Cimarex Reports Third-Quarter 2006 Earnings of $1.11 per Share

DENVER, Nov. 6 /PRNewswire-FirstCall/ -- Cimarex Energy Co. today reported third-quarter 2006 net income of $94.0 million, or $1.11 per diluted share. This compares to third-quarter 2005 earnings of $64.1 million, or $0.76 per diluted share.

Revenues from oil and gas sales in the third quarter of 2006 were $309.3 million, compared to $343.5 million in the same period of 2005. Third-quarter 2006 cash flow from operations totaled $241.7 million versus $217 million in the same period of 2005(1).

Third-quarter 2006 gas prices decreased 19% to $6.35 per thousand cubic feet (Mcf) and oil rose 12% to $66.57 per barrel from the same period of 2005.

Third-quarter 2006 oil and gas production averaged 447.5 million cubic feet equivalent per day (MMcfe/d), as compared to 445.8 MMcfe/d for the same period a year earlier. The current quarter's daily production was comprised of 338 million cubic feet of gas and 18,255 barrels of oil.

"Our quality reserve base continues to provide solid financial results and our process of rationalizing peripheral assets continues," said F.H. Merelli, Cimarex's Chairman, Chief Executive Officer and President. "Operational challenges on several significant onshore producers and completion delays in the Gulf of Mexico have affected production. Drilling results have been impacted by increased service costs and by less than expected exploration success. All of these factors force further high-grading of the drilling program and increased emphasis on cost reductions."

Included in the current quarter's net income is an $18.3 million gain on sale of certain limited partnership interests in oil and gas properties. Net sales consideration received to date via distributions from these affiliated partnerships totaled $57.9 million.

For the nine months ended September 30, 2006, Cimarex reported net income of $287 million, or $3.41 per diluted share, up from the $159.9 million, or $2.63 per diluted share for the comparable period of 2005. Cash flow from operations for the first nine months of 2006 totaled $704.7 million versus $450.4 million in the same period of 2005(1). Nine month results for the prior year reflect the impact of the Magnum Hunter merger beginning on June 7, 2005.

Capital

In the third quarter of 2006 we drilled 125 gross (81.0 net) wells and exploration and development (E&D) expenditures totaled $249.7 million, up from $192.9 million in the third quarter of 2005. We expect full-year 2006 exploration and development expenditures to approximate $1 billion.

Hedging

Cimarex has hedged a portion of its natural gas production through collars covering calendar years 2007 and 2008 for 80,000 and 40,000 MMBtu per day, respectively. The floor price protects our return on capital invested in certain Mid-Continent drilling programs while still allowing participation in potential price increases up to the ceiling. The prices in the table below are at the Mid-Continent delivery point.

Mid-Continent Weighted Average Price Period Commodity Volume/Day Settlement Floor Ceiling 2007 Gas 80,000 MMBtu Mid-Continent $7.00 $10.17 2008 Gas 40,000 MMBtu Mid-Continent $7.00 $9.90

Oil and gas collars assumed as part of the Magnum Hunter acquisition also remain in place. These contracts have not been designated for hedge accounting treatment. The following table summarizes the open contracts as of September 30, 2006:

NYMEX Weighted Average Price Period Commodity Volume/Day Settlement Floor Ceiling Oct 06 - Dec 06 Gas 20,000 MMBtu NYMEX $5.25 $6.30 Oct 06 - Dec 06 Oil 1,000 Bbl NYMEX $30.00 $35.85 Exploration and Development Activity

Cimarex drilled 429 gross (269.9 net) wells during the first nine months of 2006, with a completion rate of 92%. At the present time we have 27 operated rigs running.

Mid-Continent

Cimarex drilled 235 gross (146.2 net) wells in the Mid-Continent region during the first three quarters of 2006 realizing a 98% success rate. Mid-Continent third quarter production volumes averaged 182.7 MMcfe/d, a two percent increase over second-quarter 2006.

