Cimarex presents at EnerCom’s The Oil & Gas Conference®
During Cimarex’s breakout session, management was asked the following questions:
- In Culberson county, what is the average mix in the upper and lower Wolfcamp? And is there potential for multiple stacked laterals in the upper Wolfcamp?
- As you lay out your Wolfcamp targets, do you have a view of the lower Wolfcamp in Reeves County in terms of economic development?
- Is there any material difference in the Wolfcamp in Culberson and Reeves in terms of EUR’s and well performance?
- In your eastern position, has industry delineated any additional horizons and how do you see your asset position there?
- Does your upper Wolfcamp position include the XY sands?
- Most of your peers use successful efforts accounting versus full cost accounting, so is there any discussion in switching to successful efforts?
- In Reeves county, how much of your acreage is de-risked to the south?
- Of your 80,000 acres in Reeves country, is that de-risked or just gross acreage?
- Can you comment on your sand proppant over the past year or so? How much sand are you using compared to a year ago? Can you comment on the results?
- Would sand per cluster be a better measure than pounds per foot?
- Can you speak to the long term development opportunity in Culberson with Chevron over the next several years? What do you think an optimal rig count is on that asset?
- As you think about the outlook into 2017, how do you think about outspending cash flow? How willing are you to do so, and how would an extra $10 to strip pricing change this?
- Can you talk about your NGL supply chain in the Delaware and Oklahoma?
- How do you look at hedging for next year? And how do you think of hedging in terms of absolute rates of return?
You can listen to Cimarex’s presentation by clicking here.
For the company’s second quarter results, click here.
Cimarex Energy (ticker: XEC) is an independent exploration and production company based in Denver, Colorado with oil and gas properties located in Oklahoma, Texas, and New Mexico. The majority of the company’s activity is located in the Permian Basin and the Anadarko Basin of Western Oklahoma. Cimarex is a major player in the Wolfcamp, Woodford, Meramec, and Bone Spring.
During the second quarter of 2016, company production averaged 974 MMcfe/d, a 5% decrease from second quarter 2015. Cimarex reported a second quarter net loss of $270.3 million, or $2.91 per share, including a non-cash charge related to the impairment of oil and gas properties. More details about the company’s first quarter results can be found here.
Cimarex is attempting to adapt to the lower commodity price environment and make the business sustainable at current prices by pursuing cost reductions, improving well performance, and reducing capital expenditures. The most recent exploration and development capital guidance for 2016 is set at $750 million at its midpoint. This is a reduction from the $877 million spent in 2015, but it is an upward revision from the previous guidance.
The majority of Cimarex’s capital expenditures will go towards the Permian Basin. Holding the company’s acreage is the priority in the company’s capital program. Unlike some of its competitors, Cimarex’s management team has expressed willingness to outspend cash flow if the conditions were right.
Going forward, Cimarex plans to meet obligations to hold acreage and continue to experiment with drilling and completions designs that seek to maximize returns in the Permian Basin and Anadarko Basin. The company is working on down spacing pilot programs in the Wolfcamp in the Permian Basin and in the Woodford/Meramec in the Anadarko Basin. The results of these pilots should provide valuable information to the company going forward and help guide future development.
