SM Energy Company
Company Summary
Description
SM Energy's operations are focused on the exploration and development of oil and gas resource plays. We operate in three core areas. The South Texas & Gulf Coast, Rocky Mountain and Permian regions are operated out of our offices in Houston, Texas; Denver, Colorado; and Midland, Texas, respectively.Website
http://www.sm-energy.com/Operational Regions
- Rockies
- Gulf Coast
- Permian Basin
Financial Data:
NYSE:SM from Google FinanceTickers:
-
SM - New York Stock Exchange
Recent news
- 6/21/2023 - SM Energy Repurchases... (subscriber access)
- 2/23/2023 - SM Energy Predicts... (subscriber access)
- 2/23/2023 - SM Energy Doubles... (subscriber access)
- 11/5/2022 - SM Energy is Forecasting... (subscriber access)
- 11/5/2022 - SM Energy Announced... (subscriber access)
Investor Presentations
- 3Q22 Earnings Presentation
- 3Q21 Investor Presentation (subscriber access)
- 3Q20 Earnings Presentation (subscriber access)
- 2Q20 Earnings Presentation (subscriber access)
- 1Q20 Investor Presentation (subscriber access)
- 4Q19 Investor Presentation (subscriber access)
- 3Q19 Investor Presentation (subscriber access)
- 2Q19 Investor Presentation (subscriber access)
- 1Q19 Investor Presentation (subscriber access)
- 2018 Results and 2019 Operating Plan (subscriber access)
- 2018 Results and 2019 Operating Plan (subscriber access)
- 3Q18 Investor Presentation (subscriber access)
- 2Q18 Investor Presentation (subscriber access)
- 1Q18 Investor Presentation (subscriber access)
- IPAA OGIS Presentation - April 2018 (subscriber access)
- Fourth Quarter 2017 Earnings Presentation (subscriber access)
- Baird 47th Annual Industrial Conference (subscriber access)
- Q17 Earnings Call Presentation (subscriber access)
- 2Q17 Earnings Presentation (subscriber access)
- May 2017 Investor Presentation (Update for Asset Sale Cancellation) (subscriber access)
- 1Q17 Earnings Presentation (subscriber access)
- 4th Quarter 2016 Earnings Call and Operations Update (subscriber access)
- RockStar Results Presentation (subscriber access)
- Capital One Securities Conference - December 2016 (subscriber access)
- 3Q16 Earnings Slides (subscriber access)
- Sept. 2016 - Barclays CEO Energy-Power Conference (subscriber access)
- Enercom Presentation - August 2016 (subscriber access)
- March 2016 Weil Energy Conference (subscriber access)
Company Transactions
Date: 6/1/2018
Type: Acquisition
BUYERS:
Petro-Hunt, L.L.C.
SELLERS:
SM Energy Company
DETAILS:
COST: 260 $MM
VOLUMES: 6.1 MBOE/d
ACRES: 119000 Acres
NOTES:
The assets include 119,000 net acres of leasehold, 246 operated wells and 51 non-operated wells.
The assets include 119,000 net acres of leasehold, 246 operated wells and 51 non-operated wells.
REGIONS:
Williston Basin
Date: 5/15/2018
Type: Acquisition
NOTES:
SM Energy has entered into two agreements to sale assets in the Williston Basin and in Upton County, Texas. The Divide County, North Dakota asset sale includes 119,400 net acres and 6.1 Mboe/d in production while the Upton County deal includes a 60% working interest in 5,400 net acres producing 1.03 Mboe/d.
SM Energy has entered into two agreements to sale assets in the Williston Basin and in Upton County, Texas. The Divide County, North Dakota asset sale includes 119,400 net acres and 6.1 Mboe/d in production while the Upton County deal includes a 60% working interest in 5,400 net acres producing 1.03 Mboe/d.
REGIONS:
Texas and Producing Region
Date: 3/27/2018
Type: Acquisition
REGIONS:
Powder River Basin
Date: 3/13/2017
Type: Acquisition
SELLERS:
SM Energy Company
ASSETS:
Springfield Gathering System
DETAILS:
COST: 754 $MM
VOLUMES: 24.25 MBOE/d
ACRES: 37500 Acres
NOTES:
The sale consists of 37,500 net acres, a 12.5% stake in the Springfield Gathering System and fourth-quarter 2016 production of 24.25 Mboe/d of current production (33% oil, 33% natural gas and 34% NGL's).
The sale consists of 37,500 net acres, a 12.5% stake in the Springfield Gathering System and fourth-quarter 2016 production of 24.25 Mboe/d of current production (33% oil, 33% natural gas and 34% NGL's).
REGIONS:
Eagle Ford
Maverick Basin
Date: 12/31/2016
Type: Acquisition
REGIONS:
Midland Basin
Date: 12/22/2016
Type: Acquisition
BUYERS:
SM Energy Company
SELLERS:
Qstar LLC
DETAILS:
COST: 1.6 $B
VOLUMES: 2.4 MBOE/d
ACRES: 35700 Acres
REGIONS:
Permian Basin
Date: 12/5/2016
Type: Acquisition
BUYERS:
Oasis Petroleum Inc.
SELLERS:
SM Energy Company
DETAILS:
COST: 785 $MM
VOLUMES: 12.4 MBOE/d
ACRES: 55000 Acres
REGIONS:
Williston Basin
Date: 10/4/2016
Type: Acquisition
NOTES:
Riverstone Holdings LLC announced the signing of a deal with SM Energy to sell the joint-owned Rock Oil Holdings LLC in a cash deal valued at $980 million.
Riverstone Holdings LLC announced the signing of a deal with SM Energy to sell the joint-owned Rock Oil Holdings LLC in a cash deal valued at $980 million.
REGIONS:
Permian Basin
Date: 10/3/2016
Type: Acquisition
NOTES:
SM Energy announced plans to divest property in two separate packages. The first is comprised of waterflood assets in New Mexico while the second package consists of production assets in North Dakota and Montana.
SM Energy announced plans to divest property in two separate packages. The first is comprised of waterflood assets in New Mexico while the second package consists of production assets in North Dakota and Montana.
REGIONS:
Williston Basin
Permian Basin
News & Press Releases
Criterion News
- 6/21/2023 - SM Energy Repurchases... (subscriber access)
- 2/23/2023 - SM Energy Predicts... (subscriber access)
- 2/23/2023 - SM Energy Doubles... (subscriber access)
- 11/5/2022 - SM Energy is Forecasting... (subscriber access)
- 11/5/2022 - SM Energy Announced... (subscriber access)
- 11/5/2022 - SM Energy Announced... (subscriber access)
- 11/5/2022 - SM Energy Announced 3Q22... (subscriber access)
- 11/5/2022 - SM Energy Announced 3Q22... (subscriber access)
- 11/5/2022 - SM Energy Increasing... (subscriber access)
- 11/5/2022 - SM Energy Announces 3Q22... (subscriber access)
- 10/18/2022 - SM Energy Reports 3Q22... (subscriber access)
- 10/18/2022 - SM Energy is Forecasting... (subscriber access)
- 10/18/2022 - SM Energy is Forecasting... (subscriber access)
- 9/15/2022 - SM Energy Approves... (subscriber access)
- 8/4/2022 - SM Energy Updates 2022... (subscriber access)
- 8/4/2022 - SM Energy Reports 2Q22... (subscriber access)
- 8/4/2022 - SM Energy Reports 2Q22... (subscriber access)
- 4/29/2022 - SM Energy Reports 1Q22... (subscriber access)
- 4/29/2022 - SM Energy Reports 1Q22... (subscriber access)
- 4/29/2022 - SM Energy Redeems... (subscriber access)
- 10/29/2021 - SM Energy Reports 2022... (subscriber access)
- 10/29/2021 - SM Energy Net Income of... (subscriber access)
- 10/29/2021 - SM Energy Reports 3Q21... (subscriber access)
- 6/24/2021 - SM Energy Amends &... (subscriber access)
- 6/10/2021 - SM Energy Prices $400... (subscriber access)
- 6/10/2021 - SM Energy Commences... (subscriber access)
- 2/18/2021 - SM Energy Targeting 2021... (subscriber access)
- 2/18/2021 - SM Energy Reports FY20... (subscriber access)
- 2/18/2021 - SM Energy Reports 4Q20... (subscriber access)
- 2/18/2021 - SM Energy Targeting... (subscriber access)
Press Releases
- December 15, 2020 – MKM Partners Virtual Conference. President and Chief Executive Officer Herb Vogel will present at 11:10 a.m. Mountain time and will also meet with investors in one-on-one settings. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period.
- Capital discipline. Capital expenditures demonstrated continued capital efficiencies as well as timing of certain activity. Capital expenditures of $109.6 million adjusted for increased capital accruals of $11.5 million totaled $121.1 million.
- Generating significant cash flows. Third quarter net cash provided by operating activities of $201.6 million before net change in working capital of $16.8 million totaled $184.8 million. The Company generated free cash flow of $63.7 million (a non-GAAP measure defined and reconciled below). Free cash flow for the first nine months of 2020 was $172.1 million and on a trailing 12-month basis was $233.1 million, or a 128% yield to market capitalization of approximately $182 million as of September 30, 2020.
- Absolute debt reduction. The outstanding principal amount of long-term debt was reduced by $106.5 million, as free cash flow was used to repurchase certain unsecured senior notes due 2022 and 2024 at market rates. Net debt-to-Adjusted EBITDAX was 2.4 times at quarter-end (a non-GAAP measure defined and reconciled below).
- Reducing 2020 capital expenditures. 2020 capital expenditure guidance is further reduced and narrowed to $605-610 million. Compared with original 2020 guidance at the mid-point, capital expenditure guidance is reduced 27% while production remains in-line.
- Total production volumes were down 6% compared with the same period in 2019 and up 4% sequentially. Production during the quarter was positively affected by South Texas Austin Chalk well performance exceeding expectations and reduced flaring in the Midland Basin.
- Total production volumes of 35.2 MMBoe for the first nine months of 2020 were relatively flat with the same period in 2019.
- Benchmark pricing for the quarter included NYMEX WTI oil at $40.93/Bbl, NYMEX Henry Hub natural gas at $1.98/MMBtu and Hart Composite OPIS NGLs at $19.13/Bbl.
- The average realized price per Boe of $24.28 was down 23% compared with the same period in 2019 yet up 60% sequentially as commodity prices came off second quarter lows. Including the effect of realized hedges, the average realized price per Boe was $30.33, resulting in approximately $70.3 million of realized net hedge gains for the quarter.
- Lease operating expenses of $3.65 per Boe were down 23% compared with the same period in 2019 and up 11% sequentially. Lower year-over-year costs are the result of aggressive cost management, while the sequential increase reflects additional workover expense. Transportation costs of $3.11 per Boe were down 22% from the same period in 2019 and nearly flat sequentially. Transportation charges year-over-year benefit from a lower proportion of production from South Texas, where transportation costs are higher, as well as a relative increase in production from the Austin Chalk, which has lower transportation costs per Boe.
- Largely as a result of cost management and hedge gains, the operating margin per Boe for the first nine months of 2020 was up 5% compared with the first nine months of 2019, despite significantly lower benchmark commodity prices.
- Approximately 90%+ of expected 4Q20 oil production is hedged to WTI. The average floor price on collars is $55/Bbl and the average price on swaps is $57/Bbl. Approximately 18 MMBbls of 2021 oil production is hedged to WTI. The average floor price on collars is approximately $49/Bbl and the average price on swaps is approximately $40/Bbl.
- Approximately 85-90% of expected 4Q20 Midland Basin oil production basis is hedged to the local price point at $(0.38)/Bbl.
- Approximately 40% of expected 4Q20 natural gas production is hedged at an average price of $2.39/MMBtu to HSC, and approximately 65% of expected 4Q20 Midland natural gas production is hedged at an average price of $1.21/MMBtu to WAHA.
- NGL hedges are by individual product and include only propane.
- Capital expenditures: $605-610 million, further reduced to reflect continued capital efficiency and timing. Fourth quarter 2020 is expected to range between $203-208 million, which will include the addition of a second completions crew in the Midland Basin and a partial quarter crew in South Texas. Capital will include costs associated with wells that will be turned-in-line in January 2021.
- Production: 45.2-46.2 MMBoe, or 123.5-126.2 MBoe/d, at 49% oil. Fourth quarter 2020 is expected to range between 10.0-11.0 MMBoe, or 109-120 MBoe/d, at 48% oil.
- G&A: ~$110 million including approximately $20 million non-cash compensation.
- Exploration/Capitalized overhead: ~$40 million.
- LOE: ~$4.00 significantly reduced due to cost reductions, specifically faster connections to the electric grid, and fewer workovers.
- Transportation: $3.10-$3.30, unchanged.
- Production and ad valorem taxes: ~4.5% of pre-hedge revenue + ~ $0.40. Approximately $1.40 combined.
- DD&A: $17-$18/Boe.
- Live Conference Call Registration: http://www.directeventreg.com/registration/event/7275226
- Replay (conference ID 7275226) - Domestic toll free/International: 800-585-8367/416-621-4642
- November 18, 2020 - Stephens Annual Investment Conference 2020. President and Chief Operating Officer Herb Vogel will be present at 11:00 a.m. Eastern time. This event will be webcast, accessible from the Company's website, and available for replay for a limited period. An investor presentation for this event will be posted to the Company's website before market open on November 18, 2020.
- November 30, 2020. Bank of America Securities 2020 Leveraged Finance Virtual Conference. EVP and Chief Financial Officer Wade Pursell will present at 12:00 p.m. Eastern time. This event will be webcast, accessible from the Company's website, and available for replay for a limited period. An investor presentation for this event will be posted to the Company's website before market open on November 30, 2020.
- Live Conference Call Registration: http://www.directeventreg.com/registration/event/7275226
- Replay (conference ID 7275226) - Domestic toll free/International: 800-585-8367/416-621-4642
- greenhouse gas (GHG) emissions intensity that beat the Company's internal target;
- methane emissions intensity that was top quartile among our peer group who report this metric as well as a reduction in Midland Basin flaring by approximately two-thirds from 1H2019 to 2H2019;
- safety performance in the top half of the Company's peer group as measured by total recordable incident rate; and
- water recycling that nearly doubled from 1H2019 to 2H2019.
- Capital discipline. Capital expenditures were 26% below guidance primarily reflecting lower costs as well as timing of certain activity. Capital expenditures of $170.9 million adjusted for decreased capital accruals of $45.7 million totaled $125.2 million.
- Significant cash flows. Second quarter net cash provided by operating activities of $114.3 million before net change in working capital of $38.7 million totaled $153.1 million. The Company generated free cash flow of $27.9 million (a non-GAAP measure defined and reconciled below). Free cash flow for the first half of 2020 was $108.4 million and on a trailing 12-month basis was $124.7 million, or a 29% yield to market capitalization as of June 30, 2020.
- Absolute debt reduction. The outstanding principal amount of long-term debt was reduced by $219 million as a result of the debt exchange transactions completed in the second quarter. The debt exchange successfully reduced total debt and significantly reduced maturities through 2022 by approximately $250 million. Net debt-to-Adjusted EBITDAX was 2.45 times at quarter-end (a non-GAAP measure defined and reconciled below).
- Capital expenditures for 2020 further reduced. 2020 capital expenditure guidance is further reduced to $610-630 million to reflect aggressive cost controls for drilling and completion expenditures as well as certain delayed activity. The updated plan continues to prioritize cash flow and leverage metrics through 2020 and beyond.
- Total production volumes were down 10% compared with the prior year period and down 10% sequentially. Lower volumes during the quarter resulted from:
- voluntary curtailment of approximately 3,000 Boe/d, primarily in the Midland Basin, due to low oil prices;
- delayed start-up of all Midland Basin completions during the quarter due to the low commodity price environment (completed wells were turned to production in June); and
- the election to process ethane for one month during the second quarter 2020 versus three months during the prior year period.
- In the Midland Basin, natural gas volumes increased sequentially due to reduced flaring and fewer new wells turned to production during the quarter, as newer wells come on-line with higher oil content. The increased oil component in South Texas production is due to new Austin Chalk wells that have a higher oil content than Eagle Ford wells.
- Total production volumes for the first half of 2020 were 23.6 MMBoe, up 2% from the prior year period.
- Benchmark pricing for the quarter included NYMEX WTI oil at $27.85/Bbl, NYMEX Henry Hub natural gas at $1.72/MMBtu and Hart Composite NGLs at $14.02/Bbl.
- In the Permian Basin, the Midland-Cushing oil differential was approximately ($0.27)/Bbl on average for the three months ended June 30, 2020, while the WAHA-NYMEX natural gas differential was approximately ($0.78)/MMBtu.
- The average realized price per Boe of $15.18 was down 54% compared with the prior year period and down 47% sequentially. Including the effect of realized hedges, the average realized price per Boe was $27.93, resulting in approximately $142.5 million of realized net hedge gains for the quarter.
- Lease operating expenses of $3.30 per Boe were down 21% compared with the prior year period and down 31% sequentially. Lower costs are the result of aggressive cost management and fewer workovers completed during the quarter. Transportation costs of $3.12 per Boe were down 22% from the prior year period, due to a lower proportion of production from South Texas where transportation costs are higher, and nearly flat sequentially.
- Largely as a result of cost management and hedge gains, the operating margin per Boe for the first half of 2020 was up 8% compared with the first half of 2019, despite the collapse in commodity prices.
- Approximately 90% of expected 2H20 oil production is hedged to WTI. The average floor price on collars is $55/Bbl and the average price on swaps is $57/Bbl. Roughly, more than one-half of expected 2021 oil production is hedged at approximately $40/Bbl.
- Approximately 75-80% of expected 2H20 Midland Basin oil production basis is hedged to the local price point at $(0.50)/Bbl.
- Approximately 50% of expected 2H20 natural gas production is hedged at an average price of $2.40/MMBtu to HSC, and approximately 55-60% of expected 2H20 Midland natural gas production is hedged at an average price of $1.15/MMBtu to WAHA.
- NGL hedges are by individual product.
- Aggressive cost management that has further reduced capital expenditures and certain lease operating expenses.
- Additional cost reductions in drill and complete costs. Well costs are expected to average $560 per lateral foot in Midland and $600 per lateral foot in South Texas, down from $600 and $620, respectively, in April.
- Deferral of four net wells drilled and five net well completions in South Texas.
- Changes to the capital structure as a result of the debt exchange.
- Strip pricing as of July 8, 2020.
- Midland: approximately 77 net wells drilled and 68 net wells completed for the year, or 32 and 39 remaining, respectively, in the second half of the year.
- South Texas: 12 net wells drilled and 4 net wells completed for the year, or 5 and 2 remaining, respectively, in the second half of the year.
- Lower full year production with oil comprising 49-50%.
- Positive free cash flow generation.
- Net debt-to-Adjusted EBITDAX (a non-GAAP measure defined below) year-end < 3.0 times.
- Looking ahead to 2021: the longer term plan assumes strip pricing and an approximate 10% increase in capital activity, and it results in meaningful oil production growth, neutral-positive free cash flow and net debt-to-Adjusted EBITDAX (a non-GAAP measure defined below) of approximately 3.0 times at year-end.
- Capital expenditures: $610-630 million, down approximately 25% from the February 2020 Plan. Capital expenditures for the second half of 2020 will be more heavily weighted to the fourth quarter.
- Production: 44-46 MMBoe, or 120.2-125.7 Boe/d, at 49%-50% oil. Third quarter 2020 is expected to range between 10.5-11.0 MMBoe, or 114.1-119.6 Boe/d, at 48% oil.
- G&A: ~$110 million including approximately $20 million non-cash compensation.
- Exploration/Capitalized overhead: ~$40 million.
- LOE: $4.75-$5.00 reflecting cost reductions and fewer workovers.
- Transportation: $3.10-$3.30, reduced to correspond with declining production from South Texas.
- Production and ad valorem taxes: ~4.5% of pre-hedge revenue + ~ $0.40 or ~$1.40.
- DD&A: $17-$18/Boe.
- Live Conference Call Registration: http://www.directeventreg.com/registration/event/9577599
- Replay (conference ID 9577599) - Domestic toll free/International: 800-585-8367/416-621-4642
- Live Conference Call Registration: http://www.directeventreg.com/registration/event/9577599
- Replay (conference ID 9577599) - Domestic toll free/International: 800-585-8367/416-621-4642
- Production at the high end of prior guidance. First quarter 2020 production was 12.4 MMBoe (135.9 MBoe/d) at 51% oil, driven by continued growth in Midland Basin production.
- Significant cash flows. First quarter net cash provided by operating activities of $218.1 million before net change in working capital of $18.5 million was $236.6 million. Capital expenditures of $139.3 million before increase in capital expenditure accruals and other of $16.8 million was $156.1 million, which resulted in free cash flow of $80.5 million (a non-GAAP measure defined and reconciled below.)
- Absolute debt reduction. Cash flows generated in the first quarter 2020 were applied to open market purchases of outstanding bonds and reduction in the balance of the Company's senior secured credit facility, reducing total principal amount of debt by $91.2 million. Net debt-to-Adjusted EBITDAX was reduced to 2.45 times (a non-GAAP measure defined and reconciled below.)
- Borrowing base redetermination completed. Subsequent to quarter-end, the borrowing base and commitments on the Company's senior secured revolving credit facility were redetermined at $1.1 billion, providing $1.0 billion in liquidity pro forma at quarter-end.
- Capital activity reduced. 2020 capital expenditure pace is expected to be reduced significantly, down by approximately 20% versus earlier guidance.
- Production volumes of 12.4 MMBoe, or 135.9 MBoe/d, were 51% oil, driven by growth in oil production from both the Midland Basin and South Texas. Total net daily production is up 14% compared with the first quarter of 2019 and down 2% sequentially. Net daily oil production is up 30% compared with the first quarter of 2019 and up 4% sequentially.
- Benchmark pricing for the quarter included NYMEX WTI at $46.17/Bbl, NYMEX Henry Hub natural gas at $1.95/MMBtu and Hart Composite NGLs at $17.02/Bbl, all of which are down significantly both year-over-year and sequentially.
- The average realized price per Boe of $28.64 was down 19% sequentially from $35.17. Including the effect of realized hedges, the average price was $34.58, down 5% sequentially, resulting in approximately $73.4 million of realized net hedge gains for the quarter.
- 14,340 MBbls 2Q-4Q oil production hedged to WTI. The average floor price on collars is $55/Bbl and the average price on swaps is $57/Bbl;
- 11,330 MBbls of 2Q-4Q Midland Basin production hedged to the local price point at $(0.53)/Bbl;
- 28,985 BBtu of 2Q-4Q natural gas production hedged; and
- NGL hedges are by individual product.
- Capital expenditures: Down approximately 20%. Second quarter 2020 expected to range $165-$175 million.
- G&A: ~$110 million, a reduction of approximately $15 million. The reduction in G&A guidance reflects the decision to reduce the salary of Company executives, effective May 1, 2020, and to postpone salary increases for all employees.
- Exploration/Capitalized overhead: ~$40 million, a reduction of $10 million.
- Live (conference ID 8786740) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 8786740) - Domestic toll free/International: 800-585-8367/416-621-4642
- Production beat. Fourth quarter 2019 production was 12.8 MMBoe (138.8 MBoe/d) at 48% oil, which exceeded the midpoint of fourth quarter guidance by 5% and was driven by 13% sequential growth in Midland Basin production. Full year 2019 production was 48.3 MMBoe (132.3 MBoe/d) at 45% oil.
- Solid earnings, cash flows. Fourth quarter 2019 net loss was ($102.1) million; net cash provided by operating activities was $242.0 million; Adjusted EBITDAX was $286.2 million; and free cash flow was $68.8 million. Free cash flow for the second half of 2019 was $28.8 million. (Adjusted EBITDAX and free cash flow are non-GAAP measures defined and reconciled below.)
- Capital on target. For the fourth quarter and full year 2019, costs incurred in oil and gas activities were $178.8 million and $1.04 billion, respectively, and total capital spend (a non-GAAP measure defined and reconciled below) was $184.9 million and $1.025 billion, respectively, in-line with expectations. Continued drilling and completion efficiencies during the fourth quarter allowed for more completions by year-end within the expected capital budget.
- Net debt-to-Adjusted EBITDAX drops to 2.8 times. Full year 2019 cash provided by operating activities was $823.6 million and Adjusted EBITDAX was $993.4 million. Net debt at December 31, 2019 was $2.77 billion. (Net debt-to-Adjusted EBITDAX is a non-GAAP measure defined and reconciled below.)
- Strong reserve adds. Net reserve additions before revisions for 2019 were 101.5 MMBoe. Year-end reserves were 462 MMBoe, 40% oil.
- Oil production growth of 5%-10%. This supports higher cash margins and cash flow.
- Free cash flow. Nearly 20% lower capital budget year-over-year, at $825-850 million.
- Improved net debt-to-Adjusted EBITDAX ratio. Free cash flow applied to absolute debt reduction.
- Midland Basin volumes were up 25% year-over-year and 13% sequentially, demonstrating continued strength in Midland Basin well performance. Total Company production was up 10% year-over-year, including flat production volumes in South Texas.
- Total production was 48% oil reflecting substantial growth in the Midland Basin, as well as sequential growth in South Texas where certain new wells have higher oil content.
- Higher than projected production resulted from better than expected well performance in both the Midland Basin and South Texas and additional well completions that came on-line late in the quarter, partially offset by certain shut-ins related to offset well completion activity and other impacts that slightly exceeded Company expectations.
- Benchmark pricing for the quarter included NYMEX WTI at $56.96/Bbl, NYMEX Henry Hub natural gas at $2.50/MMBtu and Hart Composite NGLs at $21.96/Bbl.
- The average realized price per Boe of $35.17 is before the effect of hedges. Including the effect of realized hedges, the average price was $36.38, resulting in approximately $15.4 million of realized net hedge gains for the quarter.
- The Company's Midland Basin average realized price per Boe is among the highest in the region, reflecting the high oil content of the Company's production.
- Reserve additions through drilling and acquisitions net of dispositions were 101.5 MMBoe.
- Oil reserves increased from 35% to 40% of total reserves, as higher oil content Midland Basin reserves increased year-over-year.
- SEC pricing was $55.69 Bbl oil, $2.58 Mcf natural gas and $22.68 Bbl NGLs. Prices were down 15%, 17% and 32% for oil, gas and NGLs, respectively, from 2018 SEC pricing. Pricing revisions reduced year-end reserves by 70 MMBoe, almost entirely related to South Texas assets that are predominantly natural gas and NGLs.
- Generate positive full year free cash flow.
- Reduce year-end net debt-to-Adjusted EBITDAX.
- Allocate capital to further improve operating margins and cash flow, which the Company expects to be driven by growth in oil production.
- Optimize total capital spend to generate moderate growth and deliver free cash flow. The 2020 plan reduces total capital spend by nearly 20% from 2019, moderating oil production growth to 5%-10%.
- Continue to optimize well design to best manage capital and operating costs.
- Maintain top quartile environmental, health and safety performance.
- Continue efforts to increase inventory and inventory value through testing new intervals and optimizing spacing, drilling and completion designs.
- Price deck: $50.00 Bbl WTI; $2.20 MMBtu natural gas; $20.00 Bbl NGLs.
- Hedging: currently approximately 80% of oil production at an average swap price of $58 Bbl WTI and collars at $55-63/Bbl WTI; and, approximately 35% of natural gas production. NGL hedges are by individual component of the barrel; refer to the accompanying slide deck for detail.
- Total capital spend of approximately $825-850 million. Drilling and completion costs make-up approximately 90% of total capital spend.
- Midland Basin: Anticipate drilling approximately 80 net wells and completing approximately 85 net wells. Midland Basin activity will continue to co-develop zones and will include activity across the RockStar position as well as in Sweetie Peck.
- South Texas: Anticipate drilling approximately 16 net wells and completing approximately 9 net wells. Activity will be focused in higher oil content areas and in the Austin Chalk, which are expected to be economically competitive with the Midland Basin program.
- Production: 45-48 MMBoe or 123-131 MBoe/d; assumes ethane rejection for full year.
- Oil growth and percentage of total production: approximately 50% oil production; up 5%-10% year-over-year.
- Production costs: LOE $5.25-$5.50/Boe, which reflects increased oil production and planned workover activity; transportation $3.20-$3.45/Boe reflecting lower total South Texas natural gas volumes that carry higher per unit costs.
- G&A: ~$125 million, which includes $4.0-$5.0 million non-recurring charges associated with the Company's 2019 reorganization and approximately $20 million in non-cash charges.
- Exploration/Capitalized overhead: ~$50 million.
- DD&A: $18-$20/Boe.
- Production: 11.9-12.4 MMBoe or 131-136 MBoe/d.
- Total capital spend: $180-$200 million.
- Net completions: approximately 20 in the Midland Basin and one in South Texas.
- Live (conference ID 6836199) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 6836199) - Domestic toll free/International: 800-585-8367/416-621-4642
- February 24, 2020 - JP Morgan Leveraged Finance Conference. Executive Vice President and Chief Financial Officer Wade Pursell will present at 2:40 p.m. Eastern time. The presentation will not be webcast. An investor presentation for this event will be posted to the Company's website before market open on February 24, 2020.
- March 3, 2020 - Credit Suisse 25th Annual Energy Summit. President and Chief Executive Officer Jay Ottoson will present at 8:05 a.m. Mountain time. The presentation will be webcast, accessible from the Company's website and available for replay for a limited time. An investor presentation for this event will be posted to the Company's website before market open on March 2, 2020.
- Live (conference ID 6836199) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 6836199) - Domestic toll free/International: 800-585-8367/416-621-4642
- December 3, 2019 - BAML Leveraged Finance Conference. Executive Vice President and Chief Financial Officer Wade Pursell will present at 3:30 p.m. Eastern time and will also meet with investors in one-on-one settings. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period.
- Production exceeded expectations - Third quarter 2019 total production was 12.4 MMBoe (134.9 MBoe/d), 44% oil and 61% liquids. Production exceeded the Company's guidance range by 0.2 MMBoe, or 2,250 Boe/d, driven by better than expected well performance and two accelerated Austin Chalk wells in South Texas.
- Permian operations continue to rank top tier - The Company's high oil content assets generate among the highest realized price per Boe in the Basin, averaging $44.77 in the third quarter, while capital efficiencies continue to reduce the current average RockStar drill, complete and equip costs to approximately $700 per lateral foot.
- New South Texas wells generating higher oil/liquids production - Two recent Austin Chalk wells each delivered on average more than 800 Bbls/d oil peak 30-day IP rates. Twelve new design wells (Lower Eagle Ford) in the Briscoe area reached peak 30-day IP rates averaging 2,532 Boe/d (3-stream), including 463 Bbls/d oil.
- The Galvan Ranch B904H Austin Chalk test is the best Company oil well drilled to date in South Texas, based on its peak 24-hour IP rate of 3,900 Boe (3-stream), with approximately 1,100 Bbls oil. The two new Austin Chalk wells were drilled in the eastern and northern areas of the Company's South Texas acreage, intended to demonstrate the geographic extensions of the Austin Chalk across the Company's acreage position. The wells were drilled with approximately 11,300' laterals. While results are early stage, the oil content of these wells is particularly encouraging.
- As reported during the quarter, four new design Lower Eagle Ford wells reached peak 30-day IP rates averaging approximately 3,000 Boe/d (3-stream) each with 560 Bbls/d oil, or 19% oil and 41% NGLs. The wells are part of the Company's joint development program. With more than 90 days of production, these wells demonstrate cumulative production curves consistent with expectations.
- Eight additional new design Lower Eagle Ford wells (also part of the joint development program) with average lateral lengths ranging between 8,200' and 15,000' reached peak 30-day IP rates during the quarter that averaged approximately 2,300 Boe/d (3-stream) each, with 18% oil and 42% liquids.
- Permian volumes increased 11% year-over-year and were flat sequentially.
- Oil sales comprised 75% of production revenue.
- As projected, there were shut-in volumes during the quarter related to offset well completion activity and other impacts.
- Benchmark pricing for the quarter included NYMEX WTI at $56.45/Bbl, NYMEX Henry Hub natural gas at $2.23/MMBtu and Hart Composite NGLs at $18.89/Bbl.
- In the Permian Basin, the Midland-Cushing oil differential improved to approximately ($0.61)/Bbl on average for the three months while the WAHA-NYMEX natural gas differential improved to approximately ($1.43)/MMBtu.
- The average realized price per Boe of $31.39 is before the effect of hedges. Including the effect of realized hedges, the average price was $33.38 per Boe, resulting in approximately $24.7 million of realized net hedge gains for the quarter.
- WTI oil hedges for approximately 90% of expected oil production;
- HSC natural gas hedges for approximately 70% of expected natural gas production;
- Midland-Cushing differential hedges for approximately 60-65% of expected Permian oil production; and
- WAHA natural gas hedges for approximately 40% of expected Permian residue natural gas production (assumes ethane rejection.)
- During the third quarter, the Company continued to realize capital efficiencies in the form of increased lateral feet drilled per day and more stages completed per day. As a result, the Company completed more wells in the first nine months of 2019 than expected (including completed wells that have not been put on production), reduced the number of completion crews in the Permian to two, and Company-operated South Texas well completions have been concluded for the year.
- A number of wells in the Permian at quarter-end were completed but not yet producing in order to manage and reduce flowback costs.
- Full year expected production: raised at the mid-point to 47.5 - 47.9 MMBoe, or 130-131 MBoe/d, with approximately 44% oil in the commodity mix. Implied fourth quarter production is 12.0-12.4 MMBoe or 130.4-134.8 MBoe/d and assumes ethane rejection for NGL volumes and certain shut-in volumes related to maintenance, offset activity and other.
- Full year expected total capital spend: unchanged at $1,000 - 1,050 million. Implied fourth quarter total capital spend is $160-210 million. Expected net completions for 2019 are unchanged at 100+ in the Permian and 19 in South Texas.
- Full year expected general and administrative expense: the Company expects to continue to concentrate capital in the Midland Basin and has initiated a reorganization to eliminate duplicate regional functions and reduce overhead costs. As a result, the Company expects to take an associated charge to G&A in the fourth quarter of 2019. Guidance is revised to $125-130 million including non-cash compensation and reorganization charge.
- Full year expected LOE per Boe is reduced to $4.70-$4.80. The implied fourth quarter LOE per Boe is $4.80-$5.15.
- Full year expected transportation expense per Boe is reduced to $4.05-$4.15. The implied fourth quarter transportation per Boe is $4.15-$4.40.
- Live (conference ID 7069506) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 7069506) - Domestic toll free/International: 800-585-8367/416-621-4642
- November 5, 2019 - Baird's Global Industrial Conference. President and Chief Executive Officer Jay Ottoson will present at 9:30 a.m. Central time. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period. An investor presentation for this event will be posted to the Company's website before market open on November 5, 2019.
- November 14, 2019 - Stephens Nashville Investment Conference. President and Chief Executive Officer Jay Ottoson will participate in a panel discussion at 9:00 a.m. Central time. This event will not be webcast.
- November 14, 2019 - BAML Global Energy Conference. EVP and Chief Financial Officer Wade Pursell will present at 2:00 p.m. Eastern time. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period. An investor presentation for this event will be posted to the Company's website before market open on November 14, 2019.
- Live (conference ID 7069506) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 7069506) - Domestic toll free/International: 800-585-8367/416-621-4642
- Better wells at lower costs - As previously reported, second quarter production of 12.4 MMBoe (136.5 MBoe/d), was up 19% from the second quarter of 2018 and up 16% sequentially, as performance from both the Midland Basin and South Texas exceeded expectations. Oil production of 5.4 MMBbls (60 MBbls/d) was up 24% from the second quarter of 2018 and 12% sequentially. Second quarter 2019 costs incurred in oil and gas activities was $269 million and total capital spend (total capital spend is a non-GAAP measure; see below for definition and reconciliation) was $261 million. Total capital spend was below guidance and reflects continued cost savings.
- Strong production drove solid earnings and cash flow - Net income was $50.4 million; EPS was $0.45 per diluted common share, and adjusted EPS was $0.01 per diluted common share; net cash provided by operating activities was $259.9 million and adjusted EBITDAX was $263.0 million, up 41% sequentially (adjusted EPS and adjusted EBITDAX are non-GAAP measures; see below for definition and reconciliation).
- Best in class well performance - The Sarah Connor 1050WA well set SM's record as its top performing Midland Basin well to date, based on a peak 30-day IP rate of 2,426 Boe/d (93% oil) from a 10,366 foot lateral. 27 new RockStar wells across five intervals reached 30-day peak IP rates averaging 1,250 Boe/d per well and 87% oil.
- Value enhancement through successful interval tests - Four new horizons have continued to deliver encouraging results, including the Company's previously announced Austin Chalk wells in South Texas and its first Middle Spraberry, Dean and Wolfcamp D tests in RockStar.
- Results from 27 new RockStar wells, having an average lateral length of 10,552 feet, delivered 30-day peak IP rates that averaged 1,250 Boe/d per well and 87% oil. This includes wells across five intervals, 24 of which were fully or half bounded.
- By interval, results included 13 Wolfcamp A wells averaging 1,326 Boe/d per well, two Wolfcamp B wells averaging 902 Boe/d per well, and 10 Lower Spraberry wells averaging 1,076 Boe/d per well.
- As previously reported, new interval tests at RockStar targeting the Dean and Wolfcamp D reached 30-day peak rates of approximately 1,550 Boe/d (92% oil) and approximately 1,400 Boe/d (80% oil and naturally flowing), respectively. New interval tests at RockStar continue to be encouraging and the Company plans to include additional tests in future programs.
- All 25 wells that are part of the Merlin Maximus development have now reached their 30-day peak IP rates, averaging approximately 1,400 Boe/d per well and 86% oil.
- As previously reported, the Company's Watson State Austin Chalk test in South Texas continues to show encouraging results with a 30-day peak IP rate that averaged approximately 3,200 Boe/d (3-stream) with approximately 55% liquids from a 12,875 foot lateral. Both Austin Chalk test wells continue to perform well and, based on their success, the Company has planned two additional tests, both of which are expected to start producing in the fourth quarter. The Austin Chalk presents the potential for higher margin and higher return wells due to higher liquids content and lower transportation costs per Boe.
- WTI oil hedges for approximately 80% of expected second half 2019 and approximately 50% + of expected 2020 oil production;
- HSC natural gas hedges for approximately 70% of expected second half 2019 production;
- Midland-Cushing differential hedges for approximately 60% of expected second half 2019 and expected 2020 Permian oil production; and
- WAHA natural gas hedges for approximately 70% of expected second half 2019 Permian residue natural gas production
- Live (conference ID 3293419) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 3293419) - Domestic toll free/International: 800-585-8367/416-621-4642
- August 12, 2019 - Enercom's The Oil and Gas Conference. President and Chief Executive Officer Jay Ottoson will present at 2:30 p.m. Mountain time. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period. An investor presentation for this event will be posted to the Company's website before market open on August 12, 2019.
- September 3, 2019 - Barclay's Global CEO - Energy Power Conference. President and Chief Executive Officer Jay Ottoson will present at 1:45 p.m. Eastern time. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period. An investor presentation for this event will be posted to the Company's website before market open on September 3, 2019.
- Second quarter 2019 total production of 12.4 MMBoe (136.5 MBoe/d), up 16% sequentially, as performance from both the Permian and South Texas exceeded expectations. Commodity mix included 44% oil and 62% liquids.
- Second quarter 2019 costs incurred in oil and gas activities of $269 million and total capital spend of $261 million. Total capital spend was below guidance, reflecting continued capital efficiencies.
- Full year 2019 total production guidance further increased at the mid-point to 47.0 – 47.8 MMBoe, or 129 - 131 MBoe/d, while total capital spend guidance is reduced at the mid-point to $1,025 million, or approximately $70-80 million per month for the remainder of the year.
- Expected production of 47.0 - 47.8 MMBoe with approximately 44% oil in the commodity mix.
- Expected total capital spend $1,000-1,050 million with the assumption that the capital program will be executed at a run rate of approximately $70-80 million per month for the remainder of 2019.
- In 2020, the Company expects total capital spend to be similar to total capital spend in 2019, with a run rate of approximately $80-90 million per month, and to generate high-single digit corporate production growth and mid to high-teen Permian Basin production growth. Capital allocation between the Permian and South Texas is expected to be similar to 2019.
- Expected production of 12.0 -12.2 MMBoe with approximately 43% oil in the commodity mix. Production guidance for the second half of 2019 includes the effect of anticipated production shut-ins of up to 1.5 MMBoe due to offset operator activity, simops and other impacts. Production guidance also assumes ethane rejection (compared with ethane processing in the first half of 2019), which reduces overall barrel equivalent production volume. In South Texas, the Company plans to wrap-up 2019 planned net completions in the quarter, including two new Austin Chalk wells that are expected to start producing in the fourth quarter.
- Permian volumes were up 37% year-over-year and up 15% sequentially.
- Oil sales were 75% of production revenue.
- As projected, all 25 of the wells at the successful Merlin Maximus development reached their respective peak 30-day rates by the end of the quarter.
- Overall, better than expected production performance in the Permian Basin is the result of strong early performance on a number of new wells.
- In South Texas, production outperformance stems from changes in the well design as well as strong results from Austin Chalk tests. These preliminary results support the Company's objectives of increasing inventory and asset value in the region.
- Benchmark pricing for the quarter included NYMEX WTI at $59.81/Bbl, NYMEX Henry Hub natural gas at $2.64/MMBtu and Hart Composite NGLs at $22.23/Bbl.
- In the Permian Basin, the Midland-Cushing oil differential improved to approximately ($2.14)/Bbl on average for the three months while the WAHA-NYMEX natural gas differential was approximately ($2.70)/MMBtu.
- The average realized price per Boe of $32.75 is before the effect of hedges. Including the effect of realized hedges, the average price was $33.07, resulting in approximately $4.1 million of realized net hedge gains for the quarter.
- Live (conference ID 3293419) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 3293419) - Domestic toll free/International: 800-585-8367/416-621-4642
- Second quarter 2019 production guidance is revised upward to 12.0-12.2 MMBoe, or 132-134 MBoe/d, up from 11.5-11.9 MMBoe, or 126-131 MBoe/d. Oil as a percent of the commodity mix is expected to remain at 43-44% as both the Permian Basin and South Texas areas are contributing higher volumes.
- Full year 2019 production guidance is increased to 45.4-48.4 MMBoe, or 124.4-132.6 MBoe/d, up from 45-48 MMBoe, or 123.3-131.5 MBoe/d. Oil as a percent of the commodity mix is expected to remain at approximately 43-44%.
- The Dean test had a 30-day peak IP rate that averaged approximately 1,550 Boe/d with 92% oil from a ~10,350 foot lateral. The Wolfcamp D test had a 30-day peak IP rate that averaged approximately 1,400 Boe/d (naturally flowing) with 80% oil from a 7,920 foot lateral.
- The Watson State Austin Chalk test had a 30-day peak IP rate that averaged approximately 3,200 Boe/d (three-stream) with approximately 55% liquids from a 12,875 foot lateral.
- Increased drilling activity across Howard County reflects the high return potential of the area and has resulted in substantial activity around SM operations. The Company's production guidance incorporates an estimate of the effects of shut-in volumes associated with offset operator completion activity weighted to the second half of 2019.
- Cabot Oil & Gas – (NYSE: COG) – one of the largest Marcellus-focused gas producers; Cabot's 2019 capital budget is approximately $800 million; for 2019 Cabot plans to drill and complete 85 to 90 net wells and place 80 to 85 net wells on production.
- Core Laboratories – (NYSE: CLB) – industry leading reservoir optimization company with two key business segments: Reservoir Description and Production Enhancement. Core Lab works with NOCs, integrated supermajors and independent E&Ps in every oil and gas jurisdiction.
- Liberty Oilfield Services – (NYSE: LBRT) – premier technology-driven hydraulic fracturing services company with skilled crews, proprietary technology, state-of-the-art equipment, originator of "The Quiet Fleet."
- Vermilion Energy – (NYSE: VET) – In the U.S. Vermilion has a significant PRB Turner Sand position, a dominant Canadian Cardium position and European onshore and offshore operations.
- HighPoint Resources – (NYSE: HPR) – legacy DJ Basin operator in northern Colorado and southeast Wyoming, with acreage positions exclusively in rural areas with no urban exposure.
- Jagged Peak Energy – (NYSE: JAG) – pure play Delaware Basin operator with 75,000 net acres in the Southern Delaware Basin
- Baytex Energy – (NYSE: BTE) – crude oil and liquids production in the Eagle Ford shale in the U.S. and Canada's Duvernay, Lloydminster, Viking and Peace River plays.
- Occidental Petroleum – (NYSE: OXY) – top 10 U.S. E&P, with industry-leading operations in the Permian Basin, Middle East and Latin America, and significant midstream and chemical business units.
- Goodrich Petroleum – (NYSE: GDP) – leading Haynesville gas producer with 10,000 net acres in the core, with additional operations/assets in the Eagle Ford and TMS.
- Sundance Energy Australia – (NASDAQ: SNDE) – 52,000 net acres in the core of the Eagle Ford shale; 17 years of drilling inventory, 14,000 BOEPD producer.
- Kimbell Royalty Partners – (NYSE: KRP) – risk-adjusted cash yield through direct mineral ownership in over 13 million gross acres and more than 92,000 wells, without any associated operating costs or capital expenditures.
- SilverBow Resources – (NYSE: SBOW) – Eagle Ford pure play producing 227 MMcfe in Q42018 and proved reserves of 1,345 MMcfe (81% natural gas) at Dec. 31, 2018.
- Ring Energy – (NYSE: REI) – Permian pure play with 20,000 net acres in the Delaware Basin's Reeves and Culberson counties in Texas and 76,000 net acres in the Central Basin Platform.
- Gran Tierra Energy – (NYSE: GTE) – international independent E&P focused on developing oil assets in Colombia and Ecuador, producing 36,000 BOEPD.
- Lilis Energy – (NYSE: LLEX) – Delaware Basin pure-play – 20,000 net acre-contiguous acreage block in Loving and Winkler Counties, with additional acreage in Lea County, New Mexico. Focused on drilling the Wolfcamp, Bone Springs and Avalon formations.
- Panhandle Oil & Gas – (NYSE: PHX) – owns approximately 258,600 acres of perpetual mineral rights and 19,000 acres of leasehold rights in 10 states including the SCOOP, STACK, Eagle Ford Shale, Permian Basin, and the Bakken; assets include more than 6,000 gross producing wells.
- Lonestar Resources – (NASDAQ: LONE) – 57,000 net acres in the Eagle Ford shale with production of more than 11,000 BOEPD; uses geo-engineered completions and LWD steering.
- SM Energy – (NYSE: SM) – successful operator in the Midland and Eagle Ford shale basins, expects 2Q2019 production to be 126-131 MBOEPD; targeting free cash flow in 2H2019.
- W&T Offshore – (NYSE: WTI) – drilling assets on 201,000 deepwater Gulf of Mexico gross acres and 440,000 gross acres on the GOM shelf.
- Ultra Petroleum – (NASDAQ: UPL) – dominant Pinedale operator developing long-life gas reserves in the Green River Basin in the Pinedale and Jonah fields.
- Fleur de Lis Energy – (PRIVATE) – a "hybrid" private equity investment firm and oil and gas operator that has drilled 15 horizontal wells in the Permian Basin.
- peer group company valuations that are specific to the oil and gas industry;
- corporate annual reports, oil and gas company websites, custom stratigraphic and subsurface illustrations;
- company investor presentations;
- EnerCom's Monthly Oil & Gas Industry Data & Trends Report;
- Oil & Gas 360® - an online daily industry news portal; and
- EnerCom 360 - the online magazine.
- Angola on the West Hub and East Hub projects;
- Egypt on Zohr, the largest deposit in the Mediterranean Sea;
- Nooros, offshore in the Nile Delta;
- the Republic of Congo on the Nené Marine project;
- Indonesia with Jangkrik; and
- offshore Norway with Goliat.
- Eni, SpA (NYSE: E) – one of the global oil and gas super-players – operating in 67 countries worldwide, 30,000 employees, with upstream, midstream and downstream operations
- Continental Resources (NYSE: CLR) – top ten U.S. E&P, with a focus on oil and natural gas production in the Bakken and the STACK/SCOOP; 1.5 billion BOE proved reserves at 12/31/2018.
- Occidental Petroleum (NYSE: OXY) – top 10 U.S. E&P, with operations in the U.S., Middle East and Latin America, with significant midstream and chemical business units
- Whiting Petroleum (NYSE: WLL) – a top crude oil producer in the Bakken-Three Forks play in North Dakota and operator of substantial assets in northern Colorado
- Fleur de Lis Energy (PRIVATE) – a "hybrid" private equity investment firm and oil and gas operator that has drilled 15 horizontal wells in the Permian Basin
- Anschutz Exploration Corporation (PRIVATE) – independent oil and gas company with current projects in the Powder River and Washakie Basins of Wyoming, the Piceance and DJ Basins of Colorado, and the Uinta Basin of Utah
- Bonanza Creek Energy (NYSE: BCEI) – independent E&P with operations focused in the Wattenberg Field in the DJ Basin of Colorado and the Cotton Valley sands of southern Arkansas
- PDC Energy (NASDAQ: PDCE) – operates in two geographically distinct areas of the country, with primary interests in the DJ Basin's Wattenberg field in Weld County, Colorado, and in Reeves and Culberson Counties, West Texas, in the Delaware basin
- HighPoint Resources (NYSE: HPR) – DJ Basin operator in northern Colorado and southeast Wyoming, with acreage positions exclusively in rural areas with no urban exposure
- Jagged Peak Energy (NYSE: JAG) – pure play Delaware Basin operator with 75,000 net acres in the Southern Delaware
- Denbury Resources (NYSE: DNR) – operations in two key operating areas, the Gulf Coast and Rocky Mountain regions, with combination of exploitation, drilling and CO2 enhanced oil recovery operations
- Range Resources (NYSE: RRC) – discovered and pioneered the Marcellus shale play, 875,000 acres and 1.9 Bcfe/day net production from Appalachia Q4 2018, 18.1 Tcfe of proved reserves company-wide at Dec. 31, 2018
- SM Energy (NYSE: SM) – successful operator in the Midland and Eagle Ford shale basins, expects 2Q2019 production to be 126-131 MBoe/d; targeting free cash flow in 2H2019
- SilverBow Resources (NYSE: SBOW) – Eagle Ford pure play producing 227 MMcfe in Q42018 and proved reserves of 1,345 MMcfe (81% natural gas) at Dec. 31, 2018
- Cabot Oil & Gas Corporation (NYSE: COG) – one of the largest Marcellus-focused gas producers; Cabot's 2019 capital budget is approximately $800 million; for 2019 Cabot plans to drill and complete 85 to 90 net wells and place 80 to 85 net wells on production.
- Core Laboratories (NYSE: CLB) – industry leading reservoir optimization company with two key business segments: Reservoir Description and Production Enhancement. Core Lab works with NOCs, integrated supermajors and independent E&Ps in every oil and gas jurisdiction.
- Earthstone Energy (NYSE: ESTE) – independent E&P that has assets that it is developing in the Midland (27,000 net acres and 172 gross producing wells) and Eagle Ford (20,000 net acres and 144 gross producing wells) basins.
- Goodrich Petroleum (NYSE: GDP) – natural gas leader in the Haynesville shale (19,000 net acres) with additional assets in the Tuscaloosa Marine Shale (43,000 net acres) and the Eagle Ford (14,000 net acres).
- GeoPark (NYSE: GPRK) – rapidly growing onshore producer in Latin America with asset platforms in Colombia, Brazil, Peru, Chile, and Argentina. GeoPark has grown company-wide production to 70,000+ BOEPD in 2018 from 39,600 BOEPD in 2010.
- Lilis Energy (NYSE: LLEX) – Delaware Basin pure-play – 20,000 net acre-contiguous acreage block in Loving and Winkler Counties, with additional acreage in Lea County, New Mexico. Focused on Wolfcamp, Bone Springs and Avalon formations.
- peer group company valuations that are specific to the oil and gas industry;
- corporate annual reports, oil and gas company websites, custom stratigraphic and subsurface illustrations;
- company investor presentations;
- EnerCom's Monthly Oil & Gas Industry Data & Trends Report;
- Oil & Gas 360® - an online daily industry news portal; and
- EnerCom 360 - the online magazine.
- June 4, 2019 – 2019 RBC Capital Markets Global Energy and Power Conference. Chief Financial Officer Wade Pursell will present at 11:00 a.m. Eastern time and will also meet with investors in 1x1 settings. This event will not be webcast. An investor presentation for this event will be posted to the Company's website before market open on June 4, 2019.
- June 5, 2019 – Bank of America Merrill Lynch 2019 Energy Credit Conference. Chief Financial Officer Wade Pursell will present at 11:30 a.m. Eastern time and will also meet with investors in 1x1 settings. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period.
- June 10, 2019 – Stifel 2019 Cross Sector Insight Conference. President and Chief Executive Officer Jay Ottoson will present at 9:10 a.m. Eastern time and will also meet with investors in 1x1 settings. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period.
- June 19, 2019 – J.P. Morgan 2019 Energy Conference. President and Chief Executive Officer Jay Ottoson will present at 11:30 a.m. Eastern time and will also meet with investors in 1x1 settings. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period. An investor presentation for this event will be posted to the Company's website before market open on June 18, 2019.
- Continental Resources (NYSE: CLR) – top ten U.S. E&P, with a focus on oil and natural gas production in the Bakken and the STACK/SCOOP; 1.5 billion BOE proved reserves at 12/31/2018.
