DENVER, Nov. 6, 2018 /PRNewswire/ --
- Daily production averaged 218.6 MBOE; oil production
averaged 63,909 barrels per day
- 2018 capital guidance unchanged; targeting mid
point
- Fourth quarter oil production expected to average 73.0 -
78.0 MBbls per day
Cimarex Energy Co. (NYSE: XEC) today reported third quarter 2018
net income of $148.4 million, or
$1.56 per share, compared to
$91.4 million, or $0.96 per share, in the same period a year
ago. Third quarter adjusted net income (non-GAAP) was
$189.6 million, or $1.99 per share, compared to third quarter 2017
adjusted net income (non-GAAP) of $103.6
million, or $1.09 per
share1. Net cash provided by operating activities
was $453.5 million in the third
quarter of 2018 compared to $251.0
million in the same period a year ago. Adjusted cash
flow from operations (non-GAAP) was $388.7
million in the third quarter of 2018 compared to
$283.9 million in the third quarter a
year ago1.
On August 31, Cimarex closed on
the previously announced transaction for the sale of its
Ward County assets for
$544.5 million. Reported
production volumes for the third quarter reflect this closing
date.
Total company volumes for the quarter averaged 218.6 thousand
barrels of oil equivalent (MBOE) per day. Oil production
averaged 63,909 barrels (bbls) per day, up 13 percent from the same
period a year ago (17 percent on a pro forma basis) and up four
percent from second quarter 2018 levels (eight percent on a pro
forma basis). Driven by the 80 wells expected to be brought on
production in the second half of 2018 (including 44 wells brought
on production in the third quarter) and pro forma for the sale of
assets in Ward County, Texas,
Cimarex continues to expect oil production growth of 21-23 percent
year-over-year. (See Pro Forma Production Reconciliation
table below.)
Realized oil prices averaged $58.25 per barrel, up 31 percent from the
$44.38 per barrel received in the
third quarter of 2017. Realized natural gas prices averaged
$1.84 per thousand cubic feet (Mcf)
down 31 percent from the third quarter 2017 average of $2.65 per Mcf. NGL prices averaged
$25.72 per barrel, up 19 percent from
the $21.63 per barrel received in the
third quarter of 2017 and up 15 percent sequentially.
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. Our realized Permian oil
differential to WTI Cushing averaged $(14.34) per barrel in the quarter, compared to
$(8.05) per barrel in the second
quarter of 2018 and $(4.06) per
barrel in the third quarter of 2017. Cimarex's average
differential on its Permian natural gas production was $(1.25) per Mcf below Henry Hub in the third
quarter of 2018 compared to $(0.29)
per Mcf lower in the third quarter of 2017. In the
Mid-Continent region, realized gas prices were $(0.94) per Mcf below the Henry Hub index versus
$(0.38) per Mcf below Henry Hub in
the third quarter of 2017.
Cimarex invested $501 million in
exploration and development (E&D) during the third quarter, of
which $400 million is attributable to
drilling and completion activities. Third quarter investments
were funded with cash flow from operations and cash on the balance
sheet. Total debt at September 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 $864
million. Debt was 33 percent of total
capitalization2.
2018 Outlook
Fourth quarter 2018 production volumes are expected to average 238
- 247 MBOE per day with oil volumes estimated to average 73.0 -
78.0 MBbls per day, or 29 - 38 percent higher than the pro forma
fourth quarter 2017 average. The total 2018 daily production
volumes are now expected to average 218 - 221 MBOE per day with
annual oil volumes estimated to average 66.0 - 67.2 MBbls 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 17-18 percent and 21-23 percent over 2017
volumes. See Pro Forma Production Reconciliation table
below.
|
Pro Forma Production
Reconciliation
|
|
|
|
|
|
|
|
|
|
(excludes Ward
volumes for all periods)
|
|
|
|
|
|
|
|
|
|
|
|
2018E
|
|
2017
|
|
% Growth
|
|
Daily Production
(MBOE/d)
|
|
213
|
-
|
216
|
|
183.1
|
|
17-18%
|
|
Daily Oil Production
(MBbls/d)
|
|
62.6
|
-
|
63.8
|
|
51.8
|
|
21-23%
|
Estimated 2018 exploration and development investment is
$1.6 – 1.7 billion, unchanged. from original guidance given
in February.
