Cimarex Energy (CIMXP) 8-K Cimarex Reports Fourth-Quarter Earnings of $0.38 Per Share

Exhibit 99.1

Cimarex Reports Fourth-Quarter Earnings of $0.38 Per Share

DENVER - Cimarex Energy Co. (NYSE:  XEC) today reported that fourth-quarter 2002 net income rose to $15.8 million, or $0.38 per diluted share, from $4.5 million, or $0.17 per share, in the fourth quarter of 2001.

Primary contributors to the 124 percent increase in earnings per share were higher natural gas and crude oil prices and a 45 percent boost in production volumes stemming from the September 30, 2002 merger with Key Production Company, Inc. (Key).

For the full year 2002, net income totaled $39.8 million, or $1.31 per diluted share, up from net income of $12.2 million, or $0.46 per share, for the twelve-months ended December 31, 2001.

On September 30, 2002, Cimarex was spun-off from Tulsa-based Helmerich & Payne, Inc. and became a stand-alone company.  Also on that date, pursuant to a merger agreement, Cimarex acquired 100 percent of the outstanding common stock of Denver-based Key.  The acquisition of Key by Cimarex has been accounted for using the purchase method of accounting effective September 30, 2002.  As such, the fourth quarter of 2002 is the initial period in which the results of operations include combined company activity.

Fourth-quarter 2002 combined gas and oil production volumes averaged 180 million cubic feet equivalent (MMcfe) per day, up from 124 MMcfe per day during the fourth quarter of 2001.  Natural gas production was 141.4 MMcf per day, compared to 110.6 MMcf per day during the prior year’s quarter.  Oil production was 6,563 barrels per day versus 2,236 barrels per day during the fourth quarter 2001.

Fourth-quarter 2002 gas prices increased to an average of $3.60 per thousand cubic feet (Mcf) from $2.05 per Mcf during the same three months of 2001.  Oil was sold at an average price of $25.43 per barrel versus $19.97 per barrel a year earlier.

Full-year 2002 production volumes averaged 132 MMcfe per day versus 128 MMcfe per day in 2001.  Natural gas production was 113.2 MMcf per day, compared to 114.7 MMcf per day during 2001.  Oil production was 3,209 barrels per day versus 2,175 barrels per day in 2001.

Even with the substantial increase in gas prices during the latter part of the year, the weighted-average price received for all of 2002 of $2.91 per Mcf was much lower than the average selling price in 2001 of $3.90 per Mcf.  In contrast, oil prices averaged $24.91 per barrel in both years.

Operating cash flow in the fourth quarter of 2002 was $45.6 million, or $1.11 per diluted share, up from $16 million, or $0.60 per share, during the same three months of 2001.  For all of 2002, operating cash flow totaled $110.7 million, or $3.65 per share.  In 2001, operating cash flow was $124.9 million, or $4.70 per share.  Operating cash flow is a

1

non-GAAP measure that consists of net cash provided by operating activities adjusted for changes in operating assets and liabilities.

At December 31, 2002, debt totaled $32 million, or 6.7 percent of book capitalization.  Since then, debt has been reduced to $20 million.

Year-end 2002 proved reserves increased 67 percent to 409 billion cubic feet (Bcf) equivalent, comprised of 319 Bcf of gas and 15 million barrels of oil.  Of total proved reserves, 99.6 percent were classified as proved developed.  The all-in cost of reserves added during 2002 was $1.74 per Mcf equivalent, including $1.90 per Mcf equivalent associated with the 150 Bcf equivalent of proved reserves added with the merger of Key.

The estimated present value of the future net cash flow before income taxes from year-end 2002 proved reserves, calculated under guidelines established by the Securities and Exchange Commission and using a 10 percent discount rate, is $741.2 million.  For purposes of this calculation, Cimarex’s average gas price was $4.22 per Mcf and its oil price realization was $28.56 per barrel.  The standardized measure of discounted cash flows after income taxes was $533.9 million.

Capital investment plans for 2003 contemplate exploration and development expenditures of $150 million, including $90 million for the Mid-Continent region and $40-45 in the Gulf Coast area.  Capital investment plans may be modified during the year due to market conditions and other variables.  In 2002, combined exploration and development costs incurred by Cimarex and Key (prior to its merger with Cimarex) approximated $110 million.

