Energy Prospectus

3rd quarter production exceeded my forecast. I am updating my forecast model now. - Dan

DENVER, Nov. 3, 2015 /PRNewswire/ -- Cimarex Energy Co. (XEC) today reported a third quarter 2015 net loss of $763.3 million, or $8.21 per diluted share, including a non-cash impairment of oil and gas properties. The adjusted third quarter net loss was $14.4 million, or $0.15 per diluted share.(1) Third quarter 2015 adjusted cash flow from operations was $178.6 million versus $439.7 million a year ago.(1)

Total company production averaged 979 million cubic feet equivalent (MMcfe) per day during the third quarter, a four percent increase from third quarter 2014. Year-over-year oil volumes grew 15 percent, natural gas volumes decreased one percent and natural gas liquids (NGL) volumes were up one percent.

For those of you interested in Gastar Exploration:
"In the Meramec formation, Cimarex completed its first 10,000-foot lateral. The Clayton 1HX had an average 30-day initial peak production rate of 16.0 MMcfe per day (57 percent gas, 28 percent NGL, 15 percent oil). In addition, Cimarex now has eleven 5,000-foot Meramec wells on production which have an average 30-day initial gross peak production rate of 9.3 MMcfe per day (47 percent gas, 29 percent oil, 24 percent NGL)."

One thing that really jumps out at me is how much cash XEC has sitting on their balance sheet at 9/30, over $899 million.

This company is well positioned to make a significant acquisition in the Permian Basin or in Oklahoma.

I have updated my forecast model for XEC. It will be on the EPG website later today. My valuation came down a bit to $131.60, compared to First Call's price target of $129.07.

Very little of their production is hedged (none in Q4), so any increase in commodity prices will increase my valuation.