Expenses per BOE of production for the fourth quarter of 2018
are estimated to be:
|
Production
expense
|
$3.35 -
3.80
|
|
Transportation,
processing and other expense*
|
2.40 -
3.00
|
|
DD&A and ARO
accretion
|
7.00 -
7.60
|
|
General and
administrative expense
|
1.10 -
1.40
|
|
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 $501 million in
E&D during the third quarter, 74 percent in the Permian Basin
and 26 percent in the Mid-Continent. Cimarex brought 115
gross (44 net) wells on production during the quarter. At
September 30, 98 gross (41 net) wells
were waiting on completion. Cimarex currently is operating 16
drilling rigs.
WELLS BROUGHT ON
PRODUCTION BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Gross
wells
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
33
|
|
|
29
|
|
|
82
|
|
|
65
|
|
Mid-Continent
|
|
82
|
|
|
48
|
|
|
176
|
|
|
133
|
|
|
|
115
|
|
|
77
|
|
|
258
|
|
|
198
|
|
Net
wells
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
24
|
|
|
16
|
|
|
46
|
|
|
42
|
|
Mid-Continent
|
|
20
|
|
|
14
|
|
|
36
|
|
|
32
|
|
|
|
44
|
|
|
30
|
|
|
82
|
|
|
74
|
|
Permian Region
Production from the Permian region averaged 120,822 BOE per day in
the third quarter, a 15 percent increase from third quarter 2017
(19 percent on a pro forma basis). Oil volumes averaged 49,001
barrels per day, a 12 percent increase from third quarter 2017 (17
percent on a pro forma basis).
Cimarex completed 33 gross (24 net) wells in the Permian region
during the third quarter. There were 45 gross (32 net) wells
waiting on completion at September
30.
In Lea County, New Mexico,
Cimarex is pleased to announce results from five new wells
including the Red Hills Unit 17H, a long lateral Upper Wolfcamp
well that had average peak 30-day initial production of 5,164 BOE
(3,611 barrels of oil) per day. Cimarex drilled three
additional 10,000-foot lateral wells in the Red Hills area on the
Vaca Draw 20-17 lease including one well in each of the Avalon,
Leonard and Upper Wolfcamp formations (see company presentation for
details). A 5,000-foot lateral in the Third Bone Spring was
brought on line in Northern Lea
County that had a 30-day initial production rate of 2,638
BOE (2,165 barrels of oil) per day.
Cimarex currently is operating 12 drilling rigs and three
completion crews in the region.
Mid-Continent Region
Production from the Mid-Continent averaged 97,346 BOE per day for
the third quarter, up 14 percent from third quarter 2017 and up ten
percent sequentially.
During the third quarter, Cimarex completed 82 gross (20 net)
wells in the Mid-Continent region including multi-well pads at the
Steve-O Meramec development (six wells) and the Shelly (eight
wells) and J.D. Hoppinscotch (four wells) spacing pilots in the
Woodford formation in the Lone Rock area. At the end of the
quarter, 53 gross (9 net) wells were waiting on completion.
