Coterra rebuffs activist call for leadership overhaul, defends long-term strategy

Coterra Energy Inc. defended the strategic logic and long-term benefits of its 2021 merger that combined Cabot Oil & Gas and Cimarex Energy, following a public letter from activist investor Kimmeridge calling for leadership changes and a renewed focus on the company’s Permian assets. 

According to Reuters, Kimmeridge, which said it holds a “significant stake” in Coterra, urged the board to appoint an independent, non-executive chair and divest non-core assets in the Marcellus and Anadarko basins. The firm argued that Coterra’s diversified portfolio has limited its valuation compared with pure-play Permian producers.

Coterra responded swiftly, rejecting Kimmeridge’s assertions and emphasizing the company’s disciplined strategy and balanced asset base. “We are disappointed that they have chosen to release a public letter without reaching out to us,” said Coterra CEO Tom Jordan, noting that the correspondence contained “some factual errors.”

The 2021 merger, valued at $17 billion, was designed to create a resilient, free-cash-flow-focused operator spanning the U.S.’s premier oil and gas basins — the Delaware, Marcellus and Anadarko. Coterra’s integrated portfolio and conservative balance sheet have allowed the company to maintain shareholder returns through commodity-price cycles, distinguishing it from more narrowly focused peers, Reuters reported.

Industry observers point out that the company’s mix of high-return oil wells in West Texas and low-cost gas production in the Marcellus provides stability across market conditions — a strategy increasingly valued amid price volatility and shifting demand between liquids and natural gas.

Shares of Coterra rose 1.7% in Tuesday morning trading, narrowing year-to-date declines to 2.8%. The broader S&P 500 Energy Index has gained 1.25% over the same period.

Coterra missed third-quarter earnings expectations Monday due to weaker oil prices, though production rose quarter-over-quarter, underscoring the operational strength of its multi-basin model. Company executives reiterated their focus on disciplined capital allocation, shareholder returns and long-term value creation.