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IPAA OGIS – Cimarex Energy Co.

Cimarex Energy Co. · Apr 21, 2015 · 32 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. IPAA OGIS – Cimarex Energy Co. – slide 1
    IPAA Oil & Gas Investment Symposium April 21, 2015 1
  2. IPAA OGIS – Cimarex Energy Co. – slide 2
    Who is Cimarex Market cap......... 11.3B Debt/EBITDA........ 0.9x Production (4Q14)..... 950 MMcfe/d Proved reserves..... 3.1 Tcfe % Natural gas..... 53% % Proved developed..... 77% R/P Ratio.....13.7x Quarterly dividend…
  3. IPAA OGIS – Cimarex Energy Co. – slide 3
    Whats important Our strong financial position Low debt Use leverage wisely A balanced portfolio of assets Flexibility through commodity cycles Opportunityrich asset base Idea generation and execution Consistent strategy across…
  4. IPAA OGIS – Cimarex Energy Co. – slide 4
    Sound Decisions = Solid Growth Proved Reserves Daily Production (Bcfe) (MMcfe) 3,500 1,000 +38% 3,132 895935 869 3,000 425 2,497 750 2,500 693 2,259 343 2,000 500 1,500 444 1,000 350 0.7x 0.6x 0.6x 250 500 0 0 2012…
  5. IPAA OGIS – Cimarex Energy Co. – slide 5
    Regional Diversity Provides Flexibility Fourth Quarter 2014 Production Mix Permian Basin MidContinent 6
  6. IPAA OGIS – Cimarex Energy Co. – slide 6
    2015 E&D Investment Plan Total Capital estimated at: 0.91.1 billion Drilling & Completion Capital: 685mm Drilling & Completion 76% Drilling & Completion 76% 7
  7. IPAA OGIS – Cimarex Energy Co. – slide 7
    Service Costs are Down Future drivers: 15% Completion Optimization since Q4 Drilling Efficiencies Further service cost reductions 8 8
  8. IPAA OGIS – Cimarex Energy Co. – slide 8
    Permian Region Provides Multiple Opportunities E&D capex of 350mm Multiple projects/multiple zones Wolfcamp shale (oil & gas) Bone Spring sands (oil) Avalon Shale (oil window) 2015 Focus Wolfcamp Long Laterals Culberson Wolfcamp…
  9. IPAA OGIS – Cimarex Energy Co. – slide 9
    Biggest Opportunity Delaware Basin Wolfcamp 235,000 net acres in the fairway Multiple Wolfcamp Targets Culberson/White City Area 100,000+ net acres Wolfcamp A, C & D JDA with Chevron Reeves County 80,000 net acres Wolfcamp A &…
  10. IPAA OGIS – Cimarex Energy Co. – slide 10
    Culberson Area Details 100,000 netnet 100,000+ acres acres JDA with Chevron 2013 main objectives Drilling long laterals Drilling to hold acreage Five new Wolfcamp D long Wolfcamp laterals C & D peak IP 2,236 ave. 30day Two…
  11. IPAA OGIS – Cimarex Energy Co. – slide 11
    Strong Performance from Key Culberson Wolfcamp Wells Shallow Decline of Upsized Fracs (BOE/d) Wolfcamp D Wolfcamp A 3,000 1,600 30day IP Days 3060 2,450 2,500 Days 6090 2,500 1,200 1,250 1,095 90 day average 2,000 1,365 1,500…
  12. IPAA OGIS – Cimarex Energy Co. – slide 12
    Lower well costs partially offset to oil price declines Culberson County Wolfcamp D Type Curves BOE/day 3000 5,000 ft. Lateral 10,000 ft. Lateral 2500 Previous GoForward Previous GoForward Well Cost (MM) 9.0 7.6 13.5 11.9 BT IRR…
  13. IPAA OGIS – Cimarex Energy Co. – slide 13
    Sensitivity to Crude Oil Prices Culberson County Wolfcamp D BTax IRR 133% Strip dated 4/13/15 99% 90% 73% 68% 52% 49% 34% 33% 20% 10,000 ft. lateral; 43 stages 5,000 ft. lateral; 20 stages 30 40 50 60 70 Realized…
  14. IPAA OGIS – Cimarex Energy Co. – slide 14
    Upsized Frac Improves Second Bone Spring Results White City Area 180 Cumulative Production (MBOE/d) Focus Area 160 140 64% Increase 120 100 80 60 15 stages from nine 40 90 locations identified 20 HPB acreage;…
  15. IPAA OGIS – Cimarex Energy Co. – slide 15
    2015 Activity in Reeves & Ward Counties Reeves County 2015 focus on meeting acreage obligations Spud eight wells; 70mm 5mm midstream investment Ward County Minimal lease expirations in 2015 16 16
  16. IPAA OGIS – Cimarex Energy Co. – slide 16
