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JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co.

Cimarex Energy Co. · Jun 29, 2016 · 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.

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  1. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 1
    J.P. Morgan Inaugural Energy Equity Conference June 2729, 2016 1
  2. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 2
    Who is Cimarex Market cap......... 11.0B Debt/Adj. EBITDA1........ 2.2x Production (1Q16)..... 973 MMcfe/d Proved reserves..... 2.9 Tcfe % Natural gas..... 52% % Proved developed..... 75% R/P Ratio..... 8.1x Quarterly…
  3. JP Morgan Inaugural Energy Equity 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. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 4
    Reserves 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. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 5
    Production Growth Daily Production Net Debt Adjusted Production/Share (MMcfe) (MMcfe) 4 1,000 985 940970 3.55 869 3.28 3 750 693 2.56 627 2.34 2 500 250 53% 53% 1 51% 51% 48% 0 0 2012 2013 2014 2015 2016E 2012…
  6. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 6
    Hedge Strategy Targets 50% of Oil & Gas Volumes Daily Hedged Volumes Quarterly hedging program Oil (Bbl/d) Gas (MMcf/d) targets 10% of expected oil 20,000 Oil (Bbl/d) 120 and gas volumes over next Gas (MMcf/d) five quarters 15,000…
  7. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 7
    2016 E&D Investment Drilling & Completion Capital 650700mm (up 50mm from 475500mm previous guidance) Multiple projects/multiple zones Delaware Basin Acreage obligations Upper & Lower Wolfcamp in Culberson County Reeves infill…
  8. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 8
    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…
  9. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 9
    Culberson Area Wolfcamp Details 100,000+ 100,000 net netacres; acres JDA with Chevron 2013 main objectives 19 Drilling longlateral to hold Lower acreage Wolfcampwells Wolfcamp C & Dproducing Two rigs; 20 wells Ten Upper…
  10. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 10
    Long Lateral Performance Culberson Lower Wolfcamp Fourteen 10,000foot laterals 600 Cumulative Production Average 30day peak IP of (MBOE) 2,306 BOE/d (25% oil; 46% 500 gas; 29% NGL) 69% Increase 400 300 200 100 0…
  11. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 11
    Resilient Long Lateral Returns Culberson County Wolfcamp 10,000ft. lateral BTax IRR* 200% 175% 150% 125% 100% 75% 50% Upper Wolfcamp 25% Lower Wolfcamp 0% 20 30 40 50 60 Oil Price *Assumes 2.00/Mcf…
  12. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 12
    Improving Upper Wolfcamp Completion Design Culberson County Seven 7,500ft. laterals 250 Cumulative Production Two with larger completion (MBOE) Larger completions have 34% 34% Increase 200 production uplift (125 days) Avg. 30day…
  13. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 13
    Improving Upper Wolfcamp Completion Design Culberson County Three 10,000ft. laterals 250 Cumulative Production One with larger completion (MBOE) 23% Increase Larger completion has 23% 200 production uplift (120 days) 30day peak IP…
  14. JP Morgan Inaugural Energy Equity 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 eight wells/section Gato del Sol testing six Sunnys Halo Gato del Sol wells/section…
  15. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 15
    Culberson County Tim Tam Infill Development First Lower Wolfcamp Infill Five 10,000foot laterals 107acre spacing (6 wells/section) Staggered well pattern Currently drilling Completion in 4Q Barbaro Tim Tam Prewit Forward Pass…
  16. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 16
    Reeves County Activity Targeting Upper Wolfcamp Nine long laterals producing Average 30day peak IP of 1,577 BOE/d (51% oil; 28% gas; 21% NGL) Best well to date Big Timber has avg. 30day peak IP of 3,309 BOE/d (49% oil; 27% gas;…
  17. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 17
    MidContinent Overview Meramec and Woodford Stacked Targets Meramec: 115,000 net prospective acres 60% downdip; 40% updip 70,000 derisked Downspacing pilots underway Woodford: 128,000 net prospective acres (86% HBP) Meramec…
  18. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 18
