Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM			10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission file number 1-10447



COTERRA ENERGY INC.
(Exact name of registrant as specified in its charter)


Delaware						04-3072771
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

Three Memorial City Plaza

840 Gessner Road, Suite 1400, Houston, Texas 77024

(Address of principal executive offices, including ZIP code)

(281) 589-4600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	CTRA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 4, 2023, there were 755,045,540 shares of Common Stock, Par Value $0.10 Per Share, outstanding.

Table of Contents

COTERRA ENERGY INC.

TABLE OF CONTENTS


		Page
Part I. Financial Information

Item 1.	Financial Statements

Condensed Consolidated Balance Sheet (Unaudited) at June 30, 2023 and December 31, 2022		3

Condensed Consolidated Statement of Operations (Unaudited) for the Three and Six Months Ended June 30, 2023 and 2022		4



Condensed Consolidated Statement of Cash Flows (Unaudited) for the Six Months Ended June 30, 2023 and 2022		5

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) for the Three and Six Months Ended June 30, 2023 and 2022		6

Notes to the Condensed Consolidated Financial Statements (Unaudited)		7



Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34

Item 4.	Controls and Procedures	36

Part II. Other Information

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 5.	Other Information	37

Item 6.	Exhibits	40

Signatures		42

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

COTERRA ENERGY INC.

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)


(In millions, except per share amounts)	June 30, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	841	$	673
Restricted cash	9		10
Accounts receivable, net	604		1,221
Income taxes receivable	18		89
Inventories	65		63
Derivative instruments	88		146
Other current assets	15		9
Total current assets	1,640		2,211
Properties and equipment, net (Successful efforts method)	17,801		17,479



Other assets	438		464
	$	19,879	$	20,154

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	626	$	844

Accrued liabilities	294		328

Interest payable	21		21

Total current liabilities	941		1,193
Long-term debt, net	2,171		2,181

Deferred income taxes	3,367		3,339
Asset retirement obligations	277		271


Other liabilities	456		500
Total liabilities	7,212		7,484

Commitments and contingencies

Cimarex redeemable preferred stock	8		11

Stockholders' equity
Common stock:
Authorized — 1,800 shares of $0.10 par value in 2023 and 2022
Issued — 755 shares and 768 shares in 2023 and 2022, respectively	76		77
Additional paid-in capital	7,639		7,933
Retained earnings	4,931		4,636
Accumulated other comprehensive income	13		13


Total stockholders' equity	12,659		12,659
	$	19,879	$	20,154

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COTERRA ENERGY INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share amounts)	2023		2022		2023		2022
OPERATING REVENUES
Natural gas	$	436	$	1,468	$	1,258	$	2,579
Oil	626		876		1,241		1,575
NGL	129		280		306		525
Gain (loss) on derivative instruments	(12)		(66)		126		(457)
Other	6		14		31		29
	1,185		2,572		2,962		4,251
OPERATING EXPENSES
Direct operations	130		116		264		216
Transportation, processing and gathering	258		238		494		471
Taxes other than income	63		98		149		174
Exploration	5		7		9		13
Depreciation, depletion and amortization	395		414		764		774

General and administrative	58		87		134		194
	909		960		1,814		1,842

Gain (loss) on sale of assets	—		(3)		5		(1)
INCOME FROM OPERATIONS	276		1,609		1,153		2,408

Interest expense	16		22		33		43
Interest income	(10)		(1)		(22)		(1)

Income before income taxes	270		1,588		1,142		2,366
Income tax expense	61		359		256		529
NET INCOME	$	209	$	1,229	$	886	$	1,837





Earnings per share
Basic	$	0.28	$	1.53	$	1.16	$	2.28
Diluted	$	0.27	$	1.52	$	1.16	$	2.27

Weighted-average common shares outstanding
Basic	755		803		760		806
Diluted	760		808		764		809

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COTERRA ENERGY INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)


	Six Months Ended June 30,
(In millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	886	$	1,837
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization	764		774

Deferred income tax expense	27		101
(Gain) loss on sale of assets	(5)		1

(Gain) loss on derivative instruments	(126)		457
Net cash received (paid) in settlement of derivative instruments	184		(464)


Amortization of debt premium and debt issuance costs	(10)		(19)

Stock-based compensation and other	24		38
Changes in assets and liabilities:
Accounts receivable, net	617		(489)
Income taxes	71		(200)
Inventories	(2)		(9)
Other current assets	(6)		(6)
Accounts payable and accrued liabilities	(336)		147
Interest payable	—		1
Other assets and liabilities	52		32

Net cash provided by operating activities	2,140		2,201

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for drilling, completion and other fixed asset additions	(1,075)		(741)
Capital expenditures for leasehold and property acquisitions	(6)		(4)

Proceeds from sale of assets	33		4



Net cash used in investing activities	(1,048)		(741)

CASH FLOWS FROM FINANCING ACTIVITIES


Repayments of finance leases	(3)		(3)
Common stock repurchases	(325)		(487)

Dividends paid	(588)		(940)

Cash received for stock option exercises	—		10
Cash paid for conversion of redeemable preferred stock	(1)		(10)
Tax withholding on vesting of stock awards	(1)		(7)
Capitalized debt issuance costs	(7)		—

Net cash used in financing activities	(925)		(1,437)

Net increase in cash, cash equivalents and restricted cash	167		23
Cash, cash equivalents and restricted cash, beginning of period	683		1,046
Cash, cash equivalents and restricted cash, end of period	$	850	$	1,069

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COTERRA ENERGY INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)


(In millions, except per share amounts)	Common Shares	Common Stock Par		Treasury Shares	Treasury Stock		Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Total
Balance at December 31, 2022	768	$	77	—	$	—	$	7,933	$	13	$	4,636	$	12,659
Net income	—	—		—	—		—		—		677		677


Stock amortization and vesting	—	—		—	—		13		—		—		13


Conversion of Cimarex redeemable preferred stock	—	—		—	—		3		—		—		3
Common stock repurchases	—	—		11	(271)		—		—		—		(271)
Common stock retirements	(11)	(1)		(11)	271		(270)		—		—		—

Cash dividends on common stock at $0.57 per share	—	—		—	—		—		—		(438)		(438)


Balance at March 31, 2023	757	$	76	—	$	—	$	7,679	$	13	$	4,875	$	12,643
Net income	—	—		—	—		—		—		209		209


Stock amortization and vesting	—	—		—	—		17		—		—		17



Common stock repurchases	—	—		2	(57)		—		—		—		(57)
Common stock retirements	(2)	—		(2)	57		(57)		—		—		—
Cash dividends on common stock at $0.20 per share	—	—		—	—		—		—		(153)		(153)


Balance at June 30, 2023	755	$	76	—	$	—	$	7,639	$	13	$	4,931	$	12,659


(In millions, except per share amounts)	Common Shares	Common Stock Par		Treasury Shares	Treasury Stock		Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Total
Balance at December 31, 2021	893	$	89	79	$	(1,826)	$	10,911	$	1	$	2,563	$	11,738
Net income	—	—		—	—		—		—		608		608
Exercise of stock options	—	—		—	—		6		—		—		6
Stock amortization and vesting	—	—		—	—		10		—		—		10


Common stock repurchases	—	—		8	(192)		—		—		—		(192)
Cash dividends:
Common stock at $0.56 per share	—	—		—	—		—		—		(455)		(455)
Preferred stock at $20.3125 per share	—	—		—	—		—		—		(1)		(1)
Other comprehensive income	—	—		—	—		—		4		—		4
Balance at March 31, 2022	893	$	89	87	$	(2,018)	$	10,927	$	5	$	2,715	$	11,718
Net income	—	—		—	—		—		—		1,229		1,229
Exercise of stock options	—	—		—	—		3		—		—		3
Stock amortization and vesting	—	—		—	—		18		—		—		18
Conversion of Cimarex redeemable preferred stock	1	—		—	—		28		—		—		28
Common stock repurchases	—	—		12	(321)		—		—		—		(321)
Cash dividends on common stock at $0.60 per share	—	—		—	—		—		—		(484)		(484)

Balance at June 30, 2022	894	$	89	99	$	(2,339)	$	10,976	$	5	$	3,460	$	12,191

The accompanying notes are an integral part of these condensed consolidated financial statements.

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COTERRA ENERGY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Financial Statement Presentation

During interim periods, Coterra Energy Inc. (the “Company”) follows the same accounting policies disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”) filed with the Securities and Exchange Commission (“SEC”), except for any new accounting pronouncements adopted during the period. The interim condensed consolidated financial statements are unaudited and should be read in conjunction with the notes to the consolidated financial statements and information presented in the Form 10-K. In management’s opinion, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair statement. The results for any interim period are not necessarily indicative of the results that may be expected for the entire year.

From time to time, we make certain reclassifications to prior year statements to conform with the current year presentation. These reclassifications have no impact on previously reported stockholders’ equity, net income or cash flows.

2. Properties and Equipment, Net

Properties and equipment, net are comprised of the following:


(In millions)	June 30, 2023		December 31, 2022
Proved oil and gas properties	$	18,353	$	17,085
Unproved oil and gas properties	4,881		5,150
Gathering and pipeline systems	507		450
Land, buildings and other equipment	194		183
Finance lease right-of-use asset	25		24
	23,960		22,892
Accumulated depreciation, depletion and amortization	(6,159)		(5,413)
	$	17,801	$	17,479

Capitalized Exploratory Well Costs

As of June 30, 2023, the Company did not have any projects with exploratory well costs capitalized for a period of greater than one year after drilling.

3. Debt and Credit Agreements

The following table includes a summary of the Company’s long-term debt:


(In millions)	June 30, 2023		December 31, 2022

3.65% weighted-average private placement senior notes	$	825	$	825
3.90% senior notes due May 15, 2027	750		750
4.375% senior notes due March 15, 2029	500		500
Revolving credit agreement	—		—
Total	2,075		2,075
Net premium	101		111
Unamortized debt issuance costs	(5)		(5)
Long-term debt	$	2,171	$	2,181

At June 30, 2023, the Company was in compliance with all financial and other covenants for its revolving credit agreement (as defined below), 3.65% weighted-average private placement senior notes (the “private placement senior notes”) and the 3.90% senior notes due May 15, 2027 and 4.375% senior notes due March 15, 2029 (the “senior notes”).

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Revolving Credit Agreement

On March 10, 2023, the Company entered into a revolving credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan”), and certain lenders and issuing banks party thereto. The aggregate revolving commitments under the Credit Agreement are $1.5 billion, with a discretionary swingline sub-facility of up to $100 million and a letter of credit sub-facility of up to $500 million. The Company may also increase the revolving commitments under the Credit Agreement by up to an additional $500 million subject to certain conditions and the agreement of the lenders providing commitments with respect to such increase.

Borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the Company’s option, either a term secured overnight financing rate (“SOFR”) plus a 0.10 percent credit spread adjustment for all tenors or a base rate, plus an interest rate margin which ranges from 0 to 75 basis points for base rate loans and 100 to 175 basis points for term SOFR loans based on the Company’s credit rating. The commitment fee on the unused available credit is calculated at annual rates ranging from 10 basis points to 27.5 basis points. The Credit Agreement matures on March 10, 2028. The maturity date can be extended for additional one-year periods on up to two occasions upon the agreement of the Company and lenders holding at least 50 percent of the commitments under the Credit Agreement.

The Credit Agreement contains customary covenants, including the maintenance of a maximum leverage ratio of no more than 3.0 to 1.0 as of the last day of any fiscal quarter until such time as the Company has no other debt in a principal amount in excess of $75 million outstanding that has a financial maintenance covenant based on a leverage ratio, at which time the Credit Agreement requires maintenance of a ratio of total debt to total capitalization of no more than 65 percent (with all calculations based on definitions contained in the Credit Agreement).

Concurrently with the Company’s entry into the Credit Agreement, the Company terminated its existing Second Amended and Restated Credit Agreement, dated as of April 22, 2019, with the lenders party thereto and JPMorgan, as administrative agent thereunder.

At June 30, 2023, the Company had no borrowings outstanding under its revolving credit agreement and unused commitments of $1.5 billion.

4. Derivative Instruments

As of June 30, 2023, the Company had the following outstanding financial commodity derivatives:



	2023
Natural Gas	Third Quarter		Fourth Quarter




Waha gas collars
Volume (MMBtu)	8,280,000		8,280,000
Weighted average floor ($/MMBtu)	$	3.03	$	3.03
Weighted average ceiling ($/MMBtu)	$	5.39	$	5.39

NYMEX collars
Volume (MMBtu)	32,200,000		29,150,000
Weighted average floor ($/MMBtu)	$	4.07	$	4.03
Weighted average ceiling ($/MMBtu)	$	6.78	$	6.61


	2023
Oil	Third Quarter		Fourth Quarter
WTI oil collars
Volume (MBbl)	920		920
Weighted average floor ($/Bbl)	$	65.00	$	65.00
Weighted average ceiling ($/Bbl)	$	89.66	$	89.66

WTI Midland oil basis swaps
Volume (MBbl)	920		920
Weighted average differential ($/Bbl)	$	1.01	$	1.01

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Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet


		Fair Values of Derivative Instruments
		Derivative Assets				Derivative Liabilities
(In millions)	Balance Sheet Location	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022

Commodity contracts	Derivative instruments (current)	$	88	$	146	$	—	$	—

Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet


(In millions)	June 30, 2023		December 31, 2022
Derivative assets
Gross amounts of recognized assets	$	89	$	147
Gross amounts offset in the condensed consolidated balance sheet	(1)		(1)
Net amounts of assets presented in the condensed consolidated balance sheet	88		146
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	1		2
Net amount	$	89	$	148

Derivative liabilities
Gross amounts of recognized liabilities	$	1	$	1
Gross amounts offset in the condensed consolidated balance sheet	(1)		(1)
Net amounts of liabilities presented in the condensed consolidated balance sheet	—		—
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	—		1
Net amount	$	—	$	1

Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Cash received (paid) on settlement of derivative instruments
Gas contracts	$	82	$	(161)	$	181	$	(203)
Oil contracts	2		(132)		3		(261)
Non-cash gain (loss) on derivative instruments
Gas contracts	(96)		133		(54)		(49)
Oil contracts	—		94		(4)		56
	$	(12)	$	(66)	$	126	$	(457)

5. Fair Value Measurements

The Company follows the authoritative guidance for measuring fair value of assets and liabilities in its financial statements. For further information regarding the fair value hierarchy, refer to Note 1 of the Notes to the Consolidated Financial Statements in the Form 10-K.

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Financial Assets and Liabilities

The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at June 30, 2023
Assets
Deferred compensation plan	$	47	$	—	$	—	$	47
Derivative instruments	—		—		89		89
	$	47	$	—	$	89	$	136
Liabilities
Deferred compensation plan	$	47	$	—	$	—	$	47
Derivative instruments	—		—		1		1
	$	47	$	—	$	1	$	48


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2022
Assets
Deferred compensation plan	$	43	$	—	$	—	$	43
Derivative instruments	—		—		147		147
	$	43	$	—	$	147	$	190
Liabilities
Deferred compensation plan	$	55	$	—	$	—	$	55
Derivative instruments	—		—		1		1
	$	55	$	—	$	1	$	56

The Company’s investments associated with its deferred compensation plans consist of mutual funds and deferred shares of the Company’s common stock that are publicly traded and for which market prices are readily available. During the second quarter of 2023, all shares of the Company’s common stock held in the deferred compensation plan were sold and invested in other investment options.

The derivative instruments were measured based on quotes from the Company’s counterparties or internal models. Such quotes and models have been derived using an income approach that considers various inputs, including current market and contractual prices for the underlying instruments, quoted forward commodity prices, basis differentials, volatility factors and interest rates for a similar length of time as the derivative contract term as applicable. Estimates are derived from, or verified using, relevant NYMEX futures contracts, and/or are compared to multiple quotes obtained from counterparties. The determination of the fair values presented above also incorporates a credit adjustment for non-performance risk. The Company measured the non-performance risk of its counterparties by reviewing credit default swap spreads for the various financial institutions with which it has derivative contracts while non-performance risk of the Company is evaluated using market credit spreads provided by several of the Company’s banks. The Company has not incurred any losses related to non-performance risk of its counterparties and does not anticipate any material impact on its financial results due to non-performance by third parties.

The most significant unobservable inputs relative to the Company’s Level 3 derivative contracts are basis differentials and volatility factors. An increase (decrease) in these unobservable inputs would result in an increase (decrease) in fair value, respectively. The Company does not have access to the specific assumptions used in its counterparties’ valuation models. Consequently, additional disclosures regarding significant Level 3 unobservable inputs were not provided.

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The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy:


	Six Months Ended June 30,
(In millions)	2023		2022
Balance at beginning of period	$	146	$	(152)
Total gain (loss) included in earnings	126		(450)
Settlement (gain) loss	(184)		457
Transfers in and/or out of Level 3	—		—
Balance at end of period	$	88	$	(145)

Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period	$	42	$	(112)

Non-Financial Assets and Liabilities

The Company discloses or recognizes its non-financial assets and liabilities, such as impairments of oil and gas properties or acquisitions, at fair value on a nonrecurring basis. As none of the Company’s other non-financial assets and liabilities were measured at fair value as of June 30, 2023, additional disclosures were not required.

The estimated fair value of the Company’s asset retirement obligations at inception is determined by utilizing the income approach by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state to the undiscounted expected abandonment cash flows. Given the unobservable nature of the inputs, the measurement of the asset retirement obligations was classified as Level 3 in the fair value hierarchy.

Fair Value of Other Financial Instruments

The estimated fair value of other financial instruments is the amount at which the instruments could be exchanged currently between willing parties. The carrying amounts reported in the Condensed Consolidated Balance Sheet for cash and cash equivalents and restricted cash approximate fair value, due to the short-term maturities of these instruments. Cash and cash equivalents and restricted cash are classified as Level 1 in the fair value hierarchy and the remaining financial instruments are classified as Level 2.

The fair value of the Company’s senior notes is based on quoted market prices, which is classified as Level 1 in the fair value hierarchy. The Company uses available market data and valuation methodologies to estimate the fair value of its private placement senior notes. The fair value of the private placement senior notes is the estimated amount the Company would have to pay a third party to assume the debt, including a credit spread for the difference between the issue rate and the period end market rate. The credit spread is the Company’s default or repayment risk. The credit spread (premium or discount) is determined by comparing the Company’s senior notes and revolving credit agreement to new issuances (secured and unsecured) and secondary trades of similar size and credit statistics for both public and private debt. The fair value of the private placement senior notes is based on interest rates currently available to the Company. The Company’s private placement senior notes are valued using an income approach and are classified as Level 3 in the fair value hierarchy.

The carrying amount and estimated fair value of debt is as follows:


	June 30, 2023				December 31, 2022
(In millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	2,171	$	1,962	$	2,181	$	1,955

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6. Asset Retirement Obligations

Activity related to the Company’s asset retirement obligations is as follows:


(In millions)	Six Months Ended June 30, 2023
Balance at beginning of period	$	277
Liabilities incurred	3
Liabilities settled	1

Liabilities divested	(4)

Accretion expense	5
Balance at end of period	282
Less: current asset retirement obligations	(5)
Noncurrent asset retirement obligations	$	277

7. Commitments and Contingencies

Contractual Obligations

The Company has various contractual obligations in the normal course of its operations. There have been no material changes to the Company’s contractual obligations described under “Transportation, Processing and Gathering Agreements” and “Lease Commitments” as disclosed in Note 8 of the Notes to Consolidated Financial Statements in the Form 10-K.

Legal Matters

Securities Litigation

In October 2020, a class action lawsuit styled Delaware County Emp. Ret. Sys. v. Cabot Oil and Gas Corp., et. al. (U.S. District Court, Middle District of Pennsylvania), was filed against the Company, Dan O. Dinges, its then Chief Executive Officer, and Scott C. Schroeder, its then Chief Financial Officer, alleging that the Company made misleading statements in its periodic filings with the SEC in violation of Section 10(b) and Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The plaintiffs allege misstatements in the Company’s public filings and disclosures over a number of years relating to its potential liability for alleged environmental violations in Pennsylvania. The plaintiffs allege that such misstatements caused a decline in the price of the Company’s common stock when it disclosed in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 two notices of violations from the Pennsylvania Department of Environmental Protection and an additional decline when it disclosed on June 15, 2020 the criminal charges brought by the Office of the Attorney General of the Commonwealth of Pennsylvania related to alleged violations of the Pennsylvania Clean Streams Law, which prohibits discharge of industrial wastes. The court appointed Delaware County Employees Retirement System to represent the purported class on February 3, 2021. In April 2021, the complaint was amended to include Phillip L. Stalnaker, the Company’s then Senior Vice President of Operations, as a defendant. The plaintiffs seek monetary damages, interest and attorney’s fees.

Also in October 2020, a stockholder derivative action styled Ezell v. Dinges, et. al. (U.S. District Court, Middle District of Pennsylvania) was filed against the Company, Messrs. Dinges and Schroeder and the Board of Directors of the Company serving at that time, for alleged securities violations under Section 10(b) and Section 21D of the Exchange Act arising from the same alleged misleading statements that form the basis of the class action lawsuit described above. In addition to the Exchange Act claims, the derivative actions also allege claims based on breaches of fiduciary duty and statutory contribution theories. In December 2020, the Ezell case was consolidated with a second derivative case filed in the U.S. District Court, Middle District of Pennsylvania with similar allegations. In January 2021, a third derivative case was filed in the U.S. District Court, Middle District of Pennsylvania with substantially similar allegations and it too was consolidated with the Ezell case in February 2021.

On February 25, 2021, the Company filed a motion to transfer the class action lawsuit to the U.S. District Court for the Southern District of Texas, in Houston, Texas, where its headquarters are located. On June 11, 2021, the Company filed a motion to dismiss the class action lawsuit on the basis that the plaintiffs’ allegations do not meet the requirements for pleading a claim under Section 10(b) or Section 20 of the Exchange Act. On June 22, 2021, the motion to transfer the class action lawsuit to the Southern District of Texas was granted. Pursuant to the prior agreement of the parties, the consolidated derivative case discussed in the preceding paragraph was also transferred to the Southern District of Texas on July 12, 2021. Subsequently, an additional stockholder derivative action styled Treppel Family Trust U/A 08/18/18 Lawrence A. Treppel and Geri D. Treppel for the benefit of Geri D. Treppel and Larry A. Treppel v. Dinges, et al. (U.S. District Court, Southern District of Texas,

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Houston Division), asserting substantially similar Delaware common law claims as in the existing derivative cases, was filed in the Southern District of Texas and consolidated with the existing consolidated derivative cases. On January 12, 2022, the U.S. District Court for the Southern District of Texas granted the Company’s motion to dismiss the class action lawsuit but allowed the plaintiffs to file an amended complaint. The class action plaintiffs filed their amended complaint on February 11, 2022. The Company filed a motion to dismiss the amended class action complaint on March 10, 2022. On August 10, 2022, the U.S. District Court for the Southern District of Texas granted in part and denied in part the Company’s motion to dismiss the amended class action complaint, dismissing certain claims with prejudice but allowing certain claims to proceed. The Company filed its answer to the amended class action complaint on September 14, 2022. The class action case is presently in the discovery and class certification stage. With respect to the consolidated derivative cases, on April 1, 2022, the U.S. District Court for the Southern District of Texas granted the Company’s motion to dismiss such consolidated derivative cases but allowed the plaintiffs to file an amended complaint. The derivative plaintiffs filed their third amended complaint on May 16, 2022. The Company filed its motion to dismiss such amended complaint on June 24, 2022, and filed its reply in support of such motion to dismiss on September 4, 2022. On March 27, 2023, the U.S. District Court for the Southern District of Texas denied the motion to dismiss the derivative case as moot and ordered the Company to file a renewed motion to dismiss addressing certain issues regarding the impact of the class action litigation on the derivative case. The Company filed its renewed motion to dismiss on April 28, 2023, which is now fully briefed and pending for decision. The Company intends to vigorously defend the class action and derivative lawsuits.

In November 2020, the Company received a stockholder demand for inspection of books and records under Section 220 of the General Corporation Law of the State of Delaware (“Section 220 Demand”). The Section 220 Demand seeks broad categories of documents reviewed by the Board of Directors and minutes of meetings of the Board of Directors pertaining to alleged environmental violations in Pennsylvania, as well as documents relating to any board of directors conflicts of interest, dating from January 1, 2015 to the present. The Company also received three other similar requests from other stockholders in February and June 2021. On May 17, 2021, the Company was served with a complaint filed in the Court of Chancery of the State of Delaware by the stockholder making the February 2021 Section 220 Demand to compel the production of books and records requested. After making an agreed books and records production, the Section 220 complaint was voluntarily dismissed effective September 21, 2021. The Company also provided substantially the same books and records production in response to the other three Section 220 requests described above. It is possible that one or more additional stockholder suits could be filed pertaining to the subject matter of the Section 220 Demands and the class and derivative actions described above.

Other Legal Matters

The Company is a defendant in various other legal proceedings arising in the normal course of business. All known liabilities are accrued when management determines they are probable based on its best estimate of the potential loss. While the outcome and impact of these legal proceedings on the Company cannot be predicted with certainty, management believes that the resolution of these proceedings will not have a material effect on the Company’s financial position, results of operations or cash flows.

Contingency Reserves

When deemed necessary, the Company establishes reserves for certain legal proceedings. The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible that the Company could incur additional losses with respect to those matters for which reserves have been established. The Company believes that any such amount above the amounts accrued would not be material to the Condensed Consolidated Financial Statements. Future changes in facts and circumstances not currently known or foreseeable could result in the actual liability exceeding the estimated ranges of loss and amounts accrued.

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8. Revenue Recognition

Disaggregation of Revenue

The following table presents revenues from contracts with customers disaggregated by product:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Natural gas	$	436	$	1,468	$	1,258	$	2,579
Oil	626		876		1,241		1,575
NGL	129		280		306		525
Other	6		14		31		29
	$	1,197	$	2,638	$	2,836	$	4,708

All of the Company’s revenues from contracts with customers represent products transferred at a point in time as control is transferred to the customer and generated in the U.S.

Transaction Price Allocated to Remaining Performance Obligations

As of June 30, 2023, the Company had $6.9 billion of unsatisfied performance obligations related to natural gas sales that have a fixed pricing component and a contract term greater than one year. The Company expects to recognize these obligations over the next 16 years.

Contract Balances

Receivables from contracts with customers are recorded when the right to consideration becomes unconditional, generally when control of the product has been transferred to the customer. Receivables from contracts with customers were $434 million and $1.1 billion as of June 30, 2023 and December 31, 2022, respectively, and are reported in accounts receivable, net in the Condensed Consolidated Balance Sheet. As of June 30, 2023, the Company has no assets or liabilities related to its revenue contracts, including no upfront payments or rights to deficiency payments.

