Cimarex Reports Fourth-Quarter and Full-Year 2016 Results

DENVER, Feb. 15, 2017

For the year, Cimarex recorded a net loss of $431.0 million, or $4.62 per share.   The adjusted net income (non-GAAP) for the full year was $0.70 per share⁽¹⁾.  Cash flow from operations totaled $599.2 million in 2016 compared to $691.5 million in 2015.  Adjusted cash flow from operations (non-GAAP) totaled $629.1 million in 2016, a 15 percent drop from 2015 levels⁽¹⁾.   Revenues in 2016 totaled $1.3 billion, a 13 percent decrease from 2015.  The decrease in revenues and cash flow was the result of lower production and lower product prices received. (See table of Average Realized Price by Region below.)

Total company production volumes averaged 960 million cubic feet equivalent (MMcfe) per day in the fourth quarter, down three percent from a year ago and within company guidance.  For the full year, Cimarex reported daily production volumes of 963 MMcfe per day, down two percent from our 2015 average daily output of 985 MMcfe per day and within guidance.

Cimarex invested $735 million in exploration and development in 2016.   This was down 16 percent from the $877 million Cimarex invested in 2015.  Investments made in 2016 were funded with cash flow and cash on hand.

Proved reserves at December 31, 2016 were 2.9 trillion cubic feet equivalent (Tcfe), essentially flat with reserves reported a year ago.  Proved developed reserves increased five percent to 2.3 Tcfe.  Cimarex added 324.0 Bcfe through extensions and discoveries and 126.2 Bcfe through net performance revisions resulting in reserve replacement of 128 percent of 2016 production.  Proved reserves are 79 percent proved developed.  (See table of Proved Reserves below.)

Volatility in oil and natural gas prices had an impact on the company's financial results for both the fourth quarter and full year.  In the fourth quarter, Cimarex benefited from higher prices relative to the same period a year ago.  Realized oil prices averaged $44.67 per barrel, 20 percent higher than the same period a year ago.  Natural gas prices were also up in the fourth quarter and averaged $2.86 per Mcf versus $2.20 a year ago.  NGL prices were particularly strong in the fourth quarter averaging $18.15 per barrel up 43 percent from fourth quarter 2015. For the full year, however, realized oil prices averaged $38.30, down 12 percent from 2015.  Natural gas prices averaged $2.31 per Mcf and NGL prices averaged $14.05 per barrel compared to $2.53 and $13.75, respectively, in 2015.

Total debt at December 31, 2016 consisted of $1.5 billion of long-term notes, with $750 million maturing in 2022 and $750 million maturing in 2024. Cimarex had no borrowings under its revolving credit facility and had a cash balance of $653 million. Debt was 39 percent of total capitalization (non-GAAP)⁽²⁾.