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Cimarex Energy’s 2Q16 Earnings Beat Estimates

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Aug. 8 2016, Published 12:04 p.m. ET

Cimarex Energy’s 2Q16 revenue

Cimarex Energy (XEC) reported its 2Q16 earnings on August 4, 2016. Its 2Q16 revenue was $298.9 million versus an estimate of $292 million. Revenue in 2Q15 was ~$424 million. In 1Q16, it was ~$241 million.

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Cimarex Energy’s 2Q16 earnings

Cimarex Energy reported an adjusted net income of ~$7 million in 2Q16. Adjusted net income in the corresponding period in 2015 was $14.4 million.

The company reported adjusted EPS (earnings per share) of $0.07. Wall Street analysts’ consensus estimate for EPS was -$0.01.

As you can see in the graph above, Cimarex Energy’s earnings and revenues came in better than analysts’ expectations.

Peer comparison

Whiting Petroleum (WLL) announced 2Q16 earnings of $-0.70, while Anadarko Petroleum (APC) reported 2Q16 earnings of ~$0.60. Oasis Petroleum (OAS) reported 2Q16 earnings of -$0.11.

Key management comments

Joseph Alibi, Cimarex’s chief operating officer, remarked in the 2Q16 earnings conference, “We had another great quarter. We made tremendous strides reducing our overall operating cost structure. We’re staying focused on efficiencies to reduce and optimize our drilling and completion cost. And we continue to make good progress, maximizing the productivity and profitability of our wells.”

Commenting on XEC’s break-even costs, Thomas Jorden, Cimarex’s CEO, commented, “Our breakeven costs have come way down and that’s through both in Anadarko and in the Delaware Basin. So I will say that Cimarex looks pretty, pretty good in the mid-$40s, $2.50 to $3.00 gas environment.”

Jorden added, “We want to manage our balance sheet, we watch our cash flow, and we are absolutely committed to be disciplined and keep the health of this company second to none.”

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