Cimarex is focused on reducing both our environmental footprint and emissions associated with our operations. While we are required to report our Greenhouse Gas (GHG) emissions to the Environmental Protection Agency (EPA) annually, we have enhanced our processes to identify and monitor the location and emissions from GHG emitting devices across the entirety of our operations, with a focus on methane emissions. Table 1 shows the GHG emissions reported to the EPA as well as our total GHG emissions (reportable and non-reportable for 2017-2019.
Cimarex acquired Resolute Energy Corporation in March 2019 and reported full-year 2019 emissions for the combined company. Our total reported 2019 GHG emission volume increased 11% year-over-year due primarily to combustion associated with production, gathering, and boosting operations. Despite the increase, we achieved a 14% reduction in our GHG intensity (metric tons CO2e of GHG emissions/MBoe) as illustrated in Figure 1.
Cimarex has, and continues to focus on reducing methane emissions. In 2015 we instituted green completions during all flow-back operations. In 2017 we implemented new facility designs and updated older facilities to minimize emissions. By year-end 2017 we had removed, replaced, or retrofitted 100% of inventoried high-bleed gas pneumatic devices. Moreover, despite growing production significantly from 2017 to 2018, Cimarex realized a year-over-year methane emissions reduction of 14% as seen in Table 2. Some of Cimarex’s other efforts to reduce its methane footprint include using instrument air to operate facility equipment, centralizing production facilities to minimize our environmental footprint, minimizing flaring events, and utilizing electric horsepower for power generation where applicable.
Figure 3 – Methane Intensity Rate (%)
Sources: Company Data
Note: Total Methane Emissions (MMcf)/Company Gross Gas Production (MMcf)
Figure 4 – Methane Intensity
Sources: Company Data
Note: Total Methane Emissions (Metric Tons CO2e)/Company Gross Production (MBoe)
Figure 5 – Methane Emissions by Source
Sources: Company Data
Notes: Other includes storage tank venting and flaring, gathering pipeline leaks, gas processing plants, compressor rod packing venting, blowdowns , liquids unloading, compressor startups, flare stack, saltwater disposal, mishaps, pressure relief valve venting, pipeline blowdowns, well completions/workovers, well drilling.
In 2019, we began targeting specific locations for methane reduction, and we initiated studies regarding use of electrically driven hydraulic fracturing equipment. We achieved a two percent reduction year-over year in emitted methane volumes (Table 2), a 24% year-over-year reduction of our methane intensity rate (MMcf of CH4/MMcf gross gas production, Figure 3), and a 24% year-over-year reduction of our methane intensity (metric tons CO2e of CH4/MBoe, Figure 4). To continue this progress, Cimarex is targeting a five percent reduction of methane intensity rate in 2020.
Cimarex is also focused on reducing methane emissions is through a reduction in flaring activity. We measure our total company flared volume and calculate our flaring intensity, which is the ratio of our flared volumes to our gross operated gas production. We use this ratio to determine the progress we are making towards minimizing flaring associated with our production operations.
Another manner in which Cimarex is reducing methane emissions is through a focused reduction in flaring activity. To monitor flaring activity, we measure our total company flared volume and then compute flaring intensity (the ratio of flared volumes to gross operated gas production). This ratio is then used to determine our progress towards minimizing flaring associated with our production operations.
With the majority of flaring activity occurring in the Permian Basin, we have emphasized our focus in this area. In 2019, our Permian gross gas production grew by 28% and was accompanied by a 50% increase in flared volumes, including as a result of third party midstream companies as described below. Figure 6 illustrates our Permian Basin flaring intensity compared to flared volumes for 2018 and 2019. Despite our production increase, our Permian Basin flaring intensity remained essentially flat year-over-year, indicating flaring activity consistent with production growth. With a 2020 targeted Permian flare intensity rate of 1.44%, we are focused on the reduction of flared volumes associated with our operations.
Figure 6 – Permian Flaring Intensity
Sources: Company Data
Notes: Flaring Intensity Rate (%) = Flared Gas Volumes (Mcf)/Gross Permian Gas Production (Mcf)
Figure 7 – XEC Permian Gathering and Flaring Intensity by Midstream Operator
Sources: Company Data
Note: Flaring volumes representative of all operational flare causes
Cimarex owns and operates midstream gathering and boosting facilities across the majority of its producing assets, in the Permian Basin. The common ownership gives Cimarex the ability to align the maintenance schedules for our midstream assets with those of our operated wells tied to such facilities. In 2019, we gathered 67% of our gas production and maintained a lower associated flaring intensity compared to the associated intensities of our third-party midstream operators.
In compliance with state and federal requirements, Cimarex conducts an ongoing Leak Detection and Repair (LDAR) program in order to identify and repair methane emissions associated with our production and compression facilities located on BLM lands and our facilities constructed after September 2015. Cimarex has voluntarily expanded its LDAR program to include facilities outside of the scope of such state and federal requirements. Cimarex utilizes optical gas imaging (OGI) cameras to monitor emissions that might not otherwise be detected.
Cimarex is committed to minimizing our environmental impact, being a responsible operator, and meeting our target emission goals.