DENVER, May 5, 2021 /PRNewswire/ -- Cimarex Energy Co.
(NYSE: XEC) today reported first-quarter 2021 financial and
operating results. Net income for first-quarter 2021 totaled
$128.1 million, or $1.25 per share. Net income for the quarter was
impacted by a mark-to-market loss on the Company's commodity
derivative positions of $99.4
million. Excluding the impact of the mark-to-market loss on
commodity derivatives, adjusted net income (non-GAAP) for
first-quarter 2021 was $203.7
million, or $1.98 per
share.
Highlights
- Generated cash flow from operating activities of $403 million.
- Adjusted cash flow from operating activities (non-GAAP) totaled
$395 million, exceeding capital
expenditures and generating $231
million of free cash flow (non-GAAP).
- Long-term debt at quarter end was $2
billion, while net debt (non-GAAP) decreased by
approximately $250 million to
$1.5 billion at the end of the
quarter.
- Delivered oil volumes of 68.6 MBopd.
Outlook & Guidance
- Announces strategic non-core asset sales for total cash
consideration of approximately $115
million, subject to customary closing and post-closing
adjustments.
- Continue to expect total capital expenditures for full-year
2021 to range between $650
million and $750 million, which
is expected to drive fourth-quarter 2021 oil volume growth of
approximately 30% year-over-year.
- Expect second-quarter 2021 oil production to range between 69
MBopd to 73 MBopd.
- Advancing emissions reductions efforts, with a 2021 goal of
reducing the Company's GHG emissions intensity by 8% to 12%, which
follows a 22% reduction in 2020.
See "Supplemental Non-GAAP Financial Measures" below for
descriptions of the above non-GAAP measures as well as
reconciliations of these measures to the associated GAAP
measures.
Tom Jorden, Chairman and Chief
Executive Officer, commented, "Following a turbulent 2020, the
first quarter of 2021 presented new challenges as severe winter
weather impacted operations for many producers, including Cimarex.
I'm proud of our remarkable team for putting safety first and
delivering a strong quarter despite the conditions. Our priority in
2021 is efficiently investing in our assets to deliver strong
returns and free cash flow, while also re-setting oil volumes
higher following their decline in 2020. We remain on track with our
capital budget and exit rate outlook, which positions Cimarex to
continue generating substantial free cash flow and increasing
returns to shareholders."
First-Quarter 2021 Summary
First-quarter 2021 oil production totaled 68.6 thousand barrels
per day (MBopd). Total production for the quarter averaged 219.7
thousand barrels of oil equivalent per day (MBoepd).
Cimarex's average realized price for oil, natural gas and NGLs
for first-quarter 2021, excluding the effect of commodity
derivatives, was $33.89 per Boe,
compared with $18.25 per Boe for the
same period a year ago.
During first-quarter 2021, Cimarex's production and
transportation costs were impacted by the severe winter storm. The
incremental expenses were primarily due to higher fuel and
electricity costs. The Company's full-year 2021 production cost
guidance remains unchanged; however, the Company increased its
outlook for full-year 2021 transportation costs to account for
higher costs in first-quarter 2021 (as detailed in the Outlook
section below).
Generated Strong Cash Flow
For first-quarter 2021, cash flow from operating activities was
$402.9 million, including
$7.7 million in working capital
changes. Adjusted cash flow from operating activities (non-GAAP)
was $395.2 million, exceeding
first-quarter 2021 capital expenditures of $164.6 million, which included $130.9 million for drilling and completion
activity. Free cash flow (non-GAAP) for first-quarter 2021 totaled
$230.6 million.
Strong Financial Position
Cimarex maintains a strong financial position with
investment-grade credit ratings and substantial liquidity. At the
end of the reporting period, Cimarex had long-term debt of
$2 billion, with no outstanding debt maturities until
June 2024 and no debt outstanding
under its credit facility. Driven by strong cash flow generation in
first-quarter 2021, Cimarex's cash balance increased to
$524 million at quarter end, compared
to $273 million at December 31, 2020. The Company continues to
prioritize debt reduction and anticipates allocating excess cash
towards paying off the Company's $750
million Senior Unsecured Notes due June 2024.
Active Portfolio Management Reinforces the Balance Sheet and
High-Grades Portfolio
Cimarex has entered into definitive agreements to sell non-core
assets in the Permian Basin and Mid-Continent for a combined total
of approximately $115 million.
