Coterra Expands in Permian with $4 Billion New Mexico Acquisitions, Adds 125 Miles of Pipeline
(P&GJ) — Coterra Energy Inc. has announced agreements to acquire assets from Franklin Mountain Energy and Avant Natural Resources for a combined $3.95 billion.
The deal includes $2.95 billion in cash and $1 billion in Coterra stock, with funding expected from cash reserves and new financing. The transactions are anticipated to close in the first quarter of 2025 and are retroactively effective from October 1, 2024.
The acquisitions expand Coterra’s position in New Mexico's Permian Basin, adding 49,000 net contiguous acres in the northern Delaware Basin, adjacent to the company’s current footprint. Along with drilling locations, Coterra will acquire approximately 125 miles of pipeline and infrastructure, which is expected to improve operational efficiency and support production in the new area.
“These highly accretive acquisitions create an expanded core area in New Mexico that plays to Coterra’s organizational strengths,” said Tom Jorden, Chairman, CEO, and President of Coterra. He added that the assets will enhance oil volumes starting in 2025 and offer substantial inventory potential in both established and emerging oil formations.
Key Highlights:
- Geographic Focus: Expands Coterra’s acreage in Lea County, NM, creating a new 83,000-net-acre core.
- Production Boost: Estimated 2025 oil production increase of 40–50 thousand barrels per day from the acquired assets, with total equivalent production of 60–70 thousand barrels per day.
- Capital Investment: Anticipates a 2025 capital expenditure between $2.1 billion and $2.4 billion, focusing largely on the Permian.
Coterra expects the acquisitions to be over 15% accretive to discretionary and free cash flow per share between 2025 and 2027. The company also aims to maintain a strong balance sheet with a target leverage ratio below 1.0 by the end of 2025, even if oil prices drop to $55 per barrel.
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