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How Did Cimarex Energy’s Stock Perform Last Year?

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Nov. 20 2020, Updated 4:11 p.m. ET

Cimarex Energy’s stock performance

Cimarex Energy’s (XEC) stock was mostly in a falling trend in the second half of 2015. However, since the start of 2016, XEC has been mostly on an uptrend, mirroring the rally in energy prices.

Year-over-year, Cimarex Energy’s stock has risen by ~8%. Meanwhile, crude oil prices (USO) have fallen by ~10% in the same period, while natural gas prices (UNG) have fallen by ~2.5% in the same period. The broader energy fund, the Energy Select Sector SPDR ETF (XLE), has fallen by 6%.

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XEC’s 2016 focus

Cimarex Energy (XEC) has been extending the lateral length, or the horizontal distance, of wells in areas such as Wolfcamp in the Delaware Basin and Meramec in the Mid-Continent region to boost its returns.

XEC noted that longer laterals at Wolfcamp (10,000 feet) have resulted in resilient before-tax returns. Even at the $40 oil price before tax, returns from the lower Wolfcamp are ~50% and ~88% in the upper Wolfcamp.

Cimarex noted in its June 2016 presentation that it has 19 long lateral wells currently producing at the lower Wolfcamp and ten long lateral wells producing at upper Wolfcamp.

XEC noted in its 1Q16 earnings conference, “Our teams are tightly focused on maximizing the productivity and profitability of our wells all the while we’re optimizing our investment program results.”

Other upstream companies that are also investing in longer laterals include Whiting Petroleum (WLL) and Continental Resources (CLR).

To learn more about Cimarex Energy’s efforts to maximize returns, please read An Insider’s Analysis of Cimarex Energy in 2Q16.

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