U.S. Markets closed

Cimarex Reports Fourth Quarter and Full Year 2018 Results

DENVER, Feb. 20, 2019 /PRNewswire/ --

  • 4Q daily production above guidance averaging 251.3 MBOE; 79,904 barrels of oil
  • Daily production for the full year averaged 221.9 MBOE; 67,699 barrels of oil
  • 2018 E&D expenditures below guidance at $1.57 billion
  • Cimarex sold assets in Ward County, Texas, and reinvested in assets in Reeves County, Texas through the pending acquisition of Resolute Energy Corporation (expected to close March 1)

Cimarex Energy Co. (XEC) today reported fourth quarter 2018 net income of $316.2 million, or $3.32 per share, compared to $174.7 million, or $1.83 per share, in the same period a year ago.  Fourth quarter adjusted net income (non-GAAP) was $189.7 million, or $1.98 per share, compared to fourth quarter 2017 adjusted net income (non-GAAP) of $140.0 million, or $1.47 per share1.  Net cash provided by operating activities was $393.2 million in the fourth quarter of 2018 compared to $340.8 million in the same period a year ago.  Adjusted cash flow from operations (non-GAAP) was $428.2 million in the fourth quarter of 2018 compared to $357.1 million in the fourth quarter a year ago1.

Driven by solid execution, total company volumes for the fourth quarter averaged 251.3 thousand barrels of oil equivalent (MBOE) per day.  Oil production averaged 79,904 barrels (bbls) per day, up 29 percent from the same period a year ago and up 25 percent from third quarter 2018 levels.

Realized oil prices averaged $49.30 per barrel on the fourth quarter, down 5 percent from the $51.68 per barrel received in the fourth quarter of 2017 and realized natural gas prices averaged $2.16 per thousand cubic feet (Mcf) down 16 percent from the fourth quarter 2017 average of $2.58 per Mcf.  NGL prices averaged $20.71 per barrel, down 20 percent from the $25.88 per barrel received in the fourth quarter of 2017.  For the full year, Cimarex realized $56.61 per barrel of oil, up 20 percent from 2017, $1.99 per Mcf of natural gas and $22.28 per barrel of NGLs sold.  Realized prices for 2018 reflect the adoption of Accounting Standards Codification 606 (ASC 606).  See table below (Impact of ASC 606) for comparison of realized prices for 2018 for pre- and post-ASC 606.

During 2018, both oil and natural gas prices were negatively impacted by local price differentials.   Our realized Permian oil differential to WTI Cushing averaged $(9.82) per barrel in 2018.   Cimarex's average differential on its Permian natural gas production was $(1.40) per Mcf below Henry Hub in 2018 and, in the Mid-Continent region, realized gas prices were $(0.86) per Mcf below the Henry Hub index.

Cimarex invested $1.57 billion in exploration and development (E&D) in 2018, including $380 million in the fourth quarter. Investments made in 2018 were funded with cash flow from operations and cash on the balance sheet.  Total debt at December 31, 2018, consisted of $1.5 billion of long-term notes.  Cimarex had no borrowings under its revolving credit facility and a cash balance of $800.7 million at year-end.  Debt was 31 percent of total capitalization2.

Proved reserves at December 31, 2018, totaled 591 million barrels of oil equivalent (MMBOE), up six percent year over year.  Proved developed reserves increased eight percent to 501 MMBOE.  Cimarex added 159 MMBOE through extensions and discoveries and deducted 23 MMBOE through net revisions resulting in reserve replacement of 168 percent of 2018 production.  Proved reserves are 85 percent proved developed.

On August 31, 2018, we closed on the sale of properties in Ward County, Texas, and have received $534.6 million in net cash proceeds adjusted for the resolution of all asserted defects as of December 31, 2018.  On November 18, 2018, Cimarex entered into a merger agreement to acquire Resolute Energy Corporation in a cash and stock transaction valued at $1.6 billion, including the assumption of Resolute's long-term debt, which was approximately $710 million.  The transaction is expected to close on March 1, 2019, and is subject to the approval of the Resolute shareholders and the satisfaction of certain regulatory approvals and other closing conditions.

