Cimarex Energy Co. (XEC, Financial) filed Quarterly Report for the period ended 2009-06-30.
Cimarex Energy is an independent oil and gas exploration and production company focused on increasing shareholder value through strategies linked to generating attractive economic returns on capital employed and profitable growth in per-share reserves production and cash flow. They intend to profitably grow reserves and production through a balanced mix of exploration exploitation and acquisitions. They have a diversified base of high-quality production along with attractive drilling opportunities. Cimarex Energy Co. has a market cap of $3.09 billion; its shares were traded at around $37.09 with a P/E ratio of 7.1 and P/S ratio of 1.6. The dividend yield of Cimarex Energy Co. stocks is 0.6%. Cimarex Energy Co. had an annual average earning growth of 18.6% over the past 5 years.
During the second quarter of 2009 we entered into derivative contracts for a portion of our 2010 production. As of June 30, 2009 we have hedged a total of 5,000 barrels per day of our estimated 2010 oil production and 90,000 MMBtu per day of our expected 2010 Mid-Continent gas production. We hedged 4,000 barrels per day using collars establishing an average floor of $59.44 and an average ceiling of $89.33. For 1,000 barrels per day we purchased a $60.00 floor. Our Mid-Continent gas collars have a floor of $5.00 and an average ceiling of $6.66.
Net income for the second quarter of 2009 was $38.8 million, or $0.46 per diluted share. This compares to net income of $229.0 million, or $2.65 per diluted share for the same period in 2008. For the six months ended June 30, 2009, we recognized a net loss of $455.3 million, or $5.58 per share, compared to net income of $378.6 million, or $4.37 per diluted share, for the first six months of 2008. The decrease in net income is primarily the result of lower oil and gas sales and a non-cash full cost ceiling write-down that was recorded in the first quarter of 2009. This impairment is discussed further in the operating costs and expenses section below.
Oil and gas sales for the second quarter of 2009 totaled $213.4 million, compared to $588.7 million in 2008. Of the $375.3 million decrease in sales between the two periods, $31.9 million related to lower production volumes and $343.4 million resulted from lower prices. For the six months ended June 30, 2009, oil and gas sales decreased by $632.5 million, from $1.0 billion to $410.6 million during the first six months of 2009. Decreased commodity prices resulted in a $619.4 million decrease in oil and gas sales and lower production volumes resulted in a $13.1 million decrease between the two six-month periods.
Average realized gas prices decreased by 67% to $3.48 per Mcf for the three months ended June 30, 2009, compared to $10.57 per Mcf for the second quarter of 2008. This price decrease lowered gas sales by $205.0 million between the two periods. For the six months ended June 30, 2009, realized gas prices decreased 61% to $3.66 per Mcf from $9.49 per Mcf. This price change decreased sales by $346.2 million. Included in our first half 2008 realized gas price is $1.0 million of cash receipts (a positive $0.02 per Mcf effect) from hedges.
Realized oil prices averaged $54.61 per barrel during the second quarter of 2009, compared to $121.64 per barrel for the same period in 2008. The decrease in oil sales resulting from this 55% decrease in oil prices totaled $138.5 million. For the six months ended June 30, 2009, realized oil prices decreased 59% to $44.74 per barrel, from $107.93 per barrel, in the first six months of 2008. This oil price decrease lowered sales $273.2 million.
Read the The complete ReportXEC is in the portfolios of Third Avenue Management, Robert Rodriguez of FPA Capital, Martin Whitman of Third Avenue Value Fund, Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management.
Cimarex Energy is an independent oil and gas exploration and production company focused on increasing shareholder value through strategies linked to generating attractive economic returns on capital employed and profitable growth in per-share reserves production and cash flow. They intend to profitably grow reserves and production through a balanced mix of exploration exploitation and acquisitions. They have a diversified base of high-quality production along with attractive drilling opportunities. Cimarex Energy Co. has a market cap of $3.09 billion; its shares were traded at around $37.09 with a P/E ratio of 7.1 and P/S ratio of 1.6. The dividend yield of Cimarex Energy Co. stocks is 0.6%. Cimarex Energy Co. had an annual average earning growth of 18.6% over the past 5 years.
Highlight of Business Operations:
As a result, our earnings for the first six months of 2009 were negatively impacted. During the second quarter, we generated net income of $38.8 million, or $0.46 per diluted share, and for the first six months of the year we reported a net loss of $455.3 million, or $5.58 per share. This represented a significant decrease compared to the same period of 2008. The year to date loss in 2009 was primarily the result of a first quarter noncash impairment of our oil and gas properties of $501.8 million, net of income taxes. Substantially all of this noncash charge was the result of the continuing drop in commodity prices in the first quarter.During the second quarter of 2009 we entered into derivative contracts for a portion of our 2010 production. As of June 30, 2009 we have hedged a total of 5,000 barrels per day of our estimated 2010 oil production and 90,000 MMBtu per day of our expected 2010 Mid-Continent gas production. We hedged 4,000 barrels per day using collars establishing an average floor of $59.44 and an average ceiling of $89.33. For 1,000 barrels per day we purchased a $60.00 floor. Our Mid-Continent gas collars have a floor of $5.00 and an average ceiling of $6.66.
Net income for the second quarter of 2009 was $38.8 million, or $0.46 per diluted share. This compares to net income of $229.0 million, or $2.65 per diluted share for the same period in 2008. For the six months ended June 30, 2009, we recognized a net loss of $455.3 million, or $5.58 per share, compared to net income of $378.6 million, or $4.37 per diluted share, for the first six months of 2008. The decrease in net income is primarily the result of lower oil and gas sales and a non-cash full cost ceiling write-down that was recorded in the first quarter of 2009. This impairment is discussed further in the operating costs and expenses section below.
Oil and gas sales for the second quarter of 2009 totaled $213.4 million, compared to $588.7 million in 2008. Of the $375.3 million decrease in sales between the two periods, $31.9 million related to lower production volumes and $343.4 million resulted from lower prices. For the six months ended June 30, 2009, oil and gas sales decreased by $632.5 million, from $1.0 billion to $410.6 million during the first six months of 2009. Decreased commodity prices resulted in a $619.4 million decrease in oil and gas sales and lower production volumes resulted in a $13.1 million decrease between the two six-month periods.
Average realized gas prices decreased by 67% to $3.48 per Mcf for the three months ended June 30, 2009, compared to $10.57 per Mcf for the second quarter of 2008. This price decrease lowered gas sales by $205.0 million between the two periods. For the six months ended June 30, 2009, realized gas prices decreased 61% to $3.66 per Mcf from $9.49 per Mcf. This price change decreased sales by $346.2 million. Included in our first half 2008 realized gas price is $1.0 million of cash receipts (a positive $0.02 per Mcf effect) from hedges.
Realized oil prices averaged $54.61 per barrel during the second quarter of 2009, compared to $121.64 per barrel for the same period in 2008. The decrease in oil sales resulting from this 55% decrease in oil prices totaled $138.5 million. For the six months ended June 30, 2009, realized oil prices decreased 59% to $44.74 per barrel, from $107.93 per barrel, in the first six months of 2008. This oil price decrease lowered sales $273.2 million.
Read the The complete ReportXEC is in the portfolios of Third Avenue Management, Robert Rodriguez of FPA Capital, Martin Whitman of Third Avenue Value Fund, Kenneth Fisher of Fisher Asset Management, LLC, David Dreman of Dreman Value Management.
