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Cimarex Energy Second Quarter 2021 Results

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   |    Friday,August 06,2021

Cimarex Energy Co. reported second-quarter 2021 financial and operating results.

Net income for second-quarter 2021 totaled $113.4 million, or $1.10 per share. Net income for the quarter was impacted by a mark-to-market loss on the Company's commodity derivative positions of $125.7 million. Excluding the impact of the mark-to-market loss on commodity derivatives, adjusted net income (non-GAAP) for second-quarter 2021 was $215.6 million, or $2.09 per share.


  • Generated cash flow from operating activities of $364 million.
  • Adjusted cash flow from operating activities (non-GAAP) totaled $394 million, exceeding capital expenditures and generating $195 million of free cash flow (non-GAAP).
  • Delivered oil volumes of 72.7 MBopd.
  • Provided comprehensive environmental and safety performance data for 2020 on Cimarex's website; data highlights the Company's continued investment and progress in reducing emissions, decreasing water intensity and enhancing safety efforts.
  • Announced merger with Cabot Oil & Gas, creating a premier energy company that will be well positioned to deliver through-cycle returns on and of capital.


  • Re-affirm Cimarex's full-year 2021 total capital expenditures guidance range of $650 million to $750 million, which is expected to drive fourth-quarter 2021 oil volume growth of more than 30% year-over-year.

Tom Jorden, Chairman and Chief Executive Officer, commented, "Our team delivered solid results, with oil production at the high-end of our expectations and cumulative free cash flow generation of $426 million in the first half of 2021. Additionally, we continued to make important progress on our ESG initiatives and minimizing our environmental footprint, including continuing to reduce our total Scope 1 GHG emissions."

"Looking ahead, the merits of our merger with Cabot are clear and compelling. The combination brings together two world-class portfolios to form a stronger, more resilient company that is well positioned to deliver value for shareholders. The transaction is proceeding on track, and we expect to close in the fourth quarter of this year."

Second-Quarter 2021 Summary

Second-quarter 2021 oil production totaled 72.7 thousand barrels per day (MBopd). Total production for the quarter averaged 237.1 thousand barrels of oil equivalent per day (MBoepd).

Cimarex's average realized price for oil, natural gas and NGLs for second-quarter 2021, excluding the effect of commodity derivatives, was $32.38 per Boe, compared with $10.32 per Boe for the same period a year ago.

Generated Strong Cash Flow

For second-quarter 2021, cash flow from operating activities was $363.7 million, including $30.4 million in working capital changes. Adjusted cash flow from operating activities (non-GAAP) was $394.0 million, exceeding second-quarter 2021 capital expenditures of $198.8 million, which included $168.4 million for drilling and completion activity. Free cash flow (non-GAAP) for second-quarter 2021 totaled $195.3 million.

During second-quarter 2021, Cimarex closed its previously announced agreements to sell non-core assets in the Permian Basin and Mid-Continent for a combined total of approximately $115 million. The divestitures include more than 3,000 gross wells in aggregate producing approximately 0.9 MBopd. There is no update to the Company's guidance as a result of these transactions.

Strong Financial Position

Cimarex maintains a strong financial position with substantial liquidity and investment-grade credit ratings. At the end of the reporting period, Cimarex had long-term debt of $2 billion, with no outstanding debt maturities until June 2024 and no debt outstanding under its credit facility. Driven by strong cash flow generation in second-quarter 2021, Cimarex's cash balance increased to $799 million at quarter end, compared to $273 million at December 31, 2020.

Hedge Position

Cimarex's commodity derivatives strategy mitigates the Company's exposure to commodity price fluctuations. Please see the table under "Derivatives Information" below for detailed information about Cimarex's current derivatives positions.


Cimarex is currently running five rigs in the Permian Basin, and plans to average two completions crews during the second half of 2021. Cimarex maintains its previously-announced guidance range for 2021 capital expenditures of $650 million to $750 million, which is expected to result in fourth-quarter 2021 oil production growth guidance of more than 30%, as compared to fourth-quarter 2020.

ESG Performance

The Company continues to drive towards consistently improving its environmental performance. In 2020, Cimarex reduced its greenhouse gas (GHG) emissions intensity by 22%, and is targeting an incremental reduction between 8% and 12% in 2021. The Company also recently published 2020 environmental and safety performance results.

Highlights include:
  • 27% reduction in methane intensity rate,
  • 54% decline of our Permian Basin high-pressure flaring intensity, and
  • 73% recycled water utilization rate in Permian Basin completions operations.

Cimarex's full 2020 disclosures are available on the "Corporate Responsibility" section of our website.

Cabot Transaction Update

On May 24, 2021, Cimarex announced that it has entered into a definitive agreement whereby Cimarex will combine with Cabot Oil & Gas Corporation (NYSE: COG) in an all-stock merger. This transaction is expected to create a premier energy company with top-tier assets, more resilient free cash flow generation through cycles and a commitment to leading returns of capital, targeting returns of more than 50% of quarterly free cash flow, with the capacity and confidence to distribute more than 30% of cash flow from operations at all but the lowest commodity price levels. The completion of the transaction, which is expected to occur fourth-quarter 2021, remains subject to the approval of Cimarex and Cabot stockholders and the satisfaction of other customary closing conditions.

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