-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A9jm86co5R2RXWQ174FxD7PIfo6iQ1IxxA+HdWyV02TIctE2SWtoBmRMytRzURpI Qlpuxfe4q2S0TepCDcci8Q== 0001144204-08-010697.txt : 20080220 0001144204-08-010697.hdr.sgml : 20080220 20080220103848 ACCESSION NUMBER: 0001144204-08-010697 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080220 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080220 DATE AS OF CHANGE: 20080220 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIMAREX ENERGY CO CENTRAL INDEX KEY: 0001168054 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 450466694 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31446 FILM NUMBER: 08628585 BUSINESS ADDRESS: STREET 1: 1700 LINCOLN STREET STREET 2: SUITE 1800 CITY: DENVER STATE: CO ZIP: 80203-4518 BUSINESS PHONE: 303-295-3995 MAIL ADDRESS: STREET 1: 1700 LINCOLN STREET STREET 2: SUITE 1800 CITY: DENVER STATE: CO ZIP: 80203-4518 FORMER COMPANY: FORMER CONFORMED NAME: HELMERICH & PAYNE EXPLORATION & PRODUCTION CO DATE OF NAME CHANGE: 20020222 8-K 1 v104379_8k.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities andExchange Act of 1934. February 20, 2008 Date of Report CIMAREX ENERGY CO. (Exact name of registrant as specified in its charter) Delaware 001-31446 45-0466694 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 1700 Lincoln Street, Suite 1800, Denver, Colorado 80203-4518 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 303-295-3995 ------------------------------ - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On February 20, 2008, Cimarex Energy Co. (Cimarex) announced its fourth-quarter and full-year 2007 financial results. The news release is included in this report as Exhibit 99.1. ITEM 7.01 REGULATION FD DISCLOSURE On February 20, 2008, Cimarex issued a news release reporting its financial results for the fourth-quarter and full-year ended December 31, 2007. A copy of the news release is furnished as Exhibit 99.1 to this report. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS D. Exhibits Exhibit No. Description 99.1 Cimarex News Release, dated February 20, 2008 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CIMAREX ENERGY CO. Dated: February 20, 2008 By: /s/ Paul Korus -------------------------------------- Paul Korus, Vice President, Chief Financial Officer and Treasurer EXHIBIT INDEX Exhibit No. Description 99.1 Cimarex News Release, dated February 20, 2008 EX-99.1 2 v104379_ex99-1.txt Cimarex Reports Fourth-Quarter 2007 Earnings of $1.54 Per Share DENVER, Feb. 20 /PRNewswire-FirstCall/ -- Cimarex Energy Co. (NYSE: XEC) today reported fourth-quarter 2007 net income of $130.0 million, or $1.54 per diluted share. This compares to fourth-quarter 2006 earnings of $58.7 million, or $0.70 per diluted share. Revenues from oil and gas sales in the fourth quarter of 2007 were $417.6 million, compared to $283.7 million in the same period of 2006. Fourth-quarter 2007 cash flow from operations totaled $298.7 million versus $213.1 million in the same period of 2006(1). The increase in fourth-quarter 2007 revenues, earnings and cash flow is primarily a result of higher production and oil and gas prices. Fourth-quarter 2007 gas prices increased 24% to $7.71 per thousand cubic feet (Mcf) and oil rose 58% to $88.07 per barrel from the same period of 2006. Fourth-quarter 2007 oil and gas production averaged 471 million cubic feet equivalent per day (MMcfe/d), a 7% increase over the same period a year earlier. The latest quarter's daily production was comprised of 341.1 million cubic feet of gas and 21,680 barrels of oil. For the year-ended December 31, 2007, Cimarex reported net income of $346.5 million, or $4.09 per diluted share. In 2006, net income totaled $345.7 million, or $4.11 per diluted share. Cash flow from operations for 2007 totaled $985.7 million versus $917.7 million in 2006(1). In 2007, exploration and development (E&D) expenditures totaled $983 million, as compared to $1,049 million in 2006. E&D expenditures during the fourth quarter of 2007 totaled $266.0 million. Proved Reserves Year-end 2007 proved reserves totaled 1.472 trillion cubic feet equivalent (Tcfe) as compared to 1.449 Tcfe at year-end 2006. After adjusting for 123 billion cubic feet equivalent (Bcfe) of properties sold in 2007 proved reserves increased 11% over year-end 2006. Of total proved reserves, 76% are gas and 79% are classified as proved developed. Reserves additions totaled 311 Bcfe and replaced 189% of 2007 production. Reserves added by drilling and revisions totaled 300 Bcfe and replaced 182% of production. 