Corporate Responsibility

Cimarex is committed to reducing the environmental footprint and emissions associated with our operations. An important element of our commitment is transparent reporting of key indicators of our environmental performance. Oil and gas companies that operate in the United States are required to report greenhouse gas (GHG) emissions to the Environmental Protection Agency (EPA) on an annual basis. Table 1 reflects Cimarex’s GHG emissions as reported to the EPA for the 2018-2020 reporting years.

We continue our work to enhance our processes to identify, monitor and measure the location and GHG emission volumes across our operations and to reduce those emissions. Cimarex’s extended inventory of Scope 1 GHG emissions can be found in Table 1, and Scope 1 GHG emissions by source can be found in Figure 1.

Absolute GHG Emissions
In 2018, our absolute Scope 1 GHG emissions (including extended inventory) totaled 2,171,752 metric tons CO2e. Following the acquisition of Resolute Energy Corporation in March 2019, Cimarex’s Scope 1 GHG emissions increased 11% versus 2018. During 2020, Cimarex recognized a 31% reduction in absolute GHG emissions resulting from improved processes put in place by our operations team. Emissions also declined due to decreased development activity and production levels in response to lower demand for the resources we produce resulting from the COVID-19 pandemic.

GHG Emissions Intensity
Cimarex achieved a GHG emissions intensity rate of 14.5 in 2020, representing a 22% decrease from 2019 and a 33% decrease from 2018 as shown in Figure 2. The Company continues to work towards lowering its GHG emissions intensity and has established a target GHG emissions intensity reduction for 2021 of 8% to 12% compared to 2020.

Cimarex’s focus on reducing methane emissions has been a multi-faceted effort. In 2015, we instituted green completions, which entails capturing produced gas during all flow-back operations. Cimarex has removed, replaced or retrofitted 100% of our inventoried high-bleed gas pneumatic devices. Additional efforts include using instrument air in place of natural gas to operate pneumatic devices for facility equipment, centralizing production facilities to minimize our environmental footprint, minimizing flaring events and utilizing grid electrical power for drilling, completions and compression activity where viable. Cimarex began evaluating electrifying hydraulic fracturing (e-frac) operations in 2019 and is working on plans to expand its electric grid and electrification efforts to support e-frac operations. Cimarex also initiated a fulsome effort to deploy new facility designs and retrofit facilities across our operations in early 2021. New facility designs such as our “tankless” production batteries are engineered to substantially limit potential emissions sources, while vapor recovery units capture gas that would have been sent to flare in legacy facilities.

Methane Emissions
Our continued work to mitigate methane emissions is another key component towards reaching our GHG emissions intensity target. As a result of efforts across departments, the Company achieved a 37% reduction year-over year in 2020 of its absolute Scope 1 methane emissions (extended inventory, Table 2), including a 57% reduction in associated gas venting and flaring emissions (Figure 3). Cimarex also recognized a 29% reduction in its methane emissions intensity (Figure 4) and a 27% reduction of its methane intensity rate (Figure 5) compared to 2019.

Cimarex maintains its focus on reducing high-pressure flaring and discloses its high-pressure flare volumes in Table 2 by total company and Permian Basin-only. Our high-pressure flaring intensity can also be found in Table 2, 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.

The Permian Basin is an important operating area for the Company, with approximately 93% of our capital expenditures allocated to the region in 2020. Cimarex set a goal in early 2020 to reduce high-pressure flaring intensity in the Permian Basin to levels between 0.96% and 1.44% of its gross operated gas in the region. We achieved a 2020 Permian high-pressure flaring intensity rate of 0.90% in 2020, down 54% from 2019 (Figure 6). Cimarex is targeting an additional reduction of 15% to 30% in 2021 versus 2020.

Cimarex owns and operates midstream gathering facilities across the majority of its producing assets in the Permian Basin, which gives us greater control over flaring and emissions. Additionally, 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 2020, we gathered nearly 70% of our Permian gas production and maintained a lower associated flaring intensity compared to the associated intensities of our third-party midstream operators, shown in Figure 7.

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 voluntarily expanded its LDAR program to include facilities outside of the scope of state and federal requirements. Cimarex utilizes optical gas imaging (OGI) cameras to monitor emissions that might not otherwise be detected, including monthly “quick-pass” inspections of our facilities with handheld and drone mounted OGI cameras. As part of Cimarex’s enhanced monitoring practices, the Company implemented semi-annual aerial inspections of its Permian assets in 2020, which allows us to monitor more surface area than we could by ground monitoring. Cimarex also deployed three centralized, real-time laser monitoring systems across its assets in 2020, which provide 24/7 monitoring and detection of emissions.