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Corporate Presentation – Cimarex Energy Co.

Cimarex Energy Co. · Nov 6, 2018 · 33 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. Corporate Presentation – Cimarex Energy Co. – slide 1
    CORPORATE PRESENTATION November 2018
  2. Corporate Presentation – Cimarex Energy Co. – slide 2
    Cimarex Energy Snapshot NYSE symbol: XEC Market Cap1: 8.0 billion Enterprise Value1: 8.6 billion Debt/EBITDA2: 1.1x Annual Dividend3: 0.72 (0.9% yield) Daily Production: 219 MBOE, 64 MBO 2018E Capex: 1.6-1.7 billion 2018E…
  3. Corporate Presentation – Cimarex Energy Co. – slide 3
    Cimarex Energy Overview Enduring Maximizing full-cycle return on invested capital Culture Proven Track Creating value, generating top-tier returns Record Premier Core positions in the Permian and Anadarko Basins Portfolio…
  4. Corporate Presentation – Cimarex Energy Co. – slide 4
    The Culture of Cimarex Idea Generation Driven by Rigorous Technical Evaluation Lookback Acreage Evaluation Concentration Improves Economic Increasing Economies Returns, Operational of Scale, Returns Efficiencies Maximize…
  5. Corporate Presentation – Cimarex Energy Co. – slide 5
    What are Fully-Burdened Returns Half-Cycle vs Fully-Burdened Returns (% of Fully-Burdened Investment vs IRR) 100% 90% Half-Cycle 80% 70% 60% Fully- Burdened 50% 40% 30% 20% 10% 0% Drilling & + Midstream + SWD +…
  6. Corporate Presentation – Cimarex Energy Co. – slide 6
    History of Outsized Returns Cash Return on Capital Employed (CROCE) XEC vs S&P 500 E&P Peers 50% 40% 30% 20% 10% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 XEC Peer Avg.*** 7
  7. Corporate Presentation – Cimarex Energy Co. – slide 7
    XEC Generating Top-Tier Returns 2018 Cash Return on Capital Employed (CROCE) XEC vs S&P 500 30% 25% 20% Average CROCE (%) 15% 10% 5% 0% Source: Stifel estimates E&P estimates based on Stifel estimates,…
  8. Corporate Presentation – Cimarex Energy Co. – slide 8
    Delaware Basin Overview 259,000 total net acres 70% of 2018 D&C Budget Currently running 12 rigs, 2 completion crews Stacked pay opportunities provides multi-zone development opportunities Upper and Lower Wolfcamp Second and…
  9. Corporate Presentation – Cimarex Energy Co. – slide 9
    Well Productivity Improvements Long Lateral Upper Wolfcamp Wells (Culberson and Reeves Counties) 54 10,000-ft. lateral Upper Completion Generation IP180 (BOE/d) Wolfcamp wells drilled in Permian Basin since 2013 2,000 Improvement in…
  10. Corporate Presentation – Cimarex Energy Co. – slide 10
    Permian Basin Oil Takeaway Sales agreements in place for oil volumes through 2019 Strategic partnerships in core areas Pipelines in place Purchase obligations Midland index pricing 70% of oil production on pipe; increasing to…
  11. Corporate Presentation – Cimarex Energy Co. – slide 11
    Permian Basin Residue Gas & NGL Takeaway Sales agreements in place 98% of forecasted production through December 2019 El Paso or Waha index pricing Own and operate two gas gathering systems Triple Crown Culberson/Eddy Counties…
  12. Corporate Presentation – Cimarex Energy Co. – slide 12
    Delaware Basin Culberson/White City Low er Wolfcamp Upper Wolfcamp Operated SWD 100,000+ net acres, JDA with Chevron in Culberson 25% of 2018 D&C capital Targeting Upper and Lower Wolfcamp, Bone Spring Western delineation…
  13. Corporate Presentation – Cimarex Energy Co. – slide 13
    Resilient Long Lateral Returns Culberson Long Lateral Wolfcamp BTAX IRR* 400% 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 -…
  14. Corporate Presentation – Cimarex Energy Co. – slide 14
    Delaware Basin Reeves County Upper Wolfcamp 61,853 net acres Operated SWD 25% of 2018 D&C capital Targeting Upper Wolfcamp Wood State: 12 well/section Development wells 28% above parent wells Snowshoe Pagoda State: 16…
  15. Corporate Presentation – Cimarex Energy Co. – slide 15
    Delaware Basin Lea County 31,384 net acres Upper Wolfcamp Avalon 12% of 2018 D&C capital Bone Spring Targeting Upper Wolfcamp, Avalon, Bone Spring Vaca Draw 20-17 Lease IP30s: Triste Draw Upper Wolfcamp: 4,645 BOE/D (3,032 BO/D)…
  16. Corporate Presentation – Cimarex Energy Co. – slide 16
    Mid-Continent Overview 326,000 net acres 30% of 2018 D&C capital Woodford: 135,625 net Cana Core undeveloped acres Participated in 950 wells 14N10W Meramec: 116,500 net acres 14N-10W area: formulating Lone Rock Woodford/Meramec…
