DENVER, Feb. 14, 2018 /PRNewswire/ --
- Total company production averaged 1,204 MMcfe (201 MBOE) per
day in the fourth quarter
-
- Oil production up 36 percent year-over-year
- Proved Reserves increased 16% to 3.4 Tcfe (559 MMBOE); Cimarex
replaced 211% of 2017 production
Cimarex Energy Co. (NYSE: XEC) today reported fourth quarter
2017 net income of $174.7 million, or
$1.83 per share, compared to fourth
quarter 2016 net income of $47.8
million, or $0.50 per
share. Adjusted fourth quarter net income (non-GAAP) was
$140.0 million, or $1.47 per share, compared to fourth quarter 2016
adjusted net income (non-GAAP) of $66.4
million, or $0.70 per
share1. Cash flow from operations was $340.8 million in the fourth quarter compared to
$185.1 million in the fourth quarter
of 2016. Adjusted cash flow from operations (non-GAAP)
totaled $357.1 million in the fourth
quarter, a 63 percent increase from 2016
levels1.
For the year, net income totaled $494.3
million, or $5.19 per
share. The adjusted net income (non-GAAP) for the full year
was $443.2 million, or $4.65 per share1. Cash flow from
operations totaled $1,096.6 million
in 2017 compared to $625.8 million in
2016. Adjusted cash flow from operations (non-GAAP) totaled
$1,185.6 million in 2017, an 88
percent increase from 2016 levels1. Revenues in
2017 totaled $1.9 billion, a 53
percent increase from 2016. The increase in revenues and cash
flow was the result of higher production and higher realized
product prices.
In the fourth quarter, total company production volumes averaged
1,204 million cubic feet equivalent (MMcfe) per day (201 thousand
barrels of oil equivalent (MBOE) per day), up 25 percent from a
year ago. Fourth quarter oil production averaged 61,771
barrels per day, an increase of 36 percent from 2016 levels.
For the full year, Cimarex reported daily production volumes of
1,142 MMcfe per day (190 MBOE per day), up 19 percent from our 2016
average daily output of 963 MMcfe per day.
Cimarex invested $1.28 billion in
exploration and development (E&D) in 2017, including
$344 million in the fourth
quarter. Investments made in 2017 were funded with cash
flow and cash on hand. E&D capital exceeded the company's
estimate for 2017 of $1.2 billion due
to higher infrastructure spending, higher working interest and
costs in outside operated wells, land acquisition and acceleration
of activity.
Proved reserves at December 31,
2017 were 3.4 trillion cubic feet equivalent (Tcfe) or 559
million barrels of oil equivalent (MMBOE), up 16 percent year over
year. Proved developed reserves increased 21 percent to 2.8
Tcfe. Cimarex added 941 Bcfe through extensions and
discoveries and deducted 60 Bcfe through net revisions resulting in
reserve replacement of 211 percent of 2017
production. Proved reserves are 83 percent proved
developed.
Realized oil prices averaged $51.68 per barrel in the fourth quarter, 16
percent higher than the same period a year ago. Realized
natural gas prices were lower in the fourth quarter and averaged
$2.58 per Mcf versus $2.86 a year ago. Realized NGL prices
averaged $25.88 per barrel up 43
percent compared to fourth quarter 2016. For the full year,
realized oil prices averaged $47.06,
up 23 percent from 2016. Realized natural gas prices averaged
$2.76 per Mcf, a 19 percent increase
from 2016. Realized NGL prices averaged $21.61 per barrel, up 54 percent from 2016
levels.
Total debt at December 31, 2017
consisted of $1.5 billion of
long-term notes, with $750 million
maturing in 2024 and $750 million
maturing in 2027. Cimarex had no borrowings under its revolving
credit facility and had a cash balance of $401 million. Debt was 37 percent of total
capitalization2.
Operations Update
Cimarex invested $1.28 billion in
exploration and development in 2017, 59 percent in the Permian
region and 39 percent in the Mid-Continent. An additional
$45 million was invested in midstream
operations in 2017. During 2017, Cimarex participated in the
drilling and completion of 319 gross (98 net) wells.
