DENVER, May 6, 2020 /PRNewswire/ --
- Q1 Oil production averaged 89.8 MBbls/d
- Invested $274 million in the
first quarter
Cimarex Energy Co. (NYSE: XEC) today reported a first quarter
2020 net loss of $774.3 million, or
$7.77 per share, compared to net
income of $26.3 million, or
$0.26 per share, in the same period a
year ago. First quarter results were negatively impacted by
non-cash charges related to the impairment of oil and gas
properties and the impairment of goodwill. First quarter
adjusted net income (non-GAAP) was $59.7
million, or $0.58 per share,
compared to first quarter 2019 adjusted net income (non-GAAP) of
$117.3 million, or $1.20 per share1. Net cash
provided by operating activities was $308.8
million in the first quarter of 2020 compared to
$250.1 million in the same period a
year ago. Adjusted cash flow from operations (non-GAAP) was
$306.4 million in the first quarter
of 2020 compared to $351.1 million in
the first quarter a year ago1.
Oil production averaged 89.8 thousand barrels (MBbls) per day,
up 13 percent from the same period a year ago and down two percent
sequentially. Total company production volumes for the
quarter averaged 276.6 thousand barrels of oil equivalent (MBOE)
per day.
Realized product prices were down in the first quarter compared
to the same quarter a year ago. Realized oil prices averaged
$44.18 per barrel, down 10 percent
from the $48.87 per barrel received
in the first quarter of 2019. Realized natural gas prices
averaged $0.55 per thousand cubic
feet (Mcf), down 71 percent from the first quarter 2019 average of
$1.91 per Mcf. NGL prices
averaged $9.84 per barrel, down 40
percent from the $16.44 per barrel
received in the first quarter of 2019.
Natural gas prices were negatively impacted by local price
differentials. Cimarex's average differential to Henry Hub on
its Permian natural gas production was $1.85 per Mcf in the first quarter of 2020
compared to $1.91 per Mcf in the
first quarter of 2019 and $1.67 in
the fourth quarter of 2019. In the Mid-Continent region, the
company's average differential to Henry Hub was $0.57 per Mcf versus $0.46 per Mcf in the first quarter of 2019 and
$0.74 in the fourth quarter of
2019. Our realized Permian oil differential to WTI Cushing
improved and averaged $2.00 per
barrel in the quarter, compared to $6.90 per barrel in the first quarter of 2019 and
$2.18 per barrel in the fourth
quarter of 2019.
Cimarex invested a total of $274
million during the first quarter, of which $214 million was attributable to drilling and
completion activities, $18 million to
saltwater disposal assets, and $9
million to midstream assets. First quarter investments
were funded with cash flow from operating activities. Total
debt at March 31, 2020 consisted of $2.0 billion of long-term notes, with no debt
maturities until 2024. Cimarex had no borrowings under its
revolving credit facility and a cash balance of $89 million at quarter end. Debt was
43 percent of total capitalization2.
Outlook
Cimarex has taken a number of steps to protect
employees in the wake of the COVID-19 pandemic including the
implementation of remote work for all office staff and the adoption
of COVID-19 protocols for field staff. In addition to the
health crisis, the pandemic has caused extreme weakness in oil
prices due to lower demand. Because of price uncertainty and
resultant production curtailments, Cimarex will forgo quarterly and
annual production guidance as well as guidance on per unit
operating costs. The company withdraws any previous guidance
on these measures.
Cimarex Chairman and CEO, Tom
Jorden, said, "Investors expect us to be good stewards of
capital. As stated in our April
15th press release, Cimarex's current outlook for capital
investment in 2020 is down 55-60% from original plans and expected
to be $500 - 600 million." The
table below shows a breakdown of the projected capital by
category:
Capital Investment
($MM)
|
|
Updated 2020E
Guidance
|
|
Drilling and
Completion (D&C)
|
|
$300 -
$400
|
|
Midstream/Saltwater
Disposal (SWD)
|
|
~ $40
|
|
Other*
|
|
~ $160
|
|
Total Capital
Investment
|
|
$500 -
$600
|
|
|
*Capitalized overhead, production, NPL,
and technology
|
Mr. Jorden continued, "The low end of our investment range
assumes deferring well completions for the remainder of the year
and limited drilling activity. Under this scenario, we
estimate Cimarex will have 47 net wells in progress as we enter
2021. Should conditions warrant, we are prepared to complete
additional wells in 2020."
