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Simmons Energy Conference – Cimarex Energy Co.

Cimarex Energy Co. · Mar 2, 2016 · 33 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. Simmons Energy Conference – Cimarex Energy Co. – slide 1
    Simmons Energy Conference March 23, 2016 1
  2. Simmons Energy Conference – Cimarex Energy Co. – slide 2
    Who is Cimarex Market cap......... 8.0B Debt/Adj. EBITDA1........ 1.9x Production (4Q15)..... 986 MMcfe/d Proved reserves..... 2.9 Tcfe % Natural gas..... 52% % Proved developed..... 75% R/P Ratio..... 8.1x Quarterly…
  3. Simmons Energy Conference – Cimarex Energy Co. – slide 3
    Whats Important Returns drive decisions Balanced portfolio of assets Premier position in the Delaware Basin and MidCon region Flexibility through commodity cycles Idea generation and track record of strong execution Strong…
  4. Simmons Energy Conference – Cimarex Energy Co. – slide 4
    Reserve Growth Proved Reserves (Tcfe) 3.5 3.3 3.1 2.9 0.4 3.0 2.5 2.5 2.3 2.0 1.5 1.0 0.5 0.0 2012 2013 2014 2015 2015* Oil NGL Gas *Adjusted for negative price revisions 5 5
  5. Simmons Energy Conference – Cimarex Energy Co. – slide 5
    Production Growth Net Debt Adjusted Production/Share (MMcfe) Daily Production (MMcfe) 4 1,000 985 890930 869 3 750 693 627 2 500 250 53% 52% 1 51% 51% 48% 0 0 2012 2013 2014 2015 2016E 2012 2013 2014 2015 Oil…
  6. Simmons Energy Conference – Cimarex Energy Co. – slide 6
    Regional Diversity Provides Flexibility Fourth Quarter 2015 Production Mix Permian Basin MidContinent 4Q production averaged 986 MMcfe/d 7
  7. Simmons Energy Conference – Cimarex Energy Co. – slide 7
    2015 E&D Investment Drilling & Completion Capital Total: 877 million 730mm 11 operated rigs at yearend Projects begun in 4Q15 Culberson Upper Wolfcamp downspacing pilot Meramec stacked/ staggered spacing pilot Sixsection Woodford…
  8. Simmons Energy Conference – Cimarex Energy Co. – slide 8
    2016 E&D Investment Drilling & Completion Capital 600650mm 400460mm Multiple projects/multiple zones Delaware Basin Acreage obligations Upper & Lower Wolfcamp in Culberson County Reeves infill development MidContinent region…
  9. Simmons Energy Conference – Cimarex Energy Co. – slide 9
    Biggest Opportunity Delaware Basin Wolfcamp 230,000 net acres in the fairway Multiple Wolfcamp Targets Culberson/White City Area 100,000+ net acres Upper & Lower Wolfcamp JDA with Chevron Reeves County 80,000 net acres Upper…
  10. Simmons Energy Conference – Cimarex Energy Co. – slide 10
    Culberson Area Wolfcamp Details 100,000+ 100,000 net netacres; acres JDA with Chevron 2013 main objectives 18 Drilling LowertoWolfcamp long hold acreage Wolfcamp laterals C&D producing Two rigs; 20 wells Nine Upper Wolfcamp…
  11. Simmons Energy Conference – Cimarex Energy Co. – slide 11
    Long Lateral Performance Culberson Lower Wolfcamp Thirteen 10,000foot lateral 600 Cumulative Production Average 30day peak IP of (MBOE) 2,308 BOE/d (25% oil; 46% 500 gas; 29% NGL) 70% Increase 400 300 200 100 0 0…
  12. Simmons Energy Conference – Cimarex Energy Co. – slide 12
    Resilient Long Lateral Returns Culberson County Wolfcamp Wells 10,000ft. lateral BTax IRR* 120% 100% 80% 60% 40% 2.50 gas; Upper Wolfcamp 2.00 gas; Upper Wolfcamp 20% 2.50 gas; Lower Wolfcamp 2.00 gas; Lower…
  13. Simmons Energy Conference – Cimarex Energy Co. – slide 13
    Improving Upper Wolfcamp Completion Design Culberson County Upper Wolfcamp Seven 7,500ft. laterals 250 Cumulative Production Two with larger completion (MBOE) Larger completion yields 34% 34% Increase 200 uplift after 125 days…
  14. Simmons Energy Conference – Cimarex Energy Co. – slide 14
    Culberson County Upper Wolfcamp Pilot Sixwell downspacing pilot 7,500foot laterals Stacked/staggered well pattern Sunnys Halo section testing 8 wells/section; Sunnys Halo Gato del Sol Gato del Sol testing 6 wells/section Wells…
  15. Simmons Energy Conference – Cimarex Energy Co. – slide 15
    Culberson County Tim Tam Infill Development First Lower Wolfcamp Infill Drill five 10,000foot laterals 107acre spacing (6 wells/section) Wells to be staggered in the Lower Wolfcamp Spud in first quarter of 2016 First production…
  16. Simmons Energy Conference – Cimarex Energy Co. – slide 16
