Resolute Energy — Merger or Acquisition (November 2018)
22 slides from Resolute Energy's merger presentation, Nov 29, 2018
Slide 1: 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 2: Cimarex Energy Snapshot
Cimarex Energy Snapshot NYSE symbol: XEC Market Cap1: $7.9 billion ~940 Employees –Three offices: ~600 people –Field: ~340 people Daily Production: 219 MBOE, ~100 ppl ~375 ppl. ~125 ppl. 64 MBO 2018E Production Growth: 17%-18% 2018E Capex: $1.6-$1.7 billion Annual Dividend2: $0.72 1 As of November 2
Slide 3: Who is Cimarex?
Who is Cimarex? • Maximizing full-cycle return on invested capital • Creating value, generating top-tier returns • Core positions in the Permian and Anadarko Basins • • Trailing 10-year average CROCE: 30% 10-year production growth CAGR: 11% • Low leverage and liquidity provides opportunities 4
Slide 4: The Culture of Cimarex: Maximize Full-Cycle Returns
The Culture of Cimarex Maximize Full-Cycle Returns 5
Slide 5: 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.*** 6
Slide 6: 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% age 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 CROCE (%) Aver
Slide 7: Delaware Basin – Overview
Delaware Basin – Overview 259,000 total net acres 70% of 2018 D&C Budget Currently running 12 rigs, 2 completion crews Stacked pay opportunities provides multi-zone development opportunities – Upper and Lower Wolfcamp – Second and Third Bone Spring – Avalon 8
Slide 8: Delaware Basin – Culberson/White City
Delaware Basin – Culberson/White City Lower Wolfcamp Upper Wolfcamp Operated SWD 100,000+ net acres, JDA with Chevron in Culberson 25% of 2018 D&C capital Targeting Upper and Lower Wolfcamp, Bone Spring Western delineation continues to unlock value – Six well average: 30-day IP Carry Back 6 State A
Slide 9: Delaware Basin – Lea County
Delaware Basin – Lea County 31,384 net acres 12% of 2018 D&C capital Targeting Upper Wolfcamp, Avalon, Bone Spring Vaca Draw 20-17 Lease IP30s: – Upper Wolfcamp: 4,645 BOE/D (3,032 BO/D) – Avalon: 2,733 BOE/D (2,051 BO/D) – Leonard: 3,413 BOE/D (2,522 BO/D) Triste Draw (Avalon) – 6 wells testing 20
Slide 10: Delaware Basin – Reeves County
Delaware Basin – Reeves County 61,853 net acres 25% of 2018 D&C capital Targeting Upper Wolfcamp Wood State: 12 well/section – Development wells 28% above parent wells Pagoda State: 16 wells/section – Development wells 16% above parent wells Upper Wolfcamp Operated SWD Snowshoe Pagoda State Snowshoe
Slide 11: Resolute Assets are a Perfect Fit
Resolute Assets are a Perfect Fit ASSET HIGHLIGHTS Acquired assets have 79% average W.I.; 83% HBP 35 MBoe/d (45% oil)1 36 horizontal wells completed Takeaway in place RECENT XEC UPPER WOLFCAMP WELL RESULTS Snowshoe development (8 wells): 30-day peak avg IP of 2,508 Boe/d, 1,174 Bo/d Dixieland: 30-da
Slide 12: Well Productivity Improvements
Well Productivity Improvements Long Lateral Upper Wolfcamp Wells (Culberson and Reeves Counties) 54 –10,000-ft. lateral Upper Wolfcamp wells drilled in Permian Basin since 2013 Improvement in well productivity seen through enhanced completion design Returns get better with each design change Complet
Slide 13: Cimarex Wells See Continued Productivity Gains
Cimarex Wells See Continued Productivity Gains REEVES COUNTY WELL PRODUCTIVITY 10,000’ Laterals Cumulative Production - MBoe 2018 wells outperforming 16/17 results Technical advances driving increased productivity: – – – Completion design Optimization of landing zone Spacing/well configuration Sever
Slide 14: Cimarex is a Leader vs Peers in Delaware Basin
Cimarex is a Leader vs Peers in Delaware Basin 180-day Average Production per Well BOE 180-day Average Production per Well Barrels of Oil D A B CD E F GH I A F E C B GH I XEC REN XEC REN Cimarex and Resolute have demonstrated strong well results compared to peers Resolute assets compete for capital
Slide 15: Complementary Acquisition in Delaware Basin Adds 21,100 Net Acres
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 16
Slide 16: Mid-Continent – Overview
Mid-Continent – Overview 326,000 net acres 30% of 2018 D&C capital Woodford: 135,625 net undeveloped acres – Participated in >950 wells Meramec: 116,500 net acres 14N-10W area: formulating Woodford/Meramec co-development plans – Operate 90% of ~24,000 gross acres, 60% WI – $2 billion development (ne
Slide 17: 2018 Program Overview
2018 Program Overview Capital Program ($mm) 2018E E&D Capital D&C Capital Midstream/Other D&C as % of E&D Permian Mid-Continent $1,600 $1,300 $80 - - - 82% 70% 30% $1,700 $1,400 $90 Production Guidance 2018E Total (MBoe/d) Oil(MBbls/d) 218 66.0 - - 221 67.2 46 Pro Forma* Y/Y Growth 2018E Total (MBoe
Slide 18: Positioned for Success
Positioned for Success • • Maximizing full-cycle return on invested Idea driven, technical emphasis capital • • Generating strong returns Decades of top-tier inventory • 2018 Oil Production Growth: 21%-23% • Low leverage and liquidity provides opportunities 19
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net Income to EBITDA and Adjusted EBITDA1 LTM 9/30/18 ($ in Millions) 2015 2016 2017 $ (2,580) (1,472) 55 741 $ (409) (214) 62 400 $ 494 188 52 462 $ 650 143 47 560 Net income (loss) Income tax expense (benefit) Interest expense, net of capitalized DD&A and
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of cash flow from operations1 Nine Months Ended September 30, Debt/Cap calculation Sept 30, 2018 ($ in Millions) ($ in Millions) 2017 2018 1,500 3,026 Long-term debt (principal) Stockholders equity Net cash provided by operating activities Change in operating a
Slide 21: Contact Info
Contact Info 23 Contact Karen AciernoCimarex Energy Co. Director – Investor Relations1700 Lincoln Street, Suite 3700 kacierno@cimarex.comDenver, CO 80203 303-285-4957303-295-3995
Slide 22: Pe Contad inte
Pe Contad inte XEC LISTED NYSE fact 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 a
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