DENVER, Aug. 5 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC)
today reported second-quarter 2008 net income of $229.3 million, or $2.68 per
diluted share. This compares to second-quarter 2007 earnings of $78.7
million, or $0.93 per diluted share.
Revenues from oil and gas sales in the second quarter of 2008 were $588.7
million, compared to $325.8 million in the same period of 2007. Second-
quarter 2008 cash flow from operations totaled $435.6 million versus $236.3
million in the same period of 2007(1).
The increase in second-quarter 2008 revenues, earnings and cash flow is
primarily a result of higher production and oil and gas prices. Second-
quarter 2008 gas prices increased 45% to $10.57 per thousand cubic feet (Mcf)
and oil rose 98% to $121.64 per barrel from the same period of 2007.
Second-quarter 2008 daily oil and gas production grew 10% over last year's
second quarter. Gas production in the latest quarter averaged 353.5 million
cubic feet per day, an increase of 9% over the second-quarter 2007 and oil
production grew 13% to an average of 22,471 barrels per day. Growing
production reflects strong results from drilling.
For the six month period ended June 30, 2008, net income totaled $379.1
million, or $4.44 per diluted share, as compared to $143.3 million, or $1.69
per diluted share, for the first six months of 2007. First-half 2008 cash
flow from operations totaled $770.3 million versus $451.7 million in the same
period of 2007(1)
Capital
Second-quarter 2008 exploration and development capital totaled $359.9
million as compared to $236.9 million in the second quarter of 2007. In the
second quarter of 2008, Cimarex drilled 126 gross (82 net) wells, completing
94% as producers. Exploration and development capital investment for 2008 is
projected to approximately $1.3 - $1.5 billion.
Outlook
Third-quarter 2008 oil and gas production volumes are projected to range
between 485 - 495 million cubic feet equivalent per day (MMcfe/d). Full-year
2008 production is projected to be in the range of 480 - 495 MMcfe/d, or a 9-
12% increase over 2007 after adjusting for property sales.
Expenses for the remainder of 2008 are expected to fall within the
following ranges:
Expenses ($/Mcfe):
Production expense $1.15 - $1.25
Transportation expense 0.20 - 0.25
DD&A and ARO accretion 3.05 - 3.20
General and administrative expense 0.30 - 0.34
Production taxes (% of oil and gas revenue) 6.5% - 7.5%
Conference call and web cast
Cimarex will host a follow-up conference call today at 11:00 a.m. Mountain
Time (1:00 p.m. Eastern Time). To access the live, interactive call, please
dial (888) 603-6873 and reference call ID # 55614975 ten minutes before the
scheduled start time. A digital replay will be available for one week
following the live broadcast at (800) 642-1687 and by using the conference ID
# 55614975. The listen-only web cast of the call will be accessible via
http://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 Mid-Continent, Permian
Basin and Gulf Coast areas of the U.S.
This communication contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on current expectations and beliefs and
are subject to a number of risks, uncertainties and assumptions that could
cause actual results to differ materially from those described in the forward-
looking statements. These risks and uncertainties are more fully described in
SEC reports filed by Cimarex. While Cimarex makes these forward-looking
statements in good faith, management cannot guarantee that anticipated future
results will be achieved. Cimarex assumes no obligation and expressly
disclaims any duty to update the information contained herein except as
required by law.
(1) Cash Flow from Operations is a non-GAAP financial measure that
represents Net Cash Provided By Operating Activities adjusted for the
change in operating assets and liabilities. See below for a
reconciliation of the related amounts.
PRICE AND PRODUCTION DATA
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Gas Production:
Total production
- Mcf 32,172,121 29,462,142 63,081,660 58,638,779
Gas volume
- Mcf per day 353,540 323,760 346,603 323,971
Gas price
- per Mcf (before
hedge effect) $10.57 $7.19 $9.47 $6.87
Effect of hedges $0.00 $0.11 $0.02 $0.14
Gas price - per Mcf
(after hedge
effect) $10.57 $7.30 $9.49 $7.01
Oil Production
(including NGL):
Total production
- barrels 2,044,831 1,801,811 4,115,688 3,561,535
Oil volume
- barrels per day 22,471 19,800 22,614 19,677
Oil price
- per barrel $121.64 $61.51 $107.93 $58.40
OIL AND GAS CAPITALIZED EXPENDITURES
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2008 2007 2008 2007
(in thousands) (in thousands)
Acquisition of
properties $324 $- $1,369 $23
Exploration and
development 359,898 236,874 666,853 482,379
Total oil and gas
expenditures 360,222 236,874 668,222 482,402
Sale proceeds - (20,630) - (20,880)
$360,222 $216,244 $668,222 $461,522
RECONCILIATION OF CASH FLOW FROM OPERATIONS
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2008 2007 2008 2007
(in thousands) (in thousands)
Net cash provided
by operating
activities $382,307 $246,794 $697,552 $433,263
Increase in
operating assets
and liabilities 53,326 (10,488) 72,781 18,441
Cash flow from
operations $435,633 $236,306 $770,333 $451,704
Management believes that the non-GAAP measure of cash flow from
operations is useful information for investors because it is used
internally and is accepted by the investment community as a means of
measuring the company's ability to fund its capital program. It is also
used by professional research analysts in providing investment
recommendations pertaining to companies in the oil and gas exploration
and production industry.
