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Here's Why Cimarex Energy (XEC) Stock is Worth Betting on Now

Zacks Equity Research
·3 mins read

Cimarex Energy Co. XEC has witnessed upward estimate revisions for 2020 and 2021 earnings in the past 30 days. In fact, 11 out of 19 analysts have revised earnings estimates upward for 2020, while 11 out of 24 analysts have upwardly revised the same for 2021.

Cimarex Energy Co Price


Cimarex Energy Co Price
Cimarex Energy Co Price

Cimarex Energy Co price | Cimarex Energy Co Quote

Factors Working in Favor

The company, currently carrying Zacks Rank #2 (Buy), is a leading oil and gas exploration and production company with strong footprint in Permian – the most prolific basin in the United States. In the Delaware Basin – sub-basin of the greater Permian – the upstream energy firm’s operations spread across 238,000 net acres. In the sub-basin, the company is planning to develop roughly 5,000 federal acres through 2023, which includes the development of 46 wells. This reflects the company’s encouraging long-term production outlook.

With response to the weak oil price owing to the coronavirus pandemic, the company drastically curtailed its operations, including a reduction in May production volumes. However, with the partial recovery in crude prices over the past few months, the company is resuming activities. In the third quarter, the company is bringing back three additional drilling rigs. Notably, in September, the company is also commencing well completion activities. 

Thus, resuming activities amid recovering crude prices are likely to aid the company’s bottom line. Notably, since late April, the price of West Texas Intermediate (WTI) crude has improved more than 250%. Cimarex Energy’s well cost per completed lateral foot in the Permian region is also declining significantly since 2018 through 2020, also aiding the company’s bottom line. Notably, the company projects well cost per completed lateral foot in the range of $900 to $1000 in 2020, significantly lower than $1,106 in 2019 and $1,479 in 2018.

Other Stocks to Consider

Other prospective players in the energy space are Murphy Oil Corporation MUR, Concho Resources Inc. CXO and EOG Resources, Inc. EOG, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Murphy Oil has seen upward estimate revisions for 2020 for its bottom line in the past 30 days.

Concho is likely to see earnings growth of 21.6% in 2020.

EOG Resources’ 2020 bottom-line estimates have risen more than 200% over the past 30 days.

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EOG Resources, Inc. (EOG) : Free Stock Analysis Report
Murphy Oil Corporation (MUR) : Free Stock Analysis Report
Concho Resources Inc. (CXO) : Free Stock Analysis Report
Cimarex Energy Co (XEC) : Free Stock Analysis Report
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