s rights under this Agreement.

(c)This Agreement shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

    IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed as of the date hereof.

COTERRA ENERGY INC.

/s/ Christopher H. Clason    

By:    Christopher H. Clason

Title:    Senior Vice President and

    Chief Human Resources Officer

Employee:

    [ Participant Name ]

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EX-10.2(C)

19XEPS22C

01/31/2025

COTERRA ENERGY INC.
PERFORMANCE SHARE AWARD AGREEMENT

This Performance Award Agreement (the “Agreement”), made and entered into by and between Coterra Energy Inc. (the “Company”) with its principal office at 840 Gessner Road, Suite 1400, Houston, Texas 77024 and [ Participant Name ], (the “Employee”), is dated as of [ grant date ].

As an additional incentive and inducement to the Employee to remain in the employment of the Company, and to devote his or her best efforts to the business and affairs of the Company, the Company hereby awards to the Employee a Performance Award of [ number of shares granted ] performance shares (the “Performance Shares”) upon the terms and conditions hereinafter set forth.

This Agreement is expressly subject to the terms and provisions of the Cimarex Energy Co. Amended and Restated 2019 Equity Incentive Plan (the “Plan”). In the event there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. All undefined capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Plan.

1.Performance Period. The performance period for the Performance Shares subject to this Agreement shall be the period beginning February 1, 2022 and ending January 31, 2025 (the “Performance Period”).

2.Terms of Award. Each Performance Share represents the right to receive, after the end of the Performance Period and based on the Company’s performance, the aggregate of from 0% to 200% of the Fair Market Value of a share of Coterra Energy Inc. Common Stock, par value $.10/share (“Common Stock”). payable in shares of Common Stock and, if applicable, cash. The number of shares of Common Stock and amount of cash, if any, to be issued or paid with respect to a Performance Share at the end of the Performance Period shall be determined based upon the Company’s achievement of performance criteria established by the Compensation Committee (the “Committee”) of the Board of Directors for the Performance Period as set forth below (the “Performance Criteria”). Each Performance Share shall be payable up to 100% in Common Stock of the Company and, to the extent that the percentage of a Performance Share earned at the end of the Performance Period exceeds 100%, in cash equal to the Fair Market Value of a share of Common Stock. Cash will also be paid in lieu of the issuance of fractional shares of Common Stock.

The Performance Criteria that determine the number of shares of Common Stock (and cash, if applicable) of the Company issued or paid per Performance Share (the “Performance Shares Earned”) is the relative Total Shareholder Return (as defined below) on the Company’s Common Stock as compared to the Total Shareholder Return on the common equity of each company in the Peer Group (as defined below). “Total Shareholder Return (“TSR”)” shall be expressed as the percentage increase in the average daily closing share price for the last month of the Performance Period plus total dividends paid over the Performance Period on a cumulative, reinvested basis, over the average daily closing share price for the first month of the Performance Period. The “Peer Group” is the group of companies set forth on Exhibit A hereto. If during the Performance Period any member of the Peer Group ceases to exist or ceases to have publicly traded common stock as the result of a business combination or other transaction, the Committee may select a replacement company, which shall be included in the Peer Group as of February 1, 2022, instead of the replaced member. If during the Performance Period any member of the Peer Group (i) declares bankruptcy, or (ii) is delisted and ceases to be traded on a national securities exchange, then it will remain in the Performance Peer Group and shall be ranked with any similarly-situated company in last place for purposes of this Section 2.

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After the end of the Performance Period, the companies in the Peer Group will be arranged by their respective TSR (highest to lowest), excluding the Company. The Company’s percentile rank will be interpolated between the company with the next highest TSR and the company with the next lowest TSR, based on the differential between the Company’s TSR and the TSR of such companies. The Performance Shares Earned for such period, and the Common Stock issued and cash paid with respect to each Performance Share, shall be determined using the following scale:

Payout Level	Relative TSR Performance (Percentile Rank v. Peers)	Performance Shares Earned
Maximum	≥90th percentile	200%
Target	55th percentile	100%
Threshold	≥30th percentile	50%
<Threshold	<30th percentile	0%

Notwithstanding the foregoing, if the Company’s TSR for the Performance Period is negative, then the Performance Shares Earned, as calculated in the above table, shall not exceed 100% of the Performance Shares, regardless of the Company’s actual percentile ranking in the Peer Group. For example: If (a) Company TSR for the Performance Period is -14% and (b) Company relative TSR performance is in the 75th percentile the Performance Shares Earned would be capped at 100%.

3.Certification and Issuance of Shares. No later than the thirtieth business day following the close of the Performance Period, the Committee shall determine, in writing, the extent to which the Performance Criteria have been met and the amount to be distributed with respect to a Performance Share as provided in Section 2 hereof and the Company shall issue or pay to the Employee the appropriate number of shares of Common Stock and cash as soon as administratively practicable following such Committee determination, but in no event later than March 15, 2025, provided the Employee has been continuously employed with the Company or one of its Subsidiaries during the Performance Period (except as provided in Section 4, Section 6 and Section 7). The Committee has sole and absolute authority and discretion to determine the amount to be distributed with respect to Performance Shares. The determination of the Committee shall be binding and conclusive on the Employee. Notwithstanding anything in this Agreement to the contrary, the Employee shall not be entitled to any Common Stock or cash with respect to the Performance Shares unless and until the Committee determines and certifies the extent to which the Performance Criteria have been met. The number of shares issued shall be reduced by the number of shares of Common Stock equal to the amount the Company is required by any governmental authority to withhold for tax purposes with respect to the payment of the Performance Shares.

4.Termination of Employment. Except as otherwise provided in this Section 4 or Section 6, if the Employee’s employment is terminated for any reason prior to the completion of the Performance Period, the Performance Shares shall be immediately forfeited unless otherwise

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determined by the Committee. In the case of the termination of employment by reason of death or disability the Performance Period shall be deemed complete, and the Employee shall be deemed to have earned the Performance Shares as calculated in Section 2 above, based on the Company’s relative placement in the Peer Group as of the last day of the month in which the death or disability occurred, without any proration by reason of the shortened Performance Period.

5.Dividend Equivalents. At the same time that the Company delivers the shares of Common Stock pursuant to Section 3, Section 4 or Section 6, the Company shall also pay to the Employee an amount in cash equal to the dividends that would have been paid on each share of Common Stock underlying the Performance Shares Earned had such share been outstanding from the date of grant until the date shares and cash, if applicable, are delivered to the Employee. The dividend equivalent payment pursuant to this Section 5 shall be paid without interest or earnings and will be subject to the payment of applicable withholding taxes. No dividend equivalent payments will be made with respect to Performance Shares that do not vest pursuant to this Agreement.

6.Change in Control. Upon the occurrence of a Change in Control, as defined in the Plan, you will receive the number of Vested Shares Equivalent calculated in accordance with paragraph 2, except that the end of the Performance Period shall be the date of the Change in Control.

7.Employment at Will. This Agreement is not an employment agreement. Nothing contained herein shall be construed as creating any employment relationship other than one at will.

8.Assignment. This Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Employee and the successors and assigns of the Company. In no event shall Performance Shares granted hereunder be voluntarily or involuntarily sold, pledged, assigned or transferred by the Employee other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.

9.Governing Law. This Agreement shall be governed by the laws of the State of Delaware, without giving effect to conflict of law rules or principles. Any action or proceeding seeking to enforce any provision of or based on any right arising out of this Agreement may be brought against the Employee or the Company only in the courts of the State of Delaware or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and the Employee and the Company consent to the jurisdiction of such courts (and of the appropriate appellate courts) in any action or proceeding and waives any objection to venue laid herein.

10.Shareholder Status. The Employee shall have no rights of a shareholder with respect to the shares of Common Stock potentially deliverable pursuant to this Agreement unless and until such time as the ownership of such shares of Common Stock has been transferred to the Employee.

11.Controlling Agreement. This Agreement shall supersede and control over any other agreement between the Company and the Employee, whether entered previously or entered subsequent to the date hereof, related to Performance Shares awarded hereunder.

