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March 2018 Corporate Presentation – Cimarex Energy Co.

Cimarex Energy Co. · Mar 16, 2018 · 37 slides

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Slides

  1. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 1
    CORPORATE PRESENTATION March 2018
  2. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 2
    Who is Cimarex Market Cap1 10 billion Debt/Adj. EBITDA2 1.3x Production (4Q 17) 201 MBOE/d Proved Reserves (YE 17) 559 MMBOE % Natural gas 48% % Proved Developed 83% R/P Ratio 8.0x Quarterly Dividend 0.16/share 1As of February…
  3. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 3
    Whats Important Returns drive our decisions Balanced portfolio of assets Premier position in the Delaware Basin and Mid-Continent region Flexibility through commodity cycles Continuous idea generation Strong, disciplined…
  4. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 4
    2017 Achievements Improved well performance Enhanced completion design Allows tighter development well spacing Six successful spacing pilots announced in 2017 Additional spacing tests underway 14-wells/section Lower Wolfcamp in…
  5. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 5
    2017 Growth in Production and Reserves Daily Production Debt-adjusted production growth (MBOE) per share of 15% year-over-year 30% 45% Total Oil led the way growing 27% and 190 MBOE/D grew 36% 4Q17 vs 4Q16 25% Total E&D capital…
  6. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 6
    2017 Net Wells Online 98 net wells completed in 2017 47 30 26 24 18 1QA 2QA 3QA 4QA Wells Drilling & Waiting on Completion at Permian Basin Mid-Continent 12/31/17 7
  7. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 7
    Return driven production growth continues in 2018 Daily Production (MBOE) High return projects expected to 211-221 generate 2018 production growth 190 of 11 16% 164 Oil expected to grow 21 26% in 161 2018 145 Oil growth…
  8. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 8
    2018 Capital Investment Program E&D Capital of 1.6 1.7 billion 29% increase from 2017 Other Within cash available D&C Capital 1.3 1.4 billion Meramec 82% of Total E&D capital Permian Basin 70% D&C Capital 1.3 1.4 billion…
  9. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 9
    2018 Net Wells Online 127 net wells planned in 2018 51 48 32 31 13 1QE 2QE 3QE 4QE Wells Drilling & Waiting on Permian Basin Mid-Continent Completion at 12/31/18 10
  10. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 10
    2018 Delaware Basin Plans Total D&C Capital Economies of Scale Wells Drilled by Area Ward Bone Single Spring well Eddy Reeves Avalon 890 940mm 83 Net Wells Multi-well Lea Wolfcamp Culberson 90% multi-well drilling…
  11. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 11
    Delaware Basin Wolfcamp Overview 216,000 net acres in the fairway Multiple Wolfcamp Targets Culberson/White City Area 100,000+ net acres Upper & Lower Wolfcamp JDA with Chevron 2017/18 wells Reeves County Lower Wolfcamp Upper…
  12. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 12
    Culberson / White City Wolfcamp Details Lower Wolfcamp Wigeon Upper Wolfcamp 2,359 BOE/d Operated SWD (30% oil) 100,000+ net acres; JDA with Chevron in Culberson County 68 long lateral wells Seattle Slew spacing pilot producing…
  13. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 13
    Improving Upper Wolfcamp Results Culberson Area Long Lateral Upper Wolfcamp Cumuative Production Changes to completion design (MBOE) have resulted in better wells 700 Fifteen wells with new frac 600 design have average 30-day peak IP…
  14. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 14
    Production Improvement - Upper Wolfcamp Delaware Basin Upper Wolfcamp Wells 180 day Average Daily Production per Well (BOE) 2,000 1,749 1,482 1,500 1,239 1,000 871 731 500 0 2013 2014 2015 2016 2017 Average…
  15. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 15
    Resilient Long Lateral Returns Culberson Long Lateral Wolfcamp BTAX IRR* 200% 150% 100% 50% 0% 30 40 50 60 70 Realized Oil Price Upper Wolfcamp - 2/Mcf Lower Wolfcamp - 2/Mcf Upper Wolfcamp - 1/Mcf Lower Wolfcamp -…
  16. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 16
    Culberson County Tim Tam Development Lower Wolfcamp Cumulative Production Tim Tam infill wells generated (MBOE) 700 67%+ ATAX return Infills have surpassed parent wells 600 in both landing zones Results lead to 14 wells per 500…
  17. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 17
    Culberson County Upper Wolfcamp Development Extrapolated Average Cumulative Production per 7,500 ft well (MBOE) Similar, strong early cumulative per well production testing 6, 8 200 or 12 wells per section Upper Wolfcamp development…
  18. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 18
    Reeves County Focus Area 32 long lateral wells Targeting Upper Wolfcamp 26 10,000 ft laterals producing Average 30-day peak IP of 1,774 BOE/D (49% oil) Two downspacing pilots producing Wood State (12 wells/section) Pagoda State…
  19. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 19
