DENVER, Feb. 19, 2020 /PRNewswire/ --
- Fourth quarter oil production averaged 92.0 MBbls per
day
-
- Full year oil production averaged 86.2 MBbls per
day
- 2019 capital investment (including midstream) totaled
$1.32 billion; below guidance
range
-
- Lower D&C costs drove the beat
- Generated $1.34 billion of net
cash from operating activities
-
- $141 million of free cash
flow1 in 2019; $59
million after dividend
Cimarex Energy Co. (NYSE: XEC) today reported a net loss for
fourth quarter 2019 of $384.1
million, or $3.87 per share,
compared to net income of $316.2
million, or $3.32 per share,
in the same period a year ago. For the full year, Cimarex reported
a net loss of $124.6 million, or
$1.33 per share, compared to 2018 net
income of $791.9 million, or
$8.32 per share. Both fourth
quarter and full year results were negatively impacted by a
non-cash charge related to the impairment of oil and gas
properties. Fourth quarter 2019 adjusted net income
(non-GAAP) was $120.4 million, or
$1.18 per share, compared to adjusted
net income (non-GAAP) of $192.1
million, or $2.01 per
share in the same period a year ago1. Full
year 2019 adjusted net income (non-GAAP) was $448.8 million, or $4.46 per share, compared to $708.7 million, or $7.42 per share in
20181. Adjusted cash flow from operations
(non-GAAP) was $416.0 million in
fourth quarter 2019 compared to $428.2
million in the same period a year ago1.
Full year 2019 adjusted cash flow from operations (non-GAAP) was
$1.46 billion compared to
$1.53 billion in
20181.
Oil volumes in the fourth quarter were sequentially higher,
averaging 92.0 thousand barrels (MBbls) per day. For the full
year, Cimarex reported average daily oil volumes of 86.2 MBbls, a
27 percent year-over-year increase. Cimarex produced 292.7
thousand barrels of oil equivalent (MBOE) per day in the fourth
quarter and averaged 278.5 MBOE per day for the year.
In the fourth quarter realized oil prices averaged $54.80 per barrel, up 11 percent from the
$49.30 per barrel received in the
fourth quarter of 2018. Realized natural gas prices averaged
$1.19 per thousand cubic feet (Mcf),
down 45 percent from the fourth quarter 2018 average of
$2.16 per Mcf. NGL prices
averaged $14.13 per barrel, down 32
percent from the $20.71 per barrel
received in the fourth quarter of 2018, but up 31 percent from the
lows we saw in the third quarter of 2019. For the full year,
Cimarex realized $52.77 per barrel of
oil, down 7 percent from 2018, $1.11
per Mcf of natural gas and $13.55 per
barrel of NGLs sold.
Both oil and natural gas prices were negatively impacted by
local price differentials in 2019 although oil price differential
did see some improvement year-over-year. Our realized Permian
oil differential to WTI Cushing averaged $(4.48) per barrel in 2019 compared to
$(9.82) in 2018. For the year,
Cimarex's average differential on its Permian natural gas
production was $(2.14) per Mcf
compared to the Henry Hub index and, in the Mid-Continent region,
realized gas prices differentials were $(0.68) per Mcf compared to Henry Hub.
Cimarex invested a total of $1.32
billion in 2019, which included $944
million attributable to drilling and completion (D&C)
activities, $75 million to saltwater
disposal and $74 million to midstream
and other investments. Capital investments were funded with cash
flow from operations.
Proved reserves at December 31,
2019 totaled 620 million barrels of oil equivalent (MMBOE),
up five percent year over year. Oil reserves increased 16
percent. Cimarex added 119 MMBOE through extensions and
discoveries and 3.5 MMBOE through net performance revisions
resulting in reserve replacement of 121 percent of 2019
production. Proved reserves are 86 percent proved
developed.
Total debt at December 31, 2019 consisted of $2.0 billion of long-term notes. Cimarex
had no borrowings under its revolving credit facility and a cash
balance of $94.7 million at
year-end. Debt was 37 percent of total
capitalization2.
Operations Update
Cimarex invested $1.32 billion in
2019 including $944 million (72
percent) of D&C capital. Also included is $74 million of investment in midstream and other
and $75 million in saltwater disposal
investment. Of the $1.32
billion, 85 percent was invested in the Permian
region and 15 percent in the Mid-Continent.
