DENVER, Nov. 4, 2020 /PRNewswire/ --
- Generated Net Cash Provided by Operating Activities of
$259 million
- Generated $139 million of free
cash flow after dividend (Non-GAAP)
- Invested $83 million in
the quarter
- Oil production averaged 71,600 barrels per day
Cimarex Energy Co. (NYSE: XEC) today reported a third quarter
2020 net loss of $292.7 million, or
$2.94 per share, compared to net
income of $123.8 million, or
$1.21 per share, in the same period a
year ago. Third quarter results were negatively impacted by
non-cash charges related to the impairment of oil and gas
properties. Third quarter adjusted net income (non-GAAP) was
$52.4 million, or $0.51 per share, compared to third quarter 2019
adjusted net income (non-GAAP) of $96.0
million, or $0.94 per
share1. Net cash provided by operating activities
was $259.2 million in the third
quarter of 2020 compared to $320.1
million in the same period a year ago. Adjusted cash
flow from operations (non-GAAP) was $236.7
million in the third quarter of 2020 compared to
$360.7 million in the third quarter a
year ago1.
Oil production averaged 71.6 thousand barrels (MBbls) per day.
Total company production volumes for the quarter averaged 249.4
thousand barrels of oil equivalent (MBOE) per day.
Realized oil prices averaged $37.94 per barrel, up 94 percent from
$19.57 in the previous quarter but
down 28 percent from the $52.71 per
barrel received in the third quarter of 2019. Realized
natural gas prices averaged $1.14 per
thousand cubic feet (Mcf), up 25 percent sequentially from
$0.91 per Mcf and up 30 percent from
the third quarter 2019 average of $0.88 per Mcf. NGL prices averaged
$10.89 per barrel, up 45 percent from
$7.52 per barrel in the second
quarter of 2020 and up one percent from the $10.80 barrel received in the third quarter of
2019.
Cimarex's realized oil price was a negative differential to WTI
of $2.99 per barrel in the quarter
down from $8.28 per barrel in the
previous quarter, with a negative oil price differential in the
Permian of $2.71 per barrel in the
third quarter, down sequentially from $8.12 per barrel. The company realized a
negative differential to Henry Hub on its Permian natural gas
production of $1.15 per Mcf in the
third quarter of 2020 compared to $1.83 per Mcf in the third quarter of 2019 and
$1.09 in the second quarter of
2020. In the Mid-Continent region, the company's average
negative differential to Henry Hub was $0.31 per Mcf versus $0.66 per Mcf in the third quarter of 2019 and
$0.31 per Mcf in the second quarter
of 2020.
Cimarex invested a total of $83
million during the quarter, of which $52 million was attributable to drilling and
completion activities and $3 million
to saltwater disposal assets. Third quarter investments were
funded with cash flow from operating activities. Total debt
at September 30, 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 $273
million at quarter end.
The company has reduced staff by 20 percent year to date through
a combination of an Early Retirement Program (ERIP), further staff
reductions completed in the third quarter, and attrition.
Cimarex has incurred $31 million in
severance expenses year to date, of which $15 million was expensed in the third
quarter. Cost savings are expected to total $40-50 million annually, beginning in
2021.
Outlook
Improved oil prices in the third quarter allowed Cimarex to
resume activity. We are currently running four drilling rigs
in the Permian basin and have had two completion crews working
since September 1. Cimarex continues to expect capital
investment for the year to total approximately $600 million, as stated in guidance given in
August.
Fourth quarter 2020 production volumes are expected to average
215 - 235 MBOE per day, with oil volumes estimated to average 62.5
- 68.5 MBbls per day. Total 2020 daily production volumes are
expected to average 250 - 255 MBOE per day, with annual oil volumes
estimated to average 75.5 - 77.5 MBbls per day.
