Cimarex Energy Announces Second-Quarter 2003 Earnings of $0.50 Per Share.Energy Editors/Business Editors DENVER--(BUSINESS WIRE)--Aug. 6, 2003 Cimarex Energy Co. (NYSE NYSE See: New York Stock Exchange :XEC XEC Experimental Estelle Compiler ) today reported second-quarter 2003 net income of $21.0 million, or $0.50 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares to second-quarter 2002 net income of $9.8 million, or $0.37 per diluted share. Revenues from oil and gas sales in the second quarter of 2003 were $74.1 million, compared to $32.8 million in the same period of 2002. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the second quarter of 2003 was $48.4 million, versus $25.0 million in the same period of 2002.(1) Revenues and cash flow in the second quarter of 2003 were positively impacted by a 48 percent increase in production volumes and 62 percent increase in gas prices. Total gas and oil production volumes averaged 172 million cubic feet (MMcf) equivalent per day during the second quarter of 2003, versus 117 MMcf equivalent per day a year earlier. Second quarter 2003 gas production was 132 MMcf per day and oil production averaged 6,650 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. . The increase in production volumes is principally attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the acquisition of Key Production Company, Inc. on September September: see month. 30, 2002. The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. tables detail quarterly and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. production volumes and average realized prices. Capital expenditures for exploration and development during the second quarter of 2003 totaled $30.4 million, up from $16.4 million for the second quarter 2002. Increased capital expenditures reflect expansion of the Company's organizational capacity to generate organic growth opportunities. In addition to increasing capital investment, strong cash flows from operations enabled the Company to pay off its remaining bank debt and build a cash balance of $47.5 million as of June June: see month. 30, 2003. Year-to-Date 2003 For the first six months of 2003, Cimarex reported net income of $53.8 million, or $1.28 per diluted share. This compares to net income in the first six months of 2002 of $14.1 million, or $0.53 per share. Revenues from oil and gas sales for the first six months of 2003 were $163.9 million. For the same period of 2002, oil and gas sales were $56.0 million. Cash flow from operations increased to $114.0 million for the six months ended June 30, 2003, from $40.7 million in the same period of 2002.(1) The increases reflect 50 percent higher production volumes, 112 percent higher gas prices, and 20 percent higher oil prices. Capital expenditures for exploration and development during the first six months of 2003 were $57.4 million, up from $28.8 million during the first two quarters of 2002. The Company drilled 74 wells during the first six months of 2003 and expects to drill 134 wells in the second half. Total capital expenditures for exploration and development are currently projected to total $150-$155 million. (1)Cash Flow from Operations is a non-GAAP financial measure that represents "Net Cash Provided By Operating Activities" adjusted for the change in operating assets Operating Assets Another term for working capital. and liabilities. See below for a reconciliation of the related amounts. Conference call and web cast The second quarter earnings conference call has been scheduled for 11 a.m. Mountain Time (1 p.m. Eastern), Wednesday Wednesday: see week. , August 6, 2003. Interested parties in the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of may access the call by dialing (800) 881-5262 and requesting the Cimarex Energy Co. teleconference. In addition, a listen-only web cast of the call will be provided at www.cimarexcom. Please go to the website at least ten minutes early to register and to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. any necessary audio software. If you are unable to participate in the live broadcast of the call, an audio replay will be available by dialing (800) 642-1687 and entering conference code 1537353. Cimarex Energy Co. is an independent natural gas and crude oil exploration and production company with operations focused in the Mid-Continent and Gulf Coast regions of the U.S. This news release may contain projections and other forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . Any such projections or statements reflect the Company's current view with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that such projections will be achieved and actual results could differ materially from those projected. A discussion of important factors that could cause actual results to differ materially from those projected is included in the Company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed for the year ended December December: see month. 31, 2002, and the report filed on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2003.
