Exhibit 99.1
Cimarex Reports First-Quarter Earnings of $0.78 Per Share
DENVER--(BUSINESS WIRE)--May 7, 2003--Cimarex Energy Co.
(NYSE:XEC) today reported that strong oil and gas prices combined with
higher production volumes boosted first-quarter 2003 net income to
$32.7 million, or $0.78 per diluted share. This compares to
first-quarter 2002 net income of $4.3 million, or $0.16 per share.
Net income for the first quarter of 2003 includes an after-tax
one-time accounting benefit of $1.6 million, or $0.04 per share, from
the required adoption of Statement of Financial Accounting Standard
No. 143 relating to new accounting treatment for future asset
retirement obligations.
Revenues from first-quarter 2003 oil and gas sales grew 286
percent to $89.8 million, up from $23.2 million during the first
quarter of 2002.
Cimarex's realized gas price in the first quarter of 2003 was
$5.76 per thousand cubic feet (Mcf), which was 185 percent higher than
a year ago. Oil prices rose 38 percent to $30.14 per barrel. The
significant increase in first-quarter 2003 product prices reflects
tightening supply and demand conditions in oil and gas markets.
Cimarex was un-hedged during the first quarter and remains so.
Reported daily average gas production increased by 28 percent to
136 million cubic feet (MMcf) and reported oil production rose 257
percent to 7,212 barrels per day. The jump in production volumes
mainly reflects the September 30, 2002, acquisition of Key Production
Company, Inc.
Cash flow from operations increased more than four-fold to $65.6
million from $15.7 million during the first three months of 2002. See
below a reconciliation of cash flow from operations, a non-GAAP
financial measure that is widely used by analysts and investors as an
important indicator of financial performance in the oil and gas
exploration and production sector.
Capitalized costs incurred for oil and gas exploration and
development during the first quarter of 2003 totaled $27.6 million, up
from $12.4 million during the same three months of 2002. During the
last quarter, 41 gross wells had been drilled including 33 new
producers and eight dry holes.
The strong cash flow generated by first-quarter 2003 production
operations also enabled us to further reduce our debt by $27.0 million
to $5.0 million as of March 31, 2003.
CONFERENCE CALL
Management will conduct a conference call and web cast on
Wednesday, May 7, 2003, at 11 a.m. Mountain Time to further review
quarterly financial results and operational matters. To access the
live, interactive conference call, dial 800/881-5262 about ten minutes
before the scheduled start time and refer to Cimarex Energy Co. The
listen-only web cast of the call will be accessible via
www.cimarex.com. Subsequent to the live event, recordings will be
available via the Cimarex website or by calling 800/642-1687. The
dial-in replay conference code is 9851136.
Cimarex Energy Co. is an independent natural gas and crude oil
exploration and production company with operations focused in
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 are included in the Company's
Registration Statement on Form S-4 and Annual Report on Form 10-K
filed with the Securities and Exchange Commission.
Financial Statements and other information follow:
CAPITALIZED COSTS INCURRED
For the Three
Months Ended
March 31,
-------------------
2003 2002
--------- ---------
(in thousands)
Acquisitions of proved properties $ 576 $ --
Exploration and development 27,014 12,369
--------- ---------
Total costs incurred $ 27,590 $ 12,369
========= =========
PRICE AND PRODUCTION DATA
For the Three Months
Ended
March 31,
----------------------
2003 2002
----------- ----------
Gas Production:
Total production - Mcf 12,196,911 9,527,036
Gas volume - Mcf per day 135,521 105,856
Gas price - per Mcf $ 5.76 $ 2.02
Oil Production (including NGL):
Total production - barrels 649,121 181,667
Oil volume - barrels per day 7,212 2,019
Oil price - per barrel $ 30.14 $ 21.80
RECONCILIATION OF CASH FLOW FROM OPERATIONS
For the Three
Months Ended
March 31,
-------------------
2003 2002
--------- ---------
(in thousands)
Net cash provided by operating activities $ 53,833 $ 11,937
Decrease in operating assets and liabilities 11,722 3,771
--------- ---------
Cash flow from operations $ 65,555 $ 15,708
========= =========
INCOME STATEMENTS
For the Three
Months Ended
March 31,
----------------
2003 2002
-------- -------
(In thousands,
except per share
data)
Revenues:
Gas sales $70,203 $19,277
Oil sales 19,565 3,961
Marketing sales 46,625 11,482
Other (9) (145)
-------- -------
136,384 34,575
-------- -------
Operating expenses:
