CIMAREX ENERGY $91.50 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 86.5 million; Market cap: $7.9 billion; Dividend yield: 0.6%) 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 (50% of production); the Permian Basin of western Texas and southeastern New Mexico (47%); and the Texas Gulf Coast (3%).
In the three months ended June 30, 2013, Cimarex’s production averaged 686.8 million cubic feet of natural gas equivalent per day (including oil).
That’s up 16.4% from 590.1 million cubic feet a year earlier. Thanks to the higher production and increased oil and gas prices, Cimarex’s cash flow per share jumped 42.9%, to $4.00 from $2.80.
To keep increasing its production, it’s spending as much as $1.5 billion on exploration this year.
The stock trades at 5.7 times Cimarex’s forecast 2013 cash flow of $16.00 a share, based on the latest quarter. Its total debt of $892 million is a low 11.3% of its market cap. The shares yield 0.6%.
Cimarex is a buy.
