DENVER, April 15, 2020 /PRNewswire/ -- Cimarex
Energy Co. (NYSE: XEC) today announced that, due to the continued
weakness in oil prices, it now expects a 55-60 percent reduction in
its 2020 capital investment program from its original guidance of
$1.25-$1.35
billion.
The company has deferred completion activities and will drop all
but one drilling rig in early May.
Cimarex Chairman, President and CEO, Tom
Jorden, said, "The pressure on oil prices resulting from the
sudden and severe drop in demand, has caused us to defer activity
in the Delaware Basin, further
reducing our capital investment in 2020. Cimarex retains the
flexibility to adjust our investment in the second half of 2020 as
conditions change. Our balance sheet continues to be our
focus and allows us to maintain a long-term perspective during this
unprecedented time."
Cimarex also announced that is has curtailed approximately 30
percent of its volumes for the month of May due to weakness in
realized prices.
The company plans to provide a more detailed update as part of
its first quarter earnings release on May
6th.
Current Hedge Position
Oil
Hedges
|
2Q20
|
3Q20
|
4Q20
|
1Q21
|
2Q21
|
3Q21
|
4Q21
|
WTI Oil
Collars1
|
|
|
|
|
|
|
|
Volumes
(Bbl/d)
|
34,341
|
41,000
|
41,000
|
33,000
|
23,000
|
14,000
|
14,000
|
Weighted
Average Floor
|
48.29
|
40.91
|
40.91
|
38.71
|
34.00
|
29.71
|
29.71
|
Weighted
Average Ceiling
|
58.96
|
49.84
|
49.84
|
46.70
|
41.33
|
36.86
|
36.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI Oil Basis
Swaps2
|
|
|
|
|
|
|
|
Volumes
(Bbl/d)
|
27,648
|
32,000
|
32,000
|
24,000
|
18,000
|
13,000
|
13,000
|
Weighted
Average Differential3
|
0.38
|
0.18
|
0.18
|
0.00
|
(0.19)
|
(0.65)
|
(0.65)
|
|
|
|
|
|
|
|
|
Gas
Hedges
|
2Q20
|
3Q20
|
4Q20
|
1Q21
|
2Q21
|
3Q21
|
4Q21
|
PEPL Gas
Collars4
|
|
|
|
|
|
|
|
Volumes
(MMBtu/d)
|
63,297
|
80,000
|
80,000
|
60,000
|
50,000
|
30,000
|
30,000
|
Weighted
Average Floor
|
1.89
|
1.75
|
1.75
|
1.72
|
1.69
|
1.73
|
1.73
|
Weighted
Average Ceiling
|
2.28
|
2.17
|
2.17
|
2.12
|
2.08
|
2.14
|
2.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso Perm Gas
Collars5
|
|
|
|
|
|
|
|
Volumes
(MMBtu/d)
|
33,297
|
70,000
|
70,000
|
50,000
|
50,000
|
30,000
|
30,000
|
Weighted
Average Floor
|
1.41
|
1.36
|
1.36
|
1.36
|
1.36
|
1.51
|
1.51
|
Weighted
Average Ceiling
|
1.82
|
1.64
|
1.64
|
1.63
|
1.63
|
1.80
|
1.80
|
|
|
|
|
|
|
|
|
Waha Gas
Collars6
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
33,297
|
50,000
|
50,000
|
50,000
|
50,000
|
30,000
|
30,000
|
Weighted
Average Floor
|
1.56
|
1.32
|
1.32
|
1.32
|
1.32
|
1.50
|
1.50
|
Weighted
Average Ceiling
|
1.95
|
1.58
|
1.58
|
1.58
|
1.58
|
1.75
|
1.75
|
|
1WTI
refers to West Texas Intermediate oil prices as quoted on the New
York Mercantile Exchange
|
2Index
price on basis swaps is WTI Midland as quoted by Argus Americas
Crude
|
3Index
price on basis swaps is WTI NYMEX less weighted average
differential shown in table
|
4PEPL
refers to Panhandle Eastern Pipe Line Tex/OK Mid-Continent as
quoted on Platt's Inside FERC
|
5El Paso
Perm refers to El Paso Permian Basin index as quoted on Platt's
Inside FERC
|
6Waha
refers to West Texas Natural Gas Index ("Waha") as quoted in
Platt's Inside FERC
|
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.
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,
2019, 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, including those resulting
from demand destruction from the COVID-19 pandemic; disruptions to
the availability of workers and contractors due to illness and stay
at home orders related to the COVID-19 pandemic; disruptions to
gathering, pipeline, refining, transportation and other midstream
and downstream activities due to the COVID-19 pandemic; disruptions
to supply chains and availability of critical equipment and
supplies due to the COVID-19 pandemic; the effectiveness of
controls over financial reporting; declines in the values of our
oil and gas properties resulting in impairments; impairments of
goodwill; 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 concentration of operations
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; 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;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.
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SOURCE Cimarex Energy Co.