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BAML 2017 Global Energy Conference – Cimarex Energy Co.

Cimarex Energy Co. · Nov 16, 2017 · 34 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. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 1
    BAML Global Energy Conference November 15-16, 2017 1
  2. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 2
    Who is Cimarex Market Cap1 12 billion Debt/Adj. EBITDA2 1.4x Production (3Q 17) 1,143 MMcfe/d Proved Reserves 2.9 Tcfe % Natural gas 51% % Proved Developed 79% R/P Ratio 8.2x Quarterly Dividend 0.08/share 1 As of November…
  3. BAML 2017 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. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 4
    Recent Achievements Enhanced completion design Improved well performance Allows tighter development well spacing Five successful spacing pilots announced in 2017 Now prosecuting even tighter spacing tests 12-wells/section Upper…
  5. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 5
    Production Growth Daily Production (MMcfe) 1250 +18-19% 1,134-1,147 Strong returns lead to 985 1000 963 production growth 869 Oil to lead 2017 volume 750 693 growth 4Q 17 oil volume up 32 37% 500 vs 4Q 16 55% 250 53% 52%…
  6. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 6
    2017 Capital Plans D&C Capital vs. Production Growth Estimated 2017 E&D capital (millions) 1.2 billion 1,531 Up 63% from 2016 level Includes D&C capital of 900- 1,251 925 million 25% D&C is 76% of E&D capital Generates 18-19%…
  7. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 7
    2017 Drilling & Completion Capital 900925 million Drilling & Completion Capital Multiple projects and zones Avalon Delaware Basin Woodford Wolfcamp delineation and infill Bone Spring & Avalon Wolfcamp development Test of new…
  8. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 8
    Productivity Improvement in the Wolfcamp Delaware Basin Wolfcamp wells 180 day Average Daily Production per Well (BOE/d) 1,612 1,500 1,317 1,142 1,000 890 638 500 - 2013 2014 2015 2016 2017 Average Lateral 4,671…
  9. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 9
    Improvement in Well Level Returns Culberson Long-Lateral Wolfcamp BTAX IRR* Focused on ways to improve 150% 147% returns 130% Radically changed completion design Improved water management 100% Decreased drilling days Significantly…
  10. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 10
    Biggest Opportunity - Delaware Basin Wolfcamp 216,000 net acres in the fairway Multiple Wolfcamp Targets Culberson/White City Area 100,000+ net acres Upper & Lower Wolfcamp JDA with Chevron 2017 wells Reeves County Lower…
  11. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 11
    Culberson/White City Area Wolfcamp Details Lower Wolfcamp Upper Wolfcamp Operated SWD 100,000+ net acres; JDA with Chevron in Culberson County Marquardt 59 long lateral Wolfcamp 2,766 BOE/d (19% oil) wells producing Seattle…
  12. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 12
    Improving Upper Wolfcamp Completion Design Culberson Long Lateral Upper Wolfcamp Cumulative Production (MBOE) 700 Ten wells with new frac design 27% Increase have average 30-day peak IP of 600 2,330 BOE/d (53% oil; 28% gas; 500 19%…
  13. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 13
    Resilient Long Lateral Returns Culberson County Wolfcamp 10,000 ft lateral BTAX IRR* 300% 250% 200% 150% 100% 50% 0% 30 40 50 60 70 Realized Oil Price Upper Wolfcamp - 3/Mcf Lower Wolfcamp - 3/Mcf Upper…
  14. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 14
    Culberson County Tim Tam Infill Development Cumulative Production (MBOE) 600 Five 10,000 ft wells testing six wells per section 500 Infills have surpassed parent 400 wells in both landing zones Tim Tam spacing 300 Lower…
  15. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 15
    Culberson County Upper Wolfcamp Pilots Extrapolated Average Cumulative Production per 7,500-ft well (MBOE) Similar per-well results with 6, 200 Gato average well 8 or 12 wells per section Sunny's average well Seattle Slew testing 12…
  16. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 16
    Reeves County Focus Area Targeting Upper Wolfcamp 24 10,000 ft laterals producing Average 30-day peak IP of 1,728 BOE/d (49% oil; 29% gas; 22% NGL) Two downspacing pilots producing Wood State (12 wells per section) Pagoda State…
  17. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 17
    Reeves County Infill Well Results Cumulative Production (MBOE) Upper Wolfcamp 600 10,000 ft laterals 500 Wood State: 6 wells testing 12 wells per section 400 Best long lateral to date sits 300 right next door (Big Timber) Pagoda…
