Resolute Energy — Merger or Acquisition (November 2018)
23 slides from Resolute Energy's merger presentation, Nov 29, 2018
Slide 1: Presentation Resolute Employees November 2018
Presenatation Resolute Employees November 2018 Filed by Resolute Energy Corporation (Commission File No. 001-34464) Pursuant to Rule 425 under the Securities Act of 1933, as amended and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934, as amended Subject Company: Resolute
Slide 2: Safe Harbor Cautionary Statements Regarding Forward-Looking Information
Safe Harbor Cautionary Statements Regarding Forward-Looking Information This presentation contains certain “forward-looking statements” within the meaning of federal securities laws. Words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may” and similar expressions may be
Slide 3: Cimarex Energy Snapshot
Cimarex Energy Snapshot ï,§NYSE symbol: XECï,§Market Cap1: $7.9 billionï,§~940 Employees ~100 ppl ~375 ppl. –Three offices: ~600 people –Field: ~340 people ï,§Daily Production: 219 MBOE, 64 MBO ~125 ppl.ï,§2018E Production Growth: 17%-18%ï,§2018E Capex: $1.6-$1.7 billionï,§Annual Dividend2: $0.72 1
Slide 4: Who is Cimarex?
Who is Cimarex? Enduring • Maximizing full-cycle return on invested capital Culture Proven Track • Creating value, generating top-tier returns Record Premier • Core positions in the Permian and Anadarko Basins Portfolio Profitable • Trailing 10-year average CROCE: 30% Growth • 10-year production gro
Slide 5: The Culture of Cimarex
The Culture of Cimarex Idea Generation Driven by Rigorous Technical Evaluation Lookback Acreage Evaluation Concentration Improves Economic Increasing Economies Returns, Operational of Scale, Returns Efficiencies Maximize Full-Cycle Returns Financial Inventory Discipline Expansion Strong Returns, Cas
Slide 6: History of Outsized Returns
History of Outsized Returns Cash Return on Capital Employed (CROCE) XEC vs S&P 500 E&P Peers 50% 40% 30% 20% 10% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 XEC Peer Avg.
Slide 7: XEC Generating Top-Tier Returns
XEC Generating Top-Tier Returns 2018 Cash Return on Capital Employed (CROCE) XEC vs S&P 500 30% 25% 20% Average (%) CROCE 15% 10% 5% 0% Source: Stifel estimates E&P estimates based on Stifel estimates, S&P 500 estimates based on consensus CROCE = (CFFO + Interest (1-tax))/ (Avg Capital Employed) 7
Slide 8: Delaware Basin – Overview
Delaware Basin – Overview ï,§ 259,000 total net acresï,§ 70% of 2018 D&C Budgetï,§ Currently running 12 rigs, 2 completion crewsï,§ Stacked pay opportunities provides multi-zone development opportunities –Upper and Lower Wolfcamp –Second and Third Bone Spring – Avalon 8
Slide 9: Delaware Basin – Culberson/White City
Delaware Basin – Culberson/White City Lower Wolfcamp Upper Wolfcamp Operated SWD ï,§ 100,000+ net acres, JDA with Chevron in Culbersonï,§ 25% of 2018 D&C capitalï,§ Targeting Upper and Lower Wolfcamp, Bone Springï,§ Western delineation continues to unlock value –Six well average: 30-day IP Carry Bac
Slide 10: Delaware Basin – Lea County
Delaware Basin – Lea County Upper Wolfcampï,§ 31,384 net acres Avalon Bone Springï,§ 12% of 2018 D&C capitalï,§ Targeting Upper Wolfcamp, Avalon, Bone Springï,§ Vaca Draw 20-17 Lease IP30s: Triste Draw –Upper Wolfcamp: 4,645 BOE/D (3,032 BO/D) –Avalon: 2,733 BOE/D (2,051 Red Tank BO/D) Red Hills –Le
Slide 11: Delaware Basin – Reeves County
Delaware Basin – Reeves County ï,§ 61,853 net acres Upper Wolfcamp Operated SWDï,§ 25% of 2018 D&C capitalï,§ Targeting Upper Wolfcampï,§ Wood State: 12 well/section –Development wells 28% above parent wells Snowshoeï,§ Pagoda State: 16 wells/section –Development wells 16% above Pagoda State parent
Slide 12: Resolute Assets are a Perfect Fit
