We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cimarex (XEC) Up 9.6% After Q4 Earnings Beat on Gas Prices
Read MoreHide Full Article
Cimarex Energy Co.’s shares jumped 9.6% yesterday, following better-than-expected quarterly results on Feb 22. Investors are pleased with the company’s free cash flow generation abilities. Its premier capital allocation plan can bring tremendous value for investors.
Q4 Results
The company reported fourth-quarter 2020 adjusted earnings per share of 89 cents, outpacing the Zacks Consensus Estimate of 71 cents. However, the figure declined from $1.18 per share in the year-ago quarter.
Total revenues of $434.7 million beat the Zacks Consensus Estimate of $421 million but decreased from the year-ago quarter’s $657.2 million.
The better-than-expected quarterly results can be attributed to higher natural gas price realizations and lower production expenses, partially offset by decreased overall production and realized crude prices.
Cimarex Energy Co Price, Consensus and EPS Surprise
For the quarter under review, total production averaged 229.5 thousand barrels of oil equivalent per day (MBoe/d), down from 292.7 MBoe/d in the year-ago period on considerably lower activities in the Mid-Continent and Permian Basin. The figure was within the guided range of 215-235 MBoe/d. Of the total production, 29.5% was crude oil and 27.7% comprised natural gas liquids (NGLs).
Total oil volumes fell to 67.8 thousand barrels per day (MBbls/d) from 92 MBbls/d in the year-ago period. Moreover, natural gas production decreased to 589.5 MMcf/d from the year-ago level of 732.6 MMcf/d. Also, NGL volumes dropped to 63.5 MBbls/d from the year-ago figure of 78.6 MBbls/d.
Realized Prices
Realized price of crude oil fell from $54.80 per barrel in the prior-year quarter to $40.09. The same for NGL decreased marginally to $14.02 from $14.13 in the year-ago quarter. However, realized prices for natural gas rose to $1.69 per thousand cubic feet from $1.19 recorded a year ago.
Costs and Expenses
Overall costs and expenses for the quarter plunged to $398.3 million from the year-ago level of $1,142.4 million, primarily due to lower impairment charges of oil and gas properties. Production expense for the fourth quarter was recorded at $71.7 million, down from the prior-year figure of $82.7 million. Also, transportation, processing and other operating costs decreased to $52 million from the year-ago figure of $64.8 million. However, general and administrative expenses rose to $30.7 million from $26.3 million in the year-ago period.
Financial Condition
As of Dec 31, 2020, the company had cash and cash equivalents of $273.1 million, marginally up from the third quarter. Net long-term debt was almost $2 billion, representing a net long-term debt to capital of 56.1%. It has no debt maturities till 2024.
Cimarex's adjusted cash flow from operating activities totaled $256.6 million, down from $416 million in the prior-year quarter. The company spent $131.9 million on exploration and development in the December quarter.
Proved Reserves
Cimarex reported proved reserves — as of Dec 31, 2020 — of 531 million barrels of oil equivalent (MMBOE), down from 620 MMBOE in 2019. The decline was primarily caused by reduced drilling activities that stemmed from lower commodity prices. Notably, 84% of the proved reserves are proved developed.
Guidance
Cimarex expects average total production for 2021 in the range of 235-255 MBoe/d. However, the mid-point of the range suggests a decline from the 2020 level of 252.5 MBoe/d. Full-year 2021, oil production will likely be in the band of 75-81 MBbls/d, whose mid-point signals a rise from the 2020 reported figure of 76.7 MBbls/d. For the first quarter, the company expects total output within 205-225 MBoe/d.
Total capital expenditure for the year will likely be in the range of $650-$750 million, of which $500-$600 million will be used for drilling and completion, while $40 million will be spent on midstream and saltwater disposal. Total capital investment in 2020 was $577 million.
Climarex expects 2021 free cash flow of $700 million after dividend payments at a WTI crude price of $35 per barrel, indicating a significant increase from $279 million in 2020. At the $55 per barrel level, the potential increase in the free cash flow will be used for further debt reduction.
It expects production expenses for full-year 2021 in the range of $3.10-$3.60 per Boe. Transportation, processing & other expenses will likely be in the band of $2.20-$2.50 per Boe.
Cactus’ bottom-line estimates for 2021 have witnessed two upward revisions and no downward movement in the past 60 days.
ConocoPhillips’ sales for 2021 are expected to increase 54% year over year.
Altus Midstream’s bottom line for 2021 is expected to increase 380.5% year over year.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Cimarex (XEC) Up 9.6% After Q4 Earnings Beat on Gas Prices
Cimarex Energy Co.’s shares jumped 9.6% yesterday, following better-than-expected quarterly results on Feb 22. Investors are pleased with the company’s free cash flow generation abilities. Its premier capital allocation plan can bring tremendous value for investors.
