Cimarex (XEC) Q2 Earnings And Revenues Beat, Decline Y/Y

Independent oil and gas exploration and production firm Cimarex Energy Company (NYSE:XEC) reported second-quarter 2016 results on Aug 3, after the closing bell. The company reported earnings of 7 cents per share, which handily beat the Zacks Consensus Estimate of a penny. The reported figure was, however, lower than the year-ago earnings of 15 cents per share.

Total Revenue

In the second quarter, Cimarex Energy’s total revenue of $299 million beat the Zacks Consensus Estimate of $290 million. However, the top line decreased from $424 million a year ago.

Operational Highlights

In the quarter under review, total production averaged 974 million cubic feet equivalent (MMcfe) per day, down 5% year over year. Oil volumes plunged 21% year over year to 44.4 thousand barrels per day (MBbls/d), while natural gas volumes dipped 1% to 461.9 MMcf. Nonetheless, natural gas liquids (NGL) volumes grew 10% to 41 MBbls/d.

CIMAREX ENERGY Price, Consensus and EPS Surprise

CIMAREX ENERGY Price, Consensus and EPS Surprise | CIMAREX ENERGY Quote

In the second quarter, realized prices for natural gas declined 27% to $1.82 per thousand cubic feet, for crude decreased 21% to $40.07 per barrel, and for NGL fell 5% to $13.93 per barrel all on a year-over-year basis.

Financial Condition

Cimarex Energy had cash and cash equivalents of $641.7 million as of Jun 30, 2016. Long-term debt (net of unamortized debt issuance costs) was $1.5 billion as of Jun 30, 2016, which represents a debt-to-capitalization ratio of 39.5%.

Cimarex Energy's net cash from operating activities during the quarter was $128.6 million compared with $257.4 million in the prior-year period. The company invested $156 million in exploration and development during the second quarter, which was primarily funded with cash flow from operations and cash in hand.

Guidance

Third-quarter total production is projected in the range of 950–980 MMcfe per day. Full-year 2016 production is estimated to average 980–1,000 MMcfe per day. Capital investment for exploration and development is estimated to be $750 million for 2016.

Zacks Rank

Cimarex Energy currently holds a Zacks Rank #2 (Buy). Other favorably placed stocks in the oil and gas sector include GeoPark Limited (NYSE:GPRK) , Sasol Ltd. (NYSE:SSL) and North Atlantic Drilling Limited (NYSE:NADL) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).