Cimarex Energy (XEC)

[dan_s]

I have updated my forecast model for Cimarex and I have raised my valuation by $9.00 to $134.00.

> Q2 results beat my forecast
> Raised production guidance for 2016, which also raises my forecast for 2017 since the 2016 exit rate goes way up.
> Cimarex has a super strong balance sheet, so it deserves to trade at a higher multiple
> Cimarex production mix is 48% natural gas, 27% crude oil and 25% NGLs.
> There is upside to my forecast if natural gas moves up to $3.50 by December, which is now likely.

This morning Stifel has raised XEC to a BUY with a $142.00 price target.

[dan_s]

My forecast model for XEC will be posted to the EPG website late today.

Note that on all of my forecast models there is red box that shows First Cash operating cash flow per share for next three to four years. First Call is currently estimating that Cimarex's cash flow per share will top $20.00 by 2019.

Cimarex has added a fifth operated drilling rig to accelerate their STACK drilling program.