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Traders cheered on Wednesday as Cimarex Energy's (NYSE:XEC) adjusted earnings beat analyst estimates, lifted by higher production and gas prices.

The Denver-based oil and gas company earned a fourth quarter net income of $117.6 million, or $1.37 per diluted share. Excluding unrealized oil hedging losses, earnings per diluted share would have been $1.58, topping analyst estimates of $1.53 a share. For the year-ago period, the company earned $104.6 million, or $1.23 per diluted share.

Revenues rose 26% year-over-year to $394.7 million due to higher production and oil prices. However, revenues still fell short of the $400 million expected by analysts.

Production volumes in the fourth quarter averaged 604.5 million cubic feet equivalent (MMcfe) per day, a 29% year-over-year increase. Production was 56% gas, 27% oil and 17% natural gas liquids. Meanwhile, realized oil prices rose 13% to $82.33 per barrel.

At year-end, the company had proved reserves, 77% of which are developed, of 1.88 trillion cubic feet equivalent (Tcfe). That is an increase of 23% from the 1.53 Tcfe at the end of fiscal 2009.

For the entire fiscal 2010, the company earned a net income of $574.8 million, or $6.70 per diluted share. That compares with a $311.9 million, or $3.82 per share, loss in fiscal 2009, when the company recorded a $502 million write down.

Looking ahead, Cimarex expects to produce between 582 and 602 MMcfe per day in the first quarter, and in the range of 615 to 645 MMcfe per day for the full fiscal year. Capital expenditures are expected to range from $1.2 billion to $1.4 billion.

The company's shares rose 4.91% Wednesday to trade at $112.36.

Disclosure: None

Source: Cimarex Energy's Q4 Numbers Lifted by Higher Production and Gas Prices