During 2019, Cimarex participated in the drilling and completion
of 291 gross (92 net) wells. At year-end, 95 gross (32 net)
wells were waiting on completion, of which 45 gross (1 net) were in
the Mid-Continent and 50 gross (31 net) were in the Permian.
Cimarex currently operates ten drilling rigs.
WELLS BROUGHT ON
PRODUCTION BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Gross
wells
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
31
|
|
|
40
|
|
|
131
|
|
|
129
|
|
Mid-Continent
|
|
16
|
|
|
46
|
|
|
160
|
|
|
220
|
|
|
|
47
|
|
|
86
|
|
|
291
|
|
|
349
|
|
Net
wells
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
22
|
|
|
32
|
|
|
76
|
|
|
80
|
|
Mid-Continent
|
|
1
|
|
|
6
|
|
|
16
|
|
|
42
|
|
|
|
23
|
|
|
38
|
|
|
92
|
|
|
122
|
|
Permian Region
Production from the Permian region
averaged 207.1 MBOE per day in the fourth quarter, or 71 percent of
total company volumes. Oil volumes averaged 78.4 MBbls per
day, 85 percent of total company oil volumes. For the full
year, production averaged 190.7 MBOE per day,
68 percent of total company volumes with Permian oil
representing 84 percent of Cimarex's oil volumes in 2019.
Cimarex brought 31 gross (22 net) wells on production in the
Permian during fourth quarter, bringing the total wells on
production in 2019 to 131 gross (76 net). About 86 percent of
our operated wells were drilled from multi-well pads and our
average lateral length on our operated wells brought on production
in the Permian was 9,529 feet in 2019. Cimarex currently operates
ten rigs and two completion crews in the region.
Mid-Continent Region
Production from the Mid-Continent
averaged 85.3 MBOE per day for the fourth quarter, down 18 percent
from fourth quarter 2018 and down three percent
sequentially. Oil volumes averaged 13.5 MBbls per day and
represented 15 percent of the company's total oil volume in the
quarter. For the full year, production averaged 87.3 MBOE per
day, down eight percent year over year. Oil volumes averaged
13.8 MBbls per day in 2019, down nine percent year over
year.
Wells brought on production during the fourth quarter totaled 16
gross (1 net) in the Mid-Continent region, bringing the total wells
in 2019 to 160 gross (16 net). At the end of the quarter, 45
gross (1 net) wells were waiting on completion.
Activity in the region continues to focus on the Woodford and Meramec shale plays in western
Oklahoma.
Production by Region
Cimarex's average daily
production and commodity price by region is summarized below:
DAILY PRODUCTION
BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
451.4
|
|
|
296.4
|
|
|
398.9
|
|
|
253.7
|
|
Oil (Bbls)
|
|
78,421
|
|
|
61,621
|
|
|
72,264
|
|
|
52,339
|
|
NGL (Bbls)
|
|
53,438
|
|
|
36,380
|
|
|
51,982
|
|
|
31,505
|
|
Total Equivalent
(BOE)
|
|
207,096
|
|
|
147,404
|
|
|
190,735
|
|
|
126,124
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
280.1
|
|
|
324.2
|
|
|
289.1
|
|
|
308.8
|
|
Oil (Bbls)
|
|
13,514
|
|
|
18,122
|
|
|
13,788
|
|
|
15,150
|
|
NGL (Bbls)
|
|
25,081
|
|
|
31,275
|
|
|
25,379
|
|
|
28,697
|
|
Total Equivalent
(BOE)
|
|
85,282
|
|
|
103,432
|
|
|
87,348
|
|
|
95,307
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
732.6
|
|
|
621.9
|
|
|
689.2
|
|
|
563.9
|
|
Oil (Bbls)
|
|
92,048
|
|
|
79,904
|
|
|
86,200
|
|
|
67,699
|
|
NGL (Bbls)
|
|
78,557
|
|
|
67,706
|