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12.Section 409A. The Performance Shares granted under this Agreement are intended to comply with or be exempt from Section 409A, and ambiguous provisions of this Agreement, if any, shall be construed and interpreted in a manner consistent with such intent. This Agreement shall not be amended in a manner that would cause this Agreement or any amounts payable under this Agreement to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement. If any provision of this Agreement would result in the imposition of an additional tax under Section 409A, that provision will be reformed to avoid imposition of the additional tax. If the Employee is a “specified employee” as defined in Section 409A on the date on which the Employee has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Performance Shares settled on account of a separation from service that are deferred compensation subject to Section 409A shall be paid or settled on the earliest of (1) the fifteenth business day following the expiration of six months from the Employee’s separation from service, (2) the date of the Employee’s death, or (3) such earlier date as complies with the requirements of Section 409A. For purposes of Section 409A, each payment under this Agreement shall be deemed to be a separate payment.

13.Miscellaneous.

(a)With the approval of the Board of Directors, the Committee may terminate, amend or modify the Plan; provided, however, that no such termination, amendment or modification of the Plan may in any material way adversely affect the Employee’s rights under this Agreement.

(b)This Agreement shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(c)This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed as of the date hereof.

COTERRA ENERGY INC.

/s/ Christopher H. Clason    

By:    Christopher H. Clason

Title:    Senior Vice President and

    Chief Human Resources Officer

Employee:

    [ Participant Name ]

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5

EXHIBIT A
PEER GROUP

ANTERO RESOURCES CORPORATION

APA CORPORATION

CHESAPEAKE ENERGY CORPORATION

CONTINENTAL RESOURCES, INC.

DEVON ENERGY CORPORATION

DIAMONDBACK ENERGY, INC.

EOG RESOURCES, INC.

EQT CORPORATION

HESS CORPORATION

MARATHON OIL CORPORATION

OCCIDENTAL PETROLEUM CORPORATION

OVINTIV INC.

PIONEER NATURAL RESOURCES COMPANY

S&P 500 INDUSTRIALS

SPDR S&P OIL & GAS EXPLORATION & PRODUCTION

6

EX-10.2(D)

19XEPS22T

01/31/2025

COTERRA ENERGY INC.
PERFORMANCE SHARE AWARD AGREEMENT

This Performance Award Agreement (the “Agreement”), made and entered into by and between Coterra Energy Inc. (the “Company”) with its principal office at 840 Gessner Road, Suite 1400, Houston, Texas 77024 and [ Participant Name ], (the “Employee”), is dated as of [ grant date ].

As an additional incentive and inducement to the Employee to remain in the employment of the Company, and to devote his or her best efforts to the business and affairs of the Company, the Company hereby awards to the Employee a Performance Award of [ number of shares granted ] performance shares (the “Performance Shares”) upon the terms and conditions hereinafter set forth.

This Agreement is expressly subject to the terms and provisions of the Cimarex Energy Co. Amended and Restated 2019 Equity Incentive Plan (the “Plan”). In the event there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. All undefined capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Plan.

1.Performance Period. The performance period for the Performance Shares subject to this Agreement shall be the period beginning February 1, 2022 and ending January 31, 2025 (the “Performance Period”).

2.Terms of Award. Each Performance Share represents the right to receive, after the end of the Performance Period and based on the Company’s performance, the aggregate of from 0% to 200% of the Fair Market Value of a share of Coterra Energy Inc. Common Stock, par value $.10/share (“Common Stock”). payable in shares of Common Stock and, if applicable, cash. The number of shares of Common Stock and amount of cash, if any, to be issued or paid with respect to a Performance Share at the end of the Performance Period shall be determined based upon the Company’s achievement of performance criteria established by the Compensation Committee (the “Committee”) of the Board of Directors for the Performance Period as set forth below (the “Performance Criteria”). Each Performance Share shall be payable up to 100% in Common Stock of the Company and, to the extent that the percentage of a Performance Share earned at the end of the Performance Period exceeds 100%, in cash equal to the Fair Market Value of a share of Common Stock. Cash will also be paid in lieu of the issuance of fractional shares of Common Stock.

The Performance Criteria that determine the number of shares of Common Stock (and cash, if applicable) of the Company issued or paid per Performance Share (the “Performance Shares Earned”) is the relative Total Shareholder Return (as defined below) on the Company’s Common Stock as compared to the Total Shareholder Return on the common equity of each company in the Peer Group (as defined below). “Total Shareholder Return (“TSR”)” shall be expressed as the percentage increase in the average daily closing share price for the last month of the Performance Period plus total dividends paid over the Performance Period on a cumulative, reinvested basis, over the average daily closing share price for the first month of the Performance Period. The “Peer Group” is the group of companies set forth on Exhibit A hereto. If during the Performance Period any member of the Peer Group ceases to exist or ceases to have publicly traded common stock as the result of a business combination or other transaction, the Committee may select a replacement company, which shall be included in the Peer Group as of February 1, 2022, instead of the replaced member. If during the Performance Period any member of the Peer Group (i) declares bankruptcy, or (ii) is delisted and ceases to be traded on a national securities exchange, then it will remain in the Performance Peer Group and shall be ranked with any similarly-situated company in last place for purposes of this Section 2.

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After the end of the Performance Period, the companies in the Peer Group will be arranged by their respective TSR (highest to lowest), excluding the Company. The Company’s percentile rank will be interpolated between the company with the next highest TSR and the company with the next lowest TSR, based on the differential between the Company’s TSR and the TSR of such companies. The Performance Shares Earned for such period, and the Common Stock issued and cash paid with respect to each Performance Share, shall be determined using the following scale:

Payout Level	Relative TSR Performance (Percentile Rank v. Peers)	Performance Shares Earned
Maximum	≥90th percentile	200%
Target	55th percentile	100%
Threshold	≥30th percentile	50%
<Threshold	<30th percentile	0%

Notwithstanding the foregoing, if the Company’s TSR for the Performance Period is negative, then the Performance Shares Earned, as calculated in the above table, shall not exceed 100% of the Performance Shares, regardless of the Company’s actual percentile ranking in the Peer Group. For example: If (a) Company TSR for the Performance Period is -14% and (b) Company relative TSR performance is in the 75th percentile the Performance Shares Earned would be capped at 100%.

3.Certification and Issuance of Shares. No later than the thirtieth business day following the close of the Performance Period, the Committee shall determine, in writing, the extent to which the Performance Criteria have been met and the amount to be distributed with respect to a Performance Share as provided in Section 2 hereof and the Company shall issue or pay to the Employee the appropriate number of shares of Common Stock and cash as soon as administratively practicable following such Committee determination, but in no event later than March 15, 2025, provided the Employee has been continuously employed with the Company or one of its Subsidiaries during the Performance Period (except as provided in Section 4, Section 6 and Section 7). The Committee has sole and absolute authority and discretion to determine the amount to be distributed with respect to Performance Shares. The determination of the Committee shall be binding and conclusive on the Employee. Notwithstanding anything in this Agreement to the contrary, the Employee shall not be entitled to any Common Stock or cash with respect to the Performance Shares unless and until the Committee determines and certifies the extent to which the Performance Criteria have been met. The number of shares issued shall be reduced by the number of shares of Common Stock equal to the amount the Company is required by any governmental authority to withhold for tax purposes with respect to the payment of the Performance Shares.

4.Termination of Employment. Except as otherwise provided in this Section 4 or Section 6, if the Employee’s employment is terminated for any reason prior to the completion of the Performance Period, a pro-rata portion of the Performance Shares determined by dividing

2

the number of days remaining in the Performance Period on the date of termination by the total number of days in the Performance Period shall be immediately forfeited unless otherwise determined by the Committee, and the remaining Performance Shares shall be payable as set forth herein as if such employment continued through the end of the Performance Period. In the case of the termination of employment by reason of death or disability, or in the case of death or disability after termination and pro-ration as described in the preceding sentence, the Performance Period shall be deemed complete and the Employee shall be deemed to have earned the Performance Shares as calculated in Section 2 above, based on the Company’s relative placement in the Peer Group as of the last day of the month in which the death or disability occurred, without any proration by reason of the shortened Performance Period.