9. Capital Stock

Dividends

Common Stock

In February 2023, the Company’s Board of Directors approved an increase in the base quarterly dividend from $0.15 per share to $0.20 per share.

The following table summarizes the Company’s dividends on its common stock for each quarter in 2023 and 2022:


	Rate per share
	Fixed		Variable		Total		Total Dividends (In millions)
2023:
First quarter	$	0.20	$	0.37	$	0.57	$	438
Second quarter	0.20		—		0.20		153


Total year-to-date	$	0.40	$	0.37	$	0.77	$	591
2022:
First quarter	$	0.15	$	0.41	$	0.56	$	455
Second quarter	0.15		0.45		0.60		484


Total year-to-date	$	0.30	$	0.86	$	1.16	$	939

Treasury Stock

In February 2023, the Company’s Board of Directors approved a new share repurchase program which authorizes the purchase of up to $2.0 billion of the Company’s common stock.

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During the six months ended June 30, 2023, the Company repurchased and retired 13 million shares for $328 million under its new repurchase program. As of June 30, 2023, the Company had $1.7 billion remaining under its current share repurchase program. During the six months ended June 30, 2022, the Company repurchased 20 million shares for $513 million under its previous share repurchase program.

10. Stock-Based Compensation

General

Stock-based compensation expense of awards issued under the Company’s incentive plans, and the income tax benefit of awards vested and exercised, are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022

Restricted stock units - employees and non-employee directors	$	7	$	11	$	14	$	19
Restricted stock awards	4		5		8		10
Performance share awards	3		4		8		10
Deferred performance shares	(7)		1		(7)		5

Total stock-based compensation expense	$	7	$	21	$	23	$	44
Income tax benefit	$	1	$	—	$	2	$	5

Refer to Note 13 of the Notes to the Consolidated Financial Statements in the Form 10-K for further description of the various types of stock-based compensation awards and the applicable award terms.

On May 4, 2023, the Company’s stockholders approved the Coterra Energy Inc. 2023 Equity Incentive Plan (the “2023 Plan”) which replaced the existing Cabot Oil & Gas Corporation 2014 Incentive Plan (the “Prior Cabot Plan”) and the Cimarex Energy Co. Amended and Restated 2019 Equity Incentive Plan (the “Prior Cimarex Plan). Under the 2023 Plan, permitted awards include, but are not limited to, options, stock appreciation rights, restricted stock, restricted stock units, performance stock units and other cash and stock-based awards. A total of 22.95 million shares of common stock may be issued under the 2023 Plan. The 2023 Plan expires on February 21, 2033. No additional awards may be granted under the Prior Cabot Plan or the Prior Cimarex Plan on or after May 4, 2023. Awards outstanding under any of the Company’s prior plans will remain outstanding and vest in accordance with their original terms and conditions.

Restricted Stock Units - Employees

During the six months ended June 30, 2023, the Company granted 666,303 restricted stock units to employees of the Company with a weighted average grant date value of $23.00 per unit. The fair value of restricted stock unit grants is based on the closing stock price on the grant date. Restricted stock units generally vest either at the end of a three-year service period or on a graded or graduated vesting basis at each anniversary date over a three-year service period. The Company used an annual forfeiture rate assumption of zero to five percent for purposes of recognizing stock-based compensation expense for its restricted stock units. The annual forfeiture rate assumption was based on the Company’s actual forfeiture history or expectations for this type of award.

Restricted Stock Units - Non-Employees Directors

In June 2023, the Company granted 73,593 restricted stock units, with a weighted-average grant date value of $24.46 per unit, to the Company’s non-employee directors. The fair value of these units is measured based on the closing stock price on grant date. These units will vest in May 2024 and the Company will recognize compensation expense ratably over the vesting period.

The Company did not use as annual forfeiture rate for purposes of recognizing stock-based compensation expense for these awards. The annual forfeiture rate assumption was based on the Company’s actual forfeiture history or expectations for this type of award.

Performance Share Awards

Total Shareholder Return (“TSR”) Performance Share Awards. During the six months ended June 30, 2023, the Company granted 577,172 TSR Performance Share Awards, which are earned, or not earned, based on the comparative

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performance of the Company’s common stock measured against a predetermined group of companies in the Company’s peer group and certain industry-related indices over a three-year performance period, which commenced on February 1, 2023 and ends on January 31, 2026.

These awards have both an equity and liability component, with the right to receive up to the first 100 percent of the award in shares of common stock and the right to receive up to an additional 100 percent of the value of the award in excess of the equity component in cash. These awards also include a feature that will reduce the potential cash component of the award if the actual performance is negative over the three-year period and the base calculation indicates an above-target payout. The equity portion of these awards is valued on the grant date and is not marked to market, while the liability portion of the awards is valued as of the end of each reporting period on a mark-to-market basis. The Company calculates the fair value of the equity and liability portions of the awards using a Monte Carlo simulation model.

The Company did not use an annual forfeiture rate for purposes of recognizing stock-based compensation expense for these awards. The annual forfeiture rate assumption was based on the Company’s actual forfeiture history or expectations for this type of award.

The following assumptions were used to determine the grant date fair value of the equity component on February 21, 2023 and the period-end fair value of the liability component of the TSR Performance Share Awards:


	Grant Date			June 30, 2023
Fair value per performance share award	$	17.18		$11.36 - $12.63
Assumptions:
Stock price volatility	44.8		%	40.9% - 42.6%
Risk-free rate of return	4.40		%	4.59% - 5.02%

11. Earnings per Common Share

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is similarly calculated, except that the common shares outstanding for the period is increased using the treasury stock and as-if converted methods to reflect the potential dilution that could occur if outstanding stock awards were vested or exercised at the end of the applicable period. Anti-dilutive shares represent potentially dilutive securities that are excluded from the computation of diluted income or loss per share as their impact would be anti-dilutive.

The following is a calculation of basic and diluted earnings per share under the two-class method:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share amounts)	2023		2022		2023		2022

Income (Numerator)
Net income	$	209	$	1,229	$	886	$	1,837
Less: dividends attributable to participating securities	(1)		(1)		(3)		(3)
Less: Cimarex redeemable preferred stock dividends	—		—		—		(1)
Net income available to common stockholders	$	208	$	1,228	$	883	$	1,833

Shares (Denominator)
Weighted average shares - Basic	755		803		760		806
Dilution effect of stock awards at end of period	5		5		4		3
Weighted average shares - Diluted	760		808		764		809

Earnings per share:
Basic	$	0.28	$	1.53	$	1.16	$	2.28
Diluted	$	0.27	$	1.52	$	1.16	$	2.27

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The following is a calculation of weighted-average shares excluded from diluted EPS due to anti-dilutive effect:


	Three Months Ended June 30,		Six Months Ended June 30,
(In millions)	2023	2022	2023	2022

Weighted-average stock awards excluded from diluted EPS due to the anti-dilutive effect calculated using the treasury stock method	—	—	1	1

12. Restructuring Costs

Restructuring costs are primarily related to workforce reductions and associated severance benefits that were triggered by the merger with Cimarex Energy Co. that closed on October 1, 2021. The following table summarizes the Company’s restructuring liabilities:


	Six Months Ended June 30,
(In millions)	2023		2022
Balance at beginning of period	$	77	$	43
Additions related to merger integration	11		33
Payments of merger-related restructuring costs	(18)		(7)
Balance at end of period	$	70	$	69

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13. Additional Balance Sheet Information

Certain balance sheet amounts are comprised of the following:


(In millions)	June 30, 2023		December 31, 2022
Accounts receivable, net
Trade accounts	$	434	$	1,067
Joint interest accounts	169		108
Other accounts	3		48
	606		1,223
Allowance for credit losses	(2)		(2)
	$	604	$	1,221













Other assets
Deferred compensation plan	$	47	$	43
Debt issuance costs	9		3

Operating lease right-of-use assets	357		382


Other accounts	25		36
	$	438	$	464
Accounts payable
Trade accounts	$	75	$	27

Royalty and other owners	208		438
Accrued transportation	77		85
Accrued capital costs	180		148
Taxes other than income	5		73
Accrued lease operating costs	41		32


Other accounts	40		41
	$	626	$	844
Accrued liabilities
Employee benefits	$	37	$	74
Taxes other than income	48		62
Restructuring liability	41		39

Operating lease liabilities	115		114
Financing lease liabilities	6		6

Other accounts	47		33
	$	294	$	328
Other liabilities
Deferred compensation plan	$	47	$	55
Postretirement benefits	16		17

Operating lease liabilities	260		287
Financing lease liabilities	9		11
Restructuring liability	29		38
Other accounts	95		92
	$	456	$	500

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14. Interest Expense

Interest expense is comprised of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Interest Expense
Interest expense	$	21	$	27	$	41	57
Debt premium amortization	(6)		(8)		(11)		(19)
Debt financing costs	1		1		2		2
Other	—		2		1		3
	$	16	$	22	$	33	$	43

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following review of operations of Coterra Energy Inc. (“Coterra,” “our,” “we” and “us”) for the three and six month periods ended June 30, 2023 and 2022 should be read in conjunction with our Condensed Consolidated Financial Statements and the Notes included in this Quarterly Report on Form 10-Q (this “Form 10-Q”) and with the Consolidated Financial Statements, Notes and Management’s Discussion and Analysis included in our Annual Report on Form 10-K for the year ended December 31, 2022 (our “Form 10-K”).

OVERVIEW

Financial and Operating Overview

Financial and operating results for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 reflect the following:

•Equivalent production increased 3.5 MMBoe from 114.2 MMBoe, or 630.8 MBoepd, in 2022 to 117.7 MMBoe, or 650.1 MBoepd in 2023. The increase was attributable to higher production in the Permian and Anadarko Basins due to the timing and productivity of our 2023 drilling and completion activities.

•Natural gas production increased 2.1 Bcf from 510.3 Bcf, or 2,819 Mmcf per day, in 2022 to 512.4 Bcf, or 2,831 Mmcf per day, in the 2023 period. The slight increase was primarily attributable to higher production in the Anadarko Basin, partially offset by slightly lower production in the Permian Basin, both of which were due to the timing of our drilling and completion activities.

•Oil production increased 1.5 MMBbl from 15.5 MMBbl, or 85.6 MBblpd, in 2022 to 17.0 MMBbl, or 94.0 MBblpd, in 2023. The increase was attributable to higher production in the Permian Basin due to the timing and productivity of our drilling and completion activities.

•NGL volumes increased 1.6 MMBbl from 13.6 MMBbl, or 75.3 MBblpd, in 2022 to 15.2 MMBbl, or 84.2 MBblpd, in 2023. The increase was attributable to increased volumes in the Permian and Anadarko Basins due to the timing and productivity of our drilling and completion activities.

•Average realized natural gas price was $2.81 per Mcf, $1.85 lower than the $4.66 per Mcf realized in the corresponding period of the prior year.

•Average realized oil price was $73.11 per Bbl, $11.65 lower than the $84.76 per Bbl realized in the corresponding period of the prior year.

•Average realized NGL price was $20.11 per Bbl, $18.44 lower than the $38.55 per Bbl realized in the corresponding period of the prior year.

•Total capital expenditures for drilling, completion and other fixed assets were $1.1 billion compared to $794 million in the corresponding period of the prior year. The increase was driven by higher planned completion activity levels across our operations and higher costs.

•Drilled 125 gross wells (82.3 net) with a success rate of 100 percent compared to 127 gross wells (88.3 net) with a success rate of 100 percent for the corresponding period of the prior year.

•Turned in line 131 gross wells (87.3 net) in 2023 compared to 105 gross wells (57.0 net) in the corresponding period of 2022.

•Average rig count during the first six months of 2023 was approximately 6.0, 3.0 and 1.5 rigs in the Permian Basin, Marcellus Shale and Anadarko Basin, respectively, compared to an average rig count of approximately 6.3, 2.8 and 1.7 rigs in the Permian Basin, Marcellus Shale and Anadarko Basin, respectively, during the corresponding period of 2022.

•Increased our quarterly base dividend from $0.15 per share for regular quarterly dividends in 2022 to $0.20 per share as part of our returns-focused strategy.

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•Implemented our new $2.0 billion share repurchase program and repurchased 13 million shares for $328 million during the six months ended June 30, 2023. We repurchased 20 million shares for $513 million during the six months ended June 30, 2022 under our previous share repurchase program.

Market Conditions and Commodity Prices

Our financial results depend on many factors, particularly commodity prices and our ability to find, develop and market our production on economically attractive terms. Commodity prices are affected by many factors outside of our control, including changes in market supply and demand, which are impacted by pipeline capacity constraints, inventory storage levels, basis differentials, weather conditions, and geopolitical, economic and other factors.

NYMEX oil and natural gas futures prices have strengthened since the reduction of pandemic-related restrictions and increased OPEC+ cooperation. Improving oil and natural gas futures prices in part reflect market expectations of limited U.S. supply growth from publicly traded companies as a result of capital investment discipline and a focus on delivering free cash flow returns to stockholders. In addition, natural gas prices have benefited from strong worldwide liquefied natural gas demand, which is, in part, a result of buyers shifting from Russian gas due to the Ukraine invasion, sustained higher U.S. exports, lower associated gas growth from oil drilling and improved U.S. economic activity. These pricing increases have been partially offset by reduced gas consumption due to warmer winter weather in the U.S. and Europe and concerns over potential economic recession, negatively impacting natural gas and NGL prices. Oil price futures have improved (although such future prices are still lower than current spot prices) coinciding with recovering global economic activity, lower supply from major oil producing countries, OPEC+ cooperation and moderating inventory levels.

Although the current outlook on oil and natural gas prices is generally favorable and our operations have not been significantly impacted in the short-term, in the event further disruptions occur and continue for an extended period of time, our operations could be adversely impacted, commodity prices could decline and our costs may continue to increase further. While oil and natural gas prices have fallen since their peak in 2022, further geopolitical disruptions in 2023, such as those experienced in 2022, may cause such prices to rapidly rise once again. Although we are unable to predict future commodity prices, at current oil, natural gas and NGL price levels, we do not believe that an impairment of our oil and gas properties is reasonably likely to occur in the near future. However, in the event that commodity prices significantly decline or costs increase significantly from current levels, our management would evaluate the recoverability of the carrying value of our oil and gas properties.

In addition, the issue of, and increasing political and social attention on, climate change has resulted in both existing and pending national, regional and local legislation and regulatory measures, such as mandates for renewable energy and emissions reductions targeted at limiting or reducing emissions of greenhouse gases. Changes in these laws or regulations may result in delays or restrictions in permitting and the development of projects, may result in increased costs and may impair our ability to move forward with our construction, completions, drilling, water management, waste handling, storage, transport and remediation activities, any of which could have an adverse effect on our financial results.

For information about the impact of realized commodity prices on our revenues, refer to “Results of Operations” below.

Inflation

Certain of our capital expenditures and expenses are affected by general inflation. We are beginning to see inflation moderating as we move into the second half of 2023; however, costs in 2023 still exceed 2022 costs. While rising inflation is typically offset by the higher prices at which we are able to realize on sales of our commodity production, we nevertheless expect to see inflation impact our cost structure for the remainder of 2023, albeit at a more moderate pace compared to 2022.

Recent U.S. Tax Legislation

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law pursuant to the budget reconciliation process. The IRA introduced a new 15 percent corporate alternative minimum tax (“CAMT”), effective for tax years beginning after December 31, 2022, on the adjusted financial statement income (“AFSI”) of corporations with average AFSI exceeding $1 billion over a three-year testing period. The IRA also introduced an excise tax of one percent on the fair market value of certain public company stock repurchases made after December 31, 2022. Based on the current CAMT guidance available, we will be an “applicable corporation” beginning in 2023, but are not currently expecting to owe any additional tax under the CAMT in 2023.

Outlook

Our 2023 full year capital program is expected to be approximately $2.0 billion to $2.2 billion. We expect to fund these capital expenditures with our operating cash flow. We expect to turn-in-line 152 to 165 total net wells in 2023 across our three

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operating regions. Approximately 48 percent of our drilling and completion capital is expected to be invested in the Permian Basin, 43 percent in the Marcellus Shale and the remaining balance in the Anadarko Basin.

In 2022, we drilled 285 gross wells (174.6 net) and turned in line 251 gross wells (148.1 net). For the six months ended June 30, 2023, our capital program focused on the Permian Basin, Marcellus Shale and Anadarko Basin, where we drilled 82.3 net wells and turned in line 87.3 net wells. Our capital program for the remainder of 2023 will focus on execution of our 2023 plan. We allocate our planned program for capital expenditures based on market conditions, return on capital and free cash flow expectations and availability of services and human resources. We will continue to assess the oil and natural gas price environment and may adjust our capital expenditures accordingly.

FINANCIAL CONDITION

Liquidity and Capital Resources

We strive to maintain an adequate liquidity level to address commodity price volatility and risk. Our liquidity requirements consist primarily of our planned capital expenditures, payment of contractual obligations (including debt maturity and interest payments), working capital requirements, dividend payments and share repurchases. Although we have no obligation to do so, we may also from time-to-time refinance or retire our outstanding debt through privately negotiated transactions, open market repurchases, redemptions, exchanges, tender offers or otherwise.

Our primary sources of liquidity are cash on hand, net cash provided by operating activities and available borrowing capacity under our revolving credit agreement. Our liquidity requirements are generally funded with cash flows provided by operating activities, together with cash on hand. However, from time to time, our investments may be funded by bank borrowings (including draws on our revolving credit agreement), sales of non-strategic assets, and private or public financing based on our monitoring of capital markets and our balance sheet. Our debt is currently rated as investment grade by the three leading rating agencies, and there are no “rating triggers” in any of our debt agreements that would accelerate the scheduled maturities should our debt rating fall below a certain level. In determining our debt ratings, the agencies consider a number of qualitative and quantitative items including, but not limited to, current commodity prices, our liquidity position, our asset quality and reserve mix, debt levels, cost structure and growth plans. Credit ratings are not recommendations to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. A change in our debt rating could impact our interest rate on any borrowings under our revolving credit agreement and our ability to economically access debt markets in the future and could trigger the requirement to post credit support under various agreements, which could reduce the borrowing capacity under our revolving credit agreement. We believe that, with operating cash flow, cash on hand and availability under our revolving credit agreement, we have the ability to finance our spending plans over the next 12 months and, based on current expectations, for the longer term.

We plan to continue our practice of entering into hedging agreements to reduce the impact of commodity price volatility on our cash flow from operations.

Our working capital is substantially influenced by the variables discussed above and fluctuates based on the timing and amount of borrowings and repayments under our revolving credit agreement, repayments of debt, the timing of cash collections and payments on our trade accounts receivable and payable, respectively, payment of dividends, repurchases of our securities and changes in the fair value of our commodity derivative activity. From time to time, our working capital will reflect a deficit, while at other times it will reflect a surplus. This fluctuation is not unusual. At June 30, 2023 and December 31, 2022, we had a working capital surplus of $699 million and $1.0 billion, respectively. We believe we have adequate liquidity and availability as outlined above to meet our working capital requirements over the next 12 months.

As of June 30, 2023, we had no borrowings outstanding under our revolving credit agreement, our unused commitments were $1.5 billion and we had unrestricted cash on hand of $841 million.

Our revolving credit agreement includes a covenant limiting our borrowing capacity based on our leverage ratio. At June 30, 2023, we were in compliance with all financial and other covenants applicable to our revolving credit facility and senior notes. Refer to Note 3 of the Notes to the Condensed Consolidated Financial Statements, “Debt and Credit Agreements,” for further details regarding our revolving credit agreement.

Our investments are generally funded with cash flow provided by operating activities together with cash on hand, bank borrowings, sales of non-strategic assets, and, from time to time, private or public financing based on our monitoring of capital markets and our balance sheet. We also may use a combination of these sources of funds to refinance or retire our outstanding debt through privately negotiated transactions, open market repurchases, redemptions, exchanges, tender offers or otherwise, but we have no obligation to do so.

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Cash Flows

Our cash flows from operating activities, investing activities and financing activities were as follows:


	Six Months Ended June 30,
(In millions)	2023		2022
Cash flows provided by operating activities	$	2,140	$	2,201
Cash flows used in investing activities	(1,048)		(741)
Cash flows used in financing activities	(925)		(1,437)
Net increase in cash, cash equivalents and restricted cash	$	167	$	23

Operating Activities. Operating cash flow fluctuations are substantially driven by changes in commodity prices, production volumes and operating expenses. Commodity prices have historically been volatile, primarily as a result of supply and demand for oil and natural gas, pipeline infrastructure constraints, basis differentials, inventory storage levels, seasonal influences and geopolitical, economic and other factors. In addition, fluctuations in cash flow may result in an increase or decrease in our capital expenditures.

Net cash provided by operating activities for the six months ended June 30, 2023 decreased by $61 million compared to the same period in 2022. This decrease was primarily due to the decrease in natural gas, oil and NGL revenue resulting primarily from lower commodity prices. This decrease was partially offset by higher cash received on derivative settlements and a larger contribution from changes in working capital and other assets and liabilities.

Refer to “Results of Operations” below for additional information relative to commodity prices, production and operating expense fluctuations. We are unable to predict future commodity prices and, as a result, cannot provide any assurance about future levels of net cash provided by operating activities.

Investing Activities. Cash flows used in investing activities increased by $307 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The increase was primarily due to $336 million of higher capital expenditures due to our increased capital budget for 2023. This increase was partially offset by higher proceeds from the sale of assets of $29 million.

Financing Activities. Cash flows used in financing activities decreased by $512 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The decrease in cash flows used in financing activities was primarily due to lower dividend payments of $352 million as a result of a decrease in our base-plus-variable dividend rate from $1.16 per common share for the six months ended June 30, 2022 compared to $0.77 per common share for the six months ended June 30, 2023, and a decrease in outstanding shares of common stock due to our share repurchase programs during the last six months of 2022 and the first six months of 2023. The decrease in cash flows used in financing activities was also due to a decrease in common stock repurchases of $162 million during the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

Capitalization

Information about our capitalization is as follows:


(In millions)	June 30, 2023			December 31, 2022
Debt (1)	$	2,171		$	2,181
Stockholders' equity	12,659			12,659
Total capitalization	$	14,830		$	14,840
Debt to total capitalization	15		%	15		%
Cash and cash equivalents	$	841		$	673

________________________________________________________

(1)There were no borrowings outstanding under our revolving credit agreement as of June 30, 2023 and December 31, 2022.

Share repurchases. In February 2023, our Board of Directors approved a share repurchase program which authorizes the purchase of up to $2.0 billion of our common stock in the open market or in negotiated transactions.

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During the six months ended June 30, 2023 and 2022, we repurchased 13 million shares of our common stock for $328 million under our new share repurchase program and 20 million shares of our common stock for $513 million under our previous share repurchase program, respectively.

Dividends. In February 2023, our Board of Directors approved an increase in the base quarterly dividend from $0.15 per share to $0.20 per share.

The following table summarizes our dividends on our common stock for each quarter in 2023 and 2022.


	Rate Per Share
	Fixed		Variable		Total		Total Dividends (In millions)
2023
First quarter	$	0.20	$	0.37	$	0.57	$	438
Second quarter	$	0.20	—		0.20		$	153


Total year-to-date	$	0.40	$	0.37	$	0.77	$	591
2022
First quarter	$	0.15	$	0.41	$	0.56	$	455
Second quarter	0.15		0.45		0.60		$	484


Total	$	0.30	$	0.86	$	1.16	$	939

Capital and Exploration Expenditures

On an annual basis, we generally fund most of our capital expenditures with cash flow provided by operating activities, and, if required, cash on hand and borrowings under our revolving credit agreement. We budget these expenditures based on our projected cash flows for the year.

The following table presents major components of our capital and exploration expenditures:


	Six Months Ended June 30,
(In millions)	2023		2022
Capital expenditures:
Drilling and facilities	$	1,023	$	754

Pipeline and gathering	66		27
Other	16		13

Capital expenditures for drilling, completion and other fixed asset additions	1,105		794
Capital expenditures for leasehold and property acquisitions	6		4
Exploration expenditures(1)	9		13
	$	1,120	$	811

________________________________________________________

(1)There were no exploratory dry hole costs for the six months ended June 30, 2023 and 2022.

For the six months ended June 30, 2023, our capital program was focused on the Permian Basin, Marcellus Shale and Anadarko Basin, where we drilled 82.3 net wells and turned in line 87.3 net wells. We continue to expect that our full-year 2023 capital program will be approximately $2.0 billion to $2.2 billion. Refer to “Outlook” for additional information regarding the current year drilling program. We will continue to assess the commodity price environment and may adjust our capital expenditures accordingly.

Contractual Obligations

We have various contractual obligations in the normal course of our operations. There have been no material changes to our contractual obligations described under “Transportation, Processing and Gathering Agreements” and “Lease Commitments” as disclosed in Note 8 of the Notes to the Consolidated Financial Statements and the obligations described under “Contractual Obligations” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K.

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Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Refer to our Form 10-K for further discussion of our critical accounting policies.

RESULTS OF OPERATIONS

Second Quarters of 2023 and 2022 Compared

Operating Revenues


	Three Months Ended June 30,				Variance
(In millions)	2023		2022		Amount		Percent
Operating Revenues
Natural gas	$	436	$	1,468	$	(1,032)	(70)	%
Oil	626		876		(250)		(29)	%
NGL	129		280		(151)		(54)	%
Gain (loss) on derivative instruments	(12)		(66)		54		82	%
Other	6		14		(8)		(57)	%
	$	1,185	$	2,572	$	(1,387)	(54)	%

Production Revenues

Our production revenues are derived from sales of our oil, natural gas and NGL production. Increases or decreases in our revenues, profitability and future production growth are highly dependent on the commodity prices we receive, which we expect to fluctuate due to supply and demand factors, and the availability of transportation, seasonality and geopolitical, economic and other factors.

Natural Gas Revenues


	Three Months Ended June 30,				Variance				Increase (Decrease) (In millions)
	2023		2022		Amount		Percent
Volume variance (Bcf)	264.3		253.9		10.4		4	%	$	60
Price variance ($/Mcf)	$	1.65	$	5.78	$	(4.13)	(71)	%	(1,092)
									$	(1,032)

Natural gas revenues decreased $1.0 billion primarily due to significantly lower natural gas prices, partially offset by higher production. The increase in production was primarily related to higher production in the Marcellus Shale.