|
|
77,408
|
|
|
60,258
|
|
Total Equivalent
(BOE)
|
|
292,709
|
|
|
251,254
|
|
|
278,480
|
|
|
221,946
|
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
0.83
|
|
|
1.44
|
|
|
0.49
|
|
|
1.69
|
|
Oil ($ per
Bbl)
|
|
54.78
|
|
|
47.17
|
|
|
52.55
|
|
|
54.95
|
|
NGL ($ per
Bbl)
|
|
13.23
|
|
|
20.13
|
|
|
12.62
|
|
|
22.84
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.76
|
|
|
2.82
|
|
|
1.95
|
|
|
2.23
|
|
Oil ($ per
Bbl)
|
|
54.91
|
|
|
56.48
|
|
|
53.89
|
|
|
62.31
|
|
NGL ($ per
Bbl)
|
|
16.04
|
|
|
21.38
|
|
|
15.47
|
|
|
21.67
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.19
|
|
|
2.16
|
|
|
1.11
|
|
|
1.99
|
|
Oil ($ per
Bbl)
|
|
54.80
|
|
|
49.30
|
|
|
52.77
|
|
|
56.61
|
|
NGL ($ per
Bbl)
|
|
14.13
|
|
|
20.71
|
|
|
13.55
|
|
|
22.28
|
|
Other
The following table summarizes Cimarex's current
hedge positions:
|
|
1Q20
|
|
2Q20
|
|
3Q20
|
|
4Q20
|
|
1Q21
|
|
2Q21
|
Gas
Collars:
|
PEPL(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
90,000
|
|
|
60,000
|
|
|
30,000
|
|
|
30,000
|
|
|
10,000
|
|
|
—
|
|
|
Wtd Avg
Floor
|
$
|
1.92
|
|
|
$
|
1.90
|
|
|
$
|
1.85
|
|
|
$
|
1.85
|
|
|
$
|
1.85
|
|
|
$
|
—
|
|
|
Wtd Avg
Ceiling
|
$
|
2.36
|
|
|
$
|
2.28
|
|
|
$
|
2.31
|
|
|
$
|
2.31
|
|
|
$
|
2.31
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso
Perm(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
40,000
|
|
|
30,000
|
|
|
20,000
|
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
Wtd Avg
Floor
|
$
|
1.40
|
|
|
$
|
1.40
|
|
|
$
|
1.35
|
|
|
$
|
1.35
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Wtd Avg
Ceiling
|
$
|
1.79
|
|
|
$
|
1.82
|
|
|
$
|
1.66
|
|
|
$
|
1.66
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waha (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
50,000
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Wtd Avg
Floor
|
$
|
1.50
|
|
|
$
|
1.57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Wtd Avg
Ceiling
|
$
|
1.87
|
|
|
$
|
1.97
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
Collars:
|
WTI(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
39,000
|
|
|
31,000
|
|
|
23,000
|
|
|
23,000
|
|
|
15,000
|
|
|
5,000
|
|
|
Wtd Avg
Floor
|
$
|
52.40
|
|
|
$
|
50.43
|
|
|
$
|
49.80
|
|
|
$
|
49.80
|
|
|
$
|
49.70
|
|
|
$
|
50.00
|
|
|
Wtd Avg
Ceiling
|
$
|
64.48
|
|
|
$
|
61.55
|
|
|
$
|
60.59
|
|
|
$
|
60.59
|
|
|
$
|
59.41
|
|
|
$
|
60.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Basis
Swaps:
|
WTI
Midland(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
32,297
|
|
|
26,000
|
|
|
19,000
|
|
|
19,000
|
|
|
11,000
|
|
|
5,000
|
|
|
Weighted Avg
Differential
|
$
|
0.33
|
|
|
$
|
0.44
|
|
|
$
|
0.75
|
|
|
$
|
0.75
|
|
|
$
|
0.77
|
|
|
$
|
1.02
|
|
Conference call and webcast
Cimarex will host a
conference call tomorrow, February
20, at 11:00 a.m. EST
(9:00 a.m. MST) to discuss its fourth
quarter and 2019 financial and operating results as well as
management's outlook for 2020. 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
2019 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.
Forward-Looking Statements
This press release
contains forward-looking statements, including statements regarding
projected results and future events. These forward-looking
statements are based on management's judgment as of the date of
this press release and include certain risks and uncertainties.
