EX-99.1 2 v074134_ex99-1.txt Cimarex Reports First-Quarter 2007 Earnings of $0.77 per Share DENVER, May 9 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC) today reported first-quarter 2007 net income of $64.6 million, or $0.77 per share. This compares to first-quarter 2006 earnings of $110.2 million, or $1.29 per diluted share. Revenues from oil and gas sales in the first quarter of 2007 were $293.5 million, compared to $322.0 million in the same period of 2006. First-quarter 2007 cash flow from operations totaled $215.4 million versus $227.1 million in the same period of 2006(1). The decrease in first-quarter 2007 revenues, earnings and cash flow is primarily a result of lower oil and gas prices. First-quarter 2007 gas prices decreased 6% to $6.73 per thousand cubic feet (Mcf) and oil fell 7% to $55.22 per barrel. First-quarter 2007 oil and gas production volumes averaged 441.5 million cubic feet equivalent per day (MMcfe/d). The current quarter's average daily production was comprised of 324.2 million cubic feet of gas and 19,552 barrels of oil. Capital ------- First-quarter 2007 exploration and development expenditures totaled $246 million as compared to $273 million in the first quarter of 2006. In the first quarter of 2007, Cimarex drilled 110 gross (62 net) wells, completing 94% as producers. Exploration and development capital investment for 2007 is still projected to range from $800 million to $1 billion. Outlook ------- Second-quarter 2007 production volumes are projected to range between 440 - 450 MMcfe/d. Full-year 2007 production volumes are still expected to average 450 - 470 MMcfe/d. Expenses for the remainder of 2007 are expected to fall within the following ranges:
Expenses ($/Mcfe): Production expense $1.10 - $1.15 Transportation expense 0.13 - 0.17 DD&A and ARO accretion 2.75 - 2.90 General and administrative expense 0.27 - 0.30 Production taxes (% of oil and gas 7.0% - 8.0% revenue)
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 conference call, please dial 888-858-4756 and reference call ID # 8718366 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 # 8718366. The listen-only web cast of the call will be accessible via 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, -------------------------- 2007 2006 ----------- ------------ Gas Production: Total production - Mcf 29,176,637 32,514,466 Gas volume - Mcf per day 324,185 361,272 Gas price - per Mcf (before hedge effect) $6.55 $7.19 Effect of hedges $0.18 -- Gas price - per Mcf (after hedge effect) $6.73 -- Oil Production (including NGL): Total production - barrels 1,759,724 1,481,761 Oil volume - barrels per day 19,552 16,464 Oil price - per barrel $55.22 $59.57
OIL AND GAS CAPITALIZED COSTS INCURRED
For the Three Months Ended March 31, -------------------------- 2007 2006 ----------- ----------- (in thousands) Exploration and Development $245,505 $273,231 Acquisitions 23 2,862 -------- -------- Oil and gas expenditures 245,528 276,093 Sale proceeds (250) -- -------- -------- $245,278 $276,093 ======== ========
RECONCILIATION OF CASH FLOW FROM OPERATIONS
For the Three Months Ended March 31, -------------------------- 2007 2006 ------------ ----------- (in thousands) Net cash provided by operating activities $186,469 $228,015 Increase in operating assets and liabilities 28,929 (898) -------- -------- Cash flow from operations $215,398 $227,117 ======== ========
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, -------------------------- 2007 2006 ------------ ------------ (In thousands, except per share data) Revenues: Gas sales $196,290 $233,723 Oil sales 97,164 88,272 Gas gathering, processing, and net marketing 13,421 13,255 --------- --------- 306,875 335,250 --------- --------- Costs and expenses: Depreciation, depletion and amortization 108,884 90,628 Asset retirement obligation accretion 2,591 1,448 Production 45,005 41,772 Transportation 5,934 4,308 Gas gathering and processing 7,311 6,553 Taxes other than income 20,627 23,546 General and administrative 12,651 10,885 Stock compensation, net 2,670 1,968 Gain on derivative instruments -- (15,567) Other expense (271) 31 --------- --------- 205,402 165,572 --------- --------- Operating income 101,473 169,678 Other (income) and expense: Interest expense net of capitalized interest of $5,091 and $6,219 respectively 4,074 271 Amortization of fair value of debt (947) (945) Other, net (3,449) (3,342) --------- --------- Income before income tax expense 101,795 173,694 Income tax expense 37,167 63,543 --------- --------- Net income $64,628 $110,151 ========= ========= Earnings per share: Basic $0.79 $1.33 ========= ========= Diluted $0.77 $1.29 ========= ========= Weighted average shares outstanding: Basic 82,222 82,633 ========= ========= Diluted 84,393 85,242 ========= =========
