Cimarex Reports Second Quarter 2019 Results
Montag, 05.08.2019 22:06 von PR Newswire
PR Newswire
DENVER, Aug. 5, 2019
DENVER, Aug. 5, 2019 /PRNewswire/ --
- Daily production averaged 274.8 MBOE; oil production averaged 83,430 barrels per day
- 3Q oil production expected to be 85.0- 91.0 MBO/d; up 5.5 percent sequentially
- 2019 oil production expected to grow 23-29 percent; led by the Permian region
- 2019 capital guidance unchanged
Cimarex Energy Co. (NYSE: XEC) today reported second quarter 2019 net income of $109.3 million, or $1.07 per share, compared to $141.0 million, or $1.48 per share, in the same period a year ago. Second quarter adjusted net income (non-GAAP) was $83.0 million, or $0.82 per share, compared to second quarter 2018 adjusted net income (non-GAAP) of $151.9 million, or $1.59 per share1. Net cash provided by operating activities was $414.0 million in the second quarter of 2019 compared to $321.2 million in the same period a year ago. Adjusted cash flow from operations (non-GAAP) was $336.4 million in the second quarter of 2019 compared to $349.5 million in the second quarter a year ago1.
Total company production volumes for the quarter averaged 274.8 thousand barrels of oil equivalent (MBOE) per day. Oil production averaged 83,430 barrels (bbls) per day, up 35 percent from the same period a year ago and up five percent sequentially.
Realized product prices were down in the second quarter as compared to the same quarter a year ago. Realized oil prices averaged $54.24 per barrel, down 11 percent from the $60.99 per barrel received in the second quarter of 2018. Realized natural gas prices averaged $0.50 per thousand cubic feet (Mcf), down 70 percent from the second quarter 2018 average of $1.65 per Mcf. NGL prices averaged $13.08 per barrel, down 41 percent from the $22.29 per barrel received in the second quarter of 2018. See footnotes to the Average Realized Prices by Region table below for ASC 606 impact on realized prices.
Natural gas prices were negatively impacted by local price differentials. Cimarex's average differential to Henry Hub on its Permian natural gas production was $3.10 per Mcf in the second quarter of 2019 compared to $1.31 per Mcf in the second quarter of 2018 and $1.91 in the first quarter of 2019. In the Mid-Continent region, the company's average differential to Henry Hub was $0.86 per Mcf versus $1.03 per Mcf in the second quarter of 2018 and $0.46 in the first quarter of 2019. Our realized Permian oil differential to WTI Cushing improved and averaged $5.80 per barrel in the quarter, compared to $8.05 per barrel in the second quarter of 2018 and $6.90 per barrel in the first quarter of 2019.
Cimarex invested $325 million in exploration and development (E&D) during the second quarter, of which $265 million is attributable to drilling and completion activities. Cimarex invested $22 million in midstream assets during the quarter. Second quarter investments were funded with cash flow from operating activities. Total debt at June 30, 2019 consisted of $2.0 billion of long-term notes. Cimarex had no borrowings under its revolving credit facility and a cash balance of $19 million. Debt was 35 percent of total capitalization2.
2019 Outlook
Third quarter 2019 production volumes are expected to average 265 - 279 MBOE per day. Oil volumes estimated to average 85.0 - 91.0 MBbls per day in the third quarter, up 5.5 percent sequentially at the midpoint. Total 2019 daily production volumes are now expected to average 263 - 272 MBOE per day, with annual oil volumes estimated to average 83.0 - 87.0 MBbls per day.
Estimated 2019 exploration and development investment is $1.35 – 1.45 billion, unchanged from guidance given in February. Midstream investments are estimated to total approximately $70 million in 2019.
