Cimarex Energy Co. reported that fourth-quarter 2007 oil and gas production volumes averaged 471.1 million cubic feet equivalent per day (MMcfe/d), up 7% from the fourth-quarter 2006 average of 440.9 MMcfe/d.
Reflecting positive results from new horizontal oil wells in southeast New Mexico and West Texas, fourth-quarter oil production grew 17% to an average of 21,680 barrels per day. Gas production in the latest quarter averaged 341.1 million cubic feet per day (MMcf/d), an increase of 4% from the fourth-quarter 2006 average of 329.4 MMcf/d.
Fourth-quarter 2007 prices are expected to be in the range of $7.65 to $7.75 per thousand cubic feet of gas and $87.85 to $88.35 per barrel of oil. Gas price realizations benefited from strong prices for natural gas liquids.
Full-year 2007 oil and gas production volumes grew to 451 MMcfe/d from 449 MMcfe/d in 2006. Oil production increased 14% to 20,399 barrels per day and gas production decreased four percent to 328.6 MMcf per day. The decline in gas volumes resulted primarily from decreased investment in the Gulf of Mexico and property sales. The increase in oil volumes is principally a result of successful exploration and development drilling in the Permian Basin.
Year-end 2007 proved reserves totaled 1.472 trillion cubic feet equivalent (Tcfe), up from 1.449 Tcfe at year-end 2006. After adjusting for 123 billion cubic feet equivalent (Bcfe) associated with 2007 property sales, proved reserves increased 11% over year-end 2006. Proved reserves are 76% gas and 79% proved developed.
Reserve additions totaled 311 Bcfe and replaced 189% of 2007 production. Reserves added by drilling and revisions totaled 300 Bcfe and replaced 182% of production.
Cimarex's exploration and development (E&D) capital expenditures for 2008 are projected to range from $1.1-$1.3 billion. The actual amount invested will be highly dependent on commodity prices and rig rates.
First-quarter 2008 production is projected to range between 458-468 MMcfe/d which excludes approximately 11 MMcfe/d for the Spraberry and Gulf of Mexico Main Pass property sales. Full-year 2008 production is projected to be in the range of 465-485 MMcfe/d, or a 5-10% increase over 2007 after adjusting for property sales.
Cimarex drilled 452 gross (281 net) wells during 2007, completing 91% as producers. Exploration and development (E&D) capital investment for 2007 totaled approximately $983 million 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.
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