Projected growth in 2003 production will be highly dependent on the amount and success of the company’s capital investments, including the outcome of wells that have not yet been drilled.  The production and sale of oil and gas also involves many other complex factors that are subject to numerous uncertainties, including reservoir risk, mechanical failure, market conditions, transportation issues, human error, and weather.  Nonetheless, management currently assumes that aggregate gas and oil production will range between 180-190 MMcfe per day during 2003.

On September 30, 2002, the newly formed Cimarex Board of Directors voted to change the fiscal year of Cimarex from September 30 to December 31.  A transition report was filed with the Securities and Exchange Commission (SEC) on November 14, 2002 on Form 10-Q as of and for the quarter ended December 31, 2001.  Results of operations for the twelve months ended December 31, 2001 are unaudited and have been prepared by adding together results of operations for the nine-months ended September 30, 2001 and the quarter ended December 31, 2001.  Tables containing quarterly statements of income for each of calendar years 2001 and 2002 have been included in this news release.

PROVED RESERVES:	Oil, Condensate and NGLs (MBbls)		Gas (MMcf)		Total (MMcfe)
December 31, 2001	5,304		212,326		244,150
Revisions of previous estimates	1,094		31,153		37,719
Extensions and discoveries	643		21,064		24,922
Production	(1,171	)	(41,300	)	(48,326	)
Purchases	9,155		95,388		150,318
Sales	—		(4	)	(4	)
December 31, 2002	15,025		318,627		408,779
Proved Developed - December 31, 2002	14,765		318,452		407,044

2

PROVED RESERVES BY REGION:	Oil, Condensate and NGLs (MBbls)	Gas (MMcf)	Total (MMcfe)
Mid-Continent	3,666	159,845	181,841
Kansas	2,454	77,765	92,491
Permian Basin	3,375	38,247	58,494
Gulf Coast	1,793	26,507	37,268
Western	3,737	16,263	38,685
	15,025	318,627	408,779

CAPITALIZED COSTS INCURRED

For the Twelve Months Ended December 31, 2002

(in thousands)

Acquisitions of properties:
Proved	$	286,041
Unproved -
Key	12,142
Other	3,867
Exploration and Development	67,494
Total Costs Incurred	$	369,544

Conference call and web cast

The fourth quarter earnings conference call has been scheduled for 11 a.m. Mountain Time (1 p.m. Eastern), Thursday, February 20, 2003.  Interested parties in the U.S. and Canada may access the call by dialing (800) 881-5262 and requesting the Cimarex Energy Co. teleconference.  For other international callers, the number is (706) 645-9769.  In addition, a listen-only web cast of the call will be provided at www.cimarex.com.  If you are unable to participate in the live broadcast of the call, a replay will be available by dialing (800) 642-1687 and entering conference code 7933256.  For those outside the U.S. or Canada, please dial (706) 645-9291 to access the replay.  You may also access the replay via the Cimarex website.

Cimarex Energy Co. is an independent natural gas and crude oil exploration and production company with operations focused in Mid-Continent and Gulf Coast regions of the U.S.

This news release may contain projections and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.  Any such projections or statements reflect the Company’s current view with respect to future events and financial performance.  No assurances can be given, however, that these events will occur or that such projections will be achieved and actual results could differ materially from those projected.  A discussion of important factors that could cause actual results to differ materially from those projected is included in the Company’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission.

PRICE AND PRODUCTION DATA

	For the Three Months Ended December 31,				For the Twelve Months Ended December 31,
	2002		2001		2002		2001
Gas Production:
Total production - Mcf	12,913,384		10,173,768		41,299,762		41,850,435
Gas volume - Mcf per day	140,363		110,584		113,150		114,659
Gas price - per Mcf	$	3.60	$	2.05	$	2.91	$	3.90
Oil Production (including NGL):
Total production - Bbl	603,830		205,696		1,171,104		793,831
Oil volume - Bbls per day	6,563		2,236		3,209		2,175
Oil price - per Bbl	$	25.43	$	19.97	$	24.91	$	24.91

