Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Thousands | Mar. 31, 2010
| Dec. 31, 2009
|
Current assets: | ||
Cash and cash equivalents | $62,542 | $2,544 |
Restricted cash | 593 | 593 |
Receivables, net | 267,366 | 227,896 |
Oil and gas well equipment and supplies | 128,207 | 145,153 |
Deferred income taxes | 15,837 | |
Derivative instruments | 47,497 | 1,238 |
Other current assets | 12,890 | 13,997 |
Total current assets | 519,095 | 407,258 |
Oil and gas properties at cost, using the full cost method of accounting: | ||
Proved properties | 7,730,333 | 7,549,861 |
Unproved properties and properties under development, not being amortized | 435,379 | 399,724 |
Total oil and gas properties at gross | 8,165,712 | 7,949,585 |
Less - accumulated depreciation, depletion and amortization | (5,828,786) | (5,764,669) |
Net oil and gas properties | 2,336,926 | 2,184,916 |
Fixed assets, net | 129,395 | 127,237 |
Goodwill | 691,432 | 691,432 |
Other assets, net | 31,272 | 33,694 |
Total assets | 3,708,120 | 3,444,537 |
Current liabilities: | ||
Accounts payable | 44,471 | 30,214 |
Accrued liabilities | 232,622 | 235,815 |
Derivative instruments | 7,171 | 13,902 |
Revenue payable | 132,910 | 108,832 |
Total current liabilities | 417,174 | 388,763 |
Long-term debt | 367,832 | 392,793 |
Deferred income taxes | 407,166 | 348,897 |
Other liabilities | 277,886 | 275,978 |
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, 83,883,540 and 83,541,995 shares issued, respectively | 839 | 835 |
Paid-in capital | 1,861,417 | 1,859,255 |
Retained earnings | 375,726 | 178,035 |
Accumulated other comprehensive income (loss) | 80 | (19) |
Total stockholders' equity | 2,238,062 | 2,038,106 |
Total liabilities and stockholders' equity | $3,708,120 | $3,444,537 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
Mar. 31, 2010
| Dec. 31, 2009
| |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | 0.01 | 0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | 0.01 | 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 83,883,540 | 83,541,995 |
Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | ||
In Thousands, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Revenues: | ||
Gas sales | $225,637 | $116,624 |
Oil sales | 191,560 | 79,337 |
NGL sales | 15,209 | 1,268 |
Gas gathering, processing and other | 15,850 | 11,070 |
Gas marketing, net | 314 | 880 |
Total revenues | 448,570 | 209,179 |
Costs and expenses: | ||
Impairment of oil and gas properties | 791,137 | |
Depreciation, depletion and amortization | 69,710 | 89,666 |
Asset retirement obligation | 2,644 | 2,545 |
Production | 41,983 | 50,414 |
Transportation | 11,167 | 8,709 |
Gas gathering and processing | 6,505 | 5,106 |
Taxes other than income | 32,358 | 15,545 |
General and administrative | 13,045 | 7,762 |
Stock compensation, net | 2,778 | 2,257 |
Gain on derivative instruments, net | (52,597) | (102) |
Other operating, net | (1,846) | 10,092 |
Total costs and expenses | 125,747 | 983,131 |
Operating income (loss) | 322,823 | (773,952) |
Other (income) and expense: | ||
Interest expense | 9,462 | 8,267 |
Capitalized interest | (7,424) | (5,513) |
Other, net | (1,930) | 2,355 |
Income (loss) before income tax | 322,715 | (779,061) |
Income tax expense (benefit) | 118,354 | (284,961) |
Net income (loss) | $204,361 | ($494,100) |
Basic | ||
Distributed (in dollars per share) | 0.08 | 0.06 |
Undistributed (in dollars per share) | 2.34 | -6.11 |
Total basic (in dollars per share) | 2.42 | -6.05 |
Diluted | ||
Distributed (in dollars per share) | 0.08 | 0.06 |
Undistributed (in dollars per share) | 2.31 | -6.11 |
Total diluted (in dollars per share) | 2.39 | -6.05 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Cash flows from operating activities: | ||
Net income (loss) | $204,361 | ($494,100) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Impairments and other valuation losses | 795,562 | |
Depreciation, depletion and amortization | 69,710 | 89,666 |
Asset retirement obligation | 2,644 | 2,545 |
Deferred income taxes | 84,990 | (269,752) |
Stock compensation, net | 2,778 | 2,257 |
Derivative instruments, net | (52,056) | (102) |
Changes in non-current assets and liabilities | 3,101 | 4,426 |
Other, net | (2,321) | 7,144 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in receivables, net | (39,495) | 87,231 |
(Increase) decrease in other current assets | 18,495 | (23,744) |
Increase (decrease) in accounts payable and accrued liabilities | 6,900 | (118,577) |
Net cash provided by operating activities | 299,107 | 82,556 |
Cash flows from investing activities: | ||
Oil and gas expenditures | (203,682) | (197,549) |
Sales of oil and gas and other assets | 55 | 3,824 |
