Coterra Energy Inc. CTRA is keeping its rig count steady at nine in the Permian Basin, a sharp pivot from the earlier plan to scale back operations amid oil market uncertainty. The shift signals renewed confidence of the company, which recently updated its stance on capital spending and production plans at an energy conference held in New York.
In May, Coterra decided to cut its rig count to seven by the second half of 2025, trimming capital expenditures in the Permian by $150 million. The move was a precautionary step, caused by fears of a potential collapse in oil prices triggered by weak demand signals, high inventories and unpredictability surrounding OPEC+ supply cuts.
Rig Count Signals Confidence in Oil Price Resilience
The company earlier predicted a possible collapse of the oil market due to price headwinds, but it is now confident, given a change in macroeconomic activities. Coterra now expects to reverse its earlier decision of cutting down rig count and maintain it at nine rigs. The decision will push its capital spending to the high end of the updated $2-$2.3 billion annual range.
Robust Returns at Lower Prices
At the energy conference, Coterra announced that it is in a good position to stay profitable even in leaner price environments. The company stated that it can deliver solid returns even with West Texas Intermediate (“WTI”) crude priced between $60 and $65 per barrel, and still be profitable with a dip to $50.
Importantly, only a few of Coterra’s rigs are locked into long-term contracts, giving it room to scale back quickly if needed. This optionality provides a cushion against market swings while keeping upside potential intact.
The decision to maintain the rig count rather than cut it highlights Coterra’s cautious optimism in a still-fragile market. As sentiment around oil prices stabilizes, producers like Coterra are recalibrating for resilience rather than retreat.
CTRA’s Zacks Rank & Key Picks
Houston, TX-based Coterra is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Currently, CTRA has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like BKV Corporation BKV, Subsea 7 S.A. SUBCY and Oceaneering International, Inc. OII. While BKV and Subsea 7 currently sport a Zacks Rank #1 (Strong Buy) each, Oceaneering carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BKV Corporation is an energy company that produces natural gas from its owned and operated upstream businesses. The Zacks Consensus Estimate for BKV’s 2025 earnings indicates 338.18% year-over-year growth.
Subsea 7 operates as an engineering, construction and services contractor to the offshore energy industry worldwide. The Zacks Consensus Estimate for SUBCY’s 2025 earnings indicates 95.52% year-over-year growth.
Houston, TX-based Oceaneering is one of the leading suppliers of offshore equipment and technology solutions to the energy industry. The Zacks Consensus Estimate for OII’s 2025 earnings indicates 57.02% year-over-year growth.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
