NEW YORK, Nov. 4, 2025 /PRNewswire/ — Kimmeridge, a private investment firm focused on the energy sector and a major shareholder in Coterra Energy (CTRA), today published an open letter to Coterra’s Board of Directors calling for decisive action to address the company’s governance failures and lack of strategic focus following the failed merger of Cabot Oil & Gas and Cimarex Energy.
“Kotera’s history has been tainted by a board unwilling to admit its mistakes,” said Mark Viviano, managing partner at Kimmeridge. “Coterra is currently trading at a deep discount to both its Permian and gas-focused peers, highlighting the market’s rejection of a merger that prioritized self-preservation over strategic benefits. Mr. Kimmeridge maintains that Coterra’s path forward depends on new leadership and a renewed focus on the Delaware Basin. The board should immediately appoint an independent, non-merger non-executive chairman to restore objectivity and credibility.”
Open Letter to the Coterra Energy Board of Directors
We write this letter to express our deep concern at our company’s loss of strategic direction and governance failures that have contributed to the erosion of shareholder value. As long-term investors in the energy sector, we have emphasized the importance of board accountability, and Cotera is particularly lacking in it.
The 2021 merger of Cabot Oil & Gas and Cimarex Energy was promoted as the creation of a “balanced and resilient energy company.” Four years later, the results are clear. The merger failed. Coterra currently manages mismatched assets – dry gas in the Marcellus and oil-weighted production in the Permian – without a consistent strategy or capital allocation framework to integrate them. The so-called diversification has instead created complexity, inefficiency, and compression of evaluation. Cotera underperforms the XLE Index and its self-selected peer group despite maintaining a significant footprint in the core of the Delaware Basin.
Kotera’s poor performance has been exacerbated by governance failures. Almost 65% of S&P 500 energy companies separate the roles of CEO and chairman. Unlike its peers, Cotera has combined the roles of CEO, president, and chairman into one, effectively centralizing power and reducing accountability. Long-term underperformance, widening valuation gaps and write-downs of provisions reflect a governance model lacking true oversight. Boards should reevaluate their leadership structure and appoint an independent, non-executive chair.
The magnitude of Marcellus write-downs: A case study of oversight failures
Cotera wrote down Cabot’s Marcellus proven reserves by an astonishing 32% within 13 months of the merger. The magnitude of the impairment reveals fundamental deficiencies in capital allocation, technical oversight, and board-level risk management. Eight of the current 10 directors voted in favor of the merger, further confirming Mr Kimmeridge’s call for a truly independent chair.
Refocusing on the Core: Opportunities in the Delaware Basin
Mr. Kimmeridge believes Coterra’s future lies in focusing on the highest quality assets in the Delaware Basin. Cotera has produced the lowest-cost supply wells of all operators with at least 100 completed wells in Delaware since 2022, according to Enbels data. Shareholder value can be maximized by selling the lower-performing Marcellus and Anadarko assets and repositioning the company as a pure Permian operating company. Focusing on Cotera simplifies operations, improves return on invested capital, and enables rerating ratings. Complication failed. Focus and reliability restore value.
Shareholders are entitled to a board of directors that works for them, not management. We ask Cotera’s Board of Directors to think and act like owners, not observers.
Mr Kimmeridge stands ready to engage constructively, but will not tolerate continued inaction.
Cautionary note regarding forward-looking statements
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities mentioned herein to any person in any state. The information contained herein contains “forward-looking statements.” Certain forward-looking statements do not relate strictly to historical or current facts and can be identified by the fact that they include, without limitation, terminology such as “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “estimate,” “project,” “could,” “goal,” “predict,” “seek,” “could,” “should,” or the negative of such terms. Variations or equivalent terms of such terms. Similarly, statements that describe our objectives, plans and goals are forward-looking. Forward-looking statements involve various risks, uncertainties and assumptions. There is no guarantee that the ideas or assumptions expressed herein are correct or will prove to be correct. Additionally, there can be no assurance that the objectives, plans or goals set forth herein will ultimately be carried out or achieved. If one or more of such risks or uncertainties materialize, or if Kimmeridge’s underlying assumptions prove incorrect, actual results may differ materially from those expressed in these statements. Accordingly, forward-looking statements should not be considered a representation by Kimmeridge that any contemplated future plans, estimates or expectations will necessarily be achieved.
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