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BAML Energy Conference Miami – Cimarex Energy Co.

Cimarex Energy Co. · Nov 13, 2014 · 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. BAML Energy Conference Miami – Cimarex Energy Co. – slide 1
    BAML Energy Conference Miami November 2014 1
  2. BAML Energy Conference Miami – Cimarex Energy Co. – slide 2
    Cimarex Value Proposition Focused on idea generation and execution Diverse portfolio of assets provides flexibility Balanced commodity mix: Proved reserves are 52% natural gas Regional optionality: Permian Basin and MidContinent Strong…
  3. BAML Energy Conference Miami – Cimarex Energy Co. – slide 3
    Strong Growth Momentum Daily Production +25% Expect fullyear 2014 900 (MMcfe) 864870 production growth of 25% MidContinent operations driving 705 gas (+23%) and NGL (+45%) 627 348 growth 600 324 Permian Basin projects driving 16% oil…
  4. BAML Energy Conference Miami – Cimarex Energy Co. – slide 4
    Product and Regional Diversity 3Q 2014 Production: 942 MMcfe/d Mix Area Revenue 5
  5. BAML Energy Conference Miami – Cimarex Energy Co. – slide 5
    2014 E&D Investment Plan Total Capital: 1.95 billion By Region: Facilities & Land, Seismic Other & Cap. 6% Overhead 14% Drilling 80% Robust Permian opportunity set commands 74% of capex MidContinent investment set to increase in 2015…
  6. BAML Energy Conference Miami – Cimarex Energy Co. – slide 6
    Permian Basin Region Delaware Basin focus 90+ industry rigs working 18 Cimarexoperated rigs Multiple projects targeting multiple zones Avalon Shale (oil window) Bone Spring sands (oil) Wolfcamp shale (oil & gas) 7
  7. BAML Energy Conference Miami – Cimarex Energy Co. – slide 7
    2014 Permian Drilling Capital Total Permian Wolfcamp 1.2 billion 650 million Delineation, development and downspacing tests Wolfcamp program includes multiple extended laterals in the second half 8
  8. BAML Energy Conference Miami – Cimarex Energy Co. – slide 8
    Delaware Basin Bone Spring Activity Invest 360mm in 2014 to drill 86 gross (50 net) wells 60 gross (32 net) wells YTD Three areas New Mexico 2nd & 3rd Bone Spring (Eddy & Lea Counties) . 23 operated wells YTD 30day average peak IP*:…
  9. BAML Energy Conference Miami – Cimarex Energy Co. – slide 9
    Delaware Basin Avalon Shale Seven wells completed to date 30day average peak IP of 909 BOE/d (69% oil) Upsized frac design unlocks oil window in the Avalon 13,700 net acres identified as prospective in Lea County 200+ locations…
  10. BAML Energy Conference Miami – 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 A, C & D JDA with Chevron Reeves County 80,000 net acres Wolfcamp A & B/C Ward County…
  11. BAML Energy Conference Miami – Cimarex Energy Co. – slide 11
    Thick, Multipay 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. BAML Energy Conference Miami – Cimarex Energy Co. – slide 12
    Culberson Focus Area Wolfcamp 100,000 netnet 100,000+ acres acres Joint Development Area with CVX 2013 main objectives Long laterals in Wolfcamp D show Drilling to significant hold acreage uplift Wolfcamp C &peak; 30day average D IP of…
  13. BAML Energy Conference Miami – 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 9.0 13.5 BT IRR 30% 90% 161% NPV10 (MM) 4.0 12.2 31.6 2000 Assumptions: Oil 90/bbl; Gas 4/Mcf; NGL…
  14. BAML Energy Conference Miami – Cimarex Energy Co. – slide 14
    Performance of Key Culberson County Wolfcamp Wells Shallow Decline of Upsized Fracs (BOE/d) Wolfcamp D Wolfcamp A 3,000 2,000 30day IP 2,450 1,800 Days 3060 2,500 Days 6090 1,600 90 day average 1,400 2,000 1,095 1,200 1,365 1,500 1,000…
  15. BAML Energy Conference Miami – Cimarex Energy Co. – slide 15
    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; 25/bbl NGL 16 16
  16. BAML Energy Conference Miami – Cimarex Energy Co. – slide 16
