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Goldman Sachs Global Energy Conference – Cimarex Energy Co.

Cimarex Energy Co. · Jan 5, 2017 · 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. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 1
    Goldman Sachs Global Energy Conference January 5-6, 2017 Orlando 1
  2. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 2
    Who is Cimarex Market cap... 13.1B Debt/Adj. EBITDA1 2.8x Production (3Q16) 947 MMcfe/d Proved reserves. 2.9 Tcfe % Natural gas 52% % Proved developed 75% R/P Ratio... 8.1x Quarterly dividend of 0.08/share 1 September 30,…
  3. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 3
    Whats Important Returns drive decisions Balanced portfolio of assets Premier position in the Delaware Basin and Mid-Con region Flexibility through commodity cycles Idea generation and track record of strong execution Strong…
  4. Goldman Sachs Global Energy 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. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 5
    Production Growth Daily Production Net Debt Adjusted Production/Share (MMcfe) (MMcfe) 4 3.55 3.28 3 2.56 2.34 2 1 0 2012 2013 2014 2015 6 6
  6. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 6
    2016 E&D Investment Drilling & Completion Capital 785mm total E&D 600 million Multiple projects/multiple zones Delaware Basin Acreage obligations Upper & Lower Wolfcamp in Culberson County Reeves infill development Mid-Continent…
  7. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 7
    A Look into 2017 Preliminary 2017 D&C Capital Daily Production (MMcfe) +9%-14% of 600mm Based on nine rigs 1,000 +13% (2%) Generates 9-14% production +25% growth in 2017 year-over-year 1,531 Includes 330mm to hold 750 +11%…
  8. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 8
    Completion Evolution Continues Pounds of Sand per Lateral Foot Jan. '15 July '15 Jan. '16 July '16 Culberson Upper Wolfcamp 1,250 1,650 1,650 2,500 Culberson Lower Wolfcamp 1,250 1,250 1,250 2,400 Reeves Upper Wolfcamp 1,300…
  9. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 9
    Biggest Opportunity - Delaware Basin Wolfcamp 220,000 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. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 10
    Culberson Area Wolfcamp Details 100,000 net 100,000+ acres; net acresJDA with Chevron 2013 main objectives 20 Drilling long-lateral to hold Lower acreageWolfcamp wells producing Wolfcamp C&D 18 Upper TwoWolfcamp long rigs;…
  11. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 11
    Resilient Long Lateral Returns Culberson County Wolfcamp 10,000-ft. lateral BTax IRR* 200% 175% 150% 125% 100% 75% 50% Upper Wolfcamp (3.00 gas) Lower Wolfcamp (3.00 gas) 25% Upper Wolfcamp (2.00 gas) Lower…
  12. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 12
    Long Lateral Performance Culberson Lower Wolfcamp 600 Fifteen 10,000-foot laterals Cumulative Production Average 30-day peak IP of (MBOE) 2,361 BOE/d (25% oil; 46% 500 gas; 29% NGL) Flying Ebony 103% Increase 70% Increase 400…
  13. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 13
    Improving Upper Wolfcamp Completion Design Culberson County Four 10,000-ft. laterals 350 Cumulative Production completed to date (MBOE) 19% Increase Wells with new frac have 300 1,650 lb/ft of sand 30-day peak IP of 2,098 BOE/d…
  14. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 14
    Culberson County Upper Wolfcamp Pilot Six-well downspacing pilot 7,500-foot 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. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 15
    Culberson County Tim Tam Infill Development First Lower Wolfcamp Infill Five 10,000-foot laterals Six wells per two-section unit Staggered well pattern Completing D Barbaro Lower Wolfcamp Tim Tam 878 878 Prewit- 200…
  16. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 16
    Reeves County Focus Area Targeting Upper Wolfcamp 11 long laterals producing Cabinet State Average 30-day peak IP of 1,583 BOE/d (50% oil; 28% gas; 22% NGL) Best wells to date 10k-ft: Big Timber has avg. 30-day peak IP of 3,309…
  17. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 17
    Bigger Completion Improves Avalon Results Lea County 250 13,700 net acres Cumulative Production 250 locations (MBOE) 119% Increase Includes Avalon and Leonard 200 Assumes 80-acre spacing Triste Draw 25 7H 150 100…
  18. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 18