5.Dividend Equivalents. At the same time that the Company delivers the shares of Common Stock pursuant to Section 3, Section 4 or Section 6, the Company shall also pay to the Employee an amount in cash equal to the dividends that would have been paid on each share of Common Stock underlying the Performance Shares Earned had such share been outstanding from the date of grant until the date shares and cash, if applicable, are delivered to the Employee. The dividend equivalent payment pursuant to this Section 5 shall be paid without interest or earnings and will be subject to the payment of applicable withholding taxes. No dividend equivalent payments will be made with respect to Performance Shares that do not vest pursuant to this Agreement.

6.Change in Control. Upon the occurrence of a Change in Control, as defined in the Plan, you will receive the number of Vested Shares Equivalent calculated in accordance with paragraph 2, except that the end of the Performance Period shall be the date of the Change in Control.

7.Employment at Will. This Agreement is not an employment agreement. Nothing contained herein shall be construed as creating any employment relationship other than one at will.

8.Assignment. This Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Employee and the successors and assigns of the Company. In no event shall Performance Shares granted hereunder be voluntarily or involuntarily sold, pledged, assigned or transferred by the Employee other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.

9.Governing Law. This Agreement shall be governed by the laws of the State of Delaware, without giving effect to conflict of law rules or principles. Any action or proceeding seeking to enforce any provision of or based on any right arising out of this Agreement may be brought against the Employee or the Company only in the courts of the State of Delaware or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and the Employee and the Company consent to the jurisdiction of such courts (and of the appropriate appellate courts) in any action or proceeding and waives any objection to venue laid herein.

10.Shareholder Status. The Employee shall have no rights of a shareholder with respect to the shares of Common Stock potentially deliverable pursuant to this Agreement unless and until such time as the ownership of such shares of Common Stock has been transferred to the Employee.

11.Controlling Agreement. This Agreement shall supersede and control over any other agreement between the Company and the Employee, whether entered previously or entered subsequent to the date hereof, related to Performance Shares awarded hereunder.

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12.Section 409A. The Performance Shares granted under this Agreement are intended to comply with or be exempt from Section 409A, and ambiguous provisions of this Agreement, if any, shall be construed and interpreted in a manner consistent with such intent. This Agreement shall not be amended in a manner that would cause this Agreement or any amounts payable under this Agreement to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement. If any provision of this Agreement would result in the imposition of an additional tax under Section 409A, that provision will be reformed to avoid imposition of the additional tax. If the Employee is a “specified employee” as defined in Section 409A on the date on which the Employee has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Performance Shares settled on account of a separation from service that are deferred compensation subject to Section 409A shall be paid or settled on the earliest of (1) the fifteenth business day following the expiration of six months from the Employee’s separation from service, (2) the date of the Employee’s death, or (3) such earlier date as complies with the requirements of Section 409A. For purposes of Section 409A, each payment under this Agreement shall be deemed to be a separate payment.

13.Miscellaneous.

(a)With the approval of the Board of Directors, the Committee may terminate, amend or modify the Plan; provided, however, that no such termination, amendment or modification of the Plan may in any material way adversely affect the Employee’s rights under this Agreement.

(b)This Agreement shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(c)This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed as of the date hereof.

COTERRA ENERGY INC.

/s/ Christopher H. Clason    

By:    Christopher H. Clason

Title:    Senior Vice President and

    Chief Human Resources Officer

Employee:

    [ Participant Name ]

4

5

EXHIBIT A
PEER GROUP

ANTERO RESOURCES CORPORATION

APA CORPORATION

CHESAPEAKE ENERGY CORPORATION

CONTINENTAL RESOURCES, INC.

DEVON ENERGY CORPORATION

DIAMONDBACK ENERGY, INC.

EOG RESOURCES, INC.

EQT CORPORATION

HESS CORPORATION

MARATHON OIL CORPORATION

OCCIDENTAL PETROLEUM CORPORATION

OVINTIV INC.

PIONEER NATURAL RESOURCES COMPANY

S&P 500 INDUSTRIALS

SPDR S&P OIL & GAS EXPLORATION & PRODUCTION

6

EX-31.1

EXHIBIT 31.1

I, Thomas E. Jorden, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Coterra Energy Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2022

/s/ THOMAS E. JORDEN

Thomas E. Jorden

Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

I, Scott C. Schroeder, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Coterra Energy Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2022

/s/ SCOTT C. SCHROEDER

Scott C. Schroeder

Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) (the “Act”), each of the undersigned, Thomas E. Jorden, Chief Executive Officer of Coterra Energy Inc., a Delaware corporation (the “Company”), and Scott C. Schroeder, Chief Financial Officer of the Company, hereby certify that, to his knowledge:

(1)the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 3, 2022

/s/ THOMAS E. JORDEN

Thomas E. Jorden

Chief Executive Officer

/s/ SCOTT C. SCHROEDER

Scott C. Schroeder

Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2022	May 02, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	1-10447
Entity Registrant Name	COTERRA ENERGY INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-3072771
Entity Address, Address Line One	Three Memorial City Plaza
Entity Address, Address Line Two	840 Gessner Road,
Entity Address, Address Line Three	Suite 1400,
Entity Address, City or Town	Houston,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77024
City Area Code	281
Local Phone Number	589-4600
Title of 12(b) Security	Common Stock, par value $0.10 per share
Trading Symbol	CTRA
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		805,805,159
Entity Central Index Key	0000858470
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 1,447	$ 1,036
Restricted cash	10	10
Accounts receivable, net	1,094	1,037
Inventories	41	39
Other current assets	5	14
Total current assets	2,597	2,136
Properties and equipment, net (Successful efforts method)	17,346	17,375
Other assets	384	389
Total assets	20,327	19,900
Current liabilities
Accounts payable	874	747
Current portion of long-term debt	25	0
Accrued liabilities	209	260
Income taxes payable	153	29
Interest payable	26	25
Derivative instruments	372	159
Total current liabilities	1,659	1,220
Long-term debt, net	3,090	3,125
Deferred income taxes	3,138	3,101
Asset retirement obligations	262	259
Other liabilities	410	407
Total liabilities	8,559	8,112
Commitments and contingencies
Cimarex redeemable preferred stock	50	50
Common stock:
Common stock	89	89
Additional paid-in capital	10,927	10,911
Retained earnings	2,715	2,563
Accumulated other comprehensive income	5	1
Treasury stock	(2,018)	(1,826)
Total stockholders' equity	11,718	11,738
Total liabilities and stockholders' equity	$ 20,327	$ 19,900

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, shares authorized (in shares)	1,800,000,000	1,800,000,000
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, issued (in shares)	893,450,009	892,612,010
Treasury stock (in shares)	86,710,998	79,082,385

XML

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
OPERATING REVENUES
Operating revenues	$ 2,070	$ 473
Loss on derivative instruments	(391)	(13)
Total operating revenues	1,679	460
OPERATING EXPENSES
Direct operations	100	17
Transportation, processing and gathering	233	137
Taxes other than income	76	5
Exploration	6	3
Depreciation, depletion and amortization	360	94
General and administrative	107	29
Total operating expenses	882	285
Gain on sale of assets	2	0
INCOME FROM OPERATIONS	799	175
Interest expense, net	21	12
Income before income taxes	778	163
Income tax expense	170	37
NET INCOME	$ 608	$ 126
Earnings per share
Basic (in dollars per share)	$ 0.75	$ 0.32
Diluted (in dollars per share)	$ 0.74	$ 0.31
Weighted-average common shares outstanding
Basic (in shares)	810	399
Weighted-average shares - diluted (in shares)	814	402
Natural gas
OPERATING REVENUES
Operating revenues	$ 1,111	$ 473
Oil
OPERATING REVENUES
Operating revenues	699	0
NGL
OPERATING REVENUES
Operating revenues	245	0
Other
OPERATING REVENUES
Operating revenues	$ 15	$ 0

