UPDATE: KLR Upgrades Cimarex Energy Co to Accumulate

Citing a sizable increase in capital productivity (slightly offset by higher gas composition), KLR Group Head of Research John Gerdes published a report Friday upgrading Cimarex Energy Co.

from Hold to Accumulate and raising the price target from $152 per share to $156 per share. The reaction to the company's Q2 results released Wednesday were mixed, as the company met the analyst's consensus estimate for earnings per share for the quarter, but fell short of the consensus estimate for revenue. Production levels for Q2 exceeded expectations, leading to an increase in production estimates for 2014 by 3%. Also, E&P revenue for Q2 did not meet expectations. In the report Gerdes adds that “Cimarex's growth drivers include the Permian Basin Bone Spring/Wolfcamp Shale. Cimarex should exhibit ~26% production growth in '14. Our 3Q/14 production expectation of ~934 Mmcfepd is slightly above the midpoint of company guidance (920-945 Mmcfepd). Our '14 production expectation of ~871 Mmcfepd is slightly above the midpoint of guidance (860-875 Mmcfepd).”