DENVER, Aug. 7, 2018 /PRNewswire/ --
- Daily production averaged 211.4 MBOE; oil production up
seven percent year-over-year
- 2018 capital guidance unchanged
-
- Oil production expected to grow 20-25 percent
year-over-year
- Ward County asset sale
expected to close August 31,
2018
Cimarex Energy Co. (NYSE: XEC) today reported second quarter
2018 net income of $141.0 million, or
$1.48 per share, compared to
$97.3 million, or $1.02 per share, in the same period a year
ago. Second quarter adjusted net income (non-GAAP) was
$151.9 million, or $1.59 per share, compared to second quarter 2017
adjusted net income (non-GAAP) of $101.0
million, or $1.06 per
share1. Net cash provided by operating activities
was $321.2 million in the second
quarter of 2018 compared to $255.3
million in the same period a year ago. Adjusted cash
flow from operations (non-GAAP) was $349.5
million in the second quarter of 2018 compared to
$278.8 million in the second quarter
a year ago1.
The previously announced sale of assets in Ward County, Texas, for $570 million (before any purchase price
adjustments), is expected to close on August
31, 2018. The impact of the sale has been factored
into our production guidance starting in September.
Total company volumes for the quarter averaged 211.4 thousand
barrels of oil equivalent (MBOE) per day. Oil production
averaged 61,651 barrels (bbl) per day, up seven percent from the
same period a year ago and down five percent from first quarter
2018 levels. Driven by the number of wells expected to be brought
on production in the second half of 2018 (86 wells versus 38 wells
in the first half), and pro forma for the sale of assets in
Ward County, Texas, Cimarex
continues to expect oil production growth of 20-25 percent
year-over-year. (See Pro Forma Production Reconciliation
table below.)
Realized oil prices averaged $60.99 per barrel, up 38 percent from the
$44.14 per barrel received in the
second quarter of 2017. Realized natural gas prices averaged
$1.65 per thousand cubic feet (Mcf)
down 41 percent from the second quarter 2017 average of
$2.82 per Mcf. NGL prices
averaged $22.29 per barrel, up 22
percent from the $18.24 per barrel
received in the second quarter of 2017. Realized prices for
2018 reflect the adoption of Accounting Standards Codification 606
(ASC 606). See table below (Impact of ASC 606) for comparison
of realized prices for 2018 for pre- and post-ASC 606.
Both oil and natural gas prices were negatively impacted by
local price differentials. Market conditions in the
Permian Basin caused the realized differential for Midland priced
oil and the differential for Permian Basin gas to widen. Our
realized Permian oil differential to WTI Cushing averaged
$(8.05) per barrel in the quarter,
compared to $(3.12) per barrel in the
first quarter of 2018 and $(4.14) per
barrel in the second quarter of 2017. Cimarex's average
differential on its Permian natural gas production was $1.31 per Mcf below Henry Hub in the second
quarter of 2018 compared to $0.42 per
Mcf lower in the second quarter of 2017. In the
Mid-Continent region, realized gas prices were $1.03 per Mcf below the Henry Hub index versus
$0.34 per Mcf below Henry Hub in the
second quarter of 2017 due to abnormally wide differentials on the
ONEOK index (OGT) where approximately 75 percent of the company's
second quarter Mid-Continent gas volumes were priced.
As previously discussed, Cimarex has taken a number of steps to
ensure the flow of our oil and natural gas volumes out of the
Permian Basin with sales agreements in place for our projected oil
and natural gas volumes through 2019.
Cimarex invested $375 million in
exploration and development (E&D) during the second quarter, of
which $322 million is attributable to
drilling and completion activities. Second quarter
investments were funded with cash flow from operations and cash on
the balance sheet. Total debt at June 30, 2018 consisted
of $1.5 billion of long-term
notes. Cimarex had no borrowings under its revolving credit
facility and a cash balance of $411
million. Debt was 34 percent of total
capitalization2.
2018 Outlook
Adjusting for the previously announced
sale of assets in Ward County,
Texas (assuming an August 31
close), third quarter 2018 production volumes are expected to
average 206 -215 MBOE per day with oil volumes estimated to average
61,500 - 64,500 barrels per day. The total 2018 daily production
volumes are now expected to average 214 - 221 MBOE per day with
annual oil volumes now estimated to average 66,000 - 68,000 barrels
per day.
