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Scotia Howard Weil Energy Conference – Cimarex Energy Co.

Cimarex Energy Co. · Mar 26, 2019 · 30 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. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 1
    SCOTIA HOWARD WEIL 47TH ANNUAL ENERGY CONFERENCE March 2019
  2. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 2
    Cimarex Energy Snapshot NYSE SYMBOL: XEC MARKET CAP1: 6.9 BILLION ENTERPRISE VALUE1: 8.9 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…
  3. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 3
    Cimarex Energy: Maximizing Returns PREMIERE PORTFOLIO Core positions in the Permian and Anadarko Basins IDEA GENERATION Driven by rigorous technical evaluation FOCUSED EXECUTION Focused on maximizing ROR and NPV LOOKBACK…
  4. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 4
    What are Fully-Burdened Returns % OF FULLY-BURDENED RETURNS FULLY- 100% BURDENED 90% HALF 80% CYCLE 70% 60% 50% 40% 30% 20% 10% 0% DRILLING & MIDSTREAM SWD OVERHEAD LAND - 1,500/ACRE COMPLETION ATAX…
  5. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 5
    Maximizing Value PV vs ROR CUMULATIVE PROJECT: PV vs. ROR INCREMENTAL WELL: PV vs. ROR CUMULATIVE PV (MM) ROR (%) INCREMENTAL PV (MM) ROR % 140 90% 12 80% 130 80% CULMULATIVE PV (MM) 9 60% PER WELL PV (MM) PER WELL…
  6. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 6
    Maximizing Value: Understanding Fracture Surface Area No Interference Not Maximizing PV: < 130mm CUMULATIVE PROJECT: PV vs. ROR CUMULATIVE PV (MM) ROR (%) 150 90% C A 140 80% CUMULATIVE PV (MM) 130 70% Increased Interference…
  7. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 7
    Maximizing Value PV vs ROR CUMULATIVE PROJECT: PV vs. ROR INCREMENTAL WELL: PV vs. ROR CUMULATIVE PV (MM) ROR (%) INCREMENTAL PV (MM) ROR (%) 35 90% 6 90% CULMULATIVE PV (MM) 30 80% PER WELL PV (MM) 4 60% PER WELL ROR…
  8. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 8
    2019 Capital Investment Program AVALON OTHER 2% BONE SPRING 2% 4% E&D CAPITAL OF 1.35 1.45 BILLION WOLFCAMP Down 11% from 2018 WOODFORD 78% 4% Free cash flow neutral at 52.50 WTI; 50 WTI excluding dividend MERAMEC 10% D&C…
  9. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 9
    Delaware Basin Overview NEW MEXICO TEXAS 259,000 TOTAL NET ACRES 85% OF 2019 D&C BUDGET CURRENTLY RUNNING 8 RIGS, 3 COMPLETION CREWS STACKED PAY OPPORTUNITIES Provides multi-zone development opportunities Upper and…
  10. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 10
    Delaware Basin Reeves County, TX SKY 4 WELLS RESOLUTE ACQUISITION CLOSED SANDLOT 82,853 NET ACRES 4 WELLS SENTINEL 5 WELLS 38% OF 2019 D&C CAPITAL HARDSCRABBLE 6 WELLS TARGETING UPPER WOLFCAMP FOUR DEVELOPMENTS ON…
  11. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 11
    Delaware Basin Culberson/White City NEW MEXICO 100,000+ NET ACRES TEXAS JDA WITH CHEVRON IN CULBERSON OWL DRAW 3 WELLS 34% OF 2019 D&C CAPITAL Targeting Upper Wolfcamp & Bone Spring ARISTIDES 6 WELLS NEW 3RD BONE SPRING…
  12. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 12
    Culberson: Top-Tier Oil Wells DELAWARE BASIN CUMULATIVE OIL PRODUCTION BY COUNTY (8,500 LL, First Prod 2016, Upper Wolfcamp & Bone Spring Formations) 6 MONTH 12 MONTH LEA XEC CULBERSON EDDY REEVES WARD LOVING 300 350 CUMULATIVE…
  13. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 13
    Culberson: Water Infrastructure Driving Efficiencies RISER: XEC-ENGINEERED ACCESS FOR WATER REUSE SALTWATER DISPOSAL (SWD) Own & operate the system Improves operating costs System redundancy reduces downtime System expanding…
  14. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 14
    Culberson: Resilient Long Lateral Returns FRAC GENERATIONS INCREASING PRODUCTIVITY UPPER WOLFCAMP BTAX IRR* GEN 1 GEN 2 GEN 3 GEN 4 1/Mcf 2/Mcf CUMULATIVE OIL PRODUCTION (MBBL) 700 250% 600 200% 500 400 150% 300 100%…
  15. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 15
