Cimarex Energy Announces Third-Quarter 2003 Earnings of $0.53 Per Share
DENVER, Nov. 5 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC)
today reported third-quarter 2003 net income of $22.5 million, or $0.53 per
diluted share. This compares to third-quarter 2002 net income of $9.9
million, or $0.37 per diluted share.
Revenues from oil and gas sales in the third quarter of 2003 were $77.6
million, compared to $31.5 million in the same period of 2002. Cash flow from
operations for the third quarter of 2003 was $52.5 million, versus $24.4
million in the same period of 2002.(1) Revenues and cash flow in the third
quarter of 2003 were positively impacted by a 57 percent increase in
production volumes as well as a 63 percent increase in gas prices and an 18
percent increase in oil prices.
Total daily production volumes averaged 181 million cubic feet (MMcf)
equivalent during the third quarter of 2003 versus 115 MMcf equivalent a year
earlier. The increase is principally attributable to the acquisition of Key
Production Company, Inc. on September 30, 2002. Third quarter 2003 production
rose 5 percent from 172 MMcf equivalent per day in the second quarter. This
increase is due to the positive drilling results realized so far this year.
The accompanying tables detail quarterly and year-to-date volumes and prices.
Capital expenditures for exploration and development during the third
quarter of 2003 totaled $44.7 million, up from $20.8 million for the third
quarter 2002. Increased capital expenditures reflect expansion of the
Company's drilling program. In the third quarter of 2003, there were 48 gross
(30 net) wells drilled, up from 37 gross (17 net) wells in the second quarter.
In addition to increasing capital investment, strong cash flow from
operations enabled us to increase our cash balance to $56.9 million as of
September 30, 2003.
Year-to-Date 2003
For the first nine months of 2003, Cimarex reported net income of $76.3
million, or $1.81 per diluted share. This compares to net income in the first
nine months of 2002 of $24.0 million, or $0.90 per share.
Revenues from oil and gas sales for the first nine months of 2003 were
$241.5 million. For the same period of 2002, oil and gas sales were $87.5
million. Cash flow from operations for the nine months ended September 30,
2003 increased to $166.5 million from $65.1 million in the same period of
2002.(1) The increases reflect 52 percent higher production volumes, 94
percent higher gas prices and 19 percent higher oil prices.
Capital expenditures for exploration and development during the first nine
months of 2003 were $102.1 million, up from $45.9 million during the first
three quarters of 2002. For all of 2003, exploration and development
expenditures are currently projected to total $150-$155 million. We drilled
118 gross (61 net) wells during the first nine months of 2003, realizing a
success rate of 78%. We expect to drill approximately 60 gross wells in the
last quarter.
(1) Cash Flow from Operations is a non-GAAP financial measure that
represents "Net Cash Provided By Operating Activities" adjusted for
the change in operating assets and liabilities. See below for a
reconciliation of the related amounts.
Conference call and web cast
The third quarter earnings conference call has been scheduled for 11 a.m.
Mountain Time (1 p.m. Eastern), Wednesday, November 5, 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. In addition, a
listen-only web cast of the call will be provided at www.cimarex.com . Please
go to the website at least ten minutes early to register and to download any
necessary audio software. If you are unable to participate in the live
broadcast of the call, an audio replay will be available by dialing
(800) 642-1687 and entering conference code 2934307.
Cimarex Energy Co. is an independent natural gas and crude oil exploration
and production company with operations focused in the 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
annual report on Form 10-K filed for the year ended December 31, 2002, and the
report filed on Form 10-Q for the quarter ended June 30, 2003.
PRICE AND PRODUCTION DATA
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Gas Production:
Total
production
- Mcf 12,965,858 9,378,361 37,200,195 28,386,378
Gas volume -
Mcf per day 140,933 101,939 136,264 103,979
Gas price -
per Mcf $4.62 $2.84 $5.04 $2.60
Oil Production
(including NGL):
Total
production
- barrels 611,400 198,179 1,865,662 567,274
Oil volume -
barrels per
day 6,646 2,154 6,834 2,078
Oil price -
per barrel $28.87 $24.57 $29.00 $24.36
CAPITALIZED COSTS INCURRED
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
(in thousands) (in thousands)
Sale Proceeds $-- $-- $(46) $--
Acquisitions of
proved properties 362 -- 2,531 --
Exploration and
development 44,727 20,797 102,140 45,918
Total costs
incurred $45,089 $20,797 $104,625 $45,918
RECONCILIATION OF CASH FLOW FROM OPERATIONS
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
(in thousands) (in thousands)
Net cash provided
by operating
activities $51,862 $41,412 $171,160 $71,629
Increase
(decrease) in
operating assets
and liabilities 624 (16,997) (4,673) (6,545)
Cash flow from
operations $52,486 $24,415 $166,487 $65,084
Management believes that the non-GAAP measure of cash flow from
operations is useful information for investors because it is used
internally and is accepted by the investment community as a means of
measuring the company's ability to fund its capital program. It is also
used by professional research analysts in providing investment
recommendations pertaining to companies in the oil and gas exploration
and production industry.
