Cimarex Energy Company XEC announced the closing of the public offering of 6 million shares of its common stock and the full exercise of the underwriters' option to purchase 0.9 million additional shares. Net proceeds of approximately $730 million are likely to be used for general corporate purposes and to finance stepped-up drilling and completion activity planned for the second half of this year and throughout 2016.
Cimarex invested $308 million in exploration and development during the first quarter with funding from cash flow from operations and cash on hand. Total debt at Mar 31, 2015, consisted of $1.5 billion of long-term notes.
Denver, CO-based 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.
However, as is the case with other independent exploration and production companies, results of Cimarex are directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces. In particular, oil has lately been entrenched into a bearish territory and has fallen below the $60-a-barrel level following OPEC's decision to keep production unchanged, the effects of booming shale supplies in North America, weakening growth in China and a stagnant European economy.
Currently, Cimarex carries a Zacks Rank #3 (Hold). Some better-ranked players from the sector are Transmontaigne Partners L.P TLP, Pembina Pipeline Corporation PBA and Africa Oil Corp AOIFF. All these stocks carry a Zacks Rank #1 (Strong Buy).
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