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CORPORATE UPDATE May 2019 Forward-Looking Statements

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CORPORATE UPDATE May 2019 Forward-Looking Statements CORPORATE UPDATE May 2019 Forward-looking Statements This presentation contains projections and other forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These projections and statements reflect the Company’s current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. A discussion of these factors is included in the Company’s periodic reports filed with the U.S. Securities and Exchange Commission. Contact: Karen Acierno Vice President – Investor Relations [email protected] 303-285-4957 FORWARD-LOOKING STATEMENTS 2 Cimarex Energy Snapshot NYSE SYMBOL: XEC MARKET CAP1: $6.8 BILLION ENTERPRISE VALUE1: $8.8 BILLION DEBT/EBITDA2: 1.3X QUARTERLY DIVIDEND: $0.20/SHARE 2019E OIL PRODUCTION GROWTH: 18 - 30% 1 As of May 6, 2019 CIMAREX ENERGY SNAPSHOT 3 2 As of and for the twelve months ended 3/31/19. See Appendix for non-GAAP definitions and reconciliations to nearest comparable GAAP measure. Cimarex Energy: Maximizing Returns PREMIERE PORTFOLIO Core positions in the Permian and Anadarko Basins IDEA GENERATION Driven by rigorous technical evaluation FOCUSED EXECUTION Focused on maximizing ROR and NPV LOOKBACK EVALUATION Improves economic returns & operational efficiencies FINANCIAL DISCIPLINE Strong returns, cash flow growth, liquidity & optionality CIMAREX ENERGY: MAXIMIZING RETURNS 4 1Q19 Highlights RESOLUTE ACQUISITION CLOSED: 1Q19 PRODUCTION: 258.9 MBOE/D; 79.4 MBBL/D ADDED 21,100 NET ACRES IN DELAWARE BASIN 26% 1Q18 2Q18 3Q18 4Q18 1Q19 REAFFIRMED 2019 CAPITAL GUIDANCE 2019E OIL PRODUCTION: 80-88 MBO/D 18-30% $ 2018A 2019E 1Q19 HIGHLIGHTS 5 Maximizing Value: Understanding Fracture Surface Area No Interference – Not Maximizing PV: < $130mm CUMULATIVE PROJECT: PV vs. ROR CUMULATIVE PV ($MM) ROR (%) $150 90% C A $140 80% Increased Interference – Destroying PV: < $130mm $130 70% ($MM) $120 A 60% $110 50% B B $100 40% PROJECT ROR (%) ROR PROJECT Optimal Spacing – PV: $130-140mm $90 30% CUMULATIVE PV PV CUMULATIVE $80 20% 8 10 12 13 14 15 16 WELLS PER SECTION C Interference MAXIMIZING VALUE: UNDERSTANDING FRACTURE SURFACE AREA 6 Maximizing Value – PV vs ROR CUMULATIVE PROJECT: PV vs. ROR INCREMENTAL WELL: PV vs. ROR CUMULATIVE PV ($MM) ROR (%) INCREMENTAL PV ($MM) ROR (%) $35 90% $6 90% ) $30 80% $4 60% $MM $25 70% $20 60% $2 30% $15 50% $0 0% $10 40% PROJECT ROR (%) ROR PROJECT ($2) -30% PER WELL ROR (%) ROR WELL PER $5 30% ($MM) PV WELL PER CULMULATIVE PV ( PV CULMULATIVE $0 20% ($4) -60% 2 4 5 6 7 8 10 2 4 5 6 7 8 WELLS PER SECTION WELLS PER SECTION IN SOME RESERVOIRS, JUST ONE INCREMENTAL WELL CAN DESTROY VALUE • Competitive cumulative returns; negative PV and ROR on incremental well MAXIMIZING VALUE – PV VS ROR 7 2019 Capital Investment Program AVALON OTHER 2% 2% BONE SPRING E&D CAPITAL OF $1.35 – 1.45 BILLION 4% WOLFCAMP • Free cash flow neutral at $52.50 WTI; $50 WTI WOODFORD 78% 4% excluding dividend MERAMEC D&C CAPITAL $1.10 – 1.20 BILLION 10% • 84% of E&D capital • Permian Basin ~85% • Mid-Continent Region ~15% D&C