At year-end, 91 gross (34 net) wells were waiting on completion,
of which 60 gross (16 net) are in the Mid-Continent and 31 gross
(18 net) in the Permian. Cimarex currently is operating
14 drilling rigs.
|
WELLS COMPLETED BY
REGION
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Gross
wells
|
|
|
|
|
|
|
|
Permian
Basin
|
32
|
|
11
|
|
97
|
|
48
|
Mid-Continent
|
85
|
|
44
|
|
222
|
|
105
|
|
117
|
|
55
|
|
319
|
|
153
|
Net
wells
|
|
|
|
|
|
|
|
Permian
Basin
|
14
|
|
8
|
|
55
|
|
30
|
Mid-Continent
|
10
|
|
17
|
|
43
|
|
31
|
|
24
|
|
25
|
|
98
|
|
61
|
Permian Basin
Production from the Permian Basin averaged 673 MMcfe per day in the
fourth quarter, a 32 percent increase over fourth quarter 2016, and
a seven percent increase sequentially. Oil volumes averaged
47,642 barrels per day and represented 42 percent of the region's
total equivalent production. For the full year, production
averaged 631 MMcfe per day, up 25 percent year over year.
Cimarex brought 32 gross (14 net) wells on production in the
Permian region during the fourth quarter, bringing the total for
the year to 97 gross (55 net) wells. Cimarex currently
operates ten rigs in the Permian region.
Activity in the Permian region in the fourth quarter included
the completion of 14 wells in the Wolfcamp, Avalon and Bone Spring
formations. Cimarex also began drilling operations on two
multi-well Wolfcamp developments. The Animal Kingdom project,
located in Culberson County,
Texas, consists of eight wells targeting multiple landings
in the Lower Wolfcamp and the Snowshoe project, located in
Reeves County, Texas, is an
eight-well project targeting multiple landings in the Upper
Wolfcamp. Both are long lateral developments with first
production expected during the third quarter of 2018.
As of year-end, Cimarex has completed 70 10,000-foot lateral
Wolfcamp wells including 23 in the Lower Wolfcamp and 47 in the
Upper Wolfcamp. In addition to the multiple spacing pilots
drilled in the Wolfcamp in 2017, another highlight of the year's
program was the completion of four 10,000-foot lateral Upper
Wolfcamp wells on the western half of our Culberson County acreage, an area that was
previously untested. These wells had an average 30-day peak
initial production of 2,587 BOE per day (56 percent oil, 26 percent
gas, 18 percent NGL). A fifth well is currently flowing
back. Cimarex has additional activity planned in this area in
2018 including a development project with drilling scheduled to
begin in the third quarter.
Mid-Continent
Production from the Mid-Continent region averaged 529 MMcfe per day
in the fourth quarter, a 19 percent increase over fourth-quarter
2016, and a three percent increase sequentially. Oil volumes
averaged 13,999 barrels per day and represented 16 percent of the
region's total equivalent production. For the full year, production
averaged 509 MMcfe per day, up 11 percent year over year.
Wells brought on production during the fourth quarter totaled 85
gross (10 net) in the Mid-Continent region, bringing the total
wells in 2017 to 222 gross (43 net). As planned, drilling to
hold company's Meramec acreage was completed in 2017.
Activity in the region continues to focus on the Woodford and
Meramec shale plays in western Oklahoma. Recent highlights
include the completion of a three-well, stacked Woodford/Meramec
test in the 14N-10W township in Canadian County, Oklahoma.
This test confirms results of our previous wells in the area.
Cimarex operates nearly all of the 24,000 gross acres leased in the
14N-10W area with an average 62 percent working interest.
Drilling activity continues in the high return Lone Rock area where Cimarex has six long
lateral Woodford wells on production with average 30-day peak
initial production of 1,806 BOE per day (35 percent oil, 36 percent
gas, 29 percent NGL). The company is currently drilling the
Shelly spacing pilot in Lone Rock
with first production expected mid-summer.
Cimarex currently operates four rigs in the Mid-Continent.
Please see the latest Corporate Presentation on our website
www.cimarex.com for further details.