On a pro forma basis (excluding Ward volumes entirely), Cimarex expects 2018
total production (MBOE per day) and oil production (barrels per
day) to grow 14-18 percent and 20-25 percent over 2017 volumes,
respectively. Additionally, the company expects oil volumes
in the fourth quarter to average 75,000 - 81,000 barrels per day,
or 33-43 percent higher than the pro forma fourth quarter 2017
average. (See Pro Forma Production Reconciliation table
below.)
Pro Forma Production
Reconciliation
|
(excludes Ward
volumes for all periods)
|
|
2018E
|
|
2017
|
|
% Growth
|
Daily Production
(MBOE/d)
|
209
|
-
|
216
|
|
183.1
|
|
14-18%
|
Daily Oil Production
(MBbls/d)
|
62.4
|
-
|
64.6
|
|
51.8
|
|
20-25%
|
Estimated 2018 exploration and development investment remains
unchanged at $1.6 – 1.7 billion.
Expenses per BOE of production for the remainder of 2018 are
estimated to be:
Production
expense
|
$3.80 -
4.30
|
Transportation,
processing and other expense*
|
2.40 -
3.00
|
DD&A and ARO
accretion
|
7.50 -
8.10
|
General and
administrative expense
|
1.15 -
1.45
|
Taxes other than
income (% of oil and gas revenue)
|
5.75 -
6.25%
|
|
*Reflects adoption of
ASC 606 (see Impact of ASC 606 table below).
|
Operations Update
Cimarex invested $375 million in E&D during the second
quarter, 59 percent in the Permian Basin and 41 percent in the
Mid-Continent. Cimarex brought 89 gross (23 net) wells on
production during the quarter. At June
30, 141 gross (57 net) wells were waiting on
completion. Cimarex currently is operating 13 drilling
rigs.
WELLS BROUGHT ON
PRODUCTION BY REGION
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Gross
wells
|
|
|
|
|
|
|
|
Permian
Basin
|
32
|
|
11
|
|
49
|
|
36
|
Mid-Continent
|
57
|
|
40
|
|
94
|
|
85
|
|
89
|
|
51
|
|
143
|
|
121
|
Net
wells
|
|
|
|
|
|
|
|
Permian
Basin
|
13
|
|
10
|
|
22
|
|
26
|
Mid-Continent
|
10
|
|
8
|
|
16
|
|
18
|
|
23
|
|
18
|
|
38
|
|
44
|
Permian Region
Production from the Permian region
averaged 121,744 BOE per day in the second quarter, a 13 percent
increase from second quarter 2017. Oil volumes averaged 48,797
barrels per day, a six percent increase from second quarter
2017. Total production increased seven percent sequentially,
with oil production down two percent.
Cimarex completed 32 gross (13 net) wells in the Permian region
during the second quarter. There were 45 gross (32 net) wells
waiting on completion at June 30.
Activity in the region for the quarter included twelve wells
completed in the Wolfcamp and Bone Spring formations. Of
note, in Lea County, New Mexico,
the six-well Hallertau 5 FED Upper Wolfcamp infill pilot was
brought on-line during the quarter. The infill pilot, which
included six short laterals (4,230' average) testing 12 wells per
section, had an average peak 30-day initial production rate of
1,295 BOE (783 barrels of oil) per day, with results ranging from
1,855 BOE (1,096 barrels of oil) per day to 937 BOE (564 barrels of
oil) per day.
Cimarex currently is operating ten drilling rigs and five
completion crews in the region.
Mid-Continent Region
Production from the Mid-Continent
averaged 88,864 BOE per day for the second quarter, up five percent
versus second quarter 2017 and down three percent sequentially.
During the second quarter, Cimarex completed 57 gross (10 net)
wells in the Mid-Continent region. At the end of the quarter,
96 gross (25 net) wells were waiting on completion. Cimarex
currently is operating three drilling rigs and one
completion crew in the region.
