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Denver-based Cimarex Energy Co. (XEC - Snapshot Report) has provided a glimpse of its 2014 capital expenditure plan. The oil and gas exploration and production (E&P) firm plans to invest roughly $1.8 billion this year.

Cimarex intends to invest $1.4 billion in the Permian Region in 2014, up 40% from 2013 capital expenditures of approximately $1 billion. Of this, $1.2 billion will be invested in drilling and completing wells, including $600 million in the Wolfcamp shale.

Total company production is expected to grow to an average 760–800 million cubic feet equivalent (Mmcfe) per day in 2014, an increase of 13% over 2013.  Estimated growth in oil production of 17–19% will outpace natural gas liquids and natural gas production growth. The capital program will be funded with cash flow from operating activities and bank debt.

Cimarex currently has four downspacing pilots planned in 2014 – two in the Wolfcamp D in Culberson County and two Wolfcamp pilots in Reeves County. A four-well, 80-acre spacing pilot in the Wolfcamp A in Reeves County is now underway and drilling will commence on the first four-well, 80-acre spacing pilot in Culberson County this month.  

Cimarex is currently operating 12 horizontal rigs in the Permian Basin and expects to increase the number to 16 by the end of January.

Cimarex is an independent E&P company. The primary activities of the company are in the Mid-Continent and Permian Basin areas of the U.S.

The company is focused on increasing shareholder value through strategies linked to generating attractive economic returns on capital employed and profitable growth in per-share reserves, production and cash flow. It intends to profitably grow reserves and production through a balanced mix of exploration, exploitation and acquisitions. Cimarex has a diversified base of high-quality production along with attractive drilling opportunities.

As is the case with other independent exploration and production companies, Cimarex’s results are directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces.

Cimarex currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Better-ranked energy players include World Fuel Services Corp. (INT - Snapshot Report), Cheniere Energy Partners LP. (CQP) and Seadrill Partners LLC (SDLP - Snapshot Report). All these stocks currently sport a Zacks Rank #1 (Strong Buy) and offer value.


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