PRICE AND PRODUCTION DATA
For the Three Months For the Six Months
Ended Ended
June 30, June 30,
---------------------- -----------------------
2003 2002 2003 2002
----------- ---------- ----------- -----------
Gas Production:
Total production
- Mcf 12,037,426 9,480,981 24,234,337 19,008,017
Gas volume - Mcf
per day 132,279 104,187 133,891 105,017
Gas price - per
Mcf $ 4.75 $ 2.93 $ 5.26 $ 2.48
Oil Production
(including NGL):
Total production
- barrels 605,141 187,428 1,254,262 369,095
Oil volume -
barrels per day 6,650 2,060 6,930 2,039
Oil price - per
barrel $ 27.91 $ 26.60 $ 29.06 $ 24.24
CAPITALIZED COSTS INCURRED
For the Three Months For the Six Months
Ended Ended
June 30, June 30,
---------------------- -----------------------
2003 2002 2003 2002
----------- ---------- ----------- -----------
(in thousands) (in thousands)
Sale Proceeds $ (46) $ -- $ (46) $ --
Acquisitions of proved
properties 1,593 -- 2,169 --
Exploration and
development 30,399 16,382 57,413 28,751
----------- ---------- ----------- -----------
Total costs
incurred $ 31,946 $ 16,382 $ 59,536 $ 28,751
=========== ========== =========== ===========
RECONCILIATION OF CASH FLOW FROM OPERATIONS
For the Three Months For the Six Months
Ended Ended
June 30, June 30,
---------------------- -----------------------
2003 2002 2003 2002
----------- ---------- ----------- -----------
(in thousands) (in thousands)
Net cash provided by
operating activities $ 65,465 $ 18,280 $ 119,298 $ 30,217
Increase (decrease)
in operating assets
and liabilities (17,019) 6,681 (5,297) 10,452
----------- ---------- ----------- -----------
Cash flow from
operations $ 48,446 $ 24,961 $ 114,001 $ 40,669
=========== ========== =========== ===========
INCOME STATEMENTS (unaudited)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
--------------- ----------------
2003 2002 2003 2002
------- ------- -------- -------
(In thousands, except per
share data)
Revenues:
Gas sales $57,205 $27,792 $127,408 $47,069
Oil sales 16,888 4,985 36,453 8,946
Marketing 25,027 13,184 71,652 24,666
Other (57) 173 (66) 28
------- ------- -------- -------
99,063 46,134 235,447 80,709
------- ------- -------- -------
Operating expenses:
Depreciation, depletion and
amortization 20,887 9,290 42,004 17,987
Asset retirement obligation
accretion 255 -- 496 --
Marketing 24,794 13,060 70,871 23,267
Production 8,155 3,374 15,143 7,656
Taxes other than income 6,147 3,263 13,318 5,627
General and administrative 4,072 1,085 8,139 3,169
Stock compensation 436 -- 902 --
Financing costs -
Interest expense 274 (86) 696 82
Capitalized interest (39) -- (304) --
Interest income (53) (27) (82) (116)
------- ------- -------- -------
64,928 29,959 151,183 57,672
------- ------- -------- -------
Income before income tax expense and
cumulative effect of a change in
accounting principle 34,135 16,175 84,264 23,037
Income tax expense 13,095 6,331 32,081 8,935
------- ------- -------- -------
Income before cumulative effect
of a change in accounting
principle 21,040 9,844 52,183 14,102
Cumulative effect of a change in
accounting principle, net of tax -- -- 1,605 --
------- ------- -------- -------
Net income $21,040 $ 9,844 $ 53,788 $14,102
======= ======= ======== =======
Earnings per share:
Basic -
Income before cumulative effect
of a change in accounting
principle $ 0.51 $ 0.37 $ 1.26 $ 0.53
Cumulative effect of a change in
accounting principle, net of
tax -- -- 0.04 --
------- ------- -------- -------
Net income $ 0.51 $ 0.37 $ 1.30 $ 0.53
======= ======= ======== =======
Diluted -
Income before cumulative effect
of change in accounting
principle $ 0.50 $ 0.37 $ 1.24 $ 0.53
Cumulative effect of change in
accounting
principle, net of tax -- -- 0.04 --
------- ------- -------- -------
Net income $ 0.50 $ 0.37 $ 1.28 $ 0.53
======= ======= ======== =======
Weighted average shares outstanding:
Basic 41,545 26,591 41,512 26,591
======= ======= ======== =======
Diluted 42,246 26,591 42,142 26,591
======= ======= ======== =======
CASH FLOW STATEMENTS (unaudited)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
----------------- -----------------
2003 2002 2003 2002
