Kimmeridge Releases Letter to the Board of Coterra Energy Outlining Urgent Steps to Restore Governance and Unlock Shareholder Value

NEW YORK, Nov. 4, 2025 /PRNewswire/ -- Kimmeridge, a private investment firm focused on the energy sector and a significant shareholder of Coterra Energy (CTRA), today released an open letter to Coterra's Board of Directors calling for decisive action to address the Company's failures of governance and lack of strategic focus following the failed merger of Cabot Oil & Gas and Cimarex Energy.

"Coterra's history has been tainted by a boardroom unwilling to acknowledge its own missteps," said Mark Viviano, Managing Partner at Kimmeridge. "Coterra now trades at a significant discount to both Permian and gas-focused peers, underscoring the market's rejection of a merger that prioritized self-preservation over strategic merit. Kimmeridge maintains that Coterra's path forward hinges on new leadership and a renewed focus on the Delaware Basin. The Board should immediately appoint a non-executive Chair who is independent and unassociated with the merger to restore objectivity and credibility."

Open Letter to the Board of Coterra Energy

We are writing to express our deep concern over the Company's loss of strategic direction and failures of governance, which have contributed to an erosion of shareholder value. As long-term investors in the energy sector we have emphasized the importance of boardroom accountability, something notably absent at Coterra. 

The 2021 merger of Cabot Oil & Gas and Cimarex Energy was promoted as creating a "balanced, resilient energy company." Four years later, the results are clear: the merger has failed. Coterra now manages mismatched assets – dry gas in the Marcellus and oil-weighted production in the Permian – with no coherent strategic or capital-allocation framework integrating them. The alleged diversification has instead produced complexity, inefficiency, and valuation compression. Despite maintaining a substantial footprint in the core of the Delaware Basin, Coterra has underperformed the XLE index and its self-selected peer group.

Coterra's weak performance is compounded by failures of governance. Nearly 65% of S&P 500 Energy companies separate the CEO and Chair roles. Deviating from peers, Coterra has consolidated the roles of CEO, President and Chairman into one, effectively concentrating power and diminishing accountability. Long-term underperformance, a widening valuation gap, and a material reserve write-down reflect a governance model that lacks true oversight. The Board must reassess its leadership structure and appoint an independent, non-executive Chair.

The Magnitude of the Marcellus Write-Down: A Case Study in Failed Oversight

Coterra wrote down Cabot's Marcellus proved reserves by a stunning 32% within thirteen months of the merger. The magnitude of the impairment reveals fundamental flaws in capital allocation, technical oversight, and board-level risk management. Eight of the ten current directors voted in favor of the merger, further validating Kimmeridge's call for a truly independent Chair.

Refocusing on the Core: The Delaware Basin Opportunity

Kimmeridge believes Coterra's future lies in focusing on its highest quality assets in the Delaware basin. According to Enverus data, Coterra has produced the lowest cost of supply wells in the Delaware since 2022 amongst all operators with at least one hundred completions. Shareholder value can be maximized by divesting the low-decline Marcellus and Anadarko assets and repositioning the Company as a Permian pure play. A focused Coterra would simplify operations and improve returns on invested capital, allowing for a valuation re-rating. Complexity has failed. Focus and credibility will restore value.

Shareholders deserve a board that works for them, not for management. We are calling on Coterra's board of directors to think and act like owners, not observers.

Kimmeridge stands ready to engage constructively but will not accept continued inaction.

Cautionary Statement Regarding Forward-Looking Statements

This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein in any state to any person. The information herein contains "forward-looking statements". Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "potential," "targets," "forecasts," "seeks," "could," "should" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks, uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct or that any of the objectives, plans or goals stated herein will ultimately be undertaken or achieved. If one or more of such risks or uncertainties materialize, or if Kimmeridge's underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Kimmeridge that the future plans, estimates or expectations contemplated will ever be achieved.

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