CIMAREX ENERGY $71.16 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 86.5 million; Market cap: $6.3 billion; Dividend yield: 0.8%) produces and explores for natural gas and oil. Gas makes up 49% of its output.
Cimarex’s properties are in the Mid-Continent region of the U.S., which includes Oklahoma, Kansas and Texas (55% of production); the Permian Basin of western Texas and southeastern New Mexico (42%); and the Texas Gulf Coast (3%).
In the three months ended March 31, 2013, Cimarex’s production averaged 661.1 million cubic feet of natural gas equivalent per day (including oil). That’s up 9.5% from 603.5 million cubic feet a year earlier. Thanks to the higher production, Cimarex’s cash flow per share fell just 4.2%, to $3.38 from $3.53, despite lower oil prices.
To increase its production, the company will spend as much as $1.5 billion on exploration and development this year.
The stock trades at 5.3 times Cimarex’s forecast 2013 cash flow of $13.52 a share, based on the latest quarter. Its total debt of $870 million is a low 13.8% of its market cap. The shares yield 0.8%.
Cimarex is a buy.
