CIMAREX ENERGY $106.95 - New York symbol XEC

CIMAREX ENERGY $106.95 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 87.0 million; Market cap: $9.0 billion; Dividend yield: 0.6%) produces and explores for natural gas and oil. Gas makes up 48% of the company’s output.

Cimarex’s properties are mostly in the Wolfcamp shale area of the Permian Basin in Texas and New Mexico, and the Cana-Woodford shale area in western Oklahoma.

In the three months ended June 30, 2014, the company’s production averaged 838.7 million cubic feet of natural gas equivalent per day (including oil). That’s up 22.1% from 686.8 million cubic feet a year earlier.

Thanks to the higher production and increased oil and gas prices, Cimarex’s cash flow per share rose 30.0%, to $4.85 from $3.73.

The stock trades at 5.5 times Cimarex’s annual cash flow of $19.40 share, based on the latest quarter. Its total debt of $1.03 billion is a low 11.4% of its market cap. The stock yields 0.6%.

Cimarex is a buy.

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