Resolute Assets are a Perfect Fit ASSET HIGHLIGHTS ï,§ Acquired assets have 79% average W.I.; 83% HBPï,§ 35 MBoe/d (45% oil)1ï,§ 36 horizontal wells completedï,§ Takeaway in place RECENT XEC UPPER WOLFCAMP WELL RESULTS ï,§ Snowshoe development (8 wells): 30-day peak avg IP of 2,508 Boe/d, 1,174 Bo/d
Slide 13: Well Productivity Improvements
Well Productivity Improvements Long Lateral Upper Wolfcamp Wells (Culberson and Reeves Counties) Completion Generationï,§ 54 –10,000-ft. lateral Upper IP180 (BOE/d) Wolfcamp wells drilled in Permian Basin since 2013 2,000 ï,§ Improvement in well productivity seen through enhanced completion design 1
Slide 14: Cimarex Wells See Continued Productivity Gains
Cimarex Wells See Continued Productivity Gains REEVES COUNTY WELL PRODUCTIVITY 10,000’ Laterals Cumulative Production—MBoe ï,§ 2018 wells outperforming 16/17 resultsï,§ Technical advances driving increased productivity: – Completion design – Optimization of landing zone – Spacing/well configuration
Slide 15: Cimarex is a Leader vs Peers in Delaware Basin
Cimarex is a Leader vs Peers in Delaware Basin 180-day Average Production per Well 180-day Average Production per Well BOE Barrels of Oil LL) LL) 7,500’ . 7,500’ . (norm Oil% (normOil% Boe 53% Bbl 53% 180 180 Cum Cum Average Average A XEC REN B C D E F G H I A XEC REN F E C D B G H I ï,§ Cimarex and
Slide 16: Complementary Acquisition in Delaware Basin
Complementary Acquisition in Delaware Basin  Adds 21,100 Net Acres in Prolific Reeves County, TX Full-Cycle Returns Compete for Capital with Existing Portfolio Accretive on All Relevant Financial Metrics Acquired Assets are Self-Funding in 2019
Slide 17: Mid-Continent – Overview
Mid-Continent – Overview ï,§ 326,000 net acresï,§ 30% of 2018 D&C capitalï,§ Woodford: 135,625 net undeveloped acres –Participated in >950 wells ï,§ Meramec: 116,500 net acresï,§ 14N-10W area: formulating Woodford/Meramec co-development plans –Operate 90% of ~24,000 gross acres, 60% WI –$2 billion d
Slide 18: 2018 Program Overview
2018 Program Overview Production—MBOE/d Capital Program ($mm) 2018E E&D Capital $1,600—$1,700 238-247 218-221 D&C Capital $1,300—$1,400 Midstream/Other $80—$90 D&C as % of E&D 82% Permian 70% Mid-Continent 30% 1QA 2QA 3QA 4QE 2018E Production Guidance 2018E OIL Total (MBoe/d) 218—221 Oil(MBbls/d) 66
Slide 19: Positioned for Success
Positioned for Success Enduring • Maximizing full-cycle return on invested capital Culture • Idea driven, technical emphasis Premier • Generating strong returns Portfolio • Decades of top-tier inventory Profitable • 2018 Oil Production Growth: 21%-23% Growth Strong Financial • Low leverage and liqui
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 ($ in Millions) 2015 2016 2017 LTM 9/30/18 Net income (loss) $ (2,580) $ (409) $ 494 $ 650 Income tax expense (benefit) (1,472) (214) 188 143 Interest expense, net of capitalized 55 62 52 47 DD&A and ARO accretion 74
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Debt/Cap calculation Nine Months Ended Sept 30, September 30, ($ in Millions) 2018 ($ in Millions) 2017 2018 Long-term debt (principal) 1,500 Net cash provided by operating activities $ 756 $ 1,158 Stockholders equity 3,026 Change
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Cash Return on Capital Employed (CROCE) Cash Flow from Operating Activities+ After-tax Interest Expense Average Book Equity + Average Debt 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cash flow from operating activities 1,367 675 1,130 1,292 1,193 1,324 1,619 726 626 1,0
Slide 23: Contact Info
Contact Info Contact Karen Acierno Cimarex Energy Co. Director – Investor Relations 1700 Lincoln Street, Suite 3700 kacierno@cimarex.com Denver, CO 80203 303-285-4957 303-295-3995
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