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U.S oil and gas producer Coterra Energy on Nov. 3 reported a near six-fold rise in adjusted quarterly profit for its legacy Cabot operation, helped by higher natural gas prices.
The results are the first under the new name, Coterra, after completion of the merger of Cabot Oil & Gas and Cimarex Energy. However, the third-quarter results represented legacy Cabot and excluded amounts related to legacy Cimarex, the company said.
Average sales price of natural gas, including hedges, rose 69% to were $2.65 per Mcf.
U.S. natural gas prices soared more than 60% in the third quarter as surging global rates keep demand for U.S. LNG exports elevated, with more spikes expected heading into the winter.
The company's gas production from legacy Cabot assets stood at 2.36 Bcfe/d, down 1.7% from a year earlier, while legacy Cimarex’s production in the quarter was 251,200 boe/d.
Coterra forecast current quarter total equivalent production, which fully incorporates legacy Cimarex operations, to average between 665,000 and 690,000 boe/d.
Coterra also said its board approved the previously announced 14% increase to its annual base dividend to 50 cents per share and an acceleration of its first variable dividend by one quarter. The approved base plus variable quarterly dividend equals 30 cents per share.
Investors have been rewarding companies that have focused on returning cash to shareholders through buybacks and dividends rather than on growth, such as Pioneer Natural Resources Co. and Devon Energy Corp., which previously announced plans to pay variable dividend.
Adjusted net income rose to $207 million, or 52 cents per share, for legacy Cabot assets in the three months ended Sept. 30, from $37.3 million, or 9 cents per share last year.
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