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Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co.

Cimarex Energy Co. · Nov 10, 2015 · 35 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. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 1
    BAML Global Energy Conference Miami November 1011, 2015 1
  2. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 2
    Who is Cimarex Market cap......... 11.1B Debt/Adj. EBITDA1........ 1.5x Production (3Q15)..... 979 MMcfe/d Proved reserves..... 3.1 Tcfe % Natural gas..... 53% % Proved developed..... 77% R/P Ratio..... 9.9x Quarterly…
  3. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 3
    Whats Important Returns drive decisions Our balanced portfolio of assets Premier position in the Delaware Basin and MidCon region Provides flexibility through commodity cycles Idea generation and track record of strong…
  4. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 4
    Sound Decisions = Solid Growth Proved Reserves Daily Production (Bcfe) (MMcfe) +14% 3,500 1,000 983991 3,132 869 3,000 425 2,497 750 2,500 693 2,259 343 2,000 500 1,500 444 1,000 350 250 500 0 0 2012 2013 2014 2013…
  5. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 5
    Regional Diversity Provides Flexibility Third Quarter 2015 Production Mix Permian Basin MidContinent 6
  6. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 6
    2015 E&D Investment Plan Drilling & Completion Capital Total: 900950 million 769mm Currently seven operated rigs Expect 12 operated rigs by yearend Spud Culberson Wolfcamp A downspacing pilot in 4Q Meramec pilot to begin in 4Q…
  7. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 7
    2016 How it looks today Capital Allocation* Multiple projects/multiple zones Drilling & Completion Delaware Basin Begin Wolfcamp D development in Culberson County Continue Wolfcamp A pilot Bone Spring sands (oil) First Reeves…
  8. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 8
    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 &…
  9. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 9
    Culberson Area Wolfcamp Details 100,000+ 100,000 net netacres; acres JDA with Chevron 2013 main objectives 13 Drilling Wolfcamp D acreage to hold long laterals Wolfcamp Avg. 30dayC peak & D IP of 2,308 Two BOE/d…
  10. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 10
    Long Lateral Performance Culberson Wolfcamp D Thirteen 10,000foot laterals 600 Cumulative Production Average 30day peak IP of 2,308 (MBOE) BOE/d (25% oil; 46% gas; 29% 500 NGL) 63% Increase 400 300 200 100 0 0 60…
  11. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 11
    Long Laterals Provide Upsized Returns Culberson County Wolfcamp D 3000 BOE/day 5,000 ft. lateral 10,000 ft. lateral Well Cost (MM) 7.1 11.2 2500 BTAX IRR 48% 75% NPV10 (MM) 4.6 12.5 2000 Realized prices: Oil 50/Bbl; Gas 3.00/Mcf;…
  12. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 12
    Resilient Long Lateral Returns Culberson County Wolfcamp D well 10,000ft. lateral BTax IRR* 160% 140% 120% 100% 80% 60% 40% 3 gas; NGL 35% of oil price 3 gas; NGL 25% of oil price 20% 2 gas; NGL 25% of oil…
  13. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 13
    Culberson County Wolfcamp A Pilot Sixwell downspacing pilot 7,500foot laterals Stacked/staggered well pattern Sunnys Halo section testing 8 wells/section; Gato del Sol testing 6 wells/section Wells spuds in 4Q15 Sunnys Halo Gato…
  14. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 14
    Culberson County Tim Tam Infill Development First Wolfcamp D Infill Drill five 10,000foot laterals 107acre spacing (6 wells/section) Wells to be staggered in the Wolfcamp D Spud in first quarter of 2016 First production expected…
  15. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 15
    Upsized Frac Improves Second Bone Spring Results White City Area 180 Cumulative Production (MBOE) Focus Area 160 140 120 64% Increase 100 80 60 15 wells with average 30day peak IP of 40 1,344 BOE/d* (910 bo/d) 15 stages…
  16. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 16
    2015 Activity in Reeves & Ward Counties Reeves County 8 Wolfcamp A 10kft. laterals Average 30day peak IP of 1,575 BOE/d (50% oil; 28% gas; 22% NGL) Best well in Upper A zone Big Timber well has avg. 30day peak IP of 3,309 BOE/d…
  17. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 17
    MidContinent Woodford Shale Opportunity CanaWoodford Activity Map 2015 capex of 256mm Row 4 completions done Impacts 4Q15 production Operated Well Nonoperated Well Upcoming activity Eastern core infill: drilling in 1Q; completions…
