Exhibit 99.1
Cimarex Energy Announces First-Quarter 2004 Earnings of $0.70 Per Share
DENVER, May 4 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC)
today reported first-quarter 2004 net income of $29.9 million, or $0.70 per
diluted share. This compares to first-quarter 2003 earnings before cumulative
effect of a change in accounting principle of $31.1 million, or $0.74 per
diluted share.
Revenues from oil and gas sales in the first quarter of 2004 were
$95.5 million, compared to $91.2 million in the same period of 2003. Cash
flow from operations for the first quarter of 2004 was $69.5 million, versus
$65.6 million in the same period of 2003.(1) First-quarter 2004 financial
results were positively impacted by a 15 percent increase in gas production
volumes, and a 12 percent increase in oil prices. These increases were
offset by the effect of average realized gas prices dropping from $5.86 per
Mcf for the first quarter of 2003 to $5.26 per Mcf for the three months ended
March 31, 2004. Also, daily oil volumes dropped slightly between the two
periods due to natural declines, falling from 7,212 barrels to 6,886 barrels.
Total daily production volumes averaged 196.6 million cubic feet (MMcf)
equivalent during the first quarter of 2004 versus 178.8 MMcf equivalent a
year earlier. The increase is attributable to positive drilling results
during 2003 and the first quarter of 2004. First-quarter 2004 production rose
five percent from 186.7 MMcf equivalent per day in the fourth quarter of 2003.
The accompanying tables detail quarterly volumes and prices.
Other revenues of $3.6 million for the first quarter of 2004 include
$3.0 million ($0.04 per diluted share, net of tax) of litigation settlements
for which we were plaintiffs.
Higher expenses were realized during the first three months of 2004
compared to the first quarter of 2003, resulting from the growth in the number
of properties we manage, rising field operating costs and higher costs
associated with exploration and development.
Exploration and development expenditures during the first quarter of 2004
totaled $68.6 million, up from $27.0 million for the first quarter 2003.
Increased capital expenditures reflect expansion of our drilling program. In
the first quarter of 2004, we participated in drilling 44 gross wells, with an
overall success rate of 86 percent. On a net basis, 18 of 22 wells drilled
during the first quarter were successful.
(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), Tuesday, May 4, 2004. Interested parties may access
the call by dialing (888) 858-4710 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 (877) 519-4471 and entering conference code 4713923.
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, 2003.
PRICE AND PRODUCTION DATA
For the Three Months Ended
March 31,
-----------------------------
2004 2003
---------- ----------
Gas Production:
Total production -- Mcf 14,130,125 12,196,911
Gas volume -- Mcf per day 155,276 135,521
Gas price -- per Mcf $5.26 $5.86
Oil Production (including NGL):
Total production -- barrels 626,617 649,121
Oil volume -- barrels per day 6,886 7,212
Oil price -- per barrel $33.80 $30.31
CAPITALIZED COSTS INCURRED
For the Three Months Ended
March 31,
-----------------------------
2004 2003
---------- ----------
(in thousands)
Acquisitions of proved properties $9 $576
Exploration and development 68,619 27,014
------- -------
Oil and gas expenditures 68,628 27,590
Sale proceeds (35) --
------- -------
$68,593 $27,590
======= =======
RECONCILIATION OF CASH FLOW FROM OPERATIONS
For the Three Months Ended
March 31,
-----------------------------
2004 2003
---------- ----------
(in thousands)
Net cash provided by operating activities $63,047 $53,833
Increase (decrease) in operating assets
and liabilities 6,405 11,722
------- -------
Cash flow from operations $69,452 $65,555
======= =======
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
March 31,
-----------------------------
2004 2003
---------- ----------
(In thousands, except per share data)
Revenues:
Gas sales $74,332 $71,489
Oil sales 21,178 19,672
Marketing sales 36,761 45,407
Other 3,648 (9)
------- -------
135,919 136,559
------- -------
Costs and expenses:
Depreciation, depletion and amortization 26,338 21,117
Asset retirement obligation accretion 290 241
Marketing purchases 36,300 44,993
Transportation 2,355 1,259
Production 9,469 6,988
Taxes other than income 8,365 7,171
General and administrative 4,509 4,067
Stock compensation 468 466
Financing costs --
Interest expense 296 422
