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Cimarex Energy Company

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Cimarex Energy is a leading upstream player with premium positions in the Permian Basin and Mid-Continent region. It has the best quality assets among its peers. The company had projected an investment of $1.6 – $1.7 billion in exploration and development activities in 2018, significantly higher than the prior year. Of the total amount, 70% will likely be allocated for exploiting oil-rich and low-cost Permian Basin. We expect these developments to drive production. However, in the trailing twelve month period, the company’s net cash generated from operations came short in funding its expenditures, which resulted in a negative free cash flow.  Also, expenses related to production surged 13% year over year through 2017. If the trend continues, future profit will get affected.

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