Exhibit 99.1
Cimarex Energy Announces Fourth-Quarter 2003 Earnings of $0.43 Per Share
DENVER, Feb. 11 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC)
today reported fourth-quarter 2003 net income of $18.3 million, or $0.43 per
diluted share. This compares to fourth-quarter 2002 net income of $15.8 million,
or $0.38 per diluted share.
Revenues from oil and gas sales in the fourth quarter of 2003 were $77.1
million, compared to $64.4 million in the same period of 2002. Cash flow from
operations for the fourth quarter of 2003 was $50.5 million, versus $45.6
million in the same period of 2002.(1) Fourth-quarter 2003 financial results
were positively impacted by a 4 percent increase in production volumes and a 15
percent increase in gas and oil prices.
Total daily production volumes averaged 187 million cubic feet (MMcf)
equivalent during the fourth quarter of 2003 versus 180 MMcf equivalent a year
earlier. The increase is attributable to positive drilling results of 2003.
Fourth quarter 2003 production rose 3 percent from 181 MMcf equivalent per day
in the third quarter. The accompanying tables detail quarterly and year-to-date
volumes and prices.
Exploration and development expenditures during the fourth quarter of 2003
totaled $58.5 million, up from $36.5 million for the fourth quarter 2002.
Increased capital expenditures reflect expansion of the Company's drilling
program. In the fourth quarter of 2003, there were 60 gross (37 net) wells
drilled, up from 48 gross (30 net) wells in the third quarter.
Full-year 2003
For the full year 2003, Cimarex reported net income of $94.6 million, or
$2.22 per diluted share. This compares to net income for 2002 of $39.8 million,
or $1.31 per share.
Oil and gas sales during 2003 totaled $324.1 million. For 2002, oil and
gas sales were $157.3 million. Cash flow from operations for 2003 increased to
$217.0 million from $110.7 million in 2002.(1) The increases reflect 36 percent
higher production volumes, 60 percent higher gas prices and 17 percent higher
oil prices.
On September 30, 2002, Cimarex acquired 100 percent of the outstanding
common stock of Key Production Company, Inc. (Key) in a tax-free exchange. The
acquisition was accounted for using the purchase method of accounting. The
consolidated results of operations and cash flows subsequent to September 30,
2002 include the acquisition of Key.
Year-end 2003 proved oil and gas reserves increased by 3 percent to 422.2
billion cubic feet (Bcf) equivalent and were comprised of 337.3 Bcf of gas and
14.1 million barrels of oil. Of total proved reserves, 99.4 percent were proved
developed.
The estimated present value of the future net cash flow before income
taxes from year-end 2003 reserves, calculated under guidelines established by
the Securities and Exchange Commission and using a 10 percent discount rate, is
$1.03 billion. For purposes of this calculation, our average gas price was $5.54
per Mcf and oil was $30.49 per barrel. The standardized measure of discounted
cash flows after income taxes was $711.6 million.
Capital expenditures for exploration and development during 2003 were
$160.6 million, up from $82.5 million during 2002. For all of 2003, we drilled
178 gross (97 net) wells, realizing a success rate of 81 percent.
During the fourth quarter of 2003, Emerging Issues Task Force ("EITF")
issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs" was
adopted. As a result, certain reclassifications have been made for oil and gas
sales, marketing revenues and expenses, and gas gathering and transportation
costs. Adoption of EITF No. 00-10 has no effect on net income or cash flow from
operations.
(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
A conference call with management has been scheduled for 11 a.m. Mountain
Time (1 p.m. Eastern), Wednesday, February 11, 2004. 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 oil and gas 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 September 30, 2003.