Capitalized interest -- (265)
Interest income (87) (29)
------- -------
88,303 86,430
------- -------
Income before income tax expense and
cumulative effect of a change in
accounting principle 47,616 50,129
Income tax expense 17,751 18,986
------- -------
Income before cumulative effect of
a change in accounting principle 29,865 31,143
Cumulative effect of a change in
accounting principle, net of tax -- 1,605
------- -------
Net income $29,865 $32,748
======= =======
Earnings per share:
Basic --
Income before cumulative effect of a
change in accounting principle $0.72 $0.75
Cumulative effect of a change in
accounting principle, net of tax -- 0.04
------- -------
Net income $0.72 $0.79
======= =======
Diluted --
Income before cumulative effect of
change in accounting principle $0.70 $0.74
Cumulative effect of change in
accounting principle, net of tax -- 0.04
------- -------
Net income $0.70 $0.78
======= =======
Weighted average shares outstanding:
Basic 41,305 41,479
======= =======
Diluted 42,615 42,027
======= =======
CASH FLOW STATEMENTS (unaudited)
For the Three Months Ended
March 31,
-----------------------------
2004 2003
---------- ----------
(In thousands)
Cash flows from operating activities:
Net income $29,865 $32,748
Adjustment to reconcile net income
to net cash provided by
operating activities:
Depreciation, depletion and
amortization 26,338 21,117
Deferred income taxes 10,924 12,136
Cumulative effect of a change in
accounting principle, net of tax -- (1,605)
Asset retirement obligation accretion 290 241
Amortization of restricted
stock compensation 468 466
Income tax benefit related to
stock options exercised 1,576 257
Other (9) 195
Changes in operating assets
and liabilities:
Increase in accounts receivable (13,435) (15,460)
Increase in inventories (2,677) (1,016)
(Increase) decrease in other
current assets 1,837 (964)
Increase in accounts and
revenue payable 9,354 277
Increase (decrease) in accrued
liabilities (1,511) 5,414
Increase in other liabilities 27 27
------- -------
Net cash provided by
operating activities 63,047 53,833
------- -------
Cash flows from investing activities:
Oil and gas expenditures (67,376) (24,769)
Acquisition of oil and gas
properties (9) (576)
Proceeds from sale of assets 113 47
Other capital expenditures (1,952) (5,210)
------- -------
Net cash used in investing
activities (69,224) (30,508)
------- -------
Cash flows from financing activities:
Payments on long-term debt, net -- (27,000)
Common stock reacquired and retired (121) (1)
Proceeds from issuance of common stock 4,371 938
------- -------
Net cash provided by (used in)
financing activities 4,250 (26,063)
------- -------
Net change in cash and cash equivalents (1,927) (2,738)
Cash and cash equivalents at
beginning of period 40,420 22,327
------- -------
Cash and cash equivalents at end of
period $38,493 $19,589
======= =======
BALANCE SHEETS (Unaudited)
March 31, December 31,
Assets 2004 2003
---------- ------------
(In thousands, except share data)
Current assets:
Cash and cash equivalents $38,493 $40,420
Receivables, net 81,767 68,293
Inventories 9,377 6,700
Deferred income taxes 1,557 1,631
Other current assets 4,323 6,160
--------- ---------
Total current assets 135,517 123,204
--------- ---------
Oil and gas properties at cost, using
the full cost method of accounting:
Proved properties 1,386,258 1,331,095
Unproved properties and properties
under development, not being amortized 53,410 39,370
--------- ---------
1,439,668 1,370,465
Less -- accumulated depreciation,
depletion and amortization (771,743) (746,161)
--------- ---------
Net oil and gas properties 667,925 624,304
--------- ---------
Fixed assets, net 13,256 12,092
Goodwill 44,967 44,967
Other assets, net 865 941
--------- ---------
$862,530 $805,508
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $22,208 $18,394
Accrued liabilities 49,556 48,339
Revenue payable 24,316 18,776
--------- ---------
Total current liabilities 96,080 85,509
--------- ---------
Deferred income taxes 164,568 155,293
--------- ---------
Other liabilities 31,147 29,966
--------- ---------
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,
41,370,235 and 41,063,653 shares
issued and outstanding, respectively 413 411
Paid-in capital 243,254 237,430
Unearned compensation (9,236) (9,540)
Retained earnings 336,304 306,439
--------- ---------
570,735 534,740
--------- ---------
$862,530 $805,508
========= =========
SOURCE Cimarex Energy Co.
-0- 05/04/2004
/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: CCA ERN