Cimarex Energy (XEC) Q1 Earnings Lag Estimates, Revenues Top

Cimarex Energy Co. (NYSE:XEC) reported first-quarter 2019 earnings per share of $1.20, failing to beat the Zacks Consensus Estimate of $1.37 and declining from the year-ago quarter’s $1.82. The underperformance can be primarily blamed on declining realized commodity prices.

Total revenues of $577 million marginally beat the Zacks Consensus Estimate of $576 million and were also higher than $567.1 million recorded a year ago. Higher Permian activities attributed to the strong numbers.

Operational Highlights

In the quarter under review, total production averaged 258.9 thousand barrels of oil equivalent (MBOE) per day, up 26% year over year on considerably higher activities in the Permian Basin.

Oil volumes rose 22% to 79.4 thousand barrels per day (MBbls/d) on a year-over-year basis. Moreover, natural gas volumes increased almost 20% to 639.1 MMcf/d year over year. Natural gas liquids (NGL) volumes jumped 41.1% year over year to 73 MBbls/d.

With realized prices for natural gas declining 16.2% to $1.91 per thousand cubic feet, the same for crude oil and NGL fell 18.5% and 19% year over year to $48.87 per barrel and $16.44 per barrel, respectively.

Through the March quarter, this upstream energy player brought online 38 gross wells.

Financial Condition

As of Mar 31, 2019, the company had cash and cash equivalents of $20.9 million. Net long-term debt was almost $2 billion, which represents a debt-to-capitalization ratio of almost 34.5%.

Cimarex's cash flow from operating activities, adjusted, totaled $351.1 million, down from $367.2 million in the prior-year quarter. The company spent $332.7 million on exploration and development in the first quarter.

Guidance

Cimarex projects total daily production for the June quarter of 2019 in the range of 263-275 MBoE. The company also announced its projections of daily oil equivalent productions for 2019 in the band of 260-275 MBoE.

For 2019, the company continues to project capital spending between $1.4 billion and $1.5 billion on exploration & development activities.

Zacks Rank and Other Key Picks

Cimarex currently carries a Zacks Rank #2 (Buy). Other prospective players in the energy space are Murphy Oil Corporation (NYSE:MUR) , Anadarko Petroleum Corporation (NYSE:APC) and ProPetro Holding Corp. (NYSE:PUMP) . Murphy and Anadarko sport a Zacks Rank #1 (Strong Buy), while ProPetro holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy Oil posted an average positive earnings surprise of 17.3% for the last four quarters.

Anadarko Petroleum has average positive earnings surprise of 6.6% for the last four quarters.

The Zacks Consensus Estimate for ProPetro’s 2019 earnings is pegged at $2.53, suggesting 26.5% growth over the year-ago reported figure.

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