Depreciation, depletion and amortization 21,117 8,697
Asset retirement obligation accretion 241 --
Marketing purchases 46,077 10,207
Production 6,988 4,282
Taxes other than income 7,171 2,364
General and administrative 4,067 2,084
Stock compensation 466 --
Financing costs -
Interest expense 422 168
Capitalized interest (265) --
Interest income (29) (89)
-------- -------
86,255 27,713
-------- -------
Income before income tax expense and cumulative
effect of a change in accounting principle 50,129 6,862
Income tax expense 18,986 2,604
-------- -------
Income before cumulative effect of a change in
accounting principle 31,143 4,258
Cumulative effect of a change in accounting
principle, net of tax 1,605 --
-------- -------
Net income $32,748 $ 4,258
======== =======
Earnings per share:
Basic -
Income before cumulative effect of a change
in accounting principle $ 0.75 $ 0.16
Cumulative effect of a change in accounting
principle, net of tax 0.04 --
-------- -------
Net income $ 0.79 $ 0.16
======== =======
Diluted -
Income before cumulative effect of change
in accounting principle $ 0.74 $ 0.16
Cumulative effect of change in accounting
principle, net of tax 0.04 --
-------- -------
Net income $ 0.78 $ 0.16
======== =======
Weighted average shares outstanding:
Basic 41,479 26,591
======== =======
Diluted 42,027 26,591
======== =======
CASH FLOW STATEMENTS
For the Three
Months Ended
March 31,
-----------------
2003 2002
-------- --------
(In thousands)
Cash flows from operating activities:
Net income $ 32,748 $ 4,258
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 21,117 8,697
Deferred income taxes 12,136 2,512
Cumulative effect of a change in accounting
principle, net of tax (1,605) --
Amortization of restricted stock
compensation 466 --
Other 693 241
Changes in operating assets and liabilities:
Increase in accounts receivable (15,460) (398)
(Increase) decrease in inventories (1,016) 947
Increase in other assets (964) (2,085)
Increase in accounts and revenue payable 277 4,845
Increase (decrease) in accrued liabilities 5,414 (7,096)
Increase in other liabilities 27 16
-------- --------
Net cash provided by operating
activities 53,833 11,937
-------- --------
Cash flows from investing activities:
Oil and gas expenditures (24,769) (12,369)
Acquisition of oil and gas properties (576) --
Proceeds from sale of assets 47 --
Other capital expenditures (5,502) (276)
-------- --------
Net cash used by investing activities (30,800) (12,645)
-------- --------
Cash flows from financing activities:
Payments on long-term debt, net (27,000) --
Change in amount due to Helmerich & Payne, Inc. -- (1,522)
Proceeds from issuance of common stock 937 --
-------- --------
Net cash used by financing activities (26,063) (1,522)
-------- --------
Net decrease in cash and cash equivalents (3,030) (2,230)
Cash and cash equivalents at beginning of period 20,261 7,170
-------- --------
Cash and cash equivalents at end of period $ 17,231 $ 4,940
======== ========
BALANCE SHEETS
March December
31, 31,
Assets 2003 2002
---------- -----------
(In thousands)
Current assets:
Cash and cash equivalents $ 17,231 $ 20,261
Receivables, net 73,870 58,276
Inventories 5,002 3,986
Deferred income taxes 1,988 2,073
Other current assets 3,913 2,949
---------- -----------
Total current assets 102,004 87,545
---------- -----------
Oil and gas properties at cost,
using the full cost method of accounting:
Proved properties 1,214,064 1,172,488
Unproved properties and properties under
development, not being amortized 20,570 23,941
---------- -----------
1,234,634 1,196,429
Less - accumulated depreciation, depletion
and amortization (680,343) (665,711)
---------- -----------
Net oil and gas properties 554,291 530,718
---------- -----------
Fixed assets, net 11,107 6,849
Goodwill 45,940 45,836
Other assets, net 3,542 3,338
---------- -----------
$ 716,884 $ 674,286
========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 22,441 $ 22,339
Accrued liabilities 29,793 21,892
Revenue payable 24,197 24,022
---------- -----------
Total current liabilities 76,431 68,253
---------- -----------
Long-term debt 5,000 32,000
---------- -----------
Deferred income taxes 139,631 127,023
---------- -----------
Other liabilities 16,423 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, 41,512,899 and
41,410,308 shares issued, respectively 415 414
Paid-in capital 244,931 243,420
Unearned compensation (10,555) (10,814)
Retained earnings 244,608 211,860
---------- -----------
479,399 444,880
---------- -----------
$ 716,884 $ 674,286
========== ===========
CONTACT: Cimarex Energy Co.
Mary Kay Rohrer, 303/285-4912
mrohrer@cimarex.com