CTRA Coterra Energy Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 28, 2024

 

 

COTERRA ENERGY INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware	1-10447	04-3072771
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

Three Memorial City Plaza 840 Gessner Road, Suite 1400 Houston, Texas	77024
(Address of principal executive offices)	(Zip Code)

 

Registrant's telephone number, including area code: (281) 589-4600 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol		Name of exchange on which registered
Common Stock, par value $0.10 per share		CTRA		New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

Item 1.01.

Entry Into a Material Definitive Agreement.

 

As previously reported in the Current Report on Form 8-K filed by Coterra Energy Inc., a Delaware corporation (the “Company”), with the Securities and Exchange Commission on November 15, 2024, the Company has entered into a Membership Interest Purchase Agreement (the “FME Purchase Agreement”), dated as of November 12, 2024, by and among Franklin Mountain Energy Holdings, LP, a Delaware limited partnership, Franklin Mountain Energy Holdings 2, LP, a Delaware limited partnership, and Franklin Mountain GP2, LLC, a Texas limited liability company, the Company, Cimarex Energy Co., a Delaware corporation, and, solely in its capacity as Seller Representative (as defined therein), FMEH (collectively, the “Parties”).

 

On December 28, 2024, the Parties entered into the First Amendment to Membership Interest Purchase Agreement (the “Amendment”) in order to include approximately 1,650 net royalty acres owned by Sandia Minerals, LLC, which were previously Excluded Assets (as defined in the FME Purchase Agreement), in the transactions contemplated by the FME Purchase Agreement and to increase the cash consideration payable thereunder by $43 million. The foregoing description is qualified in its entirety by reference to the full text of the FME Purchase Agreement and the Amendment, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)         Exhibits.

 

Exhibit  No.		Description
10.1		Membership Interest Purchase Agreement, dated as of November 12, 2024, by and among Franklin Mountain Energy Holdings, LP, Franklin Mountain Energy Holdings 2, LP, and Franklin Mountain GP2, LLC, as sellers, solely in its capacity as Seller Representative, Franklin Mountain Energy Holdings, LP, Cimarex Energy Co., as purchaser, and Coterra Energy Inc., as purchaser parent (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on November 15, 2024).
10.2		First Amendment to Membership Interest Purchase Agreement, dated as of December 28, 2024, but effective for all purposes as of November 12, 2024, by and among Franklin Mountain Energy Holdings, LP, Franklin Mountain Energy Holdings 2, LP, and Franklin Mountain GP2, LLC, as sellers, solely in its capacity as Seller Representative, Franklin Mountain Energy Holdings, LP, Cimarex Energy Co., as purchaser, and Coterra Energy Inc., as purchaser parent.
104		Cover Page Interactive Data File (formatted as Inline XBRL).

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	COTERRA ENERGY INC.
Date: December 31, 2024	By:	/s/ Marcus G. Bolinder
	Name:	Marcus G. Bolinder
	Title:	Corporate Secretary

 

 

 

Exhibit 10.2

 

Execution Version

 

FIRST AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

This First Amendment to Membership Interest Purchase Agreement (this “Amendment”) is dated as of December 28, 2024 (the “Amendment Date”) but is effective for all purposes as of November 12, 2024 (the “Execution Date”) and is entered into by and among Franklin Mountain Energy Holdings, LP, a Delaware limited partnership (“FMEH”), Franklin Mountain Energy Holdings 2, LP, a Delaware limited partnership (“FMEH2”), and Franklin Mountain GP2, LLC, a Texas limited liability company (“FMGP2”, and together with FMEH and FMEH2, “Sellers” and each individually, a “Seller”), Coterra Energy Inc., a Delaware corporation (“Purchaser Parent”), Cimarex Energy Co., a Delaware corporation (“Purchaser”), and, solely in its capacity as Seller Representative hereunder, FMEH. Sellers and Purchaser are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties”. Capitalized terms used herein but not defined shall have the meanings ascribed to them in the Agreement (as defined below).

 

WHEREAS, Sellers, Purchaser, and FMEH (in its capacity as Seller Representative) entered into that certain Membership Interest Purchase Agreement dated as of the Execution Date (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Agreement”); and

 

WHEREAS, the Parties desire to amend the Agreement in certain respects, as set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.            The fourth Recital of the Agreement is hereby deleted in its entirety and replaced in its entirety with the following two Recitals:

 

WHEREAS, the issued and outstanding Interests of Sandia Minerals LLC, a New Mexico limited liability company (“Sandia” and all of the issued and outstanding Interests of Sandia, the “Sandia Interests”), are owned 100% by FMRI;

 

WHEREAS, the issued and outstanding Interests of Franklin Mountain Royalty Investments 3, LLC, a Delaware limited liability company (“FMRI3”), are owned (a) 99.9% by FMEH2 and (b) 0.1% by FMGP2 (FME, FME2, FME3, FMRI, FMRI3, and Sandia are referred to herein individually as a “Company” and all of the issued and outstanding Interests of each Company (other than Sandia), collectively, are referred to herein as the “Subject Interests”); and

 

2.            The first sentence of Section 2.2 of the Agreement is hereby deleted in its entirety and replaced in its entirety with the following:

 

The total consideration to be paid by Purchaser for the Subject Interests (the “Purchase Price”) shall consist of (a) $1,543,000,000 in cash (the “Cash Consideration”); and (b) 40,894,925 shares of Purchaser Parent Common Stock (the “Stock Consideration”).

