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June 2015 Corporate Presentation – Cimarex Energy Co.

Cimarex Energy Co. · Jun 5, 2015 · 32 slides

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Slides

  1. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 1
    June 2015 1
  2. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 2
    Who is Cimarex Market cap......... 10.8B Debt/Adj. EBITDA1........ 1.0x Production (1Q15)..... 947 MMcfe/d Proved reserves..... 3.1 Tcfe % Natural gas..... 53% % Proved developed..... 77% R/P Ratio..... 9.9x Quarterly…
  3. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 3
    Whats Important A balanced portfolio of assets Premiere position in the Delaware Basin and MidCon region Opportunityrich asset base with both crude oil and natural gas exposure Flexibility through commodity cycles Idea generation…
  4. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 4
    Sound Decisions = Solid Growth Proved Reserves Daily Production (Bcfe) (MMcfe) 3,500 +69% 1,000 3,132 920950 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. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 5
    Regional Diversity Provides Flexibility First Quarter 2015 Production Mix Permian Basin MidContinent 6
  6. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 6
    2015 E&D Investment Plan Total Capital estimated at: 0.91.1 billion Drilling & Completion 76% Drilling & Completion 76% 7
  7. June 2015 Corporate Presentation – 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. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 8
    Permian Region Provides Multiple Opportunities Multiple projects/multiple zones Wolfcamp shale (oil & gas) Bone Spring sands (oil) Avalon Shale (oil window) 2015 Focus Wolfcamp Long Laterals Meeting acreage obligations White City…
  9. June 2015 Corporate Presentation – 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. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 10
    Culberson Area Details 100,000 net 100,000+ netacres acres JDA with 2013 mainChevron objectives 7 Wolfcamp D long Drilling to hold laterals acreage Ave. 30dayCpeak Wolfcamp & D IP 2,378 BOE/d (26% oil; 45% Two gas)wells…
  11. June 2015 Corporate Presentation – 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. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 12
    Lower well costs partially offset oil price declines Culberson County Wolfcamp D 3000 BOE/day 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 32% 49% 56% 73%…
  13. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 13
    Sensitivity to Crude Oil Prices Culberson County Wolfcamp D BTax IRR 133% Strip dated 5/26/15 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. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 14
    Culberson County New Spacing Pilot Four wells 5,000 ft laterals Six wells per section 107acre spacing 16stage completion 1,200 lbs per foot Wells flowing back 2014 80-acre pilot New pilot 15 15
  15. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 15
    Upsized Frac Improves Second Bone Spring Results White City Area 180 Cumulative Production (MBOE) Focus Area 160 140 64% Increase 120 100 80 15 wells with average 30day 60 peak IP of 1,344 BOE/d* (910 bo/d) 40 15…
  16. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 16
    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 17 17
  17. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 17
    Reeves County Stacked/Staggered Spacing Pilot Six infill wells plus parent well Upper A infill wells Produce at higher rates Ave. IP of 1,068 BOE/d Lower A infill wells Ave. IP of 761 BOE/d Carbonate in landing zone made wells…
  18. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 18
    Stacked/Staggered Pilot Reeves County Wolfcamp A BOE/day 1,200 Upper Wells Lower Wells 1,000 800 30day IP Days 3060 600 Days 6090 Days 90120 400 200 0 % Oil 59% 58% 59% 57% 56% 49% 50% 43% 19 19
  19. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 19
    MidContinent Woodford Shale Opportunity CanaWoodford Activity Map Core Woodford capex of 185mm Includes seven section infill Operated Well program in Row 4 Nonoperated Well 128,000 net prospective Woodford acres (86%HBP) Golden…
  20. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 20
    Performance of upsized fracs in CanaWoodford 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 21 21
  21. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 21
    MidContinent: Meramec is an Exciting New Opportunity Seven wells with average 30 day peak IP of 10.0 MMcfe/d Updip: 49% oil, 24% gas Downdip: 16% oil, 54% gas Updip Next Steps Downdip Test long laterals Highgrade frac design…
  22. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 22
    Wellpositioned for 2015 and Beyond Strong financial position Diverse asset portfolio with good returns Flexibility to adapt to any commodity environment Emphasis on improved productivity 23 23
  23. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 23
    Appendix 24 24
  24. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 24
    Cana Area Production 450 MMcfe/day 406 400 384 350 350 310 300 255 250 229 226 215 216 217 200 184 161 156 150 100 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 Q1 15 Gas NGL Oil 25…
  25. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 25
    Permian Basin Production MBOE/day 81 80 74 70 68 65 60 59 58 55 53 50 49 46 46 40 41 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 Q1 15 Oil NGL Gas 26 26
  26. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 26
    2015 Guidance 2015 Production, Unit Expense and Capital Guidance Second Quarter FullYear Production* Total Equivalent (Mmcfe/d) 965985 920950 % Liquids 54% 53% Expenses (/Mcfe): Production 1.00 1.10 Transportation, processing &…
  27. June 2015 Corporate Presentation – 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. June 2015 Corporate Presentation – 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. June 2015 Corporate Presentation – 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. June 2015 Corporate Presentation – 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. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 31
    NonGAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA ( in Millions) 2012 2013 2014 LTM Net income (loss) 354 565 507 (46) Income tax expense (benefit) 207 329 299 (11) Interest expense, net of…
  32. June 2015 Corporate Presentation – Cimarex Energy Co. – slide 32
    NonGAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Three months March 31, Ended March 31, 2015 2015 2014 (in millions) (in millions) Long-term debt 1,500 Net cash provided by operating…

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