- Occidental Petroleum (NYSE: OXY) – top 10 U.S. E&P, with operations in the U.S., Middle East and Latin America, with significant midstream and chemical business units
- Eni (NYSE: E) – one of the global oil and gas super-players – operating in 67 countries worldwide, 30,000 employees, with upstream, midstream and downstream operations
- Whiting Petroleum (NYSE: WLL) – a top crude oil producer in the Bakken-Three Forks play in North Dakota and operator of substantial assets in northern Colorado
- Fleur de Lis Energy (PRIVATE) – a "hybrid" private equity investment firm and oil and gas operator that has drilled 15 horizontal wells in the Permian Basin
- Anschutz Exploration Corporation (PRIVATE) – independent oil and gas company with current projects in the Powder River and Washakie Basins of Wyoming, the Piceance and DJ Basins of Colorado, and the Uinta Basin of Utah
- Bonanza Creek Energy (NYSE: BCEI) – independent E&P with operations focused in the Wattenberg Field in the DJ Basin of Colorado and the Cotton Valley sands of southern Arkansas
- PDC Energy (NASDAQ: PDCE) – operates in two geographically distinct areas of the country, with primary interests in the DJ Basin's Wattenberg field in Weld County, Colorado, and in Reeves and Culberson Counties, West Texas, in the Delaware basin
- HighPoint Resources (NYSE: HPR) – DJ Basin operator in northern Colorado and southeast Wyoming, with acreage positions exclusively in rural areas with no urban exposure
- Jagged Peak Energy (NYSE: JAG) – pure play Delaware Basin operator with 75,000 net acres in the Southern Delaware
- Denbury Resources (NYSE: DNR) – operations in two key operating areas, the Gulf Coast and Rocky Mountain regions, with combination of exploitation, drilling and CO2 enhanced oil recovery operations
- Range Resources (NYSE: RRC) – discovered and pioneered the Marcellus shale play, 875,000 acres and 1.9 Bcfe/day net production from Appalachia Q4 2018, 18.1 Tcfe of proved reserves company-wide at Dec. 31, 2018
- SM Energy (NYSE: SM) – successful operator in the Midland and Eagle Ford shale basins, expects 2Q2019 production to be 126-131 MBoe/d; targeting free cash flow in 2H2019
- SilverBow Resources (NYSE: SBOW) – Eagle Ford pure play producing 227 MMcfe in Q42018 and proved reserves of 1,345 MMcfe (81% natural gas) at Dec. 31, 2018
- Cabot Oil & Gas Corporation (NYSE: COG) – one of the largest Marcellus-focused gas producers; Cabot's 2019 capital budget is approximately $800 million; for 2019 Cabot plans to drill and complete 85 to 90 net wells and place 80 to 85 net wells on production.
- peer group company valuations that are specific to the oil and gas industry;
- corporate annual reports, oil and gas company websites, custom stratigraphic and subsurface illustrations;
- company investor presentations;
- EnerCom's Monthly Oil & Gas Industry Data & Trends Report;
- Oil & Gas 360® - an online daily industry news portal; and
- EnerCom 360 - the online magazine.
- Excellent well performance and capital efficiency - demonstrated by the successful Merlin Maximus development in RockStar. 19 wells across three intervals reached 30-day peak IP rates in excess of 1,400 Boe/d per well and 87% oil, where the average cost at this 25-well development to drill, complete and equip is expected to be less than $765 per lateral foot.
- Value enhancement through testing new intervals - indicated by encouraging early results from a second Austin Chalk well in South Texas and a first Middle Spraberry test well in RockStar.
- Results from 20 new RockStar wells, having an average lateral length of 10,714 feet, have reached their 30-day peak IP rates that averaged 1,430 Boe/d per well and 88% oil. This includes wells across three intervals, all of which wells are fully or half bounded (16 fully bounded).
- By interval, results are 11 Wolfcamp A wells averaging 1,645 Boe/d per well, four Wolfcamp B wells averaging 1,350 Boe/d per well and five Lower Spraberry wells averaging 1,021 Boe/d per well.
- 19 of the wells are part of the Merlin Maximus development, with all 24 producing wells expected to meet 30-day peak IP rates by the end of the second quarter.
- One of the wells is a successfully executed 15,000 foot lateral in the Lower Spraberry.
- A second Austin Chalk test in South Texas is showing encouraging preliminary results with current rates of more than 3,500 Boe/d (three-stream) and liquids content exceeding 55%. This second Austin Chalk well has an effective lateral length of 12,875 feet. The Austin Chalk presents the potential for higher margin/higher return wells due to higher liquids revenue and lower transportation costs per Boe.
- Results from the first Middle Spraberry test in the RockStar area are also encouraging. The well produced approximately 1,000 Boe/d 30-day peak IP rate at 86% oil. Similar to Lower Spraberry wells in the area, Middle Spraberry wells are expected to exhibit lower peak IP rates compared to Wolfcamp wells as well as shallower decline rates. The Company allocated nominal value to the Middle Spraberry in its acquisition of the RockStar area, so Middle Spraberry success presents inventory upside.
- Oil hedged to benchmark pricing for approximately 80% of projected production
- Natural gas hedged to benchmark pricing for approximately 65% of projected production
- Midland-Cushing basis hedged for approximately 60% of projected Permian oil production
- Natural gas hedged at Waha for approximately 70-75% of Permian natural gas production
- Components of the NGL barrel hedged
- Production is projected to range between 11.5 and 11.9 MMBoe/126-131 MBoe/d
- The commodity mix is expected to be approximately 43-44% oil
- The Company is processing ethane in April and May
- Commodity price realizations before the effects of hedges are expected to be volatile in the Permian as the Midland regional oil price and Waha regional natural gas price reflect tight pipeline capacity. Refer to derivatives detail for the Company's hedge positions to regional pricing.
- As previously reported, the Company expects that approximately 60% of projected total capital spend will occur in the first half of 2019, and approximately 40% will occur in the second half of 2019. For the second quarter of 2019, total capital spend is projected to range between $300 and $310 million as the Company expects to:
- Drill 28 gross/26 net wells and complete 40 gross/35 net wells in the Permian Basin; and
- Drill 2 gross/2 net and complete 14 gross/14 net wells in South Texas. In addition, the Company's Joint Development Partner is expected to drill 4 and complete 0 gross wells in the area.
- Live (conference ID 3654049) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 3654049) - Domestic toll free/International: 800-585-8367/416-621-4642
- June 4, 2019 - 2019 RBC Capital Markets Global Energy and Power Conference. Chief Financial Officer Wade Pursell will present at 11:00 a.m. Eastern time. This event will not be webcast. An investor presentation for this event will be posted to the Company's website before market open on June 4, 2019.
- 10.7 MMBoe (118.7 MBoe/d) total production came in at the mid-point of guidance. Permian production was up 34% year-over-year.
- 45% oil in the commodity mix; 63% liquids.
- Costs incurred in oil and gas activities of $322 million and total capital spend of $316 million (a non-GAAP measure, reconciled below).
- Permian volumes were up 34% year-over-year and flat sequentially.
- At the Merlin Maximus development, all 25 wells were drilled and completed as planned. 24 of the 25 wells (one well was intentionally shut-in to monitor sub-surface pressure) are on production as scheduled and the development is expected to reach peak production around mid-year.
- Benchmark pricing for the quarter included NYMEX WTI at $54.90/Bbl, NYMEX Henry Hub natural gas at $3.15/MMBtu and Hart Composite NGLs at $26.28/Bbl.
- The average realized price per Boe of $31.86 is before the effect of hedges. Including the effect of realized hedges, the average price was $31.39, resulting in approximately $5.0 million of realized net hedge losses for the quarter.
- Live (conference ID 3654049) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 3654049) - Domestic toll free/International: 800-585-8367/416-621-4642
- The third-party gas processing facility that was off-line due to a force majeure event re-started service at the end of February and is expected to be at normal capacity soon. The Company's Permian Basin natural gas sales are continuing to be affected in March due to the slower than expected ramp up of the plant to full capacity. In addition, high winds in West Texas during the week of March 12th caused electrical outages that disabled artificial lift installations on several wells and resulted in temporary production shut-ins. The Company reaffirms its first quarter production guidance range of 10.5-10.9 MMBoe despite these temporary, unanticipated impacts to sales volumes in March totaling (0.2) MMBoe.
- Permian Basin oil differentials to Cushing WTI improved significantly since the start of the year. The Company's pre-hedge net differential improved from approximately ($9) per Bbl in January to approximately ($6) per Bbl in February and is expected to be further improved in March. Approximately 50%+ of expected first quarter Permian oil volumes have hedges in place for the Midland differential that average $4.44 per Bbl.
- April 9, 2019 – IPAA OGIS New York. President and Chief Executive Officer Jay Ottoson will present at 9:35 a.m. Eastern time. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited time. The Company will post an investor presentation before the market opens on April 9.
- Sizable reserves growth - Proved reserves of 503 MMBoe at year-end 2018 were up 18% year-over-year from retained assets and include reserve additions net of revisions of 119 MMBoe.
- Capital efficiency drives value creation - The standardized measure of discounted future net cash flows and pre-tax PV-10 (a non-GAAP measure, reconciled below) at year-end 2018 were $4.7 billion and $5.1 billion, respectively. The standardized measure and pre-tax PV-10 were up $1.6 billion and $2.0 billion, respectively, reflecting sizable increases in both the Permian and Eagle Ford asset values.
- Free cash flow generation in sight - The 2019 operations plan includes a projected 20%-plus reduction in total capital spend and approximately 20% growth in Permian production from retained assets (at mid-points of guidance, respectively), targeting free cash flow in the second half of 2019.
- More big wells - New RockStar results include four wells with 30-day peak IP rates that averaged approximately 2,000 Boe/d per well and 90% oil, two of which are fully bounded and two half-bounded.
- Adjusting for divestitures in the first half of 2018, proved reserves increased 18% on a retained asset basis.
- Proved reserve additions from drilling, excluding revisions, were 188 MMBoe.
- Rates averaging approximately 2,000 Boe/d per well from four Wolfcamp A wells on the Beesly pad that were fully or half-bounded.
- All 29 wells averaged approximately 1,400 Boe/d per well from three intervals across the acreage position.
- In the Permian Basin, the Company drilled 117 net wells and completed 104 net wells.
- In the Eagle Ford, the Company drilled 20 net wells and completed 26 net wells. The Company also participated with its joint-venture partner in drilling 18 gross wells (of which six related to Phase II of the JV program) and completing 16 gross wells at no capital cost to the Company.
- Total capital spend of $1,000 -1,070 million. This total capital spend represents a 22% decrease, at the mid-point, compared with 2018. The plan allocates approximately 90% of total capital spend to drilling and completion costs.
- Permian Basin activity is expected to include drilling and completing approximately 100 net wells. This level of activity is expected to support approximately 20% growth year-over-year in Permian production (based on retained assets). The Company is currently operating five rigs in the area, with plans to add a sixth rig in March, and three completions crews.
- In the RockStar area, the 2019 program will include 34 Lower Spraberry completions, a four-fold increase over the eight completions in that interval during 2018. While Lower Spraberry wells are shallower and less expensive, these wells take longer to reach peak rates than Wolfcamp wells; therefore, these wells will not contribute as much production in 2019 as comparable Wolfcamp wells.
- Eagle Ford activity is expected to include drilling 28 and completing 18 net wells. This level of activity is expected to sustain flat year-over-year production in the program. In addition, the Company agreed with its joint venture partner to a Phase II program that includes drilling 12 gross wells (of which six were drilled in 2018) and completing 12 gross wells, at no incremental capital cost to the Company. 2019 Eagle Ford wells will employ the Company's latest drilling and completion designs, which include improved landing zone placement, longer laterals, up-spaced wells and variations to the completion design.
- Total production of 45-48 MMBoe, or 123.3-131.5 MBoe/d, approximately 43%-44% oil.
- Lease operating expense, including workovers ~$5.00/Boe
- Transportation expense ~$4.25/Boe
- Production and ad valorem taxes of 4% and ~$0.70/Boe, respectively, or ~$2.00/Boe combined
- G&A, including non-cash compensation ~$120 MM
- Exploration expense, including capitalized overhead, included in total capital spend ~$50 MM
- DD&A ~$17.00/Boe
- Total production 10.5-10.9 MMBoe, or 116.7-121.1 MBoe/d, approximately 45% oil. The production range in the first quarter reflects expected effects from a continuing force majeure event at a Permian Basin natural gas plant.
- Total capital spend of $325-350 million. In general, capital spend is weighted toward the first half of the year.
- In the Permian Basin, the Company expects to complete 26 wells, predominantly on the Merlin Maximus pads.
- In the Eagle Ford, the Company will begin its planned completions in March with two completions expected that month.
- Live (conference ID 2633668) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 2633668) - Domestic toll free/International: 800-585-8367/416-621-4642
- Total production for full year 2018 was 44 MMBoe (120.3 MBoe/d) and includes production growth of 97% from core Permian Basin assets.
- Costs incurred for full year 2018 were $1.4 billion. Total capital spend (a non-GAAP measure see reconciliation below) for full year 2018 was $1.3 billion, demonstrating the Company's commitment to capital discipline.
- Total net production was 11.3 MMBoe (123 MBoe/d) and 45% oil. Production volumes compare in-line with the mid-point of original fourth quarter guidance of 11.3-11.7 MMBoe (mid-point 11.5 MMBoe), when adjusted to consider the following:
- Production was affected by significant storms and third-party gas plant force majeure events that were originally estimated to reduce fourth quarter production by approximately 0.6 MMBoe. As a result of an additional gas plant force majeure event in December, the actual impact of weather and third-party events is estimated to be 0.6-0.7 MMBoe for the quarter, approximately 50% oil.
- Original fourth quarter guidance assumed the Company processed ethane for the entire quarter while the actual results included ethane rejection for the month of December, which reduced total expected volumes by approximately 0.1 MMBoe.
- Fourth quarter production included 45% oil in the commodity mix, which reflected strong well performance in the Permian, an expected sequential decline in Eagle Ford production, due to the timing of completions early in the third and late in the fourth quarters, as well as the impact of the temporary effects of shut-in and curtailed production volumes discussed above.
- Pre-hedge realized prices of $34.74 per Boe and $37.27 per Boe for the two periods presented were up 5% and 32%, respectively, from the same periods in 2017.
- Cash derivative settlements were a loss of $33.9 million in the fourth quarter and a loss of $135.8 million for the full year.
- Live (conference ID 2633668) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 2633668) - Domestic toll free/International: 800-585-8367/416-621-4642
- New RockStar wells demonstrate excellent performance from 3 intervals. 25 new RockStar wells had average 30-day IP rates of 1,300 Boe/d per well and averaged 88% oil.
- Production exceeded guidance range. 130.2 MBoe/d average production, 42% oil; Midland Basin production from retained assets was up 26% sequentially and 108% year-over-year.
- Big revenue growth and high margins. Production revenue was up 56% year-over-year driven by a 48% increase in oil production and a 39% increase in the realized price per Boe; operating margin (pre-hedge) averaged $25.16 per Boe, up 86% year-over-year.
- High margins translated into solid cash flows. Net cash provided by operating activities (GAAP) was $229.7 million and adjusted EBITDAX was $256.1 million (adjusted EBITDAX is a non-GAAP measure, see below for additional information); adjusted EBITDAX increased 56% year-over-year.
- Strengthening debt metrics. Net debt-to-adjusted EBITDAX (trailing twelve months) dropped to 2.9 times, meeting the Company's year-end objective of less than 3.0 times (Net debt-to-adjusted EBITDAX is a non-GAAP measure, see below for additional information.)
- Successful results across three intervals with 17 Wolfcamp A wells averaging 1,341 Boe/d per well, 3 Wolfcamp B wells averaging 1,228 Boe/d per well and 5 Lower Spraberry wells averaging 1,198 Boe/d per well.
- Successful results across the acreage position including 10 of the 25 wells located in the eastern portion of the RockStar area.
- 23 of the 25 wells are half or fully bounded.
- Given results from all 14 wells at Kramer-Costanza, the development on three pads averaged 30-day peak IP rates of 1,300 Boe/d per well and 87% oil.
- This implies a fourth quarter production guidance range of 11.3-11.7 MMBoe, or 122.8-127.2 MBoe/d.
- Fourth quarter production is expected to approximate 42% oil in the commodity mix.
- The Company expects to process ethane, where possible, each month during the fourth quarter.
- This implies expected total capital spend in the fourth quarter of 2018 of approximately $240-250 million.
- The Company is currently running six rigs and three completion crews in the Midland Basin and one rig and one completions crew in the Eagle Ford.
- During the fourth quarter, the Company expects to complete approximately 20 net wells in the Midland Basin and 14 gross wells (of which 8 will be part of its Eagle Ford JV) and approximately 6 net wells in the Eagle Ford.
- Live (conference ID 6519928) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 6519928) - Domestic toll free/International: 800-585-8367/416-621-4642
- November 6, 2018 - Baird 2018 Global Industrial Conference. President and Chief Executive Officer Jay Ottoson will present at 8:30 a.m. Central time. This event will be webcast. An investor presentation for this event will be posted to the Company's website on November 6, 2018.
- November 15, 2018 - BAML 2018 Global Energy Conference. Executive Vice President and Chief Financial Officer Wade Pursell will present at 9:45 a.m. Eastern time. This event will be webcast.
- December 4, 2018 - BAML Leveraged Finance Conference. Executive Vice President and Chief Financial Officer Wade Pursell will present at 11:30 a.m. Eastern time. This event will be webcast. An investor presentation for this event will be posted to the Company's website on December 4, 2018.
- December 5, 2018 - Capital One Securities 13th Annual Energy Conference. President and Chief Executive Officer Jay Ottoson will present at 1:30 p.m. Central time. This event will be webcast.
- 12.0 MMBoe (130.2 MBoe/d) total production exceeded the high end of guidance due to better than expected well performance in the Midland Basin and higher processed NGL volumes in the Eagle Ford
- 42% oil in the commodity mix; 62% liquids
- 26% sequential and 108% year-over-year growth in Midland Basin production from retained assets
- $38.26 per Boe average realized price (pre-hedge), which remained strong despite an increased Midland-WTI differential
- Costs incurred of $276 million and total capital spend (non-GAAP) of $272 million
- Permian volumes up 26% sequentially (from retained assets); Eagle Ford volumes up 12% sequentially.
- NGL volumes up 27% sequentially as the Company elected to process ethane in the Eagle Ford, per contractual elections, due to increased pricing.
- Benchmark pricing for the quarter included NYMEX WTI at $69.50/Bbl, NYMEX Henry Hub natural gas at $2.90/MMBtu and Hart Composite NGLs at $37.97/Bbl.
- The average realized price per Boe of $38.26 is before the effect of hedges. Including the effect of realized hedges, the average price was $34.86, resulting in approximately $40.7 million of realized net hedge losses for the quarter.
- Permian realizations exceeded the Company's 2018 plan by 9%, despite an increased Midland- WTI differential that averaged ($12.82)/Bbl, before the effects of basis hedges, for the quarter.
- Eagle Ford realizations were strong, exceeding the Company's 2018 plan by 16%, primarily due to increased NGL prices.
- Live (conference ID 6519928) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 6519928) - Domestic toll free/International: 800-585-8367/416-621-4642
- RockStar wells continue to produce best in class results. Spackler Wolfcamp A sets SM record as its top performing Midland Basin well to-date with a peak 30-day IP rate of 2,324 Boe/d. 24 new RockStar wells reached peak 30-day IP rates that averaged 1,330 Boe/d per well (87% oil) from three intervals
- Production exceeded guidance range. 115 MBoe/d average production, 42% oil. Midland Basin production from retained assets was up 14% sequentially and 117% year-over-year. Full year production guidance raised ~3,700 Boe/d at the mid-point
- Rapid margin expansion. $24.44 per Boe operating margin (pre-hedge) was the highest in 15 quarters, up 6% sequentially and up 110% year-over-year
- Strong earnings. Net income was $17.2 million; EPS was $0.15 and adjusted EPS was $0.15, per diluted common share; net cash provided by operating activities (GAAP) was $171.4 million and adjusted EBITDAX was $225.0 million (adjusted EPS and adjusted EBITDAX are non-GAAP measures; see below for additional information)
- Significant reduction in long-term debt. $345 million in 6.5% senior notes due 2021 redeemed subsequent to quarter-end, following the closing of two non-core divestitures for an aggregate sales price of $292 million
- Spackler Wolfcamp A and B wells are among top 5 SM performers to-date with peak 30-day IP rates at 2,324 Boe/d and, 2,022 Boe/d, respectively (89% and 90% oil, respectively)
- 9 wells from the 14-well Kramer-Costanza development reached peak 30-day IP rates averaging 1,285 Boe/d per well from the Wolfcamp A and B. The wells are drilled at 513-660 foot spacing and 7 of the 9 wells are fully bounded
- Average peak 30-day IP rates by interval were: 15 Wolfcamp A wells produced approximately 1,320 Boe/d per well (89% oil); 8 Wolfcamp B wells produced approximately 1,385 Boe/d per well (85% oil); 1 Lower Spraberry well produced approximately 1,080 Boe/d (85% oil)
- Third quarter production is expected to range between 11.2-11.7 MMBoe, or 122-127 MBoe/d, and includes approximately 42% oil in the commodity mix. Production is expected to include increased natural gas and NGL volumes from the Eagle Ford from 12, high volume, new first half 2018 wells. The NGLs and natural gas in the commodity mix will be affected by the Company's election to process ethane in July and August of 2018, with the election for September undecided.
- Faster paced drilling and completion activity in the Midland Basin in 1H18 increased expected third quarter production, due to accelerated completion timing, and increased the number of expected third quarter new net well completions by 16 (as planned fourth quarter completions are accelerated into the third quarter), compared to the February plan.
- Total capital spend in the second half of 2018 is projected to approximate $514 million and be more heavily weighted to the third quarter due to the acceleration of fourth quarter completions. Third quarter net completions are expected to include 37 net wells in the Permian Basin and 4 net wells in the Eagle Ford.
- Live (conference ID 4891245) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 4891245) - Domestic toll free/International: 800-585-8367/416-621-4642
- August 21, 2018 - Enercom: The Oil and Gas Conference. President and Chief Executive Officer Jay Ottoson will present at 9:15 a.m. Mountain time. This event will be webcast. An investor presentation for this event will be posted to the Company's website on August 21, 2018.
- September 4, 2018 - Barclays CEO Energy-Power Conference. President and Chief Executive Officer Jay Ottoson will present at 4:25 p.m. Eastern time. This event will be webcast. An investor presentation for this event will be posted to the Company's website on September 4, 2018.
- 43 North American shale E&Ps
- 7 international E&Ps
- 10 other producers
- 1 large midstream oil and NGLs shipper
- 1 LNG export project
- 9 oilfield service providers
- 20 private E&Ps, midstream, oilfield tech and data providers, energy market experts and private equity firms
- $220+ billion in market value
- 3.2 million barrels of oil equivalent production per day (MMBOEPD)
- 5 million barrels of crude oil/NGLs handled daily via 19,000 miles of crude/liquids pipelines, 100 million barrels of storage capacity and 10,000 rail cars
- $275+ billion in enterprise value
- Enerplus Corp. (NYSE: ERF): E&P operating in the Bakken/Three Forks, Marcellus and Western Canada.
- Northern Oil & Gas (NYSE: NOG): Non-operator targeting the Bakken/Three Forks.
- Whiting Petroleum (NYSE: WLL): Bakken-focused operator with additional northeast Colorado assets.
- EOG Resources (NYSE: EOG): Large independent E&P producing the Delaware, Woodford, Eagle Ford, and Rocky Mountains – Q1 Revenues of $3.7 Billion; production of 660 MBOEPD
- Lonestar Resources (NASDAQ: LONE): Eagle Ford E&P with acreage throughout the play.
- SilverBow Resources (NYSE: SBOW): Gas-focused producer targeting southern Eagle Ford.
- Sundance Energy Australia (NASDAQ: SNDE): Pure-play Eagle Ford producer.
- WildHorse Resource Development (NYSE: WRD): Northern Eagle Ford operator with basin's second-largest acreage holdings.
- Centennial Resource Development (NASDAQ: CDEV): Pure play Delaware Basin E&P company.
- Encana (NYSE: ECA): Diversified E&P company with operations in the Permian, Montney, Eagle Ford, Duvernay and San Juan Basin.
- Earthstone Energy (NYSE: ESTE): E&P company with operations in the Midland and Eagle Ford.
- Jagged Peak (NYSE: JAG): Pure play Delaware Basin operator.
- Legacy Reserves (NASDAQ: LGCY): MLP with assets in the Permian, East Texas, Rocky Mountains and Mid-Continent.
- Lilis Energy (NYSE: LLEX): Pure play Delaware Basin operator.
- QEP Resources (NYSE: QEP): Midland Basin player with additional acreage in Williston, Uinta and Haynesville.
- Rosehill Resources (NASDAQ: ROSE): Pure play Delaware Basin operator.
- SM Energy (NYSE: SM): Midland Basin producer with additional Eagle Ford operations.
- WPX Energy (NYSE: WPX): Delaware basin E&P company with additional extensive production from Williston.
- Alta Mesa Resources (NASDAQ: AMR): E&P with operations in STACK portion of Anadarko Basin.
- BNK Petroleum (TSE: BKX): E&P with operations in Tishomingo Field of SCOOP portion of Ardmore Basin.
- Chaparral Energy (OTCMKTS: CHPE): Pure play STACK E&P company.
- Midstates Petroleum (NYSE: MPO): E&P producing from Mississippi Lime in Oklahoma.
- Panhandle Oil & Gas (NYSE: PHX): Leaseholder with interests in SCOOP/STACK, Oklahoma Woodford, Fayetteville and Eagle Ford.
- Unit Corp (NYSE: UNT): Vertically integrated energy company with drilling, producing and midstream businesses. Production in Mid Continent and Upper Gulf Coast.
- Cabot Oil & Gas (NYSE: COG): Pure play Marcellus E&P company.
- Eclipse Resources (NYSE: ECR): Appalachia-focused E&P company with assets in eastern Ohio.
- Range Resources (NYSE: RRC): Pennsylvania Marcellus producer with additional North Louisiana acreage.
- Bonanza Creek Energy (NYSE: BCEI): Wattenberg field, Mid-Continent producer
- HighPoint Resources (NYSE: HPR): Rocky Mountains-focused E&P with operations in the Wattenberg and Hereford fields.
- PDC Energy (NASDAQ: PDCE): Liquids-focused E&P in the DJ/Niobrara and Delaware basins.
- PetroShare (OTCMKTS: PRHR): Wattenberg producer active in southern portion of field.
- GulfSlope Energy (OTCMKTS: GSPE): Louisiana offshore Gulf company, partnered with Delek for drilling new wells.
- Talos Energy (NYSE: TALO): E&P operator with focus on Louisiana Gulf of Mexico, additional properties in U.S. and Mexican GOM.
- Goodrich Petroleum (NYSE: GDP): E&P company with operations in the Haynesville and Tuscaloosa Marine Shale.
- Ultra Petroleum (NASDAQ: UPL): E&P focused on Pinedale and Jonah fields, also developing Uinta basin.
- Denbury Resources (NYSE: DNR): CO2 EOR production with activity in the Gulf Coast and Rocky Mountains.
- Elk Petroleum (ASX: ELK): CO2 EOR company with operations in Wyoming and Utah.
- Evolution Petroleum (NYSE: EPM): CO2 EOR production company. Pays a dividend.
- Mid-Con Energy Partners (NASDAQ: MCEP): CO2 EOR company with production in the Permian and Mid-Continent.
- Advantage Oil & Gas (NYSE: AAV): E&P focused on Montney formation in Alberta.
- Bellatrix Exploration (NYSR: BXE): E&P focused on the Western Sedimentary Basin in Alberta, Canada.
- Blackbird Energy (CVE: BBI): E&P focused on Pipestone Corridor of Montney formation in Alberta.
- Gear Energy (TSE: GXE): E&P operating heavy oil projects in Saskatchewan and light oil in Alberta.
- International Frontier Resources (TSX-V: IFR): E&P focused on operations in the Tecolutla block, onshore Mexico.
- Iron Bridge Resources (TSE: IBR): Developing an oil and liquids rich Montney resource at Elmworth/Gold Creek.
- NuVista Energy (TSE: NVA): Alberta-based operator focused on Wapiti Montney play.
- Painted Pony Energy (TSE: PONY): E&P producing natural gas from British Columbia Montney.
- Razor Energy (CVE: RZE): Alberta oil producer targeting Swan Hills and Kaybob Montney.
- Tamarack Valley Energy (TSE: TVE): Light oil producing E&P developing Cardium, Viking and Penny Barons plays.
- Vermilion Energy (NYSE: VET): E&P with extensive international diversification. Operations in Mannville, Cardium, Powder River Basin, offshore Australia and throughout Europe.
- Alvopetro Energy (CVE: ALV): Gas-weighted E&P with operations in Brazil.
- Canacol Energy (TSE: CNE): Exploration portfolio encompassing 5 basins in Colombia and Ecuador.
- GeoPark Energy (NYSE: GPRK): International E&P with projects in Colombia, Argentina, Brazil, Chile and Peru.
- Gran Tierra Energy (NYSE: GTE): Oil-weighted E&P company with assets in Columbia.
- Jadestone Energy (CVE: JSE): E&P company with assets in Australia, Indonesia, Vietnam and Philippines.
- PetroTal (CVE: TAL): Canadian E&P company with assets in Peru.
- Valeura Energy (TSE: VLE): Canada-based company developing gas in Turkey.
- Tellurian (NASDAQ: TELL): Houston-based LNG exporter and marketer founded by Charif Souki and Martin Houston. Tellurian's initial LNG export project (now under development) is Driftwood LNG near Lake Charles, La.
- CES Energy Solutions (TSE: CEU): Provider of chemical solutions in drilling, production and specialty applications.
- Core Laboratories (NYSE: CLB): Reservoir technology and optimization company.
- EcoStim Energy Solutions (NASDAQ: ESES): Well stimulation operations in Oklahoma and Argentina.
- Flotek Industries (NYSE: FTK): Chemical solutions provider with additional reservoir characterization and engineering services.
- Independence Contract Drilling (NYSE: ICD): Drilling company focused on unconventional drilling.
- Key Energy Services (NYSE: KEG): Well service provider with rigs, coiled tubing, fishing and fluid management.
- Liberty Oilfield Services (NYSE: LBRT): Pressure pumping service provider.
- Nabors Industries (NYSE: NBR): Owns/operates world's largest land-based drilling fleet, also provides offshore drilling services, proprietary drilling software and specialty equipment.
- Superior Drilling Products (NYSE: SDPI): Drilling tool provider.
- Plains All American Pipeline (NYSE: PAA): midstream energy infrastructure and logistics services for crude oil, natural gas liquids and natural gas.
- Black Stone Minerals (NYSE: BSM): Holds 20 million gross acres throughout the U.S., with holdings in every major basin.
- CorEnergy Infrastructure Trust (NYSE: CORR): REIT owning energy infrastructure assets.
- Osprey Energy Acquisition Corp. (NASDAQ: OSPR) energy-focused special purpose acquisition corporation; completed $275 million IPO July 2017.
- Ameredev II
- Anschutz Exploration
- Atlas Sand
- BetaZi
- Bison Oil & Gas
- Blue Racer Midstream
- BTU Analytics
- Caerus Oil and Gas
- Canyon Creek Energy
- CIBC
- Comisión Nacional de Hidrocarburos (CNH)
- Credit Agricole CIB
- U.S. Energy Information Administration
- Felix Energy
- Fleur de Lis Energy
- Goodnight Midstream
- Great Western Oil & Gas
- GuildOne
- RS Energy
- Samson Resources II
- Tailwater Capital
- peer group company valuations that are specific to the oil and gas industry;
- corporate annual reports, oil and gas company websites, custom stratigraphic and subsurface illustrations; company investor presentations; sustainability reports;
- complete digital marketing services and lead capture for oilfield services and technology companies;
- EnerCom's Monthly Oil & Gas Industry Data & Trends Report;
- Profile company listings and advertising opportunities in Oil & Gas 360® - one of the industry's most popular online daily news portals; and
- EnerCom 360 - the online magazine.
- 10.5 MMBoe (115 MBoe/d) total production and 42% oil in the commodity mix
- 14% sequential and 117% year-over-year growth in Midland Basin production from retained assets
- $38.40 per Boe average realized price (pre-hedge), highest level in 15 quarters
- Costs incurred $460 million and total capital spend $429 million, in accordance with recent Company estimates (capital spend guidance of $400-440 million) and reflecting acceleration of certain drilling, completion and infrastructure spending
- Outperformance driven by continued better than expected well performance in the Midland Basin
- Non-core assets sold during the second quarter (transactions closed in May) included remaining assets in Divide County, North Dakota and third-party operated assets in Upton County, Texas.
- Permian volumes exceeded expectations, up 14% sequentially (based on retained assets), while Eagle Ford volumes were up 5% sequentially.
- Benchmark pricing for the quarter included NYMEX WTI at $67.88/Bbl, NYMEX Henry Hub natural gas $2.80/MMBtu and Hart Composite NGLs at $33.10/Bbl.
- The average realized price per Boe of $38.40 is before the effect of hedges. Including the effect of realized hedges, the average price was $34.91, resulting in approximately $36.7 million of realized net hedge losses for the quarter.
- Eagle Ford realizations were particularly strong, benefiting from increased LLS and NGL pricing.
- Permian realizations exceeded the Company's 2018 plan by 13%, despite an increased Midland-WTI Cushing differential that averaged ($6.87)/Bbl, before the effects of basis hedges, for the quarter.
- Live (conference ID 4891245) - Domestic toll free/International: 844-343-4183/647-689-5129
- Replay (conference ID 4891245) - Domestic toll free/International: 800-585-8367/416-621-4642
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- peer group company valuations that are specific to the oil and gas industry;
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- EnerCom 360 - the online magazine.
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- WPX Energy (NYSE: WPX)
- peer group company valuations that are specific to the oil and gas industry;
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- peer group company valuations that are specific to the oil and gas industry;
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- Ultra Petroleum Corporation (NASDAQ: UPL)
- Unit Corporation (NYSE: UNT)
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- WPX Energy (NYSE: WPX)
- peer group company valuations that are specific to the oil and gas industry;
- corporate annual reports, oil and gas company websites, custom stratigraphic and subsurface illustrations; company investor presentations; sustainability reports;
- complete digital marketing services and lead capture for oilfield services and technology companies;
- EnerCom's Monthly Oil & Gas Industry Data & Trends Report;
- Profile company listings and advertising opportunities in Oil & Gas 360® - one of the industry's most popular online daily news portals; and
- EnerCom 360 - the online magazine.
- June 5, 2018 - 2018 RBC Capital Markets Global Energy and Power Executive Conference. President and Chief Executive Officer Jay Ottoson will present at 10:30 a.m. Eastern Time and will also meet with investors in 1x1 settings. This event will not be webcast.
- June 6, 2018 - Bank of America Merrill Lynch 2018 Energy Credit Conference. President and Chief Executive Officer Jay Ottoson will present at 1:40 p.m. Eastern Time and will also meet with investors in 1x1 settings. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period.
- June 12, 2018 - Stifel 2018 Cross Sector Insight Conference. President and Chief Executive Officer Jay Ottoson will present at 9:45 a.m. Eastern Time and will also meet with investors in 1x1 settings. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period.
- New wells outperforming expectations. 19 new RockStar wells reached peak 30-day IP rates that averaged 1,440 Boe/d per well (88% oil)
- Production exceeded guidance range. 113 MBoe/d average production, 42% oil. Midland Basin production was up 18% sequentially and 100% year-over-year
- Rapid margin expansion. $23.10 per Boe operating margin (pre-hedge) was the highest in 14 quarters, up 30% sequentially and up 68% year-over-year
- Strong earnings. Net income was $317.4 million; EPS was $2.81 and adjusted EPS was $0.07, per diluted common share; net cash provided by operating activities (GAAP) was $140.1 million and adjusted EBITDAX was $210.2 million (adjusted EPS and adjusted EBITDAX are non-GAAP measures; see below for additional information)
- Significant reduction in net debt. $792 million in closed or pending asset sales year-to-date core up portfolio
- 13 Wolfcamp A wells had average peak 30-day IP rates of approximately 1,500 Boe/d per well (89% oil)
- 4 Wolfcamp B wells had average peak 30-day IP rates of approximately 1,250 Boe/d per well (84% oil)
- 2 Lower Spraberry wells had average peak 30-day IP rates of approximately 1,485 Boe/d per well (87% oil), among the Company's strongest Lower Spraberry wells to date
- Production of 10.14 MMBoe (112.7 MBoe/d) exceeded the Company's guidance range, reflecting strong performance from new wells in the Midland Basin, partially offset by reduced production in the Eagle Ford related to third party pipeline downtime.
- $37.76/Boe average realized price (before the effects of realized hedges) and $23.10/Boe operating margin are the highest since late 2014. Margin expansion is primarily the result of a higher percentage of oil in the production mix, as the Company continues its portfolio transition and focuses its development program on its highest return assets, as well as higher benchmark pricing for oil and NGLs.
- LOE of $4.95/Boe was lower than the Company's expectations due to higher volumes and the timing of well workovers and roadwork
- Live (conference ID 9188439) - Domestic toll free/International: 866-393-4306/734-385-2616
- Replay (conference ID 9188439) - Domestic toll free/International: 855-859-2056/404-537-3406
- 10.14 MMBoe total production, exceeding the high end of guidance
- 42% oil production in the commodity mix
- 18% sequential and 100% year-over-year growth in Midland Basin production
- $37.76 per Boe average realized price, highest level in 14 quarters
- Costs incurred $372 million and total capital spend $367 million, slightly ahead of guidance primarily due to increased ownership interests in certain RockStar wells, as a result of land trades and unitizations
- Outperformance driven by better than expected performance from first quarter well completions in the Midland Basin
- Assets sold or pending sale include the Powder River Basin divestiture that closed in March 2018 and announced asset sales in Divide County, North Dakota and Upton County, Texas (third-party operated) that are expected to close in the second quarter of 2018.
- Permian volumes exceeded expectations, up 18% compared with the fourth quarter of 2017 and reflect the benefit of better than expected production from new wells.
- Eagle Ford volumes declined sequentially as expected due to no new completions between October 2017 and January 2018 and to previously reported downtime at a third party pipeline during February 2018.
- Benchmark pricing for the quarter included NYMEX WTI at $62.87/Bbl, NYMEX Henry Hub natural gas $3.00/MMBtu and Hart Composite NGLs at $30.87/Bbl.
- The average realized price per Boe of $37.76 is before the effect of hedges. Including the effect of realized hedges, the average price was $35.34, resulting in approximately $24.5 million of realized net hedge losses for the quarter.
- The completion of 36 net wells in the Permian Basin and 9 net wells in the Eagle Ford. As previously reported, the vast majority of the Permian Basin, and all of the Eagle Ford, completions are expected to come on-line during May and June. The timing of completions results in a lower sequential production growth rate at retained assets compared with the first quarter.
- Second quarter production is also affected by shut-ins related to offset operator activity and asset sales.
- (0.1) MMBoe reduction in Eagle Ford production due to shut-ins associated with offset operator fracturing operations and repairs to a third-party pipeline that were not part of the Company's original 2018 plan.
- The sale of Powder River Basin assets as of the end of the first quarter.
- (0.2) MMBoe reduction from pending asset sales. The sale of the North Dakota (remainder of the Rocky Mountain region) and Texas (Permian region) assets are expected to close during the second quarter, reducing full quarter production from these areas.
- Assets sold and pending sale have 77% oil production.
- Live (conference ID 9188439) - Domestic toll free/International: 866-393-4306/734-385-2616
- Replay (conference ID 9188439) - Domestic toll free/International: 855-859-2056/404-537-3406
- 1Q18 Production: Based on the first two months of the quarter, Permian Basin production exceeded plan as new completions came on stronger than expected. Higher Permian Basin production performance was partially offset by downtime at a third party pipeline system in the Eagle Ford. As a result, first quarter production is expected to be closer to the upper end of original guidance (9.5-10.0 MMBoe), with the oil percentage estimated to meet or exceed 40%.
- 1Q18 Total Capital Spend: Based on the first two months of the quarter, total capital spend guidance is reiterated at $350 million, which includes an expected 18 net completions in the Midland Basin and five net completions in the Eagle Ford, as well as costs associated with the construction of water handling systems in the RockStar area. Total capital spend for 2018 is expected to approximate $1.27 billion, with higher expenditures in the first half of the year.
- 2Q18 Production Preview: Production associated with the Powder River Basin asset sale is removed from net production as of April 1, 2018. During the second quarter, planned flowing completions are expected to increase from the first quarter; however, the vast majority of Permian Basin, and all Eagle Ford, completions are scheduled to come on-line during May and June. Therefore, expected production growth from new wells is primarily projected for late in the quarter and into the third quarter (i.e. capital intensive with most of the production benefit in 3Q18).
- 2019 Plan Projections: As previously reported, the Company expects to align cash flow and total capital spend by mid-year 2019. The Company's plan includes a reduction in total capital spend in 2019 compared to the 2018 total capital spend guidance (by approximately 15%), while delivering significant production growth. The 2019 plan projects a similar number of well completions in 2019 compared with 2018 and a similar Permian Basin DUC count at year-end 2019 compared with 2018. 2019 total capital spend projections include expected lower facilities and sand costs, as well as expected lower drilling and completion costs associated with several wells drilled in 2018 that are expected to come on-line in early 2019.
- President and Chief Executive Officer Jay Ottoson is scheduled to present at IPAA in New York on Monday, April 9, 2018, at 2:05 p.m. Eastern time. The presentation will be audio webcast and accessible from the Company's Investor webpage at http://ir.sm-energy.com/. An updated investor presentation will be available on the Company's Investor webpage prior to the presentation.
- 2017 net production totaled 44.5 MMBoe, delivering 165% production growth from top tier Midland Basin assets and 47% operating margin growth per Boe 4Q16 to 4Q17 as the Company successfully continues its portfolio transition.
- 2017 year-end proved reserves increased to 468 MMBoe, adding 47% reserve growth on a retained asset basis, nearly tripling Midland Basin reserves and increasing the standardized measure of discounted future net cash flows by 2.5 times from $1.2B to $3.0B.
- 2018-2019 operating plan targets competitive growth in debt adjusted cash flow and aligns expected total capital spend with expected cash flow by mid-year 2019.
- Outstanding performance from new wells in Howard County ranks SM top Midland Basin operator by revenue per well and results in significant value creation on RockStar properties. New RockStar wells announced today include two Maverick pad wells with 30-day IP rates that each approximated 200 Boe/d per 1,000 lateral feet, continuing the Company's strong performance record.
- Adjusting year-end 2016 reserves for divestitures, proved reserves increased 47% on a retained asset basis.
- Net proved reserve additions were 192 MMBoe, or 4.3 times production.
- Midland Basin proved reserves nearly tripled to 160 MMBoe.
- Amounts may not calculate due to rounding
- Eagle Ford includes nominal other production from the region; full year includes non-operated Eagle Ford production prior to divestiture
- For purposes of 2017 presentation, retained assets include Powder River Basin assets expected to be sold in 2018
- Production increased 2% and 8% for the fourth quarter and full year, respectively, compared with the prior year periods on a retained asset basis.
- Oil production increased 51% and 52% for the fourth quarter and full year, respectively, compared with the prior year periods on a retained asset basis.
- Production in the fourth quarter reflects strong 21% sequential growth in Permian Basin volumes, which was more than offset by lower sequential Eagle Ford volumes as a result of the previously announced joint venture as well as natural declines, as no new wells were completed in the Eagle Ford during the quarter.
- Pre-hedge realized prices of $32.95 per Boe and $28.20 per Boe for the two periods presented were up 27% and 32%, respectively, from the prior year periods demonstrating the revenue benefit from increasing the proportion of production from the oil-rich Midland Basin and improved benchmark commodity prices. Oil, natural gas and NGL revenue was up in 2017 versus 2016, despite a 20% decline in total production.
- Cash derivative settlements for NGLs were a loss of $15.8 million in the fourth quarter, as the benchmark NGL price jumped to a 13-quarter high.
- General and administrative costs include $0.69 and $0.43 for the fourth quarter and full year, respectively, for non-cash expenses.
- Overall, production costs are influenced by the commodity mix as oil production from the Midland Basin increases and natural gas and NGL production from the Eagle Ford decreases, relative to the total production mix. LOE costs increase because lifting costs are higher for oil, and transportation costs decrease because higher cost third party transportation contracts relate to Eagle Ford natural gas and NGLs. Each quarter of 2017, LOE costs trended higher partially offset by transportation costs that trended lower.
- Fourth quarter of 2017 LOE costs included road work required following the Texas storms.
- The operating margin (before the effects of derivative settlements) per Boe was up 71% in 2017 compared with 2016, reflecting the portfolio transition to increased Midland Basin oil production, higher benchmark prices and a continued focus on controlling costs.
- The greater net loss in 2016 was predominantly driven by impairment and abandonment charges in 2016 totaling $435 million and higher depletion, depreciation and amortization charges.
- Fourth quarter and full year 2017 net loss includes a one-time tax benefit of $63.7 million (included in Income tax benefit) related to a reduction in deferred taxes as a result of the changed corporate income tax rate under US tax reform.
- Fourth quarter adjusted EBITDAX included an accrual of $5 million in other expense that was a non-recurring charge.
- Fourth quarter adjusted net loss removes the one-time tax benefit of $63.7 million and one-time charge of $5 million, each discussed above, as well as other items that are non-recurring or difficult to estimate.
- During 2017, the Company drilled 123 net wells, of which 98 were in the Permian Basin, 24 were in the Eagle Ford and 1 was in the Powder River Basin.
- During 2017, the Company completed 111 net wells, of which 73 were in the Permian Basin, 35 were in the Eagle Ford and 3 were in the Rocky Mountain area.
- During the fourth quarter of 2017, the Company added one rig and one completions crew to its Midland Basin program.
- Fourth quarter total capital spend was higher than forecast. A fourth Permian completions crew was added earlier than originally planned during the quarter, which enabled the Company to secure an experienced crew and increase the expected number of flowing completions for the first quarter of 2018. Total capital spend was also affected by acceleration of facilities to keep pace with completions. In addition, drilling and completion costs increased per well as a result of employing enhanced completion technologies and cost inflation, as cost escalators tied to oil prices in certain contracts began to take effect.
- generating substantial growth in high-margin Permian production
- maintaining the Company's operational excellence and top tier capital efficiency
- continuing to demonstrate the value proposition of the RockStar acquisitions; and
- managing the balance sheet as measured by ample liquidity, declining net debt:EBITDAX and absolute debt reduction.
- Total capital spend of approximately $1.27 billion.
- Cost inflation for drilling and completions services per lateral foot of 10%-15% over average 2017 costs.
- Permian -- Expect to drill approximately 130 net wells and complete approximately 100 net wells.
- Eagle Ford -- Expect to drill approximately 17 net wells and complete approximately 25 net wells. The Company's JV counterparty is expected to pay the costs to complete 16 wells, which the Company expects will effectively fund a significant portion of the Company's leasehold development obligations in the Eagle Ford. Fewer net completions for the year are expected to result in lower Eagle Ford production in 2018 compared to the fourth quarter of 2017 run rate.
- Total capital spend is weighted to the first half of 2018 as the rig and completion crew count in the Midland Basin is expected to be reduced from 9 and 5, respectively, in the first quarter to 7 and 3, respectively, at year-end.
- Rocky Mountain -- Nominal capital allocation.
- Facilities - Approximately $130 million, of which more than one-half relates to building fresh and produced water infrastructure in the RockStar area (including associated land costs). This investment is expected to enable acceleration and control of needed facilities while significantly reducing future per well capital costs and operating expenses.
- Capitalized overhead/exploration - $70-75 million.
- Average commodity price projections:
- 2018 WTI oil $57.40 (1Q18 at $64.70 and remainder of 2018 at $55.00 flat), Henry Hub natural gas $3.00, and NGLs 50% of WTI.
- Asset divestiture timing: The PRB sale is expected to close at the end of the first quarter, and as a result, production volumes are removed starting April 2018, but there can be no assurance that this transaction will close on time or at all.
- Hedges: Based on the production guidance mid-point, the Company has hedges in place for approximately 75% of 2018 oil production and 65% of 2018 natural gas production. NGL production is hedged by product and includes ethane, propane, butanes and natural gasoline.
- Total capital spend: ~$1.27 billion.
- Production: 42-46 MMBoe, with oil approximately 41% of the commodity mix.
- LOE: ~$5.00 per Boe average for the year, reflecting a higher proportion of oil in the commodity mix. It is expected that 1H18 will exceed the annual average and 2H18 to be below the annual average, as Permian costs are expected to be reduced with the planned completion of produced water handling systems.
- Transportation: ~$4.50 per Boe average for the year, expected to decline sequentially through the year as higher cost Eagle Ford production is a reduced proportion of the commodity mix. It is expected that 1H18 will exceed the annual average and 2H18 be below the annual average.
- Production taxes: ~$1.55 per Boe or 4.0-4.5% of pre-hedge revenue.
- Ad Valorem taxes: $0.55-0.65 per Boe
- G&A: $125-135 million, including approximately $20 million of non-cash compensation.
- Capitalized overhead/exploration: $70-75 million, before dry hole expense, all of which is included in capital expenditure guidance.
- DD&A: $13.00-15.00 per Boe.
- Production of approximately 9.5-10.0 MMBoe, with oil production approaching 40% of commodity mix.
- Lower sequential production from the fourth quarter of 2017 is driven by declines in the Eagle Ford, where no new wells were completed in the fourth quarter of 2017, and declines in the Rocky Mountain region.
- Completion of approximately 18 net wells in the Midland Basin and 5 net wells in the Eagle Ford during the quarter.
- Total capital spend of approximately $350 million, which includes approximately $40 million allocated to facilities and land, which is largely associated with construction of RockStar fresh and produced water infrastructure.
- Live (SM Energy call, no passcode) - Domestic toll free/International: 877-870-4263/412-317-0790
- Replay (passcode 10116628) - Domestic toll free/International: 877-344-7529/412-317-0088
- Permian production up 31% sequentially, and up 118% since 4Q16
- Total production mix 32% oil; absolute oil production exceeded expectations
- RockStar favorable new well results: three pads (eight wells) average peak 30-day IP rates of 1,191 Boe/d, 1,453 Boe/d and 1,333 Boe/d per well on each pad
- Initiated Eagle Ford North JV to accelerate use of new technology and build value
- Portfolio transition drives margin expansion, raising average realized price to $27.59 (pre-hedge), the highest level since 4Q14 despite sub-$50 oil
- Liquidity remains strong at $1.4 billion
- November 8, 2017 - Baird 47th Annual Industrial Conference. Chief Financial Officer Wade Pursell will present at 2:30 p.m. Central time. This event will be webcast. An investor presentation for this event will be posted to the Company's website on November 7, 2017.
- November 14, 2017 - KLR E&P Conference Denver. President and Chief Executive Officer Jay Ottoson will present at 12:05 p.m. Mountain time. This event will not be webcast.
- November 29, 2017 - BAML Leveraged Finance Conference. Chief Financial Officer Wade Pursell will present at 10:50 a.m. Eastern time. This event will be webcast. An investor presentation for this event will be posted to the Company's website on November 28, 2017.
- December 6, 2017 - Capital One Securities 12th Annual Energy Conference. President and Chief Executive Officer Jay Ottoson will present at 1:30 p.m. Central time. This event will be webcast.
- October 3-4, 2017 – Deutsche Bank's 25th Annual Leveraged Finance Conference. Executive Vice President and Chief Financial Officer Wade Pursell will present at 11:20 AM PT on October 4 and will also meet with investors in a 1x1 setting. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period.
- November 2, 2017 – After market close, the Company plans to release its third quarter 2017 results. This will include the earnings release, a pre-recorded discussion of third quarter financial and operating results via webcast, and an associated presentation, all of which will be posted to the Company's website at www.sm-energy.com.
- November 3, 2017 – Please join SM Energy management at 8:00 AM MT/10:00 AM ET for a third quarter financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at www.sm-energy.com or by telephone at:
- Live (SM Energy call, no passcode) - Domestic toll free/International: 877-870-4263/412-317-0790
- Replay (passcode 10112207) - Domestic toll free/International: 877-344-7529/412-317-0088
- Production beats expectations: 11.3 MMBoe, exceeding guidance due to well performance
- 11% growth from retained assets compared with the second quarter of 2016
- Full year 2017 production guidance increased by 0.8 MMBoe at the mid-point to 44.5-46.5 MMBoe
- Guidance reflects expected significant oil growth in the second half of 2017
- Capital efficiency drives value: First half of 2017 exceeds plan expectations for well performance and revenue at lower than expected drilling and completion costs
- Well tests continue to confirm RockStar acreage to east: Viper well peak 24-hour IP rate of 1,316 Boe/d, 91% oil
- Balance sheet remains strong: $1.5 B in liquidity
- Total capital spend (before acquisitions) ($MM) $875 (unchanged)
- Total production (MMBoe) 44.5-46.5
- Increased 0.8 MMBoe at the mid-point
- Oil percent near 30% of commodity mix, full year average
- LOE including ad valorem ($/Boe) $4.30-4.60
- Increased to include retention of Divide County
- Transportation ($/Boe) $5.40-5.65
- Reduced $0.10 at the midpoint
- Production taxes ($/Boe/percent of pre-hedge revenue) ~$1.10/4.0-4.5%
- G&A ($MM) $115-125
- Reduced $5 MM at the mid-point
- Includes approximately $20 MM non-cash, stock-based compensation expense
- Capitalized overhead/Exploration before dry hole expenses ($MM) $65-70 (unchanged)
- This amount is a component of capital guidance
- DD&A ($/Boe) $12.00-14.00
- August 15, 2017 - Enercom: The Oil and Gas Conference 22. President and Chief Executive Officer Jay Ottoson will present at 10:05 a.m. Mountain time. This event will be webcast. An investor presentation for this event will be posted to the Company's website on August 14, 2017.
- September 6, 2017 - Barclays CEO Energy-Power Conference. President and Chief Executive Officer Jay Ottoson will present at 11:45 a.m. Eastern time. This event will be webcast. An investor presentation for this event will be posted to the Company's website on September 5, 2017.