Oil Revenues


	Three Months Ended June 30,				Variance				Increase (Decrease) (In millions)
	2023		2022		Amount		Percent
Volume variance (MMBbl)	8.7		8.0		0.7		9	%	$	76
Price variance ($/Bbl)	$	71.88	$	109.23	$	(37.35)	(34)	%	(326)
									$	(250)

Oil revenues decreased $250 million due to significantly lower oil prices partially offset by higher production. The increase in production was primarily related to higher production in the Permian Basin.

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NGL Revenues


	Three Months Ended June 30,				Variance				Increase (Decrease) (In millions)
	2023		2022		Amount		Percent
Volume variance (MMBbl)	7.7		7.2		0.5		7	%	$	20
Price variance ($/Bbl)	$	16.67	$	39.17	$	(22.50)	(57)	%	(171)
									$	(151)

NGL revenues decreased $151 million primarily due to significantly lower NGL prices partially offset by higher volumes primarily in the Permian Basin.

Gain (Loss) on Derivative Instruments

Net gains and losses on our derivative instruments are a function of fluctuations in the underlying commodity index prices as compared to the contracted prices and the monthly cash settlements (if any) of the derivative instruments. We have elected not to designate our derivatives as hedging instruments for accounting purposes and, therefore, we do not apply hedge accounting treatment to our derivative instruments. Consequently, changes in the fair value of our derivative instruments and cash settlements are included as a component of operating revenues as either a net gain or loss on derivative instruments. Cash settlements of our contracts are included in cash flows from operating activities in our statement of cash flows.


	Three Months Ended June 30,
(In millions)	2023		2022
Cash received (paid) on settlement of derivative instruments
Gas contracts	$	82	$	(161)
Oil contracts	2		(132)
Non-cash gain (loss) on derivative instruments
Gas contracts	(96)		133
Oil contracts	—		94
	$	(12)	$	(66)

Operating Costs and Expenses

Costs associated with producing oil and natural gas are substantial. Among other factors, some of these costs vary with commodity prices, some trend with the volume and commodity mix, some are a function of the number of wells we own and operate, some depend on the prices charged by service companies, and some fluctuate based on a combination of the foregoing. Our costs for services, labor and supplies have remained high due to on-going demand for those items, and to a lesser extent rising inflation and supply chain disruptions, all of which have affected the cost of our operations throughout 2022. We currently expect these costs to level off and stabilize during 2023.

The following table reflects our operating costs and expenses for the periods indicated and a discussion of the operating costs and expenses follows.


	Three Months Ended June 30,				Variance				Per BOE
(In millions, except per BOE)	2023		2022		Amount		Percent		2023		2022
Operating Expenses
Direct operations	$	130	$	116	$	14	12	%	$	2.16	$	2.03
Transportation, processing and gathering	258		238		20		8	%	4.27		4.13
Taxes other than income	63		98		(35)		(36)	%	1.05		1.72
Exploration	5		7		(2)		(29)	%	0.09		0.12
Depreciation, depletion and amortization	395		414		(19)		(5)	%	6.54		7.21

General and administrative	58		87		(29)		(33)	%	0.96		1.52
	$	909	$	960	$	(51)	(5)	%

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Direct Operations

Direct operations generally consists of costs for labor, equipment, maintenance, saltwater disposal, compression, power, treating and miscellaneous other costs (collectively, “lease operating expense”). Direct operations also includes well workover activity necessary to maintain production from existing wells.

Direct operations expense consisted of lease operating expense and workover expense as follows:


	Three Months Ended June 30,						Per BOE
(In millions, except per BOE)	2023		2022		Variance		2023		2022
Direct Operations Expense
Lease operating expense	$	102	$	94	$	8	$	1.70	$	1.65
Workover expense	28		22		6		0.46		0.38
	$	130	$	116	$	14	$	2.16	$	2.03

Lease operating expense increased primarily due to higher production levels. Additionally, lease operating expense on a per BOE basis increased due to generally higher costs of equipment and field services and increased labor costs.

Workover expense increased $6 million primarily due to an increase in workover activities related to maintenance project activities in the Marcellus Shale and Anadarko Basin resulting in an increase of $3 million and $2 million, respectively, compared to 2022 activities. Workover activity in the Permian Basin remained relatively flat period over period.

Transportation, Processing and Gathering

Transportation, processing and gathering costs principally consist of expenditures to prepare and transport production downstream from the wellhead, including gathering, fuel, and compression, and processing costs, which are incurred to extract NGLs from the raw natural gas stream. Gathering costs also include costs associated with operating our gas gathering infrastructure, including operating and maintenance expenses. Costs vary by operating area and will fluctuate with increases or decreases in production volumes, contractual fees, and changes in fuel and compression costs.

Transportation, processing and gathering costs increased $20 million primarily due to increased production and a modest increase in transportation rates in the Marcellus Shale and the Permian Basin.

Taxes Other Than Income

Taxes other than income consist of production (or severance) taxes, drilling impact fees, ad valorem taxes and other taxes. State and local taxing authorities assess these taxes, with production taxes being based on the volume or value of production, drilling impact fees being based on drilling activities and prevailing natural gas prices and ad valorem taxes being based on the value of properties.

The following table presents taxes other than income for the periods indicated:


	Three Months Ended June 30,
(In millions)	2023			2022			Variance
Taxes Other than Income
Production	$	43		$	82		$	(39)
Drilling impact fees	4			8			(4)
Ad valorem	16			8			8

	$	63		$	98		$	(35)
Production taxes as percentage of revenue from Permian and Anadarko Basins	5.3		%	5.4		%

Taxes other than income decreased $35 million. Production taxes represented the majority of our taxes other than income, which decreased primarily due to lower oil, natural gas and NGL revenues. Drilling impact fees decreased primarily due to the timing of wells drilled in the Marcellus Shale and lower natural gas prices, which drive the rates assessed on our drilling activities. Ad valorem taxes increased primarily due to higher anticipated appraisal values on our Texas-based properties based on 2022 results of operations in the Permian Basin, which is expected to result in higher 2023 property assessments.

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Depreciation, Depletion and Amortization

Depreciation, depletion and amortization (“DD&A”) expense consisted of the following for the periods indicated:


	Three Months Ended June 30,						Per BOE
(In millions, except per BOE)	2023		2022		Variance		2023		2022
DD&A Expense
Depletion	$	362	$	356	$	6	$	5.98	$	6.19
Depreciation	19		16		3		0.33		0.29
Amortization of unproved properties	12		39		(27)		0.20		0.68
Accretion of ARO	2		3		(1)		0.03		0.05
	$	395	$	414	$	(19)	$	6.54	$	7.21

Depletion of our producing properties is computed on a field basis using the units-of-production method under the successful efforts method of accounting. The economic life of each producing property depends upon the estimated proved reserves for that property, which in turn depend upon the assumed realized sales price for future production. Therefore, fluctuations in oil and gas prices will impact the level of proved developed and proved reserves used in the calculation. Higher prices generally have the effect of increasing reserves, which reduces depletion expense. Conversely, lower prices generally have the effect of decreasing reserves, which increases depletion expense. The cost of replacing production also impacts our depletion expense. In addition, changes in estimates of reserve quantities, estimates of operating and future development costs, reclassifications of properties from unproved to proved and impairments of oil and gas properties will also impact depletion expense. Our depletion expense increased $6 million due to a five percent increase in equivalent production, partially offset by a lower depletion rate. The lower depletion rate was due to a lower depletion rate in the Permian Basin due to an increase in oil and gas reserves at December 31, 2022 due to favorable price revisions, partially offset by an increase in the depletion rate in the Marcellus Shale due to downward oil and gas reserve performance revisions.

Fixed assets consist primarily of gas gathering facilities, water infrastructure, buildings, vehicles, aircraft, furniture and fixtures and computer equipment and software. These items are recorded at cost and are depreciated on the straight-line method based on expected lives of the individual assets, which range from three to 30 years. Also included in our depreciation expense is the depreciation of the right-of-use asset associated with our finance lease gathering system.

Unproved properties are amortized based on our drilling experience and our expectation of converting our unproved leaseholds to proved properties. The rate of amortization depends on the timing and success of our exploration and development program. If development of unproved properties is deemed unsuccessful and the properties are abandoned or surrendered, the capitalized costs are expensed in the period the determination is made. Amortization of unproved properties decreased $27 million primarily due to a non-recurring charge related to the release of certain leaseholds that occurred during the second quarter of 2022.

General and Administrative (“G&A”)

G&A expense consists primarily of salaries and related benefits, stock-based compensation, office rent, legal and consulting fees, systems costs and other administrative costs incurred.

The table below reflects our G&A expense for the periods indicated:


	Three Months Ended June 30,
(In millions)	2023		2022		Variance
G&A Expense
General and administrative expense	$	48	$	52	$	(4)
Stock-based compensation expense	7		21		(14)
Merger-related expense	3		14		(11)
	$	58	$	87	$	(29)

G&A expense, excluding stock-based compensation and merger related expenses, decreased $4 million primarily due to lower compensation and benefits due to the ongoing reduction in transition personnel during the second quarter of 2023.

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Stock-based compensation expense will fluctuate based on the grant date fair value of awards, the number of awards, the requisite service period of the awards, estimated employee forfeitures, and the timing of the awards. Stock-based compensation expense decreased $14 million primarily due to higher stock-based compensation costs related to the accelerated vesting of employee performance shares and vesting of certain other awards during 2022 and a gain related to our deferred compensation plan associated with the liquidation of our common stock in the plan that occurred in the second quarter of 2023. These decreases were partially offset by stock-based compensation related to new shares granted in early 2023 and the second half of 2022.

Merger-related expenses decreased $11 million primarily due to lower employee-related severance and termination benefits associated with the expected termination of certain employees. We accrued for these costs over the transition period during 2022 and early 2023, with substantially all of our expected severance costs being fully accrued over that time period. Additional merger-related costs are not expected to be material for the second half of 2023.

Interest Expense

The table below reflects our interest expense for the periods indicated:


	Three Months Ended June 30,
(In millions)	2023		2022		Variance
Interest Expense
Interest expense	$	21	$	27	$	(6)
Debt premium amortization	(6)		(8)		2
Debt financing costs	1		1		—
Other	—		2		(2)
	$	16	$	22	$	(6)

Interest expense decreased $6 million, primarily due to the repayment of our 6.51% and 5.58% weighted-average private placement senior notes in August 2022 and the redemption of $750 million of the 4.375% senior notes in September and October 2022.

Debt premium amortization decreased $2 million primarily due to the redemption of $750 million of our 4.375% senior notes in September and October 2022.

Interest Income

Interest income increased $9 million due to higher interest rates received on higher cash balances.

Income Tax Expense


	Three Months Ended June 30,
(In millions)	2023			2022			Variance
Income Tax Expense
Current tax expense	$	57		$	294		$	(237)
Deferred tax expense	4			65			(61)
	$	61		$	359		$	(298)
Combined federal and state effective income tax rate	22.5		%	22.6		%

Income tax expense decreased $298 million due to lower pre-tax income and a slightly lower effective tax rate in the second quarter of 2023 compared to the second quarter of 2022. The effective tax rate was lower for the second quarter of 2023 compared to the second quarter of 2022 due to differences in the non-recurring discrete items recorded during the second quarter of 2023 versus the second quarter of 2022.

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First Six Months of 2023 and 2022 Compared

Operating Revenues


	Six Months Ended June 30,				Variance
(In millions)	2023		2022		Amount		Percent
Operating Revenues
Natural gas	$	1,258	$	2,579	$	(1,321)	(51)	%
Oil	1,241		1,575		(334)		(21)	%
NGL	306		525		(219)		(42)	%
Gain (loss) on derivative instruments	126		(457)		583		128	%
Other	31		29		2		7	%
	$	2,962	$	4,251	$	(1,289)	(30)	%

Production Revenues

Natural Gas Revenues


	Six Months Ended June 30,				Variance				Increase (Decrease) (In millions)
	2023		2022		Amount		Percent
Volume variance (Bcf)	512.4		510.3		2.1		—	%	$	11
Price variance ($/Mcf)	$	2.46	$	5.05	$	(2.59)	(51)	%	(1,332)
									$	(1,321)

Natural gas revenues decreased $1.3 billion primarily due to significantly lower natural gas prices, partially offset by slightly higher production. The slightly higher production is primarily due to increased production in the Anadarko Basin, partially offset by marginal decreases in the Permian Basin and Marcellus Shale production, primarily due to the timing of our drilling and completion activities.

Oil Revenues


	Six Months Ended June 30,				Variance				Increase (Decrease) (In millions)
	2023		2022		Amount		Percent
Volume variance (MMBbl)	17.0		15.5		1.5		10	%	$	152
Price variance ($/Bbl)	$	72.93	$	101.62	$	(28.69)	(28)	%	(486)
									$	(334)

Oil revenues decreased $334 million primarily due to considerably lower oil prices, partially offset by higher production. The higher production was driven by higher Permian Basin production.

NGL Revenues


	Six Months Ended June 30,				Variance				Increase (Decrease) (In millions)
	2023		2022		Amount		Percent
Volume variance (MMBbl)	15.2		13.6		1.6		12	%	$	62
Price variance ($/Bbl)	$	20.11	$	38.55	$	(18.44)	(48)	%	(281)
									$	(219)

NGL revenues decreased $219 million primarily due to significantly lower NGL prices, partially offset by higher NGL volumes. The higher volume was driven by higher Permian and Andarko Basin volumes due to the timing of our 2023 drilling and completion program.

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Gain (Loss) on Derivative Instruments

The following table presents the components of “Gain (loss) on derivative instruments” for the periods indicated:


	Six Months Ended June 30,
(In millions)	2023		2022
Cash received (paid) on settlement of derivative instruments
Gas contracts	$	181	$	(203)
Oil contracts	3		(261)
Non-cash gain (loss) on derivative instruments
Gas contracts	(54)		(49)
Oil contracts	(4)		56
	$	126	$	(457)

Operating Costs and Expenses

The following table reflects our operating costs and expenses for the periods indicated and a discussion of the operating costs and expenses follows.


	Six Months Ended June 30,				Variance				Per BOE
(In millions, except per BOE)	2023		2022		Amount		Percent		2023		2022
Operating Expenses
Direct operations	$	264	$	216	$	48	22	%	$	2.24	$	1.90
Transportation, processing and gathering	494		471		23		5	%	4.20		4.12
Taxes other than income	149		174		(25)		(14)	%	1.27		1.53
Exploration	9		13		(4)		(31)	%	0.08		0.11
Depreciation, depletion and amortization	764		774		(10)		(1)	%	6.50		6.78

General and administrative	134		194		(60)		(31)	%	1.14		1.68
	$	1,814	$	1,842	$	(28)	(2)	%

Direct Operations

Direct operations expense consisted of lease operating expense and workover expense as follows:


	Six Months Ended June 30,						Per BOE
(In millions, except per BOE)	2023		2022		Variance		2023		2022
Direct Operations
Lease operating expense	$	208	$	176	$	32	$	1.76	$	1.55
Workover expense	56		40		16		0.48		0.35
	$	264	$	216	$	48	$	2.24	$	1.90

Lease operating expense increased on an absolute basis as a result of the increase in production levels. Additionally, lease operating expense on a per BOE basis increased due to generally higher costs of equipment and field services and increased labor costs.

Workover expense increased $16 million primarily due to an increase in workover activities related to maintenance project activities in the Permian Basin, Marcellus Shale and Anadarko Basin resulting in an increase of $6 million, $6 million and $3 million, respectively, compared to 2022 activities.

Transportation, Processing and Gathering

Transportation, processing and gathering costs increased $23 million largely due to increased production and a modest increase in transportation rates in the Marcellus Shale and the Permian Basin.

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Taxes Other Than Income

The following table presents taxes other than income for the periods indicated:


	Six Months Ended June 30,
(In millions)	2023			2022			Variance
Taxes Other than Income
Production	$	103		$	145		$	(42)
Drilling impact fees	13			15			(2)
Ad valorem	32			14			18
Other	1			—			1
	$	149		$	174		$	(25)
Production taxes as percentage of revenue from Permian and Anadarko Basins	6.0		%	5.4		%

Taxes other than income decreased $25 million. Production taxes represented the majority of our taxes other than income, which decreased primarily due to lower oil, natural gas and NGL revenues. Drilling impact fees decreased primarily due to the timing of wells drilled in the Marcellus Shale and lower natural gas prices, which drive the rates assessed on our drilling activities. Ad valorem taxes increased primarily due to higher anticipated appraisal values on our Texas-based properties based on 2022 results of operations in the Permian Basin, which is expected to result in higher 2023 property assessments.

Depreciation, Depletion and Amortization (“DD&A”)

DD&A expense consisted of the following for the periods indicated:


	Six Months Ended June 30,						Per BOE
(In millions, except per BOE)	2023		2022		Variance		2023		2022
DD&A Expense
Depletion	$	699	$	695	$	4	$	5.94	$	6.09
Depreciation	36		35		1		0.32		0.31
Amortization of unproved properties	24		39		(15)		0.20		0.34
Accretion of ARO	5		5		—		0.04		0.04
	$	764	$	774	$	(10)	$	6.50	$	6.78

Depletion expense increased $4 million primarily due to higher production, partially offset by a two percent decrease in the depletion rate. The lower depletion rate was due to a lower depletion rate in the Permian Basin due to an increase in oil and gas reserves at December 31, 2022 due to favorable price revisions, partially offset by an increase in the depletion rate in the Marcellus Shale due to downward oil and gas reserve performance revisions.

Amortization of unproved properties decreased $15 million primarily due to a non-recurring charge related to the release of certain leaseholds that occurred during the second quarter of 2022.

General and Administrative (“G&A”)

The table below reflects our G&A expense for the periods indicated:


	Six Months Ended June 30,
(In millions)	2023		2022		Variance
G&A Expense
General and administrative expense	$	100	$	105	$	(5)
Stock-based compensation expense	23		44		(21)
Merger-related expense	11		45		(34)
	$	134	$	194	$	(60)

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G&A expense, excluding stock-based compensation and merger-related expenses, decreased $5 million primarily due to lower compensation and benefits due to the ongoing reduction in transition personnel during the first half of 2023.

Stock-based compensation expense decreased $21 million primarily due to higher stock-based compensation costs related to the accelerated vesting of employee performance shares and vesting of certain other awards during 2022 and a gain related to our deferred compensation plan associated with the liquidation of the Company stock in the plan. This decreases was partially offset by higher stock-based compensation costs related to new shares granted in first half of 2023 and second half of 2022.

Merger-related expenses decreased $34 million primarily due to lower employee-related severance and termination benefits associated with the expected termination of certain employees. We accrued for these costs over the transition period during 2022 and early 2023, with substantially all of our expected severance costs being fully accrued over that time period. Merger-related expenses also decreased due to $6 million of transaction-related costs associated with the Merger that were incurred in 2022. Additional merger-related costs are not expected to be material for the second half of 2023.

Interest Expense

The table below reflects our interest expense for the periods indicated:


	Six Months Ended June 30,
(In millions)	2023		2022		Variance
Interest Expense
Interest expense	$	41	$	57	$	(16)
Debt premium amortization	(11)		(19)		8
Debt financing costs	2		2		—
Other	1		3		(2)
	$	33	$	43	$	(10)

Interest expense decreased $16 million primarily due to the repayment of our 6.51% and 5.58% weighted-average private placement senior notes in August 2022 and the redemption of $750 million of the 4.375% senior notes in September and October 2022.

Debt premium amortization decreased $8 million primarily due to the redemption of $750 million of the 4.375% senior notes in September and October 2022.

Interest Income

Interest income increased $21 million due to higher interest rates received on higher cash balances.

Income Tax Expense


	Six Months Ended June 30,
(In millions)	2023			2022			Variance
Income Tax Expense
Current tax expense	$	229		$	428		$	(199)
Deferred tax expense	27			101			(74)
	$	256		$	529		$	(273)
Combined federal and state effective income tax rate	22.4		%	22.4		%

Income tax expense decreased $273 million due to lower pre-tax income.

Forward-Looking Information

This report includes forward-looking statements within the meaning of federal securities laws. All statements, other than statements of historical fact, included in this report are forward-looking statements. Such forward-looking statements include, but are not limited, statements regarding future financial and operating performance and results, the anticipated effects of, and certain other matters related to, the Merger involving Cimarex Energy Co. (“Cimarex”), strategic pursuits and goals, market prices, future hedging and risk management activities, timing and amount of capital expenditures and other statements that are not historical facts contained in or incorporated by reference into this report, are forward-looking statements. The words

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“expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “budget,” “plan,” “forecast,” “target,” “predict,” “potential,” “possible,” “may,” “should,” “could,” “would,” “will,” “strategy,” “outlook” and similar expressions are also intended to identify forward-looking statements. We can provide no assurance that the forward-looking statements contained in this report will occur as expected, and actual results may differ materially from those included in this report. Forward-looking statements are based on current expectations and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those included in this report. These risks and uncertainties include, without limitation, the impact of public health crises, including pandemics (such as the coronavirus pandemic) and epidemics and any related company or governmental policies of actions, the risk that our and Cimarex’s businesses will not be integrated successfully, the risk that the cost savings and any other synergies from the Merger involving Cimarex may not be fully realized or may take longer to realize than expected, the availability of cash on hand and other sources of liquidity to fund our capital expenditures, actions by, or disputes among or between, members of OPEC+, market factors, market prices (including geographic basis differentials) of oil and natural gas, impacts of inflation, labor shortages and economic disruption, including as a result of instability in the banking sector, pandemics and geopolitical disruptions such as the war in Ukraine, results of future drilling and marketing activities, future production and costs, legislative and regulatory initiatives, electronic, cyber or physical security breaches and other factors detailed herein and in our other Securities and Exchange Commission (“SEC”) filings. Refer to “Risk Factors” in Item 1A of Part I of our 10-K for additional information about these risks and uncertainties. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Except to the extent required by applicable law, we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Investors should note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the Investors section of our website (www.coterra.com) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of, and is not incorporated into, this report.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we are subject to a variety of risks, including market risks associated with changes in commodity prices and interest rate movements on outstanding debt. The following quantitative and qualitative information is provided about financial instruments to which we were party to as of June 30, 2023 and from which we may incur future gains or losses from changes in commodity prices or interest rates.

Commodity Price Risk

Our most significant market risk exposure is pricing applicable to our oil, natural gas and NGL production. Realized prices are mainly driven by the worldwide price for oil and spot market prices for North American natural gas and NGL production. These prices have been volatile and unpredictable. To mitigate the volatility in commodity prices, we may enter into derivative instruments to hedge a portion of our production.

Derivative Instruments and Risk Management Activities

Our risk management strategy is designed to reduce the risk of commodity price volatility for our production in the oil and natural gas markets through the use of financial commodity derivatives. A committee that consists of members of senior management oversees our risk management activities. Our financial commodity derivatives generally cover a portion of our production and, while protecting us in the event of price declines, limit the benefit to us in the event of price increases. Further, if any of our counterparties defaulted, this protection might be limited as we might not receive the full benefit of our financial commodity derivatives. Please read the discussion below as well as Note 5 of the Notes to the Consolidated Financial Statements in our Form 10-K for a more detailed discussion of our derivatives.

Periodically, we enter into financial commodity derivatives, including collar, swap and basis swap agreements, to protect against exposure to commodity price declines related to our oil and natural gas production. All of our financial derivatives are used for risk management purposes and are not held for trading purposes. Under the collar agreements, if the index price rises above the ceiling price, we pay the counterparty. If the index price falls below the floor price, the counterparty pays us. Under the swap agreements, we receive a fixed price on a notional quantity of natural gas in exchange for paying a variable price based on a market-based index.

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As of June 30, 2023, we had the following outstanding financial commodity derivatives:


	2023				Estimated Value at June 30, 2023 (in millions)
Natural Gas	Third Quarter		Fourth Quarter




Waha gas collars					13
Volume (MMBtu)	8,280,000		8,280,000
Weighted average floor ($/MMBtu)	$	3.03	$	3.03
Weighted average ceiling ($/MMBtu)	$	5.39	$	5.39

NYMEX collars					73
Volume (MMBtu)	32,200,000		29,150,000
Weighted average floor ($/MMBtu)	$	4.07	$	4.03
Weighted average ceiling ($/MMBtu)	$	6.78	$	6.61










					$	86


	2023					Estimated Value at June 30, 2023 (in millions)
Oil		Third Quarter		Fourth Quarter
WTI oil collars							$	3
Volume (MBbl)		920		920
Weighted average floor ($/Bbl)		$	65.00	$	65.00
Weighted average ceiling ($/Bbl)		$	89.66	$	89.66

WTI Midland oil basis swaps							(1)
Volume (MBbl)		920		920
Weighted average differential ($/Bbl)		$	1.01	$	1.01




							$	2

The amounts set forth in the tables above represent our total unrealized derivative position at June 30, 2023 and exclude the impact of non-performance risk. Non-performance risk is considered in the fair value of our derivative instruments that are recorded in our Condensed Consolidated Financial Statements and is primarily evaluated by reviewing credit default swap spreads for the various financial institutions with which we have derivative contracts, while our non-performance risk is evaluated using a market credit spread provided by several of our banks.

A significant portion of our expected oil and natural gas production for the remainder of 2023 and beyond is currently unhedged and directly exposed to the volatility in oil and natural gas prices, whether favorable or unfavorable.

During the six months ended June 30, 2023, natural gas collars with floor prices ranging from $3.00 to $7.50 per MMBtu and ceiling prices ranging from $4.55 to $13.08 per MMBtu covered 99.2 Bcf, or 20 percent of natural gas production at a weighted-average price of $4.53 per MMBtu.

During the six months ended June 30, 2023, oil collars with floor prices ranging from $65.00 to $80.00 per Bbl and ceiling prices ranging from $89.00 to $118.30 per Bbl covered 3.6 MMBbls, or 26 percent, of oil production at a weighted-average price of $68.74 per Bbl. Oil basis swaps covered 3.6 MMBbls, or 26 percent, of oil production at a weighted-average price of $0.72 per Bbl.

We are exposed to market risk on financial commodity derivative instruments to the extent of changes in market prices of oil and natural gas. However, the market risk exposure on these derivative contracts is generally offset by the gain or loss recognized upon the ultimate sale of the commodity. Although notional contract amounts are used to express the volume of oil and natural gas agreements, the amounts that can be subject to credit risk in the event of non-performance by third parties are substantially smaller. Our counterparties are primarily commercial banks and financial service institutions that our management believes present minimal credit risk and our derivative contracts are with multiple counterparties to minimize our exposure to any individual counterparty. We perform both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. We have not incurred any losses related to non-performance risk

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of our counterparties and we do not anticipate any material impact on our financial results due to non-performance by third parties. However, we cannot be certain that we will not experience such losses in the future.

