Cimarex Energy (CIMXP) 10-K 26 Feb 10 2009 FY Annual report Financial data

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$2,544	$1,213
Restricted cash	593	502
Short-term investments		2,502
Accounts receivable:
Trade, net of allowance	41,252	73,676
Oil and gas sales, net of allowance	176,551	136,606
Gas gathering, processing, and marketing, net of allowance	6,292	6,974
Other	3,801	41,826
Oil and gas well equipment and supplies	145,153	186,062
Deferred income taxes	15,837	2,435
Derivative instruments	1,238
Other current assets	13,997	63,148
Total current assets	407,258	514,944
Oil and gas properties at cost, using the full cost method of accounting:
Proved properties	7,549,861	7,052,464
Unproved properties and properties under development, not being amortized	399,724	465,638
Total oil and gas properties at gross	7,949,585	7,518,102
Less - accumulated depreciation, depletion and amortization	(5,764,669)	(4,709,597)
Net oil and gas properties	2,184,916	2,808,505
Fixed assets, less accumulated depreciation of $88,544 and $67,020	127,237	119,616
Goodwill	691,432	691,432
Other assets, net	33,694	30,436
Total assets	3,444,537	4,164,933
Accounts payable:
Trade	18,309	89,221
Gas gathering, processing, and marketing	11,905	11,936
Accrued liabilities:
Exploration and development	52,781	111,511
Taxes other than income	27,956	26,473
Other	155,078	126,010
Derivative instruments	13,902
Revenue payable	108,832	104,438
Total current liabilities	388,763	469,589
Long-term debt	392,793	587,630
Deferred income taxes	348,897	500,945
Asset retirement obligation	129,785	125,338
Other liabilities	146,193	129,784
Total liabilities	1,406,431	1,813,286
Stockholders' equity:
Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued	0	0
Common stock, $0.01 par value, 200,000,000 shares authorized, 83,541,995 and 84,144,024 shares issued, respectively	835	841
Treasury stock, at cost, zero and 885,392 shares held, respectively		(33,344)
Paid-in capital	1,859,255	1,874,834
Retained earnings	178,035	510,271
Accumulated other comprehensive (loss) income	(19)	(955)
Total stockholders' equity	2,038,106	2,351,647
Total liabilities and stockholders' equity	$3,444,537	$4,164,933

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data	Dec. 31, 2009	Dec. 31, 2008
CONSOLIDATED BALANCE SHEETS
Fixed assets, accumulated depreciation (in dollars)	$88,544	$67,020
Preferred stock, par value (in dollars per share)	0.01	0.01
Preferred stock, authorized (in shares)	15,000,000	15,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	0.01	0.01
Common stock, authorized (in shares)	200,000,000	200,000,000
Common stock, issued (in shares)	83,541,995	84,144,024
Treasury stock held (in shares)	0	885,392

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Revenues:
Gas sales	$485,448	$1,074,705	$845,631
Oil sales	476,995	806,186	518,991
Gas gathering, processing and other	46,763	87,757	60,818
Gas marketing, net of related costs of $68,719, $141,668 and $107,678 respectively	588	1,699	5,073
Total revenues	1,009,794	1,970,347	1,430,513
Costs and expenses:
Impairment of oil and gas properties	791,137	2,242,921
Depreciation, depletion and amortization	265,699	547,404	461,791
Asset retirement obligation	12,313	8,796	8,937
Production	178,215	218,736	201,512
Transportation	33,758	38,107	26,361
Gas gathering and processing	20,560	43,838	29,860
Taxes other than income	75,634	130,490	93,630
General and administrative	41,724	44,500	49,260
Stock compensation, net	9,254	10,090	10,772
Loss on derivative instruments, net	13,059
Other operating, net	24,263	126,433	6,637
Total costs and expenses	1,465,616	3,411,315	888,760
Operating income (loss)	(455,822)	(1,440,968)	541,753
Other (income) and expense:
Interest expense	39,777	33,079	39,105
Capitalized interest	(23,408)	(22,108)	(19,680)
Amortization of fair value of debt			(1,146)
(Gain) loss on early extinquishment of debt		10,058	(5,099)
Other, net	16,290	(10,348)	(14,151)
Income (loss) before income tax	(488,481)	(1,451,649)	542,724
Income tax expense (benefit)	(176,538)	(536,404)	197,462
Net income (loss)	($311,943)	($915,245)	$345,262
Earnings (loss) per share to common stockholders: Basic
Distributed (in dollars per share)	0.24	0.24	0.18
Undistributed (in dollars per share)	-4.06	-11.46	3.97
Total basic (in dollars per share)	-3.82	-11.22	4.15
Earnings (loss) per share to common stockholders: Diluted
Distributed (in dollars per share)	0.24	0.24	0.18
Undistributed (in dollars per share)	-4.06	-11.46	3.87
Total diluted (in dollars per share)	-3.82	-11.22	4.05

1_CONSOLIDATED STATEMENTS OF OP

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
CONSOLIDATED STATEMENTS OF OPERATIONS
Gas marketing, related costs	$68,719	$141,668	$107,678