- Live (SM Energy call, no passcode) - Domestic toll free/International: 877-870-4263/412-317-0790
- Replay (passcode 10110368) - Domestic toll free/International: 877-344-7529/412-317-0088
- June 19-20, 2017 – 2017 Wells Fargo West Coast Energy Conference. President and Chief Executive Officer Jay Ottoson will participate in investor meetings at this event.
- June 27, 2017 – J.P. Morgan 2017 Energy Conference. President and Chief Executive Officer Jay Ottoson will present at 9:20 AM ET on June 27 and will also meet with investors in 1x1 settings. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period.
- Production of 12.1 MMBoe, well ahead of guidance
- 55% sequential growth in Midland Basin
- Full year production guidance increased by 1.5 MMBoe to 41.5-44.5 MMBoe
- Costs incurred $282 MM (includes acquisitions); total capital spend $193 MM, 4% less than projected (see GAAP reconciliation below)
- Full year total capital spend (excluding acquisitions) guidance of $875 MM unchanged
- Balance sheet strengthened further with closing of non-op Eagle Ford divestiture
- Net debt reduced by 22%
- EPS of $0.67; Adjusted EPS (loss) ($0.18), ahead of expectations (see GAAP reconciliation below)
- Total capital spend (before acquisitions) ($MM) $875 (unchanged)
- Total production (MMBoe) 41.5-44.5
- Increased 1.5 MMBoe
- Oil 29% of commodity mix
- Full year production assumes sale of Divide County assets mid-year
- LOE including ad valorem ($/Boe) ~$4.00 (unchanged)
- Expected to exceed the average 1H17, be below average 2H17
- Transportation ($/Boe) $5.50-5.75 (unchanged)
- Production taxes ($/Boe) ~$1.25/4.0-4.5% (unchanged)
- G&A ($MM) $120-130 (unchanged)
- Includes approximately $21-23 MM non-cash,
stock-based compensation expense - Capitalized overhead/Exploration before dry hole expenses ($MM) $65-70 (unchanged)
- This amount is a component of capital guidance
- DD&A ($/Boe) $13.00-15.00 (unchanged)
- June 6, 2017 – RBC Global Energy & Power Conference. Executive Vice President and Chief Financial Officer Wade Pursell will participate in investor meetings at this event.
- June 7, 2017 – BAML 2017 Energy Credit Conference. Executive Vice President and Chief Financial Officer Wade Pursell will present at 8:50 a.m. Eastern Time. This event will be webcast.
- Live (SM Energy call, no passcode) - Domestic toll free/International: 877-870-4263/412-317-0790
- Replay (passcode 10104227) - Domestic toll free/International: 877-344-7529/412-317-0088
- transformative second half of 2016; more than $6 billion in completed or announced transactions that reposition the Company to have a top tier asset base in both the Midland Basin and Eagle Ford
- positioned in 2017 with significant liquidity; enter 2017 with revolving line of credit undrawn plus expected proceeds from announced divestitures
- 2017 operating plan that targets near 150% growth in Midland Basin production and near 50% improvement in the Company's operating margin per Boe, for the fourth quarter of 2017 compared with the fourth quarter of 2016
- three-year operating and financial plan that is expected to generate more than 15% production CAGR from retained assets for 2016-2019, while aligning expected capital expenditures and cash flow from operations beginning in 2019
- outstanding initial performance from wells on acquired Midland Basin assets, with new wells to date exceeding the Company's acquisition assumptions by more than 30%
- Total capital spend* (costs incurred less ARO, capitalized interest and acquisitions) of approximately $875 million. Total capital spend assumptions include modest increases for higher vendor costs (under a largely flat oil price scenario), specifically for pressure pumping.
- Permian – Drill approximately 100 wells and complete approximately 80 wells (gross, operated)
- Eagle Ford – Drill approximately 25 wells and complete approximately 35 wells (gross, operated)
- Williston – No capital allocation
- Facilities – Approximately $50-$55 million is included for facilities build-out
- Actual asset divestiture timing: Third-party operated Eagle Ford asset sale assumed to close at the end of February 2017 and the Divide County, North Dakota asset sale assumed to close at the end of the second quarter of 2017.
- Actual average commodity price projections:
- 2017 WTI oil $55.00, Henry Hub natural gas $3.30, NGLs $27.50
- Actual hedges: Based on the production guidance mid-point, the Company has hedges in place for approximately 65% of oil production, 85% of natural gas production and 75% of NGL production (hedges are ethane, propane, butanes and gasoline)
- Total capital spend: $875 million.
- Production: 40-43 MMBoe, with oil approximately 29% of quarterly commodity mix through the year as new production begins to offset asset sales. Due to the timing of asset sales and development activity, total Company production will decline through the third quarter of 2017.
- LOE: ~$4.00 per Boe, with 1H17 exceeding the average and 2H17 below the average as high cost asset sales are completed. Includes ad valorem taxes.
- Transportation: $5.50-$5.75 per Boe, with higher costs in the first quarter of 2017 as high cost asset sales are completed.
- Production taxes: ~$1.25 per Boe or 4.0-4.5%.
- G&A: $120-130 million, including approximately $18-23 million of non-cash compensation.
- Capitalized overhead/Exploration: $65-70 million, before dry hole expense, all of which is included in capital expenditure guidance.
- DD&A: $13.00-15.00 per Boe.
- Production of approximately 11.0-11.4 MMBoe. Lower sequential production from the fourth quarter of 2016 is primarily the result of: assets sold that contributed to fourth quarter production, including Raven/Bear Den on December 1, 2016; the expected sale of the third-party operated Eagle Ford assets at the end of February 2017; normal declines in the Eagle Ford and Divide County, which will not be offset by new wells due to minimal operated and third-party operated completion activity; all of which will be partially offset by increased production from the Midland Basin.
- Completion of approximately 17 wells during the quarter. The total number of completions each quarter is affected by pad drilling.
- Total capital spend of approximately $200 million, plus $60 million for the acquisition of additional Permian Basin acreage announced in the fourth quarter of 2016 and closed in January 2017.
- March 7, 2017 - Raymond James 38th Annual Institutional Investors Conference. Executive Vice President and Chief Financial Officer Wade Pursell will present at 1:40 p.m. Eastern time. This event will be webcast. The presentation for this event will be posted March 6, 2017.
- March 27, 2017 – Scotia Howard Weil Energy Conference. President and Chief Executive Officer Jay Ottoson will present at 2:20 p.m. Central time. This event is not webcast. The presentation for this event will be posted March 26, 2017.
- The Tackleberry 43-42 A 1WA, a 7,860' lateral Wolfcamp A completion, produced a peak average 30-day initial production rate of 2,262 Boe/d, which is among the highest 30-day rates per lateral foot recorded in the Midland Basin
- All eight wells are exceeding pre-completion estimates for productivity, including three Wolfcamp A wells along the southeastern flank of the Company's RockStar acreage position
- 55.3 MMBoe full year 2016 production, in-line with expectations, including fourth quarter 2016 production of 13.4 MMBoe. Production for the fourth quarter and full year was 30% oil.
- Midland Basin production increased nearly four-times, exit rate 2015 to exit rate 2016, as the Company focuses its development spending in this core area.
- The fourth quarter average realized price per Boe (pre-hedge) of $25.86 was up 11% sequentially and up 29% year-over-year.
SM Energy Announces Participation In Upcoming Investor Conference
Source: PR Newswire
DENVER, Dec. 10, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) will be participating in the following upcoming investor event. An investor presentation will be posted to the Company's website at ir.sm-energy.com before market open on December 15, 2020.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
12/10/202011/16/2020 - SM Energy Announces Reaffirmation of Borrowing Base and Agreement for South Texas Well Completions
SM Energy Announces Reaffirmation of Borrowing Base and Agreement for South Texas Well Completions
Source: PR Newswire
DENVER, Nov. 16, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) provides a fourth quarter 2020 update. The Company and its lenders under the senior secured revolving credit facility have completed the regularly scheduled fall borrowing base redetermination, and the Company has entered into an agreement with a third party to partly fund South Texas well completions.
The borrowing base and lender commitments under the Company's senior secured revolving credit facility were reaffirmed at $1.1 billion, which provided liquidity of approximately $880 million as of September 30, 2020. In addition, the Company's second-lien debt capacity of approximately $380 million was extended until the spring 2021 borrowing base redetermination.
The Company also announced that it has entered into an agreement with a third party to fund the majority of completion costs associated with six wells in South Texas. As a result, fourth quarter capital expenditure guidance is reduced by approximately $15 million. The well completion program associated with the agreement includes co-development of three lower Eagle Ford and three Austin Chalk wells currently in the Company's DUC inventory. The Company will operate the wells and retain a 50% working interest.
As previously announced, an updated investor presentation will be posted to the Company's website before market open on November 18, 2020.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address events, or developments that we expect, believe, or anticipate will or may occur in the future are forward-looking statements. Statements concerning future expectations or projections, or similar expressions, are intended to identify forward-looking statements. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its perception of current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance and actual events may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
11/16/2020SM Energy Company Announces Retirement Date Of Chief Executive Officer Javan D. Ottoson And Appointment Of Herbert S. Vogel To The Board Of Directors
Source: PR Newswire
DENVER, Oct. 30, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today confirms that Chief Executive Officer Javan (Jay) D. Ottoson will retire at the close of business on November 2, 2020 and, as previously announced, President and Chief Operating Officer Herbert S. Vogel, will transition to the role of President and Chief Executive Officer.
On October 26, 2020, the Company's Board of Directors approved an increase in the number of authorized directors from nine to ten members and appointed Mr. Vogel to the new seat, effective as of his appointment to Chief Executive Officer. As previously announced, Mr. Ottoson will remain a member of the Board of Directors until the next annual meeting in May 2021.
Chairman of the Board of Directors William Sullivan comments: "On behalf of the Board of Directors, I would like to again thank Jay for his leadership and commitment to SM Energy. During his tenure, he successfully repositioned the Company's portfolio, leading a transformation at a critical time in our industry. As the reins are handed to Herb, we expect a seamless transition. We are confident that Herb's energy, experience, proven leadership over SM Energy's operations and high level of integrity put our Company in good hands for a profitable and sustainable future."
Mr. Vogel comments: "It is an honor and a privilege to succeed Jay in leading the SM Energy team. We have worked together for many years, and share values and priorities that will be carried forward. We have great people and top tier assets, and I look forward to leading SM Energy towards greater value creation for all of our stakeholders. I know I speak for everyone at SM when I say Jay will be missed, and we wish him the best for a long, healthy and enjoyable retirement."
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address events, or developments that we expect, believe, or anticipate will or may occur in the future are forward-looking statements. The word "will" and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its perception of current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance and actual events may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
About the Company
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
10/30/2020SM Energy Reports Third Quarter 2020 Results, Generating Cash Flow And Reducing Debt
Source: PR Newswire
DENVER, Oct. 29, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced operating and financial results for the third quarter 2020 and provided updates to its 2020 guidance.
During the third quarter of 2020, the Company continued its focus on the following priorities:
Chief Executive Officer Jay Ottoson comments: "Exceptional third quarter results are due to continued capital discipline, aggressive cost management, better than expected well performance and adherence to strict financial objectives to generate free cash flow and reduce absolute debt. The entire SM Energy team is working diligently toward our common 2020 goals and objectives and we congratulate our employees on our success year-to-date, especially during a particularly challenging time.
"As we look ahead, we intend to stay-the-course and continue to prioritize generating free cash flow and reducing leverage."
THIRD QUARTER 2020 RESULTS
PRODUCTION, REALIZED PRICES AND CERTAIN OPERATING COSTS
PRODUCTION: | |||
Midland Basin | South Texas | Total | |
Oil (MBbl / MBbl/d) | 5,023 / 54.6 | 487 / 5.3 | 5,510 / 59.9 |
Natural Gas (MMcf / MMcf/d) | 12,275 / 133.4 | 13,785 / 149.8 | 26,060 / 283.3 |
NGLs (MBbl / MBbl/d) | nm / - | 1,755 / 19.1 | 1,764 / 19.2 |
Total (MBoe / MBoe/d) | 7,077 / 76.9 | 4,539 / 49.3 | 11,617 / 126.3 |
Note: Totals may not calculate due to rounding. | |||
REALIZED PRICES: | |||
Midland Basin | South Texas | Total (Pre/Post-hedge) | |
Oil ($/Bbl) | $38.73 | $26.90 | $37.69 / $50.20 |
Natural Gas ($/Mcf) | $1.90 | $1.90 | $1.90 / $1.94 |
NGLs ($/Bbl) | nm | $14.07 | $14.07/ $14.35 |
Per Boe | $30.80 | $14.11 | $24.28 / $30.33 |
Note: Totals may not calculate due to rounding | |||
For additional operating metrics and regional detail, please see the Financial Highlights section below and the accompanying 3Q20 slide deck.
NET LOSS, LOSS PER SHARE AND NET CASH PROVIDED BY OPERATING ACTIVITIES
Third quarter 2020 net loss was ($98.3) million, or ($0.86) per diluted common share, which compared with net income of $42.2 million, or $0.37 per diluted common share, in the same period in 2019. The current period included a $63.9 million net derivative loss, while the prior year period included a $100.9 million net derivative gain. For the first nine months of 2020, net loss was ($599.4) million, or ($5.28) per diluted common share, which compares with a loss of ($0.76) per diluted common share in the same period in 2019.
Third quarter 2020 net cash provided by operating activities of $201.6 million before net change in working capital of $16.8 million totaled $184.8 million, which was down ($28.1) million, or 13%, from $212.8 million in the comparable prior year period. The decline in cash flow before the net change in working capital was primarily due to the 9% decline in price per Boe after the effect of realized hedge gains and the 6% decline in production, partially offset by lower costs per unit. For the first nine months of 2020, net cash provided by operating activities of $534.1 million before net change in working capital of $40.4 million totaled $574.5 million, up 1% from the same period in 2019.
ADJUSTED EBITDAX, ADJUSTED NET INCOME AND NET DEBT-TO-ADJUSTED EBITDAX
The following paragraphs discuss non-GAAP measures including Adjusted EBITDAX, adjusted net loss, adjusted net loss per diluted share and net debt-to-Adjusted EBITDAX. Please reference the definitions and reconciliations of these measures to the most directly comparable GAAP financial measures at the end of this release.
Third quarter 2020 Adjusted EBITDAX was $232.5 million, down $25.3 million, or 10%, from $257.8 million in the same period in 2019. The decrease in Adjusted EBITDAX was due to lower realized prices and production, partially offset by lower costs per unit. For the first nine months of 2020, Adjusted EBITDAX was $720.0 million, up 2% from $707.2 million for the first nine months of 2019.
Third quarter 2020 adjusted net loss was ($5.5) million, or ($0.05) per diluted common share, which compares with adjusted net loss of ($12.1) million, or ($0.11) per diluted common share, for the same period in 2019. For the first nine months of 2020, adjusted net loss was ($28.5) million, or ($0.25) per diluted common share, compared with an adjusted net loss of ($48.5) million, or ($0.43) per diluted common share, in the first nine months of 2019.
At September 30, 2020, net debt-to-Adjusted EBITDAX was 2.4 times.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL EXPENDITURES
On September 30, 2020, the outstanding principal amount of the Company's long-term debt was $2.42 billion, down from $2.77 billion at year-end 2019. Long-term debt was comprised of $1.73 billion in unsecured senior notes, $446.7 million in secured senior notes, $65.5 million in secured senior convertible notes, plus $178.0 million drawn on the Company's senior secured revolving credit facility.
On September 30, 2020, the Company's borrowing base and commitments under its senior secured revolving credit facility were $1.1 billion. The Company's available liquidity was $880 million, which includes $178.0 million drawn and a $42 million letter of credit. The cash balance was approximately zero. The Company expects to complete its fall redetermination process in November 2020.
Capital expenditures before capital accruals for the third quarter of 2020 were $121.1 million. During the third quarter 2020, the Company drilled 19 net wells and added 24 net flowing completions. For the nine months of 2020 the Company drilled 72 net wells and added 54 net flowing completions.
COMMODITY DERIVATIVES
Commodity hedge positions as of September 30, 2020:
A detailed schedule of these and other hedge positions are provided in the 3Q20 accompanying slide deck.
GUIDANCE FULL YEAR 2020:
SCHEDULE FOR THIRD QUARTER REPORTING
October 29, 2020 - In conjunction with this release, the Company posts to its website a pre-recorded webcast discussion, a written transcript of the webcast, and an associated IR presentation. Please visit ir.sm-energy.com.
October 30, 2020 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the third quarter 2020 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone. In order to join the live conference call, please register at the link below for dial-in information.
The call replay will be available approximately one hour after the call and until November 6, 2020.
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "assumes," "anticipate," "estimate," "expect," "forecast," "generate," "guidance," "implied," "maintain," "plan," "project," "objectives," "outlook," "sustainable," "target," "will" and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this release include, among other things, certain guidance for the full year and fourth quarter 2020, including capital expenditures, production, operating costs and DD&A; and, the Company's 2020 goals, which include generating free cash flow and reducing leverage. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Future results may be impacted by the risks discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission, specifically the third quarter 2020 Form 10-Q. The forward-looking statements contained herein speak as of the date of this release. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||
Production Data | ||||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||
2020 | 2019 | Percent | 2020 | 2019 | Percent | |||||||||||||||||
Realized sales price (before the effects of derivative settlements): | ||||||||||||||||||||||
Oil (per Bbl) | $ | 37.69 | $ | 53.99 | (30) | % | $ | 35.92 | $ | 53.31 | (33) | % | ||||||||||
Gas (per Mcf) | $ | 1.90 | $ | 2.17 | (12) | % | $ | 1.59 | $ | 2.38 | (33) | % | ||||||||||
NGLs (per Bbl) | $ | 14.07 | $ | 15.73 | (11) | % | $ | 12.81 | $ | 17.09 | (25) | % | ||||||||||
Equivalent (per Boe) | $ | 24.28 | $ | 31.39 | (23) | % | $ | 22.92 | $ | 32.00 | (28) | % | ||||||||||
Realized sales price (including the effects of derivative settlements): | ||||||||||||||||||||||
Oil (per Bbl) | $ | 50.20 | $ | 53.57 | (6) | % | $ | 51.08 | $ | 52.39 | (3) | % | ||||||||||
Gas (per Mcf) | $ | 1.94 | $ | 2.59 | (25) | % | $ | 1.80 | $ | 2.55 | (29) | % | ||||||||||
NGLs (per Bbl) | $ | 14.35 | $ | 22.87 | (37) | % | $ | 14.58 | $ | 21.01 | (31) | % | ||||||||||
Equivalent (per Boe) | $ | 30.33 | $ | 33.38 | (9) | % | $ | 31.06 | $ | 32.68 | (5) | % | ||||||||||
Net production volumes: (1) | ||||||||||||||||||||||
Oil (MMBbl) | 5.5 | 5.4 | 2 | % | 17.2 | 15.7 | 10 | % | ||||||||||||||
Gas (Bcf) | 26.1 | 29.5 | (12) | % | 78.6 | 81.7 | (4) | % | ||||||||||||||
NGLs (MMBbl) | 1.8 | 2.1 | (15) | % | 4.8 | 6.2 | (22) | % | ||||||||||||||
MMBoe | 11.6 | 12.4 | (6) | % | 35.2 | 35.5 | (1) | % | ||||||||||||||
Average net daily production: (1) | ||||||||||||||||||||||
Oil (MBbls/d) | 59.9 | 59.0 | 2 | % | 62.9 | 57.5 | 9 | % | ||||||||||||||
Gas (MMcf/d) | 283.3 | 320.6 | (12) | % | 286.7 | 299.2 | (4) | % | ||||||||||||||
NGLs (MBbls/d) | 19.2 | 22.5 | (15) | % | 17.7 | 22.8 | (22) | % | ||||||||||||||
MBoe/d | 126.3 | 134.9 | (6) | % | 128.3 | 130.1 | (1) | % | ||||||||||||||
Per Boe data: | ||||||||||||||||||||||
Realized price (before the effects of derivative settlements) | $ | 24.28 | $ | 31.39 | (23) | % | $ | 22.92 | $ | 32.00 | (28) | % | ||||||||||
Lease operating expense | 3.65 | 4.73 | (23) | % | 3.93 | 4.67 | (16) | % | ||||||||||||||
Transportation costs | 3.11 | 4.00 | (22) | % | 3.11 | 4.02 | (23) | % | ||||||||||||||
Production taxes | 1.04 | 1.29 | (19) | % | 0.94 | 1.30 | (28) | % | ||||||||||||||
Ad valorem tax expense | 0.40 | 0.39 | 3 | % | 0.41 | 0.52 | (21) | % | ||||||||||||||
General and administrative (2) | 2.10 | 2.63 | (20) | % | 2.25 | 2.69 | (16) | % | ||||||||||||||
Operating margin (before the effects of derivative settlements) | 13.98 | 18.35 | (24) | % | 12.28 | 18.80 | (35) | % | ||||||||||||||
Derivative settlement gain | 6.05 | 1.99 | 204 | % | 8.14 | 0.67 | 1,115 | % | ||||||||||||||
Operating margin (including the effects of derivative settlements) | $ | 20.03 | $ | 20.34 | (2) | % | $ | 20.42 | $ | 19.47 | 5 | % | ||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 15.64 | $ | 17.02 | (8) | % | $ | 16.95 | $ | 16.76 | 1 | % | ||||||||||
(1) Amounts and percentage changes may not calculate due to rounding. | ||||||||||||||||||||||
(2) Includes non-cash stock-based compensation expense per Boe of $0.30 and $0.44 for the three months ended September 30, 2020, and 2019, respectively, and $0.36 and $0.42 for the nine months ended September 30, 2020, and 2019, respectively. |
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
September 30, 2020 | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands, except share data) | September 30, | December 31, | |||||
ASSETS | 2020 | 2019 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 10 | $ | 10 | |||
Accounts receivable | 136,613 | 184,732 | |||||
Derivative assets | 128,046 | 55,184 | |||||
Prepaid expenses and other | 10,221 | 12,708 | |||||
Total current assets | 274,890 | 252,634 | |||||
Property and equipment (successful efforts method): | |||||||
Proved oil and gas properties | 8,307,165 | 8,934,020 | |||||
Accumulated depletion, depreciation, and amortization | (4,713,442) | (4,177,876) | |||||
Unproved oil and gas properties | 907,864 | 1,005,887 | |||||
Wells in progress | 226,452 | 118,769 | |||||
Other property and equipment, net of accumulated depreciation of $66,025 and $64,032, respectively | 37,062 | 72,848 | |||||
Total property and equipment, net | 4,765,101 | 5,953,648 | |||||
Noncurrent assets: | |||||||
Derivative assets | 31,509 | 20,624 | |||||
Other noncurrent assets | 50,785 | 65,326 | |||||
Total noncurrent assets | 82,294 | 85,950 | |||||
Total assets | $ | 5,122,285 | $ | 6,292,232 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 287,777 | $ | 402,008 | |||
Derivative liabilities | 76,969 | 50,846 | |||||
Other current liabilities | 12,532 | 19,189 | |||||
Total current liabilities | 377,278 | 472,043 | |||||
Noncurrent liabilities: | |||||||
Revolving credit facility | 178,000 | 122,500 | |||||
Senior Notes, net | 2,175,038 | 2,610,298 | |||||
Asset retirement obligations | 87,014 | 84,134 | |||||
Deferred income taxes | 34,582 | 189,386 | |||||
Derivative liabilities | 33,068 | 3,444 | |||||
Other noncurrent liabilities | 52,197 | 61,433 | |||||
Total noncurrent liabilities | 2,559,899 | 3,071,195 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 114,572,800 and 112,987,952 shares, respectively | 1,146 | 1,130 | |||||
Additional paid-in capital | 1,827,836 | 1,791,596 | |||||
Retained earnings | 365,872 | 967,587 | |||||
Accumulated other comprehensive loss | (9,746) | (11,319) | |||||
Total stockholders' equity | 2,185,108 | 2,748,994 | |||||
Total liabilities and stockholders' equity | $ | 5,122,285 | $ | 6,292,232 | |||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2020 | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share data) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Operating revenues and other income: | |||||||||||||||
Oil, gas, and NGL production revenue | $ | 282,012 | $ | 389,419 | $ | 806,035 | $ | 1,136,749 | |||||||
Net gain on divestiture activity | — | — | 91 | 323 | |||||||||||
Other operating revenues | (997) | 898 | 255 | 1,347 | |||||||||||
Total operating revenues and other income | 281,015 | 390,317 | 806,381 | 1,138,419 | |||||||||||
Operating expenses: | |||||||||||||||
Oil, gas, and NGL production expense | 95,257 | 129,042 | 295,254 | 373,397 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 181,708 | 211,125 | 596,053 | 595,201 | |||||||||||
Exploration (1) | 8,547 | 11,626 | 29,683 | 33,851 | |||||||||||
Impairment | 8,750 | 6,337 | 1,007,263 | 25,092 | |||||||||||
General and administrative (1) | 24,452 | 32,578 | 79,126 | 95,584 | |||||||||||
Net derivative (gain) loss (2) | 63,871 | (100,889) | (314,269) | (3,463) | |||||||||||
Other operating expense, net | 1,562 | 1,021 | 10,174 | 422 | |||||||||||
Total operating expenses | 384,147 | 290,840 | 1,703,284 | 1,120,084 | |||||||||||
Income (loss) from operations | (103,132) | 99,477 | (896,903) | 18,335 | |||||||||||
Interest expense | (41,519) | (40,584) | (123,385) | (118,191) | |||||||||||
Gain on extinguishment of debt | 25,070 | — | 264,546 | — | |||||||||||
Other non-operating expense, net | (1,680) | (548) | (2,359) | (1,427) | |||||||||||
Income (loss) before income taxes | (121,261) | 58,345 | (758,101) | (101,283) | |||||||||||
Income tax (expense) benefit | 22,969 | (16,111) | 158,662 | 16,337 | |||||||||||
Net income (loss) | $ | (98,292) | $ | 42,234 | $ | (599,439) | $ | (84,946) | |||||||
Basic weighted-average common shares outstanding | 114,371 | 112,804 | 113,462 | 112,441 | |||||||||||
Diluted weighted-average common shares outstanding | 114,371 | 113,334 | 113,462 | 112,441 | |||||||||||
Basic net income (loss) per common share | $ | (0.86) | $ | 0.37 | $ | (5.28) | $ | (0.76) | |||||||
Diluted net income (loss) per common share | $ | (0.86) | $ | 0.37 | $ | (5.28) | $ | (0.76) | |||||||
Dividends per common share | $ | 0.01 | $ | 0.05 | $ | 0.02 | $ | 0.10 | |||||||
(1) Non-cash stock-based compensation included in: | |||||||||||||||
Exploration expense | $ | 665 | $ | 1,285 | $ | 2,713 | $ | 3,781 | |||||||
General and administrative expense | 3,499 | 5,481 | 12,724 | 14,977 | |||||||||||
Total non-cash stock-based compensation | $ | 4,164 | $ | 6,766 | $ | 15,437 | $ | 18,758 | |||||||
(2) The net derivative (gain) loss line item consists of the following: | |||||||||||||||
Settlement gain | $ | (70,305) | $ | (24,722) | $ | (286,270) | $ | (23,843) | |||||||
(Gain) loss on fair value changes | 134,176 | (76,167) | (27,999) | 20,380 | |||||||||||
Total net derivative (gain) loss | $ | 63,871 | $ | (100,889) | $ | (314,269) | $ | (3,463) | |||||||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | ||||||||||||||||||||||
Total | ||||||||||||||||||||||
Common Stock | Additional | Retained Earnings | Accumulated | |||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2019 | 112,987,952 | $ | 1,130 | $ | 1,791,596 | $ | 967,587 | $ | (11,319) | $ | 2,748,994 | |||||||||||
Net loss | — | — | — | (411,895) | — | (411,895) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 190 | 190 | ||||||||||||||||
Cash dividends declared, $0.01 per share | — | — | — | (1,130) | — | (1,130) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 730 | — | (3) | — | — | (3) | ||||||||||||||||
Stock-based compensation expense | — | — | 5,561 | — | — | 5,561 | ||||||||||||||||
Balances, March 31, 2020 | 112,988,682 | $ | 1,130 | $ | 1,797,154 | $ | 554,562 | $ | (11,129) | $ | 2,341,717 | |||||||||||
Net loss | — | — | — | (89,252) | — | (89,252) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 188 | 188 | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 297,013 | 3 | 944 | — | — | 947 | ||||||||||||||||
Stock-based compensation expense | 267,576 | 3 | 5,709 | — | — | 5,712 | ||||||||||||||||
Issuance of warrants | — | — | 21,520 | — | — | 21,520 | ||||||||||||||||
Balances, June 30, 2020 | 113,553,271 | $ | 1,136 | $ | 1,825,327 | $ | 465,310 | $ | (10,941) | $ | 2,280,832 | |||||||||||
Net loss | — | — | — | (98,292) | — | (98,292) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 1,195 | 1,195 | ||||||||||||||||
Cash dividends declared, $0.01 per share | — | — | — | (1,146) | — | (1,146) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs and settlement of PSUs, net of shares used for tax withholdings | 1,019,529 | 10 | (1,567) | — | — | (1,557) | ||||||||||||||||
Stock-based compensation expense | — | — | 4,164 | — | — | 4,164 | ||||||||||||||||
Other | — | — | (88) | — | — | (88) | ||||||||||||||||
Balances, September 30, 2020 | 114,572,800 | $ | 1,146 | $ | 1,827,836 | $ | 365,872 | $ | (9,746) | $ | 2,185,108 | |||||||||||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity (Continued) | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | ||||||||||||||||||||||
Additional | Accumulated | Total | ||||||||||||||||||||
Common Stock | Retained | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2018 | 112,241,966 | $ | 1,122 | $ | 1,765,738 | $ | 1,165,842 | $ | (12,380) | $ | 2,920,322 | |||||||||||
Net loss | — | — | — | (177,568) | — | (177,568) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 263 | 263 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,612) | — | (5,612) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 2,579 | — | (18) | — | — | (18) | ||||||||||||||||
Stock-based compensation expense | — | — | 5,838 | — | — | 5,838 | ||||||||||||||||
Balances, March 31, 2019 | 112,244,545 | $ | 1,122 | $ | 1,771,558 | $ | 982,662 | $ | (12,117) | $ | 2,743,225 | |||||||||||
Net income | — | — | — | 50,388 | — | 50,388 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 119 | 119 | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 184,079 | 2 | 1,957 | — | — | 1,959 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 290 | — | (2) | — | — | (2) | ||||||||||||||||
Stock-based compensation expense | 96,719 | 1 | 6,153 | — | — | 6,154 | ||||||||||||||||
Other | — | — | (1) | 1 | — | — | ||||||||||||||||
Balances, June 30, 2019 | 112,525,633 | $ | 1,125 | $ | 1,779,665 | $ | 1,033,051 | $ | (11,998) | $ | 2,801,843 | |||||||||||
Net income | — | — | — | 42,234 | — | 42,234 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 190 | 190 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,643) | — | (5,643) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 331,530 | 4 | (1,644) | — | — | (1,640) | ||||||||||||||||
Stock-based compensation expense | — | — | 6,766 | — | — | 6,766 | ||||||||||||||||
Balances, September 30, 2019 | 112,857,163 | $ | 1,129 | $ | 1,784,787 | $ | 1,069,642 | $ | (11,808) | $ | 2,843,750 | |||||||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2020 | |||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(in thousands) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | (98,292) | $ | 42,234 | $ | (599,439) | $ | (84,946) | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||
Net gain on divestiture activity | — | — | (91) | (323) | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 181,708 | 211,125 | 596,053 | 595,201 | |||||||||||
Impairment | 8,750 | 6,337 | 1,007,263 | 25,092 | |||||||||||
Stock-based compensation expense | 4,164 | 6,766 | 15,437 | 18,758 | |||||||||||
Net derivative (gain) loss | 63,871 | (100,889) | (314,269) | (3,463) | |||||||||||
Derivative settlement gain | 70,305 | 24,722 | 286,270 | 23,843 | |||||||||||
Amortization of debt discount and deferred financing costs | 4,506 | 3,921 | 13,084 | 11,554 | |||||||||||
Gain on extinguishment of debt | (25,070) | — | (264,546) | — | |||||||||||
Deferred income taxes | (22,796) | 19,617 | (159,064) | (13,620) | |||||||||||
Other, net | (2,376) | (1,004) | (6,203) | (2,291) | |||||||||||
Net change in working capital | 16,843 | (9,673) | (40,411) | 11,781 | |||||||||||
Net cash provided by operating activities | 201,613 | 203,156 | 534,084 | 581,586 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Net proceeds from the sale of oil and gas properties (1) | — | — | 92 | 12,520 | |||||||||||
Capital expenditures | (109,568) | (212,515) | (419,777) | (788,642) | |||||||||||
Acquisition of proved and unproved oil and gas properties | (7,075) | (2,900) | (7,075) | (2,581) | |||||||||||
Net cash used in investing activities | (116,643) | (215,415) | (426,760) | (778,703) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from revolving credit facility | 324,500 | 428,000 | 1,165,500 | 1,124,500 | |||||||||||
Repayment of revolving credit facility | (339,500) | (417,000) | (1,110,000) | (995,500) | |||||||||||
Debt issuance costs related to 10.0% Senior Secured Notes due 2025 | (2,395) | — | (12,886) | — | |||||||||||
Cash paid to repurchase Senior Notes | (65,944) | — | (94,262) | — | |||||||||||
Repayment of 1.50% Senior Convertible Notes due 2021 | — | — | (53,508) | — | |||||||||||
Net proceeds from sale of common stock | — | — | 947 | 1,959 | |||||||||||
Dividends paid | — | — | (1,130) | (5,612) | |||||||||||
Other, net | (1,631) | (1,640) | (1,985) | (2,684) | |||||||||||
Net cash provided by (used in) financing activities | (84,970) | 9,360 | (107,324) | 122,663 | |||||||||||
Net change in cash, cash equivalents, and restricted cash | — | (2,899) | — | (74,454) | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 10 | 6,410 | 10 | 77,965 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 10 | $ | 3,511 | $ | 10 | $ | 3,511 | |||||||
Less: Restricted cash (1) | — | (3,501) | — | (3,501) | |||||||||||
Cash and cash equivalents | $ | 10 | $ | 10 | $ | 10 | $ | 10 | |||||||
(1) As of September 30, 2019, a portion of net proceeds from the sale of oil and gas properties was restricted for future property acquisitions. |
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2020 | |||||||||||||||
Condensed Consolidated Statements of Cash Flows (Continued) | |||||||||||||||
(in thousands) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Supplemental schedule of additional cash flow information and non-cash activities: | |||||||||||||||
Operating activities: | |||||||||||||||
Cash paid for interest, net of capitalized interest | $ | (39,861) | $ | (45,476) | $ | (122,174) | $ | (113,122) | |||||||
Investing activities: | |||||||||||||||
Increase (decrease) in capital expenditure accruals and other | $ | 11,491 | $ | 44,975 | $ | (17,405) | $ | 34,878 | |||||||
DEFINITIONS OF NON-GAAP MEASURES AS CALCULATED BY THE COMPANY
The following non-GAAP measures are presented in addition to financial statements as the Company believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and compare investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. A non-GAAP measure should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies.
Adjusted EBITDAX: Adjusted EBITDAX is calculated as net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is also important as it is considered among financial covenants under the Company's Credit Agreement, a material source of liquidity for the Company. Please reference the Company's 2019 Form 10-K and third quarter 2020 Form 10-Q for discussion of the Credit Agreement and its covenants.
Adjusted net loss: Adjusted net loss excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, gains and losses on extinguishment of debt, and accruals for non-recurring matters.
Free cash flow: Free cash flow is calculated as net cash provided by operating activities before net change in working capital less capital expenditures before increase (decrease) in capital expenditure accruals and other.
Free cash flow yield to market capitalization: Free cash flow yield to market capitalization is calculated as Free cash flow (defined above) divided by market capitalization.
Net Debt: The total principal amount of outstanding senior secured notes and senior unsecured notes plus amounts drawn on the revolving credit facility (also referred to as total funded debt) less cash and cash equivalents.
Net debt-to-Adjusted EBITDAX: Net debt-to-Adjusted EBITDAX is calculated as Net Debt (defined above) divided by Adjusted EBITDAX (defined above). A variation of this calculation is a financial covenant under the Company's Credit Agreement for its revolving credit facility beginning in the fourth quarter of 2018.
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2020 | |||||||||||||||
Adjusted EBITDAX Reconciliation (1) | |||||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDAX (non-GAAP) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) (GAAP) | $ | (98,292) | $ | 42,234 | $ | (599,439) | $ | (84,946) | |||||||
Interest expense | 41,519 | 40,584 | 123,385 | 118,191 | |||||||||||
Income tax expense (benefit) | (22,969) | 16,111 | (158,662) | (16,337) | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 181,708 | 211,125 | 596,053 | 595,201 | |||||||||||
Exploration (2) | 7,882 | 10,341 | 26,970 | 30,070 | |||||||||||
Impairment | 8,750 | 6,337 | 1,007,263 | 25,092 | |||||||||||
Stock-based compensation expense | 4,164 | 6,766 | 15,437 | 18,758 | |||||||||||
Net derivative (gain) loss | 63,871 | (100,889) | (314,269) | (3,463) | |||||||||||
Derivative settlement gain | 70,305 | 24,722 | 286,270 | 23,843 | |||||||||||
Net gain on divestiture activity | — | — | (91) | (323) | |||||||||||
Gain on extinguishment of debt | (25,070) | — | (264,546) | — | |||||||||||
Other, net | 615 | 434 | 1,651 | 1,129 | |||||||||||
Adjusted EBITDAX (non-GAAP) | 232,483 | 257,765 | 720,022 | 707,215 | |||||||||||
Interest expense | (41,519) | (40,584) | (123,385) | (118,191) | |||||||||||
Income tax (expense) benefit | 22,969 | (16,111) | 158,662 | 16,337 | |||||||||||
Exploration (2) | (7,882) | (10,341) | (26,970) | (30,070) | |||||||||||
Amortization of debt discount and deferred financing costs | 4,506 | 3,921 | 13,084 | 11,554 | |||||||||||
Deferred income taxes | (22,796) | 19,617 | (159,064) | (13,620) | |||||||||||
Other, net | (2,991) | (1,438) | (7,854) | (3,420) | |||||||||||
Net change in working capital | 16,843 | (9,673) | (40,411) | 11,781 | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 201,613 | $ | 203,156 | $ | 534,084 | $ | 581,586 | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) Stock-based compensation expense is a component of the exploration expense and general and administrative expense line items on the accompanying condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the accompanying unaudited condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||||||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2020 | |||||||||||||||
Adjusted Net Loss Reconciliation (1) | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) to adjusted net loss (non-GAAP): | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) (GAAP) | $ | (98,292) | $ | 42,234 | $ | (599,439) | $ | (84,946) | |||||||
Net derivative (gain) loss | 63,871 | (100,889) | (314,269) | (3,463) | |||||||||||
Derivative settlement gain | 70,305 | 24,722 | 286,270 | 23,843 | |||||||||||
Net gain on divestiture activity | — | — | (91) | (323) | |||||||||||
Impairment | 8,750 | 6,337 | 1,007,263 | 25,092 | |||||||||||
Gain on extinguishment of debt | (25,070) | — | (264,546) | — | |||||||||||
Other, net (2) | 615 | 435 | 1,767 | 1,347 | |||||||||||
Tax effect of adjustments (3) | (25,708) | 15,058 | (155,457) | (10,090) | |||||||||||
Valuation allowance on deferred tax assets | — | — | 10,017 | — | |||||||||||
Adjusted net loss (non-GAAP) | $ | (5,529) | $ | (12,103) | $ | (28,485) | $ | (48,540) | |||||||
Diluted net income (loss) per common share (GAAP) | $ | (0.86) | $ | 0.37 | $ | (5.28) | $ | (0.76) | |||||||
Net derivative (gain) loss | 0.56 | (0.89) | (2.77) | (0.03) | |||||||||||
Derivative settlement gain | 0.61 | 0.22 | 2.52 | 0.21 | |||||||||||
Net gain on divestiture activity | — | — | — | — | |||||||||||
Impairment | 0.08 | 0.06 | 8.88 | 0.22 | |||||||||||
Gain on extinguishment of debt | (0.22) | — | (2.33) | — | |||||||||||
Other, net (2) | 0.01 | — | 0.02 | 0.01 | |||||||||||
Tax effect of adjustments (3) | (0.23) | 0.13 | (1.38) | (0.09) | |||||||||||
Valuation allowance on deferred tax assets | — | — | 0.09 | — | |||||||||||
Adjusted net loss per diluted common share (non-GAAP) | $ | (0.05) | $ | (0.11) | $ | (0.25) | $ | (0.43) | |||||||
Basic weighted-average common shares outstanding | 114,371 | 112,804 | 113,462 | 112,441 | |||||||||||
Diluted weighted-average common shares outstanding | 114,371 | 113,334 | 113,462 | 112,441 | |||||||||||
Note: Amounts may not calculate due to rounding. | |||||||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) For the three months and nine months ended September 30, 2020, and September 30, 2019, the adjustments related to bad debt expense and impairments of materials inventory and other property. | |||||||||||||||
(3) The tax effect of adjustments for each of the three and nine months ended September 30, 2020, and 2019, was calculated using a tax rate of 21.7%. This rate approximates the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||||||||||
Reconciliation of Net Debt (1) | |||
(in thousands) | |||
As of September 30, 2020 | |||
Senior Secured Notes (2) | $ | 512,160 | |
Senior Unsecured Notes (2) | 1,732,658 | ||
Revolving credit facility (2) | 178,000 | ||
Total funded debt | 2,422,818 | ||
Less: Cash and cash equivalents | 10 | ||
Net Debt | $ | 2,422,808 | |
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||
(2) Amounts are from Note 5 - Long-term Debt in Part I, Item I of the Company's Form 10-Q for the quarter ended September 30, 2020. | |||
Free Cash Flow (1) | |||||||||||||||
(in thousands) | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net cash provided by operating activities (GAAP) | $ | 201,613 | $ | 203,156 | $ | 534,084 | $ | 581,586 | |||||||
Net change in working capital | 16,843 | (9,673) | (40,411) | 11,781 | |||||||||||
Cash flow from operations before net change in working capital | $ | 184,770 | $ | 212,829 | $ | 574,495 | $ | 569,805 | |||||||
Capital expenditures (GAAP) | 109,568 | 212,515 | 419,777 | 788,642 | |||||||||||
Increase (decrease) in capital expenditure accruals and other | 11,491 | 44,975 | (17,405) | 34,878 | |||||||||||
Capital expenditures before accruals and other | $ | 121,059 | $ | 257,490 | $ | 402,372 | $ | 823,520 | |||||||
Free cash flow | $ | 63,711 | $ | (44,661) | $ | 172,123 | $ | (253,715) | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
Free Cash Flow (1) | ||||
(in thousands) | ||||
For the Twelve Months Ended | ||||
2020 | ||||
Net cash provided by operating activities (GAAP) | $ | 776,065 | ||
Net change in working capital | (35,340) | |||
Cash flow from operations before net change in working capital | $ | 811,405 | ||
Capital expenditures (GAAP) | 654,904 | |||
Increase (decrease) in capital expenditure accruals and other | (76,572) | |||
Capital expenditures before accruals and other | $ | 578,332 | ||
Free cash flow | $ | 233,073 | ||
Market capitalization at September 30, 2020 | $ | 182,171 | ||
Free cash flow yield | 128 | % | ||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | ||||
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-third-quarter-2020-results-generating-cash-flow-and-reducing-debt-301163359.html
SOURCE SM Energy Company
Article Date
10/29/2020SM Energy Schedules Third Quarter 2020 Earnings Release And Call
Source: PR Newswire
DENVER, Oct. 20, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that it expects to release its third quarter 2020 financial and operating results after market on October 29, 2020. See schedule below:
October 29, 2020 – After market close, the Company plans to issue its third quarter 2020 earnings release, a pre-recorded webcast discussion of the third quarter 2020 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
October 30, 2020 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the third quarter 2020 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone. In order to join the live conference call, please register at the link below for dial-in information.
The call replay will be available approximately one hour after the call and until November 6, 2020.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-schedules-third-quarter-2020-earnings-release-and-call-301156270.html
SOURCE SM Energy Company
Article Date
10/20/20209/23/2020 - SM Energy Declares Semi-Annual Cash Dividend
SM Energy Declares Semi-Annual Cash Dividend
Source: PR Newswire
DENVER, Sept. 23, 2020 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that its Board of Directors has approved a semi-annual cash dividend of $0.01 per share of common stock outstanding. The dividend will be paid on November 4, 2020, to stockholders of record as of the close of business on October 23, 2020. The Company currently has approximately 114.6 million shares of common stock outstanding.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-declares-semi-annual-cash-dividend-301136896.html
SOURCE SM Energy Company
Article Date
9/23/2020SM Energy Announces Participation In Upcoming Investor Meetings
Source: PR Newswire
DENVER, Sept. 22, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that the Company will be participating in upcoming investor meetings. An updated investor presentation will be posted to the Company's website at ir.sm-energy.com before market open on September 22, 2020.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-announces-participation-in-upcoming-investor-meetings-301135092.html
SOURCE SM Energy Company
Article Date
9/22/2020SM Energy Publishes Corporate Responsibility Report And 2019 SASB Metrics
Source: PR Newswire
DENVER, Aug. 27, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced the publication of its updated Corporate Responsibility Report, 2019 Sustainability Accounting Standards Board (SASB) metrics for oil and gas exploration and production companies, as well as certain environmental, social and governance (ESG) metrics relevant to understanding the Company's 2019 ESG performance. Please visit the Company's website at http://sm-energy.com/sustainability/ to find: (1) a letter from Chief Executive Officer Jay Ottoson; (2) 2019 ESG Performance Highlights; (3) the Company's Corporate Responsibility Report; and (4) presentation of the Company's SASB reporting.
2019 ESG performance and accomplishments included:
In July 2020, the Company's Board of Directors delegated to its Environmental, Social and Governance Committee responsibility for oversight of the development and implementation of environmental and social policies, programs and initiatives. In August 2020, the Company initiated participation with CDP.
Chief Executive Officer Jay Ottoson comments: "Our corporate culture is rooted in strong values and integrity, and our team strives to make a positive impact on the communities where we live and work. Our commitment to environmental, social and governance best practices is consistent with our culture and fundamental to being a premier operator. I hope you enjoy the third publication of our Corporate Responsibility Report and our expanded information inclusive of SASB disclosure."
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-publishes-corporate-responsibility-report-and-2019-sasb-metrics-301119268.html
SOURCE SM Energy Company
Article Date
8/27/2020SM Energy Reports Second Quarter 2020 Results and Updates 2020 Operating Plan
Source: PR Newswire
DENVER, July 30, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced operating and financial results for the second quarter 2020 and provided updates to its 2020 operating plan.
During the second quarter of 2020, the Company focused on its priorities of:
Chief Executive Officer Jay Ottoson comments: "The second quarter presented our industry with steep challenges and the SM Energy team responded. We aggressively reduced costs, maintained capital discipline, reduced outstanding debt, deferred production volumes and delivered approximately $28 million in free cash flow. We have further modified our operating plan to meet our priorities of generating free cash flow and keeping leverage metrics in-line as we move into the second half of 2020 and through 2021.
"These accomplishments are particularly impressive as our field teams adapt to new COVID-19 related protocols and the rest of us work from home. To date, we have seamlessly managed through the challenges presented by the pandemic, and we continue to make the safety of our employees and contractors our top priority.
"I am also pleased to report that we have further evidenced our commitment to environmental and social stewardship, as our Board of Directors recently delegated to its Nominating and Corporate Governance Committee the responsibility to oversee the development and implementation of the Company's environmental and social policies, programs and initiatives, and renamed the committee the Environmental, Social and Governance Committee. In addition, we are initiating participation in the Carbon Disclosure Project and intend to publish the Company's SASB metrics for oil and gas exploration and production."
SECOND QUARTER 2020 RESULTS
PRODUCTION, REALIZED PRICES AND CERTAIN OPERATING COSTS
PRODUCTION: | |||
Midland Basin | South Texas | Total | |
Oil (MBbl / MBbl/d) | 5,003 / 55.0 | 368 / 4.0 | 5,371 / 59.0 |
Natural Gas (MMcf / MMcf/d) | 11,760 / 129.2 | 14,248 / 156.6 | 26,008 / 285.8 |
NGLs (MBbl / MBbl/d) | 4 / - | 1,474 / 16.2 | 1,478 / 16.2 |
Total (MBoe / MBoe/d) | 6,966 / 76.6 | 4,217 / 46.3 | 11,184 / 122.9 |
Note: Totals may not calculate due to rounding. | |||
REALIZED PRICES: | |||
Midland Basin | South Texas | Total (Pre/Post-hedge) | |
Oil ($/Bbl) | $22.86 | $14.01 | $22.25 / $48.06 |
Natural Gas ($/Mcf) | $1.01 | $1.61 | $1.34 / $1.38 |
NGLs ($/Bbl) | nm | $10.42 | $10.43/ $12.37 |
Per Boe | $18.13 | $10.31 | $15.18 / $27.93 |
Note: Totals may not sum due to rounding | |||
For additional operating metrics and regional detail, please see the Financial Highlights section below and the accompanying 2Q20 slide deck.
NET LOSS, LOSS PER SHARE AND NET CASH PROVIDED BY OPERATING ACTIVITIES
Second quarter 2020 net loss was ($89.3) million, or ($0.79) per diluted common share. This compared with net income of $50.4 million, or $0.45 per diluted common share, in the comparable prior year period. The current period included a gain on extinguishment of debt of $227.3 million that was more than offset by a loss on fair value change in derivatives (net of realized gains) and lower production revenue. For the first half of 2020, net loss was ($501.1) million, or ($4.43) per diluted common share, down ($3.30) per diluted common share compared with the prior year period.
Second quarter 2020 GAAP net cash provided by operating activities of $114.3 million before net change in working capital of $38.7 million totaled $153.1 million, which was down ($65.2) million, or 30%, from $218.3 million in the comparable prior year period. The decline in cash flow before the net change in working capital was primarily due to the 16% decline in price per Boe after the effect of realized hedge gains and the 10% decline in production, partially offset by lower costs per unit. For the first half of 2020, net cash provided by operating activities of $332.5 million before net change in working capital of $57.3 million totaled $389.7 million, up 9% from the first half of 2019.
ADJUSTED EBITDAX, ADJUSTED NET INCOME AND NET DEBT-TO-ADJUSTED EBITDAX
The following paragraphs discuss non-GAAP measures including Adjusted EBITDAX, adjusted net income (loss), adjusted net income (loss) per diluted common share and net debt-to-Adjusted EBITDAX. Please reference the definitions and reconciliations of these measures to the most directly comparable GAAP financial measures at the end of this release.
Second quarter 2020 Adjusted EBITDAX was $201.5 million, down $61.5 million, or 23%, from $263.0 million in the comparable prior year period. The decrease in Adjusted EBITDAX was due to lower realized prices and production, partially offset by lower costs per unit. For the first half of 2020, Adjusted EBITDAX was $487.5 million, up 8% from $449.5 million in the first half of 2019.
Second quarter 2020 adjusted net loss was ($17.3) million, or ($0.15) per diluted common share, which compares with adjusted net income of $1.3 million, or $0.01 per diluted common share, in the comparable prior year period. For the first half of 2020, adjusted net loss was ($23.0) million, or ($0.20) per diluted common share, compared with a net loss of ($36.4) million, or ($0.32) per diluted common share, in the first half of 2019.
At June 30, 2020, net debt-to-Adjusted EBITDAX was 2.45 times.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL EXPENDITURES
On June 30, 2020, the outstanding principal amount of the Company's long-term debt was $2.53 billion comprised of $1.82 billion in unsecured senior notes, $446.7 million in secured senior notes, $65.5 million in secured senior convertible notes, plus $193.0 million drawn on the Company's senior secured revolving credit facility, which is down from $2.68 billion at March 31, 2020. As previously announced, during the second quarter 2020, the Company executed exchange offers that resulted in the exchange of $611.9 million of unsecured senior notes and $107.0 million of convertible notes for $446.7 million in secured senior notes, $53.5 million in cash to certain holders and warrants to acquire up to 5% of outstanding common stock of the Company under certain conditions. This transaction resulted in reducing the principal amount of long-term debt by $219 million and significantly reducing maturities due before 2023. As of the end of the quarter, the Company had significant second lien debt capacity that is available until the next scheduled redetermination date of October 1, 2020.
At June 30, 2020, the Company's borrowing base under its senior secured revolving credit facility was $1.1 billion, less $193 million drawn and a $42 million letter of credit, provided liquidity of $865 million. The cash balance was approximately zero.
Capital expenditures before capital accruals for the second quarter of 2020 were $125.2 million. During the second quarter 2020, the Company drilled 27 net wells and added 11 net flowing completions. For the first half of 2020 the Company drilled 52 net wells and added 31 net flowing completions.
COMMODITY DERIVATIVES
Commodity hedge positions as of July 30, 2020:
A detailed schedule of these and other hedge positions are provided in the 2Q20 accompanying slide deck.
2020 OPERATING PLAN – MID-YEAR FORECAST
The Company has updated its 2020 operating plan to incorporate changes since the first quarter that include:
The updated forecast for full year 2020 results in the following projections:
GUIDANCE FULL YEAR 2020:
SCHEDULE FOR SECOND QUARTER REPORTING
EARNINGS CALL AND PRESENTATION
July 30, 2020 - In conjunction with this release, the Company posts to its website a pre-recorded webcast discussion, a written transcript of the webcast, and an associated IR presentation. Please visit ir.sm-energy. com.
July 31, 2020 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the second quarter 2020 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone. In order to join the live conference call, please register at the link below for dial-in information.
