Exhibit 99.1
Cimarex Announces Fourth-Quarter Production Volumes, Year-end Proved Reserves,
2008 Guidance and Provides Operations Update
DENVER, Feb. 7 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC)
today announced that fourth-quarter 2007 oil and gas production volumes averaged
471.1 million cubic feet equivalent per day (MMcfe/d), up 7% from the
fourth-quarter 2006 average of 440.9 MMcfe/d.
Reflecting positive results from new horizontal oil wells in southeast New
Mexico and West Texas, fourth-quarter oil production grew 17% to an average of
21,680 barrels per day. Gas production in the latest quarter averaged 341.1
million cubic feet per day (MMcf/d), an increase of 4% from the fourth-quarter
2006 average of 329.4 MMcf/d.
Fourth-quarter 2007 prices are expected to be in the range of $7.65 to $7.75
per thousand cubic feet of gas and $87.85 to $88.35 per barrel of oil. Gas price
realizations benefited from strong prices for natural gas liquids.
Full-year 2007 oil and gas production volumes grew to 451 MMcfe/d from 449
MMcfe/d in 2006. Oil production increased 14% to 20,399 barrels per day and gas
production decreased four percent to 328.6 MMcf per day. The decline in gas
volumes resulted primarily from decreased investment in the Gulf of Mexico and
property sales. The increase in oil volumes is principally a result of
successful exploration and development drilling in the Permian Basin.
Proved Reserves
Year-end 2007 proved reserves totaled 1.472 trillion cubic feet equivalent
(Tcfe), up from 1.449 Tcfe at year-end 2006. After adjusting for 123 billion
cubic feet equivalent (Bcfe) associated with 2007 property sales, proved
reserves increased 11% over year-end 2006. Proved reserves are 76% gas and 79%
proved developed.
Reserve additions totaled 311 Bcfe and replaced 189% of 2007 production.
Reserves added by drilling and revisions totaled 300 Bcfe and replaced 182% of
production.
December 31, 2007
--------------------------------------
Gas Oil Total
-------- -------- --------
(Bcf) (MBbl) (Bcfe)
Total proved
reserves
Beginning of year 1,090.4 59,797 1,449.2
Revisions of
previous estimates 50.0 1,251 57.5
Extensions and
discoveries 162.1 13,361 242.3
Purchase of reserves 10.6 99 11.2
Production (119.9) (7,446) (164.6)
-------- -------- --------
Sales of properties (70.5) (8,812) (123.4)
End of year 1,122.7 58,250 1,472.2
Proved developed
reserves 848 .0 51,497 1,157.0
2007 Capital Expenditures ($ millions)
Acquisition of properties $40.9
Exploration and development 982.5
--------
Total oil and gas expenditures $1,023.4
2008 Guidance
Cimarex's exploration and development (E&D) capital expenditures for 2008
are projected to range from $1.1-$1.3 billion. The actual amount invested will
be highly dependent on commodity prices and rig rates.
2008 E&D
($ in millions) Estimate 2007 E&D
--------------- --------------
Mid-Continent $520 44% $385 39%
Permian 450 38% 368 37%
Gulf Coast/GOM 180 15% 225 23%
Western/Other 30 3% 5 1%
--------------- --------------
$1,200 100% $983 100%
First-quarter 2008 production is projected to range between 458-468 MMcfe/d
which excludes approximately 11 MMcfe/d for the Spraberry and Gulf of Mexico
Main Pass property sales. Full-year 2008 production is projected to be in the
range of 465-485 MMcfe/d, or a 5-10% increase over 2007 after adjusting for
property sales.
Exploration and Development Activity
Cimarex drilled 452 gross (281 net) wells during 2007, completing 91% as
producers. Exploration and development (E&D) capital investment for 2007 totaled
approximately $983 million focused on oil and gas plays principally located in
the Mid-Continent, Permian Basin and Gulf Coast areas of the United States.
Drilling activity remains active with 31 operated rigs currently running.
Mid-Continent
Cimarex drilled 237 gross (134 net) wells in the Mid-Continent region during
2007, completing 95% as producers. Mid-Continent drilling investment of $385
million accounted for 39% of total E&D capital. Fourth-quarter 2007
Mid-Continent production volumes averaged 209.2 MMcfe/d, an increase of 13% over
fourth-quarter 2006.
Texas Panhandle Granite Wash drilling totaled 106 gross (75 net) wells with
99% completed as producers. Notable wells commencing production during the
fourth quarter include the Earp 60 (100% working interest) at 4.3 MMcfe/d,
Hobart Ranch 68-22 (100% working interest) at 3.9 MMcfe/d, Webb 194-6 (35%
working interest) at 2.4 MMcfe/d and Byrum 4-20 (75% working interest) at 2.2
MMcfe/d.
