U.S. shale producer Coterra Energy (CTRA.N) reported a rise in first-quarter profit on Monday but said it would lower its annual capital expenditure budget due to macroeconomic uncertainty.
The U.S. energy sector is bracing for the potential fallout from President Donald Trump's sweeping tariffs and an intense trade war with China — factors that could reduce demand for oil and natural gas.
Earlier today, Diamondback Energy (FANG.O) also trimmed its annual capital budget and production forecasts amid macroeconomic uncertainty affecting global energy demand.
"As our industry faces macroeconomic uncertainty and oil price headwinds, we believe it is prudent to reduce oil-directed activity at this time," said Coterra Chief Executive Officer Tom Jorden.
The firm adjusted its 2025 capital expenditure budget to a range of $2.0 billion to $2.3 billion, down from its previous forecast of $2.1 billion to $2.4 billion.
It also plans to operate seven rigs in the Permian Basin during the second half of the year, compared to an earlier plan to run ten rigs.
This decision is intended to bolster free cash flow and maintain the company's oil production forecast, Coterra said.
Shares of the company were down 1.5% after the bell.
Coterra's first-quarter results were driven by higher production in the Permian and Anadarko basins, though these gains were partially offset by weaker oil prices.
Total production rose to 746,800 barrels of oil equivalent per day (boepd) from 686,100 boepd in the first quarter ended March 31.
Oil production averaged 141,200 barrels per day in the quarter, while average realized oil price — the price received for each barrel of oil produced — was $69.73, 7% lower than last year.
The Houston, Texas-based company said its net income rose to $516 million, or 68 cents per share, during the first quarter, compared with $352 million, or 47 cents per share, a year ago.