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash flows from operating activities:
Net income (loss)	($311,943)	($915,245)	$345,262
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Impairments and other valuation losses	806,039	2,259,687	2,138
Depreciation, depletion and amortization	265,699	547,404	461,791
Asset retirement obligation	12,313	8,796	8,937
Deferred income taxes	(164,760)	(602,593)	166,813
Stock compensation, net	9,254	10,090	10,772
Derivative instruments, net	14,453
Gain on liquidation of equity investees		(39)	(3,015)
Changes in non-current assets and liabilities	8,948	119,562	(47)
Other, net	18,478	15,557	509
Changes in operating assets and liabilities
(Increase) decrease in receivables, net	29,881	56,245	(7,777)
(Increase) decrease in oil and gas well equipment and supplies and other current assets	49,894	(155,222)	(33,917)
Increase (decrease) in accounts payable and accrued liabilities	(63,079)	23,246	43,214
Net cash provided by operating activities	675,177	1,367,488	994,680
Cash flows from investing activities:
Oil and gas expenditures	(535,308)	(1,594,775)	(1,021,456)
Sales of oil and gas and other assets	119,735	39,096	177,195
Distributions received from equity investees		39	3,015
Purchases of short-term investments			(16,000)
Sales of short-term investments	3,328	10,679	1,424
Other expenditures	(31,849)	(51,757)	(19,574)
Net cash used by investing activities	(444,094)	(1,596,718)	(875,396)
Cash flows from financing activities:
Net Increase (decrease) in bank debt	(195,000)	220,000	(95,000)
Increase in other long-term debt			350,000
Decrease in other long-term debt		(105,550)	(204,360)
Financing costs incurred	(18,001)	(158)	(6,113)
Treasury stock acquired and retired			(42,266)
Dividends paid	(20,172)	(20,040)	(13,429)
Issuance of common stock and other	3,421	13,141	9,886
Net cash provided by (used in) financing activities	(229,752)	107,393	(1,282)
Net change in cash and cash equivalents	1,331	(121,837)	118,002
Cash and cash equivalents at beginning of period	1,213	123,050	5,048
Cash and cash equivalents at end of period	$2,544	$1,213	$123,050

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS) (USD $)
In Thousands	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (loss)	Treasury Stock	Total
Balance at Dec. 31, 2006	$840	$1,886,457	$1,115,442	$31,081	($40,628)	$2,993,192
Balance, shares at Dec. 31, 2006	83,962
Increase (Decrease) in Stockholders' Equity
Dividends			(15,109)			(15,109)
Issuance of restricted stock awards	5	(5)
Issuance of restricted stock awards, shares	572
Treasury Stock					(42,266)	(42,266)
Common stock reacquired and retired	(13)	(49,270)			42,266	(7,017)
Common stock reacquired and retired, shares	(1,306)
Restricted stock forfeited and retired	(1)	1
Restricted stock forfeited and retired, shares	(61)
Amortization of unearned compensation		12,738				12,738
Exercise of stock options, net of tax benefit of $4,026 for 2007, $6,712 for 2008, and $1,208 for 2009 recorded in paid-in capital	5	9,881				9,886
Exercise of stock options, shares	454
Stock Option Compensation Expense		1,897				1,897
Comprehensive income (loss):
Net income (loss)			345,262			345,262
Net change from hedging activity				(23,302)		(23,302)
Unrealized change in short-term investments and other, net of tax				(153)		(153)
Total comprehensive income (loss)						321,807
Balance at Dec. 31, 2007	836	1,861,699	1,445,595	7,626	(40,628)	3,275,128
Balance, shares at Dec. 31, 2007	83,621
Increase (Decrease) in Stockholders' Equity
Dividends			(20,079)			(20,079)
Issuance of restricted stock awards	5	(5)
Issuance of restricted stock awards, shares	465
Retirement of treasury stock	(2)	(7,282)			7,284
Retirement of treasury stock, shares	(193)
Common stock reacquired and retired	(1)	(9,938)				(9,939)
Common stock reacquired and retired, shares	(154)
Restricted stock forfeited and retired	(1)	1
Restricted stock forfeited and retired, shares	(54)
Amortization of unearned compensation		15,491				15,491
Exercise of stock options, net of tax benefit of $4,026 for 2007, $6,712 for 2008, and $1,208 for 2009 recorded in paid-in capital	4	13,137				13,141
Exercise of stock options, shares	414
Stock Option Compensation Expense		1,731				1,731
Vesting of restricted stock units, shares	45
Comprehensive income (loss):
Net income (loss)			(915,245)			(915,245)
Net change from hedging activity				(7,652)		(7,652)
Unrealized change in short-term investments and other, net of tax				(929)		(929)
Total comprehensive income (loss)						(923,826)
Balance at Dec. 31, 2008	841	1,874,834	510,271	(955)	(33,344)	2,351,647
Balance, shares at Dec. 31, 2008	84,144
Increase (Decrease) in Stockholders' Equity
Dividends			(20,293)			(20,293)
Issuance of restricted stock awards	4	(4)
Issuance of restricted stock awards, shares	381
Retirement of treasury stock	(9)	(33,335)			33,344
Retirement of treasury stock, shares	(885)
Common stock reacquired and retired		(2,440)				(2,440)
Common stock reacquired and retired, shares	(78)
Restricted stock forfeited and retired	(2)	2
Restricted stock forfeited and retired, shares	(159)
Amortization of unearned compensation		13,404				13,404
Exercise of stock options, net of tax benefit of $4,026 for 2007, $6,712 for 2008, and $1,208 for 2009 recorded in paid-in capital	1	3,420				3,421
Exercise of stock options, shares	134
Stock Option Compensation Expense		3,374				3,374
Vesting of restricted stock units, shares	5
Comprehensive income (loss):
Net income (loss)			(311,943)			(311,943)
Unrealized change in short-term investments and other, net of tax				936		936
Total comprehensive income (loss)						(311,007)
Balance at Dec. 31, 2009	$835	$1,859,255	$178,035	($19)		$2,038,106
Balance, shares at Dec. 31, 2009	83,542