Please refer to the company's Annual Report on Form 10-K for the
year ended December 31, 2018, filed with the SEC, and other
filings including our Current Reports on Form 8-K and Quarterly
Reports on Form 10-Q, for a description 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; our ability to
successfully integrate the March 2019
acquisition of Resolute Energy Corporation; 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,
adjusted cash flow from operations and free cash flow 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 (loss) income as reported under
generally accepted accounting principles (GAAP) to adjusted net
income (non-GAAP) for the periods indicated.
|
Three Months
Ended December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(384,091)
|
|
|
$
|
316,182
|
|
|
$
|
(124,619)
|
|
|
$
|
791,851
|
|
Impairment of oil and
gas properties (1)
|
618,693
|
|
|
—
|
|
|
618,693
|
|
|
—
|
|
Mark-to-market loss
(gain) on open derivative positions
|
28,888
|
|
|
(161,516)
|
|
|
63,719
|
|
|
(110,388)
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
4,250
|
|
|
—
|
|
Acquisition related
costs
|
—
|
|
|
3,007
|
|
|
8,404
|
|
|
3,007
|
|
Tax impact
|
(143,115)
|
|
|
34,397
|
|
|
(121,637)
|
|
|
24,268
|
|
Adjusted net
income
|
$
|
120,375
|
|
|
$
|
192,070
|
|
|
$
|
448,810
|
|
|
$
|
708,738
|
|
Diluted earnings
(loss) per share
|
$
|
(3.87)
|
|
|
$
|
3.32
|
|
|
$
|
(1.33)
|
|
|
$
|
8.32
|
|
Adjusted diluted
earnings per share*
|
$
|
1.18
|
|
|
$
|
2.01
|
|
|
$
|
4.46
|
|
|
$
|
7.42
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
Adjusted
diluted**
|
101,903
|
|
|
95,675
|
|
|
100,679
|
|
|
95,523
|
|
|
|
(1)
|
Cimarex reported an
impairment of oil and gas properties of $108.9 million in the
third quarter 2019; however, no impairment should have been
recorded in the third quarter. As such, that impairment was
reversed and is now included in the impairment of oil and gas
properties of $618.7 million recorded in the fourth quarter
2019.
|
|
|
|
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, FREE CASH FLOW AND
FREE CASH FLOW AFTER
DIVIDEND
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) , free cash flow (non-GAAP) and free cash flow after
dividend (non-GAAP) for the periods indicated.
|
Three Months
Ended December 31,
|
|
Twelve Months
Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
|
359,809
|
|
|
$
|
393,181
|
|
|
$
|
1,343,966
|
|
|
$
|
1,550,994
|
|
Change in operating
assets and liabilities
|
56,178
|
|
|
34,971
|
|
|
120,174
|
|
|
(17,415)
|
|
|
|
|
|
|
|
|
|
Adjusted cash flow
from operations
|
$
|
415,987
|
|
|
$
|
428,152
|
|
|
$
|
1,464,140
|
|
|
$
|
1,533,579
|
|
|
|
|
|
|
|
|
|
Oil and gas
expenditures
|
$
|
(249,417)
|
|
|
$
|
(415,099)
|
|
|
$
|
(1,249,797)
|
|
|
$
|
(1,566,583)
|
|
Other capital
expenditures
|
(14,658)
|
|
|
(28,422)
|
|
|
(73,693)
|
|
|
(103,459)
|
|
Free cash
flow
|
151,912
|
|
|
(15,369)
|
|
|
140,650
|
|
|
(136,463)
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
(21,579)
|
|
|
(17,205)
|
|
|
(81,709)
|
|
|
(55,243)
|
|
Free cash flow after
dividend
|
$
|
130,333
|
|
|
$
|
(32,574)
|
|
|
$
|
58,941
|
|
|
$
|
(191,706)
|
|
Management uses the non-GAAP financial measures of adjusted cash
flow from operations, free cash flow and free cash flow aver
dividend as 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 these non-GAAP financial measures provide useful
information to investors for the same reason, and that they are
also used by professional research analysts in providing investment
recommendations pertaining to companies in the oil and gas
exploration and production industry.