Cimarex currently is operating four 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
239.4
|
|
|
217.9
|
|
|
239.3
|
|
|
212.9
|
|
Oil (Bbls)
|
|
49,001
|
|
|
43,735
|
|
|
49,211
|
|
|
43,544
|
|
NGL (Bbls)
|
|
31,919
|
|
|
24,659
|
|
|
29,863
|
|
|
23,771
|
|
Total Equivalent
(BOE)
|
|
120,822
|
|
|
104,703
|
|
|
118,952
|
|
|
102,798
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
317.9
|
|
|
296.8
|
|
|
303.6
|
|
|
292.4
|
|
Oil (Bbls)
|
|
14,755
|
|
|
12,846
|
|
|
14,149
|
|
|
11,937
|
|
NGL (Bbls)
|
|
29,603
|
|
|
23,142
|
|
|
27,829
|
|
|
22,999
|
|
Total Equivalent
(BOE)
|
|
97,346
|
|
|
85,451
|
|
|
92,569
|
|
|
83,676
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
558.8
|
|
|
515.9
|
|
|
544.4
|
|
|
506.7
|
|
Oil (Bbls)
|
|
63,909
|
|
|
56,687
|
|
|
63,586
|
|
|
55,596
|
|
NGL (Bbls)
|
|
61,560
|
|
|
47,840
|
|
|
57,748
|
|
|
46,806
|
|
Total Equivalent
(BOE)
|
|
218,595
|
|
|
190,518
|
|
|
212,069
|
|
|
186,858
|
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2018*
|
|
2017
|
|
2018*
|
|
2017
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.66
|
|
|
2.70
|
|
|
1.79
|
|
|
2.78
|
|
Oil ($ per
Bbl)
|
|
55.16
|
|
|
44.14
|
|
|
58.24
|
|
|
45.33
|
|
NGL ($ per
Bbl)
|
|
27.53
|
|
|
20.58
|
|
|
23.95
|
|
|
18.50
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.97
|
|
|
2.61
|
|
|
2.01
|
|
|
2.85
|
|
Oil ($ per
Bbl)
|
|
68.42
|
|
|
45.21
|
|
|
64.82
|
|
|
45.33
|
|
NGL ($ per
Bbl)
|
|
23.75
|
|
|
22.75
|
|
|
21.77
|
|
|
21.70
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.84
|
|
|
2.65
|
|
|
1.92
|
|
|
2.82
|
|
Oil ($ per
Bbl)
|
|
58.25
|
|
|
44.38
|
|
|
59.70
|
|
|
45.33
|
|
NGL ($ per
Bbl)
|
|
25.72
|
|
|
21.63
|
|
|
22.90
|
|
|
20.07
|
|
|
*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:
|
|
4Q18
|
1Q19
|
2Q19
|
3Q19
|
4Q19
|
1Q20
|
2Q20
|
Gas
Collars:
|
PEPL(3)
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
123,261
|
|
120,000
|
|
120,000
|
|
90,000
|
|
60,000
|
|
30,000
|
|
—
|
|
|
Wtd Avg
Floor
|
$
|
2.09
|
|
$
|
2.05
|
|
$
|
2.05
|
|
$
|
1.93
|
|
$
|
1.93
|
|
$
|
1.97
|
|
$
|
—
|
|
|
Wtd Avg
Ceiling
|
$
|
2.43
|
|
$
|
2.42
|
|
$
|
2.42
|
|
$
|
2.34
|
|
$
|
2.42
|
|
$
|
2.51
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso
Perm(3)
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
86,630
|
|
80,000
|
|
80,000
|
|
60,000
|
|
30,000
|
|
10,000
|
|
—
|
|
|
Wtd Avg
Floor
|
$
|
1.78
|
|
$
|
1.69
|
|
$
|
1.69
|
|
$
|
1.48
|
|
$
|
1.37
|
|
$
|
1.40
|
|
$
|
—
|
|
|
Wtd Avg
Ceiling
|
$
|
2.01
|
|
$
|
1.92
|
|
$
|
1.92
|
|
$
|
1.74
|
|
$
|
1.60
|
|
$
|
1.70
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Waha
(3)
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
26,630
|
|
30,000
|
|
30,000
|
|
30,000
|
|
30,000
|
|
20,000
|
|
—
|
|
|
Wtd Avg
Floor
|
$
|
1.38
|
|
$
|
1.38
|
