Cimarex Announces Second-Quarter Production Volumes and Provides Operations Update
30 July 2009 - 8:14AM
PR Newswire (US)
DENVER, July 29 /PRNewswire-FirstCall/ -- Cimarex Energy Co.
(NYSE:XEC) today announced second-quarter oil and gas production
volumes averaged 453.9 million cubic feet equivalent per day
(MMcfe/d). Average daily equivalent production was comprised of
317.7 million cubic feet of gas and 22,706 barrels of oil.
Second-quarter 2008 production averaged 488.4 MMcfe/d and
first-quarter 2009 averaged 489.0 MMcfe/d. Daily production
decreased as expected and is the result of reduced drilling.
Cimarex's second-quarter 2009 operated rig count averaged six as
compared to 37 in the comparable period of 2008. Second-quarter
2009 average realized prices are expected to be in the range of
$3.40 to $3.50 per thousand cubic feet (Mcf) of gas and $54.35 to
$54.85 per barrel of oil. Oil and Gas Hedges Cimarex has entered
into NYMEX oil and Mid-Continent natural gas hedge contracts for
January through December 2010 covering on average 7,000 barrels per
day and 130,000 MMBtu per day, respectively, over that period. This
represents approximately 30% of expected 2010 oil production and
40% of gas. The following tables summarize current commodity hedge
transactions: Weighted Average Price ---------- Period Commodity
Volume/Day Settlement Floor Ceiling ------ --------- ----------
---------- ----- ------- 2009 Jul Gas 147,000 Mid-Continent $3.00
$5.00 - Dec MMBtu 2010 Jan Oil 7,000 NYMEX $59.68 $89.59 - Dec*
barrels 2010 Jan Gas 90,000 Mid-Continent $5.00 $6.66 - Dec MMBtu
Period Commodity Volume/Day Settlement Swap Price ------ ---------
--------- ---------- ---------- 2010 Jan Gas 40,000 MMBtu
Mid-Continent $5.18 - Dec* * Mid-Continent swaps and NYMEX oil
collars of 2,000 barrels per day were entered into subsequent to
June 30, 2009. Cimarex accounts for these financial commodity
derivative contracts using the mark-to-market accounting method.
Cimarex will release its second-quarter 2009 financial results on
Friday, August 7, 2009, before the market opens. Exploration and
Development Highlights Cimarex drilled 65 gross (35 net) wells
during the first half of 2009, completing 95% as producers.
Cimarex's sharply reduced operated rig count resulted in drilling
74% fewer wells in the first half of 2009 as compared to 2008.
Currently, seven operated rigs are drilling; three in western
Oklahoma, three in the Permian Basin and one in the Gulf Coast.
Mid-Continent Cimarex drilled 41 gross (16 net) wells in the first
six months of 2009, completing 98% as producers. Second-quarter
2009 Mid-Continent production averaged 220.8 MMcfe/d, an increase
of 1% over second-quarter 2008. Western Oklahoma drilling totaled
36 gross (14 net) wells with 97% being completed as producers. The
majority of the drilling occurred in the Anadarko Basin Woodford
shale Cana play, where Cimarex participated in 28 gross (11 net)
wells. Since the Cana play began in late 2007, Cimarex has
participated in a total of 55 wells. Of these wells, 43 have been
brought online and the remainder are either in the process of being
drilled or awaiting completion. At June 30, 2009, the company's net
production from the Cana play was approximately 27 MMcfe/d, up from
approximately 5 MMcfe/d a year ago. During the first half of 2009,
the company's horizontal wells had an average completed well cost
of $8.0 million, average horizontal lateral length of 3,700 feet
and average time to drill to total depth of 64 days. During 2008
the average completed well cost was $10.3 million, average
horizontal lateral length was 3,500 feet and the average time to
drill to total depth was 77 days. For the wells completed and
producing in 2009, the current estimate for average gross ultimate
recovery is greater than 6.0 Bcfe. Cimarex currently has three
operated rigs drilling in the Cana play and expects to drill or
participate in approximately 45 gross (20 net) wells during 2009.
Permian Basin First-half 2009 Permian Basin drilling totaled 20
gross (15 net) wells, 90% of which were completed as producers.
Production averaged 168.1 MMcfe/d (51% oil), a 3% increase over the
second quarter of 2008. Second-quarter 2009 Permian Basin oil
production averaged of 14,261 barrels per day, a 15% increase over
second-quarter 2008. Because of weak oil prices, Cimarex dropped
all of its operated rigs in the Permian Basin by the end of the
first quarter of 2009. Beginning in the second quarter with
improving oil prices and lower service costs Cimarex has brought
back three operated rigs drilling horizontal oil wells. Gulf
Coast/Gulf of Mexico Cimarex finished drilling and completed three
gross (2.9 net) Gulf Coast producers in the first half of 2009.
Second-quarter 2009 onshore Gulf Coast production volumes averaged
49.5 MMcfe/d, a 38% decrease compared to second-quarter 2008.
Offshore production volumes averaged 12.1 MMcfe/d in the
second-quarter of 2009 versus 20.9 MMcfe/d in the second quarter of
2008. Lower production reflects an inactive drilling program and
natural reservoir depletion. In the first-half of 2009, Southeast
Texas Yegua/Cook Mountain drilling totaled 2 gross (2 net)
successful wells. In early July 2009, Cimarex brought on production
the Two Sisters #1 (100% working interest, 75% net revenue
interest) located near Beaumont in Jefferson County. The well is
currently producing approximately 40 MMcfe/d (25 MMcf/d of gas and
2,500 barrels of oil) gross with 6,900 psi flowing pressure.
Cimarex continues to operate one rig in the Southeast Texas
Yegua/Cook Mountain play. Cimarex will release second-quarter 2009
financial results and update guidance before the market opens on
Friday, August 7, 2009. Cimarex will also host a conference call
that day at 10:00 a.m. Mountain Time (12:00 p.m. Eastern Time). To
access the live, interactive call, please dial (800) 921-0061 and
reference call ID # 20269256 ten minutes before the scheduled start
time. A digital replay will be available for one week following the
live broadcast at (800) 642-1687 and by using the conference ID #
20269256. The listen-only web cast of the call will be accessible
via http://www.cimarex.com/. About Cimarex Energy Denver-based
Cimarex Energy Co. is an independent oil and gas exploration and
production company with principal operations in the Mid-Continent,
Permian Basin and Gulf Coast areas of the U.S. This communication
contains statements that constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on current expectations and
beliefs and are subject to a number of risks, uncertainties and
assumptions that could cause actual results to differ materially
from those described in the forward-looking statements. These risks
and uncertainties are more fully described in SEC reports filed by
Cimarex. While Cimarex makes these forward-looking statements in
good faith, management cannot guarantee that anticipated future
results will be achieved. Cimarex assumes no obligation and
expressly disclaims any duty to update the information contained
herein except as required by law. http://www.cimarex.com/
DATASOURCE: Cimarex Energy Co. CONTACT: Mark Burford, Director of
Capital Markets of Cimarex Energy Co., +1-303-295-3995 Web Site:
http://www.cimarex.com/
Copyright