They’re setting themselves up for gains

Article Excerpt

CIMAREX ENERGY $49.76 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 101.4 million; Market cap: $5.2 billion; Dividend yield: 1.6%) produces and explores for natural gas and oil. Gas makes up 41% of the company’s output; the remaining 59% is oil. In the three months ended March 31, 2019, Cimarex produced an average 258,882 barrels of oil equivalent per day. That output is up 25.6% from 206,050 barrels of oil equivalent a year earlier. Despite the stronger output, the company’s cash flow fell 6.6% in the latest quarter. That was due to lower realized oil and gas prices. In March 2019, Cimarex completed the acquisition of Resolute Energy (symbol REN on New York) for $1.6 billion in cash and stock. That firm was under activist-investor pressure to find a buyer. Resolute had prime holdings in the Permian basis in West Texas and New Mexico. However, it lacked the financial strength to exploit them fully. The combined company should be much better able…

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