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Cimarex Energy (XEC) Beats Q2 Earnings & Revenue Estimates

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Upstream firm Cimarex Energy Co. (XEC - Free Report) reported second-quarter 2017 earnings of $1.06 per share beat the Zacks Consensus Estimate of 95 cents. The earnings also increased from 22 cents reported in the year-ago quarter. The improvement is mainly attributable to increase in production and higher oil and gas price realizations.

Total Revenue

In the second quarter, Cimarex Energy’s total revenue of $456.4 million surpassed the Zacks Consensus Estimate of $443.5 million. Revenues also increased from $298.9 million a year ago.
 

Cimarex Energy Co Price, Consensus and EPS Surprise

 

Cimarex Energy Co Price, Consensus and EPS Surprise | Cimarex Energy Co Quote

Operational Highlights

In the quarter under review, total production averaged 1,156.3 million cubic feet equivalent (MMcfe) per day, up 18.7% year over year. Oil volumes increased 30.3% to 57.9 thousand barrels per day (MBbls/d) and natural gas volumes inched up 11.9% to 516.7 MMcf, both on a year-over-year basis. Natural gas liquids (NGL) volumes jumped 19% year over year to 48.7 MBbls/d.

Realized prices for natural gas, crude oil and NGL displayed year-over-year increase of 55%, 10% and 31% to $2.82 per thousand cubic feet, $44.14 per barrel and $18.24 per barrel, respectively, in the reported quarter.  

The company brought 51 gross (18 net) wells onstream during the quarter. The company added that a total of 98 gross (29 net) wells were pending completion as of Jun 30.

Financial Condition

As of Jun 30, Cimarex Energy had cash and cash equivalents of $519.6 million compared with $652.9 million as of Dec 31, 2016. Net long-term debt was $1.5 billion, which represents a debt-to-capitalization ratio of 39.1%.   

Cimarex Energy's net cash from operating activities during the quarter was $255.3 million compared with $132.4 million in the prior-year period. The company spent $296 million for exploration and development during the second quarter, of which 53% was allocated to the Permian Basin and 45% was allotted for the Mid-Continent. This was primarily funded with cash flow from operations and cash in hand.

Second-Quarter Price Performance

The company’s shares have underperformed the industry during the second quarter of this year. During the period, the stock has lost 21.4% compared with the industry’s 17% decrease.

Guidance

Total production for the third quarter of 2017 is projected to average 1,100–1140 MMcfe per day, slightly down from second-quarter level.

Full-year 2017 production has been increased to the range of 1,120-1,140 MMcfe from earlier guidance.

Capital investment for exploration and development has been reiterated at $1.1–$1.2 billion for 2017. Of the total, 62% is allocated for the Permian, while 37% is allocated for the Mid-Continent.

Zacks Rank & Other Stocks

Cimarex Energy currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Global Partners LP (GLP - Free Report) , Braskem S.A. (BAK - Free Report) and TransCanada Corp. (TRP - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Global Partners delivered a positive earnings surprise of 1200.00% in the preceding quarter. The company beat estimates in three of the trailing four quarters with an average positive earnings surprise of 415.30%.

Braskem delivered a positive earnings surprise of 107.79% in the quarter ending September 2016.

TransCanada delivered a positive earnings surprise of 12.00% in the preceding quarter. It surpassed estimates in two of the trailing four quarters with an average positive earnings surprise of 4.06%.

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