INCOME STATEMENTS (unaudited)
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
2003 2002 2003 2002
(In thousands, except per share data)
Revenues:
Gas sales $59,956 $26,626 $187,364 $73,695
Oil sales 17,652 4,870 54,105 13,816
Marketing, gathering and
transportation 34,337 20,222 105,989 44,888
Other 168 90 102 118
112,113 51,808 347,560 132,517
Operating expenses:
Depreciation, depletion
and amortization 22,672 10,158 64,676 28,145
Asset retirement
obligation accretion 241 -- 737 --
Marketing, gathering and
transportation 34,192 19,339 105,063 42,606
Production 8,364 4,015 23,507 11,671
Taxes other than income 6,131 2,733 19,449 8,360
General and administrative 4,181 1,699 12,320 4,868
Stock compensation 448 -- 1,350 --
Financing costs -
Interest expense 302 (12) 998 70
Capitalized interest -- -- (304) --
Interest income (123) (78) (205) (194)
76,408 37,854 227,591 95,526
Income before income tax
expense and cumulative
effect of a change in
accounting principle 35,705 13,954 119,969 36,991
Income tax expense 13,164 4,024 45,245 12,959
Income before cumulative
effect of a change in
accounting principle 22,541 9,930 74,724 24,032
Cumulative effect of a
change in accounting
principle, net of tax -- -- 1,605 --
Net income $22,541 $9,930 $76,329 $24,032
Earnings per share:
Basic -
Income before cumulative
effect of a change
in accounting principle $0.54 $0.37 $1.80 $0.90
Cumulative effect of a
change in accounting
principle, net of tax -- -- 0.04 --
Net income $0.54 $0.37 $1.84 $0.90
Diluted -
Income before cumulative
effect of change in
accounting principle $0.53 $0.37 1.77 $0.90
Cumulative effect of
change in accounting
principle, net of tax -- -- 0.04 --
Net income $0.53 $0.37 $1.81 $0.90
Weighted average shares
outstanding:
Basic 41,612 26,745 41,545 26,643
Diluted 42,297 26,749 42,195 26,644
CASH FLOW STATEMENTS (unaudited)
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
2003 2002 2003 2002
(In thousands)
Cash flows from operating
activities:
Net income $22,541 $9,930 $76,329 $24,032
Adjustment to reconcile
net income to net cash
provided by operating
activities:
Depreciation,
depletion and
amortization 22,672 10,158 64,676 28,145
Deferred income taxes 6,410 4,567 24,137 12,929
Cumulative effect of
a change in accounting
principle, net of tax -- -- (1,605) --
Asset retirement
obligation accretion 241 -- 737 --
Amortization of
restricted stock
compensation 513 -- 1,416 --
Income tax benefit
related to stock
options exercised (112) -- 561 --
Other 221 (240) 236 (22)
Changes in operating
assets and liabilities:
(Increase) decrease
in accounts receivable (388) 5,212 1,621 (2,480)
(Increase) decrease
in inventories (1,512) 145 (2,758) 1,199
(Increase) decrease
in other current
assets (31) 2,770 (615) 1,326
Increase (decrease)
in accounts and
revenue payable 347 1,836 (5,740) 4,700
Increase in accrued
liabilities 855 7,181 12,308 1,944
Increase (decrease)
in other liabilities 105 (147) (143) (144)
Net cash provided
by operating
activities 51,862 41,412 171,160 71,629
Cash flows from
investing activities:
Oil and gas expenditures (41,627) (20,467) (97,896) (45,918)
Acquisition of oil and
gas properties (362) -- (2,531) --
Merger related costs -- (4,900) -- (4,900)
Cash received in
connection with
acquisition of Key -- 2,135 -- 2,135
Proceeds from sale of
assets 67 -- 231 --
Other capital expenditures (804) 262 (6,691) (902)
Net cash used by
investing activities (42,726) (22,970) (106,887) (49,585)
Cash flows from
financing activities:
Payments on long-term
debt, net -- -- (32,000) --
Change in amount due
(to) from Helmerich &
Payne, Inc. -- (6,319) -- (13,908)
Common stock reacquired
and retired (3) -- (8) --
Proceeds from issuance
of common stock 235 -- 2,266 --
Net cash provided
(used) by financing
activities 232 (6,319) (29,742) (13,908)
Net change in cash and
cash equivalents 9,368 12,123 34,531 8,136
Cash and cash equivalents
at beginning of period 47,490 3,183 22,327 7,170
Cash and cash equivalents
at end of period $56,858 $15,306 $56,858 $15,306
BALANCE SHEETS
September 30, December 31,
Assets 2003 2002
(unaudited) (audited)
(In thousands, except share data)
Current assets:
Cash and cash equivalents $56,858 $22,327
Receivables, net 56,510 58,276
Inventories 6,744 3,986
Deferred income taxes 1,741 2,073
Other current assets 3,533 2,949
Total current assets 125,386 89,611
Oil and gas properties at cost, using
the full cost method of accounting:
Proved properties 1,268,952 1,172,488
Unproved properties and properties
under development, not being amortized 43,325 23,941
1,312,277 1,196,429
Less - accumulated depreciation,
depletion and amortization (722,693) (665,711)
Net oil and gas properties 589,584 530,718
Fixed assets, net 11,617 6,849
Goodwill 44,967 45,836
Other assets, net 1,011 1,272
$772,565 $674,286
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $18,160 $22,339
Accrued liabilities 38,574 21,892
Revenue payable 22,580 24,022
Total current liabilities 79,314 68,253
Long-term debt -- 32,000
Deferred income taxes 149,641 127,023
Other liabilities 17,830 2,130
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,
41,638,226 and 41,410,308 shares
issued and outstanding, respectively 416 414
Paid-in capital 247,188 243,420
Unearned compensation (9,959) (10,814)
Retained earnings 288,135 211,860
525,780 444,880
$772,565 $674,286
SOURCE Cimarex Energy Co.
-0- 11/05/2003
/CONTACT: Paul Korus of Cimarex Energy Co., +1-303-295-3995/
/Web site: http://www.cimarex.com /
(XEC)
CO: Cimarex Energy Co.
ST: Colorado
IN: OIL
SU: ERN CCA