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Cimarex Energy (XEC) Misses Q2 Earnings & Revenue Estimates

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Cimarex Energy Co. (XEC - Free Report) reported second-quarter 2018 earnings of $1.59 per share, which lagged the Zacks Consensus Estimate of $1.64. The figure improved from $1.06 in the year-ago quarter. The upside can be primarily attributed to increase in production and higher liquids price realizations, which was partially offset by lower gas price realizations.

Cimarex Energy Co Price, Consensus and EPS Surprise


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

Total Revenues

In the second quarter, Cimarex Energy’s total revenues amounted to $556.3 million and missed the Zacks Consensus Estimate of $559 million. The figure improved from $456.4 million in the year-ago quarter.

Operational Highlights

In the quarter under review, total production averaged 211.4 thousand barrels of oil equivalent (MBOE) per day, up 9.7% year over year. Oil volumes rose 6.5% to 61.6 thousand barrels per day (MBbls/d) on a year-over-year basis, but lagged the Zacks Consensus Estimate of 66 MBbls/d. Natural gas volumes increased 4.4% to 539.5 MMcf on a year-over-year basis and beat the Zacks Consensus Estimate of 535 MMcf. Natural gas liquids (NGL) volumes jumped 22.8% year over year to 59.8 MBbls/d and beat the Zacks Consensus Estimate of 52 MBbls/d.

Realized prices for natural gas declined 41.5% to $1.65 per thousand cubic feet, while crude oil and NGL displayed year-over-year increase of 38.2% and 22.2% to $60.99 per barrel and $22.29 per barrel, respectively.  

The company brought 57 gross (10 net) wells on stream during the quarter. Per the company, a total of 96 gross (25 net) wells were pending completion as of Jun 30.

Financial Condition

As of Jun 30, the company had cash and cash equivalents of $410.8 million. Net long-term debt was $1.5 billion, which represents a debt-to-capitalization ratio of 34%.   

Cimarex Energy's net cash from operating activities during the quarter was $321.2 million compared with $255.3 million in the prior-year quarter. The company spent $375 million for exploration and development during the second quarter, of which $322 million was allocated for drilling and completion activities.


Total production for the third quarter of 2018 is projected to average 206-215 MMcfe per day, adjusting for the sale of Ward County assets.Of which, oil production is estimated in the range of 61,500-64,500 barrels per day. Full-year 2018 production is estimated in the range of 214-221MMcfe.

Moreover, Cimarex Energy expects 2018 total production and oil production to rise14-18% and 20-25%, respectively, from the year-ago levels.

The company reiterated capital spending for 2018 between $1.6 billion and $1.7 billion.

Price Performance

Cimarex Energy’s shares gained 8.8% during the April-to-June quarter of 2018 compared with 12.5% rise of the industry.


Zacks Rank & Stocks to Consider

Currently, Cimarex Energy carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Canadian Natural Resources Limited (CNQ - Free Report) , China Petroleum and Chemical Corporation (SNP - Free Report) , also known as Sinopec, and Sunrun Inc. (RUN - Free Report) . Canadian Natural Resources carries a Zacks Rank #2 (Buy), while Sinopec and Sunrun flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Natural Resources, based in Calgary, Alberta, is an exploration and production (E&P) company. It pulled off an average positive earnings surprise of 4.7% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.

Sunrun is engaged in offering solar services through various channels. The company delivered an average positive earnings surprise of 16.3% in the last four quarters.

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