Cimarex Energy (XEC) Update - May 28

Cimarex Energy (XEC) Update - May 28

Postby dan_s » Fri May 28, 2021 10:13 am

This morning I listened to the replay of the Cimarex + Cabot merger presentation and adjusted my pro foma 2022 forecast/valuation model.
I have posted it to the EPG website.

XEC is trading at $67.28 this morning.
TipRanks shows 5 analysts that have reset their XEC price targets since the merger was announced.
Their price targets range from $67 to $86 for XEC. The average is $75.80.

Per my combined pro forma model, the 2022 operating cash flow per share is $4.54 for NewCo's 815.3 million shares. < Based on realized commodity prices of $60/bbl of oil, $2.75/mcf for dry gas and $21/bbl for NGLs.

NewCo will have a VERY STRONG BALANCE SHEET with less than 1X debt to EBITDAX and lots of high-quality low-risk development drilling inventory. So, I think a valuation of 6X operating cash flow is a reasonable valuation. Therefore, my valuation for XEC is $4.54 X 4.0146 shares X 6 = $109.36
Dan Steffens
Energy Prospectus Group
dan_s
 
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