Interest Rate Risk

At June 30, 2023, we had total debt of $2.2 billion (with a principal amount of $2.1 billion). All of our outstanding debt is based on fixed interest rates and, as a result, we do not have significant exposure to movements in market interest rates with respect to such debt. Our revolving credit agreement provides for variable interest rate borrowings; however, we did not have any borrowings outstanding as of June 30, 2023 and, therefore, no related exposure to interest rate risk.

Fair Value of Other Financial Instruments

The estimated fair value of other financial instruments is the amount at which the instrument could be exchanged currently between willing parties. The carrying amounts reported in the Condensed Consolidated Balance Sheet for cash, cash equivalents and restricted cash approximate fair value due to the short-term maturities of these instruments.

The fair value of our senior notes is based on quoted market prices. We use available market data and valuation methodologies to estimate the fair value of our private placement senior notes. The fair value of the private placement senior notes is the estimated amount we would have to pay a third party to assume the debt, including a credit spread for the difference between the issue rate and the period end market rate. The credit spread is our default or repayment risk. The credit spread (premium or discount) is determined by comparing our senior notes and revolving credit agreement to new issuances (secured and unsecured) and secondary trades of similar size and credit statistics for both public and private debt. The fair value of the private placement senior notes is based on interest rates currently available to us.

The carrying amount and fair value of debt is as follow:


	June 30, 2023				December 31, 2022
(In millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	2,171	$	1,962	$	2,181	$	1,955

ITEM 4. Controls and Procedures

As of June 30, 2023, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934 (the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance with respect to the recording, processing, summarizing and reporting, within the time periods specified in the Commission’s rules and forms, of information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

There were no changes in the Company’s internal control over financial reporting that occurred during the second quarter of 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

Legal Matters

The information set forth under the heading “Legal Matters” in Note 7 of the Notes to Condensed Consolidated Financial Statements included in this Form 10-Q is incorporated by reference in response to this item.

Environmental Matters

From time to time, we receive notices of violation from governmental and regulatory authorities in areas in which we operate relating to alleged violations of environmental statutes or the rules and regulations promulgated thereunder. Although we cannot predict with certainty whether these notices of violation will result in fines, penalties or both, if fines or penalties are imposed, they may result in monetary sanctions, individually or in the aggregate, in excess of $300,000.

In June 2023, we received a Notice of Violation and Opportunity to Confer (“NOVOC”) from the U.S. Environmental Protection Agency (“EPA”) alleging violations of the Clean Air Act, the Texas State Implementation Plan, the New Mexico State Implementation Plan and certain other state and federal regulations pertaining to facilities in Texas and New Mexico. Separately, in July 2023, we received a letter from the U.S. Department of Justice that the EPA has referred the NOVOC for civil enforcement proceedings. We have exchanged information with the EPA and are engaged in discussions aimed at resolving the allegations. At this time we are unable to predict with certainty the financial impact of the NOVOC or the timing of its resolution. However, any enforcement action related to the NOVOC will likely result in fines or penalties, or both, and corrective actions, which may increase our development costs or operating costs. We believe that any fines, penalties, or corrective actions that may result from this matter will not have a material effect on our financial position, results of operations, or cash flows.

ITEM 1A. Risk Factors

For additional information about the risk factors that affect us, see Item 1A of Part I of our Form 10-K.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Share repurchase activity during the quarter ended June 30, 2023 was as follows:


Period	Total Number of Shares Purchased (In thousands)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (In thousands) (1)	Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (In millions)
April 2023	—	$	—	—	$	—
May 2023	—	$	—	—	$	—
June 2023	2,421	$	23.55	2,421	$	1,675
Total	2,421			2,421

________________________________________________________

(1)In February 2023, our Board of Directors approved a new share repurchase program which authorizes us to purchase up to $2.0 billion of our common stock.

ITEM 5. Other Information

Amended and Restated Bylaws

On August 4, 2023, the Board of Directors of the Company amended and restated the Company’s Amended and Restated Bylaws (as so amended and restated, the “Amended and Restated Bylaws”), which became effective immediately. The Amended and Restated Bylaws consolidate prior amendments, enhance clarity and effect technical and administrative changes to reflect recent amendments to the Delaware General Corporation Law (the “DGCL”) and Rule 14a-19 promulgated under the

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Exchange Act (the “Universal Proxy Rules”). The amendments effected by the Amended and Restated Bylaws, among other things:

•provide that business transacted at a special meeting of stockholders is limited to the matters set forth in the notice of meeting;

•require that any stockholder submitting a director nomination notice make a representation as to whether such stockholder intends to comply with the Universal Proxy Rules and provide that, if any such stockholder does not comply with the requirements thereof, such nomination shall be disregarded;

•modify the procedures and disclosure requirements set forth in the advance notice bylaw provisions, including (i) to limit the number of nominees a stockholder may nominate for election at a meeting to the number of directors to be elected at such meeting and (ii) to require additional information, representations and disclosures from proposing stockholders, proposed nominees and other persons related to a stockholder’s solicitation of proxies;

•require that a stockholder directly or indirectly soliciting proxies from other stockholders use a proxy card color other than white;

•modify certain provisions, including, without limitation, those relating to adjournment procedures and the availability of lists of stockholders entitled to vote at stockholder meetings, in each case to conform to recent amendments to the DGCL;

•provide for mandatory indemnification and advancement of expenses for the Company’s directors, officers and employees; and

•incorporate certain ministerial and conforming changes to provide clarification and consistency.

The foregoing summary of the Amended and Restated Bylaws does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Amended and Restated Bylaws, a copy of which is filed as Exhibit 3.2 to this filing and incorporated herein by reference.

Certain Equity Awards to Mr Stephen P. Bell

On August 4, 2023, the Company and Stephen P. Bell entered into a letter agreement to memorialize the parties’ agreement regarding the terms of Mr. Bell’s annual long-term incentive awards for each of calendar years 2024 and 2025 and certain of his rights, benefits and entitlements under that certain Severance Compensation Agreement dated as of March 9, 2020 between Mr. Bell and Cimarex (the obligations of which were assumed by the Company on October 1, 2021 in connection with the Merger) (as amended from time to time, the “SPB Severance Agreement”).

In consideration for Mr. Bell’s waiver of the right to assert good reason under the SPB Severance Agreement, the Company agreed to grant to Mr. Bell annual long-term incentive awards with a target annual grant date fair value of $4.5 million during each of calendar years 2024 and 2025 (collectively, the “Annual LTI Awards”), subject to his continued employment with the Company through the applicable grant date. The Annual LTI Awards will be granted in the ordinary course and on the same terms as the annual long-term incentive awards granted to similarly situated executive officers at the applicable grant date. In the unfortunate event of Mr. Bell’s death prior to the date the 2024 Annual LTI Award is granted, the Company will pay to Mr. Bell’s estate a lump sum cash payment of $4.5 million (less applicable taxes) and the right to receive the Annual LTI Awards will be forfeited.

The foregoing description of the letter agreement and the actions contemplated thereby is not complete and is subject to and qualified in its entirety by reference to the full text of the letter agreement, a copy of which is filed as Exhibit 10.4 to this Quarterly Report on Form 10-Q and the terms of which are incorporated herein by reference.

The terms of the SPB Severance Agreement are further described on pages 42 and 58 of the Company’s Definitive Proxy Statement filed with the SEC on March 20, 2023, which description is incorporated herein by reference.

Certain Equity Awards of Mr. Christopher H. Clason

On June 15, 2023 the Company announced that Christopher H. Clason, the Company’s former Senior Vice President and Chief Human Resources Officer, was separating from the Company for good reason under that certain Severance Compensation Agreement dated as of March 9, 2020 between Mr. Clason and Cimarex (the obligations of which were assumed by the Company on October 1, 2021 in connection with the Merger) (as amended from time to time, the “CHC Severance Agreement”) and retiring effective September 30, 2023.

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Following a review of compensation received by similarly situated executive officers who separated from the Company following the Merger and in recognition of the continuity provided by Mr. Clason’s service since the Merger, in addition to Mr. Clason’s rights, benefits and entitlements under the CHC Severance Agreement, on August 3, 2023 the Company approved certain enhanced vesting rights with respect to each of Mr. Clason’s outstanding equity awards. In exchange for such enhanced vesting, Mr. Clason has agreed to complete certain transition services prior to his separation from the Company and to enter into and to comply with a satisfactory separation agreement and release containing non-competition, non-solicitation and confidentiality provisions.

In addition to the pro-rata vesting that will occur in connection with Mr. Clason’s retirement following his resignation for good reason, the equity awards granted to Mr. Clason prior to February 21, 2023 that would have otherwise been forfeited will remain outstanding and be eligible to vest, if at all, in accordance with the original vesting schedule and subject to the satisfaction of any performance criteria, as if Mr. Clason had remained in continuous employment with the Company through the original vesting date of such awards.

Further, 70 percent of Mr. Clason’s equity awards granted on February 21, 2023 will remain outstanding and be eligible to vest, if at all, in accordance with the original vesting schedule and subject to satisfaction of any performance criteria as if Mr. Clason had remained in continuous employment with the Company through the original vesting date of such awards, with only 30 percent being forfeited in connection with Mr. Clason’s retirement.

The terms of the CHC Severance Agreement are further described on pages 42 and 58 of the Company’s Definitive Proxy Statement filed with the SEC on March 20, 2023, which description is incorporated herein by reference.

Trading Plan Arrangements

During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a “Rule10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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ITEM 6. Exhibits

Index to Exhibits


Exhibit Number						Description

3.1						Restated Certificate of Incorporation of Coterra Energy Inc. (incorporated herein by reference to Exhibit 3.3 of Coterra's Current Report on Form 8-K filed with the SEC on October 1, 2021).

3.2						Amended and Restated Bylaws of Coterra Energy Inc.

4.1						Certificate of Designations to 8 1⁄8% Series A Cumulative Perpetual Convertible Preferred Stock of Cimarex Energy Co. (incorporated herein by reference to Exhibit 4.3 of Coterra’s Annual Report on Form 10-K filed with the SEC on March 1, 2022).

4.2						Amendment to Certificate of Designations to 8 1/8% Series A Cumulative Perpetual Convertible Preferred Stock of Cimarex Energy Co. (incorporated herein by reference to Exhibit 4.4 of Coterra’s Annual Report on Form 10-K filed with the SEC on March 1, 2022).

4.3						Amendment to Certificate of Designations to 8 1/8% Series A Cumulative Perpetual Convertible Preferred Stock of Cimarex Energy Co. (incorporated herein by reference to Exhibit 4.3 of Coterra’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022).

10.1*						Coterra Energy Inc. 2023 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 of Coterra’s Current Report on Form 8-K filed with the SEC on May 4, 2023).
						(a) Form of Non-Employee Director Restricted Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.2(a) of Coterra ’s Current Report on Form 8-K filed with the SEC on May 4, 2023);
						(b) Form of Restricted Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.2(b ) of Coterra’s Current Report on Form 8-K filed with the SEC on May 4, 2023);
						(c) Form of Performance Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.2(c ) of Coterra’s Current Report on Form 8-K filed with the SEC on May 4, 2023);

10.2*						Non-Employee Director Deferred Compensation Plan effective May 4, 2023 (incorporated herein by reference to Exhibit 10.3 of Coterra's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023).
						(a) Form of Non-Employee Director Deferred Restricted Stock Unit Award Agreement (Annual Fees) (incorporated herein by reference to Exhibit 10.3 (a) of Coterra's Quarterly Report on 10-Q for the fiscal quarter ended March 31, 2023);
						(b) Form of Non-Employee Director Deferred Restricted Stock Unit Award Agreement (Annual RSU Grant) (incorporated herein by reference to Exhibit 10.3 (b) of Coterra's Quarterly Report on 10-Q for the fiscal quarter ended March 31, 2023).

10.3*						Form of Executive Severance Compensation Agreement between Coterra Energy Inc. and certain officers (incorporated herein by reference to Exhibit 10.4 of Coterra's Current Report on Form 10-Q for the fiscal quarter ended March 31, 2023).

10.4*						Letter Agreement with Stephen P. Bell

31.1						302 Certification — Chairman, President and Chief Executive Officer.

31.2						302 Certification — Executive Vice President and Chief Financial Officer.

32.1						906 Certification.

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Exhibit Number						Description
101.INS						Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

_______________________________________________________________________________.

*Compensatory plan, contract or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	COTERRA ENERGY INC.
	(Registrant)

August 8, 2023	By:	/s/ THOMAS E. JORDEN
		Thomas E. Jorden
		Chairman, Chief Executive Officer and President
		(Principal Executive Officer)

August 8, 2023	By:	/s/ SHANNON E. YOUNG III
		Shannon E. Young III
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

August 8, 2023	By:	/s/ TODD M. ROEMER
		Todd M. Roemer
		Vice President and Chief Accounting Officer
		(Principal Accounting Officer)

Exhibit 3.2

AMENDED AND RESTATED
BYLAWS
OF COTERRA ENERGY INC.

Adopted August 5, 1994

Amended February 20, 1997

Amended May 3, 2001

Amended September 6, 2001

Amended May 2, 2007

Amended January 14, 2010

Amended February 17, 2012

Amended March 11, 2015

Amended July 27, 2016

Amended May 23, 2021

Amended June 17, 2021

Amended October 1, 2021

Last Amended August 4, 2023

INDEX OF AMENDED AND RESTATED BYLAWS
COTERRA ENERGY INC.

Page


ARTICLE I MEETINGS OF STOCKHOLDERS			1
Section 1 Annual Meeting of Stockholders			1
Section 2 Special Meetings of Stockholders			1
Section 3 Place of Stockholders’ Meetings			1
Section 4 Notice of Stockholders’ Meetings, Business and Nominations			1
Section 5 Adjournments and Postponements of Stockholders’ Meetings			14
Section 6 Quorum and Action of Stockholders			14
Section 7 Proxies and Voting			15
Section 8 List of Stockholders Entitled to Vote			15
Section 9 Conduct of Stockholders’ Meetings			16
Section 10 Action by Consent			16
ARTICLE II BOARD OF DIRECTORS AND BOARD COMMITTEES			17
Section 1 Board of Directors			17
Section 2 Powers of the Board of Directors			18
Section 3 Executive Committee			18
Section 4 Committees			18
Section 5 Meetings of the Board of Directors			19
Section 6 Quorum and Action of Directors			19
Section 7 Compensation of Directors			19
Section 8 Chairman of the Board			19
Section 9 Resignation; Removal			19
ARTICLE III OFFICERS			20
Section 1 Officers and Agents			20
Section 2 Chief Executive Officer			20
Section 3 President			20
Section 4 Executive Vice Presidents, Senior Vice Presidents and Vice Presidents			20
Section 5 Chief Financial Oﬃcer			21
Section 6 Secretary and Assistant Secretaries			21
Section 7 Treasurer and Assistant Treasurers			21
Section 8 General Counsel and Assistant General Counsels			22
Section 9 Controller			22
Section 10 Resignations and Removals			22
Section 11 Vacancies			23
ARTICLE IV STOCK			23
Section 1 Certiﬁcates of Stock			23
Section 2 Record Date			23
Section 3 Transfer Books; Record Date			24

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Section 4 Loss of Certiﬁcates			24
ARTICLE V GENERAL PROVISIONS			24
Section 1 Seal			24
Section 2 Execution of Papers			24
Section 3 Fiscal Year			24
Section 4 Waiver of Notice			24
Section 5 Amendments			25
ARTICLE VI INDEMNIFICATION AND ADVANCMENT OF EXPENSES			25
Section 1 Right to Indemnification			25
Section 2 Advancement of Expenses			25
Section 3 Claims			25
Section 4 Nonexclusivity of Rights			26
Section 5 Other Sources			26
Section 6 Amendment or Repeal			26
Section 7 Other Indemnification and Advancement of Expenses			26
ARTICLE VII EXCLUSIVE FORUM FOR ADJUDICATION OF DISPUTES			26
ARTICLE VIII CERTAIN CORPORATE GOVERNANCE MATTERS			27
Section 1 Executive Chairman; President and Chief Executive Officer			27
Section 2 Board Size and Composition			27
Section 3 Lead Independent Director			28
Section 4 Article VIII Amendments; Interpretation			28

- ii -

AMENDED AND RESTATED

BYLAWS

COTERRA ENERGY INC.

(THE “CORPORATION”)

Article I

MEETINGS OF STOCKHOLDERS

Section 1Annual Meeting of Stockholders.

The annual meeting of stockholders for the election of directors shall be held at such date and time as the board of directors of the Corporation (the “Board of Directors”) may designate. Any other proper business may be transacted at the annual meeting.

Section 2Special Meetings of Stockholders. A special meeting of the stockholders may be called at any time only by the chairman of the Board of Directors (the “Chairman”), by the chief executive officer of the Corporation (the “Chief Executive Officer”), by the president of the Corporation (the “President”) or by the Board of Directors. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 3Place of Stockholders’ Meetings. Annual or special meetings of stockholders shall be held at such place, if any, within or without the State of Delaware as shall be designated by the Board of Directors. The Board of Directors may, in its sole discretion, determine that an annual meeting or special meeting shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a)(2) of the General Corporation Law of the State of Delaware (the “DGCL”).

Section 4Notice of Stockholders’ Meetings, Business and Nominations.

(A)Notice of Meetings.

Except as may be otherwise required by applicable law, by the certificate of incorporation of the Corporation (as it may be amended or restated from time to time, the “Certificate of Incorporation”) or by other provisions of these Bylaws, a notice of each meeting of stockholders, stating the place, if any, day and hour thereof, the means of remote communication, if any, by which stockholders and holders of proxies for stockholders may participate in that meeting and be deemed present in person and vote at that meeting, and, in the case of a special meeting, the purposes for which the meeting is called, shall be given, at least 10 days but no more than 60 days before the date of the meeting, to each stockholder entitled to vote thereat in accordance with Section 232 of the DGCL.

(B)Annual Meetings of Stockholders.

(1)Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the Corporation’s notice of meeting, (b) by or at the direction of the Board of Directors, (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Article I, Section 4 and on the record date for determination of stockholders entitled to vote at such meeting, who is entitled to vote at

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the meeting and who complies with the notice procedures set forth in this Article I, Section 4 or (d) with respect to nominations of persons for election to the Board of Directors, by an Eligible Stockholder (defined below) who meets the requirements of and complies with all of the procedures set forth in Article I, Section 4(E). Clause (c) of the immediately preceding sentence shall be the exclusive means for a stockholder to submit business or proposals (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and included in the notice relating to the meeting given by or at the direction of the Board of Directors and other than nominations of persons for election to the Board of Directors described below) before an annual meeting of stockholders and clauses (c) and (d) of the immediately preceding sentence shall be the exclusive means for a stockholder to make any nomination of persons for election to the Board of Directors at an annual meeting of stockholders. Any business proposed to be brought before an annual meeting by a stockholder of the Corporation must be a proper matter for stockholder action and be properly introduced at such meeting.

(2)For director nominations to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of Article I, Section 4(B)(1), in addition to any other applicable requirements, the stockholder must have given timely advance notice thereof in writing to the secretary of the Corporation (the “Secretary”).

Any stockholder’s advance notice to the Secretary pursuant to Article I, Section 4(B)(2), (C) or (E) shall set forth (i) as to each person whom such stockholder proposes to nominate for election to the Board of Directors, (a) the name, age, business address and residence address of such person, (b) the principal occupation or employment of such person, (c) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors of the Corporation in a contested election or would otherwise be required, in each case pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including, without limitation, the written consent of such person to having such person’s name placed in nomination at the meeting, to being named in a proxy statement and accompanying proxy card and to serving on the Board of Directors if elected), and (d) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates , or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if such stockholder and such beneficial owner, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant, and (ii) as to such stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination is made and each proposed nominee, (a) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any, and the name and address of any other stockholders known by such stockholder to be supporting such nomination, (b)(1) the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, such beneficial owner and such nominee, (2) any Derivative Instrument (defined below) directly or indirectly owned beneficially by such stockholder, such beneficial owner and such nominee and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of capital stock of the Corporation, (3) any proxy, contract, arrangement, understanding or relationship the effect or intent of which is to increase or decrease the voting power of such stockholder, beneficial owner or nominee with respect to any shares of any security of the Corporation, (4) any pledge by such stockholder, beneficial owner or nominee of any security of

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the Corporation or any short interest of such stockholder, beneficial owner or nominee in any security of the Corporation, (5) any rights to dividends on the shares of capital stock of the Corporation owned beneficially by such stockholder, beneficial owner and nominee that are separated or separable from the underlying shares of capital stock of the Corporation, (6) any proportionate interest in shares of capital stock of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder, beneficial owner or nominee is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (7) any performance-related fees (other than an asset-based fee) that such stockholder, beneficial owner or nominee is entitled to based on any increase or decrease in the value of shares of capital stock of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, for purposes of clauses (b)(1) through (b)(7) above, any of the foregoing held by members of such stockholder’s, beneficial owner’s or nominee’s immediate family sharing the same household, (c) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice, (d) a representation that such stockholder or beneficial owner, if any, intends or is part of a group that intends (x) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to elect the nominee, (y) otherwise to solicit proxies or votes from stockholders in support of such nomination and (z) to solicit proxies in support of any proposed nominee in accordance with Rule 14a-19 promulgated under the Exchange Act, (e) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder and (f) any other information relating to such stockholder, beneficial owner, if any, and nominee that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors of the Corporation in a contested election or would otherwise be required, in each case pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. The number of nominees a stockholder may nominate for election at the annual meeting on its own behalf (or in the case of one or more stockholders giving the notice on behalf of a beneficial owner, the number of nominees such stockholders may collectively nominate for election at the annual meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such annual meeting. Any such stockholder’s notice to the Secretary shall also include or be accompanied by, with respect to each nominee for election to the Board of Directors, a completed and signed questionnaire, representation and agreement required by the third paragraph of this Article I, Section 4(B)(2). The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

To be eligible to be a nominee for election to the Board of Directors, a person must deliver (with respect to a nomination made by a stockholder pursuant to this Article I, Section 4, in accordance with the time periods prescribed for delivery of notice under this Article I, Section 4, or, in the case of a Stockholder Nominee (defined below), the time periods prescribed for delivery of a Notice of Proxy Access Nomination (defined below) under Article I, Section 4(E)) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be in the form provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (a) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment

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that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (b) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (c) in such person’s individual capacity, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.

(3)For business, other than director nominations (which are governed by Article I, Section 4(B)(2) and Article I, Section 4(E)), to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of Article I, Section 4(B)(1), in addition to any other applicable requirements, the stockholder must have given timely notice thereof in writing to the Secretary.

Any stockholder’s advance notice to the Secretary pursuant to this Article I, Section 4(B)(3) shall set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, together with the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment), (ii) as to such stockholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made, (a) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any, and the name and address of any other stockholders known by such stockholder to be supporting such business or proposal, (b)(1) the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, (2) any Derivative Instrument directly or indirectly owned beneficially by such stockholder and by such beneficial owner and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of capital stock of the Corporation, (3) any proxy, contract, arrangement, understanding or relationship the effect or intent of which is to increase or decrease the voting power of such stockholder or beneficial owner with respect to any shares of any security of the Corporation, (4) any pledge by such stockholder or beneficial owner of any security of the Corporation or any short interest of such stockholder or beneficial owner in any security of the Corporation, (5) any rights to dividends on the shares of capital stock of the Corporation owned beneficially by such stockholder and by such beneficial owner that are separated or separable from the underlying shares of capital stock of the Corporation, (6) any proportionate interest in shares of capital stock of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (7) any performance-related fees (other than an asset-based fee) that such stockholder or beneficial owner is entitled to based on any increase or decrease in the value of shares of capital stock of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, for purposes of clauses (b)(1) through (b)(7) above, any of the foregoing held by members of such stockholder’s or beneficial owner’s immediate family sharing the same household and (c) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for the proposal, or would otherwise be required, in each case pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (iii) any material interest of such stockholder and beneficial owner, if any, in such business or proposal, (iv) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting, (v) a representation that such stockholder or beneficial owner, if

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any, intends or is part of a group that intends (x) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal and (y) otherwise to solicit proxies or votes from stockholders in support of such proposal and (vi) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with such business or proposal by such stockholder.

(4)To be timely, a stockholder’s notice pursuant to the first paragraph of Article I, Section 4(B)(2) (other than a Notice of Proxy Access Nomination, which must be delivered or mailed to and received at the principal executive offices of the Corporation within the time periods provided in Article I, Section 4(E)) or the first paragraph of Article I, Section 4(B)(3) shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or, if less than 100 days’ prior notice or public announcement of the scheduled meeting date is given or made, the 10th day following the earlier of the day on which the notice of such meeting was mailed to stockholders of the Corporation or the day on which such public announcement was made. In no event shall the public announcement of an adjournment, postponement or recess of an annual meeting commence a new time period (or extend any time period) for the giving of timely notice as described above. Notwithstanding anything in the first sentence of this paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no prior notice or public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice to nominate a director required by this Article I, Section 4 (other than a Notice of Proxy Access Nomination, which must be delivered or mailed to and received at the principal executive offices of the Corporation within the time periods provided in Article I, Section 4(E)) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the earlier of the day on which the notice of such meeting was mailed to stockholders of the Corporation or the day on which such public announcement was made.

(5)A stockholder providing (a) notice of any director nomination proposed to be made at a meeting (including any Notice of Proxy Access Nomination) or (b) notice of business proposed to be brought before a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice other than the representations at Article I, Section 4(B)(2)(ii)(c)-(d) and the representations at Article I, Section 4(B)(3)(iv)-(v) pursuant to this Article I, Section 4 shall be true and correct as of the record date for the meeting and as of the date that is 10 business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received at, the principal executive offices of the Corporation not later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight business days prior to the date for the meeting, if practicable (or, if not practicable, on the first practicable date prior to the date for the meeting) or any adjournment or postponement thereof (in the case of the update and supplement required to be made as of 10 business days prior to the meeting or any adjournment or postponement thereof). In addition, a stockholder providing a notice described in clause (a) or (b) of the immediately preceding sentence shall update and supplement such notice, and deliver

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such update and supplement to the principal executive offices of the Corporation, promptly following the occurrence of any event that materially changes the information provided or required to be provided in such notice pursuant to this Article I, Section 4. For the avoidance of doubt, the obligation to update and supplement as set forth in this Article I, Section 4(B)(5) or any other section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any stockholder’s notice, including, without limitation, any representation required herein, extend any applicable deadlines under these Bylaws or enable or be deemed to permit a stockholder who has previously submitted a stockholder’s notice under these Bylaws to amend or update any proposal or to submit any new proposal, including by changing or adding nominees, matters, business or resolutions proposed to be brought before a meeting of stockholders.