2_CONSOLIDATED STATEMENTS OF ST

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $)
In Thousands	1/1/2009 - 12/31/2009	1/1/2008 - 12/31/2008	1/1/2007 - 12/31/2007
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)
Tax benefit, exercise of stock options recorded in paid-in capital	$1,208	$6,712	$4,026

BASIS OF PRESENTATION

BASIS OF PRESENTATION
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION Cimarex was formed in February 2002 as a wholly-owned subsidiary of Helmerich Payne,Inc. (HP). On September30, 2002, Cimarex was spun-off and became a stand-alone company. Also on September30, 2002, Cimarex acquired 100% of the outstanding common stock of Key Production Company,Inc. (Key) in a tax-free exchange. In June of 2005, we acquired Magnum Hunter Resources,Inc. in a stock-for-stock merger. Magnum Hunter's results of operations are included in our consolidated statements of operations beginning June7, 2005. The accounts of Cimarex and its subsidiaries are presented in the accompanying Consolidated Financial Statements. All intercompany accounts and transactions were eliminated in consolidation. Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. Our significant accounting policies are described in Note3 to our Consolidated Financial Statements. We analyze our estimates, including those related to oil and gas revenues, reserves and properties, as well as goodwill and contingencies, and base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Certain amounts in prior years' financial statements have been reclassified to conform to the 2009 financial statement presentation. In addition, effective January1, 2009, we adopted new rules promulgated by the Financial Accounting Standards Board (FASB) pertaining to the accounting treatment for certain convertible debt instruments (see Note7) and to the calculation of earnings per share (see Note10). Accordingly, prior periods have been adjusted retrospectively to conform to the applicable accounting pronouncements.

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DESCRIPTION OF BUSINESS	2. DESCRIPTION OF BUSINESS Cimarex EnergyCo. is an independent oil and gas exploration and production company with operations entirely located in the United States. Our oil and gas reserves and operations are mainly located in Texas, Oklahoma, New Mexico, Kansas and Wyoming. We operate wells that account for a substantial portion of our total proved reserves and production.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash in banks and investments readily convertible into cash, which have original maturities within three months at the date of acquisition. Cash equivalents are stated at cost, which approximates market value. Restricted cash consists of monies of third parties being held by Cimarex as operator of a property in Oklahoma, until ownership disputes among the third parties are resolved. Short-term Investments Our short-term investments consisted of investments in an asset-backed securities fund. The investments were classified as available-for-sale and were carried at fair value in our balance sheet. Unrealized holding gains and losses were reported in other comprehensive income (loss). We liquidated our remaining short-term investments in September, 2009. Oil and Gas Well Equipment and Supplies Our oil and gas well equipment and supplies are valued at the lower of cost or market using weighted average cost. Oil and Gas Properties We use the full cost method of accounting for our oil and gas operations. All costs associated with property acquisition, exploration, and development activities are capitalized. Exploration and development costs include dry hole costs, geological and geophysical costs, direct overhead related to exploration and development activities, and other costs incurred for the purpose of finding oil and gas reserves. Salaries and benefits paid to employees directly involved in the exploration and development of properties, as well as other internal costs that can be directly identified with acquisition, exploration, and development activities, are also capitalized. Under the full cost method of accounting, no gain or loss is recognized upon the disposition of oil and gas properties unless such disposition would significantly alter the relationship between capitalized costs and proved reserves. At the end of each quarter, we make a full cost ceiling limitation calculation, whereby net capitalized costs related to proved properties less associated deferred income taxes may not exceed the amount of the present value discounted at ten percent of estimated future net revenues from proved reserves less estimated future production and development costs and related income tax expense. Future net revenues used in the calculation of the full cost ceiling limitation have previously been determined based on current oil and gas prices and are adjusted for designated cash flow hedges. For year-end 2009, new SEC rules were implemented requiring reserve calculations to be based on the unweighted average first-day-of-the-month prices for the prior twelve months. Changes in proved reserve estimates (whether based upon quantity revisions or oil and gas prices) will cause corresponding changes to the full cost ceiling limitation. If net capitalized costs subject to amortization exceed this limit, the excess would be charged to expense. Any recorded impairment of oil and gas properties is not reversible at a later date. In prior periods we used prices in effect at period end. Due to a signifi