CAPITAL ADDITIONAL $60 – 70 MILLION BUDGETED FOR $1.1 – 1.2 BILLION MIDSTREAM CURRENTLY OPERATING NINE RIGS • Eight in Permian • One in Mid-Continent 2019 CAPITAL INVESTMENT PROGRAM 8 Capital Investment – Q1 $ MILLIONS 1Q19A 2019E DRILLING & COMPLETION1 (D&C) $ 319 $ 1,100 - 1,200 EXPLORATION & DEVELOPMENT2 (E&D) $ 368 $ 1,350 - 1,450 MIDSTREAM 18 60 - 70 TOTAL CAPITAL INVESTMENT $ 386 $ 1,410 - 1,520 1 Drilling, completion, flowback, batteries, well connections/flowlines, SWD system costs 2D&C1 + capitalized overhead, production capital, land, technology CAPITAL INVESTMENT – Q1 9 2019 Net Wells on Production 2019 ACTIVITY: 82 NET WELLS (AVERAGE OPERATED LATERAL LENGTH: 9,050’) 38 30 26 18 8 1QA 2QE 3QE 4QE WELLS WAITING ON COMPLETION AT 12/31/19 PERMIAN BASIN MID-CONTINENT 2019 NET WELLS ON PRODUCTION 10 2019 Delaware Basin Plans D&C WELLS DRILLED AVERAGE LATERAL CAPITAL BY COUNTY LENGTH BY COUNTY 10,000 8,000 WOLFCAMP EDDY REEVES 6,000 LEA 4,000 $935–$1,020MM 65 NET WELLS 2,000 0 CULBERSON BONE LEA SPRING EDDY AVALON REEVES CULBERSON 2019 DELAWARE BASIN PLANS 11 Delaware Basin – Overview NEW MEXICO TEXAS 259,000 TOTAL NET ACRES 85% OF 2019 D&C BUDGET CURRENTLY RUNNING 8 RIGS, 3 COMPLETION CREWS STACKED PAY OPPORTUNITIES • Provides multi-zone development opportunities • Upper and Lower Wolfcamp • Second and Third Bone Spring • Avalon CIMAREX ACREAGE WOLFCAMP BONE SPRING AVALON DELAWARE BASIN – OVERVIEW 12 Delaware Basin – Reeves County, TX SKY PILOT 4 WELLS RESOLUTE ACQUISITION CLOSED 82,853 NET ACRES SANDLOT 4 WELLS SENTINEL 5 WELLS 38% OF 2019 D&C CAPITAL HARDSCRABBLE 6 WELLS TARGETING UPPER WOLFCAMP FOUR DEVELOPMENTS ON PRODUCTION IN 2019 • Sandlot development flowing back NEW MEXICO CIMAREX ACREAGE TEXAS UPPER WOLFCAMP OPERATED SWD DELAWARE BASIN – REEVES COUNTY, TX 13 Delaware Basin – Culberson/White City NEW MEXICO TEXAS OWL DRAW 3 WELLS 100,000+ NET ACRES JDA WITH CHEVRON IN CULBERSON ARISTIDES 6 WELLS SIR BARTON 34% OF 2019 D&C CAPITAL 7 WELLS • Targeting Upper Wolfcamp & Bone Spring BROKERS TIP 7 WELLS FIVE DEVELOPMENTS ON PRODUCTION IN 2019 • Sir Barton & Brokers Tip flowing back OLD ROSEBUD 4 WELLS CIMAREX ACREAGE UPPER WOLFCAMP LOWER WOLFCAMP OPERATED SWD DELAWARE BASIN – CULBERSON/WHITE CITY 14 Culberson: Top-Tier Oil Wells DELAWARE BASIN CUMULATIVE OIL PRODUCTION BY COUNTY (>8,500 LL, First Prod >2016, Upper Wolfcamp & Bone Spring Formations) 6 MONTH 12 MONTH 18 MONTH XEC CULBERSON LOVING LEA EDDY WARD REEVES 400 350 350 300 300 250 250 OIL 200 - 200 150 150 100 MBBLS 100 50 50 23 WELLS 23 19 15 122 80 47 103 63 32 92 47 15 15 14 12 245 167 106 (MBBL) OIL CUMULATIVE 0 0 0 3 6 9 12 15 18 XEC CULBERSON LOVING LEA EDDY WARD REEVES COUNTY MONTHS ATTRIBUTES OF CULBERSON COUNTY LONG LATERALS • Competitive Oil Production • Shallow Declines • Low Operating Costs (LOE) CULBERSON: TOP-TIER OIL WELLS 15 Culberson: Water Infrastructure Driving Efficiencies RISER: XEC-ENGINEERED ACCESS FOR WATER REUSE SALTWATER DISPOSAL (SWD) • Own & operate the system • Improves operating costs • System redundancy reduces downtime • System expanding efficiently with additional development WATER REUSE DRIVES EFFICIENCY SWD INFRASTRUCTURE