Sales of short-term investments | 923 | |
Other expenditures | (7,822) | (7,967) |
Net cash used by investing activities | (211,449) | (200,769) |
Cash flows from financing activities: | ||
Net increase (decrease) in bank debt | (25,000) | 125,000 |
Financing costs incurred | (2) | |
Dividends paid | (5,069) | (5,040) |
Issuance of common stock and other | 2,409 | |
Net cash (used in) provided by financing activities | (27,660) | 119,958 |
Net change in cash and cash equivalents | 59,998 | 1,745 |
Cash and cash equivalents at beginning of period | 2,544 | 1,213 |
Cash and cash equivalents at end of period | $62,542 | $2,958 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | |
3 Months Ended
Mar. 31, 2010 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 1. Basis of Presentation The accompanying unaudited financial statements have been prepared by Cimarex Energy Co. pursuant to rulesand regulations of the Securities and Exchange Commission (SEC). Accordingly, certain disclosures required by accounting principles generally accepted in the United States and normally included in annual reports on Form10-K have been omitted. Although management believes that our disclosures in these interim financial statements are adequate, they should be read in conjunction with the financial statements, summary of significant accounting policies, and footnotes included in our 2009 Annual Report onForm 10-K. In the opinion of management, the accompanying financial statements reflect all adjustments necessary to present fairly our financial position, results of operations, and cash flows for the periods shown. We have evaluated subsequent events after the balance sheet date of March 31, 2010, through the filing of this report. Full Cost Accounting Method and Ceiling Limitation 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 commodity prices and are adjusted for designated cash flow hedges. For year-end 2009, new SEC ruleswere 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 commodity 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 periods prior to year-end 2009 we used prices in effect at period end. Due to decreases in period end commodity prices at March31, |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING | |
3 Months Ended
Mar. 31, 2010 | |
DERIVATIVE INSTRUMENTS AND HEDGING | |
DERIVATIVE INSTRUMENTS AND HEDGING | 2. 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. At March31, 2010, 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 WeightedAveragePrice FairValue Period Type Volume/Day Index(1) Floor Ceiling Swap (000s) Apr 10 - Dec 10 Collar 100,000 MMBtu PEPL $ 5.00 $ 6.62 $ 29,505 Apr 10 - Dec 10 Swap 40,000 MMBtu PEPL $ 5.18 $ 12,783 Apr 10 - Dec 10 Collar 20,000 MMBtu HSC $ 5.00 $ 6.85 $ 5,209 Oil Contracts WeightedAveragePrice FairValue Period Type Volume/Day Index(1) Floor Ceiling (000s) Apr 10 - Dec 10 Collar 10,000 Bbls WTI $ 60.03 $ 92.07 $ (7,205 ) Apr 10 - Dec 10 Put/Floor 1,000 Bbls WTI $ 60.00 $ 141 Jan 11 - Dec 11 Collar 5,000 Bbls WTI $ 65.00 $ 105.64 $ (1,483 ) (1) PEPL refers to Panhandle Eastern Pipe Line Company price and HSC refers to Houston Ship Channel price, both as quoted in Platts 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 represent approximately 40% of our equivalent oil and gas production for the remainder of 2010. In March2010, we entered into additional oil contracts relative to our 2011 production, as noted in the table above. Management has been authorized to hedge up to 50% of our anticipated equivalent oil and gas production for 2011. Subsequent to March31, 2010, we entered into additional derivative contracts relative to our 2011 oil 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 pric |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | |
3 Months Ended
Mar. 31, 2010 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 3. 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. Level 1 inputs are the highest priority and consist of unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for an asset or liability. The following tables provide fair value measurement information for certain assets and liabilities as of March31, 2010 and December31, 2009. Carrying Amount FairValue (Inthousands) March31, 2010: Financial Assets (Liabilities): Derivative instruments assets $ 47,497 $ 47,497 Derivative instruments liabilities $ (8,547 ) $ (8,547 ) 7.125% Notes due 2017 $ (350,000 ) $ (357,438 ) Floating rate convertible notes due 2023 $ (17,832 ) $ (40,397 ) Carrying Amount FairValue (Inthousands) December31, 2009: Financial Assets (Liabilities): Derivative instruments assets $ 1,238 $ 1,238 Derivative instruments liabilities $ (13,902 ) $ (13,902 ) Bank debt $ (25,000 ) $ (25,000 ) 7.125% Notes due 2017 $ (350,000 ) $ (354,375 ) Floating rate convertible notes due 2023 $ (17,793 ) $ (36,036 ) 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. Bank Debt and Notes Debt We had no bank debt at March31, 2010. The fair value of our bank debt at December31, 2009 was estimated to approximate the carrying amount because the floating rate interest rate paid on such debt was set for periods of three months or less. Notes The fair values for our 7.125% fixed rate notes were based on their last traded value before period end. There is not an observable market for our convertible notes. At March31, 2010 and December31, 2009, the closing price of our common stock (as defined by the indenture) exceeded the conversion rate of $28.59 attributable to the conversion feature; therefore, the fair value of the convertible notes at March31, 2010 and December31, 2009 included value attributable to both the face amount of the notes and the conversion feature. The fair value of the face amount of the notes was estimated to approximate the face value of the notes because the notes bear interest at the London Interbank Offered Rate, and reset quarterly. The fair value of the conversion feature was calculated using the conversion formula for the notes, based on the closing price per share for our common stock at March31, 2010 and December31, 2009. Derivative Instruments (Level 2) The fair values of our derivative instruments were estimated using internal discounted cash flow calcul |
CAPITAL STOCK
CAPITAL STOCK | |
3 Months Ended
Mar. 31, 2010 | |
CAPITAL STOCK | |
CAPITAL STOCK | 4. Capital Stock A summary of our common stock activity for the three months ended March31, 2010 follows: NumberofShares (inthousands) Issued Treasury Outstanding December31, 2009 83,542 83,542 Restricted shares issued under compensation plans, net of cancellations 264 264 Option exercises, net of cancellations 78 78 March31, 2010 83,884 83,884 Stock-based Compensation Our 2002 Stock Incentive Plan was approved by stockholders in May2003 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 the three months ended March31, 2010, we issued a total of 401,000 restricted shares to non-employee directors, officers, and other employees. Included in that amount are 396,000 shares issued to certain executives that are subject to market condition-based vesting determined by our stock price performance relative to a defined peer groups 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 May2006. The other shares granted in 2010 have service-based vesting schedules of five years. The following table presents restricted stock activity as of March31, 2010, and changes during the year: Outstanding as of January1, 2010 1,727,250 Vested (218,880 ) Granted 401,000 Canceled (49,220 ) Outstanding as of March31, 2010 1,860,150 The following table presents restricted unit activity as of March31, 2010 and changes during the year: Outstanding as of January1, 2010 649,843 Converted to Stock (2,336 ) Granted Canceled Outstanding as of March31, 2010 647,507 Vested included in outstanding 643,223 Vesting of restricted stock and units granted in years before 2006 is exclusively related to continued service of the grantee for one to five years. In certain cases, a three-year required holding period following vesting is also required. A restricted unit represents a right to an unrestricted share of common stock upon completion of defined vesting and holding periods. The restricted stock and stock unit agreements provide that grantees are entitled to receive dividends on unvested shares. Compensation expense for service-based vesting restricted shares or units is based upon amortization of the grant-date market value of the award. The fair value of the market condition-based restricted stock awards is based on the grant-date market value of the award utilizing a Monte Carlo simulation model to estimate the percentage of awards that will vest at the end of a three-year period. Compensation expense related to the restricted stock and unit awards is recognized ratably over the applicable vesting period. For the three months ended March31, 2010 and 2009, total compensation expense (includ |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | |
3 Months Ended
Mar. 31, 2010 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | 5. 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, and 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 three months ended March31, 2010 (in thousands): Asset retirement obligation at January1, 2010 $ 149,310 Liabilities incurred 538 Liability settlements and disposals (2,116 ) Accretion expense 1,973 Revisions of estimated liabilities Asset retirement obligation at March31, 2010 149,705 Less current obligation (21,821 ) Long-term asset retirement obligation $ 127,884 |
