Coterra CEO says takeover was an easy decision and energy company can keep it going


Coterra Energy CEO Thomas Jorden told CNBC’s Jim Cramer on Tuesday that the oil and gas company is confident in its decision to begin buying back shares.

Houston-based Coterra — the result of Cabot Oil & Gas Corporation’s formal merger with Cimarex Energy in October — announced its $1.25 billion share buyback program last week.

“We believe in our history. We believe in the future. We believe in the power of our ability to maintain it,” Jorden said in an interview on “Mad Money.” “We’re looking at intrinsic and relative value, and it wasn’t a very difficult decision. We have the money. We have the means.”

The CEO noted that the Coterra buyout adds to its two-pronged dividend approach. They combine to form Coterra’s strategy of returning capital to shareholders, at a time when oil and natural gas prices are elevated from levels a year ago.

In late February, Coterra’s board also raised the company’s annual base dividend to 60 cents per share, from 50 cents previously. Then there’s Coterra’s variable dividend payout, which is calculated quarterly based on the company’s free cash flow.

For the fourth quarter, Coterra’s variable payout was 41 cents per share, bringing its overall dividend to 56 cents per share. The stock closed Tuesday’s session at $24.36, which equates to a return of more than 9% if Coterra maintains that variable dividend payout.

Shares of Coterra are up more than 28% year-to-date, bringing the company’s market capitalization to nearly $20 billion.

“Margins are pretty high,” Jorden said. “We only invest less than 35% of our cash flow in our capital program, so you can kind of do the math in your head, that the power of our assets, the power of our portfolio, is really unprecedented in my experience.”

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