It was standing room only when Tom Jorden, Cimarex Energy’s president and CEO, started running through the company’s business model and outlined its Anadarko basin and Delaware basin assets on day two of EnerCom’s 21st annual The Oil & Gas Conference® in Denver.
“Re-investing our cash flow at the highest rate of return” is how Jorden stated the Cimarex mission. Jorden said the company is “geosciences heavy; we like to generate our own opportunities, and we use leverage conservatively.”
“Production growth is an outcome of our approach,” Jorden told the standing-room-only crowd at EnerCom. “We grow by reinvesting cash flow, not by setting growth targets.”
Jorden mentioned that Cimarex has never been known for hedging, but “get ready for this: we are layering some hedges in place.” Jorden said the company had hedged about 10% of production and its goal is to hedge 40%-50%. “We entered the downturn unhedged, so we had to find a better way.”
Jorden went into detail about the company’s completion evolution taking them up to 3,000 or more pounds of sand per foot; he mentioned some wells are using less sand per cluster, however.
Jorden said that Cimarex has been able to achieve much lower decline after a year of production in some wells.
He said that Cimarex is a believer in the uplift the company is seeing from 10,000 foot laterals and talked about having 100,000 acres in one play “with no lease boundaries.”
He said that in some of its assets Cimarex has installed its own oil gathering systems. “Our oil now is on pipe.”
Jorden ran through the STACK assets and the merits of the Upper and Lower Wolfcamp, one in particular being that “they are independent from each other; we know we can come back years later and produce the other one.”
Woodford Shale
Jorden said the company is very high on the Woodford shale and the Meramec shale above it. He said Cimarex likes overpressured plays and “very strong deliverability from our wells.” Jorden called some of their pilot programs in the Meramec “a future science project.” He said the Woodford is “a strong contender for capital within our portfolio.”
Jorden said Cimarex “has no preference for commodity type; we don’t want to be a one-play company or a one-basin player. We’ve always been an exploration company: we’re always looking for the next big play.”