CONDENSED CASH FLOW STATEMENTS (unaudited)
For the Three Months Ended March 31, -------------------------- 2007 2006 ---------- ---------- (In thousands) Cash flows from operating activities: Net income $64,628 $110,151 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 108,884 90,628 Asset retirement obligation accretion 2,591 1,448 Deferred income taxes 37,167 46,681 Stock compensation, net 2,670 1,968 Derivative instruments -- (22,919) Other (542) (840) Changes in operating assets and liabilities: Decrease in receivables, net 6,311 28,525 (Increase) decrease in other current assets 1,115 (14,448) (Decrease) in accounts payable and accrued liabilities (35,245) (13,541) Increase (decrease) in other non-current liabilities (1,110) 362 --------- --------- Net cash provided by operating activities 186,469 228,015 --------- --------- Cash flows from investing activities: Oil and gas expenditures (252,348) (218,963) Acquisition of oil and gas properties (23) (2,862) Merger related costs -- (469) Proceeds from sale of assets 349 60 Other expenditures (2,303) (5,729) --------- --------- Net cash used by investing activities (254,325) (227,963) --------- --------- Cash flows from financing activities: Borrowings (payments) on long-term debt, net 66,000 -- Treasury stock acquired and retired -- (10,281) Dividends paid (3,365) (3,327) Proceeds from issuance of common stock and other 7,524 2,584 --------- --------- Net cash (used in) provided by financing activities 70,159 (11,024) --------- --------- Net change in cash and cash equivalents 2,303 (10,972) Cash and cash equivalents at beginning of period 5,048 61,647 --------- --------- Cash and cash equivalents at end of period $7,351 $50,675 ========= =========
BALANCE SHEETS (unaudited)
March 31, December 31, ----------------------- Assets 2007 2006 ---------- ----------- (In thousands, except share data) Current assets: Cash and cash equivalents $7,351 $5,048 Receivables, net 300,147 306,458 Inventories 42,001 39,397 Deferred income taxes 4,477 1,498 Derivative instruments 10,093 41,945 Other current assets 18,692 22,411 ----------- ----------- Total current assets 382,761 416,757 ----------- ----------- Oil and gas properties at cost, using the full cost method of accounting: Proved properties 4,954,773 4,656,854 Unproved properties and properties under development, not being amortized 373,555 425,173 ----------- ----------- 5,328,328 5,082,027 Less - accumulated depreciation, depletion and amortization (1,598,955) (1,494,317) ----------- ----------- Net oil and gas properties 3,729,373 3,587,710 ----------- ----------- Fixed assets, net 86,882 88,924 Goodwill 691,432 691,432 Derivative instruments 2,823 7,051 Other assets, net 38,404 37,876 ----------- ----------- $4,931,675 $4,829,750 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $49,436 $56,241 Accrued liabilities 176,343 202,163 Revenue payable 95,670 96,184 ----------- ----------- Total current liabilities 321,449 354,588 ----------- ----------- Long-term debt 508,720 443,667 ----------- ----------- Deferred income taxes 945,411 921,665 ----------- ----------- Other liabilities 136,622 133,687 ----------- ----------- 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, 83,286,560 and 83,962,132 shares issued, respectively 844 840 Treasury stock, at cost, 1,078,822 and 1,078,822 shares held, respectively (40,628) (40,628) Paid-in capital 1,872,286 1,867,448 Retained earnings 1,178,635 1,117,402 Accumulated other comprehensive income 8,336 31,081 ----------- ----------- 3,019,473 2,976,143 ----------- ----------- $4,931,675 $4,829,750 =========== ===========
SOURCE Cimarex Energy Co. -0- 05/09/2007 /CONTACT: Mark Burford, Director of Capital Markets of Cimarex Energy Co., +1-303-295-3995/ /Web site: http://www.cimarex.com /