(C)Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting given by or at the direction of the Board of Directors. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board of Directors or (b) if, but only if, the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Article I, Section 4 and on the record date for determination of stockholders entitled to vote at such meeting, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Article I, Section 4, including Article I, Section 4(B)(2) hereof. Clause (b) of the immediately preceding sentence shall be the exclusive means for a stockholder to make any nomination of a person or persons for election as a director of the Corporation at a special meeting of stockholders of the Corporation. The number of nominees a stockholder may nominate for election at the special meeting at which directors are to be elected on its own behalf (or in the case of one or more stockholders giving the notice on behalf of a beneficial owner, the number of nominees such stockholders may collectively nominate for election at the special meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such special meeting. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by Article I, Section 4(B)(2) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the 90th day prior to such special meeting; provided, however, that if less than 100 days’ prior notice or public announcement of the scheduled meeting date and of the nominees proposed by the Board of Directors to be elected at such meeting is given or made, notice by such stockholder, to be timely, must be so delivered not later than the close of business on the 10th day following the earlier of the day on which the notice of such meeting was mailed to stockholders of the Corporation or the day on which such public announcement was made. In no event shall the public announcement of an adjournment, postponement or recess of a special meeting commence a new time period (or extend any time period) for the giving of timely notice as described above. Nominations pursuant to Article I, Section 4(E) may not be made in connection with any special meeting of the stockholders.

(D)General.

(1)Subject to such rights of holders of shares of one or more outstanding series of preferred stock of the Corporation to elect one or more directors of the Corporation under circumstances as shall be provided by or pursuant to the Certificate of Incorporation, only such persons who are nominated in accordance with the procedures set forth in this Article I,

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Section 4 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Article I, Section 4. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, at any meeting of stockholders, the chairman of the meeting (or, in advance of such meeting of stockholders, the Board of Directors) shall have the power and duty to determine whether a nomination or proposed nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Article I, Section 4 and, if any proposed nomination or business is not in compliance with this Article I, Section 4, to so declare, and such defective proposal or nomination shall be disregarded.

(2)For purposes of this Article I, Section 4, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act or posted on the Corporation’s website at www.coterra.com.

(3)For purposes of this Article I, Section 4, a “Derivative Instrument” shall include any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of capital stock of the Corporation or with a value derived in whole or in part from the price, value or volatility of any class or series of shares of capital stock of the Corporation or any derivative or synthetic arrangement having characteristics of a long position in any class or series of shares of capital stock of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise.

(4)For purposes of this Article I, Section 4, a person shall be deemed to have a short interest in a security if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security.

(5)Notwithstanding the other provisions of this Article I, Section 4, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Article I, Section 4. Nothing in this Article I, Section 4 shall be deemed to affect any rights (a) of the holders of any series of preferred stock to elect directors if and to the extent provided for in the Certificate of Incorporation or (b) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

(6)Notwithstanding the foregoing provisions of this Article I, Section 4, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business advanced by such stockholder, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that such proposal or nomination is set forth in the notice of meeting or other proxy materials and notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Article I, Section 4, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders. Notwithstanding anything to the contrary in these Bylaws, unless otherwise required by law, if any stockholder or

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beneficial owner (i) provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act with respect to any proposed nominee and (ii) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) or Rule 14a-19(a)(3) promulgated under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such stockholder has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance with the following sentence), then the nomination of each such proposed nominee shall be disregarded, notwithstanding that the nominee is included as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy materials for any annual meeting (or any supplement thereto) and notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Corporation (which proxies and votes shall be disregarded). Upon request by the Corporation, if any stockholder or beneficial owner provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act, such stockholder shall deliver to the Corporation, no later than five business days prior to the applicable meeting, reasonable evidence that it or such beneficial owner has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act.

(E)Proxy Access for Director Nominations

(1)Whenever the Board of Directors solicits proxies with respect to the election of directors at an annual meeting of the stockholders, subject to the provisions of this Article I, Section 4(E), the Corporation shall include in its proxy statement for such annual meeting, in addition to any persons nominated for election by the Board of Directors or any committee thereof, the name, together with the Required Information, of any person or persons, as applicable, nominated for election (the “Stockholder Nominee(s)”) to the Board of Directors by a stockholder or group of not more than 20 stockholders that satisfies the requirements of Article I, Section 4(E)(5) (the “Eligible Stockholder”), and who expressly elects at the time of providing the notice required by this Article I, Section 4(E) (the “Notice of Proxy Access Nomination”) to have its nominee or nominees, as applicable, included in the Corporation’s proxy materials pursuant to this Article I, Section 4(E). For purposes of this Article I, Section 4(E), the “Required Information” that the Corporation will include in its proxy statement is the information provided to the Secretary concerning the Stockholder Nominee(s) and the Eligible Stockholder that is required to be disclosed in the Corporation’s proxy statement by Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder, and, if the Eligible Stockholder so elects, a written statement, not to exceed 500 words, in support of the candidacy of the Stockholder Nominee(s) (the “Statement”). Notwithstanding anything to the contrary contained in this Article I, Section 4(E), the Corporation may omit from its proxy materials any information or Statement (or portion thereof) that it, in good faith, believes is untrue in any material respect (or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading) or would violate any applicable law or regulation. The Corporation may solicit against, and include in the proxy statement its own statement relating to, any Stockholder Nominee.

(2)To be timely for purposes of this Article I, Section 4(E), the Notice of Proxy Access Nomination shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the date (as specified in the Corporation’s proxy materials for its immediately preceding annual meeting of stockholders) on which the Corporation first mailed its proxy materials for its immediately preceding annual meeting of stockholders. In no event will an adjournment, postponement or recess of an annual meeting of stockholders or the announcement thereof commence a new time period (or extend any time period) for the giving of a Notice of Proxy Access Nomination as provided above.

(3)The maximum number of Stockholder Nominees nominated by all Eligible Stockholders that will be included in the Corporation’s proxy materials with respect to

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an annual meeting of stockholders shall not exceed 20% of the number of directors in office as of the last day on which a Notice of Proxy Access Nomination may be delivered pursuant to and in accordance with this Article I, Section 4(E) (the “Final Proxy Access Nomination Date”), or if such amount is not a whole number, the largest whole number below 20%. In the event that one or more vacancies for any reason occurs on the Board of Directors after the Final Proxy Access Nomination Date but before the date of the annual meeting and the Board of Directors resolves to reduce the size of the Board of Directors in connection therewith, the maximum number of Stockholder Nominees included in the Corporation’s proxy materials shall be calculated based on the number of directors in office as so reduced. Any individual nominated by an Eligible Stockholder for inclusion in the Corporation’s proxy materials pursuant to this Article I, Section 4(E) whom the Board of Directors decides to nominate as a nominee for director shall be counted as one of the Stockholder Nominees for purposes of determining when the maximum number of Stockholder Nominees provided for in this Article I, Section 4(E) has been reached. Any Eligible Stockholder submitting more than one Stockholder Nominee for inclusion in the Corporation’s proxy materials pursuant to this Article I, Section 4(E) shall rank such Stockholder Nominees based on the order that the Eligible Stockholder desires such Stockholder Nominees to be selected for inclusion in the Corporation’s proxy statement in the event that the total number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Article I, Section 4(E) exceeds the maximum number of nominees provided for in this Article I, Section 4(E). In the event that the number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Article I, Section 4(E) exceeds the maximum number of nominees provided for in this Article I, Section 4(E), the highest ranking Stockholder Nominee who meets the requirements of this Article I, Section 4(E) from each Eligible Stockholder will be selected for inclusion in the Corporation’s proxy materials until the maximum number is reached, going in order of the number (largest to smallest) of shares of common stock of the Corporation each Eligible Stockholder disclosed as owned in its respective Notice of Proxy Access Nomination submitted to the Corporation. If the maximum number is not reached after the highest-ranking Stockholder Nominee who meets the requirements of this Article I, Section 4(E) from each Eligible Stockholder has been selected, this process will continue as many times as necessary, following the same order each time, until the maximum number is reached. Notwithstanding anything to the contrary contained in this Article I, Section 4(E), if the Corporation receives notice pursuant to Article I, Section 4(B) that any stockholder intends to nominate for election at such meeting one or more persons (whether or not subsequently withdrawn), no Stockholder Nominees will be included in the Corporation’s proxy materials with respect to such meeting pursuant to this Article I, Section 4(E).

(4)For purposes of this Article I, Section 4(E), an Eligible Stockholder shall be deemed to “own” only those outstanding shares of common stock of the Corporation as to which the stockholder possesses both (i) the full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit from and risk of loss on) such shares; provided, that the number of shares calculated in accordance with clauses (i) and (ii) shall not include any shares (x) sold by such stockholder or any of its affiliates in any transaction that has not been settled or closed, including any short sale, (y) borrowed by such stockholder or any of its affiliates for any purposes or purchased by such stockholder or any of its affiliates pursuant to an agreement to resell or (z) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such stockholder or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of shares of outstanding common stock of the Corporation, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of (1) reducing in any manner, to any extent or at any time in the future, such stockholder’s or its affiliates’ full right to vote or direct the voting of any such shares or (2) hedging, offsetting or altering to any degree any gain or loss realized or realizable from maintaining the full economic ownership of such shares by such stockholder or affiliate. For purposes of this Article I, Section 4(E), a stockholder shall “own” shares held in the name of a

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nominee or other intermediary so long as the stockholder retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A stockholder’s ownership of shares shall be deemed to continue during any period in which (i) the stockholder has loaned such shares, provided that the stockholder has the power to recall such loaned shares on no more than five business days’ notice or (ii) the stockholder has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement which is revocable at any time by the stockholder. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings. Whether outstanding shares of the common stock of the Corporation are “owned” for these purposes shall be determined by the Board of Directors or any committee thereof. For purposes of this Article I, Section 4(E), the term “affiliate” or “affiliates” shall have the meaning ascribed thereto under the general rules and regulations under the Exchange Act.

(5)In order to make a nomination pursuant to this Article I, Section 4(E), an Eligible Stockholder must have owned the Required Ownership Percentage of the Corporation’s outstanding common stock (the “Required Shares”) continuously for the Minimum Holding Period as of both the date the Notice of Proxy Access Nomination is delivered to or mailed to and received by the Secretary in accordance with this Article I, Section 4(E) and the record date for determining the stockholders entitled to vote at the annual meeting and must continue to own the Required Shares through the meeting date. For purposes of this Article I, Section 4(E), the “Required Ownership Percentage” is three percent or more, and the “Minimum Holding Period” is three years. Within the time period specified in this Article I, Section 4(E) for delivering the Notice of Proxy Access Nomination, an Eligible Stockholder must provide the following information in writing to the Secretary: (i) one or more written statements from the record holder of the shares (and from each intermediary through which the shares are or have been held during the Minimum Holding Period) verifying that, as of a date within seven calendar days prior to the date the Notice of Proxy Access Nomination is delivered to or mailed to and received by the Secretary, the Eligible Stockholder owns, and has owned continuously for the Minimum Holding Period, the Required Shares, and the Eligible Stockholder’s agreement to provide, within five business days after the record date for the annual meeting, written statements from the record holder and intermediaries verifying the Eligible Stockholder’s continuous ownership of the Required Shares through the record date; (ii) a copy of the Schedule 14N that has been filed with the Securities and Exchange Commission as required by Rule 14a-18 under the Exchange Act; (iii) the information, representations and agreements that are the same as those that would be required to be set forth in a stockholder’s notice of nomination with respect to each Stockholder Nominee pursuant to Article I, Section 4(B); (iv) the consent of each Stockholder Nominee to being named in the proxy statement as a nominee and to serving as a director if elected; (v) a representation that the Eligible Stockholder (a) acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control at the corporation, and does not currently have such intent, (b) currently intends to maintain qualifying ownership of the Required Shares through the date of the annual meeting, (c) has not engaged and will not engage in, and has not and will not be a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the annual meeting other than its Stockholder Nominee(s) or a nominee of the Board of Directors, (d) agrees to comply with all applicable laws and regulations applicable to the use, if any, of soliciting material and (e) has provided and will provide facts, statements and other information in all communications with the Corporation and its stockholders that are or will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; (vi) an undertaking that the Eligible Stockholder agrees to (a) assume all liability stemming from any legal or regulatory violation arising out of the Eligible Stockholder’s communications with the stockholders of the Corporation or out of the information that the Eligible Stockholder provided to the Corporation and (b) indemnify and hold harmless the Corporation and each of its directors, officers and employees individually against any

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liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the corporation or any of its directors, officers or employees arising out of the Eligible Stockholder’s communications with the stockholders of the Corporation or out of the information that the Eligible Stockholder provided to the Corporation; and (vii) in the case of a nomination by a group of stockholders that together comprises an Eligible Stockholder, each group member’s agreement designating one group member as the exclusive group member authorized to interact with the Corporation for purposes of this Article I, Section 4(E) on behalf of all such members with respect to the nomination and matters related thereto, including withdrawal of the nomination.

(6)Within the time period specified in this Article I, Section 4(E) for delivering the Notice of Proxy Access Nomination, each Stockholder Nominee must deliver to the Secretary the questionnaire, representations, agreements and other information required by Article I, Section 4(B).

(7)In the event that any information or communications provided by the Eligible Stockholder or any Stockholder Nominees to the Corporation or its stockholders ceases to be true and correct in all material respects or omits a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading, each Eligible Stockholder or Stockholder Nominee, as the case may be, shall promptly notify the Secretary of any defect in such previously provided information and of the information that is required to correct any such defect; it being understood that providing any such notification shall not be deemed to cure any defect or limit the Corporation’s rights to omit a Stockholder Nominee from its proxy materials as provided in this Article I, Section 4.

(8)The Corporation shall not be required to include, pursuant to this Article I, Section 4(E), a Stockholder Nominee in its proxy materials for any meeting of stockholders (i) for which the Secretary receives a notice that a stockholder has nominated (whether or not subsequently withdrawn) such Stockholder Nominee for election to the Board of Directors pursuant to the advance notice requirements for stockholder nominees for director set forth in Article I, Section 4(B), (ii) if the Eligible Stockholder that has nominated such Stockholder Nominee has engaged in or is currently engaged in, or has been or is a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the annual meeting other than its Stockholder Nominee(s) or a nominee of the Board of Directors, (iii) if the Stockholder Nominee is or becomes a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director, if elected, that has not been disclosed to the Corporation by the Stockholder Nominee pursuant to Article I, Section 4(E)(6), (iv) who is not independent under the listing standards of each principal U.S. exchange upon which the common stock of the Corporation is listed, any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board of Directors in determining and disclosing independence of the Corporation’s directors, in each case as determined by the Board of Directors, (v) whose election as a member of the Board of Directors would cause the Corporation to be in violation of these Bylaws, the Certificate of Incorporation, the rules and listing standards of the principal U.S. exchanges upon which the common stock of the Corporation is traded, or any applicable state or federal law, rule or regulation, (vi) who is or has been, within the past fiscal year, an officer or director of a competitor, as defined for purposes of Article I, Section 8 of the Clayton Antitrust Act of 1914, as amended, (vii) who is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in such a criminal proceeding within the past 10 years, (viii) who is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), (ix) if such Stockholder Nominee or the applicable Eligible Stockholder shall have provided information to the Corporation in

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respect to such nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, as determined by the Board of Directors or any committee thereof or (x) if the Eligible Stockholder or applicable Stockholder Nominee fails to comply with its obligations pursuant to this Article I, Section 4(E).

(9)Notwithstanding anything to the contrary set forth herein, at any annual meeting of stockholders, the chairman of such annual meeting of stockholders (or, in advance of such annual meeting, the Board of Directors) shall declare a nomination by an Eligible Stockholder to be invalid, and such nomination shall be disregarded notwithstanding that proxies in respect of such vote may have been received by the Corporation, if (i) the Stockholder Nominee(s) or the applicable Eligible Stockholder shall have breached its or their obligations under this Article I, Section 4(E), as determined by the Board of Directors or such chairman of the meeting or (ii) the Eligible Stockholder (or a qualified representative thereof) does not appear at the meeting of stockholders to present any nomination pursuant to this Article I, Section 4(E).

(10)Any Stockholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of stockholders but either (i) withdraws from or becomes ineligible or unavailable for election at the annual meeting or (ii) does not receive at least 25% of the votes cast in favor of such Stockholder Nominee’s election, will be ineligible to be a Stockholder Nominee pursuant to this Article I, Section 4(E) for the next two annual meetings. For the avoidance of doubt, this Article I, Section 4(E) shall not prevent any stockholder from nominating any person to the Board of Directors pursuant to and in accordance with Article I, Section 4(B).

(11)Whenever the Eligible Stockholder consists of a group of more than one stockholder, each provision in this Article I, Section 4(E) that requires the Eligible Stockholder to provide any written statements, representations, undertakings, agreements or other instruments or to meet any other requirements or conditions (including without limitation the Minimum Holding Period) shall be deemed to require that each stockholder that is a member of such group to provide such written statements, representations, undertakings, agreements or other instruments and to meet such other requirements or conditions; provided, however, that the Required Ownership Percentage shall apply to the ownership of the group in the aggregate. In addition, a group of any two or more funds that are under common management and investment control shall be treated as one stockholder for purposes of forming a group to qualify as an Eligible Stockholder. No person may be a member of more than one group of stockholders constituting an Eligible Stockholder with respect to any annual meeting.

(12)This Article I, Section 4(E) shall be the exclusive method for stockholders to include nominees for director in the Corporation’s proxy materials (including, without limitation, any proxy card or written ballot, other than with respect to Rule 14a-19 of the Exchange Act to the extent applicable with respect to form of proxies).

Section 5Adjournments and Postponements of Stockholders’ Meetings.

Any meeting of stockholders, annual or special, may be adjourned by the chairman of the meeting from time to time, and for any reason, to reconvene at the same or some other place, if any, and, except as required by applicable law, notice need not be given of any such reconvened meeting if the time, place, if any, thereof and the means of remote communication, if any, by which stockholders and holders of proxies for stockholders may be deemed present in person and vote at that reconvened meeting are announced at the meeting at which the adjournment is taken or are provided in any other manner permitted by the DGCL. At the reconvened meeting the Corporation may transact any business it might have transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment the Board of Directors fixes a

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new record date for the meeting to be reconvened, the Corporation will give, in accordance with Article I, Section 4(A), notice of the reconvened meeting to each stockholder of record and entitled to vote at the reconvened meeting.

The Board of Directors may, at any time prior to the holding of a meeting of stockholders, annual or special, and for any reason, cancel, postpone, or reschedule such meeting by public announcement made prior to the time previously scheduled for such meeting of stockholders.

Section 6Quorum and Action of Stockholders.

At any meeting of the stockholders, the holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business, except in any case where a larger quorum is required by applicable law, by the Certificate of Incorporation or by these Bylaws. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. In any case, any meeting may be adjourned from time to time, whether or not a quorum is present, by the chairman of the meeting or stockholders so present by the affirmative vote of the holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote thereon, present in person or represented by proxy.

Each director shall be elected by the affirmative vote of the holders of the majority of the votes cast at a meeting for the election of directors at which a quorum is present; provided, however, that the directors shall be elected by a plurality of the votes cast at any meeting for which the number of candidates for election as directors exceeds the number of directors to be elected, with the determination thereof being made by the Secretary as of the 10th day preceding the date the Corporation first mails or delivers its notice of meeting for such meeting to stockholders. For purposes of this paragraph, a majority of votes cast shall mean that the number of shares voted “for” a director’s election exceeds the number of shares voted “against” such director’s election. Votes cast shall exclude abstentions and broker non-votes with respect to that director’s election.

The Board of Directors shall have the power to establish procedures with respect to the resignation of continuing directors who are not reelected as provided above.

When a quorum is present at any meeting, any question brought before the meeting, other than in an election of directors as provided for above, shall be decided by the affirmative vote of the holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote thereon, present in person or represented by proxy, unless a different or minimum vote is required by the Certificate of Incorporation, these Bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or any law or regulation applicable to the Corporation or its securities, in which case such different or minimum vote shall be the applicable vote on the matter.

Section 7Proxies and Voting.

Except as otherwise may be provided in the Certificate of Incorporation and subject to the provisions of Article IV, Section 2 of these Bylaws, each stockholder at every meeting of the stockholders shall be entitled to one vote in person or by proxy for each share of the capital stock held by such stockholder, but no proxy shall be voted after three years from its date, unless the proxy provides for a longer period.

Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board of Directors.

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Section 8List of Stockholders Entitled to Vote.

The Corporation shall prepare or cause to be prepared, no later than the 10th day before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the date of such meeting, the list shall reflect the stockholders entitled to vote as of the 10th day before the meeting date), arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of 10 days ending on the day before the meeting date (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (ii) during ordinary business hours, at the principal place of business of the Corporation. The original or duplicate stock ledger shall conclusively list and identify the stockholders entitled to examine such list or to vote in person or by proxy at any meeting of stockholders.

Section 9Conduct of Stockholders’ Meetings.

At every meeting of stockholders, the Chairman, or, if a chairman has not been appointed or is absent, the Chief Executive Officer, or if no Chief Executive Officer is then serving or is absent, the President, or, if no President is then serving or is absent, any vice president of the Corporation (a “Vice President”), or, if no Vice President is then serving or all are absent, a chairman of the meeting chosen by the Board of Directors, shall act as chairman of the meeting. The Chairman may appoint the Chief Executive Officer as chairman of the meeting. The Secretary, or, in his or her absence, an assistant secretary of the Corporation (“Assistant Secretary”) or other officer or other person directed to do so by the chairman of the meeting, shall act as secretary of the meeting.

To the extent not in conflict with the provisions of applicable law relating thereto, the Certificate of Incorporation or these Bylaws, the Board of Directors may adopt by resolution such rules and regulations for the conduct of meetings of stockholders as it deems appropriate. Except to the extent inconsistent with those rules and regulations, if any, the chairman of any meeting of stockholders will have the right and authority to convene and (for any or no reason) to recess or adjourn the meeting and prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of that chairman, are appropriate for the proper conduct of that meeting. Those rules, regulations or procedures, by whomever so adopted, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record, their duly authorized and constituted proxies or such other persons as the chairman of the meeting may determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; (v) limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting and matters which are to be voted on by ballot; and (vi) restrictions on the use of audio or video recording devices at the meeting. The chairman at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such chairman should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Except to the extent the Board of Directors or the chairman of any meeting otherwise prescribes, no rules or parliamentary procedure will be required to govern any meeting of stockholders.

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Section 10Action by Consent.

(A)Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in accordance with Delaware law.

(B)In order that the Corporation may determine the stockholders entitled to consent to corporate action without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date after the expiration of such 10 day period on which a signed consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with Delaware law. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.

(C)In the event of the delivery, in the manner provided by this Article I, Section 10, to the Corporation of the requisite consent or consents to take corporate action or any related revocation or revocations, the Corporation may engage independent inspectors of elections for the purpose of promptly performing a ministerial review of the validity of the consents and revocations. If such independent inspectors are engaged, for the purpose of permitting the inspectors to perform such review, no action by consent and without a meeting shall be effective until such inspectors have completed their review, determined that the requisite number of valid and unrevoked consents delivered to the Corporation in accordance with this Article I, Section 10 and applicable law have been obtained to authorize or take the action specified in the consents, and certified such determination for entry in the records of the Corporation kept for the purpose of recording the proceedings of meetings of stockholders. Nothing contained in this Article I, Section 10(C) shall in any way be construed to suggest or imply that the Board of Directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after such certification by the independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto).

Article II

BOARD OF DIRECTORS AND BOARD COMMITTEES

Section 1Board of Directors.

The number of directors which constitute the whole Board of Directors shall be neither less than three nor more than 15. Within the limits above specified, the number of directors shall

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be determined by resolution of the Board of Directors. The directors shall be elected at the annual meeting of the stockholders, except as provided elsewhere in these Bylaws, and each director elected shall hold office until a successor is elected and qualified, or until he or she sooner dies, resigns or is removed. Directors need not be stockholders. Newly-created directorships resulting from any increase in the authorized number of directors and vacancies on the Board of Directors shall be filled by the Board of Directors, by vote of a majority of the directors then in office though less than a quorum or by the sole remaining director, or may be filled, at the discretion of the Board of Directors, by an election at a meeting of stockholders held for that purpose, and each director so chosen shall hold office until the next annual meeting of the stockholders and until such director’s successor is elected and qualified. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director.

Section 2Powers of the Board of Directors. The Board of Directors shall have and may exercise all the powers of the Corporation, except such as are conferred exclusively upon the stockholders by applicable law or by the Certificate of Incorporation.

Section 3Executive Committee.

The Board of Directors may from its own number designate an executive committee of the Board of Directors, to consist of not less than two members. The Chairman and the Chief Executive Officer, if also a director, shall each be an ex officio member of the executive committee.

Such executive committee shall, to the extent permitted by law, be vested with all the power and authority to the Board of Directors in the management of the business and affairs of the Corporation to take any action which the Board of Directors itself could take with respect to the conduct and management of the business of the Corporation, as well as authorizing the seal of the Corporation to be affixed to all papers which may require it.

If an executive committee is designated, each member of such executive committee shall hold office until the first meeting of the Board of Directors following the next annual meeting of the stockholders and until his or her successor is elected and qualified, or until he or she sooner dies, resigns, is removed, or becomes disqualified by ceasing to be a director.

One-half of the members of the executive committee then in office, but in no case less than two members, shall constitute a quorum for the transaction of business. The executive committee may make rules not inconsistent herewith for the holding and conducting of its meetings, but unless otherwise provided in such rules, its meetings shall be held and conducted in the same manner, as nearly as may be, as is provided in these Bylaws for meetings of the Board of Directors. The Board of Directors shall have power and authority to rescind any vote or resolution of the executive committee, but no such rescission shall have retroactive effect. In the absence or disqualification of a member of the executive committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.

Section 4Committees. The Board of Directors may at any time and from time to time, by resolution, appoint, designate, change the membership of or terminate the existence of one or more committees, each committee to consist of two or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. Each such committee shall have such name as may be determined from time to time by resolution adopted by the Board of Directors and shall have and may exercise such powers of the Board of Directors in the management of the business and aﬀairs of the Corporation, including the power to authorize the seal of the Corporation to be aﬃxed to all papers which may require it, as may be permitted by law and determined from time to time by resolution. One-half

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of the members of each such committee then in oﬃce, but in no case less than two members, shall constitute a quorum for the transaction of business. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.

Section 5Meetings of the Board of Directors.

Regular meetings of the Board of Directors may be held without call or formal notice at such places, if any, either within or without the State of Delaware and at such times as the Board of Directors may from time to time determine. A regular meeting of the Board of Directors may be held without call or formal notice immediately after and at the same place, if any, as the annual meeting of the stockholders.

