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BANK OF AMERICA MERRILL LYNCH2019 GLOBAL ENERGY CONFERENCE
November 2019
2FORWARD-LOOKING STATEMENTS
Forward-looking Statements
Contact:
Karen AciernoVice President – Investor Relations
This presentation contains projections and other forward-looking statements within the meaning of Section 27A ofthe U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These projectionsand statements reflect the Company’s current views with respect to future events and financial performance. Noassurances can be given, however, that these events will occur or that these projections will be achieved, andactual results could differ materially from those projected as a result of certain factors. A discussion of thesefactors is included in the Company’s periodic reports filed with the U.S. Securities and Exchange Commission.
3CIMAREX ENERGY SNAPSHOT
Cimarex Energy Snapshot
NYSE SYMBOL: XEC
MARKET CAP1: $4.5 BILLION
ENTERPRISE VALUE1: $6.5 BILLION
DEBT/EBITDA2: 1.2X
QUARTERLY DIVIDEND: $0.20/SHARE
2019E OIL PRODUCTION GROWTH: 25 - 28%
1 As of November 1, 20192 As of and for the twelve months ended 9/30/19. See Appendix for non-GAAP definitions and reconciliations to nearest comparable GAAP measure.
4CIMAREX ENERGY: MAXIMIZING RETURNS
Cimarex Energy: Maximizing Returns
PREMIER PORTFOLIO
FOCUSED EXECUTION
FINANCIAL DISCIPLINE
Core positions in the Permian and Anadarko Basins
Focused on maximizing ROR and NPV
Strong returns, cash flow growth, liquidity & optionality
IDEA GENERATIONDriven by rigorous technical evaluation
LOOKBACK EVALUATIONImproves economic returns & operational efficiencies
53Q19 HIGHLIGHTS
3Q19 Highlights
EXCEEDED THE HIGH END OF BOE GUIDANCE
• 287.1 MBOE/d vs 265 – 279 MBOE/d
GREW OIL PRODUCTION 8% SEQUENTIALLY
• 89.7 MBbls/d vs 83.4 MBbls/d
BROUGHT 21 NET WELLS ON PRODUCTION
• Anadarko Basin: 5
• Permian Basin: 16
CAPITAL GUIDANCE LOWERED
• D&C now $1.10 – 1.15 billion
• E&D now $1.30 – 1.40 billion
TOTAL COMPANY PRODUCTION EXPENSE DOWN 12% FROM 3Q18 AND DOWN 5% SEQUENTIALLY
$3.79 $3.51 $3.34 $0.00
$1.00
$2.00
$3.00
$4.00
3Q18 4Q18 1Q19 2Q19 3Q19
62019 CAPITAL INVESTMENT PROGRAM
2019 Capital Investment Program
E&D CAPITAL OF $1.30 – 1.40 BILLION
D&C CAPITAL $1.10 – 1.15 BILLION• 83% of E&D capital• Permian Basin ~86% • Mid-Continent Region ~14%
ADDITIONAL $70 MILLION BUDGETED FOR MIDSTREAM
CURRENTLY OPERATING EIGHT RIGS & TWO COMPLETION CREWS IN PERMIAN
WOLFCAMP78%
MERAMEC10%
WOODFORD4%
BONE SPRING4%
AVALON2%
OTHER2%
D&C CAPITAL$1.1 – 1.15 BILLION
72019 DELAWARE BASIN PLANS
2019 Delaware Basin Plans
WELLS ON LINE BY COUNTY
REEVES
CULBERSON
LEA
EDDY
64 NET WELLS
WOLFCAMP
AVALON
BONE SPRING
$935–$1,020MM
D&CCAPITAL
AVERAGE LATERAL LENGTH BY COUNTY
0
2,000
4,000
6,000
8,000
10,000
CU
LB
ER
SO
N
RE
EV
ES