PROVED RESERVES
|
Gas (MMcf)
|
|
Oil (MBbls)
|
|
NGL (MBbls)
|
|
Total
(MBOE)
|
December 31,
2018
|
1,591,321
|
|
|
146,538
|
|
|
179,436
|
|
|
591,195
|
|
Revisions of previous
estimates
|
(180,632)
|
|
|
(8,516)
|
|
|
(12,038)
|
|
|
(50,661)
|
|
Extensions and
discoveries
|
247,406
|
|
|
41,193
|
|
|
36,834
|
|
|
119,261
|
|
Purchases of
reserves
|
129,435
|
|
|
22,628
|
|
|
18,818
|
|
|
63,019
|
|
Production
|
(251,567)
|
|
|
(31,463)
|
|
|
(28,254)
|
|
|
(101,645)
|
|
Sales of
reserves
|
(3,818)
|
|
|
(610)
|
|
|
(328)
|
|
|
(1,574)
|
|
December 31,
2019
|
1,532,145
|
|
|
169,770
|
|
|
194,468
|
|
|
619,595
|
|
|
|
|
|
|
|
|
|
Proved developed
reserves:
|
|
|
|
|
|
|
|
December 31,
2018
|
1,398,729
|
|
|
116,339
|
|
|
151,566
|
|
|
501,027
|
|
December 31,
2019
|
1,358,329
|
|
|
138,783
|
|
|
166,552
|
|
|
531,722
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
%
Change
|
|
|
Standardized Measure
($ in millions)
|
3,629
|
|
|
4,015
|
|
|
(10)
|
%
|
|
|
Pre-tax PV-10 ($ in
millions) *
|
3,948
|
|
|
4,739
|
|
|
(17)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices used
in Standardized Measure
|
2019
|
|
2018
|
|
%
Change
|
|
|
Gas ($ per
Mcf)
|
2.58
|
|
|
3.10
|
|
|
(17)
|
%
|
|
|
Oil ($ per
Bbl)
|
55.67
|
|
|
65.56
|
|
|
(15)
|
%
|
|
|
NGL ($ per
Bbl)
|
13.27
|
|
|
21.03
|
|
|
(37)
|
%
|
|
|
* Pre-tax PV-10 is a non-GAAP financial measure. Pre-tax PV-10
is comparable to the standardized measure, which is the most
directly comparable GAAP financial measure. Pre-tax PV-10 is
computed on the same basis as the standardized measure but without
deducting future income taxes. As of December 31, 2019 and 2018, Cimarex's discounted
future income taxes were $319.4
million and $724.0 million,
respectively. Cimarex's standardized measure of discounted future
net cash flows was $3,629.0 million
at year-end 2019 and $4,015.2 million
at year-end 2018. Management uses pre-tax PV-10 as one measure of
the value of the company's proved reserves and to compare relative
values of proved reserves to other exploration and production
companies without regard to income taxes. Management believes
pre-tax PV-10 is a useful measure for comparison of proved reserve
values among companies because, unlike standardized measure, it
excludes future income taxes that often depend on the unique income
tax characteristics of the owner of the reserves rather than on the
nature, location and quality of the reserves themselves. Management
further believes that professional research analysts and rating
agencies use pre-tax PV-10 in similar ways. However, pre-tax PV-10
is not a substitute for the standardized measure of discounted
future net cash flows. Cimarex's pre-tax PV-10 and the standardized
measure of discounted future net cash flows do not purport to
present the fair value of its oil and natural gas reserves.
PROVED RESERVES BY REGION
|
Gas
(MMcf)
|
|
Oil
(MBbls)
|
|
NGL
(MBbls)
|
|
Total
(MBOE)
|
Permian
Basin
|
870,208
|
|
|
147,662
|
|
|
130,007
|
|
|
422,703
|
|
Mid-Continent
|
660,161
|
|
|
21,848
|
|
|
64,377
|
|
|
196,252
|
|
Other
|
1,776
|
|
|
260
|
|
|
84
|
|
|
640
|
|
|
1,532,145
|
|
|
169,770
|
|
|
194,468
|
|
|
619,595
|
|
OIL AND GAS
CAPITALIZED EXPENDITURES
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in