    Mid-Continent Overview Meramec and Woodford Stacked Targets Meramec: 115,000 net prospective acres 90,000 derisked Woodford: 135,000 net undeveloped acres (88% HBP) Meramec play outline Woodford play outline Cana core…
  19. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 19
    Meramec: The Big Picture 20 5,000-ft laterals have avg. Peterson 30-day peak IP of 1,418 BOE/d 37% oil; 42% gas; 21% NGL Nine 10,000-ft laterals with avg. 30-day peak IP of 2,057 BOE/d Sims 43% oil; 37% gas; 20% NGL Oil yield…
  20. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 20
    Meramec Long Lateral Performance 300 54% uplift after 180 days Cumulative Production Nine 10,000-ft laterals have 30- (MBOE) day peak IP of 2,057 BOE/d 250 43% oil; 37% gas; 20% NGL Oil yields range from 37 to 523 200 Bbl/MMcf 54%…
  21. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 21
    Meramec Spacing Pilots Stacked/Staggered Pilot Meramec Eight total wells Four Meramec wells Osage Stacked/staggered spacing Testing 10 wells per section Four Woodford wells Testing nine wells per section Woodford Flowing back…
  22. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 22
    Woodford Shale Activity Cana-Woodford Activity Map Long history of activity Participated in 817 gross wells since 2007 Operated Well Non-operated Well Eastern core infill completing six sections; two operated 47 gross (22 net)…
  23. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 23
    Woodford: Completion Evolution Continues Cumulative Production Armacost section developed 2,400 using larger completion Per Well Average (MMcfe) Per well production in-line with earlier sections 2,000 Tighter spacing means more…
  24. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 24
    Well-positioned 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…
  25. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 25
    Appendix 26 26
  26. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 26
    2016 Guidance 2016 Production, Unit Expense and Capital Guidance Fourth Quarter Full-Year Production Total Equivalent (Mmcfe/d) 945-985 960-970 % Liquids 52% 52% Capital Expenditures 785 million Expenses (/Mcfe): Fourth…
  27. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 27
    Hedges 2016 2017 2018 Average Fourth First Second Third Fourth First Oil: Quarter Quarter Quarter Quarter Quarter Quarter WTI Oil Collars (1) Volume (Bbl/d) 14,000 20,000 20,000 16,000 11,000 6,000 14,501 Wtd Avg Floor Purchased…
  28. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 28
    Hedge Strategy Hedged Volumes as of 10/31/16 Target volume is 50% of oil MMcfe/d and 50% of gas production 300 Methodical approach Five quarter duration 250 Bias toward costless collars 200 Downside protection Some upside price…
  29. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 29
    Cana Area Production MMcfe/day 450 Row 4 Drilling Commenced 419 406 Row 4 Completions Began 400 384 385 390 350 353 350 333 322 310 300 255 250 229 226 216 217 200 150 100 50 - Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14…
  30. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 30
    Permian Basin Production MBOE/day 100 99 94 90 87 86 85 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 Q2 16 Q3 16 Oil NGL…
  31. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 31
    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 32
  32. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 32
    Upsized Frac Improves Second Bone Spring Results White City 5,000-ft 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…
  33. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 33
    Culberson County Downspacing Pilot Results Two four-well pilots; 5,000-ft laterals Barbaro Pilot 80-acre spacing (8 wells/section) 20-stage completion; 1,200 lbs/foot Prewit-Omaha Pilot 107-acre spacing (6 wells/section) 16-stage…
  34. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 34
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 ( in Millions) 2013 2014 2015 LTM Net income (loss) 565 507 (2,409) (1,100) Income tax expense (benefit) 329 299 (1,373) (641) Interest expense,…
  35. Goldman Sachs Global Energy Conference – Cimarex Energy Co. – slide 35
    Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Debt/Cap Calculation2 Three months Sep. 30, Ended Sep. 30, 2016 2016 2015 (in millions) (in millions) Long-term debt (principal) 1,500 Net cash provided by…

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