Expenses per BOE of production for 2020 are estimated to be:
|
Production
expense
|
$2.90 -
$3.10
|
|
Transportation,
processing and other expense
|
2.10 -
2.40
|
|
DD&A and ARO
accretion
|
7.50 -
8.00
|
|
General and
administrative expense
|
1.00 -
1.10
|
|
Taxes other than
income (% of oil and gas revenue)
|
5.0% -
7.0%
|
Operations Update
Cimarex invested $83 million
during the third quarter, with 95 percent invested in the Permian
Basin and 5 percent in the Mid-Continent. Cimarex brought 11
gross (1.4 net) wells on production during the quarter. At
September 30, 74 gross (39.0 net)
wells were waiting on completion.
WELLS BROUGHT ON
PRODUCTION BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Gross
wells
|
|
|
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
7
|
|
44
|
|
59
|
|
100
|
Mid-Continent
|
|
4
|
|
52
|
|
43
|
|
144
|
|
|
11
|
|
96
|
|
102
|
|
244
|
Net
wells
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
1.4
|
|
16.1
|
|
32.3
|
|
53.0
|
Mid-Continent
|
|
nil
|
|
5.4
|
|
1.7
|
|
16.1
|
|
|
1.4
|
|
21.5
|
|
34.0
|
|
69.1
|
Permian Region
Production from the Permian region averaged 180.3 MBOE per day
in the third quarter, a nine percent decrease from third quarter
2019. Oil volumes averaged 62.9 MBbls per day, a 16 percent
decrease from third quarter 2019 and down nine percent
sequentially.
Cimarex brought 7 gross (1.4 net) wells on production in the
Permian region during the third quarter. There were 51 gross
(38.7 net) wells waiting on completion at September 30.
Cimarex currently is operating four drilling rigs and two
completion crews in the region.
Mid-Continent Region
Production from the Mid-Continent averaged 68.8 MBOE per day for
the third quarter, down 22 percent from third quarter 2019 and in
line with the previous quarter.
During the third quarter, 4 gross (nil net) wells were brought
on production in the Mid-Continent region. At the end of the
quarter, 23 gross (0.3 net) wells were waiting on completion.
Cimarex currently is not operating 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
380.2
|
|
|
422.9
|
|
|
415.6
|
|
|
381.2
|
|
Oil (Bbls)
|
|
62,930
|
|
|
74,819
|
|
|
70,415
|
|
|
70,188
|
|
NGL (Bbls)
|
|
53,971
|
|
|
53,311
|
|
|
50,079
|
|
|
51,492
|
|
Total Equivalent
(MBOE)
|
|
180.3
|
|
|
198.6
|
|
|
189.8
|
|
|
185.2
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
222.3
|
|
|
293.7
|
|
|
234.5
|
|
|
292.1
|
|
Oil (Bbls)
|
|
8,523
|
|
|
14,788
|
|
|
9,173
|
|
|
13,880
|
|
NGL (Bbls)
|
|
23,249
|
|
|
24,338
|
|
|
21,814
|
|
|
25,480
|
|
Total Equivalent
(MBOE)
|
|
68.8
|
|
|
88.1
|
|
|
70.1
|
|
|
88.0
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas (MMcf)
|
|
603.4
|
|
|
718.0
|
|
|
651.0
|
|
|
674.6
|
|
Oil (Bbls)
|
|
71,571
|
|
|
89,731
|
|
|
79,743
|
|
|
84,230
|
|
NGL (Bbls)
|
|
77,294
|
|
|
77,693
|
|
|
71,951
|
|
|
77,021
|
|
Total Equivalent
(MBOE)
|
|
249.4
|
|
|
287.1
|
|
|
260.2
|
|
|
273.7
|
|
|
|
AVERAGE REALIZED
PRICE BY REGION
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
0.83
|
|
|
0.40
|
|
|
0.50
|
|
|
0.36
|
|
Oil ($ per
Bbl)
|
|
38.22
|
|
|
52.69
|
|
|
34.46
|
|
|
51.70
|
|
NGL ($ per
Bbl)
|
|
10.17
|
|
|
9.94
|
|
|
8.68
|
|
|
12.40
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.67
|
|
|
1.57
|
|
|
1.48
|
|
|
2.01
|
|
Oil ($ per
Bbl)
|
|
35.87
|
|
|
52.73
|
|
|
33.09
|
|
|
53.55
|
|
NGL ($ per
Bbl)
|
|
12.59
|
|
|
12.69
|
|
|
11.38
|
|
|
15.28
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
Gas ($ per
Mcf)
|
|
1.14
|
|
|
0.88
|
|
|
0.85
|
|
|
1.08
|
|
Oil ($ per
Bbl)
|
|
37.94
|
|
|
52.71
|
|
|
34.31
|
|
|
52.02
|
|
NGL ($ per
Bbl)
|
|
10.89
|
|
|
10.80
|
|
|
9.50
|
|
|
13.36
|
|
Other
Cimarex received cash settlements of $10.8 million related to its oil hedges during
the quarter. Settlement of gas hedges resulted in cash
receipts of $2.8 million .
