Energy Prospectus

My forecast was production of 183,500 Boepd, EPS of $0.99 and CFPS of $2.82. - Dan

Cimarex Reports Second Quarter 2017 Results

DENVER, Aug. 8, 2017 /PRNewswire/ --
•Second Quarter Production up 9% sequentially; Oil Production up 11% sequentially
•Successful Wolfcamp Downspacing test in the Delaware Basin
•16 wells per section in Reeves County Upper Wolfcamp
•E&D Capital unchanged for 2017; Production guidance raised slightly

Cimarex Energy Co. (NYSE: XEC) today reported second quarter 2017 net income of $97.3 million, or $1.02 per share compared to a net loss of $214.4 million, or $2.31 per share, in the same period a year ago. Second quarter adjusted net income (non-GAAP) was $101.0 million, or $1.06 per share, compared to second quarter 2016 adjusted income (non-GAAP) of $20.9 million, or $0.22 per share1. Net cash provided by operating activities was $255.3 million in the second quarter of 2017 compared to $132.4 million a year ago. Adjusted cash flow from operations (non-GAAP) was $278.8 million in the second quarter (compares to my forecast of $268.5 million) of 2017 compared to $146.9 million in the second quarter a year ago1.

Total company production came in above the high end of our guidance averaging 1,156 million cubic feet equivalent (MMcfe) per day (192.7 thousand barrels oil equivalent (MBoe) per day) during the second quarter. This was a 19 percent increase over second quarter 2016 and a nine percent increase sequentially. Oil production averaged 57,871 barrels per day, an 11 percent increase sequentially. < I was expecting oil production of 56,000 barrels per day.

I have updated my forecast for Cimarex and it will be posted to the EPG website this evening.

I have raised my valuation by $2.50/share to $146.00, which compares to First Call's price target of $128.72.

Each time I take a hard look at Cimarex, I am reminded what a rock solid company this is. In addition to annual production and proven reserve growth in the 16% to 18% range, they have a decade of running room and a strong balance sheet. They also give conservative guidance and actual production regularly comes in at or above the high end of their guidance.

BTW they are funding their growth almost entirely with cash flow from operations.

Cimarex has two core areas, the Permian Basin and the Mid-Continent (STACK).

Read: http://www.oilandgas360.com/cimarex-ene ... ding-2017/