|
$
|
1.38
|
|
$
|
1.38
|
|
$
|
1.38
|
|
$
|
1.40
|
|
$
|
—
|
|
|
Wtd Avg
Ceiling
|
$
|
1.67
|
|
$
|
1.67
|
|
$
|
1.67
|
|
$
|
1.67
|
|
$
|
1.67
|
|
$
|
1.73
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Oil
Collars:
|
WTI(4)
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
37,000
|
|
31,000
|
|
31,000
|
|
24,000
|
|
16,000
|
|
8,000
|
|
—
|
|
|
Wtd Avg
Floor
|
$
|
52.97
|
|
$
|
53.94
|
|
$
|
53.94
|
|
$
|
55.67
|
|
$
|
58.50
|
|
$
|
60.00
|
|
$
|
—
|
|
|
Wtd Avg
Ceiling
|
$
|
64.79
|
|
$
|
66.88
|
|
$
|
66.88
|
|
$
|
70.03
|
|
$
|
71.94
|
|
$
|
75.85
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Oil Basis
Swaps:
|
WTI
Midland(5)
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
29,000
|
|
29,000
|
|
29,000
|
|
24,000
|
|
16,000
|
|
7,000
|
|
7,000
|
|
|
Weighted Avg
Differential
|
$
|
(5.01)
|
|
$
|
(5.46)
|
|
$
|
(5.46)
|
|
$
|
(6.50)
|
|
$
|
(7.79)
|
|
$
|
(0.40)
|
|
$
|
(0.40)
|
|
Conference call and webcast
Cimarex will host a conference call tomorrow, November 7, 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 third 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 Permian Basin and Mid-Continent 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; costs and availability of
third party facilities for gathering, processing, refining and
transportation; 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;
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
Net income
|
$
|
148,354
|
|
|
$
|
91,399
|
|
|
$
|
475,669
|
|
|
$
|
319,633
|
|
Mark-to-market loss
(gain) on open derivative positions
|
53,507
|
|
|
19,085
|
|
|
51,128
|
|
|
(53,003)
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
28,169
|
|
Tax impact
|
(12,253)
|
|
|
(6,851)
|
|
|
(11,810)
|
|
|
9,213
|
|
Adjusted net
income
|
$
|
189,608
|
|
|
$
|
103,633
|
|
|
$
|
514,987
|
|
|
$
|
304,012
|
|
Diluted earnings per
share
|
$
|
1.56
|
|
|
$
|
0.96
|
|
|
$
|
5.00
|
|
|
$
|
3.36
|
|
Adjusted diluted
earnings per share*
|
$
|
1.99
|
|
|
$
|
1.09
|
|
|
$
|
5.39
|
|
|
$
|
3.19
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
Adjusted
diluted**
|
95,512
|
|
|
95,320
|
|
|
95,472
|
|
|
95,222
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
|
453,474
|
|
|
$
|
251,005
|
|
|
$
|
1,157,813
|
|
|
$
|
755,805
|
|
Change in operating
assets and liabilities
|
(64,792)
|
|
|
32,901
|
|
|
(52,386)
|
|
|
72,728
|
|
|
|
|
|
|
|
|
|
Adjusted cash flow
from operations
|
$
|
388,682
|
|
|
$
|
283,906
|
|
|
$
|
1,105,427
|
|
|
$
|
828,533
|
|
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
September 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
|
|
(in
thousands)
|
Oil sales
|
|
$
|
342,495
|
|
|
$
|
342,495
|
|
|
$
|
231,441
|
|
Gas sales
|
|
$
|
98,321
|
|
|
$
|
94,433
|
|
|
$
|
125,707
|
|
NGL sales
|
|
$
|
151,648
|
|
|
$
|
145,654
