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CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co.

Cimarex Energy Co. · Jul 12, 2012 · 53 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. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 1
    KeyBanc Capital Markets Permian Bus Tour 2012 July 12, 2012
  2. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 2
    Corporate Profile NYSE: XEC Shares outstanding 85.7 MM Proved reserves3.. 2.05 Tcfe Market cap1... 4.4 B % Natural gas 59% Long-term debt 2.. 0.8 B % Proved developed 82% Enterprise value 5.2 B R/P Ratio.. 9.5x Stockholders' equity3…
  3. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 3
    Cimarex Strategy Grow through the drill-bit Portfolio approach Keep a mix of opportunitiesgas/oil; low- medium-higher risk projects; seek geologic and geographic diversity Rate of return based decisions Underpin with low/moderate…
  4. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 4
    Core Operating Areas YE 2011 Proved Reserves 2.05 Tcfe 82% Proved Developed By Region Mid-Continent Permian Gulf Coast By Product 5
  5. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 5
    2012 Capital Investment 2011 E&D Capital 2012E E&D Capital 1.58 B 1.4-1.6 B E&D Well Count E&D Well Count Capital Gross Net Capital Gross Net ( MM) (Drilled & Completed) ( MM) (Drilled & Completed) (MidPt. Est.) PB 731 140 100…
  6. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 6
    Mid-Continent Region Summary Statistics Proved reserves (YE 11) 1,375.7 (Bcfe) 32% liquids; 72% proved developed Production (Q1 12) 313.9 (MMcfe/d) 31% liquids Net acres (YE 11) 729 (000s) Mid-Continent Capital Investment 2012E…
  7. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 7
    Cana-Woodford Shale Drilled or non-op in 366 wells through Q1 2012 Strong land position: 120,000 net acres w/ 75,000 Acres NRIs 81% (Liquids Rich) Liquids Rich Area - Net acres: 75,000 45,000 Acres - Gross pay: 100 300 (Gas…
  8. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 8
    Cana-Woodford Infill Development Infill drilling in liquids- Canadian River rich core XEC River 4-7 operated rigs Access Drilling off two well pads XEC Infill Row with 9 wells/section Began frac of infill wells late…
  9. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 9
    Cana-Woodford Summary Q1 2012 production: Infill row looking east Gas (MMcf/d) 108.3 67% NGLs (b/d) 6,668 25% Oil (b/d) 2,175 8% Equivalent (MMcfe/d) 161.3 100% Significant resource potential: % Net Net Net Resource…
  10. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 10
    Gulf Coast Summary Statistics Proved reserves (YE 11) 49.0 (Bcfe) Production (Q1 12) 49.3 (MMcfe/d) Net acres (YE 11) 81 (000s) Capital Investment 2012E 2011A Gulf Coast E&D Capital ( MM) 80 95 Wells drilled - gross 8 11 net 6…
  11. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 11
    Permian Basin 12
  12. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 12
    Agenda Infill row looking east Introduction NM & TX BSPG Horizontal Oil Lee Catalano & Michael Swain Kim Nordstog & Floyd Hammond NM & TX Wolfcamp Horizontal Dave Rittersbacher & Michael DeShazer 13
  13. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 13
    Permian Basin Summary Statistics Proved reserves (YE 11) 620.4 (Bcfe) 60% liquids; 99% proved developed Production (Q1 12) 240.3 (MMcfe/d) 60% liquids Net acres (YE 11) 438 (000s) Permian Capital Investment 2012E 2011A E&D…
  14. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 14
    Permian Basin Rig Count Overview Permian Basin Total 498 active rigs 150 Horizontal 348 Vertical Midland Basin & CBP: 328 active rigs 50 Horizontal 278 Vertical Delaware Basin: 170 active rigs 100 Horizontal 70 Vertical…
  15. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 15
    Number of Rigs 0 50 100 150 200 250 300 350 400 450 500 550 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09…
  16. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 16
    Most Active Operators Infill row looking east 17
  17. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 17
    Permian Basin Infill row looking east 18
  18. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 18
    Permian Region Properties Infill row looking east 19
  19. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 19
    2012 Permian Programs (projected) Infill row looking east 2012 Oil/Gas Ratio = 73/27 20
  20. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 20
    2006 to 2012 Wells Drilled Infill row looking east 21
  21. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 21
    2006 to 2012 Drilling Investment Infill row looking east 22
  22. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 22
    Permian Basin - Regional Setting Abo & Paddock Bone Spring Shelf Edge Shelf to Basin Midland Central Basin Basin Platform Delaware Basin Shale Deep Basin System Series Northern Shelf Delaware Basin Bone Spring Deep Basin
  23. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 23
    Lower Permian Correlation Chart Infill row looking east 24
  24. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 24
    Permian Basin Prolific multi-pay Abo/Paddock basin Strong position in New Mexico Bone Spring multiple plays in the Delaware Basin: - New Mexico Bone Spring 65,000 net acres New Mexico Texas/New Mexico Texas Unconventional -…
  25. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 25
    Permian Bone Spring Bone Spring Sandstones Depositional Model LOBE COMPLEX 3 miles Thick-bedded Lobe Sandstones Thin-bedded Lobe Fringe Deposits Basinal Mudstones 26
  26. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 26
    Permian 2nd Bone Spring New Mexico 2nd BSPG 0.3 DPHI NPHI -0.1 0.2 RS LLS 2000 Type Log & Reservoir Data 0 GR 100 0.3 0.3 XPHI -0.1 0.2 -0.1 0.2 LLD 2000 2000 - Sand Reservoir 7450 7500 - 11% Porosity /…
  27. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 27