CONDENSED INCOME STATEMENTS (unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2008 2007 2008 2007
(In thousands, except per share data)
Revenues:
Gas sales $339,965 $214,937 $598,920 $411,227
Oil sales 248,741 110,830 444,191 207,994
Gas gathering,
processing and other 26,610 15,013 47,981 27,652
Gas marketing, net 1,067 1,304 2,367 2,086
616,383 342,084 1,093,459 648,959
Costs and expenses:
Depreciation,
depletion and
amortization 133,201 112,797 258,757 221,681
Asset retirement
obligation 1,862 2,399 3,456 4,990
Production 49,092 50,916 101,144 95,921
Transportation 10,621 6,294 18,930 12,228
Gas gathering and
processing 12,361 7,825 22,402 15,136
Taxes other than income 39,749 23,802 70,356 44,429
General and
administrative 13,876 11,958 25,460 24,609
Stock compensation, net 2,366 2,598 4,641 5,268
Other operating, net 85 2,586 1,121 2,315
263,213 221,175 506,267 426,577
Operating income 353,170 120,909 587,192 222,382
Other (income) and expense:
Interest expense 7,748 10,297 16,168 19,462
Capitalized interest (4,653) (4,898) (9,259) (9,989)
Amortization of fair
value of debt (190) (580) (381) (1,527)
Gain on early
extinguishment of debt - (5,099) - (5,099)
Other, net (5,507) (3,457) (8,524) (6,906)
Income before income
tax expense 355,772 124,646 589,188 226,441
Income tax expense 126,464 45,939 210,045 83,106
Net income $229,308 $78,707 $379,143 $143,335
Earnings per share:
Basic $2.81 $0.96 $4.66 $1.74
Diluted $2.68 $0.93 $4.44 $1.69
Weighted average shares
outstanding:
Basic 81,474 82,282 81,380 82,252
Diluted 85,589 84,836 85,482 84,745
CONDENSED CASH FLOW STATEMENTS (unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Cash flows from operating
activities:
Net income $229,308 $78,707 $379,143 $143,335
Adjustment to reconcile
net income to net cash
provided by operating
activities:
Depreciation,
depletion and
amortization 133,201 112,797 258,757 221,681
Asset retirement
obligation 1,862 2,399 3,456 4,990
Deferred income taxes 68,799 45,939 124,462 83,106
Stock compensation,
net 2,366 2,598 4,641 5,268
Other 97 (6,134) (126) (6,676)
Changes in operating
assets and liabilities:
(Increase) decrease
in receivables, net (62,488) 5,430 (103,137) 11,741
Increase in other
current assets (39,610) (10,083) (46,047) (8,968)
Increase (decrease)
in accounts payable
and accrued
liabilities 49,445 16,383 77,752 (18,862)
Decrease in other
non-current
liabilities (673) (1,242) (1,349) (2,352)
Net cash provided
by operating
activities 382,307 246,794 697,552 433,263
Cash flows from
investing activities:
Oil and gas
expenditures (356,786) (220,858) (641,067) (473,229)
Proceeds from sale of
assets 250 21,181 354 21,530
Sales of short-term
investments 2,061 - 7,061 -
Other expenditures (12,092) (5,087) (21,086) (7,390)
Net cash used by
investing
activities (366,567) (204,764) (654,738) (459,089)
Cash flows from
financing activities:
Net decrease in bank
debt - (161,000) - (95,000)
Increase in other
long-term debt - 350,000 - 350,000
Decrease in other
long-term debt - (204,360) - (204,360)
Financing costs incurred (50) (6,037) (50) (6,098)
Treasury stock acquired - (5,623) - (5,623)
Dividends paid (5,021) (3,382) (9,974) (6,747)
Proceeds from issuance
of common stock and
other 10,845 432 12,961 8,017
Net cash provided
by (used in)
financing
activities 5,774 (29,970) 2,937 40,189
Net change in cash and
cash equivalents 21,514 12,060 45,751 14,363
Cash and cash equivalents
at beginning of period 147,287 7,351 123,050 5,048
Cash and cash equivalents
at end of period $168,801 $19,411 $168,801 $19,411
BALANCE SHEETS (unaudited)
June 30, December 31,
2008 2007
Assets (In thousands, except share data)
Current assets:
Cash and cash equivalents $168,801 $123,050
Restricted cash 685 -
Short-term investments 7,393 14,391
Receivables, net 418,464 315,327
Inventories 74,874 29,642
Deferred income taxes 365 5,697
Derivative instruments - 12,124
Other current assets 24,671 64,346
Total current assets 695,253 564,577
Oil and gas properties at cost, using the
full cost method of accounting:
Proved properties 6,195,685 5,545,977
Unproved properties and properties under
development, not being amortized 388,020 364,618
6,583,705 5,910,595
Less - accumulated depreciation,
depletion and amortization (2,188,611) (1,938,863)
Net oil and gas properties 4,395,094 3,971,732
Fixed assets, net 101,647 90,584
Goodwill 691,432 691,432
Other assets, net 85,846 44,469
$5,969,272 $5,362,794
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $107,697 $52,671
Accrued liabilities 236,830 240,387
Derivative instruments 16,555 -
Revenue payable 184,819 131,513
Total current liabilities 545,901 424,571
Long-term debt 486,778 487,159
Deferred income taxes 1,178,369 1,076,223
Other liabilities 136,959 115,554
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,
83,962,774 and 83,620,480 shares
issued, respectively 840 836
Treasury stock, at cost, 885,392 and
1,078,822 shares held, respectively (33,344) (40,628)
Paid-in capital 1,846,365 1,842,690
Retained earnings 1,817,902 1,448,763
Accumulated other comprehensive income (10,498) 7,626
3,621,265 3,259,287
$5,969,272 $5,362,794
SOURCE Cimarex Energy Co.
-0- 08/05/2008
/CONTACT: Mark Burford, Director of Capital Markets of Cimarex Energy
Co., +1-303-295-3995/
/Web site: http://www.cimarex.com/
(XEC)