Production by Region
Cimarex's average daily
production and commodity price by region is summarized below:
DAILY PRODUCTION
BY REGION
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
Gas (MMcf)
|
240.5
|
|
219.8
|
|
239.2
|
|
210.4
|
Oil (Bbls)
|
48,797
|
|
45,828
|
|
49,318
|
|
43,446
|
NGL (Bbls)
|
32,865
|
|
24,996
|
|
28,817
|
|
23,319
|
Total Equivalent
(BOE)
|
121,744
|
|
107,456
|
|
118,002
|
|
101,829
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
Gas (MMcf)
|
297.0
|
|
295.4
|
|
296.2
|
|
290.2
|
Oil (Bbls)
|
12,473
|
|
11,893
|
|
13,841
|
|
11,475
|
NGL (Bbls)
|
26,894
|
|
23,693
|
|
26,927
|
|
22,926
|
Total Equivalent
(BOE)
|
88,864
|
|
84,827
|
|
90,142
|
|
82,774
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
Gas (MMcf)
|
539.5
|
|
516.7
|
|
537.1
|
|
502.0
|
Oil (Bbls)
|
61,651
|
|
57,871
|
|
63,422
|
|
55,042
|
NGL (Bbls)
|
59,857
|
|
48,731
|
|
55,810
|
|
46,281
|
Total Equivalent
(BOE)
|
211,424
|
|
192,720
|
|
208,752
|
|
184,998
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2018*
|
|
2017
|
|
2018*
|
|
2017
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
1.49
|
|
2.77
|
|
1.86
|
|
2.83
|
Oil ($ per
Bbl)
|
59.83
|
|
44.15
|
|
59.79
|
|
45.94
|
NGL ($ per
Bbl)
|
22.80
|
|
16.65
|
|
21.93
|
|
17.38
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
1.77
|
|
2.85
|
|
2.04
|
|
2.97
|
Oil ($ per
Bbl)
|
65.70
|
|
44.10
|
|
62.87
|
|
45.39
|
NGL ($ per
Bbl)
|
21.66
|
|
19.90
|
|
20.67
|
|
21.16
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
1.65
|
|
2.82
|
|
1.96
|
|
2.91
|
Oil ($ per
Bbl)
|
60.99
|
|
44.14
|
|
60.45
|
|
45.82
|
NGL ($ per
Bbl)
|
22.29
|
|
18.24
|
|
21.32
|
|
19.26
|
|
*Realized prices for
2018 reflect the adoption of ASC 606. See Impact of ASC 606 table
for a comparison of 2018 realized prices on a pre- and post-ASC 606
basis.
|
Other
The following table summarizes the company's
current open hedge positions:
|
|
3Q18
|
4Q18
|
1Q19
|
2Q19
|
3Q19
|
4Q19
|
Gas
Collars:
|
PEPL(3)
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
130,000
|
100,000
|
90,000
|
90,000
|
60,000
|
30,000
|
|
Wtd Avg
Floor
|
$
|
2.19
|
$
|
2.12
|
$
|
2.08
|
$
|
2.08
|
$
|
1.92
|
$
|
1.90
|
|
Wtd Avg
Ceiling
|
$
|
2.48
|
$
|
2.42
|
$
|
2.39
|
$
|
2.39
|
$
|
2.26
|
$
|
2.33
|
|
|
|
|
|
|
|
|
|
El Paso
Perm(3)
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
100,000
|
80,000
|
70,000
|
70,000
|
50,000
|
20,000
|
|
Wtd Avg
Floor
|
$
|
1.92
|
$
|
1.81
|
$
|
1.73
|
$
|
1.73
|
$
|
1.50
|
$
|
1.35
|
|
Wtd Avg
Ceiling
|
$
|
2.14
|
$
|
2.03
|
$
|
1.95
|
$
|
1.95
|
$
|
1.74
|
$
|
1.55
|
|
|
|
|
|
|
|
|
|
Waha
(3)
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
10,000
|
10,000
|
10,000
|
10,000
|
10,000
|
10,000
|
|
Wtd Avg
Floor
|
$
|
1.35
|
$
|
1.35
|
$
|
1.35
|
$
|
1.35
|
$
|
1.35
|
$
|
1.35
|
|
Wtd Avg
Ceiling
|
$
|
1.56
|
$
|
1.56
|
$
|
1.56
|
$
|
1.56
|
$
|
1.56
|
$
|
1.56
|
|
|
|
|
|
|
|
|
Oil
Collars:
|
WTI(4)
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
35,000
|
29,000
|
23,000
|
23,000
|
16,000
|
8,000
|
|
Wtd Avg
Floor
|
$
|
49.80
|
$
|
51.03
|
$
|
51.83
|
$
|
51.83
|
$
|
53.50
|
$
|
57.00
|
|
Wtd Avg
Ceiling
|
$
|
60.49
|
$
|
61.74
|
$
|
63.77
|
$
|
63.77
|
$
|
67.13
|
$
|
68.04
|
|
|
|
|
|
|
|
|
Oil Basis
Swaps:
|
WTI
Midland(5)
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
27,000
|
22,000
|
19,000
|
19,000
|
14,000
|
6,000
|
|
