ITEMS 1 and 2. BUSINESS and PROPERTIES General Cimarex Energy Co., a Delaware Corporation Formed in 2002, Is an Independent

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ITEMS 1 AND 2. BUSINESS AND PROPERTIES General Cimarex Energy Co., a Delaware corporation formed in 2002, is an independent oil and gas exploration and production company. Our operations are located entirely within the United States of America, mainly in Texas, New Mexico, and Oklahoma. Currently our operations are focused in two main areas: the Permian Basin and the Mid-Continent. Our Permian Basin region encompasses west Texas and southeast New Mexico. Our Mid- Continent region consists of Oklahoma and the Texas Panhandle. On our website — www.cimarex.com — you will find our annual reports, proxy statements, and all of our Securities and Exchange Commission (“SEC”) filings, which we make available free of charge. Information contained on our website is not incorporated by reference into this Annual Report. Throughout this Form 10-K we use the terms “Cimarex,” “company,” “we,” “our,” and “us” to refer to Cimarex Energy Co. and its subsidiaries. Our principal business objective is to increase shareholder value through the profitable growth of our proved reserves and production while seeking to minimize our impact on the communities in which we operate for the long-term. Our strategy centers on maximizing cash flow from producing properties for reinvestment in exploration and development activities and for providing cash returns to shareholders through dividends and debt reduction. We consider merger and acquisition opportunities that enhance our competitive position and we occasionally divest non-strategic assets. Key elements to our approach include: • Maintaining a strong financial position; • Investing in a diversified portfolio of drilling opportunities; • Evaluating projects based on rate-of-return and rank investment decisions; • Tracking predicted versus actual results in a centralized exploration management system to provide feedback to improve results; • Attracting quality employees and maintaining integrated teams of geoscientists, landmen, and engineers; and • Maximizing profitability. Conservative use of leverage has long been the key to our financial strategy. We believe that low leverage coupled with strong full-cycle returns enables us to better withstand volatility in commodity prices and provide competitive returns and growth to shareholders. See Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Stock Performance Graph and Item 6 Selected Financial Data for additional financial and operating information for fiscal years 2016 - 2020. 7.

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Chairman Murkowski, Ranking Member Cantwell, Members of the Committee, It Is an Honor to Be with You This Morning
Cimarex Energy Co. Steve J. Simonton 202 S. Cheyenne Ave Vice President, Drilling & Completion Operations Suite 1000 DIRECT: 918.295.1710 Tulsa, Oklahoma 74103 [email protected] PHONE 918.585.1100 FAX 918.749.8059 Chairman Murkowski, Ranking Member Cantwell, members of the committee, it is an honor to be with you this morning. My name is Steve Simonton, Vice President of Drilling and Completion Operations for Cimarex Energy Co., a publically traded (NYSE:XEC) oil and gas exploration company with operations primarily located in Oklahoma, Texas and New Mexico. The majority of our current activity is in the Permian Basin of West Texas and New Mexico and the Anadarko Basin in Western Oklahoma. We pride ourselves on having strong technical teams with a common goal of adding shareholder value through drilling and production. Simply stated, our business strategy is to maximize our cash flow from producing oil and gas properties and effectively redeploy the cash flow in drilling projects to grow the company. In order to be competitive and ultimately be successful in our business strategy, it is imperative we stay ahead in the technologies that continue to evolve in our industry. Over the last decade, our industry has made tremendous advancements to improve the productivity of the wells we drill. Years ago, we drilled vertical holes into the earth to extract oil and gas from rock intervals, which were, in general, 20’ – 300’+ thick. These “vertical completions” only allowed us to extract the oil and gas from the vertical section of the rock interval we contacted. With the evolution of horizontal drilling technology, we are now able to drill the vertical section of the well down to the rock interval we are targeting, and then drill horizontally out into the interval, thereby contacting up to 10,000’ of rock section from which to produce.
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