The following table summarizes the company's current open hedge
positions:
|
|
|
4Q20
|
|
1Q21
|
|
2Q21
|
|
3Q21
|
|
4Q21
|
|
1Q22
|
|
2Q22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
Collars:
|
PEPL (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
100,000
|
|
|
100,000
|
|
|
100,000
|
|
|
90,000
|
|
|
90,000
|
|
|
60,000
|
|
|
20,000
|
|
|
Wtd Avg
Floor
|
|
$
|
1.78
|
|
|
$
|
1.83
|
|
|
$
|
1.89
|
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
$
|
2.13
|
|
|
$
|
2.40
|
|
|
Wtd Avg
Ceiling
|
|
$
|
2.21
|
|
|
$
|
2.23
|
|
|
$
|
2.28
|
|
|
$
|
2.42
|
|
|
$
|
2.42
|
|
|
$
|
2.55
|
|
|
$
|
2.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso Perm
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
70,000
|
|
|
70,000
|
|
|
80,000
|
|
|
70,000
|
|
|
70,000
|
|
|
40,000
|
|
|
20,000
|
|
|
Wtd Avg
Floor
|
|
$
|
1.36
|
|
|
$
|
1.50
|
|
|
$
|
1.62
|
|
|
$
|
1.86
|
|
|
$
|
1.86
|
|
|
$
|
2.13
|
|
|
$
|
2.40
|
|
|
Wtd Avg
Ceiling
|
|
$
|
1.64
|
|
|
$
|
1.79
|
|
|
$
|
1.92
|
|
|
$
|
2.22
|
|
|
$
|
2.22
|
|
|
$
|
2.53
|
|
|
$
|
2.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waha (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/d)
|
|
70,000
|
|
|
90,000
|
|
|
100,000
|
|
|
90,000
|
|
|
90,000
|
|
|
60,000
|
|
|
20,000
|
|
|
Wtd Avg
Floor
|
|
$
|
1.43
|
|
|
$
|
1.52
|
|
|
$
|
1.61
|
|
|
$
|
1.82
|
|
|
$
|
1.82
|
|
|
$
|
1.98
|
|
|
$
|
2.40
|
|
|
Wtd Avg
Ceiling
|
|
$
|
1.73
|
|
|
$
|
1.83
|
|
|
$
|
1.93
|
|
|
$
|
2.17
|
|
|
$
|
2.17
|
|
|
$
|
2.39
|
|
|
$
|
2.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
Collars:
|
WTI (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
41,000
|
|
|
40,000
|
|
|
34,000
|
|
|
25,000
|
|
|
25,000
|
|
|
11,000
|
|
|
4,000
|
|
|
Wtd Avg
Floor
|
|
$
|
40.91
|
|
|
$
|
38.06
|
|
|
$
|
34.62
|
|
|
$
|
32.44
|
|
|
$
|
32.44
|
|
|
$
|
35.91
|
|
|
$
|
37.50
|
|
|
Wtd Avg
Ceiling
|
|
$
|
49.84
|
|
|
$
|
46.45
|
|
|
$
|
43.28
|
|
|
$
|
41.49
|
|
|
$
|
41.49
|
|
|
$
|
47.37
|
|
|
$
|
51.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Basis
Swaps:
|
WTI Midland
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
32,000
|
|
|
31,000
|
|
|
33,000
|
|
|
28,000
|
|
|
28,000
|
|
|
15,000
|
|
|
8,000
|
|
|
Wtd Avg
Differential
|
|
$
|
0.18
|
|
|
$
|
0.03
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.20)
|
|
|
$
|
(0.20)
|
|
|
$
|
0.19
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Roll Differential
Swaps:
|
WTI (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbl/d)
|
|
—
|
|
|
7,000
|
|
|
11,000
|
|
|
11,000
|
|
|
11,000
|
|
|
11,000
|
|
|
4,000
|
|
|
Wtd Avg
Price
|
|
$
|
—
|
|
|
$
|
(0.24)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference call and webcast
Cimarex will host a conference call tomorrow, November 5, 2020 at 11:00
a.m. EST (9:00 a.m.