XML

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 608	$ 126
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization	360	94
Deferred income tax expense	36	12
Gain on sale of assets	(2)	0
Loss on derivative instruments	391	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 other	20	11
Changes in assets and liabilities:
Accounts receivable, net	(57)	17
Income taxes	124	24
Inventories	(2)	(1)
Other current assets	2	1
Accounts payable and accrued liabilities	21	4
Interest payable	1	(13)
Other assets and liabilities	1	(2)
Net cash provided by operating activities	1,322	290
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(271)	(123)
Proceeds from sale of assets	2	0
Net cash used in investing activities	(269)	(123)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of debt	0	(88)
Repayments of finance leases	(2)	0
Share repurchases	(184)	0
Dividends paid	(456)	(40)
Cash received for stock option exercises	6	0
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 cash	411	33
Cash, cash equivalents and restricted cash, beginning of period	1,046	152
Cash, cash equivalents and restricted cash, end of period	$ 1,457	$ 185

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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Treasury Stock	Paid-In Capital	Accumulated Other Comprehensive Income	Retained Earnings
Beginning balance (in shares) at Dec. 31, 2020		478	(79)
Balance at beginning of period at Dec. 31, 2020	$ 2,216	$ 48	$ (1,823)	$ 1,804	$ 2	$ 2,185
Increase (Decrease) in Stockholders' Equity
Net income	126					126
Stock amortization and vesting	4			4
Common stock cash dividends	(40)					(40)
Ending balance (in shares) at Mar. 31, 2021		478	(79)
Balance at end of period at Mar. 31, 2021	2,306	$ 48	$ (1,823)	1,808	2	2,271
Beginning balance (in shares) at Dec. 31, 2020		478	(79)
Balance at beginning of period at Dec. 31, 2020	2,216	$ 48	$ (1,823)	1,804	2	2,185
Increase (Decrease) in Stockholders' Equity
Share repurchases	(8)
Ending balance (in shares) at Dec. 31, 2021		893	(79)
Balance at end of period at Dec. 31, 2021	11,738	$ 89	$ (1,826)	10,911	1	2,563
Increase (Decrease) in Stockholders' Equity
Net income	608					608
Exercise of stock options	6			6
Stock amortization and vesting	$ 10			10
Share repurchases (in shares)	(8)
Share repurchases	$ (192)
Common stock cash dividends	(455)					(455)
Preferred stock dividends	(1)					(1)
Other comprehensive income	4				4
Ending balance (in shares) at Mar. 31, 2022		893	(87)
Balance at end of period at Mar. 31, 2022	$ 11,718	$ 89	$ (2,018)	$ 10,927	$ 5	$ 2,715

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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical)	3 Months Ended
	Mar. 31, 2022 $ / shares
Statement of Stockholders' Equity [Abstract]
Cash dividends, per share (in dollars per share)	$ 0.56
Preferred stock, dividends (in dollars per share)	$ 20.3125

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Financial Statement Presentation

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Financial Statement Presentation

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.

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Acquisitions

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

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

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 income	79
Pro forma basic earnings per share	$	0.10
Pro forma diluted earnings per share	$	0.10

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Properties and Equipment, Net

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Properties and Equipment, Net

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 gathering	402		395
Land, buildings and other equipment	140		140
Finance lease right-of-use asset	24		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.

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Debt and Credit Agreements

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt and Credit Agreements

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.

Revolving Credit AgreementAt March 31, 2022, the Company had no borrowings outstanding under its revolving credit facility and unused commitments of $1.5 billion.

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Derivative Instruments

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

As of March 31, 2022, the Company had the following outstanding financial commodity derivatives:

			Collars
			Floor				Ceiling
Type of Contract	Volume (Mmbtu)	Contract Period	Range ($/Mmbtu)		Weighted-Average ($/Mmbtu)		Range ($/Mmbtu)		Weighted-Average ($/Mmbtu)
Natural gas (NYMEX)	74,900,000	Apr. 2022 - Oct. 2022	$3.00 - $4.50		$	3.61	$4.07 - $6.68		$	5.12
Natural gas (Perm EP)(1)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.85 - $2.90		$	2.88
Natural gas (Perm EP)(1)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.50	$	—	$	3.15
Natural gas (PEPL)(2)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.81 - $2.91		$	2.86
Natural gas (PEPL)(2)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.60	$	—	$	3.27
Natural gas (Waha)(3)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.82 - $2.89		$	2.86
Natural gas (Waha)(3)	1,830,000	Apr. 2022 - Sep. 2022	$	—	$	2.40	$	—	$	2.77
Natural gas (Waha)(3)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.50	$	—	$	3.12
Natural gas (NYMEX)	71,500,000	Apr. 2022 - Dec 2022	$3.50 - $4.25		$	3.84	$4.75 - $6.60		$	5.39
Natural gas (NYMEX)	52,850,000	Nov 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
			Floor				Ceiling			Basis Swaps		Roll Swaps
Type of Contract	Volume (Mbbl)	Contract Period	Range ($/Bbl)		Weighted-Average ($/Bbl)		Range ($/Bbl)	Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)
Crude oil (WTI)	819	Apr. 2022-Jun. 2022	$35.00 - $37.50		$	36.11	$48.38 - $51.10	$	49.97
Crude oil (WTI)	1,830	Apr. 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)	728	Apr. 2022-Jun. 2022								$	0.25
Crude oil (WTI Midland)(1)	1,281	Apr. 2022-Sep. 2022								$	0.38
Crude oil (WTI Midland)(1)	2,200	Apr. 2022-Dec. 2022								$	0.05
Crude oil (WTI)	364	Apr. 2022-Jun. 2022										$	(0.20)
Crude oil (WTI)	1,281	Apr. 2022-Sep. 2022										$	0.10

________________________________________________________

(1)The index price is WTI Midland as quoted by Argus Americas Crude.

Subsequent event. In April 2022, the Company entered into the following financial commodity derivatives:

			Swaps
Type of Contract	Volume (Mmbtu)	Contract Period	Weighted-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
			Floor				Ceiling			Basis Swaps
Type of Contract	Volume (Mbbl)	Contract Period	Range ($/Bbl)		Weighted-Average ($/Bbl)		Range ($/Bbl)	Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)
Crude oil (WTI)	920	Oct. 2022 - Dec. 2022	$	—	$	65.00	$136.25 - $145.25	$	140.49
Crude oil (WTI)	1,810	Jan. 2023 - Jun 2023	$	—	$	65.00	$116.30 - $118.30	$	117.47
Crude oil (WTI Midland)(1)	920	Oct. 2022 - Dec. 2022								$	0.64
Crude oil (WTI Midland)(1)	1,810	Jan. 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 Assets				Derivative Liabilities
(In millions)	Balance Sheet Location	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Commodity contracts	Derivative 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 sheet	372		159
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	58		35
Net amount	$	314	$	194

Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

	Three Months Ended  March 31,
(In millions)	2022		2021
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)

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

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

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)	2022		2021
Balance at beginning of period	$	(152)	$	24
Total gain (loss) included in earnings	(391)		(13)
Settlement (gain) loss	171		(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.

The carrying amount and estimated fair value of debt is as follows:

	March 31, 2022				December 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

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Asset Retirement Obligations

3 Months Ended

Mar. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

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 incurred	3
Liabilities settled	(1)
Liabilities divested	(2)
Accretion expense	2
Balance at end of period	265
Less: current asset retirement obligations	(3)
Noncurrent asset retirement obligations	$	262

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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.

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.

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Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Disaggregation of Revenue

The following table presents revenues from contracts with customers disaggregated by product:

	Three Months Ended March 31,
(In millions)	2022		2021
Natural gas	$	1,111	$	473
Oil	699		—
NGL	245		—
Other	15		—
	$	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.

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Capital Stock

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Capital Stock

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.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

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 Date			March 31, 2022
Fair value per performance share award	$	17.89		$	14.81
Assumptions:
Stock price volatility	42.3		%	43.7		%
Risk-free rate of return	1.60		%	2.41		%

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Earnings per Common Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings per Common Share

Earnings per Common ShareBasic 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.

