Coterra Energy (NYSE:CTRA) Inc. has entered into an underwriting agreement with J.P. Morgan Securities LLC, PNC Capital Markets LLC, and TD Securities (USA) LLC for a public offering of senior notes totaling $1.5 billion. The transaction includes $750 million of 5.40% Senior Notes due 2035 and an equal amount in 5.90% Senior Notes due 2055. According to InvestingPro data, the company currently operates with a moderate debt level, with a debt-to-equity ratio of just 0.18.
The Houston-based company, operating in the crude petroleum and natural gas industry, confirmed the offering under its existing shelf registration statement. The deal, expected to close on December 17, 2024, is subject to customary closing conditions. With a market capitalization of $18.82 billion and a healthy current ratio of 1.61, InvestingPro analysis indicates the company's liquid assets comfortably exceed its short-term obligations.
The underwriters, well-established financial institutions, have previously engaged in various services for Coterra Energy, including commercial banking, investment banking, and advisory services. Some underwriters also participate as lenders in the company's revolving credit facility.
Coterra Energy, formerly known as Cabot (NYSE:CBT) Oil & Gas Corp, is incorporated in Delaware and has its principal executive offices in Houston, Texas. The company's common stock is listed on the New York Stock Exchange under the ticker symbol CTRA.
In other recent news, Coterra Energy has seen several significant developments. The company's recent acquisitions of assets from Franklin Mountain Energy and Avant Natural Resources for a total of $3.95 billion have been met with favorable responses from analysts. Piper Sandler, Truist Securities, and Wolfe Research have all increased their price targets for Coterra, citing the strategic value of these acquisitions. However, JPMorgan has slightly lowered its price target, maintaining an overweight rating on the stock.
Coterra's Q3 performance was robust, reporting a net income of $252 million and total production averaging 669 thousand barrels of oil equivalent per day, surpassing their guidance. The company also demonstrated increased drilling efficiency and frac pumping hours, indicating a commitment to high-quality projects and disciplined capital allocation.
Coterra has also emphasized its dedication to shareholders, returning 96% of free cash flow via dividends and share repurchases. Furthermore, the company has established new LNG sales agreements to diversify its revenue.
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