    Upsized Frac Improves Second Bone Spring Results White City Area 200 Cumulative Production (MBOE) Focus Area 180 160 140 70% Increase 120 100 80 15 stages from nine 60 100 locations identified 40 Latest 7,000 ft lateral…
  17. Simmons Energy Conference – Cimarex Energy Co. – slide 17
    2015 Activity in Reeves County 8 Upper Wolfcamp long laterals Average 30day peak IP of 1,575 BOE/d (50% oil; 28% gas; 22% NGL) Best well to date Big Timber has avg. 30day peak IP of 3,309 BOE/d (49% oil; 27% gas; 24% NGL) 2016…
  18. Simmons Energy Conference – Cimarex Energy Co. – slide 18
    MidContinent Woodford Shale Activity CanaWoodford Activity Map Row 4 production began in 4Q15 Eastern core infill drilling Operated Well Nonoperated Well Completions begin in 4Q16 6 sections; 2 operated 50 gross (22 net) wells…
  19. Simmons Energy Conference – Cimarex Energy Co. – slide 19
    Woodford: Consistent Results Across Acreage Phillips, Armacost Sections Row 4 Infill 2,400 Cumulative Production (MMcfe) 2,000 Golden Section Haley Section Hartz Section 1,600 Eastern Core Infill First Year Cumulative…
  20. Simmons Energy Conference – Cimarex Energy Co. – slide 20
    Meramec: The Big Picture Two 10,000ft laterals producing Third long lateral flowing back First stacked/staggered Meramec test producing Two wells 270 apart vt.; 660 hz. Avg. 30day peak IP of 7.6 MMcfe/d (42% gas, 23% NGL, 35% oil)…
  21. Simmons Energy Conference – Cimarex Energy Co. – slide 21
    Meramec Long Lateral Performance 69% uplift after 120 days 1,400 Cumulative Production Two 10,000ft laterals have 30 (MMCFE) day peak IP of 15.0 MMcfe/d 1,200 53% gas, 23% NGL, 24% oil Oil yields range from 37104 1,000 Bbl/MMcf 69%…
  22. Simmons Energy Conference – Cimarex Energy Co. – slide 22
    Meramec Next Step: Spacing Pilots Stacked/Staggered Pilot Eight total wells; Two rigs Meramec working Osage Four Meramec wells Staggered between upper and lower zones Testing 10 wells per section; five per landing zone Woodford…
  23. Simmons Energy Conference – Cimarex Energy Co. – slide 23
    2016 Guidance 2016 Production, Unit Expense and Capital Guidance First Quarter 2016 Production Total Equivalent (Mmcfe/d) 925955 890930 % Liquids 52% 52% Capital Expenditures 600650 million Expenses (/Mcfe): 2016 Production…
  24. Simmons Energy Conference – Cimarex Energy Co. – slide 24
    Hedges 2016 2017 First Second Third Fourth First Second Third Fourth Oil: Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total WTI Oil Collars (1) Volume (Bbl) 364,000 368,000 368,000 1,100,000 360,000 364,000…
  25. Simmons Energy Conference – Cimarex Energy Co. – slide 25
    Cana Area Production MMcfe/day 450 Row 4 Drilling Commenced 406 Row 4 Completions Began 400 384 385 350 350 333 322 310 300 255 250 229 226 215 216 217 200 184 161 156 150 100 50 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13…
  26. Simmons Energy Conference – Cimarex Energy Co. – slide 26
    Permian Basin Production MBOE/day 100 99 94 90 87 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…
  27. Simmons Energy Conference – Cimarex Energy Co. – slide 27
    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…
  28. Simmons Energy Conference – Cimarex Energy Co. – slide 28
    Long Laterals Provide Upsized Returns Culberson County Lower Wolfcamp 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…
  29. Simmons Energy Conference – Cimarex Energy Co. – slide 29
    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…
  30. Simmons Energy Conference – Cimarex Energy Co. – slide 30
    Strong Performance from Key Culberson Wolfcamp Wells Shallow Decline of Upsized Fracs (BOE/d) Lower Wolfcamp Upper Wolfcamp 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…
  31. Simmons Energy Conference – Cimarex Energy Co. – slide 31
    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…
  32. Simmons Energy Conference – Cimarex Energy Co. – slide 32
    NonGAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA ( in Millions) 2012 2013 2014 2015 Net income (loss) 354 565 507 (2,409) Income tax expense (benefit) 207 329 299 (1,373) Interest expense, net of…
  33. Simmons Energy Conference – Cimarex Energy Co. – slide 33
    NonGAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Dec. 31, Three months 2015 Ended Dec. 31 (in millions) 2015 2014 (in millions) Long-term debt (principal) 1,500 Net cash provided by…

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