Expenses per BOE of production for 2019 are estimated to be:
Production expense | $3.30 - 3.65 | |
Transportation, processing and other expense | 1.80 - 2.20 | |
DD&A and ARO accretion | 7.75 - 8.75 | |
General and administrative expense | 0.95 - 1.20 | |
Taxes other than income (% of oil and gas revenue) | 6.5 - 7.5% |
Operations Update
Cimarex invested $325 million in E&D during the second quarter, 83 percent in the Permian Basin and 17 percent in the Mid-Continent. Cimarex brought 110 gross (40 net) wells on production during the quarter. At June 30, 99 gross (24 net) wells were waiting on completion. Cimarex currently is operating eight drilling rigs.
WELLS BROUGHT ON PRODUCTION BY REGION | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Gross wells | ||||||||||||
Permian Basin | 44 | 32 | 56 | 49 | ||||||||
Mid-Continent | 66 | 57 | 92 | 94 | ||||||||
110 | 89 | 148 | 143 | |||||||||
Net wells | ||||||||||||
Permian Basin | 32 | 13 | 37 | 22 | ||||||||
Mid-Continent | 8 | 10 | 11 | 16 | ||||||||
40 | 23 | 48 | 38 | |||||||||
Permian Region
Production from the Permian region averaged 188,703 BOE per day in the second quarter, a 55 percent increase from second quarter 2018. Oil volumes averaged 70,669 barrels per day, a 45 percent increase from second quarter 2018 and up nine percent sequentially.
Cimarex completed 44 gross (32 net) wells in the Permian region during the second quarter. There were 44 gross (20 net) wells waiting on completion at June 30. Cimarex currently is operating eight drilling rigs and two completion crews in the region.
Mid-Continent Region
Production from the Mid-Continent averaged 85,696 BOE per day for the second quarter, down four percent from second quarter 2018 and down five percent sequentially.
During the second quarter, Cimarex completed 66 gross (8 net) wells in the Mid-Continent region. At the end of the quarter, 55 gross (4 net) wells were waiting on completion. Cimarex is not currently operating a drilling rig or completion crew in the Mid-Continent.
Production by Region
Cimarex's average daily production and commodity price by region is summarized below:
DAILY PRODUCTION BY REGION | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Permian Basin | ||||||||||||
Gas (MMcf) | 379.3 | 240.5 | 360.1 | 239.2 | ||||||||
Oil (Bbls) | 70,669 | 48,797 | 67,835 | 49,318 | ||||||||
NGL (Bbls) | 54,813 | 32,865 | 50,567 | 28,817 | ||||||||
Total Equivalent (BOE) | 188,703 | 121,744 | 178,413 | 118,002 | ||||||||
Mid-Continent | ||||||||||||
Gas (MMcf) | 285.5 | 297.0 | 291.3 | 296.2 | ||||||||
Oil (Bbls) | 12,623 | 12,473 | 13,419 | 13,841 | ||||||||
NGL (Bbls) | 25,496 | 26,894 | 26,060 | 26,927 | ||||||||
Total Equivalent (BOE) | 85,696 | 88,864 | 88,028 | 90,142 | ||||||||
Total Company | ||||||||||||
Gas (MMcf) | 665.8 | 539.5 | 652.5 | 537.1 | ||||||||
Oil (Bbls) | 83,430 | 61,651 | 81,433 | 63,422 | ||||||||
NGL (Bbls) | 80,362 | 59,857 | 76,680 | 55,810 | ||||||||
