Exploration & Production | Quarterly / Earnings Reports | Second Quarter (2Q) Update
Cimarex Predicts Sizable Production Growth by Year-End
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Cimarex Energy Co. reported second quarter 2014 net income of $148.6 million, or $1.70 per diluted share. This compares to 2013 second quarter net income of $129.6 million, or $1.49 per diluted share. Adjusted 2014 second quarter net income was $1.71 per diluted share.
Production volumes averaged 839 million cubic feet equivalent (MMcfe) per day in the quarter, a 22 percent increase over second quarter 2013 output of 687 MMcfe per day. Oil production grew 13 percent over the same period last year to 41,759 barrels per day. Permian oil volumes were 33,317 barrels per day. Natural gas production increased 20 percent over last year to 410 MMcf per day. Cimarex reported NGL volumes of 29,680 barrels per day up 43 percent from 2013 levels as a result of more Permian Basin gas being fully processed. Second quarter 2014 production volumes were 49 percent natural gas, 30 percent oil and 21 percent NGL.
Operational Update
Wells Drilling & Completed by Region:
The company has updated its E&P sectors for the second quarter, which can be accessed below:
Cimarex Goes Big in the Wolfcamp; Larger Laterals, Fracs
Cimarex's Upsized Frac Boosts Cana-Woodford Results
2014 Outlook
Cimarex estimates 2014 production to average 860-875 MMcfe per day, a mid-point increase of 25 percent over 2013. Oil volumes are projected to grow 22-25 percent year-over-year. Third quarter 2014 volumes are projected to average 920-945 MMcfe per day.
Capital investment in exploration and development is now expected to be $1.95 billion due to slightly higher activity levels in the Mid-Continent.
Cimarex invested $498 million on exploration and development during the second quarter, bringing the total invested year-to-date to $964 million. The Permian Basin accounted for 71 percent of the capital investment in the first half of 2014 with the Mid-Continent representing the remainder. The company also purchased assets in the Cana-Woodford area for $238 million during the quarter.
Cimarex drilled a total of 85 gross (51 net) wells during the quarter. At quarter-end, 46 gross (25 net) wells were awaiting completion.
Other Financial Results
Growth in production and higher product prices resulted in revenues of $622.9 million in the second quarter of 2014 compared to $483.3 million in the same period of 2013. Second quarter 2014 adjusted cash flow from operations was $443.1 million versus $346.3 million a year ago.
Natural gas prices averaged $4.62 per thousand cubic feet (Mcf) in the quarter, up 13 percent year-over-year. Oil prices averaged $93.39 per barrel, up three percent from a year ago and NGL prices averaged $35.35 per barrel.
Long-term debt at June 30, 2014, consisted of $1.5 billion of senior notes. Cimarex had no borrowings under its senior unsecured revolving credit facility and had a cash balance of $129 million. Debt to total capitalization at June 30 was 26 percent.