Boston, MA 05/08/2014 (wallstreetpr) – Cimarex Energy Co (NYSE:XEC) rallied by over 9% on Wednesday after posting a better first quarter performance and news that it intends to add more Cana-Woodford assets in consideration of nearly $250 million.
First-Quarter Performance And Outlook
In the first quarter, Cimarex Energy Co (NYSE:XEC)’s reported earnings were $1.67 per share, which topped the analysts estimate by $0.15. During the same period, the revenue of the company rose 41% to $599.2 million year-over-year, which again surpassed the revenue estimates of $542.04 million by the analysts.During the quarter, the company witnessed extraordinary improvement in production at Cana-Woodford play that resulted in a jump of production of 740 million cubic feet, representing a 12% increase year-over-year. The oil production improved 18% to nearly 39,168 barrels per day. At the same time, Natural gas volumes too surged 7% to 355.3 MMcfe per day, while natural gas liquids (NGL) grew to 16%.
For the year 2014, Cimarex Energy Co (NYSE:XEC) expects the total production volume to be in the range of 822-847 MMcfe per day, which is a midpoint escalationof20% over 2013. Oil Volumes are estimated to rise in between 20-23% in the current year, while gas volumes are projected to grow at a rate of 13-17%. The total production for the second quarter is estimated at 810-830 MMcfe per day. Exploration and development capital for the year 2014 is projected to be $1.9 billion with $1.5 billion earmarked towards the Permian region.
Addition of Cana-Woodford Assets
The production improvement at Cana played a major role in the company’s decision to acquire additional 50,000 net acres of Cana-Woodford assets for nearly $250 million. Out of these 50,000 net acres, 30,000 net acres are in the Cana-Woodford area and oil-rich East Cana area. Cimarex Energy Co (NYSE:XEC)’s share in Cana’s assets includes current production of 35 million cubic feet per day and proved developed reserves of 140 billion cubic feet. The acquisition is funded through a bank debt and is expected to conclude on or before June 30.