WOLFCAMP FRAC WATER • On-demand recycled water lowers cost • Wolfcamp completions used 97% recycled RECYCLED PURCHASED water in 2018 • Saved $1.54/bbl for procured water ENVIRONMENTAL BENEFITS XEC ACREAGE • Avoids surface storage of produced water INFRASTRUCTURE • OPERATED SWD 97% Permanent underground flow helps to prevent spills 87% • Reduces need for fresh water 32% 2016 2017 2018 CULBERSON: WATER INFRASTRUCTURE DRIVING EFFICIENCIES 16 Culberson: Resilient Long Lateral Returns FRAC GENERATIONS – INCREASING PRODUCTIVITY UPPER WOLFCAMP BTAX IRR* GEN 1 GEN 2 GEN 3 GEN 4 $1/Mcf $2/Mcf 700 250% 600 200% 500 400 150% 300 100% 200 50% 100 0 0% 0 200 400 600 800 1,000 1,200 1,400 $30 $40 $50 $60 $70 CUMULATIVE OIL PRODUCTION (MBBL) (MBBL) PRODUCTIONOIL CUMULATIVE DAYS ON PRODUCTION NYMEX OIL PRICE PAYOUT IN ~15 MONTHS AT $50 OIL* BASIN-LOW LOE INVESTMENT OPPORTUNITY HAS TRIPLED SINCE 2016 *Assumes NYMEX oil pricing, realized gas pricing, NGL price is 30% of oil price – assumes full NGL recovery CULBERSON: RESILIENT LONG LATERAL RETURNS 17 Delaware Basin – Lea County, NM 31,384 NET ACRES VACA DRAW TARGETING: 6 WELLS • Upper Wolfcamp • Avalon • Bone Spring ONE DEVELOPMENT ON PRODUCTION IN 2019 NEW MEXICO CIMAREX ACREAGE TEXAS UPPER WOLFCAMP AVALON BONE SPRING DELAWARE BASIN – LEA COUNTY, NM 18 Mid-Continent – Overview OKLAHOMA 326,000 NET ACRES BILLY WORT MISS MARY 2 WELLS 3 WELLS 5 WELLS WOODFORD: 135,625 NET UNDEVELOPED ACRES (HBP) MERAMEC: 116,500 NET ACRES (>98% HBP) • Three developments on production in 2019 • Billy development on flow back 15% OF 2019 D&C CAPITAL CIMAREX ACREAGE MERAMEC OUTLINE WOODFORD OUTLINE MID-CONTINENT – OVERVIEW 19 Disciplined Financial Positioning XEC DEBT/TTM EBITDA 3.0x 2.5x LIQUIDITY • $1.3 billion of liquidity, including $21 MM of cash 2.0x (3/31/2019) 1.5x CONSERVATIVE LEVERAGE • 1.3x Debt/TTM EBITDA (3/31/19) 1.0x INVESTMENT GRADE DEBT • $500 million 4.375% senior unsecured notes due in 2029 0.5x • $750 million 3.900% senior unsecured notes due in 2027 • $750 million 4.375% senior unsecured notes due in 2024 0.0x 2014 2015 2016 2017 2018 1Q19 DEBT/TTM EBITDA AVERAGE DISCIPLINED FINANCIAL POSITIONING 20 Cash Operating Margin Expansion DECLINING CASH COSTS SUPPORTING MARGIN EXPANSION $50 80% 70% $40 68% 70% 65% 66% $30 60% 55% 54% $20 50% MARGIN MARGIN % $10 40% $14.2 $10.7 $9.5 $9.6 $8.6 $8.3 $/BOE OPEX & CASH MARGIN $/BOE & CASH OPEX $0 30% 2014 2015 2016 2017 2018 1Q19 CASH OPERATING COSTS MARGIN MARGIN % Cash operating costs include: LOE, Transportation, Production Tax, G&A; Realized prices exclude hedge gain/loss CASH OPERATING MARGIN EXPANSION 21 Cimarex Energy Overview PROVEN STRONG PREMIER ENDURING TRACK FINANCIAL PORTFOLIO CULTURE RECORD POSITION CREATING VALUE CORE POSITIONS IN MAXIMIZING FULL- LOW LEVERAGE AND AND GENERATING THE PERMIAN AND CYCLE RETURN ON LIQUIDITY PROVIDES TOP-TIER RETURNS ANADARKO BASINS INVESTED CAPITAL OPPORTUNITIES CIMAREX ENERGY OVERVIEW 22 APPENDIX APPENDIX 23 2019 Guidance 2Q19E FY19E Production (MBOE/d) 263 - 275 260 – 275 Oil Production (MBO/d) 79.5 – 85.5 80.0 – 88.0 Capital Expenditures ($billion) E & D
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