Cimarex's portfolio management efforts enable the Company to
monetize legacy assets and reinforce the Company's balance
sheet.
The divestitures include more than 3,000 gross wells in
aggregate and are currently producing approximately 0.9 MBopd.
Cimarex expects the asset sales will decrease the Company's
production expense, with minimal impact to production volumes for
full-year 2021. The transactions are expected to close in
second-quarter 2021. The Company will look to update its guidance,
if necessary, in its second-quarter 2021 earnings materials.
Hedge Position
Cimarex's commodity derivatives strategy mitigates the Company's
exposure to commodity price fluctuations. Please see the table
under "Derivatives Information" below for detailed information
about Cimarex's current derivatives positions.
Outlook
Disciplined Capital Allocation Driving Strong Outlook
Cimarex is currently running five rigs in the Permian Basin, and
plans to average two completions crews during second-quarter 2021.
The Company is currently running one rig in the Mid-Continent
region, which it plans to release by the end of May 2021. Cimarex maintains its
previously-announced guidance range for 2021 capital expenditures
of $650 million to $750 million. The Company's development program
is expected to drive approximately 30% oil production growth in
fourth-quarter 2021, as compared to fourth-quarter 2020, as well as
strong cash flow generation for the year.
Second-quarter 2021 production volumes are expected to average
between 220 MBoepd and 240 MBoepd, with oil volumes estimated to
average between 69 MBopd and 73 MBopd.
As referenced above, first-quarter 2021 transportation costs
were higher than anticipated due to the severe winter weather
experienced in first-quarter 2021. As a result of elevated
first-quarter transportation costs, the Company increased its
full-year 2021 guidance for transportation and processing expenses
to $2.45 per Boe to $2.75 per Boe, as compared to the prior range of
$2.20 per Boe to $2.50 per Boe. Cimarex decreased its outlook for
full-year 2021 DD&A expense to $5.50 per Boe to $6.50 per Boe; the prior range was $6.00 per Boe to $7.00 per Boe.
ESG Performance Foundational to Cimarex's Success
Cimarex believes the foundation for its success is the Company's
ESG performance, and the Company continues to drive towards
consistently improving its environmental performance. In 2020,
Cimarex reduced its greenhouse gas (GHG) emissions intensity by
22%, and is targeting an incremental reduction between 8% and 12%
in 2021. Cimarex's Board of Directors recently established a new
Environmental, Health & Safety (EHS) Committee to oversee the
Company's EHS risk management, initiatives and disclosure
practices.
Enhancing Corporate Governance
Cimarex submitted an important management proposal to the
Company's shareholders for a vote at its Annual Shareholders
Meeting on May 12, 2021. The proposal
seeks shareholder approval to amend the Company's Certificate of
Incorporation (Charter) in order to declassify the Company's Board
of Directors and allow for the annual election of directors.
First-Quarter 2021 Conference Call
Cimarex will host a conference call tomorrow, May 6, 2021 at 9:00 AM
MT (11:00 AM ET) to discuss
first-quarter 2021 financial and operational results.
Conference Call Information
Dial-in (for callers in the U.S.): (866) 367-3053
Dial-in (for callers in Canada):
(855) 669-9657
Intl. dial-in: (412) 902-4216
The live audio webcast and related earnings presentation can be
accessed on the "Events & Presentations" page under the
"Investor Relations" section of the Company's website at
www.cimarex.com. The webcast will be archived and available at the
same location after the conclusion of the live event.
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. For more information about Cimarex, visit
www.cimarex.com.
Forward-Looking Statements & Cautionary
Statements
This press release contains forward-looking statements,
including statements regarding projected results and future events.
