Quarterly dividend of $0.16/share

Transcription

1 Corporate Update February

2 Forward looking Statements This presentation contains projections and other forward looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of These projections and statements reflect the Company s current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. A discussion of these factors is included in the Company s periodic reports filed with the U.S. Securities and Exchange Commission. Contact: Karen Acierno Director Investor Relations kacierno@cimarex.com Mark Burford VP Capital Markets & Planning Cimarex Energy Co Lincoln Street, Suite 3700 Denver, CO

3 Corporate Profile Shares outstanding 87.7 MM Proved reserves Tcfe Market cap 1... $9.9 B % Natural gas 53% Long-term debt 2... $1.5 B % Proved developed 77% Enterprise value $11.4 B R/P Ratio x Stockholders' equity 2 $4.5 B Production MMcfe/d Debt/Cap 2 25% Quarterly dividend of $0.16/share 1 Share price as of February 17, At December 31, As of December 31, Fourth quarter

4 Cimarex Value Proposition Focused on idea generation and execution Diverse portfolio of assets provides flexibility Balanced commodity mix: Proved reserves are 53% natural gas Regional optionality: Permian Basin and Mid Continent Strong balance sheet No bank debt Sale of non core assets provides cash at year end Debt/total capitalization: 25% Long term time horizon 4 4

5 Solid Growth and Financial Discipline Daily Production (MMcfe) Proved Reserves (Bcfe) 1, % % ,500 3,000 2,500 2,259 2,497 3,132 2, , , x 0.6x 0.7x E Oil & NGL Natural Gas Oil NGL Gas Net Debt/EBITDA 5 5

6 Product and Regional Diversity 4Q 2014 Production: 950 MMcfe/d Mix Area Revenue 6

7 2015 E&D Investment Plan Total Capital: $0.9 $1.1 billion Permian Drilling & Completion Mid Continent $350 million $312 million 7

8 Permian Basin Region Multiple projects in multiple zones Wolfcamp shale (oil & gas) Bone Spring sands (oil) Avalon Shale (oil window) 2015 Focus Wolfcamp Long Laterals Culberson Wolfcamp A & D Reeves County acreage obligations White City Bone Spring 8

9 Bone Spring Play. Invested $337mm in 2014 to drill 81 gross (44 net) wells Three areas New Mexico 2nd & 3rd Bone Spring (Eddy & Lea Counties) 23 operated wells in day average peak IP*: 962 BOE/d; 749 bo/d Texas 3rd Bone Spring (Ward County) 12 operated wells in day average peak IP*: 1,022 BOE/d (801 bo/d) Culberson County 2nd Bone Spring 16 operated wells in day average peak IP*: 1,018 BOE/d (594 bo/d) *Two stream. 9

10 White City Second Bone Spring 180 Cumulative Production (MBOE/d) Focus Area % Increase Completion upsized to 15 stages from nine 64% increase in cum production over 180 days 90 locations identified HPB acreage; infrastructure in place Upsized Completion (15 stages) Original Completion (9 stages) 10

11 Delaware Basin Wolfcamp Fairway ~235,000 net acres in the fairway Multiple Wolfcamp Targets Culberson/White City Area 100,000+ net acres Wolfcamp A, C & D JDA with Chevron Reeves County 80,000 net acres Wolfcamp A & B/C Ward County 38,000 net acres Wolfcamp A & B/C 11

12 Culberson Focus Area Wolfcamp 100,000 net acres 100,000+ net acres 2015 focus on long laterals in Wolfcamp A & D Drilling to hold acreage Five new Wolfcamp D long laterals Wolfcamp have ave. C & D30 day peak IP 2,236 BOE/d Two (26% rigs; ~20 oil; wells 45% gas) 2013 main objectives 41 wells to date; 30 day First Wolfcamp A long lateral has average IP of 6.5 MMcfe/d ave. 30 day peak IP of 1,491 Product mix of 45% gas; BOE/d (50% 26% oil; oil; 30 29% % NGL gas) 7,500 feet; 30 stage completion Upsize frac stages 25% uplift to 5,000 foot test First 20 stage test has 30 day Oil gathering by 4Q15 average IP of 8.4 MMcfe/d Fee based agreement Testing Wolfcamp A Improve realizations $25mm Experiment infrastructure with long spend laterals in 2015 Stacked lateral test Design downspacing pilot 12