    Delaware Basin Lea County, NM 31,384 NET ACRES TARGETING: Upper Wolfcamp VACA DRAW Avalon 5 WELLS Bone Spring TRISTE DRAW (AVALON) 6 wells tested 20 wells/section, producing ONE DEVELOPMENT ON PRODUCTION IN 2019 NEW…
  16. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 16
    Mid-Continent Overview OKLAHOMA 326,000 NET ACRES BILLY WORT MISS MARY 2 WELLS 3 WELLS 5 WELLS WOODFORD: 135,625 NET UNDEVELOPED ACRES (HBP) MERAMEC: 116,500 NET ACRES Three developments on production in 2019 15% OF 2019…
  17. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 17
    Disciplined Financial Positioning XEC DEBT/TTM EBITDA DEBT/TTM EBITDA AVERAGE 3.0x 2.5x SIGNIFICANT LIQUIDITY 2.1 billion of liquidity, including 801mm of cash (12/31/2018) 2.0x CONSERVATIVE LEVERAGE 1.5x 0.9x Debt/TTM EBITDA…
  18. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 18
    Cash Operating Margin Expansion DECLINING CASH COSTS AND INCREASED REALIZED PRICES DRIVING MARGIN EXPANSION 50 80% 70% 68% /BOE OPEX & CASH MARGIN 40 70% 65% 30 60% 55% MARGIN % 54% 20 50% 10 40% 14.2…
  19. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 19
    Hitting Our Stride: Generating Free Cash Flow* CUMULATIVE FREE CASH FLOW (MM) CUMULATIVE FREE CASH FLOW: 2016 - 2018A 2019 - 2021E 19-21E: 100-600 MM 600 16-18A: 532 MM outspend 600 AVERAGE ANNUAL OIL GROWTH: 400 19-21E: 15%…
  20. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 20
    Cimarex Energy Overview PROVEN STRONG PREMIER ENDURING TRACK FINANCIAL PORTFOLIO CULTURE RECORD POSITION CREATING VALUE CORE POSITIONS IN MAXIMIZING FULL- LOW LEVERAGE AND AND GENERATING THE PERMIAN AND CYCLE RETURN ON…
  21. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 21
    APPENDIX APPENDIX 22
  22. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 22
    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…
  23. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 23
    Hedges as of February 20, 2019 2019 2020 1Q 2Q 3Q 4Q 1Q 2Q OIL WTI Oil Collars1 Volume (Bbl/d) 31,689 33,000 26,000 18,000 10,000 2,000 Weighted Average Floor 53.85 53.70 55.23 57.56 58.00 50.00 Weighted Average Ceiling 66.79 66.62…
  24. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 24
    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 AT 12/31/19 PERMIAN BASIN MID-CONTINENT 2019 NET WELLS ONLINE…
  25. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 25
    2019 Delaware Basin Plans TOTAL D&C WELLS DRILLED AVERAGE LATERAL CAPITAL BY COUNTY LENGTH BY COUNTY 10,000 8,000 WOLFCAMP EDDY REEVES 6,000 LEA 4,000 9351,020MM 66 NET WELLS 2,000 0 CULBERSON EDDY REEVES…
  26. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 26
    Permian Basin Water Management 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 water procured in 2018 was…
  27. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 27
    Permian Basin Takeaway SALES AGREEMENTS IN PLACE FOR OIL VOLUMES THROUGH 2019 80% of oil production on pipe STRATEGIC PARTNERSHIPS IN CORE AREAS Pipelines in place Purchase obligations Midland index pricing GAS SALES AGREEMENTS…
  28. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 28
    2018 Growth in Production and Reserves PROVED RESERVES (MMBOE) DAILY PRODUCTION (MBOE) 559 591 250 600 222 482 190 200 161 150 300 100 50 0 0 2016 2017 2018 2016 2017 2018 OIL NGL NATURAL GAS OIL NGL NATURAL GAS…
  29. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 29
    Non-GAAP Reconciliation ( in Millions) 2015 2016 2017 2018 Net income (loss) (2,580) (409) 494 792 Income tax expense (benefit) (1,472) (214) 188 231 Interest expense, net of capitalized 55 62 52 47 DD&A and ARO accretion 741 400…
  30. Scotia Howard Weil Energy Conference – Cimarex Energy Co. – slide 30
    Non-GAAP Reconciliation Twelve Months Ended Dec 31, December 31, ( in Millions) 2018 ( in Millions) 2017 2018 Long-term debt (principal) 1,500 Net cash provided by operating activities 1,097 1,551 Stockholders equity 3,330 Change…

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