Anadarko Basin and Southern Oklahoma drilling totaled 95 gross (29 net)
wells with 89% being completed as producers. Wells in this area recently
commencing production include the Cassell C 3-7 (l00% working interest) at 2.8
MMcfe/d, Pickett B 3-18 (80% working interest) at 2.2 MMcfe/d and Cook Unit 3-12
(100% working interest) at 1.8 MMcfe/d.
Fourteen operated rigs are currently drilling in the Mid-Continent region,
including nine in the Texas Panhandle.
Permian Basin
Permian Basin drilling for 2007 totaled 172 gross (118 net) wells, 91% of
which were completed as producers. Full-year 2007 drilling investment in this
area totaled $368 million, or 37% of total E&D capital. Fourth-quarter 2007
Permian Basin production volumes averaged 151.4 MMcfe/d, a 14% increase over the
fourth quarter of 2006. Oil production in the fourth quarter of 2007 reached a
new record high 10,261 barrels per day, 19% greater than the fourth quarter of
2006. Increased oil production is a result of successful horizontal drilling
programs in southeast New Mexico and West Texas.
Southeast New Mexico 2007 drilling totaled 67 gross (48 net) wells with 84%
being completed as producers. Recent wells brought on production in southeast
New Mexico include the Pyramid 1H (80% working interest) at 180 barrels of oil
per day, Glenwood 28 Fed 1 (55% working interest) at 1.2 MMcfe/d and the
Mescalero 30 Fed 6 (50% working interest) at 1.5 MMcfe/d.
A total of 28 gross (19 net) wells were drilled in West Texas, of which 93%
were successful. In Ward and Reeves Counties drilling totaled 16 gross (9.5 net)
horizontal wells in the Third Bone Spring formation.
Cimarex has 15 operated rigs drilling in the Permian Basin, including nine
in southeast New Mexico and six in West Texas.
Gulf Coast/Gulf of Mexico
Cimarex drilled 42 gross (29 net) Gulf Coast wells in 2007, completing 71%
as producers. Gulf Coast capital investment of $175 million accounted for 18% of
total E&D expenditures. Fourth-quarter 2007 Gulf Coast production volumes
averaged 74.3 MMcfe/d, an increase of 9% from fourth-quarter 2006 volumes of
68.5 MMcfe/d. Fluctuations in Gulf Coast volumes reflect the timing of
production additions from new wells relative to natural reservoir declines.
Full-year 2007 Yegua/Cook Mountain drilling in Liberty and Hardin Counties,
Texas totaled 19 gross (16 net) wells with a 79% success rate. Wells recently
commencing production include the Sharon Crissey 1 (70% working interest) at
10.4 MMcfe/d, Willis Estate 5 (47% working interest) at 8.2 MMcfe/d and
Blackstone Rock Creek 2 (100% working interest) at 5.1 MMcfe/d.
The Gulf of Mexico Main Pass operated property sale closed in late December
2007. Offshore production volumes averaged 30.9 MMcfe/d, as compared to 46.1
MMcfe/d in the fourth quarter of 2006. Decline in offshore production is a
result of an inactive drilling program, natural reservoir decline and the sale
of operated Main Pass properties. Offshore E&D capital expenditure for 2007
totaled $50 million, or 5% of total E&D investment, which was primarily spent on
development and hookup of previous Main Pass discoveries.
Cimarex has two operated rigs drilling onshore along the Texas Gulf Coast.
Cimarex will release its fourth-quarter 2007 financial results on Wednesday,
February 20, 2008 before the market opens and will host a follow-up conference
call at 11:00 a.m. Mountain Time (1:00 p.m. Eastern Time). To access the live,
interactive call, please dial 888-603-6873 and reference call ID # 31106767 ten
minutes before the scheduled start time. A digital replay will be available for
one week following the live broadcast at 800-642-1687 and by using the
conference ID # 31106767. The listen-only web cast of the call will be
accessible via http://www.cimarex.com.
About Cimarex Energy
Denver-based Cimarex Energy Co. is an independent oil and gas exploration
and production company with principal operations in the Mid-Continent, Permian
Basin and Gulf Coast areas of the U.S.
This communication contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on current expectations and beliefs and are
subject to a number of risks, uncertainties and assumptions that could cause
actual results to differ materially from those described in the forward-looking
statements. These risks and uncertainties are more fully described in SEC
reports filed by Cimarex. While Cimarex makes these forward-looking statements
in good faith, management cannot guarantee that anticipated future results will
be achieved. Cimarex assumes no obligation and expressly disclaims any duty to
update the information contained herein except as required by law.