Special meetings of the Board of Directors may be held at any time and at any place, if any, either within or without the State of Delaware when called by the Chairman, the Chief Executive Officer, the President, the chief financial officer of the Corporation (the “Chief Financial Officer”) or two or more directors. Notice of a special meeting of the Board of Directors shall be given by the person or persons calling the meeting at least 24 hours before the special meeting.

Section 6Quorum and Action of Directors. At any meeting of the Board of Directors, a quorum shall consist of one-half of the directors then in oﬃce, but in no case less than two directors. When a quorum is present at any meeting, the votes of a majority of the directors present shall decide any questions brought before such meeting, except in any case where a larger vote is required by applicable law, by the Certificate of Incorporation or by these Bylaws.

Section 7Compensation of Directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a ﬁxed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be paid like compensation for attending committee meetings.

Section 8Chairman of the Board. The Board of Directors may elect from among its members a Chairman of the Board. Subject to Article I, Section 9 of these Bylaws, the Chairman shall preside at all meetings of the stockholders and of the Board of Directors at which he or she is present.

Section 9Resignation; Removal. Any director may resign at any time by delivering his or her resignation in writing or by electronic transmission to the Chairman, the Lead Independent Director (defined below), the Chief Executive Officer, the President or the Secretary. Such resignation shall take effect at the time stated in the resignation, or if no time be so stated therein, immediately upon its delivery, and without the necessity of its being accepted unless the resignation shall so state. The stockholders may remove any director from office with or without cause, by the affirmative vote of the holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote at an election of directors.

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Article III

OFFICERS

Section 1Officers and Agents.

The officers of the Corporation shall be chosen by the Board of Directors and shall consist of a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary, a Treasurer (defined below) and such other officers as the Board of Directors shall deem necessary or appropriate, which may include, without limitation a Chief Financial Officer, one or more executive vice presidents of the Corporation (each, an “Executive Vice President”), senior vice presidents of the Corporation (each, a “Senior Vice President”), a General Counsel (defined below) and Assistant General Counsels (defined below), a Controller (defined below) and assistant controllers, Assistant Secretaries, and assistant treasurers of the Corporation (each, an “Assistant Treasurer”). Two or more offices may be held by the same person.

The Board of Directors at its first meeting after each annual meeting of stockholders or at such other time as determined by the Board of Directors shall appoint the officers of the Corporation, of whom only the Chief Executive Officer must be a board member. The officers of the Corporation shall have such powers and duties in the management of the Corporation as may be prescribed in these Bylaws, a resolution by the Board of Directors or, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors.

Any vacancies occurring in any office of the Corporation shall be filled by the Board of Directors.

Section 2Chief Executive Officer.

The Chief Executive Officer shall perform all duties commonly incident to his or her office and shall perform such other duties as the Board of Directors shall from time to time designate. The Chief Executive Officer, in addition to his or her other duties, shall have general and active management authority of corporate business and shall ensure that all orders and resolutions of the Board of Directors are carried into effect.

Section 3President.

The President shall have such duties and powers as shall be designated from time to time by the Chief Executive Officer or the Board of Directors. The President shall have all the powers and shall discharge all the duties of the Chief Executive Officer during his or her absence or his or her inability or incapacity to act. The President shall have general responsibility for the daily operations of the Corporation and shall have such duties and powers as shall be designated from time to time by the Chief Executive Officer or the Board of Directors.

Section 4Executive Vice Presidents, Senior Vice Presidents and Vice Presidents.

Any Executive Vice President, any Senior Vice President or, if they are not available, any available Vice President (in each case, in the order as determined by the Board of Directors), shall have all the powers and shall discharge all the duties of the President during his or her absence or his or her inability or incapacity to act, and each such Executive Vice President, Senior Vice President or Vice President shall further have such powers and discharge such duties as are imposed upon them by these Bylaws or may be from time to time conferred or imposed upon them by the Chief Executive Oﬃcer, the President or the Board of Directors.

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Section 5Chief Financial Oﬃcer.

The Chief Financial Oﬃcer, if such oﬃcer is appointed, or if not, the treasurer of the Corporation (the “Treasurer”), shall be responsible for developing, recommending and implementing ﬁnancial policies of the Corporation and shall have general responsibility for protecting the Corporation’s ﬁnancial position. He or she shall keep and maintain or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses capital, retained earnings and shares. The Treasurer shall further have such powers and discharge such duties as are imposed upon him or her by these Bylaws or may be from time to time conferred or imposed upon him or her by the Chief Executive Oﬃcer, the President or the Board of Directors.

Section 6Secretary and Assistant Secretaries.

The Secretary or an Assistant Secretary shall attend all meetings of the stockholders and all meetings of the Board of Directors and its committees and shall record all the proceedings of the meetings of the stockholders and of the Board of Directors and its committees in a book or books to be kept for that purpose. He or she shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors and shall perform such other duties as may be prescribed by the Chief Executive Officer, the President or by the Board of Directors, under whose supervision the Secretary shall work. The Secretary shall keep in safe custody the seal of the Corporation and when authorized by the Chief Executive Officer, the President, the Board of Directors, or these Bylaws, affix the same to any instrument requiring it and, when so affixed, the Secretary or an Assistant Secretary shall attest the seal by signing his or her name to the sealed document. The Secretary shall be responsible for the stock ledger (which may, however, be kept by any transfer agent or agents of the Corporation under the direction of the Secretary).

The Assistant Secretary, or if there are more than one, the Assistant Secretaries, in the order determined by the Secretary, shall in the absence or disability of the Secretary perform the duties and exercise the powers of the Secretary, and shall perform such other duties and have such other powers as the Chief Executive Officer, the President, the Board of Directors and the Secretary may from time to time prescribe.

Section 7Treasurer and Assistant Treasurers.

The Treasurer shall have custody of the corporate funds and securities and shall keep, or cause to be kept, full and accurate account of receipts and disbursements in books belonging to the Corporation and shall deposit or cause to be deposited all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall invest surplus funds, if any, in such investments as he or she shall deem appropriate in consultation with the Chief Executive Officer or Chief Financial Officer, as applicable, and pursuant to this authority may buy and sell securities on behalf of the Corporation from time to time. He or she shall disburse or cause to be disbursed the funds of the Corporation as may be ordered by the Board of Directors, the Chief Executive Officer or such other officer as the Chief Executive Officer may from time to time designate, taking proper vouchers for such disbursements. The Treasurer shall work under the supervision of the Chief Financial Officer if the Board of Directors has appointed such an officer.

The Assistant Treasurer, if any, (or there are more than one, the Assistant Treasurers, in the order determined by the Treasurer) shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as Chief Executive Officer, the President, the Board of Directors and the Treasurer may from time to time prescribe and shall be responsible to and shall report to the Treasurer.

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Section 8General Counsel and Assistant General Counsels.

The general counsel of the Corporation (the “General Counsel”), if the Board of Directors appoints such an officer, shall be the chief legal officer of the Corporation. The General Counsel shall further have such powers and discharge such duties as are imposed upon him or her by these Bylaws or may be from time to time conferred or imposed upon him or her by the Chief Executive Oﬃcer, the President or the Board of Directors.

The assistant general counsel of the Corporation (each, an “Assistant General Counsel”), or, if there are more than one, the Assistant General Counsels, shall, in the order determined by the General Counsel, in the absence or disability of the General Counsel, perform his or her duties and exercise his or her powers and shall perform such other duties and have such other powers as the Chief Executive Officer, the President, the Board of Directors or the General Counsel may from time to time prescribe.

Section 9Controller.

The controller of the Corporation (the “Controller”), if the Board of Directors elects such an officer, shall be the chief accounting officer of the Corporation, shall keep its books of account and accounting records, and shall oversee the Corporation’s accounting policies and procedures. The Controller shall work under the supervision of the Chief Financial Officer. The Controller shall further have such powers and discharge such duties as are imposed upon him or her by these Bylaws or may be from time to time conferred or imposed upon him or her by the Chief Executive Oﬃcer, the President, the Chief Financial Officer, or the Board of Directors.

The assistant controller of the Corporation, if any, shall, in the absence or disability of the Controller, perform the duties and exercise the powers of the Controller, and shall perform such other duties and have such other powers as the Chief Executive Officer, the President, the Board of Directors, the Chief Financial Officer or the Controller may from time to time prescribe, and shall be responsible to and shall report to the Controller.

Section 10Resignations and Removals.

Any officer may resign at any time by delivering his or her resignation in writing or by electronic transmission to the Chairman, the Chief Executive Officer, the President or the Secretary. Such resignation shall take effect at the time stated in the resignation, or if no time be so stated therein, immediately upon its delivery, and without the necessity of its being accepted unless the resignation shall so state.

Subject to Article VIII, the Board of Directors may at any time, by vote of a majority of the directors then in office (so long as a quorum is present), remove from office the Chief Executive Officer, the President, any Executive Vice President, and Senior Vice President, any Vice President, the Chief Financial Officer, the Treasurer, the Secretary, the General Counsel or the Controller. Any other officer, agent or employee may be removed from office, agency or employment by (i) the Board of Directors, or (ii) in the case of any officer, agent or employee not appointed to his or her position by the Board of Directors or any duly authorized committee thereof, by any officer upon whom such power may be conferred by the Board of Directors.

Section 11Vacancies.

If the oﬃce of any oﬃcer becomes vacant, by reason of death, resignation, removal, disqualiﬁcation or otherwise, a successor may be appointed by the Board of Directors. Each such successor shall hold oﬃce for the unexpired term of office to which such successor was appointed, and until his or her successor shall be appointed and qualiﬁed, or until he or she sooner dies, resigns, is removed or replaced or becomes disqualiﬁed.

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Article IV

STOCK

Section 1Certiﬁcates of Stock. Shares of capital stock of the Corporation may be certiﬁcated or uncertiﬁcated, as permitted by applicable law. Every holder of capital stock in the Corporation represented by certificates shall be entitled to have a certiﬁcate, signed by or in the name of the Corporation, by any two authorized officers of the Corporation (it being understood that the Chairman, the President, a Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary shall be an authorized officer for such purpose), certifying the number of shares owned by him or her in the Corporation. Any or all of the signatures on such certiﬁcate may be a facsimile copy, engraved, stamped or printed. In case any oﬃcer, transfer agent or registrar who shall have signed, or whose signature or signatures shall have been used on any such certiﬁcate or certiﬁcates shall cease to be such oﬃcer, transfer agent or registrar before such certiﬁcate or certiﬁcates are issued, such certiﬁcate or certiﬁcates may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 2Record Date. In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may ﬁx in advance a date, which record date shall not precede the date upon which the resolutions fixing the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by law, not be more than 60 days nor less than 10 days before the date of any meeting of stockholders. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

Section 3Transfer Books; Record Date. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action (other than determining stockholders entitled to express consent to corporate action without a meeting which is addressed in Article I, Section 10 of these Bylaws), the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than 60 days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 4Loss of Certiﬁcates. In the case of a certificate that is alleged to be lost, stolen or destroyed, the Corporation may issue a new certiﬁcate or uncertificated shares (if applicable) in place thereof and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

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Article V

GENERAL PROVISIONS

Section 1Seal. The corporate seal of the Corporation shall, subject to alteration by the Board of Directors, consist of a ﬂat-faced circular die with the word “Delaware”, together with the name of the Corporation and the year of its organization, cut or engraved thereon. The corporate seal of the Corporation may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 2Execution of Papers. Unless the Board of Directors generally or in particular cases authorizes the execution thereof in some other manner, all deeds, leases, transfers, sales of securities, contracts, proxies, bonds, notes, checks, drafts and other obligations, agreements and undertakings made, accepted or endorsed by the Corporation, shall be signed by the Chief Executive Oﬃcer, the President or by one of the Vice Presidents (including any Executive Vice President or Senior Vice President), and, if such papers require a seal, the seal of the Corporation shall be aﬃxed thereto and attested by the Secretary or an Assistant Secretary.

Section 3Fiscal Year. Except as from time to time otherwise provided by the Board of Directors, the ﬁscal year of the Corporation shall commence on the first day of January of each year.

Section 4Waiver of Notice. Whenever any notice is required to be given by applicable law or under the provisions of the Certiﬁcate of Incorporation or of these Bylaws, a waiver of notice, given by the person or persons entitled to such notice shall be deemed to satisfy such notice requirement, whether such waiver was given before or after the meeting or other event for which notice is waived. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any annual or special meeting of the stockholders, directors, or members of a committee of directors need be specified in a waiver of notice.

Section 5Amendments. These Bylaws may be altered, amended or repealed by (i) the aﬃrmative vote of the holders of a majority of the voting power of the issued and outstanding capital stock of the Corporation or (ii) the Board of Directors, provided that such amendments are not inconsistent with the Certificate of Incorporation or the DGCL.

Article VI

INDEMNIFICATION AND ADVANCMENT OF EXPENSES

Section 1Right to Indemnification. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, regulatory, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director, officer or employee of the Corporation or, while a director, officer or employee of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, non-profit entity, or other enterprise, including service with respect to employee benefit plans sponsored by the Corporation or such other corporation, partnership, joint venture, trust, non-profit entity, or enterprise, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such

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Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Article VI, Section 3, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors.

Section 2Advancement of Expenses. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VI or otherwise.

Section 3Claims. If a claim for indemnification under this Article VI (following the final disposition of such proceeding) is not paid in full within 60 days after the Corporation has received a claim therefor by the Covered Person, or if a claim for any advancement of expenses under this Article VI is not paid in full within 30 days after the Corporation has received a statement or statements requesting such amounts to be advanced, the Covered Person shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. If successful in whole or in part, the Covered Person shall be entitled to be paid the expense (including attorneys’ fees) of prosecuting such claim to the fullest extent permitted by law. In any such action, the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

Section 4Nonexclusivity of Rights. The rights conferred on any Covered Person by this Article VI shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

Section 5Other Sources. The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, non-profit entity or other enterprise shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, non-profit entity or other enterprise.

Section 6Amendment or Repeal. Any right to indemnification or to advancement of expenses of any Covered Person arising under these Bylaws shall not be eliminated or impaired by an amendment to or repeal of these Bylaws after the occurrence of the act or omission that is the subject of the proceeding for which indemnification or advancement of expenses is sought.

Section 7Other Indemnification and Advancement of Expenses. This Article VI shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

Article VII

EXCLUSIVE FORUM FOR ADJUDICATION OF DISPUTES

Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current

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or former director, officer, other employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or these Bylaws or the Certificate of Incorporation of the Corporation (as either may be amended from time to time) or (iv) any action asserting a claim governed by the internal affairs doctrine or asserting an “internal corporate claim” (as that term is defined in Section 115 of the DGCL) (any action, proceeding or claim described in clauses (i) through (iv) being referred to as a “Covered Action”) shall, to the fullest extent permitted by applicable law, be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the U.S. Federal District Court for the District of Delaware).

If any Covered Action is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall, to the fullest extent permitted by applicable law, be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce this Article VII (an “Enforcement Action”) and (ii) having service of process made upon such stockholder in any such Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

Unless the Corporation consents in writing to the selection of an alternative forum, the Federal District Courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article VII.

Article VIII

CERTAIN CORPORATE GOVERNANCE MATTERS

Section 1Executive Chairman; President and Chief Executive Officer.

Effective as of the Effective Time (for all purposes of this Article VIII, as defined in the Agreement and Plan of Merger dated as of May 23, 2021 by and among the Corporation, Double C Merger Sub, Inc. and Cimarex Energy Co. (“Cimarex”), as amended as of June 29, 2021 and as the same may be further amended from time to time (the “Merger Agreement”)), Mr. Thomas E. Jorden shall serve as the President and Chief Executive Officer of the Corporation and as a member of the Board of Directors. The role of Mr. Jorden as President and Chief Executive Officer shall be consistent with the employment letter agreement entered into with Mr. Jorden by the Corporation on May 23, 2021 in connection with the Merger Agreement.

Prior to the Expiration Date (defined below), the removal of Mr. Jorden from, or the failure to appoint, re-elect or re-nominate Mr. Jorden to, as applicable, his positions as the President and Chief Executive Officer of the Corporation and as a member of the Board of Directors (or as Chairman, if Mr. Jorden is elected Chairman prior to the Expiration Date) shall require the affirmative vote of at least 75% of all the members of the Board of Directors (other than the person being considered for removal pursuant to the following provisions).

Section 2Board Size and Composition.

Effective as of the Effective Time, the Board of Directors shall be comprised of five Continuing Corporation Directors (defined below), including Mr. Dan O. Dinges, and five Continuing Cimarex Directors (defined below), including Mr. Jorden. From and after the Effective Time until the Expiration Date: (i) the number of directors that comprises the full Board of Directors shall be 10, (ii) no vacancy on the Board created by the cessation of service of a director shall be filled by the Board of Directors and the Board of Directors shall not nominate

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any individual to fill such vacancy, unless (x) such individual would be an independent director of the Corporation, as applicable (unless such predecessor director was not an independent director), (y) in the case of a vacancy created by the cessation of service of a Continuing Corporation Director, not less than a majority of the Continuing Corporation Directors have approved the appointment or nomination (as applicable) of the individual appointed or nominated (as applicable) to fill such vacancy, and (z) in the case of a vacancy created by the cessation of service of a Continuing Cimarex Director, not less than a majority of the Continuing Cimarex Directors have approved the appointment or nomination (as applicable) of the individual appointed or nominated (as applicable) to fill such vacancy; provided that any such appointment or nomination pursuant to clause (y) or (z) shall be made in accordance with applicable law and the rules of the New York Stock Exchange (or other national securities exchange on which the Corporation’s securities are listed); (iii) at its first meeting following the Effective Time, the Board of Directors shall determine what committees of the Board of Directors shall exist following that time (which shall include, without limitation, all committees required by applicable stock exchange and federal securities laws, rules and regulations); provided that from and after the Effective Time, each committee of the Board of Directors shall consist of an equal number of Continuing Corporation Directors and Continuing Cimarex Directors; (iv) each of the Compensation Committee and the Environment, Health and Safety Committee shall be chaired by a Continuing Cimarex Director; (v) each of the Audit Committee and, subject to the next sentence, the Governance and Social Responsibility Committee shall be chaired by a Continuing Corporation Director; and (vi) the executive committee of the Board of Directors (to the extent it exists) shall have four members, consisting of two Continuing Corporation Directors and two Continuing Cimarex Directors and including Mr. Jorden (for so long as he serves as Chief Executive Officer and a member of the Board of Directors). In the event the Governance and Social Responsibility Committee does not include as members each of the independent members of the Board of Directors, the Governance and Social Responsibility Committee shall have two joint chairs, one a Continuing Corporation Director and one a Continuing Cimarex Director. For purposes of this Article VIII, Section 2, the terms “Continuing Corporation Directors” and “Continuing Cimarex Directors” shall mean, respectively, the directors of the Corporation or Cimarex, as applicable, who were selected to be directors of the Corporation as of the Effective Time, pursuant to Section 2.7(a) of the Merger Agreement, and any directors of the Corporation who were subsequently appointed or nominated and elected to fill a vacancy created by the cessation of service of any such director (or any successor thereto) pursuant to this Article VIII, Section 2.

Section 3Lead Independent Director.

From the Effective Time through the Expiration Date, the Board of Directors shall have a lead independent director who shall be (i) a Continuing Cimarex Director at any time when the Chairman is a Continuing Corporation Director and (ii) a Continuing Corporation Director at any time when the Chairman is a Continuing Cimarex Director.

Section 4Article VIII Amendments; Interpretation.

Effective as of the Effective Time until the completion of the Corporation’s 2024 annual meeting of stockholders (the “Expiration Date”), the provisions of this Article VIII may be modified, amended or repealed, and any bylaw provision or other resolution (including any proposed corresponding modification, amendment or repeal of any provision of the Corporation’s other constituent documents) inconsistent with this Article VIII may be adopted, only by (and any such modification, amendment, repeal or inconsistent bylaw provision or other resolution may be proposed or recommended by the Board of Directors for adoption by the stockholders of the Corporation only by) the affirmative vote of at least 75% of the full Board of Directors. In the event of any inconsistency between any provision of this Article VIII and any other provision of these Bylaws or the Corporation’s other constituent documents, the provisions of this Article VIII shall control to the fullest extent permitted by law.

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EXHIBIT 10.4

Coterra Energy Inc. T 281-589-4600

Corporate Headquarters F 281-589-4955

Three Memorial City Plaza coterra.com

840 Gessner Road

Suite 1400

Houston, TX 77024

August 4, 2023

Mr. Stephen P. Bell
c/o Coterra Energy Inc.
Three Memorial City Plaza
840 Gessner Road, Suite 1400
Houston, Texas 77024

Re: Equity Awards

Dear Steve,

This letter memorializes our agreement regarding the terms of your annual long-term incentive awards for each of calendar years 2024 and 2025 and certain of your rights, benefits and entitlements under that certain Severance Compensation Agreement dated as of March 9, 2020 between you and Cimarex Energy Co., a Delaware corporation (the obligations of which were assumed by Coterra Energy Inc., a Delaware corporation (the “Company”), on October 1, 2021) (as amended from time to time, the “Severance Agreement”).

In consideration for your waiver of the right to assert “Good Reason” under the Severance Agreement, you will be granted annual long-term incentive awards with a target annual grant date fair value of $4,500,000 (the “Annual Target LTI Opportunity”) during each of calendar years 2024 and 2025 (individually, the “2024 LTI Award” and the “2025 LTI Award,” respectively, and collectively, the “Annual LTI Awards”), subject to your continued employment with the Company through each applicable grant date. These Annual LTI Awards will be (1) granted to you at the same time, (2) of the same type and in the same proportion (e.g. 50 percent restricted stock units and 50 percent performance stock units), and (3) on the same form, in each case, as the annual long-term incentive awards granted to similarly situated executive officers at the time of each such grant. In the unfortunate event of your death prior to the grant date of the 2024 LTI Award, the Company will pay to your estate a lump sum cash payment equal to the Annual Target LTI Opportunity ($4,500,000, less applicable taxes) and your and your estate’s right to receive the Annual LTI Awards will be forfeited.

For the avoidance of doubt, you hereby irrevocably and unconditionally waive and release any and all rights, claims, demands or actions that you, your personal representatives, successors, assigns or estate may have to assert “Good Reason” under the Severance Agreement or any successor thereto for a material reduction in long-term incentive compensation opportunity following the grant of the 2025 LTI Award.

This letter represents the complete understanding between you and the Company regarding the subject matter hereof. No amendment to this letter will be binding upon you or the Company unless in writing and signed by or on behalf of both parties.

Sincerely,

COTERRA ENERGY INC.

Acknowledged and Agreed

By:

/s/ Andrea M. Alexander

/s/ Stephen P. Bell

Andrea M. Alexander

Stephen P. Bell

Senior Vice President – Chief HR Officer

EXHIBIT 31.1

I, Thomas E. Jorden, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Coterra Energy Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2023


			/s/ THOMAS E. JORDEN
			Thomas E. Jorden
			Chief Executive Officer and President

EXHIBIT 31.2

I, Shannon E. Young III, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Coterra Energy Inc.;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2023


			/s/ SHANNON E. YOUNG III
			Shannon E. Young III
			Executive Vice President and Chief Financial Officer

EXHIBIT 32.1

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) (the “Act”), each of the undersigned, Thomas E. Jorden, Chief Executive Officer of Coterra Energy Inc., a Delaware corporation (the “Company”), and Shannon E. Young III, Chief Financial Officer of the Company, hereby certify that, to his knowledge:

(1) the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 8, 2023


			/s/ THOMAS E. JORDEN
			Thomas E. Jorden
			Chief Executive Officer

			/s/ SHANNON E. YOUNG III
			Shannon E. Young III
			Chief Financial Officer

Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2023	Aug. 04, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	1-10447
Entity Registrant Name	COTERRA ENERGY INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-3072771
Entity Address, Address Line One	Three Memorial City Plaza
Entity Address, Address Line Two	840 Gessner Road,
Entity Address, Address Line Three	Suite 1400,
Entity Address, City or Town	Houston,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77024
City Area Code	281
Local Phone Number	589-4600
Title of 12(b) Security	Common Stock, par value $0.10 per share
Trading Symbol	CTRA
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		755,045,540
Entity Central Index Key	0000858470
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 841	$ 673
Restricted cash	9	10
Accounts receivable, net	604	1,221
Income taxes receivable	18	89
Inventories	65	63
Derivative instruments	88	146
Other current assets	15	9
Total current assets	1,640	2,211
Properties and equipment, net (Successful efforts method)	17,801	17,479
Other assets	438	464
Total assets	19,879	20,154
Current liabilities
Accounts payable	626	844
Accrued liabilities	294	328
Interest payable	21	21
Total current liabilities	941	1,193
Long-term debt, net	2,171	2,181
Deferred income taxes	3,367	3,339
Asset retirement obligations	277	271
Other liabilities	456	500
Total liabilities	7,212	7,484
Commitments and contingencies
Cimarex redeemable preferred stock	8	11
Stockholders' equity
Common stock: Authorized — 1,800 shares of $0.10 par value in 2023 and 2022, respectively Issued — 757 shares and 768 shares in 2023 and 2022, respectively	76	77
Additional paid-in capital	7,639	7,933
Retained earnings	4,931	4,636
Accumulated other comprehensive income	13	13
Total stockholders' equity	12,659	12,659
Total liabilities and stockholders' equity	$ 19,879	$ 20,154

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, shares authorized (in shares)	1,800,000,000	1,800,000,000
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, issued (in shares)	755,000,000	768,000,000

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
OPERATING REVENUES
Operating revenues	$ 1,197	$ 2,638	$ 2,836	$ 4,708
Gain (loss) on derivative instruments	(12)	(66)	126	(457)
Total operating revenues	1,185	2,572	2,962	4,251
OPERATING EXPENSES
Direct operations	130	116	264	216
Transportation, processing and gathering	258	238	494	471
Taxes other than income	63	98	149	174
Exploration	5	7	9	13
Depreciation, depletion and amortization	395	414	764	774
General and administrative	58	87	134	194
Total operating expenses	909	960	1,814	1,842
Gain (loss) on sale of assets	0	(3)	5	(1)
INCOME FROM OPERATIONS	276	1,609	1,153	2,408
Interest expense	16	22	33	43
Interest income	(10)	(1)	(22)	(1)
Income before income taxes	270	1,588	1,142	2,366
Income tax expense	61	359	256	529
NET INCOME	$ 209	$ 1,229	$ 886	$ 1,837
Earnings per share
Basic (in dollars per share)	$ 0.28	$ 1.53	$ 1.16	$ 2.28
Diluted (in dollars per share)	$ 0.27	$ 1.52	$ 1.16	$ 2.27
Weighted-average common shares outstanding
Basic (in shares)	755	803	760	806
Diluted (in shares)	760	808	764	809
Natural gas
OPERATING REVENUES
Operating revenues	$ 436	$ 1,468	$ 1,258	$ 2,579
Oil
OPERATING REVENUES
Operating revenues	626	876	1,241	1,575
NGL
OPERATING REVENUES
Operating revenues	129	280	306	525
Other
OPERATING REVENUES
Operating revenues	$ 6	$ 14	$ 31	$ 29

