Coterra Energy Inc., Houston, will run nine rigs in the Permian basin during the second half of this year, two more than the number executives had planned to in early May.
Speaking at the JPMorgan Energy, Power, Renewables & Mining Conference in New York, Coterra chairman, president and chief executive officer Tom Jorden said June 24 that going with nine rigs reflects his team’s confidence in the stability of the oil market, which had looked like it was struggling this spring.
“I’ve seen these periods in my career where when oil markets wobble,” Jorden said. “They don’t glide gently down to their low. They kind of wobble for a while and then they suddenly collapse. So we were looking at the possibility of a collapse. We’re feeling a little better about that now.”
When reporting Coterra’s first-quarter earnings last month, Jorden and other executives had said they would trim their Permian rig count to seven from the 10 they had envisioned at the beginning of 2025. That, they said, would lower Coterra’s capital spending for the year in the Permian by about $120 million to roughly $1.45 billion.
At the JPMorgan gathering, Jorden didn’t update that dollar figure but did note that running nine rigs in the Permian—where Coterra produced 303,000 boe/d (68% liquids) in the first quarter—rather than seven is likely to mean that its capex will run near the high end of the company’s revised full-year range of $2.0-2.3 billion.
“Right now, we’ve decided we’re just going to steady as she goes,” Jorden said.
Jorden added that Coterra is positioned to “make a really nice return” with the price of a barrel of West Texas Intermediate between $60 and $65 and still make money with that price closer to $50. But he also noted that only a few of the company’s rigs are being operated under long contracts, giving his team the flexibility to adjust down at little cost.
Shares of Coterra (Ticker: CTRA) were changing hands at $26.81 during afternoon trading June 24, up slightly on the day. Over the past 6 months, they have risen nearly 10%, growing the company’s market capitalization to nearly $20.5 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.