In a recent press release, Cimarex Energy (NYSE: XEC) announced a peer-to-peer merger with Cabot Oil & Gas (NYSE: COG). As the oil and gas industry faces an uncertain demand environment due to the pandemic, consolidation is key to superior investor performance and operational efficiency. Interestingly, Cimarex Energy shares are trading 35% above pre-Covid levels and Trefis believes it is time to make a profit as WTI futures indicate a correction in spot prices over the second. semester. In addition, the IEA (International Energy Agency) expects exploration for fossil fuels to decline dramatically with new policies favoring renewable energy. We highlight historical trends in income, earnings, and stock prices of XEC and COG in interactive dashboards, Buy or fear the Cimarex energy stock? and Buy or fear Cabot’s oil and gas stocks?
[Updated 03/29/2021] – The pandemic blues weighs on the Cimarex energy stock
Actions of Cimarex Energy (NYSE: XEC) surpassed the pre-Covid level of $ 55 as OPEC announced the extension of production cuts at its ministerial meeting on March 4. Cimarex is an independent exploration and production company with operations in Texas, New Mexico and Oklahoma. The company has a flexible cash allocation plan for 2021 given the uncertain demand environment due to short-term spikes in coronavirus cases in the United States and other countries. Due to the recently introduced restraint measures in Europe, high levels of commercial crude oil inventories in the United States, and the EIA’s expectations of lower benchmark prices in the second half of the year, Trefis believes the stock has reached its short-term potential. We highlight historical trends in income, earnings, and stock prices in an interactive dashboard analysis on Buy or fear the Cimarex energy stock?
Asset write-downs reduced the company’s asset base by 35%
Cimarex Energy’s revenues fell 33%, from $ 2.3 billion in 2018 to $ 1.6 billion in 2020, as the pandemic resulted in lower demand and lower benchmark prices. While the profit margin fell into negative territory due to an impairment charge of $ 1.6 billion, the company’s balance sheet declined 35% in 2020. Improving the company’s finances largely depends on global crude oil demand and OPEC supply constraints. With major oil companies including Exxon Mobil
The benchmarks of Brent and WTI crossed the $ 60 / bbl mark over the past month due to the extension of OPEC’s mandatory production cuts. Closing stocks of crude oil and other petroleum products in the United States have yet to reach pre-Covid levels as travel demand rebounds and vaccination rates rise. The EIA expects the WTI benchmark to average around $ 50 / bbl in 2021, which will negatively affect the revenues and margins of upstream companies. While supply-side constraints have supported benchmark prices, demand-side factors, including the emergence of another coronavirus wave in Europe and a slow vaccination rate in emerging economies, could remain dissuasive.
Is there a better alternative to Cimarex Energy? Comparison of Cimarex Energy shares with peers summarizes how XEC stacks up against its peers on important metrics. You can find other useful comparisons at Peer comparisons.