Exhibit 99.1
CIMAREX ENERGY ANNOUNCES SECOND-QUARTER PRODUCTION VOLUMES, PROVIDES
OPERATIONS UPDATE AND SCHEDULES EARNINGS RELEASE AND CONFERENCE CALL
DENVER, July 25 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC)
today announced that second-quarter 2006 oil and gas production volumes averaged
448 million cubic feet equivalent per day (MMcfe/d), a 52% increase over the
same period a year earlier. Gas production rose 46% to 338.7 million cubic feet
per day and oil volumes increased 75% to 18,213 barrels per day.
Current quarter production volumes reflect a full three months of output
from the properties acquired in the Magnum Hunter merger on June 7, 2005.
Second-quarter prices are expected to range from to $6.15 to $6.25 per
thousand cubic feet of gas and $65.50 to $65.75 per barrel of oil.
Cimarex will release its second-quarter 2006 financial results on Wednesday,
August 2, 2006 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 conference call, please dial 888-459-5609 and reference call ID #
7617046 ten minutes before the scheduled start time. A digital replay will be
available for one week following the live broadcast at 877-519-4471 by using the
conference ID # 7617046. The listen-only web cast of the call will be accessible
via www.cimarex.com.
Exploration and Development Activity
Cimarex drilled 304 gross (188.9 net) wells during the first six months of
2006, realizing a success rate of 89%. At the present time we have 27 operated
rigs running and expect to average about 30 for the year. We continue to expect
that full-year 2006 exploration and development expenditures will approximate $1
billion.
Mid-Continent
Cimarex drilled 173 gross (107.9 net) wells in the Mid-Continent region
during the first half of 2006 realizing a 95% success rate. Mid-Continent second
quarter production volumes averaged 179 MMcfe/d, an increase of two percent over
first quarter of 2006.
In the Texas Panhandle, principally targeting the Granite Wash formation at
depths of 11,000-14,000 feet, Cimarex drilled 41 gross (27.3 net) wells with a
95% success rate. Initial production rates averaged 1.3 MMcfe/d. Meaningful new
wells include the Hobart Ranch 15-69 (100% working interest) at 2.3 MMcfe/d,
Hobart Ranch 15-68 (100% working interest) at 2.1 MMcfe/d, Byrum 10-27 (75%
working interest) at 1.8 MMcfe/d, Marion Osborne 18-26 (74% working interest) at
1.9 MMcfe/d, Flowers 8-84 (100% working interest) at 1.5 MMcfe/d and the Wiggins
4-54 (65% working interest) at 1.2 MMcfe/d.
Exploitation activity in the Panoma gas field, also located in the Texas
Panhandle, consisted of drilling 56 (55.4 net) infill wells with a 100% success
rate. These wells target the Brown Dolomite formation at 2,200 feet. Initial
production rates from the 48 wells that commenced production before the end of
the second quarter averaged 100 Mcf/d.
In the Anadarko Basin of western Oklahoma, Cimarex drilled 52 (11.3 net)
wells realizing a 96% success rate. Wells in this area generally target the Red
Fork and Clinton Lake/Atoka at depths of 12,000-15,000 feet. Notable wells
include the Thompson 3-9 (92% working interest) at 3.5 MMcfe/d, Sullavan 11-26
(69% working interest) at 3.5 MMcfe/d and the Boggs 1-25 at 1.0 MMcfe/d.
Five operated rigs are currently drilling in the Panhandle and five are
drilling in Oklahoma.
Permian Basin
Permian Basin first-half 2006 drilling totaled 80 gross (58.1 net) wells,
95% of which were completed as producers. Permian Basin second quarter
production volumes averaged 138 MMcfe/d, an increase of seven percent over the
first quarter of 2006.
In southeast New Mexico, 28 gross (19.0 net) wells were drilled with an 89%
success rate in the Morrow, Atoka and Strawn formations. Initial production
rates averaged 1.5 MMcfe/d.
In West Texas, a total of 47 gross (35.5 net) wells were drilled, of which
98% were successful. Included in the West Texas program is exploitation of the
Westbrook Unit (90% working interest) where 22 infill wells were drilled and
completed in the Clearfork formation at 3,200 feet. As a result of successful
drilling and recompletion activity, daily production from Westbrook has
increased from approximately 950 barrels of oil per day in December 2005 to
1,300 barrels per day currently. Other geologic targets in West Texas include
the Devonian, Ellenburger, Bone Springs and Spraberry. The Samurai #2 (87%
working interest) horizontal well was drilled in the Devonian formation and is
producing at 650 barrels per day.
Cimarex currently has six operated rigs drilling in southeast New Mexico and
six in West Texas.
Gulf Coast
Cimarex drilled 24 gross (13.9 net) Gulf Coast area wells during the first
half of 2006, realizing a 63% success rate. Gulf Coast second-quarter production
volumes decreased 28% to 76 MMcfe/d from 106 MMcfe/d in the prior quarter.
In South Louisiana, net production from the fourth-quarter 2005 Donald
Harrington #1 (100% working interest) discovery decreased to 4 MMcfe/d in the
second quarter of 2006 from 15 MMcfe/d in the first quarter. The decrease was a
result of increased water production in the primary zone. The well is being
evaluated for either a recompletion or a sidetrack.
Completion of the previously announced Hoffpauir #1 discovery at Tortoise
Creek (62.5% working interest) in Lafayette Parish has been delayed due to down
hole mechanical problems. Three company-operated wells are currently being
drilled at the Timone, Lion Cub and Creek prospects.
Cimarex drilled or participated in seven gross (5.0 net) Liberty County
wells, four of which were successful. The Cimarex-operated Galloway Gas Unit #2
(50% working interest) commenced production in July and is currently producing
gas of 9.4 MMcf/d and oil of 1,200 barrels per day (16.6 MMcfe/d). In the
Mississippi Salt Basin, Cimarex successfully drilled the Blackstone #2 (100%
working interest) to a total depth of 16,546 feet. The Blackstone #2 has tested
at a rate of 5.5 MMcfe/d.
Overall Cimarex currently has five operated rigs drilling in the onshore
Gulf Coast area.
Gulf of Mexico
Gulf of Mexico first-half 2006 drilling totaled 10 gross (3.9 net) wells
with a 40% success rate. Currently, non-operated wells are drilling at West
Cameron 295 #4 (10% working interest) and East Cameron 73 (33% working
interest). Cimarex expects to resume drilling on its Main Pass operated blocks
in August with the Pride Arizona rig.
Gulf of Mexico second-quarter production volumes averaged 46 MMcfe/d, up
from 40 MMcfe/d in the first quarter of 2006. Average deferred production from
hurricane and other weather related delays approximated 10-15 MMcfe/d in the
second quarter of 2006 versus 20-25 MMcfe/d in the first quarter of 2006.
Outlook
Second-half 2006 production volumes will benefit from the addition of
several high-rate wells in the Gulf Coast including the Galloway Gas Unit #2,
Hoffpauir #1, and the Blackstone #2. With the contribution from these wells,
continued active drilling programs in the Mid-Continent and Permian Basin, and
numerous other factors we estimate that second-half 2006 production volumes will
range between 455-475 MMcfe/d, resulting in full-year 2006 volumes of 455-465
MMcfe/d.
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, Gulf
Coast, Permian Basin of West Texas and New Mexico and Gulf of Mexico 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.
SOURCE Cimarex Energy Co.
-0- 07/25/2006
/CONTACT: Mark Burford, Director of Capital Markets of Cimarex Energy
Co., +1-303-295-3995/
/Web site: http://www.cimarex.com /