thousands)
|
Acquisitions:
|
|
|
|
|
|
|
|
Proved
|
$
|
(723)
|
|
|
$
|
—
|
|
|
$
|
695,450
|
|
|
$
|
62
|
|
Unproved
|
3,908
|
|
|
13,965
|
|
|
1,025,376
|
|
|
26,216
|
|
|
3,185
|
|
|
13,965
|
|
|
1,720,826
|
|
|
26,278
|
|
|
|
|
|
|
|
|
|
Exploration and
development:
|
|
|
|
|
|
|
|
Land and
seismic
|
17,719
|
|
|
6,764
|
|
|
60,175
|
|
|
82,791
|
|
Exploration and
development
|
234,603
|
|
|
373,555
|
|
|
1,181,605
|
|
|
1,487,453
|
|
|
252,322
|
|
|
380,319
|
|
|
1,241,780
|
|
|
1,570,244
|
|
|
|
|
|
|
|
|
|
Property sales
including purchase price adjustments
|
1,829
|
|
|
(7,285)
|
|
|
(35,320)
|
|
|
(581,799)
|
|
|
$
|
257,336
|
|
|
$
|
386,999
|
|
|
$
|
2,927,286
|
|
|
$
|
1,014,723
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(in thousands, except
per share information)
|
Revenues:
|
|
|
|
|
|
|
|
|
Oil sales
|
|
$
|
464,044
|
|
|
$
|
362,411
|
|
|
$
|
1,660,210
|
|
|
$
|
1,398,813
|
|
Gas and NGL
sales
|
|
182,269
|
|
|
252,825
|
|
|
661,711
|
|
|
898,832
|
|
Gas gathering and
other
|
|
10,931
|
|
|
8,885
|
|
|
41,048
|
|
|
41,372
|
|
|
|
657,244
|
|
|
624,121
|
|
|
2,362,969
|
|
|
2,339,017
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Impairment of oil and
gas properties
|
|
618,693
|
|
|
—
|
|
|
618,693
|
|
|
—
|
|
Depreciation,
depletion, amortization, and accretion
|
|
252,637
|
|
|
180,060
|
|
|
890,759
|
|
|
597,615
|
|
Production
|
|
82,722
|
|
|
67,271
|
|
|
339,941
|
|
|
296,189
|
|
Transportation,
processing, and other operating
|
|
64,780
|
|
|
55,535
|
|
|
238,259
|
|
|
211,463
|
|
Gas gathering and
other
|
|
6,279
|
|
|
9,738
|
|
|
23,294
|
|
|
28,327
|
|
Taxes other than
income
|
|
43,353
|
|
|
38,620
|
|
|
148,953
|
|
|
125,169
|
|
General and
administrative
|
|
26,349
|
|
|
13,635
|
|
|
95,843
|
|
|
77,843
|
|
Stock
compensation
|
|
6,394
|
|
|
6,633
|
|
|
26,398
|
|
|
22,895
|
|
Loss (gain) on
derivative instruments, net
|
|
40,901
|
|
|
(157,505)
|
|
|
76,850
|
|
|
(85,959)
|
|
Other operating
expense, net
|
|
248
|
|
|
3,037
|
|
|
19,305
|
|
|
18,507
|
|
|
|
1,142,356
|
|
|
217,024
|
|
|
2,478,295
|
|
|
1,292,049
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
|
(485,112)
|
|
|
407,097
|
|
|
(115,326)
|
|
|
1,046,968
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
23,721
|
|
|
17,387
|
|
|
93,386
|
|
|
68,224
|
|
Capitalized
interest
|
|
(14,421)
|
|
|
(5,738)
|
|
|
(56,232)
|
|
|
(20,855)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
4,250
|
|
|
—
|
|
Other, net
|
|
(1,193)
|
|
|
(8,192)
|
|
|
(5,741)
|
|
|
(22,908)
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income tax
|
|
(493,219)
|
|
|
403,640
|
|
|
(150,989)
|
|
|
1,022,507
|
|
Income tax (benefit)
expense
|
|
(109,128)
|
|
|
87,458
|
|
|
(26,370)
|
|
|
230,656
|
|
Net (loss)
income
|
|
$
|
(384,091)
|
|
|
$
|
316,182
|
|
|
$
|
(124,619)
|
|
|
$
|
791,851
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share to common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(3.87)
|
|
|
$
|
3.32
|
|
|
$
|
(1.33)
|
|
|
$
|
8.32
|
|
Diluted
|
|
$
|
(3.87)
|
|
|
$
|
3.32
|
|
|
$
|
(1.33)
|
|
|
$
|
8.32
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
|
$
|
0.80
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
99,789
|
|
|
93,897
|
|
|
98,789
|
|
|
93,793
|
|