Weighted Avg
Differential
|
$
|
(3.89)
|
$
|
(4.56)
|
$
|
(5.17)
|
$
|
(5.17)
|
$
|
(6.84)
|
$
|
(10.73)
|
Conference call and webcast
Cimarex will host a
conference call tomorrow, August 8,
at 11:00 a.m. EDT (9:00 a.m. MT). The call will be webcast and
accessible on the Cimarex website at www.cimarex.com. To join the
live, interactive call, please dial 866-367-3053 ten minutes before
the scheduled start time (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
second quarter 2018 results, please refer to the company's investor
presentation available at www.cimarex.com.
About Cimarex Energy
Denver-based Cimarex Energy Co. is an
independent oil and gas exploration and production company with
principal operations in the Mid-Continent and Permian Basin areas
of the U.S.
This press release contains forward-looking statements,
including statements regarding projected results and future events.
In particular, the "2018 Outlook" contains projections for certain
2018 operational and financial metrics. 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 for the year ended December 31, 2017, 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, El Paso
Perm refers to El Paso Permian Basin index, and Waha refers to West
Texas (Waha) Index, all 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 NYMEX less the weighted average WTI Midland
differential, as quoted by Argus Americas Crude.
|
RECONCILIATION OF ADJUSTED NET INCOME
The following reconciles net income as reported under generally
accepted accounting principles (GAAP) to adjusted net income
(non-GAAP) for the periods indicated.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
Net income
|
$
|
140,997
|
|
|
$
|
97,262
|
|
|
$
|
327,315
|
|
|
$
|
228,234
|
|
Mark-to-market loss
(gain) on open derivative positions
|
14,169
|
|
|
(22,166)
|
|
|
(2,379)
|
|
|
(72,087)
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
28,169
|
|
|
—
|
|
|
28,169
|
|
Tax impact
|
(3,259)
|
|
|
(2,257)
|
|
|
552
|
|
|
16,469
|
|
Adjusted net
income
|
$
|
151,907
|
|
|
$
|
101,008
|
|
|
$
|
325,488
|
|
|
$
|
200,785
|
|
Diluted earnings per
share
|
$
|
1.48
|
|
|
$
|
1.02
|
|
|
$
|
3.44
|
|
|
$
|
2.40
|
|
Adjusted diluted
earnings per share*
|
$
|
1.59
|
|
|
$
|
1.06
|
|
|
$
|
3.41
|
|
|
$
|
2.11
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
Adjusted
diluted**
|
95,428
|
|
|
95,179
|
|
|
95,451
|
|
|
95,172
|
|
Adjusted net income and adjusted diluted earnings per share
exclude 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 measures 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.
* Does not include adjustments resulting from application of the
"two-class method" used to determine earnings per share under
GAAP.
** Reflects the weighted-average number of common shares
outstanding during the period as adjusted for the dilutive effects
of outstanding stock options.
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.
|
Three Months
Ended June 30,
|
|
Six Months
Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
|
321,246
|
|
|
$
|
255,286
|
|
|
$
|
704,339
|
|
|
$
|
504,800
|
|
Change in operating
assets and liabilities
|
28,265
|
|
|
23,507
|
|
|
12,406
|
|
|
39,827
|
|
|
|
|
|
|
|
|
|
Adjusted cash flow
from operations
|
$
|
349,511
|
|
|
$
|
278,793
|
|
|
$
|
716,745
|
|
|
$
|
544,627
|
|
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.
