FORM |
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
(In millions, except per share amounts) | March 31, 2022 | December 31, 2021 | ||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Properties and equipment, net (Successful efforts method) | ||||||||||||||
Other assets | ||||||||||||||
$ | $ | |||||||||||||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Current portion of long-term debt | ||||||||||||||
Accrued liabilities | ||||||||||||||
Income taxes payable | ||||||||||||||
Interest payable | ||||||||||||||
Derivative instruments | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, net | ||||||||||||||
Deferred income taxes | ||||||||||||||
Asset retirement obligations | ||||||||||||||
Other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies | ||||||||||||||
Cimarex redeemable preferred stock | ||||||||||||||
Stockholders' equity | ||||||||||||||
Common stock: | ||||||||||||||
Authorized — | ||||||||||||||
Issued — | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive income | ||||||||||||||
Less treasury stock, at cost: | ||||||||||||||
( | ( | |||||||||||||
Total stockholders' equity | ||||||||||||||
$ | $ |
Three Months Ended March 31, | ||||||||||||||
(In millions, except per share amounts) | 2022 | 2021 | ||||||||||||
OPERATING REVENUES | ||||||||||||||
Natural gas | $ | $ | ||||||||||||
Oil | ||||||||||||||
NGL | ||||||||||||||
Loss on derivative instruments | ( | ( | ||||||||||||
Other | ||||||||||||||
OPERATING EXPENSES | ||||||||||||||
Direct operations | ||||||||||||||
Transportation, processing and gathering | ||||||||||||||
Taxes other than income | ||||||||||||||
Exploration | ||||||||||||||
Depreciation, depletion and amortization | ||||||||||||||
General and administrative | ||||||||||||||
Gain on sale of assets | ||||||||||||||
INCOME FROM OPERATIONS | ||||||||||||||
Interest expense, net | ||||||||||||||
Income before income taxes | ||||||||||||||
Income tax expense | ||||||||||||||
NET INCOME | $ | $ | ||||||||||||
Earnings per share | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ | ||||||||||||
Weighted-average common shares outstanding | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(In millions) | 2022 | 2021 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||
Depreciation, depletion and amortization | ||||||||||||||
Deferred income tax expense | ||||||||||||||
Gain on sale of assets | ( | |||||||||||||
Loss on derivative instruments | ||||||||||||||
Net cash (paid) received in settlement of derivative instruments | ( | |||||||||||||
Amortization of premium and debt issuance costs | ( | |||||||||||||
Stock-based compensation and other | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable, net | ( | |||||||||||||
Income taxes | ||||||||||||||
Inventories | ( | ( | ||||||||||||
Other current assets | ||||||||||||||
Accounts payable and accrued liabilities | ||||||||||||||
Interest payable | ( | |||||||||||||
Other assets and liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||
Capital expenditures | ( | ( | ||||||||||||
Proceeds from sale of assets | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||
Repayments of debt | ( | |||||||||||||
Repayments of finance leases | ( | |||||||||||||
Share repurchases | ( | |||||||||||||
Dividends paid | ( | ( | ||||||||||||
Cash received for stock option exercises | ||||||||||||||
Tax withholdings on vesting of stock awards | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Net increase in cash, cash equivalents and restricted cash | ||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
(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 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Stock amortization and vesting | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Cash dividends: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock at $ | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Preferred stock at $ | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
(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 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Stock amortization and vesting | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends at $ | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
(In millions, except per share information) | Three Months Ended March 31, 2021 | |||||||
Pro forma revenue | $ | |||||||
Pro forma net income | ||||||||
Pro forma basic earnings per share | $ | |||||||
Pro forma diluted earnings per share | $ |
(In millions) | March 31, 2022 | December 31, 2021 | ||||||||||||
Proved oil and gas properties | $ | $ | ||||||||||||
Unproved oil and gas properties | ||||||||||||||
Pipelines and gathering | ||||||||||||||
Land, buildings and other equipment | ||||||||||||||
Finance lease right-of-use asset | ||||||||||||||
Accumulated depreciation, depletion and amortization | ( | ( | ||||||||||||
$ | $ |
(In millions) | March 31, 2022 | December 31, 2021 | ||||||||||||
Total debt | ||||||||||||||
$ | $ | |||||||||||||
Revolving credit facility | ||||||||||||||
Net premium (discount) | ||||||||||||||
Unamortized debt issuance costs | ( | ( | ||||||||||||
$ | $ |
Collars | ||||||||||||||||||||||||||||||||||||||
Floor | Ceiling | |||||||||||||||||||||||||||||||||||||
Type of Contract | Volume (Mmbtu) | Contract Period | Range ($/Mmbtu) | Weighted-Average ($/Mmbtu) | Range ($/Mmbtu) | Weighted-Average ($/Mmbtu) | ||||||||||||||||||||||||||||||||