The following is a calculation of basic and diluted earnings per share:

	Three Months Ended  March 31,
(In millions except per share amounts)	2022		2021
Income (Numerator)
Net income	$	608	$	126
Less: dividends attributable to participating securities	(2)		—
Less: Cimarex redeemable preferred stock dividends	(1)		—
Net income available to common stockholders	$	605	$	126
Shares (Denominator)
Weighted-average shares - Basic	810		399
Dilution effect of stock awards at end of period	4		3
Weighted-average shares - Diluted	814		402
Earnings per share:
Basic	$	0.75	$	0.32
Diluted	$	0.74	$	0.31

The following is a calculation of weighted-average shares excluded from diluted EPS due to anti-dilutive effect:

	Three Months Ended  March 31,
(In millions)	2022	2021
Weighted-average stock awards excluded from diluted EPS due to the anti-dilutive effect calculated using the treasury stock method	1	1

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Related Party Transactions	3 Months Ended
	Mar. 31, 2022
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsFrom time to time, Helmerich & Payne, Inc. (“H&P”) provides contract drilling services to the Company. The Company incurred drilling costs of approximately $3 million related to these services during the three months ended March 31, 2022.Hans Helmerich, a director of the Company, is the Chairman of the Board of Directors of H&P.

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Restructuring Costs

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring Costs

Restructuring Costs

In connection with the Merger, the Company incurred certain merger-related restructuring costs that are primarily related to workforce reductions and the associated employee severance benefits that were triggered by the Merger. The Company recognized $24 million of restructuring expenses during 2022 related to the accrual of employee-related severance and termination benefits associated with the expected termination of certain Cimarex employees.

The following table summarizes the Company’s restructuring liabilities:

(In millions)	Three Months Ended March 31, 2022
Balance at beginning of period	$	43
Additions related to merger integration	24
Reductions related to merger integration payments	(3)
Balance at end of period	$	64

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Additional Balance Sheet Information

3 Months Ended

Mar. 31, 2022

Balance Sheet Related Disclosures [Abstract]

Additional Balance Sheet Information

Additional Balance Sheet Information

Certain balance sheet amounts are comprised of the following:

(In millions)	March 31, 2022		December 31, 2021
Accounts receivable, net
Trade accounts	$	1,004	$	922
Joint interest accounts	70		83
Other accounts	22		34
	1,096		1,039
Allowance for doubtful accounts	(2)		(2)
	$	1,094	$	1,037
Other assets
Deferred compensation plan	$	46	$	47
Debt issuance costs	4		5
Operating lease right-of-use assets	308		317
Other accounts	26		20
	$	384	$	389
Accounts payable
Trade accounts	$	41	$	94
Royalty and other owners	393		315
Accrued transportation	90		96
Accrued capital costs	149		88
Taxes other than income	77		60
Accrued lease operating costs	29		29
Other accounts	95		65
	$	874	$	747
Accrued liabilities
Employee benefits	$	92	$	124
Taxes other than income	13		13
Operating lease liabilities	71		69
Financing lease liabilities	6		14
Other accounts	27		40
	$	209	$	260
Other liabilities
Deferred compensation plan	$	60	$	56
Postretirement benefits	28		33
Operating lease liabilities	237		248
Financing lease liabilities	15		7
Other accounts	70		63
	$	410	$	407

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Financial Statement Presentation (Policies)	3 Months Ended
	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Accounting	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.
Reclassifications	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.

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Pro forma financial information

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

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 income	79
Pro forma basic earnings per share	$	0.10
Pro forma diluted earnings per share	$	0.10

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Properties and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of 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 gathering	402		395
Land, buildings and other equipment	140		140
Finance lease right-of-use asset	24		20
	21,536		21,211
Accumulated depreciation, depletion and amortization	(4,190)		(3,836)
	$	17,346	$	17,375

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Debt and Credit Agreements (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of debt and credit agreement components

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.

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding commodity derivatives

As of March 31, 2022, the Company had the following outstanding financial commodity derivatives:

			Collars
			Floor				Ceiling
Type of Contract	Volume (Mmbtu)	Contract Period	Range ($/Mmbtu)		Weighted-Average ($/Mmbtu)		Range ($/Mmbtu)		Weighted-Average ($/Mmbtu)
Natural gas (NYMEX)	74,900,000	Apr. 2022 - Oct. 2022	$3.00 - $4.50		$	3.61	$4.07 - $6.68		$	5.12
Natural gas (Perm EP)(1)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.85 - $2.90		$	2.88
Natural gas (Perm EP)(1)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.50	$	—	$	3.15
Natural gas (PEPL)(2)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.81 - $2.91		$	2.86
Natural gas (PEPL)(2)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.60	$	—	$	3.27
Natural gas (Waha)(3)	1,820,000	Apr. 2022 - Jun. 2022	$	—	$	2.40	$2.82 - $2.89		$	2.86
Natural gas (Waha)(3)	1,830,000	Apr. 2022 - Sep. 2022	$	—	$	2.40	$	—	$	2.77
Natural gas (Waha)(3)	5,500,000	Apr. 2022 - Dec. 2022	$	—	$	2.50	$	—	$	3.12
Natural gas (NYMEX)	71,500,000	Apr. 2022 - Dec 2022	$3.50 - $4.25		$	3.84	$4.75 - $6.60		$	5.39
Natural gas (NYMEX)	52,850,000	Nov 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
			Floor				Ceiling			Basis Swaps		Roll Swaps
Type of Contract	Volume (Mbbl)	Contract Period	Range ($/Bbl)		Weighted-Average ($/Bbl)		Range ($/Bbl)	Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)
Crude oil (WTI)	819	Apr. 2022-Jun. 2022	$35.00 - $37.50		$	36.11	$48.38 - $51.10	$	49.97
Crude oil (WTI)	1,830	Apr. 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)	728	Apr. 2022-Jun. 2022								$	0.25
Crude oil (WTI Midland)(1)	1,281	Apr. 2022-Sep. 2022								$	0.38
Crude oil (WTI Midland)(1)	2,200	Apr. 2022-Dec. 2022								$	0.05
Crude oil (WTI)	364	Apr. 2022-Jun. 2022										$	(0.20)
Crude oil (WTI)	1,281	Apr. 2022-Sep. 2022										$	0.10

________________________________________________________

(1)The index price is WTI Midland as quoted by Argus Americas Crude.

Subsequent event. In April 2022, the Company entered into the following financial commodity derivatives:

			Swaps
Type of Contract	Volume (Mmbtu)	Contract Period	Weighted-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
			Floor				Ceiling			Basis Swaps
Type of Contract	Volume (Mbbl)	Contract Period	Range ($/Bbl)		Weighted-Average ($/Bbl)		Range ($/Bbl)	Weighted-Average ($/Bbl)		Weighted-Average ($/Bbl)
Crude oil (WTI)	920	Oct. 2022 - Dec. 2022	$	—	$	65.00	$136.25 - $145.25	$	140.49
Crude oil (WTI)	1,810	Jan. 2023 - Jun 2023	$	—	$	65.00	$116.30 - $118.30	$	117.47
Crude oil (WTI Midland)(1)	920	Oct. 2022 - Dec. 2022								$	0.64
Crude oil (WTI Midland)(1)	1,810	Jan. 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

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet

		Derivative Assets				Derivative Liabilities
(In millions)	Balance Sheet Location	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Commodity contracts	Derivative instruments (current)	$	—	$	7	$	372	$	159
		$	—	$	7	$	372	$	159

Schedule of offsetting of derivative liabilities in the condensed consolidated balance sheet

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 sheet	372		159
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	58		35
Net amount	$	314	$	194

Schedule of offsetting of derivative assets in the condensed consolidated balance sheet

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 sheet	372		159
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	58		35
Net amount	$	314	$	194

Effect of derivatives on the condensed consolidated statement of operations

Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations

	Three Months Ended  March 31,
(In millions)	2022		2021
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)

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Financial assets and liabilities measured at fair value on a recurring basis

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

Reconciliation of changes in the fair value of financial assets and liabilities classified as level 3

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)	2022		2021
Balance at beginning of period	$	(152)	$	24
Total gain (loss) included in earnings	(391)		(13)
Settlement (gain) loss	171		(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)

Carrying amounts and fair values of debt

The carrying amount and estimated fair value of debt is as follows:

	March 31, 2022				December 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

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Asset Retirement Obligations (Tables)

3 Months Ended

Mar. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

Activity related to 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 incurred	3
Liabilities settled	(1)
Liabilities divested	(2)
Accretion expense	2
Balance at end of period	265
Less: current asset retirement obligations	(3)
Noncurrent asset retirement obligations	$	262

