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2017 JP Morgan Energy Equity Conference – Cimarex Energy Co.

Cimarex Energy Co. · Jun 27, 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. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 1
    J.P. Morgan Energy Equity Conference June 26-28, 2017 1
  2. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 2
    Who is Cimarex Market cap... 8.7 billion Debt/Adj. EBITDA1 1.8x Production (1Q17) 1.063 Bcfe/d Proved reserves. 2.9 Tcfe % Natural gas 51% % Proved developed 79% R/P Ratio... 8.2x Quarterly dividend of 0.08/share 1 Asof and…
  3. 2017 JP Morgan Energy Equity 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. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 4
    Production Growth Daily Production Net Debt Adjusted Production/Share (MMcfe) (MMcfe) 4 3.55 3.44 3.28 3 2.56 2 1 0 2013 2014 2015 2016 5 5
  5. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 5
    Per-Unit LOE Highlights Efficiency Gains 1.08 0.83 0.56 0.66 0.65 0.40 0.33 0.35 0.14 0.10 0.05 0.25 0.06 0.23 0.19 0.17 0.13 0.10 0.08 0.07 2014 2015 2016 1Q 17 Compressor Rental & Repair Labor/Other Water Disposal…
  6. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 6
    2017 Capital Plans Drilling & Completion Capital (millions) 2017 E&D Capital estimated 1,531 to be 1.1 1.2 billion Up 56% from 2016 level 1,251 Includes D&C capital of 850- 25% 900mm 76% of E&D capital 850-900 Generates 15%…
  7. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 7
    2017 Drilling & Completion Capital 850-900 million Multiple projects & zones Delaware Basin Wolfcamp delineation & infill Bone Spring & Avalon development Test of new concepts Mid-Continent region Meramec delineation and acreage…
  8. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 8
    2017 Net Well Completions by Quarter 44 34 26 24 15 1QA 2Q 3Q 4Q Wells Drilling Permian Basin Mid-Continent & WOC at 12/31/17 9 9
  9. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 9
    Completion Evolution Continues Pounds of Sand per Lateral Foot Jan. '15 July '15 Jan. '16 July '16 Jan. '17 Culberson Upper Wolfcamp 1,250 1,650 1,650 2,500 2,500 Culberson Lower Wolfcamp 1,250 1,250 1,250 2,400 2,500 Reeves Upper…
  10. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 10
    Permian Region Oil Gravity Oil Production by County* County API Gravity* Ward Eddy 12% 15% Eddy 45.32 Lea Lea 42.29 16% Reeves 28% Culberson 49.65 Reeves 44.97 Culberson 25% Ward 42.26 *April 2017 Gravity deducts…
  11. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 11
    Biggest Opportunity - Delaware Basin Wolfcamp 225,000 net acres in the fairway Multiple Wolfcamp Targets Culberson/White City Area 100,000+ net acres Upper & Lower Wolfcamp JDA with Chevron Reeves County 71,000 net acres Upper…
  12. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 12
    Culberson Area Wolfcamp Details 100,000+ net 100,000+ netacres; acresJDA with Chevron in Culberson County 2013 main objectives 26 Drilling Lower Wolfcamp long to hold acreage Pintail 1,557 BOE/d laterals producing Wolfcamp…
  13. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 13
    Long Lateral Performance Culberson Lower Wolfcamp Sixteen 10,000-foot laterals 700 Cumulative Production Average 30-day peak IP of (MBOE) 115% 2,316 BOE/d (25% oil; 45% Increase 600 gas; 30% NGL) Flying Ebony 500 Average 30-day…
  14. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 14
    Improving Upper Wolfcamp Completion Design Culberson County Seven 10,000-ft. laterals Cumulative Production (MBOE) 18% Increase completed to date 600 Wells with new frac have 1,650+ lb/ft of sand 500 30-day peak IP of 2,061 BOE/d…
  15. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 15
    Resilient Long Lateral Returns Culberson County Wolfcamp 10,000-ft. lateral BTax IRR* 300% 250% 200% 150% 100% Upper Wolfcamp - 3/Mcf 50% Upper Wolfcamp - 2/Mcf Lower Wolfcamp (Flying Ebony Completion) 3/Mcf…
  16. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 16
    Culberson County Tim Tam Infill Development Cumulative Production (Mcfe) Tim Tam Infill - Lower Wolfcamp Five 10,000-foot infill wells 2,000 Testing six wells per section Parent Well (lower landing) Infills performing well versus…
  17. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 17
    Culberson County Upper Wolfcamp Pilot 250 Extrapolated Average Cumulative Production per 7,500-ft well Similar per-well results with (MBOE) 200 6 or 8 wells per section Next step: tighter spacing 150 12 wells per section…
  18. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 18
