Cimarex Energy Co. Reports Operating Results (10-K/A)
Cimarex Energy Co. has a market cap of $5.7 billion; its shares were traded at around $67.98 with a P/E ratio of 12.9 and P/S ratio of 5.6. The dividend yield of Cimarex Energy Co. stocks is 0.5%.XEC is in the portfolios of Third Avenue Management, Robert Rodriguez of FPA Capital, Martin Whitman of Third Avenue Value Fund, First Pacific Advisors of First Pacific Advisors, LLC, Diamond Hill Capital of Diamond Hill Capital Management Inc, Stanley Druckenmiller of Duquesne Capital Management, LLC, Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, David Dreman of Dreman Value Management, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations: Beginning in the fourth quarter of 2008, severe financial market disruptions and global economic contraction contributed to large decreases in the prices we received for our oil and gas production. Our oil price realizations for 2009 averaged $56 per barrel, 42% less than our 2008 average of $96 per barrel. Our average gas price dropped 51% to $4.12 per Mcf during 2009 from $8.43 per Mcf in 2008. The large decrease in price resulted in a significant decrease in the amount of cash flow available to invest in exploration and development. In response, we sharply reduced our drilling activity. In 2009 we drilled 76% fewer wells as compared to 2008. Our total capital investment in exploration and development during 2009 was just $524 million versus $1.4 billion in 2008.
In early 2010, oil and gas prices have improved and the cost to drill and complete our wells has decreased. We have begun to increase our drilling activity and our exploration and development capital investment for 2010 is presently expected to range from $700-$900 million.
Recorded a first-quarter 2009 non-cash full-cost ceiling test write-down of oil and gas properties of $502 million after-tax. Had a net loss for 2009 of $311.9 million. Business Strategy
Our principal business objective is to profitably grow our proved reserves and production for the long-term benefit of our shareholders. Our strategy centers on maximizing cash flow from our producing properties and profitably reinvesting that cash flow in exploration and development. During 2009, our cash flow from operating activities totaled approximately $675 million. Our 2009 investment in exploration and development was $524 million.
We have a large development project in Sublette County, Wyoming where we are developing the deep Madison gas formation and constructing a gas processing plant. During 2009 we invested a total of $20.1 million in this project and our cumulative investment in this project is $70.9 million. We presently expect that we will initiate gas sales from this project in 2011. Our total investment, including planned expansion, will approximate $200 million.
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