Total Equivalent (BOE) | 274,767 | 211,424 | 266,868 | 208,752 | ||||||||
AVERAGE REALIZED PRICE BY REGION | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Permian Basin | ||||||||||||
Gas ($ per Mcf) (1) | (0.46) | 1.49 | 0.34 | 1.86 | ||||||||
Oil ($ per Bbl) | 54.02 | 59.83 | 51.15 | 59.79 | ||||||||
NGL ($ per Bbl) (2) | 11.97 | 22.80 | 13.72 | 21.93 | ||||||||
Mid-Continent | ||||||||||||
Gas ($ per Mcf) (3) | 1.78 | 1.77 | 2.24 | 2.04 | ||||||||
Oil ($ per Bbl) | 55.43 | 65.70 | 54.01 | 62.87 | ||||||||
NGL ($ per Bbl) (4) | 15.47 | 21.66 | 16.51 | 20.67 | ||||||||
Total Company | ||||||||||||
Gas ($ per Mcf) (5) | 0.50 | 1.65 | 1.19 | 1.96 | ||||||||
Oil ($ per Bbl) | 54.24 | 60.99 | 51.64 | 60.45 | ||||||||
NGL ($ per Bbl) (6) | 13.08 | 22.29 | 14.67 | 21.32 | ||||||||
______________________________________ | |
(1) | The average realized gas price shown in the table above includes the effects of ASC 606, which reduced the average realized prices by $0.40 per Mcf, $0.13 per Mcf, $0.34 per Mcf, and $0.11 per Mcf for the three months ended June 30, 2019 and 2018 and the six months ended June 30, 2019 and 2018, respectively. |
(2) | The average realized NGL price shown in the table above includes the effects of ASC 606, which reduced the average realized prices by $1.77 per barrel, $1.01 per barrel, $1.79 per barrel, and $1.69 per barrel for the three months ended June 30, 2019 and 2018 and the six months ended June 30, 2019 and 2018, respectively. |
(3) | The average realized gas price shown in the table above includes the effects of ASC 606, which reduced the average realized prices by $0.04 per Mcf, $0.04 per Mcf, $0.04 per Mcf, and $0.04 per Mcf for the three months ended June 30, 2019 and 2018 and the six months ended June 30, 2019 and 2018, respectively. |
(4) | The average realized NGL price shown in the table above includes the effects of ASC 606, which reduced the average realized prices by $0.25 per barrel, $0.28 per barrel, $0.32 per barrel, and $1.34 per barrel for the three months ended June 30, 2019 and 2018 and the six months ended June 30, 2019 and 2018, respectively. |
(5) | The average realized gas price shown in the table above includes the effects of ASC 606, which reduced the average realized prices by $0.25 per Mcf, $0.08 per Mcf, $0.21 per Mcf, and $0.07 per Mcf for the three months ended June 30, 2019 and 2018 and the six months ended June 30, 2019 and 2018, respectively. |
(6) | The average realized NGL price shown in the table above includes the effects of ASC 606, which reduced the average realized prices by $1.29 per barrel, $0.68 per barrel, $1.29 per barrel, and $1.52 per barrel for the three months ended June 30, 2019 and 2018 and the six months ended June 30, 2019 and 2018, respectively. |
Other
Cimarex received cash settlements of $21.2 million related to its gas hedges during the quarter. Settlement of oil hedges resulted in a cash payment of $14.9 million.
