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UPDATE 2-Cimarex Energy to boost oil and liquids output
February 15, 2012 / 11:31 AM / 6 years ago

UPDATE 2-Cimarex Energy to boost oil and liquids output

* Says to spend majority of 2012 capex on oil, liquids-rich gas

* Sees 2012 production up 4-10 pct

* Q4 EPS $1.36 vs est $1.30

* Q4 rev up 6 pct at $417.5 mln

Feb 15 (Reuters) - Natural-gas focused Cimarex Energy said it will direct nearly all of its 2012 capital budget towards lucrative oil and liquids-rich gas drilling and forecast higher full-year production.

Natural gas prices have slumped to their lowest level in a decade, pressured by a glut caused by higher output from shale fields and slack demand due to a mild winter. U.S. crude oil prices rose 17 percent to average about $92.39 per barrel in the October-December period.

Cimarex, whose fourth-quarter production dipped half a percent, said it expects full-year output to grow by 4 percent to 10 percent to 615-650 million cubic feet equivalent per day.

The Denver, Colorado-based company forecast capital expenditure of $1.4 billion to $1.6 billion for the year. The company said more than half of the budget would be invested in its Permian Basin assets in Texas.

The Permian Basin accounted for nearly 70 percent of Cimarex’s fourth-quarter oil output.

Fourth-quarter profit beat market estimates for the third-straight quarter as higher oil prices helped offset the drop in production.

Net income fell marginally to $116.9 million, or $1.36 a share, from $117.6 million, or $1.37 a share, in the year-ago period.

Total revenue rose 6 percent to $417.5 million.

Analysts on average had expected earnings of $1.30 a share, on revenue of $417.7 million, according to Thomson Reuters I/B/E/S.

Shares of the company closed at $68.78 on Tuesday on the New York Stock Exchange.

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