    Woodford Shale Activity CanaWoodford Activity Map Long history of activity Participated in 817 gross wells since 2007 Operated Well Nonoperated Well Eastern core infill underway 6 sections; 2 operated 47 gross (22 net) wells…
  19. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 19
    Woodford: Consistent Results Across Acreage Phillips, Armacost Row 4 Infill 2,400 Cumulative Production (MMcfe) Golden Haley 2,000 Hartz 1,600 Eastern Core Infill First Year Cumulative Production (Bcfe) 1,200 2.1 2.1 2.2…
  20. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 20
    Meramec: The Big Picture 18 5,000ft laterals have avg. 30day peak IP of 8.3 MMcfe/d Three10,000ft laterals with avg. 30day peak IP of 13.6 MMcfe/d Product mix averages 44% gas; 33% oil; 23% NGL Oil yield ranges from 11486 bbl/…
  21. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 21
    Meramec Long Lateral Performance 62% uplift after 120 days 1,400 Cumulative Production Three 10,000ft laterals have (MMCFE) 30day peak IP of 13.6 1,200 MMcfe/d 45% gas, 32% oil, 23% NGL 1,000 Oil yields range from 37 to 278…
  22. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 22
    Meramec Spacing Pilots Stacked/Staggered Pilot Eight total wells; two rigs working Meramec Four Meramec wells Osage Stacked/staggered spacing Testing 10 wells per section Four Woodford wells Testing 9 wells per section Woodford…
  23. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 23
    Wellpositioned for 2016 and Beyond Diverse asset portfolio with solid returns Strong financial position Investment grade rating with stable outlook at both S&P and Moodys Flexibility to adapt to commodity environment Emphasis…
  24. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 24
    Appendix 25 25
  25. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 25
    2016 Guidance 2016 Production, Unit Expense and Capital Guidance Second Quarter FullYear Production Total Equivalent (Mmcfe/d) 935965 940970 % Liquids 52% 53% Capital Expenditures 650700 million Expenses (/Mcfe): Remainder of…
  26. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 26
    Hedges 2016 2017 Second Third Fourth First Second Third Fourth Oil: Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total (1) WTI Oil Collars Volume (Bbl/d) 4,000 9,000 9,000 5,519 9,000 9,000 5,000 5,723 Wtd Avg Floor…
  27. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 27
    Cana Area Production MMcfe/day 450 Row 4 Drilling Commenced 419 406 Row 4 Completions Began 400 384 385 350 350 333 322 310 300 255 250 229 226 216 217 200 150 100 50 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14…
  28. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 28
    Permian Basin Production MBOE/day 100 99 94 90 87 81 80 80 74 70 68 65 60 59 58 55 53 50 46 40 30 20 10 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Oil NGL Gas 29…
  29. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 29
    Permian Region Provides Multiple Opportunities Multiple projects/multiple zones Wolfcamp shale (oil & gas) Bone Spring sands (oil) Avalon Shale (oil window) 2016 Focus Wolfcamp Long Laterals Meeting acreage obligations 30
  30. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 30
    Upsized Frac Improves Second Bone Spring Results White City 5,000ft lateral 200 Cumulative Production (MBOE) Focus Area 180 160 140 70% Increase 120 100 80 15 stages from nine 60 100 locations identified 40 First 7,000 ft…
  31. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 31
    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…
  32. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 32
    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…
  33. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 33
    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…
  34. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 34
    NonGAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA ( in Millions) 2013 2014 2015 LTM Net income (loss) 565 507 (2,409) (2,180) Income tax expense (benefit) 329 299 (1,373) (1,251) Interest expense,…
  35. JP Morgan Inaugural Energy Equity Conference – Cimarex Energy Co. – slide 35
    NonGAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation March 31, Three months 2016 Ended March 31, (in millions) 2016 2015 (in millions) Long-term debt (principal) 1,500 Net cash provided by…

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