The following table summarizes the company's current open hedge positions:
3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | |||||||||||||
Gas Collars: | PEPL(3) | |||||||||||||||||
Volume (MMBtu/d) | 140,000 | 110,000 | 80,000 | 50,000 | 20,000 | 20,000 | ||||||||||||
Wtd Avg Floor | $ | 1.93 | $ | 1.92 | $ | 1.93 | $ | 1.91 | $ | 1.85 | $ | 1.85 | ||||||
Wtd Avg Ceiling | $ | 2.32 | $ | 2.36 | $ | 2.36 | $ | 2.28 | $ | 2.31 | $ | 2.31 | ||||||
El Paso Perm(3) | ||||||||||||||||||
Volume (MMBtu/d) | 90,000 | 60,000 | 40,000 | 30,000 | 20,000 | 20,000 | ||||||||||||
Wtd Avg Floor | $ | 1.46 | $ | 1.38 | $ | 1.40 | $ | 1.40 | $ | 1.35 | $ | 1.35 | ||||||
Wtd Avg Ceiling | $ | 1.76 | $ | 1.71 | $ | 1.79 | $ | 1.82 | $ | 1.66 | $ | 1.66 | ||||||
Waha (3) | ||||||||||||||||||
Volume (MMBtu/d) | 60,000 | 60,000 | 50,000 | 30,000 | — | — | ||||||||||||
Wtd Avg Floor | $ | 1.48 | $ | 1.48 | $ | 1.50 | $ | 1.57 | $ | — | $ | — | ||||||
Wtd Avg Ceiling | $ | 1.82 | $ | 1.82 | $ | 1.87 | $ | 1.97 | $ | — | $ | — | ||||||
Oil Collars: | WTI(4) | |||||||||||||||||
Volume (Bbl/d) | 40,000 | 32,000 | 24,000 | 16,000 | 8,000 | 8,000 | ||||||||||||
Wtd Avg Floor | $ | 53.85 | $ | 54.81 | $ | 54.08 | $ | 51.13 | $ | 50.00 | $ | 50.00 | ||||||
Wtd Avg Ceiling | $ | 67.44 | $ | 67.75 | $ | 67.65 | $ | 63.56 | $ | 62.80 | $ | 62.80 | ||||||
Oil Basis Swaps: | WTI Midland(5) | |||||||||||||||||
Volume (Bbl/d) | 35,500 | 35,500 | 23,000 | 15,000 | 8,000 | 8,000 | ||||||||||||
Wtd Avg Differential | $ | (7.36) | $ | (6.32) | $ | 0.16 | $ | 0.19 | $ | 0.71 | $ | 0.71 | ||||||
Oil Swaps: | WTI(4) | |||||||||||||||||
Volume (Bbl/d) | 5,000 | 5,000 | — | — | — | — | ||||||||||||
Wtd Avg Fixed | $ | 64.54 | $ | 64.54 | $ | — | $ | — | $ | — | $ | — | ||||||
Gas Swaps: | Henry Hub(6) | |||||||||||||||||
Volume (MMBtu/d) | 35,000 | 35,000 | — | — | — | — | ||||||||||||
Wtd Avg Fixed | $ | 3.00 | $ | 3.00 | $ | — | $ | — | $ | — | $ | — | ||||||
Sold Oil Calls: | WTI(4) | |||||||||||||||||
Volume (Bbl/d) | 3,670 | 3,670 | — | — | — | — | ||||||||||||
Wtd Avg Ceiling | $ | 64.36 | $ | 64.36 | $ | — | $ | — | $ | — | $ | — | ||||||
Conference call and webcast
Cimarex will host a conference call tomorrow, August 6, at 11:00 a.m. EDT (9:00 a.m. MDT). The call will be webcast and accessible on the Cimarex website at www.cimarex.com. To join the live, interactive call, please dial 866-367-3053 ten minutes before the scheduled start time (callers in Canada dial 855-669-9657 and international callers dial 412-902-4216).
A replay will be available on the company's website.
Investor Presentation
For more details on Cimarex's second quarter 2019 results, please refer to the company's investor presentation available at 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 Permian Basin and Mid-Continent areas of the U.S.
This press release contains forward-looking statements, including statements regarding projected results and future events. In particular, the "2019 Outlook" contains projections for certain 2019 operational and financial metrics. These forward-looking statements are based on management's judgment as of the date of this press release and include certain risks and uncertainties. Please refer to the company's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC, and other filings including our Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, for a list of certain risk factors that may affect these forward-looking statements.