Natural gas (NYMEX) | Apr. 2022 - Oct. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (Perm EP)(1) | Apr. 2022 - Jun. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (Perm EP)(1) | Apr. 2022 - Dec. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (PEPL)(2) | Apr. 2022 - Jun. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (PEPL)(2) | Apr. 2022 - Dec. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (Waha)(3) | Apr. 2022 - Jun. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (Waha)(3) | Apr. 2022 - Sep. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (Waha)(3) | Apr. 2022 - Dec. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (NYMEX) | Apr. 2022 - Dec 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Natural gas (NYMEX) | Nov 2022 - Mar 2023 | $ | $ | $ | $ |
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) | Apr. 2022-Jun. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI) | Apr. 2022-Sep. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI) | Apr. 2022-Dec. 2022 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI Midland)(1) | Apr. 2022-Jun. 2022 | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI Midland)(1) | Apr. 2022-Sep. 2022 | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI Midland)(1) | Apr. 2022-Dec. 2022 | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI) | Apr. 2022-Jun. 2022 | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI) | Apr. 2022-Sep. 2022 | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Swaps | ||||||||||||||||||||
Type of Contract | Volume (Mmbtu) | Contract Period | Weighted-Average ($/Mmbtu) | |||||||||||||||||
Natural gas (Waha)(1) | May 2022 - Oct 2022 | $ |
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) | Oct. 2022 - Dec. 2022 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI) | Jan. 2023 - Jun 2023 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI Midland)(1) | Oct. 2022 - Dec. 2022 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Crude oil (WTI Midland)(1) | Jan. 2023 - Jun 2023 | $ | |||||||||||||||||||||||||||||||||||||||||||||
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) | $ | $ | $ | $ | |||||||||||||||||||||||||||
$ | $ | $ | $ |
(In millions) | March 31, 2022 | December 31, 2021 | ||||||||||||
Derivative assets | ||||||||||||||
Gross amounts of recognized assets | $ | $ | ||||||||||||
Gross amounts offset in the condensed consolidated balance sheet | ( | |||||||||||||
Net amounts of assets presented in the condensed consolidated balance sheet | ||||||||||||||
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet | ||||||||||||||
Net amount | $ | $ | ||||||||||||
Derivative liabilities | ||||||||||||||
Gross amounts of recognized liabilities | $ | $ | ||||||||||||
Gross amounts offset in the condensed consolidated balance sheet | ( | |||||||||||||
Net amounts of liabilities presented in the condensed consolidated balance sheet | ||||||||||||||
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet | ||||||||||||||
Net amount | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In millions) | 2022 | 2021 | ||||||||||||
Cash received (paid) on settlement of derivative instruments | ||||||||||||||
Gas Contracts | $ | ( | $ | |||||||||||
Oil Contracts | ( | |||||||||||||
Non-cash loss on derivative instruments | ||||||||||||||
Gas Contracts | ( | ( | ||||||||||||
Oil Contracts | ( | |||||||||||||
$ | ( | $ | ( |
(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 | $ | $ | $ | $ | ||||||||||||||||||||||
Derivative instruments | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Deferred compensation plan | $ | $ | $ | $ | ||||||||||||||||||||||
Derivative instruments | ||||||||||||||||||||||||||
$ | $ | $ | $ |
(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 | $ | $ | $ | $ | ||||||||||||||||||||||
Derivative instruments | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Deferred compensation plan | $ | $ | $ | $ | ||||||||||||||||||||||
Derivative instruments | ||||||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In millions) | 2022 | 2021 | ||||||||||||
Balance at beginning of period | $ | ( | $ | |||||||||||
Total gain (loss) included in earnings | ( | ( | ||||||||||||
Settlement (gain) loss | ( | |||||||||||||
Transfers in and/or out of Level 3 | ||||||||||||||
Balance at end of period | $ | ( | $ | |||||||||||
Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period | $ | ( | $ | ( |
March 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
(In millions) | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ | ||||||||||||||||||||||
Current maturities | ( | ( | ||||||||||||||||||||||||
Long-term debt, excluding current maturities | $ | $ | $ | $ |
(In millions) | Three Months Ended March 31, 2022 | |||||||
Balance at beginning of period | $ | |||||||
Liabilities incurred | ||||||||
Liabilities settled | ( | |||||||
Liabilities divested | ( | |||||||
Accretion expense | ||||||||
Balance at end of period | ||||||||
Less: current asset retirement obligations | ( | |||||||
Noncurrent asset retirement obligations | $ |
Three Months Ended March 31, | ||||||||||||||
(In millions) | 2022 | 2021 | ||||||||||||
Natural gas | $ | $ | ||||||||||||
Oil | ||||||||||||||
NGL | ||||||||||||||
Other | ||||||||||||||
$ | $ |
Grant Date | March 31, 2022 | |||||||||||||
Fair value per performance share award | $ | $ | ||||||||||||
Assumptions: | ||||||||||||||
Stock price volatility | % | % | ||||||||||||
Risk-free rate of return | % | % |
Three Months Ended March 31, | ||||||||||||||
(In millions except per share amounts) | 2022 | 2021 | ||||||||||||
Income (Numerator) | ||||||||||||||
Net income | $ | $ | ||||||||||||
Less: dividends attributable to participating securities | ( | |||||||||||||
Less: Cimarex redeemable preferred stock dividends | ( | |||||||||||||
Net income available to common stockholders | $ | $ | ||||||||||||
Shares (Denominator) | ||||||||||||||
Weighted-average shares - Basic | ||||||||||||||
Dilution effect of stock awards at end of period | ||||||||||||||
Weighted-average shares - Diluted | ||||||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ |
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 | ||||||||||||||
(In millions) | Three Months Ended March 31, 2022 | |||||||
Balance at beginning of period | $ | |||||||
Additions related to merger integration | ||||||||
Reductions related to merger integration payments | ( | |||||||
Balance at end of period | $ |
(In millions) | March 31, 2022 | December 31, 2021 | ||||||||||||
Accounts receivable, net | ||||||||||||||
Trade accounts | $ | $ | ||||||||||||
Joint interest accounts | ||||||||||||||
Other accounts | ||||||||||||||
Allowance for doubtful accounts | ( | ( | ||||||||||||
$ | $ | |||||||||||||
Other assets | ||||||||||||||
Deferred compensation plan | $ | $ | ||||||||||||
Debt issuance costs | ||||||||||||||
Other accounts | ||||||||||||||
$ | $ | |||||||||||||
Accounts payable | ||||||||||||||
Trade accounts | $ | $ | ||||||||||||
Royalty and other owners | ||||||||||||||
Accrued transportation | ||||||||||||||
Accrued capital costs | ||||||||||||||
Taxes other than income | ||||||||||||||
Accrued lease operating costs | ||||||||||||||
Other accounts | ||||||||||||||
$ | $ | |||||||||||||
Accrued liabilities | ||||||||||||||
Employee benefits | $ | $ | ||||||||||||
Taxes other than income | ||||||||||||||
Other accounts | ||||||||||||||
$ | $ | |||||||||||||
Other liabilities | ||||||||||||||
Deferred compensation plan | $ | $ | ||||||||||||
Postretirement benefits | ||||||||||||||
Other accounts | ||||||||||||||
$ | $ |
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 |
(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 |
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 |
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 | % |
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 |
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) |
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 | % |
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 |
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 | % |
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 |
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 |
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 | % |
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) |
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) |
Swaps | ||||||||||||||||||||
Type of Contract | Volume (Mmbtu) | Contract Period | Weighted-Average ($/Mmbtu) | |||||||||||||||||
Natural gas (Waha)(1) | 9,200,000 | May 2022 - Oct 2022 | $ | 4.77 |
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 | ||||||||||||||||||||||||||||||||||||||||
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 |
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 |
Exhibit Number | Description | |||||||
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. | |||||||
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). |
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) |
/s/ Scott C. Schroeder | |||||
Scott C. Schroeder | |||||
Executive Vice President and Chief Financial Officer |
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% | ||||||
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% | ||||||
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% | ||||||
/s/ THOMAS E. JORDEN | |||||
Thomas E. Jorden | |||||
Chief Executive Officer and President |
/s/ SCOTT C. SCHROEDER | |||||
Scott C. Schroeder | |||||
Executive Vice President and Chief Financial Officer |
/s/ THOMAS E. JORDEN | |||||
Thomas E. Jorden | |||||
Chief Executive Officer | |||||
/s/ SCOTT C. SCHROEDER | |||||
Scott C. Schroeder | |||||
Chief Financial Officer |
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 |
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 |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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.
|
Properties and Equipment, Net |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
________________________________________________________ (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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
(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.
________________________________________________________ (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:
________________________________________________________ (1)The index price is Waha West Texas Natural Gas Index (“Waha”) as quoted in Platt’s Inside FERC.
________________________________________________________ (1)The index price is WTI Midland as quoted by Argus Americas Crude. Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet
Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet
Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
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Fair Value Measurements |
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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:
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:
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:
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Asset Retirement Obligations |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset Retirement Obligations Activity related to the Company’s asset retirement obligations is as follows:
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Commitments and Contingencies |
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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 |
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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:
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 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 |
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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 |
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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:
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Earnings per Common Share |
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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:
The following is a calculation of weighted-average shares excluded from diluted EPS due to anti-dilutive effect:
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Related Party Transactions |
3 Months Ended |
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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. |
Restructuring Costs |
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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:
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Additional Balance Sheet Information |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Balance Sheet Information | Additional Balance Sheet Information Certain balance sheet amounts are comprised of the following:
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Financial Statement Presentation (Policies) |
3 Months Ended |
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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. |
Acquisitions (Tables) |
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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.
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Properties and Equipment, Net (Tables) |
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Schedule of properties and equipment, net | Properties and equipment, net are comprised of the following:
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Debt and Credit Agreements (Tables) |
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Schedule of debt and credit agreement components | The Company’s debt and credit agreements consisted of the following:
________________________________________________________ (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) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding commodity derivatives | As of March 31, 2022, the Company had the following outstanding financial commodity derivatives:
(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.
________________________________________________________ (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:
________________________________________________________ (1)The index price is Waha West Texas Natural Gas Index (“Waha”) as quoted in Platt’s Inside FERC.
________________________________________________________ (1)The index price is WTI Midland as quoted by Argus Americas Crude.
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Effect of derivative instruments on the condensed consolidated balance sheet | Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet
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Schedule of offsetting of derivative liabilities in the condensed consolidated balance sheet | Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet
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Schedule of offsetting of derivative assets in the condensed consolidated balance sheet | Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet
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Effect of derivatives on the condensed consolidated statement of operations | Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
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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:
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Carrying amounts and fair values of debt | The carrying amount and estimated fair value of debt is as follows:
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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:
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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:
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
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Earnings per Common Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
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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:
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Restructuring Costs (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and related costs | The following table summarizes the Company’s restructuring liabilities:
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Additional Balance Sheet Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional balance sheet information | Certain balance sheet amounts are comprised of the following:
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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 |
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 |
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 |
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 |
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 |
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 |
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) |
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% |
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 |
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 |
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 |
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 |
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% |
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 |
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 |
Related Party Transactions (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Related Party Transactions [Abstract] | |
Related party transaction | $ 3 |
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 |
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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