Operations Update
Cimarex invested $1.57 billion in E&D in 2018--70 percent in the Permian region and 30 percent in the Mid-Continent. An additional $103 million was invested in midstream operations and other infrastructure in 2018.   Of the $1.57 billion of E&D investment in 2018, $1.35 billion (86 percent) went toward the drilling and completion of new wells.

During 2018, Cimarex participated in the drilling and completion of 349 gross (122 net) wells.  At year-end, 83 gross (28 net) wells were waiting on completion, of which 48 gross (8 net) were in the Mid-Continent and 35 gross (20 net) were in the Permian.  Cimarex currently operates 11 drilling rigs.

WELLS BROUGHT ON PRODUCTION BY REGION












Three Months Ended
December 31,


Twelve Months Ended
December 31,



2018


2017


2018


2017










Gross wells









Permian Basin


40



32



129



97


Mid-Continent


46



85



220



222




86



117



349



319


Net wells









Permian Basin


32



14



80



55


Mid-Continent


6



10



42



43




38



24



122



98


Permian Region
Production from the Permian region averaged 147,404 BOE per day in the fourth quarter, a 31 percent increase from fourth quarter 2017. Oil volumes averaged 61,621 barrels per day, a 29 percent increase from fourth quarter 2017.  For the full year, production averaged 126,124 BOE per day, up 20 percent year over year.

Cimarex brought 40 gross (32 net) wells on production in the Permian region during the fourth quarter.  Activity in the fourth quarter included first production from 32 wells in the Wolfcamp, Avalon and Bone Spring formations. Of note is a 10,000-ft lateral, the Kingman 45 State Unit 3H, a Third Bone Spring test on the western side of Culberson County, Texas.  This new zone had average 30-day initial peak production of 2,917 BOE per day including 1,965 barrels of oil per day (67 percent).  Cimarex had additional success in the Third Bone Spring in Lea County, New Mexico, where three 5,000-ft laterals had an average 30-day peak initial production of 1,461 BOE per day (81 percent oil).

Cimarex brought 129 gross (80 net) wells on production in the Permian region in 2018.   About 70 percent of our operated wells were drilled from multi-well pads and our average lateral length on our operated wells in the Permian was 7,617 feet in 2018. Cimarex currently operates ten rigs in the region.   Please see our press release announcing our 2019 capital plans as well as our most recent presentation for more details.

Mid-Continent Region
Production from the Mid-Continent averaged 103,432 BOE per day for the fourth quarter, up 17 percent from fourth quarter 2017 and up six percent sequentially. Oil volumes averaged 18,122 barrels per day and represented 18 percent of the region's total equivalent production. For the full year, production averaged 95,307 BOE per day, up 12 percent year over year.

Wells brought on production during the fourth quarter totaled 46 gross (6 net) in the Mid-Continent region, bringing the total wells in 2018 to 220 gross (42 net). At the end of the quarter, 48 gross (8 net) wells were waiting on completion.

Activity in the region continues to focus on the Woodford and Meramec shale plays in western Oklahoma. Cimarex currently operates one rig in the Mid-Continent.  Please see our press release announcing our 2019 capital plans as well as our most recent presentation for more details.