IMPACT OF ASC 606
Effective January 1, 2018, Cimarex adopted the provisions
of Accounting Standards Codification 606, Revenue from
Contracts with Customers ("ASC 606"). Application of
ASC 606 has no impact on our net income or cash flows from
operations; however, certain costs classified as Transportation,
processing, and other operating expenses in the statement of
operations under prior accounting standards are now reflected as
deductions from revenue under ASC 606. The following
tables present certain Pre- and Post-ASC 606 amounts:
REVENUES
|
|
|
Three Months
Ended June 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
|
|
(in
thousands)
|
Oil sales
|
|
$
|
342,184
|
|
|
$
|
342,184
|
|
|
$
|
232,453
|
|
Gas sales
|
|
$
|
84,727
|
|
|
$
|
80,787
|
|
|
$
|
132,474
|
|
NGL sales
|
|
$
|
125,126
|
|
|
$
|
121,415
|
|
|
$
|
80,886
|
|
|
|
|
|
|
Six Months
Ended June 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
|
|
(in
thousands)
|
Oil sales
|
|
$
|
693,907
|
|
|
$
|
693,907
|
|
|
$
|
456,519
|
|
Gas sales
|
|
$
|
197,404
|
|
|
$
|
190,508
|
|
|
$
|
264,419
|
|
NGL sales
|
|
$
|
230,739
|
|
|
$
|
215,412
|
|
|
$
|
161,312
|
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
Three Months
Ended
June 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
Permian
Basin
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.62
|
|
|
1.49
|
|
|
2.77
|
|
Oil ($ per
Bbl)
|
|
59.83
|
|
|
59.83
|
|
|
44.15
|
|
NGL ($ per
Bbl)
|
|
23.81
|
|
|
22.80
|
|
|
16.65
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.81
|
|
|
1.77
|
|
|
2.85
|
|
Oil ($ per
Bbl)
|
|
65.70
|
|
|
65.70
|
|
|
44.10
|
|
NGL ($ per
Bbl)
|
|
21.94
|
|
|
21.66
|
|
|
19.90
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.73
|
|
|
1.65
|
|
|
2.82
|
|
Oil ($ per
Bbl)
|
|
60.99
|
|
|
60.99
|
|
|
44.14
|
|
NGL ($ per
Bbl)
|
|
22.97
|
|
|
22.29
|
|
|
18.24
|
|
|
|
|
Six Months
Ended
June 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
Permian
Basin
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.97
|
|
|
1.86
|
|
|
2.83
|
|
Oil ($ per
Bbl)
|
|
59.79
|
|
|
59.79
|
|
|
45.94
|
|
NGL ($ per
Bbl)
|
|
23.62
|
|
|
21.93
|
|
|
17.38
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
2.08
|
|
|
2.04
|
|
|
2.97
|
|
Oil ($ per
Bbl)
|
|
62.87
|
|
|
62.87
|
|
|
45.39
|
|
NGL ($ per
Bbl)
|
|
22.01
|
|
|
20.67
|
|
|
21.16
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
2.03
|
|
|
1.96
|
|
|
2.91
|
|
Oil ($ per
Bbl)
|
|
60.45
|
|
|
60.45
|
|
|
45.82
|
|
NGL ($ per
Bbl)
|
|
22.84
|
|
|
21.32
|
|
|
19.26
|
|
TRANSPORTATION,
PROCESSING, AND OTHER OPERATING EXPENSES
|
|
|
Three Months
Ended
June 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
|
|
(in thousands, except
per BOE)
|
Transportation,
processing, and other operating expenses
|
|
$
|
59,584
|
|
|
$
|
51,933
|
|
|
$
|
58,624
|
|
Per BOE
|
|
$
|
3.10
|
|
|
$
|
2.70
|
|
|
$
|
3.34
|
|
|
|
|
Six Months
Ended
June 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
|
|
(in thousands, except
per BOE)
|
Transportation,
processing, and other operating expenses