MST). The call will be webcast and accessible on the
Cimarex website at www.cimarex.com. To join the live,
interactive call, please dial 866-367-3053 ten minutes before the
scheduled start time (callers in Canada dial 855-669-9657 and international
callers dial 412-902-4216). A replay will be available on the
company's website.
Investor Presentation
For more details on Cimarex's third quarter 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, including due to the COVID-19 pandemic; disruptions to
supply chains and availability of critical equipment and supplies,
including as a result of 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, which may be
impacted by the COVID-19 pandemic; compliance with environmental
and other regulations, including new regulations that may result
from a change in federal and state administrations and
legislatures; regulatory approvals, including regulatory
restrictions on federal lands which may be negatively impacted by a
change in administration; legislative or regulatory changes,
including initiatives related to hydraulic fracturing, emissions
and disposal of produced water, which may be negatively impacted by
a change in administration; 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,
which may be negatively impacted by COVID-19 restrictions on
regulatory personnel who process and approve those matters and by
changes in federal and state administrations and legislatures;
development drilling and testing results; the potential for
production decline rates to be greater than expected; performance
of acquired properties and newly drilled wells; 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
|
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.
|
|
|
3
|
WTI refers to West
Texas Intermediate oil price as quoted on the New York Mercantile
Exchange.
|
|
|
4
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(292,740)
|
|
|
$
|
123,847
|
|
|
$
|
(1,992,169)
|
|
|
$
|
259,472
|
|
|
Impairment of oil and
gas properties (1)
|
351,029
|
|
|
—
|
|
|
1,625,878
|
|
|
—
|
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
714,447
|
|
|
—
|
|
|
Mark-to-market loss
(gain) on open derivative positions
|
79,281
|
|
|
(37,039)
|
|
|
83,281
|
|
|
34,831
|
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
4,250
|
|
|
Acquisition related
costs
|
—
|
|
|
13
|
|
|
—
|
|
|
8,404
|
|
|
Asset retirement
obligation
|
—
|
|
|
—
|
|
|
2,800
|
|
|
—
|
|
|
Tax impact
(2)
|
(85,201)
|
|
|
9,146
|
|
|
(376,631)
|
|
|
(11,491)
|
|
|
Adjusted net
income
|
$
|
52,369
|
|
|
$
|
95,967
|
|
|
$
|
57,606
|
|
|
$
|
295,466
|
|
|
Diluted (loss)
earnings per share
|
$
|
(2.94)
|
|
|
$
|
1.21
|
|
|
$
|
(19.99)
|
|
|
$
|
2.56
|
|
|
Adjusted diluted
earnings per share*
|
$
|
0.51
|
|
|
$
|
0.94
|
|
|
$
|
0.56
|
|
|
$
|
2.95