DERIVATIVE INSTRUMENTS AND HEDG

DERIVATIVE INSTRUMENTS AND HEDGING
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DERIVATIVE INSTRUMENTS/HEDGING	4. DERIVATIVE INSTRUMENTS/HEDGING We periodically enter into derivative instruments to mitigate a portion of our potential exposure to a decline in commodity prices and the corresponding negative impact on cash flow available for reinvestment. While the use of these instruments limits the downside risk of adverse price changes, their use may also limit future revenues from favorable price changes. On January1, 2009, we adopted provisions set forth by the FASB which requires qualitative and quantitative disclosures about objectives and strategies for using derivatives, how such derivatives are accounted for and how the derivative instruments affect an entity's financial position, results of operations, and cash flows. At December31, 2009, we had the following outstanding contracts relative to our future production. We have elected not to account for these derivatives as cash flow hedges. Natural Gas Contracts Weighted Average Price Fair Value (000's) Period Type Volume/Day Index(1) Floor Ceiling Swap Jan 10-Dec 10 Collar 100,000 MMBtu PEPL $ 5.00 $ 6.62 $ 2,228 Jan 10-Dec 10 Swap 40,000 MMBtu PEPL $ 5.18 $ (5,289 ) Jan 10-Dec 10 Collar 20,000 MMBtu HSC $ 5.00 $ 6.85 $ (10 ) Oil Contracts Weighted Average Price Fair Value (000's) Period Type Volume/Day Index(1) Floor Ceiling Jan 10-Dec 10 Collar 10,000 Bbls WTI $ 60.03 $ 92.07 $ (10,164 ) Jan 10-Dec 10 Put/Floor 1,000 Bbls WTI $ 60.00 $ 570 (1) PEPL refers to Panhandle Eastern Pipe Line Company price and HSC refers to Houston Ship Channel price, both as quoted in Platt's Inside FERC on the first business day of each month. WTI refers to West Texas Intermediate price as quoted on the New York Mercantile Exchange. The combined gas and oil contracts that expire in 2010 represents approximately 40% of our equivalent oil and gas production for 2010. We do not anticipate entering into further contracts related to our 2010 production. Under a collar agreement, we receive the difference between the published index price and a floor price if the index price is below the floor. We pay the difference between the ceiling price and the index price only if the index price is above the contracted ceiling price. No amounts are paid or received if the index price is between the floor and ceiling prices. Under a floor contract, if the settlement price for a settlement period is below the floor price, we receive the difference between the settlement price and the floor price. We are not required to make any payments in connection with the settlement of a floor contract. For a swap contract, the counterparty is required to make a payment to us if the settlement price for any settlement period is less than the swap price. We are required to make a payment to the counterparty if the settlement price for the settlement period is greater than the swap price. Our derivative contracts are carried at their fair value o

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FAIR VALUE MEASUREMENTS	5. FAIR VALUE MEASUREMENTS The FASB has established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels. Level1 inputs are the highest priority and consist of unadjusted quoted prices in active markets for identical assets and liabilities. Level2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level3 inputs are unobservable inputs for an asset or liability. The following tables provide fair value measurement information for certain assets and liabilities as of December31, 2009 and 2008. Carrying Amount Fair Value (In thousands) December31, 2009: Financial Assets (Liabilities): Derivative instruments $ 1,238 $ 1,238 Derivative instruments $ (13,902 ) $ (13,902 ) 7.125% Notes due 2017 $ (350,000 ) $ (354,375 ) Bank debt $ (25,000 ) $ (25,000 ) Floating rate convertible notes due 2023 $ (17,793 ) $ (36,036 ) Carrying Amount Fair Value (In thousands) December31, 2008: Financial Assets (Liabilities): Short-term investments $ 2,502 $ 2,502 7.125% Notes due 2017 $ (350,000 ) $ (267,750 ) Bank debt $ (220,000 ) $ (220,000 ) Floating rate convertible notes due 2023 $ (17,630 ) $ (19,450 ) Assessing the significance of a particular input to the fair value measurement requires judgment, considering factors specific to the asset or liability. The following methods and assumptions were used to estimate the fair values of the assets and liabilities in the table above. Short-term Investments (Level2) In the fourth quarter of 2007, we invested $16million in an asset-backed securities fund, which was liquidated in the third quarter of 2009. The investments were classified as available-for-sale, and at the end of each period, changes in the fair value of the investments are recorded in other comprehensive income (loss). The fair values of these investments were based on a net asset valuation provided by the fund manager. During 2009, we liquidated the remaining investments for $3.3million, with a realized gain of $280thousand, which was included in earnings for the period. During 2008, we liquidated $10.4million of the investments, with a realized loss of $395thousand and an impairment charge of $801thousand, both of which were included in earnings for the period. We also reflected an unrealized loss of $664thousand in other comprehensive income (loss) as of December31, 2008. Bank Debt and Notes Debt The fair value of our bank debt is estimated to approximate the carrying amount because we recently entered into a new revolving credit facility. Interest on the facility is a floating rate based on either (a)a London Interbank Offered Rate ("LIBOR") plus 2 to 3percent, based on borrowing base usage, or (b)the higher of (i)a prime rate, (ii)the federal funds effective rate plus 0.50percent, or (iii)adjusted LIBOR, in each case, plus an additional 1.125 to 2.125percent, b

