Cimarex Energy (XEC) Beats Q1 Earnings & Revenue Estimates

Cimarex Energy Co. XEC reported first-quarter 2018 earnings per share of $1.82 that beat the Zacks Consensus Estimate of $1.70 and improved from the year-ago $1.05.

In the first quarter, Cimarex Energy’s total revenues of $567.1 million surpassed the Zacks Consensus Estimate of $562.9 million. The figure also increased from $447.2 million a year ago.

The strong first-quarter results were primarily aided by increased production in the Permian Basin and higher oil price realization.

Operational Highlights

In the quarter under review, total average production was 206.1 thousand barrels of oil equivalent (MBOE) per day, jumped 16.3% year over year. Oil volumes increased 25% year over year to 65.2 thousand barrels per day (MBbls/d) and natural gas volumes rose 9.7% to 534.7 MMcf. Natural gas liquids (NGL) volumes improved 18% to 51.7 MBbls/d. Higher activities in both the Mid-Continent area and the Permian Basin led to the improvement.

Year-over-year realized prices for natural gas declined 24.3% to $2.28 per thousand cubic feet but realized prices for crude surged 25.6% to $59.93 per barrel. The price of NGL decreased a marginal 1% to $20.19 per barrel.

As of Mar 31, 2018, a total of 54 gross (15 net) wells were brought online by the company, significantly lower than 70 gross (26 net) wells as of Mar 31, 2017.

Financial Condition

Cimarex Energy had cash and cash equivalents of $463.8 million as of Mar 31, 2018. Net long-term debt was $1.5 billion as of Mar 31, 2018, which represents a debt-to-capitalization ratio of 34.9%.

Cimarex Energy's net cash from operating activities was recorded at $383.1 million, higher than $249.5 million in the prior-year quarter. Through the January-to-March quarter, the firm spent $313 million on operations related to exploration and production. Cimarex allocated roughly $264 million of the total amount to drilling and completion work. The company financed the entire amount through operating cashflows.

Guidance

The company has maintained its total production projection for 2018 in the range of 211-221 thousand barrels of oil equivalent per day (MBoe/d). Cimarex Energy also projects production through the April-to-June quarter between 200 MBoe/d and 209 MBoe/d.

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

Cimarex Energy Co Price, Consensus and EPS Surprise

 

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

Zacks Rank & Key Picks

Currently, Cimarex Energy carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are BP p.l.c BP, China Petroleum & Chemical Corporation SNP and W&T Offshore, Inc. WTI. BP and China Petroleum sport a Zacks Rank #1 (Strong Buy), while W&T Offshore carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

BP managed to beat the Zacks Consensus Estimate in three of the last four quarters.  

China Petroleum is expected to see year-over-year earnings growth of 56% in 2018.

W&T Offshore, Inc. (WTI) will likely record earnings growth of 7.1% in 2018.

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