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Adjusted
diluted**
|
102,046
|
|
|
101,593
|
|
|
102,097
|
|
|
100,266
|
|
|
______________________________________
|
|
(1)
|
An additional ceiling
test impairment is anticipated in the fourth 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
thousands)
|
Net cash provided by
operating activities
|
$
|
259,193
|
|
|
$
|
320,074
|
|
|
$
|
712,690
|
|
|
$
|
984,157
|
|
Change in operating
assets and liabilities
|
(22,529)
|
|
|
40,655
|
|
|
(25,077)
|
|
|
63,996
|
|
|
|
|
|
|
|
|
|
Adjusted cash flow
from operations
|
236,664
|
|
|
360,729
|
|
|
687,613
|
|
|
1,048,153
|
|
|
|
|
|
|
|
|
|
Oil and gas
expenditures
|
(70,811)
|
|
|
(286,250)
|
|
|
(482,141)
|
|
|
(999,225)
|
|
Other capital
expenditures
|
(1,913)
|
|
|
(18,894)
|
|
|
(39,965)
|
|
|
(59,035)
|
|
Change in capital
accruals
|
(1,343)
|
|
|
(2,787)
|
|
|
84,943
|
|
|
11,866
|
|
Free cash
flow
|
162,597
|
|
|
52,798
|
|
|
250,450
|
|
|
1,759
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
(23,684)
|
|
|
(21,483)
|
|
|
(68,893)
|
|
|
(60,130)
|
|
Free cash flow after
dividend
|
$
|
138,913
|
|
|
$
|
31,315
|
|
|
$
|
181,557
|
|
|
$
|
(58,371)
|
|
Management uses the non-GAAP financial measures of adjusted cash
flow from operations, free cash flow and free cash flow after
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
thousands)
|
Acquisitions:
|
|
|
|
|
|
|
|
Proved
|
$
|
—
|
|
|
$
|
2,373
|
|
|
$
|
7,250
|
|
|
$
|
696,173
|
|
Unproved
|
—
|
|
|
(30,314)
|
|
|
—
|
|
|
1,021,468
|
|
|
—
|
|
|
(27,941)
|
|
|
7,250
|
|
|
1,717,641
|
|
|
|
|
|
|
|
|
|
Exploration and
development:
|
|
|
|
|
|
|
|
Land and
seismic
|
11,586
|
|
|
18,377
|
|
|
$
|
37,626
|
|
|
$
|
42,456
|
|
Exploration and
development
|
68,963
|
|
|
278,083
|
|
|
375,357
|
|
|
947,002
|
|
|
80,549
|
|
|
296,460
|
|
|
412,983
|
|
|
989,458
|
|
|
|
|
|
|
|
|
|
Property
sales:
|
|
|
|
|
|
|
|
Proved
|
(67,514)
|
|
|
(9,286)
|
|
|
$
|
(67,514)
|
|
|
$
|
(27,314)
|
|
Unproved
|
—
|
|
|
(81)
|
|
|
(830)
|
|
|
(9,835)
|
|
|
(67,514)
|
|
|
(9,367)
|
|
|
(68,344)
|
|
|
(37,149)
|
|
|
|
|
|
|
|
|
|
|
$
|
13,035
|
|
|
$
|
259,152
|
|
|
$
|
351,889
|
|
|
$
|
2,669,950
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(in thousands, except
per share information)
|
Revenues:
|
|
|
|
|
|
|
|
|
Oil sales
|
|
$
|
249,826
|
|
|
$
|
435,094
|
|
|
$
|
749,623
|
|
|
$
|
1,196,166
|
|
Gas and NGL
sales
|
|
140,761
|
|
|
135,483
|
|
|
339,503
|
|
|
479,442
|
|
Gas gathering and
other
|
|
11,072
|
|
|
11,728
|
|
|
34,746
|
|
|
30,117
|
|
|
|
401,659
|
|
|
582,305
|
|
|
1,123,872
|
|
|
1,705,725
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Impairment of oil and
gas properties
|
|
351,029
|
|
|
—
|
|
|
1,625,878
|
|
|
—
|
|
Depreciation,
depletion, amortization, and accretion
|
|
159,626
|
|
|
230,172
|
|
|
