(Reuters) -U.S. oil and gas producer Coterra Energy missed Wall Street estimates for third-quarter profit on Thursday due to weaker commodity prices.
Benchmark natural gas prices remained subdued during much of the quarter, hurt by high storage levels and tepid demand.
The U.S. Energy Information Administration expects U.S. gas production to decline in 2024, the first time since 2020, as producers like Coterra have reduced their output after prices touched multi-decade lows.
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The company’s average sales price for natural gas, excluding hedges, fell to $1.30 per thousand cubic feet (mcf) from $1.80 per mcf a year earlier. Oil prices also fell 8.4% to $74.04 per barrel on demand woes.
Total production fell marginally to 669,100 barrels of oil equivalent per day (boepd) from 670,300 boepd, as declines in natural gas output were mostly offset by a 22.2% rise in oil production.
Coterra has reallocated resources to oil-heavy Permian and Anadarko basins from the country’s largest gas producing region, Marcellus shale, following the slump in natural gas prices this year.
The company, however, raised 2024 production forecast to a range of 660,000 to 675,000 boepd, up 1% at midpoint compared to its earlier projections, primarily backed by strong oil production.
Its shares rose 1.8% in after-market trade.
The company also forecast oil production to grow at 5% annually for the next two years.
But it said total equivalent production growth would be in the range of zero to 5% until 2026.
Coterra’s third-quarter net income fell 22% to $252 million, compared to the year-ago quarter.
Its adjusted profit of 32 cents per share came in below market estimate of 34 cents, according to data compiled by LSEG.
(Reporting by Sourasis Bose in Bengaluru; Editing by Maju Samuel)