In the Texas Panhandle, principally targeting the Granite Wash formation at depths of 11,000-14,000 feet, Cimarex drilled 61 gross (42.6 net) wells with a 97% success rate. Meaningful wells recently brought on production in the Texas Panhandle area include the Webb 5-194 (100% working interest) at 3.6 MMcfe/d, Webb 4-194 (75% working interest) at 3.4 MMcfe/d, Earp 3-60 (100% working interest) at 2.7 MMcfe/d and the Earp 3-59 (75% working interest) at 2.4 MMcfe/d.

Exploitation activity in the Panoma gas field, also located in the Texas Panhandle, consisted of drilling 75 (73.4 net) infill wells with a 100% success rate. These wells target the Brown Dolomite formation at 2,200 feet. This drilling has increased gross field production by 5.1 MMcfe/d.

In the Anadarko Basin of western Oklahoma, Cimarex drilled 71 gross (13.1 net) wells realizing a 99% success rate. Wells in this area generally target the Red Fork and Clinton Lake/Atoka at depths of 12,000-15,000 feet. A notable Clinton Lake well, the Patricia 1-29 (56% working interest), commenced production averaging 6.5 MMcfe/d. In southern Oklahoma, Cimarex drilled 13 gross (10.4 net) wells with an 85% success rate including the Eola Robberson field's, Harmon Heirs 4-8H (100% working interest) producing at 2.0 MMcfe/d.

Cimarex currently has 11 operated rigs drilling in the Mid-Continent region.

Permian Basin

Permian Basin drilling for the first nine months of 2006 totaled 125 gross (92.0 net) wells, 97% of which were completed as producers. Permian Basin third-quarter 2006 production volumes averaged 130.2 MMcfe/d as compared to 137.6 MMcfe/d in the second quarter of 2006.

In southeast New Mexico, two wells the Laguna Deep 8 (94% working interest) and the New Mexico DD State 3 (100% working interest) declined rapidly as a result of smaller than anticipated reservoir size and/or water encroachment. Net daily production from these two wells decreased 5.3 MMcfe/d from the second to the third quarter of 2006. Year-to-date southeast New Mexico drilling totaled 43 gross (31.6 net) wells with a 93% success rate in the Morrow, Atoka and Strawn formations. Initial production rates averaged 1.5 MMcfe/d. Notable wells in Eddy County, New Mexico include the Ozley 25 (100% working interest) at 2.9 MMcfe/d, White City 31 (100% working interest) at 2.7 MMcfe/d and the Parks 1 (62.5% working interest) at 2.6 MMcfe/d.

In West Texas, a total of 70 gross (51.9 net) wells were drilled, of which 99% were successful. Included in the West Texas program is exploitation of the Westbrook Unit (90% working interest) where 32 infill wells have been drilled and completed in the Clearfork formation at 3,200 feet. Other geologic targets in West Texas include the Devonian, Ellenburger, Bone Springs and Spraberry. Cimarex has drilled or participated in 17 (5.8 net) Devonian wells in the Arbol de Nada field, five gross (five net) Ellenburger wells in the Will-O field, and four gross (1.8 net) Bone Springs wells in the War-Wink field.

Cimarex has 11 operated rigs drilling in the Permian Basin, six in southeast New Mexico and five in West Texas.

Gulf Coast

Cimarex drilled 37 gross (21.2 net) Gulf Coast area wells during the first nine months of 2006, realizing a 65% success rate. Gulf Coast third-quarter 2006 production volumes averaged 72.9 MMcfe/d as compared to 76.4 MMcfe/d in the second quarter of 2006.

Net production from the Donald Harrington #1 (100% working interest) in south Louisiana, Rich #1 (100% working interest) and the Galloway Gas Unit #1, both in Liberty County Texas, cumulatively decreased 5.4 MMcfe/d from the second to the third quarter of 2006. The decrease in production from these wells is a result of increased water production in the primary zone, mechanical well bore failure and natural decline.

