Cimarex Reports Fourth-Quarter – Full-Year 2020 Results

Posted on June 7, 2021Comments Off on Cimarex Reports Fourth-Quarter – Full-Year 2020 Results

DENVER, CO (STL.News) Cimarex Energy Co. released the following information.  However, this is a summary, and the entire release can be found on their website.

  • Fourth-quarter oil production averaged 67.8 MBbls per day
  • Full year oil production averaged 76.7 MBbls per day
  • 2020 total capital investment of $577.2 million; below the guidance range
  • Generated $904.2 million of net cash from operating activities
  • $372 million of free cash flow 1 (non-GAAP) in 2020; $279 million of free cash flow after dividend 1 (non-GAAP) in 2020

Cimarex Energy Co. (NYSE: XEC) today reported net income for fourth-quarter 2020 of $24.7 million, or $0.25 per share, compared to a net loss of $384.1 million, or $3.87 per share, in the same period a year ago.  For the full year, Cimarex reported a net loss of $1,967.5 million, or $19.73 per share, compared to a 2019 net loss of $124.6 million, or $1.33 per share.  Both fourth-quarter and full-year results were negatively impacted by a non-cash charge related to the impairment of oil and gas properties.  Fourth-quarter 2020 adjusted net income (non-GAAP) was $91.3 million, or $0.89 per share, compared to adjusted net income (non-GAAP) of $120.4 million, or $1.18 per share in the same period a year ago1.  Full-year 2020 adjusted net income (non-GAAP) was $142.2 million, or $1.39 per share, compared to $448.8 million, or $4.46 per share in 20191.  Adjusted cash flow from operations (non-GAAP) was $256.6 million in fourth-quarter 2020 compared to $416.0 million in the same period a year ago1.  The full-year 2020 adjusted cash flow from operations (non-GAAP) was $944.2 million compared to $1.46 billion in 20191.

Oil volumes in the fourth quarter were sequentially lower, averaging 67.8 thousand barrels (MBbls) per day.  For the full year, Cimarex reported average daily oil volumes of 76.7 MBbls, an 11 percent year-over-year decrease.  Cimarex produced 229.5 thousand barrels of oil equivalent (MBOE) per day in the fourth quarter and averaged 252.5 MBOE per day for the year.

In the fourth quarter, realized oil prices averaged $40.09 per barrel, down 27 percent from the $54.80 per barrel received in the fourth quarter of 2019.  Realized natural gas prices averaged $1.69 per thousand cubic feet (Mcf), up 42 percent from the fourth quarter 2019 average of $1.19 per Mcf.  NGL prices averaged $14.02 per barrel, down one percent from the $14.13 per barrel received in the fourth quarter of 2019.  For the full year, Cimarex realized $35.59 per barrel of oil, down 33 percent from 2019, $1.05 per Mcf of natural gas, and $10.53 per barrel of NGLs sold.

Realized oil and natural gas price differentials to WTI Cushing and Henry Hub improved year-over-year.  Our realized Permian oil differential to WTI Cushing averaged $(3.74) per barrel in 2020 compared to $(4.48) in 2019.  For the year, Cimarex’s average differential on its Permian natural gas production was $(1.39) per Mcf compared to the Henry Hub index versus $(2.14) per Mcf in 2019.  Cimarex’s 2020 realized gas price differential in the Mid-Continent region was $(0.41) per Mcf compared to Henry Hub versus $(0.68) in 2019.

Cimarex invested a total of $577.2 million in 2020, which includes exploration and development capital (E&D) of $544.9 million, $20.8 million to saltwater disposal, and $11.5 million to midstream and other investments.  E&D capital is comprised of $417.4 million attributable to drilling and completion (D&C) activities and $127.5 million for capitalized interest and overhead, production capital, and leasehold acquisition.  Capital investments were funded with cash flow from operations.

Proved reserves at December 31, 2020, totaled 531 million barrels of oil equivalent (MMBOE), down 14 percent year over year.  The decrease in proved reserves resulted from a reduction in drilling activity and negative price-related revisions, both due to lower commodity prices.  Cimarex added 57 MMBOE through extensions and discoveries, while revisions reduced proved reserves by 52 MMBOE.  Production for 2020 totaled 92 MMBOE. Proved reserves are 84 percent proved developed.

Total debt at December 31, 2020, consisted of $2.0 billion of long-term notes. Cimarex had no borrowings under its revolving credit facility and a cash balance of $273.1 million at year-end.

Cimarex repurchased and canceled 34,335 shares (55 percent) of the outstanding 8.125% Series A Cumulative Perpetual Convertible Preferred Stock in the fourth quarter, for a total consideration of $43.5 million, including accrued and unpaid dividends.

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