Actual results may differ materially from company projections and other forward-looking statements and can be affected by a variety of factors outside the control of the company including among other things: oil, NGL and natural gas price levels and volatility; local commodity price differentials; derivative and hedging activities; higher than expected costs and expenses, including the availability and cost of services and materials; our ability to successfully integrate the business of the recently acquired Resolute Energy Corporation; compliance with environmental and other regulations; costs and availability of third party facilities for gathering, processing, refining and transportation; risks associated with operating in one major geographic area; environmental liabilities; the ability to receive drilling and other permits and rights-of-way in a timely manner; development drilling and testing results; declines in the values of our oil and gas properties resulting in impairments; the potential for production decline rates to be greater than expected; performance of acquired properties and newly drilled wells; regulatory approvals, including regulatory restrictions on federal lands; legislative or regulatory changes, including initiatives related to hydraulic fracturing, emissions and disposal of produced water; unexpected future capital expenditures; economic and competitive conditions; the availability and cost of capital; the ability to obtain industry partners to jointly explore certain prospects, and the willingness and ability of those partners to meet capital obligations when requested; changes in estimates of proved reserves; the success of the company's risk management activities; title to properties; litigation; the ability to complete property sales or other transactions; the effectiveness of controls over financial reporting; and other factors discussed in the company's reports filed with the SEC. Cimarex Energy Co. encourages readers to consider the risks and uncertainties associated with projections and other forward-looking statements. In addition, the company assumes no obligation to publicly revise or update any forward-looking statements based on future events or circumstances.
______________________________________ | |
1 | Adjusted net income and adjusted cash flow from operations are non-GAAP financial measures. See below for reconciliations of the related GAAP amounts. |
2 | Debt to total capitalization is calculated by dividing the sum of (i) the principal amount of senior notes and (ii) redeemable preferred stock by the sum of (x) the principal amount of senior notes, (y) redeemable preferred stock, and (z) total stockholders' equity. |
3 | PEPL refers to Panhandle Eastern Pipe Line Tex/OK Mid-Continent index, El Paso Perm refers to El Paso Permian Basin index, and Waha refers to West Texas (Waha) Index, all as quoted in Platt's Inside FERC. |
4 | WTI refers to West Texas Intermediate oil price as quoted on the New York Mercantile Exchange. |
5 | Index price on basis swaps is WTI NYMEX less the weighted average WTI Midland differential, as quoted by Argus Americas Crude. |
6 | Henry Hub (located in So. Louisiana) is the official location for futures contracts on the New York Mercantile Exchange (NYMEX). |
RECONCILIATION OF ADJUSTED NET INCOME
The following reconciles net income as reported under generally accepted accounting principles (GAAP) to adjusted net income (non-GAAP) for the periods indicated.
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||
Net income | $ | 109,309 | $ | 140,997 | $ | 135,625 | $ | 327,315 | |||||||
Mark-to-market (gain) loss on open derivative positions | (34,531) | 14,169 | 71,870 | (2,379) | |||||||||||
Loss on early extinguishment of debt | — | — | 4,250 | — | |||||||||||
Acquisition related costs | 74 | — | 8,391 | — | |||||||||||
Tax impact | 8,166 | (3,259) | (20,029) | 552 | |||||||||||
Adjusted net income | $ | 83,018 | $ | 151,907 | $ | 200,107 | $ | 325,488 | |||||||
Diluted earnings per share | $ | 1.07 | $ | 1.48 | $ | 1.34 | $ | 3.44 | |||||||
Adjusted diluted earnings per share* | $ | 0.82 | $ | 1.59 | $ | 2.01 | $ | 3.41 | |||||||
Weighted-average number of shares outstanding: | |||||||||||||||
Adjusted diluted** | 101,448 | 95,428 | 99,592 | 95,451 | |||||||||||
Adjusted net income and adjusted diluted earnings per share exclude the noted items because management believes these items affect the comparability of operating results. The company discloses these non-GAAP financial measures as a useful adjunct to GAAP measures because: | ||
a) | Management uses adjusted net income to evaluate the company's operating performance between periods and to compare the company's performance to other oil and gas exploration and production companies. | |
b) | Adjusted net income is more comparable to earnings estimates provided by research analysts. | |
* Does not include adjustments resulting from application of the "two-class method" used to determine earnings per share under GAAP. | ||
** Reflects the weighted-average number of common shares outstanding during the period as adjusted for the dilutive effects of outstanding stock options. | ||
RECONCILIATION OF ADJUSTED CASH FLOW FROM OPERATIONS
The following table provides a reconciliation from generally accepted accounting principles (GAAP) measures of net cash provided by operating activities to adjusted cash flows from operations (non-GAAP) for the periods indicated.
