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1Q 2018 Earnings Presentation – Cimarex Energy Co.

Cimarex Energy Co. · May 9, 2018 · 36 slides

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Slides

  1. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 1
    CORPORATE PRESENTATION May 2018
  2. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 2
    XEC Statistical Summary Market Cap1 9 billion Debt/Adj. EBITDA2 1.2x Daily Production (1Q 18) 206 MBOE Proved Reserves (YE 17) 559 MMBOE % Natural gas 48% % Proved Developed 83% R/P Ratio 8.0x Quarterly Dividend 0.16/share 1As…
  3. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 3
    Who is Cimarex Returns driven E&P company Balanced portfolio of assets Premier position in the Delaware Basin and Mid-Continent region Flexibility through commodity cycles Continuous idea generation Strong, disciplined execution…
  4. 1Q 2018 Earnings 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 Result: infill development that…
  5. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 5
    Return driven production growth continues in 2018 Daily Production (MBOE) High return projects expected to 211-221 generate 2018 production growth 190 of 1116% 164 Oil expected to grow 2126% 161 145 Oil growth estimated at 3035%…
  6. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 6
    2018 Capital Investment Program E&D Capital of 1.6 1.7 billion 29% increase from 2017 Other Within cash available Meramec D&C Capital 1.3 1.4 billion 82% of Total E&D capital Permian Basin 70% D&C Capital 1.3 1.4 billion…
  7. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 7
    2018 Production Growth Daily Production Net Wells Online (MBOE) 49 50 211-221 206 200-209 190 34 23 15 2017A 1QA 2QE 3QE 4QE 2018E 1QA 2QE 3QE 4QE Wells Drilling or WOC at Oil 12/31/18 Permian Mid-Continent 8
  8. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 8
    2018 Delaware Basin Plans Total D&C Capital Economies of Scale Activity by Area Ward Bone Single Spring well Reeves Eddy Avalon 885 935mm 80 Net Wells Multi-well Lea Culberson Wolfcamp 9
  9. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 9
    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…
  10. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 10
    Culberson / White City Wolfcamp Details Lower Wolfcamp Upper Wolfcamp Operated SWD 100,000+ net acres; JDA with Chevron in Culberson County 72 long lateral wells Owl Draw 12 Seattle Slew spacing pilot 2,521 BOE/d (1,393 b/d)…
  11. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 11
    Well Productivity Improvements Long Lateral Upper Wolfcamp Wells Completion Generation 52 10,000-ft. lateral Upper IP180 (BOE/d) Wolfcamp wells drilled since 2,000 2013 Improvement in well productivity seen through enhanced 1,500…
  12. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 12
    Resilient Long Lateral Returns Culberson Long Lateral Wolfcamp BTAX IRR* 300% 200% 100% 0% 30 40 50 60 70 Realized Oil Price Upper Wolfcamp - 2/Mcf Lower Wolfcamp - 2/Mcf Upper Wolfcamp - 1/Mcf Lower Wolfcamp -…
  13. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 13
    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 500 Results lead to 14 wells per…
  14. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 14
    Reeves County Focus Area 34 long lateral wells Targeting Upper Wolfcamp 28 10,000-ft. laterals producing Average 30-day peak IP of 1,809 BOE/d (49% oil) Dixieland State 55-6 2,505 BOE/d Two downspacing pilots producing (1,464…
  15. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 15
    Reeves County Strong Infill Well Results Cumulative 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…
  16. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 16
    Lea County Thyme APY 2,059 BOE/d Exciting multi-pay area (1,416 b/d) 225 million capital spend in 2018 Coriander AOC 1-12 Two Avalon wells brought online in 3,333 BOE/d (2,248 b/d) 1Q 18 Coriander AOC 1-12 State 1H with average…
  17. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 17
    Permian Basin Residue Gas Takeaway Sales agreements in place 98% of forecasted production through October 2019 El Paso or Waha index pricing Own and operate two gas gathering systems Triple Crown Culberson/Eddy Counties Matterhorn…
  18. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 18
    Permian Basin Oil Takeaway Sales agreements in place for oil volumes through 2018 & 2019 Strategic partnerships in core areas Pipelines in place Purchase obligations Midland index pricing 70% oil production on pipe Gas Plains…
