8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934.

November 4, 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 of incorporation)	(Commission File Number)	(I.R.S. Employer 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 2.02RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 4, 2008, Cimarex Energy Co. (Cimarex) announced its third-quarter 2008 financial results. The news release is included in this report as Exhibit 99.1.

ITEM 7.01REGULATION FD DISCLOSURE

On November 4, 2008, Cimarex issued a news release reporting its financial results for the third-quarter 2008. A copy of the news release is furnished as Exhibit 99.1 to this report.

ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS

D.Exhibits

Exhibit No.	Description
99.1	Cimarex News Release, dated November 4, 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: November 4, 2008	By:	/s/ Paul Korus
		Paul Korus, Vice President,
		Chief Financial Officer and Treasurer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Cimarex News Release, dated November 4, 2008

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EX-99.1

Cimarex Energy Co.
1700 Lincoln Street, Suite 1800
Denver, CO 80203
Phone: (303) 295-3995

Cimarex Reports Third-Quarter 2008 Financial Results

DENVER, November 4, 2008 - Cimarex Energy Co. (NYSE: XEC) today reported third-quarter 2008 operating results. For the quarter, adjusted net income was $185.2 million, or $2.19 per diluted share. Cimarex’s adjusted net income excludes a $657.1 million ($417.4 million after-tax) full-cost, non-cash ceiling test write-down which is typically not included in security analyst’s published estimates^(1&2).

Including the non-cash, full-cost write-down, Cimarex reported a net loss for the quarter of $232.1 million, or $2.85 per common share. This compares to third-quarter 2007 earnings of $73.2 million, or $0.87 per diluted share. Quarter-end gas prices fell sharply to an average of approximately $4.50 per Mcf in the Permian and Mid-Continent where Cimarex produces over 80% of its gas, resulting in the full-cost write-down.

Revenues from oil and gas sales in the third quarter of 2008 were $552.4 million, compared to $327.8 million in the same period of 2007. Third-quarter 2008 cash flow from operations totaled $414.2 million versus $235.3 million in the same period of 2007⁽2).

The increase in third-quarter 2008 revenues and cash flow is primarily a result of higher oil and gas prices and growing production. Third-quarter 2008 gas prices increased 52% to $9.76 per Mcf and oil rose 60% to $114.87 per barrel from the same period of 2007. Oil and gas prices at the end of the third-quarter fell sharply, which resulted in Cimarex taking a non-cash, full-cost write-down.

Third-quarter 2008 daily oil and gas production grew 8% over last year’s third quarter to 484.9 million cubic feet equivalent per day (MMcfe/d). Gas production in the latest quarter averaged 349.3 million cubic feet per day, an increase of 7% over the third-quarter 2007 and oil production grew 10% to an average of 22,607 barrels per day. Production grew despite hurricanes Gustav and Ike reducing third-quarter 2008 volumes by approximately 15 MMcfe/d.

For the nine months ended September 30, 2008, net income was $147.0 million, or $1.74 per diluted share, as compared to $216.5 million, or $2.56 per diluted share, for the first nine months of 2007. The lower 2008 earnings is a result of the $657.1 million ($417.4 million after-tax) non-cash, full-cost write-down taken in the current quarter. Cash flow from operations for the first nine months of 2008 was $1.2 billion versus $687.0 million in the same period of 2007⁽1).

Capital

Third-quarter 2008 exploration and development expenditures were $418.9 million as compared to $234.2 million in the third quarter of 2007. In the third quarter of 2008, Cimarex drilled 124 gross (74 net) wells, completing 97% as producers. Exploration and development capital investment for 2008 is projected to be approximately $1.4 billion.

Outlook

Fourth-quarter 2008 oil and gas production volumes are projected to range between 488 - 498 MMcfe/d, resulting in full-year 2008 production volumes of 484 - 487 MMcfe/d. The remaining impact from the hurricanes is expected to reduce fourth-quarter production on average approximately 8-10 MMcfe/d.

Expenses for the fourth quarter of 2008 are expected to fall within the following ranges:

Expenses ($/Mcfe):
Production expense	$1.15 - $1.25
Transportation expense	0.20 - 0.25
DD&A and ARO accretion	2.75 - 2.95
General and administrative expense	0.28 - 0.32
Production taxes (% of oil and gas revenue)	6.5% - 7.5%

(1) At each quarter-end, a full cost pool impairment evaluation is calculated using period end pricing which compares the after-tax present value at 10% of estimated future proved reserves (“full cost ceiling limit”) to the proved properties net book-value. If the proved properties net book-value exceeds the full cost ceiling limit, a write-down of the excess must be charged to expense. 

(2) Adjusted net income and Cash Flow from Operations are non-GAAP financial measure. See below for a reconciliation of the related amounts.

