Coterra Energy beats profit estimates on strong output, higher gas prices

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(Reuters) -Coterra Energy beat Wall Street estimates for second-quarter profit on Monday, as higher production and a rebound in U.S. natural gas prices offset weaker oil prices.

Shares of the company rose 1.3% in after-hours trading.

The Houston-based shale producer saw increased output across the Permian and Anadarko basins, with total production rising 17% to 783,900 barrels of oil equivalent per day (boepd) in the quarter.

While gains from production helped lift results, they were partially offset by weaker crude prices, with the average benchmark Brent crude price falling over 20% from a year earlier amid U.S. tariffs, weak global demand and increased supply from OPEC+ producers.

Coterra’s average realized price for oil — the price it received for each barrel produced — fell to $62.80 per barrel, from $79.37 per barrel last year.

Meanwhile, a rise in U.S. natural gas prices helped cushion the impact of weak oil prices. The company’s average realized prices for natural gas jumped over 74% to $2.20 per thousand cubic feet (Mcf) in the second quarter.

Coterra also announced a new supply agreement to deliver 50 million cubic feet of natural gas per day to the CPV Basin Ranch Energy Center — a proposed 1,350 megawatt combined-cycle natural gas power plant — under a seven-year deal beginning in 2028.

The facility is being built in the Permian Basin, and the deal marks Coterra’s first supply deal in the top U.S. oil patch, as the company looks capitalize on growing demand for natural gas.

Coterra posted an adjusted profit of 48 cents per share for the three months ended June 30, compared with analysts’ estimates of 45 cents per share, according to data compiled by LSEG.

(Reporting by Vallari Srivastava in Bengaluru; Editing by Tasim Zahid)