Production by Region
Cimarex's average daily production and commodity price by region is summarized below:

DAILY PRODUCTION BY REGION












Three Months Ended
December 31,


Twelve Months Ended
December 31,



2018


2017


2018


2017










Permian Basin









Gas (MMcf)


296.4



232.6



253.7



217.9


Oil (Bbls)


61,621



47,642



52,339



44,577


NGL (Bbls)


36,380



25,747



31,505



24,269


Total Equivalent (BOE)


147,404



112,157



126,124



105,157











Mid-Continent









Gas (MMcf)


324.2



300.3



308.8



294.4


Oil (Bbls)


18,122



13,999



15,150



12,457


NGL (Bbls)


31,275



24,176



28,697



23,296


Total Equivalent (BOE)


103,432



88,225



95,307



84,822











Total Company









Gas (MMcf)


621.9



534.0



563.9



513.6


Oil (Bbls)


79,904



61,771



67,699



57,153


NGL (Bbls)


67,706



49,954



60,258



47,600


Total Equivalent (BOE)


251,254



200,729



221,946



190,354




AVERAGE REALIZED PRICE BY REGION












Three Months Ended
December 31,


Twelve Months Ended
December 31,



2018*


2017


2018*


2017










Permian Basin









Gas ($ per Mcf)


1.44



2.56



1.69



2.72


Oil ($ per Bbl)


47.17



51.38



54.95



46.96


NGL ($ per Bbl)


20.13



25.07



22.84



20.25











Mid-Continent









Gas ($ per Mcf)


2.82



2.60



2.23



2.78


Oil ($ per Bbl)


56.48



52.72



62.31



47.42


NGL ($ per Bbl)


21.38



26.73



21.67



23.02











Total Company









Gas ($ per Mcf)


2.16



2.58



1.99



2.76


Oil ($ per Bbl)


49.30



51.68



56.61



47.06


NGL ($ per Bbl)


20.71



25.88



22.28



21.61



*Realized prices for 2018 reflect the adoption of ASC 606. See Impact of ASC 606 table for a comparison of 2018 realized prices on a pre- and post-ASC 606 basis.

Other
The following table summarizes Cimarex's current hedge positions:



1Q19


2Q19


3Q19


4Q19


1Q20


2Q20

Gas Collars:

PEPL(3)













Volume (MMBtu/d)

139,667


150,000


120,000


90,000


60,000


30,000


Wtd Avg Floor

$

2.04


$

2.03


$

1.94


$

1.94


$

1.96


$

1.95


Wtd Avg Ceiling

$

2.40


$

2.39


$

2.32


$

2.37


$

2.38


$

2.26















El Paso Perm(3)













Volume (MMBtu/d)

86,556


90,000


70,000


40,000


20,000


10,000


Wtd Avg Floor

$

1.67


$

1.67


$

1.49


$

1.40


$

1.45


$

1.50


Wtd Avg Ceiling

$

1.94


$

1.95


$

1.79


$

1.73


$

1.92


$

2.13















Waha (3)













Volume (MMBtu/d)

36,556


40,000


40,000


40,000


30,000


10,000


Wtd Avg Floor

$

1.40


$

1.41


$

1.41


$

1.41


$

1.43


$

1.50


Wtd Avg Ceiling

$

1.71


$

1.73


$

1.73


$

1.73


$

1.79


$

1.90














Oil Collars:

WTI(4)













Volume (Bbl/d)

31,689


33,000


26,000


18,000


10,000


2,000


Wtd Avg Floor

$

53.85


$

53.70


$

55.23


$

57.56


$

58.00


$

50.00


Wtd Avg Ceiling

$

66.79


$

66.62


$

69.46


$

70.90


$

73.20


$

62.60














Oil Basis Swaps:

WTI Midland(5)













Volume (Bbl/d)

29,000


29,000


24,000


16,000


7,000


7,000


Weighted Avg Differential

$

(5.46)


$

(5.46)


$

(6.50)


$

(7.79)


$

(0.40)


$

(0.40)

Conference call and webcast
Cimarex will host a conference call tomorrow, February 21, at 11:00 a.m. EST (9:00 a.m. MST) to discuss its fourth quarter and 2018 financial and operating results as well as management's outlook for 2019. The call will be webcast and accessible on the Cimarex website at www.cimarex.com. To join the live, interactive call, please dial 866-367-3053 ten minutes before the scheduled start time (callers in Canada dial 855-669-9657 and international callers dial 412-902-4216).