ED
DY
LE
A
8DELAWARE BASIN – OVERVIEW
Delaware Basin – Overview
248,200 TOTAL NET ACRES• 32% federal acres (All in New Mexico)
86% OF 2019 D&C BUDGET• 22% capital spend in New Mexico
CURRENTLY RUNNING 8 RIGS; 2COMPLETION CREWS
STACKED PAY OPPORTUNITIES• Provides multi-zone development opportunities• Upper and Lower Wolfcamp• Second and Third Bone Spring• Avalon
ELEVEN DEVELOPMENTS ON PRODUCTION IN 2019
CIMAREX ACREAGE
WOLFCAMP
BONE SPRING
AVALON
NEW MEXICO
TEXAS
9PERMIAN REGION COST REDUCTIONS
Permian Region Cost Reductions
FOCUS ON LOE IMPROVES MARGINS
• Ownership and control of midstream and saltwater disposal (SWD) assets reduces operation expenses
• Midstream assets provides reliable takeaway and processing
• SWD system reduces water handling costs and provides recycled water for completion operations through on-demand system
WELL COSTS TRENDING AT $1,150 – 1,200 PER LATERAL FOOT IN 2019
• Well costs include drilling, completion, well facilities and flow back
$9.37 $9.14 $8.06 $6.50
62%
70%75%
73%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$5
$10
$15
$20
$25
$30
$35
2016A 2017A 2018A YTD
MA
RG
IN %
$/B
OE
OP
EX
& C
AS
H M
AR
GIN
OPEX MARGIN MARGIN %
*LOE, Workover, Transportation, Production Tax. YTD as of September 30, 2019Realized prices exclude hedge gain/loss
DECLINING OPERATING EXPENSES IMPROVES % MARGIN
*
*
NEW MEXICO
TEXAS
10DELAWARE BASIN – CULBERSON/WHITE CITY
Delaware Basin – Culberson/White City
100,000+ NET ACRES
JDA WITH CHEVRON IN CULBERSON
34% OF 2019 D&C CAPITAL• Targeting Upper Wolfcamp & Bone Spring
ALL DEVELOPMENTS CURRENTLY ON PRODUCTION
CIMAREX ACREAGE
OPERATED SWD
LOWER WOLFCAMP
UPPER WOLFCAMP
OWL DRAW 3 WELLS
SIR BARTON7 WELLS
ARISTIDES6 WELLS
OLD ROSEBUD4 WELLS
BROKERS TIP7 WELLS
11CULBERSON: TOP-TIER OIL WELLS
Culberson: Top-Tier Oil WellsDELAWARE BASIN CUMULATIVE OIL PRODUCTION BY COUNTY
(>8,500 LL, First Prod >2016, Upper Wolfcamp & Bone Spring Formations)
CU
MU
LA
TIV
E O
IL (
MB
BL
S)
MONTHS
ATTRIBUTES OF CULBERSON COUNTY LONG LATERALS• Competitive Oil Production• Shallow Declines• Low Operating Costs (LOE)
COUNTY
CU
MU
LA
TIV
E O
IL (
MB
BL
S)
0
50
100
150
200
250
300
350
400
450
0 4 8 12 16 20 24
XEC CULBERSON LEA LOVING EDDY REEVES WARD
34 W
EL
LS
181 166 160 312 4022 120 126 113 260 3617 67 84 56 169 3311 34 52 19 103 170
50
100
150
200
250
300
350
400
450
XEC CULBERSON LEA LOVING EDDY REEVES WARD
6 MONTH 12 MONTH 18 MONTH 24 MONTH
12CULBERSON: WATER INFRASTRUCTURE DRIVING EFFICIENCIES
Culberson: Water Infrastructure Driving Efficiencies
SALTWATER DISPOSAL (SWD)• Own & operate the system• Improves operating costs• System redundancy reduces downtime• System expanding efficiently with additional
development
WATER REUSE DRIVES EFFICIENCY• On-demand recycled water lowers cost• Wolfcamp completions used 97% recycled