"Our top priorities continue to be the health and safety of our
employees, commitment to our balance sheet, and returning capital
to shareholders through our dividend. At current prices, with
the benefit of our hedge position, Cimarex will generate free cash
in 2020. Our immediate actions were and will continue to be
focused on the things we can control to protect our company during
these unprecedented times. In addition to deferring
completions and the slowdown in drilling activity, and with final
nominations in, we have curtailed approximately 20 percent of our
May oil production. Curtailments will continue should
commodity prices remain depressed."
"Another top priority at Cimarex is environmental stewardship
including, but not limited to, the reduction of methane emissions
and reducing flaring intensity. These measures are now part
of the formula used for determining executive compensation."
He went on to say, "We continue to focus on cost control.
We recently initiated an Early Retirement Incentive Plan which will
result in a ten percent reduction to our staff and ultimately save
$25 million on an annual basis when
completed. We will continue to reduce costs through the
redeployment of our workforce, including replacing field contract
labor with company employees. In addition, we have lowered
executive salaries and the cash retainer fees paid to our board of
directors--a provisionary action in the event the situation
improves."
Cimarex previously announced the retirement of Joe Albi, executive vice president and chief
operating officer, from the company and as a member of the Board of
Directors effective July 1,
2020. At the board's request, in order to have ongoing access
to his deep knowledge of the industry and of Cimarex operations,
Mr. Albi has agreed to serve out the remainder of his board term,
which expires May 2021. At that time, he will not stand for
nomination and will retire from the board.
Operations Update
Cimarex invested $274 million during the first quarter, 93 percent
in the Permian Basin and 7 percent in the Mid-Continent.
Cimarex brought 54 gross (20 net) wells on production during the
quarter. At March 31, 98 gross
(35 net) wells were waiting on completion. Cimarex is
currently running two drilling rigs (dropping to one by
mid-May).
WELLS BROUGHT ON
PRODUCTION BY REGION
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Gross
wells
|
|
|
|
|
Permian
Basin
|
|
35
|
|
|
12
|
|
Mid-Continent
|
|
19
|
|
|
26
|
|
|
|
54
|
|
|
38
|
|
Net
wells
|
|
|
|
|
Permian
Basin
|
|
20
|
|
|
5
|
|
Mid-Continent
|
|
—
|
|
|
3
|
|
|
|
20
|
|
|
8
|
|
Permian Region
Production from the Permian region
averaged 203.4 MBOE per day in the first quarter, a 21 percent
increase from first quarter 2019. Oil volumes averaged 79.6
MBbls per day, a 23 percent increase from first quarter 2019 and up
two percent sequentially.
Cimarex brought 35 gross (20 net) wells on production in the
Permian region during the first quarter. There were 51 gross
(33 net) wells waiting on completion at March 31. Cimarex
currently operates two drilling rigs (dropping to one by mid-May)
but no completion crews in the region.
Mid-Continent Region
Production from the Mid-Continent
averaged 72.7 MBOE per day for the first quarter, down 20 percent
from first quarter 2019 and down 15 percent sequentially.
During the first quarter, Cimarex brought 19 gross (0 net) wells
on production in the Mid-Continent region. At the end of the
quarter, 47 gross (2 net) wells were waiting on completion.
Cimarex does not currently operate drilling rigs or completion
crews in the Mid-Continent.
Cimarex's average daily production and commodity price by region
is summarized below:
DAILY PRODUCTION
BY REGION
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
Gas (MMcf)
|
|
449.0
|
|
|
340.6
|
|
Oil (Bbls)
|
|
79,606
|
|
|
64,969
|
|
NGL (Bbls)
|
|
48,932
|
|
|
46,273
|
|
Total Equivalent
(MBOE)
|
|
203.4
|
|
|
168.0
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
Gas (MMcf)
|
|
244.1
|
|
|
297.2
|
|
Oil (Bbls)
|
|
9,941
|
|
|
14,224
|
|
NGL (Bbls)
|
|
22,110
|
|
|
26,630
|
|
Total Equivalent
(MBOE)
|
|
72.7
|
|
|
90.4
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
Gas (MMcf)
|
|
694.3
|
|
|
639.1
|
|
Oil (Bbls)
|
|
89,791
|
|
|
79,415
|
|
NGL (Bbls)
|
|
71,099
|
|
|
72,956
|
|
Total Equivalent
(MBOE)
|
|
276.6
|
|
|
258.9
|
|
|
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
Gas ($ per
Mcf)
|
|
0.10
|
|
|
1.24
|
|
Oil ($ per
Bbl)
|
|
44.17
|
|
|
48.00
|
|
NGL ($ per
Bbl)
|
|
8.84
|
|
|
15.81
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.38
|
|
|
2.69
|
|
Oil ($ per
Bbl)
|
|
44.15
|
|
|
52.73
|
|
NGL ($ per
Bbl)
|
|
12.03
|
|
|
17.52
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
Gas ($ per
Mcf)
|
|
0.55
|
|
|
1.91
|
|
Oil ($ per
Bbl)
|
|
44.18
|
|
|
48.87
|
|
NGL ($ per
Bbl)
|
|
9.84
|
|
|
16.44
|
|
Other
Cimarex received cash settlements of
$11.7 million related to its gas
hedges during the quarter. Settlement of oil hedges resulted
in cash receipts of $31.4
million.