A replay will be available on the company's website.

Investor Presentation
For more details on Cimarex's 2018 results, please refer to the company's investor presentation available at www.cimarex.com.

About Cimarex Energy
Denver-based Cimarex Energy Co. is an independent oil and gas exploration and production company with principal operations in the Permian Basin and Mid-Continent areas of the U.S.

Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding projected results and future events. These forward-looking statements are based on management's judgment as of the date of this press release and include certain risks and uncertainties.  Please refer to the company's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC, and other filings including our Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, for a description of certain risk factors that may affect these forward-looking statements.

Actual results may differ materially from company projections and other forward-looking statements and can be affected by a variety of factors outside the control of the company including among other things: oil, NGL and natural gas price levels and volatility; higher than expected costs and expenses, including the availability and cost of services and materials; our ability to complete our pending acquisition of Resolute Energy ("Resolute") and to successfully integrate the business of Resolute; compliance with environmental and other regulations; costs and availability of third party facilities for gathering, processing, refining and transportation; risks associated with operating in one major geographic area; environmental liabilities; the ability to receive drilling and other permits and rights-of-way in a timely manner; development drilling and testing results; declines in the values of our oil and gas properties resulting in impairments; the potential for production decline rates to be greater than expected; performance of acquired properties and newly drilled wells; regulatory approvals, including regulatory restrictions on federal lands; legislative or regulatory changes, including initiatives related to hydraulic fracturing, emissions and disposal of produced water; unexpected future capital expenditures; economic and competitive conditions; the availability and cost of capital; the ability to obtain industry partners to jointly explore certain prospects, and the willingness and ability of those partners to meet capital obligations when requested; changes in estimates of proved reserves; derivative and hedging activities; the success of the company's risk management activities; title to properties; litigation; the ability to complete property sales or other transactions; the effectiveness of controls over financial reporting; and other factors discussed in the company's reports filed with the SEC. Cimarex Energy Co. encourages readers to consider the risks and uncertainties associated with projections and other forward-looking statements. In addition, the company assumes no obligation to publicly revise or update any forward-looking statements based on future events or circumstances.












1

Adjusted net income and adjusted cash flow from operations are non-GAAP financial measures.  See below for reconciliations of the related GAAP amounts. 

2

Debt to total capitalization is calculated by dividing long-term debt by long-term debt plus stockholders' equity. 

3

PEPL refers to Panhandle Eastern Pipe Line Tex/OK Mid-Continent index, El Paso Perm refers to El Paso Permian Basin index, and Waha refers to West Texas (Waha) Index, all as quoted in Platt's Inside FERC.

4

WTI refers to West Texas Intermediate oil price as quoted on the New York Mercantile Exchange.

5

Index price on basis swaps is WTI NYMEX less the weighted average WTI Midland differential, as quoted by Argus Americas Crude.

RECONCILIATION OF ADJUSTED NET INCOME

The following reconciles net income as reported under generally accepted accounting principles (GAAP) to adjusted net income (non-GAAP) for the periods indicated.


Three Months Ended
December 31,


Twelve Months Ended
December 31,


2018


2017


2018


2017


(in thousands, except per share data)









Net income

$

316,182



$

174,696



$

791,851



$

494,329


Mark-to-market (gain) loss on open derivative positions

(161,516)



30,160



(110,388)



(22,843)


Loss on early extinguishment of debt



18





28,187


Asset Retirement Obligation



10,460





10,460


Impact of reduction in Federal statutory tax rate



(61,146)





(61,146)


Tax impact

35,049



(14,142)



24,948



(5,768)


Adjusted net income

$

189,715



$

140,046



$

706,411



$

443,219


Diluted earnings per share

$

3.32



$

1.83



$

8.32



$

5.19


Adjusted diluted earnings per share*

$

1.98



$

1.47



$

7.40



$

4.65










Weighted-average number of shares outstanding:








Adjusted diluted**

95,675



95,363



95,523



95,265




Adjusted net income and adjusted diluted earnings per share exclude the noted items because management believes these items affect the comparability of operating results. The company discloses these non-GAAP financial measures as a useful adjunct to GAAP measures because:



a)

Management uses adjusted net income to evaluate the company's operating performance between periods and to compare the company's performance to other oil and gas exploration and production companies.

b) 

Adjusted net income is more comparable to earnings estimates provided by research analysts.



