XEC - Embedded Expectations Analysis - 2021 05 07
Cimarex Energy Co. (XEC:USA) currently trades at a discount relative to UAFRS-based (Uniform) assets, with a 0.4x Uniform P/B. At these levels, the market is pricing in expectations profitability to remain muted, and management may have concerns about their long-term financial targets, drilling rig operations, and capex spendSpecifically, management may lack confidence in their ability to meet their long-term financial targets, reduce net debt levels, and achieve their projected oil production rate growth. In addition, they may have concerns about the amount of capex needed to maintain their production targets as well as the sustainability of drilling rig operations through inclement weather. Furthermore, they may lack confidence in their ability to maintain their current cash position, drive well efficiency improvements, and minimize their Permian Basin D&C capital cost per foot. Finally, they may be overstating their financial flexibility, the potential of their natural gas liquids (NGLs) positioning, and the value of their fuel savings and emission reductions data
Cimarex Energy is an independent oil and gas exploration and production company. The company's operations are mainly located in Texas, New Mexico, and Oklahoma. The company's operations are focused in two main areas: the Permian Basin and the Mid-Continent. The company's Permian Basin region encompasses west Texas and southeast New Mexico. The company's Mid-Continent region consists of Oklahoma and the Texas Panhandle.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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