Q4 Results
The company reported fourth-quarter 2020 adjusted earnings per share of 89 cents, outpacing the Zacks Consensus Estimate of 71 cents. However, the figure declined from $1.18 per share in the year-ago quarter.
Total revenues of $434.7 million beat the Zacks Consensus Estimate of $421 million but decreased from the year-ago quarter’s $657.2 million.
The better-than-expected quarterly results can be attributed to higher natural gas price realizations and lower production expenses, partially offset by decreased overall production and realized crude prices.
Cimarex Energy Co Price, Consensus and EPS Surprise
Cimarex Energy Co price-consensus-eps-surprise-chart | Cimarex Energy Co Quote
Operational Highlights
Production
For the quarter under review, total production averaged 229.5 thousand barrels of oil equivalent per day (MBoe/d), down from 292.7 MBoe/d in the year-ago period on considerably lower activities in the Mid-Continent and Permian Basin. The figure was within the guided range of 215-235 MBoe/d. Of the total production, 29.5% was crude oil and 27.7% comprised natural gas liquids (NGLs).
Total oil volumes fell to 67.8 thousand barrels per day (MBbls/d) from 92 MBbls/d in the year-ago period. Moreover, natural gas production decreased to 589.5 MMcf/d from the year-ago level of 732.6 MMcf/d. Also, NGL volumes dropped to 63.5 MBbls/d from the year-ago figure of 78.6 MBbls/d.
Realized Prices
Realized price of crude oil fell from $54.80 per barrel in the prior-year quarter to $40.09. The same for NGL decreased marginally to $14.02 from $14.13 in the year-ago quarter. However, realized prices for natural gas rose to $1.69 per thousand cubic feet from $1.19 recorded a year ago.
Costs and Expenses
Overall costs and expenses for the quarter plunged to $398.3 million from the year-ago level of $1,142.4 million, primarily due to lower impairment charges of oil and gas properties. Production expense for the fourth quarter was recorded at $71.7 million, down from the prior-year figure of $82.7 million. Also, transportation, processing and other operating costs decreased to $52 million from the year-ago figure of $64.8 million. However, general and administrative expenses rose to $30.7 million from $26.3 million in the year-ago period.
Financial Condition
As of Dec 31, 2020, the company had cash and cash equivalents of $273.1 million, marginally up from the third quarter. Net long-term debt was almost $2 billion, representing a net long-term debt to capital of 56.1%. It has no debt maturities till 2024.
Cimarex's adjusted cash flow from operating activities totaled $256.6 million, down from $416 million in the prior-year quarter. The company spent $131.9 million on exploration and development in the December quarter.
Proved Reserves
Cimarex reported proved reserves — as of Dec 31, 2020 — of 531 million barrels of oil equivalent (MMBOE), down from 620 MMBOE in 2019. The decline was primarily caused by reduced drilling activities that stemmed from lower commodity prices. Notably, 84% of the proved reserves are proved developed.
Guidance
Cimarex expects average total production for 2021 in the range of 235-255 MBoe/d. However, the mid-point of the range suggests a decline from the 2020 level of 252.5 MBoe/d. Full-year 2021, oil production will likely be in the band of 75-81 MBbls/d, whose mid-point signals a rise from the 2020 reported figure of 76.7 MBbls/d. For the first quarter, the company expects total output within 205-225 MBoe/d.
Total capital expenditure for the year will likely be in the range of $650-$750 million, of which $500-$600 million will be used for drilling and completion, while $40 million will be spent on midstream and saltwater disposal. Total capital investment in 2020 was $577 million.
Climarex expects 2021 free cash flow of $700 million after dividend payments at a WTI crude price of $35 per barrel, indicating a significant increase from $279 million in 2020. At the $55 per barrel level, the potential increase in the free cash flow will be used for further debt reduction.
It expects production expenses for full-year 2021 in the range of $3.10-$3.60 per Boe. Transportation, processing & other expenses will likely be in the band of $2.20-$2.50 per Boe.
Zacks Rank & Key Picks
The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Cactus, Inc. (WHD - Free Report) , ConocoPhillips (COP - Free Report) and Altus Midstream Company (ALTM - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cactus’ bottom-line estimates for 2021 have witnessed two upward revisions and no downward movement in the past 60 days.
ConocoPhillips’ sales for 2021 are expected to increase 54% year over year.
Altus Midstream’s bottom line for 2021 is expected to increase 380.5% year over year.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>