DENVER, Feb. 22, 2021 /PRNewswire/ -- Cimarex Energy
Co. (NYSE: XEC) today announced its projected 2021 total capital
investment (including midstream capital) of $650 - 750 million. The table below shows a
breakdown of the projected capital by category:
Capital
Expenditures
|
2021
Guidance
|
|
Drilling and
Completion (D&C)
|
$500 - 600
million
|
|
Midstream/Saltwater
Disposal (SWD)
|
~ $40
million
|
|
Other*
|
~ $110
million
|
|
Total Capital
Investment
|
$650 - 750
million
|
|
|
|
|
*Capitalized overhead, production, NPL and
technology
|
|
In 2021, oil production is projected to average 75 - 81 thousand
barrels of oil (MBbls) per day, up two percent at the midpoint from
2020 levels. Total equivalent production is expected to
average 235 - 255 thousand barrels of oil equivalent (MBOE) per
day. Oil production in the first quarter of 2021 is expected
to average 65 - 69 MBbls per day. First quarter total
production is expected to average 205 - 225 MBOE per day.
First quarter guidance includes an estimated five to seven percent
negative impact on production volumes due to downtime associated
with recent weather conditions in the Permian and Mid-Continent
regions.
Tom Jorden, Cimarex Chairman and
CEO, said, "We remain committed to a disciplined investment
approach and targeting a 70-80 percent reinvestment rate. At
a $35 flat WTI oil price, we expect
to generate free cash flow after the dividend at the $700 million midpoint of our planned 2021 capital
investment. At recent strip prices, this same plan results in
a significantly lower reinvestment rate, with the potential
additional free cash flow targeted toward debt reduction."
Mr. Jorden went on to say, "As we look at 2021 and beyond,
Cimarex's asset quality, cost structure, and organization positions
us to generate significant returns, free cash flow and value for
our owners."
Cimarex intends to invest $500 -
600 million on the drilling and completion of wells in 2021 with 73
net wells expected to begin producing during the period. Over
90 percent of the D&C capital will be invested in the Permian
region with the remainder in the Mid-Continent. Permian
activities will continue to focus on long lateral Wolfcamp and Bone
Spring wells in Culberson and
Reeves counties in Texas, and in Lea and Eddy counties in New Mexico.
Below are the net wells expected to be on production in 2021 by
quarter:
|
|
1Q21
|
|
2Q21
|
|
3Q21
|
|
4Q21
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Permian
Basin
|
|
6
|
|
|
22
|
|
|
19
|
|
|
20
|
|
|
67
|
|
Mid-Continent
|
|
—
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
6
|
|
Total
|
|
6
|
|
|
23
|
|
|
24
|
|
|
20
|
|
|
73
|
|
Expenses for 2021 on a per unit basis are expected to fall
within the following ranges:
($/BOE)
|
|
|
Production
expense
|
$3.10 -
$3.60
|
|
Transportation and
other operating expense
|
2.20
- 2.50
|
|
DD&A and ARO
accretion
|
6.00
- 7.00
|
|
General and
administrative expense
|
0.90 - 1.10
|
|
Taxes other than
income (% of oil and gas revenue)
|
5.5%
- 6.5%
|
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, the Annual Report on Form 10-K for
the year ended December 31, 2020 to
be 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, all of which
may be amplified by the COVID-19 pandemic and its unpredictable
nature, including among other things: fluctuations in the price we
receive for our oil, gas, and NGL production, including local
market price differentials, which may be exacerbated by the demand
destruction resulting from COVID-19; disruptions to the
availability of workers and contractors due to illness and stay at
home orders related to the COVID-19 pandemic; cost and availability
of gathering, pipeline, refining, transportation and other
midstream and downstream activities and our ability to sell oil,
gas, and NGLs, which may be negatively impacted by the COVID-19
pandemic, severe weather and other risks and lead to a lack of any
available markets; availability of supply chains and critical
equipment and supplies; higher than expected costs and expenses,
including the availability and cost of services and materials;
compliance with environmental and other regulations, including new
regulations that may result from the recent change in federal and
state administrations and legislatures; legislative or regulatory
changes, including initiatives related to hydraulic fracturing,
emissions, and disposal of produced water, which may be negatively
impacted by the recent change in Presidential administration or
legislatures; the ability to receive drilling and other permits or
approvals and rights-of-way in a timely manner (or at all), which
may be negatively impacted by the impact of COVID-19 restrictions
on regulatory employees who process and approve permits, other
approvals and rights-of-way and which may be restricted by new
Presidential and Secretarial orders and regulation and legislation;
reductions in the quantity of oil, gas, and NGLs sold and prices
received because of decreased demand and/or curtailments in
production relating to mechanical, transportation, storage,
capacity, marketing, weather, the COVID-19 pandemic, or other
problems; declines in the SEC PV10 value of our oil and gas
properties resulting in full cost ceiling test impairments to the
carrying values of our oil and gas properties; the effectiveness of
our internal control over financial reporting; success of the
company's risk management activities; availability of financing and
access to capital markets; estimates of proved reserves,
exploitation potential, or exploration prospect size; greater than
expected production decline rates; timing and amount of future
production of oil, gas, and NGLs; cybersecurity threats, technology
system failures and data security issues; the inability to
transport, process and store oil and gas; hedging activities and
the viability of our hedging counterparties, many of whom have been
negatively impacted by the COVID-19 pandemic; economic and
competitive conditions; lack of available insurance; cash flow and
anticipated liquidity; continuing compliance with the financial
covenant contained in our amended and restated credit agreement;
the loss of certain federal income tax deductions; litigation;
environmental liabilities; new federal regulations regarding
species or habitats; exploration and development opportunities that
we pursue may not result in economic, productive oil and gas
properties; drilling of wells; development drilling and testing
results; performance of acquired properties and newly drilled
wells; ability to obtain industry partners to jointly explore
certain prospects, and the willingness and ability of those
partners to meet capital obligations when requested; unexpected
future capital expenditures; amount, nature, and timing of capital
expenditures; proving up undeveloped acreage and maintaining
production on leases; unforeseen liabilities associated with
acquisitions and dispositions; establishing valuation allowances
against our net deferred tax assets; potential payments for failing
to meet minimum oil, gas, NGL, or water delivery or sales
commitments; increased financing costs due to a significant
increase in interest rates; risks associated with concentration of
operations in one major geographic area; availability and cost of
capital; title to properties; ability to complete property sales or
other transactions; and other factors discussed in the company's
reports filed with the SEC. Cimarex Energy Co. encourages
readers to consider the risks and uncertainties associated with
projections and other forward-looking statements. In
addition, the company assumes no obligation to publicly revise or
update any forward-looking statements based on future events or
circumstances.
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SOURCE Cimarex Energy Co.