Cimarex Reports on Third-Quarter
Cimarex Energy (NYSE:XEC) announced that third-quarter 2007 oil and gas production volumes averaged 448.5 million cubic feet equivalent per day (MMcfe/d), up from 447.5 MMcfe/d in the third quarter of 2006.
Reflecting positive results from new horizontal oil wells in southeast New Mexico and West Texas, third-quarter oil production grew 12.5% to an average of 20,537 barrels per day. Gas production in the latest quarter averaged 325.2 million cubic feet per day (MMcf/d) versus 338.0 MMcf/d a year-earlier.
Third-quarter prices are expected to be in the range of $6.35 to $6.45 per thousand cubic feet of gas and $71.25 to $71.75 per barrel of oil.
Exploration and Development Activity
Cimarex drilled 345 gross (199 net) wells during the first nine months ended September 30, 2007, completing 92% as producers. Exploration and development capital investment for 2007 is projected to be approximately $1 billion focused on oil and gas plays principally located in the Mid-Continent, Permian Basin and Gulf Coast areas of the United States. Drilling activity remains active with 31 operated rigs currently running.
Cimarex drilled 191 gross (97 net) wells in the Mid-Continent region during the first three quarters of 2007, completing 96% as producers. Third-quarter 2007 Mid-Continent production volumes averaged 194.3 MMcfe/d, an increase of 6% over third-quarter 2006.
Texas Panhandle Granite Wash drilling totaled 70 gross (51 net) wells with 100% completed as producers. Notable wells commencing production during the third quarter include the Wilson 2-217 (90% working interest) at 7.1 MMcfe/d, DD Payne B3H (50% working interest) at 2.7 MMcfe/d, Hobart Ranch 67-18 (100% working interest) at 2.1 MMcfe/d, Earp 58-4 (80% working interest) at 2.0 MMcfe/d.
Anadarko Basin and Southern Oklahoma drilling totaled 69 (22 net) wells with 91% being completed as producers. Wells in this area recently commencing production include the Barney 1-29 (l00% working interest) at 4.9 MMcfe/d and the Harrell A9 (100% working interest) at 3.8 MMcfe/d.
Twelve operated rigs are currently drilling in the Mid-Continent region, including six in the Texas Panhandle.
Permian Basin drilling for the first nine months of 2007 totaled 122 gross (80 net) wells, 92% of which were completed as producers. Third-quarter 2007 Permian Basin production volumes averaged 145.1 MMcfe/d, a 12% increase over the third quarter of 2006. Permian third-quarter 2007 oil production reached a record high 9,557 barrels per day, 18% greater than the third quarter of 2006. Increased oil production is a result of successful horizontal drilling programs in southeast New Mexico and West Texas.
Year-to-date southeast New Mexico drilling totaled 47 gross (32 net) wells with 89% being completed as producers. Recent wells brought on production in southeast New Mexico include the Crow Flats 16 State 2H (73% working interest) at 350 barrels of oil per day, Home State Com 1 (100% working interest) at 3.0 MMcfe/d and the State HH 2 (100% working interest) at 2.9 MMcfe/d.
A total of 21 gross (12 net) wells were drilled in West Texas, of which 90% were successful. In Ward and Winkler Counties drilling totaled 15 gross (seven net) horizontal wells in the Third Bone Spring formation. As a result of this program, Third Bone Spring gross production has increased from approximately 600 BOE/d in early to 2006 to nearly 5,000 BOE/d currently.
Cimarex has 15 operated rigs drilling in the Permian Basin, including seven in southeast New Mexico and eight in West Texas.
Gulf Coast/Gulf of Mexico
Cimarex drilled 32 gross (23 net) Gulf Coast wells during the first nine months of 2007, completing 69% as producers. Third-quarter 2007 Gulf Coast production volumes averaged 67.5 MMcfe/d, a decrease of 8% from third-quarter 2006 volumes of 73.0 MMcfe/d. Fluctuations in Gulf Coast volumes reflect the timing of production additions from new wells relative to natural reservoir declines.
Current year Yegua/Cook Mountain drilling in Liberty and Hardin Counties, Texas has totaled 12 gross (ten net) wells with an 83% success rate. Wells recently commencing production include the Grammier 1 (98% working interest) at 5.8 MMcfe/d, Blackstone Rock Creek 1 (100% working interest) at 5.6 MMcfe/d and the Barbeaud 1 at 3.5 MMcfe/d.
Offshore activity is currently focused on production facility installations in the Main Pass area. Third-quarter 2007 Gulf of Mexico production volumes averaged 32.6 MMcfe/d, as compared to 51.4 MMcfe/d in the third quarter of 2006. Decline in offshore production is a result of natural reservoir decline and an inactive drilling program.
Cimarex has four operated rigs drilling onshore along the Texas Gulf Coast.
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