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Cimarex Energy Company

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Cimarex Energy reported strong fourth-quarter 2016 earnings following increase in price realizations. The company also managed to beat the Zacks Consensus Estimate of earnings in three of the last four quarters with an average positive earnings surprise of 151.81%. These events are reflected in the company’s one-year price chart where Cimarex Energy outperformed the Zacks Categorized Oil & Gas-U.S Exploration and Production industry. Cimarex Energy’s combination of exposure to two most coveted areas in the country - Delaware Basin and Mid-Continent/STACK - along with a strong balance sheet provides it the ability to accelerate activity in a sustained price recovery environment. However, the company’s dividend history is not impressive. We see limited upside from current levels until volatile oil prices stabilize. Hence, we remain on the sidelines regarding the prospects of Cimarex Energy shares.

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