Cimarex Energy Co. Dec 05

Standard & Poors, December 2005

Abstract
Low debt leverage after the Magnum Hunter Resources Inc. acquisition; Diversified reserve base, with a focus in the Mid-Continent and Permian Basin; and The ability to grow organically, through the development of its reserves and acreage after the Magnum Hunter acquisition. High all-in and drillbit cost structures; A lack of hedging given its high cost structure; and The acquisition of Magnum Hunter nearly triples the company's size and could pose operational challenges. The ratings on Cimarex Energy Co. reflect the risks associated with the acquisition of Magnum Hunter Resources Inc., which more than doubles Cimarex's size and a somewhat higher than average cost structure for the combined entity, relative to peers. Somewhat mitigating these concerns is a record of good...

Companies mentioned in this report are: Cimarex Energy Co.,Forest Oil Corp.,Swift Energy Co.,Magnum Hunter Resources Inc.,Encore Acquisition Co.
Action: Review

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Full Analysis

Cimarex Energy Co.,Forest Oil Corp.,Swift Energy Co.,Magnum Hunter Resources Inc.,Encore Acquisition Co.

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