|
|
$
|
119,321
|
|
|
$
|
97,098
|
|
|
$
|
113,647
|
|
Per BOE
|
|
$
|
3.16
|
|
|
$
|
2.57
|
|
|
$
|
3.39
|
|
OIL AND GAS
CAPITALIZED EXPENDITURES
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in
thousands)
|
Acquisitions:
|
|
|
|
|
|
|
|
Proved
|
$
|
—
|
|
|
$
|
255
|
|
|
$
|
62
|
|
|
$
|
260
|
|
Unproved
|
77
|
|
|
792
|
|
|
2,236
|
|
|
3,825
|
|
|
77
|
|
|
1,047
|
|
|
2,298
|
|
|
4,085
|
|
|
|
|
|
|
|
|
|
Exploration and
development:
|
|
|
|
|
|
|
|
Land and
seismic
|
$
|
10,327
|
|
|
$
|
33,302
|
|
|
$
|
20,424
|
|
|
$
|
110,487
|
|
Exploration and
development
|
365,097
|
|
|
262,575
|
|
|
668,469
|
|
|
491,042
|
|
|
375,424
|
|
|
295,877
|
|
|
688,893
|
|
|
601,529
|
|
|
|
|
|
|
|
|
|
Sales
proceeds:
|
|
|
|
|
|
|
|
Proved
|
$
|
(4,577)
|
|
|
$
|
(1,957)
|
|
|
$
|
(29,541)
|
|
|
$
|
(1,892)
|
|
Unproved
|
(441)
|
|
|
(2,305)
|
|
|
(5,301)
|
|
|
(7,271)
|
|
|
(5,018)
|
|
|
(4,262)
|
|
|
(34,842)
|
|
|
(9,163)
|
|
|
|
|
|
|
|
|
|
|
$
|
370,483
|
|
|
$
|
292,662
|
|
|
$
|
656,349
|
|
|
$
|
596,451
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in thousands, except
per share information)
|
Revenues:
|
|
|
|
|
|
|
|
|
Oil sales
|
|
$
|
342,184
|
|
|
$
|
232,453
|
|
|
$
|
693,907
|
|
|
$
|
456,519
|
|
Gas and NGL
sales
|
|
202,202
|
|
|
213,360
|
|
|
405,920
|
|
|
425,731
|
|
Gas gathering and
other
|
|
11,888
|
|
|
10,639
|
|
|
23,581
|
|
|
21,378
|
|
|
|
556,274
|
|
|
456,452
|
|
|
1,123,408
|
|
|
903,628
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, amortization, and accretion
|
|
145,441
|
|
|
108,844
|
|
|
279,360
|
|
|
206,280
|
|
Production
|
|
79,215
|
|
|
62,578
|
|
|
150,486
|
|
|
124,999
|
|
Transportation,
processing, and other operating
|
|
51,933
|
|
|
58,624
|
|
|
97,098
|
|
|
113,647
|
|
Gas gathering and
other
|
|
9,467
|
|
|
8,647
|
|
|
19,290
|
|
|
17,074
|
|
Taxes other than
income
|
|
27,930
|
|
|
17,477
|
|
|
58,118
|
|
|
38,790
|
|
General and
administrative
|
|
19,739
|
|
|
19,762
|
|
|
43,060
|
|
|
37,796
|
|
Stock
compensation
|
|
3,095
|
|
|
6,293
|
|
|
9,825
|
|
|
12,581
|
|
Loss (gain) on
derivative instruments, net
|
|
21,699
|
|
|
(22,509)
|
|
|
17,540
|
|
|
(66,370)
|
|
Other operating
expense, net
|
|
5,252
|
|
|
266
|
|
|
5,455
|
|
|
882
|
|
|
|
363,771
|
|
|
259,982
|
|
|
680,232
|
|
|
485,679
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
192,503
|
|
|
196,470
|
|
|
443,176
|
|
|
417,949
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
16,895
|
|
|
20,095
|
|
|
33,678
|
|
|
41,147
|
|
Capitalized
interest
|
|
(4,850)
|
|
|
(5,442)
|
|
|
(9,660)
|
|
|
(12,083)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
28,169
|
|
|
—
|
|
|
28,169
|
|
Other, net
|
|
(2,605)
|
|
|
(2,231)
|
|
|
(7,172)
|
|
|
(4,441)
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax
|
|
183,063
|
|
|
155,879
|
|
|
426,330
|
|
|
365,157
|
|
Income tax
expense
|
|
42,066
|
|
|
58,617
|
|
|
99,015
|
|
|
136,923
|
|
Net income
|
|
$
|
140,997
|
|
|
$
|
97,262
|
|
|
$
|
327,315
|
|
|
$
|
228,234
|
|
|
|
|
|
|
|
|
|
|
Earnings per share to