The call replay will be available approximately one hour after the call and until August 7, 2020.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "assumes," "anticipate," "estimate," "expect," "forecast," "generate," "guidance," "implied," "maintain," "plan," "project," "objectives," "outlook," "sustainable," "target," "will" and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this release include, among other things, revised guidance for the full year and third quarter 2020, including production volumes, oil production percentage, operating and general and administrative costs, DD&A, and capital expenditures; the Company's 2020 goals, including: generating free cash flow; and the number of wells the Company plans to drill and complete. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Future results may be impacted by the risks discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission, specifically the second quarter 2020 Form 10-Q. The forward-looking statements contained herein speak as of the date of this release. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Production Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | Percent Change | 2020 | 2019 | Percent Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized sales price (before the effects of derivative settlements): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil (per Bbl) | $ | 22.25 | $ | 56.04 | (60) | % | $ | 35.09 | $ | 52.95 | (34) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gas (per Mcf) | $ | 1.34 | $ | 2.31 | (42) | % | $ | 1.44 | $ | 2.50 | (42) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
NGLs (per Bbl) | $ | 10.43 | $ | 16.42 | (36) | % | $ | 12.09 | $ | 17.76 | (32) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equivalent (per Boe) | $ | 15.18 | $ | 32.75 | (54) | % | $ | 22.25 | $ | 32.34 | (31) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Realized sales price (including the effects of derivative settlements): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil (per Bbl) | $ | 48.06 | $ | 54.07 | (11) | % | $ | 51.49 | $ | 51.77 | (1) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gas (per Mcf) | $ | 1.38 | $ | 2.51 | (45) | % | $ | 1.74 | $ | 2.53 | (31) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
NGLs (per Bbl) | $ | 12.37 | $ | 20.42 | (39) | % | $ | 14.72 | $ | 20.08 | (27) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equivalent (per Boe) | $ | 27.93 | $ | 33.07 | (16) | % | $ | 31.42 | $ | 32.30 | (3) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net production volumes: (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil (MMBbl) | 5.4 | 5.4 | (1) | % | 11.7 | 10.3 | 14 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gas (Bcf) | 26.0 | 28.3 | (8) | % | 52.5 | 52.2 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
NGLs (MMBbl) | 1.5 | 2.3 | (35) | % | 3.1 | 4.2 | (26) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
MMBoe | 11.2 | 12.4 | (10) | % | 23.6 | 23.1 | 2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average net daily production: (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil (MBbls/d) | 59.0 | 59.6 | (1) | % | 64.4 | 56.7 | 14 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gas (MMcf/d) | 285.8 | 310.9 | (8) | % | 288.5 | 288.3 | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
NGLs (MBbls/d) | 16.2 | 25.1 | (35) | % | 16.9 | 23.0 | (26) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
MBoe/d | 122.9 | 136.5 | (10) | % | 129.4 | 127.7 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per Boe data: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized price (before the effects of derivative settlements) | $ | 15.18 | $ | 32.75 | (54) | % | $ | 22.25 | $ | 32.34 | (31) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Lease operating expense | 3.30 | 4.16 | (21) | % | 4.06 | 4.64 | (13) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transportation costs | 3.12 | 4.00 | (22) | % | 3.11 | 4.04 | (23) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Production taxes | 0.56 | 1.30 | (57) | % | 0.90 | 1.30 | (31) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ad valorem tax expense | 0.22 | 0.44 | (50) | % | 0.42 | 0.59 | (29) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative (2) | 2.43 | 2.49 | (2) | % | 2.32 | 2.73 | (15) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating margin (before the effects of derivative settlements) | 5.55 | 20.36 | (73) | % | 11.44 | 19.04 | (40) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative settlement gain (loss) | 12.74 | 0.32 | 3,881 | % | 9.17 | (0.04) | 23,025 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating margin (including the effects of derivative settlements) | $ | 18.29 | $ | 20.68 | (12) | % | $ | 20.61 | $ | 19.00 | 8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 16.17 | $ | 16.61 | (3) | % | $ | 17.59 | $ | 16.62 | 6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Amounts and percentage changes may not calculate due to rounding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Includes non-cash stock-based compensation expense per Boe of $0.41 and $0.39 for the three months ended June 30, 2020, and 2019, respectively, and $0.39 and $0.41 for the six months ended June 30, 2020, and 2019, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SM ENERGY COMPANY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except share data) | June 30, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSETS | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 10 | $ | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | 127,173 | 184,732 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets | 211,582 | 55,184 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other | 16,704 | 12,708 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total current assets | 355,469 | 252,634 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment (successful efforts method): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proved oil and gas properties | 8,134,461 | 8,934,020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated depletion, depreciation, and amortization | (4,536,537) | (4,177,876) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unproved oil and gas properties | 923,666 | 1,005,887 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wells in progress | 266,957 | 118,769 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other property and equipment, net of accumulated depreciation of $65,447 and $64,032, respectively | 37,278 | 72,848 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total property and equipment, net | 4,825,825 | 5,953,648 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets | 34,390 | 20,624 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other noncurrent assets | 51,944 | 65,326 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total noncurrent assets | 86,334 | 85,950 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 5,267,628 | $ | 6,292,232 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses | $ | 257,053 | $ | 402,008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | 38,250 | 50,846 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other current liabilities | 12,597 | 19,189 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total current liabilities | 307,900 | 472,043 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revolving credit facility | 193,000 | 122,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes, net | 2,263,119 | 2,610,298 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset retirement obligations | 86,628 | 84,134 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred income taxes | 57,049 | 189,386 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | 24,028 | 3,444 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other noncurrent liabilities | 55,072 | 61,433 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total noncurrent liabilities | 2,678,896 | 3,071,195 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' equity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and | 1,136 | 1,130 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional paid-in capital | 1,825,327 | 1,791,596 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retained earnings | 465,310 | 967,587 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive loss | (10,941) | (11,319) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total stockholders' equity | 2,280,832 | 2,748,994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 5,267,628 | $ | 6,292,232 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SM ENERGY COMPANY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except per share data) | For the Three Months Ended | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating revenues and other income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil, gas, and NGL production revenue | $ | 169,790 | $ | 406,854 | $ | 524,023 | $ | 747,330 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain on divestiture activity | 91 | 262 | 91 | 323 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other operating revenues | (249) | 56 | 1,252 | 449 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating revenues and other income | 169,632 | 407,172 | 525,366 | 748,102 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil, gas, and NGL production expense | 80,445 | 123,050 | 199,997 | 244,355 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 180,856 | 206,330 | 414,345 | 384,076 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exploration (1) | 9,787 | 10,877 | 21,136 | 22,225 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment | 8,750 | 12,417 | 998,513 | 18,755 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative (1) | 27,227 | 30,920 | 54,674 | 63,006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net derivative (gain) loss (2) | 167,200 | (79,655) | (378,140) | 97,426 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other operating (income) expense, net | 8,046 | (934) | 8,612 | (599) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | 482,311 | 303,005 | 1,319,137 | 829,244 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | (312,679) | 104,167 | (793,771) | (81,142) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (40,354) | (39,627) | (81,866) | (77,607) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on extinguishment of debt | 227,281 | — | 239,476 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other non-operating expense, net | (185) | (562) | (679) | (879) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | (125,937) | 63,978 | (636,840) | (159,628) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax (expense) benefit | 36,685 | (13,590) | 135,693 | 32,448 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (89,252) | $ | 50,388 | $ | (501,147) | $ | (127,180) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic weighted-average common shares outstanding | 113,008 | 112,262 | 113,015 | 112,257 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted weighted-average common shares outstanding | 113,008 | 112,932 | 113,015 | 112,257 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic net income (loss) per common share | $ | (0.79) | $ | 0.45 | $ | (4.43) | $ | (1.13) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted net income (loss) per common share | $ | (0.79) | $ | 0.45 | $ | (4.43) | $ | (1.13) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends per common share | $ | — | $ | — | $ | 0.01 | $ | 0.05 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Non-cash stock-based compensation included in: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exploration expense | $ | 1,091 | $ | 1,291 | $ | 2,048 | $ | 2,496 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative expense | 4,621 | 4,863 | 9,225 | 9,496 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total non-cash stock-based compensation | $ | 5,712 | $ | 6,154 | $ | 11,273 | $ | 11,992 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) The net derivative (gain) loss line item consists of the following: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement (gain) loss | $ | (142,528) | $ | (4,090) | $ | (215,965) | $ | 879 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Gain) loss on fair value changes | 309,728 | (75,565) | (162,175) | 96,547 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net derivative (gain) loss | $ | 167,200 | $ | (79,655) | $ | (378,140) | $ | 97,426 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
SM ENERGY COMPANY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except share data and dividends per share) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Retained Earnings | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2019 | 112,987,952 | $ | 1,130 | $ | 1,791,596 | $ | 967,587 | $ | (11,319) | $ | 2,748,994 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (411,895) | — | (411,895) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 190 | 190 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $0.01 per share | — | — | — | (1,130) | — | (1,130) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 730 | — | (3) | — | — | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 5,561 | — | — | 5,561 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, March 31, 2020 | 112,988,682 | $ | 1,130 | $ | 1,797,154 | $ | 554,562 | $ | (11,129) | $ | 2,341,717 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (89,252) | — | (89,252) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 188 | 188 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 297,013 | 3 | 944 | — | — | 947 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 267,576 | 3 | 5,709 | — | — | 5,712 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants | — | — | 21,520 | — | — | 21,520 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, June 30, 2020 | 113,553,271 | $ | 1,136 | $ | 1,825,327 | $ | 465,310 | $ | (10,941) | $ | 2,280,832 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Retained Earnings | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2018 | 112,241,966 | $ | 1,122 | $ | 1,765,738 | $ | 1,165,842 | $ | (12,380) | $ | 2,920,322 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (177,568) | — | (177,568) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 263 | 263 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,612) | — | (5,612) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 2,579 | — | (18) | — | — | (18) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 5,838 | — | — | 5,838 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, March 31, 2019 | 112,244,545 | $ | 1,122 | $ | 1,771,558 | $ | 982,662 | $ | (12,117) | $ | 2,743,225 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 50,388 | — | 50,388 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 119 | 119 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 184,079 | 2 | 1,957 | — | — | 1,959 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 290 | — | (2) | — | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 96,719 | 1 | 6,153 | — | — | 6,154 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | (1) | 1 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances, June 30, 2019 | 112,525,633 | $ | 1,125 | $ | 1,779,665 | $ | 1,033,051 | $ | (11,998) | $ | 2,801,843 | |||||||||||||||||||||||||||||||||||||||||||||||||||
SM ENERGY COMPANY | ||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||||||||||||
(in thousands) | For the Three Months Ended June 30, | For the Six Months Ended | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||||||
Net income (loss) | $ | (89,252) | $ | 50,388 | $ | (501,147) | $ | (127,180) | ||||||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||||||||||||||||||||||||||
Net gain on divestiture activity | (91) | (262) | (91) | (323) | ||||||||||||||||||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 180,856 | 206,330 | 414,345 | 384,076 | ||||||||||||||||||||||||||
Impairment | 8,750 | 12,417 | 998,513 | 18,755 | ||||||||||||||||||||||||||
Stock-based compensation expense | 5,712 | 6,154 | 11,273 | 11,992 | ||||||||||||||||||||||||||
Net derivative (gain) loss | 167,200 | (79,655) | (378,140) | 97,426 | ||||||||||||||||||||||||||
Derivative settlement gain (loss) | 142,528 | 4,090 | 215,965 | (879) | ||||||||||||||||||||||||||
Amortization of debt discount and deferred financing costs | 4,586 | 3,844 | 8,578 | 7,633 | ||||||||||||||||||||||||||
Gain on extinguishment of debt | (227,281) | — | (239,476) | — | ||||||||||||||||||||||||||
Deferred income taxes | (36,921) | 13,766 | (136,268) | (33,237) | ||||||||||||||||||||||||||
Other, net | (3,011) | 1,243 | (3,827) | (1,287) | ||||||||||||||||||||||||||
Net change in working capital | (38,737) | 41,613 | (57,254) | 21,454 | ||||||||||||||||||||||||||
Net cash provided by operating activities | 114,339 | 259,928 | 332,471 | 378,430 | ||||||||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||||
Net proceeds from the sale of oil and gas properties (1) | 92 | 6,406 | 92 | 12,520 | ||||||||||||||||||||||||||
Capital expenditures | (170,903) | (326,787) | (310,209) | (576,127) | ||||||||||||||||||||||||||
Other, net | — | 28 | — | 319 | ||||||||||||||||||||||||||
Net cash used in investing activities | (170,811) | (320,353) | (310,117) | (563,288) | ||||||||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||||
Proceeds from revolving credit facility | 415,500 | 524,500 | 841,000 | 696,500 | ||||||||||||||||||||||||||
Repayment of revolving credit facility | (294,500) | (453,000) | (770,500) | (578,500) | ||||||||||||||||||||||||||
Debt issuance costs related to 10.0% Senior Secured Notes due 2025 | (10,491) | — | (10,491) | — | ||||||||||||||||||||||||||
Cash paid to repurchase 6.125% Senior Notes due 2022 | — | — | (28,318) | — | ||||||||||||||||||||||||||
Repayment of 1.50% Senior Convertible Notes due 2021 | (53,508) | — | (53,508) | — | ||||||||||||||||||||||||||
Net proceeds from sale of common stock | 947 | 1,959 | 947 | 1,959 | ||||||||||||||||||||||||||
Dividends paid | (1,130) | (5,612) | (1,130) | (5,612) | ||||||||||||||||||||||||||
Other, net | (351) | (1,026) | (354) | (1,044) | ||||||||||||||||||||||||||
Net cash provided by (used in) financing activities | 56,467 | 66,821 | (22,354) | 113,303 | ||||||||||||||||||||||||||
Net change in cash, cash equivalents, and restricted cash | (5) | 6,396 | — | (71,555) | ||||||||||||||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 15 | 14 | 10 | 77,965 | ||||||||||||||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 10 | $ | 6,410 | $ | 10 | $ | 6,410 | ||||||||||||||||||||||
Less: Restricted cash (1) | — | (6,398) | — | (6,398) | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 10 | $ | 12 | $ | 10 | $ | 12 | ||||||||||||||||||||||
(1) As of June 30, 2019, a portion of net proceeds from the sale of oil and gas properties was restricted for future property acquisitions. Restricted cash is included in the other noncurrent assets line item on the accompanying unaudited condensed consolidated balance sheets. | ||||||||||||||||||||||||||||||
SM ENERGY COMPANY | ||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||||||||||
6/30/2020 | ||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows (Continued)
| ||||||||||||||||||||||||||||||
(in thousands) | For the Three Months Ended June 30, | For the Six Months Ended | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||
Supplemental schedule of additional cash flow information and non-cash activities: | ||||||||||||||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||||||||
Cash paid for interest, net of capitalized interest | $ | (34,844) | $ | (27,689) | $ | (82,313) | $ | (67,646) | ||||||||||||||||||||||
Investing activities: | ||||||||||||||||||||||||||||||
Decrease in capital expenditure accruals and other | $ | (45,698) | $ | (72,282) | $ | (28,896) | $ | (10,097) | ||||||||||||||||||||||
Supplemental non-cash investing activities: | ||||||||||||||||||||||||||||||
Carrying value of properties exchanged | $ | — | $ | 800 | $ | — | $ | 66,588 | ||||||||||||||||||||||
Supplemental non-cash financing activities: | ||||||||||||||||||||||||||||||
Non-cash gain on extinguishment of debt, net | $ | 280,553 | $ | — | $ | 292,984 | $ | — | ||||||||||||||||||||||
DEFINITIONS OF NON-GAAP MEASURES AS CALCULATED BY THE COMPANY
The following non-GAAP measures are presented in addition to financial statements as the Company believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and compare investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. A non-GAAP measure should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies.
Adjusted EBITDAX: Adjusted EBITDAX is calculated as net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is also important as it is considered among financial covenants under the Company's Credit Agreement, a material source of liquidity for the Company. Please reference the Company's 2019 Form 10-K and second quarter 2020 Form 10-Q for discussion of the Credit Agreement and its covenants.
Adjusted net loss: Adjusted net loss excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, gains and losses on extinguishment of debt, and accruals for non-recurring matters.
Free cash flow: Free cash flow is calculated as net cash provided by operating activities before net change in working capital less capital expenditures before change in capital expenditure accruals and other.
Free cash flow yield to market capitalization: Free cash flow yield to market capitalization is calculated as Free cash flow (defined above) divided by market capitalization.
Net Debt: The total principal amount of outstanding senior secured notes, senior convertible notes, and senior unsecured notes plus amounts drawn on the revolving credit facility (also referred to as total funded debt) less cash and cash equivalents.
Net debt-to-Adjusted EBITDAX: Net debt-to-Adjusted EBITDAX is calculated as Net Debt (defined above) divided by Adjusted EBITDAX (defined above). A variation of this calculation is a financial covenant under the Company's Credit Agreement for its revolving credit facility beginning in the fourth quarter of 2018.
FORWARD-LOOKING NON-GAAP MEASURES
The Company is unable to present a reconciliation of forward-looking net debt-to-Adjusted EBITDAX because components of the calculation (such as potential gains and losses related to derivatives, divestiture activity, or the extinguishment of debt) are inherently unpredictable. Moreover, estimating the most directly comparable GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort.
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
June 30, 2020 | |||||||||||||||
Adjusted EBITDAX Reconciliation (1) | |||||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDAX (non-GAAP) | For the Three Months Ended June 30, | For the Six Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) (GAAP) | $ | (89,252) | $ | 50,388 | $ | (501,147) | $ | (127,180) | |||||||
Interest expense | 40,354 | 39,627 | 81,866 | 77,607 | |||||||||||
Income tax expense (benefit) | (36,685) | 13,590 | (135,693) | (32,448) | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 180,856 | 206,330 | 414,345 | 384,076 | |||||||||||
Exploration (2) | 8,696 | 9,586 | 19,088 | 19,729 | |||||||||||
Impairment | 8,750 | 12,417 | 998,513 | 18,755 | |||||||||||
Stock-based compensation expense | 5,712 | 6,154 | 11,273 | 11,992 | |||||||||||
Net derivative (gain) loss | 167,200 | (79,655) | (378,140) | 97,426 | |||||||||||
Derivative settlement gain (loss) | 142,528 | 4,090 | 215,965 | (879) | |||||||||||
Net gain on divestiture activity | (91) | (262) | (91) | (323) | |||||||||||
Gain on extinguishment of debt | (227,281) | — | (239,476) | — | |||||||||||
Other, net | 703 | 691 | 1,036 | 695 | |||||||||||
Adjusted EBITDAX (non-GAAP) | 201,490 | 262,956 | 487,539 | 449,450 | |||||||||||
Interest expense | (40,354) | (39,627) | (81,866) | (77,607) | |||||||||||
Income tax (expense) benefit | 36,685 | (13,590) | 135,693 | 32,448 | |||||||||||
Exploration (2) | (8,696) | (9,586) | (19,088) | (19,729) | |||||||||||
Amortization of debt discount and deferred financing costs | 4,586 | 3,844 | 8,578 | 7,633 | |||||||||||
Deferred income taxes | (36,921) | 13,766 | (136,268) | (33,237) | |||||||||||
Other, net | (3,714) | 552 | (4,863) | (1,982) | |||||||||||
Net change in working capital | (38,737) | 41,613 | (57,254) | 21,454 | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 114,339 | $ | 259,928 | $ | 332,471 | $ | 378,430 | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) Stock-based compensation expense is a component of the exploration expense and general and administrative expense line items on the accompanying condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the accompanying condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||||||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
June 30, 2020 | |||||||||||||||
Adjusted Net Income (Loss) Reconciliation (1) | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) to adjusted net loss (non-GAAP): | For the Three Months Ended June 30, | For the Six Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) (GAAP) | $ | (89,252) | $ | 50,388 | $ | (501,147) | $ | (127,180) | |||||||
Net derivative (gain) loss | 167,200 | (79,655) | (378,140) | 97,426 | |||||||||||
Derivative settlement gain (loss) | 142,528 | 4,090 | 215,965 | (879) | |||||||||||
Net gain on divestiture activity | (91) | (262) | (91) | (323) | |||||||||||
Impairment | 8,750 | 12,417 | 998,513 | 18,755 | |||||||||||
Gain on extinguishment of debt | (227,281) | — | (239,476) | — | |||||||||||
Other, net (2) | 765 | 699 | 1,151 | 912 | |||||||||||
Tax effect of adjustments (3) | (19,936) | 13,608 | (129,749) | (25,148) | |||||||||||
Valuation allowance on deferred tax assets | — | — | 10,017 | — | |||||||||||
Adjusted net income (loss) (non-GAAP) | $ | (17,317) | $ | 1,285 | $ | (22,957) | $ | (36,437) | |||||||
Diluted net income (loss) per common share (GAAP) | $ | (0.79) | $ | 0.45 | $ | (4.43) | $ | (1.13) | |||||||
Net derivative (gain) loss | 1.48 | (0.71) | (3.35) | 0.87 | |||||||||||
Derivative settlement gain (loss) | 1.26 | 0.04 | 1.91 | (0.01) | |||||||||||
Net gain on divestiture activity | — | — | — | — | |||||||||||
Impairment | 0.08 | 0.11 | 8.84 | 0.17 | |||||||||||
Gain on extinguishment of debt | (2.01) | — | (2.12) | — | |||||||||||
Other, net (2) | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||
Tax effect of adjustments (3) | (0.18) | 0.11 | (1.15) | (0.23) | |||||||||||
Valuation allowance on deferred tax assets | — | — | 0.09 | — | |||||||||||
Adjusted net income (loss) per diluted common share (non-GAAP) | $ | (0.15) | $ | 0.01 | $ | (0.20) | $ | (0.32) | |||||||
Basic weighted-average common shares outstanding | 113,008 | 112,262 | 113,015 | 112,257 | |||||||||||
Diluted weighted-average common shares outstanding | 113,008 | 112,932 | 113,015 | 112,257 | |||||||||||
Note: Amounts may not calculate due to rounding. | |||||||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) For the three months ended June 30, 2020, the adjustments related to bad debt expense and impairments of materials inventory. For the six months ended June 30, 2020, and the three and six months ended June 30, 2019, the adjustments related to bad debt expense and impairments of materials inventory and other property. | |||||||||||||||
(3) The tax effect of adjustments for each of the three and six months ended June 30, 2020, and 2019, was calculated using a tax rate of 21.7%. This rate approximates the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||||||||||
Reconciliation of Net Debt (1) | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
As of June 30, 2020 | ||||||||||||||||||
Senior Secured Notes (principal amount from Note 5 of 2Q20 Form 10-Q) | $ | 512,160 | ||||||||||||||||
Senior Unsecured Notes (principal amount from Note 5 of 2Q20 Form 10-Q) | 1,824,151 | |||||||||||||||||
Revolving credit facility | 193,000 | |||||||||||||||||
Total funded debt | 2,529,311 | |||||||||||||||||
Less: Cash and cash equivalents | 10 | |||||||||||||||||
Net Debt | $ | 2,529,301 | ||||||||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | ||||||||||||||||||
Free Cash Flow (1) | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 114,339 | $ | 259,928 | $ | 332,471 | $ | 378,430 | ||||||||||
Net change in working capital | (38,737) | 41,613 | (57,254) | 21,454 | ||||||||||||||
Cash flow from operations before net change in working capital | $ | 153,076 | $ | 218,315 | $ | 389,725 | $ | 356,976 | ||||||||||
Less: Capital expenditures (GAAP) | 170,903 | 326,787 | 310,209 | 576,127 | ||||||||||||||
Change in capital expenditure accruals and other | (45,698) | (72,282) | (28,896) | (10,097) | ||||||||||||||
Capital expenditures before accruals | $ | 125,205 | $ | 254,505 | $ | 281,313 | $ | 566,030 | ||||||||||
Free cash flow | $ | 27,871 | $ | (36,190) | $ | 108,412 | $ | (209,054) | ||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | ||||||||||||||||||
Free Cash Flow (1) | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
For the Twelve Months Ended June 30, | ||||||||||||||||||
2020 | ||||||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 777,608 | ||||||||||||||||
Net change in working capital | (61,856) | |||||||||||||||||
Cash flow from operations before net change in working capital | $ | 839,464 | ||||||||||||||||
Less: Capital expenditures (GAAP) | 757,851 | |||||||||||||||||
Change in capital expenditure accruals and other | (43,088) | |||||||||||||||||
Capital expenditures before accruals | $ | 714,763 | ||||||||||||||||
Free cash flow | $ | 124,701 | ||||||||||||||||
Market capitalization at June 30, 2020 | 425,825 | |||||||||||||||||
Free cash flow yield | 29 | % | ||||||||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | ||||||||||||||||||
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SOURCE SM Energy Company
Article Date
7/30/2020SM Energy Schedules Second Quarter 2020 Earnings Release And Call
Source: PR Newswire
DENVER, July 24, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that it expects to release its second quarter 2020 financial and operating results after market on July 30, 2020. See schedule below:
July 30, 2020 – After market close, the Company plans to issue its second quarter 2020 earnings release, a pre-recorded webcast discussion of the second quarter 2020 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
July 31, 2020 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the second quarter 2020 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone. In order to join the live conference call, please register at the link below for dial-in information.
The call replay will be available approximately one hour after the call and until August 7, 2020.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-schedules-second-quarter-2020-earnings-release-and-call-301099498.html
SOURCE SM Energy Company
Article Date
7/24/2020SM Energy Company Announces Planned Retirement Of Chief Executive Officer Javan D. Ottoson And Appointment Of Herbert S. Vogel As President
Source: PR Newswire
DENVER, July 23, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced that President and Chief Executive Officer Javan (Jay) D. Ottoson has advised the Board of Directors of SM Energy of his intention to retire before the end of 2020. Mr. Ottoson will remain a member of the Board of Directors until the next annual meeting in May 2021.
The Company also announced that Herbert S. Vogel has been appointed to the position of President of the Company. Mr. Vogel was appointed Executive Vice President and Chief Operating Officer of the Company in June 2019, having previously served as Executive Vice President-Operations of the Company since August 2014. Mr. Vogel joined the Company in March 2012 after holding leadership positions with ARCO and BP, and has 36 years of experience in the oil and gas business. The Board of Directors intends to promote Mr. Vogel to Chief Executive Officer effective upon Mr. Ottoson's departure.
"On behalf of the Board of Directors, I want to congratulate Jay on a successful and impactful career. Through 14 years with the Company, and more than five years as our Chief Executive Officer, his strength of character has had an incredible impact on the Company and our team, including our directors, employees, and service partners. Through Jay's leadership, SM Energy transformed itself into a premier operator in the Permian and Maverick Basins in Texas. I would like to thank Jay for his commitment to SM Energy, his leadership, guidance, and steady hand during a highly volatile time in our industry," said William Sullivan, chairman of the SM Energy Board of Directors.
Mr. Ottoson joined the Company in December 2006 as Executive Vice President and Chief Operating Officer. Mr. Ottoson was appointed as President of the Company in October 2012 and as Chief Executive Officer of the Company in February 2015.
"It has been a privilege and a pleasure to be part of the great team at SM Energy," said Mr. Ottoson. "Herb is an integral part of leadership and is an energetic and highly capable executive. I am confident he will serve our Company well through challenging and better times. I expect a smooth and effective transition during my remaining time at the Company."
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address events, or developments that we expect, believe, or anticipate will or may occur in the future are forward-looking statements. The words "intention," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its perception of current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance and actual events may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
About the Company
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
7/23/20206/15/2020 - SM Energy Company Announces Expiration And Final Results Of Exchange Offers And Consent Solicitations
SM Energy Company Announces Expiration And Final Results Of Exchange Offers And Consent Solicitations
Source: PR Newswire
DENVER, June 15, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced the final results of its offers to exchange (the "Exchange Offers") its outstanding notes listed in the table below (together, the "Old Notes") for newly issued 10.00% senior secured notes due 2025 (the "New Notes"). As of 11:59 p.m., New York City time, on June 12, 2020 (the "Expiration Time"), approximately $295.8 million aggregate principal amount, or approximately 12% of all outstanding Old Notes, were validly tendered and not validly withdrawn, excluding principal amounts of Old Notes tendered pursuant to the previously announced exchange agreement (the "Exchange Agreement") entered into by the Company with certain holders of the Old Notes (the "Backstop Group"). Together with the Old Notes and 1.50% Senior Convertible Notes due 2021 ("Old Convertible Notes") to be exchanged pursuant to the Exchange Agreement, the Company expects to exchange approximately $612 million aggregate principal amount of Old Notes and approximately $107.0 million aggregate principal amount of Old Convertible Notes and issue approximately $447 million in aggregate principal amount of New Notes on the settlement date, which is expected to be on or about June 17, 2020 (the "Settlement Date"). After giving effect to the Exchange Offers and the private exchanges with the Backstop Group, the Company expects to reduce its outstanding senior debt by approximately $272 million.
The following table sets forth the approximate aggregate principal amounts of each series of Old Notes that were validly tendered and not validly withdrawn on or prior to the Expiration Time, other than Old Notes tendered pursuant to the Exchange Agreement:
Title of Old Notes Tendered | CUSIP Number / ISIN | Outstanding Principal Amount | Acceptance Priority Level | Principal Amount of Old |
6.125% Senior Notes due November 15, 2022 | 78454LAK6 / US78454LAK61 | $436,047,000 | 1 | $45,017,000 |
5.000% Senior Notes due January 15, 2024 | 78454LAH3 / US78454LAH33 | $500,000,000 | 2 | $81,151,000 |
5.625% Senior Notes due June 1, 2025 | 78454LAL4 / US78454LAL45 | $500,000,000 | 3 | $104,564,000 |
6.750% Senior Notes due September 15, 2026 | 78454LAN0 / US78454LAN01 | $500,000,000 | 4 | $43,115,000 |
6.625% Senior Notes due January 15, 2027 | 78454LAP5 / US78454LAP58 | $500,000,000 | 5 | $22,007,000 |
Based on these results, the Company expects to accept all Old Notes tendered for exchange and issue New Notes as consideration therefor on the Settlement Date. The New Notes issued in the privately negotiated transactions will be fungible with, and comprise one series with, the New Notes issued in the Exchange Offers.
Holders of Old Notes accepted for exchange will also receive a cash payment equal to the accrued and unpaid interest on such accepted Old Notes from the applicable latest interest payment date to, but not including, the Settlement Date. Interest on the New Notes will accrue from the Settlement Date.
The Company expects that approximately $65.5 million in principal amount of Old Convertible Notes that remain outstanding after the Settlement Date will be secured pursuant to their terms on a pari passu basis with the New Notes (and any refinancing of such amount of Old Convertible Notes will also be required to be secured on a pari passu basis with the New Notes).
In conjunction with the Exchange Offers, SM Energy also announced the results to date of its previously announced solicitations of consents (collectively, the "Consent Solicitations") from holders of Old Notes to amend certain provisions (the "Proposed Amendments") of the indentures governing the Old Notes (collectively, the "Indentures"). The Company did not receive consents sufficient to effect the Proposed Amendments in any series of Old Notes. As such, the Proposed Amendments will not be adopted or become operative.
The Exchange Offers were only made, and the New Notes were offered and to be issued only, (a) in the United States to holders of Old Notes who are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and (b) outside the United States to holders of Old Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act. The holders of Old Notes who certified to the Company that they were eligible to participate in the Exchange Offers pursuant to at least one of the foregoing conditions are referred to as "Eligible Holders." The Company made the Exchange Offers only to Eligible Holders through, and pursuant to, the terms of the Confidential Offering Memorandum, as amended.
The New Notes and the Exchange Offers have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers and Consent Solicitations were not made to Eligible Holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that we expect, believe, or anticipate will or may occur in the future are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, among other things, the completion of the Exchange Offers and the private exchange, the redemption of the Old Notes, the completion of the Consent Solicitations and the effectiveness of the Proposed Amendments. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties, which may cause SM Energy's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Some of these risks are described in the "Risk Factors" section in Part I, Item 1A of SM Energy's Annual Report on Form 10-K for the year ended December 31, 2019 and Part II of our Quarterly Report on Form 10-Q for the period ended March 31, 2020. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
About the Company
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
6/15/20206/1/2020 - SM Energy Company Announces Amendment Of Exchange Offers And Agreements With Certain Noteholders
SM Energy Company Announces Amendment Of Exchange Offers And Agreements With Certain Noteholders
Source: PR Newswire
DENVER, June 1, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced that it has amended its pending offers to exchange (the "Exchange Offers") its outstanding notes listed in the table below (together, the "Old Notes") for newly issued 10.00% senior secured notes due 2025 (the "New Notes") after reaching an agreement with certain holders of the Old Notes. The terms and conditions of the Exchange Offers, as amended, are set forth in a supplement to the confidential offering memorandum and consent solicitation statement, dated April 29, 2020 (as supplemented, the "Offering Memorandum").
The following table sets forth the new terms to be offered to eligible holders of the Old Notes in the Exchange Offers, as amended:
Title of Old Notes to be Tendered | CUSIP | Outstanding | Acceptance | Principal Amount of |
6.125% Senior Notes due November 15, 2022 | 78454LAK6 / | $436,047,000 | 1 | $700 |
5.000% Senior Notes due January 15, 2024 | 78454LAH3 / | $500,000,000 | 2 | $600 |
5.625% Senior Notes due June 1, 2025 | 78454LAL4 / | $500,000,000 | 3 | $600 |
6.750% Senior Notes due September 15, 2026 | 78454LAN0 / | $500,000,000 | 4 | $580 |
6.625% Senior Notes due January 15, 2027 | 78454LAP5 / | $500,000,000 | 5 | $550 |
The maximum principal amount of New Notes to be issued in the Exchange Offers is $532.9 million (the "Maximum Exchange Amount"), which, together with the New Notes to be issued in the private exchanges with certain holders of Old Notes referred to below, would amount to a maximum of $800 million principal amount of New Notes. The New Notes will be secured by second priority security interests in the collateral that secures SM Energy's senior secured credit facility. The New Notes will be SM Energy's secured second lien obligations and will be effectively junior to the Company's current and future secured first lien indebtedness, including its senior secured credit facility, to the extent of the value of the collateral securing such indebtedness, effectively senior to all of the Company's existing and future unsecured indebtedness, including any Old Notes that remain outstanding following the completion of the Exchange Offers, to the extent of the value of the collateral, and senior to any future subordinated indebtedness. Interest on the New Notes will accrue from the date of issuance of the New Notes.
The Exchange Offers will expire at 11:59 p.m., New York City time, on June 12, 2020 (the "Expiration Time"). Pursuant to the Exchange Offers and subject to the proration terms described below, in exchange for each $1,000 principal amount of Old Notes and integral multiples in excess thereof validly tendered (and not validly withdrawn) at any time prior to the Expiration Time and accepted by the Company, participating holders will receive a principal amount of New Notes equal to the "Total Consideration" listed in the above table under the column heading "Total Consideration". Participating holders will also receive, in cash, accrued and unpaid interest, if any, on their accepted Old Notes up to, but not including the settlement date for the Exchange Offers, which is expected to be on June 17, 2020. Investors who have already tendered their Old Notes do not need re-tender their Old Notes or take any other action in order to participate in the Exchange Offers as amended and will receive the benefit of the amended terms without taking any further action. Tenders of Old Notes may be withdrawn and Consents may be revoked at any time at or prior to 11:59 p.m., New York City time, on June 12, 2020 (the "Withdrawal Deadline").
Subject to proration as described below, the amount of each series of Old Notes that is accepted for exchange will be determined in accordance with the acceptance priority levels set forth in the table above (the "Acceptance Priority Levels"), with Acceptance Priority Level 1 being the highest Acceptance Priority Level and Acceptance Priority Level 5 being the lowest Acceptance Priority Level. The "Maximum Exchange Amount" of New Notes that the Company will issue in the Exchange Offers equals $532.9 million aggregate principal amount of New Notes. If there is a sufficient amount of Old Notes available to exchange some, but not all, Old Notes of the series with the lowest Acceptance Priority Level that is accepted, then tenders of Old Notes of that particular series will be accepted on a pro rata basis. The Exchange Offers are not conditioned upon any minimum amount of Old Notes being tendered.
Separately, SM Energy announced today that it has agreed with certain holders of Old Notes (the "Backstop Group") to privately issue $213.5 million aggregate principal amount of New Notes in exchange for $316.4 million aggregate principal amount of Old Notes, consisting of $96.7 million principal amount of 6.125% Senior Notes due 2022, $74.6 million principal amount of 5.00% Senior Notes due 2024, $46.3 million principal amount of 5.625% Senior Notes due 2025, $37.7 million principal amount of 6.75% Senior Notes due 2026 and $61.2 million principal amount of 6.625% Senior Notes due 2027. Holders of such Old Notes have also agreed to provide consents to the Proposed Amendments (as defined below). In addition, the Backstop Group expects to tender $42.5 million aggregate principal amount of Old Notes in the Exchange Offers (the "Backstop Support Notes") and the Company has agreed to issue to the Backstop Group warrants to acquire up to 5% of the outstanding common stock of the Company (subject to certain conditions).
The Company has also agreed to acquire $107.0 million principal amount of 1.50% Senior Convertible Notes due 2021 ("Old Convertible Notes") from the Backstop Group for consideration including $53.5 million principal amount of New Notes and $53.5 million in cash. In addition, $65.5 million in principal amount of Old Convertible Notes that remain outstanding will be secured pursuant to their terms on a pari passu basis with the New Notes (and any refinancing of such amount of Old Convertible Notes will be permitted to also be secured on a pari passu basis with the New Notes).
The total principal amount of New Notes that would be issued pursuant to these privately negotiated transactions and pursuant to the Exchange Offers based on the participation in the Exchange Offers to date, the additional tender of the Backstop Support Notes and the amended terms of the Exchange Offers is $452.8 million principal amount of New Notes. The closing of the privately negotiated transactions is expected to occur contemporaneously with the consummation of the Exchange Offers but is not conditioned on the consummation of the Exchange Offers. The New Notes issued in the privately negotiated transactions will be fungible with, and comprise one series with, the New Notes issued in the Exchange Offers.
In conjunction with the Exchange Offers, SM Energy is soliciting consents (the "Consent Solicitations") from holders of each series of Old Notes ("Consents") to certain proposed amendments to each indenture governing the Old Notes (the "Old Notes Indentures") to eliminate substantially all of the restrictive covenants and certain of the default provisions contained therein (the "Proposed Amendments"). The Exchange Offers are not conditioned upon receiving Requisite Consents (as defined below) from holders any series of the Old Notes. Holders of Old Notes may not tender Old Notes without delivering the related Consents, and holders of Old Notes may not deliver Consents without tendering the related Old Notes.
To adopt the Proposed Amendments related to a series of Old Notes, SM Energy must receive Consents from holders representing a majority of the outstanding principal amount of such series Old Notes (the "Requisite Consents"). If the Requisite Consents are delivered with respect to any series of Old Notes, a supplemental indenture to each Old Notes Indenture will be executed promptly following the Expiration Time to give effect to the Proposed Amendments. The Proposed Amendments will become operative, with respect to Old Notes for which Requisite Consents have been delivered and not validly withdrawn, immediately prior to the acceptance of such Old Notes pursuant to the applicable Exchange Offer. In the event that the Requisite Consents for a series of Old Notes are received and not validly revoked but the Old Notes of such series tendered in the applicable Exchange Offer are subject to proration, the Proposed Amendments with respect to such series of Old Notes will not become operative despite the Company accepting the Old Notes of such series in the applicable Exchange Offer.
Old Notes may not be withdrawn from the Exchange Offers and the related Consents may not be revoked from the Consent Solicitations after the Withdrawal Deadline, unless otherwise required by applicable law.
The Exchange Offers are being made, and the New Notes are being offered and issued, only (a) in the United States to holders of Old Notes who are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and (b) outside the United States to holders of Old Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act. The holders of Old Notes who have certified to the Company that they are eligible to participate in the Exchange Offers pursuant to at least one of the foregoing conditions are referred to as "Eligible Holders." Only Eligible Holders who have completed and returned an eligibility letter, available from the information agent, may receive and review the Offering Memorandum or participate in the Exchange Offers. Eligible Holders of the Old Notes who desire to obtain and complete an eligibility form should contact the information agent and exchange agent, D.F. King & Co., Inc., at (866) 620-2536 (toll-free) or (212) 269-5550 (for banks and brokers), email sm@dfking.com or online at www.dfking.com/smenergy.
Eligible Holders of the Old Notes are urged to carefully read the Offering Memorandum before making any decision with respect to the Exchange Offers and Consent Solicitations. None of the Company, the dealer managers, the trustee with respect to the Old Notes, the trustee with respect to the New Notes, the information and exchange agent or any affiliate of any of them makes any recommendation as to whether Eligible Holders of the Old Notes should exchange their Old Notes for New Notes in the Exchange Offers, and no one has been authorized by any of them to make such a recommendation. Eligible Holders must make their own decision as to whether to tender Old Notes and, if so, the principal amount of Old Notes to tender.
The New Notes and the Exchange Offers have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers and Consent Solicitations are not being made to Eligible Holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that we expect, believe, or anticipate will or may occur in the future are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, among other things, the completion of the Exchange Offers and the private exchange, the redemption of the Old Notes, the completion of the Consent Solicitations and the effectiveness of the Proposed Amendments. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties, which may cause SM Energy's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Some of these risks are described in the "Risk Factors" section in Part I, Item 1A of SM Energy's Annual Report on Form 10-K for the year ended December 31, 2019 and Part II of our Quarterly Report on Form 10-Q for the period ended March 31, 2020. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
6/1/20205/28/2020 - SM Energy Company Announces Extension Of Previously Announced Exchange Offers And Consent Solicitations
SM Energy Company Announces Extension Of Previously Announced Exchange Offers And Consent Solicitations
Source: PR Newswire
DENVER, May 28, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced that it has extended the expiration of its previously announced offers to all Eligible Holders (as defined below) to exchange (the "Exchange Offers") any and all of its outstanding notes listed in the table below (together, the "Old Notes") for newly issued senior secured notes listed in the table below (together, the "New Notes"), in each case upon the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement, dated April 29, 2020, as supplemented by Supplement No. 1 to the Offering Memorandum, dated May 5, 2020 (as so supplemented, the "Offering Memorandum"). The Company has extended the expiration of the Exchange Offers from 12:00 midnight, New York City time, at the end of May 27, 2020 to 5:00 p.m., New York City time, on May 29, 2020.
Title of Old Notes being | CUSIP Number / ISIN | Principal Amount of New | New Notes Offered |
6.125% Senior Notes due 2022 | 78454LAK6 / US78454LAK61 | $650 | 10.00% Senior Secured Notes |
5.000% Senior Notes due 2024 | 78454LAH3 / US78454LAH33 | $500 | 10.00% Senior Secured Notes |
5.625% Senior Notes due 2025 | 78454LAL4 / US78454LAL45 | $500 | 10.00% Senior Secured Notes |
6.750% Senior Notes due 2026 | 78454LAN0 / US78454LAN01 | $500 | 10.00% Senior Secured Notes |
6.625% Senior Notes due 2027 | 78454LAP5 / US78454LAP58 | $500 | 10.00% Senior Secured Notes |
As of 5:00 p.m., New York City time, on May 27, 2020, approximately $252.7 million of Old Notes had been tendered in the Exchange Offers.
Except as described herein, the complete terms and conditions of the Exchange Offers and the Consent Solicitations remain the same as set forth and detailed in the Offering Memorandum, copies of which were previously distributed to eligible holders of the Old Notes. Withdrawal rights expired at 5:00 p.m., New York City time, on May 12, 2020 and tendered Old Notes may no longer be withdrawn.
The Exchange Offers are being made, and the New Notes are being offered and issued, only (a) in the United States to holders of Old Notes who are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) and (b) outside the United States to holders of Old Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act. The holders of Old Notes who have certified to the Company that they are eligible to participate in the Exchange Offers pursuant to at least one of the foregoing conditions are referred to as "Eligible Holders." Only Eligible Holders who have completed and returned an eligibility letter, available from the information agent, may receive and review the Offering Memorandum or participate in the Exchange Offers. Eligible Holders of the Old Notes who desire to obtain and complete an eligibility form should contact the information agent and exchange agent, D.F. King & Co., Inc., at (866) 620-2536 (toll-free) or (212) 269-5550 (for banks and brokers), email sm@dfking.com or online at www.dfking.com/smenergy.
Eligible Holders of the Old Notes are urged to carefully read the Offering Memorandum before making any decision with respect to the Exchange Offers and the Consent Solicitations. None of the Company, the dealer managers, the trustee with respect to the Old Notes, the trustee with respect to the New Notes, the information and exchange agent or any affiliate of any of them makes any recommendation as to whether Eligible Holders of the Old Notes should exchange their Old Notes for New Notes in the Exchange Offers, and no one has been authorized by any of them to make such a recommendation. Eligible Holders must make their own decision as to whether to tender Old Notes and, if so, the principal amount of Old Notes to tender.
The New Notes and the Exchange Offers have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers and the Consent Solicitations are not being made to Eligible Holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that the Company expects, believes, or anticipates will or may occur in the future are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, among other things, the completion of the Exchange Offers, the redemption of the Old Notes, the completion of the Consent Solicitations and the effectiveness of extending the expiration of the Exchange Offers. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties, which may cause SM Energy's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Some of these risks are described in the "Risk Factors" section in Part I, Item 1A of SM Energy's Annual Report on Form 10-K for the year ended December 31, 2019 and Part II of SM Energy's Quarterly Report on Form 10-Q for the period ended March 31, 2020. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in the state of Texas.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
5/28/2020SM Energy Company Announces Early Results And Extension Of Early Tender Time Of The Exchange Offers And Consent Solicitations
Source: PR Newswire
DENVER, May 13, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced that it has extended the date by which early tenders must be received for its previously announced offers to all Eligible Holders (as defined below) to exchange (the "Exchange Offers") any and all of its outstanding notes listed in the table below (together, the "Old Notes") for newly issued senior secured notes listed in the table below (together, the "New Notes"), in each case upon the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement, dated April 29, 2020, as supplemented by Supplement No. 1 to the Offering Memorandum, dated May 5, 2020 (as so supplemented, the "Offering Memorandum").
As of 5:00 p.m., New York City time, on May 12, 2020 (the "Early Tender Time"), approximately $243.5 million of Old Notes had been tendered in the Exchange Offers. Accordingly, based on results to date, approximately $307.2 million principal amount of Senior Secured Second Lien Notes would be outstanding upon closing of the Exchange Offers, including $172.5 million principal amount of our outstanding 1.50% Senior Convertible Notes due 2021.
The Company also announced it has extended the Early Tender Time for each Exchange Offer to be the Expiration Time. Therefore, the deadline for tendering Old Notes in order to receive the consideration listed in the table below has been extended from 5:00 p.m., New York City time, on May 12, 2020 to 12:00 midnight, New York City time, at the end of May 27, 2020.
Title of Old Notes being | CUSIP Number / ISIN | Principal Amount of | New Notes Offered | |||
6.125% Senior Notes due 2022 | 78454LAK6 / US78454LAK61 | $650 | 10.00% Senior Secured Notes | |||
5.000% Senior Notes due 2024 | 78454LAH3 / US78454LAH33 | $500 | 10.00% Senior Secured Notes | |||
5.625% Senior Notes due 2025 | 78454LAL4 / US78454LAL45 | $500 | 10.00% Senior Secured Notes | |||
6.750% Senior Notes due 2026 | 78454LAN0 / US78454LAN01 | $500 | 10.00% Senior Secured Notes | |||
6.625% Senior Notes due 2027 | 78454LAP5 / US78454LAP58 | $500 | 10.00% Senior Secured Notes |
Except as described herein, the complete terms and conditions of the Exchange Offers and the Consent Solicitations remain the same as set forth and detailed in the Offering Memorandum, copies of which were previously distributed to eligible holders of the Old Notes. Withdrawal rights expired at 5:00 p.m., New York City time, on May 12, 2020 and tendered Old Notes may no longer be withdrawn.
The Exchange Offers are being made, and the New Notes are being offered and issued, only (a) in the United States to holders of Old Notes who are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) and (b) outside the United States to holders of Old Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act. The holders of Old Notes who have certified to the Company that they are eligible to participate in the Exchange Offers pursuant to at least one of the foregoing conditions are referred to as "Eligible Holders." Only Eligible Holders who have completed and returned an eligibility letter, available from the information agent, may receive and review the Offering Memorandum or participate in the Exchange Offers. Eligible Holders of the Old Notes who desire to obtain and complete an eligibility form should contact the information agent and exchange agent, D.F. King & Co., Inc., at (866) 620-2536 (toll-free) or (212) 269-5550 (for banks and brokers), email sm@dfking.com or online at www.dfking.com/smenergy.
Eligible Holders of the Old Notes are urged to carefully read the Offering Memorandum before making any decision with respect to the Exchange Offers and the Consent Solicitations. None of the Company, the dealer managers, the trustee with respect to the Old Notes, the trustee with respect to the New Notes, the information and exchange agent or any affiliate of any of them makes any recommendation as to whether Eligible Holders of the Old Notes should exchange their Old Notes for New Notes in the Exchange Offers, and no one has been authorized by any of them to make such a recommendation. Eligible Holders must make their own decision as to whether to tender Old Notes and, if so, the principal amount of Old Notes to tender.
The New Notes and the Exchange Offers have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers and the Consent Solicitations are not being made to Eligible Holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that the Company expects, believes, or anticipates will or may occur in the future are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, among other things, the completion of the Exchange Offers, the redemption of the Old Notes, the completion of the Consent Solicitations and the effectiveness of extending the Early Tender Time. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties, which may cause SM Energy's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Some of these risks are described in the "Risk Factors" section in Part I, Item 1A of SM Energy's Annual Report on Form 10-K for the year ended December 31, 2019 and Part II of SM Energy's Quarterly Report on Form 10-Q for the period ended March 31, 2020. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in the state of Texas.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
5/13/2020SM Energy Company Announces Amendments To Exchange Offers And Consent Solicitations
Source: PR Newswire
DENVER, May 5, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced that it has amended certain terms of its previously announced offers to all Eligible Holders (as defined in the Offering Memorandum) to exchange (the "Exchange Offers") any and all of its outstanding notes (together, the "Old Notes") for newly issued senior secured notes (collectively, the "New Notes") and solicitations of consents (the "Consent Solicitations") from holders of each series of Old Notes to certain proposed amendments to each indenture governing the Old Notes (the "Proposed Amendments"), in each case upon the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement, dated April 29, 2020 (the "Offering Memorandum") and in the Supplement No. 1 to the Offering Memorandum, dated May 5, 2020 (the "Offering Memorandum Supplement").
The Company has amended the terms of the Exchange Offers to (i) withdraw its offer to exchange and solicit consents for its outstanding 1.500% Senior Convertible Notes due 2021 (the "2021 Notes"), (ii) reduce the "Maximum Exchange Amount" of New Notes that the Company will issue in the Exchange Offers from $900 million to $825.0 million aggregate principal amount of New Notes, (iii) modify the "Acceptance Priority Cap" to apply to Acceptance Priority Levels equal or lower to Acceptance Priority 2, and (iv) remove all references to the "New 2022 Notes" (as defined in the Offering Memorandum).
In connection with the withdrawal of the exchange offer and the consent solicitation with respect to the 2021 Notes, pursuant to the terms of the indenture that governs the 2021 Notes, the Company will cause effective provisions to be made to grant holders of the 2021 Notes an equal and ratable security interest in the collateral securing the New Notes concurrently with the closing of the Exchange Offers.
Except as described herein and in the Offering Memorandum Supplement, the complete terms and conditions of the Exchange Offers and Consent Solicitations remain the same as set forth and detailed in the Offering Memorandum, copies of which were previously distributed to eligible holders of the Old Notes.
The Exchange Offers are being made, and the New Notes are being offered and issued, only (a) in the United States to holders of Old Notes other than the 2021 Notes (the "Exchange Notes") who are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) and (b) outside the United States to holders of Exchange Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act. The holders of Exchange Notes who have certified to the Company that they are eligible to participate in the Exchange Offers pursuant to at least one of the foregoing conditions are referred to as "Eligible Holders." Only Eligible Holders who have completed and returned an eligibility letter, available from the information agent, may receive and review the Offering Memorandum or participate in the Exchange Offers. Eligible Holders of the Exchange Notes who desire to obtain and complete an eligibility form should contact the information agent and exchange agent, D.F. King & Co., Inc., at (866) 620-2536 (toll-free) or (212) 269-5550 (for banks and brokers), email sm@dfking.com or online at www.dfking.com/smenergy.
Eligible Holders of the Exchange Notes are urged to carefully read the Offering Memorandum and the Offering Memorandum Supplement before making any decision with respect to the Exchange Offers and Consent Solicitations. None of the Company, the dealer managers, the trustee with respect to the Exchange Notes, the trustee with respect to the New Notes, the information and exchange agent or any affiliate of any of them makes any recommendation as to whether Eligible Holders of the Exchange Notes should exchange their Exchange Notes for New Notes in the Exchange Offers, and no one has been authorized by any of them to make such a recommendation. Eligible Holders must make their own decision as to whether to tender Exchange Notes and, if so, the principal amount of Exchange Notes to tender.
The New Notes and the Exchange Offers have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers and Consent Solicitations are not being made to Eligible Holders of Exchange Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that the Company expects, believes, or anticipates will or may occur in the future are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, among other things, the completion of the Exchange Offers, the redemption of the Exchange Notes, and the completion of the Consent Solicitations. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties, which may cause SM Energy's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Some of these risks are described in the "Risk Factors" section in Part I, Item 1A of SM Energy's Annual Report on Form 10-K for the year ended December 31, 2019 and Part II of SM Energy's Quarterly Report on Form 10-Q for the period ended March 31, 2020. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
5/6/2020SM Energy Company Announces Amendment To Credit Agreement
Source: PR Newswire
DENVER, May 5, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced an amendment to its existing Credit Agreement to increase the aggregate amount of second lien debt permitted thereunder. The Fourth Amendment to the Sixth Amended and Restated Credit Agreement provides that the Company is permitted to grant a second-lien security interest on up to $1.0 billion in aggregate amount, including the entire amount of its outstanding $172.5 million 1.500% Senior Convertible Notes due 2021.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-company-announces-amendment-to-credit-agreement-301053517.html
SOURCE SM Energy Company
Article Date
5/6/2020SM Energy Company Announces Commencement Of Exchange Offers And Consent Solicitations For All Outstanding Notes
Source: PR Newswire
DENVER, April 29, 2020 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced that it has commenced offers to all Eligible Holders (as defined below) to exchange (the "Exchange Offers") any and all of its outstanding notes listed in the table below (together, the "Old Notes") for up to $900 million aggregate principal amount of newly issued senior secured notes maturing on the dates set forth below (collectively, the "New Notes"), in each case upon the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement, dated April 29, 2020 (the "Offering Memorandum").