  19. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 19
    Permian Basin Water Management Saltwater Disposal System Own and operate salt water disposal (SWD) systems in Culberson, Eddy and Reeves Improves operating costs Recycling produced water for completion operations 40% of total…
  20. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 20
    Mid-Continent Basin 2018 Outlook Total D&C Capital Economies of Scale Activity by Area Other Meramec Woodford Meramec Woodford Single well 375 425 41 Net Wells million Multi-well Lone Rock 21
  21. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 21
    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 22
  22. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 22
    Meramec The Big Picture Dupree BIA 1H 2,877 BOE/d (1,597 b/d) Rocky 1-17H Improving well results driving 1,912 BOE/d Tillman BIA 1H (1,282 b/d) activity 2,389 BOE/d (1,069 b/d) Thirteen 10,000-ft. lateral wells Mike Com 1H 4,353…
  23. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 23
    Meramec Development Plans 2018 developments Steve O 6 wells with 8 wells/section spacing (currently completing) Lehman 6 wells with 8 wells/section spacing Lehman Miss Mary 3 wells with 8 wells/section spacing (waiting on…
  24. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 24
    Woodford Activity Long history of activity Emerging Lone Rock play yielding best results to date Clyde Copeland high density 14N10W spacing pilot yielding good results Clyde Copeland Formulating development plans in the 14N-10W…
  25. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 25
    Lone Rock Activity Jimmie Com Best Woodford returns in portfolio 10.2 MMcfed (368 b/d) Meyers 1H 16,000 net contiguous acres 13.4 MMcfed (535 b/d) Multiple completion design factors enhance productivity Infill testing: JD…
  26. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 26
    Well-positioned for 2018 Solid returns from large portfolio Strong financial position 464 million of cash on the balance sheet at March 31, 2018 Emphasis on execution Preserve returns in inflationary environment Idea generation…
  27. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 27
    Appendix 28
  28. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 28
    2018 Guidance Second Quarter Full Year Daily Production (MBOE) 200 209 211 221 % Oil 33% Capital Expenditures (billion) E&D 1.6 1.7 D&C 1.3 1.4 Midstream/Other 0.08 0.09 Expenses (/BOE) Production 3.80 4.30 Transportation,…
  29. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 29
    Hedges as of May 7, 2018 2018 2019 Second Third Fourth First Second Third Quarter Quarter Quarter Quarter Quarter Quarter OIL WTI Oil Collars1 Volume (Bbl/d) 31,000 27,000 21,000 15,000 15,000 8,000 Weighted Average Floor…
  30. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 30
    Permian Region Production Daily Production (MBOE) 114 112 107 105 99 100 96 94 87 85 86 85 81 80 74 75 50 25 0 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 Q1 18 Oil NGL…
  31. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 31
    Mid-Continent Region Production Daily Production (MBOE) 91 88 85 85 81 82 81 77 77 74 74 75 71 70 68 50 25 0 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 Q1 18 Oil NGL Natural…
  32. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 32
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 LTM ( in Millions) 2015 2016 2017 3/31/18 Net income (loss) (2,580) (409) 494 550 Income tax expense (benefit) (1,472) (214) 188 166 Interest…
  33. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 33
    Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Debt/Cap calculation Three months Mar 31, Ended Mar 31, ( in Millions) 2018 ( in Millions) 2017 2018 Long-term debt (principal) 1,500 Net cash provided by operating…
  34. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 34
    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…
  35. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 35
    Culberson County Upper Wolfcamp Development Extrapolated Average Cumulative Production per 7,500-ft. well (MBOE) Similar, strong early cumulative 400 per well production testing 6, 8 or 12 wells per section 300 Upper Wolfcamp…
  36. 1Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 36
    Clyde Copeland Results Cumulative Production (MBOE) Increased density pilot 350 8 wells testing 16 and 20 wells 300 per section 250 Results positive for future 200 well spacing 150 Interference testing on-going 100 50 Clyde Copeland…

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