In particular, the disclosures under the heading "Outlook" contain
projections for certain 2021 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, 2020, 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 estimates and
projections and other forward-looking statements and can be
affected by a variety of factors outside the control of the
Company, all of which may be amplified by the COVID-19 pandemic and
its unpredictable nature, including among other things:
fluctuations in the price we receive for our oil, gas, and NGL
production, including local market price differentials, which may
be exacerbated by the demand destruction resulting from COVID-19;
disruptions to the availability of workers and contractors due to
illness and stay at home orders related to the COVID-19 pandemic;
cost and availability of gathering, pipeline, refining,
transportation and other midstream and downstream activities and
our ability to sell oil, gas, and NGLs, which may be negatively
impacted by the COVID-19 pandemic, severe weather and other risks,
and may lead to a lack of any available markets; availability of
supply chains and critical equipment and supplies; higher than
expected costs and expenses, including the availability and cost of
services and materials; compliance with environmental and other
regulations, including new regulations that may result from the
recent change in federal and state administrations and
legislatures; legislative or regulatory changes, including
initiatives related to hydraulic fracturing, emissions, and
disposal of produced water, which may be negatively impacted by the
recent change in Presidential administration or legislatures; the
ability to receive drilling and other permits or approvals and
rights-of-way in a timely manner (or at all), which may be
negatively impacted by the impact of COVID-19 restrictions on
regulatory employees who process and approve permits, other
approvals and rights-of-way and which may be restricted by new
Presidential and Secretarial orders and regulation and legislation;
reductions in the quantity of oil, gas, and NGLs sold and prices
received because of decreased demand and/or curtailments in
production relating to mechanical, transportation, storage,
capacity, marketing, weather (such as the severe winter weather
impacting our operations in February
2021), the COVID-19 pandemic, or other problems; declines in
the SEC PV10 value of our oil and gas properties resulting in full
cost ceiling test impairments to the carrying values of our oil and
gas properties; the effectiveness of our internal control over
financial reporting; success of the Company's risk management
activities; availability of financing and access to capital
markets; estimates of proved reserves, exploitation potential, or
exploration prospect size; greater than expected production decline
rates; timing and amount of future production of oil, gas, and
NGLs; cybersecurity threats, technology system failures and data
security issues; the inability to transport, process and store oil
and gas; hedging activities and the viability of our hedging
counterparties, many of whom have been negatively impacted by the
COVID-19 pandemic; economic and competitive conditions; lack of
available insurance; cash flow and anticipated liquidity;
continuing compliance with the financial covenant contained in our
amended and restated credit agreement; the loss of certain federal
income tax deductions; litigation; environmental liabilities; new
federal regulations regarding species or habitats; exploration and