water in 2018 • Saved $1.54/bbl for procured water
ENVIRONMENTAL BENEFITS• Avoids surface storage of produced water• Permanent underground flow helps to
prevent spills• Reduces need for fresh water
RISER: XEC-ENGINEERED ACCESS FOR WATER REUSE
XEC ACREAGE
INFRASTRUCTURE
OPERATED SWD
SWD INFRASTRUCTURE WOLFCAMP FRAC WATER
32%
87%
97% 92%
2016 2017 2018 YTD*
RECYCLED PURCHASED
*As of September 30, 2019
13CULBERSON: STRONG PRODUCTIVITY, LOW LOE
Culberson: Strong Productivity, Low LOE
PAYOUT IN ~11 MONTHS AT $50 OIL AND $2.50 NATURAL GAS
INVESTMENT HAS TRIPLED SINCE 2016
PERMIAN BASIN PRODUCTION EXPENSE YTD AS OF SEPTEMBER 30FRAC GENERATIONS – INCREASING PRODUCTIVITY
PRODUCTION REGIONDAYS ON PRODUCTION
CU
MU
LA
TIV
E O
IL P
RO
DU
CT
ION
(M
BB
L)
*Not limited to Upper Wolfcamp production
$-
$1.00
$2.00
$3.00
$4.00
CULBERSON* TOTAL PERMIAN0
100
200
300
400
500
600
700
800
0 200 400 600 800 1,000 1,200 1,400
GEN 1 GEN 2 GEN 3 GEN 4
$ P
RO
DU
CT
ION
EX
PE
NS
E P
ER
BO
E
14DISCIPLINED FINANCIAL POSITIONING
Disciplined Financial Positioning
LIQUIDITY• $1.3 billion of liquidity, including $24 MM of cash
(9/30/2019)
CONSERVATIVE LEVERAGE• 1.2x Debt/TTM EBITDA (9/30/19)
INVESTMENT GRADE DEBT• $500 million 4.375% senior unsecured notes due in 2029• $750 million 3.900% senior unsecured notes due in 2027• $750 million 4.375% senior unsecured notes due in 2024
XEC DEBT/TTM EBITDA
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
2016 2017 2018 9/30/2019
DEBT/TTM EBITDA AVERAGE
15IMPROVING CASH COSTS OFFSET LOWER REALIZED PRICE
Improving Cash Costs Offset Lower Realized Price
Cash operating costs include: LOE, Workover, Transportation, Production Tax, G&ARealized prices exclude hedge gain/loss
TOTAL COMPANY CASH OPERATING MARGIN
$14.15$10.71 $9.51 $9.55 $8.64 $8.31 $8.08 $7.09
68%
55% 54%
65%
70%
66%
62%
67%
30%
40%
50%
60%
70%
80%
$0
$10
$20
$30
$40
$50
2014 2015 2016 2017 2018 1Q19 2Q19 3Q19
MA
RG
IN %
$/B
OE
OP
EX
& C
AS
H M
AR
GIN
CASH OPERATING COSTS MARGIN MARGIN %
21% 40% 52%
2016 2017 2018
RECYCLED PURCHASED
16ENVIRONMENTAL HIGHLIGHTS
Environmental Highlights
0.43% 0.28% 0.21%
2016 2017 2018
METHANE INTENSITY RATE1
1Intensity rate defined as total methane emissions divided by total gross operated production
-51%
PERMIAN FRAC WATER
150%
12% 23% 36%
2016 2017 2018
TOTAL COMPANY RECYCLED WATER USE2
198%
2Recycled water use = Recycled water / Procured water
TOTAL COMPANY FLARING
APPROXIMATELY 1.5% OF TOTAL COMPANY GROSS GAS PRODUCTION WAS FLARED BETWEEN JANUARY 1, 2019 AND SEPTEMBER 30, 2019
172020 FRAMEWORK
2020 Framework
FOCUSED ON PERMIAN OIL GROWTH
• Reflected in capital allocation
PLANNING ASSUMPTIONS
• Capex flat to slightly down vs 2019
• Flat commodity prices
Oil: $50 per Bbl WTI
Natural gas: $2.50 per Mcf NYMEX
NGL: 25% of WTI