Production by Region
Cimarex's average daily
production and commodity price by region is summarized below:
DAILY PRODUCTION
BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
232.6
|
|
179.3
|
|
217.9
|
|
178.1
|
|
Oil (Bbls)
|
47,642
|
|
36,253
|
|
44,577
|
|
36,018
|
|
NGL (Bbls)
|
25,747
|
|
19,114
|
|
24,269
|
|
18,244
|
|
Total Equivalent
(MMcfe)
|
672.9
|
|
511.5
|
|
630.9
|
|
503.7
|
|
Total Equivalent
(BOE)
|
112,157
|
|
85,250
|
|
105,157
|
|
83,945
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
300.3
|
|
276.3
|
|
294.4
|
|
280.1
|
|
Oil (Bbls)
|
13,999
|
|
9,205
|
|
12,457
|
|
8,969
|
|
NGL (Bbls)
|
24,176
|
|
19,036
|
|
23,296
|
|
20,513
|
|
Total Equivalent
(MMcfe)
|
529.3
|
|
445.8
|
|
508.9
|
|
456.9
|
|
Total Equivalent
(BOE)
|
88,225
|
|
74,291
|
|
84,822
|
|
76,165
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
534.0
|
|
457.2
|
|
513.6
|
|
459.6
|
|
Oil (Bbls)
|
61,771
|
|
45,567
|
|
57,153
|
|
45,158
|
|
NGL (Bbls)
|
49,954
|
|
38,184
|
|
47,600
|
|
38,797
|
|
Total Equivalent
(MMcfe)
|
1,204.4
|
|
959.7
|
|
1,142.1
|
|
963.4
|
|
Total Equivalent
(BOE)
|
200,729
|
|
159,951
|
|
190,354
|
|
160,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
2.56
|
|
2.85
|
|
2.72
|
|
2.35
|
|
Oil ($ per
Bbl)
|
51.38
|
|
44.75
|
|
46.96
|
|
38.45
|
|
NGL ($ per
Bbl)
|
25.07
|
|
15.71
|
|
20.25
|
|
12.32
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
2.60
|
|
2.86
|
|
2.78
|
|
2.29
|
|
Oil ($ per
Bbl)
|
52.72
|
|
44.36
|
|
47.42
|
|
37.65
|
|
NGL ($ per
Bbl)
|
26.73
|
|
20.58
|
|
23.02
|
|
15.59
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
2.58
|
|
2.86
|
|
2.76
|
|
2.31
|
|
Oil ($ per
Bbl)
|
51.68
|
|
44.67
|
|
47.06
|
|
38.30
|
|
NGL ($ per
Bbl)
|
25.88
|
|
18.15
|
|
21.61
|
|
14.05
|
Other
The following table summarizes the company's
current open hedge positions:
|
|
1Q18
|
2Q18
|
3Q18
|
4Q18
|
1Q19
|
2Q19
|
3Q19
|
Gas
Collars:
|
PEPL³
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
130,000
|
120,000
|
90,000
|
60,000
|
50,000
|
50,000
|
20,000
|
|
Wtd Avg
Floor
|
2.57
|
2.39
|
2.33
|
2.28
|
2.23
|
2.23
|
1.98
|
|
Wtd Avg
Ceiling
|
2.93
|
2.70
|
2.56
|
2.49
|
2.46
|
2.46
|
2.16
|
|
|
|
|
|
|
|
|
|
|
El Paso
Perm³
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
90,000
|
90,000
|
70,000
|
50,000
|
40,000
|
40,000
|
20,000
|
|
Wtd Avg
Floor
|
2.52
|
2.22
|
2.14
|
2.06
|
1.98
|
1.98
|
1.65
|
|
Wtd Avg
Ceiling
|
2.84
|
2.48
|
2.32
|
2.23
|
2.14
|
2.14
|
1.80
|
|
|
|
|
|
|
|
|
|
Oil
Collars:
|
WTI⁴
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
29,000
|
29,000
|
25,000
|
19,000
|
13,000
|
13,000
|
6,000
|
|
Wtd Avg
Floor
|
47.28
|
47.83
|
47.48
|
48.63
|
48.92
|
48.92
|
50.00
|
|
Wtd Avg
Ceiling
|
56.33
|
57.93
|
57.76
|
58.80
|
61.04
|
61.04
|
66.82
|
|
|
|
|
|
|
|
|
|
Oil Basis
Swaps:
|
WTI
Midland⁵
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
13,000
|
14,000
|
14,000
|
9,000
|
6,000
|
6,000
|
1,000
|
|
Weighted Avg
Differential⁶
|
(0.72)
|
(0.72)
|
(0.72)
|
(0.59)
|
(0.51)
|
(0.51)
|
(0.70)
|
Conference call and webcast
Cimarex will host a conference call tomorrow, February 15, at 11:00 a.m.
EST (9:00 a.m. MST). The
call will be webcast and accessible on the Cimarex website at
www.cimarex.com. To participate in the live, interactive
call, please dial 866-367-3053 ten minutes before the scheduled
start (callers in Canada dial
855-669-9657 and international callers dial 412-902-4216). A
replay will be available on the company's website.
Investor Presentation
For more details on Cimarex's
2017 results, please refer to the company's investor presentation
available at www.cimarex.com.
This press release contains forward-looking statements,
including statements regarding projected results and future events.
These forward-looking statements are based on management's judgment
as of the date of this press release and include certain risks and
uncertainties. Please refer to the company's Annual Report on
Form 10-K/A for the year ended December 31,
2016, filed with the SEC, in the 2017 Annual Report and Form
10-K to be filed with the SEC, and other filings including our
Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, for
a list of certain risk factors that may affect these
forward-looking statements.
