4. Coterra Energy Inc. (NYSE:CTRA)
Number of Hedge Fund Holders: 39
Cramer likes Coterra Energy Inc. (NYSE:CTRA) and expressed faith in the company’s ability to tackle any environment.
“I still very much like Coterra Energy, currently the only energy holding in my Charitable Trust… This is another exploration production play, although it’s more balanced between oil and gas. In fact, after a pair of acquisitions announced earlier this month, Coterra’s revenue mix will tip a bit more in favor of oil. Next year, we like to say it’s more oily, less gassy. It does happen to have the lowest cost natural gas of any company in our country and that’s because of the legacy of the old Cabot Oil & Gas which created Coterra when it merged with Cimarex and rebranded the combined company.
I like Coterra Energy because it’s one of the shrewdest operators in the industry. I trust them to handle whatever environment we already have, making it a great long-term holding. When reported late last month, Coterra announced that they’d signed three new liquified natural gas supply agreements to sell a total of 200 million cubic feet per day, indexed to international price points.
Now that’s huge because international price points are much, much higher than domestic ones. The actual sales won’t take place until 2027, 2028. That was a bummer to me, but… Look, they’re gonna unlock a lot of demand and I think it’s going to, it gives it a great, great glide path for the next couple years. When we spoke to Coterra’s CEO Tom Jorden a couple weeks ago, he told us that ‘there’s more of that to do’ and you know what that meant. That meant be patient, he’s gonna do some more deals but no deals that aren’t accretive.”
Coterra (NYSE:CTRA) is an independent oil and gas company engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids across the United States. In the third quarter, it made significant progress in its natural gas business by signing three new long-term agreements to sell a total of 200 MMcfpd (million cubic feet per day) of natural gas.
These sales are set to begin in 2027 and 2028. The natural gas from these deals will be sourced from the company’s existing production in the Permian Basin, Anadarko Basin, and Marcellus Shale. These new contracts are a key part of the company’s ongoing efforts to diversify its natural gas marketing strategy, providing exposure to international LNG pricing in European and Asian markets.
Additionally, on November 13, Coterra (NYSE:CTRA) announced it reached two separate definitive agreements to acquire assets from Franklin Mountain Energy and Avant Natural Resources, along with its affiliates, for a total of $3.95 billion. Upon completion of these acquisitions, the company’s net locations in New Mexico and the Permian Basin are expected to increase by approximately 75% and 25%, respectively.
The company also noted that these assets will contribute substantial oil volumes in 2025, boosting its production by about 60,000 to 70,000 barrels of oil equivalent per day. The transactions are anticipated to close in the first quarter of 2025.
