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Acquisitions
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Franklin Mountain Energy (“FME”) Acquisition

On January 27, 2025, the Company closed on its acquisition of all of the issued and outstanding equity ownership interests of a group of privately owned oil and gas exploration and production companies with assets and operations in the Delaware Basin of New Mexico (the “FME Interests”) for total consideration of $2.5 billion, which included $1.7 billion in cash and the issuance of 28,190,682 shares of the Company’s common stock valued at $785 million based on the closing price of the Company’s common stock on the closing date.
Preliminary Purchase Price Allocation
The transaction was accounted for using the acquisition method of accounting. Under the acquisition method of accounting, the assets and liabilities of the FME Interests were recorded at their respective fair values as of the effective closing date of the acquisition. The purchase price allocation is substantially complete; however, management continues to refine the preliminary valuation of certain assets acquired and liabilities assumed, and may adjust the allocation in subsequent periods. Determining the fair value of the assets and liabilities of the FME Interests requires judgment and certain assumptions to be made. The most significant fair value estimates relate to the valuation of the oil and gas properties and gathering and pipeline systems. Oil and gas properties and gathering and pipeline systems 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.
The following table represents the preliminary allocation of the total purchase price of the FME Interests to the identifiable assets acquired and liabilities assumed based on the fair values as of the closing date of the acquisition:
(In millions, except shares and share price)Preliminary Purchase Price Allocation
Consideration:
Coterra common stock issued in exchange for FME equity interests28,190,682 
Coterra common stock closing price on January 27, 2025$27.83 
Total value of Coterra common stock issued$785 
Cash consideration (1) (2)
1,733 
Total consideration$2,518 
Assets acquired:
Current assets$178 
Proved oil and gas properties1,833 
Unproved oil and gas properties590 
Gathering and pipeline systems172 
Other assets6 
Total assets acquired$2,779 
Liabilities assumed:
Current liabilities$239 
Asset retirement obligations
13 
Other liabilities9 
Total liabilities assumed$261 
Net assets acquired$2,518 
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(1)Cash consideration included the release of escrow funds in the amount of $107 million. These funds were included in restricted cash in the Condensed Consolidated Balance Sheet as of December 31, 2024.
(2)As of June 30, 2025, cash consideration of $16 million remains in escrow and is included in restricted cash and accounts payable on the Company’s Condensed Consolidated Balance Sheet.
FME Post-Acquisition Operating Results
The FME Interests contributed the following to the Company’s consolidated operating results:
(In millions)January 28, 2025 through
June 30, 2025
Revenue$384 
Net income$145 
Avant Acquisition

On January 17, 2025, the Company closed on the acquisition of certain interests in oil and gas properties located in the Delaware Basin in New Mexico from certain privately owned sellers for total cash consideration of $1.5 billion (the “Avant assets”).
Preliminary Purchase Price Allocation
The transaction was accounted for using the acquisition method of accounting. Under the acquisition method of accounting, the assets and liabilities acquired in the Avant assets acquisition were recorded at their respective fair values as of
the closing date of the acquisition. The purchase price allocation is substantially complete; however, management continues to refine the preliminary valuation of certain assets acquired and liabilities assumed, and may adjust the allocation in subsequent periods. Determining the fair value of the assets and liabilities of the Avant assets requires judgment and certain assumptions to be made. The most significant fair value estimates relate to the valuation of the oil and gas properties and gathering and pipeline systems. Oil and gas properties and gathering and pipeline systems 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.
The following table represents the preliminary allocation of the total purchase price of the Avant assets to the identifiable assets acquired and liabilities assumed based on the fair values as of the closing date of the acquisition:
(In millions)Preliminary Purchase Price Allocation
Consideration:
Cash consideration (1)
$1,518 
Total consideration$1,518 
Assets acquired:
Current assets$34 
Proved oil and gas properties640 
Unproved oil and gas properties696 
Gathering and pipeline systems161 
Other assets1 
Total assets acquired$1,532 
Liabilities assumed:
Current liabilities$3 
Asset retirement obligations
6 
Other liabilities5 
Total liabilities assumed$14 
Net assets acquired$1,518 
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(1)Cash consideration included the release of escrow funds in the amount of $109 million. These funds were included in restricted cash in the Condensed Consolidated Balance Sheet as of December 31, 2024.
Avant Post-Acquisition Operating Results
The Avant assets contributed the following to the Company’s consolidated operating results:
(In millions)
January 18, 2025 through
June 30, 2025
Revenue$118 
Net income$30 
Combined Unaudited Pro Forma Financial Information
The results of operations of the FME Interests and Avant assets have been included in the Company’s condensed consolidated financial statements since the closing date of the acquisitions. The following supplemental pro forma financial information for the six months ended June 30, 2025 and 2024 have been prepared to give effect to the acquisitions of the FME Interests and the Avant assets as if they had occurred on January 1, 2024. The information below reflects pro forma adjustments based on available information and certain assumptions that the Company 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 acquisitions or any estimated costs that have been or will be incurred by the Company to integrate the FME Interests and Avant assets.
The pro forma financial information is not necessarily indicative of the results that might have occurred had the transactions actually taken place on January 1, 2024 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 financial information because of normal production declines, changes in commodity prices, future acquisitions and divestitures, future development and exploration activities and other factors.
The following table represents the pro forma effect on the Company of the FME and Avant acquisitions as if they had occurred on January 1, 2024:
Three Months Ended
June 30,
Six Months Ended
June 30,
(In millions)
202420252024
Pro forma revenue$1,595 $3,961 $3,308 
Pro forma net income$307 $1,058 $738 
Other Information
In connection with the FME and Avant acquisitions, the Company recognized $14 million of transaction costs for the six months ended June 30, 2025. These costs are primarily related to integration costs, advisory and legal fees and are included in G&A expense in the condensed consolidated financial statements.