CTRA - Dividend Paying Coterra Energy Likely To Rise On M&A
2024-06-12 12:17:35 ET
Summary
- Growing power demand is increasing the need for natural gas-fired power plants due to AI data centers, blockchain, and the electrification of transportation.
- Natural gas prices are currently low but expected to increase next year, with LNG export capacity set to increase by 76% in late 2024.
- I believe Coterra Energy may engage in M&A soon, potentially selling assets or the entire company to maximize value for shareholders in the face of increasing oil and gas prices.
- Rising oil and gas prices should drive free cash flow higher for Coterra and drive share prices higher as well.
- Please see Coterra's latest filings and presentation for important background information.
In mid-May, I attended Hart Energy's SuperDug "the largest shale event of 2024" in Fort Worth. One of the main topics covered by multiple speakers was the growing power demand, increasing the need for natural gas fired power plants. Oil was also on everybody's mind. Especially the massive wave of M&A centered around the Permian Basin.
Coterra is an oil and gas play with three good standalone assets. However, I believe they will engage in M&A soon, either being swallowed whole or parted off. They could also find themselves down to one core asset, most likely in the Delaware Basin of the Permian....
Dividend Paying Coterra Energy Likely To Rise On M&A