Energy Prospectus

Cimarex Reports Fourth-Quarter and Full-Year 2014 Results

- Proved Reserves up 25 percent to 3.1 Tcfe
- Record quarterly production of 950 MMcfe per day
- Five New Wolfcamp D Long Laterals average 2,236 BOE/day
- Meramec tests average 10.2 MMcfe/day

I am updating my forecast model now. It will be on the website this afternoon.

Earning and operating cash flows came in above my forecast.

Proved reserves at December 31, 2014 were 3.1 trillion cubic feet equivalent (Tcfe), up 25 percent year over year. Reserves added from extensions and discoveries totaled 814 billion cubic feet equivalent (Bcfe) and when combined with upward revisions of 105 Bcfe, replaced 290 percent of production. Proved reserves are 77 percent proved developed.

My Fair Value Estimate for XEC is now $126.80, compared to First Call's Price Target of $121.43.

XEC is one of the "Elite Eight". It has a very strong balance sheet and they are able to increase production and proven reserves while living within cash flows, even in today's low oil price environment.

In a report published Thursday, Wunderlich Securities analyst Irene O. Haas reiterated a Buy rating on Cimarex Energy Co. (NYSE: XEC), and raised the price target from $122.00 to $132.00.

In the report, Wunderlich Securities noted, "Cimarex Energy (XEC) is exiting 2014 with a debt-to-cap ratio of 25% and should be able to fund a much-reduced capex of $0.9-$1.1 billion in 2015 with operational cash flow and cash on hand. The company is determined not to increase leverage in this uncertain time. By starting with a very defensive game plan, XEC has plenty of flexibility and the option to ramp up if and when crude prices stabilize. XEC delivered impressive growth in proved reserves and, as a result, we raised our NAV and price target from $122 to $132. Even in a $50/ bbl oil and $3/mcfe gas environment, the combination of lower service costs and optimization is yielding some very strong returns in some of XEC's key plays in the Permian and the Mid-Continent. We reiterate our Buy rating on XEC."

Cimarex Energy closed on Wednesday at $113.14.