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Net cash provided by operating activities | $ | 413,992 | $ | 321,246 | $ | 664,083 | $ | 704,339 | |||||||
Change in operating assets and liabilities | (77,630) | 28,265 | 23,341 | 12,406 | |||||||||||
Adjusted cash flow from operations | $ | 336,362 | $ | 349,511 | $ | 687,424 | $ | 716,745 | |||||||
Management uses the non-GAAP financial measure of adjusted cash flow from operations as a means of measuring our ability to fund our capital program and dividends, without fluctuations caused by changes in current assets and liabilities, which are included in the GAAP measure of net cash provided by operating activities. Management believes this non-GAAP financial measure provides useful information to investors for the same reason, and that it is also used by professional research analysts in providing investment recommendations pertaining to companies in the oil and gas exploration and production industry.
OIL AND GAS CAPITALIZED EXPENDITURES | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Acquisitions: | |||||||||||||||
Proved | $ | 1,200 | $ | — | $ | 693,800 | $ | 62 | |||||||
Unproved | 1,000 | 77 | 1,051,782 | 2,236 | |||||||||||
2,200 | 77 | 1,745,582 | 2,298 | ||||||||||||
Exploration and development: | |||||||||||||||
Land and seismic | $ | 14,552 | $ | 10,327 | $ | 24,079 | $ | 20,424 | |||||||
Exploration and development | 310,428 | 365,097 | 668,919 | 668,469 | |||||||||||
324,980 | 375,424 | 692,998 | 688,893 | ||||||||||||
Property sales: | |||||||||||||||
Proved | $ | (22,058) | $ | (4,577) | $ | (18,028) | $ | (29,541) | |||||||
Unproved | (6,253) | (441) | (9,754) | (5,301) | |||||||||||
(28,311) | (5,018) | (27,782) | (34,842) | ||||||||||||
$ | 298,869 | $ | 370,483 | $ | 2,410,798 | $ | 656,349 | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands, except per share information) | |||||||||||||||
Revenues: | |||||||||||||||
Oil sales | $ | 411,766 | $ | 342,184 | $ | 761,072 | $ | 693,907 | |||||||
Gas and NGL sales | 126,044 | 202,202 | 343,959 | 405,920 | |||||||||||
Gas gathering and other | 8,653 | 11,888 | 18,389 | 23,581 | |||||||||||
546,463 | 556,274 | 1,123,420 | 1,123,408 | ||||||||||||
Costs and expenses: | |||||||||||||||
Depreciation, depletion, amortization, and accretion | 215,484 | 145,441 | 407,950 | 279,360 | |||||||||||
Production | 87,726 | 79,215 | 164,959 | 150,486 | |||||||||||
Transportation, processing, and other operating | 48,331 | 51,933 | 101,939 | 97,098 | |||||||||||
Gas gathering and other | 13,605 | 9,467 | 25,925 | 19,290 | |||||||||||
Taxes other than income | 41,033 | 27,930 | 74,727 | 58,118 | |||||||||||
General and administrative | 24,911 | 19,739 | 53,995 | 43,060 | |||||||||||
Stock compensation | 6,494 | 3,095 | 13,207 | 9,825 | |||||||||||
(Gain) loss on derivative instruments, net | (40,768) | 21,699 | 74,684 | 17,540 | |||||||||||
Other operating expense, net | 590 | 5,252 | 8,916 | 5,455 | |||||||||||
397,406 | 363,771 | 926,302 | 680,232 | ||||||||||||
Operating income | 149,057 | 192,503 | 197,118 | 443,176 | |||||||||||
Other (income) and expense: | |||||||||||||||
Interest expense | 24,674 | 16,895 | 45,079 | 33,678 | |||||||||||
Capitalized interest | (16,805) | (4,850) | (25,547) | (9,660) | |||||||||||