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of revenue

The following table presents revenues from contracts with customers disaggregated by product:

	Three Months Ended March 31,
(In millions)	2022		2021
Natural gas	$	1,111	$	473
Oil	699		—
NGL	245		—
Other	15		—
	$	2,070	$	473

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Assumptions to determine the grant date fair value of the equity component and the period-end fair value of the liability

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 Date			March 31, 2022
Fair value per performance share award	$	17.89		$	14.81
Assumptions:
Stock price volatility	42.3		%	43.7		%
Risk-free rate of return	1.60		%	2.41		%

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Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Calculation of basic and diluted weighted-average shares outstanding

The following is a calculation of basic and diluted earnings per share:

	Three Months Ended  March 31,
(In millions except per share amounts)	2022		2021
Income (Numerator)
Net income	$	608	$	126
Less: dividends attributable to participating securities	(2)		—
Less: Cimarex redeemable preferred stock dividends	(1)		—
Net income available to common stockholders	$	605	$	126
Shares (Denominator)
Weighted-average shares - Basic	810		399
Dilution effect of stock awards at end of period	4		3
Weighted-average shares - Diluted	814		402
Earnings per share:
Basic	$	0.75	$	0.32
Diluted	$	0.74	$	0.31

Calculation of weighted-average shares excluded from diluted EPS due to the anti-dilutive effect

The following is a calculation of weighted-average shares excluded from diluted EPS due to anti-dilutive effect:

	Three Months Ended  March 31,
(In millions)	2022	2021
Weighted-average stock awards excluded from diluted EPS due to the anti-dilutive effect calculated using the treasury stock method	1	1

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Restructuring Costs (Tables)

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring and related costs

The following table summarizes the Company’s restructuring liabilities:

(In millions)	Three Months Ended March 31, 2022
Balance at beginning of period	$	43
Additions related to merger integration	24
Reductions related to merger integration payments	(3)
Balance at end of period	$	64

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Additional Balance Sheet Information (Tables)

3 Months Ended

Mar. 31, 2022

Balance Sheet Related Disclosures [Abstract]

Additional balance sheet information

Certain balance sheet amounts are comprised of the following:

(In millions)	March 31, 2022		December 31, 2021
Accounts receivable, net
Trade accounts	$	1,004	$	922
Joint interest accounts	70		83
Other accounts	22		34
	1,096		1,039
Allowance for doubtful accounts	(2)		(2)
	$	1,094	$	1,037
Other assets
Deferred compensation plan	$	46	$	47
Debt issuance costs	4		5
Operating lease right-of-use assets	308		317
Other accounts	26		20
	$	384	$	389
Accounts payable
Trade accounts	$	41	$	94
Royalty and other owners	393		315
Accrued transportation	90		96
Accrued capital costs	149		88
Taxes other than income	77		60
Accrued lease operating costs	29		29
Other accounts	95		65
	$	874	$	747
Accrued liabilities
Employee benefits	$	92	$	124
Taxes other than income	13		13
Operating lease liabilities	71		69
Financing lease liabilities	6		14
Other accounts	27		40
	$	209	$	260
Other liabilities
Deferred compensation plan	$	60	$	56
Postretirement benefits	28		33
Operating lease liabilities	237		248
Financing lease liabilities	15		7
Other accounts	70		63
	$	410	$	407

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Acquisitions - Pro Forma (Details) - Cimarex $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) $ / shares
Business Acquisition [Line Items]
Pro forma revenue | $	$ 978
Pro forma net income | $	$ 79
Pro forma basic earnings per share (in dollars per share) | $ / shares	$ 0.10
Pro forma diluted earnings per share (in dollars per share) | $ / shares	$ 0.10

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Properties and Equipment, Net (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Finance lease right-of-use asset	$ 24	$ 20
Property, plant and equipment	21,536	21,211
Accumulated depreciation, depletion and amortization	(4,190)	(3,836)
Properties and equipment, net	$ 17,346	17,375
Costs capitalized period	1 year
Proved oil and gas properties
Property, Plant and Equipment [Line Items]
Properties and equipment, gross, total	$ 15,653	15,340
Unproved oil and gas properties
Property, Plant and Equipment [Line Items]
Properties and equipment, gross, total	5,317	5,316
Pipelines and gathering
Property, Plant and Equipment [Line Items]
Properties and equipment, gross, total	402	395
Land, buildings and other equipment
Property, Plant and Equipment [Line Items]
Properties and equipment, gross, total	$ 140	$ 140

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Debt and Credit Agreements - Schedule of Debt (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Net premium (discount)	$ 175	$ 185
Unamortized debt issuance costs	(9)	(9)
Long-term debt	3,115	3,125
Current portion of long-term debt	$ 25	0
6.51% weighted-average private placement senior notes
Debt Instrument [Line Items]
Weighted average interest rate	6.51%
Total debt	$ 37	37
5.58% weighted-average senior notes
Debt Instrument [Line Items]
Weighted average interest rate	5.58%
Total debt	$ 87	87
3.65% weighted-average private placement senior notes
Debt Instrument [Line Items]
Weighted average interest rate	3.65%
Total debt	$ 825	825
4.375% senior notes due June 1, 2024
Debt Instrument [Line Items]
Stated percentage	4.375%
Total debt	$ 750	750
3.90% senior notes due May 15, 2027
Debt Instrument [Line Items]
Stated percentage	3.90%
Total debt	$ 750	750
4.375% senior notes due March 15, 2029
Debt Instrument [Line Items]
Stated percentage	4.375%
Total debt	$ 500	500
Revolving credit facility
Debt Instrument [Line Items]
Total debt	$ 0	$ 0

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Debt and Credit Agreements - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Revolving credit facility
Debt Instrument [Line Items]
Long-term debt	$ 0	$ 0
Revolving credit facility
Debt Instrument [Line Items]
Remaining borrowing capacity	$ 1,500