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 886	$ 1,837
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization	764	774
Deferred income tax expense	27	101
(Gain) loss on sale of assets	(5)	1
(Gain) loss on derivative instruments	(126)	457
Net cash received (paid) in settlement of derivative instruments	184	(464)
Amortization of debt premium and debt issuance costs	(10)	(19)
Stock-based compensation and other	24	38
Changes in assets and liabilities:
Accounts receivable, net	617	(489)
Income taxes	71	(200)
Inventories	(2)	(9)
Other current assets	(6)	(6)
Accounts payable and accrued liabilities	(336)	147
Interest payable	0	1
Other assets and liabilities	52	32
Net cash provided by operating activities	2,140	2,201
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for drilling, completion and other fixed asset additions	(1,075)	(741)
Capital expenditures for leasehold and property acquisitions	(6)	(4)
Proceeds from sale of assets	33	4
Net cash used in investing activities	(1,048)	(741)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of finance leases	(3)	(3)
Common stock repurchases	(325)	(487)
Dividends paid	(588)	(940)
Cash received for stock option exercises	0	10
Cash paid for conversion of redeemable preferred stock	(1)	(10)
Tax withholding on vesting of stock awards	(1)	(7)
Capitalized debt issuance costs	(7)	0
Net cash used in financing activities	(925)	(1,437)
Net increase in cash, cash equivalents and restricted cash	167	23
Cash, cash equivalents and restricted cash, beginning of period	683	1,046
Cash, cash equivalents and restricted cash, end of period	$ 850	$ 1,069

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Treasury Shares	Paid-In Capital	Accumulated Other Comprehensive Income	Retained Earnings
Beginning balance (in shares) at Dec. 31, 2021		893
Beginning balance (in shares) at Dec. 31, 2021			79
Balance at beginning of period at Dec. 31, 2021	$ 11,738	$ 89	$ (1,826)	$ 10,911	$ 1	$ 2,563
Increase (Decrease) in Stockholders' Equity
Net income	608					608
Exercise of stock options	6			6
Stock amortization and vesting	10			10
Treasury stock repurchases (in shares)			8
Common stock repurchases	(192)		$ (192)
Common stock cash dividends	(455)					(455)
Preferred stock cash dividends	(1)					(1)
Other comprehensive loss	4				4
Ending balance (in shares) at Mar. 31, 2022		893
Ending balance (in shares) at Mar. 31, 2022			87
Balance at end of period at Mar. 31, 2022	11,718	$ 89	$ (2,018)	10,927	5	2,715
Beginning balance (in shares) at Dec. 31, 2021		893
Beginning balance (in shares) at Dec. 31, 2021			79
Balance at beginning of period at Dec. 31, 2021	11,738	$ 89	$ (1,826)	10,911	1	2,563
Increase (Decrease) in Stockholders' Equity
Net income	$ 1,837
Treasury stock repurchases (in shares)	20
Common stock repurchases	$ (513)
Ending balance (in shares) at Jun. 30, 2022		894
Ending balance (in shares) at Jun. 30, 2022			99
Balance at end of period at Jun. 30, 2022	12,191	$ 89	$ (2,339)	10,976	5	3,460
Beginning balance (in shares) at Mar. 31, 2022		893
Beginning balance (in shares) at Mar. 31, 2022			87
Balance at beginning of period at Mar. 31, 2022	11,718	$ 89	$ (2,018)	10,927	5	2,715
Increase (Decrease) in Stockholders' Equity
Net income	1,229					1,229
Exercise of stock options	3			3
Stock amortization and vesting	18			18
Conversion of Cimarex redeemable preferred stock (in shares)		1
Conversion of Cimarex redeemable preferred stock	28			28
Treasury stock repurchases (in shares)			12
Common stock repurchases	(321)		$ (321)
Common stock cash dividends	(484)					(484)
Ending balance (in shares) at Jun. 30, 2022		894
Ending balance (in shares) at Jun. 30, 2022			99
Balance at end of period at Jun. 30, 2022	12,191	$ 89	$ (2,339)	10,976	5	3,460
Beginning balance (in shares) at Dec. 31, 2022		768
Beginning balance (in shares) at Dec. 31, 2022			0
Balance at beginning of period at Dec. 31, 2022	12,659	$ 77	$ 0	7,933	13	4,636
Increase (Decrease) in Stockholders' Equity
Net income	677					677
Stock amortization and vesting	13			13
Conversion of Cimarex redeemable preferred stock	3			3
Treasury stock repurchases (in shares)			11
Common stock repurchases	(271)		$ (271)
Common stock retirements (in shares)		(11)	(11)
Common stock retirements	0	$ (1)	$ 271	(270)
Common stock cash dividends	(438)					(438)
Ending balance (in shares) at Mar. 31, 2023		757
Ending balance (in shares) at Mar. 31, 2023			0
Balance at end of period at Mar. 31, 2023	12,643	$ 76	$ 0	7,679	13	4,875
Beginning balance (in shares) at Dec. 31, 2022		768
Beginning balance (in shares) at Dec. 31, 2022			0
Balance at beginning of period at Dec. 31, 2022	12,659	$ 77	$ 0	7,933	13	4,636
Increase (Decrease) in Stockholders' Equity
Net income	886
Ending balance (in shares) at Jun. 30, 2023		755
Ending balance (in shares) at Jun. 30, 2023			0
Balance at end of period at Jun. 30, 2023	12,659	$ 76	$ 0	7,639	13	4,931
Beginning balance (in shares) at Mar. 31, 2023		757
Beginning balance (in shares) at Mar. 31, 2023			0
Balance at beginning of period at Mar. 31, 2023	12,643	$ 76	$ 0	7,679	13	4,875
Increase (Decrease) in Stockholders' Equity
Net income	209
Stock amortization and vesting	17			17
Treasury stock repurchases (in shares)			2
Common stock repurchases	(57)		$ (57)
Common stock retirements (in shares)		(2)	(2)
Common stock retirements	0		$ 57	(57)
Common stock cash dividends	(153)					(153)
Ending balance (in shares) at Jun. 30, 2023		755
Ending balance (in shares) at Jun. 30, 2023			0
Balance at end of period at Jun. 30, 2023	$ 12,659	$ 76	$ 0	$ 7,639	$ 13	$ 4,931

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical)	3 Months Ended
	Mar. 31, 2022 $ / shares
Statement of Stockholders' Equity [Abstract]
Cash dividends, per share (in dollars per share)	$ 0.56
Preferred stock, dividends (in dollars per share)	$ 20.3125

Financial Statement Presentation	6 Months Ended
Financial Statement Presentation	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Financial Statement Presentation	Financial Statement Presentation During interim periods, Coterra Energy Inc. (the “Company”) follows the same accounting policies disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”) filed with the Securities and Exchange Commission (“SEC”), except for any new accounting pronouncements adopted during the period. The interim condensed consolidated financial statements are unaudited and should be read in conjunction with the notes to the consolidated financial statements and information presented in the Form 10-K. In management’s opinion, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair statement. The results for any interim period are not necessarily indicative of the results that may be expected for the entire year. From time to time, we make certain reclassifications to prior year statements to conform with the current year presentation. These reclassifications have no impact on previously reported stockholders’ equity, net income or cash flows.

Properties and Equipment, Net

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Properties and Equipment, Net

Properties and equipment, net are comprised of the following:


(In millions)	June 30, 2023		December 31, 2022
Proved oil and gas properties	$	18,353	$	17,085
Unproved oil and gas properties	4,881		5,150
Gathering and pipeline systems	507		450
Land, buildings and other equipment	194		183
Finance lease right-of-use asset	25		24
	23,960		22,892
Accumulated depreciation, depletion and amortization	(6,159)		(5,413)
	$	17,801	$	17,479

Capitalized Exploratory Well Costs

As of June 30, 2023, the Company did not have any projects with exploratory well costs capitalized for a period of greater than one year after drilling.

Debt and Credit Agreements

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt and Credit Agreements

The following table includes a summary of the Company’s long-term debt:


(In millions)	June 30, 2023		December 31, 2022

3.65% weighted-average private placement senior notes	$	825	$	825
3.90% senior notes due May 15, 2027	750		750
4.375% senior notes due March 15, 2029	500		500
Revolving credit agreement	—		—
Total	2,075		2,075
Net premium	101		111
Unamortized debt issuance costs	(5)		(5)
Long-term debt	$	2,171	$	2,181

Revolving Credit Agreement

At June 30, 2023, the Company had no borrowings outstanding under its revolving credit agreement and unused commitments of $1.5 billion.

Derivative Instruments

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

As of June 30, 2023, the Company had the following outstanding financial commodity derivatives:



	2023
Natural Gas	Third Quarter		Fourth Quarter




Waha gas collars
Volume (MMBtu)	8,280,000		8,280,000
Weighted average floor ($/MMBtu)	$	3.03	$	3.03
Weighted average ceiling ($/MMBtu)	$	5.39	$	5.39

NYMEX collars
Volume (MMBtu)	32,200,000		29,150,000
Weighted average floor ($/MMBtu)	$	4.07	$	4.03
Weighted average ceiling ($/MMBtu)	$	6.78	$	6.61


	2023
Oil	Third Quarter		Fourth Quarter
WTI oil collars
Volume (MBbl)	920		920
Weighted average floor ($/Bbl)	$	65.00	$	65.00
Weighted average ceiling ($/Bbl)	$	89.66	$	89.66

WTI Midland oil basis swaps
Volume (MBbl)	920		920
Weighted average differential ($/Bbl)	$	1.01	$	1.01

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet


		Fair Values of Derivative Instruments
		Derivative Assets				Derivative Liabilities
(In millions)	Balance Sheet Location	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022

Commodity contracts	Derivative instruments (current)	$	88	$	146	$	—	$	—

Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet


(In millions)	June 30, 2023		December 31, 2022
Derivative assets
Gross amounts of recognized assets	$	89	$	147
Gross amounts offset in the condensed consolidated balance sheet	(1)		(1)
Net amounts of assets presented in the condensed consolidated balance sheet	88		146
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	1		2
Net amount	$	89	$	148

Derivative liabilities
Gross amounts of recognized liabilities	$	1	$	1
Gross amounts offset in the condensed consolidated balance sheet	(1)		(1)
Net amounts of liabilities presented in the condensed consolidated balance sheet	—		—
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	—		1
Net amount	$	—	$	1

Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Cash received (paid) on settlement of derivative instruments
Gas contracts	$	82	$	(161)	$	181	$	(203)
Oil contracts	2		(132)		3		(261)
Non-cash gain (loss) on derivative instruments
Gas contracts	(96)		133		(54)		(49)
Oil contracts	—		94		(4)		56
	$	(12)	$	(66)	$	126	$	(457)

Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value MeasurementsThe Company follows the authoritative guidance for measuring fair value of assets and liabilities in its financial statements. For further information regarding the fair value hierarchy, refer to Note 1 of the Notes to the Consolidated Financial Statements in the Form 10-K.

Financial Assets and Liabilities

The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at June 30, 2023
Assets
Deferred compensation plan	$	47	$	—	$	—	$	47
Derivative instruments	—		—		89		89
	$	47	$	—	$	89	$	136
Liabilities
Deferred compensation plan	$	47	$	—	$	—	$	47
Derivative instruments	—		—		1		1
	$	47	$	—	$	1	$	48


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2022
Assets
Deferred compensation plan	$	43	$	—	$	—	$	43
Derivative instruments	—		—		147		147
	$	43	$	—	$	147	$	190
Liabilities
Deferred compensation plan	$	55	$	—	$	—	$	55
Derivative instruments	—		—		1		1
	$	55	$	—	$	1	$	56

The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy:


	Six Months Ended June 30,
(In millions)	2023		2022
Balance at beginning of period	$	146	$	(152)
Total gain (loss) included in earnings	126		(450)
Settlement (gain) loss	(184)		457
Transfers in and/or out of Level 3	—		—
Balance at end of period	$	88	$	(145)

Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period	$	42	$	(112)

Non-Financial Assets and Liabilities

Fair Value of Other Financial Instruments

The carrying amount and estimated fair value of debt is as follows:


	June 30, 2023				December 31, 2022
(In millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	2,171	$	1,962	$	2,181	$	1,955

Asset Retirement Obligations

6 Months Ended

Jun. 30, 2023

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

Activity related to the Company’s asset retirement obligations is as follows:


(In millions)	Six Months Ended June 30, 2023
Balance at beginning of period	$	277
Liabilities incurred	3
Liabilities settled	1

Liabilities divested	(4)

Accretion expense	5
Balance at end of period	282
Less: current asset retirement obligations	(5)
Noncurrent asset retirement obligations	$	277

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contractual Obligations The Company has various contractual obligations in the normal course of its operations. There have been no material changes to the Company’s contractual obligations described under “Transportation, Processing and Gathering Agreements” and “Lease Commitments” as disclosed in Note 8 of the Notes to Consolidated Financial Statements in the Form 10-K. Legal Matters Securities Litigation In October 2020, a class action lawsuit styled Delaware County Emp. Ret. Sys. v. Cabot Oil and Gas Corp., et. al. (U.S. District Court, Middle District of Pennsylvania), was filed against the Company, Dan O. Dinges, its then Chief Executive Officer, and Scott C. Schroeder, its then Chief Financial Officer, alleging that the Company made misleading statements in its periodic filings with the SEC in violation of Section 10(b) and Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The plaintiffs allege misstatements in the Company’s public filings and disclosures over a number of years relating to its potential liability for alleged environmental violations in Pennsylvania. The plaintiffs allege that such misstatements caused a decline in the price of the Company’s common stock when it disclosed in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 two notices of violations from the Pennsylvania Department of Environmental Protection and an additional decline when it disclosed on June 15, 2020 the criminal charges brought by the Office of the Attorney General of the Commonwealth of Pennsylvania related to alleged violations of the Pennsylvania Clean Streams Law, which prohibits discharge of industrial wastes. The court appointed Delaware County Employees Retirement System to represent the purported class on February 3, 2021. In April 2021, the complaint was amended to include Phillip L. Stalnaker, the Company’s then Senior Vice President of Operations, as a defendant. The plaintiffs seek monetary damages, interest and attorney’s fees. Also in October 2020, a stockholder derivative action styled Ezell v. Dinges, et. al. (U.S. District Court, Middle District of Pennsylvania) was filed against the Company, Messrs. Dinges and Schroeder and the Board of Directors of the Company serving at that time, for alleged securities violations under Section 10(b) and Section 21D of the Exchange Act arising from the same alleged misleading statements that form the basis of the class action lawsuit described above. In addition to the Exchange Act claims, the derivative actions also allege claims based on breaches of fiduciary duty and statutory contribution theories. In December 2020, the Ezell case was consolidated with a second derivative case filed in the U.S. District Court, Middle District of Pennsylvania with similar allegations. In January 2021, a third derivative case was filed in the U.S. District Court, Middle District of Pennsylvania with substantially similar allegations and it too was consolidated with the Ezell case in February 2021. On February 25, 2021, the Company filed a motion to transfer the class action lawsuit to the U.S. District Court for the Southern District of Texas, in Houston, Texas, where its headquarters are located. On June 11, 2021, the Company filed a motion to dismiss the class action lawsuit on the basis that the plaintiffs’ allegations do not meet the requirements for pleading a claim under Section 10(b) or Section 20 of the Exchange Act. On June 22, 2021, the motion to transfer the class action lawsuit to the Southern District of Texas was granted. Pursuant to the prior agreement of the parties, the consolidated derivative case discussed in the preceding paragraph was also transferred to the Southern District of Texas on July 12, 2021. Subsequently, an additional stockholder derivative action styled Treppel Family Trust U/A 08/18/18 Lawrence A. Treppel and Geri D. Treppel for the benefit of Geri D. Treppel and Larry A. Treppel v. Dinges, et al. (U.S. District Court, Southern District of Texas, Houston Division), asserting substantially similar Delaware common law claims as in the existing derivative cases, was filed in the Southern District of Texas and consolidated with the existing consolidated derivative cases. On January 12, 2022, the U.S. District Court for the Southern District of Texas granted the Company’s motion to dismiss the class action lawsuit but allowed the plaintiffs to file an amended complaint. The class action plaintiffs filed their amended complaint on February 11, 2022. The Company filed a motion to dismiss the amended class action complaint on March 10, 2022. On August 10, 2022, the U.S. District Court for the Southern District of Texas granted in part and denied in part the Company’s motion to dismiss the amended class action complaint, dismissing certain claims with prejudice but allowing certain claims to proceed. The Company filed its answer to the amended class action complaint on September 14, 2022. The class action case is presently in the discovery and class certification stage. With respect to the consolidated derivative cases, on April 1, 2022, the U.S. District Court for the Southern District of Texas granted the Company’s motion to dismiss such consolidated derivative cases but allowed the plaintiffs to file an amended complaint. The derivative plaintiffs filed their third amended complaint on May 16, 2022. The Company filed its motion to dismiss such amended complaint on June 24, 2022, and filed its reply in support of such motion to dismiss on September 4, 2022. On March 27, 2023, the U.S. District Court for the Southern District of Texas denied the motion to dismiss the derivative case as moot and ordered the Company to file a renewed motion to dismiss addressing certain issues regarding the impact of the class action litigation on the derivative case. The Company filed its renewed motion to dismiss on April 28, 2023, which is now fully briefed and pending for decision. The Company intends to vigorously defend the class action and derivative lawsuits. In November 2020, the Company received a stockholder demand for inspection of books and records under Section 220 of the General Corporation Law of the State of Delaware (“Section 220 Demand”). The Section 220 Demand seeks broad categories of documents reviewed by the Board of Directors and minutes of meetings of the Board of Directors pertaining to alleged environmental violations in Pennsylvania, as well as documents relating to any board of directors conflicts of interest, dating from January 1, 2015 to the present. The Company also received three other similar requests from other stockholders in February and June 2021. On May 17, 2021, the Company was served with a complaint filed in the Court of Chancery of the State of Delaware by the stockholder making the February 2021 Section 220 Demand to compel the production of books and records requested. After making an agreed books and records production, the Section 220 complaint was voluntarily dismissed effective September 21, 2021. The Company also provided substantially the same books and records production in response to the other three Section 220 requests described above. It is possible that one or more additional stockholder suits could be filed pertaining to the subject matter of the Section 220 Demands and the class and derivative actions described above. Other Legal Matters The Company is a defendant in various other legal proceedings arising in the normal course of business. All known liabilities are accrued when management determines they are probable based on its best estimate of the potential loss. While the outcome and impact of these legal proceedings on the Company cannot be predicted with certainty, management believes that the resolution of these proceedings will not have a material effect on the Company’s financial position, results of operations or cash flows. Contingency Reserves When deemed necessary, the Company establishes reserves for certain legal proceedings. The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible that the Company could incur additional losses with respect to those matters for which reserves have been established. The Company believes that any such amount above the amounts accrued would not be material to the Condensed Consolidated Financial Statements. Future changes in facts and circumstances not currently known or foreseeable could result in the actual liability exceeding the estimated ranges of loss and amounts accrued.

Revenue Recognition

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Disaggregation of Revenue

The following table presents revenues from contracts with customers disaggregated by product:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Natural gas	$	436	$	1,468	$	1,258	$	2,579
Oil	626		876		1,241		1,575
NGL	129		280		306		525
Other	6		14		31		29
	$	1,197	$	2,638	$	2,836	$	4,708

All of the Company’s revenues from contracts with customers represent products transferred at a point in time as control is transferred to the customer and generated in the U.S.

Transaction Price Allocated to Remaining Performance Obligations

Contract Balances

Capital Stock

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Capital Stock

Dividends

Common Stock

In February 2023, the Company’s Board of Directors approved an increase in the base quarterly dividend from $0.15 per share to $0.20 per share.

The following table summarizes the Company’s dividends on its common stock for each quarter in 2023 and 2022:


	Rate per share
	Fixed		Variable		Total		Total Dividends (In millions)
2023:
First quarter	$	0.20	$	0.37	$	0.57	$	438
Second quarter	0.20		—		0.20		153


Total year-to-date	$	0.40	$	0.37	$	0.77	$	591
2022:
First quarter	$	0.15	$	0.41	$	0.56	$	455
Second quarter	0.15		0.45		0.60		484


Total year-to-date	$	0.30	$	0.86	$	1.16	$	939

Treasury Stock

In February 2023, the Company’s Board of Directors approved a new share repurchase program which authorizes the purchase of up to $2.0 billion of the Company’s common stock.

Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

General

Stock-based compensation expense of awards issued under the Company’s incentive plans, and the income tax benefit of awards vested and exercised, are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022

Restricted stock units - employees and non-employee directors	$	7	$	11	$	14	$	19
Restricted stock awards	4		5		8		10
Performance share awards	3		4		8		10
Deferred performance shares	(7)		1		(7)		5

Total stock-based compensation expense	$	7	$	21	$	23	$	44
Income tax benefit	$	1	$	—	$	2	$	5

Refer to Note 13 of the Notes to the Consolidated Financial Statements in the Form 10-K for further description of the various types of stock-based compensation awards and the applicable award terms.

Restricted Stock Units - Employees

Restricted Stock Units - Non-Employees Directors

Performance Share Awards


	Grant Date			June 30, 2023
Fair value per performance share award	$	17.18		$11.36 - $12.63
Assumptions:
Stock price volatility	44.8		%	40.9% - 42.6%
Risk-free rate of return	4.40		%	4.59% - 5.02%

Earnings per Common Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings per Common Share

The following is a calculation of basic and diluted earnings per share under the two-class method:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share amounts)	2023		2022		2023		2022

Income (Numerator)
Net income	$	209	$	1,229	$	886	$	1,837
Less: dividends attributable to participating securities	(1)		(1)		(3)		(3)
Less: Cimarex redeemable preferred stock dividends	—		—		—		(1)
Net income available to common stockholders	$	208	$	1,228	$	883	$	1,833

Shares (Denominator)
Weighted average shares - Basic	755		803		760		806
Dilution effect of stock awards at end of period	5		5		4		3
Weighted average shares - Diluted	760		808		764		809

Earnings per share:
Basic	$	0.28	$	1.53	$	1.16	$	2.28
Diluted	$	0.27	$	1.52	$	1.16	$	2.27

The following is a calculation of weighted-average shares excluded from diluted EPS due to anti-dilutive effect:


	Three Months Ended June 30,		Six Months Ended June 30,
(In millions)	2023	2022	2023	2022

Weighted-average stock awards excluded from diluted EPS due to the anti-dilutive effect calculated using the treasury stock method	—	—	1	1

Restructuring Costs

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring Costs


	Six Months Ended June 30,
(In millions)	2023		2022
Balance at beginning of period	$	77	$	43
Additions related to merger integration	11		33
Payments of merger-related restructuring costs	(18)		(7)
Balance at end of period	$	70	$	69

Additional Balance Sheet Information

6 Months Ended

Jun. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Additional Balance Sheet Information

Certain balance sheet amounts are comprised of the following:


(In millions)	June 30, 2023		December 31, 2022
Accounts receivable, net
Trade accounts	$	434	$	1,067
Joint interest accounts	169		108
Other accounts	3		48
	606		1,223
Allowance for credit losses	(2)		(2)
	$	604	$	1,221













Other assets
Deferred compensation plan	$	47	$	43
Debt issuance costs	9		3

Operating lease right-of-use assets	357		382


Other accounts	25		36
	$	438	$	464
Accounts payable
Trade accounts	$	75	$	27

Royalty and other owners	208		438
Accrued transportation	77		85
Accrued capital costs	180		148
Taxes other than income	5		73
Accrued lease operating costs	41		32


Other accounts	40		41
	$	626	$	844
Accrued liabilities
Employee benefits	$	37	$	74
Taxes other than income	48		62
Restructuring liability	41		39

Operating lease liabilities	115		114
Financing lease liabilities	6		6

Other accounts	47		33
	$	294	$	328
Other liabilities
Deferred compensation plan	$	47	$	55
Postretirement benefits	16		17

Operating lease liabilities	260		287
Financing lease liabilities	9		11
Restructuring liability	29		38
Other accounts	95		92
	$	456	$	500

Interest Expense

6 Months Ended

Jun. 30, 2023

Interest Income (Expense), Net [Abstract]

Interest Expense

Interest expense is comprised of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Interest Expense
Interest expense	$	21	$	27	$	41	57
Debt premium amortization	(6)		(8)		(11)		(19)
Debt financing costs	1		1		2		2
Other	—		2		1		3
	$	16	$	22	$	33	$	43

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Millions	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net income	$ 209	$ 677	$ 1,229	$ 608	$ 886	$ 1,837

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Financial Statement Presentation (Policies)	6 Months Ended
Financial Statement Presentation (Policies)	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Accounting	During interim periods, Coterra Energy Inc. (the “Company”) follows the same accounting policies disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”) filed with the Securities and Exchange Commission (“SEC”), except for any new accounting pronouncements adopted during the period. The interim condensed consolidated financial statements are unaudited and should be read in conjunction with the notes to the consolidated financial statements and information presented in the Form 10-K. In management’s opinion, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair statement. The results for any interim period are not necessarily indicative of the results that may be expected for the entire year.
Reclassifications	From time to time, we make certain reclassifications to prior year statements to conform with the current year presentation. These reclassifications have no impact on previously reported stockholders’ equity, net income or cash flows.