13 Performance of Key Culberson County Wolfcamp Wells Shallow Decline of Upsized Fracs (BOE/d) Wolfcamp D Wolfcamp A 3,000 2, day IP Days Days ,450 2,000 1,800 1,600 2,000 1, day average 1,365 1,400 1,200 1,000 1, , Tim Tam 5,000 ft. lateral Gallant Fox 10,000 ft. lateral Twenty Grand 5,000 ft. lateral First Year Cum: 1.0 Bcf (wet gas) 89 Mbbls First Year Cum: 2.1 Bcf (wet gas) 149 Mbbls First Year Cum: 0.6 Bcf (wet gas) 135 Mbbls 13

14 Culberson County Focus Area: Wolfcamp D Type Curves Lower well costs = partial offset to oil price declines BOE/day ,000 ft. Lateral 10,000 ft. Lateral Previous Go Forward Previous Go Forward Well Cost ($MM) $9.0 $7.6 $13.5 $11.9 BT IRR 32% 49% 56% 73% NPV10 ($MM) $4.3 $5.7 $12.2 $ Assumptions: Oil $50/Bbl; Gas $3.00/Mcf; NGL $17.50/Bbl (full recovery) Months 10,000 ft. lateral; 43 stages 5,000 ft. lateral; 20 stages 14 14

15 Sensitivity to Crude Oil Prices Culberson County Wolfcamp D Before Tax IRR 133% 52% 33% 73% 49% 99% 68% 90% Wolfcamp D 10,000 ft. lateral; 43 stages Wolfcamp D 5,000 ft. lateral; 20 stages $40 $50 $60 $70 Realized Oil Price ($/Bbl) Assumptions: $3.00 gas, NGLs 35% of Crude Price, Full NGL recovery 15 15

16 Reeves & Ward Counties Reeves County Weather & pipeline issues cause delays in reporting new long lateral results including fourth pilot 2015 focus on meeting acreage obligations Spud eight wells; $70mm $25mm midstream investment in 2015 Ward County Minimal lease expirations in

17 Mid Continent Highlights Cana Woodford Activity Map Golden Section Operated Well Non operated Well E&D capex of $312mm Cana Core capex of ~$179mm Meramec capex of $70mm 128,000 net acres prospective for Woodford Shale (86%HBP) 115,000 net acres prospective for Meramec 2015 Infill Hartz Section $9 $8 $7 $6 Cana Woodford Cost Reductions $8.2 15% $7.0 $5 $4 17 $3 4Q E

18 Mid Continent: Meramec is an Exciting New Opportunity Downdip Updip First six wells had average 30 day peak IP of 10.2 MMcfe/d Updip: 49% oil, 27% NGL, 24% gas Downdip: 16% oil, 30% NGL, 54% gas 115,000 net acres prospective for Meramec Results to date have de risked 70,000 net acres) 18

19 Mid Continent Focus: Cana Woodford and Meramec Mcfe/day Culberson Area 100,000 net acres Reeves County 80,000 net acres Ward County 38,000 net acres Cana Infill Meramec Well Cost ($MM) $7.0 $7.3 BTAX IRR 39% 59% NPV10 ($MM) $5.4 $ Assumptions: Oil $50/Bbl; Gas $3.00/Mcf; NGL $17.50/Bbl (full recovery) Months IIndicates producing zone. Woodford 5,000 ft. lateral; 23 stages Meramec 5,000 ft. lateral; 23 stages 19 19