PRICE AND PRODUCTION DATA
For the Three Months Ended For the Year Ended
December 31, December 31,
2003 2002 2003 2002
Gas Production:
Total
production - Mcf 13,352,012 12,913,384 50,552,207 41,299,762
Gas volume -
Mcf per day 145,131 140,363 138,499 113,150
Gas price -
per Mcf $ 4.36 $ 3.79 $ 4.96 $ 3.10
Oil Production
(including NGL):
Total production -
barrels 637,922 603,830 2,503,584 1,171,104
Oil volume -
barrels per day 6,934 6,563 6,859 3,209
Oil price - per
barrel $ 29.60 $ 25.54 $ 29.30 $ 24.97
Oil,
Condensate
and NGLs Gas Total
PROVED RESERVES (MBbls) (MMcf) (MMcfe)
December 31, 2002 15,025 318,627 408,777
Revisions of previous estimates 41 6,699 6,943
Extensions and discoveries 1,625 61,545 71,296
Production (2,504) (50,552) (65,574)
Purchases 43 1,320 1,581
Sales (93) (295) (856)
December 31, 2003 14,137 337,344 422,167
Proved Developed -
December 31,2003 13,876 336,230 419,488
Oil,
Condensate
and NGLs Gas Total
PROVED RESERVES BY REGION (MBbls) (MMcf) (MMcfe)
Mid-Continent 2,951 172,150 189,855
Kansas 2,769 72,569 89,182
Permian Basin 3,307 36,959 56,800
Gulf Coast 1,916 35,829 47,328
Western 3,194 19,837 39,002
14,137 337,344 422,167
CAPITALIZED COSTS INCURRED For the Year Ended
December 31,
2003 2002
(in thousands)
Acquisitions of Properties
Proved $ 2,032 $ 286,041
Unproved 9,330 16,008
Exploration 50,350 29,181
Development 100,915 37,273
Oil and gas expenditures 162,627 368,503
Sale Proceeds (694) (151)
$ 161,933 $ 368,352
RECONCILIATION OF CASH FLOW FROM OPERATIONS
For the Three Months Ended For the Year Ended
December 31, December 31,
2003 2002 2003 2002
(in thousands) (in thousands)
Net cash provided by
operating activities $ 35,153 $ 32,826 $206,313 $104,455
Increase (decrease) in
operating assets and
liabilities 15,311 12,751 10,638 6,206
Cash flow from
operations $ 50,464 $ 45,577 $216,951 $110,661
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 Ended For the Year Ended
December 31, December 31,
2003 2002 2003 2002
(In thousands, except per share data)
Revenues:
Gas sales $ 58,205 $ 48,950 $ 250,764 $ 128,060
Oil sales 18,884 15,423 73,355 29,239
Marketing, gathering
and transportation 28,697 12,876 130,156 52,350
Other (165) (123) (63) (5)
105,621 77,126 454,212 209,644
Operating expenses:
Depreciation, depletion
and amortization 24,098 21,086 88,774 49,231
Asset retirement
obligation accretion 272 -- 1,009 --
Marketing 28,619 12,480 129,503 49,671
Gas gathering and
transportation 2,262 2,502 7,472 7,918
Production 8,294 7,756 31,801 19,427
Taxes other than income 8,036 4,794 27,485 13,154
General and
administrative 5,206 3,700 17,526 8,568
Stock compensation 474 125 1,824 125
Financing costs -
Interest expense 287 550 1,285 620
Capitalized interest -- (206) (304) (206)
Interest income (127) (49) (332) (243)
77,421 52,738 306,043 148,265
Income before income tax
expense and cumulative
effect of a change in
accounting principle 28,200 24,388 148,169 61,379
Income tax expense 9,896 8,601 55,141 21,560
Income before cumulative
effect of a change in
accounting principle 18,304 15,787 93,028 39,819
Cumulative effect of a
change in accounting
principle, net of tax -- -- 1,605 --
Net income $ 18,304 $ 15,787 $ 94,633 $ 39,819
Earnings per share:
Basic -
Income before
cumulative effect
of a change in
accounting principle $ 0.44 $ 0.39 $ 2.24 $ 1.32
Cumulative effect of a
change in accounting
principle, net of tax -- -- 0.04 --
Net income $ 0.44 $ 0.39 $ 2.28 $ 1.32
Diluted -
Income before
cumulative effect of
change in accounting
principle $ 0.43 $ 0.38 $ 2.18 $ 1.31
Cumulative effect of
change in accounting
principle, net of tax -- -- 0.04 --
Net income $ 0.43 $ 0.38 $ 2.22 $ 1.31
Weighted average shares
outstanding:
Basic 41,441 40,908 41,521 30,239
Diluted 42,668 41,217 42,640 30,317
CASH FLOW STATEMENTS (unaudited)
For the Three Months Ended For the Year Ended
December 31, December 31,
