DENVER, May 4, 2015 /MILITARY-TECHNOLOGIES.NET/ -- Cimarex Energy Co. (NYSE: XEC) today reported a first quarter 2015 net loss of $414.9 million, or $4.84 per diluted share, primarily the result of a non-cash charge related to the impairment of oil and gas properties. The adjusted first quarter net loss was $31.7 million, or $0.37 per diluted share. First quarter 2015 adjusted cash flow from operations was $186.9 million versus $408.9 million a year ago(1).
Total company production averaged 946.7 million cubic feet equivalent (MMcfe) per day during the first quarter, a 28 percent increase from first quarter 2014. Year-over-year natural gas volumes increased 25 percent, oil volumes grew 31 percent and NGL volumes were up 29 percent.
Continued weakness in commodity prices impacted Cimarex's financial results for the quarter. Realized oil prices averaged $42.50 per barrel, down 54 percent versus a year ago and 35 percent sequentially. Natural gas prices were down 48 percent year-over-year and averaged $2.77 per Mcf compared to $5.32 per Mcf. NGL prices averaged $15.71 per barrel, down 61 percent from the $39.94 per barrel in the first quarter of 2014. (See table of Price and Production Data below.)
Cimarex invested $308 million in exploration and development during the first quarter which was funded with cash flow from operations and cash on hand. Total debt at March 31, 2015, consisted of $1.5 billion of long-term notes. Cimarex had no borrowings under its revolving credit facility and a cash balance of $121 million. Debt was 27 percent of total capitalization(2).
2015 Outlook
Cimarex now estimates total production volumes for 2015 to average 920–950 MMcfe per day, a midpoint increase of eight percent over 2014 volumes. Oil volumes are expected to grow 11-15 percent and gas volumes 3-6 percent. Total company production for the second quarter 2015 is projected to average 965-985 MMcfe per day. Capital investment budgeted for exploration and development remains at $0.9-$1.1 billion in 2015.
Expenses per Mcfe of production for the remainder of 2015 are estimated to be:
Operations Update
Cimarex invested $308 million in exploration and development during the first quarter, 68 percent in the Permian Basin and 31 percent in the Mid-Continent. We completed 53 gross (33 net) wells during the quarter. At March 31, 2015, 59 gross (30 net) wells were awaiting completion. Cimarex is currently operating six drilling rigs.
Permian Region
Production from the Permian Basin averaged 487.8 MMcfe per day in the first quarter, a 41 percent increase over first quarter 2014. Quarterly oil volumes increased 36 percent year-over-year to 43,089 barrels per day and accounted for 53 percent of the region's total production for the quarter.
During the first quarter Cimarex completed and brought on production 42 gross (30 net) wells in the Permian region. There were 23 gross (16 net) wells waiting on completion on March 31.
The 42 gross wells completed consisted of 16 Avalon wells, 12 Second Bone Spring wells, two Texas Third Bone Spring wells and 12 Wolfcamp wells (six in Culberson area and six in Reeves County).
Cimarex now has seven long-lateral Wolfcamp D wells producing in Culberson County, Texas, with an average 30-day gross peak production rate of 2,378 BOE per day (26 percent oil, 45 percent gas, 29 percent NGL). Four 7,500-foot Wolfcamp A wells are also producing in Culberson County. Average 30-day peak production from these wells was 1,266 BOE per day (47 percent oil, 32 percent gas, 21 percent NGL).
Mid-Continent
The majority of Mid-Continent activity was in the Cana area in western Oklahoma, where Cimarex completed and brought on production seven gross (3 net) wells. At the end of the quarter, 27 gross (11 net) wells were waiting on completion. First quarter production from the Cana area averaged 350.0 MMcfe per day, representing 37 percent of Cimarex's total company production. Total Mid-Continent production averaged 444.1 MMcfe per day for the first quarter of 2015.
Cimarex completed an additional Meramec well in the first quarter bringing the total wells on production to seven. Average 30-day peak production from these wells was 10.0 MMcfe per day, with oil yields ranging from 17 barrels/MMcf to over 300 barrels/MMcf. Cimarex is currently drilling its first 10,000-foot long lateral in the Meramec formation.
Cimarex's average daily production and commodity price by region are summarized below:
Conference call and webcast
Cimarex will host a conference call Tuesday, May 5, at 11:00 a.m. EDT. The call will be webcast and accessible on the Cimarex website at www.cimarex.com. To participate in the live, interactive call, please dial 866-367-3053 five minutes before the scheduled start time (international callers dial 1-412-902-4216). A replay will be available for one week following the call by dialing 877-344-7529 (international callers dial 1-412-317-0088); conference I.D. 10063893. The replay will also be available on the company's website or via the Cimarex App.
Investor Presentation
For more details on Cimarex's first quarter 2015 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 Mid-Continent and Permian Basin areas of the U.S.
This press release contains forward-looking statements, including statements regarding projected results and future events. In particular, the company is providing revised "2015 Outlook", which contains projections for certain 2015 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/A for the year ended December 31, 2014, 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 volatility; declines in the values of our oil and gas properties resulting in impairments; 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; costs and availability of third party facilities for gathering, processing, refining and transportation; regulatory approvals, including regulatory restrictions on federal lands; legislative or regulatory changes, including initiatives related to hydraulic fracturing; higher than expected costs and expenses, including the availability and cost of services and materials; unexpected future capital expenditures; economic and competitive conditions; 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; compliance with environmental and other regulations; derivative and hedging activities; risks associated with operating in one major geographic area; the success of the company's risk management activities; title to properties; litigation; environmental liabilities; 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.