Cimarex Energy Company
) announced it has signed various purchase and sale agreements to
sell $326 million of oil and gas assets. All sales are expected to
close on or before Sep 30.
The assets earmarked for sale mainly comprise 4,200 net acres and
associated wells in the Midland Basin located in Reagan County, TX.
This is to be disposed of for $242 million. An additional $84
million of non-core properties in the Mid-Continent and Gulf Coast
are also being sold. In total, these properties contain
approximately 47 billion cubic feet equivalent of proved developed
reserves (63% natural gas) and produce about 11 million cubic feet
equivalent per day.
Proceeds from the sales will be used to fund the company's ongoing
capital investment program. For 2014, capital investment in
exploration and development is expected at around $1.95 billion.
Cimarex invested $964 million in exploration and development during
the first half of 2014. The Permian Basin accounted for 71% of the
capital investment in the first half of 2014 with Mid-Continent
representing the remainder. The company also purchased assets
in the Cana-Woodford area for $238 million during the second
Cimarex is an independent exploration & production company. The
primary activities of the company are in the Mid-Continent and
Permian Basin areas of the U.S.
The company is focused on increasing shareholder value through
strategies linked to generating attractive economic returns on
capital employed and profitable growth in per-share reserves,
production and cash flow. It intends to profitably grow reserves
and production through a balanced mix of exploration, exploitation
and acquisitions. Cimarex has a diversified base of high-quality
production and attractive drilling opportunities.
As is the case with other independent exploration and production
companies, Cimarex's results are directly exposed to oil and gas
prices, which are inherently volatile and subject to complex market
Currently, Cimarex carries a Zacks Rank #2 (Buy). One can also
consider other players from the broader energy sector such as
Sanchez Energy Corporation (
), TransAtlantic Petroleum Ltd. (
) and Sunoco Logistics Partners L.P (
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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