The following table summarizes the company's current open hedge
positions:
|
|
|
2Q20
|
|
3Q20
|
|
4Q20
|
|
1Q21
|
|
2Q21
|
|
3Q21
|
|
4Q21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
Collars:
|
PEPL (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
63,297
|
|
|
80,000
|
|
|
80,000
|
|
|
60,000
|
|
|
50,000
|
|
|
30,000
|
|
|
30,000
|
|
|
Wtd Avg
Floor
|
|
$
|
1.89
|
|
|
$
|
1.75
|
|
|
$
|
1.75
|
|
|
$
|
1.72
|
|
|
$
|
1.69
|
|
|
$
|
1.73
|
|
|
$
|
1.73
|
|
|
Wtd Avg
Ceiling
|
|
$
|
2.28
|
|
|
$
|
2.17
|
|
|
$
|
2.17
|
|
|
$
|
2.12
|
|
|
$
|
2.08
|
|
|
$
|
2.14
|
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso Perm
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
33,297
|
|
|
70,000
|
|
|
70,000
|
|
|
50,000
|
|
|
50,000
|
|
|
30,000
|
|
|
30,000
|
|
|
Wtd Avg
Floor
|
|
$
|
1.41
|
|
|
$
|
1.36
|
|
|
$
|
1.36
|
|
|
$
|
1.36
|
|
|
$
|
1.36
|
|
|
$
|
1.51
|
|
|
$
|
1.51
|
|
|
Wtd Avg
Ceiling
|
|
$
|
1.82
|
|
|
$
|
1.64
|
|
|
$
|
1.64
|
|
|
$
|
1.63
|
|
|
$
|
1.63
|
|
|
$
|
1.80
|
|
|
$
|
1.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waha (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
33,297
|
|
|
50,000
|
|
|
50,000
|
|
|
50,000
|
|
|
50,000
|
|
|
30,000
|
|
|
30,000
|
|
|
Wtd Avg
Floor
|
|
$
|
1.56
|
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
|
$
|
1.50
|
|
|
$
|
1.50
|
|
|
Wtd Avg
Ceiling
|
|
$
|
1.95
|
|
|
$
|
1.58
|
|
|
$
|
1.58
|
|
|
$
|
1.58
|
|
|
$
|
1.58
|
|
|
$
|
1.75
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
Collars:
|
WTI (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
34,341
|
|
|
41,000
|
|
|
41,000
|
|
|
33,000
|
|
|
23,000
|
|
|
14,000
|
|
|
14,000
|
|
|
Wtd Avg
Floor
|
|
$
|
48.29
|
|
|
$
|
40.91
|
|
|
$
|
40.91
|
|
|
$
|
38.71
|
|
|
$
|
34.00
|
|
|
$
|
29.71
|
|
|
$
|
29.71
|
|
|
Wtd Avg
Ceiling
|
|
$
|
58.96
|
|
|
$
|
49.84
|
|
|
$
|
49.84
|
|
|
$
|
46.70
|
|
|
$
|
41.33
|
|
|
$
|
36.86
|
|
|
$
|
36.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Basis
Swaps:
|
WTI Midland
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
27,648
|
|
|
32,000
|
|
|
32,000
|
|
|
24,000
|
|
|
18,000
|
|
|
13,000
|
|
|
13,000
|
|
|
Wtd Avg
Differential
|
|
$
|
0.38
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
—
|
|
|
$
|
(0.19)
|
|
|
$
|
(0.65)
|
|
|
$
|
(0.65)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Swaps:
|
WTI (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
4,692
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Wtd Avg
Fixed
|
|
$
|
20.73
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference call and webcast
Cimarex will host a
conference call tomorrow, May 7, at
11:00 a.m. EDT (9:00 a.m. MDT). 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
first quarter 2020 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 disclosures under the heading "Outlook" contain
projections for certain 2020 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, 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 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, 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.