576,051
|
|
|
638,122
|
|
Impairment of
goodwill
|
|
—
|
|
|
—
|
|
|
714,447
|
|
|
—
|
|
Production
|
|
62,025
|
|
|
89,820
|
|
|
213,598
|
|
|
257,219
|
|
Transportation,
processing, and other operating
|
|
53,130
|
|
|
59,797
|
|
|
161,334
|
|
|
173,479
|
|
Gas gathering and
other
|
|
4,649
|
|
|
5,273
|
|
|
16,473
|
|
|
17,015
|
|
Taxes other than
income
|
|
22,822
|
|
|
30,873
|
|
|
70,269
|
|
|
105,600
|
|
General and
administrative
|
|
28,598
|
|
|
15,499
|
|
|
80,333
|
|
|
69,494
|
|
Stock
compensation
|
|
9,738
|
|
|
6,797
|
|
|
22,879
|
|
|
20,004
|
|
Loss (gain) on
derivative instruments, net
|
|
65,607
|
|
|
(38,735)
|
|
|
(37,448)
|
|
|
35,949
|
|
Other operating
expense, net
|
|
167
|
|
|
10,141
|
|
|
548
|
|
|
19,057
|
|
|
|
757,391
|
|
|
409,637
|
|
|
3,444,362
|
|
|
1,335,939
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
|
(355,732)
|
|
|
172,668
|
|
|
(2,320,490)
|
|
|
369,786
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
23,361
|
|
|
24,586
|
|
|
69,589
|
|
|
69,665
|
|
Capitalized
interest
|
|
(12,286)
|
|
|
(16,264)
|
|
|
(38,407)
|
|
|
(41,811)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,250
|
|
Other, net
|
|
(1,572)
|
|
|
(140)
|
|
|
1,053
|
|
|
(4,548)
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income tax
|
|
(365,235)
|
|
|
164,486
|
|
|
(2,352,725)
|
|
|
342,230
|
|
Income tax (benefit)
expense
|
|
(72,495)
|
|
|
40,639
|
|
|
(360,556)
|
|
|
82,758
|
|
Net (loss)
income
|
|
$
|
(292,740)
|
|
|
$
|
123,847
|
|
|
$
|
(1,992,169)
|
|
|
$
|
259,472
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share to common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(2.94)
|
|
|
$
|
1.21
|
|
|
$
|
(19.99)
|
|
|
$
|
2.56
|
|
Diluted
|
|
$
|
(2.94)
|
|
|
$
|
1.21
|
|
|
$
|
(19.99)
|
|
|
$
|
2.56
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.22
|
|
|
$
|
0.20
|
|
|
$
|
0.66
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
100,013
|
|
|
99,735
|
|
|
99,912
|
|
|
98,452
|
|
Diluted
|
|
100,013
|
|
|
99,735
|
|
|
99,912
|
|
|
98,458
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss)
income:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(292,740)
|
|
|
$
|
123,847
|
|
|
$
|
(1,992,169)
|
|
|
$
|
259,472
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
Change in fair value
of investments, net of tax of $0, ($648), $0 and ($220),
respectively
|
|
—
|
|
|
(2,198)
|
|
|
—
|
|
|
(745)
|
|
Total comprehensive
(loss) income
|
|
$
|
(292,740)
|
|
|
$
|
121,649
|
|
|
$
|
(1,992,169)
|
|
|
$
|
258,727
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(in
thousands)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(292,740)
|
|
|
$
|
123,847
|
|
|
$
|
(1,992,169)
|
|
|
$
|
259,472
|
|
Adjustments to
reconcile net (loss) income to net cash
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