    Reeves & Ward Counties Reeves County Fourwell, 80acre spacing test producing Wells average 1,029 BOE/d (49% oil); 30day peak IP Nearby acreage available for long laterals Offset long lateral completing Toptier returns implied 35mm…
  17. BAML Energy Conference Miami – Cimarex Energy Co. – slide 17
    MidContinent Highlights CanaWoodford Activity Map E&D capex of 480mm Woodford shale capex of 360mm Operated Well Nonoperated Well Upsized frac boosts results Production grew 44% year overyear Complimentary 238mm Golden Section…
  18. BAML Energy Conference Miami – Cimarex Energy Co. – slide 18
    Upsized Production from Upsized Frac CanaWoodford Shale Completion Comparison Average 30day Peak IP (MMcfe/d) 12.0 Golden Section 10.2 10.0 9.6 8% 12% 8.0 Hartz Section 6.7 5% 6.0 4.0 2.0 0.0 Old Completion Golden Section Hartz Section…
  19. BAML Energy Conference Miami – Cimarex Energy Co. – slide 19
    MidContinent Regional Activity Map Redefinition of Woodford underway Glenda well has 30day peak IP of 12.4 MMcfe/d Meramec test & Woodford long 69% gas lateral (Bomhoff) Woodford test (Glenda) Leota well has 30day peak IP of 11.4…
  20. BAML Energy Conference Miami – Cimarex Energy Co. – slide 20
    Well Positioned for 2015 and beyond Diverse portfolio with strong returns Multiple Delaware Basin opportunities CanaWoodford upside & redelineation Continuous generation of ideas Production growth driving cash flow Strong balance sheet…
  21. BAML Energy Conference Miami – Cimarex Energy Co. – slide 21
    Upsized Wolfcamp Frac Old Frac Design: 5,000foot lateral; 12 stages; 4mm lbs of sand New Frac Design: 5,000foot lateral; 20 stages; 6mm lbs of sand 23
  22. BAML Energy Conference Miami – Cimarex Energy Co. – slide 22
    CanaWoodford Production 450 MMcfe/day 406 400 350 310 300 255 250 229 226 215 216 217 200 184 161 156 150 100 50 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Gas NGL Oil 24 24
  23. BAML Energy Conference Miami – Cimarex Energy Co. – slide 23
    Permian Production Growth MBOE/day 70 68 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 Q3 14 Oil NGL Gas 25 25
  24. BAML Energy Conference Miami – Cimarex Energy Co. – slide 24
    2014 Guidance 2014 Production, Unit Expense and Capital Guidance Fourth Quarter FullYear Production* Total Equivalent (Mmcfe/d) 930955 864870 % Liquids 51% 51% Expenses (/Mcfe): Production 1.08 1.12 Transportation, processing & other…
  25. BAML Energy Conference Miami – Cimarex Energy Co. – slide 25
    Permian Basin Oil Takeaway Capacity1 Existing Takeaway Capacity (Mbo/d) Local Refineries 400 Oil Pipelines 1,575 Total Existing capacity 1,975 Upcoming Capacity Additions (Mbo/d) LongHaul Expansions InService Capacity Cactus 2Q15 200…
  26. BAML Energy Conference Miami – Cimarex Energy Co. – slide 26
    Culberson County Wolfcamp Pilots Stacked Lateral Test 80acre Spacing Pilot Wolfcamp C & D Wolfcamp D Two wells Four wells Producing/Evaluating Producing/Evaluating 28 28
  27. BAML Energy Conference Miami – Cimarex Energy Co. – slide 27
    Reeves County Wolfcamp Pilots 80acre Spacing Pilot Stacked/Staggered Spacing Pilot Wolfcamp A Wolfcamp A Four wells Six wells Producing/Evaluating Flowing Back 29 29
  28. BAML Energy Conference Miami – Cimarex Energy Co. – slide 28
    Hedges Oil Weighted Average Price (1) Period Index Type Bbl/d Floor Ceiling Oct. - Dec. '14 WTI Collar 12,000 85.00 103.47 Gas Weighted Average Price (1) Period Index Type MMBTU/d Floor Ceiling Oct. - Dec. '14 PEPL Collar 80,000 3.51…
  29. BAML Energy Conference Miami – Cimarex Energy Co. – slide 29
    NonGAAP 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 DD&A…
  30. BAML Energy Conference Miami – Cimarex Energy Co. – slide 30
    NonGAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Nine months September 30, Ended September 30, 2014 2014 2013 (in millions) (in millions) Long-term debt 1,500 Net cash provided by operating…

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