______________________________________
|
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 the sum of (i) the
principal amount of senior notes and (ii) redeemable preferred
stock by the sum of (x) the principal amount of senior notes, (y)
redeemable preferred stock, and (z) total 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
March 31,
|
|
2020
|
|
2019
|
|
(in thousands, except
per share data)
|
|
|
|
|
Net (loss)
income
|
$
|
(774,282)
|
|
|
$
|
26,316
|
|
Impairment of oil and
gas properties (1)
|
333,651
|
|
|
—
|
|
Impairment of
goodwill
|
714,447
|
|
|
—
|
|
Mark-to-market (gain)
loss on open derivative positions
|
(183,826)
|
|
|
106,401
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
4,250
|
|
Acquisition related
costs
|
—
|
|
|
8,318
|
|
Asset retirement
obligation
|
2,800
|
|
|
—
|
|
Tax impact
(2)
|
(33,120)
|
|
|
(27,958)
|
|
Adjusted net
income
|
$
|
59,670
|
|
|
$
|
117,327
|
|
Diluted earnings per
share
|
$
|
(7.77)
|
|
|
$
|
0.26
|
|
Adjusted diluted
earnings per share*
|
$
|
0.58
|
|
|
$
|
1.20
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
Adjusted
diluted**
|
102,131
|
|
|
97,715
|
|
______________________________________
|
(1)
|
An additional ceiling
test impairment is anticipated in the second quarter.
|
|
|
(2)
|
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 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
March 31,
|
|
2020
|
|
2019
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
|
308,791
|
|
|
$
|
250,091
|
|
Change in operating
assets and liabilities
|
(2,370)
|
|
|
100,971
|
|
|
|
|
|
Adjusted cash flow
from operations
|
306,421
|
|
|
351,062
|
|
|
|
|
|
Oil and gas
expenditures
|
(266,070)
|
|
|
(332,742)
|
|
Other capital
expenditures
|
(26,425)
|
|
|
(17,828)
|
|
Free cash
flow
|
13,926
|
|
|
492
|
|
|
|
|
|
Dividends
paid
|
(21,593)
|
|
|
(17,179)
|
|
Free cash flow after
dividend
|
$
|
(7,667)
|
|
|
$
|
(16,687)
|
|
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.
OIL AND GAS
CAPITALIZED EXPENDITURES
|
|
|
|
Three Months
Ended
March 31,
|
|
2020
|
|
2019
|
|
(in
thousands)
|
Acquisitions:
|
|
|
|
Proved
|
$
|
7,250
|
|
|
$
|
692,600
|
|
Unproved
|
—
|
|
|
1,050,782
|
|
|
7,250
|
|
|
1,743,382
|
|
|
|
|
|
Exploration and
development:
|
|
|
|
Land and
seismic
|
13,924
|
|
|
9,527
|
|
Exploration and
development
|
234,728
|
|
|
358,491
|
|
|
248,652
|
|
|
368,018
|
|
|
|
|
|
Property
sales:
|
|
|
|
Proved
|
—
|
|
|
4,030
|
|
Unproved
|
(830)
|
|
|
(3,501)
|
|
|
(830)
|
|
|
529
|
|
|
|
|
|
|
$
|
255,072
|
|
|
$
|
2,111,929
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2020
|
|
2019
|
|
|
(in thousands, except
per
share information)
|
Revenues:
|
|
|
|
|
Oil sales
|
|
$
|
360,980
|
|
|
$
|
349,306
|
|
Gas and NGL
sales
|
|
98,481
|
|
|
217,915
|
|
Gas gathering and
other
|
|
13,369
|
|
|
9,736
|
|
|
|
472,830
|
|
|
576,957
|
|
Costs and
expenses:
|
|
|
|
|
Impairment of oil and
gas properties
|
|
333,651
|
|
|
—
|
|
Depreciation,
depletion, amortization, and accretion
|
|
219,810
|
|
|
192,466
|
|
Impairment of
goodwill
|
|
714,447
|
|
|
—
|
|
Production
|
|
87,236
|
|
|
78,404
|
|
Transportation,
processing, and other operating
|
|
54,922
|
|
|
59,575
|
|
Gas gathering and
other
|
|
8,298
|
|
|
5,182
|
|
Taxes other than
income
|
|
30,961
|
|
|
33,694
|
|
General and
administrative
|
|
25,509
