947 MMcfe/d. 3.1 Tcfe

Transcription

1 1 May 2015

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 Who is Cimarex? Market cap... $10.8B Debt/EBITDA x Production (1Q15) Proved reserves. 947 MMcfe/d 3.1 Tcfe % Natural gas 53% % Proved developed 77% R/P Ratio x Quarterly dividend of $0.16/share 3 3

4 What s important Our strong financial position Low debt Use leverage wisely A balanced portfolio of assets Flexibility through commodity cycles Opportunity rich asset base Idea generation and execution Consistent strategy across commodity price cycles 4 4

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

6 Regional Diversity Provides Flexibility First Quarter 2015 Production Mix Permian Basin Mid Continent 6

7 2015 E&D Investment Plan Total Capital estimated at: $0.9 $1.1 billion Drilling & Completion Capital: $685mm Drilling & Completion Drilling & Completion 76% 76% 7

8 Service Costs are Down 15% since Q4 Future drivers: Completion optimization Drilling efficiencies Further service cost reductions? 8 8

9 Permian Region Provides Multiple Opportunities E&D capex of $350mm Multiple projects/multiple zones Wolfcamp shale (oil & gas) Bone Spring sands (oil) Avalon Shale (oil window) 2015 Focus Wolfcamp Long Laterals Meeting acreage obligations White City Bone Spring 9

10 Biggest Opportunity Delaware Basin Wolfcamp ~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 10

11 Culberson Area Details 100,000+ net net acres acres 2013 JDA with main Chevron objectives 7 Wolfcamp D long laterals Drilling to hold acreage Wolfcamp Ave. 30 day C peak & D IP 2,378 BOE/d (26% oil; 45% gas) Two rigs; ~20 wells 10k feet; 41 wells ~40 stage to date; completion 30 day average IP of 6.5 MMcfe/d 4 Wolfcamp A long laterals Product mix of 45% gas; Ave. 30 day 26% oil; peak 29% IP NGL of 1,266 BOE/d (47% oil; 32 % gas) 7,500 feet; 30 stage completion First 20 stage test has 30 day average IP of 8.4 MMcfe/d Fee based agreement Upsize frac stages Oil gathering by 4Q15 Testing Wolfcamp A Experiment Improve realizations with long laterals $25mm Stacked on lateral infrastructure test in 2015 Design downspacing pilot 11

12 Strong Performance from Key Culberson Wolfcamp Wells Shallow Decline of Upsized Fracs (BOE/d) Wolfcamp D Wolfcamp A 3, day IP 1,600 2,500 2,000 Days Days day average 2,500 2,450 1,200 1,250 1,095 1,500 1,500 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 12

13 Lower well costs partially offset to oil price declines Culberson County Wolfcamp D BOE/day 5,000 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 $13.7 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 13 13

14 Sensitivity to Crude Oil Prices Culberson County Wolfcamp D BTax IRR Strip dated 4/27/15 133% 99% 90% 34% 20% 52% 33% 73% 49% 68% 10,000 ft. lateral; 43 stages 5,000 ft. lateral; 20 stages $30 $40 $50 $60 $70 Realized Oil Price Assumptions: Gas $3.00/Mcf; NGL 35% of oil price (full recovery) 14 14

15 Culberson County New Spacing Pilot Four wells 5,000 ft laterals Six wells per section 107 acre spacing 16 stage completion 1,200 lbs per foot Completions start in May acre pilot New pilot 15 15

16 Upsized Frac Improves Second Bone Spring Results White City Area Cumulative Production (MBOE/d) Focus Area % Increase wells with average 30 day peak IP of 1,344 BOE/d* (910 bo/d) 15 stages from nine 100 locations identified HBP acreage; infrastructure in place *Three stream. Upsized Completion Original Completion 16

17 2015 Activity in Reeves & Ward Counties Reeves County 2015 focus on meeting acreage obligations Spud eight wells; $70mm $5mm midstream investment Ward County Minimal lease expirations in

18 Reeves County Stacked/Staggered Spacing Pilot Six infill wells plus parent well Upper A infill wells Produce at higher rates Ave. IP of 1,068 BOE/d Lower A infill wells Ave. IP of 761 BOE/d Carbonate in landing zone made wells difficult to frac Parent well Landed in the lower A Ave. IP of 960 BOE/d 18 18

19 Stacked/Staggered Pilot Reeves County Wolfcamp A BOE/day 1,200 Upper Wells 1,000 Lower Wells day IP Days Days Days % Oil 59% 58% 59% 57% 56% 49% 50% 43% 19 19

20 Mid Continent Woodford Shale Opportunity Cana Woodford Activity Map Golden Section Operated Well Non operated Well Row 4 Infill 2015 E&D capex of $312mm Core Woodford capex of ~$185mm Includes seven section infill program in Row 4 128,000 net prospective Woodford acres (86%HBP) $9 Cana Woodford Well Cost (MM) $8 $7 15% Haley Section $6 $5 $8.2 $7.0 $4 Hartz Section $3 4Q E 20

21 Performance of upsized fracs in Cana Woodford core (MMcfe/d) 12 Golden Section Hartz Section day IP 6 Days Days day average 2 0 Golden Hartz 21 21

22 Mid Continent: Meramec is an Exciting New Opportunity Downdip Updip Seven wells with average 30 day peak IP of 10.0 MMcfe/d Updip: 49% oil, 24% gas Downdip: 16% oil, 54% gas Next Steps Test long laterals Highgrade frac design Refinement of geologic model 115,000 net prospective acres Results to date have de risked 70,000 net acres Cana core 22

23 Well Positioned for 2015 and beyond Track record of profitable growth Strong balance sheet Sale of non core assets provided cash at year end Near term focus on maintaining financial position Diverse portfolio with good returns 23 23

24 Appendix 24 24

25 Cana Area 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 Q1 15 Gas NGL Oil 25 25

26 80 Permian Basin Production MBOE/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 Q1 15 Oil NGL Gas 26 26

27 2015 Guidance 2015 Production, Unit Expense and Capital Guidance Second Quarter Full Year Production* Total Equivalent (Mmcfe/d) % Liquids 54% 53% Expenses ($/Mcfe): Production $1.00 $1.10 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 27 27

28 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

29 Culberson County Wolfcamp Pilots Stacked Lateral Test Wolfcamp C & D Two wells Producing/Evaluating 80 acre Spacing Pilot Wolfcamp D Four wells Producing/Evaluating 29 29

30 Reeves County Wolfcamp Pilots 80 acre Spacing Pilot Wolfcamp A Four wells Producing/Evaluating Stacked/Staggered Spacing Pilot Wolfcamp A Six wells Flowing Back 30 30

31 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 31

32 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,

33 Non GAAP Reconciliation Reconciliation of cash flow from operations Debt/Cap Calculation Net cash provided by operating activities $ 113 $ 348 Change in operating assets Three months Ended March 31, (in millions) and liabilities Adjusted cash flow from operations $ 187 $ 409 Finding & development (F&D) cost 2014 Proved Reserves adds (Bcfe) Revisions of previous estimates Extensions & discoveries [C] Purchase of reserves Total adds [A] 1,052.3 Total capital $MM [B] $ 2,131 All-sources F&D ($/Mcfe) [B]/[A] $ 2.03 Drilling (excl. revisions) F&D ($/Mcfe) [B]/[C] $ Long-term debt $ 1,500 Stockholders' Equity 4,086 Total capitalization $ 5,586 Long-term debt/total capitalization 27% Net Debt/EBITDA Calculation March 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 33 33