Diluted
|
|
99,789
|
|
|
93,915
|
|
|
98,789
|
|
|
93,820
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(384,091)
|
|
|
$
|
316,182
|
|
|
$
|
(124,619)
|
|
|
$
|
791,851
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
Change in fair value
of investments, net of tax
|
|
(10)
|
|
|
(1,985)
|
|
|
(755)
|
|
|
(1,444)
|
|
Total comprehensive
income (loss)
|
|
$
|
(384,101)
|
|
|
$
|
314,197
|
|
|
$
|
(125,374)
|
|
|
$
|
790,407
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED CASH FLOW STATEMENTS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(in
thousands)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(384,091)
|
|
|
$
|
316,182
|
|
|
$
|
(124,619)
|
|
|
$
|
791,851
|
|
Adjustments to
reconcile net (loss) income to net cash
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
Impairment of oil and
gas properties
|
|
618,693
|
|
|
—
|
|
|
618,693
|
|
|
—
|
|
Depreciation,
depletion, amortization, and accretion
|
|
252,637
|
|
|
180,060
|
|
|
890,759
|
|
|
597,615
|
|
Deferred income
taxes
|
|
(109,660)
|
|
|
90,465
|
|
|
(26,902)
|
|
|
233,280
|
|
Stock
compensation
|
|
6,394
|
|
|
6,633
|
|
|
26,398
|
|
|
22,895
|
|
Loss (gain) on
derivative instruments, net
|
|
40,901
|
|
|
(157,505)
|
|
|
76,850
|
|
|
(85,959)
|
|
Settlements on
derivative instruments
|
|
(12,013)
|
|
|
(4,011)
|
|
|
(13,131)
|
|
|
(24,429)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
4,250
|
|
|
—
|
|
Changes in
non-current assets and liabilities
|
|
(167)
|
|
|
(535)
|
|
|
(2,797)
|
|
|
(1,779)
|
|
Other, net
|
|
3,293
|
|
|
(3,137)
|
|
|
14,639
|
|
|
105
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(15,055)
|
|
|
17,193
|
|
|
65,128
|
|
|
5,421
|
|
Other current
assets
|
|
(2,879)
|
|
|
(6,378)
|
|
|
(739)
|
|
|
(1,957)
|
|
Accounts payable and
other current liabilities
|
|
(38,244)
|
|
|
(45,786)
|
|
|
(184,563)
|
|
|
13,951
|
|
Net cash provided by
operating activities
|
|
359,809
|
|
|
393,181
|
|
|
1,343,966
|
|
|
1,550,994
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Oil and gas capital
expenditures
|
|
(249,417)
|
|
|
(415,099)
|
|
|
(1,249,797)
|
|
|
(1,566,583)
|
|
Acquisition of
Resolute Energy, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(284,441)
|
|
|
—
|
|
Sales of oil and gas
assets
|
|
398
|
|
|
7,285
|
|
|
28,945
|
|
|
580,652
|
|
Sales of other
assets
|
|
245
|
|
|
2,782
|
|
|
1,104
|
|
|
3,772
|
|
Other capital
expenditures
|
|
(14,658)
|
|
|
(28,422)
|
|
|
(73,693)
|
|
|
(103,459)
|
|
Net cash used by
investing activities
|
|
(263,432)
|
|
|
(433,454)
|
|
|
(1,577,882)
|
|
|
(1,085,618)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
|
380,000
|
|
|
—
|
|
|
2,619,310
|
|
|
—
|
|
Repayments of
long-term debt
|
|
(380,000)
|
|
|
—
|
|
|
(2,990,000)
|
|
|
—
|
|
Financing,
underwriting, and debt redemption fees
|
|
—
|
|
|
(100)
|
|
|
(11,798)
|
|
|
(100)
|
|
Finance lease
payments
|
|
(1,138)
|
|
|
—
|
|
|
(3,869)
|
|
|
—
|
|
Dividends
paid
|
|
(21,579)
|
|
|
(17,205)
|
|
|
(81,709)
|
|
|
(55,243)
|
|
Employee withholding
taxes paid upon the net settlement of equity-classified stock
awards
|
|
(2,823)
|
|
|
(5,732)
|
|
|
(5,229)
|
|
|
(12,142)
|
|
Proceeds from
exercise of stock options
|
|
—
|
|
|
30
|
|
|
1,267
|
|
|
2,241
|
|
Net cash used by