LONG-TERM DEBT
LONG-TERM DEBT | |
3 Months Ended
Mar. 31, 2010 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 6. Long-Term Debt Debt at March31, 2010 and December31, 2009 consisted of the following (in thousands): March31, 2010 December31, 2009 Bank debt $ $ 25,000 7.125% Notes due 2017 350,000 350,000 Floating rate convertible notes due 2023 (face value $19,450) 17,832 17,793 Total long-term debt $ 367,832 $ 392,793 Bank Debt We have a three-year senior secured revolving credit facility (credit facility). The credit facility provides for bank commitments of $800 million, with a borrowing base of $1 billion. 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 borrowing base of $1billion and bank commitments of $800million were reaffirmed in April2010. 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 agreement 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 March31, 2010, we were in compliance with all of the financial and non-financial covenants. At Cimarexs option, borrowings under the credit facility may bear interest at either (a)a London Interbank Offered Rate (LIBOR) plus 2 to 3 percent, based on borrowing base usage, or (b)the higher of (i)a prime rate, (ii)the federal funds effective rate plus 0.50 percent, or (iii)adjusted LIBOR, in each case plus an additional 1.125 to 2.125 percent based on borrowing base usage. At March31, 2010, there were no outstanding borrowings under the credit facility. We had letters of credit outstanding of $14.4million leaving an unused borrowing availability of $785.6million. 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 up to 35% of the original principal |
INCOME TAXES
INCOME TAXES | |
3 Months Ended
Mar. 31, 2010 | |
INCOME TAXES | |
INCOME TAXES | 7. Income Taxes The components of our provision for income taxes are as follows (in thousands): ThreeMonthsEnded March31, 2010 2009 Current provision (benefit) $ 33,364 $ (15,209 ) Deferred tax (benefit) 84,990 (269,752 ) $ 118,354 $ (284,961 ) We account for uncertainty in our income tax provisions in accordance with rulespromulgated by the FASB. At March31, 2010 we have 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. Our provision for income taxes differed from the U.S. statutory rate of 35% primarily due to state income taxes, non-deductible expenses, and special deductions. The effective income tax rate for the three months ended March31, 2010 was 36.7%. |
SUPPLEMENTAL DISCLOSURE OF CASH
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (in thousands) | |
3 Months Ended
Mar. 31, 2010 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (in thousands) | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (in thousands) | 8. Supplemental Disclosure of Cash Flow Information (in thousands): ThreeMonthsEnded March31, 2010 2009 Cash paid during the period for: Interest expense $ 1,371 $ 1,837 Interest capitalized 7,424 5,513 Income taxes 22,945 20 Cash received for income taxes 1,866 41,982 |
Earnings
Earnings (Loss) per Share and Comprehensive Income | |
3 Months Ended
Mar. 31, 2010 | |
Earnings (Loss) per Share and Comprehensive Income | |
Earnings (Loss) per Share and Comprehensive Income | 9. Earnings (Loss) per Share and Comprehensive Income Earnings (Loss) per Share We calculate earnings (loss) per share based on FASB guidance which holds that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities 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. 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): ThreeMonthsEndedMarch31, 2010 2009 Net income (loss) $ 204,361 $ (494,100 ) Less distributed earnings (dividends declared during the period) (6,759 ) (5,038 ) Undistributed earnings (loss) for the period $ 197,602 $ (499,138 ) Allocation of undistributed earnings(loss): Basic allocation to unrestricted common stockholders $ 191,740 $ (499,138 ) Basic allocation to participating securities $ 5,862 $ (2) Diluted allocation to unrestricted common stockholders $ 191,799 $ (499,138 ) Diluted allocation to participating securities $ 5,803 $ (2) Basic Shares Outstanding Unrestricted outstanding common shares 82,023 81,684 Add Participating securities: Restricted stock outstanding 1,860 1,613 Restricted stock units outstanding 648 651 Total participating securities 2,508 2,264 (2) Total basic shares outstanding 84,531 83,948 Fully Diluted Shares Unrestricted outstanding common shares 82,023 81,684 Incremental shares from assumed exercise of stock options 477 (1) Incremental shares from assumed conversion of the convertible senior notes 370 (1) Fully diluted common stock 82,870 81,684 Participating securities 2,508 2,264 (2) Total Fully Diluted Shares 85,378 83,948 Basic earnings (loss) per share Unrestricted common stockholders: Distributed earnings $ 0.08 $ 0.06 Undistributed earnings (loss) 2.34 (6.11 ) $ 2.42 $ (6.05 ) Participating securities: Distributed earnings $ 0.08 $ 0.06 Undistributed earnings 2.34 0.00 $ 2.42 $ 0.06 Fully diluted earnings (loss) per share Unrestricted common stockholders: Distributed earnings $ 0.08 $ 0.06 Undistributed earnings (loss) 2.31 (6.11 ) $ 2.39 $ (6.05 ) Participating securities: Distributed earnings $ 0.08 $ 0.06 Undistribut |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