 

 

3.            The first sentence of Section 2.4(d) of the Agreement is hereby deleted in its entirety and replaced in its entirety with the following:

 

Notwithstanding anything to the contrary herein: (i) for purposes of any Adjustment Amount included in the Preliminary Settlement Statement, all adjustments shall be made (A) sixty and seven tenths percent (60.7%) to the Stock Consideration based on a price of $24.45 per share and (B) thirty nine and three tenths percent (39.3%) the Cash Consideration, the intent of the Parties to apply such adjustments to the Stock Consideration and the Cash Consideration pro rata; provided that to the extent the Purchase Price is adjusted pursuant to Section 2.4(a)(i) as a result of Title Defects affecting the Sandia Assets, such adjustment shall be made one hundred percent (100%) to the Cash Consideration; and (ii) for purposes of any Adjustment Amount included in the Final Settlement Statement, any positive or negative adjustment will be paid or settled by the Parties in cash.

 

4.            The following sentence is added as clause (g) of Section 4.3 of the Agreement:

 

(g)            FMRI is the direct owner, holder of record and beneficial owner of the Sandia Interests, free and clear of all Encumbrances, restrictions on transfer or other encumbrances other than those Encumbrances, restrictions or other encumbrances arising pursuant to or described in this Agreement, the Organizational Documents of Sandia as in effect as of the Execution Date or applicable securities Laws.

 

5.            Section 4.15 of the Agreement is hereby deleted in its entirety and replaced in its entirety with the following:

 

Section 4.15         Special Warranty of Title. Each Company represents and warrants Defensible Title to each of the Wells, Leases, and Mineral Interests unto Purchaser against every Person whomsoever lawfully claims the same or any part thereof by, through or under a Company or its Affiliates (including Sellers), but not otherwise, subject, however, to the Permitted Encumbrances (the “Special Warranty”).

 

6.            The first sentence of Section 6.12 of the Agreement is hereby deleted in its entirety and replaced in its entirety with the following:

 

Notwithstanding anything to the contrary contained herein, the Parties acknowledge that upon the Closing, Sellers shall retain the sole right to the use of the names “FME”, “Franklin Mountain Energy,” “Sandia” and any variants thereof, together with any service marks, trademarks, trade names, identifying symbols, logos, emblems or signs containing, comprising or used in connection with such names, including any name or mark confusingly similar thereto and the goodwill associated therewith (collectively, the “Seller Marks”).

 

7.            The definition of “Closing Stock Consideration” in the Agreement is hereby deleted in its entirety and replaced in its entirety with the following:

 

“Closing Stock Consideration” means the estimate of the Adjusted Stock Consideration specified in the Preliminary Settlement Statement delivered in accordance with Section 2.6 (inclusive of any adjustments agreed to by the Parties in accordance with Section 2.6, if applicable).

 

 

8.            The following definition of “Sandia” is hereby added to Appendix A of the Agreement:

 

“Sandia” has the meaning set forth in the Recitals of this Agreement.

 

9.            The following definition of “Sandia Assets” is hereby added to Appendix A of the Agreement:

 

“Sandia Assets” means all of Sandia’s right, title, and interest in and to the Assets.

 

10.         The following definition of “Sandia Interests” is hereby added to Appendix A of the Agreement:

 

“Sandia Interests” has the meaning set forth in the Recitals of this Agreement.

 

11.          Exhibit A-2 to the Agreement is hereby amended to include, at the bottom of the original Exhibit A-2, the contents set forth on Exhibit A-2 attached hereto.

 

12.          Exhibit A-3 to the Agreement is hereby amended to include, at the bottom of the original Exhibit A-3, the contents set forth on Exhibit A-3 attached hereto.

 

13.          Exhibit C to the Agreement is hereby deleted in its entirety and replaced in its entirety with Exhibit C attached hereto.

 

14.          Schedule 4.3(a) to the Agreement is hereby deleted in its entirety and replaced in its entirety with Schedule 4.3(a) attached hereto.

 

15.          Schedule 4.12(a) to the Agreement is hereby amended to include, at the bottom of the original Schedule 4.12(a), the contents set forth on Schedule 4.12(a) attached hereto.

