Commitments and Contingencies

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Gathering, Processing and Transportation Agreements

As of December 31, 2024, the Company future minimum obligations under gathering, processing and transportation agreements are as follows:


(In millions)	Gathering and Transportation		Gas Processing		Volume Delivery		Water Delivery
Year Ending December 31,
2025	$	148	$	96	$	24	$	7
2026	203		84		22		7
2027	208		80		17		7
2028	168		72		13		6
2029	159		26		—		6
Thereafter	943		59		—		5
Total	$	1,829	$	417	$	76	$	38

Gathering, Processing and Transportation Commitments

The Company has entered into certain gathering and transportation agreements with various pipeline carriers. Under certain of these agreements, the Company is obligated to ship minimum daily quantities, or pay for any deficiencies at a specified rate. The Company’s forecasted production to be shipped on these pipelines is expected to exceed minimum daily quantities provided in the agreements. The Company is also obligated under certain of these arrangements to pay a demand charge for firm capacity rights on pipeline systems regardless of the amount of pipeline capacity utilized by the Company. If the Company does not utilize the capacity, it can release it to others, thus reducing its potential liability.

Gas Processing Commitments

The Company has entered into certain gas processing agreements. Under certain of these agreements, the Company is obligated to process minimum daily quantities, or pay for any deficiencies at a specified rate. The Company’s forecasted production to be processed under most of these agreements is expected to exceed minimum daily quantities provided in the agreements.

Volume Delivery Commitments

The Company also has minimum volume delivery commitments associated with agreements to reimburse connection costs to various pipelines. Under certain of these agreements, the Company is obligated to deliver minimum daily quantities, or pay for any deficiencies at a specified rate. The Company’s forecasted production to be delivered under most of these agreements is expected to exceed minimum daily quantities provided in the agreements.

Water Delivery Commitments

The Company has minimum volume water delivery commitments associated with a water services agreement that expires in 2030. The Company is obligated to deliver minimum daily quantities or pay for any deficiencies at a specified rate.

As of December 31, 2024, the Company had an accrued liability of $19 million associated with this commitment, representing the present value of estimated amounts payable due to insufficient forecasted delivery volumes.

Lease Commitments

The Company has operating leases for office space, surface use agreements, compressor services, electric hydraulic fracturing services, a finance lease for an oil gathering system agreement, and other leases. The leases have remaining terms ranging from one month to 21 years, including options to extend leases that the Company is reasonably certain to exercise. During the year ended December 31, 2024, the Company recognized operating lease cost and variable lease cost of $131 million and $245 million, respectively. During the year ended December 31, 2023, the Company recognized operating lease cost and variable lease cost of $127 million and $139 million, respectively.

Short-term leases. The Company leases drilling rigs, fracturing and other equipment under lease terms ranging from 30 days to one year. Lease cost of $387 million and $777 million was recognized on short-term leases during the year ended December 31, 2024 and 2023, respectively. Certain lease costs are capitalized and included in properties and equipment, net in the Consolidated Balance Sheet because they relate to drilling and completion activities, while other costs are expensed because they relate to production and administrative activities.

As of December 31, 2024, the Company’s future undiscounted minimum cash payment obligations for its operating lease liabilities are as follows:


(In millions)	Amount
Year Ending December 31,
2025	$	124
2026	63
2027	28
2028	20
2029	15
Thereafter	36
Total undiscounted future lease payments	286
Present value adjustment	(26)
Net operating lease liabilities	$	260

As of December 31, 2024, the Company’s future undiscounted minimum cash payment obligation for its financing lease liability is $7 million for the year ending December 31, 2025.

Supplemental cash flow information related to leases was as follows:


	Year Ended December 31,
(In millions)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	137	$	132
Financing cash flows from financing leases	$	5	$	6

Information regarding the weighted-average remaining lease term and the weighted-average discount rate for operating and financing leases is summarized below:


	December 31,
	2024		2023
Weighted-average remaining lease term (in years)
Operating leases	4.1		4.5
Financing leases	0.7		1.7
Weighted-average discount rate
Operating leases	4.2	%	3.9	%
Financing leases	3.2	%	2.1	%

Legal Matters

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 then-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 lawsuit was subsequently transferred to the United States District Court for the Southern District of Texas, and the plaintiffs amended the complaint to add claims against Phillip L. Stalnaker, the Company’s then-Senior Vice President of Operations. The claims against Mr. Stalnaker, however, were later dismissed. The current amended complaint was filed on January 9, 2024 and alleges that the Company and the individual defendants made material misstatements and

omissions regarding the Company’s 2019 production growth guidance and the status of certain environmental matters in Pennsylvania, including alleged violations of the Pennsylvania Clean Streams Law and the remediation status of certain gas wells. The plaintiffs allege claims under Section 10(b) and Section 20 of the Exchange Act and seek monetary damages, interest, and attorney’s fees. The court has certified a class consisting of persons and entities who purchased the Company’s common stock between February 22, 2016 and June 12, 2020, inclusive. On April 29, 2024, the Company and plaintiffs reached a settlement in principle, with most of the settlement amount paid by the Company’s insurance carriers. The formal settlement agreement was filed with the court on June 3, 2024. On October 29, 2024, the court entered a final order accepting the settlement and dismissed the case with prejudice.

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 Messrs. Dinges and Schroeder and the Board of Directors of the Company serving at that time. Several additional derivative complaints were also filed and have been consolidated with the Ezell lawsuit, which was later transferred to the U.S. District Court for the Southern District of Texas. The most recent consolidated amended derivative complaint asserted claims 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, as well as claims based on alleged breaches of fiduciary duty and statutory contribution theories. On January 2, 2024, the court issued an order and final judgment granting the Company’s and defendants’ motion to dismiss and dismissing the consolidated derivative case in its entirety with prejudice. The derivative plaintiffs filed a notice of appeal regarding the final judgment on February 1, 2024, with oral arguments heard by the Fifth Court of Appeals on February 3, 2025. The Company intends to vigorously defend any further proceedings in the derivative lawsuit.

On March 21, 2024, one of the plaintiffs in the above consolidated derivative action served a demand letter on the Company’s current Board of Directors. The letter demanded that the Board of Directors pursue legal claims against various current and former officers and directors of the Company based on similar factual allegations as contained in the securities class action and consolidated shareholder derivative action described above. On June 11, 2024, the individual who made the demand filed a stockholder derivative lawsuit styled Fischer v. Dinges et. al. (U.S. District Court, Southern District of Texas). The Board of Directors has formed a committee to advise it in addressing each of the demands and the lawsuit.

Other Legal Matters

The Company is a defendant in various other legal proceedings arising in the normal course of business. 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. All known liabilities for legal matters are accrued when management determines they are probable and the potential loss is estimable. 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 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.