Loss on early extinguishment of debt | — | — | 4,250 | — | |||||||||||
Other, net | (2,167) | (2,605) | (4,408) | (7,172) | |||||||||||
Income before income tax | 143,355 | 183,063 | 177,744 | 426,330 | |||||||||||
Income tax expense | 34,046 | 42,066 | 42,119 | 99,015 | |||||||||||
Net income | $ | 109,309 | $ | 140,997 | $ | 135,625 | $ | 327,315 | |||||||
Earnings per share to common stockholders: | |||||||||||||||
Basic | $ | 1.07 | $ | 1.48 | $ | 1.34 | $ | 3.44 | |||||||
Diluted | $ | 1.07 | $ | 1.48 | $ | 1.34 | $ | 3.44 | |||||||
Dividends declared per share | $ | 0.20 | $ | 0.16 | $ | 0.40 | $ | 0.32 | |||||||
Weighted-average number of shares outstanding: | |||||||||||||||
Basic | 99,658 | 93,728 | 97,800 | 93,713 | |||||||||||
Diluted | 99,665 | 93,759 | 97,809 | 93,748 | |||||||||||
Comprehensive income: | |||||||||||||||
Net income | $ | 109,309 | $ | 140,997 | $ | 135,625 | $ | 327,315 | |||||||
Other comprehensive income: | |||||||||||||||
Change in fair value of investments, net of tax of $89, $57, $428 and $1, respectively | 304 | 192 | 1,453 | 2 | |||||||||||
Total comprehensive income | $ | 109,613 | $ | 141,189 | $ | 137,078 | $ | 327,317 | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 109,309 | $ | 140,997 | $ | 135,625 | $ | 327,315 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation, depletion, amortization, and accretion | 215,484 | 145,441 | 407,950 | 279,360 | |||||||||||
Deferred income taxes | 34,046 | 42,783 | 42,119 | 99,732 | |||||||||||
Stock compensation | 6,494 | 3,095 | 13,207 | 9,825 | |||||||||||
(Gain) loss on derivative instruments, net | (40,768) | 21,699 | 74,684 | 17,540 | |||||||||||
Settlements on derivative instruments | 6,237 | (7,530) | (2,814) | (19,919) | |||||||||||
Loss on early extinguishment of debt | — | — | 4,250 | — | |||||||||||
Amortization of debt issuance costs and discounts | 783 | 727 | 1,502 | 1,456 | |||||||||||
Changes in non-current assets and liabilities | 601 | 1,613 | 2,749 | 713 | |||||||||||
Other, net | 4,176 | 686 | 8,152 | 723 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | 83,716 | (29,710) | 117,692 | 15,012 | |||||||||||
Other current assets | (1,111) | 283 | (761) | 1,886 | |||||||||||
Accounts payable and other current liabilities | (4,975) | 1,162 | (140,272) | (29,304) | |||||||||||
Net cash provided by operating activities | 413,992 | 321,246 | 664,083 | 704,339 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Acquisition of Resolute Energy, net of cash acquired | — | — | (284,441) | — | |||||||||||
Oil and gas capital expenditures | (379,015) | (327,352) | (711,757) | (650,807) | |||||||||||
Sales of oil and gas assets | 8,233 | 5,018 | 13,233 | 34,842 | |||||||||||
Sales of other assets | 234 | 93 | 434 | 525 | |||||||||||
Other capital expenditures | (22,313) | (37,056) | (40,141) | (56,112) | |||||||||||
Net cash used by investing activities | (392,861) | (359,297) | (1,022,672) | (671,552) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings of long-term debt | 528,000 | — | 1,710,310 | — | |||||||||||
Repayments of long-term debt | (528,000) | — | (2,081,000) | — | |||||||||||
Financing, underwriting, and debt redemption fees | (853) | — | (11,791) | — | |||||||||||
Finance lease payments | (920) | — | (1,555) | — | |||||||||||