Year-to-date Cimarex drilled or participated in 12 gross (7.7 net) Liberty County wells, eight of which were successful. The Cimarex-operated Galloway Gas Unit #2 (50% working interest) commenced production in July and is currently producing 16 MMcfe/d. In the fourth quarter, first production is expected from three Kate Dishman (60% working interest) wells at rates of 350 barrels of oil per day each. In the Mississippi Salt Basin, Cimarex drilled the Blackstone #2 (100% working interest) to a total depth of 16,546 feet. Production commenced in August at a rate of 5.5 Mcfe/d.

Cimarex has three operated rigs drilling in the onshore Gulf Coast area. Gulf of Mexico

Third-quarter Gulf of Mexico production volumes averaged 51 MMcfe/d, up from 46 MMcfe/d in the second quarter of 2006. Shut-in production volumes related to damage from last year's hurricanes decreased to approximated 1-2 MMcfe/d in the third quarter from 10-15 MMcfe/d in the second quarter. In addition, 6 MMcfe/d of production in the Main Pass area has been consistently curtailed because of weather-related difficulties impacting barging operations. To prevent such ongoing delays, work is proceeding to tie-in Main Pass oil production to a new pipeline which is expected to be completed in early 2007.

Net volumes of 15-20 MMcfe/d from discoveries at Main Pass 185 (47% working interest), Main Pass 187 (100% working interest) and Main Pass 200 (50% working interest) are expected to begin in the first quarter of 2007. Cimarex will resume drilling on its Main Pass operated blocks in November. However, Cimarex has elected to market its operated Main Pass assets. The sales package includes these three discoveries as well as interest in 40 total blocks and 15 billion cubic feet equivalent of proved reserves.

Outlook

The following statements provide a summary of production and certain expense projections for the remainder of 2006.

We estimate that fourth-quarter 2006 production volumes will range between 445-455 MMcfe/d, resulting in full-year 2006 volumes of 450-455 MMcfe/d. Fourth-quarter volume estimates have been negatively impacted by Gulf Coast operational issues, less than expected exploration success, delays in bringing on Gulf of Mexico production and completion delays in the Permian Basin.

Expenses for the remainder of 2006 are expected to fall within the following ranges:

Expenses ($/Mcfe): Production expense $1.00 - $1.10 Transportation expense 0.11 - 0.14 DD&A and ARO accretion 2.60 - 2.70 General and administrative expense 0.25 - 0.28 Production taxes (% of oil and gas revenue) 7.0% - 8.0% Conference call and web cast

Cimarex will host a follow-up conference call today at 11:00 a.m. Mountain Time (1:00 p.m. Eastern Time). To access the live, interactive conference call, please dial 877-715-5282 and reference call ID # 7985033 ten minutes before the scheduled start time. A digital replay will be available for one week following the live broadcast at 877-519-4471 by using the conference ID # 7985033. The listen-only web cast of the call will be accessible via http://www.cimarex.com/.

About Cimarex Energy

Denver-based Cimarex Energy Co. is an independent oil and gas exploration and production company with principal operations in the Mid-Continent, Gulf Coast, Permian Basin of West Texas and New Mexico and Gulf of Mexico areas of the U.S.

This communication contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are more fully described in SEC reports filed by Cimarex. While Cimarex makes these forward-looking statements in good faith, management cannot guarantee that anticipated future results will be achieved. Cimarex assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law. See report filed on form 10Q to be filed for the period ended September 30, 2006 for further disclosures.

