Adjusted EPS came in $0.20/share higher than my forecast. - Dan
DENVER, May 6, 2014 /PRNewswire/ -- Cimarex Energy Co. (XEC) today reported 2014 first quarter net income of $138.5 million, or $1.59 per diluted share. First quarter 2013 net income was $89.9 million, or $1.04 per diluted share. Adjusted 2014 first quarter net income was $145.3 million, $1.67 per diluted share(1).
Driven by improved results in the Cana-Woodford shale play, first quarter production grew 12 percent to a record 740 million cubic feet equivalent (MMcfe) per day compared to 2013 first quarter output of 661 MMcfe per day. Oil production grew 18 percent to an average 39,168 barrels per day. Natural gas volumes increased seven percent to 355.3 MMcfe per day and natural gas liquids (NGL) were up 16 percent.
Growth in production and higher product prices resulted in revenues of $599.2 million versus $426.4 million for the same period in 2013. Adjusted cash flow from operations was $408.9 million up 40 percent from $292.4 million during the same period a year ago(1).
Natural gas prices increased 57 percent to $5.32 per Mcf in the first quarter of 2014 compared to the first quarter of 2013. Realized oil prices averaged $92.22 per barrel and NGL prices averaged $39.94* per barrel, increases of seven percent and 36 percent, respectively.
XEC beats forecast
XEC beats forecast
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: XEC beats forecast
You will see a lot more upgrades like this. XEC is a fantastic company. - Dan
Drew Venker, CFA – Morgan Stanley
May 7, 2014 4:07 AM GMT
Cimarex employed new completions in Cana that drove a big production beat and raised 2014 production guidance from 13% to 20% growth. We are raising our price target 17% to $170 to reflect the impact of these new completions.
Cana on steroids: new completions + acquisition expand high return inventory. As we projected in our 1Q14 preview, Cana was likely to surprise to the upside with well performance. The speed at which it translated to total company growth was a surprise to us, but is all the more indicative of very strong well performance.
Cana’s pre-tax IRRs on this new completion design are competitive with the Wolfcamp at 70%, by our estimate (on XEC’s calculations pre-tax IRRs are 86%). This high return drilling inventory’s geographical location has favorable gas pricing and adequate infrastructure to accommodate significant growth.
Operational results very strong. Cimarex reported 30-day average IPs of 1,510 Boe/d from three Culberson County Wolfcamp D wells using upsized fracs. These results are inline with the first well completed with upsized fracs (Tim Tam well), which had a 30 day IP of 1,520 Boe/d. Cimarex also reported a 30 day rate of 2,516 Boe/d for its newest long lateral well. This compares to the first 10,000 foot well which had a 30-day IP of 2,803 Boe/d.
Wolfcamp downspacing tests next catalysts. Cimarex is currently conducting four downspacing pilots: two located in Culberson County and two in Reeves County. Results of these tests are expected by 3Q14.
Beat and raise on higher Cana production. 1Q14 Cana volumes grew 13% sequentially (to 255 MMcfe/d) vs. our estimate of -10% (FY2014 guidance: 4% growth to 226 MMcfe/d). Cimarex raised full year guidance to 18-22% growth (pre-acquisition) from 13%. Cimarex now expects 2014 oil production to grow 20-23% vs. 17-19% prior.
Drew Venker, CFA – Morgan Stanley
May 7, 2014 4:07 AM GMT
Cimarex employed new completions in Cana that drove a big production beat and raised 2014 production guidance from 13% to 20% growth. We are raising our price target 17% to $170 to reflect the impact of these new completions.
Cana on steroids: new completions + acquisition expand high return inventory. As we projected in our 1Q14 preview, Cana was likely to surprise to the upside with well performance. The speed at which it translated to total company growth was a surprise to us, but is all the more indicative of very strong well performance.
Cana’s pre-tax IRRs on this new completion design are competitive with the Wolfcamp at 70%, by our estimate (on XEC’s calculations pre-tax IRRs are 86%). This high return drilling inventory’s geographical location has favorable gas pricing and adequate infrastructure to accommodate significant growth.
Operational results very strong. Cimarex reported 30-day average IPs of 1,510 Boe/d from three Culberson County Wolfcamp D wells using upsized fracs. These results are inline with the first well completed with upsized fracs (Tim Tam well), which had a 30 day IP of 1,520 Boe/d. Cimarex also reported a 30 day rate of 2,516 Boe/d for its newest long lateral well. This compares to the first 10,000 foot well which had a 30-day IP of 2,803 Boe/d.
Wolfcamp downspacing tests next catalysts. Cimarex is currently conducting four downspacing pilots: two located in Culberson County and two in Reeves County. Results of these tests are expected by 3Q14.
Beat and raise on higher Cana production. 1Q14 Cana volumes grew 13% sequentially (to 255 MMcfe/d) vs. our estimate of -10% (FY2014 guidance: 4% growth to 226 MMcfe/d). Cimarex raised full year guidance to 18-22% growth (pre-acquisition) from 13%. Cimarex now expects 2014 oil production to grow 20-23% vs. 17-19% prior.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group