* Does not include adjustments resulting from application of the "two-class method" used to determine earnings per share under GAAP.



** Reflects the weighted-average number of common shares outstanding during the period as adjusted for the dilutive effects of outstanding stock options.

RECONCILIATION OF ADJUSTED CASH FLOW FROM OPERATIONS

The following table provides a reconciliation from generally accepted accounting principles (GAAP) measures of net cash provided by operating activities to adjusted cash flows from operations (non-GAAP) for the periods indicated.


Three Months Ended
December 31,


Twelve Months Ended
December 31,


2018


2017


2018


2017


(in thousands)

Net cash provided by operating activities

$

393,181



$

340,759



$

1,550,994



$

1,096,564


Change in operating assets and liabilities

34,971



16,339



(17,415)



89,067










Adjusted cash flow from operations

$

428,152



$

357,098



$

1,533,579



$

1,185,631


Management uses the non-GAAP financial measure of adjusted cash flow from operations as a means of measuring our ability to fund our capital program and dividends, without fluctuations caused by changes in current assets and liabilities, which are included in the GAAP measure of net cash provided by operating activities. Management believes this non-GAAP financial measure provides useful information to investors for the same reason, and that it is also used by professional research analysts in providing investment recommendations pertaining to companies in the oil and gas exploration and production industry.

PROVED RESERVES


Gas
(MMcf)


Oil
(MBbls)


NGL
(MBbls)


Total
(MBOE)

December 31, 2017

1,607,635



137,238



153,860



559,037


Revisions of previous estimates

(132,577)



(4,348)



3,777



(22,667)


Extensions and discoveries

342,810



53,763



47,614



158,512


Purchases of reserves

3







1


Production

(205,837)



(24,710)



(21,994)



(81,010)


Sales of reserves

(20,713)



(15,405)



(3,821)



(22,678)


December 31, 2018

1,591,321



146,538



179,436



591,195










Proved developed reserves:








December 31, 2017

1,334,510



114,116



126,227



462,761


December 31, 2018

1,398,729



116,339



151,566



501,027











2018


2017


% Change



Standardized Measure ($ in millions)

4,015



3,285



22

%



Pre-tax PV-10 ($ in millions) *

4,739



3,725



27

%



























Average prices used in Standardized Measure

2018


2017


% Change



Gas ($ per Mcf)

3.10



2.98



4

%



Oil ($ per Bbl)

65.56



51.34



28

%



NGL ($ per Bbl)

21.03



19.09



10

%




* Pre-tax PV-10 is a non-GAAP financial measure. Pre-tax PV-10 is comparable to the standardized measure, which is the most directly comparable GAAP financial measure. Pre-tax PV-10 is computed on the same basis as the standardized measure but without deducting future income taxes. As of December 31, 2018 and 2017, Cimarex's discounted future income taxes were $724.0 million and $439.8 million, respectively. Cimarex's standardized measure of discounted future net cash flows was $4,015.2 million at year-end 2018 and $3,285.0 million at year-end 2017. Management uses pre-tax PV-10 as one measure of the value of the company's proved reserves and to compare relative values of proved reserves to other exploration and production companies without regard to income taxes. Management believes pre-tax PV-10 is a useful measure for comparison of proved reserve values among companies because, unlike standardized measure, it excludes future income taxes that often depend on the unique income tax characteristics of the owner of the reserves rather than on the nature, location and quality of the reserves themselves. Management further believes that professional research analysts and rating agencies use pre-tax PV-10 in similar ways. However, pre-tax PV-10 is not a substitute for the standardized measure of discounted future net cash flows. Cimarex's pre-tax PV-10 and the standardized measure of discounted future net cash flows do not purport to present the fair value of its oil and natural gas reserves.