Actual results may differ materially from company projections
and other forward-looking statements and can be affected by a
variety of factors outside the control of the company including
among other things: oil, NGL and natural gas price levels and
volatility; higher than expected costs and expenses, including the
availability and cost of services and materials; compliance with
environmental and other regulations; risks associated with
operating in one major geographic area; environmental liabilities;
the ability to receive drilling and other permits and rights-of-way
in a timely manner; development drilling and testing results;
declines in the values of our oil and gas properties resulting in
impairments; the potential for production decline rates to be
greater than expected; performance of acquired properties and newly
drilled wells; costs and availability of third party facilities for
gathering, processing, refining and transportation; regulatory
approvals, including regulatory restrictions on federal lands;
legislative or regulatory changes, including initiatives related to
hydraulic fracturing, emissions and disposal of produced water;
unexpected future capital expenditures; economic and competitive
conditions; the availability and cost of capital; the ability to
obtain industry partners to jointly explore certain prospects, and
the willingness and ability of those partners to meet capital
obligations when requested; changes in estimates of proved
reserves; derivative and hedging activities; the success of the
company's risk management activities; title to properties;
litigation; the ability to complete property sales or other
transactions; the effectiveness of controls over financial
reporting; and other factors discussed in the company's reports
filed with the SEC. Cimarex Energy Co. encourages readers to
consider the risks and uncertainties associated with projections
and other forward-looking statements. In addition, the company
assumes no obligation to publicly revise or update any
forward-looking statements based on future events or
circumstances.
___________________________
|
|
|
1
|
Adjusted net income
and adjusted cash flow from operations are non-GAAP financial
measures. See below for reconciliations of the related GAAP
amounts.
|
|
|
2
|
Debt to total
capitalization is calculated by dividing long-term debt by
long-term debt plus stockholders' equity.
|
|
|
3
|
PEPL refers to
Panhandle Eastern Pipe Line Tex/OK Mid-Continent index and El Paso
Perm is El Paso Permian Basin index both as quoted in Platt's
Inside FERC.
|
|
|
4
|
WTI refers to West
Texas Intermediate oil price as quoted on the New York Mercantile
Exchange.
|
|
|
5
|
Index price on basis
swaps is WTI Midland as quoted by Argus Americas Crude.
|
|
|
6
|
Index price on basis
swaps is WTI NYMEX less the weighted average differential shown in
table.
|
RECONCILIATION OF
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
provides a reconciliation from generally accepted accounting
principles (GAAP) measures of net income (loss) and earnings (loss)
per share to adjusted net income and adjusted earnings per share
(non-GAAP) for the periods indicated.
|
|
|
|
|
For the Three
Months Ended
|
|
|
For the Twelve
Months Ended
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
174,696
|
|
$
|
47,783
|
|
$
|
494,329
|
|
$
|
(408,803)
|
|
Impairment of oil and
gas properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
757,670
|
|
Mark-to-market (gain)
loss on open derivative positions
|
|
30,160
|
|
|
30,417
|
|
|
(22,843)
|
|
|
63,186
|
|
Loss on early
extinguishment of debt
|
|
18
|
|
|
—
|
|
|
28,187
|
|
|
—
|
|
Asset Retirement
Obligation
|
|
10,460
|
|
|
—
|
|
|
10,460
|
|
|
—
|
|
Impact of reduction
in Federal statutory tax rate
|
|
(61,146)
|
|
|
—
|
|
|
(61,146)
|
|
|
—
|
|
Tax
impact*
|
|
(14,142)
|
|
|
(11,832)
|
|
|
(5,768)
|
|
|
(298,867)
|
Adjusted net
income
|
$
|
140,046
|
|
$
|
66,368
|
|
$
|
443,219
|
|
$
|
113,186
|
Diluted earnings
(loss) per share**
|
$
|
1.83
|
|
$
|
0.50
|
|
$
|
5.19
|
|
$
|
(4.38)
|
Adjusted diluted
earnings per share**
|
$
|
1.47
|
|
$
|
0.70
|
|
$
|
4.65
|
|
$
|
1.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
attributable to common stockholders and participating
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
95,363
|
|
|
95,175
|
|
|
95,265
|
|
|
95,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
and adjusted diluted earnings per share excludes the noted items
because management believes these items affect the comparability of
operating results. The company discloses these non-GAAP financial
measures as a useful adjunct to GAAP earnings because:
|
|
|
a) Management uses
adjusted net income to evaluate the company's operating performance
between periods and to compare the company's performance to other
oil and gas exploration and production companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b) Adjusted net
income is more comparable to earnings estimates provided by
research analysts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The tax impact of the
2016 periods is calculated using a tax rate that excludes the
effects of tax adjustments recorded in the fourth quarter primarily
related to the revision of previous tax balances.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
|
Earnings (loss) per
share are based on actual figures rather than the rounded figures
presented.
