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Are Cimarex Energy’s Production Trends in Line with Its Guidance?

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2016 production and capex guidance

Cimarex Energy’s (XEC) 2016 production growth guidance range has risen to 980 MMcfepd–1,000 MMcfepd (million cubic feet equivalent per day).

XEC’s previous guidance range, provided in 1Q16, was 940 MMcfepd–970 MMcfepd. The company’s updated guidance represents a year-over-year (or YoY) rise of 0.5% over 2015. Its 3Q16 production volumes are expected to average 950 MMcfepd–980 MMcfepd.

Cimarex’s capex (capital expenditure) spending is now expected to be $675 million, compared to the $600 million it had previously anticipated. XEC noted that the additional capex would primarily be used for funding drilling in the Meramec play and to accelerate well completions in the Midcontinental region and the Permian Basin.

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XEC’s production trends

As we can see in the image above, XEC’s production has risen consistently since 2012, but it’s expected to stay flat in 2016.

Since 3Q15, when crude oil prices started experiencing multiyear lows, XEC’s oil production percentage has been falling. That said, XEC’s liquids production (its production of oil and natural gas liquids) as a percentage of its total production has mostly remained consistent at ~53% since 1Q13. XEC expects oil to make up 28% of its total production volumes in 2016.

2Q16 production volumes

Cimarex Energy’s production volumes totaled 974 million cubic feet equivalent per day (MMcfepd) in 2Q16. In comparison, its 2Q15 production volumes were ~1.0 billion cubic feet equivalent per day. Cimarex Energy’s 1Q16 production volumes were 973 MMcfepd.

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