PROVED RESERVES BY REGION


Gas

(MMcf)


Oil

(MBbls)


NGL

(MBbls)


Total

(MBOE)

Permian Basin

727,985



116,378



96,533



334,241


Mid-Continent

861,440



29,908



82,826



256,307


Other

1,896



252



77



647



1,591,321



146,538



179,436



591,195


IMPACT OF ASC 606

Effective January 1, 2018, Cimarex adopted the provisions of Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606").  Application of ASC 606 has no impact on our net income or cash flows from operations; however, certain costs classified as Transportation, processing, and other operating expenses in the statement of operations under prior accounting standards are now reflected as deductions from revenue under ASC 606.  The following tables present certain Pre- and Post-ASC 606 amounts:

REVENUES




Three Months Ended
December 31,



2018


2017



Pre-ASC 606
Adoption


Post-ASC 606
Adoption


As Reported



(in thousands)

Oil sales


$

362,411



$

362,411



$

293,686


Gas sales


$

129,508



$

123,810



$

126,810


NGL sales


$

136,023



$

129,015



$

118,918










Twelve Months Ended
December 31,



2018


2017



Pre-ASC 606
Adoption


Post-ASC 606
Adoption


As Reported



(in thousands)

Oil sales


$

1,398,813



$

1,398,813



$

981,646


Gas sales


$

425,233



$

408,751



$

516,936


NGL sales


$

518,410



$

490,081



$

375,421


 

AVERAGE REALIZED PRICE BY REGION




Three Months Ended
December 31,



2018


2017



Pre-ASC 606
Adoption


Post-ASC 606
Adoption


As Reported

Permian Basin







Gas ($ per Mcf)


1.60



1.44



2.56


Oil ($ per Bbl)


47.17



47.17



51.38


NGL ($ per Bbl)


21.94



20.13



25.07









Mid-Continent







Gas ($ per Mcf)


2.86



2.82



2.60


Oil ($ per Bbl)


56.48



56.48



52.72


NGL ($ per Bbl)


21.70



21.38



26.73









Total Company







Gas ($ per Mcf)


2.26



2.16



2.58


Oil ($ per Bbl)


49.30



49.30



51.68


NGL ($ per Bbl)


21.84



20.71



25.88










Twelve Months Ended
December 31,



2018


2017



Pre-ASC 606
Adoption


Post-ASC 606
Adoption


As Reported

Permian Basin







Gas ($ per Mcf)


1.82



1.69



2.72


Oil ($ per Bbl)


54.95



54.95



46.96


NGL ($ per Bbl)


24.53



22.84



20.25









Mid-Continent







Gas ($ per Mcf)


2.27



2.23



2.78


Oil ($ per Bbl)


62.31



62.31



47.42


NGL ($ per Bbl)


22.52



21.67



23.02









Total Company







Gas ($ per Mcf)


2.07



1.99



2.76


Oil ($ per Bbl)


56.61



56.61



47.06


NGL ($ per Bbl)


23.57



22.28



21.61


 

TRANSPORTATION, PROCESSING, AND OTHER OPERATING EXPENSES




Three Months Ended
December 31,



2018


2017



Pre-ASC 606
Adoption


Post-ASC 606
Adoption


As Reported



(in thousands, except per BOE)

Transportation, processing, and other operating expenses


$

66,690



$

53,984



$

59,606


Per BOE


$

2.89



$

2.34



$

3.23










Twelve Months Ended
December 31,



2018


2017



Pre-ASC 606 Adoption


Post-ASC 606 Adoption


As Reported



(in thousands, except per BOE)

Transportation, processing, and other operating expenses


$

245,613



$

200,802



$

231,640


Per BOE


$

3.03



$

2.48



$

3.33


 