|
|
|
$
|
95,191
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
|
|
(in
thousands)
|
Oil sales
|
|
$
|
1,036,402
|
|
|
$
|
1,036,402
|
|
|
$
|
687,960
|
|
Gas sales
|
|
$
|
295,725
|
|
|
$
|
284,941
|
|
|
$
|
390,126
|
|
NGL sales
|
|
$
|
382,387
|
|
|
$
|
361,066
|
|
|
$
|
256,503
|
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
|
Three Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
Permian
Basin
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.78
|
|
|
1.66
|
|
|
2.70
|
|
Oil ($ per
Bbl)
|
|
55.16
|
|
|
55.16
|
|
|
44.14
|
|
NGL ($ per
Bbl)
|
|
29.08
|
|
|
27.53
|
|
|
20.58
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
2.01
|
|
|
1.97
|
|
|
2.61
|
|
Oil ($ per
Bbl)
|
|
68.42
|
|
|
68.42
|
|
|
45.21
|
|
NGL ($ per
Bbl)
|
|
24.28
|
|
|
23.75
|
|
|
22.75
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.91
|
|
|
1.84
|
|
|
2.65
|
|
Oil ($ per
Bbl)
|
|
58.25
|
|
|
58.25
|
|
|
44.38
|
|
NGL ($ per
Bbl)
|
|
26.78
|
|
|
25.72
|
|
|
21.63
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
Permian
Basin
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.90
|
|
|
1.79
|
|
|
2.78
|
|
Oil ($ per
Bbl)
|
|
58.24
|
|
|
58.24
|
|
|
45.33
|
|
NGL ($ per
Bbl)
|
|
25.59
|
|
|
23.95
|
|
|
18.50
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
2.05
|
|
|
2.01
|
|
|
2.85
|
|
Oil ($ per
Bbl)
|
|
64.82
|
|
|
64.82
|
|
|
45.33
|
|
NGL ($ per
Bbl)
|
|
22.82
|
|
|
21.77
|
|
|
21.70
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.99
|
|
|
1.92
|
|
|
2.82
|
|
Oil ($ per
Bbl)
|
|
59.70
|
|
|
59.70
|
|
|
45.33
|
|
NGL ($ per
Bbl)
|
|
24.26
|
|
|
22.90
|
|
|
20.07
|
|
TRANSPORTATION,
PROCESSING, AND OTHER OPERATING EXPENSES
|
|
|
|
Three Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
|
|
(in thousands, except
per BOE)
|
Transportation,
processing, and other operating expenses
|
|
$
|
59,602
|
|
|
$
|
49,720
|
|
|
$
|
58,387
|
|
Per BOE
|
|
$
|
2.96
|
|
|
$
|
2.47
|
|
|
$
|
3.33
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
Pre-ASC 606
Adoption
|
|
Post-ASC 606
Adoption
|
|
As
Reported
|
|
|
(in thousands, except
per BOE)
|
Transportation,
processing, and other operating expenses
|
|
$
|
178,923
|
|
|
$
|
146,818
|
|
|
$
|
172,034
|
|
Per BOE
|
|
$
|
3.09
|
|
|
$
|
2.54
|
|
|
$
|
3.37
|
|
OIL AND GAS
CAPITALIZED EXPENDITURES
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in
thousands)
|
Acquisitions:
|
|
|
|
|
|
|
|
Proved
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62
|
|
|
$
|
260
|
|
Unproved
|
10,015
|
|
|
438
|
|
|
12,251
|
|
|
4,263
|
|
|
10,015
|
|
|
438
|
|
|
12,313
|
|
|
4,523
|
|
|
|
|
|
|
|
|
|
Exploration and
development:
|
|
|
|
|
|
|
|
Land and
seismic
|
$
|
55,603
|
|
|
$
|
12,872
|
|
|
$
|
76,027
|
|
|
$
|
123,359
|
|
Exploration and
development
|
445,429
|
|
|
322,651
|
|
|
