BAML Energy Conference Miami | November 2014 2 materially from - PowerPoint PPT Presentation

1 BAML Energy Conference Miami | November 2014

2 materially from those projected as a result of Denver, CO 80203 1700 Lincoln Street, Suite 3700 Cimarex Energy Co. VP – Capital Markets & Planning Mark Burford 303‐285‐4957 kacierno@cimarex.com Director – Investor Relations Karen Acierno Contact: Commission. filed with the U.S. Securities and Exchange is included in the Company’s periodic reports certain factors. A discussion of these factors be achieved, and actual results could differ Forward‐looking Statements projections This presentation contains projections and other forward‐looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These and events will occur or that these projections will statements reflect the Company’s current views with respect to future events and financial performance. No assurances can be given, however, that these 303‐295‐3995

3 Focused on idea generation and execution Diverse portfolio of assets provides flexibility Strong balance sheet Long‐term time horizon Cimarex Value Proposition • • — Balanced commodity mix: Proved reserves are 52% natural gas — Regional optionality: Permian Basin and Mid‐Continent • — No bank debt — Sale of non‐core assets provides cash at year end — Net debt/total capitalization: 18% • 3

4 Daily Production +25% 2014E 2013 2012 900 600 300 0 705 627 (MMcfe) 350 Strong Growth Momentum Horizontal volume growth Expect full‐year 2014 production growth of 25% gas (+23%) and NGL (+45%) growth 16% oil growth 864‐870 driving earnings and cash flow • — Mid‐Continent operations driving 348 324 — Permian Basin projects driving • 357 303 — YTD Net Income up 20% — Cash Flow up 35% Oil & NGL Natural Gas

5 Product and Regional Diversity Revenue Mix Area 3Q 2014 Production: 942 MMcfe/d

6 14% Cana‐Woodford infill accelerating Mid‐Continent investment set to increase in 2015 Robust Permian opportunity set commands 74% of capex 6% Other 2014 E&D Investment Plan Facilities & Overhead & Cap. Land, Seismic 80% Drilling By Region: Total Capital: $1.95 billion Mid‐year acquisition consolidates position • • • •

7 multiple zones Permian Basin Region • Delaware Basin focus — 90+ industry rigs working — 18 Cimarex‐operated rigs • Multiple projects targeting — Avalon Shale (oil window) — Bone Spring sands (oil) — Wolfcamp shale (oil & gas)

8 2014 Permian Drilling Capital in the second half Total Permian $1.2 billion Wolfcamp $650 million • Delineation, development and downspacing tests • Wolfcamp program includes multiple extended laterals

9 12 operated wells YTD 30‐day average peak IP*: 1,026 BOE/d (763 bo/d) 30‐day average peak IP*: 989 BOE/d (606 bo/d) 7 operated wells YTD Texas 3rd Bone Spring (Ward County) *Two stream. BOE/d; 749 bo/d 30‐day average peak IP*: 962 Delaware Basin ‐ Bone Spring Activity 23 operated wells YTD (Eddy & Lea Counties) New Mexico 2nd & 3rd Bone Spring 86 gross (50 net) wells Culberson County 2nd Bone Spring • Invest $360mm in 2014 to drill • 60 gross (32 net) wells YTD • Three areas ■ • . • ■ • • ■ • •

10 Delaware Basin Avalon Shale BOE/d (69% oil) window in the Avalon prospective in Lea County • Seven wells completed to date — 30‐day average peak IP of 909 • Upsized frac design unlocks oil • 13,700 net acres identified as • 200+ locations identified • 13 net wells planned in 2014 • $160mm of capex

11 fairway Delaware Basin Wolfcamp Fairway • ~235,000 net acres in the • Multiple Wolfcamp Targets — Culberson/White City Area • 100,000+ net acres • Wolfcamp A, C & D • JDA with Chevron — Reeves County • 80,000 net acres • Wolfcamp A & B/C — Ward County • 42,000 net acres • Wolfcamp A & B/C

12 Thick, Multi‐pay Wolfcamp Section Culberson Area 100,000 net acres Reeves County 80,000 net acres Ward County 42,000 net acres IIndicates producing zone. 12

13 average IP of 8.4 MMcfe/d 2014 ($27mm YTD) BOE/d average 30‐day peak IP of1,103 BOE/d (54% oil) in 4Q (Wolfcamp D & A) BOE/d vs. 1,500 BOE/d on 5k’ significant uplift Culberson Focus Area Wolfcamp average IP of 6.5 MMcfe/d 26% oil; 29% NGL • 100,000 net acres • 100,000+ net acres • Joint Development Area with CVX • 2013 main objectives • Long laterals in Wolfcamp D show — Drilling to hold acreage — Wolfcamp C & D — 30‐day average peak IP of 2,660 • Two rigs; ~20 wells — 40% gas, 27% oil, 33% NGL • 41 wells to date; 30‐day • Additional long laterals planned • Product mix of 45% gas; • Wolfcamp A wells average 1,192 — Upsize frac stages • Downspacing pilots producing • First 20‐stage test has 30‐day — Stacked C/D lateral test — 4‐well, 80‐acre downspacing pilot has — Testing Wolfcamp A — Experiment with long laterals • $35mm midstream investment in — Stacked lateral test — Design downspacing pilot