(1) Cash Flow from Operations is a non-GAAP financial measure that represents Net Cash Provided By Operating Activities adjusted for the change in operating assets and liabilities. See below for a reconciliation of the related amounts. PRICE AND PRODUCTION DATA For the Three Months For the Nine Months Ended Ended September 30, September 30, 2006 2005 2006 2005 Gas Production: Total production - Mcf 31,096,190 31,074,792 94,428,972 69,853,736 Gas volume - Mcf per day 338,002 337,769 345,894 255,874 Gas price - per Mcf $6.35 $7.88 $6.60 $6.99 Oil Production (including NGL): Total production - barrels 1,679,470 1,656,194 4,818,606 3,269,132 Oil volume - barrels per day 18,255 18,002 17,651 11,975 Oil price - per barrel $66.57 $59.45 $64.11 $54.40 OIL AND GAS CAPITALIZED COSTS INCURRED For the Three Months For the Nine Months Ended Ended September 30, September 30, 2006 2005 2006 2005 (in thousands) (in thousands) Exploration and development $249,718 $192,880 $804,599 $426,588 Acquisitions 566 (15,580) 7,710 1,821,048 Oil and gas expenditures 250,284 177,300 812,309 2,247,636 Sale proceeds * (4,450) (61,339) (4,450) (61,686) $245,834 $115,961 $807,859 $2,185,950

* The September 30, 2006 amounts do not include consideration received attributable to property sales by our limited partner affiliates.

RECONCILIATION OF CASH FLOW FROM OPERATIONS For the Three Months For the Nine Months Ended Ended September 30, September 30, 2006 2005 2006 2005 (in thousands) (in thousands) Net cash provided by operating activities $215,352 $218,269 $677,136 $417,475 Increase in operating assets and liabilities 26,329 (1,236) 27,523 32,916 Cash flow from operations $241,681 $217,033 $704,659 $450,391

Management believes that the non-GAAP measure of cash flow from operations is useful information for investors because it is used internally and is accepted by the investment community as a means of measuring the company's ability to fund its capital program. It is also used by professional research analysts in providing investment recommendations pertaining to companies in the oil and gas exploration and production industry.

