Cimarex Energy (XEC) - Updated Forecast
Posted: Sun Jan 15, 2017 2:59 pm
Cimarex Energy looks a lot better to me every time I take a hard look at it. I have updated my forecast / valuation model through 2018.
My valuation of the common stock increases by $23.00/share to $170.00. This compares to First Call's price target of $154.85, which moves higher week after week.
Cimarex has a super strong balance sheet with over $600 million in cash. It also has access to over a $Billion in capital, but won't need any of it unless they make a big acquisition.
Based on my forecast, cash flow from operations should exceed $1.2 Billion in 2017, which compares to their preliminary capex budget of $600 million (D&C only).
Cimarex is completing several pilot projects in STACK to determine the best completion method and horizontal well spacing. They have moved a bit slower than our other STACK companies (CLR, NFX and DVN) up until now, but they are now in position to accelerate development drilling.
The one thing I hope they do is announce a stock split. I think the high price of their common stock scares off some investors. Don't let it scare you. XEC is a "Core of the Core" quality company.
My valuation of the common stock increases by $23.00/share to $170.00. This compares to First Call's price target of $154.85, which moves higher week after week.
Cimarex has a super strong balance sheet with over $600 million in cash. It also has access to over a $Billion in capital, but won't need any of it unless they make a big acquisition.
Based on my forecast, cash flow from operations should exceed $1.2 Billion in 2017, which compares to their preliminary capex budget of $600 million (D&C only).
Cimarex is completing several pilot projects in STACK to determine the best completion method and horizontal well spacing. They have moved a bit slower than our other STACK companies (CLR, NFX and DVN) up until now, but they are now in position to accelerate development drilling.
The one thing I hope they do is announce a stock split. I think the high price of their common stock scares off some investors. Don't let it scare you. XEC is a "Core of the Core" quality company.