The following table sets forth the consideration to be offered to Eligible Holders of the Old Notes in the Exchange Offers:
Principal Amount of New Notes per | ||||||
Title of Old | CUSIP | Outstanding | Acceptance | Total | Exchange | New Notes Offered |
1.500% Senior Convertible | 78454LAM2 / US78454LAM28 | $172.50 | 1 | $600 | $550 | 10.00% Senior Secured Notes |
6.125% Senior Notes | 78454LAK6 / US78454LAK61 | $436.047 | 2 | $650 | $600 | 10.00% Senior Secured Notes |
5.000% Senior Notes | 78454LAH3 / US78454LAH33 | $500.00 | 3 | $500 | $450 | 10.00% Senior Secured Notes |
5.625% Senior Notes | 78454LAL4 / US78454LAL45 | $500.00 | 4 | $500 | $450 | 10.00% Senior Secured Notes |
6.750% Senior Notes | 78454LAN0 / US78454LAN01 | $500.00 | 5 | $500 | $450 | 10.00% Senior Secured Notes |
6.625% Senior Notes | 78454LAP5 / US78454LAP58 | $500.00 | 6 | $500 | $450 | 10.00% Senior Secured Notes |
The New Notes will be secured by second priority security interests in the collateral that secures SM Energy's senior secured credit facility. The New Notes will be SM Energy's secured second lien obligations and will be effectively junior to the Company's current and future secured first lien indebtedness, including indebtedness incurred under its senior secured credit facility, to the extent of the value of the collateral securing such indebtedness, effectively senior to all of the Company's existing and future unsecured indebtedness, including any Old Notes that remain outstanding following the completion of the Exchange Offers, to the extent of the value of the collateral, and senior to any future subordinated indebtedness. Interest on the New Notes will accrue from the date of issuance of the New Notes.
Pursuant to the Exchange Offers and subject to the proration terms described below, in exchange for each $1,000 principal amount of Old Notes and integral multiples in excess thereof validly tendered (and not validly withdrawn) at any time (i) at or prior to the May 12, 2020 (the "Early Tender Time") and accepted by the Company, participating holders of Old Notes will receive a principal amount of New Notes equal to the "Total Consideration" listed in the above table under the column heading "Total Consideration prior to the Early Tender Time" and (ii) after the Early Tender Time but at any time at or prior to May 27, 2020 (the "Expiration Time") and accepted by the Company, participating holders will receive a principal amount of New Notes equal to the "Exchange Consideration" listed in the above table under the column heading "Exchange Consideration after the Early Tender Time." Participating holders will receive, in cash, accrued and unpaid interest, if any, on their accepted Old Notes up to, but not including, June 1, 2020 (the "Settlement Date"). Tenders of Old Notes may be withdrawn and Consents may be revoked at any time at or prior to 5:00 p.m., New York City time, on May 12, 2020, but not thereafter, subject to limited exceptions and unless as otherwise required by applicable law, unless such time is extended (such time and date with respect to the Exchange Offers, as the same may be extended, the "Withdrawal Deadline").
The Exchange Offers are not conditioned upon any minimum amount of Old Notes being tendered. In addition, the Exchange Offers and the Consent Solicitations, either as a whole, or with respect to one or more series of Old Notes, may be amended, extended, terminated or withdrawn for any reason, including based on the acceptance rate and outcome of the Exchange Offers or failure to satisfy any condition to the Exchange Offers. Subject to the proration terms described in the Offering Memorandum, the amounts of each series of Old Notes that are accepted on the Settlement Date will be determined in accordance with the acceptance priority levels set forth in the table above (the "Acceptance Priority Levels"), with Acceptance Priority Level 1 being the highest Acceptance Priority Level and Acceptance Priority Level 6 being the lowest Acceptance Priority Level. The "Maximum Exchange Amount" of New Notes that the Company will issue in the Exchange Offers equals $900 million aggregate principal amount of New Notes; provided that the Company will not accept for exchange more than $1,350 million aggregate principal amount of Old Notes having Acceptance Priority Levels equal to or lower than Acceptance Priority Level 3 (the "Acceptance Priority Cap").
In conjunction with the Exchange Offers, SM Energy is soliciting consents (the "Consent Solicitations") from holders of each series of Old Notes ("Consents") to certain proposed amendments to each indenture governing the Old Notes (the "Old Notes Indentures") to eliminate substantially all of the restrictive covenants and certain of the default provisions contained therein (the "Proposed Amendments"). The Exchange Offers are not conditioned upon receiving Requisite Consents (as defined below) from holders of any series of the Old Notes. Holders of Old Notes may not tender Old Notes without delivering the related Consents, and holders of Old Notes may not deliver Consents without tendering the related Old Notes.
To adopt the Proposed Amendments related to a series of Old Notes, SM Energy must receive Consents from holders representing a majority of the outstanding principal amount of such series Old Notes (the "Requisite Consents"). If the Requisite Consents are delivered with respect to any series of Old Notes, a Supplemental Indenture will be executed promptly following the receipt of the Requisite Consents, but in no event prior to the later of the Early Tender Time and the Withdrawal Deadline, to give effect to the Proposed Amendments. The Proposed Amendments will become operative, with respect to Old Notes for which Requisite Consents have been delivered and not validly withdrawn, immediately prior to the acceptance of such Old Notes pursuant to the applicable Exchange Offer. In the event that the Requisite Consents for a series of Old Notes are received and not validly revoked but the Old Notes of such series tendered in the applicable Exchange Offer are subject to proration, the Proposed Amendments with respect to such series of Old Notes will not become operative despite the Company accepting the Old Notes of such series in the applicable Exchange Offer.
Old Notes may not be withdrawn from the Exchange Offers and the related Consents may not be revoked from the Consent Solicitations after the Withdrawal Deadline, unless otherwise required by applicable law.
The Exchange Offers are being made, and the New Notes are being offered and issued, only (a) in the United States to holders of Old Notes who are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and (b) outside the United States to holders of Old Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act. The holders of Old Notes who have certified to the Company that they are eligible to participate in the Exchange Offers pursuant to at least one of the foregoing conditions are referred to as "Eligible Holders." Only Eligible Holders who have completed and returned an eligibility letter, available from the information agent, may receive and review the Offering Memorandum or participate in the Exchange Offers. Eligible Holders of the Old Notes who desire to obtain and complete an eligibility form should contact the information agent and exchange agent, D.F. King & Co., Inc., at (866) 620-2536 (toll-free) or (212) 269-5550 (for banks and brokers), email sm@dfking.com or online at www.dfking.com/smenergy.
Eligible Holders of the Old Notes are urged to carefully read the Offering Memorandum before making any decision with respect to the Exchange Offers and Consent Solicitations. None of the Company, the dealer managers, the trustee with respect to the Old Notes, the trustee with respect to the New Notes, the information and exchange agent or any affiliate of any of them makes any recommendation as to whether Eligible Holders of the Old Notes should exchange their Old Notes for New Notes in the Exchange Offers, and no one has been authorized by any of them to make such a recommendation. Eligible Holders must make their own decision as to whether to tender Old Notes and, if so, the principal amount of Old Notes to tender.
The New Notes and the Exchange Offers have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers and Consent Solicitations are not being made to Eligible Holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that we expect, believe, or anticipate will or may occur in the future are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, among other things, the completion of the Exchange Offers, the redemption of the Old Notes, the completion of the Consent Solicitations and the effectiveness of the Proposed Amendments. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties, which may cause SM Energy's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Some of these risks are described in the "Risk Factors" section in Part I, Item 1A of SM Energy's Annual Report on Form 10-K for the year ended December 31, 2019 and Part II of our Quarterly Report on Form 10-Q for the period ended March 31, 2020. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-company-announces-commencement-of-exchange-offers-and-consent-solicitations-for-all-outstanding-notes-301049302.html
SOURCE SM Energy Company
Article Date
4/29/2020SM Energy Reports First Quarter 2020 Results And Updates 2020 Operating Plan
Source: PR Newswire
DENVER, April 29, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced operating and financial results for the first quarter 2020 and provided updates to its 2020 operating plan.
Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "As our industry faces unprecedented circumstances, our priorities are: first, the safety of our employees and contractors under the conditions of the pandemic; and second, maintaining a sustainable business plan under the contracted macro-economic environment. We have implemented a wide range of changes from modifying our capital activity to adopting new daily safety protocols for field teams. Our pace of capital spending has been reduced, and we have a strong hedge position in 2020 to bolster our cash flows during a time of considerable uncertainty."
FIRST QUARTER 2020 RESULTS
PRODUCTION: | |||
Midland Basin | South Texas | Total | |
Oil (MBbl / MBbl/d) | 5,932 / 65.2 | 415 / 4.6 | 6,347 / 69.8 |
Natural Gas (MMcf / MMcf/d) | 9,931 / 109.1 | 16,570 / 182.1 | 26,501 / 291.2 |
NGLs (MBbl / MBbl/d) | 3 / - | 1,599 / 17.6 | 1,602 / 17.6 |
Total (MBoe / MBoe/d) | 7,590 / 83.4 | 4,776 / 52.5 | 12,367 / 135.9 |
Note: Totals may not calculate due to rounding. | |||
REALIZED PRICES: | |||
Midland Basin | South Texas | Total | |
Oil ($/Bbl) | $46.55 | $37.45 | $45.96 / $54.40 |
Natural Gas ($/Mcf) | $1.14 | $1.77 | $1.54 / $2.09 |
NGLs ($/Bbl) | $16.77 | $13.62 | $13.62 / $16.89 |
Per Boe | $37.88 | $13.97 | $28.64 / $34.58 |
For additional regional detail on operating metrics, please see the Financial Highlights section below and the accompanying 1Q20 slide deck.
CHANGE IN DEFINITIONS
In order to better align discussion of results with GAAP reporting, the Company will no longer use the non-GAAP measures discretionary cash flow and total capital spend. The Company will replace these terms, respectively, with net cash provided by operating activities and capital expenditures, both found in the GAAP Statement of Cash Flows, as adjusted for changes in net working capital accruals. These new terms will not be directly comparable to the prior non-GAAP definitions. Please refer to the 1Q20 slide deck for a reconciliation of differences.
NET LOSS, LOSS PER SHARE AND NET CASH PROVIDED BY OPERATING ACTIVITIES
First quarter 2020 net loss was ($411.9) million, or ($3.64) per diluted common share. This compared with a net loss of ($177.6) million, or ($1.58) per diluted common share, in the comparable prior year period. The current period included an impairment of $989.8 million ($775.0 million net of tax) related predominantly to the write-down of South Texas proved oil and gas properties and related support facilities. The impairment was due to the significant decrease in commodity prices at the end of the first quarter of 2020, which was partially offset by higher production and realized hedge gains.
First quarter 2020 GAAP net cash provided by operating activities was $218.1 million, or $236.6 million before net change in working capital. Net cash provided by operating activities before net change in working capital is up $97.9 million, or 71%, from $138.7 million in the comparable prior year period. The significant increase in cash flow was due to 32% net daily production growth in the Midland Basin, which has high operating margins, as well as the benefit from realized hedge gains.
ADJUSTED EBITDAX, ADJUSTED NET INCOME AND NET DEBT-TO-ADJUSTED EBITDAX
The following paragraphs discuss non-GAAP measures including Adjusted EBITDAX, adjusted net income (loss), adjusted net income (loss) per diluted common share and net debt-to-Adjusted EBITDAX. Please reference the definitions and reconciliations of these measures to the most directly comparable GAAP financial measures at the end of this release.
First quarter 2020 Adjusted EBITDAX was $286.0 million, up $99.5 million, or 53%, from $186.5 million in the comparable prior year period. The significant increase in Adjusted EBITDAX was due to 32% net daily production growth in the Midland Basin as well as the benefit from realized hedge gains.
First quarter 2020 adjusted net loss was ($5.6) million, or ($0.05) per diluted common share, which compares with adjusted net loss of ($37.7) million or ($0.34) per diluted common share in the comparable prior year period.
Leverage improved during the first quarter of 2020 due to strong Adjusted EBITDAX and reduced absolute debt. At March 31, 2020, net debt-to-Adjusted EBITDAX was 2.45 times.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL EXPENDITURES
On March 31, 2020, the outstanding principal amount of the Company's long-term debt was comprised of $2.4 billion in senior notes, plus $172.5 million in senior convertible notes, plus $72.0 million drawn on the Company's senior secured revolving credit facility. The outstanding balance of the senior notes reflects $40.7 million principal amount of Senior Notes due 2022 repurchased for $28.3 million during the first quarter. Together, the reduction in the principal amount of the outstanding senior notes and the reduction in the senior secured revolving credit facility was $91.2 million. The cash balance was approximately zero.
Subsequent to March 31, 2020, the Company's lenders redetermined its senior secured revolving credit facility borrowing base at $1.1 billion and commitment level at $1.1 billion. Pro forma for the revised lender commitments, the Company had $1.0 billion of liquidity at March 31, 2020. The Company and its lenders also entered into the Third Amendment to the Credit Agreement (details of which are provided in the Company's First Quarter 2020 Form 10-Q.)
Capital expenditures for the first quarter of 2020 were $139.3 million, or $156.1 million before accruals. During the first quarter 2020, the Company drilled 25 net wells and completed 20 net wells.
COMMODITY DERIVATIVES
Commodity hedge positions include approximately:
The Company has certain other hedge positions in 2020 and added positions in 2021 and 2022. Please see the 1Q20 slide deck for detail.
2020 OPERATING PLAN - REVISED
Significant changes in the macro-economic outlook have occurred since the Company issued its 2020 operating plan and guidance. The economy has been severely impacted by COVID-19 virus response, and the resulting oversupply of oil has driven oil prices to 20-year lows. As a result, the Company has reduced its well completion and drilling pace, and expects capital spending for the remainder of 2020 to drop by approximately 30% versus its original plan, which is expected to result in a full year decrease in capital spending of approximately 20%. The Company is currently operating five rigs in the Midland Basin and one in South Texas and has one active completions crew in the Midland Basin and none in South Texas. The Company expects to reduce activity in the Midland Basin to four rigs in July.
Worldwide production of oil remains higher than demand, and oil storage capacity is nearly full, increasing the potential for forced shut-in of production. Government entities are actively considering pro-rationing of production, and economic conditions may also result in well shut-ins to reduce economic loss. Given the difficulty of accurately forecasting production volumes in this environment, the Company is withdrawing its previously issued production guidance for 2020.
CERTAIN REVISED GUIDANCE FULL YEAR 2020:
UPCOMING EVENTS
EARNINGS CALL AND PRESENTATION
April 29, 2020 - In conjunction with this release, the Company posts to its website a pre-recorded webcast discussion, a written transcript of the webcast, and an associated IR presentation. Please visit ir.sm-energy.com. The Company's first quarter results live Q&A call is canceled.
DISCLOSURES
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "assumes," "anticipate," "estimate," "expect," "forecast," "generate," "guidance," "implied," "maintain," "plan," "project," "objectives," "outlook," "sustainable," "target," "will" and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this release include, among other things, revised guidance for the full year and second quarter 2020, including production volumes, oil production growth, operating and general and administrative costs, DD&A, and capital expenditures; the Company's 2020 goals, including: generating free cash flow; and the number of wells the Company plans to drill and complete. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Future results may be impacted by the risks discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission, specifically the first quarter 2020 Form 10-Q. The forward-looking statements contained herein speak as of the date of this release. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | ||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||
March 31, 2020 | ||||||||||
Production Data | ||||||||||
For the Three Months Ended March 31, | ||||||||||
2020 | 2019 | Percent | ||||||||
Realized sales price (before the effects of derivative settlements): | ||||||||||
Oil (per Bbl) | $ | 45.96 | $ | 49.47 | (7) | % | ||||
Gas (per Mcf) | $ | 1.54 | $ | 2.73 | (44) | % | ||||
NGLs (per Bbl) | $ | 13.62 | $ | 19.39 | (30) | % | ||||
Equivalent (per Boe) | $ | 28.64 | $ | 31.86 | (10) | % | ||||
Realized sales price (including the effects of derivative settlements): | ||||||||||
Oil (per Bbl) | $ | 54.40 | $ | 49.19 | 11 | % | ||||
Gas (per Mcf) | $ | 2.09 | $ | 2.55 | (18) | % | ||||
NGLs (per Bbl) | $ | 16.89 | $ | 19.67 | (14) | % | ||||
Equivalent (per Boe) | $ | 34.58 | $ | 31.39 | 10 | % | ||||
Net production volumes: (1) | ||||||||||
Oil (MMBbl) | 6.3 | 4.8 | 31 | % | ||||||
Gas (Bcf) | 26.5 | 23.9 | 11 | % | ||||||
NGLs (MMBbl) | 1.6 | 1.9 | (14) | % | ||||||
MMBoe | 12.4 | 10.7 | 16 | % | ||||||
Average net daily production: (1) | ||||||||||
Oil (MBbls/d) | 69.8 | 53.7 | 30 | % | ||||||
Gas (MMcf/d) | 291.2 | 265.5 | 10 | % | ||||||
NGLs (MBbls/d) | 17.6 | 20.8 | (15) | % | ||||||
MBoe/d | 135.9 | 118.7 | 14 | % | ||||||
Per Boe data: | ||||||||||
Realized price (before the effects of derivative settlements) | $ | 28.64 | $ | 31.86 | (10) | % | ||||
Lease operating expense | 4.75 | 5.20 | (9) | % | ||||||
Transportation costs | 3.11 | 4.08 | (24) | % | ||||||
Production taxes | 1.20 | 1.31 | (8) | % | ||||||
Ad valorem tax expense | 0.60 | 0.76 | (21) | % | ||||||
General and administrative (2) | 2.22 | 3.00 | (26) | % | ||||||
Operating margin (before the effects of derivative settlements) | 16.76 | 17.51 | (4) | % | ||||||
Derivative settlement gain (loss) | 5.94 | (0.47) | 1,364 | % | ||||||
Operating margin (including the effects of derivative settlements) | $ | 22.70 | $ | 17.04 | 33 | % | ||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 18.88 | $ | 16.63 | 14 | % | ||||
(1) | Amounts and percentage changes may not calculate due to rounding. | ||||||||||
(2) | Includes non-cash stock-based compensation expense per Boe of $0.37 and $0.43 for the three months ended March 31, 2020, and 2019, respectively. | ||||||||||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2020 | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands, except share data) | March 31, | December 31, | |||||
ASSETS | 2020 | 2019 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 15 | $ | 10 | |||
Accounts receivable | 143,311 | 184,732 | |||||
Derivative assets | 463,992 | 55,184 | |||||
Prepaid expenses and other | 17,842 | 12,708 | |||||
Total current assets | 625,160 | 252,634 | |||||
Property and equipment (successful efforts method): | |||||||
Proved oil and gas properties | 8,043,156 | 8,934,020 | |||||
Accumulated depletion, depreciation, and amortization | (4,389,103) | (4,177,876) | |||||
Unproved oil and gas properties | 972,844 | 1,005,887 | |||||
Wells in progress | 224,509 | 118,769 | |||||
Other property and equipment, net of accumulated depreciation of $64,815 and $64,032, respectively | 36,932 | 72,848 | |||||
Total property and equipment, net | 4,888,338 | 5,953,648 | |||||
Noncurrent assets: | |||||||
Derivative assets | 44,909 | 20,624 | |||||
Other noncurrent assets | 56,618 | 65,326 | |||||
Total noncurrent assets | 101,527 | 85,950 | |||||
Total assets | $ | 5,615,025 | $ | 6,292,232 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 359,406 | $ | 402,008 | |||
Derivative liabilities | 8,277 | 50,846 | |||||
Other current liabilities | 15,780 | 19,189 | |||||
Total current liabilities | 383,463 | 472,043 | |||||
Noncurrent liabilities: | |||||||
Revolving credit facility | 72,000 | 122,500 | |||||
Senior Notes, net of unamortized deferred financing costs | 2,413,663 | 2,453,035 | |||||
Senior Convertible Notes, net of unamortized discount and deferred financing costs | 159,721 | 157,263 | |||||
Asset retirement obligations | 85,267 | 84,134 | |||||
Deferred income taxes | 93,918 | 189,386 | |||||
Derivative liabilities | 7,202 | 3,444 | |||||
Other noncurrent liabilities | 58,074 | 61,433 | |||||
Total noncurrent liabilities | 2,889,845 | 3,071,195 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,988,682 and 112,987,952 shares, respectively | 1,130 | 1,130 | |||||
Additional paid-in capital | 1,797,154 | 1,791,596 | |||||
Retained earnings | 554,562 | 967,587 | |||||
Accumulated other comprehensive loss | (11,129) | (11,319) | |||||
Total stockholders' equity | 2,341,717 | 2,748,994 | |||||
Total liabilities and stockholders' equity | $ | 5,615,025 | $ | 6,292,232 | |||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2020 | |||||||
Condensed Consolidated Statements of Operations | |||||||
(in thousands, except per share data) | For the Three Months Ended March 31, | ||||||
2020 | 2019 | ||||||
Operating revenues and other income: | |||||||
Oil, gas, and NGL production revenue | $ | 354,233 | $ | 340,476 | |||
Net gain on divestiture activity | — | 61 | |||||
Other operating revenues | 1,501 | 393 | |||||
Total operating revenues and other income | 355,734 | 340,930 | |||||
Operating expenses: | |||||||
Oil, gas, and NGL production expense | 119,552 | 121,305 | |||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 233,489 | 177,746 | |||||
Exploration (1) | 11,349 | 11,348 | |||||
Impairment | 989,763 | 6,338 | |||||
General and administrative (1) | 27,447 | 32,086 | |||||
Net derivative (gain) loss (2) | (545,340) | 177,081 | |||||
Other operating expenses, net | 566 | 335 | |||||
Total operating expenses | 836,826 | 526,239 | |||||
Loss from operations | (481,092) | (185,309) | |||||
Interest expense | (41,512) | (37,980) | |||||
Gain on extinguishment of debt | 12,195 | — | |||||
Other non-operating expense, net | (494) | (317) | |||||
Loss before income taxes | (510,903) | (223,606) | |||||
Income tax benefit | 99,008 | 46,038 | |||||
Net loss | $ | (411,895) | $ | (177,568) | |||
Basic weighted-average common shares outstanding | 113,009 | 112,252 | |||||
Diluted weighted-average common shares outstanding | 113,009 | 112,252 | |||||
Basic net loss per common share | $ | (3.64) | $ | (1.58) | |||
Diluted net loss per common share | $ | (3.64) | $ | (1.58) | |||
Dividends per common share | $ | 0.01 | $ | 0.05 | |||
(1) Non-cash stock-based compensation included in: | |||||||
Exploration expense | $ | 957 | $ | 1,205 | |||
General and administrative expense | 4,604 | 4,633 | |||||
Total non-cash stock-based compensation | $ | 5,561 | $ | 5,838 | |||
(2) The net derivative (gain) loss line item consists of the following: | |||||||
Settlement (gain) loss | $ | (73,437) | $ | 4,969 | |||
(Gain) loss on fair value changes | (471,903) | 172,112 | |||||
Total net derivative (gain) loss | $ | (545,340) | $ | 177,081 | |||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
March 31, 2020 | ||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | ||||||||||||||||||||||
Additional | Accumulated | Total | ||||||||||||||||||||
Common Stock | Retained | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2019 | 112,987,952 | $ | 1,130 | $ | 1,791,596 | $ | 967,587 | $ | (11,319) | $ | 2,748,994 | |||||||||||
Net loss | — | — | — | (411,895) | — | (411,895) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 190 | 190 | ||||||||||||||||
Cash dividends declared, $0.01 per share | — | — | — | (1,130) | — | (1,130) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 730 | — | (3) | — | — | (3) | ||||||||||||||||
Stock-based compensation expense | — | — | 5,561 | — | — | 5,561 | ||||||||||||||||
Balances, March 31, 2020 | 112,988,682 | $ | 1,130 | $ | 1,797,154 | $ | 554,562 | $ | (11,129) | $ | 2,341,717 | |||||||||||
Additional | Accumulated | Total | ||||||||||||||||||||
Common Stock | Retained | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2018 | 112,241,966 | $ | 1,122 | $ | 1,765,738 | $ | 1,165,842 | $ | (12,380) | $ | 2,920,322 | |||||||||||
Net loss | — | — | — | (177,568) | — | (177,568) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 263 | 263 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,612) | — | (5,612) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 2,579 | — | (18) | — | — | (18) | ||||||||||||||||
Stock-based compensation expense | — | — | 5,838 | — | — | 5,838 | ||||||||||||||||
Balances, March 31, 2019 | 112,244,545 | $ | 1,122 | $ | 1,771,558 | $ | 982,662 | $ | (12,117) | $ | 2,743,225 | |||||||||||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2020 | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(in thousands) | For the Three Months Ended March 31, | ||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (411,895) | $ | (177,568) | |||
Adjustments to reconcile net loss to net cash provided by operating activities | |||||||
Net gain on divestiture activity | — | (61) | |||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 233,489 | 177,746 | |||||
Impairment | 989,763 | 6,338 | |||||
Stock-based compensation expense | 5,561 | 5,838 | |||||
Net derivative (gain) loss | (545,340) | 177,081 | |||||
Derivative settlement gain (loss) | 73,437 | (4,969) | |||||
Amortization of debt discount and deferred financing costs | 3,992 | 3,789 | |||||
Gain on extinguishment of debt | (12,195) | — | |||||
Deferred income taxes | (99,347) | (47,003) | |||||
Other, net | (816) | (2,530) | |||||
Net change in working capital | (18,517) | (20,159) | |||||
Net cash provided by operating activities | 218,132 | 118,502 | |||||
Cash flows from investing activities: | |||||||
Net proceeds from the sale of oil and gas properties | — | 6,114 | |||||
Capital expenditures | (139,306) | (249,340) | |||||
Other, net | — | 291 | |||||
Net cash used in investing activities | (139,306) | (242,935) | |||||
Cash flows from financing activities: | |||||||
Proceeds from revolving credit facility | 425,500 | 172,000 | |||||
Repayment of revolving credit facility | (476,000) | (125,500) | |||||
Cash paid to repurchase 6.125% Senior Notes due 2022 | (28,318) | — | |||||
Other, net | (3) | (18) | |||||
Net cash provided by (used in) financing activities | (78,821) | 46,482 | |||||
Net change in cash, cash equivalents, and restricted cash | 5 | (77,951) | |||||
Cash, cash equivalents, and restricted cash at beginning of period | 10 | 77,965 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 15 | $ | 14 | |||
Supplemental schedule of additional cash flow information and non-cash activities: | |||||||
Operating activities: | |||||||
Cash paid for interest, net of capitalized interest | $ | (47,469) | $ | (39,957) | |||
Investing activities: | |||||||
Increase in capital expenditure accruals and other | $ | 16,802 | $ | 62,185 | |||
Supplemental non-cash investing activities: | |||||||
Carrying value of properties exchanged | $ | — | $ | 65,788 | |||
DEFINITIONS OF NON-GAAP MEASURES AS CALCULATED BY THE COMPANY
The following non-GAAP measures are presented in addition to financial statements as the Company believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and compare investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. A non-GAAP measure should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies.
Adjusted EBITDAX: Adjusted EBITDAX is calculated as net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is also important as it is considered among financial covenants under the Company's Credit Agreement, a material source of liquidity for the Company. Please reference the Company's 2019 Form 10-K and first quarter 2020 Form 10-Q for discussion of the Credit Agreement and its covenants.
Adjusted net income (loss): Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, gains and losses on extinguishment of debt, and accruals for non-recurring matters.
Free cash flow: Free cash flow is calculated as net cash provided by operating activities before net change in working capital less capital expenditures before increase in capital expenditure accruals and other.
Net Debt: The total principal amount of outstanding senior notes, senior convertible notes plus amounts drawn on the revolving credit facility (also referred to as total funded debt) less cash and cash equivalents.
Net debt-to-Adjusted EBITDAX: Net debt-to-Adjusted EBITDAX is calculated as Net Debt (defined above) divided by Adjusted EBITDAX (defined above). A variation of this calculation is a financial covenant under the Company's Credit Agreement for its revolving credit facility beginning in the fourth quarter of 2018.
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2020 | |||||||
Adjusted EBITDAX Reconciliation (1) | |||||||
(in thousands) | |||||||
Reconciliation of net loss (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDAX (non-GAAP) | For the Three Months Ended | ||||||
2020 | 2019 | ||||||
Net loss (GAAP) | $ | (411,895) | $ | (177,568) | |||
Interest expense | 41,512 | 37,980 | |||||
Income tax benefit | (99,008) | (46,038) | |||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 233,489 | 177,746 | |||||
Exploration (2) | 10,392 | 10,143 | |||||
Impairment | 989,763 | 6,338 | |||||
Stock-based compensation expense | 5,561 | 5,838 | |||||
Net derivative (gain) loss | (545,340) | 177,081 | |||||
Derivative settlement gain (loss) | 73,437 | (4,969) | |||||
Net gain on divestiture activity | — | (61) | |||||
Gain on extinguishment of debt | (12,195) | — | |||||
Other, net | 333 | 4 | |||||
Adjusted EBITDAX (non-GAAP) | 286,049 | 186,494 | |||||
Interest expense | (41,512) | (37,980) | |||||
Income tax benefit | 99,008 | 46,038 | |||||
Exploration (2) | (10,392) | (10,143) | |||||
Amortization of debt discount and deferred financing costs | 3,992 | 3,789 | |||||
Deferred income taxes | (99,347) | (47,003) | |||||
Other, net | (1,149) | (2,534) | |||||
Net change in working capital | (18,517) | (20,159) | |||||
Net cash provided by operating activities (GAAP) | $ | 218,132 | $ | 118,502 | |||
(1) | See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) | Stock-based compensation expense is a component of the exploration expense and general and administrative expense line items on the accompanying condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the accompanying condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2020 | |||||||
Adjusted Net Loss Reconciliation (1) | |||||||
(in thousands, except per share data) | |||||||
Reconciliation of net loss (GAAP) to adjusted net loss (non-GAAP): | For the Three Months Ended | ||||||
2020 | 2019 | ||||||
Net loss (GAAP) | $ | (411,895) | $ | (177,568) | |||
Net derivative (gain) loss | (545,340) | 177,081 | |||||
Derivative settlement gain (loss) | 73,437 | (4,969) | |||||
Net gain on divestiture activity | — | (61) | |||||
Impairment | 989,763 | 6,338 | |||||
Gain on extinguishment of debt | (12,195) | — | |||||
Other, net (2) | 386 | 213 | |||||
Tax effect of adjustments (3) | (109,813) | (38,757) | |||||
Valuation allowance on deferred tax assets | 10,017 | — | |||||
Adjusted net loss (non-GAAP) | $ | (5,640) | $ | (37,723) | |||
Diluted net loss per common share (GAAP) | $ | (3.64) | $ | (1.58) | |||
Net derivative (gain) loss | (4.83) | 1.58 | |||||
Derivative settlement gain (loss) | 0.65 | (0.04) | |||||
Net gain on divestiture activity | — | — | |||||
Impairment | 8.76 | 0.06 | |||||
Gain on extinguishment of debt | (0.11) | — | |||||
Other, net (2) | — | — | |||||
Tax effect of adjustments (3) | (0.97) | (0.36) | |||||
Valuation allowance on deferred tax assets | 0.09 | — | |||||
Adjusted net loss per diluted common share (non-GAAP) | $ | (0.05) | $ | (0.34) | |||
Basic weighted-average common shares outstanding | 113,009 | 112,252 | |||||
Diluted weighted-average common shares outstanding | 113,009 | 112,252 | |||||
Note: Amounts may not calculate due to rounding. | ||||||||
(1) | See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) | For the three months ended March 31, 2020, the adjustment relates to bad debt expense and impairments on materials inventory and other property. For the three months ended March 31, 2019, the adjustment relates to bad debt expense and impairment on materials inventory. | |||||||
(3) | The tax effect of adjustments for the three months ended March 31, 2020, and 2019, was calculated using a tax rate of 21.7%. This rate approximates the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||
Reconciliation of Net Debt (1) | |||
(in thousands) | |||
As of March 31, 2020 | |||
Senior Notes (principal amount from Note 5 of 1Q20 Form 10-Q) | $ | 2,436,047 | |
Senior Convertible Notes (principal amount from Note 5 of 1Q20 Form 10-Q) | 172,500 | ||
Revolving credit facility | 72,000 | ||
Total funded debt | 2,680,547 | ||
Less: Cash and cash equivalents | 15 | ||
Net Debt | $ | 2,680,532 | |
(1) | See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||
Free Cash Flow (1) | |||
(in thousands) | |||
For the Three Months | |||
2020 | |||
Net cash provided by operating activities (GAAP) | $ | 218,132 | |
Net change in working capital | (18,517) | ||
Cash flow from operations before net change in working capital | $ | 236,649 | |
Less: | |||
Capital expenditures (GAAP) | 139,306 | ||
Increase in capital expenditure accruals and other | 16,802 | ||
Free cash flow | $ | 80,541 | |
(1) | See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-first-quarter-2020-results-and-updates-2020-operating-plan-301049301.html
SOURCE SM Energy Company
Article Date
4/29/2020SM Energy Schedules First Quarter 2020 Earnings Release And Call
Source: PR Newswire
DENVER, April 23, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that it expects to release its first quarter 2020 financial and operating results after market on May 6, 2020. See schedule below:
May 6, 2020 – After market close, the Company plans to release its first quarter 2020 financial and operating results. This will include the earnings release, a pre-recorded webcast discussing first quarter 2020 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
May 7, 2020 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the first quarter 2020 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call and until May 14, 2020.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-schedules-first-quarter-2020-earnings-release-and-call-301046464.html
SOURCE SM Energy Company
Article Date
4/23/20204/9/2020 - SM Energy Declares Semi-Annual Cash Dividend
SM Energy Declares Semi-Annual Cash Dividend
Source: PR Newswire
DENVER, April 9, 2020 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that its Board of Directors has approved a semi-annual cash dividend of $0.01 per share of common stock outstanding. The dividend reflects a reduction for the current period consistent with the Company's priority to manage cash flow in light of the unprecedented and volatile market conditions. The dividend will be paid on May 8, 2020, to stockholders of record as of the close of business on April 24, 2020. The Company currently has approximately 113.0 million shares of common stock outstanding.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-declares-semi-annual-cash-dividend-301037895.html
SOURCE SM Energy Company
Article Date
4/9/2020SM Energy Reports 2019 Results And 2020 Operating Plan
Source: PR Newswire
DENVER, Feb. 19, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced operating and financial results for the fourth quarter and full year 2019, year-end reserves and the 2020 operating plan. Highlights include:
2019 Results:
2020 Outlook:
President and Chief Executive Officer Jay Ottoson comments: "Our operations team delivered outstanding results throughout 2019, culminating in year-over-year Midland Basin production growth of 25% for both the fourth quarter and full year. We achieved a key milestone by generating free cash flow in the second half of the year, and we met or exceeded our objectives in every meaningful metric of our business, including top quartile industry benchmarks for environmental, health and safety performance. We were also successful in proving up additional investment opportunities on our existing acreage.
"This is an exciting time for our Company as we believe we are now on a positive trajectory of growing free cash flow and reducing debt, after a three-year program to transition our portfolio to top tier assets. Our 2020 operating plan prioritizes free cash flow and improved leverage metrics while positioning our Company to generate sustainable, moderate production growth within cash flow beyond 2020. Our organization and cost structure have been stream-lined to facilitate accomplishment of our strategic objectives, and our compensation plan design reinforces our focus on achieving high returns and outstanding safety and emissions performance. We believe that we are a premier operator of top tier assets, and that we will create differential value for our shareholders going forward."
2019 IN REVIEW
MIDLAND BASIN - TOP TIER EXECUTION
During 2019, the Company's continued focus on optimizing capital efficiency, operating costs and well performance in the Midland Basin led to top tier returns. Well performance supported production growth of 25% compared with planned growth of 20%. Capital efficiency is highlighted by 2019 average well costs of approximately $690 per lateral foot, supported by a 15% increase in lateral feet drilled per day and 47% increase in lateral feet completed per day, compared with 2018. Focus on operating costs delivered an average 2019 cash production margin of $36.45 per Boe in the Midland Basin (cash production margin is an operating metric that provides the region-specific cash operating margin before allocation of general and administrative expenses).
AUSTIN CHALK, SOUTH TEXAS - NEW RESULTS
During the fourth quarter, the Company brought on production an additional Austin Chalk test well with a completed 6,500 foot lateral that achieved a 30-day peak IP rate of 2,635 Boe/d 3-stream (61% oil) in the northern portion of the Company's acreage position. The five wells that the Company has completed to date in the Austin Chalk have averaged 30-day peak IP rates of 2,580 Boe/d with an average of 34% oil. Given the strong rates encountered to date, a capital program focused on the oilier Austin Chalk would be expected to deliver highly competitive returns.
FOURTH QUARTER AND FULL YEAR RESULTS
PRODUCTION BY REGION
Fourth Quarter 2019 | Full Year 2019 | ||||||
Midland Basin | South Texas | Total | Midland Basin | South Texas | Total | ||
Oil - MMBbl | 5.8 | 0.4 | 6.2 | 20.5 | 1.3 | 21.9 | |
Natural gas - Bcf | 9.9 | 18.2 | 28.1 | 34.4 | 75.4 | 109.8 | |
NGLs - MMBbl | nm | 1.9 | 1.9 | nm | 8.1 | 8.1 | |
Total - MMBoe | 7.4 | 5.3 | 12.8 | 26.3 | 22.0 | 48.3 | |
Total - MBoe/d | 80.8 | 57.9 | 138.8 | 72.0 | 60.3 | 132.3 | |
Note: Totals may not calculate due to rounding |
Fourth quarter:
REALIZED PRICES BY REGION
Fourth Quarter 2019: | |||
Midland Basin | South Texas | Totals Pre/Post-Hedge | |
Oil/$Bbl | $56.88 | $45.03 | $56.09/$55.22 |
Natural gas/$Mcf | 2.62 | 2.32 | 2.42/2.75 |
NGLs/$Bbl | nm | 17.84 | 17.84/23.93 |
Per Boe | $47.70 | $17.69 | $35.17/$36.38 |
Full Year 2019: | |||
Midland Basin | South Texas | Totals Pre/Post-Hedge | |
Oil/$Bbl | $54.52 | $47.58 | $54.10/$53.20 |
Natural gas/$Mcf | 2.21 | 2.47 | 2.39/2.60 |
NGLs/$Bbl | nm | 17.26 | 17.26/21.69 |
Per Boe | $45.51 | $17.72 | $32.84/$33.65 |
Fourth quarter:
For additional regional detail on operating metrics, please see the accompanying 4Q19 Earnings and 2020 Operating Plan slide deck.
EARNINGS/NET LOSS, EARNINGS/LOSS PER SHARE AND NET CASH PROVIDED BY OPERATING ACTIVITIES
Full year 2019 GAAP net loss was ($187.0) million, or ($1.66) per diluted common share, and fourth quarter 2019 GAAP net loss was ($102.1) million, or ($0.90) per diluted common share. This compared with GAAP earnings in the prior year periods of $508.4 million, or $4.48 per diluted common share, and $309.7 million, or $2.73 per diluted common share, respectively.
Full year 2019 GAAP net cash provided by operating activities was $823.6 million, and fourth quarter 2019 GAAP net cash provided by operating activities was $242.0 million. This compared favorably with the prior year periods of $720.6 million and $179.5 million, respectively.
ADJUSTED EBITDAX, ADJUSTED NET INCOME AND NET-DEBT-TO- ADJUSTED EBITDAX
The following paragraphs discuss non-GAAP measures including Adjusted EBITDAX, adjusted net income (loss), adjusted net income (loss) per diluted common share and net debt-to-Adjusted EBITDAX. Please reference the definitions and reconciliations of these measures to the most directly comparable GAAP financial measures at the end of this release.
Full year Adjusted EBITDAX was $993.4 million, up 10% from $900.4 million in 2018. Fourth quarter Adjusted EBITDAX was $286.2 million up 37% from $209.2 million in the prior year period. The increase in Adjusted EBITDAX for the full year 2019 is predominantly driven by a 10% increase in total production that included 17% growth in oil production. Higher oil production, which carries a higher margin, supported a slightly increased cash operating margin per Boe (including the effects of hedges), despite significant declines in benchmark commodity prices in 2019 versus 2018 for each of oil, natural gas and NGLs. The significant increase in Adjusted EBITDAX for the fourth quarter 2019, compared with the prior year period, was similarly driven by a 13% increase in total production and a 22% increase in oil production.
Full year adjusted net loss was ($53.5) million and fourth quarter adjusted net loss was ($5.0) million. This compared to adjusted earnings of $3.3 million for full year 2018 and adjusted net loss of ($20.0) million in the fourth quarter of 2018. For the full year, the benefit of higher Adjusted EBITDAX was offset by higher depletion, depreciation, amortization and accretion expense, associated with both a higher per unit rate and higher production.
Leverage improved during 2019, ending the year with net-debt-to-Adjusted EBITDAX at 2.8 times.
FINANCIAL POSITION, LIQUIDITY, COSTS INCURRED AND TOTAL CAPITAL SPEND
On December 31, 2019, the outstanding principal amount of the Company's long-term debt was $2.5 billion in senior notes, plus $172.5 million in senior convertible notes, plus $122.5 million drawn on the Company's senior secured credit facility. The cash balance was approximately zero. Liquidity was $1.1 billion.
Costs incurred in oil and gas activities for the fourth quarter of 2019 was $178.8 million. Total capital spend (a non-GAAP measure defined and reconciled below) for the quarter was $184.9 million. For the full year 2019, costs incurred in oil and gas activities was $1.040 billion and total capital spend was $1.025 billion. During the fourth quarter, the Company drilled 33 net wells and completed 34 net wells, reflecting slightly accelerated timing on certain wells turned-in-line before year-end. For the full year, the Company drilled 124 net wells and completed 131 net wells.
PROVED RESERVES AT YEAR-END 2019
Proved reserves were 462 MMBoe with 40% oil, 44% natural gas and 16% NGLs. Reserves were 53% PD and 47% PUD.
MMBoe | ||
Proved reserves year-end 2018 | 503.4 | |
Reserve additions | 98.4 | |
Acquisitions net of divestitures | 3.1 | |
Net reserve additions before revisions | 101.5 | |
Revisions (5-year rule, price and performance) | (94.7) | |
Production | (48.3) | |
Proved reserves year-end 2019 | 462.0 |
Note: Total does not sum due to rounding |
STANDARDIZED MEASURE AND PRE-TAX PV-10 AT YEAR-END 2019
The standardized measure of discounted future net cash flows from proved reserves was $4.1 billion at year-end 2019, down from $4.7 billion at year-end 2018. The decline in the standardized measure is primarily due to the reduction in SEC pricing used in the calculation for NGLs and natural gas, which were down 32% and 17% respectively. Pre-tax PV-10 is a non-GAAP measure (defined and reconciled at the end of this release) that considers the standardized measure calculation before the effect of taxes. Pre-tax PV10 was $4.4 billion at year-end 2019 compared with $5.1 billion at year-end 2018. The approximate $741 million decrease in pre-tax PV-10 reflects an $860 million decrease in the value of South Texas proved reserves due to the significant decline in SEC pricing year-over-year, specifically for natural gas and NGLs, partially offset by an $119 million increase in the value of Midland Basin proved reserves, despite a 15% decline in SEC oil pricing.
2020 OPERATING PLAN AND GUIDANCE
Discussion in this release of the 2020 operating plan and guidance include total capital spend, discretionary cash flow, free cash flow and net debt-to-Adjusted EBITDAX, which are non-GAAP measures. The Company is unable to provide reconciliations of these forward-looking measures because components of the calculations are inherently unpredictable (such as future expenditures to acquire properties, changes to current assets and liabilities) and estimating future GAAP measures with the precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort.
A key Company objective is generating profitable growth in cash flow from operations (a return metric tied to the Company's long-term incentive plan).
2020 GOALS:
Consistent with long-term objectives
STRATEGIC PRIORITIES:
KEY ASSUMPTIONS:
GUIDANCE FULL YEAR 2020:
GUIDANCE FIRST QUARTER 2020:
UPCOMING EVENTS
EARNINGS Q&A WEBCAST AND CONFERENCE CALL
February 19, 2020 - In conjunction with the release, the Company posts to its website a pre-recorded webcast discussion, a written transcript of the webcast, and an associated IR presentation. Please visit ir.sm-energy.com.
February 20, 2020 - Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the fourth quarter and full year 2019 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call and until February 27, 2020.
CONFERENCE PARTICIPATION
DISCLOSURES
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "assumes," "anticipate," "estimate," "expect," "forecast," "guidance," "implied," "plan," "project," "objectives," "outlook," "target," "will" and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this release include, among other things, guidance for the full year and first quarter 2020, including production volumes, oil production growth, operating and general and administrative costs, DD&A, and total capital spend; the Company's 2020 strategic priorities, including: improved operating margins and cash flow, the allocation of capital across the Company's assets, oil mix as a percentage of production, delivery of free cash flow, maintaining top quartile environmental, health and safety performance, and increasing inventory and inventory value; the Company's 2020 goals, including: reducing leverage and generating full-year 2020 free cash flow; and the number of wells the Company plans to drill and complete. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Future results may be impacted by the risks discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this release. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws.
RESERVE DISCLOSURE
The SEC requires oil and natural gas companies, in their filings with the SEC, to disclose proved reserves, which are those quantities of oil, natural gas and NGLs, that, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible-from a given date forward, from known reservoirs and under existing economic conditions (using the trailing 12-month average first-day-of-the-month prices), operating methods and government regulations-prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The SEC also permits the disclosure of separate estimates of probable or possible reserves that meet SEC definitions for such reserves; however, the Company currently does not disclose probable or possible reserves in its SEC filings.