1,113,898
|
|
|
813,693
|
|
|
501,032
|
|
|
335,523
|
|
|
1,189,925
|
|
|
937,052
|
|
|
|
|
|
|
|
|
|
Property
sales:
|
|
|
|
|
|
|
|
Proved
|
$
|
(527,650)
|
|
|
$
|
1,807
|
|
|
$
|
(557,191)
|
|
|
$
|
(85)
|
|
Unproved
|
(12,022)
|
|
|
(780)
|
|
|
(17,323)
|
|
|
(8,051)
|
|
|
(539,672)
|
|
|
1,027
|
|
|
(574,514)
|
|
|
(8,136)
|
|
|
|
|
|
|
|
|
|
|
$
|
(28,625)
|
|
|
$
|
336,988
|
|
|
$
|
627,724
|
|
|
$
|
933,439
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in thousands, except
per share information)
|
Revenues:
|
|
|
|
|
|
|
|
|
Oil sales
|
|
$
|
342,495
|
|
|
$
|
231,441
|
|
|
$
|
1,036,402
|
|
|
$
|
687,960
|
|
Gas and NGL
sales
|
|
240,087
|
|
|
220,898
|
|
|
646,007
|
|
|
646,629
|
|
Gas gathering and
other
|
|
8,906
|
|
|
11,342
|
|
|
32,487
|
|
|
32,720
|
|
|
|
591,488
|
|
|
463,681
|
|
|
1,714,896
|
|
|
1,367,309
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, amortization, and accretion
|
|
138,195
|
|
|
112,893
|
|
|
417,555
|
|
|
319,173
|
|
Production
|
|
76,272
|
|
|
65,410
|
|
|
226,758
|
|
|
190,409
|
|
Transportation,
processing, and other operating
|
|
49,720
|
|
|
58,387
|
|
|
146,818
|
|
|
172,034
|
|
Gas gathering and
other
|
|
10,569
|
|
|
8,856
|
|
|
29,859
|
|
|
25,930
|
|
Taxes other than
income
|
|
28,431
|
|
|
24,314
|
|
|
86,549
|
|
|
63,104
|
|
General and
administrative
|
|
21,148
|
|
|
21,039
|
|
|
64,208
|
|
|
58,835
|
|
Stock
compensation
|
|
6,437
|
|
|
7,038
|
|
|
16,262
|
|
|
19,619
|
|
Loss (gain) on
derivative instruments, net
|
|
54,006
|
|
|
16,109
|
|
|
71,546
|
|
|
(50,261)
|
|
Other operating
expense, net
|
|
10,015
|
|
|
95
|
|
|
15,470
|
|
|
977
|
|
|
|
394,793
|
|
|
314,141
|
|
|
1,075,025
|
|
|
799,820
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
196,695
|
|
|
149,540
|
|
|
639,871
|
|
|
567,489
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
17,159
|
|
|
16,838
|
|
|
50,837
|
|
|
57,985
|
|
Capitalized
interest
|
|
(5,457)
|
|
|
(5,373)
|
|
|
(15,117)
|
|
|
(17,456)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,169
|
|
Other, net
|
|
(7,544)
|
|
|
(4,563)
|
|
|
(14,716)
|
|
|
(9,004)
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax
|
|
192,537
|
|
|
142,638
|
|
|
618,867
|
|
|
507,795
|
|
Income tax
expense
|
|
44,183
|
|
|
51,239
|
|
|
143,198
|
|
|
188,162
|
|
Net income
|
|
$
|
148,354
|
|
|
$
|
91,399
|
|
|
$
|
475,669
|
|
|
$
|
319,633
|
|
|
|
|
|
|
|
|
|
|
Earnings per share to
common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.56
|
|
|
$
|
0.96
|
|
|
$
|
5.00
|
|
|
$
|
3.36
|
|
Diluted
|
|
$
|
1.56
|
|
|
$
|
0.96
|
|
|
$
|
5.00
|
|
|
$
|
3.36
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
|
$
|
0.18
|
|
|
$
|
0.08
|
|
|
$
|
0.50
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
93,845
|
|
|
93,501
|
|
|
93,758
|
|
|
93,431
|
|
