Cimarex Sees 25% Increase in Production
Cimarex announced first-quarter oil and gas production volumes averaged 584.5 million cubic feet equivalent per day (MMcfe/d). Average daily equivalent production was comprised of 390.8 million cubic feet of gas, 27,967 barrels of oil and 4,313 barrels of natural gas liquids.
First-quarter 2010 production grew 25% sequentially from the fourth-quarter 2009 average of 467.6 MMcfe/d and 20% as compared to the first-quarter 2009 average of 489.0 MMcfe/d. Production increases reflect successful Gulf Coast exploration and strong Cana-Woodford results.
First-quarter 2010 realized prices are expected to be in the range of $6.35 to $6.45 per thousand cubic feet of gas, $75.85 to $76.35 per barrel of oil and $38.90 to $39.40 per barrel of natural gas liquids.
Cimarex will release its first-quarter 2010 financial results on Friday, May 7, 2010, before the market opens.
Exploration and Development Activity
Cimarex drilled and completed 37 gross (23.1 net) wells in the first quarter of 2010, of which three gross (two net) were unsuccessful. At quarter-end 29 gross (18.5 net) wells were in the process of being completed or were awaiting completion.
Cimarex drilled and completed 22 gross (10.4 net) Mid-Continent wells during the first quarter, completing 100% as producers. At quarter-end 18 gross (10.2 net) wells were in the process of being completed or were awaiting completion. First-quarter 2010 Mid-Continent production averaged 239 MMcfe/d, versus a fourth-quarter 2009 average of 206 MMcfe/d and first-quarter 2009 average of 239 MMcfe/d.
The majority of the first-quarter activity occurred in the Anadarko Basin, Cana-Woodford shale play, where Cimarex drilled and completed 15 gross (6.7 net) wells. At quarter-end 14 gross (7.1 net) wells were being completed or awaiting completion in this area.
Since the Cana play began in late 2007, Cimarex has participated in 95 gross (41.5 net) wells. Of total wells, 74 gross (31.2 net) were on production at quarter-end and the remainder were either in the process of being drilled or awaiting completion. First-quarter 2010 net production from the Cana play averaged 67 MMcfe/d versus the fourth-quarter 2009 average of 33 MMcfe/d.
Texas Panhandle drilling in the quarter totaled five gross (4.4 net) wells: four Granite Wash and one Morrow. Cimarex drilled a horizontal Granite Wash well, the Huff 16-5H (41.5% working interest) in southern Hemphill County, which was brought on production in early March and averaged 20 MMcfe/d (18 MMcf/d of gas and 400 barrels per day of oil) for the first-30 days.
Cimarex currently has eight operated rigs running in the Mid-Continent; seven in the Cana play and one in the Texas Panhandle.
In the first quarter Cimarex drilled and completed 10 gross (8.9 net) Permian Basin wells, 90% of which were completed as producers. At quarter-end 11 gross (8.3 net) wells were in the process of being completed or were awaiting completion. First-quarter 2010 Permian production averaged 155 MMcfe/d, versus a fourth-quarter 2009 average of 144 MMcfe/d and first-quarter 2009 average of 182 MMcfe/d.
All drilling occurred in southeast New Mexico, mainly targeting the Abo, Bone Spring, Cherry Canyon, Paddock and Wolfcamp formations.
Recent horizontal Abo wells brought on production include the Ticonderoga 16 State Com 1H (100% working interest) at 725 barrels equivalent per day and the Ticonderoga 16 State Com 3H (100% working interest) at 605 barrels equivalent per day (first 30-day average). First-quarter Bone Spring horizontal oil wells include the Parkway State Com 3H (62% working interest) at 760 barrels equivalent per day and the Mallon 34 Fed 16H (82% working interest) at 360 barrels equivalent per day and (30-day average).
Cimarex drilled four gross (3.8 net) Gulf Coast wells in the first quarter of 2010, of which one was unsuccessful. First-quarter 2010 Gulf Coast production volumes averaged 190 MMcfe/d, as compared to 116 MMcfe/d and 64 MMcfe/d during the fourth and first quarter of 2009, respectively.
Cimarex's first-quarter 2010 Gulf Coast drilling has been primarily near Beaumont in Jefferson County, Texas where three gross (2.8 net) wells have been drilled: the Jefferson Airplane #1 and #4 and the Nine Dragons #1. The Jefferson Airplane #1 (96% working interest) was brought on production in February and the Jefferson Airplane #4 (96% working interest) is being side-tracked for mechanical reasons. The Nine Dragons # 1 (85% working interest) was drilled into a new reservoir and was brought on production in late March at a restricted rate of 8 MMcfe/d. The Nine Dragons #1 production is expected to be increased to rates comparable to the Two Sisters #1 (see below) as pipeline capacity becomes available.
Two rigs are drilling in the Southeast Texas Yegua/Cook Mountain play near Beaumont.
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