Cimarex Energy (XEC) Update - Feb 4

[dan_s]

Cimarex Chairman and CEO, Tom Jorden, said, "We have seen strong execution in 2019, which we expect to continue into 2020. Our initial planning indicates that we will generate meaningful free cash flow in 2020 using a flat $50 per barrel WTI price and NYMEX gas price of $2.50 per Mcf, adjusted for basis differentials."

I am updating the XEC forecast model today. Even if their realized natural gas price averages $1.50/mcf in 2020, Cimarex should generate over $1.6 Billion of cash flow from operations in 2020. This compares to their 2019 D&C capex of $1.35 Billion.

During January, five Wall Street firms updated their price targets for XEC. They range from $55 to $72.

My updated forecast/valuation model will be posted to the EPG website this afternoon.