Diluted
|
|
93,867
|
|
|
93,531
|
|
|
93,788
|
|
|
93,465
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
148,354
|
|
|
$
|
91,399
|
|
|
$
|
475,669
|
|
|
$
|
319,633
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
Change in fair value
of investments, net of tax
|
|
539
|
|
|
234
|
|
|
541
|
|
|
860
|
|
Total comprehensive
income
|
|
$
|
148,893
|
|
|
$
|
91,633
|
|
|
$
|
476,210
|
|
|
$
|
320,493
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED CASH FLOW STATEMENTS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(in
thousands)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
148,354
|
|
|
$
|
91,399
|
|
|
$
|
475,669
|
|
|
$
|
319,633
|
|
Adjustments to
reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, amortization, and accretion
|
|
138,195
|
|
|
112,893
|
|
|
417,555
|
|
|
319,173
|
|
Deferred income
taxes
|
|
43,083
|
|
|
51,239
|
|
|
142,815
|
|
|
188,168
|
|
Stock
compensation
|
|
6,437
|
|
|
7,038
|
|
|
16,262
|
|
|
19,619
|
|
Loss (gain) on
derivative instruments, net
|
|
54,006
|
|
|
16,109
|
|
|
71,546
|
|
|
(50,261)
|
|
Settlements on
derivative instruments
|
|
(499)
|
|
|
2,975
|
|
|
(20,418)
|
|
|
(2,742)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,169
|
|
Changes in
non-current assets and liabilities
|
|
(1,957)
|
|
|
1,068
|
|
|
(1,244)
|
|
|
2,144
|
|
Other, net
|
|
1,063
|
|
|
1,185
|
|
|
3,242
|
|
|
4,630
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(26,784)
|
|
|
(67,776)
|
|
|
(11,772)
|
|
|
(128,921)
|
|
Other current
assets
|
|
2,535
|
|
|
(8,268)
|
|
|
4,421
|
|
|
(19,372)
|
|
Accounts payable and
other current liabilities
|
|
89,041
|
|
|
43,143
|
|
|
59,737
|
|
|
75,565
|
|
Net cash provided by
operating activities
|
|
453,474
|
|
|
251,005
|
|
|
1,157,813
|
|
|
755,805
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Oil and gas capital
expenditures
|
|
(500,677)
|
|
|
(319,777)
|
|
|
(1,151,484)
|
|
|
(901,949)
|
|
Sales of oil and gas
assets
|
|
538,525
|
|
|
(1,027)
|
|
|
573,367
|
|
|
8,136
|
|
Sales of other
assets
|
|
465
|
|
|
116
|
|
|
990
|
|
|
510
|
|
Other capital
expenditures
|
|
(18,925)
|
|
|
(13,123)
|
|
|
(75,037)
|
|
|
(31,332)
|
|
Net cash provided
(used) by investing activities
|
|
19,388
|
|
|
(333,811)
|
|
|
(652,164)
|
|
|
(924,635)
|
|
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
|
|
—
|
|
|
(159)
|
|
|
—
|
|
|
(29,194)
|
|
Dividends
paid
|
|
(15,237)
|
|
|
(7,590)
|
|
|
(38,038)
|
|
|
(22,743)
|
|
Employee withholding
taxes paid upon the net settlement of equity-classified stock
awards
|
|
(5,464)
|
|
|
(6,422)
|
|
|
(6,410)
|
|
|
(7,637)
|
|
Proceeds from
exercise of stock options
|
|
962
|
|
|
190
|
|
|
2,211
|
|
|
226
|
|
Net cash used by
financing activities
|
|
(19,739)
|
|
|
(13,981)
|
|
|
(42,237)
|
|
|
(61,238)
|
|