|
RECONCILIATION OF
ADJUSTED CASH FLOW FROM OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
provides a reconciliation from generally accepted accounting
principles (GAAP) measures of net cash provided by operating
activities to adjusted cash flows from operations (non-GAAP) for
the periods indicated.
|
|
|
|
|
For the Three
Months Ended
|
|
|
For the Twelve
Months Ended
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
|
340,759
|
|
$
|
185,061
|
|
$
|
1,096,564
|
|
$
|
625,849
|
|
Change in operating
assets and liabilities
|
|
16,339
|
|
|
33,679
|
|
|
89,067
|
|
|
3,289
|
Adjusted cash flow
from operations
|
$
|
357,098
|
|
$
|
218,740
|
|
$
|
1,185,631
|
|
$
|
629,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management uses the
non-GAAP financial measure of adjusted cash flow from operations as
a means of measuring our ability to fund our capital program and
dividends, without fluctuations caused by changes in current assets
and liabilities, which are included in the GAAP measure of net cash
provided by operating activities. Management believes this
non-GAAP financial measure provides useful information to investors
for the same reason, and that it is also used by professional
research analysts in providing investment recommendations
pertaining to companies in the oil and gas exploration and
production industry.
|
PROVED
RESERVES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
|
|
Oil
|
|
NGL
|
|
Total
|
|
Total
|
|
|
(Bcf)
|
|
(MBbls)
|
|
(MBbls)
|
|
(Bcfe)
|
|
(MBOE)
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
1,471
|
|
105,878
|
|
130,633
|
|
2,890.5
|
|
481,748
|
|
Revisions of previous
estimates
|
(40)
|
|
(1,225)
|
|
(2,099)
|
|
(59.7)
|
|
(9,951)
|
|
Extensions and
discoveries
|
364
|
|
53,464
|
|
42,692
|
|
940.7
|
|
156,786
|
|
Purchase of
reserves
|
1
|
|
42
|
|
78
|
|
1.4
|
|
227
|
|
Production
|
(187)
|
|
(20,861)
|
|
(17,374)
|
|
(416.9)
|
|
(69,479)
|
|
Sale of
properties
|
(1)
|
|
(60)
|
|
(70)
|
|
(1.8)
|
|
(294)
|
December 31,
2017
|
1,608
|
|
137,238
|
|
153,860
|
|
3,354.2
|
|
559,037
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed
reserves
|
|
|
|
|
|
|
|
|
|
Year-end
2016
|
1,145
|
|
92,032
|
|
99,176
|
|
2,292.0
|
|
381,995
|
Year-end
2017
|
1,335
|
|
114,116
|
|
126,227
|
|
2,776.6
|
|
462,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax PV-10 ($ in
millions) *
|
3,725
|
|
2,122
|
|
76 %
|
|
|
|
|
Standardized Measure
($ in millions)
|
3,285
|
|
1,893
|
|
74 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices used
in Standardized Measure
|
2017
|
|
2016
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
2.98
|
|
2.48
|
|
20 %
|
|
|
|
|
Oil ($ per
Bbl)
|
51.34
|
|
42.75
|
|
20 %
|
|
|
|
|
NGL ($ per
Bbl)
|
19.09
|
|
14.37
|
|
33 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Pre-tax PV-10 is a non-GAAP
financial measure. Pre-tax PV-10 is comparable to the standardized
measure, which is the most directly comparable GAAP financial
measure. Pre-tax PV-10 is computed on the same basis as the
standardized measure but without deducting future income taxes. As
of December 31, 2017 and 2016, Cimarex's discounted future income
taxes were $439.8 million and $229.3 million, respectively.