3

INCOME STATEMENTS

	For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
	2002			2001			2002			2001
	(In thousands, except per share data)
Revenues:
Natural gas sales	$	46,515		$	20,864		$	120,210		$	163,291
Oil sales	15,356			4,107			29,172			19,775
Gas marketing, net	396			1,661			2,678			3,516
Other	(123		)	84			(5		)	387
	62,144			26,716			152,055			186,969
Expenses:
Depreciation, depletion and amortization	21,086			8,983			49,231			49,205
Reduction to carrying value of gas and oil properties	—			—			—			78,082
Production	7,756			4,197			19,427			14,650
Taxes other than income	4,794			2,559			13,154			17,330
General and administrative	3,700			3,626			8,568			11,316
Stock compensation	125			—			125			—
Financing costs:
Interest expense	550			141			620			(1,475		)
Capitalized interest	(206		)	—			(206		)	—
Interest income	(49		)	(43		)	(243		)	(186		)
	37,756			19,463			90,676			168,922
Income before income tax expense	24,388			7,253			61,379			18,047
Income tax expense	8,601			2,774			21,560			5,897
Net income	$	15,787		$	4,479		$	39,819		$	12,150
Earnings per share:
Basic	40,908			26,591			30,239			26,591
Diluted	41,217			26,591			30,317			26,591
Weighted average shares outstanding:
Basic	$	0.39		$	0.17		$	1.32		$	0.46
Diluted	$	0.38		$	0.17		$	1.31		$	0.46

4

CASH FLOW STATEMENTS

	For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
	2002			2001			2002			2001
	(In thousands)
Cash flows from operating activities:
Net income	$	15,787		$	4,479		$	39,819		$	11,150
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	21,086			8,972			49,231			49,205
Reduction to carrying value of oil and gas properties	—			—			—			78,082
Deferred income taxes	8,499			2,805			21,428			(13,209		)
Amortization of unearned compensation	125			—			125			—
Other	80			(241		)	58			(286		)
	45,577			16,015			110,661			124,942
Changes in operating assets and liabilities, net of effects of the acquisition of Key Production Company, Inc.:
(Increase) decrease in accounts receivable	(13,516		)	7,387			(15,996		)	26,385
(Increase) decrease in inventories	571			145			1,770			(446		)
(Increase) decrease in other assets	(2,260		)	—			(934		)	4,607
Increase (decrease) in accounts and revenue payable	12,310			(16,656		)	17,010			(15,740		)
Decrease in accrued liabilities	(10,265		)	(3,319		)	(8,321		)	(7,954		)
Increase in other liabilities	409			32			265			114
Net cash provided by operating activities	32,826			3,604			104,455			131,908
Cash flows from investing activities:
Oil and gas expenditures	(19,495		)	(14,667		)	(65,413		)	(88,962		)
Cash cost of acquisition	(179		)	—			(5,079		)	—
Acquisition of oil and gas properties	(1,045		)	—			(1,045		)	—
Cash received in connection with acquisition of Key Production Company, Inc.	—			—			2,135			—
Proceeds from sale of assets	313			681			313			55
Other capital expenditures	(4,687		)	(345		)	(5,589		)	(562		)
Net cash used by investing activities	(25,093		)	(14,331		)	(74,678		)	(89,469		)
Cash flows from financing activities:
Payments on long-term debt, net	(4,000		)	—			(4,000		)	—
Net distributions from (contributions to) Helmerich & Payne, Inc.	—			4,808			—			(48,358		)
Change in amount due (to) from Helmerich & Payne, Inc.	819			13,089			(13,089		)	13,089
Proceeds from issuance of common stock	403			—			403			—
Net cash used by financing activities	(2,778		)	17,897			(16,686		)	(35,269		)
Net increase in cash and cash equivalents	4,955			7,170			13,091			7,170
Cash and cash equivalents at beginning of year	15,306			—			7,170			—
Cash and cash equivalents at end of period	$	20,261		$	7,170		$	20,261		$	7,170

5

BALANCE SHEETS

	As of December 31,
	2002			2001
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	20,261		$	7,170
Accounts receivable, net	58,276			23,096
Inventories	3,986			4,840
Deferred income taxes	2,073			870
Other current assets	2,949			1,446
	87,545			37,422
Property and equipment, under the full cost method:
Proved properties	1,172,488			801,248
Unproved properties and properties under development, not being amortized	23,941			26,829
	1,196,429			828,077
Less – accumulated depreciation, depletion and amortization	(665,711		)	(617,676		)
	530,718			210,401
Fixed assets, net	6,849			3,904
Non-amortizable goodwill	45,836			—
Other assets, net	3,338			239
	$	674,286		$	251,966
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	22,339		$	8,791
Due to Helmerich & Payne, Inc.	—			13,089
Accrued liabilities	45,914			16,201
	68,253			38,081
Long-term debt	32,000			—
Deferred income taxes	127,023			37,286
Other liabilities	2,130			1,517
Stockholders’ equity:
Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued	—			—
Common stock, $0.01 par value, 100,000,000 shares authorized, 41,410,308 and 26,591,321 shares issued, respectively	414			266
Paid-in capital	243,420			—
Unearned compensation	(10,814		)	—
Retained earnings	211,860			174,816
	444,880			175,082
	$	674,286		$	251,966

