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4Q 2018 Earnings Presentation – Cimarex Energy Co.

Cimarex Energy Co. · Feb 20, 2019 · 28 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. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 1
    4Q18 EARNINGS PRESENTATION February 2019
  2. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 2
    Cimarex Energy Snapshot NYSE symbol: XEC Market Cap1: 7.3 billion Enterprise Value1: 8.8 billion Debt/EBITDA2: 0.9x Annual Dividend: 0.80 (1.1% yield) 4Q18 Production: 251 MBOE/d, 80 MBO/d 2019E Capex: 1.35 - 1.45 billion 2019E…
  3. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 3
    2018 Achievements Generated solid financial & operational results EPS of 8.32 on revenues of 2.3 billion; adjusted cash flow from operations totaled 1.5 billion Solid execution resulted in production growth of 18% Sold properties in…
  4. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 4
    2018 Growth in Production and Reserves Daily Production (MBOE) Oil/BOE growth of 18%/17% Y/Y 31% Pro Forma Ward sale, Oil/BOE 42% 222 MBOE growth of 24%/19% Total E&D capital 1.57 billion 27% D&C capital of 1.34 billion Oil NGL…
  5. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 5
    Cash Operating Margin Expansion Declining Cash Costs and Increased Realized Prices Driving Margin Expansion 75% 50 70% 45 70% 68% 40 65% 65% 35 /BOE OPEX & Cash Margin 30 60% Margin % 25 55% 54% 55% 20 50%…
  6. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 6
    2019 Capital Investment Program Bone Avalon Spring Other E&D Capital of 1.35 1.45 billion 2% 4% 2% 11% decrease Y/Y Woodford Free cash flow neutral at 52.50 4% WTI, 50 WTI excluding dividend Meramec 10% D&C Capital 1.1 1.2…
  7. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 7
    2019 Net Wells Online 2019 Activity: 83 net wells (average operated lateral length: 9,050) 33 34 23 20 6 1QE 2QE 3QE 4QE Wells Waiting on Completion Permian Basin Mid-Continent at 12/31/19 8
  8. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 8
    Return Driven Production Growth Continues in 2019 Daily Production (MBOE) High return projects expected 250-270 to generate 2019 production growth of 1322% 222 Oil expected to grow 15 30% 190 in 2019 Three-year oil CAGR: 23%…
  9. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 9
    Hitting Our Stride: Generating Free Cash Flow1 Cumulative Free Cash Flow (2016-18 vs. 2019-21) Cumulative Free Cash Flow: 2016-2018A 2019-2021E 19-21E: 100-600 MM 600 16-18A: (532 MM) 600 Average Annual Oil Growth: 400 19-21E:…
  10. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 10
    Delaware Basin Overview 259,000 total net acres 85% of 2019 D&C Budget Currently running 10 rigs, 3 completion crews Stacked pay opportunities provides multi-zone development opportunities Upper and Lower Wolfcamp Second and…
  11. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 11
    2019 Delaware Basin Plans Total D&C Capital Wells Drilled by Average Lateral County Length by County 10,000 Eddy Wolfcamp 8,000 Reeves Lea 6,000 9351,020mm 66 Net Wells 4,000 2,000 Culberson 0 REEVES LEA…
  12. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 12
    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 80% of oil production on pipe Plains pipeline…
  13. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 13
    Permian Basin Residue Gas & NGL Takeaway Sales agreements in place 97% of forecasted production through 2019 El Paso or Waha index pricing Own and operate two gas gathering systems Triple Crown Culberson/Eddy Counties Matterhorn…
  14. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 14
    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 53% of total…
  15. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 15
    Delaware Basin Culberson/White City Lower Wolfcamp Crawford 27- Upper Wolfcamp Operated SWD 100,000+ net acres 26 FEE 2H JDA with Chevron in Culberson 34% of 2019 D&C capital Targeting Upper and Lower Wolfcamp, Bone Spring…
  16. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 16
    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 -…
  17. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 17
    Delaware Basin Reeves County 61,853 net acres Upper Wolfcamp Operated SWD 38% of 2018 D&C capital Targeting Upper Wolfcamp Snowshoe: 18 wells/section Eight well test producing Three developments drilled and completed in 2019…
  18. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 18
    Delaware Basin Lea County Upper Wolfcamp 31,384 net acres Avalon Bone Spring 5% of 2018 D&C capital Targeting Upper Wolfcamp, Avalon, Bone Spring Triste Draw Triste Draw (Avalon) 6 wells testing 20 wells/section, producing Red…
  19. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 19
    Mid-Continent Overview Meramec outline Woodford outline 326,000 net acres 15% of 2019 D&C capital Currently running one rig, one Cana Core completion crew 14N10W Woodford: 135,625 net undeveloped acres Participated in 950…
  20. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 20
    Mid-Continent Basin 2019 Plans Average Lateral Total D&C Capital Length by Play 10,000 9,000 8,000 Woodford Meramec 7,000 6,000 5,000 165 180mm 4,000 17 Net Wells 3,000 2,000 1,000 0 Woodford Meramec 21
  21. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 21
    Mid-Continent Meramec Dupree Cumulative 5,430 BOE/d, 3,147 Bo/d 116,500 net acres Dupree Lehman 100% HBP Billy/Wort/Miss Mary 10% of 2019 D&C capital Recent Developments Lehman: 4 wells on 6 well spacing, flowing back 14N10W…
  22. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 22
    Disciplined Financial Positioning Significant 2.1 billion of liquidity, including 801mm of cash (12/31/18) Liquidity Conservative 0.90x Debt/TTM EBITDA (12/31/18) Leverage Investment 750 million 3.900% senior unsecured notes due in 2027…
  23. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 23
    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 2019 Oil Production…
  24. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 24
    Appendix 25
  25. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 25
    2019 Guidance 1Q19E FY19E Production (MBOE/d) 245 - 257 250 - 270 Oil Production (MBO/d) 75 - 81 78 - 88 Capital Expenditures (billion) E&D 1.35 1.45 D&C 1.1 1.2 Midstream/Other 0.06 0.07 Expenses (/BOE) Production 3.20 3.70…
  26. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 26
    Hedges as of February 20, 2019 2019 2020 First Second Third Fourth First Second Quarter Quarter Quarter Quarter Quarter Quarter OIL WTI Oil Collars1 Volume (Bbl/d) 31,689 33,000 26,000 18,000 10,000 2,000 Weighted Average Floor…
  27. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 27
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 ( in Millions) 2015 2016 2017 2018 Saltwater Disposal System Net income (loss) (2,580) (409) 494 792 Income tax expense (benefit) (1,472) (214) 188 231…
  28. 4Q 2018 Earnings Presentation – Cimarex Energy Co. – slide 28
    Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Debt/Cap calculation Saltwater Disposal System Twelve Months Ended December 31, ( in Millions) Dec 31, 2018 ( in Millions) 2017 2018 Long-term debt (principal)…

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