Cimarex's standardized measure of discounted future net cash flows
was $3,285.0 million at year-end 2017 and $1,892.6 million at
year-end 2016. Management uses pre-tax PV-10 as one measure of the
value of the company's proved reserves and to compare relative
values of proved reserves to other exploration and production
companies without regard to income taxes. Management believes
pre-tax PV-10 is a useful measure for comparison of proved reserve
values among companies because, unlike standardized measure, it
excludes future income taxes that often depend on the unique income
tax characteristics of the owner of the reserves rather than on the
nature, location and quality of the reserves themselves. Management
further believes that professional research analysts and rating
agencies use pre-tax PV-10 in similar ways. However, pre-tax PV-10
is not a substitute for the standardized measure of discounted
future net cash flows. Cimarex's pre-tax PV-10 and the standardized
measure of discounted future net cash flows do not purport to
present the fair value of its oil and natural gas
reserves.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVED RESERVES BY
REGION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
|
|
Oil
|
|
NGL
|
|
Total
|
|
Total
|
|
|
(Bcf)
|
|
(MBbls)
|
|
(MBbls)
|
|
(Bcfe)
|
|
(MBOE)
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
1,033
|
|
31,853
|
|
85,292
|
|
1,735.6
|
|
289,261
|
|
Permian
Basin
|
574
|
|
105,198
|
|
68,530
|
|
1,616.1
|
|
269,354
|
|
Other
|
1
|
|
187
|
|
38
|
|
2.5
|
|
422
|
|
|
1,608
|
|
137,238
|
|
153,860
|
|
3,354.2
|
|
559,037
|
OIL AND GAS
CAPITALIZED EXPENDITURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
For the Twelve
Months Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
(in
thousands)
|
Acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
Proved
|
$
|
678
|
|
$
|
60
|
|
$
|
938
|
|
$
|
2,678
|
Unproved
|
|
2,590
|
|
|
319
|
|
|
6,853
|
|
|
11,865
|
|
|
3,268
|
|
|
379
|
|
|
7,791
|
|
|
14,543
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration and
development:
|
|
|
|
|
|
|
|
|
|
|
|
Land and
seismic
|
|
17,157
|
|
|
16,260
|
|
|
140,516
|
|
|
61,870
|
Exploration and
development
|
|
326,855
|
|
|
229,603
|
|
|
1,140,548
|
|
|
672,882
|
|
|
344,012
|
|
|
245,863
|
|
|
1,281,064
|
|
|
734,752
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale
proceeds:
|
|
|
|
|
|
|
|
|
|
|
|
Proved
|
|
(1,947)
|
|
|
(2,473)
|
|
|
(2,032)
|
|
|
(15,078)
|
Unproved
|
|
(1,597)
|
|
|
(1)
|
|
|
(9,648)
|
|
|
(9,609)
|
|
|
(3,544)
|
|
|
(2,474)
|
|
|
(11,680)
|
|
|
(24,687)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
343,736
|
|
$
|
243,768
|
|
$
|
1,277,175
|
|
$
|
724,608
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
For the Twelve
Months Ended
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil sales
|
$
|
293,686
|
|
$
|
187,277
|
|
$
|
981,646
|
|
$
|
632,934
|
|
Gas sales
|
|
126,810
|
|
|
120,285
|
|
|
516,936
|
|
|
388,786
|
|
NGL sales
|
|
118,918
|
|
|
63,743
|
|
|
375,421
|
|
|
199,498
|
|
Gas gathering and
other, net
|
|
11,526
|
|
|
10,850
|
|
|
44,246
|
|
|
36,127
|
|
|
|
|
550,940
|
|
|
382,155
|
|
|
1,918,249
|
|
|
1,257,345
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of oil and
gas properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
757,670
|
|
Depreciation,
depletion, amortization, and accretion
|
|
142,482
|
|
|
91,096
|
|
|
461,655
|
|
|
400,176
|
|
Production
|
|
71,771
|
|
|
51,111
|
|
|
262,180
|
|
|
232,002
|
|
Transportation,
processing, and other operating
|
|
59,606
|
|
|
51,140
|
|
|
231,640
|
|
|
190,725
|
|
Gas gathering and
other
|
|
9,910
|
|
|
8,308
|
|
|
35,840
|
|
|
31,785
|
|
Taxes other than
income
|
|
26,760
|
|
|
18,067
|
|
|
89,864
|
|
|
61,946
|