development opportunities that we pursue may not result in
economic, productive oil and gas properties; drilling of wells;
development drilling and testing results; performance of acquired
properties and newly drilled wells; ability to obtain industry
partners to jointly explore certain prospects, and the willingness
and ability of those partners to meet capital obligations when
requested; unexpected future capital expenditures; amount, nature,
and timing of capital expenditures; proving up undeveloped acreage
and maintaining production on leases; unforeseen liabilities
associated with acquisitions and dispositions; establishing
valuation allowances against our net deferred tax assets; potential
payments for failing to meet minimum oil, gas, NGL, or water
delivery or sales commitments; increased financing costs due to a
significant increase in interest rates; risks associated with
concentration of operations in one major geographic area;
availability and cost of capital; title to properties; ability to
complete property sales or other transactions; 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.
Operational
Activity
|
|
The tables below
provide a summary of operational activity, production volumes and
price realizations by region for
first-quarter 2021:
|
|
Wells Brought on
Production by
Region
|
|
Three Months
Ended
March
31,
|
|
|
2021
|
|
2020
|
Gross
wells
|
|
|
|
|
Permian
Basin
|
|
8
|
|
|
35
|
|
Mid-Continent
|
|
5
|
|
|
19
|
|
|
|
13
|
|
|
54
|
|
Net
wells
|
|
|
|
|
Permian
Basin
|
|
7.0
|
|
|
19.8
|
|
Mid-Continent
|
|
—
|
|
|
0.3
|
|
|
|
7.0
|
|
|
20.1
|
|
|
|
|
Daily Production
Volumes by
Region
|
|
Three Months
Ended
March
31,
|
|
|
2021
|
|
2020
|
Permian
Basin
|
|
|
|
|
Gas (MMcf)
|
|
359.3
|
|
|
449.0
|
|
Oil (Bbls)
|
|
61,982
|
|
|
79,606
|
|
NGL (Bbls)
|
|
39,129
|
|
|
48,932
|
|
Total Equivalent
(MBOE)
|
|
161.0
|
|
|
203.4
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
Gas (MMcf)
|
|
199.8
|
|
|
244.1
|
|
Oil (Bbls)
|
|
6,503
|
|
|
9,941
|
|
NGL (Bbls)
|
|
18,570
|
|
|
22,110
|
|
Total Equivalent
(MBOE)
|
|
58.4
|
|
|
72.7
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
Gas (MMcf)
|
|
560.1
|
|
|
694.3
|
|
Oil (Bbls)
|
|
68,581
|
|
|
89,791
|
|
NGL (Bbls)
|
|
57,752
|
|
|
71,099
|
|
Total Equivalent
(MBOE)
|
|
219.7
|
|
|
276.6
|
|
|
|
|
Average Realized
Commodity Prices by
Region
|
|
Three Months
Ended
March
31,
|
|
|
2021
|
|
2020
|
Permian
Basin
|
|
|
|
|
Gas ($ per
Mcf)
|
|
4.00
|
|
|
0.10
|
|
Oil ($ per
Bbl)
|
|
55.84
|
|
|
44.17
|
|
NGL ($ per
Bbl)
|
|
21.52
|
|
|
8.84
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
Gas ($ per
Mcf)
|
|
4.40
|
|
|
1.38
|
|
Oil ($ per
Bbl)
|
|
55.88
|
|
|
44.15
|
|
NGL ($ per
Bbl)
|
|
24.35
|
|
|
12.03
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
Gas ($ per
Mcf)
|
|
4.14
|
|
|
0.55
|
|
Oil ($ per
Bbl)
|
|
55.85
|
|
|
44.18
|
|
NGL ($ per
Bbl)
|
|
22.43
|
|
|
9.84
|
|
Derivatives
Information
|
|
The table below
summarizes the Company's outstanding derivative contracts as of May
5, 2021, for the periods
indicated:
|
|
|
|
2021
|
|
2022
|
|
|
2Q
|
|
3Q
|
|
4Q
|
|
Total
|
|
1Q
|
|
2Q
|
|
3Q
|
|
Total
|
Gas
Collars:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEPL (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
100,000
|
|
|
90,000
|
|
|
90,000
|
|
|
93,309
|
|
|
60,000
|
|
|
20,000
|
|
|
—
|
|
|
19,781
|
|
Wtd Avg
Floor
|
|
$
|
1.89
|
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
$
|
1.96
|
|
|
$
|
2.13
|
|
|
$
|
2.40
|
|
|
$
|
—
|
|
|
$
|
2.20
|
|
Wtd Avg
Ceiling
|
|
$
|
2.28
|
|
|
