Cimarex Energy (XEC) Q3 Results
Posted: Wed Nov 02, 2016 4:30 pm
Q3 production was slightly below my forecast, but cash flow from operations (more important) was very close to my forecast. Cimarex is a very fiscally conservative company with a strong balance sheet and first class technical teams. - Dan
DENVER, Nov. 2, 2016 /PRNewswire/ -- Cimarex Energy Co. (XEC) today reported third quarter 2016 operational and financial results and provided guidance for the fourth quarter and full-year 2016. Cimarex also provided initial production guidance for 2017. Highlights include:
Third quarter production of 947 MMcfe/day, slightly below company's guidance
Full-year 2016 production estimate lowered to 960-970 MMcfe/day due to well completion timing and the duration of larger than anticipated completions
2017 production estimated to be 1,050 – 1,100 MMcfe/day; up 11 percent year-over-year at the mid-point
Initial estimate of 2017 drilling and completion capital is $600 million; in line with 2016 levels < This compares to over $1Billion cash flow from operations expected in 2017
Eight operated rigs currently working in core areas; nine planned by year-end
Tom Jorden, Cimarex Chairman and CEO said, "Our confidence in our well performance, Cimarex's operational excellence and the quality of our assets remains steadfast. During the third quarter, we faced delays in our completion schedule, driven mostly by stimulations that were upsized beyond our original plans. These upsized stimulations lengthened the time required for our pad completions. The resultant production ramps slipped later into the fourth quarter, with peak production moving into first quarter 2017. We will enter 2017 with great momentum."
Cimarex reported a third quarter 2016 net loss of $12.8 million, or $0.14 per diluted share, including a non-cash impairment of oil and gas properties. The adjusted third quarter net income (non-GAAP) was $38.2 million, or $0.41 per diluted share(1). Third quarter 2016 net cash provided by operating activities was $215.6 million versus $206.0 million a year ago. Adjusted cash flow from operations (non-GAAP) was $181.9 million versus $178.6 million a year ago(1).
Total company production averaged 947 million cubic feet equivalent (MMcfe) per day during the third quarter, slightly below the low end of company guidance of 950 – 980 MMcfe per day. Lower-than-expected third quarter production was caused by several factors including higher than anticipated ethane rejection, which accounted for seven MMcfe per day, and the timing of new well completions and subsequent production as well as production shut in during completion operations (13 MMcfe per day). Natural gas production averaged 447 MMcf per day (47 percent of total), oil production averaged 44,532 barrels per day (28 percent of total) and natural gas liquids (NGL) production averaged 38,786 barrels per day (25 percent of total). Compared to the same period in 2015, year-over-year natural gas volumes decreased four percent, oil volumes decreased 11 percent and NGL volumes were up eight percent. In total, third quarter production was three percent lower than third quarter 2015 production.
Oil prices continued to negatively impact Cimarex's year-over-year quarterly financial results. Realized oil prices averaged $40.54 per barrel, down three percent versus a year ago. Natural gas prices were essentially flat year-over-year and averaged $2.66 per thousand cubic feet (Mcf) compared to $2.68 per Mcf a year ago. Higher NGL prices partially offset lower oil prices and averaged $14.14 per barrel, up 16 percent from the third quarter of 2015. (See table of Average Realized Price by Region below.)
Cimarex invested $489 million in exploration and development year-to-date, including $175 million during the third quarter, which was funded with cash flow from operations. Total debt at September 30, 2016 remained at $1.5 billion of long-term notes. Cimarex had no borrowings under its revolving credit facility and a cash balance of $699 million at September 30, 2016. Debt was 39 percent of total capitalization (non-GAAP)(2).
DENVER, Nov. 2, 2016 /PRNewswire/ -- Cimarex Energy Co. (XEC) today reported third quarter 2016 operational and financial results and provided guidance for the fourth quarter and full-year 2016. Cimarex also provided initial production guidance for 2017. Highlights include:
Third quarter production of 947 MMcfe/day, slightly below company's guidance
Full-year 2016 production estimate lowered to 960-970 MMcfe/day due to well completion timing and the duration of larger than anticipated completions
2017 production estimated to be 1,050 – 1,100 MMcfe/day; up 11 percent year-over-year at the mid-point
Initial estimate of 2017 drilling and completion capital is $600 million; in line with 2016 levels < This compares to over $1Billion cash flow from operations expected in 2017
Eight operated rigs currently working in core areas; nine planned by year-end
Tom Jorden, Cimarex Chairman and CEO said, "Our confidence in our well performance, Cimarex's operational excellence and the quality of our assets remains steadfast. During the third quarter, we faced delays in our completion schedule, driven mostly by stimulations that were upsized beyond our original plans. These upsized stimulations lengthened the time required for our pad completions. The resultant production ramps slipped later into the fourth quarter, with peak production moving into first quarter 2017. We will enter 2017 with great momentum."
Cimarex reported a third quarter 2016 net loss of $12.8 million, or $0.14 per diluted share, including a non-cash impairment of oil and gas properties. The adjusted third quarter net income (non-GAAP) was $38.2 million, or $0.41 per diluted share(1). Third quarter 2016 net cash provided by operating activities was $215.6 million versus $206.0 million a year ago. Adjusted cash flow from operations (non-GAAP) was $181.9 million versus $178.6 million a year ago(1).
Total company production averaged 947 million cubic feet equivalent (MMcfe) per day during the third quarter, slightly below the low end of company guidance of 950 – 980 MMcfe per day. Lower-than-expected third quarter production was caused by several factors including higher than anticipated ethane rejection, which accounted for seven MMcfe per day, and the timing of new well completions and subsequent production as well as production shut in during completion operations (13 MMcfe per day). Natural gas production averaged 447 MMcf per day (47 percent of total), oil production averaged 44,532 barrels per day (28 percent of total) and natural gas liquids (NGL) production averaged 38,786 barrels per day (25 percent of total). Compared to the same period in 2015, year-over-year natural gas volumes decreased four percent, oil volumes decreased 11 percent and NGL volumes were up eight percent. In total, third quarter production was three percent lower than third quarter 2015 production.
Oil prices continued to negatively impact Cimarex's year-over-year quarterly financial results. Realized oil prices averaged $40.54 per barrel, down three percent versus a year ago. Natural gas prices were essentially flat year-over-year and averaged $2.66 per thousand cubic feet (Mcf) compared to $2.68 per Mcf a year ago. Higher NGL prices partially offset lower oil prices and averaged $14.14 per barrel, up 16 percent from the third quarter of 2015. (See table of Average Realized Price by Region below.)
Cimarex invested $489 million in exploration and development year-to-date, including $175 million during the third quarter, which was funded with cash flow from operations. Total debt at September 30, 2016 remained at $1.5 billion of long-term notes. Cimarex had no borrowings under its revolving credit facility and a cash balance of $699 million at September 30, 2016. Debt was 39 percent of total capitalization (non-GAAP)(2).