ASSUMPTIONS YIELD HIGH SINGLE- TO LOW DOUBLE-DIGIT Y/Y GROWTH IN TOTAL COMPANY OIL PRODUCTION
• Permian oil growth outpaces total company growth
2020 GUIDANCE TO BE PROVIDED IN FEBRUARY0%
2%
4%
6%
8%
10%
12%
CASH FLOW YIELD* – OIL PRICE SENSITIVITY
$50/BBL WTI
$60/BBL WTI
*$4.5 billion market cap as of November 1, 2019; before dividend
CREATING VALUEAND GENERATINGTOP-TIER RETURNS
PROVENTRACK
RECORD
18CIMAREX ENERGY OVERVIEW
Cimarex Energy Overview
PREMIER PORTFOLIO
CORE POSITIONS INTHE PERMIAN ANDANADARKO BASINS
ENDURINGCULTURE
MAXIMIZING FULL-CYCLE RETURN ON INVESTED CAPITAL
STRONGFINANCIALPOSITION
LOW LEVERAGE ANDLIQUIDITY PROVIDES
OPPORTUNITIES
19APPENDIX
APPENDIX
202019 GUIDANCE
2019 Guidance
4Q19E FY19E
Production (MBOE/d) 272 – 292 274 – 278
Oil Production (MBbls/d) 86.0 – 92.0 84.5 – 86.5
Capital Expenditures ($billion)
E & D $1.30 – 1.40
D & C $1.10 – 1.15
Midstream/Other $0.07
Expenses ($/BOE) 2019
Production $3.30 – 3.55
Transportation, processing & other $1.80 – 2.20
DD&A and ARO accretion $7.75 – 8.75
General and administrative $0.95 – 1.10
Taxes other than income (% of oil and gas revenue) 6.0 – 7.0%
YTD AS OF SEPTEMBER 30
$ MILLIONS PERMIAN TOTAL
DRILLING & COMPLETION $ 507 $ 578
FACILITIES & FLOW BACK 87 92
OUTSIDE OPERATED 13 72
SWD 62 63
DRILLING & COMPLETION (D&C) $ 669 $ 805
EXPLORATION & DEVELOPMENT* (E&D) $ 989
MIDSTREAM 59
TOTAL CAPITAL INVESTMENT $ 1,048
21CAPITAL INVESTMENT
Capital Investment
*D&C + capitalized overhead, production capital, land, technology
22OIL HEDGES AS OF NOVEMBER 4, 2019
Oil Hedges as of November 4, 2019
2019 2020 2021OIL 4Q 1Q 2Q 3Q 4Q 1Q
WTI OIL COLLARS1
Volume (Bbl/d) 37,326 30,000 22,000 14,000 14,000 6,000
Weighted Average Floor 54.05 53.12 50.61 49.68 49.68 49.24
Weighted Average Ceiling 66.48 65.80 62.15 60.92 60.92 58.41
WTI OIL BASIS SWAPS2
Volume (Bbl/d) 40,826 29,000 21,000 14,000 14,000 6,000Weighted Average Differential3
(5.42) 0.25 0.29 0.65 0.65 0.57
WTI OIL SWAPS2
Volume (Bbl/d) 5,000 - - - - -Weighted Average Fixed3 64.54 - - - - -
WTI OIL SOLD CALL
Volume (Bbl/d) 3,670 - - - - -Weighted Average Ceiling
64.36 - - - - -
Notes:1 WTI refers to West Texas Intermediate oil prices as quoted on the New York Mercantile Exchange2 Index price on basis swaps is WTI Midland as quoted by Argus Americas Crude 3 Index price on basis swaps is WTI NYMEX less weighted average differential shown in table
23GAS HEDGES AS OF NOVEMBER 4, 2019
Gas Hedges as of November 4, 20192019 2020 2021
GAS 4Q 1Q 2Q 3Q 4Q 1Q
PEPL GAS COLLARS1
Volume (MMBtu/d) 120,000 90,000 60,000 30,000 30,000 10,111
Weighted Average Floor 1.92 1.92 1.90 1.85 1.85 1.85
Weighted Average Ceiling 2.35 2.36 2.28 2.31 2.31 2.31
EL PASO PERM GAS COLLARS2
Volume (MMBtu/d) 60,000 40,000 30,000 20,000 20,000 -
Weighted Average Floor 1.38 1.40 1.40 1.35 1.35 -