|
|
|
29,084
|
|
Stock
compensation
|
|
6,394
|
|
|
6,713
|
|
(Gain) loss on
derivative instruments, net
|
|
(226,940)
|
|
|
115,452
|
|
Other operating
expense, net
|
|
251
|
|
|
8,326
|
|
|
|
1,254,539
|
|
|
528,896
|
|
|
|
|
|
|
Operating (loss)
income
|
|
(781,709)
|
|
|
48,061
|
|
|
|
|
|
|
Other (income) and
expense:
|
|
|
|
|
Interest
expense
|
|
23,181
|
|
|
20,405
|
|
Capitalized
interest
|
|
(13,182)
|
|
|
(8,742)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
4,250
|
|
Other, net
|
|
(871)
|
|
|
(2,241)
|
|
|
|
|
|
|
(Loss) income before
income tax
|
|
(790,837)
|
|
|
34,389
|
|
Income tax (benefit)
expense
|
|
(16,555)
|
|
|
8,073
|
|
Net (loss)
income
|
|
$
|
(774,282)
|
|
|
$
|
26,316
|
|
|
|
|
|
|
Earnings (loss) per
share to common stockholders:
|
|
|
|
|
Basic
|
|
$
|
(7.77)
|
|
|
$
|
0.26
|
|
Diluted
|
|
$
|
(7.77)
|
|
|
$
|
0.26
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.22
|
|
|
$
|
0.20
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
Basic
|
|
99,842
|
|
|
95,922
|
|
Diluted
|
|
99,842
|
|
|
95,932
|
|
|
|
|
|
|
Comprehensive (loss)
income:
|
|
|
|
|
Net (loss)
income
|
|
$
|
(774,282)
|
|
|
$
|
26,316
|
|
Other comprehensive
income:
|
|
|
|
|
Change in fair value
of investments, net of tax of $0 and $339, respectively
|
|
—
|
|
|
1,149
|
|
Total comprehensive
(loss) income
|
|
$
|
(774,282)
|
|
|
$
|
27,465
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2020
|
|
2019
|
|
|
(in
thousands)
|
Cash flows from
operating activities:
|
|
|
|
|
Net (loss)
income
|
|
$
|
(774,282)
|
|
|
$
|
26,316
|
|
Adjustments to
reconcile net (loss) income to net cash
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
Impairment of oil and
gas properties
|
|
333,651
|
|
|
—
|
|
Depreciation,
depletion, amortization, and accretion
|
|
219,810
|
|
|
192,466
|
|
Impairment of
goodwill
|
|
714,447
|
|
|
—
|
|
Deferred income
taxes
|
|
(16,357)
|
|
|
8,073
|
|
Stock
compensation
|
|
6,394
|
|
|
6,713
|
|
(Gain) loss on
derivative instruments, net
|
|
(226,940)
|
|
|
115,452
|
|
Settlements on
derivative instruments
|
|
43,114
|
|
|
(9,051)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
4,250
|
|
Amortization of debt
issuance costs and discounts
|
|
784
|
|
|
719
|
|
Changes in
non-current assets and liabilities
|
|
2,410
|
|
|
2,148
|
|
Other, net
|
|
3,390
|
|
|
3,976
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
119,605
|
|
|
33,976
|
|
Other current
assets
|
|
(24)
|
|
|
350
|
|
Accounts payable and
other current liabilities
|
|
(117,211)
|
|
|
(135,297)
|
|
Net cash provided by
operating activities
|
|
308,791
|
|
|
250,091
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisition of
Resolute Energy, net of cash acquired
|
|
—
|
|
|
(284,441)
|
|
Oil and gas capital
expenditures
|
|
(266,070)
|
|
|
(332,742)
|
|
Other capital
expenditures
|
|
(26,425)
|
|
|
(17,828)
|
|
Sales of oil and gas
assets
|
|
830
|
|
|
5,000
|
|
Sales of other
assets
|
|
181
|
|
|
200
|
|
Net cash used by
investing activities
|
|
(291,484)
|
|
|
(629,811)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Borrowings of
long-term debt
|
|
101,000
|
|
|
1,182,310
|
|
Repayments of
long-term debt
|
|
(101,000)
|
|
|
(1,553,000)
|
|
Financing,
underwriting, and debt redemption fees
|
|
(100)
|
|
|
(10,938)
|
|
Finance lease
payments
|
|
(1,465)
|
|
|
(635)
