Coterra CEO Tom Jordan told CNBC’s Jim Cramer on Monday how the oil and gas company deals with unpredictable commodity pricing, emphasizing the “flexibility” of its assets.
“We built Coterra to have flexibility of top tier assets, low cost of supply, but also a team that is nimble, always looking at iterations and ready to pivot,” Jordan said. “We’ve built our service contracts so we don’t have many long term commitments, and that means we can move capital from one basin to another in fairly short order as we did with our recent release.”
The price of natural gas has been volatile over the past few months, and in February it hit its lowest level since 2020.
But Jordan said Coterra is able to project stable revenue and cash flow because of its “asset quality” and “organization.” He stressed that Coterra doesn’t try to predict commodity pricing. Instead, the company keeps its debt low and moves assets depending on its needs, he said.
Coterra announced during its most recent earnings report it would cut back its natural gas production and instead invest more heavily in oil. However, Jordan said the company is “well-positioned” and has plans in place to increase natural gas production if necessary.
“We have contingency plans to ramp back up if things look better,” he said. “…What we want to do is not invest in future wells at least put a pause on that and redirect that capital to other assets.”
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Coterra.
