Tickers in this Article: XEC, OXY, PXD, CLR
Cimarex Energy (NYSE:XEC) advanced the development of its Permian and Woodford plays during the first quarter of 2011. This oil and gas exploration/production company directed the majority of its capital into these and other oil and liquid development opportunities. Let's take a look at the company's Q1 results, and what investors can expect going forward. (For background reading on investing in this sector, check out the Oil And Gas Industry Primer.)

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Cimarex in the Permian Basin
Cimarex Energy has 448,000 net acres under lease in the Permian Basin, which spreads across New Mexico and Texas. During the first quarter of 2011, Cimarex Energy drilled and completed 19.7 net wells and has another 18.1 net wells in various stages of completion.

Cimarex Energy spent $154 million in capital in the Permian basin during the first quarter of 2011, or about 45% of its total budget. This spending will continue for the balance of 2011 and Cimarex Energy plans to put as much as $750 million into the play.

One formation that Cimarex Energy is working on in the Permian Basin is the Bone Spring located in New Mexico. The company has increased its production from two separate Bone Spring formations to 6,000 barrels of oil equivalent (BOE) per day in January 2011.

Cimarex Energy reported that recent Bone Spring wells produced between 560 and 1,100 BOE per day and that this production was 75-90% oil. Other formations that Cimarex Energy is pursuing in the Permian Basin are the Paddock, Abo, Wolfcamp and Avalon formations.

Other Players in Cimarex's Industry
Many operators are active in the Permian Basin as they seek to increase oil production. Occidental Petroleum (NYSE:OXY) is the largest operator in this development, with 2.4 million acres under lease. The company reported average daily production of 197,000 BOE per day from the Permian in 2010.

Pioneer Natural Resources (NYSE:PXD) is also developing properties in the Permian Basin, and has interests in more than 5,600 wells in the Spraberry field in Texas.

Cimarex's Woodford Shale Activity
Cimarex Energy is also active in the midcontinent area and is focused on the Cana Woodford Shale. The company spent $169 million in capital here in the first quarter of 2011, on the way to as much as $550 million for the full year.

Cimarex Energy has 100,000 net acres in the Cana Woodford Shale and is operating nine rigs there. During the first quarter of 2011, the company drilled and completed 9.6 net wells.

Other operators in the Woodford Shale include Continental Resources (NYSE:CLR), which has approximately 322,000 net acres under lease in the play. The company reported production of 2,685 BOE per day in the first quarter of 2011 from the Anadarko Woodford.

The Bottom Line
Cimarex Energy deployed most of its capital to develop oil and liquid plays during the first quarter of 2011, with a focus on the Permian and Woodford plays in the inshore area of the United States.

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