    Reeves County Focus Area Targeting Upper Wolfcamp 18 10,000-ft. laterals producing Average 30-day peak IP of 1,733 Cabinet State BOE/d 48% oil; 29% gas; 23% NGL) Best wells to date 10k-ft: Big Timber has avg. 30-day peak IP of…
  19. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 19
    Reeves County Wood St. Infill Results Cumulative Production (BOE) Upper Wolfcamp 500,000 10k-ft laterals Big Timber Five of six wells producing 400,000 Wood St. Testing 12 wells per section Infill Wells 300,000 Best long lateral to…
  20. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 20
    Bigger Completion Improves Avalon Results Lea County 250 13,700 net acres Cumulative Production Current inventory of 250 (MBOE) 119% Increase locations 200 Includes Avalon and Leonard Assumes 8 wells per section Plans to test 12…
  21. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 21
    Mid-Continent Overview Meramec and Woodford Stacked Targets Meramec: 116,500 net prospective acres 90,000 derisked Woodford: 136,500 net undeveloped acres (88% HBP) Meramec play outline Woodford play outline Cana core…
  22. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 22
    Meramec: The Big Picture Peterson 24-5,000-ft laterals have avg. 30-day peak IP of 1,417 BOE/d 34% oil; 43% gas; 23% NGL Nine 10,000-ft laterals have avg. 30-day peak IP of 2,057 BOE/d Sims 43% oil; 37% gas; 20% NGL Oil yield…
  23. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 23
    Leon Gundy Pilot Results Meramec Wells Cum Production 1,800 Mcfe Stacked/Staggered Pilot Eight total wells 1,500 Four Meramec wells 1,200 Osage Stacked/staggered spacing 900 Testing 10 wells per section Four Woodford wells 600…
  24. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 24
    Woodford Shale Activity Cana-Woodford Activity Map Long history of activity Participated in 880 gross wells since 2007 Eastern core infill underway Operated Well Non-operated Well Six sections; two operated 47 gross (22 net)…
  25. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 25
    Woodford Increased Density Spacing Pilots 264 Testing 16 & 20 wells per 16 wells/section 20 wells/section section Woodford 80 Eight well test 4 wells testing 16 wells/section 330 5 wells testing 20 wells/section Two rigs…
  26. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 26
    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…
  27. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 27
    Well-positioned for 2017 and Beyond Diverse asset portfolio with solid returns Strong financial position Debt to total cap of 40% 579 million of cash on the balance sheet at 3/31/17 Investment grade rating with stable outlook at…
  28. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 28
    Appendix 29 29
  29. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 29
    2017 Guidance 2017 Production, Unit Expense and Capital Guidance Second Quarter Full-Year Production Total Equivalent (Bcfe/d) 1.08 - 1.13 1.09 - 1.13 % Gas 45% 45% Capital Expenditures 1.1 - 1.2 billion Expenses (/Mcfe):…
  30. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 30
    Hedges 2017 2018 Average Second Third Fourth First Second Oil: Quarter Quarter Quarter Quarter Quarter (1) WTI Oil Collars Volume (Bbl/d) 24,000 20,000 15,000 10,000 4,000 14,600 Wtd. Avg. Floor 44.23 46.08 47.27 48.40 50.00…
  31. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 31
    Cana Area Production MMcfe/day 450 419 417 406 400 384 385 390 375 350 353 350 333 322 310 300 255 250 200 150 100 50 - Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Gas NGL Oil…
  32. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 32
    Permian Basin Production MBOE/day 100 99 96 94 90 87 86 85 85 81 80 80 74 70 68 65 60 58 50 40 30 20 10 - Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Oil NGL Gas 33 33
  33. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 33
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 LTM ( in Millions) 2014 2015 2016 3/31/17 Net income (loss) 526 (2,580) (409) (46) Income tax expense (benefit) 310 (1,472) (214) (4) Interest…
  34. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 34
    Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Debt/Cap Calculation Three months Mar. 31, Ended Mar. 31, 2017 2017 2016 (in millions) (in millions) Long-term debt (principal) 1,500 Net cash provided by…
  35. 2017 JP Morgan Energy Equity Conference – Cimarex Energy Co. – slide 35
    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 36

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