|
General and
administrative
|
|
21,161
|
|
|
18,462
|
|
|
79,996
|
|
|
73,901
|
|
Stock
compensation
|
|
6,637
|
|
|
5,741
|
|
|
26,256
|
|
|
24,523
|
|
(Gain) loss on
derivative instruments, net
|
|
29,051
|
|
|
32,699
|
|
|
(21,210)
|
|
|
55,749
|
|
Other operating
expense, net
|
|
337
|
|
|
462
|
|
|
1,314
|
|
|
755
|
|
|
|
|
367,715
|
|
|
277,086
|
|
|
1,167,535
|
|
|
1,829,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
183,225
|
|
|
105,069
|
|
|
750,714
|
|
|
(571,887)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
16,836
|
|
|
20,712
|
|
|
74,821
|
|
|
83,272
|
|
Capitalized
interest
|
|
(5,492)
|
|
|
(5,290)
|
|
|
(22,948)
|
|
|
(21,248)
|
|
Loss on early
extinguishment of debt
|
|
18
|
|
|
—
|
|
|
28,187
|
|
|
—
|
|
Other, net
|
|
(2,338)
|
|
|
(3,218)
|
|
|
(11,342)
|
|
|
(10,707)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax
|
|
174,201
|
|
|
92,865
|
|
|
681,996
|
|
|
(623,204)
|
Income tax expense
(benefit)
|
|
(495)
|
|
|
45,082
|
|
|
187,667
|
|
|
(214,401)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
174,696
|
|
$
|
47,783
|
|
$
|
494,329
|
|
$
|
(408,803)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.83
|
|
$
|
0.50
|
|
$
|
5.19
|
|
$
|
(4.38)
|
|
Diluted
|
$
|
1.83
|
|
$
|
0.50
|
|
$
|
5.19
|
|
$
|
(4.38)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.08
|
|
$
|
0.08
|
|
$
|
0.32
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares attributable
to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrestricted common
shares outstanding
|
|
93,569
|
|
|
93,379
|
|
|
93,466
|
|
|
93,379
|
|
Diluted common
shares
|
|
93,612
|
|
|
93,422
|
|
|
93,509
|
|
|
93,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
174,696
|
|
$
|
47,783
|
|
$
|
494,329
|
|
$
|
(408,803)
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value
of investments, net of tax
|
|
394
|
|
|
(64)
|
|
|
1,254
|
|
|
504
|
|
Total comprehensive
income (loss)
|
$
|
175,090
|
|
$
|
47,719
|
|
$
|
495,583
|
|
$
|
(408,299)
|
CONDENSED
CONSOLIDATED CASH FLOW STATEMENTS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
For the Twelve
Months Ended
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
174,696
|
|
$
|
47,783
|
|
$
|
494,329
|
|
$
|
(408,803)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of oil and
gas properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
757,670
|
|
|
Depreciation,
depletion, amortization, and accretion
|
|
142,482
|
|
|
91,096
|
|
|
461,655
|
|
|
400,176
|
|
|
Deferred income
taxes
|
|
2,311
|
|
|
45,082
|
|
|
190,479
|
|
|
(213,286)
|
|
|
Stock
compensation
|
|
6,637
|
|
|
5,741
|
|
|
26,256
|
|
|
24,523
|
|
|
(Gain) loss on
derivative instruments, net
|
|
29,051
|
|
|
32,699
|
|
|
(21,210)
|
|
|
55,749
|
|
|
Settlements on
derivative instruments
|
|
1,109
|
|
|
(2,281)
|
|
|
(1,633)
|
|
|
7,437
|
|
|
Loss on early
extinguishment of debt
|
|
18
|
|
|
—
|
|
|
28,187
|
|
|
—
|
|
|
Changes in
non-current assets and liabilities
|
|
(253)
|
|
|
(254)
|
|
|
1,891
|
|
|
3,867
|
|
|
Other, net
|
|
1,047
|
|
|
(1,126)
|
|
|
5,677
|
|
|
1,805
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
(57,236)
|
|
|
(47,617)
|
|
|
(186,157)
|
|
|
(49,340)
|
|
|
Other current
assets
|
|
1,441
|
|
|
(2,154)
|
|
|
(17,931)
|
|
|
20,880
|
|
|
Accounts payable and
other current liabilities
|
|
39,456
|
|
|
16,092
|
|
|
115,021
|
|
|
25,171
|
|
|
|
Net cash provided by
operating activities
|
|
340,759
|
|
|
185,061
|
|
|
1,096,564
|
|
|
625,849
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas capital
expenditures
|
|
(331,177)
|
|
|
(214,444)
|
|
|
(1,233,126)
|
|
|
(699,558)
|
|
Sales of oil and gas
assets
|
|
3,544
|
|
|
2,474
|
|
|
11,680
|
|
|
21,487
|
|
Sales of other
assets
|
|
391
|
|
|
2,171
|
|
|
901
|
|
|
7,889
|
|