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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 # 69548653 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 # 69548653. 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.

FOR FURTHER INFORMATION CONTACT

Cimarex Energy Co.

Mark Burford, Director of Capital Markets

303-295-3995

www.cimarex.com

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RECONCILIATION OF ADJUSTED NET INCOME

	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2008			2007		2008		2007
	(in thousands, except per share data)
Net income (loss)	$	(232,129	)	$	73,156	$	147,014	$	216,491
Impairment of oil and gas properties, net of tax		417,353			—		417,353		—
Adjusted net income	$	185,224		$	73,156	$	564,367	$	216,491
Diluted earnings (loss) per share	$	(2.85	)	$	0.87	$	1.74	$	2.56
Adjusted diluted earnings per share	$	2.19		$	0.87	$	6.69	$	2.56
Diluted average shares outstanding		81,572			84,025		84,389		84,418
Adjusted diluted shares outstanding		84,454			84,025		84,389		84,418

Adjusted net income and adjusted earnings per diluted share excludes the impairment of oil and gas properties because management believes this item affects the comparability of operating results. The company discloses these non-GAAP financial measures as a useful adjunct to GAAP earnings because:

a) Management uses adjusted net income to evaluate the company's operational trends and performance relative to other oil and gas exploration and production companies.

b) Adjusted net income available to common stockholders is more comparable to earnings estimates provided by research analysts.

Adjusted diluted average shares outstanding for the three months ended September 30, 2008 include shares that are considered antidilutive for calculating earnings per share in accordance with GAAP.

RECONCILIATION OF CASH FLOW FROM OPERATIONS

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2008			2007			2008		2007
	(in thousands)						(in thousands)
Net cash provided by operating activities	$	443,157		$	259,906		$	1,140,709	$	693,169
Change in operating assets and liabilities		(28,982	)		(24,653	)		43,799		(6,212	)
Cash flow from operations	$	414,175		$	235,253		$	1,184,508	$	686,957

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.

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PRICE AND PRODUCTION DATA

	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2008			2007		2008		2007
Total production - Mcf		32,135,957			29,921,053		95,217,617		88,559,832
Gas volume - Mcf per day		349,304			325,229		347,510		324,395
Gas price - per Mcf (before hedge effect)	$	9.79		$	6.04	$	9.58	$	6.59
Effect of hedges	$	(0.03	)	$	0.39		—	$	0.23
Gas price - per Mcf (after hedge effect)	$	9.76		$	6.43	$	9.58	$	6.82
Total production - barrels		2,079,835			1,889,376		6,195,523		5,450,911
Oil volume - barrels per day		22,607			20,537		22,611		19,967
Oil price - per barrel	$	114.87		$	71.63	$	110.26	$	62.99

OIL AND GAS CAPITALIZED EXPENDITURES

	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2008		2007			2008		2007
	(in thousands)					(in thousands)
Acquisition of properties	$	120	$	41,111		$	1,489	$	41,134
Exploration and development		418,941		234,188			1,085,794		716,567
Total oil and gas expenditures		419,061		275,299			1,087,283		757,701
Sale proceeds		—		(1,825	)		—		(22,705	)
	$	419,061	$	273,474		$	1,087,283	$	734,996

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CONDENSED INCOME STATEMENTS (unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
	(In thousands, except per share data)
Revenues:
Gas sales	$	313,523		$	192,423		$	912,443		$	603,650
Oil sales		238,918			135,335			683,109			343,329
Gas gathering, processing and other		23,245			14,773			71,226			42,425
Gas marketing, net		863			1,222			3,230			3,308
		576,549			343,753			1,670,008			992,712
Costs and expenses:
Impairment of oil and gas properties		657,146			—			657,146			—
Depreciation, depletion and amortization		147,432			117,634			406,189			339,315
Asset retirement obligation		1,978			2,124			5,434			7,114
Production		55,362			55,945			156,506			151,866
Transportation		10,621			6,882			29,551			19,110
Gas gathering and processing		11,882			6,859			34,284			21,995
Taxes other than income		39,097			22,397			109,453			66,826
General and administrative		12,377			10,922			37,837			35,531
Stock compensation, net		2,791			2,800			7,432			8,068
Other operating, net		11,871			3,867			12,992			6,182
		950,557			229,430			1,456,824			656,007
Operating income (loss)		(374,008	)		114,323			213,184			336,705
Other (income) and expense:
Interest expense		7,795			9,274			23,963			28,736
Capitalized interest		(5,671	)		(4,990	)		(14,930	)		(14,979	)
Amortization of fair value of debt		(191	)		(191	)		(572	)		(1,718	)
Gain on early extinguishment of debt		—			—			—			(5,099	)
Other, net		(8,086	)		(5,316	)		(16,610	)		(12,222	)
Income (loss) before income tax		(367,855	)		115,546			221,333			341,987
Income tax expense (benefit)		(135,726	)		42,390			74,319			125,496
Net income (loss)	$	(232,129	)	$	73,156		$	147,014		$	216,491
Earnings (loss) per share:
Basic	$	(2.85	)	$	0.90		$	1.81		$	2.64
Diluted	$	(2.85	)	$	0.87		$	1.74		$	2.56
Weighted average shares outstanding:
Basic		81,572			81,568			81,445			82,022
Diluted		81,572			84,025			84,389			84,418