$
|
2.42
|
|
|
$
|
2.42
|
|
|
$
|
2.37
|
|
|
$
|
2.55
|
|
|
$
|
2.86
|
|
|
$
|
—
|
|
|
$
|
2.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso Permian
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
80,000
|
|
|
70,000
|
|
|
70,000
|
|
|
73,309
|
|
|
40,000
|
|
|
20,000
|
|
|
—
|
|
|
14,849
|
|
Wtd Avg
Floor
|
|
$
|
1.62
|
|
|
$
|
1.86
|
|
|
$
|
1.86
|
|
|
$
|
1.77
|
|
|
$
|
2.13
|
|
|
$
|
2.40
|
|
|
$
|
—
|
|
|
$
|
2.22
|
|
Wtd Avg
Ceiling
|
|
$
|
1.92
|
|
|
$
|
2.22
|
|
|
$
|
2.22
|
|
|
$
|
2.11
|
|
|
$
|
2.53
|
|
|
$
|
2.88
|
|
|
$
|
—
|
|
|
$
|
2.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waha (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
100,000
|
|
|
100,000
|
|
|
100,000
|
|
|
100,000
|
|
|
70,000
|
|
|
30,000
|
|
|
10,000
|
|
|
27,260
|
|
Wtd Avg
Floor
|
|
$
|
1.61
|
|
|
$
|
1.88
|
|
|
$
|
1.88
|
|
|
$
|
1.79
|
|
|
$
|
2.04
|
|
|
$
|
2.40
|
|
|
$
|
2.40
|
|
|
$
|
2.17
|
|
Wtd Avg
Ceiling
|
|
$
|
1.93
|
|
|
$
|
2.23
|
|
|
$
|
2.23
|
|
|
$
|
2.13
|
|
|
$
|
2.44
|
|
|
$
|
2.83
|
|
|
$
|
2.77
|
|
|
$
|
2.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
Collars:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
34,000
|
|
|
40,000
|
|
|
40,000
|
|
|
38,015
|
|
|
26,000
|
|
|
19,000
|
|
|
10,000
|
|
|
13,668
|
|
Wtd Avg
Floor
|
|
$
|
34.62
|
|
|
$
|
34.65
|
|
|
$
|
34.65
|
|
|
$
|
34.64
|
|
|
$
|
37.31
|
|
|
$
|
38.16
|
|
|
$
|
40.00
|
|
|
$
|
38.09
|
|
Wtd Avg
Ceiling
|
|
$
|
43.28
|
|
|
$
|
44.37
|
|
|
$
|
44.37
|
|
|
$
|
44.04
|
|
|
$
|
48.41
|
|
|
$
|
49.56
|
|
|
$
|
49.19
|
|
|
$
|
48.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Basis
Swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI Midland
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
33,000
|
|
|
35,000
|
|
|
35,000
|
|
|
34,338
|
|
|
22,000
|
|
|
15,000
|
|
|
7,000
|
|
|
10,929
|
|
Wtd Avg
Differential
|
|
$
|
(0.02)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.06)
|
|
|
$
|
0.25
|
|
|
$
|
0.31
|
|
|
$
|
0.38
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Roll
Differential Swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
11,000
|
|
|
18,000
|
|
|
18,000
|
|
|
15,684
|
|
|
18,000
|
|
|
11,000
|
|
|
7,000
|
|
|
8,945
|
|
Wtd Avg
Price
|
|
$
|
(0.22)
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.01)
|
|
|
$
|
0.10
|
|
|
$
|
(0.03)
|
|
|
1. PEPL refers to
Panhandle Eastern Pipe Line Tex/OK Mid-Continent index, El Paso
Permian refers to El Paso
Permian Basin index, and Waha refers to West
Texas (Waha) Index, all as quoted in Platt's Inside
FERC.
2. WTI refers to West
Texas Intermediate oil price as quoted on the New York Mercantile
Exchange.
3. Index price on
basis swaps and oil roll differential swaps are WTI NYMEX less the
weighted average WTI Midland
differential, as quoted by Argus Americas
Crude.
|
Condensed
Consolidated Balance Sheets
(unaudited)
|
|
|
|
|
|
|
|
March 31,
2021
|
|
December 31,
2020
|
Assets
|
|
(in thousands, except
share and
per share information)
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
523,798
|
|
|
$
|
273,145
|
|
Accounts receivable,
net of allowance
|
|
426,964
|
|
|
332,485
|
|
Oil and gas well
equipment and supplies
|
|
30,846
|
|
|
37,150
|
|
Derivative
instruments
|
|
173
|
|
|
6,848
|
|
Other current
assets
|
|
6,304
|
|
|
7,710
|
|
Total current
assets
|
|
988,085
|
|
|
657,338
|
|
Oil and gas
properties at cost, using the full cost method of
accounting:
|
|
|
|
|
Proved
properties
|
|
21,374,434
|
|
|
21,281,840
|
|
Unproved properties
and properties under development, not being amortized
|
|
1,203,910
