Cimarex earmarks 90% of 2020 drilling and completion capital to Permian assets
Cimarex Energy Co., Denver, projects 2020 total capital investment (including midstream capital) of $1.25-1.35 billion. Of that, $950,000 to $1.05 million is allocated for drilling and completion–90% of which is planned for projects in the Permian Basin. The remainder is expected to be spent in the Mid-Continent.
In 2020, oil production is projected to average 91,000-97,000 b/d of oil, up 9% at the midpoint from 2019 levels. Total equivalent production is expected to average 270,000-286,000 boe/d, essentially flat from 2019. Oil production in first-quarter 2020 is expected to average 87,500-91,500 b/d with total production expected to average 272,000-288,000 boe/d, both slightly down from fourth quarter levels.
In 2020, Cimarex expects 90 net wells to begin producing. Permian activities will focus on long lateral Wolfcamp wells in Culberson and Reeves counties in Texas, and in Lea and Eddy counties in New Mexico. Avalon and Bone Spring activities round out the remainder of investments in the region.
2019
Cimarex reported a net loss for fourth quarter 2019 of $384.1 million compared to net income of $316.2 million in the same period a year ago. For the full year, Cimarex reported a net loss of $124.6 million compared to 2018 net income of $791.9 million.
Oil volumes in the fourth quarter were sequentially higher, averaging 92,000 b/d. For the full year, Cimarex reported average daily oil volumes of 86,200 bbd, a 27% year-over-year increase. Cimarex produced 292,700 boe/d in the fourth quarter and averaged 278,500 boe/d for the year.
Cimarex invested a total of $1.32 billion in 2019, which included $944 million attributable to D&C activities, $75 million to saltwater disposal, and $74 million to midstream and other investments. Of the $1.32 billion, 85% was invested in the Permian region and 15% in the Mid-Continent.
During 2019, Cimarex participated in the drilling and completion of 291 gross (92 net) wells. At year-end, 95 gross (32 net) wells were waiting on completion, of which 45 gross (1 net) were in the Mid-Continent and 50 gross (31 net) were in the Permian.
Production from the Permian region averaged 207,100 boe/d in the fourth quarter, or 71% of total company volumes. Oil volumes averaged 78,400 b/d, 85% of total company oil volumes. For the full year, production averaged 190,700 boe/d, 68% of total company volumes with Permian oil representing 84% of Cimarex’s oil volumes in 2019.
Cimarex brought 31 gross (22 net) wells on production in the Permian during the quarter, bringing the total wells on production in 2019 to 131 gross (76 net). About 86% of operated wells were drilled from multi-well pads and average lateral length on operated wells brought on production was 9,529 ft in 2019. Ten rigs and two completion crews are currently running in the region.
Production from the Mid-Continent averaged 85,300 boe/d for the quarter, down 18% from fourth-quarter 2018 and down 3% sequentially. Oil volumes averaged 13,500 b/d. For the full year, production averaged 87,300 boe/d, down 8% year over year. Oil volumes averaged 13,800 b/d in 2019.
A total of 16 gross (1 net) wells were brought on production during the fourth quarter in the Mid-Continent region, bringing the total wells in 2019 to 160 gross (16 net). At the end of the quarter, 45 gross (1 net) wells were waiting on completion. Activity in the region continues to focus on the Woodford and Meramec shale plays in western Oklahoma.
