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Tuesday, Aug 27
Cimarex shares push higher after FBR upgrade
- Cimarex Energy (XEC +2.6%) is upgraded to Outperform from Market Perform with a $120 price target, up from $72, at FBR Capital to reflect what it sees as an upcoming significant step-up in efficiency of capital deployment as well as enhanced Wolfcamp potential in the Permian Basin.
- The firm believes that as the Wolfcamp program gets de-risked, capital deployed in the play could go to ~$550M in 2015 and $1B in 2017 from $175M in 2013.
- Because of the efficiency of capital from increasing lateral length and stages, the firm expects returns in the area on capital deployed to go from 45% pretax IRR to 95% pretax IRR by 2015 and 117% in 2017.