Net change in cash
and cash equivalents
|
|
453,123
|
|
|
(96,787)
|
|
|
463,412
|
|
|
(230,068)
|
|
Cash and cash
equivalents at beginning of period
|
|
410,823
|
|
|
519,595
|
|
|
400,534
|
|
|
652,876
|
|
Cash and cash
equivalents at end of period
|
|
$
|
863,946
|
|
|
$
|
422,808
|
|
|
$
|
863,946
|
|
|
$
|
422,808
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
Assets
|
|
(in thousands, except
share and
per share information)
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
863,946
|
|
|
$
|
400,534
|
|
Accounts receivable,
net of allowance
|
|
471,423
|
|
|
460,174
|
|
Oil and gas well
equipment and supplies
|
|
55,546
|
|
|
49,722
|
|
Derivative
instruments
|
|
31,176
|
|
|
15,151
|
|
Other current
assets
|
|
5,624
|
|
|
10,054
|
|
Total current
assets
|
|
1,427,715
|
|
|
935,635
|
|
Oil and gas
properties at cost, using the full cost method of
accounting:
|
|
|
|
|
Proved
properties
|
|
18,047,645
|
|
|
17,513,460
|
|
Unproved properties
and properties under development, not being amortized
|
|
564,982
|
|
|
476,903
|
|
|
|
18,612,627
|
|
|
17,990,363
|
|
Less – accumulated
depreciation, depletion, amortization, and impairment
|
|
(15,124,111)
|
|
|
(14,748,833)
|
|
Net oil and gas
properties
|
|
3,488,516
|
|
|
3,241,530
|
|
Fixed assets, net of
accumulated depreciation of $324,270 and $290,114,
respectively
|
|
244,125
|
|
|
210,922
|
|
Goodwill
|
|
620,232
|
|
|
620,232
|
|
Derivative
instruments
|
|
154
|
|
|
2,086
|
|
Other
assets
|
|
37,693
|
|
|
32,234
|
|
|
|
$
|
5,818,435
|
|
|
$
|
5,042,639
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
141,426
|
|
|
$
|
98,386
|
|
Accrued
liabilities
|
|
412,747
|
|
|
351,849
|
|
Derivative
instruments
|
|
97,480
|
|
|
42,066
|
|
Revenue
payable
|
|
193,692
|
|
|
187,273
|
|
Total current
liabilities
|
|
845,345
|
|
|
679,574
|
|
Long-term
debt:
|
|
|
|
|
Principal
|
|
1,500,000
|
|
|
1,500,000
|
|
Less – unamortized
debt issuance costs and discount
|
|
(11,853)
|
|
|
(13,080)
|
|
Long-term debt,
net
|
|
1,488,147
|
|
|
1,486,920
|
|
Deferred income
taxes
|
|
244,592
|
|
|
101,618
|
|
Derivative
instruments
|
|
14,076
|
|
|
4,268
|
|
Other
liabilities
|
|
200,453
|
|
|
201,981
|
|
Total
liabilities
|
|
2,792,613
|
|
|
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, 95,602,550 and 95,437,434
shares issued, respectively
|
|
956
|
|
|
954
|
|
Additional paid-in
capital
|
|
2,778,203
|
|
|
2,764,384
|
|
Retained earnings
(accumulated deficit)
|
|
243,923
|
|
|
(199,259)
|
|
Accumulated other
comprehensive income
|
|
2,740
|
|
|
2,199
|
|
Total stockholders'
equity
|
|
3,025,822
|
|
|
2,568,278
|
|
|
|
$
|
5,818,435
|
|
|
$
|
5,042,639
|
|
View original
content:http://www.prnewswire.com/news-releases/cimarex-reports-third-quarter-2018-results-300745088.html
SOURCE Cimarex Energy Co.