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Derivative Instruments - Outstanding Commodity Derivatives (Details)	1 Months Ended		3 Months Ended
	May 05, 2022 $ / MBbls MBbls	May 03, 2022 MMBTU $ / MBbls $ / MMBTU MBbls	Mar. 31, 2022 MMBTU $ / MMBTU
Natural gas (NYMEX)
Derivative [Line Items]
Notional amount, energy | MMBTU			74,900,000
Floor, weighted-average (in dollars per Mmbtu/Bbl)			3.61
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			5.12
Natural gas (NYMEX) | Minimum
Derivative [Line Items]
Floor price (in dollars per Mmbtu/Bbl)			3,000.00
Ceiling, cap price (in dollars per Mmbtu/Bbl)			4.07
Natural gas (NYMEX) | Maximum
Derivative [Line Items]
Floor price (in dollars per Mmbtu/Bbl)			4.50
Ceiling, cap price (in dollars per Mmbtu/Bbl)			6.68
Natural gas (Perm EP)
Derivative [Line Items]
Notional amount, energy | MMBTU			1,820,000
Floor price (in dollars per Mmbtu/Bbl)			0
Floor, weighted-average (in dollars per Mmbtu/Bbl)			2.40
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			2.88
Natural gas (Perm EP) | Minimum
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl)			2.85
Natural gas (Perm EP) | Maximum
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl)			2.90
Natural gas (Perm EP)
Derivative [Line Items]
Notional amount, energy | MMBTU			5,500,000
Floor price (in dollars per Mmbtu/Bbl)			0
Floor, weighted-average (in dollars per Mmbtu/Bbl)			2.50
Ceiling, cap price (in dollars per Mmbtu/Bbl)			0
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			3.15
Natural gas (PEPL)
Derivative [Line Items]
Notional amount, energy | MMBTU			1,820,000
Floor price (in dollars per Mmbtu/Bbl)			0
Floor, weighted-average (in dollars per Mmbtu/Bbl)			2.40
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			2.86
Natural gas (PEPL) | Minimum
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl)			2.81
Natural gas (PEPL) | Maximum
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl)			2.91
Natural gas (PEPL)
Derivative [Line Items]
Notional amount, energy | MMBTU			5,500,000
Floor price (in dollars per Mmbtu/Bbl)			0
Floor, weighted-average (in dollars per Mmbtu/Bbl)			2.60
Ceiling, cap price (in dollars per Mmbtu/Bbl)			0
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			3.27
Natural gas (Waha)
Derivative [Line Items]
Notional amount, energy | MMBTU			1,820,000
Floor price (in dollars per Mmbtu/Bbl)			0
Floor, weighted-average (in dollars per Mmbtu/Bbl)			2.40
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			2.86
Natural gas (Waha) | Minimum
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl)			2.82
Natural gas (Waha) | Maximum
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl)			2.89
Natural gas (Waha)
Derivative [Line Items]
Notional amount, energy | MMBTU			1,830,000
Floor price (in dollars per Mmbtu/Bbl)			0
Floor, weighted-average (in dollars per Mmbtu/Bbl)			2.40
Ceiling, cap price (in dollars per Mmbtu/Bbl)			0
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			2.77
Natural gas (Waha)
Derivative [Line Items]
Notional amount, energy | MMBTU			5,500,000
Floor price (in dollars per Mmbtu/Bbl)			0
Floor, weighted-average (in dollars per Mmbtu/Bbl)			2.50
Ceiling, cap price (in dollars per Mmbtu/Bbl)			0
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			3.12
Natural gas (Waha) | Subsequent event
Derivative [Line Items]
Notional amount, energy | MMBTU		9,200,000
Swaps weighted-average (in dollars per Mmbtu/Bbl)		4.77
Natural gas (NYMEX)
Derivative [Line Items]
Notional amount, energy | MMBTU			71,500,000
Floor, weighted-average (in dollars per Mmbtu/Bbl)			3.84
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			5.39
Natural gas (NYMEX) | Minimum
Derivative [Line Items]
Floor price (in dollars per Mmbtu/Bbl)			3.50
Ceiling, cap price (in dollars per Mmbtu/Bbl)			4.75
Natural gas (NYMEX) | Maximum
Derivative [Line Items]
Floor price (in dollars per Mmbtu/Bbl)			4.25
Ceiling, cap price (in dollars per Mmbtu/Bbl)			6.60
Natural gas (NYMEX)
Derivative [Line Items]
Notional amount, energy | MMBTU			52,850,000
Floor, weighted-average (in dollars per Mmbtu/Bbl)			4.46
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)			8.37
Natural gas (NYMEX) | Minimum
Derivative [Line Items]
Floor price (in dollars per Mmbtu/Bbl)			4.00
Ceiling, cap price (in dollars per Mmbtu/Bbl)			7.00
Natural gas (NYMEX) | Maximum
Derivative [Line Items]
Floor price (in dollars per Mmbtu/Bbl)			4.75
Ceiling, cap price (in dollars per Mmbtu/Bbl)			10.10
Crude oil (WTI) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls	819
Floor, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	36.11
Ceiling, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	49.97
Crude oil (WTI) | Minimum | Subsequent event
Derivative [Line Items]
Floor price (in dollars per Mmbtu/Bbl) | $ / MBbls	35.00
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls	48.38
Crude oil (WTI) | Maximum | Subsequent event
Derivative [Line Items]
Floor price (in dollars per Mmbtu/Bbl) | $ / MBbls	37.50
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls	51.10
Crude oil (WTI) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls	1,830
Floor price (in dollars per Mmbtu/Bbl) | $ / MBbls	0
Floor, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	40.00
Ceiling, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	49.19
Crude oil (WTI) | Minimum | Subsequent event
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls	47.55
Crude oil (WTI) | Maximum | Subsequent event
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls	50.89
Crude oil (WTI) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls	2,200
Floor price (in dollars per Mmbtu/Bbl) | $ / MBbls	0
Floor, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	57.00
Ceiling, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	72.43
Crude oil (WTI) | Minimum | Subsequent event
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls	72.20
Crude oil (WTI) | Maximum | Subsequent event
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls	72.80
Crude oil (WTI Midland) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls	728
Crude oil (WTI Midland) | Basis Swaps | Subsequent event
Derivative [Line Items]
Swaps weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	0.25
Crude oil (WTI Midland) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls	1,281
Crude oil (WTI Midland) | Basis Swaps | Subsequent event
Derivative [Line Items]
Swaps weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	0.38
Crude oil (WTI Midland) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls	2,200
Crude oil (WTI Midland) | Basis Swaps | Subsequent event
Derivative [Line Items]
Swaps weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	0.05
Crude oil (WTI) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls	364
Crude oil (WTI) | Roll Swaps | Subsequent event
Derivative [Line Items]
Swaps weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	(0.20)
Crude oil (WTI) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls	1,281
Crude oil (WTI) | Roll Swaps | Subsequent event
Derivative [Line Items]
Swaps weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls	0.10
Crude oil (WTI) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls		920
Floor price (in dollars per Mmbtu/Bbl) | $ / MBbls		0
Floor, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls		65.00
Ceiling, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls		140.49
Crude oil (WTI) | Minimum | Subsequent event
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls		136.25
Crude oil (WTI) | Maximum | Subsequent event
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls		145.25
Crude oil (WTI) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls		1,810
Floor price (in dollars per Mmbtu/Bbl) | $ / MBbls		0
Floor, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls		65.00
Ceiling, weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls		117.47
Crude oil (WTI) | Minimum | Subsequent event
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls		116.30
Crude oil (WTI) | Maximum | Subsequent event
Derivative [Line Items]
Ceiling, cap price (in dollars per Mmbtu/Bbl) | $ / MBbls		118.30
Crude oil (WTI Midland) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls		920
Crude oil (WTI Midland) | Roll Swaps | Subsequent event
Derivative [Line Items]
Swaps weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls		0.64
Crude oil (WTI Midland) | Subsequent event
Derivative [Line Items]
Notional amount, volume | MBbls		1,810
Crude oil (WTI Midland) | Roll Swaps | Subsequent event
Derivative [Line Items]
Swaps weighted-average (in dollars per Mmbtu/Bbl) | $ / MBbls		0.64

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Derivative Instruments - Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Effect of derivative instruments on the Consolidated Balance Sheet
Derivative Assets	$ 0	$ 7
Derivatives Not Designated as Hedges | Commodity contracts
Effect of derivative instruments on the Consolidated Balance Sheet
Derivative Assets	0	7
Derivative Liabilities	372	159
Derivative instruments (current) | Derivatives Not Designated as Hedges | Commodity contracts
Effect of derivative instruments on the Consolidated Balance Sheet
Derivative Assets	0	7
Derivative Liabilities	$ 372	$ 159

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Derivative Instruments - Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Derivative assets
Gross amounts of recognized assets	$ 0	$ 27
Gross amounts offset in the condensed consolidated balance sheet	0	(20)
Net amounts of assets presented in the condensed consolidated balance sheet	0	7
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	0	0
Net amount	0	7
Derivative liabilities
Gross amounts of recognized liabilities	372	179
Gross amounts offset in the condensed consolidated balance sheet	0	(20)
Net amounts of liabilities presented in the condensed consolidated balance sheet	372	159
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	58	35
Net amount	$ 314	$ 194

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Derivative Instruments - Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Effect of derivative instruments on the Consolidated Balance Sheet
Total	$ (391)	$ (13)
Gas Contracts
Effect of derivative instruments on the Consolidated Balance Sheet
Cash (paid) received on settlement of derivative instruments	(42)	3
Non-cash (loss) gain on derivative instruments	(182)	(16)
Oil Contracts
Effect of derivative instruments on the Consolidated Balance Sheet
Cash (paid) received on settlement of derivative instruments	(129)	0
Non-cash (loss) gain on derivative instruments	$ (38)	$ 0

