Cimarex Energy (XEC) - Update
Posted: Fri Dec 29, 2017 1:28 pm
In the last 3 months, 13 ranked analysts set 12-month price targets for XEC. The average price target among the analysts is $135.33. < The price targets range from $117 to $150.
Today's stock price is $122.50.
It is obvious that most of the Wall Street analysts' valuations are based on much lower oil and NGL prices than we have today.
My valuation is $159.00/share, based on a realized crude oil price of $50 for 2018 and 2019.
Things to remember about Cimarex:
> Super strong balance sheet with total debt less than 20% of asset value.
> Assuming $50 oil, cash flow from operation s/b approximately $1.5 Billion in 2018. This compares to D&C budget of approximately $1.0 Billion.
> Lots of running room in the Permian and STACK. At current activity level, production growth s/b 15% to 20% each year.
> Production mix is approximately 44% natural gas, 31% crude oil and 25% NGLs. Liquids production is growing faster than gas production.
> High share price is because they have relatively few shares outstanding, only 95.5 million. Quite low for a company of this size.
> XEC is one of our "Elite Eight"
My forecast/valuation model has been updated and will be available on the EPG website late today.
Today's stock price is $122.50.
It is obvious that most of the Wall Street analysts' valuations are based on much lower oil and NGL prices than we have today.
My valuation is $159.00/share, based on a realized crude oil price of $50 for 2018 and 2019.
Things to remember about Cimarex:
> Super strong balance sheet with total debt less than 20% of asset value.
> Assuming $50 oil, cash flow from operation s/b approximately $1.5 Billion in 2018. This compares to D&C budget of approximately $1.0 Billion.
> Lots of running room in the Permian and STACK. At current activity level, production growth s/b 15% to 20% each year.
> Production mix is approximately 44% natural gas, 31% crude oil and 25% NGLs. Liquids production is growing faster than gas production.
> High share price is because they have relatively few shares outstanding, only 95.5 million. Quite low for a company of this size.
> XEC is one of our "Elite Eight"
My forecast/valuation model has been updated and will be available on the EPG website late today.