History
Cimarex spent a decade refinancing its debt, raised equity in 2015, bought Resolute in 2019, then merged into Cabot (now Coterra) in October 2021.
2011-2014: Building a debt base
The record for these years is about funding rather than drilling. In July 2011 Cimarex entered a new $800 million senior unsecured revolving credit facility, with JPMorgan Chase as agent, maturing in July 2016. In March 2012 it agreed to sell $750 million of 5 7/8% Senior Notes due 2022, closing the offering on April 5 with net proceeds of about $737 million. Part of the money went to a tender offer for its $350 million 7 1/8% notes due 2017. Holders of about 86% ($299.8 million) tendered, and Cimarex gave notice to redeem the rest on May 7, 2012 at 103.563% of principal. The remainder of the proceeds went to general purposes, including reducing revolver borrowings.
The record then goes quiet until May 2014, when Cimarex amended the revolver. The borrowing base rose from $2.0 billion to $2.5 billion, and maturity was extended to July 2018. Later that month it priced $750 million of 4.375% Senior Notes due 2024, upsized from the $600 million first announced. The offering closed on June 4 with net proceeds of about $741.5 million, used to repay the revolver and for general purposes.
2015-2018: Fresh equity and a lighter debt structure
In May 2015 Cimarex sold 6,000,000 new shares at $109.00 each. The underwriters took up their option for another 900,000. Net proceeds were about $729.5 million, meant for general purposes and for more drilling and completion work in the second half of 2015 and more significantly in 2016. The new shares diluted existing holders, and the share count rose from about 87.2 million at the end of 2014 to about 94.6 million a year later.
In October 2015 Cimarex replaced its revolver with a new $1.0 billion unsecured facility expiring in October 2020, with no borrowings outstanding. Because the notes had reached investment-grade ratings, the subsidiary guarantees on the 2022 and 2024 notes were released and the 2022 notes' covenants ended. The new facility swapped the borrowing base for a maximum 65% debt-to-capitalization limit.
In April 2017 Cimarex priced $750 million of 3.90% Senior Notes due 2027, closing on April 10 with net proceeds of about $741.7 million. It used the money to tender for the 5.875% notes due 2022, and $253.4 million were accepted. It expected to redeem the rest on May 12, 2017, though the record does not confirm this.
In May 2018 it agreed to sell its Ward County, Texas properties to Callon for $570 million. They produced about 6,831 barrels of oil equivalent a day, 73% of it oil. The sale closed on August 31, 2018 at an adjusted price of $544.5 million, with Cimarex receiving $510.1 million at closing and a final settlement due within 120 days.
2018-2019: The Resolute acquisition
In November 2018 Cimarex agreed to buy Resolute Energy for $35.00 a share in cash and stock, about $1.6 billion including Resolute's $710 million of long-term debt. The deal added 21,100 net acres in Reeves County and 35,000 barrels of oil equivalent a day of production, 45% of it oil. Resolute holders could choose cash, shares, or a mix.
In February 2019 Cimarex replaced its revolver with one of $1.25 billion maturing in February 2024. The Resolute deal closed on March 1, 2019. Cimarex issued about 5.7 million shares, paid $325.6 million in cash and exchanged 62,500 of its new 8 1/8% Series A preferred shares for Resolute's preferred. It also redeemed Resolute's $600 million 8.50% notes, drawing $525 million on the revolver. On March 8 it sold $500 million of 4.375% notes due 2029, with net proceeds of about $494.6 million to repay that borrowing. The share count reached about 102.1 million by the end of 2019.
2020-2021: Merger with Cabot
The record is quiet for 2020. In May 2021 Cimarex agreed to merge with Cabot Oil & Gas. Each Cimarex share would convert into 4.0146 Cabot shares, leaving former Cimarex holders with about 50.5% of the combined company. Thomas Jorden was to be chief executive and Cabot's Dan Dinges executive chairman. By August 19 the offer was worth about $58.57 per Cimarex share, against about $71.50 at announcement. Stockholders were due to vote on September 29.
The merger closed on October 1, 2021, and Cimarex became a subsidiary of Cabot, now Coterra Energy. Its common stock was delisted, the credit agreement was terminated with nothing borrowed, and its directors left their posts, with Jorden to be reappointed to the surviving company's board. The 8.125% preferred stock stayed outstanding. On October 7 Coterra completed exchange offers for Cimarex's bonds. It took in $705.5 million of the 2024 notes, $687.3 million of the 2027 notes and $433.2 million of the 2029 notes, leaving $44.5 million, $62.7 million and $66.8 million outstanding. Those remaining notes had many covenants removed. On October 12 Cimarex ended its registration of a class of securities, ending its reporting obligation for them. As of October 7, 2021, the Ward County sale's final settlement and ten shareholder lawsuits over the merger were still unresolved.
Written from the 24 story beats below (2011 to 12 Oct 2021), which come from the company's own announcements and filings.