|
|
|
1,142,183
|
|
|
|
22,578,344
|
|
|
22,424,023
|
|
Less – accumulated
depreciation, depletion, amortization, and impairment
|
|
(19,083,054)
|
|
|
(18,987,354)
|
|
Net oil and gas
properties
|
|
3,495,290
|
|
|
3,436,669
|
|
Fixed assets, net of
accumulated depreciation of $472,961 and $455,815,
respectively
|
|
410,347
|
|
|
436,101
|
|
Derivative
instruments
|
|
2,376
|
|
|
2,342
|
|
Deferred income
taxes
|
|
—
|
|
|
20,472
|
|
Other
assets
|
|
69,023
|
|
|
69,067
|
|
|
|
$
|
4,965,121
|
|
|
$
|
4,621,989
|
|
Liabilities,
Redeemable Preferred Stock, and Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
78,092
|
|
|
$
|
44,290
|
|
Accrued
liabilities
|
|
315,570
|
|
|
280,849
|
|
Derivative
instruments
|
|
233,296
|
|
|
145,398
|
|
Revenue
payable
|
|
201,935
|
|
|
130,637
|
|
Operating
leases
|
|
57,120
|
|
|
59,051
|
|
Total current
liabilities
|
|
886,013
|
|
|
660,225
|
|
Long-term debt
principal
|
|
2,000,000
|
|
|
2,000,000
|
|
Less—unamortized debt
issuance costs and discounts
|
|
(12,186)
|
|
|
(12,701)
|
|
Long-term debt,
net
|
|
1,987,814
|
|
|
1,987,299
|
|
Deferred income
taxes
|
|
19,698
|
|
|
—
|
|
Derivative
instruments
|
|
22,611
|
|
|
17,749
|
|
Operating
leases
|
|
122,720
|
|
|
134,705
|
|
Other
liabilities
|
|
225,719
|
|
|
231,776
|
|
Total
liabilities
|
|
3,264,575
|
|
|
3,031,754
|
|
Redeemable preferred
stock - 8.125% Series A Cumulative Perpetual Convertible
Preferred Stock, $0.01 par value, 28,165 shares authorized and
issued
|
|
36,781
|
|
|
36,781
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value, 200,000,000 shares authorized, 102,827,556 and
102,866,806 shares issued, respectively
|
|
1,028
|
|
|
1,029
|
|
Additional paid-in
capital
|
|
3,193,760
|
|
|
3,211,562
|
|
Accumulated
deficit
|
|
(1,531,023)
|
|
|
(1,659,137)
|
|
Total stockholders'
equity
|
|
1,663,765
|
|
|
1,553,454
|
|
|
|
$
|
4,965,121
|
|
|
$
|
4,621,989
|
|
Condensed
Consolidated Statements of Operations
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2021
|
|
2020
|
|
|
(in thousands, except
per share
information)
|
Revenues:
|
|
|
|
|
Oil sales
|
|
$
|
344,704
|
|
|
$
|
360,980
|
|
Gas and NGL
sales
|
|
325,398
|
|
|
98,481
|
|
Gas gathering and
other
|
|
9,364
|
|
|
13,369
|
|
|
|
679,466
|
|
|
472,830
|
|
Costs and
expenses:
|
|
|
|
|
Impairment of oil and
gas properties
|
|
—
|
|
|
333,651
|
|
Depreciation,
depletion, amortization, and accretion
|
|
115,152
|
|
|
219,810
|
|
Impairment of
goodwill
|
|
—
|
|
|
714,447
|
|
Production
|
|
74,806
|
|
|
87,236
|
|
Transportation,
processing, and other operating
|
|
63,607
|
|
|
54,922
|
|
Gas gathering and
other
|
|
10,478
|
|
|
8,298
|
|
Taxes other than
income
|
|
40,986
|
|
|
30,961
|
|
General and
administrative
|
|
25,260
|
|
|
25,509
|
|
Stock
compensation
|
|
8,549
|
|
|
6,394
|
|
Loss (gain) on
derivative instruments, net
|
|
161,935
|
|
|
(226,940)
|
|
Other operating
expense, net
|
|
(933)
|
|
|
251
|
|
|
|
499,840
|
|
|
1,254,539
|
|
|
|
|
|
|
Operating income
(loss)
|
|
179,626
|
|
|
(781,709)
|
|
|
|
|
|
|
Other (income) and
expense:
|
|
|
|
|
Interest
expense
|
|
23,078
|
|
|
23,181
|
|
Capitalized
interest
|
|
(11,565)
|
|
|
(13,182)
|
|
Other, net
|
|
(139)
|
|
|
(871)
|
|
|
|
|
|
|
Income (loss) before
income tax
|
|
168,252
|
|
|
(790,837)
|
|
Income tax expense
(benefit)
|
|
40,170
|
|
|
(16,555)
|
|
Net income
(loss)
|
|
$
|
128,082
|
|
|
$
|
(774,282)
|
|
|
|
|
|
|
Earnings (loss) per
share to common stockholders:
|
|
|
|
|
Basic
|
|
$
|
1.25
|
|
|
$
|
(7.77)
|
|
Diluted
|
|
$
|
1.25
|
|
|
$
|
(7.77)