2003 2002 2003 2002
(In thousands)
Cash flows from
operating activities:
Net income $ 18,304 $ 15,787 $ 94,633 $ 39,819
Adjustment to reconcile
net income to net cash
provided by operating
activities:
Depreciation,
depletion and
amortization 24,098 21,086 88,774 49,231
Deferred income taxes 6,453 8,499 30,590 21,428
Cumulative effect of
a change in accounting
principle, net of tax -- -- (1,605) --
Asset retirement
obligation accretion 272 -- 1,009 --
Amortization of
restricted stock
compensation 498 125 1,914 125
Income tax benefit
related to stock
options exercised 642 -- 1,203 --
Other 197 80 433 58
Changes in operating assets
and liabilities:
(Increase) decrease in
accounts receivable (11,744) (13,516) (10,123) (15,996)
(Increase) decrease
in inventories 44 571 (2,714) 1,770
(Increase) decrease in
other current assets (2,627) (2,260) (3,242) (934)
Increase (decrease)
in accounts and
revenue payable (3,570) 12,310 (9,310) 17,010
Increase in accrued
liabilities 3,318 (10,265) 15,626 (8,321)
Increase (decrease) in
other liabilities (732) 409 (875) 265
Net cash provided
by operating
activities 35,153 32,826 206,313 104,455
Cash flows from
investing activities:
Oil and gas
expenditures (52,605) (20,540) (150,501) (66,458)
Acquisition of oil and
gas properties 499 -- (2,032) --
Merger related costs -- (179) -- (5,079)
Cash received in
connection with
acquisition of Key -- -- -- 2,135
Proceeds from sale of
assets 810 313 1,041 313
Other capital
expenditures (1,458) (1,694) (8,149) (2,596)
Net cash used by
investing
activities (52,754) (22,100) (159,641) (71,685)
Cash flows from
financing activities:
Long-term borrowings -- 41,016 -- 41,016
Payments on long-term
debt, net -- (45,016) (32,000) (45,016)
Financing costs -- (927) -- (927)
Change in amount due (to)
from Helmerich & Payne,
Inc -- 819 -- (13,089)
Common stock reacquired
and retired -- -- (8) --
Proceeds from issuance
of common stock 1,163 403 3,429 403
Net cash provided
(used) by financing
activities 1,163 (3,705) (28,579) (17,613)
Net change in cash and
cash equivalents (16,438) 7,021 18,093 15,157
Cash and cash equivalents
at beginning of period 56,858 15,306 22,327 7,170
Cash and cash equivalents
at end of period $ 40,420 $ 22,327 $ 40,420 $ 22,327
BALANCE SHEETS (unaudited)
December 31, December 31,
Assets 2003 2002
(In thousands, except share data)
Current assets:
Cash and cash equivalents $ 40,420 $ 22,327
Receivables, net 68,293 58,276
Inventories 6,700 3,986
Deferred income taxes 1,631 2,073
Other current assets 6,160 2,949
Total current assets 123,204 89,611
Oil and gas properties at cost, using
the full cost method of accounting:
Proved properties 1,331,095 1,172,488
Unproved properties and properties under
development, not being amortized 39,370 23,941
1,370,465 1,196,429
Less - accumulated depreciation,
depletion and amortization (746,161) (665,711)
Net oil and gas properties 624,304 530,718
Fixed assets, net 12,092 6,849
Goodwill 44,967 45,836
Other assets, net 941 1,272
$ 805,508 $ 674,286
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 18,394 $ 22,339
Accrued liabilities 48,339 21,892
Revenue payable 18,776 24,022
Total current liabilities 85,509 68,253
Long-term debt -- 32,000
Deferred income taxes 155,293 127,023
Asset retirement obligation 16,463 --
Deferred compensation 11,724 --
Other liabilities 1,779 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,
41,063,653 and 41,410,308 shares
issued and outstanding, respectively 411 414
Paid-in capital 237,430 243,420
Unearned compensation (9,540) (10,814)
Retained earnings 306,439 211,860
534,740 444,880
$ 805,508 $ 674,286
SOURCE Cimarex Energy Co.
-0- 02/11/2004
/CONTACT: Paul Korus of Cimarex Energy Co., +1-303-295-3995/
/First Call Analyst: /
/FCMN Contact: mrohrer@cimarex.com /
/Web site: http://www.cimarex.com /
(XEC)
CO: Cimarex Energy Co.
ST: Colorado
IN: OIL
SU: ERN CCA MAV TNM