|
|
Dividends
paid
|
|
(21,593)
|
|
|
(17,179)
|
|
Employee withholding
taxes paid upon the net settlement of equity-classified stock
awards
|
|
(165)
|
|
|
(654)
|
|
Proceeds from
exercise of stock options
|
|
—
|
|
|
80
|
|
Net cash used by
financing activities
|
|
(23,323)
|
|
|
(400,016)
|
|
Net change in cash
and cash equivalents
|
|
(6,016)
|
|
|
(779,736)
|
|
Cash and cash
equivalents at beginning of period
|
|
94,722
|
|
|
800,666
|
|
Cash and cash
equivalents at end of period
|
|
$
|
88,706
|
|
|
$
|
20,930
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
Assets
|
|
(in thousands, except
share and
per share information)
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
88,706
|
|
|
$
|
94,722
|
|
Accounts receivable,
net of allowance
|
|
329,977
|
|
|
448,584
|
|
Oil and gas well
equipment and supplies
|
|
45,108
|
|
|
47,893
|
|
Derivative
instruments
|
|
200,537
|
|
|
17,944
|
|
Other current
assets
|
|
12,263
|
|
|
12,343
|
|
Total current
assets
|
|
676,591
|
|
|
621,486
|
|
Oil and gas
properties at cost, using the full cost method of
accounting:
|
|
|
|
|
Proved
properties
|
|
20,894,962
|
|
|
20,678,334
|
|
Unproved properties
and properties under development, not being amortized
|
|
1,297,493
|
|
|
1,255,908
|
|
|
|
22,192,455
|
|
|
21,934,242
|
|
Less – accumulated
depreciation, depletion, amortization, and impairment
|
|
(17,255,321)
|
|
|
(16,723,544)
|
|
Net oil and gas
properties
|
|
4,937,134
|
|
|
5,210,698
|
|
Fixed assets, net of
accumulated depreciation of $406,388 and $389,458, respectively
|
|
527,652
|
|
|
519,291
|
|
Goodwill
|
|
—
|
|
|
716,865
|
|
Derivative
instruments
|
|
7,121
|
|
|
580
|
|
Other
assets
|
|
69,848
|
|
|
71,109
|
|
|
|
$
|
6,218,346
|
|
|
$
|
7,140,029
|
|
Liabilities,
Redeemable Preferred Stock, and Stockholders' Equity
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
56,500
|
|
|
$
|
49,020
|
|
Accrued
liabilities
|
|
360,790
|
|
|
418,978
|
|
Derivative
instruments
|
|
6,772
|
|
|
16,681
|
|
Revenue
payable
|
|
135,079
|
|
|
207,939
|
|
Operating
leases
|
|
65,958
|
|
|
66,003
|
|
Total current
liabilities
|
|
625,099
|
|
|
758,621
|
|
Long-term debt
principal
|
|
2,000,000
|
|
|
2,000,000
|
|
Less—unamortized debt
issuance costs and discounts
|
|
(14,242)
|
|
|
(14,754)
|
|
Long-term debt,
net
|
|
1,985,758
|
|
|
1,985,246
|
|
Deferred income
taxes
|
|
322,067
|
|
|
338,424
|
|
Derivative
instruments
|
|
16,235
|
|
|
1,018
|
|
Operating
leases
|
|
182,590
|
|
|
184,172
|
|
Other
liabilities
|
|
215,477
|
|
|
214,787
|
|
Total
liabilities
|
|
3,347,226
|
|
|
3,482,268
|
|
Redeemable preferred
stock - 8.125% Series A Cumulative Perpetual Convertible Preferred
Stock, $0.01 par value, 62,500 shares authorized and
issued
|
|
81,620
|
|
|
81,620
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value, 200,000,000 shares authorized, 102,101,878 and
102,144,577 shares issued, respectively
|
|
1,021
|
|
|
1,021
|
|
Additional paid-in
capital
|
|
3,254,760
|
|
|
3,243,325
|
|
(Accumulated deficit)
retained earnings
|
|
(466,281)
|
|
|
331,795
|
|
Total stockholders'
equity
|
|
2,789,500
|
|
|
3,576,141
|
|
|
|
$
|
6,218,346
|
|
|
$
|
7,140,029
|
|
View original
content:http://www.prnewswire.com/news-releases/cimarex-reports-first-quarter-2020-results-issues-abridged-guidance-301054288.html
SOURCE Cimarex Energy Co.