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ASSET RETIREMENT OBLIGATIONS	6. ASSET RETIREMENT OBLIGATIONS We recognize the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. Oil and gas producing companies incur this liability which includes costs related to the plugging of wells, the removal of facilities and equipment, and site restorations, upon acquiring or drilling a successful well. Subsequent to initial measurement, the asset retirement liability is required to be accreted each period. If the fair value of a recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the asset retirement capitalized cost. Capitalized costs are depleted as a component of the full cost pool. The following table reflects the components of the change in the carrying amount of the asset retirement obligation for the years ended December31, 2009 and 2008 (in thousands): 2009 2008 Asset retirement obligation at January1, $ 139,948 $ 113,054 Liabilities incurred 3,730 6,095 Liability settlements and disposals (15,598 ) (8,882 ) Accretion expense 7,819 6,663 Revisions of estimated liabilities 13,411 23,018 Asset retirement obligation at December31, 149,310 139,948 Less current obligation 19,525 14,610 Long-term asset retirement obligation $ 129,785 $ 125,338 During 2009 we recognized a revision of $13million to our asset retirement obligation primarily from an increase in abandonment cost estimates for our Gulf of Mexico properties. During 2008 a revision of $23million to our asset retirement obligation resulted primarily from an overall increase in abandonment cost estimates and changes in the productive lives of our wells.

LONG TERM DEBT

LONG TERM DEBT
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
LONG TERM DEBT	7. LONG TERM DEBT Debt at December31, 2009 and 2008 consisted of the following (in thousands): 2009 2008 Bank debt $ 25,000 $ 220,000 7.125% Notes due 2017 350,000 350,000 Floating rate convertible notes due 2023 (face value $19,450) 17,793 17,630 Total long-term debt $ 392,793 $ 587,630 Bank Debt In April 2009, we entered into a new three-year senior secured revolving credit facility ("credit facility"). The new credit facility increased bank commitments from $500million to $800million, with a borrowing base of $1billion. The credit facility is provided by a syndicate of banks led by JP Morgan Chase Bank, N.A., matures on April14, 2012 and is secured by mortgages on certain of our oil and gas properties and the stock of certain wholly-owned operating subsidiaries. The borrowing base under the credit agreement is determined at the discretion of the lenders, based on the collateral value of our proved reserves, and is subject to potential special and regular semi-annual redeterminations. The credit facility contains covenants and restrictive provisions which may limit our ability to incur additional indebtedness, make investments or loans and create liens. The credit facility requires us to maintain a current ratio (defined to include undrawn borrowings) greater than 1 to 1 and a leverage ratio not to exceed 3.5 to 1. As of December31, 2009, we were in compliance with all of the financial and non-financial covenants. At Cimarex's option, borrowings under the credit facility may bear interest at either (a)a London Interbank Offered Rate ("LIBOR") plus 2 to 3percent, based on borrowing base usage, or (b)the higher of (i)a prime rate, (ii)the federal funds effective rate plus 0.50percent, or (iii)adjusted LIBOR, in each case, plus an additional 1.125 to 2.125percent, based on borrowing base usage. At December31, 2009, there was $25million of borrowings outstanding under the credit facility at a weighted average interest rate of approximately 2.2%. We also had letters of credit outstanding of $16.7million leaving an unused borrowing availability of $758.3million. 7.125% Notes due 2017 In May, 2007, we issued $350million of 7.125% senior unsecured notes that mature May1, 2017 at par. Interest on the notes is payable May1 and November1 of each year. The notes are governed by an indenture containing covenants that could limit our ability to incur additional indebtedness; pay dividends or repurchase our common stock; make investments and other restricted payments; incur liens; enter into sale/leaseback transactions; engage in transactions with affiliates; sell assets; and consolidate, merge or transfer assets. The notes are redeemable at our option, in whole or in part, at any time on and after May1, 2012 at the following redemption prices (expressed as percentages of the principal amount) plus accrued interest, if any, thereon to the date of redemption. Year Percentage 2012 103.6 % 2013 102.4 % 2014 101.2 % 2015 and thereafter 100.0 % At any time prior to May1, 2010, we may redeem

INCOME TAXES

INCOME TAXES
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INCOME TAXES	8. INCOME TAXES Federal income tax expense (benefit) for the years ended December31, 2009, 2008, and 2007 differ from the amounts that would be provided by applying the U.S. Federal income tax rate, due to the effect of state income taxes, and the Domestic Production Activities allowance. The components of the provision for income taxes are as follows (in thousands): Years Ended December31, 2009 2008 2007 Current taxes: Federal $ (11,335 ) $ 65,323 $ 26,993 State (443 ) 866 3,656 (11,778 ) 66,189 30,649 Deferred taxes: Federal (158,264 ) (576,699 ) 161,477 State (6,496 ) (25,894 ) 5,336 (164,760 ) (602,593 ) 166,813 $ (176,538 ) $ (536,404 ) $ 197,462 Reconciliations of the income tax (benefit) expense calculated at the federal statutory rate of 35% to the total income tax (beneft) expense are as follows (in thousands): Years Ended December31, 2009 2008 2007 Provision at statutory rate $ (170,969 ) $ (508,044 ) $ 189,974 Effect of state taxes (6,863 ) (26,453 ) 8,992 Domestic Production Activities allowance 663 (2,208 ) (1,723 ) Other 631 301 219 Income tax (benefit) expense $ (176,538 ) $ (536,404 ) $ 197,462 The components of Cimarex's net deferred tax liabilities are as follows (in thousands): December31, 2009 2008 Long-term: Assets: Other $ 42,980 $ 37,411 42,980 37,411 Liabilities: Property, plant and equipment (391,877 ) (538,356 ) Net, long-term deferred tax liability (348,897 ) (500,945 ) Current: Assets: Derivative instruments 5,274 Other 10,563 2,435 15,837 2,435 Net deferred tax liabilities $ (333,060 ) $ (498,510 ) We have recorded deferred tax assets of $58.8million the realization of which is dependent on generating sufficient taxable income in the future. We account for uncertainty in our income tax provisions in accordance with rules promulgated by the FASB. At December31, 2008 and 2009 we had no unrecognized tax benefits that would impact our effective rate and we have made no provisions for interest or penalties related to uncertain tax positions. The tax years 2005-2008 remain open to examination by the Internal Revenue Service of the United States. We file tax returns with various state taxing authorities which remain open for tax years 2005-2008 for examination.

