Cimarex Reports First-Quarter 2008 Earnings of $1.76 per Share
DENVER, May 6 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC) today
reported first-quarter 2008 net income of $149.8 million, or $1.76 per diluted
share. This compares to first-quarter 2007 earnings of $64.6 million, or $0.77
per diluted share.
Revenues from oil and gas sales in the first quarter of 2008 were $454.4
million, compared to $293.5 million in the same period of 2007. First-quarter
2008 cash flow from operations totaled $334.7 million versus $215.4 million in
the same period of 2007(1).
The increase in first-quarter 2008 revenues, earnings and cash flow is
primarily a result of higher production and oil and gas prices. First-quarter
2008 gas prices increased 25% to $8.38 per thousand cubic feet (Mcf) and oil
rose 71% to $94.38 per barrel from the same period of 2007.
First-quarter 2008 daily oil and gas production grew 8% over last year's
first quarter. Gas production in the latest quarter averaged 339.7 million cubic
feet per day, an increase of 5% over the first-quarter 2007 and oil production
grew 16% to an average of 22,757 barrels per day. Growing production reflects
strong results from drilling.
Capital
First-quarter 2008 exploration and development capital totaled $307.0
million as compared to $245.5 million in the first quarter of 2007. In the first
quarter of 2008, Cimarex drilled 126 gross (76 net) wells, completing 95% of the
gross wells as producers. Exploration and development capital investment for
2008 is still projected to range from $1.1 - $1.3 billion.
Outlook
Second-quarter 2008 production volumes are projected to range between
478-488 MMcfe/d. Full-year 2008 production is projected to be in the range of
475-495 MMcfe/d, or an 8-12% increase over 2007 after adjusting for property
sales.
Expenses for the remainder of 2008 are expected to fall within the following
ranges:
Expenses ($/Mcfe):
Production expense $1.20 - $1.30
Transportation expense 0.17 - 0.20
DD&A and ARO accretion 2.85 - 3.00
General and administrative expense 0.26 - 0.30
Production taxes (% of oil and gas revenue) 6.5% - 7.5%
Conference call and web cast
Cimarex will host a follow-up conference call today 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 # 42803763 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 # 42803763. 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.
(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.
PRICE AND PRODUCTION DATA
For the Three Months Ended
March 31,
2008 2007
Gas Production:
Total production - Mcf 30,909,539 29,176,637
Gas volume - Mcf per day 339,665 324,185
Gas price - per Mcf (before hedge effect) $8.35 $6.55
Effect of hedges $0.03 $0.18
Gas price - per Mcf (after hedge effect) $8.38 $6.73
Oil Production (including NGL):
Total production - barrels 2,070,857 1,759,724
Oil volume - barrels per day 22,757 19,552
Oil price - per barrel $94.38 $55.22
OIL AND GAS CAPITALIZED EXPENDITURES
For the Three Months Ended
March 31,
2008 2007
(in thousands)
Acquisition of properties $1,045 $23
Exploration and development 306,955 245,505
Total oil and gas expenditures 308,000 245,528
Sale proceeds -- (250)
$308,000 $245,278
RECONCILIATION OF CASH FLOW FROM OPERATIONS
For the Three Months Ended
March 31,
2008 2007
(in thousands)
Net cash provided by operating activities $315,245 $186,469
Increase in operating assets and liabilities 19,455 28,929
Cash flow from operations $334,700 $215,398
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.