Impairment of oil and
gas properties
|
|
351,029
|
|
|
—
|
|
|
1,625,878
|
|
|
—
|
|
Depreciation,
depletion, amortization, and accretion
|
|
159,626
|
|
|
230,172
|
|
|
576,051
|
|
|
638,122
|
|
Impairment of
goodwill
|
|
—
|
|
|
—
|
|
|
714,447
|
|
|
—
|
|
Deferred income
taxes
|
|
(72,495)
|
|
|
40,639
|
|
|
(360,395)
|
|
|
82,758
|
|
Stock
compensation
|
|
9,738
|
|
|
6,797
|
|
|
22,879
|
|
|
20,004
|
|
Loss (gain) on
derivative instruments, net
|
|
65,607
|
|
|
(38,735)
|
|
|
(37,448)
|
|
|
35,949
|
|
Settlements on
derivative instruments
|
|
13,674
|
|
|
1,696
|
|
|
120,729
|
|
|
(1,118)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,250
|
|
Amortization of debt
issuance costs and discounts
|
|
886
|
|
|
783
|
|
|
2,488
|
|
|
2,285
|
|
Changes in non-current
assets and liabilities
|
|
(949)
|
|
|
(5,379)
|
|
|
6,070
|
|
|
(2,630)
|
|
Other, net
|
|
2,288
|
|
|
909
|
|
|
9,083
|
|
|
9,061
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(24,662)
|
|
|
(37,509)
|
|
|
179,953
|
|
|
80,183
|
|
Other current
assets
|
|
5,193
|
|
|
2,901
|
|
|
6,688
|
|
|
2,140
|
|
Accounts payable and
other current liabilities
|
|
41,998
|
|
|
(6,047)
|
|
|
(161,564)
|
|
|
(146,319)
|
|
Net cash provided by
operating activities
|
|
259,193
|
|
|
320,074
|
|
|
712,690
|
|
|
984,157
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Acquisition of oil and
gas properties
|
|
—
|
|
|
(2,373)
|
|
|
(7,250)
|
|
|
(285,596)
|
|
Oil and gas capital
expenditures
|
|
(70,811)
|
|
|
(286,250)
|
|
|
(482,141)
|
|
|
(999,225)
|
|
Other capital
expenditures
|
|
(1,913)
|
|
|
(18,894)
|
|
|
(39,965)
|
|
|
(59,035)
|
|
Sales of oil and gas
assets
|
|
69,006
|
|
|
15,314
|
|
|
69,836
|
|
|
28,547
|
|
Sales of other
assets
|
|
704
|
|
|
425
|
|
|
1,892
|
|
|
859
|
|
Net cash used by
investing activities
|
|
(3,014)
|
|
|
(291,778)
|
|
|
(457,628)
|
|
|
(1,314,450)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
|
11,000
|
|
|
529,000
|
|
|
172,000
|
|
|
2,239,310
|
|
Repayments of
long-term debt
|
|
(11,000)
|
|
|
(529,000)
|
|
|
(172,000)
|
|
|
(2,610,000)
|
|
Financing,
underwriting, and debt redemption fees
|
|
(9)
|
|
|
(7)
|
|
|
(1,566)
|
|
|
(11,798)
|
|
Finance lease
payments
|
|
(1,055)
|
|
|
(1,176)
|
|
|
(3,863)
|
|
|
(2,731)
|
|
Dividends
paid
|
|
(23,684)
|
|
|
(21,483)
|
|
|
(68,893)
|
|
|
(60,130)
|
|
Employee withholding
taxes paid upon the net settlement of
equity-classified stock awards
|
|
(2,316)
|
|
|
(1,752)
|
|
|
(2,505)
|
|
|
(2,406)
|
|
Proceeds from exercise
of stock options
|
|
—
|
|
|
593
|
|
|
—
|
|
|
1,267
|
|
Net cash used by
financing activities
|
|
(27,064)
|
|
|
(23,825)
|
|
|
(76,827)
|
|
|
(446,488)
|
|
Net change in cash
and cash equivalents
|
|
229,115
|
|
|
4,471
|
|
|
178,235
|
|
|
(776,781)
|
|
Cash and cash
equivalents at beginning of period