Proved reserves attributable to the Company at December 31, 2019, are estimated utilizing SEC reserve recognition standards and pricing assumptions based on the trailing 12-month average first-day-of-the-month prices of $55.69 per Bbl of oil, $2.58 per MMBtu of natural gas, and $22.68 per Bbl of NGLs. At least 80% of the PV-10 of the Company's estimate of its total proved reserves at December 31, 2019, was audited by Ryder Scott Company, L.P.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | |||||||||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||
Production Data | |||||||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||
2019 | 2018 | Percent | 2019 | 2018 | Percent | ||||||||||||||||
Realized sales price (before the effects of derivative settlements): | |||||||||||||||||||||
Oil (per Bbl) | $ | 56.09 | $ | 49.29 | 14 | % | $ | 54.10 | $ | 56.80 | (5) | % | |||||||||
Gas (per Mcf) | $ | 2.42 | $ | 3.71 | (35) | % | $ | 2.39 | $ | 3.43 | (30) | % | |||||||||
NGL (per Bbl) | $ | 17.84 | $ | 24.01 | (26) | % | $ | 17.26 | $ | 27.22 | (37) | % | |||||||||
Per Boe | $ | 35.17 | $ | 34.74 | 1 | % | $ | 32.84 | $ | 37.27 | (12) | % | |||||||||
Realized sales price (including the effects of derivative settlements): | |||||||||||||||||||||
Oil (per Bbl) | $ | 55.22 | $ | 47.94 | 15 | % | $ | 53.20 | $ | 53.13 | — | % | |||||||||
Gas (per Mcf) | $ | 2.75 | $ | 3.01 | (9) | % | $ | 2.60 | $ | 3.31 | (21) | % | |||||||||
NGL (per Bbl) | $ | 23.93 | $ | 19.36 | 24 | % | $ | 21.69 | $ | 20.44 | 6 | % | |||||||||
Equivalent (per Boe) | $ | 36.38 | $ | 31.74 | 15 | % | $ | 33.65 | $ | 34.18 | (2) | % | |||||||||
Net production volumes: (1) | |||||||||||||||||||||
Oil (MMBbls) | 6.2 | 5.1 | 22 | % | 21.9 | 18.8 | 17 | % | |||||||||||||
Gas (Bcf) | 28.1 | 25.5 | 10 | % | 109.8 | 103.2 | 6 | % | |||||||||||||
NGL (MMBbls) | 1.9 | 2.0 | (4) | % | 8.1 | 7.9 | 2 | % | |||||||||||||
MMBoe | 12.8 | 11.3 | 13 | % | 48.3 | 43.9 | 10 | % | |||||||||||||
Average net daily production: (1) | |||||||||||||||||||||
Oil (MBbls/d) | 67.3 | 55.3 | 22 | % | 59.9 | 51.4 | 17 | % | |||||||||||||
Gas (MMcf/d) | 305.7 | 277.0 | 10 | % | 300.8 | 282.7 | 6 | % | |||||||||||||
NGL (MBbls/d) | 20.5 | 21.3 | (4) | % | 22.2 | 21.8 | 2 | % | |||||||||||||
MBoe/d | 138.8 | 122.8 | 13 | % | 132.3 | 120.3 | 10 | % | |||||||||||||
Per Boe Data: | |||||||||||||||||||||
Realized price (before the effects of derivative settlements) | $ | 35.17 | $ | 34.74 | 1 | % | $ | 32.84 | $ | 37.27 | (12) | % | |||||||||
Lease operating expense | 4.67 | 4.98 | (6) | % | 4.67 | 4.74 | (1) | % | |||||||||||||
Transportation costs | 3.46 | 4.19 | (17) | % | 3.88 | 4.36 | (11) | % | |||||||||||||
Production taxes | 1.48 | 1.19 | 24 | % | 1.35 | 1.52 | (11) | % | |||||||||||||
Ad valorem tax expense | 0.37 | 0.39 | (5) | % | 0.48 | 0.48 | — | % | |||||||||||||
General and administrative (2) | 2.92 | 2.69 | 8 | % | 2.75 | 2.65 | 4 | % | |||||||||||||
Operating margin (before the effects of derivative settlements) | 22.27 | 21.30 | 5 | % | 19.71 | 23.52 | (16) | % | |||||||||||||
Derivative settlement gain (loss) | 1.20 | (3.00) | 140 | % | 0.81 | (3.09) | 126 | % | |||||||||||||
Operating margin (including the effects of derivative settlements) | $ | 23.47 | $ | 18.30 | 28 | % | $ | 20.52 | $ | 20.43 | — | % | |||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 17.91 | $ | 16.10 | 11 | % | $ | 17.06 | $ | 15.15 | 13 | % | |||||||||
(1) Amounts and percentage changes may not calculate due to rounding. | |||||||||||||||||||||
(2) Includes non-cash stock-based compensation expense per Boe of $0.38 and $0.42 for the three months ended December 31, 2019, and 2018, respectively, and $0.41 and $0.42 for the twelve months ended December 31, 2019, and 2018, respectively. |
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS | |||||||
December 31, 2019 | |||||||
Consolidated Balance Sheets | |||||||
(in thousands, except share data) | December 31, | ||||||
ASSETS | 2019 | 2018 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 10 | $ | 77,965 | |||
Accounts receivable | 184,732 | 167,536 | |||||
Derivative assets | 55,184 | 175,130 | |||||
Prepaid expenses and other | 12,708 | 8,632 | |||||
Total current assets | 252,634 | 429,263 | |||||
Property and equipment (successful efforts method): | |||||||
Proved oil and gas properties | 8,934,020 | 7,278,362 | |||||
Accumulated depletion, depreciation, and amortization | (4,177,876) | (3,417,953) | |||||
Unproved oil and gas properties | 1,005,887 | 1,581,401 | |||||
Wells in progress | 118,769 | 295,529 | |||||
Other property and equipment, net of accumulated depreciation of $64,032 and $57,102, respectively | 72,848 | 93,826 | |||||
Total property and equipment, net | 5,953,648 | 5,831,165 | |||||
Noncurrent assets: | |||||||
Derivative assets | 20,624 | 58,499 | |||||
Other noncurrent assets | 65,326 | 33,935 | |||||
Total noncurrent assets | 85,950 | 92,434 | |||||
Total assets | $ | 6,292,232 | $ | 6,352,862 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 402,008 | $ | 403,199 | |||
Derivative liabilities | 50,846 | 62,853 | |||||
Other current liabilities | 19,189 | — | |||||
Total current liabilities | 472,043 | 466,052 | |||||
Noncurrent liabilities: | |||||||
Revolving credit facility | 122,500 | — | |||||
Senior Notes, net of unamortized deferred financing costs | 2,453,035 | 2,448,439 | |||||
Senior Convertible Notes, net of unamortized discount and deferred financing costs | 157,263 | 147,894 | |||||
Asset retirement obligations | 84,134 | 91,859 | |||||
Deferred income taxes | 189,386 | 223,278 | |||||
Derivative liabilities | 3,444 | 12,496 | |||||
Other noncurrent liabilities | 61,433 | 42,522 | |||||
Total noncurrent liabilities | 3,071,195 | 2,966,488 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,987,952 and 112,241,966 shares, respectively | 1,130 | 1,122 | |||||
Additional paid-in capital | 1,791,596 | 1,765,738 | |||||
Retained earnings | 967,587 | 1,165,842 | |||||
Accumulated other comprehensive loss | (11,319) | (12,380) | |||||
Total stockholders' equity | 2,748,994 | 2,920,322 | |||||
Total liabilities and stockholders' equity | $ | 6,292,232 | $ | 6,352,862 | |||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
December 31, 2019 | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share data) | For the Three Months | For the Twelve Months | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues and other income: | |||||||||||||||
Oil, gas, and NGL production revenue | $ | 449,001 | $ | 392,531 | $ | 1,585,750 | $ | 1,636,357 | |||||||
Net gain on divestiture activity | 539 | 1,261 | 862 | 426,917 | |||||||||||
Other operating revenues | 2,146 | 400 | 3,493 | 3,798 | |||||||||||
Total operating revenues and other income | 451,686 | 394,192 | 1,590,105 | 2,067,072 | |||||||||||
Operating expenses: | |||||||||||||||
Oil, gas, and NGL production expense | 127,312 | 121,450 | 500,709 | 487,367 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 228,597 | 181,970 | 823,798 | 665,313 | |||||||||||
Exploration (1) | 17,649 | 14,322 | 51,500 | 55,166 | |||||||||||
Impairment of oil and gas properties | 8,750 | 23,274 | 33,842 | 49,889 | |||||||||||
General and administrative (1) | 37,213 | 30,438 | 132,797 | 116,504 | |||||||||||
Net derivative (gain) loss (2) | 101,002 | (411,136) | 97,539 | (161,832) | |||||||||||
Other operating expenses, net | 19,466 | 4,109 | 19,888 | 18,328 | |||||||||||
Total operating expenses | 539,989 | (35,573) | 1,660,073 | 1,230,735 | |||||||||||
Income (loss) from operations | (88,303) | 429,765 | (69,968) | 836,337 | |||||||||||
Interest expense | (40,911) | (38,056) | (159,102) | (160,906) | |||||||||||
Loss on extinguishment of debt | — | (18) | — | (26,740) | |||||||||||
Other non-operating income (expense), net | (547) | 69 | (1,974) | 3,086 | |||||||||||
Income (loss) before income taxes | (129,761) | 391,760 | (231,044) | 651,777 | |||||||||||
Income tax (expense) benefit | 27,706 | (82,028) | 44,043 | (143,370) | |||||||||||
Net income (loss) | $ | (102,055) | $ | 309,732 | $ | (187,001) | $ | 508,407 | |||||||
Basic weighted-average common shares outstanding | 112,847 | 112,138 | 112,544 | 111,912 | |||||||||||
Diluted weighted-average common shares outstanding | 112,847 | 113,286 | 112,544 | 113,502 | |||||||||||
Basic net income (loss) per common share | $ | (0.90) | $ | 2.76 | $ | (1.66) | $ | 4.54 | |||||||
Diluted net income (loss) per common share | $ | (0.90) | $ | 2.73 | $ | (1.66) | $ | 4.48 | |||||||
(1) Non-cash stock-based compensation component included in: | |||||||||||||||
Exploration expense | $ | 724 | $ | 1,463 | $ | 4,505 | $ | 5,539 | |||||||
General and administrative expense | 4,836 | 4,765 | 19,813 | 18,369 | |||||||||||
Total non-cash stock-based compensation | $ | 5,560 | $ | 6,228 | $ | 24,318 | $ | 23,908 | |||||||
(2) The net derivative (gain) loss line item consists of the following: | |||||||||||||||
Settlement (gain) loss | $ | (15,379) | $ | 33,892 | $ | (39,222) | $ | 135,803 | |||||||
(Gain) loss on fair value changes | 116,381 | (445,028) | 136,761 | (297,635) | |||||||||||
Total net derivative (gain) loss | $ | 101,002 | $ | (411,136) | $ | 97,539 | $ | (161,832) | |||||||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||
Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | Additional | Accumulated | Total | |||||||||||||||||||
Common Stock | Retained | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2017 | 111,687,016 | $ | 1,117 | $ | 1,741,623 | $ | 665,657 | $ | (13,789) | $ | 2,394,608 | |||||||||||
Net income | — | — | — | 508,407 | — | 508,407 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 4,378 | 4,378 | ||||||||||||||||
Cash dividends, $0.10 per share | — | — | — | (11,191) | — | (11,191) | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 199,464 | 2 | 3,185 | — | — | 3,187 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 291,745 | 3 | (2,978) | — | — | (2,975) | ||||||||||||||||
Stock-based compensation expense | 63,741 | — | 23,908 | — | — | 23,908 | ||||||||||||||||
Cumulative effect of accounting change | — | — | — | 2,969 | (2,969) | — | ||||||||||||||||
Balances, December 31, 2018 | 112,241,966 | $ | 1,122 | $ | 1,765,738 | $ | 1,165,842 | $ | (12,380) | $ | 2,920,322 | |||||||||||
Net loss | — | — | — | (187,001) | — | (187,001) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 1,061 | 1,061 | ||||||||||||||||
Cash dividends declared, $0.10 per share | — | — | — | (11,254) | — | (11,254) | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 314,868 | 3 | 3,206 | — | — | 3,209 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 334,399 | 4 | (1,665) | — | — | (1,661) | ||||||||||||||||
Stock-based compensation expense | 96,719 | 1 | 24,317 | — | — | 24,318 | ||||||||||||||||
Balances, December 31, 2019 | 112,987,952 | $ | 1,130 | $ | 1,791,596 | $ | 967,587 | $ | (11,319) | $ | 2,748,994 | |||||||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
December 31, 2019 | |||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||
(in thousands) | For the Three Months | For the Twelve Months | |||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | (102,055) | $ | 309,732 | $ | (187,001) | $ | 508,407 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Net gain on divestiture activity | (539) | (1,261) | (862) | (426,917) | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 228,597 | 181,970 | 823,798 | 665,313 | |||||||||||
Impairment of oil and gas properties | 8,750 | 23,274 | 33,842 | 49,889 | |||||||||||
Stock-based compensation expense | 5,560 | 6,228 | 24,318 | 23,908 | |||||||||||
Net derivative (gain) loss | 101,002 | (411,136) | 97,539 | (161,832) | |||||||||||
Derivative settlement gain (loss) | 15,379 | (33,892) | 39,222 | (135,803) | |||||||||||
Amortization of debt discount and deferred financing costs | 3,920 | 3,716 | 15,474 | 15,258 | |||||||||||
Loss on extinguishment of debt | — | 18 | — | 26,740 | |||||||||||
Deferred income taxes | (28,215) | 81,036 | (41,835) | 141,708 | |||||||||||
Other, net | 4,511 | 2,371 | 2,220 | 287 | |||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable | (38,922) | 13,709 | (39,556) | (20,775) | |||||||||||
Prepaid expenses and other | 9,019 | 7,234 | 6,130 | (729) | |||||||||||
Accounts payable and accrued expenses | 34,974 | (3,547) | 50,278 | 35,175 | |||||||||||
Net cash provided by operating activities | 241,981 | 179,452 | 823,567 | 720,629 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Net proceeds from the sale of oil and gas properties | 539 | 5,310 | 13,059 | 748,509 | |||||||||||
Capital expenditures | (235,127) | (270,600) | (1,023,769) | (1,303,188) | |||||||||||
Acquisition of proved and unproved oil and gas properties | — | (8,684) | (2,581) | (33,255) | |||||||||||
Net cash used in investing activities | (234,588) | (273,974) | (1,013,291) | (587,934) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from credit facility | 464,500 | — | 1,589,000 | — | |||||||||||
Repayment of credit facility | (471,000) | — | (1,466,500) | — | |||||||||||
Net proceeds from Senior Notes | — | — | — | 492,079 | |||||||||||
Cash paid to repurchase Senior Notes, including premium | — | (18) | — | (845,002) | |||||||||||
Net proceeds from sale of common stock | 1,250 | 1,306 | 3,209 | 3,187 | |||||||||||
Dividends paid | (5,642) | (5,607) | (11,254) | (11,191) | |||||||||||
Other, net | (2) | — | (2,686) | (7,746) | |||||||||||
Net cash provided by (used in) financing activities | (10,894) | (4,319) | 111,769 | (368,673) | |||||||||||
Net change in cash, cash equivalents, and restricted cash | (3,501) | (98,841) | (77,955) | (235,978) | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 3,511 | 176,806 | 77,965 | 313,943 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 10 | $ | 77,965 | $ | 10 | $ | 77,965 | |||||||
DEFINITIONS OF NON-GAAP MEASURES AS CALCULATED BY THE COMPANY
The following non-GAAP measures are presented in addition to financial statements as the Company believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and compare investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. A non-GAAP measure should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies.
Adjusted EBITDAX: Adjusted EBITDAX is calculated as net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that the Company presents because management believes it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for development, exploration, acquisitions, and to service debt. Adjusted EBITDAX is also important as it is considered among financial covenants under the Company's Credit Agreement, a material source of liquidity for the Company. Please reference the Company's 2019 Form 10-K for discussion of the Credit Agreement and its covenants.
Adjusted net income (loss): Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, gains and losses on extinguishment of debt, and accruals for non-recurring matters. Adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of the Company's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) attributable to common shareholders is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of upstream oil and gas companies.
Total capital spend: Total capital spend is calculated as costs incurred from oil and gas producing activities, less asset retirement obligations ("ARO"), capitalized interest and acquisitions. Total capital spend is presented because management believes that it provides useful information to investors in the analysis of SM Energy Company and is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. Total capital spend should not be used in isolation or as a substitute to costs incurred or other capital spending measures prepared under GAAP.
Discretionary cash flow: Discretionary cash flow is calculated as net cash provided by operating activities excluding changes in current assets and current liabilities, and exploration expense (net of stock-based compensation expense). Exploration expense (net of stock-based compensation expense) is added back in the calculation because, for peer comparison purposes, this number is included in our total capital spend. The Company believes this measure is important to investors because it provides useful additional information to investors for analysis of the Company's ability to generate cash to fund exploration and development, and to service indebtedness. In addition, management believes that discretionary cash flow is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of upstream oil and gas companies.
Free cash flow: Free cash flow is calculated as Discretionary cash flow (defined above) less Total capital spend (defined above). The Company believes that this is an important measure because it represents the cash from operations, in excess of capital expenditures, available to operate the Company and fund discretionary obligations.
Free cash flow yield: Free cash flow yield is calculated as Free cash flow (defined above) divided by market capitalization.
Net Debt: The total principal value of outstanding senior notes, senior convertible notes plus amounts drawn on the revolving credit facility (also referred to as total funded debt) less cash and cash equivalents. The Company presents this metric to help evaluate its capital structure and financial leverage and believes that it is widely used by professional research analysts, including credit analysts, and others in the evaluation of total leverage.
Net debt to Adjusted EBITDAX: Net debt to Adjusted EBITDAX is calculated as Net Debt (defined above) divided by Adjusted EBITDAX (defined above). The Company presents this metric to show trends that investors may find useful in understanding the Company's ability to service its debt. This metric is widely used by professional research analysts, including credit analysts, in the valuation and comparison of companies in the oil and gas exploration and production industry. A variation of this calculation is a financial covenant under the Company's Credit Agreement for its revolving credit facility beginning in the fourth quarter of 2018.
Pre-Tax PV-10: Pre-Tax PV-10 is the present value of estimated future revenue to be generated from the production of estimated net proved reserves, net of estimated production and future development costs, based on prices used in estimating the proved reserves and costs in effect as of the date indicated (unless such costs are subject to change pursuant to contractual provisions), without giving effect to non-property related expenses such as general and administrative expenses, debt service, future income tax expenses, or depreciation, depletion, and amortization, discounted using an annual discount rate of 10 percent. While this measure does not include the effect of income taxes as it would in the use of the standardized measure of discounted future net cash flows calculation, it does provide an indicative representation of the relative value of the Company on a comparative basis to other companies and from period to period. This measure is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that Pre-Tax PV-10 is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Pre-Tax PV-10 should not be considered in isolation or as a substitute for other measures prepared under GAAP.
FORWARD-LOOKING NON-GAAP MEASURES
The Company is unable to present a reconciliation of forward-looking Total Capital Spend because components of the calculation, such as potential acquisitions, are inherently unpredictable (such as future expenditures to acquire properties, changes to current assets and liabilities). Moreover, estimating the most directly comparable GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort.
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
December 31, 2019 | |||||||||||||||
Adjusted EBITDAX Reconciliation (1) | |||||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to adjusted EBITDAX (non-GAAP) | For the Three Months | For the Twelve Months | |||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) (GAAP) | $ | (102,055) | $ | 309,732 | $ | (187,001) | $ | 508,407 | |||||||
Interest expense | 40,911 | 38,056 | 159,102 | 160,906 | |||||||||||
Income tax expense (benefit) | (27,706) | 82,028 | (44,043) | 143,370 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 228,597 | 181,970 | 823,798 | 665,313 | |||||||||||
Exploration (2) | 16,925 | 12,859 | 46,995 | 49,627 | |||||||||||
Impairment of oil and gas properties | 8,750 | 23,274 | 33,842 | 49,889 | |||||||||||
Stock-based compensation expense | 5,560 | 6,228 | 24,318 | 23,908 | |||||||||||
Net derivative (gain) loss | 101,002 | (411,136) | 97,539 | (161,832) | |||||||||||
Derivative settlement gain (loss) | 15,379 | (33,892) | 39,222 | (135,803) | |||||||||||
Net (gain) loss on divestiture activity | (539) | (1,261) | (862) | (426,917) | |||||||||||
Loss on extinguishment of debt | — | 18 | — | 26,740 | |||||||||||
Other, net | (648) | 1,305 | 481 | (3,214) | |||||||||||
Adjusted EBITDAX (non-GAAP) | $ | 286,176 | $ | 209,181 | $ | 993,391 | $ | 900,394 | |||||||
Interest expense | (40,911) | (38,056) | (159,102) | (160,906) | |||||||||||
Income tax (expense) benefit | 27,706 | (82,028) | 44,043 | (143,370) | |||||||||||
Exploration (2) | (16,925) | (12,859) | (46,995) | (49,627) | |||||||||||
Amortization of debt discount and deferred financing costs | 3,920 | 3,716 | 15,474 | 15,258 | |||||||||||
Deferred income taxes | (28,215) | 81,036 | (41,835) | 141,708 | |||||||||||
Other, net | 5,159 | 1,066 | 1,739 | 3,501 | |||||||||||
Changes in current assets and liabilities | 5,071 | 17,396 | 16,852 | 13,671 | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 241,981 | $ | 179,452 | $ | 823,567 | $ | 720,629 | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's accompanying consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
December 31, 2019 | |||||||||||||||
Adjusted Net Income (Loss) Reconciliation (1) | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non-GAAP): | For the Three Months | For the Twelve Months | |||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) (GAAP) | $ | (102,055) | $ | 309,732 | $ | (187,001) | $ | 508,407 | |||||||
Total net derivative (gain) loss | 101,002 | (411,136) | 97,539 | (161,832) | |||||||||||
Derivative settlement gain (loss) | 15,379 | (33,892) | 39,222 | (135,803) | |||||||||||
Net gain on divestiture activity | (539) | (1,261) | (862) | (426,917) | |||||||||||
Impairment of oil and gas properties | 8,750 | 23,274 | 33,842 | 49,889 | |||||||||||
Loss on extinguishment of debt | — | 18 | — | 26,740 | |||||||||||
Other, net (2) | (647) | 1,901 | 700 | 2,777 | |||||||||||
Tax effect of adjustments (3) | (26,896) | 91,378 | (36,986) | 139,997 | |||||||||||
Adjusted net income (loss) (non-GAAP) | $ | (5,006) | $ | (19,986) | $ | (53,546) | $ | 3,258 | |||||||
Diluted net income (loss) per common share (GAAP) | $ | (0.90) | $ | 2.73 | $ | (1.66) | $ | 4.48 | |||||||
Total net derivative (gain) loss | 0.90 | (3.63) | 0.87 | (1.43) | |||||||||||
Derivative settlement gain (loss) | 0.14 | (0.30) | 0.35 | (1.20) | |||||||||||
Net gain on divestiture activity | — | (0.01) | (0.01) | (3.76) | |||||||||||
Impairment of oil and gas properties | 0.08 | 0.21 | 0.30 | 0.44 | |||||||||||
Loss on extinguishment of debt | — | — | — | 0.24 | |||||||||||
Other, net (2) | (0.01) | 0.02 | 0.01 | 0.02 | |||||||||||
Tax effect of adjustments (3) | (0.25) | 0.80 | (0.34) | 1.24 | |||||||||||
Adjusted net income (loss) per diluted common share (non-GAAP) | $ | (0.04) | $ | (0.18) | $ | (0.48) | $ | 0.03 | |||||||
Basic weighted-average shares outstanding (GAAP) | 112,847 | 112,138 | 112,544 | 111,912 | |||||||||||
Diluted weighted-average shares outstanding (GAAP) | 112,847 | 113,286 | 112,544 | 113,502 | |||||||||||
Note: Amounts and percentage changes may not calculate due to rounding. | |||||||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) For the three month period ended December 31, 2019, the adjustment relates to impairments on materials inventory and other property, and the change in Net Profits Plan liability. For the twelve month period ended December 31, 2019, the adjustment relates to bad debt expense, impairments on materials inventory and other property, and the change in Net Profits Plan liability. For the three month period ended December 31, 2018, the adjustment relates to impairment on materials inventory, the change in Net Profits Plan liability, and bad debt expense. For the twelve month period ended December 31, 2018, the adjustment relates to impairment on materials inventory, the change in Net Profits Plan liability, bad debt expense and an accrual for a non-recurring matter. These items are included in other operating expenses, net on the Company's condensed consolidated statements of operations. | |||||||||||||||
(3) The tax effect of adjustments for the three and twelve month periods ended December 31, 2019, and 2018, was calculated using a tax rate of 21.7%. This rate approximates the Company's statutory tax rate, as adjusted for ordinary permanent differences. |
SM ENERGY COMPANY | |||||||||
FINANCIAL HIGHLIGHTS | |||||||||
December 31, 2019 | |||||||||
Regional proved oil and gas reserve quantities | |||||||||
Midland Basin | South Texas | Total | |||||||
Year-end 2019 proved reserves | |||||||||
Oil (MMBbl) | 167.5 | 16.6 | 184.1 | ||||||
Gas (Bcf) | 398.8 | 824.4 | 1,223.2 | ||||||
NGL (MMBbl) | 0.1 | 73.9 | 74.0 | ||||||
Total (MMBoe) | 234.1 | 227.8 | 462.0 | ||||||
% Proved developed | 49% | 58% | 53% | ||||||
Note: Amounts may not calculate due to rounding. | |||||||||
Pre-Tax PV-10 Reconciliation (1) | |||||||
(in millions) | |||||||
As of December 31, | |||||||
Reconciliation of standardized measure (GAAP) to PV-10 (non-GAAP) | 2019 | 2018 | |||||
Standardized measure of discounted future net cash flows (GAAP): | $ | 4,104.0 | $ | 4,654.4 | |||
Add: 10 percent annual discount, net of income taxes | 2,955.3 | 3,847.1 | |||||
Add: future undiscounted income taxes | 579.8 | 1,012.2 | |||||
Pre-tax undiscounted future net cash flows | 7,639.1 | 9,513.7 | |||||
Less: 10 percent annual discount without tax effect | (3,276.3) | (4,409.4) | |||||
Pre-Tax PV-10 (non-GAAP): | $ | 4,362.8 | $ | 5,104.3 | |||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
Reconciliation of Net Debt (1) | |||
(in thousands) | |||
As of | |||
Senior Notes (principal value from Note 5 of Form 10-K) | $ | 2,476,796 | |
Senior Convertible Notes (principal value from Note 5 of Form 10-K) | 172,500 | ||
Revolving credit facility | 122,500 | ||
Total funded debt | 2,771,796 | ||
Less: Cash and cash equivalents | (10) | ||
Net Debt | $ | 2,771,786 | |
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS | |||||||
December 31, 2019 | |||||||
Discretionary Cash Flow Reconciliation (1) | |||||||
(in millions) | |||||||
Reconciliation of net cash provided by operating activities (GAAP) to discretionary cash flow (Non-GAAP) | For the Three Months Ended | For the Twelve Months Ended | |||||
Net cash provided by operating activities (GAAP): | $ | 242.0 | $ | 823.6 | |||
Net change in working capital | (5.1) | (16.9) | |||||
Exploration (2)(3) | 16.9 | 47.0 | |||||
Discretionary cash flow (non-GAAP): | $ | 253.7 | $ | 853.7 | |||
Note: Amounts may not calculate due to rounding. | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) Exploration expense is added back in the calculation of discretionary cash flow because, for peer comparison purposes, this number is included in our reported total capital spend. | |||||||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
Total Capital Spend Reconciliation (1) | |||||||
(in millions) | |||||||
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (non-GAAP) | For the Three Months Ended | For the Twelve Months Ended | |||||
Costs incurred in oil and gas activities (GAAP): | $ | 178.8 | $ | 1,040.2 | |||
Asset retirement obligations | 11.0 | 9.9 | |||||
Capitalized interest | (4.4) | (18.5) | |||||
Proved property acquisitions (2) | — | 0.3 | |||||
Unproved property acquisitions (2) | — | (2.9) | |||||
Other | (0.5) | (3.9) | |||||
Total capital spend (non-GAAP): | $ | 184.9 | $ | 1,025.1 | |||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) The Company completed several non-monetary acreage trades in the Midland Basin during 2019 totaling $73.4 million of value attributed to the properties surrendered. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. |
SM ENERGY COMPANY | |||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||
December 31, 2019 | |||||||||||
Discretionary Cash Flow Reconciliation (1) | |||||||||||
(in millions) | |||||||||||
For the Year Ended | For the Six Months Ended | ||||||||||
Reconciliation of net cash provided by operating activities (GAAP) to discretionary cash flow (Non-GAAP) | December 31, 2019 | June 30, 2019 | December 31, 2019 | ||||||||
Net cash provided by operating activities (GAAP): | $ | 823.6 | $ | 378.4 | $ | 445.2 | |||||
Net change in working capital | (16.9) | (21.5) | 4.6 | ||||||||
Exploration (2)(3) | 47.0 | 19.7 | 27.3 | ||||||||
Discretionary cash flow (non-GAAP): | $ | 853.7 | $ | 376.6 | $ | 477.1 | |||||
Note: Amounts may not calculate due to rounding. | |||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||
(2) Exploration expense is added back in the calculation of discretionary cash flow because, for peer comparison purposes, this number is included in our reported total capital spend. | |||||||||||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||||||
Total Capital Spend Reconciliation (1) | |||||||||||
(in millions) | |||||||||||
For the Year Ended | For the Six Months Ended | ||||||||||
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (non-GAAP) |
December 31, 2019 | June 30, 2019 | December 31, 2019 | ||||||||
Costs incurred in oil and gas activities (GAAP): | $ | 1,040.2 | $ | 590.5 | $ | 449.7 | |||||
Asset retirement obligations | 9.9 | (0.8) | 10.7 | ||||||||
Capitalized interest | (18.5) | (9.9) | (8.6) | ||||||||
Proved property acquisitions (2) | 0.3 | 0.3 | — | ||||||||
Unproved property acquisitions (2) | (2.9) | — | (2.9) | ||||||||
Other | (3.9) | (3.4) | (0.5) | ||||||||
Total capital spend (non-GAAP): | $ | 1,025.1 | $ | 576.8 | $ | 448.3 | |||||
Note: Amounts may not calculate due to rounding. | |||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||
(2) The Company completed several non-monetary acreage trades in the Midland Basin during 2019 totaling $73.4 million of value attributed to the properties surrendered. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. | |||||||||||
Free Cash Flow and Free Cash Flow Yield (1) | ||||||||
(in millions) | ||||||||
For the Three Months Ended | For the Six Months Ended | |||||||
December 31, 2019 | December 31, 2019 | |||||||
Discretionary cash flow | $ | 253.7 | $ | 477.1 | ||||
Total capital spend | 184.9 | 448.3 | ||||||
Free cash flow: | $ | 68.8 | $ | 28.8 | ||||
Market capitalization at 12/31/19 | $ | 1,270.0 | $ | 1,270.0 | ||||
Free cash flow yield: | 5% | 2% | ||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | ||||||||
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-2019-results-and-2020-operating-plan-301007845.html
SOURCE SM Energy Company
Article Date
2/19/2020SM Energy Schedules Fourth Quarter And Full Year 2019 Earnings Release And Call
Source: PR Newswire
DENVER, Feb. 13, 2020 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that it expects to release its fourth quarter and full year 2019 financial and operating results and 2020 operating plan after market on February 19, 2020. See schedule below:
February 19, 2020 – After market close, the Company plans to release its fourth quarter and full year 2019 financial and operating results and 2020 operating plan. This will include the earnings release, a pre-recorded webcast discussing fourth quarter and full year 2019 financial and operating results and the Company's 2020 operating plan, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
February 20, 2020 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the fourth quarter and full year 2019 financial and operating results and 2020 operating plan Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call and until February 27, 2020.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the state of Texas. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-schedules-fourth-quarter-and-full-year-2019-earnings-release-and-call-301004923.html
SOURCE SM Energy Company
Article Date
2/13/2020SM Energy Announces Participation In Upcoming Investor Conference
Source: PR Newswire
DENVER, Nov. 25, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) will be participating in the following upcoming investor event. An investor presentation will be posted to the Company's website at ir.sm-energy.com before market open on December 3, 2019.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-announces-participation-in-upcoming-investor-conference-300964785.html
SOURCE SM Energy Company
Article Date
11/25/2019SM Energy Reports Third Quarter 2019 Results: Top Tier Operational Execution Continues
Source: PR Newswire
DENVER, Oct. 31, 2019 /PRNewswire/ -- SM Energy Company (the "Company" or "SM Energy") (NYSE: SM) today announced financial and operating results for the third quarter of 2019. Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "Our third quarter results continue to demonstrate the quality of our Midland Basin assets and execution. Our efforts to prove up oily economic drilling inventory in our large South Texas operating area are showing success. As we go forward, we expect to allocate a high percentage of our capital to the Midland Basin, while focusing our investment in South Texas on these higher margin opportunities. Our capital efficiency continues to improve, and we have taken steps to streamline our organization and reduce cash costs. We expect to generate free cash flow in the fourth quarter of 2019 and our corporate objective is to generate free cash flow, reducing absolute debt and leverage in 2020."
SUMMARY WELL RESULTS
ROCKSTAR
New well results include RockStar area wells that reached their peak 30-day IP rates subsequent to the Company's August 2019 update: 11 new RockStar wells drilled into the Wolfcamp A and Lower Spraberry intervals, at locations that span the acreage position, having an average lateral length of 10,150 feet, delivered peak 30-day IP rates that averaged 1,180 Boe/d per well and 90% oil. All of the wells were half or fully bounded.
SOUTH TEXAS
In the South Texas, efforts to drive value and inventory through more efficient well design and testing the higher liquids content/higher margin Austin Chalk are showing success.
THIRD QUARTER PRODUCTION AND REALIZED PRICES | ||||
PRODUCTION: | ||||
Permian | South Texas | Total | ||
Oil - MBbl | 5,076 | 348 | 5,424 | |
Natural gas - MMcf | 9,079 | 20,417 | 29,496 | |
NGLs - MBbl | 5 | 2,061 | 2,067 | |
Total - MBoe | 6,595 | 5,812 | 12,407 | |
Total - MBoe/d | 71.7 | 63.2 | 134.9 | |
Note: amounts may not calculate due to rounding | ||||
REALIZED PRICES: | |||
Permian | South Texas | Totals Pre/Post- | |
Oil/$Bbl | $54.64 | $44.50 | $53.99/$53.57 |
Natural gas/$Mcf | 1.96 | 2.27 | 2.17/2.59 |
NGLs/$Bbl | nm | 15.71 | 15.73/22.87 |
Per Boe | $44.77 | $16.20 | $31.39/$33.38 |
THIRD QUARTER FINANCIAL RESULTS
Third quarter of 2019 net income was $42.2 million, or $0.37 per diluted common share, compared with a net loss of ($135.9) million, or ($1.21) per diluted common share, in the third quarter of 2018. For the first nine months of 2019, net loss was ($84.9) million or ($0.76) per diluted common share.
Third quarter of 2019 net cash provided by operating activities was $203.2 million. For the first nine months of 2019, net cash provided by operating activities was $581.6 million.
The following paragraphs discuss adjusted EBITDAX, adjusted net income (loss), and adjusted net income (loss) per diluted common share, all of which are non-GAAP measures. Please reference the definitions and reconciliations of these measures to the most directly comparable GAAP financial measures at the end of this release.
Third quarter of 2019 adjusted EBITDAX was $257.8 million. Adjusted EBITDAX is largely unchanged year-over-year as higher production in the 2019 period was offset by higher realized (post-hedge) prices in the 2018 period. Sequentially, adjusted EBITDAX was largely unchanged given comparable production and operating margins.
Third quarter of 2019 adjusted net loss was ($12.1) million, or ($0.11) per diluted common share, compared with adjusted net loss of ($1.0) million, or ($0.01) per diluted common share, in the third quarter of 2018. For the first nine months of 2019, adjusted net loss was ($48.5) million, or ($0.43) per diluted common share.
COMMODITY DERIVATIVES
As of October 30, 2019, the Company had commodity derivatives in place for the fourth quarter of 2019 that included:
Detailed data on derivatives are provided in the accompanying IR presentation and the Company's Quarterly Report on Form 10-Q for the third quarter of 2019.
FINANCIAL POSITION, LIQUIDITY AND TOTAL CAPITAL SPEND
On September 30, 2019, the outstanding principal amount of the Company's long-term debt was $2.5 billion in senior notes plus $172.5 million in senior convertible notes, and $129.0 million drawn on the Company's senior secured revolving credit facility. Amounts drawn under this facility increased by $11 million sequentially, keeping total net debt nearly flat compared with the second quarter of 2019.
Subsequent to quarter-end, the Company's lenders reaffirmed the senior secured revolving credit facility borrowing base of $1.6 billion and commitment level of $1.2 billion. The Company had $1.1 billion of liquidity at quarter-end.
Costs incurred in oil and gas activities for the third quarter of 2019 were $270.9 million. Total capital spend (a non-GAAP measure defined and reconciled below) for the quarter was $263.4 million. During the third quarter, the Company drilled 22 net wells and had 19 net flowing completions in the Permian and drilled six net wells and completed six net wells in South Texas.
UPDATED GUIDANCE - FOURTH QUARTER & FULL YEAR 2019
SCHEDULE FOR THIRD QUARTER REPORTING
This release is accompanied by an investor presentation and pre-recorded call with transcript, all of which are posted to the Company's website. Please visit the Company's website at ir.sm-energy.com to access this additional third quarter detail.
November 1, 2019 - Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the Company's third quarter 2019 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call and until November 8, 2019.
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "assumes," "anticipate," "estimate," "expect," "forecast," "guidance," "implied," "plan," "project," "objectives," "target," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include: projections for production, certain operating costs, general and administrative expenses and expected savings, and total capital spend; the expectation that the Company will spend within discretionary cash flow in the fourth quarter of 2019 and beyond; the potential to reduce absolute debt and leverage in 2020; and, the Company's expectations regarding capital allocation. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; and other such matters discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this release. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | |||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||
Production Data | |||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||
2019 | 2018 | Percent | 2019 | 2018 | Percent | ||||||||||||||||
Realized sales price (before the effects of derivative settlements): | |||||||||||||||||||||
Oil (per Bbl) | $ | 53.99 | $ | 56.96 | (5) | % | $ | 53.31 | $ | 59.60 | (11) | % | |||||||||
Gas (per Mcf) | $ | 2.17 | $ | 3.56 | (39) | % | $ | 2.38 | $ | 3.35 | (29) | % | |||||||||
NGLs (per Bbl) | $ | 15.73 | $ | 30.77 | (49) | % | $ | 17.09 | $ | 28.28 | (40) | % | |||||||||
Per Boe | $ | 31.39 | $ | 38.26 | (18) | % | $ | 32.00 | $ | 38.15 | (16) | % | |||||||||
Realized sales price (including the effects of derivative settlements): | |||||||||||||||||||||
Oil (per Bbl) | $ | 53.57 | $ | 53.64 | — | % | $ | 52.39 | $ | 55.06 | (5) | % | |||||||||
Gas (per Mcf) | $ | 2.59 | $ | 3.53 | (27) | % | $ | 2.55 | $ | 3.41 | (25) | % | |||||||||
NGLs (per Bbl) | $ | 22.87 | $ | 21.16 | 8 | % | $ | 21.01 | $ | 20.79 | 1 | % | |||||||||
Per Boe | $ | 33.38 | $ | 34.86 | (4) | % | $ | 32.68 | $ | 35.02 | (7) | % | |||||||||
Net production volumes: (1) | |||||||||||||||||||||
Oil (MMBbl) | 5.4 | 5.0 | 7 | % | 15.7 | 13.7 | 15 | % | |||||||||||||
Gas (Bcf) | 29.5 | 27.2 | 9 | % | 81.7 | 77.7 | 5 | % | |||||||||||||
NGLs (MMBbl) | 2.1 | 2.4 | (14) | % | 6.2 | 6.0 | 4 | % | |||||||||||||
Equivalent (MMBoe) | 12.4 | 12.0 | 4 | % | 35.5 | 32.6 | 9 | % | |||||||||||||
Average net daily production: (1) | |||||||||||||||||||||
Oil (MBbl per day) | 59.0 | 54.9 | 7 | % | 57.5 | 50.1 | 15 | % | |||||||||||||
Gas (MMcf per day) | 320.6 | 295.3 | 9 | % | 299.2 | 284.7 | 5 | % | |||||||||||||
NGLs (MBbl per day) | 22.5 | 26.2 | (14) | % | 22.8 | 21.9 | 4 | % | |||||||||||||
Equivalent (MBoe per day) | 134.9 | 130.2 | 4 | % | 130.1 | 119.4 | 9 | % | |||||||||||||
Per Boe data: | |||||||||||||||||||||
Realized price (before the effects of derivative settlements) | $ | 31.39 | $ | 38.26 | (18) | % | $ | 32.00 | $ | 38.15 | (16) | % | |||||||||
Lease operating expense | 4.73 | 4.41 | 7 | % | 4.67 | 4.66 | — | % | |||||||||||||
Transportation costs | 4.00 | 4.20 | (5) | % | 4.02 | 4.42 | (9) | % | |||||||||||||
Production taxes | 1.29 | 1.58 | (18) | % | 1.30 | 1.64 | (21) | % | |||||||||||||
Ad valorem tax expense | 0.39 | 0.45 | (13) | % | 0.52 | 0.51 | 2 | % | |||||||||||||
General and administrative (2) | 2.63 | 2.46 | 7 | % | 2.69 | 2.64 | 2 | % | |||||||||||||
Operating margin (before the effects of derivative settlements) | 18.35 | 25.16 | (27) | % | 18.80 | 24.28 | (23) | % | |||||||||||||
Derivative settlement gain (loss) | 1.99 | (3.40) | 159 | % | 0.67 | (3.13) | 121 | % | |||||||||||||
Operating margin (including the effects of derivative settlements) | $ | 20.34 | $ | 21.76 | (7) | % | $ | 19.47 | $ | 21.15 | (8) | % | |||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 17.02 | $ | 16.78 | 1 | % | $ | 16.76 | $ | 14.82 | 13 | % | |||||||||
(1) Amounts and percentage changes may not calculate due to rounding. | |||||||||||||||||||||
(2) Includes non-cash stock-based compensation expense per Boe of $0.44 and $0.45 for the three months ended September 30, 2019, and 2018, respectively, and $0.42 for each of the nine months ended September 30, 2019, and 2018. |
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
September 30, 2019 | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands, except share data) | September 30, | December 31, | |||||
ASSETS | 2019 | 2018 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 10 | $ | 77,965 | |||
Accounts receivable | 146,211 | 167,536 | |||||
Derivative assets | 143,142 | 175,130 | |||||
Prepaid expenses and other | 21,751 | 8,632 | |||||
Total current assets | 311,114 | 429,263 | |||||
Property and equipment (successful efforts method): | |||||||
Proved oil and gas properties | 8,143,381 | 7,278,362 | |||||
Accumulated depletion, depreciation, and amortization | (3,953,181) | (3,417,953) | |||||
Unproved oil and gas properties | 1,434,435 | 1,581,401 | |||||
Wells in progress | 325,230 | 295,529 | |||||
Properties held for sale, net | — | 5,280 | |||||
Other property and equipment, net of accumulated depreciation of $64,971 and $57,102, respectively | 79,278 | 88,546 | |||||
Total property and equipment, net | 6,029,143 | 5,831,165 | |||||
Noncurrent assets: | |||||||
Derivative assets | 38,571 | 58,499 | |||||
Other noncurrent assets | 74,255 | 33,935 | |||||
Total noncurrent assets | 112,826 | 92,434 | |||||
Total assets | $ | 6,453,083 | $ | 6,352,862 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 431,440 | $ | 403,199 | |||
Derivative liabilities | 37,798 | 62,853 | |||||
Other current liabilities | 21,804 | — | |||||
Total current liabilities | 491,042 | 466,052 | |||||
Noncurrent liabilities: | |||||||
Revolving credit facility | 129,000 | — | |||||
Senior Notes, net of unamortized deferred financing costs | 2,451,886 | 2,448,439 | |||||
Senior Convertible Notes, net of unamortized discount and deferred financing costs | 154,883 | 147,894 | |||||
Asset retirement obligations | 95,806 | 91,859 | |||||
Deferred income taxes | 217,469 | 223,278 | |||||
Derivative liabilities | 6,014 | 12,496 | |||||
Other noncurrent liabilities | 63,233 | 42,522 | |||||
Total noncurrent liabilities | 3,118,291 | 2,966,488 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,857,163 and 112,241,966 shares, respectively | 1,129 | 1,122 | |||||
Additional paid-in capital | 1,784,787 | 1,765,738 | |||||
Retained earnings | 1,069,642 | 1,165,842 | |||||
Accumulated other comprehensive loss | (11,808) | (12,380) | |||||
Total stockholders' equity | 2,843,750 | 2,920,322 | |||||
Total liabilities and stockholders' equity | $ | 6,453,083 | $ | 6,352,862 | |||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2019 | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share data) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues and other income: | |||||||||||||||
Oil, gas, and NGL production revenue | $ | 389,419 | $ | 458,382 | $ | 1,136,749 | $ | 1,243,826 | |||||||
Net gain on divestiture activity | — | 786 | 323 | 425,656 | |||||||||||
Other operating revenues | 898 | 201 | 1,347 | 3,398 | |||||||||||
Total operating revenues and other income | 390,317 | 459,369 | 1,138,419 | 1,672,880 | |||||||||||
Operating expenses: | |||||||||||||||
Oil, gas, and NGL production expense | 129,042 | 127,638 | 373,397 | 365,917 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 211,125 | 201,105 | 595,201 | 483,343 | |||||||||||
Exploration(1) | 11,626 | 13,061 | 33,851 | 40,844 | |||||||||||
Abandonment and impairment of unproved properties | 6,337 | 9,055 | 25,092 | 26,615 | |||||||||||
General and administrative(1) | 32,578 | 29,464 | 95,584 | 86,066 | |||||||||||
Net derivative (gain) loss(2) | (100,889) | 178,026 | (3,463) | 249,304 | |||||||||||
Other operating expenses, net | 1,021 | 9,664 | 422 | 14,219 | |||||||||||
Total operating expenses | 290,840 | 568,013 | 1,120,084 | 1,266,308 | |||||||||||
Income (loss) from operations | 99,477 | (108,644) | 18,335 | 406,572 | |||||||||||
Interest expense | (40,584) | (38,111) | (118,191) | (122,850) | |||||||||||
Loss on extinguishment of debt | — | (26,722) | — | (26,722) | |||||||||||
Other non-operating income (expense), net | (548) | 806 | (1,427) | 3,017 | |||||||||||
Income (loss) before income taxes | 58,345 | (172,671) | (101,283) | 260,017 | |||||||||||
Income tax (expense) benefit | (16,111) | 36,748 | 16,337 | (61,342) | |||||||||||
Net income (loss) | $ | 42,234 | $ | (135,923) | $ | (84,946) | $ | 198,675 | |||||||
Basic weighted-average common shares outstanding | 112,804 | 112,107 | 112,441 | 111,836 | |||||||||||
Diluted weighted-average common shares outstanding | 113,334 | 112,107 | 112,441 | 113,600 | |||||||||||
Basic net income (loss) per common share | $ | 0.37 | $ | (1.21) | $ | (0.76) | $ | 1.78 | |||||||
Diluted net income (loss) per common share | $ | 0.37 | $ | (1.21) | $ | (0.76) | $ | 1.75 | |||||||
Dividends per common share | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | 0.10 | |||||||
(1) Non-cash stock-based compensation included in: | |||||||||||||||
Exploration expense | $ | 1,285 | $ | 1,571 | $ | 3,781 | $ | 4,076 | |||||||
General and administrative expense | 5,481 | 5,433 | 14,977 | 13,604 | |||||||||||
Total non-cash stock-based compensation | $ | 6,766 | $ | 7,004 | $ | 18,758 | $ | 17,680 | |||||||
(2) The net derivative (gain) loss line item consists of the following: | |||||||||||||||
Settlement (gain) loss | $ | (24,722) | $ | 40,718 | $ | (23,843) | $ | 101,911 | |||||||
(Gain) loss on fair value changes | (76,167) | 137,308 | 20,380 | 147,393 | |||||||||||
Total net derivative (gain) loss | $ | (100,889) | $ | 178,026 | $ | (3,463) | $ | 249,304 | |||||||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
September 30, 2019 | ||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | ||||||||||||||||||||||
Common Stock | Additional | Retained | Accumulated | Total | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2018 | 112,241,966 | $ | 1,122 | $ | 1,765,738 | $ | 1,165,842 | $ | (12,380) | $ | 2,920,322 | |||||||||||
Net loss | — | — | — | (177,568) | — | (177,568) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 263 | 263 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,612) | — | (5,612) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 2,579 | — | (18) | — | — | (18) | ||||||||||||||||
Stock-based compensation expense | — | — | 5,838 | — | — | 5,838 | ||||||||||||||||
Balances, March 31, 2019 | 112,244,545 | $ | 1,122 | $ | 1,771,558 | $ | 982,662 | $ | (12,117) | $ | 2,743,225 | |||||||||||
Net income | — | — | — | 50,388 | — | 50,388 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 119 | 119 | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 184,079 | 2 | 1,957 | — | — | 1,959 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 290 | — | (2) | — | — | (2) | ||||||||||||||||
Stock-based compensation expense | 96,719 | 1 | 6,153 | — | — | 6,154 | ||||||||||||||||
Other | — | — | (1) | 1 | — | — | ||||||||||||||||
Balances, June 30, 2019 | 112,525,633 | $ | 1,125 | $ | 1,779,665 | $ | 1,033,051 | $ | (11,998) | $ | 2,801,843 | |||||||||||
Net income | — | — | — | 42,234 | — | 42,234 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 190 | 190 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,643) | — | (5,643) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 331,530 | 4 | (1,644) | — | — | (1,640) | ||||||||||||||||
Stock-based compensation expense | — | — | 6,766 | — | — | 6,766 | ||||||||||||||||
Balances, September 30, 2019 | 112,857,163 | $ | 1,129 | $ | 1,784,787 | $ | 1,069,642 | $ | (11,808) | $ | 2,843,750 | |||||||||||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
September 30, 2019 | ||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity (Continued) | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | ||||||||||||||||||||||
Common Stock | Additional | Retained | Accumulated | Total | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2017 | 111,687,016 | $ | 1,117 | $ | 1,741,623 | $ | 665,657 | $ | (13,789) | $ | 2,394,608 | |||||||||||
Net income | — | — | — | 317,401 | — | 317,401 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 260 | 260 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,584) | — | (5,584) | ||||||||||||||||
Stock-based compensation expense | — | 5,412 | — | — | 5,412 | |||||||||||||||||
Cumulative effect of accounting change | — | — | — | 2,969 | (2,969) | — | ||||||||||||||||
Other | — | — | — | 1 | (1) | — | ||||||||||||||||
Balances, March 31, 2018 | 111,687,016 | $ | 1,117 | $ | 1,747,035 | $ | 980,444 | $ | (16,499) | $ | 2,712,097 | |||||||||||
Net income | — | — | — | 17,197 | — | 17,197 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 198 | 198 | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 100,249 | 1 | 1,880 | — | — | 1,881 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 1,161 | — | (10) | — | — | (10) | ||||||||||||||||
Stock-based compensation expense | 58,572 | — | 5,264 | — | — | 5,264 | ||||||||||||||||
Balances, June 30, 2018 | 111,846,998 | $ | 1,118 | $ | 1,754,169 | $ | 997,641 | $ | (16,301) | $ | 2,736,627 | |||||||||||
Net loss | — | — | — | (135,923) | — | (135,923) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 263 | 263 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,607) | — | (5,607) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 290,584 | 3 | (2,968) | — | — | (2,965) | ||||||||||||||||
Stock-based compensation expense | — | 7,004 | — | — | 7,004 | |||||||||||||||||
Balances, September 30, 2018 | 112,137,582 | $ | 1,121 | $ | 1,758,205 | $ | 856,111 | $ | (16,038) | $ | 2,599,399 | |||||||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2019 | |||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(in thousands) | For the Three Months | For the Nine Months | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | 42,234 | $ | (135,923) | $ | (84,946) | $ | 198,675 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Net gain on divestiture activity | — | (786) | (323) | (425,656) | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 211,125 | 201,105 | 595,201 | 483,343 | |||||||||||
Abandonment and impairment of unproved properties | 6,337 | 9,055 | 25,092 | 26,615 | |||||||||||
Stock-based compensation expense | 6,766 | 7,004 | 18,758 | 17,680 | |||||||||||
Net derivative (gain) loss | (100,889) | 178,026 | (3,463) | 249,304 | |||||||||||
Derivative settlement gain (loss) | 24,722 | (40,718) | 23,843 | (101,911) | |||||||||||
Amortization of debt discount and deferred financing costs | 3,921 | 3,792 | 11,554 | 11,542 | |||||||||||
Loss on extinguishment of debt | — | 26,722 | — | 26,722 | |||||||||||
Deferred income taxes | 19,617 | (36,833) | (13,620) | 60,672 | |||||||||||
Other, net | (1,004) | 218 | (2,291) | (2,084) | |||||||||||
Net change in working capital | (9,673) | 17,997 | 11,781 | (3,725) | |||||||||||
Net cash provided by operating activities | 203,156 | 229,659 | 581,586 | 541,177 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Net proceeds from the sale of oil and gas properties (1) | — | 984 | 12,520 | 743,199 | |||||||||||
Capital expenditures | (212,515) | (309,269) | (788,642) | (1,032,588) | |||||||||||
Acquisition of proved and unproved oil and gas properties | (2,900) | 44 | (2,581) | (24,571) | |||||||||||
Net cash used in investing activities | (215,415) | (308,241) | (778,703) | (313,960) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from credit facility | 428,000 | — | 1,124,500 | — | |||||||||||
Repayment of credit facility | (417,000) | — | (995,500) | — | |||||||||||
Net proceeds from Senior Notes | — | 492,079 | — | 492,079 | |||||||||||
Cash paid to repurchase Senior Notes, including premium | — | (844,984) | — | (844,984) | |||||||||||
Net proceeds from sale of common stock | — | — | 1,959 | 1,881 | |||||||||||
Dividends paid | — | — | (5,612) | (5,584) | |||||||||||
Other, net | (1,640) | (7,613) | (2,684) | (7,746) | |||||||||||
Net cash provided by (used in) financing activities | 9,360 | (360,518) | 122,663 | (364,354) | |||||||||||
Net change in cash, cash equivalents, and restricted cash | (2,899) | (439,100) | (74,454) | (137,137) | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 6,410 | 615,906 | 77,965 | 313,943 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 3,511 | $ | 176,806 | $ | 3,511 | $ | 176,806 | |||||||
Less: Restricted cash (1) | (3,501) | — | (3,501) | — | |||||||||||
Cash and cash equivalents | $ | 10 | $ | 176,806 | $ | 10 | $ | 176,806 | |||||||
(1) As of September 30, 2019, a portion of net proceeds from the sale of oil and gas properties was restricted for future property acquisitions. Restricted cash is included in the other noncurrent assets line item on the accompanying unaudited condensed consolidated balance sheets. |
DEFINITIONS OF NON-GAAP MEASURES AS CALCULATED BY THE COMPANY
The following non-GAAP measures are presented in addition to financial statements as the Company believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and compare investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. Non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies.
Adjusted EBITDAX: Adjusted EBITDAX is calculated as net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, and certain other items. Adjusted EBITDAX excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that the Company presents because management believes it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. Adjusted EBITDAX is also important as it is considered among financial covenants under the Company's Credit Agreement, a material source of liquidity for the Company. Please reference the Company's third quarter of 2019 Form 10-Q and 2018 Form 10-K for discussion of the Credit Agreement and its covenants.
Adjusted net income (loss): Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, and accruals for non-recurring matters. Adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of the Company's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) attributable to common shareholders is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of upstream oil and gas companies.
Total capital spend: Total capital spend is calculated as costs incurred, less asset retirement obligations ("ARO"), capitalized interest and acquisitions. Total capital spend is presented because management believes that it provides useful information to investors in the analysis of SM Energy Company and is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. Total capital spend should not be used in isolation or as a substitute to costs incurred or other capital spending measures under GAAP.
Discretionary cash flow: Discretionary cash flow is calculated as net cash provided by operating activities excluding changes in current assets and current liabilities, and exploration. Exploration expense is added back in the calculation because, for peer comparison purposes, this number is included in our total capital spend. The Company believes this measure is important to investors because it provides useful additional information to investors for analysis of the Company's ability to generate cash to fund exploration and development, and to service indebtedness. In addition, management believes that discretionary cash flows is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of upstream oil and gas companies.
FORWARD-LOOKING NON-GAAP MEASURES
The Company is unable to present a reconciliation of forward-looking Total Capital Spend because components of the calculation, such as potential acquisitions, are inherently unpredictable. Moreover, estimating the most directly comparable GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort.