CAPITAL STOCK

CAPITAL STOCK
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CAPITAL STOCK	9. CAPITAL STOCK A summary of the Company's Common Stock activity follows: Number of Shares (in thousands) Issued Treasury Outstanding December31, 2006 83,962 (1,079 ) 82,883 Restricted shares issued under compensation plans, net of cancellations 511 511 Option exercises, net of cancellations 262 262 Treasury shares purchased (1,114 ) (1,114 ) Treasury shares cancelled (1,114 ) 1,114 December31, 2007 83,621 (1,079 ) 82,542 Restricted shares issued under compensation plans, net of cancellations 441 441 Option exercises, net of cancellations 276 276 Treasury shares cancelled (194 ) 194 December31, 2008 84,144 (885 ) 83,259 Restricted shares issued under compensation plans, net of cancellations 166 166 Option exercises, net of cancellations 117 117 Treasury shares cancelled (885 ) 885 December31, 2009 83,542 83,542 Stock-based Compensation Our 2002 Stock Incentive Plan was approved by stockholders in May 2003 and is effective until October1, 2012. The plan provides for grants of stock options, restricted stock and restricted stock units to non-employee directors, officers and other eligible employees. A total of 12.7million shares of common stock may be issued under the Plan. Restricted Stock and Units During 2009 we issued a total of 381,090 restricted shares to non-employee directors, officers, and other employees. Included in that amount are 228,000 shares issued to certain executives that are subject to market condition-based vesting determined by our stock price performance relative to a defined peer group's stock price performance. After three years of continued service, an executive will be entitled to vest in 50% to 100% of the award. The material terms of performance goals applicable to these awards were approved by stockholders in May 2006. The other shares granted in 2009 have service-based vesting schedules of three to five years. The following table presents restricted stock activity during the last three years: Years Ended December31, 2009 2008 2007 Outstanding beginning of period 1,672,245 1,289,695 792,779 Vested (166,725 ) (28,470 ) (13,693 ) Granted 381,090 464,620 572,009 Canceled (159,360 ) (53,600 ) (61,400 ) Outstanding end of period 1,727,250 1,672,245 1,289,695 The following table presents restricted unit activity during the last three years: Years Ended December31, 2009 2008 2007 Outstanding beginning of period 655,205 701,915 696,641 Converted to Stock (5,362 ) (45,500 ) Granted 3,790 5,274 Canceled (5,000 ) Outstanding end of period 649,843 655,205 701,915 Vested included in outstanding 620,559 596,247 559,8

EARNINGS

EARNINGS (LOSS) PER SHARE
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EARNINGS (LOSS) PER SHARE	10. EARNINGS (LOSS) PER SHARE In 2008, the FASB issued new guidance which holds that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are "participating securities" (as defined as securities that may participate in undistributed earnings with common stock, whether that participation is conditioned upon the occurrence of a specified event or not, regardless of the form of participation), and therefore should be included in computing earnings per share using the two-class earnings allocation method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The guidance became effective for financial statements issued in fiscal years beginning after December15, 2008, and for interim periods within those years. The requirements are to be applied by recasting previously reported earnings per share data. Under this guidance, our unvested share based payment awards, consisting of restricted stock and restricted stock units, qualify as participating securities. We adopted this guidance in the first quarter of 2009. The calculations of basic and diluted net earnings (loss) per common share under the two-class method are presented below (in thousands, except per share data): Years Ended December31, 2009 2008 2007 Net income (loss) $ (311,943 ) $ (915,245 ) $ 345,262 Less distributed earnings (dividends declared during the period) (20,282 ) (20,108 ) (14,991 ) Undistributed earnings (loss) for the period $ (332,225 ) $ (935,353 ) $ 330,271 Allocation of undistributed earnings (loss): Basic allocation to unrestricted common stockholders $ (332,225 ) $ (935,353 ) $ 322,369 Basic allocation to participating securities $ (2) $ (2) $ 7,902 Diluted allocation to unrestricted common stockholders $ (332,225 ) $ (935,353 ) $ 322,553 Diluted allocation to participating securities $ (2) $ (2) $ 7,718 Basic Shares Outstanding Unrestricted outstanding common shares 81,815 81,587 81,252 Add participating securities: Restricted stock outstanding 1,727 1,672 1,290 Restricted stock units outstanding 650 655 702 Total participating securities 2,377 2,327 1,992 Total basic shares outstanding 84,192 83,914 83,244 Fully Diluted Shares Unrestricted outstanding common shares 81,815 81,587 81,252 Incremental shares from assumed exercise of stock options (1) (1) 611 Incremental shares from assumed conversion of the convertible senior notes (1) (1) 1,375 Fully diluted common stock 81,815 81,587 83,238 Participating securities 2,377 (2) 2,327 (2) 1,992 Total fully