  18. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 18
    Mid-Continent Overview Meramec and Woodford Stacked Targets Meramec: 116,500 net prospective acres 90,000 derisked 100% HBP by YE17 Woodford: 136,500 net undeveloped acres (88% HBP) Meramec play outline Woodford play…
  19. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 19
    Meramec: The Big Picture 45 wells producing with average lateral length of 6,800 ft Average 30-day IP of 1,591 BOE/d (40% oil; 40% gas; 20% NGL) Seven 10,000 ft lateral wells Leon Gundy brought on-line in 2017 YTD Average 30-day…
  20. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 20
    Leon Gundy Pilot Results Cumulative Production MMcfe Average Middle Meramec well Stacked/Staggered Pilot 2,000 Average Lower Meramec well Four Meramec wells Average Parent Well Stacked/staggered spacing 1,500 Testing ten wells per…
  21. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 21
    Woodford Shale Activity Long history of activity Participated in 882 gross Operated well wells since 2007 Non-operated well Eastern core infill wells Leota Jacobs completed Long lateral Leota Jacobs infill planned following…
  22. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 22
    Clyde Copeland Results Cumulative Production MMcfe 800 Increased density pilot 700 8 wells testing 16 and 20 600 wells per section 500 Completion design optimized 400 for tighter well spacing 300 Results positive for future well 200…
  23. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 23
    Lone Rock Activity 16,000 net contiguous acres in over-pressured Meyers 1H 13.4 MMcfed (24% oil) Woodford Meiwes 1-25H Best Woodford returns 10.4 MMcfed (15% oil) in portfolio Shelly Shelly infill drilling Hines Federal 1H 15.2…
  24. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 24
    Well-positioned for 2017 and Beyond Diverse portfolio with solid returns Strong financial position 423 million of cash on the balance sheet at 9/30/17 Technical emphasis on idea generation Enhancements to completion design Testing…
  25. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 25
    Appendix 26 26
  26. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 26
    2017 Guidance Fourth Quarter Full Year Production Total Equivalent (MMcfe/d) 1,175 1,225 1,134 1,147 Total Equivalent (BOE/D) 195.8 204.2 189.0 191.2 % Oil 30% Capital Expenditures (billion) 1.2 Expenses /Mcfe /BOE Production 0.60…
  27. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 27
    Hedges as of November 2, 2017 2017 2018 2019 Fourth First Second Third Fourth First Second Quarter Quarter Quarter Quarter Quarter Quarter Quarter OIL WTI Oil Collars1 Volume (Bbl/d) 21,000 28,000 22,000 18,000 12,000 6,000…
  28. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 28
    2017 Net Wells Completed 43 30 26 24 18 1QA 2QA 3QA 4QE Wells Drilling & WOC at Permian Basin Mid-Continent 12/31/17 29 29
  29. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 29
    Mid-Continent Region Production Daily Production (MMcfe) 509 513 500 419 417 406 400 384 385 390 375 350 353 333 322 300 200 100 0 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17…
  30. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 30
    Permian Region Production Daily Production (MBOE) 107 105 99 100 96 94 87 86 85 85 81 80 74 75 68 50 25 0 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Oil NGL Gas 31 31
  31. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 31
    Efficiency Gains Continue in LOE (/Mcfe) 1.08 0.21 0.83 0.14 0.33 0.66 0.62 0.24 0.12 0.11 0.14 0.19 0.18 0.10 0.05 0.06 0.27 0.25 0.22 0.20 0.13 0.10 0.08 0.07 2014 2015 2016 2017 YTD Compressor Rental & Repair…
  32. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 32
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 LTM ( in Millions) 2014 2015 2016 9/30/17 Net income (loss) 526 (2,580) (409) 368 Income tax expense (benefit) 310 (1,472) (214) 233 Interest expense,…
  33. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 33
    Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Debt/Cap calculation Three months Sept 30, Ended Sept 30 ( in Millions) 2017 ( in Millions) 2017 2016 Long-term debt (principal) 1,500 Net cash provided by operating…
  34. BAML 2017 Global Energy Conference – Cimarex Energy Co. – slide 34
    Completion Evolution Pounds of Sand per Lateral Foot Jul Jan Jul Jan Jul 2015 2016 2016 2017 2017 Culberson Upper Wolfcamp 1,650 1,650 2,500 2,500 2,500 Culberson Lower Wolfcamp 1,250 1,250 2,500 2,500 2,500 Reeves Upper Wolfcamp…

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