  17. Corporate Presentation – Cimarex Energy Co. – slide 17
    Mid-Continent Meramec 116,500 net acres Lehman Steve O 100% HBP 15% of 2018 D&C capital Miss Mary 40 industry development pilots active, XEC has interest or data in 31 14N10W 2018 Developments 5,000 ft Meramec Steve O: 6…
  18. Corporate Presentation – Cimarex Energy Co. – slide 18
    Mid-Continent Woodford Operated well Non-operated well 135,625 net undeveloped acres 15% of 2018 D&C capital 14N 10W Lone Rock (16,000 net acres) yielding best Woodford results to date, completion optimization Kim Anderson Farm…
  19. Corporate Presentation – Cimarex Energy Co. – slide 19
    Cash Operating Margin Expansion Declining LOE and Increasing Realized Prices Driving Margin Expansion 70% 35 60% 30 50% 25 /Boe OPEX & Margin 40% 20 Margin % 30% 15 20% 10 10% 5 0% 0 1Q16 2Q16 3Q16 4Q16 1Q17…
  20. Corporate Presentation – Cimarex Energy Co. – slide 20
    2018 Program Overview Production - MBOE/d Capital Program (mm) 2018E E&D Capital 1,600 - 1,700 238-247 218-221 D&C Capital 1,300 - 1,400 Midstream/Other 80 - 90 D&C as % of E&D 82% Permian 70% Mid-Continent 30% 1QA 2QA 3QA 4QE…
  21. Corporate Presentation – Cimarex Energy Co. – slide 21
    Disciplined Financial Positioning Significant 1.9 billion of liquidity, including 864mm of cash (3Q18) Liquidity Conservative 1.1x Debt/TTM EBITDA (3Q18) Leverage Investment 750 million 3.900% senior unsecured notes due in 2027 Grade…
  22. Corporate Presentation – Cimarex Energy Co. – slide 22
    Positioned for Success Enduring Maximizing full-cycle return on invested capital Culture Idea driven, technical emphasis Premier Generating strong returns Portfolio Decades of top-tier inventory Profitable 2018 Oil Production…
  23. Corporate Presentation – Cimarex Energy Co. – slide 23
    Appendix 24
  24. Corporate Presentation – Cimarex Energy Co. – slide 24
    2018 Guidance 4Q18E FY18E Production (MBOE/d) 238 - 247 218-221 Oil Production (MBbls/d) 73.0 - 78.0 66.0 67.2 Capital Expenditures (billion) E&D 1.6 1.7 D&C 1.3 1.4 Midstream/Other 0.08 0.09 Expenses (/BOE) Production 3.35…
  25. Corporate Presentation – Cimarex Energy Co. – slide 25
    Hedges as of October 30, 2018 2018 2019 2020 Fourth First Second Third Fourth First Second Quarter Quarter Quarter Quarter Quarter Quarter Quarter OIL WTI Oil Collars1 Volume (Bbl/d) 37,000 31,000 31,000 24,000 16,000 8,000…
  26. Corporate Presentation – Cimarex Energy Co. – slide 26
    Permian Region Production Daily Production (BOE) 125 122 121 112 114 107 105 99 100 96 94 87 85 86 85 81 80 75 50 25 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Oil NGL…
  27. Corporate Presentation – Cimarex Energy Co. – slide 27
    Mid-Continent Region Production Daily Production (MBOE) 100 97 91 88 89 85 85 82 81 77 77 74 74 75 71 70 68 50 25 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Oil NGL Natural…
  28. Corporate Presentation – Cimarex Energy Co. – slide 28
    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…
  29. Corporate Presentation – Cimarex Energy Co. – slide 29
    Investment Sensitivities Highlight Asset Quality and Depth Production Growth Cumulative 2019-2021 Capex (3-Yr CAGR) Free Cash Growth Sensitivities (mm) Boe Oil Flow (mm)* CROCE Maintenance Case 700 Flat Flat Growth Sensitivity…
  30. Corporate Presentation – Cimarex Energy Co. – slide 30
    Permian Basin Development Pilot Details Culberson Lower Wolfcamp - Animal Kingdom Animal Kingdom spacing Eight wells testing 14 wells per section Lower Wolfcamp 225 Waiting on completion 1,216 225 1,216 Red Hills (Lea)…
  31. Corporate Presentation – Cimarex Energy Co. – slide 31
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 LTM ( in Millions) 2015 2016 2017 9/30/18 Net income (loss) (2,580) (409) 494 650 Income tax expense (benefit) (1,472) (214) 188 143 Interest expense,…
  32. Corporate Presentation – Cimarex Energy Co. – slide 32
    Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Debt/Cap calculation Nine Months Ended Sept 30, September 30, ( in Millions) 2018 ( in Millions) 2017 2018 Long-term debt (principal) 1,500 Net cash provided by…
  33. Corporate Presentation – Cimarex Energy Co. – slide 33
    Non-GAAP Reconciliation Cash Return on Capital Employed (CROCE) Cash Flow from Operating Activities+ After-tax Interest Expense Average Book Equity + Average Debt 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cash flow from…

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