    Reeves County Strong Infill Well Results Daily Production (MBOE) Upper Wolfcamp 600 10,000 ft laterals 500 Wood State: 6 wells testing 12 wells per section 400 Surpassed Big Timber, previously best long lateral to date 300 Average…
  20. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 20
    Lea County Exciting multi-pay area 225 million capital spend in 2018 Triste Draw Avalon activity 24,000 net prospective acres Triste Draw infill spacing pilot currently drilling Wolfcamp activity Red Tank 32,000 net prospective…
  21. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 21
    Mid-Continent Basin 2018 Outlook Total D&C Capital Economies of Scale Activity by Area Other Woodford Meramec Woodford Meramec Single well 370 420 43 Net Wells million Multi-well Lone Rock 75% multi-well drilling…
  22. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 22
    Mid-Continent Overview Meramec and Woodford Stacked Targets Meramec: 116,500 net prospective acres 100% HBP Woodford: 136,500 net undeveloped acres (88% HBP) Meramec play outline Woodford play outline Cana core 23
  23. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 23
    Meramec The Big Picture 52 wells producing with average lateral length of 7,100 ft Average 30-day IP of 1,742 BOE/D Dupree BIA 1H (38% oil) 2,877 BOE/d (56% oil) Thirteen 10,000 ft lateral wells Rocky 1-17H 1,912 BOE/d brought…
  24. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 24
    Meramec Development Plans 2018 developments Steve O - developing remaining section with 8 well spacing Lehman - developing remaining Lehman section with 8 well spacing Miss Mary - testing landing zone with 8 well spacing Steve…
  25. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 25
    Woodford Activity Long history of activity Emerging Lone Rock play yielding best results to date Clyde Copeland high density 14N10W spacing pilot yielding good Leota Jacobs results Clyde Copeland Formulating development plans in…
  26. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 26
    Clyde Copeland Results Cumulative Production (MBOE) Increased density pilot 8 wells testing 16 and 20 wells 200 per section 150 Results positive for future well spacing 100 Interference testing on-going 50 Clyde Copeland…
  27. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 27
    Lone Rock Activity Best Woodford returns in portfolio Jimmie Com 10.2 MMcfed (22% oil) 16,000 net contiguous acres Meyers 1H 13.4 MMcfed (24% oil) Multiple completion design factors enhance productivity Infill testing: JD…
  28. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 28
    Well-positioned for 2018 Solid returns from large portfolio Strong financial position 401 million of cash on the balance sheet at 12/31/17 Emphasis on execution Preserve returns in inflationary environment Idea generation…
  29. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 29
    Appendix 30
  30. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 30
    2018 Guidance First Quarter Full Year Daily Production (BOE) 198 207 211 221 % Oil 33% Capital Expenditures (billion) E&D 1.6 1.7 D&C 1.3 1.4 Midstream 0.08 0.09 Expenses (/BOE) Production 3.75 4.35 Transportation,…
  31. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 31
    Hedges as of February 14, 2018 2018 2019 First Second Third Fourth First Second Third Quarter Quarter Quarter Quarter Quarter Quarter Quarter OIL WTI Oil Collars1 Volume (Bbl/d) 29,000 29,000 25,000 19,000 13,000 13,000 6,000…
  32. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 32
    Permian Region Production Daily Production (MBOE) 112 107 105 99 100 96 94 87 85 86 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 Q4 17 Oil NGL…
  33. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 33
    Mid-Continent Region Production Daily Production (MBOE) 88 85 85 75 70 70 68 64 64 65 63 58 59 56 54 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 Q4 17 Oil NGL Natural…
  34. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 34
    Efficiency Gains Continue in LOE /BOE 6.48 1.25 5.00 0.83 1.97 3.95 3.77 0.73 1.45 0.68 0.83 1.15 1.11 0.61 0.28 0.37 1.63 1.49 1.30 1.17 0.81 0.62 0.49 0.44 2014 2015 2016 2017 Compressor Rental & Repair…
  35. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 35
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 ( in Millions) 2014 2015 2016 2017 Net income (loss) 526 (2,580) (409) 494 Income tax expense (benefit) 310 (1,472) (214) 188 Interest expense, net of…
  36. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 36
    Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Debt/Cap calculation Three months Dec 31, Ended Dec 31 ( in Millions) 2017 ( in Millions) 2017 2016 Long-term debt (principal) 1,500 Net cash provided by operating…
  37. March 2018 Corporate Presentation – Cimarex Energy Co. – slide 37
    Permian Basin Pilot Details Culberson Lower Wolfcamp Animal Red Hills Upper Wolfcamp Hallertau Kingdom development development Eight wells testing 14 wells per Five wells testing 12 wells per section section Currently drilling…

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