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CONDENSED CASH FLOW STATEMENTS (unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(232,129	)	$	73,156		$	147,014		$	216,491
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Impairment of oil and gas properties		657,146			—			657,146			—
Depreciation, depletion and amortization		147,432			117,634			406,189			339,315
Asset retirement obligation		1,978			2,124			5,434			7,114
Deferred income taxes		(162,794	)		42,390			(38,332	)		125,496
Stock compensation, net		2,791			2,800			7,432			8,068
Gain on liquidation of equity investees		—			(3,015	)		—			(3,015	)
Other		(249	)		164			(375	)		(6,512	)
Changes in operating assets and liabilities:
(Increase) decrease in receivables, net		82,375			7,902			(20,762	)		19,643
(Increase) decrease in other current assets		(13,622	)		4,517			(59,669	)		(4,451	)
Increase (decrease) in accounts payable and accrued liabilities		(38,005	)		17,607			39,747			(1,255	)
Decrease in other non-current liabilities		(1,766	)		(5,373	)		(3,115	)		(7,725	)
Net cash provided by operating activities		443,157			259,906			1,140,709			693,169
Cash flows from investing activities:
Oil and gas expenditures		(385,651	)		(280,262	)		(1,026,719	)		(753,491	)
Proceeds from sale of assets		79			1,666			434			23,196
Distributions received from equity investees		—			3,015			—			3,015
Sales of short-term investments		2,227			—			9,288			—
Other expenditures		(22,167	)		(3,601	)		(43,253	)		(10,991	)
Net cash used by investing activities		(405,512	)		(279,182	)		(1,060,250	)		(738,271	)
Cash flows from financing activities:
Net increase (decrease) in bank debt		—			39,000			—			(56,000	)
Increase in other long-term debt		—			—			—			350,000
Decrease in other long-term debt		—			—			—			(204,360	)
Financing costs incurred		—			(1	)		(50	)		(6,099	)
Treasury stock acquired		—			(36,643	)		—			(42,266	)
Dividends paid		(5,033	)		(3,348	)		(15,007	)		(10,095	)
Issuance of common stock and other		(30	)		880			12,931			8,897
Net cash provided by (used in) financing activities		(5,063	)		(112	)		(2,126	)		40,077
Net change in cash and cash equivalents		32,582			(19,388	)		78,333			(5,025	)
Cash and cash equivalents at beginning of period		168,801			19,411			123,050			5,048
Cash and cash equivalents at end of period	$	201,383		$	23		$	201,383		$	23

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BALANCE SHEETS (unaudited)

	September 30,			December 31,
	2008			2007
	(In thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	201,383		$	123,050
Restricted cash		500			—
Short-term investments		5,133			14,391
Receivables, net		336,089			315,327
Inventories		112,972			29,642
Deferred income taxes		4,543			5,697
Derivative instruments		7,156			12,124
Other current assets		6,555			64,346
Total current assets		674,331			564,577
Oil and gas properties at cost, using the full cost method of accounting:
Proved properties		6,569,058			5,545,977
Unproved properties and properties under development, not being amortized		434,550			364,618
		7,003,608			5,910,595
Less – accumulated depreciation, depletion and amortization		(2,988,075	)		(1,938,863	)
Net oil and gas properties		4,015,533			3,971,732
Fixed assets, net		116,875			90,584
Goodwill		691,432			691,432
Other assets, net		80,869			44,469
	$	5,579,040		$	5,362,794
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	62,793		$	52,671
Accrued liabilities		304,266			240,387
Revenue payable		160,063			131,513
Total current liabilities		527,122			424,571
Long-term debt		486,587			487,159
Deferred income taxes		1,027,949			1,076,223
Other liabilities		133,958			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, 84,157,024 and 83,620,480 shares issued, respectively		842			836
Treasury stock, at cost, 885,392 and 1,078,822 shares held, respectively		(33,344	)		(40,628	)
Paid-in capital		1,851,031			1,842,690
Retained earnings		1,580,728			1,448,763
Accumulated other comprehensive income		4,167			7,626
		3,403,424			3,259,287
	$	5,579,040		$	5,362,794

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