    Largest Bone Spring Producer and Most Active Bone Spring Driller in Basin 35,000 Gross BOPD XEC Operated Bone Spring Production Gross MCFD 30,000 25,000 Gross BOPD/Gross MCFD 20,000 15,000 10,000 5,000…
  28. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 28
    Southern California 29 Fed 15H 2nd BSPG 10,000 Gross BOPD 980 MBOE Gross MCFD Gross BWPD 1,000 Gross BOPD/Gross MCFD 100 10 29
  29. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 29
    COMPLETION DESIGN CHANGE HAS INCREASED RESERVES 50% 2nd BSPG CHRONOLOGICAL RESERVES RESERVES MBOE 650 MBOE AVERAGE 400 MBOE AVERAGE 4-2009 Wells 9-2011 30
  30. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 30
    Permian Basin Prolific multi-pay Abo/Paddock basin Strong position in New Mexico Bone Spring multiple plays in the Delaware Basin: - New Mexico Bone Spring 65,000 net acres New Mexico Texas/New Mexico Texas Unconventional -…
  31. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 31
    Permian Bone Spring Bone Spring Sandstones Depositional Model LOBE COMPLEX 3 miles Thick-bedded Lobe Sandstones Thin-bedded Lobe Fringe Deposits Basinal Mudstones 32
  32. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 32
    Permian 3rd Bone Spring Texas 3rd BSPG 0.3 DPHI -0.1 0.2 RS 2000 NPHI LLS Type Log & Reservoir Data GR 0.3 XPHI -0.1 0.2 LLD 2000 0 150 0.3 -0.1 0.2 2000 - Sand Reservoirs with Organic Shales 10950 11000 - 11%…
  33. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 33
    Pitzer 8-1H - 3rd BSPG 10,000 Gross Act BOPD 798 MBOE Gross Act MCFD Gross Act BWPD Gross BOPD/Gross MCFD 1,000 100 10 34
  34. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 34
    COMPLETION DESIGN CHANGE HAS INCREASED RESERVES 60% 3rd BSPG CHRONOLOGICAL RESERVES 730 MBOE AVERAGE RESERVES MBOE 450 MBOE AVERAGE 5-2006 Wells 9-2011 35
  35. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 35
    Permian Delaware Bone Spring 2011 Drilling: 80 Bone Spring wells First-quarter 2012 drilled and 63 New Mexico completed 18 gross (11 net) 17 Texas Bone Spring wells - 13 gross (6 net) in New Mexico - 5 gross (5 net) in Texas…
  36. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 36
    Future BSPG Development Oil Window 173 Bone Spring HZ Wells Drilled to Date - Most in Industry - Longest Production History Over 200 Remaining Locations in Focus Areas - Expanding to Other Areas of Our Acreage - Aggressively…
  37. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 37
    Wolfcamp Paleogeography : Early Permian North America (Laurentia) Delaware Basin South America, Africa, et al (Gondwana) After R. Blakey, NAU 2010
  38. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 38
    Delaware Basin Regional Setting Guadalupe Mountains White City New Mexico Texas Culberson N
  39. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 39
    Permian Stratigraphic Column Atoka / Morrow/ Silurian Oil Oil & Gas
  40. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 40
    Delaware Basin - Wolfcamp Shale Play Depositional Model Deep Basin Shelf Shale Carbonate Carbonate Debris
  41. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 41
    Wolfcamp Type Log White City Area, Eddy Co, NM Target : Wolfcamp B,C,D Zones Black Shale / Limestone 600-700 Gross Thickness Mudlog Gas Shows / Flares
  42. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 42
    Wolfcamp Core Photo Healed Fractures Organic Rich Shale Limestone
  43. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 43
    Focused Ion Beam / Scanning Electron Microscope Image
  44. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 44
    Permian Horizontal Wolfcamp White City/northern Culberson Cty. Focus area 80,000 net acres White City Eddy Organic-rich shale Depth: 8,500-10,000 New Mexico Texas Gross thickness: 600 700 Total organic carbon: 2 - 4%…
  45. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 45
    Permian Horizontal Wolfcamp Drilled and completed 20 horizontal Wolfcamp wells Triple Crown to date White City 34 miles 12 pipeline First 30-day production per well average: 6.6 MMcfe/d Comprised of : 47% gas, 23% oil and 30%…
  46. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 46
    Permian Horizontal Wolfcamp Drilling Days Spud to Rig Release Drilling Days Reduced Over Time 47
  47. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 47
    Permian Horizontal Wolfcamp Significant investment in infrastructure in 2011/2012 - Support full development of Wolfcamp and other regional shale plays - No acreage dedications, flexibility to access markets Triple Crown…
  48. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 48
    Permian Horizontal Wolfcamp Net Operated Production* Growth *Assumes Full NGL Recovery New Pipeline In Place Drilling and Completion Delays Due to Pipeline Constraints 49
  49. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 49
    Key Investment Considerations Diversified drilling program - Well positioned in multi-pay Permian Basin and Mid-Continent areas which underpin long-term growth and value - Oil and NGLs focus - Quickly adaptable to economic…
  50. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 50
    Appendix 51
  51. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 51
    Hedges Oil Average Price Daily (2) Period Index Type Volume(1) Floor Ceiling Mar - Dec 2012 WTI Collar 14,000 80.00 119.35 (1) Oil volume = bbls/d (2) WTI = NYMEX West Texas Intermediate price. 52
  52. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 52
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA ( in Millions) 2007 2008 2009 2010 2011 Net income (loss) 345 (902) (312) 575 530 Income tax expense (benefit) 197 (529) (177) 339 312 Interest expense,…
  53. CAPITAL MARKETS PERMIAN BUS TOUR – Cimarex Energy Co. – slide 53
    Non-GAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Quarter ended YE March 31, 2012 2011 (in millions) (in millions) Pro Forma long-term debt 750 Net cash provided by operating activities…

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