2008 Guidance Cimarex's exploration and development (E&D) capital expenditures for 2008 are projected to range from $1.1-$1.3 billion. The actual amount invested will be highly dependent on commodity prices and rig rates. Mid-point 2008 projection and actual 2007 E&D investment by region are as follows: ($ in millions) 2008 2007 Mid-Continent $520 43 % $385 39 % Permian 450 38 % 368 37 % Gulf Coast/GOM 190 16 % 225 23 % Western/Other 40 3 % 5 1 % $1,200 100 % $983 100 % First-quarter 2008 production is projected to range between 458-468 MMcfe/d which excludes 11 MMcfe/d for the Spraberry and the Gulf of Mexico Main Pass property sales. Full-year 2008 production is projected to be in the range of 465-485 MMcfe/d, or a 5-10% increase over 2007 after adjusting for property sales. Expenses for 2008 are expected to fall within the following ranges: Expenses ($/Mcfe): Production expense $1.20 - $1.30 Transportation expense 0.16 - 0.18 DD&A and ARO accretion 2.85 - 3.00 General and administrative expense 0.28 - 0.32 Production taxes (% of oil and gas revenue) 6.5% - 7.5% 2 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 888-603-6873 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. (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. 3 PRICE AND PRODUCTION DATA For the Three Months Ended For the Year Ended December 31, December 31, 2007 2006 2007 2006 Gas Production: Total production - Mcf 31,377,310 30,303,817 119,937,142 124,732,789 Gas volume - Mcf per day 341,058 329,389 328,595 341,734 Gas price - per Mcf (before hedge effect) $7.46 $6.21 $6.82 $6.50 Effect of hedges $0.25 - $0.23 - Gas price - per Mcf (after hedge effect) $7.71 $6.21 $7.05 $6.50 Oil Production (including NGL): Total production - barrels 1,994,542 1,710,016 7,445,453 6,528,622 Oil volume - barrels per day 21,680 18,587 20,399 17,887 Oil price - per barrel $88.07 $55.91 $69.71 $61.96 PROVED RESERVES Gas Oil Total (Bcf) (MBbls) (Bcfe) December 31, 2006 1,090.4 59,797 1,449.2 Revisions of previous estimates 50.0 1,251 57.5 Extensions, discoveries, and improved recovery 162.1 13,361 242.3 Purchase of reserves 10.6 99 11.2 Production (119.9) (7,446) (164.6) Sale of properties (70.5) (8,812) (123.4) December 31, 2007 1,122.7 58,250 1,472.2 Proved developed - December 31, 2007 848.0 51,497 1,157.0 PROVED RESERVES BY REGION Gas Oil Total (Bcf) (MBbls) (Bcfe) Mid-Continent 562.0 9,166 617.0 Permian Basin 269.0 43,122 527.7 Gulf Coast 73.3 4,615 101.0 Gulf of Mexico 19.8 820 24.7 Western/Other 198.6 527 201.8 1,122.7 58,250 1,472.2 4 OIL AND GAS CAPITALIZED EXPENDITURES For the Three Months Ended For the Year Ended December 31, December 31, 2007 2006 2007 2006 (in thousands) (in thousands) Acquisition of properties $ - $18,260 $40,914 $26,483 Exploration and development 265,733 244,104 982,520 1,048,190 Total oil and gas expenditures 265,733 262,364 1,023,434 1,074,673 Sale proceeds (153,954) (9) (176,659) (4,459) $111,779 $262,355 $846,775 $1,070,214 RECONCILIATION OF CASH FLOW FROM OPERATIONS For the Three Months Ended For the Year Ended December 31, December 31, 2007 2006 2007 2006 (in thousands) (in thousands) Net cash provided by operating activities $301,511 $201,283 $994,680 $878,419 Increase in operating assets and liabilities (2,798) 11,800 (9,010) 39,323 Cash flow from operations $298,713 $213,083 $985,670 $917,742 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. 5 CONDENSED INCOME STATEMENTS (unaudited) For the Three Months Ended For the Year Ended December 31, December 31, 2007 2006 2007 2006 (In thousands, except per share data) Revenues: Gas sales $241,981 $188,053 $845,631 $810,894 Oil sales 175,662 95,606 518,991 404,517 Gas gathering, processing, and net marketing 20,811 11,972 66,544 51,733 438,454 295,631 1,431,166 1,267,144 Costs and expenses: Depreciation, depletion and amortization 122,476 106,089 461,791 396,394 Asset retirement obligation 1,823 2,100 8,937 7,018 Production 49,646 48,633 201,512 176,833 Transportation 7,251 5,521 26,361 21,157 Gas gathering and processing 8,518 7,146 30,513 27,410 Taxes other than income 26,804 22,674 93,630 91,066 General and administrative 13,729 10,609 49,260 42,288 Stock compensation, net 2,704 1,914 10,772 8,243 (Gain) Loss on derivative instruments - 628 - (22,970) Other operating, net 455 2,125 6,637 2,064 233,406 207,439 889,413 749,503 Operating income 205,048 88,192 