Cimarex Energy (ticker: XEC) will be presenting at EnerCom’s The Oil & Gas Conference® 21 in Denver on August 16, 2016, at 1:00 p.m. EST. Cimarex 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 first quarter of 2016, company production averaged 973 MMcfe/d, a 3%increase from first quarter 2015. Cimarex reported a first quarter net loss of $186.1 million, or $2.00 per share, primarily due to a non-cash charge related to the impairment of oil and gas properties. The adjusted first quarter net loss was $36.9 million, or $0.40 per share. Cash flow from operations during the first quarter of 2016 was $81.6 million, compared to $186.9 million in the first quarter of 2015. More details about the company’s first quarter results can be found here in the 10-Q.
Cimarex is attempting to adapt to the lower commodity price environment and make the business sustainable at current pricesby pursuing cost reductions, improving well performance, and reducing capital expenditures. The most recent exploration and development capital guidance for 2016 is set at $700 million at its midpoint. This is a reduction from the $877 million spent in 2015.
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.
On the first quarter earnings call for 2016, Cimarex’s President, Chairman, and CEO Thomas Jorden said, “We are very willing to outspend cash flow, and the way I think about it is very simple, it’s about creating value… With our top-tier assets, I think our bias as a management team is to bring that value forward for our shareholders.”
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.
To see who else will be presenting at EnerCom’s The Oil & Gas Conference 21 in Denver, click here.