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.27
|
|
|
$
|
0.22
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
Basic
|
|
100,126
|
|
|
99,842
|
|
Diluted
|
|
100,163
|
|
|
99,842
|
|
Condensed
Consolidated Statements of Cash Flows
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2021
|
|
2020
|
|
|
(in
thousands)
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
(loss)
|
|
$
|
128,082
|
|
|
$
|
(774,282)
|
|
Adjustments to
reconcile net income (loss) to net cash
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
Impairment of oil and
gas properties
|
|
—
|
|
|
333,651
|
|
Depreciation,
depletion, amortization, and accretion
|
|
115,152
|
|
|
219,810
|
|
Impairment of
goodwill
|
|
—
|
|
|
714,447
|
|
Deferred income
taxes
|
|
40,170
|
|
|
(16,357)
|
|
Stock
compensation
|
|
8,549
|
|
|
6,394
|
|
Loss (gain) on
derivative instruments, net
|
|
161,935
|
|
|
(226,940)
|
|
Settlements on
derivative instruments
|
|
(62,534)
|
|
|
43,114
|
|
Amortization of debt
issuance costs and discounts
|
|
887
|
|
|
784
|
|
Changes in non-current
assets and liabilities
|
|
(744)
|
|
|
2,410
|
|
Other, net
|
|
3,675
|
|
|
3,390
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
(94,500)
|
|
|
119,605
|
|
Other current
assets
|
|
774
|
|
|
(24)
|
|
Accounts payable and
other current liabilities
|
|
101,466
|
|
|
(117,211)
|
|
Net cash provided by
operating activities
|
|
402,912
|
|
|
308,791
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisition of oil and
gas properties
|
|
(310)
|
|
|
(7,250)
|
|
Oil and gas capital
expenditures
|
|
(130,007)
|
|
|
(258,820)
|
|
Other capital
expenditures
|
|
(3,531)
|
|
|
(26,425)
|
|
Sales of oil and gas
assets
|
|
5,035
|
|
|
830
|
|
Sales of other
assets
|
|
385
|
|
|
181
|
|
Net cash used by
investing activities
|
|
(128,428)
|
|
|
(291,484)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Borrowings of
long-term debt
|
|
—
|
|
|
101,000
|
|
Repayments of
long-term debt
|
|
—
|
|
|
(101,000)
|
|
Financing
fees
|
|
(100)
|
|
|
(100)
|
|
Finance lease
payments
|
|
(1,067)
|
|
|
(1,465)
|
|
Dividends
paid
|
|
(23,049)
|
|
|
(21,593)
|
|
Employee withholding
taxes paid upon the net settlement of equity-classified stock
awards
|
|
—
|
|
|
(165)
|
|
Proceeds from exercise
of stock options
|
|
385
|
|
|
—
|
|
Net cash used by
financing activities
|
|
(23,831)
|
|
|
(23,323)
|
|
Net change in cash
and cash equivalents
|
|
250,653
|
|
|
(6,016)
|
|
Cash and cash
equivalents at beginning of period
|
|
273,145
|
|
|
94,722
|
|
Cash and cash
equivalents at end of period
|
|
$
|
523,798
|
|
|
$
|
88,706
|
|
Supplemental
Non-GAAP Financial Measures
(unaudited)
|
|
Reconciliation of
Net Income (Loss) to Adjusted Net Income and Adjusted Earnings per
Share
|
|
The Company's
presentation of adjusted net income and adjusted earnings per share
that exclude the effect of certain items are non-GAAP financial
measures. Adjusted net income and adjusted earnings per share
represent earnings (loss) and diluted earnings (loss) per share
determined under GAAP without regard to certain non-cash and
special items. The Company believes these measures provide useful
information to analysts and investors for analysis of its operating
results on a recurring, comparable basis from period to period.
Adjusted net income and adjusted earnings per share should not be
considered in isolation or as a substitute for earnings (loss) or
diluted earnings (loss) per share as determined in accordance with
GAAP and may not be comparable to other similarly titled measures
of other companies.
