Cimarex planning to spend more in Permian, Anadarko

By Patrick C. Miller | February 20, 2018

Denver-based Cimarex Energy is projecting a 2018 exploration and development capital budget of $1.6 to $1.7 billion—a 29 percent increase above 2017 levels.

Cimarex, which operates primarily in the Anadarko Basin of western Oklahoma and the Permian Basin of Texas and New Mexico, projects its 2018 production to average 211,000 to 221,000 barrels of oil equivalent per day, an increase of 14 percent from mid-year 2017 levels.

Capital available within current commodity prices includes a drilling and completion budget of between $1.3 and $1.4 billion. An additional $80 to $90 million is earmarked for midstream and other infrastructure.

Tom Jorden, Cimarex chairman and CEO, said, the company generated strong full-cycle returns for shareholders in 2017 and its capital program for 2018 is expected to continue this trend. 

“It will be funded through cash available including operating cash flow and some portion of cash on the balance sheet,” Jorden said. “We have stress tested this program and we will be able to execute our plans well within our available cash.”

In its 2018 production and expense guidance, Cimarex said oil production is expected to lead year-over-year growth with an increase of 21 to 26 percent. Fourth quarter 2018 oil production is projected to increase 29 to 34 percent over fourth quarter 2017 levels.

By the end of 2018, Cimarex estimates that 81 gross (47 net) wells should be in the process of being drilled or awaiting completion. This includes 36 gross (12 net) in Mid-Continent region of Oklahoma and 45 gross (35 net) in the Permian Basin.

"We generated significant capital efficiencies through the down cycle,” Jorden said. “The challenge now is to maintain them.  Some of those efficiencies have proven to be lasting, some will require hard work to maintain and those tied to commodity prices may go away.”

Cimarex intends to invest nearly 70 percent of its capital in the Permian region and the remainder in the Mid-Continent. The company’s Permian activities will continue to focus on its long-lateral Wolfcamp programs in Culberson and Reeves counties in Texas, and in Lea County, New Mexico. 

In the Mid-Continent, Cimarex's 2018 investments are focused on the drilling and completion of Woodford wells in the Lone Rock area and in further delineation and initial development of the Meramec play.  The company plans to continue to test new concepts across its acreage in both operating regions.