Other capital
expenditures
|
|
(14,020)
|
|
|
1,785
|
|
|
(45,352)
|
|
|
(22,228)
|
|
|
|
Net cash used by
investing activities
|
|
(341,262)
|
|
|
(208,014)
|
|
|
(1,265,897)
|
|
|
(692,410)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
|
—
|
|
|
—
|
|
|
748,110
|
|
|
—
|
|
Repayments of
long-term debt
|
|
—
|
|
|
—
|
|
|
(750,000)
|
|
|
—
|
|
Call premium,
financing, and underwriting fees
|
|
(118)
|
|
|
(100)
|
|
|
(29,312)
|
|
|
(101)
|
|
Dividends
paid
|
|
(7,789)
|
|
|
(7,781)
|
|
|
(30,532)
|
|
|
(38,024)
|
|
Employee withholding
taxes paid upon the net settlement of equity-classified stock
awards
|
|
(14,032)
|
|
|
(15,167)
|
|
|
(21,669)
|
|
|
(26,624)
|
|
Proceeds from
exercise of stock options
|
|
168
|
|
|
181
|
|
|
394
|
|
|
4,804
|
|
|
|
Net cash used by
financing activities
|
|
(21,771)
|
|
|
(22,867)
|
|
|
(83,009)
|
|
|
(59,945)
|
Net change in cash
and cash equivalents
|
|
(22,274)
|
|
|
(45,820)
|
|
|
(252,342)
|
|
|
(126,506)
|
Cash and cash
equivalents at beginning of period
|
|
422,808
|
|
|
698,696
|
|
|
652,876
|
|
|
779,382
|
Cash and cash
equivalents at end of period
|
$
|
400,534
|
|
$
|
652,876
|
|
$
|
400,534
|
|
$
|
652,876
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
Assets
|
|
(in thousands, except
share and per
share information)
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
400,534
|
|
$
|
652,876
|
|
Receivables, net of
allowance
|
|
460,174
|
|
|
274,570
|
|
Oil and gas well
equipment and supplies
|
|
49,722
|
|
|
33,342
|
|
Derivative
instruments
|
|
15,151
|
|
|
—
|
|
Other current
assets
|
|
10,054
|
|
|
8,516
|
|
|
Total current
assets
|
|
935,635
|
|
|
969,304
|
Oil and gas
properties at cost, using the full cost method of
accounting:
|
|
|
|
|
|
|
Proved
properties
|
|
17,513,460
|
|
|
16,225,495
|
|
Unproved properties
and properties under development, not being amortized
|
|
476,903
|
|
|
478,277
|
|
|
|
|
17,990,363
|
|
|
16,703,772
|
|
Less – accumulated
depreciation, depletion, amortization, and impairment
|
|
(14,748,833)
|
|
|
(14,349,505)
|
|
|
Net oil and gas
properties
|
|
3,241,530
|
|
|
2,354,267
|
Fixed assets, net of
accumulated depreciation of $290,114 and $246,901,
respectively
|
|
210,922
|
|
|
205,465
|
Goodwill
|
|
620,232
|
|
|
620,232
|
Derivative
instruments
|
|
2,086
|
|
|
—
|
Deferred income
taxes
|
|
—
|
|
|
55,835
|
Other
assets
|
|
32,234
|
|
|
32,621
|
|
|
|
$
|
5,042,639
|
|
$
|
4,237,724
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
|
98,386
|
|
$
|
74,486
|
|
Accrued
liabilities
|
|
351,849
|
|
|
278,781
|
|
Derivative
instruments
|
|
42,066
|
|
|
49,370
|
|
Revenue
payable
|
|
187,273
|
|
|
119,715
|
|
|
Total current
liabilities
|
|
679,574
|
|
|
522,352
|
Long-term
debt:
|
|
|
|
|
|
|
Principal
|
|
1,500,000
|
|
|
1,500,000
|
|
Less – unamortized
debt issuance costs and discount
|
|
(13,080)
|
|
|
(12,061)
|
|
|
Long-term debt,
net
|
|
1,486,920
|
|
|
1,487,939
|
Deferred income
taxes
|
|
101,618
|
|
|
—
|
Derivative
Instruments
|
|
4,268
|
|
|
2,570
|
Other
liabilities
|
|
201,981
|
|
|
181,874
|
|
|
Total
liabilities
|
|
2,474,361
|
|
|
2,194,735
|
Stockholders'
equity:
|
|
|
|
|
|
|
Preferred stock,
$0.01 par value, 15,000,000 shares authorized, no shares
issued
|
|
—
|
|
|
—
|
|
Common stock, $0.01
par value, 200,000,000 shares authorized, 95,437,434 and 95,123,525
shares issued, respectively
|
|
954
|
|
|
951
|
|
Additional paid-in
capital
|
|
2,764,384
|
|
|
2,763,452
|
|
Retained earnings
(accumulated deficit)
|
|
(199,259)
|
|
|
(722,359)
|
|
Accumulated other
comprehensive income
|
|
2,199
|
|
|
945
|
|
|
Total stockholders'
equity
|
|
2,568,278
|
|
|
2,042,989
|
|
|
|
$
|
5,042,639
|
|
$
|
4,237,724
|
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SOURCE Cimarex Energy Co.