541,753 517,641 Other (income) and expense: Interest expense 9,230 7,939 37,966 29,940 Capitalized interest (4,701) (5,693) (19,680) (24,248) Amortization of fair value of debt (190) (946) (1,908) (3,784) Gain on early extinguishment of debt - - (5,099) - Other, net (1,929) (3,076) (14,151) (28,591) Income before income tax expense 202,638 89,968 544,625 544,324 Income tax expense 72,660 31,223 198,156 198,605 Net income $129,978 $58,745 $346,469 $345,719 Earnings per share: Basic $1.60 $0.72 $4.23 $4.21 Diluted $1.54 $0.70 $4.09 $4.11 Weighted average shares outstanding: Basic 81,218 82,077 81,819 82,066 Diluted 84,188 84,102 84,632 84,090 6 CONDENSED CASH FLOW STATEMENTS (unaudited) For the Three Months Ended For the Year Ended December 31, December 31, 2007 2006 2007 2006 (In thousands) Cash flows from operating activities: Net income $ 129,978 $ 58,745 $ 346,469 $ 345,719 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 122,476 106,089 461,791 396,394 Asset retirement obligation 1,823 2,100 8,937 7,018 Deferred income taxes 42,011 45,937 167,507 220,539 Stock compensation, net 2,704 1,914 10,772 8,243 Derivative instruments - (2,726) - (41,926) Gain on liquidation of equity investees - (1,463) (3,015) (19,785) Other (279) 2,487 (6,791) 1,540 Changes in operating assets and liabilities: (Increase) in receivables, net (27,420) (60,878) (7,777) (9,811) (Increase) in other current assets (27,729) (2,358) (32,180) (11,812) Increase (decrease) in accounts payable and accrued liabilities 56,691 51,043 55,436 (18,293) Increase (decrease) in other non-current liabilities 1,256 393 (6,469) 593 Net cash provided by operating activities 301,511 201,283 994,680 878,419 Cash flows from investing activities: Oil and gas expenditures (267,965) (246,896) (1,021,456) (1,054,581) Merger related costs - - - (439) Proceeds from sale of assets 153,999 46 177,195 10,705 Distributions received from equity investees - 1,538 3,015 59,823 Purchases of short-term investments (16,000) - (16,000) - Sales of short-term investments 1,424 - 1,424 - Other expenditures (8,583) (2,098) (19,574) (25,310) Net cash used by investing activities (137,125) (247,410) (875,396) (1,009,802) Cash flows from financing activities: Net increase (decrease) in bank debt (39,000) 45,000 (95,000) 95,000 Increase in other long-term debt - - 350,000 - Decrease in other long-term debt - - (204,360) - Financing costs incurred (14) (79) (6,113) (153) Treasury stock acquired - - (42,266) (11,016) Dividends paid (3,334) (3,352) (13,429) (13,358) Proceeds from issuance of common stock and other 989 1,522 9,886 4,311 Net cash provided by (used in) financing activities (41,359) 43,091 (1,282) 74,784 Net change in cash and cash equivalents 123,027 (3,036) 118,002 (56,599) Cash and cash equivalents at beginning of period 23 8,084 5,048 61,647 Cash and cash equivalents at end of period $ 123,050 $ 5,048 $ 123,050 $ 5,048 7 BALANCE SHEETS (unaudited) December 31, December 31, Assets 2007 2006 (In thousands, except share data) Current assets: Cash and cash equivalents $123,050 $5,048 Short-term investments 14,391 - Receivables, net 315,327 306,458 Inventories 29,642 39,397 Deferred income taxes 5,697 1,498 Derivative instruments 12,124 41,945 Other current assets 64,346 22,411 Total current assets 564,577 416,757 Oil and gas properties at cost, using the full cost method of accounting: Proved properties 5,545,977 4,656,854 Unproved properties and properties under development, not being amortized 364,618 425,173 5,910,595 5,082,027 Less - accumulated depreciation, depletion and amortization (1,938,863) (1,494,317) Net oil and gas properties 3,971,732 3,587,710 Fixed assets, net 90,584 88,924 Goodwill 691,432 691,432 Derivative instruments - 7,051 Other assets, net 44,469 37,876 $5,362,794 $4,829,750 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $52,671 $56,241 Accrued liabilities 240,387 202,163 Revenue payable 131,513 96,184 Total current liabilities 424,571 354,588 Long-term debt 487,159 443,667 Deferred income taxes 1,076,223 921,665 Other liabilities 115,554 133,687 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, 83,620,480 and 83,962,132 shares issued, respectively 836 840 Treasury stock, at cost, 1,078,822 shares held (40,628) (40,628) Paid-in capital 1,842,690 1,867,448 Retained earnings 1,448,763 1,117,402 Accumulated other comprehensive income 7,626 31,081 3,259,287 2,976,143 $5,362,794 $4,829,750 8 -----END PRIVACY-ENHANCED MESSAGE-----