 

16.          Schedule 4.27 to the Agreement is hereby deleted in its entirety and replaced in its entirety with Schedule 4.27 attached hereto.

 

17.          Schedule 4.39 to the Agreement is hereby deleted in its entirety and replaced in its entirety with Schedule 4.39 attached hereto.

 

18.          Schedule 6.4 to the Agreement is hereby amended by deleting Item #1 in its entirety.

 

19.          Schedule 6.18 to the Agreement is hereby deleted in its entirety and replaced in its entirety with Schedule 6.18 attached hereto.

 

20.          Schedule 12.4 to the Agreement is hereby deleted in its entirety and replaced in its entirety with Schedule 12.4 attached hereto.

 

21.         Schedule EA to the Agreement is hereby amended by deleting Item #1 in its entirety.

 

 

22.          Except to the limited extent amended hereby, the Agreement shall continue in full force and effect, and the Parties ratify and confirm the Agreement as specifically amended hereby. After giving effect to this Amendment, any references in the Agreement to “this Agreement” or to the words “hereof” or “hereunder” or words of similar import, and all references to the Agreement in any and all agreements, instruments, documents, notes, certificates and other writings of every kind or nature (other than in this Amendment or as otherwise expressly provided), shall mean the Agreement as amended by this Amendment, whether or not this Amendment is expressly referenced. All references in the Agreement to “Execution Date,” “the date hereof” or “the date of this Agreement” shall refer to November 12, 2024.

 

23.            Sections 14.2 (Counterparts), 14.5 (Governing Law; Waiver of Jury Trial), 14.8 (Entire Agreement), 14.11 (Construction), 14.12 (Limitation on Damages), and 14.16 (Severability) of the Agreement shall apply mutatis mutandis to this Amendment.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, this Amendment has been signed by each of the Parties on the Amendment Date.

 

	SELLERS
	Franklin Mountain Energy Holdings, LP
	By: Franklin Mountain Energy GP, LLC, its General Partner
	By:	/s/ Scott Weaver
	Name: Scott Weaver
	Title: Vice President
	Franklin Mountain Energy Holdings 2, LP
	By: Franklin Mountain Energy GP 2, LLC, its General Partner
	By:	/s/ Scott Weaver
	Name: Scott Weaver
	Title: Vice President
	Franklin Mountain GP2, LLC
	By:	/s/ Scott Weaver
	Name: Scott Weaver
	Title: Vice President

 

[Signature Page to First Amendment to Membership Interest Purchase Agreement]

 

 

IN WITNESS WHEREOF, this Amendment has been signed by each of the Parties on the Amendment Date.

 

	Purchaser
	Cimarex Energy Co.
	By:	/s/ Shannon E. Young III
	Name: Shannon E. Young III
	Title: Executive Vice President and Chief Financial Officer
	Purchaser Parent
	Coterra Energy Inc.
	By:	/s/ Shannon E. Young III
	Name: Shannon E. Young III
	Title: Executive Vice President and Chief Financial Officer

 

[Signature Page to First Amendment to Membership Interest Purchase Agreement]

 

 

IN WITNESS WHEREOF, this Amendment has been signed by each of the Parties on the Amendment Date.

 

	Seller Representative
	Franklin Mountain Energy Holdings, LP, solely in its capacity as Seller Representative hereunder
	By: Franklin Mountain Energy GP, LLC, its General Partner
	By:	/s/ Scott Weaver
	Name: Scott Weaver
	Title: Vice President

 

[Signature Page to First Amendment to Membership Interest Purchase Agreement]

 

 

Exhibit A-2

 

WELLS SUPPLEMENT

 

[See Attached.]

 

 

Exhibit A-3

 

MINERAL INTERESTS SUPPLEMENT

 

[See Attached.]

 

 

Exhibit C

 

To that certain Membership Interest Purchase Agreement dated November 12, 2024, by and among Franklin Mountain Energy Holdings, LP, Franklin Mountain Energy Holdings 2, LP, and Franklin Mountain GP2, LLC, as Sellers, and Cimarex Energy Co., as Purchaser, Coterra Energy Inc., as Purchaser Parent, and Franklin Mountain Energy Holdings, LP., as Seller Representative

 

FORM OF EXCLUDED ASSET ASSIGNMENT

 

[See Attached.]

 

 

v3.24.4

Cover	Dec. 28, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 28, 2024
Entity File Number	1-10447
Entity Registrant Name	COTERRA ENERGY INC.
Entity Central Index Key	0000858470
Entity Tax Identification Number	04-3072771
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Three Memorial City Plaza
Entity Address, Address Line Two	840 Gessner Road
Entity Address, Address Line Three	Suite 1400
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77024
City Area Code	281
Local Phone Number	589-4600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.10 per share
Trading Symbol	CTRA
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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