CONDENSED INCOME STATEMENTS (unaudited)
For the Three Months Ended
March 31,
2008 2007
(In thousands, except per share data)
Revenues:
Gas sales $258,955 $196,290
Oil sales 195,450 97,164
Gas gathering, processing and other 21,371 12,639
Gas marketing, net 1,300 782
477,076 306,875
Costs and expenses:
Depreciation, depletion and amortization 125,556 108,884
Asset retirement obligation 1,594 2,591
Production 52,052 45,005
Transportation 8,309 5,934
Gas gathering and processing 10,041 7,311
Taxes other than income 30,607 20,627
General and administrative 11,584 12,651
Stock compensation, net 2,275 2,670
Other operating, net 1,036 (271)
243,054 205,402
Operating income 234,022 101,473
Other (income) and expense:
Interest expense 8,420 9,165
Capitalized interest (4,606) (5,091)
Amortization of fair value of debt (191) (947)
Other, net (3,017) (3,449)
Income before income tax expense 233,416 101,795
Income tax expense 83,581 37,167
Net income $149,835 $64,628
Earnings per share:
Basic $1.84 $0.79
Diluted $1.76 $0.77
Weighted average shares outstanding:
Basic 81,286 82,222
Diluted 85,200 84,393
CONDENSED CASH FLOW STATEMENTS (unaudited)
For the Three Months Ended
March 31,
2008 2007
Cash flows from operating activities:
Net income $149,835 $64,628
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 125,556 108,884
Asset retirement obligation 1,594 2,591
Deferred income taxes 55,663 37,167
Stock compensation, net 2,275 2,670
Other (223) (542)
Changes in operating assets and liabilities:
(Increase) decrease in receivables, net (40,649) 6,311
(Increase) decrease in other current assets (6,437) 1,115
Increase (decrease) in accounts payable and
accrued liabilities 28,307 (35,245)
Decrease in other non-current liabilities (676) (1,110)
Net cash provided by operating activities 315,245 186,469
Cash flows from investing activities:
Oil and gas expenditures (284,281) (252,371)
Proceeds from sale of assets 104 349
Sales of short-term investments 5,000 --
Other expenditures (8,994) (2,303)
Net cash used by investing activities (288,171) (254,325)
Cash flows from financing activities:
Net increase in bank debt -- 66,000
Dividends paid (4,953) (3,365)
Proceeds from issuance of common stock and other 2,116 7,524
Net cash provided by (used in) financing
activities (2,837) 70,159
Net change in cash and cash equivalents 24,237 2,303
Cash and cash equivalents at beginning of period 123,050 5,048
Cash and cash equivalents at end of period $147,287 $7,351
BALANCE SHEETS (unaudited)
March 31, December 31,
2008 2007
Assets (In thousands, except share data)
Current assets:
Cash and cash equivalents $147,287 $123,050
Restricted cash 724 --
Short-term investments 9,364 14,391
Receivables, net 355,976 315,327
Inventories 40,785 29,642
Deferred income taxes 79 5,697
Derivative instruments -- 12,124
Other current assets 10,489 64,346
Total current assets 564,704 564,577
Oil and gas properties at cost, using the
full cost method of accounting:
Proved properties 5,851,042 5,545,977
Unproved properties and properties under
development, not being amortized 362,416 364,618
6,213,458 5,910,595
Less - accumulated depreciation,
depletion and amortization (2,060,047) (1,938,863)
Net oil and gas properties 4,153,411 3,971,732
Fixed assets, net 94,440 90,584
Goodwill 691,432 691,432
Other assets, net 94,461 44,469
$5,598,448 $5,362,794
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $72,294 $52,671
Accrued liabilities 234,664 240,387
Derivative instruments 6,773 --
Revenue payable 145,474 131,513
Total current liabilities 459,205 424,571
Long-term debt 486,968 487,159
Deferred income taxes 1,121,923 1,076,223
Other liabilities 132,310 115,554
Stockholders' equity:
Preferred stock, $0.01 par value,
15,000,000 shares authorized, no shares
issued -- --
Common stock, $0.01 par value,
200,000,000 shares authorized,
83,929,645 and 83,620,480 shares issued,
respectively 839 836
Treasury stock, at cost, 1,078,822
shares held (40,628) (40,628)
Paid-in capital 1,848,532 1,842,690
Retained earnings 1,593,627 1,448,763
Accumulated other comprehensive income (4,328) 7,626
3,398,042 3,259,287
$5,598,448 $5,362,794