|
|
The following table
provides a reconciliation from the GAAP measure of net income
(loss) to adjusted net income, both in total and on a per diluted
share basis, for the periods indicated:
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
|
(in thousands, except
per share data)
|
|
|
|
|
Net income
(loss)
|
$
|
128,082
|
|
|
$
|
(774,282)
|
|
Impairment of oil and
gas properties
|
—
|
|
|
333,651
|
|
Impairment of
goodwill
|
—
|
|
|
714,447
|
|
Mark-to-market loss
(gain) on open derivative positions
|
99,401
|
|
|
(183,826)
|
|
Asset retirement
obligation
|
—
|
|
|
2,800
|
|
Tax impact
(1)
|
(23,757)
|
|
|
(33,120)
|
|
Adjusted net
income
|
$
|
203,726
|
|
|
$
|
59,670
|
|
Diluted earnings
(loss) per share
|
$
|
1.25
|
|
|
$
|
(7.77)
|
|
Adjusted diluted
earnings per share*
|
$
|
1.98
|
|
|
$
|
0.58
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
Adjusted
diluted**
|
102,870
|
|
|
102,131
|
|
|
______________________________________
(1) Because the goodwill
impairment is not deductible for tax purposes, the tax impact in
the 2020 period is calculated
using an effective tax
rate determined by excluding goodwill from the effective tax rate
calculation.
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
Cash Flow from Operating Activities (CFO) to Adjusted CFO and to
Free Cash Flow
|
|
The Company provides
adjusted CFO, which is a non-GAAP financial measure. Adjusted CFO
represents net cash provided by operating activities as determined
under GAAP without regard to changes in operating assets and
liabilities. The Company believes adjusted CFO is an accepted
measure of an oil and natural gas company's ability to generate
cash to fund development and acquisition activities and service
debt or pay dividends. Additionally, the Company provides free cash
flow, which is a non-GAAP financial measure. Free cash flow is
adjusted CFO in excess of oil and gas capital expenditures and
other capital expenditures. The Company believes that free cash
flow is useful to investors as it provides a measure to compare
both cash flow from operating activities and oil and gas capital
expenditures across periods on a consistent basis.
|
|
These non-GAAP
measures should not be considered as alternatives to, or more
meaningful than, net cash provided by operating activities as an
indicator of operating performance.
|
|
The following table
provides a reconciliation from the GAAP measure of net cash
provided by operating activities to adjusted CFO and to free cash
flow as well as free cash flow after dividend, for the periods
indicated:
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
|
(in
thousands)
|
Net cash provided
by operating activities
|
$
|
402,912
|
|
|
$
|
308,791
|
|
Total changes in cash
due to changes in operating assets and liabilities (working
capital):
|
(7,740)
|
|
|
(2,370)
|
|
Adjusted cash flow
from operating activities
|
395,172
|
|
|
306,421
|
|
|
|
|
|
Oil and gas capital
expenditures
|
(130,007)
|
|
|
(258,820)
|
|
Other capital
expenditures
|
(3,531)
|
|
|
(26,425)
|
|
Change in capital
accruals
|
(21,704)
|
|
|
16,216
|
|
Capitalized stock
compensation, inventory, and other
|
(9,380)
|
|
|
(5,202)
|
|
Capital
expenditures
|
(164,622)
|
|
|
(274,231)
|
|
|
|
|
|
Free cash
flow
|
230,550
|
|
|
32,190
|
|
Dividends
paid
|
(23,049)
|
|
|
(21,593)
|
|
Free cash flow
after dividend
|
$
|
207,501
|
|
|
$
|
10,597
|
|
Reconciliation of
Long-Term Debt to Net Debt
|
|
The Company defines
net debt as debt less cash and cash equivalents. Net debt should
not be considered as an alternative to, or more meaningful than,
total debt, the most directly comparable GAAP measure. Management
uses net debt to determine the Company's outstanding debt
obligations that would not be readily satisfied by its cash and
cash equivalents on hand. The Company believes this metric is
useful to analysts and investors in determining the Company's
leverage position because the Company has the ability to, and may
decide to, use a portion of its cash and cash equivalents to reduce
debt.
|
|
|
March 31,
2021
|
|
December 31,
2020
|
|
(in
thousands)
|
Long-term
debt
|
$
|
2,000,000
|
|
|
$
|
2,000,000
|
|
Cash and cash
equivalents
|
(523,798)
|
|
|
(273,145)
|
|
Net
debt
|
$
|
1,476,202
|
|
|
$
|
1,726,855
|
|
View original
content:http://www.prnewswire.com/news-releases/cimarex-energy-co-reports-first-quarter-2021-results-301284868.html
SOURCE Cimarex Energy Co.