CONDENSED INCOME STATEMENTS (unaudited) For the Three Months For the Nine Months Ended Ended September 30, September 30, 2006 2005 2006 2005 (In thousands, except per share data) Revenues: Gas sales $197,460 $245,010 $622,841 $488,043 Oil sales 111,801 98,459 308,911 177,829 Gas gathering, processing, and net marketing 13,621 19,625 39,761 23,224 322,882 363,094 971,513 689,096 Costs and expenses: Depreciation, depletion and amortization 104,904 82,826 290,305 172,493 Asset retirement obligation accretion 1,977 1,331 4,918 2,266 Production 42,624 40,473 128,200 68,056 Transportation 5,845 4,237 15,636 10,319 Gas gathering and processing 7,325 13,750 20,264 15,612 Taxes other than income 22,912 21,418 68,392 45,913 General and administrative 10,804 8,418 31,679 23,967 Stock compensation, net 2,265 1,225 6,329 3,663 Expenses related to merger -- 1,402 (61) 8,087 (Gain) Loss on derivative instruments (4,782) 81,946 (23,598) 83,976 193,874 257,026 542,064 434,352 Operating income 129,008 106,068 429,449 254,744 Other (income) and expense: Interest expense net of capitalized interest of $6,726, $4,978, $18,555 and $6,157, respectively 1,388 3,302 3,446 6,082 Amortization of fair value of debt (947) (771) (2,838) (1,187) Other, net (20,137) 3,456 (25,515) (700) Income before income tax expense 148,704 100,081 454,356 250,549 Income tax expense 54,747 36,006 167,382 90,632 Net income $93,957 $64,075 $286,974 $159,917 Earnings per share: Basic $1.15 $0.78 $3.50 $2.72 Diluted $1.11 $0.76 $3.41 $2.63 Weighted average shares outstanding: Basic 82,052 82,284 82,062 58,815 Diluted 84,311 84,840 84,275 60,767 CONDENSED CASH FLOW STATEMENTS (unaudited) For the Three Months For the Nine Months Ended Ended September 30, September 30, 2006 2005 2006 2005 (In thousands) Cash flows from operating activities: Net income $93,957 $64,075 $286,974 $159,917 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 104,904 82,826 290,305 172,493 Asset retirement obligation accretion 1,977 1,331 4,918 2,266 Deferred income taxes 66,285 (3,475) 174,602 32,644 Stock compensation, net 2,265 1,225 6,329 3,663 Derivative instruments (8,744) 65,127 (39,200) 66,538 Gain on liquidation of equity investees (18,322) -- (18,322) -- Other (641) 5,924 (947) 12,870 Changes in operating assets and liabilities: (Increase) decrease in receivables, net (3,978) (41,106) 51,067 (23,765) (Increase) decrease in other current assets 1,270 (12,458) (9,454) (24,420) Increase (decrease) in accounts payable and accrued liabilities (23,391) 54,213 (69,336) 15,081 Increase (decrease) in other non-current liabilities (230) 587 200 188 Net cash provided by operating activities 215,352 218,269 677,136 417,475 Cash flows from investing activities: Oil and gas expenditures (260,368) (193,763) (802,155) (398,191) Acquisition of oil and gas properties (789) (1,271) (5,530) (1,973) Merger related costs -- (25) (439) (12,405) Cash received in connection with acquisition of MHR -- -- -- 33,407 Proceeds from sale of assets 5,059 70,171 10,659 70,576 Distributions received from equity investees 57,871 215 58,285 235 Other expenditures (8,154) (2,651) (23,212) (20,033) Net cash used by investing activities (206,381) (127,324) (762,392) (328,384) Cash flows from financing activities: Borrowings (payments) on long-term debt, net (3,000) (128,358) 50,000 (188,422) Treasury stock acquired -- -- (11,016) -- Dividends paid (3,345) -- (10,006) -- Proceeds from issuance of common stock and other 69 7,581 2,715 11,058 Net cash (used in) provided by financing activities (6,276) (120,777) 31,693 (177,364) Net change in cash and cash equivalents 2,695 (29,832) (53,563) (88,273) Cash and cash equivalents at beginning of period 5,389 57,305 61,647 115,746 Cash and cash equivalents at end of period $8,084 $27,473 $8,084 $27,473 BALANCE SHEETS (unaudited) September 30, December 31, Assets 2006 2005 (In thousands, except share data) Current assets: Cash and cash equivalents $8,084 $61,647 Receivables, net 256,206 289,184 Inventories 46,233 34,784 Deferred income taxes 11,056 17,959 Derivative instruments, net 19,395 -- Other current assets 13,247 25,454 Total current assets 354,221 429,028 Oil and gas properties at cost, using the full cost method of accounting: Proved properties 4,348,788 3,602,797 Unproved properties and properties under development, not being amortized 462,036 388,839 4,810,824 3,991,636 Less - accumulated depreciation, depletion and amortization (1,392,650) (1,114,677) Net oil and gas properties 3,418,174 2,876,959 Fixed assets, net 91,272 86,916 Goodwill 691,432 717,391 Derivative instruments 9,976 -- Other assets, net 38,780 70,041 $4,603,855 $4,180,335 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $53,650 $81,947 Accrued liabilities 154,153 179,076 Derivative instruments -- 41,926 Revenue payable 99,594 94,469 Total current liabilities 307,397 397,418 Long-term debt 399,613 352,451 Deferred income taxes 867,724 717,790 Other liabilities 122,436 117,223 Stockholders' equity: Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued -- -- Common stock, $0.01 par value, 200,000,000 shares authorized, 83,928,841 and 83,524,285 shares issued, respectively 839 835 Treasury stock, at cost, 1,078,822 and 1,146,822 shares held, respectively (40,628) (43,554) Paid-in capital 1,864,054 1,865,597 Unearned compensation -- (15,862) Retained earnings 1,062,011 788,356 Accumulated other comprehensive income 20,409 81 2,906,685 2,595,453 $4,603,855 $4,180,335