OIL AND GAS CAPITALIZED EXPENDITURES








Three Months Ended
December 31,


Twelve Months Ended
December 31,


2018


2017


2018


2017


(in thousands)

Acquisitions:








Proved

$



$

678



$

62



$

938


Unproved

13,965



2,590



26,216



6,853



13,965



3,268



26,278



7,791










Exploration and development:








Land and seismic

$

6,764



$

17,157



$

82,791



$

140,516


Exploration and development

373,555



326,855



1,487,453



1,140,548



380,319



344,012



1,570,244



1,281,064










Property sales

(7,285)



(3,544)



(581,799)



(11,680)



$

386,999



$

343,736



$

1,014,723



$

1,277,175


 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)












Three Months Ended
December 31,


Twelve Months Ended
December 31,



2018


2017


2018


2017



(in thousands, except per share information)

Revenues:









Oil sales


$

362,411



$

293,686



$

1,398,813



$

981,646


Gas and NGL sales


252,825



245,728



898,832



892,357


Gas gathering and other


8,885



11,526



41,372



44,246




624,121



550,940



2,339,017



1,918,249


Costs and expenses:









Depreciation, depletion, amortization, and accretion


180,060



142,482



597,615



461,655


Production


66,455



71,771



293,213



262,180


Transportation, processing, and other operating


53,984



59,606



200,802



231,640


Gas gathering and other


12,105



9,910



41,964



35,840


Taxes other than income


38,620



26,760



125,169



89,864


General and administrative


16,642



21,161



80,850



79,996


Stock compensation


6,633



6,637



22,895



26,256


(Gain) loss on derivative instruments, net


(157,505)



29,051



(85,959)



(21,210)


Other operating expense, net


30



337



15,500



1,314




217,024



367,715



1,292,049



1,167,535











Operating income


407,097



183,225



1,046,968



750,714











Other (income) and expense:









Interest expense


17,387



16,836



68,224



74,821


Capitalized interest


(5,738)



(5,492)



(20,855)



(22,948)


Loss on early extinguishment of debt




18





28,187


Other, net


(8,192)



(2,338)



(22,908)



(11,342)











Income before income tax


403,640



174,201



1,022,507



681,996


Income tax expense (benefit)


87,458



(495)



230,656



187,667


Net income


$

316,182



$

174,696



$

791,851



$

494,329











Earnings per share to common stockholders:









Basic


$

3.32



$

1.83



$

8.32



$

5.19


Diluted


$

3.32



$

1.83



$

8.32



$

5.19











Dividends declared per share


$

0.18



$

0.08



$

0.68



$

0.32











Weighted-average number of shares outstanding:









Basic


93,897



93,569



93,793



93,466


Diluted


93,915



93,612



93,820



93,509











Comprehensive income:









Net income


$

316,182



$

174,696



$

791,851



$

494,329


Other comprehensive income (loss):









Change in fair value of investments, net of tax


(1,985)



394



(1,444)



1,254


Total comprehensive income


$

314,197



$

175,090



$

790,407



$

495,583












 

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (unaudited)












Three Months Ended
December 31,


Twelve Months Ended
December 31,



2018


2017


2018


2017



(in thousands)

Cash flows from operating activities:









Net income


$

316,182



$

174,696



$

791,851



$

494,329


Adjustments to reconcile net income to net cash provided by operating activities:









Depreciation, depletion, amortization, and accretion


180,060



142,482



597,615



461,655


Deferred income taxes


90,465



2,311



233,280



190,479


Stock compensation


6,633



6,637



22,895



26,256


(Gain) loss on derivative instruments, net


(157,505)



29,051



(85,959)



(21,210)


Settlements on derivative instruments


(4,011)



1,109



(24,429)



(1,633)


Loss on early extinguishment of debt




18





28,187


Changes in non-current assets and liabilities


(535)



(253)



