Cimarex Energy - Q3 is another great quarter
Posted: Wed Nov 08, 2017 3:51 pm
Cimarex Reports Third Quarter 2017 Results
- Daily Production averaged 1,143 MMcfe (190.5 MBOE)
- 4Q17 oil production expected to grow 32 - 37% from 4Q16 levels
- Full-year 2017 production guidance raised to 1,134 - 1,147 MMcfe; up 5% from original forecast made in February
Year-over-year production growth will be 18% to 19%. Growth almost fully funded by cash flow from operations. Operating cash flows in 2018 will be near $1.5 Billion assuming $50/bbl realized oil price. Much higher NGL prices is what caused results to beat my forecast.
Best news is coming from Oklahoma:
During the third quarter, Cimarex completed 48 gross (14 net) wells in the Mid-Continent region. At the end of the quarter, 89 gross (16 net) wells were waiting on completion. Cimarex currently is operating five rigs in the region.
Of note, Cimarex is announcing drilling results from several Woodford shale wells in its Lone Rock area. These wells were brought on production over the past several quarters and show some of the best returns the company has seen to date in the Woodford shale. Cimarex has approximately 16,000 net acres in the Lone Rock area and has completed seven wells in 2017 including the Hines Federal #1H, the company's best well to date in the area. The Hines had 30-day average peak production of 15.2 MMcfe per day (40% oil, 23% NGL, 37% gas). Additional drilling, including a downspacing test, is underway.
Also during the third quarter, Cimarex began producing from eight Woodford shale wells drilled as part of an increased density pilot. The project tested both 16- and 20-well spacing per section. Preliminary results show no significant difference in well performance between the two spacing tests, indicating that Woodford wells can be drilled closer together in future infill projects than they have been historically.
- Daily Production averaged 1,143 MMcfe (190.5 MBOE)
- 4Q17 oil production expected to grow 32 - 37% from 4Q16 levels
- Full-year 2017 production guidance raised to 1,134 - 1,147 MMcfe; up 5% from original forecast made in February
Year-over-year production growth will be 18% to 19%. Growth almost fully funded by cash flow from operations. Operating cash flows in 2018 will be near $1.5 Billion assuming $50/bbl realized oil price. Much higher NGL prices is what caused results to beat my forecast.
Best news is coming from Oklahoma:
During the third quarter, Cimarex completed 48 gross (14 net) wells in the Mid-Continent region. At the end of the quarter, 89 gross (16 net) wells were waiting on completion. Cimarex currently is operating five rigs in the region.
Of note, Cimarex is announcing drilling results from several Woodford shale wells in its Lone Rock area. These wells were brought on production over the past several quarters and show some of the best returns the company has seen to date in the Woodford shale. Cimarex has approximately 16,000 net acres in the Lone Rock area and has completed seven wells in 2017 including the Hines Federal #1H, the company's best well to date in the area. The Hines had 30-day average peak production of 15.2 MMcfe per day (40% oil, 23% NGL, 37% gas). Additional drilling, including a downspacing test, is underway.
Also during the third quarter, Cimarex began producing from eight Woodford shale wells drilled as part of an increased density pilot. The project tested both 16- and 20-well spacing per section. Preliminary results show no significant difference in well performance between the two spacing tests, indicating that Woodford wells can be drilled closer together in future infill projects than they have been historically.