common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.48
|
|
|
$
|
1.02
|
|
|
$
|
3.44
|
|
|
$
|
2.40
|
|
Diluted
|
|
$
|
1.48
|
|
|
$
|
1.02
|
|
|
$
|
3.44
|
|
|
$
|
2.40
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
|
$
|
0.16
|
|
|
$
|
0.08
|
|
|
$
|
0.32
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
93,728
|
|
|
93,402
|
|
|
93,713
|
|
|
93,396
|
|
Diluted
|
|
93,759
|
|
|
93,435
|
|
|
93,748
|
|
|
93,431
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
140,997
|
|
|
$
|
97,262
|
|
|
$
|
327,315
|
|
|
$
|
228,234
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
Change in fair value
of investments, net of tax
|
|
192
|
|
|
224
|
|
|
2
|
|
|
626
|
|
Total comprehensive
income
|
|
$
|
141,189
|
|
|
$
|
97,486
|
|
|
$
|
327,317
|
|
|
$
|
228,860
|
|
CONDENSED
CONSOLIDATED CASH FLOW STATEMENTS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in
thousands)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
140,997
|
|
|
$
|
97,262
|
|
|
$
|
327,315
|
|
|
$
|
228,234
|
|
Adjustments to
reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, amortization, and accretion
|
|
145,441
|
|
|
108,844
|
|
|
279,360
|
|
|
206,280
|
|
Deferred income
taxes
|
|
42,783
|
|
|
58,617
|
|
|
99,732
|
|
|
136,929
|
|
Stock
compensation
|
|
3,095
|
|
|
6,293
|
|
|
9,825
|
|
|
12,581
|
|
Loss (gain) on
derivative instruments, net
|
|
21,699
|
|
|
(22,509)
|
|
|
17,540
|
|
|
(66,370)
|
|
Settlements on
derivative instruments
|
|
(7,530)
|
|
|
343
|
|
|
(19,919)
|
|
|
(5,717)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
28,169
|
|
|
—
|
|
|
28,169
|
|
Changes in
non-current assets and liabilities
|
|
1,613
|
|
|
57
|
|
|
713
|
|
|
1,076
|
|
Other, net
|
|
1,413
|
|
|
1,717
|
|
|
2,179
|
|
|
3,445
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(29,710)
|
|
|
(16,483)
|
|
|
15,012
|
|
|
(61,145)
|
|
Other current
assets
|
|
283
|
|
|
(8,139)
|
|
|
1,886
|
|
|
(11,104)
|
|
Accounts payable and
other current liabilities
|
|
1,162
|
|
|
1,115
|
|
|
(29,304)
|
|
|
32,422
|
|
Net cash provided by
operating activities
|
|
321,246
|
|
|
255,286
|
|
|
704,339
|
|
|
504,800
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Oil and gas capital
expenditures
|
|
(327,352)
|
|
|
(270,331)
|
|
|
(650,807)
|
|
|
(582,172)
|
|
Sales of oil and gas
assets
|
|
5,018
|
|
|
4,262
|
|
|
34,842
|
|
|
9,163
|
|
Sales of other
assets
|
|
93
|
|
|
349
|
|
|
525
|
|
|
394
|
|
Other capital
expenditures
|
|
(37,056)
|
|
|
(10,127)
|
|
|
(56,112)
|
|
|
(18,209)
|
|
Net cash used by
investing activities
|
|
(359,297)
|
|
|
(275,847)
|
|
|
(671,552)
|
|
|
(590,824)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
|
—
|
|
|
748,110
|
|
|
—
|
|
|
748,110
|
|
Repayments of
long-term debt
|
|
—
|
|
|
(750,000)
|
|
|
—
|
|
|
(750,000)
|
|
Call premium,
financing, and underwriting fees
|
|
—
|
|
|
(29,009)
|
|
|
—
|
|
|
(29,035)
|
|
Dividends
paid
|
|
(15,199)
|
|
|
(7,576)
|
|
|
(22,801)
|
|
|
(15,153)
|
|
Employee withholding
taxes paid upon the net settlement of equity-classified stock
awards
|
|
(641)
|