(1,779)



1,891


Other, net


(3,137)



1,047



105



5,677


Changes in operating assets and liabilities:









Accounts receivable


17,193



(57,236)



5,421



(186,157)


Other current assets


(6,378)



1,441



(1,957)



(17,931)


Accounts payable and other current liabilities


(45,786)



39,456



13,951



115,021


Net cash provided by operating activities


393,181



340,759



1,550,994



1,096,564


Cash flows from investing activities:









Oil and gas capital expenditures


(415,099)



(331,177)



(1,566,583)



(1,233,126)


Sales of oil and gas assets


7,285



3,544



580,652



11,680


Sales of other assets


2,782



391



3,772



901


Other capital expenditures


(28,422)



(14,020)



(103,459)



(45,352)


Net cash used by investing activities


(433,454)



(341,262)



(1,085,618)



(1,265,897)


Cash flows from financing activities:









Borrowings of long-term debt








748,110


Repayments of long-term debt








(750,000)


Call premium, financing, and underwriting fees


(100)



(118)



(100)



(29,312)


Dividends paid


(17,205)



(7,789)



(55,243)



(30,532)


Employee withholding taxes paid upon the net settlement of equity-classified stock awards


(5,732)



(14,032)



(12,142)



(21,669)


Proceeds from exercise of stock options


30



168



2,241



394


Net cash used by financing activities


(23,007)



(21,771)



(65,244)



(83,009)


Net change in cash and cash equivalents


(63,280)



(22,274)



400,132



(252,342)


Cash and cash equivalents at beginning of period


863,946



422,808



400,534



652,876


Cash and cash equivalents at end of period


$

800,666



$

400,534



$

800,666



$

400,534


 

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)








December 31,
2018


December 31,
2017

Assets


(in thousands, except share and per share information)

Current assets:





Cash and cash equivalents


$

800,666



$

400,534


Accounts receivable, net of allowance


454,200



460,174


Oil and gas well equipment and supplies


55,553



49,722


Derivative instruments


101,939



15,151


Other current assets


11,781



10,054


Total current assets


1,424,139



935,635


Oil and gas properties at cost, using the full cost method of accounting:





Proved properties


18,566,757



17,513,460


Unproved properties and properties under development, not being amortized


436,325



476,903




19,003,082



17,990,363


Less – accumulated depreciation, depletion, amortization, and impairment


(15,287,752)



(14,748,833)


Net oil and gas properties


3,715,330



3,241,530


Fixed assets, net of accumulated depreciation of $324,631 and $290,114, respectively


257,686



210,922


Goodwill


620,232



620,232


Derivative instruments


9,246



2,086


Other assets


35,451



32,234




$

6,062,084



$

5,042,639


Liabilities and Stockholders' Equity





Current liabilities:





Accounts payable


$

106,814



$

98,386


Accrued liabilities


379,455



351,849


Derivative instruments


27,627



42,066


Revenue payable


194,811



187,273


Total current liabilities


708,707



679,574


Long-term debt:





Principal


1,500,000



1,500,000


Less – unamortized debt issuance costs and discount


(11,446)



(13,080)


Long-term debt, net


1,488,554



1,486,920


Deferred income taxes


334,473



101,618


Derivative instruments


2,267



4,268


Other liabilities


198,297



201,981


Total liabilities


2,732,298



2,474,361







Stockholders' equity:





Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued





Common stock, $0.01 par value, 200,000,000 shares authorized, 95,755,797 and 95,437,434 shares issued, respectively


958



954


Additional paid-in capital


2,785,188



2,764,384


Retained earnings (accumulated deficit)


542,885



(199,259)


Accumulated other comprehensive income


755



2,199


Total stockholders' equity


3,329,786



2,568,278




$

6,062,084



$

5,042,639


 

Cision

View original content:http://www.prnewswire.com/news-releases/cimarex-reports-fourth-quarter-and-full-year-2018-results-300799193.html