financing activities
|
|
(25,540)
|
|
|
(23,007)
|
|
|
(472,028)
|
|
|
(65,244)
|
|
Net change in cash
and cash equivalents
|
|
70,837
|
|
|
(63,280)
|
|
|
(705,944)
|
|
|
400,132
|
|
Cash and cash
equivalents at beginning of period
|
|
23,885
|
|
|
863,946
|
|
|
800,666
|
|
|
400,534
|
|
Cash and cash
equivalents at end of period
|
|
$
|
94,722
|
|
|
$
|
800,666
|
|
|
$
|
94,722
|
|
|
$
|
800,666
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
Assets
|
|
(in thousands, except
share and per share information)
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
94,722
|
|
|
$
|
800,666
|
|
Accounts receivable,
net of allowance
|
|
448,584
|
|
|
454,200
|
|
Oil and gas well
equipment and supplies
|
|
47,893
|
|
|
55,553
|
|
Derivative
instruments
|
|
17,944
|
|
|
101,939
|
|
Other current
assets
|
|
12,343
|
|
|
11,781
|
|
Total current
assets
|
|
621,486
|
|
|
1,424,139
|
|
Oil and gas
properties at cost, using the full cost method of
accounting:
|
|
|
|
|
Proved
properties
|
|
20,678,334
|
|
|
18,566,757
|
|
Unproved properties
and properties under development, not being amortized
|
|
1,255,908
|
|
|
436,325
|
|
|
|
21,934,242
|
|
|
19,003,082
|
|
Less – accumulated
depreciation, depletion, amortization, and impairment
|
|
(16,723,544)
|
|
|
(15,287,752)
|
|
Net oil and gas
properties
|
|
5,210,698
|
|
|
3,715,330
|
|
Fixed assets, net of
accumulated depreciation of $389,458 and $324,631,
respectively
|
|
519,291
|
|
|
257,686
|
|
Goodwill
|
|
716,865
|
|
|
620,232
|
|
Derivative
instruments
|
|
580
|
|
|
9,246
|
|
Other
assets
|
|
71,109
|
|
|
35,451
|
|
|
|
$
|
7,140,029
|
|
|
$
|
6,062,084
|
|
Liabilities,
Redeemable Preferred Stock, and Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
49,020
|
|
|
$
|
106,814
|
|
Accrued
liabilities
|
|
418,978
|
|
|
379,455
|
|
Derivative
instruments
|
|
16,681
|
|
|
27,627
|
|
Revenue
payable
|
|
207,939
|
|
|
194,811
|
|
Operating
leases
|
|
66,003
|
|
|
—
|
|
Total current
liabilities
|
|
758,621
|
|
|
708,707
|
|
Long-term
debt:
|
|
|
|
|
Principal
|
|
2,000,000
|
|
|
1,500,000
|
|
Less – unamortized
debt issuance costs and discounts
|
|
(14,754)
|
|
|
(11,446)
|
|
Long-term debt,
net
|
|
1,985,246
|
|
|
1,488,554
|
|
Deferred income
taxes
|
|
338,424
|
|
|
334,473
|
|
Derivative
instruments
|
|
1,018
|
|
|
2,267
|
|
Operating
leases
|
|
184,172
|
|
|
—
|
|
Other
liabilities
|
|
214,787
|
|
|
198,297
|
|
Total
liabilities
|
|
3,482,268
|
|
|
2,732,298
|
|
Redeemable preferred
stock - 8.125% Series A Cumulative Perpetual Convertible Preferred
Stock, $0.01 par value, 62,500 shares authorized and issued and no
shares authorized and issued, respectively
|
|
81,620
|
|
|
—
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value, 200,000,000 shares authorized, 102,144,577 and
95,755,797 shares issued, respectively
|
|
1,021
|
|
|
958
|
|
Additional paid-in
capital
|
|
3,243,325
|
|
|
2,785,188
|
|
Retained
earnings
|
|
331,795
|
|
|
542,885
|
|
Accumulated other
comprehensive income
|
|
—
|
|
|
755
|
|
Total stockholders'
equity
|
|
3,576,141
|
|
|
3,329,786
|
|
|
|
$
|
7,140,029
|
|
|
$
|
6,062,084
|
|
View original
content:http://www.prnewswire.com/news-releases/cimarex-reports-fourth-quarter-and-full-year-2019-results-301007860.html
SOURCE Cimarex Energy Co.