    MidContinent Woodford Shale Opportunity CanaWoodford Activity Map E&D capex of 312mm Woodford capex of 179mm Operated Well Nonoperated Well Includes seven section infill program in Cana Core 128,000 net prospective Woodford acres…
  17. IPAA OGIS – Cimarex Energy Co. – slide 17
    Performance of upsized fracs in Cana Woodford core Golden Section (MMcfe/d) 12 Hartz Section 10 8.7 10.2 8.2 9.2 8 30day IP 6 Days 3060 Days 6090 4 90 day average 2 0 Golden Hartz 18 18
  18. IPAA OGIS – Cimarex Energy Co. – slide 18
    MidContinent: Meramec is an Exciting New Opportunity First six wells had average 30 day peak IP of 10.2 MMcfe/d Updip: 49% oil, 27% NGL, 24% gas Updip Downdip: 16% oil, 30% NGL, Downdip 54% gas 115,000 net prospective Meramec…
  19. IPAA OGIS – Cimarex Energy Co. – slide 19
    MidContinent Focus: CanaWoodford and Meramec Culberson Area Reeves County Ward County 100,000 net acres 80,000 net acres 38,000 net acres MMcfe/day 12 Cana Infill Meramec 10 Well Cost (MM) 7.0 7.3 BTAX IRR 39% 59% NPV10 (MM) 5.4…
  20. IPAA OGIS – Cimarex Energy Co. – slide 20
    Sensitivity to Crude Oil Prices CanaWoodford and Meramec BTax IRR Strip dated 4/13/15 102% 78% 59% 61% 49% 40% 39% 26% 31% 24% Meramec 5,000 ft. lateral; 23 stages Woodford 5,000 ft. lateral; 23 stages (Row 4 infill…
  21. IPAA OGIS – Cimarex Energy Co. – slide 21
    Well Positioned for 2015 and beyond Track record of profitable growth Strong balance sheet Sale of noncore assets provided cash at year end Nearterm focus on maintaining financial position Diverse portfolio with good…
  22. IPAA OGIS – Cimarex Energy Co. – slide 22
    Appendix 23 23
  23. IPAA OGIS – Cimarex Energy Co. – slide 23
    CanaWoodford Production 450 MMcfe/day 406 400 384 350 310 300 255 250 229 226 215 216 217 200 184 161 156 150 100 50 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Gas NGL Oil 24 24
  24. IPAA OGIS – Cimarex Energy Co. – slide 24
    Permian Production Growth MBOE/day 74 70 68 65 60 59 58 55 53 50 49 46 46 41 40 40 30 20 10 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Oil NGL Gas 25 25
  25. IPAA OGIS – Cimarex Energy Co. – slide 25
    2015 Guidance 2015 Production, Unit Expense and Capital Guidance First Quarter FullYear Production* Total Equivalent (Mmcfe/d) 920940 895935 % Liquids 52% 52% Expenses (/Mcfe): Production 1.07 1.17 Transportation, processing &…
  26. IPAA OGIS – Cimarex Energy Co. – slide 26
    Bone Spring Play Invested 337mm in 2014 to drill 81 gross (44 net) wells Three areas New Mexico 2nd & 3rd Bone Spring (Eddy & Lea Counties) 23 operated wells in 2014 30day average peak IP*: 962 . BOE/d; 749 bo/d Texas 3rd Bone…
  27. IPAA OGIS – Cimarex Energy Co. – slide 27
    Thick, Multipay Wolfcamp Section Culberson Area Reeves County Ward County 100,000 net acres 80,000 net acres 38,000 net acres IIndicates producing zone. 28 28
  28. IPAA OGIS – Cimarex Energy Co. – slide 28
    Culberson County Wolfcamp Pilots Stacked Lateral Test 80acre Spacing Pilot Wolfcamp C & D Wolfcamp D Two wells Four wells Producing/Evaluating Producing/Evaluating 29 29
  29. IPAA OGIS – Cimarex Energy Co. – slide 29
    Reeves County Wolfcamp Pilots 80acre Spacing Pilot Stacked/Staggered Spacing Pilot Wolfcamp A Wolfcamp A Four wells Six wells Producing/Evaluating Flowing Back 30 30
  30. IPAA OGIS – Cimarex Energy Co. – slide 30
    Upsized Wolfcamp Frac Old Frac Design: 5,000foot lateral; 12 stages; 4mm lbs of sand New Frac Design: 5,000foot lateral; 20 stages; 6mm lbs of sand 31
  31. IPAA OGIS – Cimarex Energy Co. – slide 31
    NonGAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA ( in Millions) 2012 2013 2014 Net income (loss) 354 565 507 Income tax expense (benefit) 207 329 299 Interest expense, net of capitalized 14 23 37…
  32. IPAA OGIS – Cimarex Energy Co. – slide 32
    NonGAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Twelve months December 31, Ended December 31, 2014 2014 2013 (in millions) (in millions) Long-term debt 1,500 Net cash provided by operating…

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