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MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co.

Cimarex Energy Co. · Oct 21, 2014 · 29 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. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 1
    Morgan Stanley NDR West Coast October 21-22, 2014 1
  2. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 2
    Corporate Profile Shares outstanding 87.0 MM Proved reserves3.. 2.5 Tcfe Market cap1... 9.5 B % Natural gas 52% Long-term debt 2.. 1.5 B % Proved developed 80% Enterprise value 11.0 B R/P Ratio.. 9.9x Stockholders' equity2 4.3…
  3. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 3
    Whats New +25% Daily Production 860-875 Expect 2014 production to (MMcfe) grow 25% (midpoint) Cana-Woodford Q2 production up 22% sequentially 2014 E&D Capex of 1.95bn up 25% y-o-y Closed 238mm Mid- 350 Continent acquisition…
  4. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 4
    Production Profile 2Q 2014 Production Mix Revenue Contribution Oil 30% Natural Gas 49% NGL 21% 839MMcfe per day; up 22% year-over-year Gas grew 22%, oil up 13% and NGL increased 43% Production driving earnings & cash…
  5. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 5
    2014 Capital Investment Plan Total Capital: 1.95 billion By Region: Facilities & Land, Seismic Other & Cap. 6% Overhead 14% Drilling 80% Robust Permian opportunity set commands 75% of capex Oil production growth of 22-25%…
  6. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 6
    Permian Basin Region Delaware Basin focus 90+ industry rigs working 18 Cimarex-operated rigs Multiple projects targeting multiple zones Avalon Shale (oil window) Bone Spring sands (oil) Wolfcamp shale (oil & gas) 7
  7. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 7
    2014 Permian Drilling Capital Total Permian Wolfcamp 1.2 billion 685 million Strong results continue in Bone Spring & Avalon Wolfcamp program includes multiple extended laterals in the second half 8
  8. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 8
    Delaware Basin - Bone Spring Activity Spend 375mm in 2014 to drill 100 gross (56 net) wells 48 gross (25 net) wells YTD Three areas New Mexico 2nd & 3rd Bone Spring (Eddy & Lea Counties) . 17 operated wells YTD 30-day average peak…
  9. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 9
    Delaware Basin Avalon Shale Six wells completed to date 30-day average peak IP of 943 BOE/d (74% oil) Upsized frac design unlocks oil window in the Avalon 13,700 net acres identified as prospective in Lea County 200+ locations…
  10. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 10
    Delaware Basin Wolfcamp Fairway 235,000 net acres in the fairway Multiple Wolfcamp Targets Culberson/White City Area 100,000+ net acres Wolfcamp D, C & A producing JDA with Chevron Reeves County New focus area 80,000 net acres…
  11. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 11
    Thick, Multi-pay Wolfcamp Section Culberson Area Reeves County Ward County 100,000 net acres 80,000 net acres 42,000 net acres IIndicates producing zone. 12 12
  12. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 12
    Culberson Focus Area Wolfcamp 100,000 netnet 100,000+ acres acres Joint Development Area with CVX 2013 main objectives Downspacing pilots underway Stacked C/D Drilling lateralacreage to hold test producing 80-acre downspacing…
  13. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 13
    Upsized Returns from Long Lateral with Upsized Frac Culberson County Wolfcamp D Wells BOE/day 3000 Old New Long 2500 Well Cost (MM) 8.0 8.7 13.5 BT IRR 30% 90% 161% NPV10 (MM) 4.0 12.2 31.6 2000 Assumptions: Oil - 90/bbl; Gas -…
  14. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 14
    Upsized Returns Oil Price Sensitivity Culberson County Wolfcamp D Wells Before Tax IRR 122% 113% 89% 74% 65% 60% 45% 37% 5,000 ft. lateral 10,000 ft. lateral 50 60 75 80 Realized Oil Price Assumes 3.50/Mcf gas;…
  15. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 15
    Reeves & Ward Counties Emerging Wolfcamp Reeves County Recent Wolfcamp A well has average 30-day peak IP of 1,368 BOE/d; 899bo/d (66%) Upsized frac design +30% uplift to IP Two Wolfcamp A downspacing . pilots underway 35mm…
  16. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 16
    Culberson County Wolfcamp Pilots Stacked Lateral Test 80-acre Spacing Pilot Wolfcamp C & D Wolfcamp D Two wells Four wells Producing/Evaluating Producing/Evaluating 17 17
  17. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 17
    Reeves County Wolfcamp Pilots 80-acre Spacing Pilot Stacked/Staggered Spacing Pilot Wolfcamp A Wolfcamp A Four wells Six wells Producing/Evaluating Flowing Back 18 18
  18. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 18
    Mid-Continent Highlights Cana-Woodford Activity Map Complimentary 238mm acquisition in May E&D capex of 480mm Operated Well Non-operated Well Woodford shale development capex of 360mm Upsized frac boosts results Golden Section…
  19. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 19
    Upsized Returns from Upsized Frac Golden Section Cana-Woodford Shale Mcfe/day 10,000 Old New Completion Completion 8,000 Well Cost MM 6.5 7.2 BT IRR 38% 86% NPV10 (MM) 5.5 14.0 Assumptions: Oil 90; Gas 4.00; NGL 29 - held flat…
  20. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 20
    Mid-Continent Regional Activity Map Redefinition of Woodford potential underway Leota well has 30-day Meramec test & Woodford long peak IP of 11.4 MMcfe/d lateral (Bomhoff) 3x offsetting wells Includes 662 bo/d Woodford test…
  21. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 21
    Summary Recap Well positioned for 2014 and beyond Focused on Permian projects & Cana-Woodford upside Continue generating new ideas Solid base of proved reserves and production 80% proved developed; 10-year reserve life Portfolio…
  22. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 22
    Appendix 23 23
  23. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 23
    Upsized Wolfcamp Frac Old Frac Design: 5,000-foot lateral; 12 stages; 4mm lbs of sand New Frac Design: 5,000-foot lateral; 20 stages; 6mm lbs of sand 24
  24. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 24
    Cana-Woodford Production 350 MMcfe/day 310 300 255 250 229 226 215 216 217 200 184 161 156 150 100 50 - Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Gas NGL Oil 25 25
  25. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 25
    Permian Production Growth MBOE/day 70 66 60 59 58 55 53 50 49 46 46 41 40 40 36 34 30 30 29 20 10 - Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Oil NGL Gas 26 26
  26. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 26
    2014 Guidance 2014 Production, Unit Expense and Capital Guidance Third Quarter Full-Year Production* Total Equivalent (Mmcfe/d) 920-945 860-875 % Liquids 52% 52% Expenses (/Mcfe): Production 1.12 - 1.17 Transportation,…
  27. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 27
    Hedges Oil Weighted Average Price (1) Period Index Type Bbl/d Floor Ceiling July - Dec. '14 WTI Collar 12,000 85.00 103.47 Gas Weighted Average Price (1) Period Index Type MMBTU/d Floor Ceiling July - Dec. '14 PEPL Collar…
  28. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 28
    Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA ( in Millions) 2011 2012 2013 Net income (loss) 530 354 565 Income tax expense (benefit) 312 207 329 Interest expense, net of capitalized 7 14 23…
  29. MORGAN STANLEY WEST COAST INVESTOR MEETING – Cimarex Energy Co. – slide 29
    Non-GAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Six months June 30, Ended June 30, 2014 2014 2013 (in millions) (in millions) Long-term debt 1,500 Net cash provided by operating activities…

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