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2019 | |||||||||||||||
Adjusted EBITDAX Reconciliation (1) | |||||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to adjusted EBITDAX (non-GAAP) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) (GAAP) | $ | 42,234 | $ | (135,923) | $ | (84,946) | $ | 198,675 | |||||||
Interest expense | 40,584 | 38,111 | 118,191 | 122,850 | |||||||||||
Income tax expense (benefit) | 16,111 | (36,748) | (16,337) | 61,342 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 211,125 | 201,105 | 595,201 | 483,343 | |||||||||||
Exploration (2) | 10,341 | 11,490 | 30,070 | 36,768 | |||||||||||
Abandonment and impairment of unproved properties | 6,337 | 9,055 | 25,092 | 26,615 | |||||||||||
Stock-based compensation expense | 6,766 | 7,004 | 18,758 | 17,680 | |||||||||||
Net derivative (gain) loss | (100,889) | 178,026 | (3,463) | 249,304 | |||||||||||
Derivative settlement gain (loss) | 24,722 | (40,718) | 23,843 | (101,911) | |||||||||||
Net gain on divestiture activity | — | (786) | (323) | (425,656) | |||||||||||
Loss on extinguishment of debt | — | 26,722 | — | 26,722 | |||||||||||
Other, net | 434 | (1,265) | 1,129 | (4,519) | |||||||||||
Adjusted EBITDAX (non-GAAP) | 257,765 | 256,073 | 707,215 | 691,213 | |||||||||||
Interest expense | (40,584) | (38,111) | (118,191) | (122,850) | |||||||||||
Income tax (expense) benefit | (16,111) | 36,748 | 16,337 | (61,342) | |||||||||||
Exploration (2) | (10,341) | (11,490) | (30,070) | (36,768) | |||||||||||
Amortization of debt discount and deferred financing costs | 3,921 | 3,792 | 11,554 | 11,542 | |||||||||||
Deferred income taxes | 19,617 | (36,833) | (13,620) | 60,672 | |||||||||||
Other, net | (1,438) | 1,483 | (3,420) | 2,435 | |||||||||||
Net change in working capital | (9,673) | 17,997 | 11,781 | (3,725) | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 203,156 | $ | 229,659 | $ | 581,586 | $ | 541,177 | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the unaudited condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's unaudited condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2019 | |||||||||||||||
Adjusted Net Income (Loss) Reconciliation (1) | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non-GAAP): | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) (GAAP) | $ | 42,234 | $ | (135,923) | $ | (84,946) | $ | 198,675 | |||||||
Net derivative (gain) loss | (100,889) | 178,026 | (3,463) | 249,304 | |||||||||||
Derivative settlement gain (loss) | 24,722 | (40,718) | 23,843 | (101,911) | |||||||||||
Net gain on divestiture activity | — | (786) | (323) | (425,656) | |||||||||||
Abandonment and impairment of unproved properties | 6,337 | 9,055 | 25,092 | 26,615 | |||||||||||
Loss on extinguishment of debt | — | 26,722 | — | 26,722 | |||||||||||
Other, net (2) | 435 | 67 | 1,347 | 876 | |||||||||||
Tax effect of adjustments (3) | 15,058 | (37,403) | (10,090) | 48,619 | |||||||||||
Adjusted net income (loss) (non-GAAP) | $ | (12,103) | $ | (960) | $ | (48,540) | $ | 23,244 | |||||||
Diluted net income (loss) per common share (GAAP) | $ | 0.37 | $ | (1.21) | $ | (0.76) | $ | 1.75 | |||||||
Net derivative (gain) loss | (0.89) | 1.59 | (0.03) | 2.19 | |||||||||||
Derivative settlement gain (loss) | 0.22 | (0.36) | 0.21 | (0.90) | |||||||||||
Net gain on divestiture activity | — | (0.01) | — | (3.75) | |||||||||||
Abandonment and impairment of unproved properties | 0.06 | 0.08 | 0.22 | 0.23 | |||||||||||
Loss on extinguishment of debt | — | 0.24 | — | 0.24 | |||||||||||
Other, net (2) | — | — | 0.01 | 0.01 | |||||||||||
Tax effect of adjustments (3) | 0.13 | (0.34) | (0.09) | 0.43 | |||||||||||
Adjusted net income (loss) per diluted common share (non-GAAP) | $ | (0.11) | $ | (0.01) | $ | (0.43) | $ | 0.20 | |||||||
Basic weighted-average common shares outstanding | 112,804 | 112,107 | 112,441 | 111,836 | |||||||||||
Diluted weighted-average common shares outstanding | 113,334 | 112,107 | 112,441 | 113,600 | |||||||||||
Note: Amounts may not calculate due to rounding. | |||||||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) For the three and nine month periods ended September 30, 2019, the adjustment relates to bad debt expense and impairments on materials inventory and other property. For the three-month period ended September 30, 2018, the adjustment relates to bad debt expense. For the nine-month period ended September 30, 2018, the adjustment relates to bad debt expense and an accrual for a non-recurring matter. These items are included in other operating expenses, net on the Company's condensed consolidated statements of operations. | |||||||||||||||
(3) The tax effect of adjustments for the three and nine month periods ended September 30, 2019, and 2018, was calculated using a tax rate of 21.7%. This rate approximates the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. |
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
September 30, 2019 | |||||||
Total Capital Spend Reconciliation (1) | |||||||
(in millions) | |||||||
Reconciliation of costs incurred in oil & gas activities | For the Three Months Ended | For the Nine Months Ended | |||||
2019 | 2019 | ||||||
Costs incurred in oil and gas activities (GAAP): | $ | 270.9 | $ | 861.4 | |||
Asset retirement obligations | (0.3) | (1.1) | |||||
Capitalized interest | (4.2) | (14.1) | |||||
Proved and unproved property acquisitions (2) | (2.9) | (2.6) | |||||
Other | — | (3.4) | |||||
Total capital spend (non-GAAP): | $ | 263.4 | $ | 840.2 | |||
Note: Amounts may not sum due to rounding. | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) The Company completed several non-monetary acreage trades in the Midland Basin during the first nine months of 2019 totaling $70.8 million of value attributed to the properties transferred. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. | |||||||
Discretionary Cash Flow Reconciliation (1) | |||||||
(in millions) | |||||||
Reconciliation of net cash provided by operating activities | For the Three Months Ended | For the Nine Months Ended | |||||
2019 | 2019 | ||||||
Net cash provided by operating activities (GAAP): | $ | 203.2 | $ | 581.6 | |||
Net change in working capital | 9.7 | (11.8) | |||||
Exploration (2)(3) | 10.3 | 30.1 | |||||
Discretionary cash flow (non-GAAP): | $ | 223.3 | $ | 599.9 | |||
Note: Amounts may not sum due to rounding. | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) Exploration expense is added back in the calculation of discretionary cash flow because, for peer comparison purposes, this number is included in our reported total capital spend. | |||||||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the unaudited condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's unaudited condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-third-quarter-2019-results-top-tier-operational-execution-continues-300949330.html
SOURCE SM Energy Company
Article Date
10/31/2019SM Energy Schedules Third Quarter 2019 Earnings Release And Call
Source: PR Newswire
DENVER, Oct. 21, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that it expects to release its third quarter 2019 financial and operating results after market on October 31, 2019. See schedule below:
October 31, 2019 – After market close, the Company plans to issue its third quarter 2019 earnings release, a pre-recorded webcast discussion of the third quarter 2019 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
November 1, 2019 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the third quarter 2019 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call and until November 8, 2019.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-schedules-third-quarter-2019-earnings-release-and-call-300942091.html
SOURCE SM Energy Company
Article Date
10/21/20199/24/2019 - SM Energy Declares Semi-Annual Cash Dividend
SM Energy Declares Semi-Annual Cash Dividend
Source: PR Newswire
DENVER, Sept. 24, 2019 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that its Board of Directors has approved a semi-annual cash dividend of $0.05 per share of common stock outstanding. The dividend will be paid on November 6, 2019, to stockholders of record as of the close of business on October 25, 2019. The Company currently has approximately 112.9 million shares of common stock outstanding.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-declares-semi-annual-cash-dividend-300924573.html
SOURCE SM Energy Company
Article Date
9/24/2019SM Energy Reports Second Quarter 2019 Results: Solid Earnings And Cash Flow Driven By Continued Execution
Source: PR Newswire
DENVER, Aug. 1, 2019 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced financial and operating results for the second quarter of 2019. Highlights include:
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "Our excellent performance is the result of having some of the best assets in the Midland Basin combined with continued outstanding operational execution. This year, operational efforts include well tests from South Texas and the Midland Basin on four new horizons that, while early, remain encouraging for organic inventory growth and value creation. Adjusted EBITDAX for the second quarter was the highest recorded since 2015, despite lower natural gas and NGL prices. We are generating top tier returns, continuing to drive higher operating margins and are on course with our long-term plan to deliver a positive free cash flow yield and de-lever the balance sheet."
SUMMARY WELL RESULTS
New well results include RockStar area wells that reached their 30-day peak IP rates subsequent to the Company's May 2019 update and new interval exploration results in both the RockStar area and South Texas.
SECOND QUARTER 2019 RESULTS
Second quarter of 2019 production was 12.4 MMBoe, or 136.5 MBoe/d, with 44% oil in the commodity mix. Second quarter realized prices (before the effects of hedges) averaged $32.75 per Boe. The Company realized a $4.1 million, or $0.32 per Boe, gain after the effects of hedges.
Second quarter of 2019 net income was $50.4 million, or $0.45 per diluted common share, compared with net income of $17.2 million, or $0.15 per diluted common share, in the second quarter of 2018. For the first six months of 2019, net loss was ($127.2) million or ($1.13) per diluted common share.
Second quarter of 2019 net cash provided by operating activities was $259.9 million. For the first six months of 2019, net cash provided by operating activities was $378.4 million.
The following paragraphs discuss adjusted net income (loss), adjusted net income (loss) per diluted common share, and adjusted EBITDAX, all of which are non-GAAP measures. Please reference the definitions and reconciliations of these measures to the most directly comparable GAAP financial measures at the end of this release.
Second quarter of 2019 adjusted EBITDAX was $263.0 million. Adjusted EBITDAX is up 17% year-over-year and up 41% sequentially. The increase in adjusted EBITDAX year-over-year was primarily driven by a production increase of 19% and per unit operating costs down by 11%, partially offset by lower realized prices (post-hedge). The sequential increase in adjusted EBITDAX was driven by a 16% increase in total production, including a 12% increase in oil production and a 14% decline in per unit operating costs. For the first six months of 2019, adjusted EBITDAX was $449.5 million.
Second quarter of 2019 adjusted net income was $1.3 million, or $0.01 per diluted common share, compared with adjusted net income of $16.8 million, or $0.15 per diluted common share, in the second quarter of 2018. For the first six months of 2019, adjusted net loss was ($36.4) million, or ($0.32) per diluted common share.
COMMODITY DERIVATIVES
As of July 31, 2019, the Company had commodity derivatives in place for the third and fourth quarters of 2019 and fiscal year 2020, including:
Detailed data on derivatives are provided in the accompanying IR presentation and the Company's Quarterly Report on Form 10-Q for the second quarter of 2019.
SCHEDULE FOR SECOND QUARTER REPORTING
This release is accompanied by an investor presentation and pre-recorded call with transcript all of which are posted to the Company's website. Please visit the Company's website at ir.sm-energy.com to access this additional second quarter detail.
Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time on August 2, 2019 for the second quarter 2019 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until August 9, 2019.
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "objectives," "target," "will," "on course," "potential" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include: projections for cash flow yield; projections for improved margins; Austin Chalk production and related margin projections; expected inventory growth; expected value creation; and, expected de-levering of the balance sheet. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future test results and timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; and other such matters discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | |||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||||||||
June 30, 2019 | |||||||||||||||||||||
Production Data | |||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||
2019 | 2018 | Percent | 2019 | 2018 | Percent | ||||||||||||||||
Average realized sales price, before the effects of derivative settlements: | |||||||||||||||||||||
Oil (per Bbl) | $ | 56.04 | $ | 61.02 | (8) | % | $ | 52.95 | $ | 61.14 | (13) | % | |||||||||
Gas (per Mcf) | $ | 2.31 | $ | 3.32 | (30) | % | $ | 2.50 | $ | 3.23 | (23) | % | |||||||||
NGLs (per Bbl) | $ | 16.42 | $ | 27.55 | (40) | % | $ | 17.76 | $ | 26.60 | (33) | % | |||||||||
Per Boe | $ | 32.75 | $ | 38.40 | (15) | % | $ | 32.34 | $ | 38.09 | (15) | % | |||||||||
Average realized sales price, including the effects of derivative settlements: | |||||||||||||||||||||
Oil (per Bbl) | $ | 54.07 | $ | 55.42 | (2) | % | $ | 51.77 | $ | 55.90 | (7) | % | |||||||||
Gas (per Mcf) | $ | 2.51 | $ | 3.29 | (24) | % | $ | 2.53 | $ | 3.34 | (24) | % | |||||||||
NGLs (per Bbl) | $ | 20.42 | $ | 21.51 | (5) | % | $ | 20.08 | $ | 20.54 | (2) | % | |||||||||
Equivalent (per Boe) | $ | 33.07 | $ | 34.91 | (5) | % | $ | 32.30 | $ | 35.12 | (8) | % | |||||||||
Production(1): | |||||||||||||||||||||
Oil (MMBbl) | 5.4 | 4.4 | 24 | % | 10.3 | 8.6 | 19 | % | |||||||||||||
Gas (Bcf) | 28.3 | 25.3 | 12 | % | 52.2 | 50.5 | 3 | % | |||||||||||||
NGLs (MMBbl) | 2.3 | 1.9 | 20 | % | 4.2 | 3.6 | 16 | % | |||||||||||||
MMBoe | 12.4 | 10.5 | 19 | % | 23.1 | 20.6 | 12 | % | |||||||||||||
Average daily production(1): | |||||||||||||||||||||
Oil (MBbl/d) | 59.6 | 47.9 | 24 | % | 56.7 | 47.6 | 19 | % | |||||||||||||
Gas (MMcf/d) | 310.9 | 278.3 | 12 | % | 288.3 | 279.3 | 3 | % | |||||||||||||
NGLs (MBbl/d) | 25.1 | 20.9 | 20 | % | 23.0 | 19.7 | 16 | % | |||||||||||||
MBoe/d | 136.5 | 115.2 | 19 | % | 127.7 | 113.9 | 12 | % | |||||||||||||
Per Boe data: | |||||||||||||||||||||
Realized price, before the effects of derivative settlements | $ | 32.75 | $ | 38.40 | (15) | % | $ | 32.34 | $ | 38.09 | (15) | % | |||||||||
Lease operating expense | 4.16 | 4.66 | (11) | % | 4.64 | 4.80 | (3) | % | |||||||||||||
Transportation costs | 4.00 | 4.47 | (11) | % | 4.04 | 4.55 | (11) | % | |||||||||||||
Production taxes | 1.30 | 1.66 | (22) | % | 1.30 | 1.67 | (22) | % | |||||||||||||
Ad valorem tax expense | 0.44 | 0.41 | 7 | % | 0.59 | 0.54 | 9 | % | |||||||||||||
General and administrative(2) | 2.49 | 2.76 | (10) | % | 2.73 | 2.74 | — | % | |||||||||||||
Operating margin, before the effects of derivative settlements | 20.36 | 24.44 | (17) | % | 19.04 | 23.79 | (20) | % | |||||||||||||
Derivative settlement gain (loss) | 0.32 | (3.49) | 109 | % | (0.04) | (2.97) | 99 | % | |||||||||||||
Operating margin, including the effects of derivative settlements | $ | 20.68 | $ | 20.95 | (1) | % | $ | 19.00 | $ | 20.82 | (9) | % | |||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 16.61 | $ | 14.48 | 15 | % | $ | 16.62 | $ | 13.69 | 21 | % | |||||||||
(1) Amounts and percentage changes may not calculate due to rounding. | |||||||||||||||||||||
(2) Includes non-cash stock-based compensation expense per Boe of $0.39 for the three months ended June 30, 2019, and 2018, and $0.41 and $0.40 for the six months ended June 30, 2019, and 2018, respectively. |
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
June 30, 2019 | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands, except share data) | June 30, | December 31, | |||||
ASSETS | 2019 | 2018 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 12 | $ | 77,965 | |||
Accounts receivable | 165,757 | 167,536 | |||||
Derivative assets | 114,242 | 175,130 | |||||
Prepaid expenses and other | 8,723 | 8,632 | |||||
Total current assets | 288,734 | 429,263 | |||||
Property and equipment (successful efforts method): | |||||||
Proved oil and gas properties | 7,974,754 | 7,278,362 | |||||
Accumulated depletion, depreciation, and amortization | (3,774,548) | (3,417,953) | |||||
Unproved oil and gas properties | 1,445,985 | 1,581,401 | |||||
Wells in progress | 257,945 | 295,529 | |||||
Properties held for sale, net | — | 5,280 | |||||
Other property and equipment, net of accumulated depreciation of $62,372 and $57,102, respectively | 81,193 | 88,546 | |||||
Total property and equipment, net | 5,985,329 | 5,831,165 | |||||
Noncurrent assets: | |||||||
Derivative assets | 30,180 | 58,499 | |||||
Other noncurrent assets | 87,696 | 33,935 | |||||
Total noncurrent assets | 117,876 | 92,434 | |||||
Total assets | $ | 6,391,939 | $ | 6,352,862 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 407,883 | $ | 403,199 | |||
Derivative liabilities | 70,259 | 62,853 | |||||
Other current liabilities | 25,803 | — | |||||
Total current liabilities | 503,945 | 466,052 | |||||
Noncurrent liabilities: | |||||||
Revolving credit facility | 118,000 | — | |||||
Senior Notes, net of unamortized deferred financing costs | 2,450,737 | 2,448,439 | |||||
Senior Convertible Notes, net of unamortized discount and deferred financing costs | 152,503 | 147,894 | |||||
Asset retirement obligations | 95,194 | 91,859 | |||||
Deferred income taxes | 190,146 | 223,278 | |||||
Derivative liabilities | 12,431 | 12,496 | |||||
Other noncurrent liabilities | 67,140 | 42,522 | |||||
Total noncurrent liabilities | 3,086,151 | 2,966,488 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,525,633 and 112,241,966 shares, respectively | 1,125 | 1,122 | |||||
Additional paid-in capital | 1,779,665 | 1,765,738 | |||||
Retained earnings | 1,033,051 | 1,165,842 | |||||
Accumulated other comprehensive loss | (11,998) | (12,380) | |||||
Total stockholders' equity | 2,801,843 | 2,920,322 | |||||
Total liabilities and stockholders' equity | $ | 6,391,939 | $ | 6,352,862 | |||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
June 30, 2019 | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share data) | For the Three Months Ended | For the Six Months Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues and other income: | |||||||||||||||
Oil, gas, and NGL production revenue | $ | 406,854 | $ | 402,558 | $ | 747,330 | $ | 785,444 | |||||||
Net gain on divestiture activity | 262 | 39,501 | 323 | 424,870 | |||||||||||
Other operating revenues | 56 | 1,857 | 449 | 3,197 | |||||||||||
Total operating revenues and other income | 407,172 | 443,916 | 748,102 | 1,213,511 | |||||||||||
Operating expenses: | |||||||||||||||
Oil, gas, and NGL production expense | 123,050 | 117,400 | 244,355 | 238,279 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 206,330 | 151,765 | 384,076 | 282,238 | |||||||||||
Exploration(1) | 10,877 | 14,056 | 22,225 | 27,783 | |||||||||||
Abandonment and impairment of unproved properties | 12,417 | 11,935 | 18,755 | 17,560 | |||||||||||
General and administrative(1) | 30,920 | 28,920 | 63,006 | 56,602 | |||||||||||
Net derivative (gain) loss(2) | (79,655) | 63,749 | 97,426 | 71,278 | |||||||||||
Other operating expenses, net | (934) | (57) | (599) | 4,555 | |||||||||||
Total operating expenses | 303,005 | 387,768 | 829,244 | 698,295 | |||||||||||
Income (loss) from operations | 104,167 | 56,148 | (81,142) | 515,216 | |||||||||||
Interest expense | (39,627) | (41,654) | (77,607) | (84,739) | |||||||||||
Other non-operating income (expense), net | (562) | 1,802 | (879) | 2,211 | |||||||||||
Income (loss) before income taxes | 63,978 | 16,296 | (159,628) | 432,688 | |||||||||||
Income tax (expense) benefit | (13,590) | 901 | 32,448 | (98,090) | |||||||||||
Net income (loss) | $ | 50,388 | $ | 17,197 | $ | (127,180) | $ | 334,598 | |||||||
Basic weighted-average common shares outstanding | 112,262 | 111,701 | 112,257 | 111,698 | |||||||||||
Diluted weighted-average common shares outstanding | 112,932 | 113,630 | 112,257 | 113,267 | |||||||||||
Basic net income (loss) per common share | $ | 0.45 | $ | 0.15 | $ | (1.13) | $ | 3.00 | |||||||
Diluted net income (loss) per common share | $ | 0.45 | $ | 0.15 | $ | (1.13) | $ | 2.95 | |||||||
Dividends per common share | $ | — | $ | — | $ | 0.05 | $ | 0.05 | |||||||
(1) Non-cash stock-based compensation included in: | |||||||||||||||
Exploration expense | $ | 1,291 | $ | 1,189 | $ | 2,496 | $ | 2,505 | |||||||
General and administrative expense | 4,863 | 4,075 | 9,496 | 8,171 | |||||||||||
Total non-cash stock-based compensation | $ | 6,154 | $ | 5,264 | $ | 11,992 | $ | 10,676 | |||||||
(2) The net derivative (gain) loss line item consists of the following: | |||||||||||||||
Settlement (gain) loss | $ | (4,090) | $ | 36,665 | $ | 879 | $ | 61,193 | |||||||
(Gain) loss on fair value changes | (75,565) | 27,084 | 96,547 | 10,085 | |||||||||||
Total net derivative (gain) loss | $ | (79,655) | $ | 63,749 | $ | 97,426 | $ | 71,278 | |||||||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
June 30, 2019 | ||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | ||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||
Common Stock | Paid-in | Retained | Comprehensive | Stockholders' | ||||||||||||||||||
Shares | Amount | Capital | Earnings | Loss | Equity | |||||||||||||||||
Balances, December 31, 2018 | 112,241,966 | $ | 1,122 | $ | 1,765,738 | $ | 1,165,842 | $ | (12,380) | $ | 2,920,322 | |||||||||||
Net loss | — | — | — | (177,568) | — | (177,568) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 263 | 263 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,612) | — | (5,612) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 2,579 | — | (18) | — | — | (18) | ||||||||||||||||
Stock-based compensation expense | — | — | 5,838 | — | — | 5,838 | ||||||||||||||||
Balances, March 31, 2019 | 112,244,545 | $ | 1,122 | $ | 1,771,558 | $ | 982,662 | $ | (12,117) | $ | 2,743,225 | |||||||||||
Net income | — | — | — | 50,388 | — | 50,388 | ||||||||||||||||
Other comprehensive income | — | — | — | 119 | 119 | |||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 184,079 | 2 | 1,957 | — | — | 1,959 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 290 | — | (2) | — | — | (2) | ||||||||||||||||
Stock-based compensation expense | 96,719 | 1 | 6,153 | — | — | 6,154 | ||||||||||||||||
Other | — | — | (1) | 1 | — | — | ||||||||||||||||
Balances, June 30, 2019 | 112,525,633 | $ | 1,125 | $ | 1,779,665 | $ | 1,033,051 | $ | (11,998) | $ | 2,801,843 | |||||||||||
Accumulated | ||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||
Common Stock | Paid-in | Retained | Comprehensive | Stockholders' | ||||||||||||||||||
Shares | Amount | Capital | Earnings | Loss | Equity | |||||||||||||||||
Balances, December 31, 2017 | 111,687,016 | $ | 1,117 | $ | 1,741,623 | $ | 665,657 | $ | (13,789) | $ | 2,394,608 | |||||||||||
Net income | — | — | — | 317,401 | — | 317,401 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 260 | 260 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,584) | — | (5,584) | ||||||||||||||||
Stock-based compensation expense | — | 5,412 | — | — | 5,412 | |||||||||||||||||
Cumulative effect of accounting change | — | — | — | 2,969 | (2,969) | — | ||||||||||||||||
Other | — | — | — | 1 | (1) | — | ||||||||||||||||
Balances, March 31, 2018 | 111,687,016 | $ | 1,117 | $ | 1,747,035 | $ | 980,444 | $ | (16,499) | $ | 2,712,097 | |||||||||||
Net income | — | — | — | 17,197 | — | 17,197 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 198 | 198 | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 100,249 | 1 | 1,880 | — | — | 1,881 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 1,161 | — | (10) | — | — | (10) | ||||||||||||||||
Stock-based compensation expense | 58,572 | — | 5,264 | — | — | 5,264 | ||||||||||||||||
Balances, June 30, 2018 | 111,846,998 | $ | 1,118 | $ | 1,754,169 | $ | 997,641 | $ | (16,301) | $ | 2,736,627 | |||||||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
June 30, 2019 | |||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(in thousands) | For the Three Months | For the Six Months Ended | |||||||||||||
Ended June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | 50,388 | $ | 17,197 | $ | (127,180) | $ | 334,598 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Net gain on divestiture activity | (262) | (39,501) | (323) | (424,870) | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 206,330 | 151,765 | 384,076 | 282,238 | |||||||||||
Abandonment and impairment of unproved properties | 12,417 | 11,935 | 18,755 | 17,560 | |||||||||||
Stock-based compensation expense | 6,154 | 5,264 | 11,992 | 10,676 | |||||||||||
Net derivative (gain) loss | (79,655) | 63,749 | 97,426 | 71,278 | |||||||||||
Derivative settlement gain (loss) | 4,090 | (36,665) | (879) | (61,193) | |||||||||||
Amortization of debt discount and deferred financing costs | 3,844 | 3,884 | 7,633 | 7,750 | |||||||||||
Deferred income taxes | 13,766 | (861) | (33,237) | 97,505 | |||||||||||
Other, net | 1,243 | 225 | (1,287) | (2,302) | |||||||||||
Net change in working capital | 41,613 | (5,609) | 21,454 | (21,722) | |||||||||||
Net cash provided by operating activities | 259,928 | 171,383 | 378,430 | 311,518 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Net proceeds from the sale of oil and gas properties (1) | 6,406 | 251,435 | 12,520 | 742,215 | |||||||||||
Capital expenditures | (326,787) | (421,798) | (576,127) | (723,319) | |||||||||||
Acquisition of proved and unproved oil and gas properties | 28 | (24,615) | 319 | (24,615) | |||||||||||
Net cash used in investing activities | (320,353) | (194,978) | (563,288) | (5,719) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from credit facility | 524,500 | — | 696,500 | — | |||||||||||
Repayment of credit facility | (453,000) | — | (578,500) | — | |||||||||||
Net proceeds from sale of common stock | 1,959 | 1,881 | 1,959 | 1,881 | |||||||||||
Dividends paid | (5,612) | (5,584) | (5,612) | (5,584) | |||||||||||
Other, net | (1,026) | (133) | (1,044) | (133) | |||||||||||
Net cash provided by (used in) financing activities | 66,821 | (3,836) | 113,303 | (3,836) | |||||||||||
Net change in cash, cash equivalents, and restricted cash | 6,396 | (27,431) | (71,555) | 301,963 | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 14 | 643,337 | 77,965 | 313,943 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period (1) | $ | 6,410 | $ | 615,906 | $ | 6,410 | $ | 615,906 | |||||||
Less: Restricted cash (1) | (6,398) | — | (6,398) | — | |||||||||||
Cash and cash equivalents | $ | 12 | $ | 615,906 | $ | 12 | $ | 615,906 | |||||||
(1) As of June 30, 2019, a portion of net proceeds from the sale of oil and gas properties was restricted for future property acquisitions. Restricted cash is included in the other noncurrent assets line item on the accompanying unaudited condensed consolidated balance sheets. |
DEFINITIONS OF NON-GAAP MEASURES AS CALCULATED BY THE COMPANY
The following non-GAAP measures are presented in addition to financial statements as the Company believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and compare investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. Non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies.
Adjusted EBITDAX: Adjusted EBITDAX is calculated as net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, and certain other items. Adjusted EBITDAX excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that the Company presents because management believes it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. Adjusted EBITDAX is also important as it is considered among financial covenants under the Company's Credit Agreement, a material source of liquidity for the Company. Please reference the Company's second quarter of 2019 Form 10-Q and 2018 Form 10-K for discussion of the Credit Agreement and its covenants.
Adjusted net income (loss): Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, and accruals for non-recurring matters. Adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of the Company's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) attributable to common shareholders is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of upstream oil and gas companies.
Total capital spend: Total capital spend is calculated as costs incurred, less asset retirement obligations ("ARO"), capitalized interest and acquisitions. Total capital spend is presented because management believes that it provides useful information to investors in the analysis of SM Energy Company and is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. Total capital spend should not be used in isolation or as a substitute to costs incurred or other capital spending measures under GAAP.
Discretionary cash flow: Discretionary cash flow is calculated as net cash provided by operating activities excluding changes in current assets and current liabilities, and exploration. Exploration expense is added back in the calculation because, for peer comparison purposes, this number is included in our total capital spend. The Company believes this measure is important to investors because it provides useful additional information to investors for analysis of the Company's ability to generate cash to fund exploration and development, and to service indebtedness. In addition, management believes that discretionary cash flows is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of upstream oil and gas companies.
FORWARD-LOOKING NON-GAAP MEASURES
The Company is unable to present a reconciliation of forward-looking Total Capital Spend because components of the calculation, such as potential acquisitions, are inherently unpredictable. Moreover, estimating the most directly comparable GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort.
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
June 30, 2019 | |||||||||||||||
Adjusted EBITDAX Reconciliation(1) | |||||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to adjusted EBITDAX (non-GAAP) | For the Three Months Ended | For the Six Months Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) (GAAP) | $ | 50,388 | $ | 17,197 | $ | (127,180) | $ | 334,598 | |||||||
Interest expense | 39,627 | 41,654 | 77,607 | 84,739 | |||||||||||
Income tax expense (benefit) | 13,590 | (901) | (32,448) | 98,090 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 206,330 | 151,765 | 384,076 | 282,238 | |||||||||||
Exploration(2) | 9,586 | 12,867 | 19,729 | 25,278 | |||||||||||
Abandonment and impairment of unproved properties | 12,417 | 11,935 | 18,755 | 17,560 | |||||||||||
Stock-based compensation expense | 6,154 | 5,264 | 11,992 | 10,676 | |||||||||||
Net derivative (gain) loss | (79,655) | 63,749 | 97,426 | 71,278 | |||||||||||
Derivative settlement gain (loss) | 4,090 | (36,665) | (879) | (61,193) | |||||||||||
Net gain on divestiture activity | (262) | (39,501) | (323) | (424,870) | |||||||||||
Other, net | 691 | (2,412) | 695 | (3,254) | |||||||||||
Adjusted EBITDAX (non-GAAP) | 262,956 | 224,952 | 449,450 | 435,140 | |||||||||||
Interest expense | (39,627) | (41,654) | (77,607) | (84,739) | |||||||||||
Income tax (expense) benefit | (13,590) | 901 | 32,448 | (98,090) | |||||||||||
Exploration(2) | (9,586) | (12,867) | (19,729) | (25,278) | |||||||||||
Amortization of debt discount and deferred financing costs | 3,844 | 3,884 | 7,633 | 7,750 | |||||||||||
Deferred income taxes | 13,766 | (861) | (33,237) | 97,505 | |||||||||||
Other, net | 552 | 2,637 | (1,982) | 952 | |||||||||||
Net change in working capital | 41,613 | (5,609) | 21,454 | (21,722) | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 259,928 | $ | 171,383 | $ | 378,430 | $ | 311,518 | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
June 30, 2019 | |||||||||||||||
Adjusted Net Income (Loss) Reconciliation(1) | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non-GAAP): | For the Three Months Ended | For the Six Months Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) (GAAP) | $ | 50,388 | $ | 17,197 | $ | (127,180) | $ | 334,598 | |||||||
Net derivative (gain) loss | (79,655) | 63,749 | 97,426 | 71,278 | |||||||||||
Derivative settlement gain (loss) | 4,090 | (36,665) | (879) | (61,193) | |||||||||||
Net gain on divestiture activity | (262) | (39,501) | (323) | (424,870) | |||||||||||
Abandonment and impairment of unproved properties | 12,417 | 11,935 | 18,755 | 17,560 | |||||||||||
Other, net(2) | 699 | 2 | 912 | 809 | |||||||||||
Tax effect of adjustments(3) | 13,608 | 104 | (25,148) | 86,022 | |||||||||||
Adjusted net income (loss) (non-GAAP) | $ | 1,285 | $ | 16,821 | $ | (36,437) | $ | 24,204 | |||||||
Diluted net income (loss) per common share (GAAP) | $ | 0.45 | $ | 0.15 | $ | (1.13) | $ | 2.95 | |||||||
Net derivative (gain) loss | (0.71) | 0.56 | 0.87 | 0.63 | |||||||||||
Derivative settlement gain (loss) | 0.04 | (0.32) | (0.01) | (0.54) | |||||||||||
Net gain on divestiture activity | — | (0.35) | — | (3.75) | |||||||||||
Abandonment and impairment of unproved properties | 0.11 | 0.11 | 0.17 | 0.16 | |||||||||||
Other, net(2) | 0.01 | — | 0.01 | 0.01 | |||||||||||
Tax effect of adjustments(3) | 0.11 | — | (0.23) | 0.75 | |||||||||||
Adjusted net income (loss) per diluted common share (non-GAAP) | $ | 0.01 | $ | 0.15 | $ | (0.32) | $ | 0.21 | |||||||
Basic weighted-average common shares outstanding | 112,262 | 111,701 | 112,257 | 111,698 | |||||||||||
Diluted weighted-average common shares outstanding | 112,932 | 113,630 | 112,257 | 113,267 | |||||||||||
Note: Amounts may not calculate due to rounding. | |||||||||||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||||||||||
(2) For the three and six-month periods ended June 30, 2019, the adjustment relates to bad debt expense and impairment on materials inventory. For the three-month period ended June 30, 2018, the adjustment relates to bad debt expense. For the six-month period ended June 30, 2018, the adjustment relates to bad debt expense and an accrual for a non-recurring matter. These items are included in other operating expenses, net on the Company's condensed consolidated statements of operations. | |||||||||||||||
(3) The tax effect of adjustments for the three and six month periods ended June 30, 2019, and 2018, was calculated using a tax rate of 21.7%. These rates approximate the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. |
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
June 30, 2019 | |||||||
Total Capital Spend Reconciliation(1) | |||||||
(in millions) | |||||||
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (non-GAAP) | For the Three Months Ended | For the Six Months Ended | |||||
2019 | 2019 | ||||||
Costs incurred in oil and gas activities (GAAP): | $ | 268.5 | $ | 590.5 | |||
Asset retirement obligations | (0.3) | (0.8) | |||||
Capitalized interest | (5.0) | (9.9) | |||||
Proved property acquisitions(2) | — | 0.3 | |||||
Other | (2.0) | (3.4) | |||||
Total capital spend (non-GAAP): | $ | 261.3 | $ | 576.8 | |||
Note: Amounts may not sum due to rounding. | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) The Company completed several primarily non-monetary acreage trades in the Midland Basin during the first half of 2019 totaling $66.6 million of value attributed to the properties transferred. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. | |||||||
Discretionary Cash Flow Reconciliation(1) | |||||||
(in millions) | |||||||
Reconciliation of net cash provided by operating activities (GAAP) to discretionary cash flow (non-GAAP) | For the Three Months Ended | For the Six Months Ended | |||||
2019 | 2019 | ||||||
Net cash provided by operating activities (GAAP): | $ | 259.9 | $ | 378.4 | |||
Net change in working capital | (41.6) | (21.5) | |||||
Exploration(2)(3) | 9.6 | 19.7 | |||||
Discretionary cash flow (non-GAAP): | $ | 227.9 | $ | 376.6 | |||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | ||||||||||||||||||
(2) Exploration expense is added back in the calculation of discretionary cash flow because, for peer comparison purposes, this number is included in our reported total capital spend. | ||||||||||||||||||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense as it is non-cash. |
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SOURCE SM Energy Company
Article Date
8/1/2019SM Energy Updates 2019 Guidance - Production Up And Capital Down - And Reports Second Quarter Production, Pricing And Capital Expenditures
Source: PR Newswire
DENVER, July 18, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced certain operating and financial results for the second quarter of 2019, including production, realized pricing and total capital spend. In addition, for the full year, the Company is increasing its expected mid-point production guidance and lowering expected mid-point total capital spend (a non-GAAP measure defined and reconciled below). Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "Our performance in the first half of 2019 continued to demonstrate the quality of our assets and execution, with production higher than our recently increased guidance and capital invested lower than guided. During the quarter, we announced successful tests of several new intervals on our existing acreage. We now forecast higher second half production and lower full year total capital spend than we originally planned. We are well hedged for the remainder of 2019 and expect that our improving capital efficiency will allow us to achieve our second half objective of beginning to reduce debt while maintaining a steady pace of activity and strong exit rate production.
"During 2020, we expect to invest within our full-year discretionary cash flow, delivering moderate growth in production, higher margins, reduced debt and improved leverage metrics. At this point, we expect that our 2020 capital program will be very similar to our 2019 program and that spending will be evenly spread throughout the year. We currently have more than 50% of our expected oil production in 2020 hedged at prices over $55 per barrel.
"In summary, our results so far in 2019 and revised guidance indicate that we are on track to deliver on our business plan priorities: achieving growth within discretionary cash flow, de-levering our balance sheet, and proving up additional drilling inventory on our existing acreage."
UPDATED GUIDANCE
FULL YEAR 2019/GLIMPSE INTO 2020
THIRD QUARTER 2019
SECOND QUARTER OF 2019 PRODUCTION AND REALIZED PRICES
PRODUCTION: | |||
Permian | South Texas | Total | |
Oil - MBbl | 5,137 | 290 | 5,427 |
Natural gas - MMcf | 8,469 | 19,822 | 28,291 |
NGLs - MBbl | - | 2,283 | 2,282 |
Total - MBoe | 6,548 | 5,877 | 12,425 |
Total - MBoe/d | 72.0 | 64.6 | 136.5 |
Note: Totals may not sum due to rounding |
REALIZED PRICES: | |||
Permian | South Texas | Totals Pre/Post-Hedge | |
Oil/$Bbl | $56.15 | $54.15 | $56.04/$54.07 |
Natural gas/$Mcf | 1.94 | 2.46 | 2.31/2.51 |
NGLs/$Bbl | nm | 16.44 | 16.42/20.42 |
Per Boe | $46.56 | $17.36 | $32.75/$33.07 |
HEDGE POSITIONS
The Company's production revenue is primarily from oil sales. For the remainder of 2019, approximately 80% of oil production is hedged to Cushing WTI at weighted average floors between $50 - $61/Bbl. The Company has added 2020 Cushing WTI oil hedges and currently has more than 50% of expected 2020 oil production hedged at weighted average floors between $55 – $60/Bbl.
FINANCIAL POSITION, LIQUIDITY AND TOTAL CAPITAL SPEND
On June 30, 2019, the outstanding principal amount of the Company's long-term debt was $2.5 billion in senior notes plus $172.5 million in senior convertible notes, with $118.0 million drawn on the Company's senior secured credit facility.
Costs incurred in oil and gas activities for the second quarter of 2019 were $269 million. Total capital spend (a non-GAAP measure defined and reconciled below) for the quarter was $261 million. During the second quarter, the Company drilled 25 net wells and completed 32 net wells in the Permian, and drilled three net wells and completed 11 net wells in South Texas. Additionally, two net wells in the Permian and three net wells in South Texas were completed and were waiting on flowline connections at the end of the second quarter.
TOTAL CAPITAL SPEND RECONCILIATION(1):
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (non-GAAP) | For the Three Months Ended | For the Six Months Ended | |||||
($ in millions) | 2019 | 2019 | |||||
Costs incurred in oil and gas activities (GAAP): | $ | 268.5 | $ | 590.5 | |||
Asset retirement obligations | (0.3) | (0.8) | |||||
Capitalized interest | (5.0) | (9.9) | |||||
Proved property acquisitions | — | 0.3 | |||||
Other | (2.0) | (3.4) | |||||
Total capital spend (non-GAAP): | $ | 261.3 | $ | 576.8 | |||
Note: Totals may not sum due to rounding | |||||||
(1) Total capital spend is calculated as costs incurred, less asset retirement obligations ("ARO"), capitalized interest and acquisitions. Total capital spend is presented because management believes that it provides useful information to investors in the analysis of SM Energy Company and is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. The Company is unable to present a quantitative reconciliation of this forward-looking, non-GAAP financial measure without unreasonable effort because acquisition costs are inherently unpredictable. Total capital spend should not be used in isolation or as a substitute to costs incurred or other capital spending measures under GAAP. | |||||||
SCHEDULE FOR SECOND QUARTER REPORTING
August 1, 2019 – After market close, the Company plans to issue its second quarter 2019 earnings release, a pre-recorded webcast discussion of the second quarter 2019 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
August 2, 2019 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the second quarter 2019 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call and until August 9, 2019.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "objectives," "target," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include: projections for production and total capital spend; the potential for future debt reduction and improved margins; the expected effect of shut-in volumes; and the expectation that the Company will spend within discretionary cash flow in the second half of 2019 and beyond. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; and other such matters discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
7/18/2019Spirit Realty Capital Set to Join S&P MidCap 400; SM Energy to Join S&P SmallCap 600
Source: PR Newswire
NEW YORK, July 1, 2019 /PRNewswire/ -- Spirit Realty Capital Inc. (NYSE: SRC) will replace SM Energy Co. (NYSE: SM) in the S&P MidCap 400, and SM Energy will replace Multi-Color Corp. (NASD: LABL) in the S&P SmallCap 600 effective prior to the open of trading on Tuesday, July 9. Platinum Equity LLC is acquiring Multi-Color in a deal that closed today. SM Energy is ranked near the bottom of the S&P MidCap 400 and has a total market capitalization that is more representative of the small-cap market space.
Spirit Realty Capital is a net-lease REIT (Real Estate Investment Trust) that primarily invests in industrial, office and data center properties. Headquartered in Dallas, TX, the company will be added to the S&P MidCap 400 GICS (Global Industry Classification Standard) Retail REIT's Sub-Industry index.
SM Energy engages in the acquisition, exploration, development, and production of crude oil & condensate, natural gas, and natural gas liquids. Headquartered in Denver, CO, the company will be added to the S&P SmallCap 600 GICS Oil & Gas Exploration & Production Sub-Industry index.
Following is a summary of the changes:
S&P MIDCAP 400 INDEX – July 9, 2019 | |||
COMPANY | GICS ECONOMIC SECTOR | GICS SUB-INDUSTRY | |
ADDED | Spirit Realty Capital | Real Estate | Retail REITs |
DELETED | SM Energy | Energy | Oil & Gas Exploration & Production |
S&P SMALLCAP 600 INDEX – July 9, 2019 | |||
COMPANY | GICS ECONOMIC SECTOR | GICS SUB-INDUSTRY | |
ADDED | SM Energy | Energy | Oil & Gas Exploration & Production |
DELETED | Multi-Color | Industrials | Commercial Printing |
For more information about S&P Dow Jones Indices, please visit www.spdji.com
ABOUT S&P DOW JONES INDICES
S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has become home to over 1,000,000 indices across the spectrum of asset classes that have helped define the way investors measure and trade the markets.
S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit www.spdji.com.
FOR MORE INFORMATION:
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SOURCE S&P Dow Jones Indices
Article Date
7/1/2019SM Energy Raises Production Guidance And Provides Updated New Well Results
Source: PR Newswire
DENVER, June 18, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that second quarter 2019 production is exceeding expectations and the Company is raising guidance for second quarter and full year production volumes by 0.4 MMBoe, at the mid-point, due to better than expected well performance and completion timing. Second quarter and full year production is expected to be approximately 43-44% oil.
The Company also announces strong 30-day peak IP rates on two wells testing new intervals, the Dean and the Wolfcamp D in the RockStar area of the Permian Basin, which produced approximately 1,550 Boe/d and 1,400 Boe/d, respectively. In addition, at the previously reported Watson State Austin Chalk test in South Texas, the well reached a 30-day peak IP rate of nearly 3,200 Boe/d (three-stream). These intervals have the potential to add significantly to the Company's inventory in the Midland Basin and South Texas, respectively.
"I continue to congratulate our team on truly outstanding execution, which includes optimizing capital expenditures, in achieving our results to date," comments President and CEO Jay Ottoson. "Higher than expected production volumes in the Permian reflect strong early performance from a number of new wells including the Wolfcamp D and Dean tests, as well as completion timing. In South Texas, production is benefiting from our newly-designed development wells, as well as a better than expected decline rate at a recently completed Austin Chalk test. Better well performance while maintaining capital discipline further supports our goal to be free cash flow positive in the second half of this year."
Mr. Ottoson continues, "We are very pleased with results to date on several well tests into new intervals, including the 30-day peak rates we are reporting today for the Wolfcamp D and Dean in the Permian Basin and the Austin Chalk in South Texas. These intervals, in addition to our recent Middle Spraberry test in RockStar, are potential catalysts to drive inventory growth and value creation from our existing footprint."
SECOND QUARTER UPDATES
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "target," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things: revised guidance for the second quarter and full year 2019, potential inventory increases and projected free cash flow in the second half of 2019. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; and other such matters discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
6/18/2019EnerCom Posts Schedule of Presenters for The Oil & Gas Conference® Aug. 11-14, 2019
Source: PR Newswire
DENVER, June 12, 2019 /PRNewswire/ -- EnerCom has released the presentation schedule for the oil and gas companies presenting at its 24th annual The Oil & Gas Conference® on Aug. 11-14, 2019, in Denver, Colorado.
Day One Presenting Companies at the 2019 EnerCom Conference
Aug. 12, 2019, the first day of the EnerCom conference presentation schedule, features a large, established group of operators working across North America's shale basins and internationally, including:
The conference investor presentations begin at 7:30 a.m. and run through 4:30 p.m. on Monday, Aug. 12.
Expert Speakers: Global energy industry leaders, economists, market strategists, government officials, energy finance professionals and other energy experts will provide their insights on global commodities markets, energy exports, frac sand supply and logistics, and capital sources for energy development.
EnerCom is pleased to include Credit Agricole CIB's Chief Economist for the United States Michael Carey as a guest expert speaker at 11:30 a.m. on Monday, Aug. 12. Carey will provide his insight on energy markets, capital markets and market conditions going forward.
Monday's luncheon keynote address on Aug. 12, 2019 will be provided by Cedric Burgher, Occidental Petroleum (NYSE: OXY) CFO.
Online Registration is Open for EnerCom's 24TH Annual The Oil & Gas Conference®: Buyside investors and oil and gas company professionals may register for the event through the conference website registration page.
Conference Details: The Oil & Gas Conference® 24 offers investment professionals the opportunity to listen to senior management teams in the oil and gas industry present operational and financial strategies and to gain exposure to important energy topics affecting the global oil and gas industry.
The EnerCom conference forum fosters healthy dialogue and informal networking opportunities for attendees at several sponsored events the week of the conference.
Public and Private Company Presenters: The 2019 edition of EnerCom's The Oil & Gas Conference® will feature public and private oil and gas companies with operations around the world including the U.S. shale basins, the Gulf of Mexico and Canada. A work-in-progress list of the 2019 presenting companies will be updated on the conference website. The daily schedule of presenters is also posted on the website (presenters, days, times are subject to change).
How to Hear the Luncheon Speakers: Completing online registration well in advance of The Oil & Gas Conference® will provide your best chance to gain insight from Occidental Petroleum SVP and chief financial officer Cedric Burgher, Continental Resources Chairman and CEO Harold Hamm, and global supermajor Eni, SpA VP of North America Investor Relations Andrew Lees.
Who Attends the Conference: More than 2,000 institutional, private equity and hedge fund investors, family offices, energy research analysts, retail brokers, trust officers, high net worth investors, investment bankers and energy industry professionals gather in Denver for the conference.
One-on-One Meetings: EnerCom works in advance with presenting company management teams to arrange one-on-one meetings with the attending institutional investors and research analysts at the conference venue. In 2018, EnerCom arranged and managed more than 2,000 one-on-one meeting requests.
How to Register: Investment professionals and oil and gas companies may register for the event through the conference website.
EnerCom History and Sponsors: EnerCom, Inc. founded The Oil & Gas Conference® in 1996. It is the oldest and largest energy investment conference in Denver.
Global sponsors of EnerCom's conferences are Netherland, Sewell & Associates; and Drillinginfo. Sponsors of The Oil & Gas Conference® 24 include CIBC; Credit Agricole CIB; McGriff, Seibels & Williams; Haynes and Boone; Moss Adams; PNC; Preng & Associates; Bank of America Merrill Lynch; DNB Bank ASA; Holland & Hart; MUFG; Petrie Partners; SMBC; and Wells Fargo.
About EnerCom, Inc.
Since 1994 EnerCom, Inc. has developed into a nationally recognized management consultancy advising oil and gas industry clients on corporate strategy, asset valuations, investor relations, media relations, external communications and visual communications design.
EnerCom produces and publishes numerous data products and external communications tools for public energy companies and oil and gas investors including:
Headquartered in Denver, with senior consultants in Dallas, EnerCom uses the team approach for delivering its wide range of services to public and private companies, large and small, operating in the global exploration and production, OilService, capital markets, and associated advanced-technology industries. EnerCom's professionals have more than 170 years of industry and business experience and a proven track record of success.
EnerCom's upcoming oil and gas investment conferences include:
EnerCom Denver (The Oil & Gas Conference®) – August 11-14, 2019
EnerCom Dallas – Q1 - 2020
For more information about EnerCom and its services, please visit http://www.enercominc.com/ or call +1 303-296-8834 to speak with the management team or one of our consultants.
About Netherland, Sewell & Associates, Inc.
Netherland, Sewell & Associates, Inc. (NSAI) was founded in 1961 to provide the highest quality engineering and geological consulting to the petroleum industry. Today they are recognized as the worldwide leader of petroleum property analysis to industry and financial organizations and government agencies. With offices in Dallas and Houston, NSAI provides a complete range of geological, geophysical, petrophysical, and engineering services and has the technical experience and ability to perform these services in any of the onshore and offshore oil and gas producing areas of the world. They provide reserves reports and audits, acquisition and divestiture evaluations, simulation studies, exploration resources assessments, equity determinations, and management and advisory services. For a complete list of services or to learn more about Netherland, Sewell & Associates, Inc. please visit www.netherlandsewell.com.
For more information about NSAI, call C.H. (Scott) Rees, Chief Executive Officer, at 214-969-5401 or send an email to info@nsai-petro.com.
About Drillinginfo
Drillinginfo delivers business-critical insights to the energy, power, and commodities markets. Its state-of-the-art SaaS platform offers sophisticated technology, powerful analytics, and industry-leading data. Drillinginfo's solutions deliver value across upstream, midstream and downstream markets, empowering exploration and production (E&P), oilfield services, midstream, utilities, trading and risk, and capital markets companies to be more collaborative, efficient, and competitive. Drillinginfo delivers actionable intelligence over mobile, web, and desktop to analyze and reduce risk, conduct competitive benchmarking, and uncover market insights. Drillinginfo serves over 5,000 companies globally from its Austin, Texas headquarters and has more than 1,000 employees.
For more information visit drillinginfo.com
About CIBC
CIBC is a leading Canadian-based global financial institution with a reputation as a strong, reliable banking partner focused on delivering customized products and services built on innovative thinking and leading technology.
Through our major business units – Canadian Personal & Business Banking, Canadian Commercial Banking & Wealth Management, U.S. Commercial Banking & Wealth Management and Capital Markets – our more than 45,000 employees provide a full range of financial products and services to 10 million clients around the world.
With offices throughout North America and other major financial centers, we are widely recognized as a strong global financial institution with more than $634 billion in assets and a market capitalization of $50 billion. We are rated A+ by Standard & Poor's, Aa2 by Moody's Investor Service and AA- by Fitch Ratings.
Our dedicated industry specialists based in Houston, New York, Calgary, London, Hong Kong, Beijing, Tokyo, Singapore and Sydney draw on the breadth of our capabilities to support firms across the entire energy value chain. From credit commitments, A&D advisory, M&A, and capital markets, we help our clients achieve their objectives and unlock value across a range of market conditions.
Visit www.cibccm.com/energy to learn more about CIBC Capital Markets and our energy capabilities.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group, the world's eighth largest bank by total assets (The Banker, July 2014). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking, and international private banking.
With headquarters in New York City, and U.S. offices in Houston and Chicago, Credit Agricole CIB Americas offers its corporate and institutional clients financial products and services and made-to-order structuring, origination and distribution, through both its banking unit Credit Agricole CIB, and the full-service broker-dealer Credit Agricole Securities (USA) Inc., which is a member of the NYSE and NASD. Credit Agricole CIB is also present in Montreal, Canada, and in Latin America with offices in Argentina, Brazil, and Mexico.
The Energy Industry represents the single largest concentration of industry exposure at Credit Agricole Corporate and Investment Bank, whose specialty focus dates back over 100 years. Our Energy practice for North America, located in Houston, focuses on all segments of the business and covers it on a truly global basis.
For more information, visit www.ca-cib.com.
McGriff, Seibels & Williams
As one of the most progressive insurance brokerage firms in the United States, McGriff, Seibels & Williams leads the way with innovative programs to protect our clients' financial interests. Our experienced professionals work with some of the world's largest corporations to design state-of-the-art solutions for a full range of needs "…from property and casualty exposures…to employee benefits, life and pension plans…to financial services and surety products…to specialty insurance programs."
Our philosophy of personal service and attention to individual needs puts the client at the top of our organizational chart. We work to make each relationship a long-term partnership that continues to grow in value.
For more information please visit mcgriff.com.
About Haynes and Boone
Haynes and Boone, LLP is an energy-focused corporate law firm, providing a full spectrum of legal services to our clients across the oil and gas industry, including the upstream, midstream, and downstream sectors. We serve energy clients from our offices in Texas, Colorado, New York, California, Washington, D.C., London, Mexico City and Shanghai. We work as a team representing U.S. and foreign public and private companies engaged in the dynamic day-to-day work of finding and extracting oil and gas, and the banks, investment funds and other investors that support them.
Our team of more than 100 energy lawyers and landmen understands the U.S. and international physical and financial energy markets, and the firm has been helping operators and lenders complete some of the largest financings and M&A transactions in recent years. With more than 600 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal, and our energy lawyers have been ranked by publications such as Best Lawyers in America, Chambers and Partners and Who's Who in Energy.
For more info, please visit www.haynesboone.com.
About Moss Adams LLP
For more than 30 years, Hein & Associates has been recognized throughout the industry as a leading oil and gas accounting and advisory firm. In late 2017, Hein combined with Moss Adams LLP, one of the largest accounting, consulting and wealth management firms in the nation, creating a $600 million middle-market accounting/tax/audit leader in the western U.S. with a strong oil & gas practice group. With more than 2,900 professionals and staff across more than 25 locations in the West and beyond, Moss Adams works with many of the world's most innovative companies and leaders. Our strength in the middle market enables us to advise clients at all intervals of development—from start-up, to rapid growth and expansion, to transition. Today, we help over 2,300 companies doing business in more than 100 countries and territories.
For more information, please contact Joe Blice, Partner, National Practice Leader, Oil & Gas, CPA joe.blice@mossadams.com, (972) 687-7818.
Moss Adams LLP provides details at https://www.mossadams.com/home .
About PNC Financial Services Group
PNC is one of the largest, best-regarded and best-capitalized financial services companies in the country, with approximately $325 billion in assets and offices in 33 states, Canada and the United Kingdom.
PNC's Energy Group, headed by Tom Byargeon, is a significant capital and service provider to energy companies, with approximately $6.5 billion in commitments to the industry. The Energy office in Houston houses a team with extensive experience and deep relationships across the entire energy supply chain. This group also offers strategic corporate finance advice and delivers PNC's comprehensive set of solutions and capabilities, including commodity and interest rate hedging, debt capital markets, loan syndications, treasury management, asset securitization, equipment finance and institutional investments.
For more information, please contact Tom Byargeon at 713-353-8782 or tom.byargeon@pnc.com. You can also visit www.pnc.com.
About Preng & Associates
Preng & Associates, founded in 1980, is the only retainer-based, international executive search firm specializing solely in the energy industry. Its number one priority is to assist clients with their executive selection, organization development, and human resource needs by providing the highest quality service. Preng's record of accomplishment is directly attributable to their experienced staff, worldwide network of industry contacts, proven search methodology, and high standards of professionalism. Preng has conducted over 3000 searches for board, executive, management, and professional positions in its 35-year history and has the highest success and repeat client track record.
Preng's practice is based on the premise that the search process is most effective when conducted by professionals with significant search industry experience. The company has earned a reputation for combining professional search disciplines with an in-depth industry and market understanding and has succeeded in some of the industry's most challenging and high-profile searches. Preng's international reach allows it to effectively conduct global engagements; and as a member of the Association of Executive Search Consultants, Preng practices and promotes its high standards of conduct and professionalism.
For more information about Preng & Associates, contact Charles Carpenter, Partner at 713-243-2610 or ccarpenter@preng.com.
About Bank of America Merrill Lynch
Bank of America Merrill Lynch Oil and Gas Group
The Bank of America Merrill Lynch (BofAML) Oil and Gas practice is comprised of a global team of bankers dedicated to covering the energy industry, dating back to the 1920s when Texas predecessor banks pioneered reserve-based lending. The practice includes an experienced in-house Petroleum Engineering team with over 150 years of combined experience. With one of the only full-service financial energy platforms in the industry, the BofAML oil and gas team manages significant capital commitments in the energy sector with dedicated bankers based in Calgary, Denver, Dallas, Houston, London and New York.
