Cimarex Energy Says Gas Production Remains Shut-in

Cimarex Energy says that approximately 125 million cubic feet per day of its natural gas equivalent production (MMcfe/d) remains shut-in as a result of hurricane activity in the Gulf of Mexico and nearby coastal areas.

Production curtailments in anticipation of Hurricane Rita began Wednesday, September 21 and total company-wide net volumes shut in reached a maximum of 145 MMcfe/d over the weekend. Included in the peak amount of curtailments was 20 MMcfe/d of Permian Basin production that was turned offline because third-party gas processing facilities were shut down.

Of total remaining shut-in volumes, approximately 65 MMcfe/d is from Gulf of Mexico fields and 60 MMcfe/d is from wells located in Vermilion Parish, Louisiana, Liberty County, Texas and other areas along the Texas Gulf Coast. Included in the total amount of shut-in offshore volumes is 14 MMcfe/d that was initially curtailed on August 28 because of Hurricane Katrina.

Preliminary inspections of operated facilities and reports from other operators indicate little to no apparent damage to affected production facilities. As such, current general expectations are that the bulk of the Hurricane Rita related curtailments should be back online within two weeks. However, because of extensive flooding and the requisite start-up of downstream trucking operations, gas transportation pipelines, gas processing plants and offshore production facilities managed by others, the exact timing of the resumption of output is still being assessed and may change.

Depending on the receipt of more definitive information from industry partners, downstream facility operators, affected regulatory agencies, and select oil and gas purchasers, Cimarex currently plans to update its overall 2005 production outlook in conjunction with its third-quarter 2005 operations update and earnings release.

The company has also been informed by one of its partners that two offshore jackup rigs drilling wells on blocks in which Cimarex had working interests are no longer at their pre-storm locations.