-------- -------- -------- --------
(In thousands)
Cash flows from operating
activities:
Net income $ 21,040 $ 9,844 $ 53,788 $ 14,102
Adjustment to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion and
amortization 20,887 9,290 42,004 17,987
Deferred income taxes 5,590 5,850 17,726 8,362
Cumulative effect of a
change in accounting
principle, net of tax -- -- (1,605) --
Asset retirement obligation
accretion 255 -- 496 --
Amortization of restricted
stock compensation 436 -- 902 --
Income tax benefit related to
stock options exercised 416 -- 673 --
Other (178) (23) 17 218
Changes in operating assets and
liabilities:
(Increase) decrease in
accounts receivable 17,469 (7,294) 2,009 (7,692)
(Increase) decrease in
inventories (230) 107 (1,246) 1,054
(Increase) decrease in other
current assets 380 641 (584) (1,444)
Increase (decrease) in
accounts and revenue payable (6,364) (1,981) (6,087) 2,864
Increase (decrease) in
accrued liabilities 6,039 1,859 11,453 (5,237)
Increase (decrease) in
other liabilities (275) (13) (248) 3
-------- -------- -------- --------
Net cash provided by
operating activities 65,465 18,280 119,298 30,217
-------- -------- -------- --------
Cash flows from investing
activities:
Oil and gas expenditures (31,500) (13,082) (56,269) (25,451)
Acquisition of oil and gas
properties (1,593) -- (2,169) --
Proceeds from sale of assets 117 -- 164 --
Other capital expenditures (677) (888) (5,887) (1,164)
-------- -------- -------- --------
Net cash used by
investing activities (33,653) (13,970) (64,161) (26,615)
-------- -------- -------- --------
Cash flows from financing
activities:
Payments on long-term debt, net (5,000) -- (32,000) --
Change in amount due to Helmerich
& Payne, Inc. -- (6,067) -- (7,589)
Common stock reacquired and
retired (4) -- (5) --
Proceeds from issuance of
common stock 1,093 -- 2,031 --
-------- -------- -------- --------
Net cash used by
financing activities (3,911) (6,067) (29,974) (7,589)
-------- -------- -------- --------
Net change in cash and cash
equivalents 27,901 (1,757) 25,163 (3,987)
Cash and cash equivalents at
beginning of period 19,589 4,940 22,327 7,170
-------- -------- -------- --------
Cash and cash equivalents at end
of period $ 47,490 $ 3,183 $ 47,490 $ 3,183
======== ======== ======== ========
BALANCE SHEETS
June 30, December 31,
Assets 2003 2002
----------- ------------
(unaudited) (audited)
----------- ------------
(In thousands)
Current assets:
Cash and cash equivalents $ 47,490 $ 22,327
Receivables, net 56,267 58,276
Inventories 5,232 3,986
Deferred income taxes 2,217 2,073
Other current assets 3,533 2,949
----------- ------------
Total current assets 114,739 89,611
----------- ------------
Oil and gas properties at cost, using the
full cost method of accounting:
Proved properties 1,238,546 1,172,488
Unproved properties and properties under
development, not being amortized 28,240 23,941
----------- ------------
1,266,786 1,196,429
Less - accumulated depreciation, depletion
and amortization (700,664) (665,711)
----------- ------------
Net oil and gas properties 566,122 530,718
----------- ------------
Fixed assets, net 11,348 6,849
Goodwill 44,852 45,836
Other assets, net 1,224 1,272
----------- ------------
$ 738,285 $ 674,286
=========== ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 21,255 $ 22,339
Accrued liabilities 34,611 21,892
Revenue payable 19,272 24,022
----------- ------------
Total current liabilities 75,138 68,253
----------- ------------
Long-term debt -- 32,000
----------- ------------
Deferred income taxes 143,544 127,023
----------- ------------
Other liabilities 17,074 2,130
----------- ------------
Stockholders' equity:
Preferred stock, $0.01 par value,
15,000,000 shares authorized, no
shares issued -- --
Common stock, $0.01 par value, 100,000,000
shares authorized, 41,593,608 and
41,410,308 shares issued, respectively 416 414
Paid-in capital 246,506 243,420
Unearned compensation (9,987) (10,814)
Retained earnings 265,594 211,860
----------- ------------
502,529 444,880
----------- ------------
$ 738,285 $ 674,286
=========== ============
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