Weighted Average Ceiling 1.71 1.79 1.82 1.66 1.66 -
WAHA GAS COLLARS3
Volume (MMBtu/d) 60,000 50,000 30,000 - - -
Weighted Average Floor 1.48 1.50 1.57 - - -
Weighted Average Ceiling 1.82 1.87 1.97 - - -
TOTAL NATURAL GAS COLLARS
Volume (MMBtu/d) 240,000 180,000 120,000 50,000 50,000 10,111
HENRY HUB GAS SWAPS4
Volume (MMBtu/d) 35,000 - - - - -
Weighted Average Floor 3.00 - - - - -
Notes:1 PEPL refers to Panhandle Eastern Pipe Line Tex/OK Mid-Continent as quoted on Platt’s Inside FERC 2 El Paso Perm refers to El Paso Permian Basin index as quoted on Platt’s Inside FERC3 Waha refers to West Texas Natural Gas Index (“Waha”) as quoted in Platt’s Inside FERC4Henry Hub is the official location for futures contracts on the NYMEX
80 NET WELLS IN 2019
8
40
21
11
44
0
10
20
30
40
50
1QA 2QA 3QA 4QE WELLS WAITING ONCOMPLETION AT 12/31/19
NE
T W
EL
L C
OU
NT
MID-CONTINENT PERMIAN BASIN
242019 NET WELLS ON PRODUCTION BY QUARTER
2019 Net Wells on Production by Quarter
SENTINEL5 WELLS
NEW MEXICO
TEXAS
25DELAWARE BASIN – REEVES COUNTY, TX
Delaware Basin – Reeves County, TX
70,012 NET ACRES
39% OF 2019 D&C CAPITAL
TARGETING UPPER WOLFCAMP
ALL DEVELOPMENTS CURRENTLY ON PRODUCTION
CIMAREX ACREAGE
OPERATED SWD
UPPER WOLFCAMP
HARDSCRABBLE6 WELLS
SANDLOT4 WELLS
SKY PILOT4 WELLS
RED LODGE6 WELLS
26DELAWARE BASIN – LEA COUNTY, NM
Delaware Basin – Lea County, NM
31,384 NET ACRES
TARGETING:• Upper Wolfcamp• Avalon• Bone Spring
VACA DRAW ON PRODUCTION
NEW MEXICO
TEXAS
CIMAREX ACREAGE
BONE SPRING
AVALON
UPPER WOLFCAMP
VACA DRAW6 WELLS
27MID-CONTINENT – OVERVIEW
Mid-Continent – Overview
326,000 NET ACRES
WOODFORD: 135,625 NET UNDEVELOPED ACRES (HBP)
MERAMEC: 116,500 NET ACRES (>98% HBP)• Billy, Wort & Miss Mary developments on production
14% OF 2019 D&C CAPITAL
CIMAREX ACREAGE
MERAMEC OUTLINE
WOODFORD OUTLINE
OKLAHOMA
2 WELLSBILLY
3 WELLSWORT
5 WELLSMISS MARY
28PERMIAN BASIN TAKEAWAY
Permian Basin Takeaway
SALES AGREEMENTS IN PLACE FOR OIL VOLUMES THROUGH 2019• ~85% of oil production on pipe
STRATEGIC PARTNERSHIPS IN CORE AREAS• Pipelines in place• Purchase obligations• Midland index pricing
GAS SALES AGREEMENTS IN PLACE• 98% of forecasted production through 2019; 75% in 2020• El Paso or Waha index pricing• Committed 125,000 MMBtu per day to Whistler Pipeline
Project; 10 year firm commitment, provides access to Gulf Coast pricing, expected online 2Q21
OWN AND OPERATE TWO GAS GATHERING SYSTEMS • Triple Crown – Culberson/Eddy Counties• Matterhorn – Reeves County• Connected to multiple gas processors with inter- and
intrastate outlets• Long-term sales agreements in place for NGL volumes
CIMAREX ACREAGE
ENERGY TRANSFER PIPELINE
EAGLECLAW
OFFLOADING SITE
PLAINS PIPELINE
29PERMIAN BASIN WATER MANAGEMENT
Permian Basin Water Management