|
|
43,842
|
|
|
19,414
|
|
|
94,722
|
|
|
800,666
|
|
Cash and cash
equivalents at end of period
|
|
$
|
272,957
|
|
|
$
|
23,885
|
|
|
$
|
272,957
|
|
|
$
|
23,885
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
|
|
|
|
September 30,
2020
|
|
December 31,
2019
|
Assets
|
|
(in thousands, except
share and
per share information)
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
272,957
|
|
|
$
|
94,722
|
|
Accounts receivable,
net of allowance
|
|
269,440
|
|
|
448,584
|
|
Oil and gas well
equipment and supplies
|
|
45,959
|
|
|
47,893
|
|
Derivative
instruments
|
|
39,402
|
|
|
17,944
|
|
Other current
assets
|
|
6,271
|
|
|
12,343
|
|
Total current
assets
|
|
634,029
|
|
|
621,486
|
|
Oil and gas
properties at cost, using the full cost method of
accounting:
|
|
|
|
|
Proved
properties
|
|
21,076,796
|
|
|
20,678,334
|
|
Unproved properties
and properties under development, not being amortized
|
|
1,208,733
|
|
|
1,255,908
|
|
|
|
22,285,529
|
|
|
21,934,242
|
|
Less – accumulated
depreciation, depletion, amortization, and impairment
|
|
(18,862,339)
|
|
|
(16,723,544)
|
|
Net oil and gas
properties
|
|
3,423,190
|
|
|
5,210,698
|
|
Fixed assets, net of
accumulated depreciation of $439,968 and $389,458,
respectively
|
|
457,010
|
|
|
519,291
|
|
Goodwill
|
|
—
|
|
|
716,865
|
|
Derivative
instruments
|
|
952
|
|
|
580
|
|
Deferred income
taxes
|
|
21,971
|
|
|
—
|
|
Other
assets
|
|
68,818
|
|
|
71,109
|
|
|
|
$
|
4,605,970
|
|
|
$
|
7,140,029
|
|
Liabilities,
Redeemable Preferred Stock, and Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
34,635
|
|
|
$
|
49,020
|
|
Accrued
liabilities
|
|
280,861
|
|
|
418,978
|
|
Derivative
instruments
|
|
96,763
|
|
|
16,681
|
|
Revenue
payable
|
|
123,705
|
|
|
207,939
|
|
Operating
leases
|
|
59,989
|
|
|
66,003
|
|
Total current
liabilities
|
|
595,953
|
|
|
758,621
|
|
Long-term debt
principal
|
|
2,000,000
|
|
|
2,000,000
|
|
Less—unamortized debt
issuance costs and discounts
|
|
(13,215)
|
|
|
(14,754)
|
|
Long-term debt,
net
|
|
1,986,785
|
|
|
1,985,246
|
|
Deferred income
taxes
|
|
—
|
|
|
338,424
|
|
Derivative
instruments
|
|
26,048
|
|
|
1,018
|
|
Operating
leases
|
|
144,755
|
|
|
184,172
|
|
Other
liabilities
|
|
227,007
|
|
|
214,787
|
|
Total
liabilities
|
|
2,980,548
|
|
|
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, 101,970,811 and
102,144,577 shares issued, respectively
|
|
1,020
|
|
|
1,021
|
|
Additional paid-in
capital
|
|
3,226,828
|
|
|
3,243,325
|
|
(Accumulated deficit)
retained earnings
|
|
(1,684,046)
|
|
|
331,795
|
|
Total stockholders'
equity
|
|
1,543,802
|
|
|
3,576,141
|
|
|
|
$
|
4,605,970
|
|
|
$
|
7,140,029
|
|
View original
content:http://www.prnewswire.com/news-releases/cimarex-reports-third-quarter-2020-results-301166618.html
SOURCE Cimarex Energy Co.