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EMPLOYEE BENEFIT PLANS	11. EMPLOYEE BENEFIT PLANS We maintain and sponsor a contributory 401(k) plan for our employees. Costs related to the plan were $5.1million, $5.2million, and $5.2million in the years ended December31, 2009, 2008, and 2007, respectively.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RELATED PARTY TRANSACTIONS	12. RELATED PARTY TRANSACTIONS Helmerich Payne,Inc. provides contract drilling services to Cimarex. Drilling costs of approximately $17.5million, $40.2million, and $21.5million were incurred by Cimarex related to such services for the years ended December31, 2009, 2008, and 2007, respectively. At December31, 2009, we have minimum expenditure commitments of $16.2million to secure the use of Helmerich Payne,Inc.'s drilling rigs. At December31, 2008, we had minimum expenditure commitments of $26.2million. We had no such commitments at December31, 2007. Hans Helmerich, a director of Cimarex, is President and Chief Executive Officer of Helmerich Payne,Inc. Certain subsidiaries of Newpark Resources,Inc. have provided various drilling services to Cimarex. Costs of such services were $10.8million, $24.3million, and $15.6million for the years ended December31, 2009, 2008, and 2007, respectively. In 2009, Cimarex sold excess casing to a subsidiary of Newpark Resources,Inc. for $108thousand. Jerry Box, a director of Cimarex, is a non-executive director and Chairman of the Board of Newpark Resources,Inc.

MAJOR CUSTOMERS

MAJOR CUSTOMERS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAJOR CUSTOMERS	13. MAJOR CUSTOMERS During 2009, sales to one purchaser represented approximately 14% of our revenues. No individual purchasers represented more than 10% of our revenues for the years ended December31, 2008 and 2007.

SUPPLEMENTAL DISCLOSURE OF CASH

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (in thousands)
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (in thousands)	14. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (in thousands) For the Years Ended December31, 2009 2008 2007 Cash paid during the period for: Interest (net of amounts capitalized) $ 10,668 $ 8,902 $ 19,006 Interest capitalized $ 23,408 $ 22,108 $ 19,680 Income taxes $ 2,270 $ 128,861 $ 2,408 Cash received for income taxes $ 94,617 $ 4,251 $ 46,518

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
COMMITMENTS AND CONTINGENCIES	15. COMMITMENTS AND CONTINGENCIES Shown below are the five year debt maturities and five year lease commitments as of December31, 2009: Payments Due by Period Total Less than 1 Year 1-3 Years 4-5 Years More than 5 Years (In thousands) Long term debt (face value) $ 394,450 $ $ 25,000 $ $ 369,450 Operating leases $ 20,994 $ 5,092 $ 9,588 $ 6,032 $ 282 Litigation In January 2009, the Tulsa County District Court issued a judgment in the H.B. Krug, et al versus Helmerich Payne,Inc. ("HP") case. This lawsuit was originally filed in 1998 and addressed HP's conduct pertaining to a 1989 take-or-pay settlement, along with potential drainage issues and other related matters. Damages of $6.9million, plus $119.5million for disgorgement of HP's estimated potential compounded profit since 1989 resulting from the noted damages, were awarded to plaintiff royalty owners for a total of $126.4million. This amount was subsequently adjusted by the court to a total of $119.6million. Pursuant to the 2002 spin-off transaction to shareholders of HP by which Cimarex became a publicly-traded entity, Cimarex assumed the assets and liabilities of HP's exploration and production business. In 2008 we had accrued litigation expense of $119.6million for this lawsuit. During 2009, we have accrued an additional $9.4million. We have appealed the District Court's judgments. In the normal course of business, we have other various litigation related matters. We assess the probability of estimable amounts related to litigation matters in accordance with guidance established by the FASB and adjust our accruals accordingly. For the year 2009, we had approximately $10.0million of such expenses. Though some of the related claims may be significant, the resolution of them we believe, individually or in the aggregate, would not have a material adverse effect on our financial condition or results of operations. Other We have a large development project in Sublette County, Wyoming where we are developing the deep Madison gas formation and constructing a gas processing plant. At December31, 2009, we had commitments of $151.2million relating to construction of the gas processing plant of which $96.2million is subject to a construction contract. The total cost of the project will approximate $345million. Pursuant to the terms of our operating agreement with our partners in this project, we will be reimbursed by them for 42.5% of the costs. The gas processing plant is subject to a delivery commitment agreement over a 20year period, commencing December, 2011. If no deliveries were made, the maximum amount that would be payable under the agreement would be approximately $43million. We have drilling commitments of approximately $72.9million consisting of obligations to complete drilling wells in progress at December31, 2009. We also have minimum expenditure commitments of $50.7million to secure the use of drilling rigs. At December31, 2009, we have a purchase commitment of $11.1million for construction of an aircraft. The total cost of the aircraft is $12.3million with an optio

PROPERTY SALES AND ACQUISITIONS

PROPERTY SALES AND ACQUISITIONS
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PROPERTY SALES AND ACQUISITIONS	16. PROPERTY SALES AND ACQUISITIONS Various interests in oil and gas properties were sold during 2009 and 2008 for $109.4million and $38.1million, respectively. These were recorded as a reduction to oil and gas properties. There were no significant acquisitions during 2009. Subsequent to year end we acquired additional interests in our Western Oklahoma Cana-Woodford shale play for approximately $23million.

