Coterra Energy Inc.

in a listen-only mode to the question and the answer session at the end of today's conference. I will now turn the call over to Dan Guffey, Vice President in Finance, Investor Relations, and Treasury.

Thank you, Operator. Good morning, and thank you for joining Cotera Energy's second quarter 2024 earnings conference call. Today's prepared remarks will include an overview from Tom Jordan, Chairman, CEO, and President, Shane Young, Executive Vice President and CFO, and Blake Sergo, Senior Vice President of Operations. Following our prepared remarks, we will take your questions during our Q&A session. As a reminder, on today's call, we will make forward-looking statements based on our current expectations. Additionally, some of our comments will reference non-GAAP financial measures. Forward-looking statements and other disclaimers, as well as reconciliations to the most directly comparable GAAP financial measures, were provided in our earnings release and updated investor presentation. both of which can be found on our website. With that, I'll turn the call over to Tom.

Thank you, Dan, and thank you to all that are joining us this morning. We're pleased to discuss our second quarter results with you this morning. Cotera had an excellent second quarter. We delivered strong financial results and a robust return of capital to our owners. We beat production guidance on all three streams, oil, natural gas, and natural gas liquids, came in on the low end of our capital guidance range and delivered capital efficiency that demonstrates the quality of our assets and our organization. Shane and Blake will walk you through the details of our quarterly results and updated guidance. I would like to make a few comments regarding our positioning in the marketplace, gas macro outlook, and perspectives on M&A. First, we've never felt better about our portfolio of assets. Cotera is uniquely positioned in the marketplace. Although we saw a 42% drop in realized natural gas prices between Q1 and Q2 2024, our revenue only declined a modest 12%. This financial resiliency affords us the opportunity to make sustained, long-term capital allocation decisions without being buffeted by short-term commodity swings. In a cyclic business, flexibility is the coin of the realm. The combination of our balanced revenue stream as well as our geographic and geologic diversity gives us market flexibility. Additionally, our inventory depth and lack of long-term service contracts affords us the luxury to focus solely on the best capital allocation decisions. We can pivot between the Marcellus, the Anadarko, and the Permian as conditions and opportunities warrant. Next, a few thoughts on the gas macro. Simply put, gas markets are oversupplied. After bottoming out near 97 BCF per day in May, US natural gas production has rebounded to over 102 BCF per day. This increase has come primarily from the Marcellus and the Permian, with the Marcellus contributing the lion's share. Although natural gas power demand has steadily increased over the past four years, largely driven by the retirement of coal-fired generation, a mild winter and inconsistent runtime in LNG facilities have contributed to a near-term oversupply. Northeast storage is trending at or near the five-year max. Although we remain bullish on gas long-term, Near-term supply-demand dynamics are placing downward pressure on natural gas prices and likely will continue to do so throughout the remainder of injection season. To that end, we have made the decision to curtail production once again in the third quarter. Additionally, we are exploring the option of delaying upcoming Marcellus turn-in lines and curtailing planned drilling and completion activities. We do not expect any of these decisions to materially impact our 2020 forecast flow. These curtailments of potential capital changes are tactical responses to a temporary situation. Our capital allocation decisions are not made in response to fluctuations in the near-term strip. They are in response to macro market conditions. We have plans in place to rapidly restore or curtail activity in response to these changing macro conditions. With increasing LNG exports and growing natural gas power demand, we have a line of sight to a materially better natural gas market. Our industry does not need $5 gas to have a healthy runway. We do, however, need sustainable price support in the mid threes or better to motivate producers to bring incremental gas to market to meet growing demand. We remain ready and willing to do our part. When natural gas prices recover, and they will recover, Cotera is nicely positioned with significant exposure to the upside. Drilling and completion dollars are far and away the most significant expenditures we make. Rather than just curtailing existing production, The biggest impact on Cotera in responding to an oversupplied market will come from delaying or deferring drilling and completion investments. Remember, we do not manage Cotera around production goals. Production is an outcome of sound investment decisions. Our existing production is the consequence of yesterday's capital allocation decisions. We believe that it is never wise to make poor investment decisions to maintain or increase production, nor to assign any of our business units a budget that is their, quote, fair share of capital. Today's decisions should be based upon today's reality. At current commodity prices, much of the Marcellus does not compete with other opportunities in our portfolio. Our core mission is to allocate capital prudently and prioritize our most profitable programs. The most profitable long-term Cotera will best be built by this disciplined capital allocation. We maintain the option to redirect capital to multiple other opportunities within our portfolio or to reduce capital expenditures. We remain focused on per share value creation through the cycles. Now, a few thoughts on M&A. Cotera has established a track record of outstanding execution, consistent top-tier financial returns, and discipline capital allocation among a diverse portfolio of assets. Adding quality assets to our portfolio would play to our strengths, and we have confidence that our organization would manage them exceptionally well. However, quality assets are only half the equation. The assets must come at a reasonable price, including a margin of safety. Buying assets at discount rates that are at or near our cost of capital at high commodity prices can be a recipe for disaster. Upswings in commodity prices, new technology, or new geologic zones can save the purchaser, but disaster waits patiently on the other side. It will wait for a significant sustained downdraft in commodity prices and strike with lethal precision. Furthermore, disaster loves deals that are measured on single metrics, such as near-term free cash flow. We have seen this movie play out repeatedly in our industry. This is not a commentary in any particular deal, but a reflection on lessons learned through the years. Cotera has a deep and diverse inventory, significant and sufficient scale, and a pristine balance sheet that we will defend vigorously. We would love to add assets to our portfolio, but they must offer a combination of quality and value. We are willing to be patient discipline and counter cyclical we are also willing to be lonely finally last night we also released our 2024 sustainability report we hope that you will find it to be a readable fact-based discussion of the tremendous progress we have made as well as the ongoing challenges we face we remain committed to operational excellence with emissions reduction as a central tenet Our organization is focused on this mission from the field to the C-suite. We are deeply proud of this commitment and of the progress that we have delivered. We strive for an authentic voice when discussing these topics, and we hope you will find that our sustainability report reflects this. With that, I will turn the call over to Shane and Blake, who will provide detail on our quarterly results and outlook. First, let's hear from Shane.