  18. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 18
    Woodford: Consistent Results Across Acreage 2,400 Golden Section Cumulative Production (MMCFE) 2,000 Haley Section 1,600 Hartz Section 1,200 800 400 0 0 60 120 180 240 300 360 Days Golden Hartz Haley 19 19
  19. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 19
    Meramec: The Big Picture First 10,000ft lateral has 30 day peak IP of 16.0 MMcfe/d 57% gas, 28% NGL, 15% oil Second well producing Updip Third long lateral drilling Downdip First stacked/staggered Meramec test producing Two…
  20. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 20
    Meramec Long Lateral Performance First 10,000ft. lateral avg. 30day 1,200 Cumulative Production peak IP of 16.0 MMcfe/d (57% (MMCFE) gas, 15% oil, 28% NGL) 1,000 72% uplift in 30day peak IP from eleven 5000foot average 800…
  21. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 21
    Meramec Next Step: Spacing Pilots Meramec Stacked/Staggered Pilot Eleven total wells Wells spud in 4Q Osage Six Meramec wells Staggered between upper and lower zones Testing 10 wells per section; five per landing zone Woodford…
  22. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 22
    Wellpositioned for 2015 and Beyond Diverse asset portfolio with solid returns Strong financial position Flexibility to adapt to commodity environment Emphasis on improved productivity 23 23
  23. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 23
    Appendix 24 24
  24. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 24
    2015 Guidance 2015 Production, Unit Expense and Capital Guidance Fourth Quarter FullYear Production Total Equivalent (Mmcfe/d) 9801,010 983991 % Liquids 52% 53% Capital Expenditures 900950 million Expenses (/Mcfe): Remainder of…
  25. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 25
    Hedges First Second Third Fourth Oil: Quarter Quarter Quarter Quarter Total 2016 WTI Oil ThreeWay Collars (1) Volume (Bbl) 273,000 273,000 276,000 276,000 1,098,000 Wtd Avg Floor Sold (put) 40.00 40.00 40.00 40.00 40.00 Wtd Avg…
  26. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 26
    Cana Area Production MMcfe/day 450 Row 4 Drilling Commenced 406 400 384 Row 4 Completions Began 350 350 333 322 310 300 255 250 229 226 215 216 217 200 184 161 156 150 100 50 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3…
  27. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 27
    Permian Basin Production MBOE/day 100 99 94 90 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 Q2 15 Q3 15 Oil NGL…
  28. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 28
    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…
  29. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 29
    Thick, Multipay Wolfcamp Section Culberson Area Reeves County Ward County 100,000 net acres 80,000 net acres 37,000 net acres IIndicates producing zone. 30 30
  30. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 30
    Culberson County Downspacing Pilot Results Two fourwell pilots; 5,000ft laterals Barbaro Pilot 80acre spacing (8 wells/section) 20stage completion; 1,200 lbs/foot PrewitOmaha Pilot 107acre spacing (6 wells/section) 16stage…
  31. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 31
    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…
  32. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 32
    Delaware Basin Avalon Shale: Spacing Pilots Four spacing pilots; 18 total wells Testing 6 & 8 wells/section Average 30day peak rate of 1,012 BOE/d (70% oil; 17% gas; 13% NGL) 250 locations Includes Avalon and Leonard Assumes…
  33. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 33
    Performance of Upsized Fracs in CanaWoodford Core (MMcfe/d) Golden Section 12 10 Haley Section 10.2 8.7 10.3 8.8 8.2 9.2 Hartz Section 8 30day IP 6 Days 3060 Days 6090 4 90 day average 2 0 Golden Hartz Haley Oil…
  34. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 34
    NonGAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA ( in Millions) 2012 2013 2014 LTM Net income (loss) 354 565 507 (1,703) Income tax expense (benefit) 207 329 299 (955) Interest expense, net of…
  35. Bank of America Merrill Lynch Global Energy Conference – Cimarex Energy Co. – slide 35
    NonGAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Three months Sep. 30, Ended Sep. 30 2015 2015 2014 (in millions) (in millions) Long-term debt 1,500 Net cash provided by operating activities…

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