20 Mid Continent Economics: Cana Woodford & Meramec Economic Sensitivity to Crude Oil Prices BTAX IRR Culberson Area 100,000 net acres Reeves County 80,000 net acres Ward County 38,000 net acres 102% 78% 40% 59% 39% 49% 61% 31% $40 $50 $60 $70 Crude Oil ($/Bbl)* Woodford 5,000 ft. lateral; 23 stages *Realized IIndicates prices. producing Assumes zone. $3.00 gas, NGLs 35% of Crude Oil Meramec 5,000 ft. lateral; 23 stages 20 20

21 Upsized Fracs Show Sustained Production Strength (MMcfe/d) 12 Golden Section Hartz Section day IP Days Days day average 2 0 Golden Hartz 21 21

22 Well Positioned for 2015 and beyond Diverse portfolio with strong returns Multiple Delaware Basin opportunities Cana Woodford infill & re delineation Emerging Meramec play Continuous generation of ideas Strong balance sheet Sale of non core assets provides cash at year end Near term focus on maintaining financial position Long track record of profitable growth 22 22

23 Appendix 23 23

24 Cana Woodford Production MMcfe/day Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Gas NGL Oil 24 24

25 70 Permian Production Growth MBOE/day Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Oil NGL Gas 25 25

26 2015 Guidance 2015 Production, Unit Expense and Capital Guidance First Quarter Full Year Production* Total Equivalent (Mmcfe/d) % Liquids 52% 52% Expenses ($/Mcfe): Production $1.07 $1.17 Transportation, processing & other DD&A and ARO accretion* General and administrative Taxes other than income (% of oil and gas revenue) % *Excludes the impact of any ceiling test write downs Capital Expenditures $0.9 $1.1 billion 26 26

27 Thick, Multi pay Wolfcamp Section Culberson Area 100,000 net acres Reeves County 80,000 net acres Ward County 38,000 net acres IIndicates producing zone

28 Culberson County Wolfcamp Pilots Stacked Lateral Test Wolfcamp C & D Two wells Producing/Evaluating 80 acre Spacing Pilot Wolfcamp D Four wells Producing/Evaluating 28 28

29 Reeves County Wolfcamp Pilots 80 acre Spacing Pilot Wolfcamp A Four wells Producing/Evaluating Stacked/Staggered Spacing Pilot Wolfcamp A Six wells Flowing Back 29 29

30 Upsized Wolfcamp Frac Old Frac Design: 5,000 foot lateral; 12 stages; 4mm lbs of sand New Frac Design: 5,000 foot lateral; 20 stages; 6mm lbs of sand 30

31 Non GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA ($ in Millions) Net income (loss) $ 354 $ 565 $ 507 Income tax expense (benefit) Interest expense, net of capitalized DD&A and ARO accretion EBITDA 1,102 1,541 1,

32 Non GAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Net cash provided by operating activities $ 1,619 $ 1,324 Change in operating assets Twelve months Ended December 31, (in millions) and liabilities Adjusted cash flow from operations $ 1,634 $ 1,388 Finding & development (F&D) cost 2014 Proved Reserves adds (Bcfe) Revisions of previous estimates Extensions & discoveries [C] Purchase of reserves Total adds [A] 1,052.4 Total capital $MM [B] $ 2,131 All-sources F&D ($/Mcfe) [B]/[A] $ 2.02 Drilling (excl. revisions) F&D ($/Mcfe) [B]/[C] $ Long-term debt $ 1,500 Stockholders' Equity 4,501 Total capitalization $ 6,001 Long-term debt/total capitalization 25% Net Debt/EBITDA Calculation December 31, (in millions) Twelve months Ended December 31, Long-term debt ,500 Cash & cash equivalents Net Debt ,094 EBITDA 1,102 1,541 1,659 Net Debt/EBITDA 0.6x 0.6x 0.7x 32 32