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Fair Value Measurements - Financial Assets and Liabilities, Recurring (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Assets
Deferred compensation plan	$ 46	$ 47
Derivative instruments	0	27
Liabilities
Deferred compensation plan	60	56
Recurring basis
Assets
Deferred compensation plan	46	47
Derivative instruments	0	27
Total assets	46	74
Liabilities
Deferred compensation plan	60	56
Derivative instruments	372	179
Total liabilities	432	235
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring basis
Assets
Deferred compensation plan	46	47
Derivative instruments	0	0
Total assets	46	47
Liabilities
Deferred compensation plan		56
Derivative instruments	0	0
Total liabilities	60	56
Significant Other Observable Inputs (Level 2) | Recurring basis
Assets
Deferred compensation plan	0	0
Derivative instruments	0	0
Total assets	0	0
Liabilities
Deferred compensation plan	0	0
Derivative instruments	0	0
Total liabilities	0	0
Significant Unobservable Inputs (Level 3) | Recurring basis
Assets
Deferred compensation plan	0	0
Derivative instruments	0	27
Total assets	0	27
Liabilities
Deferred compensation plan	0	0
Derivative instruments	372	179
Total liabilities	$ 372	$ 179

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Fair Value Measurements - Reconciliation of Changes in Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy
Balance at beginning of period	$ (152)	$ 24
Total gain (loss) included in earnings	(391)	(13)
Settlement (gain) loss	171	(3)
Transfers in and/or out of Level 3	0	0
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)

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Fair Value Measurements - Narrative (Details)	3 Months Ended
	Mar. 31, 2022 impaired_asset_and_liability
Debt Instrument [Line Items]
Number of non-financial assets and liabilities impaired	0
4.375% senior notes due June 1, 2024
Debt Instrument [Line Items]
Stated percentage	4.375%
3.90% senior notes due May 15, 2027
Debt Instrument [Line Items]
Stated percentage	3.90%
4.375% senior notes due March 15, 2029
Debt Instrument [Line Items]
Stated percentage	4.375%

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Fair Value Measurements - Fair Value of Other Financial Instruments (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Fair value disclosures
Long-term debt	$ 3,115	$ 3,125
Current maturities	(25)	0
Long-term debt, excluding current maturities	3,090	3,125
Carrying Amount
Fair value disclosures
Long-term debt	3,115	3,125
Current maturities	(25)	0
Long-term debt, excluding current maturities	3,090	3,125
Estimated Fair Value
Fair value disclosures
Long-term debt	2,999	3,163
Current maturities	(25)	0
Long-term debt, excluding current maturities	$ 2,974	$ 3,163

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Asset Retirement Obligations (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Asset Retirement Obligation
Balance at beginning of period	$ 263
Liabilities incurred	3
Liabilities settled	(1)
Liabilities divested	(2)
Accretion expense	2
Balance at end of period	265
Less: current asset retirement obligations	(3)
Noncurrent asset retirement obligations	$ 262	$ 259

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Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 2,070	$ 473
Natural gas
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	1,111	473
Oil
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	699	0
NGL
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	245	0
Other
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 15	$ 0

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Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Contracts with customers	$ 1,004	$ 922
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01
Revenue from Contract with Customer [Abstract]
Unsatisfied performance obligations	$ 7,600
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligations, expected period of satisfaction	2 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligations, expected period of satisfaction	16 years

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Capital Stock (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended		3 Months Ended		12 Months Ended
	May 05, 2022	Feb. 28, 2022	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Class of Stock [Line Items]
Cash dividends, per share (in dollars per share)		$ 0.15	$ 0.56	$ 0.10	$ 0.125
Variable dividend payable (in dollars per share)		0.41
Dividend payable (in dollars per share)		$ 0.56
Stock repurchase program, authorized amount		$ 1,250
Stock repurchased during period (in shares)			8,000,000
Share repurchases			$ 192		$ 8
Treasury stock (in shares)			86,710,998		79,082,385
Stock repurchase program			$ 1,100
Subsequent event
Class of Stock [Line Items]
Cash dividends, per share (in dollars per share)	$ 0.15
Variable dividend payable (in dollars per share)	0.45
Dividend payable (in dollars per share)	$ 0.60

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Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Feb. 28, 2022	Mar. 31, 2022	Mar. 31, 2021
Stock-based Compensation arrangements
Stock based compensation expense		$ 23	$ 12
Restricted Stock Units | Share-based Payment Arrangement, Employee
Stock-based Compensation arrangements
Granted (in shares)		1,222,705
Granted (in dollars per share)		$ 23.33
Restricted Stock Units | Share-based Payment Arrangement, Employee | Minimum
Stock-based Compensation arrangements
Annual forfeiture rate assumption (as a percent)		0.00%
Restricted Stock Units | Share-based Payment Arrangement, Employee | Maximum
Stock-based Compensation arrangements
Annual forfeiture rate assumption (as a percent)		5.00%
Performance Share Awards
Stock-based Compensation arrangements
Annual forfeiture rate assumption (as a percent)		0.00%
Performance Shares Based on Market Conditions
Stock-based Compensation arrangements
Right to receive shares		100.00%
Right to receive an additional award in cash		100.00%
TSR Performance Share Awards
Stock-based Compensation arrangements
Granted (in shares)		1,161,599
Granted (in dollars per share)	$ 17.89	$ 14.81
Performance period		3 years

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Stock-Based Compensation - Assumptions for TSR Shares (Details) - TSR Performance Share Awards - $ / shares		3 Months Ended
	Feb. 28, 2022	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)	$ 17.89	$ 14.81
Stock price volatility	42.30%	43.70%
Risk-free rate of return	1.60%	2.41%

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Earnings per Common Share - Schedule of EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income (Numerator)
Net income	$ 608	$ 126
Less: dividends attributable to participating securities	(2)	0
Less: Cimarex redeemable preferred stock dividends	(1)	0
Net income available to common stockholders	$ 605	$ 126
Shares (Denominator)
Weighted-average shares - basic (in shares)	810	399
Dilution effect of stock awards at end of period (in shares)	4	3
Weighted-average shares - diluted (in shares)	814	402
Earnings per share:
Basic (in dollars per share)	$ 0.75	$ 0.32
Diluted (in dollars per share)	$ 0.74	$ 0.31

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Earnings per Common Share - Calculation of Weighted-Average Shares Excluded from Diluted EPS (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Treasury Stock Method
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares (in shares)	1	1

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Related Party Transactions (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Related Party Transactions [Abstract]
Related party transaction	$ 3

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Restructuring Costs - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Restructuring Cost and Reserve [Line Items]
Additions related to merger integration	$ 24
Employee Severance
Restructuring Cost and Reserve [Line Items]
Additions related to merger integration	$ 24

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Restructuring Costs - Restructuring Liabilities (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 43
Additions related to merger integration	24
Reductions related to merger integration payments	(3)
Balance at end of period	$ 64

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Additional Balance Sheet Information (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Accounts receivable, net
Trade accounts	$ 1,004	$ 922
Joint interest accounts	70	83
Other accounts	22	34
Accounts receivable, gross	1,096	1,039
Allowance for doubtful accounts	(2)	(2)
Accounts receivable, net	1,094	1,037
Other assets
Deferred compensation plan	46	47
Debt issuance costs	4	5
Operating lease right-of-use assets	308	317
Other accounts	26	20
Other assets	384	389
Accounts payable
Trade accounts	41	94
Royalty and other owners	393	315
Accrued transportation	90	96
Accrued capital costs	149	88
Taxes other than income	77	60
Accrued lease operating costs	29	29
Other accounts	95	65
Accounts payable	874	747
Accrued liabilities
Employee benefits	92	124
Taxes other than income	13	13
Operating lease liabilities	71	69
Financing lease liabilities	6	14
Other accounts	27	40
Accrued liabilities	209	260
Other liabilities
Deferred compensation plan	60	56
Postretirement benefits	28	33
Operating lease liabilities	237	248
Financing lease liabilities	15	7
Other accounts	70	63
Other liabilities	$ 410	$ 407
Operating lease, right-of-use asset, statement of financial position [Extensible List]	Other assets	Other assets
Operating lease, liability, current, statement of financial position [Extensible List]	Accrued liabilities	Accrued liabilities
Finance lease, liability, current, statement of financial position [Extensible Enumeration]	Accrued liabilities	Accrued liabilities
Operating lease, liability, noncurrent, statement of financial position [Extensible List]	Other liabilities	Other liabilities
Finance lease, liability, noncurrent, statement of financial position [Extensible Enumeration]	Other liabilities	Other liabilities