3 Months Ended
Mar. 31, 2010 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 10. Commitments and Contingencies Litigation In January2009, the Tulsa County District Court issued a judgment totaling $119.6million in the H.B. Krug, et al versus HelmerichPayne,Inc. (HP) case. This lawsuit was originally filed in 1998 and addressed HPs conduct pertaining to a 1989 take-or-pay settlement, along with potential drainage issues and other related matters. Only $6.9million of the judgment pertained to damages, with the remainder being disgorgement of HPs estimated potential compounded profit since 1989 resulting from the noted damages. 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 HPs exploration and production business. In 2008 we had accrued litigation expense of $119.6million for this lawsuit. During 2009 and the first quarter of 2010, we have accrued an additional $9.4million and $2.2million, respectively. We have appealed the District Courts 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. 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 March31, 2010, we had commitments of $141.6million relating to construction of the gas processing plant of which $86.7million is subject to a construction contract. The total cost of the project will approximate $347million. 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 20 year period, commencing December, 2011. If no deliveries were made, the maximum amount that would be payable under the agreement would be approximately $43 million. We have drilling commitments of approximately $77.2million consisting of obligations to complete drilling wells in progress at March31, 2010. We also have minimum expenditure contractual commitments of $47.0million to secure the use of drilling rigs. At March31, 2010, we have a purchase commitment of $11.1 million for construction of an aircraft. The total cost of the aircraft is $12.3 million with an option to trade in our existing aircraft. The completion of the aircraft is expected to be no later than October30, 2010. At March31, 2010, we had firm sales contracts to deliver approximately 9.5Bcf of natural gas over the next twelve months. If this gas is not delivered, our financial commitment would be approximately $35.7million. This commitment will fluctuate due to price volatility and actual volumes delivered. However, we believe no significant financial commitment will be due based on our reserves and current p |
PROPERTY SALES AND ACQUISITIONS
PROPERTY SALES AND ACQUISITIONS | |
3 Months Ended
Mar. 31, 2010 | |
PROPERTY SALES AND ACQUISITIONS | |
PROPERTY SALES AND ACQUISITIONS | 11. Property Sales and Acquisitions During the first quarter of 2010 we had property acquisitions of $23.2 million, primarily for additional interests in our Anadarko Basin, Cana-Woodford shale play. In order to acquire and sell oil and gas properties in a tax efficient manner, we periodically enter into like-kind exchange tax-deferred transactions. This first quarter acquisition was structured to qualify as the first step of a reverse like-kind exchange. We utilized an exchange accommodation titleholder, a type of variable interest entity, for which we are the primary beneficiary. Accordingly, as of the acquisition date, we have consolidated the oil and gas assets and reserves, as well as production, revenues and expenses attributable to these properties. Subsequent to March 31, 2010 we agreed to acquire additional interests in our Cana-Woodford shale play for approximately $9.4 million. We had no significant property sales during the first quarter of 2010. |
Document and Entity Information
Document and Entity Information | |
3 Months Ended
Mar. 31, 2010 | |
Document and Entity Information | |
Entity Registrant Name | CIMAREX ENERGY CO |
Entity Central Index Key | 0001168054 |
Document Type | 10-Q |
Document Period End Date | 2010-03-31 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 83,883,540 |
Document Fiscal Year Focus | 2,010 |
Document Fiscal Period Focus | Q1 |