Properties and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Properties and Equipment, Net

Properties and equipment, net are comprised of the following:


(In millions)	June 30, 2023		December 31, 2022
Proved oil and gas properties	$	18,353	$	17,085
Unproved oil and gas properties	4,881		5,150
Gathering and pipeline systems	507		450
Land, buildings and other equipment	194		183
Finance lease right-of-use asset	25		24
	23,960		22,892
Accumulated depreciation, depletion and amortization	(6,159)		(5,413)
	$	17,801	$	17,479

Debt and Credit Agreements (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt and Credit Agreement Components

The following table includes a summary of the Company’s long-term debt:


(In millions)	June 30, 2023		December 31, 2022

3.65% weighted-average private placement senior notes	$	825	$	825
3.90% senior notes due May 15, 2027	750		750
4.375% senior notes due March 15, 2029	500		500
Revolving credit agreement	—		—
Total	2,075		2,075
Net premium	101		111
Unamortized debt issuance costs	(5)		(5)
Long-term debt	$	2,171	$	2,181

Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Outstanding Commodity Derivatives

As of June 30, 2023, the Company had the following outstanding financial commodity derivatives:



	2023
Natural Gas	Third Quarter		Fourth Quarter




Waha gas collars
Volume (MMBtu)	8,280,000		8,280,000
Weighted average floor ($/MMBtu)	$	3.03	$	3.03
Weighted average ceiling ($/MMBtu)	$	5.39	$	5.39

NYMEX collars
Volume (MMBtu)	32,200,000		29,150,000
Weighted average floor ($/MMBtu)	$	4.07	$	4.03
Weighted average ceiling ($/MMBtu)	$	6.78	$	6.61


	2023
Oil	Third Quarter		Fourth Quarter
WTI oil collars
Volume (MBbl)	920		920
Weighted average floor ($/Bbl)	$	65.00	$	65.00
Weighted average ceiling ($/Bbl)	$	89.66	$	89.66

WTI Midland oil basis swaps
Volume (MBbl)	920		920
Weighted average differential ($/Bbl)	$	1.01	$	1.01

Schedule of Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet


		Fair Values of Derivative Instruments
		Derivative Assets				Derivative Liabilities
(In millions)	Balance Sheet Location	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022

Commodity contracts	Derivative instruments (current)	$	88	$	146	$	—	$	—

Schedule of Offsetting of Derivative Assets in the Condensed Consolidated Balance Sheet

Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet


(In millions)	June 30, 2023		December 31, 2022
Derivative assets
Gross amounts of recognized assets	$	89	$	147
Gross amounts offset in the condensed consolidated balance sheet	(1)		(1)
Net amounts of assets presented in the condensed consolidated balance sheet	88		146
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	1		2
Net amount	$	89	$	148

Derivative liabilities
Gross amounts of recognized liabilities	$	1	$	1
Gross amounts offset in the condensed consolidated balance sheet	(1)		(1)
Net amounts of liabilities presented in the condensed consolidated balance sheet	—		—
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	—		1
Net amount	$	—	$	1

Schedule of Offsetting of Derivative Liabilities in the Condensed Consolidated Balance Sheet

Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet


(In millions)	June 30, 2023		December 31, 2022
Derivative assets
Gross amounts of recognized assets	$	89	$	147
Gross amounts offset in the condensed consolidated balance sheet	(1)		(1)
Net amounts of assets presented in the condensed consolidated balance sheet	88		146
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	1		2
Net amount	$	89	$	148

Derivative liabilities
Gross amounts of recognized liabilities	$	1	$	1
Gross amounts offset in the condensed consolidated balance sheet	(1)		(1)
Net amounts of liabilities presented in the condensed consolidated balance sheet	—		—
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	—		1
Net amount	$	—	$	1

Schedule of Effect of Derivatives on the Condensed Consolidated Statement of Operations

Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Cash received (paid) on settlement of derivative instruments
Gas contracts	$	82	$	(161)	$	181	$	(203)
Oil contracts	2		(132)		3		(261)
Non-cash gain (loss) on derivative instruments
Gas contracts	(96)		133		(54)		(49)
Oil contracts	—		94		(4)		56
	$	(12)	$	(66)	$	126	$	(457)

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at June 30, 2023
Assets
Deferred compensation plan	$	47	$	—	$	—	$	47
Derivative instruments	—		—		89		89
	$	47	$	—	$	89	$	136
Liabilities
Deferred compensation plan	$	47	$	—	$	—	$	47
Derivative instruments	—		—		1		1
	$	47	$	—	$	1	$	48


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2022
Assets
Deferred compensation plan	$	43	$	—	$	—	$	43
Derivative instruments	—		—		147		147
	$	43	$	—	$	147	$	190
Liabilities
Deferred compensation plan	$	55	$	—	$	—	$	55
Derivative instruments	—		—		1		1
	$	55	$	—	$	1	$	56

Reconciliation of Changes in the Fair Value of Financial Assets and Liabilities Classified as Level 3

The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy:


	Six Months Ended June 30,
(In millions)	2023		2022
Balance at beginning of period	$	146	$	(152)
Total gain (loss) included in earnings	126		(450)
Settlement (gain) loss	(184)		457
Transfers in and/or out of Level 3	—		—
Balance at end of period	$	88	$	(145)

Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period	$	42	$	(112)

Carrying Amounts and Fair Values of Debt

The carrying amount and estimated fair value of debt is as follows:


	June 30, 2023				December 31, 2022
(In millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	2,171	$	1,962	$	2,181	$	1,955

Asset Retirement Obligations (Tables)

6 Months Ended

Jun. 30, 2023

Asset Retirement Obligation Disclosure [Abstract]

Activity related to the Company’s asset retirement obligations is as follows:


(In millions)	Six Months Ended June 30, 2023
Balance at beginning of period	$	277
Liabilities incurred	3
Liabilities settled	1

Liabilities divested	(4)

Accretion expense	5
Balance at end of period	282
Less: current asset retirement obligations	(5)
Noncurrent asset retirement obligations	$	277

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table presents revenues from contracts with customers disaggregated by product:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Natural gas	$	436	$	1,468	$	1,258	$	2,579
Oil	626		876		1,241		1,575
NGL	129		280		306		525
Other	6		14		31		29
	$	1,197	$	2,638	$	2,836	$	4,708

Capital Stock (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Stock by Class

The following table summarizes the Company’s dividends on its common stock for each quarter in 2023 and 2022:


	Rate per share
	Fixed		Variable		Total		Total Dividends (In millions)
2023:
First quarter	$	0.20	$	0.37	$	0.57	$	438
Second quarter	0.20		—		0.20		153


Total year-to-date	$	0.40	$	0.37	$	0.77	$	591
2022:
First quarter	$	0.15	$	0.41	$	0.56	$	455
Second quarter	0.15		0.45		0.60		484


Total year-to-date	$	0.30	$	0.86	$	1.16	$	939

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Share-Based Compensation Expense Income Tax Benefit Awards Issued Under Incentive Plans

Stock-based compensation expense of awards issued under the Company’s incentive plans, and the income tax benefit of awards vested and exercised, are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022

Restricted stock units - employees and non-employee directors	$	7	$	11	$	14	$	19
Restricted stock awards	4		5		8		10
Performance share awards	3		4		8		10
Deferred performance shares	(7)		1		(7)		5

Total stock-based compensation expense	$	7	$	21	$	23	$	44
Income tax benefit	$	1	$	—	$	2	$	5

Assumptions to Determine the Grant Date Fair Value of the Equity Component and the Period-end Fair Value of the Liability


	Grant Date			June 30, 2023
Fair value per performance share award	$	17.18		$11.36 - $12.63
Assumptions:
Stock price volatility	44.8		%	40.9% - 42.6%
Risk-free rate of return	4.40		%	4.59% - 5.02%

Earnings per Common Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Weighted-Average Shares Outstanding

The following is a calculation of basic and diluted earnings per share under the two-class method:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share amounts)	2023		2022		2023		2022

Income (Numerator)
Net income	$	209	$	1,229	$	886	$	1,837
Less: dividends attributable to participating securities	(1)		(1)		(3)		(3)
Less: Cimarex redeemable preferred stock dividends	—		—		—		(1)
Net income available to common stockholders	$	208	$	1,228	$	883	$	1,833

Shares (Denominator)
Weighted average shares - Basic	755		803		760		806
Dilution effect of stock awards at end of period	5		5		4		3
Weighted average shares - Diluted	760		808		764		809

Earnings per share:
Basic	$	0.28	$	1.53	$	1.16	$	2.28
Diluted	$	0.27	$	1.52	$	1.16	$	2.27

Calculation of Weighted-average Shares Excluded from Diluted EPS Due to the Anti-Dilutive Effect

The following is a calculation of weighted-average shares excluded from diluted EPS due to anti-dilutive effect:


	Three Months Ended June 30,		Six Months Ended June 30,
(In millions)	2023	2022	2023	2022

Weighted-average stock awards excluded from diluted EPS due to the anti-dilutive effect calculated using the treasury stock method	—	—	1	1

Restructuring Costs (Tables)

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring Costs

The following table summarizes the Company’s restructuring liabilities:


	Six Months Ended June 30,
(In millions)	2023		2022
Balance at beginning of period	$	77	$	43
Additions related to merger integration	11		33
Payments of merger-related restructuring costs	(18)		(7)
Balance at end of period	$	70	$	69

Additional Balance Sheet Information (Tables)

6 Months Ended

Jun. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Additional Balance Sheet Information

Certain balance sheet amounts are comprised of the following:


(In millions)	June 30, 2023		December 31, 2022
Accounts receivable, net
Trade accounts	$	434	$	1,067
Joint interest accounts	169		108
Other accounts	3		48
	606		1,223
Allowance for credit losses	(2)		(2)
	$	604	$	1,221













Other assets
Deferred compensation plan	$	47	$	43
Debt issuance costs	9		3

Operating lease right-of-use assets	357		382


Other accounts	25		36
	$	438	$	464
Accounts payable
Trade accounts	$	75	$	27

Royalty and other owners	208		438
Accrued transportation	77		85
Accrued capital costs	180		148
Taxes other than income	5		73
Accrued lease operating costs	41		32


Other accounts	40		41
	$	626	$	844
Accrued liabilities
Employee benefits	$	37	$	74
Taxes other than income	48		62
Restructuring liability	41		39

Operating lease liabilities	115		114
Financing lease liabilities	6		6

Other accounts	47		33
	$	294	$	328
Other liabilities
Deferred compensation plan	$	47	$	55
Postretirement benefits	16		17

Operating lease liabilities	260		287
Financing lease liabilities	9		11
Restructuring liability	29		38
Other accounts	95		92
	$	456	$	500

Interest Expense (Tables)

6 Months Ended

Jun. 30, 2023

Interest Income (Expense), Net [Abstract]

Interest Expense, net

Interest expense is comprised of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Interest Expense
Interest expense	$	21	$	27	$	41	57
Debt premium amortization	(6)		(8)		(11)		(19)
Debt financing costs	1		1		2		2
Other	—		2		1		3
	$	16	$	22	$	33	$	43

Properties and Equipment, Net (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Finance lease right-of-use asset	$ 25	$ 24
Property, plant and equipment	23,960	22,892
Accumulated depreciation, depletion and amortization	(6,159)	(5,413)
Properties and equipment, net	$ 17,801	17,479
Costs capitalized period	1 year
Proved oil and gas properties
Property, Plant and Equipment [Line Items]
Properties and equipment, gross	$ 18,353	17,085
Unproved oil and gas properties
Property, Plant and Equipment [Line Items]
Properties and equipment, gross	4,881	5,150
Gathering and pipeline systems
Property, Plant and Equipment [Line Items]
Properties and equipment, gross	507	450
Land, buildings and other equipment
Property, Plant and Equipment [Line Items]
Properties and equipment, gross	$ 194	$ 183

Debt and Credit Agreements - Schedule of Debt (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total debt	$ 2,075,000,000	$ 2,075,000,000
Net premium	101,000,000	111,000,000
Unamortized debt issuance costs	(5,000,000)	(5,000,000)
Long-term debt	$ 2,171,000,000	2,181,000,000
3.90% senior notes due May 15, 2027
Debt Instrument [Line Items]
Stated percentage	3.90%
4.375% senior notes due March 15, 2029
Debt Instrument [Line Items]
Stated percentage	4.375%
Senior Notes \| 3.65% weighted-average private placement senior notes
Debt Instrument [Line Items]
Weighted average interest rate	3.65%
Total debt	$ 825,000,000	825,000,000
Senior Notes \| 3.90% senior notes due May 15, 2027
Debt Instrument [Line Items]
Total debt	750,000,000	750,000,000
Senior Notes \| 4.375% senior notes due March 15, 2029
Debt Instrument [Line Items]
Total debt	500,000,000	500,000,000
Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Total debt	$ 0	$ 0

Debt and Credit Agreements - Narrative (Details) - USD ($)	Mar. 10, 2023	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-term debt		$ 2,075,000,000	$ 2,075,000,000
3.90% senior notes due May 15, 2027
Debt Instrument [Line Items]
Stated percentage		3.90%
4.375% senior notes due March 15, 2029
Debt Instrument [Line Items]
Stated percentage		4.375%
Senior Notes \| 3.65% weighted-average private placement senior notes
Debt Instrument [Line Items]
Weighted average interest rate		3.65%
Long-term debt		$ 825,000,000	825,000,000
Senior Notes \| 3.90% senior notes due May 15, 2027
Debt Instrument [Line Items]
Long-term debt		750,000,000	750,000,000
Senior Notes \| 4.375% senior notes due March 15, 2029
Debt Instrument [Line Items]
Long-term debt		500,000,000	500,000,000
Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt		0	$ 0
Remaining borrowing capacity		$ 1,500,000,000
Line of Credit \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A
Debt Instrument [Line Items]
Borrowing base	$ 1,500,000,000
Additional borrowing base	$ 500,000,000
Agreement extended period	1 year
Lenders holding percent	50.00%
Minimum required asset coverage ratio	3.0
Other debt outstanding	$ 75,000,000
Total capitalization	65.00%
Line of Credit \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A \| Minimum
Debt Instrument [Line Items]
Commitment fee on unused credit	0.10%
Line of Credit \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A \| Maximum
Debt Instrument [Line Items]
Commitment fee on unused credit	0.275%
Line of Credit \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A \| SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	10.00%
Line of Credit \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A \| SOFR \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Line of Credit \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A \| SOFR \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	1.75%
Line of Credit \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A \| Base Rate \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.00%
Line of Credit \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A \| Base Rate \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	0.75%
Line of Credit \| Letter of Credit \| JPMorgan Chase Bank, N.A
Debt Instrument [Line Items]
Borrowing base	$ 500,000,000
Line of Credit \| Swingline Sub Facility \| Revolving Credit Facility \| JPMorgan Chase Bank, N.A
Debt Instrument [Line Items]
Borrowing base	$ 100,000,000

Derivative Instruments - Outstanding Commodity Derivatives (Details) - Forecast	3 Months Ended
	Dec. 31, 2023 MMBTU $ / MMBTU	Sep. 30, 2023 MMBTU $ / MMBTU
Waha gas collars
Derivative [Line Items]
Notional amount, energy \| MMBTU	8,280,000	8,280,000
Floor, weighted-average (in dollars per Mmbtu/Bbl)	3.03	3.03
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)	5.39	5.39
NYMEX collars
Derivative [Line Items]
Notional amount, energy \| MMBTU	29,150,000	32,200,000
Floor, weighted-average (in dollars per Mmbtu/Bbl)	4.03	4.07
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)	6.61	6.78
WTI oil collars
Derivative [Line Items]
Notional amount, energy \| MMBTU	920	920
Floor, weighted-average (in dollars per Mmbtu/Bbl)	65.00	65.00
Ceiling, weighted-average (in dollars per Mmbtu/Bbl)	89.66	89.66
WTI Midland oil basis swaps
Derivative [Line Items]
Notional amount, energy \| MMBTU	920	920
Differential price weighted average (in dollars per Mmbtu/Bbl)	1.01	1.01

Derivative Instruments - Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Effect of derivative instruments on the Consolidated Balance Sheet
Derivative Assets	$ 88	$ 146
Derivatives Not Designated as Hedges \| Commodity Contracts
Effect of derivative instruments on the Consolidated Balance Sheet
Derivative Assets	88	146
Derivative Liabilities	$ 0	$ 0

Derivative Instruments - Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Derivative assets
Gross amounts of recognized assets	$ 89	$ 147
Gross amounts offset in the condensed consolidated balance sheet	(1)	(1)
Net amounts of assets presented in the condensed consolidated balance sheet	88	146
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	1	2
Net amount	89	148
Derivative liabilities
Gross amounts of recognized liabilities	1	1
Gross amounts offset in the condensed consolidated balance sheet	(1)	(1)
Net amounts of liabilities presented in the condensed consolidated balance sheet	0	0
Gross amounts of financial instruments not offset in the condensed consolidated balance sheet	0	1
Net amount	$ 0	$ 1

Derivative Instruments - Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Effect of derivative instruments on the Consolidated Balance Sheet
Total	$ (12)	$ (66)	$ 126	$ (457)
Gas contracts
Effect of derivative instruments on the Consolidated Balance Sheet
Cash received (paid) on settlement of derivative instruments	82	(161)	181	(203)
Non-cash gain (loss) on derivative instruments	(96)	133	(54)	(49)
Oil contracts
Effect of derivative instruments on the Consolidated Balance Sheet
Cash received (paid) on settlement of derivative instruments	2	(132)	3	(261)
Non-cash gain (loss) on derivative instruments	$ 0	$ 94	$ (4)	$ 56

Fair Value Measurements - Financial Assets and Liabilities, Recurring (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Assets
Deferred compensation plan	$ 47	$ 43
Derivative instruments	88	146
Liabilities
Deferred compensation plan	47	55
Recurring basis
Assets
Deferred compensation plan	47	43
Derivative instruments	89	147
Total assets	136	190
Liabilities
Deferred compensation plan	47	55
Derivative instruments	1	1
Total liabilities	48	56
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Recurring basis
Assets
Deferred compensation plan	47	43
Derivative instruments	0	0
Total assets	47	43
Liabilities
Deferred compensation plan		55
Derivative instruments	0	0
Total liabilities	47	55
Significant Other Observable Inputs (Level 2) \| Recurring basis
Assets
Deferred compensation plan	0	0
Derivative instruments	0	0
Total assets	0	0
Liabilities
Deferred compensation plan	0	0
Derivative instruments	0	0
Total liabilities	0	0
Significant Unobservable Inputs (Level 3) \| Recurring basis
Assets
Deferred compensation plan	0	0
Derivative instruments	89	147
Total assets	89	147
Liabilities
Deferred compensation plan	0	0
Derivative instruments	1	1
Total liabilities	$ 1	$ 1

Fair Value Measurements - Reconciliation of Changes in Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy
Balance at beginning of period	$ 146	$ (152)
Total gain (loss) included in earnings	126	(450)
Settlement (gain) loss	(184)	457
Transfers in and/or out of Level 3	0	0
Balance at end of period	88	(145)
Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period	$ 42	$ (112)
Fair Value Recurring Basis Unobservable Input Reconciliation Net Derivative Asset Liability Gain Loss Statement Of Income Extensible List Not Disclosed Flag	Total gain (loss) included in earnings	Total gain (loss) included in earnings

Fair Value Measurements - Narrative (Details)	6 Months Ended
Fair Value Measurements - Narrative (Details)	Jun. 30, 2023 impaired_asset_and_liability
Fair Value Disclosures [Abstract]
Number of non-financial assets and liabilities impaired	0

Fair Value Measurements - Fair Value of Other Financial Instruments (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Fair value disclosures
Long-term debt	$ 2,171	$ 2,181
Carrying Amount
Fair value disclosures
Long-term debt	2,171	2,181
Estimated Fair Value
Fair value disclosures
Long-term debt	$ 1,962	$ 1,955

Asset Retirement Obligations (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Asset Retirement Obligation
Balance at beginning of period	$ 277
Liabilities incurred	3
Liabilities settled	1
Liabilities divested	(4)
Accretion expense	5
Balance at end of period	282
Less: current asset retirement obligations	(5)
Noncurrent asset retirement obligations	$ 277	$ 271

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 1,197	$ 2,638	$ 2,836	$ 4,708
Natural gas
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	436	1,468	1,258	2,579
Oil
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	626	876	1,241	1,575
NGL
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	129	280	306	525
Other
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 6	$ 14	$ 31	$ 29

Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contracts with customers	$ 434	$ 1,100
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligations	$ 6,900
Unsatisfied performance obligations, expected period of satisfaction	16 years

Capital Stock - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions	1 Months Ended	3 Months Ended				6 Months Ended		12 Months Ended
	Feb. 27, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Feb. 28, 2023
Equity [Abstract]
Cash dividends, per share (in dollars per share)	$ 0.20	$ 0.20	$ 0.57	$ 0.60	$ 0.56			$ 0.15
Stock repurchase program, authorized amount									$ 2,000,000,000
Share repurchases and retirements (in shares)						13
Share repurchases and retirements						$ 328,000,000
Stock repurchase program		$ 1,700,000,000				$ 1,700,000,000
Stock repurchased during period (in shares)							20
Share repurchases		$ 57,000,000	$ 271,000,000	$ 321,000,000	$ 192,000,000		$ 513,000,000

Capital Stock - Dividends Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Equity [Abstract]
Fixed (in dollars per share)	$ 0.20	$ 0.20	$ 0.15	$ 0.15	$ 0.40	$ 0.30
Variable (in dollars per share)	0	0.37	0.45	0.41	0.37	0.86
Total (in dollars per share)	$ 0.20	$ 0.57	$ 0.60	$ 0.56	$ 0.77	$ 1.16
Total Dividends (In millions)	$ 153	$ 438	$ 484	$ 455	$ 591	$ 939

Stock-Based Compensation - Summary of Share-Based Compensation Expense Income Tax Benefit Awards Issued Under Incentive Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 7	$ 21	$ 23	$ 44
Income tax benefit	1	0	2	5
Restricted stock units - employees and non-employee directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	7	11	14	19
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	4	5	8	10
Performance share awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	3	4	8	10
Deferred performance shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ (7)	$ 1	$ (7)	$ 5

Stock-Based Compensation - Narrative (Details) - $ / shares		1 Months Ended	6 Months Ended
	Feb. 28, 2022	Jun. 30, 2023	Jun. 30, 2023	May 04, 2023
Coterra Energy Inc. 2023 Equity Incentive Plan
Stock-based Compensation arrangements
Shares available for grant (in shares)				22,950,000
Restricted Stock Units \| Employee
Stock-based Compensation arrangements
Granted (in shares)			666,303
Granted (in dollars per share)			$ 23.00
Service period			3 years
Restricted Stock Units \| Employee \| Minimum
Stock-based Compensation arrangements
Award vesting period			3 years
Annual forfeiture rate assumption (as a percent)			0.00%
Restricted Stock Units \| Employee \| Maximum
Stock-based Compensation arrangements
Annual forfeiture rate assumption (as a percent)			5.00%
Restricted Stock Units \| Nonemployee
Stock-based Compensation arrangements
Granted (in shares)		73,593
Granted (in dollars per share)		$ 24.46
Performance Shares Based on Market Conditions
Stock-based Compensation arrangements
Right to receive shares			100.00%
Right to receive an additional award in cash			100.00%
TSR Performance Share Awards
Stock-based Compensation arrangements
Granted (in shares)			577,172
Granted (in dollars per share)	$ 17.18
Performance period			3 years
TSR Performance Share Awards \| Minimum
Stock-based Compensation arrangements
Granted (in dollars per share)			$ 11.36
TSR Performance Share Awards \| Maximum
Stock-based Compensation arrangements
Granted (in dollars per share)			$ 12.63

Stock-Based Compensation - Assumptions for TSR Shares (Details) - TSR Performance Share Awards - $ / shares		6 Months Ended
	Feb. 28, 2022	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value per performance share award (in dollars per share)	$ 17.18
Stock price volatility	44.80%
Risk-free rate of return	4.40%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value per performance share award (in dollars per share)		$ 11.36
Stock price volatility		40.90%
Risk-free rate of return		4.59%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value per performance share award (in dollars per share)		$ 12.63
Stock price volatility		42.60%
Risk-free rate of return		5.02%

Earnings per Common Share - Schedule of EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Income (Numerator)
Net income	$ 209	$ 677	$ 1,229	$ 608	$ 886	$ 1,837
Less: dividends attributable to participating securities	(1)		(1)		(3)	(3)
Less: Cimarex redeemable preferred stock dividends	0		0		0	(1)
Net income available to common stockholders	$ 208		$ 1,228		$ 883	$ 1,833
Shares (Denominator)
Weighted-average shares - basic (in shares)	755		803		760	806
Dilution effect of stock awards at end of period (in shares)	5		5		4	3
Weighted-average shares - diluted (in shares)	760		808		764	809
Earnings per share:
Basic (in dollars per share)	$ 0.28		$ 1.53		$ 1.16	$ 2.28
Diluted (in dollars per share)	$ 0.27		$ 1.52		$ 1.16	$ 2.27

Earnings per Common Share - Calculation of Weighted-Average Shares Excluded from Diluted EPS (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Treasury Stock Method
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares (in shares)	0	0	1	1

Restructuring Costs - Restructuring Liabilities (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 77	$ 43
Additions related to merger integration	11	33
Payments of merger-related restructuring costs	(18)	(7)
Balance at end of period	$ 70	$ 69

Additional Balance Sheet Information (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Accounts receivable, net
Trade accounts	$ 434	$ 1,067
Joint interest accounts	169	108
Other accounts	3	48
Accounts receivable, gross	606	1,223
Allowance for credit losses	(2)	(2)
Accounts receivable, net	604	1,221
Other assets
Deferred compensation plan	47	43
Debt issuance costs	9	3
Operating lease right-of-use assets	357	382
Other accounts	25	36
Other assets	438	464
Accounts payable
Trade accounts	75	27
Royalty and other owners	208	438
Accrued transportation	77	85
Accrued capital costs	180	148
Taxes other than income	5	73
Accrued lease operating costs	41	32
Other accounts	40	41
Accounts payable	626	844
Accrued liabilities
Employee benefits	37	74
Taxes other than income	48	62
Restructuring liability	41	39
Operating lease liabilities	115	114
Financing lease liabilities	6	6
Other accounts	47	33
Accrued liabilities	294	328
Other liabilities
Deferred compensation plan	47	55
Postretirement benefits	16	17
Operating lease liabilities	260	287
Financing lease liabilities	9	11
Restructuring liability	29	38
Other accounts	95	92
Other liabilities	$ 456	$ 500
Operating lease, right-of-use asset, statement of financial position [Extensible List]	Other assets	Other assets
Operating lease, liability, current, statement of financial position [Extensible List]	Accrued liabilities	Accrued liabilities
Finance lease, liability, current, statement of financial position [Extensible Enumeration]	Accrued liabilities	Accrued liabilities
Operating lease, liability, noncurrent, statement of financial position [Extensible List]	Other liabilities	Other liabilities
Finance lease, liability, noncurrent, statement of financial position [Extensible Enumeration]	Other liabilities	Other liabilities

Interest Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Interest Expense (Details) - USD ($) $ in Millions	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest Income (Expense), Net [Abstract]
Interest expense	$ 21	$ 27	$ 41	$ 57
Debt premium amortization	(6)	(8)	(11)	(19)
Debt financing costs	1	1	2	2
Other	0	2	1	3
Interest expense	$ 16	$ 22	$ 33	$ 43