UNAUDITED SUPPLEMENTAL OIL AND

UNAUDITED SUPPLEMENTAL OIL AND GAS DISCLOSURES
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED SUPPLEMENTAL OIL AND GAS DISCLOSURES	17. UNAUDITED SUPPLEMENTAL OIL AND GAS DISCLOSURES Oil and Gas OperationsThe following tables contain direct revenue and cost information relating to our oil and gas exploration and production activities for the periods indicated. We have no long-term supply or purchase agreements with governments or authorities in which we act as producer. Income tax expense (benefit) related to our oil and gas operations are computed using the effective tax rate for the period (in thousands): Years Ended December31, 2009 2008 2007 Oil and gas revenues from production $ 962,443 $ 1,880,891 $ 1,364,622 Less operating costs and income taxes: Impairment of oil and gas properties 791,137 2,242,921 Depletion 243,471 527,813 444,546 Asset retirement obligation 12,313 8,796 8,937 Production 178,215 218,736 201,512 Transportation 33,758 38,107 26,361 Taxes other than income 75,634 130,490 93,630 Income tax expense (benefit) (134,472 ) (475,295 ) 214,510 1,200,056 2,691,568 989,496 Results of operations from oil and gas producing activities $ (237,613 ) $ (810,677 ) $ 375,126 Amortization rate per Mcfe $ 1.44 $ 2.97 $ 2.70 Costs IncurredThe following table sets forth the capitalized costs incurred in our oil and gas production, exploration, and development activities (in thousands): Years Ended December31, 2009 2008 2007 Costs incurred during the year: Acquisition of properties Proved $ 13,530 $ 6,618 $ 17,334 Unproved 24,804 310,666 102,572 Exploration 59,350 268,052 236,866 Development 430,357 1,035,442 666,662 Oil and gas expenditures 528,041 1,620,778 1,023,434 Property sales (109,408 ) (38,093 ) (176,659 ) 418,633 1,582,685 846,775 Asset retirement obligation, net 12,850 24,822 (18,207 ) $ 431,483 $ 1,607,507 $ 828,568 Aggregate Capitalized CostsThe table below reflects the aggregate capitalized costs relating to our oil and gas producing activities at December31, 2009 (in thousands): Proved properties $ 7,549,861 Unproved properties and properties under development, not being amortized 399,724 7,949,585 Less-accumulated depreciation, depletion and amortization (5,764,669 ) Net oil and gas properties $ 2,184,916 Costs Not Being AmortizedThe following table summarizes oil and gas property costs not being amortized at December31, 2009, by year that the costs were incurred (in thousands): 2009 $ 109,958 2008 271,551 2007 16,677 2006 and prior 1,538 $ 399,724 Costs not being amortized include the costs of wells in progress and certain unevaluated properties. On a quarterly basis, such costs are evalua

UNAUDITED SUPPLEMENTAL QUARTERL

UNAUDITED SUPPLEMENTAL QUARTERLY FINANCIAL DATA
	12 Months Ended Dec. 31, 2009 USD / shares
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED SUPPLEMENTAL QUARTERLY FINANCIAL DATA	18. UNAUDITED SUPPLEMENTAL QUARTERLY FINANCIAL DATA 2009 First Second Third Fourth (In thousands, except for per share data) Revenues $ 209,179 $ 222,685 $ 249,134 $ 328,796 Expenses, net 703,279 183,878 210,429 224,151 Net income (loss) $ (494,100 ) $ 38,807 $ 38,705 $ 104,645 Earnings (loss) per share to common stockholders: Basic Distributed $ 0.06 $ 0.06 $ 0.06 $ 0.06 Undistributed (6.11 ) 0.40 0.40 1.18 $ (6.05 ) $ 0.46 $ 0.46 $ 1.24 Diluted Distributed $ 0.06 $ 0.06 $ 0.06 $ 0.06 Undistributed (6.11 ) 0.40 0.40 1.17 $ (6.05 ) $ 0.46 $ 0.46 $ 1.23 2008 First Second Third Fourth (In thousands, except for per share data) Revenues $ 477,210 $ 617,043 $ 577,258 $ 298,836 Expenses, net 327,672 388,030 809,681 1,360,209 Net income (loss) $ 149,538 $ 229,013 $ (232,423 ) $ (1,061,373 ) Earnings (loss) per share to common stockholders: Basic Distributed $ 0.06 $ 0.06 $ 0.06 $ 0.06 Undistributed 1.73 2.67 (2.91 ) (13.07 ) $ 1.79 $ 2.73 $ (2.85 ) $ (13.01 ) Diluted Distributed $ 0.06 $ 0.06 $ 0.06 $ 0.06 Undistributed 1.67 2.59 (2.91 ) (13.07 ) $ 1.73 $ 2.65 $ (2.85 ) $ (13.01 ) The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share because each period's computation is based on the weighted average number of shares outstanding during that period.

Document and Entity Information

Document and Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Feb. 19, 2010	Jun. 30, 2009
Document and Entity Information
Entity Registrant Name	CIMAREX ENERGY CO
Entity Central Index Key	0001168054
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$2,319,938,473
Entity Common Stock, Shares Outstanding		83,839,327