What Are Cimarex Energy’s Production Trends and Guidance for 2016?



2016 production guidance

In 2016, Cimarex Energy (XEC) expects its annual production to be in the range of 940 MMcfe–970 MMcfe (million cubic feet equivalent), 3% lower than its 2015 production at the midpoint.

In comparison, Whiting Petroleum (WLL) has provided 2016 production growth guidance of -18% at the midpoint, and Oasis Petroleum (OAS) has provided growth guidance of -6% at the midpoint. Apache (APA) has provided growth guidance of -9% at the midpoint.

On the other hand, PDC Energy (PDCE) expects its annual production to grow by 30%–40% in 2016. All these companies together make up ~8.7% of the iShares US Oil & Gas Exploration & Production ETF (IEO).

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Production volumes in 1Q16

Cimarex Energy’s (XEC) total production volume in 1Q16 was 973 MMcfe (millions of cubic feet equivalent). This represents a rise of ~3% YoY (year-over-year). Sequentially, it represents a decline of 1%. XEC’s production has grown consistently since 2012 but is expected to dip in 2016.

XEC’s production trends

Crude oil represented 28% of Cimarex Energy’s (XEC) total production in 1Q16. Since 3Q15, when crude oil prices started experiencing multiyear lows, XEC’s oil production percentage declined. That said, XEC’s liquids production (oil plus natural gas liquids) as a percentage of total production has mostly remained consistent since 1Q13 at ~53%.

Capex guidance for 2016

XEC’s exploration and development capex (capital expenditure) budget for 2016 is $650 million–$700 million, ~23% lower than last year’s budget.


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