|
|
(277)
|
|
|
(946)
|
|
|
(1,215)
|
|
Proceeds from
exercise of stock options
|
|
904
|
|
|
—
|
|
|
1,249
|
|
|
36
|
|
Net cash used by
financing activities
|
|
(14,936)
|
|
|
(38,752)
|
|
|
(22,498)
|
|
|
(47,257)
|
|
Net change in cash
and cash equivalents
|
|
(52,987)
|
|
|
(59,313)
|
|
|
10,289
|
|
|
(133,281)
|
|
Cash and cash
equivalents at beginning of period
|
|
463,810
|
|
|
578,908
|
|
|
400,534
|
|
|
652,876
|
|
Cash and cash
equivalents at end of period
|
|
$
|
410,823
|
|
|
$
|
519,595
|
|
|
$
|
410,823
|
|
|
$
|
519,595
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
Assets
|
|
(in thousands, except
share and
per share information)
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
410,823
|
|
|
$
|
400,534
|
|
Accounts receivable,
net of allowance
|
|
444,655
|
|
|
460,174
|
|
Oil and gas well
equipment and supplies
|
|
53,375
|
|
|
49,722
|
|
Derivative
instruments
|
|
72,943
|
|
|
15,151
|
|
Other current
assets
|
|
8,346
|
|
|
10,054
|
|
Total current
assets
|
|
990,142
|
|
|
935,635
|
|
Oil and gas
properties at cost, using the full cost method of
accounting:
|
|
|
|
|
Proved
properties
|
|
18,112,548
|
|
|
17,513,460
|
|
Unproved properties
and properties under development, not being amortized
|
|
532,715
|
|
|
476,903
|
|
|
|
18,645,263
|
|
|
17,990,363
|
|
Less – accumulated
depreciation, depletion, amortization, and impairment
|
|
(15,000,443)
|
|
|
(14,748,833)
|
|
Net oil and gas
properties
|
|
3,644,820
|
|
|
3,241,530
|
|
Fixed assets, net of
accumulated depreciation of $312,927 and $290,114,
respectively
|
|
238,964
|
|
|
210,922
|
|
Goodwill
|
|
620,232
|
|
|
620,232
|
|
Derivative
instruments
|
|
2,330
|
|
|
2,086
|
|
Other
assets
|
|
34,905
|
|
|
32,234
|
|
|
|
$
|
5,531,393
|
|
|
$
|
5,042,639
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
95,239
|
|
|
$
|
98,386
|
|
Accrued
liabilities
|
|
370,371
|
|
|
351,849
|
|
Derivative
instruments
|
|
90,480
|
|
|
42,066
|
|
Revenue
payable
|
|
180,869
|
|
|
187,273
|
|
Total current
liabilities
|
|
736,959
|
|
|
679,574
|
|
Long-term
debt:
|
|
|
|
|
Principal
|
|
1,500,000
|
|
|
1,500,000
|
|
Less – unamortized
debt issuance costs and discount
|
|
(12,261)
|
|
|
(13,080)
|
|
Long-term debt,
net
|
|
1,487,739
|
|
|
1,486,920
|
|
Deferred income
taxes
|
|
201,350
|
|
|
101,618
|
|
Derivative
instruments
|
|
11,511
|
|
|
4,268
|
|
Other
liabilities
|
|
207,336
|
|
|
201,981
|
|
Total
liabilities
|
|
2,644,895
|
|
|
2,474,361
|
|
|
|
|
|
|
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, 95,392,547 and 95,437,434
shares issued, respectively
|
|
954
|
|
|
954
|
|
Additional paid-in
capital
|
|
2,770,532
|
|
|
2,764,384
|
|
Retained earnings
(accumulated deficit)
|
|
112,811
|
|
|
(199,259)
|
|
Accumulated other
comprehensive income
|
|
2,201
|
|
|
2,199
|
|
Total stockholders'
equity
|
|
2,886,498
|
|
|
2,568,278
|
|
|
|
$
|
5,531,393
|
|
|
$
|
5,042,639
|
|
View original
content:http://www.prnewswire.com/news-releases/cimarex-reports-second-quarter-2018-results-300693526.html
SOURCE Cimarex Energy Co.