OWN AND OPERATE SALT WATER DISPOSAL (SWD) SYSTEMS IN CULBERSON, EDDY AND REEVES • Improves operating costs
RECYCLING PRODUCED WATER FOR COMPLETION OPERATIONS• 52% of total water procured in 2018 was recycled• Cost savings of ~$1.20/bbl of water
CULBERSON WOLFCAMP WELLS USE 97% RECYCLED WATER FOR COMPLETIONS; REEVES WOLFCAMPWELLS USE 48%
SECURED SWD AGREEMENTS IN LEA COUNTY
30NON-GAAP RECONCILIATION
Non-GAAP Reconciliation
($ IN MILLIONS) 2016 2017 2018 LTM 9/30/19
Net income (loss) $ (409) $ 494 $ 792 $ 492
Income tax expense (benefit) (214) 188 231 145
Interest expense, net of capitalized 62 52 47 40
DD&A and ARO accretion 400 462 598 818
EBITDA (161) 1,196 1,668 1,495
Impairment of oil and gas 758 — — 109
ADJUSTED EBITDA1 597 1,196 1,668 1,604
1The above table provides a reconciliation from generally accepted accounting principles (GAAP) net income (loss) to non-GAAP EBITDA and non-GAAP adjusted EBITDA, which excludes ceiling test impairments
2017 2018 LTM9/30/2019
Basic shares outstanding (in 000s) 95,437 95,756 101,820Debt adjusted shares outstanding
YE Debt, net 1,099,466 699,334 1,976,115
TTM stock price 114.00 93.77 66.21
Equivalent shares issued using TTM stock price 9,644 7,458 29,846
Debt adjusted shares using TTM stock price 105,082 103,214 131,666
31NON-GAAP RECONCILIATION
Non-GAAP ReconciliationNINE MONTHS ENDED
SEPTEMBER 30, ($ IN MILLIONS) SEPT 30, 2019
($ IN MILLIONS) 2018 2019
Long-term debt (principal) 2,000
Net cash provided by operating activities $ 1,158 $ 984 Redeemable preferred stock 82
Change in operating assets and liabilities (52) 64 Stockholders equity 3,890
Adjusted cash flow from operations1 $ 1,105 $ 1,048 Total capitalization 5,972
Long-term debt/total capitalization 35%2018
ADDITIONS TO PROVED RESERVES (MMBOE)
Revisions of previous estimates (22.7)
Extensions & discoveries 158.5
Purchase of reserves —
TOTAL ADDITIONS (ALL SOURCES) 135.8
TOTAL CAPITAL ($MM) $ 1,570
F&D COSTS (ALL SOURCES) ($/BOE) $ 11.56
DRILLING F&D COST (EXTENSIONS & DISCOVERIES) ($/BOE) $ 9.91
TWELVE MONTHS ENDEDDECEMBER 31, LTM
($ IN MILLIONS) 2016 2017 2018 9/30/19
Long-term debt (principal) $1,500 $1,500 $1,500 $2,000
Adjusted EBITDA 597 1,196 1,668 1,604
Debt/Adjusted EBITDA 2.5x 1.3x 0.9x 1.2x
1Management uses the non-GAAP measure of adjusted cash flow from operations as a means of measuring the company's ability to fund its capital program and dividends, without fluctuations caused by changes in current assets and liabilities, which are included in the GAAP measure of cash flow from operating activities. Management believes this non-GAAP measure provides useful information to investors for the same reasons, and that it is also used by professional research analysts in providing investment recommendations pertaining to companies in the oil and gas exploration and production industry.