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2Q 2019 Earnings Presentation – Cimarex Energy Co.

Cimarex Energy Co. · Aug 6, 2019 · 32 slides

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Slides

  1. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 1
    2Q19 EARNINGS PRESENTATION August 2019
  2. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 2
    Cimarex Energy Snapshot NYSE SYMBOL: XEC MARKET CAP1: 4.6 BILLION ENTERPRISE VALUE1: 6.6 BILLION DEBT/EBITDA2: 1.3X QUARTERLY DIVIDEND: 0.20/SHARE 2019E OIL PRODUCTION GROWTH: 23 - 29% 1 As of August 2, 2019 CIMAREX…
  3. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 3
    Cimarex Energy: Maximizing Returns PREMIER 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. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 4
    Recent Highlights RAISING FULL-YEAR OIL GUIDANCE: 83 87 MBO/D CAPITAL GUIDANCE UNCHANGED NO ADDITIONAL DEBT RECENT HIGHLIGHTS 5
  5. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 5
    2019 Capital Investment Program AVALON OTHER 2% 2% BONE SPRING 4% WOLFCAMP WOODFORD 78% 4% E&D CAPITAL OF 1.35 1.45 BILLION MERAMEC 10% D&C CAPITAL 1.10 1.20 BILLION 84% of E&D capital Permian Basin 85% Mid-Continent Region…
  6. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 6
    Capital Investment MILLIONS 1Q19A 2Q19A 2019E DRILLING & COMPLETION1 (D&C) 319 265 1,100 - 1,200 EXPLORATION & DEVELOPMENT2 (E&D) 368 325 1,350 - 1,450 MIDSTREAM 18 22 70 TOTAL CAPITAL INVESTMENT 386 347 1,420 - 1,520…
  7. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 7
    2019 Net Wells on Production by Quarter 50 80 NET WELLS IN 2019 40 42 40 NET WELL COUNT 30 20 17 15 10 8 0 1QA 2QA 3QE 4QE WELLS WAITING ON COMPLETION AT 12/31/19 MID-CONTINENT PERMIAN BASIN 2019 NET WELLS ON…
  8. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 8
    2019 Delaware Basin Plans 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 65 NET WELLS 2,000 0 CULBERSON REEVES EDDY…
  9. 2Q 2019 Earnings Presentation – 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; 2 COMPLETION CREWS STACKED PAY OPPORTUNITIES Provides multi-zone development opportunities Upper and Lower…
  10. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 10
    Delaware Basin Reeves County, TX SKY PILOT 4 WELLS RED LODGE 6 WELLS 82,853 NET ACRES SANDLOT 37% OF 2019 D&C CAPITAL 4 WELLS SENTINEL 5 WELLS TARGETING UPPER WOLFCAMP HARDSCRABBLE 6 WELLS FIVE DEVELOPMENTS ON PRODUCTION…
  11. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 11
    Delaware Basin Culberson/White City NEW MEXICO TEXAS OWL DRAW 3 WELLS 100,000+ NET ACRES JDA WITH CHEVRON IN CULBERSON ARISTIDES 6 WELLS SIR BARTON 34% OF 2019 D&C CAPITAL 7 WELLS Targeting Upper Wolfcamp & Bone Spring…
  12. 2Q 2019 Earnings Presentation – 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 18 MONTH XEC CULBERSON LEA LOVING EDDY REEVES WARD 400 350…
  13. 2Q 2019 Earnings Presentation – 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. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 14
    Culberson: Strong Productivity, Low LOE FRAC GENERATIONS INCREASING PRODUCTIVITY PERMIAN BASIN LOE YTD GEN 1 GEN 2 GEN 3 GEN 4 CUMULATIVE OIL PRODUCTION (MBBL) 700 4.00 600 3.00 500 LOE PER BOE 400 2.00 300 200 1.00…
  15. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 15
    Delaware Basin Lea County, NM 31,384 NET ACRES VACA DRAW TARGETING: 6 WELLS Upper Wolfcamp Avalon Bone Spring VACA DRAW ON PRODUCTION NEW MEXICO CIMAREX ACREAGE TEXAS UPPER WOLFCAMP AVALON BONE SPRING DELAWARE…
  16. 2Q 2019 Earnings Presentation – 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 (98% HBP) Billy, Wort & Miss Mary developments on…
  17. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 17
    Disciplined Financial Positioning XEC DEBT/TTM EBITDA 3.0x 2.5x LIQUIDITY 1.2 billion of liquidity, including 19 MM of cash 2.0x (6/30/2019) 1.5x CONSERVATIVE LEVERAGE 1.3x Debt/TTM EBITDA (6/30/19) 1.0x INVESTMENT GRADE DEBT…
  18. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 18
    Improving Cash Costs Offset Lower Realized Price CASH OPERATING MARGIN 50 80% /BOE OPEX & CASH MARGIN 70% 40 68% 70% 65% 66% 62% 30 60% MARGIN % 55% 54% 20 50% 10 40% 14.15 10.71 9.51 9.55 8.64 8.31 8.08 0…
  19. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 19
    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…
  20. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 20
    APPENDIX APPENDIX 21
  21. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 21
    2019 Guidance 3Q19E FY19E Production (MBOE/d) 265 279 263 272 Oil Production (MBO/d) 85.0 91.0 83.0 87.0 Capital Expenditures (billion) E&D 1.35 1.45 D&C 1.10 1.20 Midstream/Other 0.7 Expenses (/BOE) 2019 Production 3.30…
  22. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 22
    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%…
  23. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 23
    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…
  24. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 24
    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…
  25. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 25
    Animal Kingdom Well Performance AVERAGE CUMULATIVE PRODUCTION vs TIME WOLFCAMP C, 3 WELLS WOLFCAMP D, 5 WELLS 550 EIGHT WELLS ON PRODUCTION FOR 310 DAYS 500 450 POSITIVE RESULTS FROM LOWER WOLFCAMP 400 SPACING PILOT 350 Eight…
  26. 2Q 2019 Earnings Presentation – 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. 2Q 2019 Earnings Presentation – 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. 2Q 2019 Earnings Presentation – 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. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 29
    Oil Hedges as of August 5, 2019 2019 2020 OIL 3Q 4Q 1Q 2Q 3Q 4Q WTI Oil Collars1 Volume (Bbl/d) 40,000 32,000 24,000 16,000 8,000 8,000 Weighted Average Floor 53.85 54.81 54.08 51.13 50.00 50.00 Weighted Average Ceiling 67.44 67.75…
  30. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 30
    Gas Hedges as of August 5, 2019 2019 2020 GAS 3Q 4Q 1Q 2Q 3Q 4Q PEPL Gas Collars1 Volume (MMBtu/d) 140,000 110,000 80,000 50,000 20,000 20,000 Weighted Average Floor 1.93 1.92 1.93 1.91 1.85 1.85 Weighted Average Ceiling 2.32 2.36…
  31. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 31
    Non-GAAP Reconciliation ( in Millions) 2016 2017 2018 LTM 6/30/19 Net income (loss) (409) 494 792 600 Income tax expense (benefit) (214) 188 231 174 Interest expense, net of capitalized 62 52 47 43 DD&A and ARO accretion 400 462…
  32. 2Q 2019 Earnings Presentation – Cimarex Energy Co. – slide 32
    Non-GAAP Reconciliation Six Months Ended ( in Millions) Jun 30, June 30, 2019 ( in Millions) 2018 2019 Long-term debt (principal) 2,000 Net cash provided by operating activities 704 664 Redeemable preferred stock 82 Change in…

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