The 2025 full year capital program is expected to be in the range of approximately $2.1 billion to $2.4 billion, an increase of 28 percent (at the mid-point) from $1.8 billion in 2024. The increase in our budgeted capital program was primarily driven by incremental capital expenditures associated with our January 2025 FME and Avant acquisitions, which increased our anticipated expenditures in the Permian Basin.

In January 2025, Coterra closed on the acquisition of all of the issued and outstanding equity ownership interests of a group of privately owned oil and gas exploration and production companies with assets and operations in the Delaware Basin of New Mexico (the "FME Interests") for total consideration of $2.5 billion, subject to certain post-closing adjustments, which included $1.7 billion of cash and the issuance of 28,190,682 shares of our common stock.

Approximately 70 percent of capital expenditures will be invested in the Permian Basin, 11 percent in the Marcellus Shale, 10 percent in the Anadarko Basin and remaining nine percent for gathering systems infrastructure, saltwater disposal and other spend.

The safety of our employees and contractors is the cornerstone of our focus on operational excellence. We empower all employees and contractors to utilize our Stop Work Authority program, which allows them to stop any work at any time if they are uncomfortable, discover a dangerous condition, or suspect any other EHS hazard.

The safety of our employees and contractors is the cornerstone of our focus on operational excellence. We empower all employees and contractors to utilize our Stop Work Authority program, which allows them to stop any work at any time if they are uncomfortable, discover a dangerous condition, or suspect any other EHS hazard.

Demonstrating our continued confidence in our business model, in February 2025, our Board of Directors increased our annual base dividend to $0.88 per share. This decision reflects management's commitment to returning value to shareholders.

Our revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prices we receive for the oil, natural gas and NGLs that we sell. Lower commodity prices may reduce the amount of oil, natural gas and NGLs that we can produce economically, while higher commodity prices could cause us to experience periods of higher costs.

Our growth is materially dependent upon the success of our drilling program. Drilling for oil and natural gas involves numerous risks, including the risk that no commercially productive reservoirs will be encountered. The cost of drilling, completing and operating wells is substantial and uncertain, and drilling operations may be curtailed, delayed or canceled as a result of a variety of factors beyond our control, including the risk of electric grid outages and the potential impacts thereof on our electric fracturing systems.

Our business, like the oil and gas industry in general, has become increasingly dependent on data, information systems, and digitally connected infrastructure, including technologies managed by third-party providers on whom we rely on to help us collect, host or process information.

Competition in the oil and natural gas industry is intense. We primarily compete with integrated, independent and other energy companies for the sale and transportation of our oil and natural gas production to pipelines, marketing companies and end users.

We believe that our concentrated acreage positions and our access to both third-party and Company-owned gathering and pipeline infrastructure in our core operating areas, along with our expected activity level and the related services and equipment that we have secured for the upcoming years, enhance our competitive position.

During the year ended December 31, 2024, two customers accounted for approximately 21 percent and 19 percent of our total sales. Dependence on a limited number of customers could create vulnerabilities.

Lease operating expense increased primarily due to higher production levels and higher operating costs driven by our production mix related to higher production in fields with higher operating costs, primarily in the Permian Basin, and higher equipment and field service costs.

Gathering, processing and transportation increased $1 million primarily due to higher gathering and transportation costs in the Permian Basin related to higher production and higher transportation rates, partially offset by lower gathering charges in the Marcellus Shale related to lower production.

Total capital expenditures for drilling, completion and other fixed assets were $1.8 billion in 2024 compared to $2.1 billion in 2023. This decrease is a key indicator of the company's financial health and performance.

We are also focused on making our operations more environmentally sustainable by actively implementing technology across our operations from the design phase to equipment improvements to limit our methane emissions and flaring activity.

Our CIRT is supported by dedicated Information Technology ("IT") and Operational Technology (“OT”) security resources, and further supported by various external parties, including but not limited to, cybersecurity service providers, assessors, consultants, auditors, and other third parties engaged on an as-needed basis.

In addition, cybersecurity risk is exacerbated with the advancement of technologies like artificial intelligence, which malicious third parties are using to create new, more sophisticated and more frequent attacks.

Increased our quarterly base dividend from $0.20 per share to $0.21 per share in February 2024, and in February 2025 our Board of Directors approved an additional increase of our quarterly base dividend from $0.21 per share to $0.22 per share.

Repurchased 17 million shares of our common stock during 2024 for $464 million, demonstrating a commitment to returning capital to shareholders.

Issued $500 million aggregate principal amount of 5.60% senior notes due March 15, 2034. We used the net proceeds, and cash on hand, to repay the $575 million of 3.65% weighted-average private placement senior notes that matured in September 2024.

We have published our 2024 Sustainability Report, which includes more information related to our sustainability practices, on our website at www.coterra.com.

We have entered into various voluntary Candidate Conservation Agreements (“CCAs”), whereby we agreed to take certain actions and limit certain activities, such as limiting drilling on certain portions of our acreage during nesting seasons, in an effort to protect certain threatened or endangered species.

In response to studies suggesting that emissions of carbon dioxide and certain other greenhouse gas (“GHG”), including methane, may be contributing to global climate change, there is increasing focus by local, state, regional, national and international regulatory bodies as well as by investors and the public on GHG emissions and climate change issues.

Oil prices were relatively steady in 2024 compared to 2023 as demand has continued for oil supply. Following global conflict and supply chain disruptions that drove high oil prices in 2022, OPEC+ reacted with supply reductions which helped to stabilize oil price levels in 2023.

Natural gas prices trended down in 2024 compared to 2023 as strong production and relatively weak demand drove inventory levels above the five-year average.

Meanwhile, basis differentials became more divergent in 2024, in part due to constrained pipeline capacity and oversupply in certain geographic areas, and at times have resulted in negative spot market pricing for natural gas during 2024, such as the Waha Hub in the Permian Basin.