14 $9.0 New Completion ‐ 5,000 ft. lateral; 20 stages (4‐well average) Long lateral ‐ 10,000 ft.; 43 stages (single well ‐ Gallant Fox) Old New Long Well Cost ($MM) $8.0 $13.5 Months BT IRR 30% 90% 161% NPV10 ($MM) $4.0 $12.2 $31.6 Old Completion ‐ 5,000 ft. lateral; 12 stages (12‐well average) 48 Upsized Returns from Long Lateral with Upsized Frac 42 BOE/day Culberson County Wolfcamp D Wells 0 500 1000 1500 2000 2500 3000 0 6 12 18 24 30 36 Assumptions: Oil ‐ $90/bbl; Gas ‐ $4/Mcf; NGL ‐ $30/bbl (full recovery) 14

15 1,800 600 800 1,000 1,200 1,400 1,600 2,000 200 Twenty Grand 5,000 ft. lateral Wolfcamp D Wolfcamp A Tim Tam 5,000 ft. lateral Gallant Fox 400 ‐ Shallow Decline of Upsized Fracs 1,000 (BOE/d) Performance of Key Culberson County Wolfcamp Wells 1,365 2,450 ‐ 500 1,500 1,095 2,000 2,500 3,000 30‐day IP Days 30‐60 Days 60‐90 90 day average 10,000 ft. lateral

16 74% 5,000 ft. lateral $80 $75 $60 $50 122% 113% 89% 65% Upsized Returns – Oil Price Sensitivity 60% 45% 37% Assumes $3.50/Mcf gas; $25/bbl NGL Realized Oil Price Before Tax IRR Culberson County Wolfcamp D Wells 10,000 ft. lateral 16

17 Reeves County Reeves & Ward Counties zone (74%) day peak IP of 648 BOE/d; 477 bo/d Ward County in 2014 ($28mm YTD) 4Q Long lateral long laterals (49% oil); 30‐day peak IP producing • Four‐well, 80‐acre spacing test — Wells average 1,029 BOE/d • Nearby acreage available for • Offset long lateral completing — Top‐tier returns implied • $35mm midstream investment • 12 wells producing with average 30‐ • Optimizing completion & landing 17

18 on 2015 infill development Hartz Section Golden Section Cana‐Woodford Activity Map Non‐operated Well Operated Well Mid‐Continent Highlights program for Woodford Shale (86%HBP) acquisition in May over‐year ~$360mm 2015 Infill • E&D capex of $480mm • Woodford shale capex of — Upsized frac boosts results — Production grew 44% year‐ — Complimentary $238mm — 128,000 net acres prospective • Drilling already underway

19 6.0 9.6 10.2 Oil NGLs Gas Hartz Section Golden Section Old Completion 12.0 10.0 8.0 4.0 2.0 0.0 12% 8% 5% Golden Section Hartz Section (MMcfe/d) Average 30‐day Peak IP Cana‐Woodford Shale Completion Comparison Upsized Production from Upsized Frac 6.7 19

20 IP of 9.4 MMcfe/d (306 lateral (Bomhoff) Woodford long Meramec test & Regional Activity Map Woodford test (Leota) Mid‐Continent bo/d) MMcfe/d (20% oil) peak IP of 11.4 MMcfe/d drilled in Woodford peak IP of 12.4 MMcfe/d Woodford underway Woodford test (Glenda) • Redefinition of — Glenda well has 30‐day • 69% gas — Leota well has 30‐day • Includes 662 bo/d — First 10,000 foot lateral • 30‐day peak IP of 12.9 • 7 Meramec tests in 2014 — First well has 30‐day peak — 70k net acres (86% HBP)

21 Diverse portfolio with strong returns Production growth driving cash flow Strong balance sheet Long track record of profitable growth Well Positioned for 2015 and beyond • — Multiple Delaware Basin opportunities — Cana‐Woodford upside & re‐delineation — Continuous generation of ideas • • — Sale of non‐core assets provides cash at year end • 21

22 Appendix 22

23 Upsized Wolfcamp Frac Old Frac Design: 5,000‐foot lateral; 12 stages; 4mm lbs of sand 5,000‐foot lateral; 20 stages; 6mm lbs of sand New Frac Design:

24 Q1 13 350 400 450 Q1 12 Q2 12 Q3 12 Q4 12 Q2 13 250 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Gas NGL 300 200 Oil 216 MMcfe/day Cana‐Woodford Production 161 156 184 215 229 217 150 226 255 310 406 ‐ 50 100 24

25 Q4 12 70 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q1 13 50 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Oil NGL Gas 60 40 MBOE/day 49 Permian Production Growth 29 30 34 36 40 41 46 46 30 53 59 55 58 66 68 ‐ 10 20 25