Dividends paid | (21,468) | (15,199) | (38,647) | (22,801) | |||||||||||
Employee withholding taxes paid upon the net settlement of equity-classified stock awards | — | (641) | (654) | (946) | |||||||||||
Proceeds from exercise of stock options | 594 | 904 | 674 | 1,249 | |||||||||||
Net cash used by financing activities | (22,647) | (14,936) | (422,663) | (22,498) | |||||||||||
Net change in cash and cash equivalents | (1,516) | (52,987) | (781,252) | 10,289 | |||||||||||
Cash and cash equivalents at beginning of period | 20,930 | 463,810 | 800,666 | 400,534 | |||||||||||
Cash and cash equivalents at end of period | $ | 19,414 | $ | 410,823 | $ | 19,414 | $ | 410,823 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | |||||||
June 30, | December 31, | ||||||
Assets | (in thousands, except share and | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 19,414 | $ | 800,666 | |||
Accounts receivable, net of allowance | 387,362 | 454,200 | |||||
Oil and gas well equipment and supplies | 58,306 | 55,553 | |||||
Derivative instruments | 42,957 | 101,939 | |||||
Other current assets | 12,017 | 11,781 | |||||
Total current assets | 520,056 | 1,424,139 | |||||
Oil and gas properties at cost, using the full cost method of accounting: | |||||||
Proved properties | 19,846,426 | 18,566,757 | |||||
Unproved properties and properties under development, not being amortized | 1,564,074 | 436,325 | |||||
21,410,500 | 19,003,082 | ||||||
Less – accumulated depreciation, depletion, amortization, and impairment | (15,659,363) | (15,287,752) | |||||
Net oil and gas properties | 5,751,137 | 3,715,330 | |||||
Fixed assets, net of accumulated depreciation of $356,631 and $324,631, respectively | 526,429 | 257,686 | |||||
Goodwill | 727,573 | 620,232 | |||||
Derivative instruments | 613 | 9,246 | |||||
Other assets | 70,126 | 35,451 | |||||
$ | 7,595,934 | $ | 6,062,084 | ||||
Liabilities, Redeemable Preferred Stock, and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 119,076 | $ | 106,814 | |||
Accrued liabilities | 397,210 | 379,455 | |||||
Derivative instruments | 50,056 | 27,627 | |||||
Revenue payable | 186,206 | 194,811 | |||||
Operating leases | 62,119 | — | |||||
Total current liabilities | 814,667 | 708,707 | |||||
Long-term debt principal | 2,000,000 | 1,500,000 | |||||
Less—unamortized debt issuance costs and discounts | (15,770) | (11,446) | |||||
Long-term debt, net | 1,984,230 | 1,488,554 | |||||
Deferred income taxes | 439,429 | 334,473 | |||||
Derivative instruments | 840 | 2,267 | |||||
Operating leases | 191,413 | — | |||||
Other liabilities | 221,842 | 198,297 | |||||
Total liabilities | 3,652,421 | 2,732,298 | |||||
Redeemable preferred stock - 8.125% Series A Cumulative Perpetual Convertible Preferred Stock, $0.01 par value, 62,500 shares authorized and issued and no shares authorized and issued, respectively | 81,620 | — | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value, 200,000,000 shares authorized, 101,473,177 and 95,755,797 shares issued, respectively | 1,015 | 958 | |||||
Additional paid-in capital | 3,223,331 | 2,785,188 | |||||
Retained earnings | 635,339 | 542,885 | |||||
Accumulated other comprehensive income | 2,208 | 755 | |||||
Total stockholders' equity | 3,861,893 | 3,329,786 | |||||
$ | 7,595,934 | $ | 6,062,084 | ||||
SOURCE Cimarex Energy Co.