6

SUPPLEMENTAL QUARTERLY INCOME STATEMENTS - 2002

	For the Three Months Ended
	03/31/02			06/30/02			09/30/02			12/31/02
	(in thousands, except as noted)
Revenues:
Natural gas sales	$	19,277		$	27,792		$	26,626		$	46,515
Oil sales	3,961			4,985			4,870			15,356
Gas marketing, net	1,275			124			883			396
Other	(145		)	173			90			(123		)
	24,368			33,074			32,469			62,144
Expenses:
Depreciation, depletion and amortization	8,697			9,290			10,158			21,086
Production	4,282			3,374			4,015			7,756
Taxes other than income	2,364			3,263			2,733			4,794
General and administrative	2,084			1,085			1,699			3,700
Stock compensation	—			—			—			125
Financing costs:
Interest expense	168			(86		)	(12		)	550
Capitalized interest	—			—			—			(206		)
Interest income	(89		)	(27		)	(78		)	(49		)
	17,506			16,899			18,515			37,756
Income before income tax expense	6,862			16,175			13,954			24,388
Income tax expense	2,604			6,331			4,024			8,601
Net income	$	4,258		$	9,844		$	9,930		$	15,787
Earnings per share:
Basic	$	0.16		$	0.37		$	0.37		$	0.39
Diluted	$	0.16		$	0.37		$	0.37		$	0.38
Weighted average common shares outstanding:
Basic	26,591			26,591			26,745			40,908
Diluted	26,591			26,591			26,749			41,217
Daily gas volume (Mcf)	105,856			104,187			101,939			140,363
Total quarterly gas volume (Mcf)	9,527,036			9,480,981			9,378,361			12,913,384
Gas price	$	2.02		$	2.93		$	2.84		$	3.60
Daily oil volume (Bbls)	2,019			2,060			2,154			6,563
Total quarterly oil volume (Bbls)	181,667			187,428			198,179			603,830
Oil price	$	21.80		$	26.60		$	24.57		$	25.43

7

SUPPLEMENTAL QUARTERLY INCOME STATEMENTS - 2001

	For the Three Months Ended
	03/31/01			06/30/01			09/30/01			12/31/01
	(in thousands, except as noted)
Revenues:
Natural gas sales	$	68,988		$	46,529		$	26,910		$	20,864
Oil sales	5,527			5,355			4,786			4,107
Gas marketing, net	397			674			784			1,661
Other	(112		)	297			118			84
	74,800			52,855			32,598			26,716
Expenses:
Depreciation, depletion and amortization	11,405			14,468			14,349			8,983
Reduction to carrying value of oil and gas properties	—			—			78,082			—
Production	3,003			3,802			3,648			4,197
Taxes other than income	6,397			4,655			3,719			2,559
General and administrative	3,097			2,028			2,565			3,626
Financing costs:
Interest expense	(447		)	(1,931		)	762			141
Capitalized interest	—			—			—			—
Interest income	(75		)	(42		)	(26		)	(43		)
	23,380			22,980			103,099			19,463
Income (loss) before income tax expense	51,420			29,875			(70,501		)	7,253
Income tax expense (benefit)	18,944			11,044			(26,865		)	2,774
Net income (loss)	$	32,476		$	18,831		$	(43,636	)	$	4,479
Earnings per share:
Basic	$	1.22		$	0.71		$	(1.64	)	$	0.17
Diluted	$	1.22		$	0.71		$	(1.64	)	$	0.17
Weighted average common shares outstanding:
Basic	26,591			26,591			26,591			26,591
Diluted	26,591			26,591			26,591			26,591
Daily gas volume (Mcf)	118,483			119,330			110,371			110,584
Total quarterly gas volume (Mcf)	10,663,503			10,859,030			10,154,134			10,173,768
Gas price	$	6.47		$	4.28		$	2.65		$	2.05
Daily oil volume (Bbls)	2,183			2,252			2,029			2,236
Total quarterly oil volume (Bbls)	196,506			204,923			186,706			205,696
Oil price	$	28.13		$	26.13		$	25.63		$	19.97

8