The BofA Merrill Lynch Global Research platform offers clients access to information and actionable ideas on stocks, bonds, economics and investment strategies. With approximately 700 analysts in more than 20 countries, we offer our clients knowledge about economic and business developments that are having an impact on the markets, so that they can work with their financial advisors to make the most of opportunities. BofA Merrill Lynch Global Research was ranked No. 1 for the fourth consecutive year on the 2014 list of Top Global Research Firms, Institutional Investor.
About DNB ASA
DNB is Norway's largest financial services provider, with total assets approaching $400 billion. The bank has for years been a major provider of capital to the oil & gas industry, growing up literally side by side with the highly prolific fields developed in the Norwegian Sector of the North Sea. The Oslo Energy Office maintains a global financing strategy and serves this market through multiple offices around the world including Houston, London and Singapore.
Energy Americas, based in Houston, comprises approximately 20 seasoned energy finance professionals. Aside from facilitating the bank's global business strategies, the office concentrates primarily on serving middle market and larger customers in the four principal oil & gas sectors — upstream, midstream, downstream and service — as well as in Power and Renewables. The bank offers a variety of financial products, from traditional oil & gas reserve financing, to longer-term capital markets transactions and merger/acquisition advisory services through its broker-dealer arm, DNB Markets, Inc. Ancillary service capabilities include cash management/depository services, as well as commodity and interest rate hedging.
For information on DNB's energy services, please visit the DNB energy website.
About Holland & Hart
Holland & Hart's oil and gas clients include the major, large independent producers and small to medium sized independents.
The Mountain West is one of the nation's leading oil and gas producing regions, and we are the only law firm with established oil and gas lawyers in every state in the region. We provide clients broad-based, in-depth industry knowledge and legal capabilities by local practitioners who have long-standing professional relationships with decision makers in each of the Mountain West states.
We assist clients at every stage of the oil and gas business, from upstream activities including exploration, production, secondary and tertiary recovery, to midstream gathering and processing activities; and to downstream elements including refining, pipelines, local distribution, marketing, and Federal and State utility regulation. Within each segment of the oil and gas business, Holland & Hart's regional team has experience providing representation every step of the way.
For details, please contact Lisa Adelberg in the Denver office: (303) 295-8148.
About MUFG
Mitsubishi UFJ Financial Group (MUFG) has been a leading provider of banking services to the oil and gas industry in the Americas for more than 30 years, consistently ranking in the Top 10 Lead Arrangers and Top 10 Bond Arrangers in the Thomson Reuters Oil and Gas League Tables.
We support clients across the industry—from regional exploration and production to global diversified services companies—that benefit from our focused approach, strong execution, and customized services. Whether you are looking to expand existing reserves, make an acquisition, or streamline operations, we can support your growth with services, including: underwriting and syndications; U.S./Canadian cross-border funding; securities underwriting and placements; leasing and tax equity financing; and commodities, interest rate, and foreign exchange risk management.
For more information, visit: www.mufgamericas.com/oil-gas.
About Petrie Partners
Petrie Partners, LLC is a boutique investment banking firm offering financial advisory services to the oil and gas industry. We provide specialized advice on mergers, divestitures and acquisitions and private placements.
For more information please refer to petrie.com.
About SMBC
Sumitomo Mitsui Banking Corporation (SMBC) is a core member of Sumitomo Mitsui Financial Group (SMFG), a Tokyo-based bank holding company that is ranked among the largest 25 banks globally by assets under management.
SMBC Americas Division, with more than 2,500 employees, oversees operations in the U.S., Canada, Mexico, and South America. We work across SMFG to offer corporate and institutional clients sophisticated and comprehensive financial services around the globe.
SMBC's roots in Japan trace back more than 400 years to 1590. The Americas Division of SMBC has more than a century of experience in the United States, beginning when the San Francisco branch of Sumitomo Bank was established in 1919. Sumitomo Mitsui Financial Group (NYSE: SMFG) was listed on the New York Stock Exchange in 2010.
For more information please visit the corporate website: www.smbcgroup.com/americas/group-companies/
About Wells Fargo & Company
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.
The Energy Banking Group, headed by Bart Schouest, provides corporate banking products and services to the energy sector, including upstream, midstream, oilfield services, and diversified industries. With offices in Houston, Dallas, Denver, Calgary, and Aberdeen the group's success is driven by in-depth industry expertise and longstanding relationships with key industry participants. The group has over $45 billion of credit commitments to public and private companies across the upstream, midstream, downstream, services, and power and utilities sectors.
The Energy & Power Investment Banking Group, headed by James Kipp, provides strategic advisory and corporate finance expertise to energy and power clients, including upstream, midstream, oilfield services, downstream, coal and the power & utilities sectors. Areas of focus include equity, equity-linked and debt underwritings, private placements, syndications, and mergers and acquisitions. The Energy & Power Investment Banking Group has offices in Houston and Charlotte.
These teams work together to offer clients industry and product expertise, in addition to sharing their understanding of internal and external forces that drive both industry trends and financial markets. For additional information, contact us at 713-319-1350 or Energy@wellsfargo.com.
View original content:http://www.prnewswire.com/news-releases/enercom-posts-schedule-of-presenters-for-the-oil--gas-conference-aug-11-14-2019-300866065.html
SOURCE EnerCom, Inc.
Article Date
6/12/2019Eni VP Andrew Lees to Keynote EnerCom's The Oil & Gas Conference® Aug. 14, 2019
Source: PR Newswire
DENVER, June 5, 2019 /PRNewswire/ -- EnerCom is pleased to announce that global oil and gas giant Eni, SpA Vice President Andrew Lees will deliver the keynote luncheon address at EnerCom's The Oil & Gas Conference® on Aug. 14, 2019.
Eni, SpA
Eni, SpA (NYSE: E) is an Italian global oil and gas and energy company operating in 67 countries worldwide, with 30,000 employees in upstream, midstream and downstream operations. Eni reported daily production for oil and gas of 1.85 MMBOPD for 2018. The company's adjusted operating profit for 2018 more than doubled its 2017 operating profit and represented Eni's best performance of the past eight years, Eni reports.
In 2018 Eni, SpA's upstream exploration group operated in:
Goliat has been developed using the world's largest and most sophisticated cylindrical floating production and storage unit - FPSO—it is the largest and most sophisticated cylindrical FPSO ever built with production capacity of a million barrels of oil.
"With the increasing integration of Upstream and Mid-downstream and due to the massive amount of gas we have discovered, we are turning into a gas and power company with an evolving model that is that is still tied to retail but linked to Upstream," Eni said.
Andrew Lees
Andrew Lees is vice president of North America investor relations for Eni, SpA.
Lees draws on a wealth of energy investing, analysis and oil and gas finance and capital experience in his leadership of Eni, SpA's North American investor relations duties. Before joining Eni in 2015, he was principal at Gadsden Enterprises, LLC. Lees previously served as Invesco's lead portfolio manager for both the energy team and the gold and precious metals team. He entered the investment industry in 1994 and worked for Invesco from 2005 to 2013. Before Invesco Lees served as director of investment banking with Trinity Capital Services, director and research analyst with RBC Capital Markets, VP and senior analyst for Stifel, Nicolaus & Co., senior analyst for Petrie Parkman & Co., and as a research analyst for A.G. Edwards.
How to Hear the Speakers: Completing online registration well in advance of The Oil & Gas Conference® will provide your best chance to gain insight from global supermajor Eni during Mr. Lees' luncheon as well as hearing the luncheon discussions with Continental Resources Chairman and CEO Harold Hamm and Occidental Petroleum SVP and chief financial officer Cedric Burgher earlier in the conference.
Online Registration is Open for EnerCom's 24TH Annual The Oil & Gas Conference®: The conference is August 11-14, 2019, at the Westin Denver Downtown hotel. Buyside investors and oil and gas company professionals may register for the event through the conference website.
Conference Details: The Oil & Gas Conference® 24 offers investment professionals the opportunity to listen to senior management teams in the oil and gas industry present operational and financial strategies and to gain exposure to important energy topics affecting the global oil and gas industry.
The EnerCom forum fosters healthy dialogue and informal networking opportunities for attendees.
Public and Private Company Presenters: The 2019 edition of EnerCom's The Oil & Gas Conference® will feature public and private oil and gas companies with operations around the world including the U.S. shale basins, the Gulf of Mexico and Canada. A work-in-progress list of the 2019 presenting companies will be updated on the conference website.
The list of EnerCom's 2019 presenting companies includes (but is not limited to) the following companies:
Additional Speakers: Global energy industry leaders, economists, market strategists, government officials, energy finance professionals and other energy experts will provide their insights on global commodities markets, the U.S. becoming a net energy exporter, frac sand supply and logistics, and capital sources for energy development.
Who Attends the Conference: More than 2,000 institutional, private equity and hedge fund investors, family offices, energy research analysts, retail brokers, trust officers, high net worth investors, investment bankers and energy industry professionals gather in Denver for the conference.
One-on-One Meetings: EnerCom works in advance with presenting company management teams to arrange one-on-one meetings with the attending institutional investors and research analysts at the conference venue. In 2018, EnerCom arranged and managed more than 2,000 one-on-one meeting requests.
How to Register: Investment professionals and oil and gas companies can register for the event through the conference website.
EnerCom History and Sponsors: EnerCom, Inc. founded The Oil & Gas Conference® in 1996. It is the oldest and largest energy investment conference in Denver.
Global sponsors of EnerCom's conferences are Netherland, Sewell & Associates; and Drillinginfo.
Sponsors of The Oil & Gas Conference® 24 include CIBC; Credit Agricole CIB; McGriff, Seibels & Williams; Haynes and Boone; Moss Adams; PNC; Preng & Associates; Bank of America Merrill Lynch; DNB Bank ASA; Holland & Hart; MUFG; Petrie Partners; SMBC; and Wells Fargo.
About EnerCom, Inc.
Since 1994 EnerCom, Inc. has developed into a nationally recognized management consultancy advising oil and gas industry clients on corporate strategy, asset valuations, investor relations, media relations, external communications and visual communications design.
EnerCom produces and publishes numerous data products and external communications tools for public energy companies and oil and gas investors including:
Headquartered in Denver, with senior consultants in Dallas, EnerCom uses the team approach for delivering its wide range of services to public and private companies, large and small, operating in the global exploration and production, OilService, capital markets, and associated advanced-technology industries. EnerCom's professionals have more than 170 years of industry and business experience and a proven track record of success.
EnerCom's upcoming oil and gas investment conferences include:
EnerCom Denver (The Oil & Gas Conference®) – August 11-14, 2019
EnerCom Dallas – Q1 - 2020
For more information about EnerCom and its services, please visit http://www.enercominc.com/ or call +1 303-296-8834 to speak with the management team or one of our consultants.
About Netherland, Sewell & Associates, Inc.
Netherland, Sewell & Associates, Inc. (NSAI) was founded in 1961 to provide the highest quality engineering and geological consulting to the petroleum industry. Today they are recognized as the worldwide leader of petroleum property analysis to industry and financial organizations and government agencies. With offices in Dallas and Houston, NSAI provides a complete range of geological, geophysical, petrophysical, and engineering services and has the technical experience and ability to perform these services in any of the onshore and offshore oil and gas producing areas of the world. They provide reserves reports and audits, acquisition and divestiture evaluations, simulation studies, exploration resources assessments, equity determinations, and management and advisory services. For a complete list of services or to learn more about Netherland, Sewell & Associates, Inc. please visit www.netherlandsewell.com.
For more information about NSAI, call C.H. (Scott) Rees, Chief Executive Officer, at 214-969-5401 or send an email to info@nsai-petro.com.
About Drillinginfo
Drillinginfo delivers business-critical insights to the energy, power, and commodities markets. Its state-of-the-art SaaS platform offers sophisticated technology, powerful analytics, and industry-leading data. Drillinginfo's solutions deliver value across upstream, midstream and downstream markets, empowering exploration and production (E&P), oilfield services, midstream, utilities, trading and risk, and capital markets companies to be more collaborative, efficient, and competitive. Drillinginfo delivers actionable intelligence over mobile, web, and desktop to analyze and reduce risk, conduct competitive benchmarking, and uncover market insights. Drillinginfo serves over 5,000 companies globally from its Austin, Texas headquarters and has more than 1,000 employees.
For more information visit drillinginfo.com
About CIBC
CIBC is a leading North American bank headquartered in Canada and with offices around the world. CIBC was originally founded nearly 150 years ago and has supported and financed the energy industry for many decades. CIBC was recently ranked as the strongest publicly traded bank in North America by Bloomberg and is rated A+/Aa3 by S&P and Moody's, respectively.
Our energy specialists draw on the breadth of CIBC's capabilities to provide market insights and creative solutions for our clients. Services include corporate banking, commodity and interest rate hedging and strategy, A&D advisory, and capital markets.
CIBC is publicly traded on the NYSE and Toronto Stock Exchange under the symbol "CM" and has a market cap of $36 billion and nearly $400 billion in total assets. For more information, please visit the CIBC energy website.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group, the world's eighth largest bank by total assets (The Banker, July 2014). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking, and international private banking.
With headquarters in New York City, and U.S. offices in Houston and Chicago, Credit Agricole CIB Americas offers its corporate and institutional clients financial products and services and made-to-order structuring, origination and distribution, through both its banking unit Credit Agricole CIB, and the full-service broker-dealer Credit Agricole Securities (USA) Inc., which is a member of the NYSE and NASD. Credit Agricole CIB is also present in Montreal, Canada, and in Latin America with offices in Argentina, Brazil, and Mexico.
The Energy Industry represents the single largest concentration of industry exposure at Credit Agricole Corporate and Investment Bank, whose specialty focus dates back over 100 years. Our Energy practice for North America, located in Houston, focuses on all segments of the business and covers it on a truly global basis.
For more information, visit www.ca-cib.com.
McGriff, Seibels & Williams
As one of the most progressive insurance brokerage firms in the United States, McGriff, Seibels & Williams leads the way with innovative programs to protect our clients' financial interests. Our experienced professionals work with some of the world's largest corporations to design state-of-the-art solutions for a full range of needs "…from property and casualty exposures…to employee benefits, life and pension plans…to financial services and surety products…to specialty insurance programs."
Our philosophy of personal service and attention to individual needs puts the client at the top of our organizational chart. We work to make each relationship a long-term partnership that continues to grow in value.
For more information please visit mcgriff.com.
About Haynes and Boone
Haynes and Boone, LLP is an energy-focused corporate law firm, providing a full spectrum of legal services to our clients across the oil and gas industry, including the upstream, midstream, and downstream sectors. We serve energy clients from our offices in Texas, Colorado, New York, California, Washington, D.C., London, Mexico City and Shanghai. We work as a team representing U.S. and foreign public and private companies engaged in the dynamic day-to-day work of finding and extracting oil and gas, and the banks, investment funds and other investors that support them.
Our team of more than 100 energy lawyers and landmen understands the U.S. and international physical and financial energy markets, and the firm has been helping operators and lenders complete some of the largest financings and M&A transactions in recent years. With more than 600 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal, and our energy lawyers have been ranked by publications such as Best Lawyers in America, Chambers and Partners and Who's Who in Energy.
For more info, please visit www.haynesboone.com.
About Moss Adams LLP
For more than 30 years, Hein & Associates has been recognized throughout the industry as a leading oil and gas accounting and advisory firm. In late 2017, Hein combined with Moss Adams LLP, one of the largest accounting, consulting and wealth management firms in the nation, creating a $600 million middle-market accounting/tax/audit leader in the western U.S. with a strong oil & gas practice group. With more than 2,900 professionals and staff across more than 25 locations in the West and beyond, Moss Adams works with many of the world's most innovative companies and leaders. Our strength in the middle market enables us to advise clients at all intervals of development—from start-up, to rapid growth and expansion, to transition. Today, we help over 2,300 companies doing business in more than 100 countries and territories.
For more information, please contact Joe Blice, Partner, National Practice Leader, Oil & Gas, CPA
joe.blice@mossadams.com, (972) 687-7818.
Moss Adams LLP provides details at https://www.mossadams.com/home .
About PNC Financial Services Group
PNC is one of the largest, best-regarded and best-capitalized financial services companies in the country, with approximately $325 billion in assets and offices in 33 states, Canada and the United Kingdom.
PNC's Energy Group, headed by Tom Byargeon, is a significant capital and service provider to energy companies, with approximately $6.5 billion in commitments to the industry. The Energy office in Houston houses a team with extensive experience and deep relationships across the entire energy supply chain. This group also offers strategic corporate finance advice and delivers PNC's comprehensive set of solutions and capabilities, including commodity and interest rate hedging, debt capital markets, loan syndications, treasury management, asset securitization, equipment finance and institutional investments.
For more information, please contact Tom Byargeon at 713-353-8782 or tom.byargeon@pnc.com. You can also visit www.pnc.com.
About Preng & Associates
Preng & Associates, founded in 1980, is the only retainer-based, international executive search firm specializing solely in the energy industry. Its number one priority is to assist clients with their executive selection, organization development, and human resource needs by providing the highest quality service. Preng's record of accomplishment is directly attributable to their experienced staff, worldwide network of industry contacts, proven search methodology, and high standards of professionalism. Preng has conducted over 3000 searches for board, executive, management, and professional positions in its 35-year history and has the highest success and repeat client track record.
Preng's practice is based on the premise that the search process is most effective when conducted by professionals with significant search industry experience. The company has earned a reputation for combining professional search disciplines with an in-depth industry and market understanding and has succeeded in some of the industry's most challenging and high-profile searches. Preng's international reach allows it to effectively conduct global engagements; and as a member of the Association of Executive Search Consultants, Preng practices and promotes its high standards of conduct and professionalism.
For more information about Preng & Associates, contact Charles Carpenter, Partner at 713-243-2610 or ccarpenter@preng.com.
About Bank of America Merrill Lynch
Bank of America Merrill Lynch Oil and Gas Group
The Bank of America Merrill Lynch (BofAML) Oil and Gas practice is comprised of a global team of bankers dedicated to covering the energy industry, dating back to the 1920s when Texas predecessor banks pioneered reserve-based lending. The practice includes an experienced in-house Petroleum Engineering team with over 150 years of combined experience. With one of the only full-service financial energy platforms in the industry, the BofAML oil and gas team manages significant capital commitments in the energy sector with dedicated bankers based in Calgary, Denver, Dallas, Houston, London and New York.
The BofA Merrill Lynch Global Research platform offers clients access to information and actionable ideas on stocks, bonds, economics and investment strategies. With approximately 700 analysts in more than 20 countries, we offer our clients knowledge about economic and business developments that are having an impact on the markets, so that they can work with their financial advisors to make the most of opportunities. BofA Merrill Lynch Global Research was ranked No. 1 for the fourth consecutive year on the 2014 list of Top Global Research Firms, Institutional Investor.
About DNB ASA
DNB is Norway's largest financial services provider, with total assets approaching $400 billion. The bank has for years been a major provider of capital to the oil & gas industry, growing up literally side by side with the highly prolific fields developed in the Norwegian Sector of the North Sea. The Oslo Energy Office maintains a global financing strategy and serves this market through multiple offices around the world including Houston, London and Singapore.
Energy Americas, based in Houston, comprises approximately 20 seasoned energy finance professionals. Aside from facilitating the bank's global business strategies, the office concentrates primarily on serving middle market and larger customers in the four principal oil & gas sectors — upstream, midstream, downstream and service — as well as in Power and Renewables. The bank offers a variety of financial products, from traditional oil & gas reserve financing, to longer-term capital markets transactions and merger/acquisition advisory services through its broker-dealer arm, DNB Markets, Inc. Ancillary service capabilities include cash management/depository services, as well as commodity and interest rate hedging.
For information on DNB's energy services, please visit the DNB energy website.
About Holland & Hart
Holland & Hart's oil and gas clients include the major, large independent producers and small to medium sized independents.
The Mountain West is one of the nation's leading oil and gas producing regions, and we are the only law firm with established oil and gas lawyers in every state in the region. We provide clients broad-based, in-depth industry knowledge and legal capabilities by local practitioners who have long-standing professional relationships with decision makers in each of the Mountain West states.
We assist clients at every stage of the oil and gas business, from upstream activities including exploration, production, secondary and tertiary recovery, to midstream gathering and processing activities; and to downstream elements including refining, pipelines, local distribution, marketing, and Federal and State utility regulation. Within each segment of the oil and gas business, Holland & Hart's regional team has experience providing representation every step of the way.
For details, please contact Lisa Adelberg in the Denver office: (303) 295-8148.
About MUFG
Mitsubishi UFJ Financial Group (MUFG) has been a leading provider of banking services to the oil and gas industry in the Americas for more than 30 years, consistently ranking in the Top 10 Lead Arrangers and Top 10 Bond Arrangers in the Thomson Reuters Oil and Gas League Tables.
We support clients across the industry—from regional exploration and production to global diversified services companies—that benefit from our focused approach, strong execution, and customized services. Whether you are looking to expand existing reserves, make an acquisition, or streamline operations, we can support your growth with services, including: underwriting and syndications; U.S./Canadian cross-border funding; securities underwriting and placements; leasing and tax equity financing; and commodities, interest rate, and foreign exchange risk management.
For more information, visit: www.mufgamericas.com/oil-gas.
About Petrie Partners
Petrie Partners, LLC is a boutique investment banking firm offering financial advisory services to the oil and gas industry. We provide specialized advice on mergers, divestitures and acquisitions and private placements.
For more information please refer to petrie.com.
About SMBC
Sumitomo Mitsui Banking Corporation (SMBC) is a core member of Sumitomo Mitsui Financial Group (SMFG), a Tokyo-based bank holding company that is ranked among the largest 25 banks globally by assets under management.
SMBC Americas Division, with more than 2,500 employees, oversees operations in the U.S., Canada, Mexico, and South America. We work across SMFG to offer corporate and institutional clients sophisticated and comprehensive financial services around the globe.
SMBC's roots in Japan trace back more than 400 years to 1590. The Americas Division of SMBC has more than a century of experience in the United States, beginning when the San Francisco branch of Sumitomo Bank was established in 1919. Sumitomo Mitsui Financial Group (NYSE: SMFG) was listed on the New York Stock Exchange in 2010.
For more information please visit the corporate website: www.smbcgroup.com/americas/group-companies/
About Wells Fargo & Company
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.
The Energy Banking Group, headed by Bart Schouest, provides corporate banking products and services to the energy sector, including upstream, midstream, oilfield services, and diversified industries. With offices in Houston, Dallas, Denver, Calgary, and Aberdeen the group's success is driven by in-depth industry expertise and longstanding relationships with key industry participants. The group has over $45 billion of credit commitments to public and private companies across the upstream, midstream, downstream, services, and power and utilities sectors.
The Energy & Power Investment Banking Group, headed by James Kipp, provides strategic advisory and corporate finance expertise to energy and power clients, including upstream, midstream, oilfield services, downstream, coal and the power & utilities sectors. Areas of focus include equity, equity-linked and debt underwritings, private placements, syndications, and mergers and acquisitions. The Energy & Power Investment Banking Group has offices in Houston and Charlotte.
These teams work together to offer clients industry and product expertise, in addition to sharing their understanding of internal and external forces that drive both industry trends and financial markets. For additional information, contact us at 713-319-1350 or Energy@wellsfargo.com.
View original content:http://www.prnewswire.com/news-releases/eni-vp-andrew-lees-to-keynote-enercoms-the-oil--gas-conference-aug-14-2019-300862186.html
SOURCE EnerCom, Inc.
Article Date
6/5/2019SM Energy Announces Participation In Upcoming Investor Conferences
Source: PR Newswire
DENVER, June 3, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) will be participating in the following upcoming investor events. The Company will post an updated investor presentation on the dates and times referenced below on the Company's website at ir.sm-energy.com:
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-announces-participation-in-upcoming-investor-conferences-300860129.html
SOURCE SM Energy Company
Article Date
6/3/2019SM Energy Announces Promotion Of Herbert S. Vogel To Chief Operating Officer
Source: PR Newswire
DENVER, June 3, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that the Company's Board of Directors has appointed Herbert S. Vogel to the position of Chief Operating Officer. Mr. Vogel joined the Company in 2012 and has served in the role of Executive Vice President – Operations since August 2014. Mr. Vogel has 35 years of experience in the oil and natural gas business.
President and Chief Executive Officer Jay Ottoson comments, "Herb has done an exceptional job leading our operations team through a multi-year portfolio transition, and he has been instrumental in building and retaining our highly valued technical teams that have positioned SM as a top operator within our core areas. We congratulate Herb on this well-deserved promotion!"
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
6/3/2019Continental Petroleum Chairman Harold Hamm to Keynote EnerCom's The Oil & Gas Conference® Tues. Aug. 13, 2019
Source: PR Newswire
DENVER, May 29, 2019 /PRNewswire/ -- EnerCom is pleased to announce that legendary oilman Harold G. Hamm, chairman and CEO of Continental Resources (NYSE: CLR), will take the stage for a discussion about U.S. shale and look at the prospects for U.S. oil and gas exploration in a "fireside chat" Tuesday, August 13, 2019, during EnerCom's The Oil & Gas Conference® in downtown Denver's Westin hotel.
Limited space is available for conference registrants to join the discussion with Mr. Hamm. Completing online registration well in advance of The Oil & Gas Conference® will provide your best chance to participate in Mr. Hamm's luncheon discussion during the 2019 EnerCom conference.
Harold Hamm and Continental Resources
Harold Hamm is founder, chairman and chief executive officer of Continental Resources, one of North America's iconic oil and gas explorers and producers and one of the leading oil producers in the Bakken oil play in the Williston Basin and the STACK/SCOOP plays in Oklahoma. With a market capitalization of $14.5 billion, Continental ranks in the top ten largest U.S. independent exploration and production companies, sharing the top of the list with companies like ConocoPhillips ($COP), EOG Resources ($EOG) and Occidental Petroleum (NYSE: OXY), whose CFO Cedric Burgher will give a luncheon keynote address at The Oil & Gas Conference® on Monday, Aug. 12.
Mr. Hamm is heavily involved with furthering the success of the U.S. oil and gas industry on a global scale. He co-founded and serves as chairman of the Domestic Energy Producers Alliance, whose goal is to preserve the millions of jobs and billions of dollars in economic activity and tax revenues generated by onshore drilling and production activities within the United States. Through his work with DEPA, Mr. Hamm is widely recognized as the man who led the charge to lift America's 40-year-old ban on U.S. crude oil exports, opening new global markets for America's oil producers.
Hamm, the youngest of 13 children born to a family of sharecroppers, began working in the oilfields as a teenager and founded Continental Resources in 1967 at the age of 21. He is a frequent guest on business and financial cable networks and global business publications. Mr. Hamm has been recognized by numerous industry groups as Executive of the Year, Wildcatter of the Year, Chief Roughneck, CEO of the Year and Entrepreneur of the Year. In 2012 Harold Hamm was named by TIME Magazine as one of the "100 Most Influential People in the World."
Online registration is open for EnerCom's 24TH annual The Oil & Gas Conference®
The conference is August 11-14, 2019, at the Westin Denver Downtown hotel. Buyside investors and oil and gas company professionals may register for the event through the conference website.
Conference Details: The Oil & Gas Conference® 24 offers investment professionals the opportunity to listen to senior management teams in the oil and gas industry present operational and financial strategies and to gain exposure to important energy topics affecting the global oil and gas industry.
The EnerCom forum fosters healthy dialogue and informal networking opportunities for attendees.
Public and Private Company Presenters: The 2019 edition of EnerCom's The Oil & Gas Conference® will feature public and private oil and gas companies with operations around the world including the U.S. shale basins, the Gulf of Mexico and Canada. A work-in-progress list of the 2019 presenting companies will be updated on the conference website.
The list of EnerCom's 2019 presenting companies includes (but is not limited to) the following companies:
Additional Speakers: Global energy industry leaders, economists, market strategists, government officials, energy finance professionals and other energy experts will provide their insights on global commodities markets, the U.S. becoming a net energy exporter, frac sand supply and logistics, and capital sources for energy development.
Who Attends the Conference: More than 2,000 institutional, private equity and hedge fund investors, family offices, energy research analysts, retail brokers, trust officers, high net worth investors, investment bankers and energy industry professionals gather in Denver for the conference.
One-on-One Meetings: EnerCom works in advance with presenting company management teams to arrange one-on-one meetings with the attending institutional investors and research analysts at the conference venue. In 2018, EnerCom arranged and managed more than 2,000 one-on-one meeting requests.
How to Register: Investment professionals and oil and gas companies can register for the event through the conference website.
EnerCom History and Sponsors: EnerCom, Inc. founded The Oil & Gas Conference® in 1996. It is the oldest and largest energy investment conference in Denver.
Global sponsors of EnerCom's conferences are Netherland, Sewell & Associates; and Drillinginfo.
Sponsors of The Oil & Gas Conference® 24 include CIBC; Credit Agricole CIB; McGriff, Seibels & Williams; Haynes and Boone; Moss Adams; PNC; Preng & Associates; Bank of America Merrill Lynch; DNB Bank ASA; Holland & Hart; MUFG; Petrie Partners; SMBC; and Wells Fargo.
About EnerCom, Inc.
Since 1994 EnerCom, Inc. has developed into a nationally recognized management consultancy advising oil and gas industry clients on corporate strategy, asset valuations, investor relations, media relations, external communications and visual communications design.
EnerCom produces and publishes numerous data products and external communications tools for public energy companies and oil and gas investors including:
Headquartered in Denver, with senior consultants in Dallas, EnerCom uses the team approach for delivering its wide range of services to public and private companies, large and small, operating in the global exploration and production, OilService, capital markets, and associated advanced-technology industries. EnerCom's professionals have more than 170 years of industry and business experience and a proven track record of success.
EnerCom's upcoming oil and gas investment conferences include:
EnerCom Denver (The Oil & Gas Conference®) – August 11-14, 2019
EnerCom Dallas – Q1 - 2020
For more information about EnerCom and its services, please visit http://www.enercominc.com/ or call +1 303-296-8834 to speak with the management team or one of our consultants.
About Netherland, Sewell & Associates, Inc.
Netherland, Sewell & Associates, Inc. (NSAI) was founded in 1961 to provide the highest quality engineering and geological consulting to the petroleum industry. Today they are recognized as the worldwide leader of petroleum property analysis to industry and financial organizations and government agencies. With offices in Dallas and Houston, NSAI provides a complete range of geological, geophysical, petrophysical, and engineering services and has the technical experience and ability to perform these services in any of the onshore and offshore oil and gas producing areas of the world. They provide reserves reports and audits, acquisition and divestiture evaluations, simulation studies, exploration resources assessments, equity determinations, and management and advisory services. For a complete list of services or to learn more about Netherland, Sewell & Associates, Inc. please visit www.netherlandsewell.com.
For more information about NSAI, call C.H. (Scott) Rees, Chief Executive Officer, at 214-969-5401 or send an email to info@nsai-petro.com.
About Drillinginfo
Drillinginfo delivers business-critical insights to the energy, power, and commodities markets. Its state-of-the-art SaaS platform offers sophisticated technology, powerful analytics, and industry-leading data. Drillinginfo's solutions deliver value across upstream, midstream and downstream markets, empowering exploration and production (E&P), oilfield services, midstream, utilities, trading and risk, and capital markets companies to be more collaborative, efficient, and competitive. Drillinginfo delivers actionable intelligence over mobile, web, and desktop to analyze and reduce risk, conduct competitive benchmarking, and uncover market insights. Drillinginfo serves over 5,000 companies globally from its Austin, Texas headquarters and has more than 1,000 employees.
For more information visit drillinginfo.com
About CIBC
CIBC is a leading North American bank headquartered in Canada and with offices around the world. CIBC was originally founded nearly 150 years ago and has supported and financed the energy industry for many decades. CIBC was recently ranked as the strongest publicly traded bank in North America by Bloomberg and is rated A+/Aa3 by S&P and Moody's, respectively.
Our energy specialists draw on the breadth of CIBC's capabilities to provide market insights and creative solutions for our clients. Services include corporate banking, commodity and interest rate hedging and strategy, A&D advisory, and capital markets.
CIBC is publicly traded on the NYSE and Toronto Stock Exchange under the symbol "CM" and has a market cap of $36 billion and nearly $400 billion in total assets. For more information, please visit the CIBC energy website.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group, the world's eighth largest bank by total assets (The Banker, July 2014). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking, and international private banking.
With headquarters in New York City, and U.S. offices in Houston and Chicago, Credit Agricole CIB Americas offers its corporate and institutional clients financial products and services and made-to-order structuring, origination and distribution, through both its banking unit Credit Agricole CIB, and the full-service broker-dealer Credit Agricole Securities (USA) Inc., which is a member of the NYSE and NASD. Credit Agricole CIB is also present in Montreal, Canada, and in Latin America with offices in Argentina, Brazil, and Mexico.
The Energy Industry represents the single largest concentration of industry exposure at Credit Agricole Corporate and Investment Bank, whose specialty focus dates back over 100 years. Our Energy practice for North America, located in Houston, focuses on all segments of the business and covers it on a truly global basis.
For more information, visit www.ca-cib.com.
McGriff, Seibels & Williams
As one of the most progressive insurance brokerage firms in the United States, McGriff, Seibels & Williams leads the way with innovative programs to protect our clients' financial interests.
Our experienced professionals work with some of the world's largest corporations to design state-of-the-art solutions for a full range of needs "…from property and casualty exposures…to employee benefits, life and pension plans…to financial services and surety products…to specialty insurance programs."
Our philosophy of personal service and attention to individual needs puts the client at the top of our organizational chart. We work to make each relationship a long-term partnership that continues to grow in value.
For more information please visit mcgriff.com.
About Haynes and Boone
Haynes and Boone, LLP is an energy-focused corporate law firm, providing a full spectrum of legal services to our clients across the oil and gas industry, including the upstream, midstream, and downstream sectors. We serve energy clients from our offices in Texas, Colorado, New York, California, Washington, D.C., London, Mexico City and Shanghai. We work as a team representing U.S. and foreign public and private companies engaged in the dynamic day-to-day work of finding and extracting oil and gas, and the banks, investment funds and other investors that support them.
Our team of more than 100 energy lawyers and landmen understands the U.S. and international physical and financial energy markets, and the firm has been helping operators and lenders complete some of the largest financings and M&A transactions in recent years. With more than 600 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal, and our energy lawyers have been ranked by publications such as Best Lawyers in America, Chambers and Partners and Who's Who in Energy.
For more info, please visit www.haynesboone.com.
About Moss Adams LLP
For more than 30 years, Hein & Associates has been recognized throughout the industry as a leading oil and gas accounting and advisory firm. In late 2017, Hein combined with Moss Adams LLP, one of the largest accounting, consulting and wealth management firms in the nation, creating a $600 million middle-market accounting/tax/audit leader in the western U.S. with a strong oil & gas practice group.
With more than 2,900 professionals and staff across more than 25 locations in the West and beyond, Moss Adams works with many of the world's most innovative companies and leaders. Our strength in the middle market enables us to advise clients at all intervals of development—from start-up, to rapid growth and expansion, to transition. Today, we help over 2,300 companies doing business in more than 100 countries and territories.
For more information, please contact Joe Blice, Partner, National Practice Leader, Oil & Gas, CPA
joe.blice@mossadams.com, (972) 687-7818.
Moss Adams LLP provides details at https://www.mossadams.com/home.
About PNC Financial Services Group
PNC is one of the largest, best-regarded and best-capitalized financial services companies in the country, with approximately $325 billion in assets and offices in 33 states, Canada and the United Kingdom.
PNC's Energy Group, headed by Tom Byargeon, is a significant capital and service provider to energy companies, with approximately $6.5 billion in commitments to the industry. The Energy office in Houston houses a team with extensive experience and deep relationships across the entire energy supply chain. This group also offers strategic corporate finance advice and delivers PNC's comprehensive set of solutions and capabilities, including commodity and interest rate hedging, debt capital markets, loan syndications, treasury management, asset securitization, equipment finance and institutional investments.
For more information, please contact Tom Byargeon at 713-353-8782 or tom.byargeon@pnc.com. You can also visit www.pnc.com.
About Preng & Associates
Preng & Associates, founded in 1980, is the only retainer-based, international executive search firm specializing solely in the energy industry. Its number one priority is to assist clients with their executive selection, organization development, and human resource needs by providing the highest quality service. Preng's record of accomplishment is directly attributable to their experienced staff, worldwide network of industry contacts, proven search methodology, and high standards of professionalism. Preng has conducted over 3000 searches for board, executive, management, and professional positions in its 35-year history and has the highest success and repeat client track record.
Preng's practice is based on the premise that the search process is most effective when conducted by professionals with significant search industry experience. The company has earned a reputation for combining professional search disciplines with an in-depth industry and market understanding and has succeeded in some of the industry's most challenging and high-profile searches. Preng's international reach allows it to effectively conduct global engagements; and as a member of the Association of Executive Search Consultants, Preng practices and promotes its high standards of conduct and professionalism.
For more information about Preng & Associates, contact Charles Carpenter, Partner at 713-243-2610 or ccarpenter@preng.com.
About Bank of America Merrill Lynch
Bank of America Merrill Lynch Oil and Gas Group
The Bank of America Merrill Lynch (BofAML) Oil and Gas practice is comprised of a global team of bankers dedicated to covering the energy industry, dating back to the 1920s when Texas predecessor banks pioneered reserve-based lending. The practice includes an experienced in-house Petroleum Engineering team with over 150 years of combined experience. With one of the only full-service financial energy platforms in the industry, the BofAML oil and gas team manages significant capital commitments in the energy sector with dedicated bankers based in Calgary, Denver, Dallas, Houston, London and New York.
The BofA Merrill Lynch Global Research platform offers clients access to information and actionable ideas on stocks, bonds, economics and investment strategies. With approximately 700 analysts in more than 20 countries, we offer our clients knowledge about economic and business developments that are having an impact on the markets, so that they can work with their financial advisors to make the most of opportunities. BofA Merrill Lynch Global Research was ranked No. 1 for the fourth consecutive year on the 2014 list of Top Global Research Firms, Institutional Investor.
About DNB ASA
DNB is Norway's largest financial services provider, with total assets approaching $400 billion. The bank has for years been a major provider of capital to the oil & gas industry, growing up literally side by side with the highly prolific fields developed in the Norwegian Sector of the North Sea. The Oslo Energy Office maintains a global financing strategy and serves this market through multiple offices around the world including Houston, London and Singapore.
Energy Americas, based in Houston, comprises approximately 20 seasoned energy finance professionals. Aside from facilitating the bank's global business strategies, the office concentrates primarily on serving middle market and larger customers in the four principal oil & gas sectors — upstream, midstream, downstream and service — as well as in Power and Renewables. The bank offers a variety of financial products, from traditional oil & gas reserve financing, to longer-term capital markets transactions and merger/acquisition advisory services through its broker-dealer arm, DNB Markets, Inc. Ancillary service capabilities include cash management/depository services, as well as commodity and interest rate hedging.
For information on DNB's energy services, please visit the DNB energy website.
About Holland & Hart
Holland & Hart's oil and gas clients include the major, large independent producers and small to medium sized independents.
The Mountain West is one of the nation's leading oil and gas producing regions, and we are the only law firm with established oil and gas lawyers in every state in the region. We provide clients broad-based, in-depth industry knowledge and legal capabilities by local practitioners who have long-standing professional relationships with decision makers in each of the Mountain West states.
We assist clients at every stage of the oil and gas business, from upstream activities including exploration, production, secondary and tertiary recovery, to midstream gathering and processing activities; and to downstream elements including refining, pipelines, local distribution, marketing, and Federal and State utility regulation. Within each segment of the oil and gas business, Holland & Hart's regional team has experience providing representation every step of the way.
For details, please contact Lisa Adelberg in the Denver office: (303) 295-8148.
About MUFG
Mitsubishi UFJ Financial Group (MUFG) has been a leading provider of banking services to the oil and gas industry in the Americas for more than 30 years, consistently ranking in the Top 10 Lead Arrangers and Top 10 Bond Arrangers in the Thomson Reuters Oil and Gas League Tables.
We support clients across the industry—from regional exploration and production to global diversified services companies—that benefit from our focused approach, strong execution, and customized services. Whether you are looking to expand existing reserves, make an acquisition, or streamline operations, we can support your growth with services, including: underwriting and syndications; U.S./Canadian cross-border funding; securities underwriting and placements; leasing and tax equity financing; and commodities, interest rate, and foreign exchange risk management.
For more information, visit: www.mufgamericas.com/oil-gas.
About Petrie Partners
Petrie Partners, LLC is a boutique investment banking firm offering financial advisory services to the oil and gas industry. We provide specialized advice on mergers, divestitures and acquisitions and private placements.
For more information please refer to petrie.com.
About SMBC
Sumitomo Mitsui Banking Corporation (SMBC) is a core member of Sumitomo Mitsui Financial Group (SMFG), a Tokyo-based bank holding company that is ranked among the largest 25 banks globally by assets under management.
SMBC Americas Division, with more than 2,500 employees, oversees operations in the U.S., Canada, Mexico, and South America. We work across SMFG to offer corporate and institutional clients sophisticated and comprehensive financial services around the globe.
SMBC's roots in Japan trace back more than 400 years to 1590. The Americas Division of SMBC has more than a century of experience in the United States, beginning when the San Francisco branch of Sumitomo Bank was established in 1919. Sumitomo Mitsui Financial Group (NYSE: SMFG) was listed on the New York Stock Exchange in 2010.
For more information please visit the corporate website: www.smbcgroup.com/americas/group-companies/
About Wells Fargo & Company
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.
The Energy Banking Group, headed by Bart Schouest, provides corporate banking products and services to the energy sector, including upstream, midstream, oilfield services, and diversified industries. With offices in Houston, Dallas, Denver, Calgary, and Aberdeen the group's success is driven by in-depth industry expertise and longstanding relationships with key industry participants. The group has over $45 billion of credit commitments to public and private companies across the upstream, midstream, downstream, services, and power and utilities sectors.
The Energy & Power Investment Banking Group, headed by James Kipp, provides strategic advisory and corporate finance expertise to energy and power clients, including upstream, midstream, oilfield services, downstream, coal and the power & utilities sectors. Areas of focus include equity, equity-linked and debt underwritings, private placements, syndications, and mergers and acquisitions. The Energy & Power Investment Banking Group has offices in Houston and Charlotte.
These teams work together to offer clients industry and product expertise, in addition to sharing their understanding of internal and external forces that drive both industry trends and financial markets. For additional information, contact us at 713-319-1350 or Energy@wellsfargo.com.
View original content:http://www.prnewswire.com/news-releases/continental-petroleum-chairman-harold-hamm-to-keynote-enercoms-the-oil--gas-conference-tues-aug-13-2019-300858017.html
SOURCE EnerCom, Inc.
Article Date
5/29/2019SM Energy Reports First Quarter 2019 Results: Solid Execution On 2019 Plan
Source: PR Newswire
DENVER, May 1, 2019 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced financial and operating results for the first quarter of 2019. Highlights include:
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "We are solidly on track to meet our objective of growing production while keeping total capital spend within discretionary cash flow starting in the second half of 2019. Our Midland Basin Merlin Maximus development is performing even better than we expected, and we are encouraged by early results from testing new intervals and enhancing completions across our acreage positions in both the Permian Basin and in South Texas. We made good progress in the first quarter on all of our priorities for the year."
SUMMARY WELL RESULTS
New well results include wells in the RockStar area that reached their 30-day peak IP rates since the Company's February 2019 update and new interval exploration results in both RockStar and South Texas.
FIRST QUARTER 2019 RESULTS
As previously announced, first quarter production of 10.7 MMBoe, or 118.7 MBoe/d, came in at the mid-point of guidance despite impacts totaling (0.2) MMBoe in March from severe weather and delays at a third-party processing plant in reaching full capacity following a force majeure event. Realized prices (before the effects of hedges) averaged $31.86 per Boe, benefiting from improved regional oil differentials in the Permian Basin that were offset by lower regional natural gas prices and a lower realized NGL uplift from Permian production related to force majeure events.
First quarter of 2019 net loss was ($177.6) million, or ($1.58) per diluted common share, compared with net income of $317.4 million, or $2.81 per diluted common share, in the first quarter of 2018. The primary components of the year-over-year difference include a net gain on divestiture activity of $385.4 million in the first quarter of 2018 and a net derivative loss of $177.1 million in the first quarter of 2019.
First quarter of 2019 net cash provided by operating activities (GAAP) was $118.5 million.
The following paragraphs discuss adjusted net income (loss), adjusted net income (loss) per diluted common share, and adjusted EBITDAX, all of which are non-GAAP measures. Please reference the definitions and reconciliations of these measures to the most directly comparable GAAP financial measures at the end of this release.
First quarter of 2019 adjusted net loss was ($37.7) million, or ($0.34) per diluted common share, compared with adjusted net income of $8.2 million, or $0.07 per diluted common share, in the first quarter of 2018. The decline in adjusted net income is predominantly due to lower realized commodity prices in the first quarter of 2019, which were down 16% per Boe, partially offset by a lower realized loss on derivatives in the first quarter of 2019.
First quarter of 2019 adjusted EBITDAX was $186.5 million, compared with adjusted EBITDAX of $210.2 million in the first quarter of 2018. The decrease in adjusted EBITDAX was primarily driven by lower realized prices after the effects of hedges discussed above.
FINANCIAL POSITION AND LIQUIDITY
As previously reported, the outstanding principal amount on the Company's long-term debt was $2.5 billion in senior notes, $172.5 million in senior convertible notes, and $46.5 million drawn on the Company's senior secured credit facility. The cash balance at quarter-end was $0.0 million.
Subsequent to quarter-end, the Company's revolving credit agreement was amended to increase the borrowing base and lender commitments to $1.6 billion and $1.2 billion, respectively. Pro forma for the amended credit facility terms, liquidity at quarter-end was $1.2 billion.
COMMODITY DERIVATIVES
As of April 26, 2019, the Company had commodity derivatives in place for the second through fourth quarters of 2019, including:
Detailed data on derivatives are provided in the accompanying IR presentation and the Company's Quarterly Report on Form 10-Q for the first quarter of 2019.
GUIDANCE UPDATE
Total capital spend is a non-GAAP measure; please refer to the definition of total capital spend and description of forward-looking total capital spend at the end of this release.
Full year 2019 guidance remains unchanged.
Second quarter 2019 guidance is as follows:
SCHEDULE FOR FIRST QUARTER REPORTING
This release is accompanied by an investor presentation and pre-recorded call with transcript all posted to the Company's website. Please visit the Company's website at ir.sm-energy.com to access this additional first quarter detail.
Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time on May 2, 2019 for the first quarter 2019 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until May 9, 2019.
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things: guidance for production volumes, commodity mix, price realizations and total capital spend for the second quarter and full year 2019; the timing and results of new wells relating to 30-day peak IP rates; and, the potential for well tests in new intervals in the Permian Basin and South Texas. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertain nature of joint venture or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected joint venture or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2018 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | ||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||
March 31, 2019 | ||||||||||
Production Data | ||||||||||
For the Three Months Ended | ||||||||||
2019 | 2018 | Percent | ||||||||
Average realized sales price, before the effects of derivative settlements: | ||||||||||
Oil (per Bbl) | $ | 49.47 | $ | 61.25 | (19) | % | ||||
Gas (per Mcf) | $ | 2.73 | $ | 3.14 | (13) | % | ||||
NGLs (per Bbl) | $ | 19.39 | $ | 25.53 | (24) | % | ||||
Per Boe | $ | 31.86 | $ | 37.76 | (16) | % | ||||
Average realized sales price, including the effects of derivative settlements: | ||||||||||
Oil (per Bbl) | $ | 49.19 | $ | 56.39 | (13) | % | ||||
Gas (per Mcf) | $ | 2.55 | $ | 3.39 | (25) | % | ||||
NGLs (per Bbl) | $ | 19.67 | $ | 19.44 | 1 | % | ||||
Equivalent (per Boe) | $ | 31.39 | $ | 35.34 | (11) | % | ||||
Production(1): | ||||||||||
Oil (MMBbl) | 4.8 | 4.3 | 13 | % | ||||||
Gas (Bcf) | 23.9 | 25.2 | (5) | % | ||||||
NGLs (MMBbl) | 1.9 | 1.7 | 12 | % | ||||||
MMBoe | 10.7 | 10.1 | 5 | % | ||||||
Average daily production(1): | ||||||||||
Oil (MBbl/d) | 53.7 | 47.4 | 13 | % | ||||||
Gas (MMcf/d) | 265.5 | 280.2 | (5) | % | ||||||
NGLs (MBbl/d) | 20.8 | 18.6 | 12 | % | ||||||
MBoe/d | 118.7 | 112.7 | 5 | % | ||||||
Per Boe data: | ||||||||||
Realized price, before the effects of derivative settlements | $ | 31.86 | $ | 37.76 | (16) | % | ||||
Lease operating expense | 5.20 | 4.95 | 5 | % | ||||||
Transportation costs | 4.08 | 4.63 | (12) | % | ||||||
Production taxes | 1.31 | 1.68 | (22) | % | ||||||
Ad valorem tax expense | 0.76 | 0.67 | 13 | % | ||||||
General and administrative(2) | 3.00 | 2.73 | 10 | % | ||||||
Operating margin, before the effects of derivative settlements | 17.51 | 23.10 | (24) | % | ||||||
Derivative settlement loss | (0.47) | (2.42) | 81 | % | ||||||
Operating margin, including the effects of derivative settlements | $ | 17.04 | $ | 20.68 | (18) | % | ||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 16.63 | $ | 12.87 | 29 | % | ||||
(1) Amounts and percentage changes may not calculate due to rounding. | ||||||||||
(2) Includes non-cash stock-based compensation expense per Boe of $0.43 and $0.40 for the three months ended March 31, 2019, and 2018, respectively. | ||||||||||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2019 | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands, except share data) | March 31, | December 31, | |||||
ASSETS | 2019 | 2018 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 14 | $ | 77,965 | |||
Accounts receivable | 145,299 | 167,536 | |||||
Derivative assets | 67,567 | 175,130 | |||||
Prepaid expenses and other | 8,454 | 8,632 | |||||
Total current assets | 221,334 | 429,263 | |||||
Property and equipment (successful efforts method): | |||||||
Proved oil and gas properties | 7,578,976 | 7,278,362 | |||||
Accumulated depletion, depreciation, and amortization | (3,586,650) | (3,417,953) | |||||
Unproved oil and gas properties | 1,529,825 | 1,581,401 | |||||
Wells in progress | 345,507 | 295,529 | |||||
Properties held for sale, net | — | 5,280 | |||||
Other property and equipment, net of accumulated depreciation of $59,720 and $57,102, respectively | 86,732 | 88,546 | |||||
Total property and equipment, net | 5,954,390 | 5,831,165 | |||||
Noncurrent assets: | |||||||
Derivative assets | 27,202 | 58,499 | |||||
Other noncurrent assets | 83,692 | 33,935 | |||||
Total noncurrent assets | 110,894 | 92,434 | |||||
Total assets | $ | 6,286,618 | $ | 6,352,862 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 426,550 | $ | 403,199 | |||
Derivative liabilities | 95,269 | 62,853 | |||||
Other current liabilities | 23,523 | — | |||||
Total current liabilities | 545,342 | 466,052 | |||||
Noncurrent liabilities: | |||||||
Revolving credit facility | 46,500 | — | |||||
Senior Notes, net of unamortized deferred financing costs | 2,449,588 | 2,448,439 | |||||
Senior Convertible Notes, net of unamortized discount and deferred financing costs | 150,199 | 147,894 | |||||
Asset retirement obligations | 94,026 | 91,859 | |||||
Deferred income taxes | 176,348 | 223,278 | |||||
Derivative liabilities | 13,332 | 12,496 | |||||
Other noncurrent liabilities | 68,058 | 42,522 | |||||
Total noncurrent liabilities | 2,998,051 | 2,966,488 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,244,545 and 112,241,966 shares, respectively | 1,122 | 1,122 | |||||
Additional paid-in capital | 1,771,558 | 1,765,738 | |||||
Retained earnings | 982,662 | 1,165,842 | |||||
Accumulated other comprehensive loss | (12,117) | (12,380) | |||||
Total stockholders' equity | 2,743,225 | 2,920,322 | |||||
Total liabilities and stockholders' equity | $ | 6,286,618 | $ | 6,352,862 | |||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2019 | |||||||
Condensed Consolidated Statements of Operations | |||||||
(in thousands, except per share data) | For the Three Months Ended | ||||||
2019 | 2018 | ||||||
Operating revenues and other income: | |||||||
Oil, gas, and NGL production revenue | $ | 340,476 | $ | 382,886 | |||
Net gain on divestiture activity | 61 | 385,369 | |||||
Other operating revenues | 393 | 1,340 | |||||
Total operating revenues and other income | 340,930 | 769,595 | |||||
Operating expenses: | |||||||
Oil, gas, and NGL production expense | 121,305 | 120,879 | |||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 177,746 | 130,473 | |||||
Exploration(1) | 11,348 | 13,727 | |||||
Abandonment and impairment of unproved properties | 6,338 | 5,625 | |||||
General and administrative(1) | 32,086 | 27,682 | |||||
Net derivative loss(2) | 177,081 | 7,529 | |||||
Other operating expenses, net | 335 | 4,612 | |||||
Total operating expenses | 526,239 | 310,527 | |||||
Income (loss) from operations | (185,309) | 459,068 | |||||
Interest expense | (37,980) | (43,085) | |||||
Other non-operating income (expense), net | (317) | 409 | |||||
Income (loss) before income taxes | (223,606) | 416,392 | |||||
Income tax (expense) benefit | 46,038 | (98,991) | |||||
Net income (loss) | $ | (177,568) | $ | 317,401 | |||
Basic weighted-average common shares outstanding | 112,252 | 111,696 | |||||
Diluted weighted-average common shares outstanding | 112,252 | 112,879 | |||||
Basic net income (loss) per common share | $ | (1.58) | $ | 2.84 | |||
Diluted net income (loss) per common share | $ | (1.58) | $ | 2.81 | |||
Dividends per common share | $ | 0.05 | $ | 0.05 | |||
(1) Non-cash stock-based compensation included in: | |||||||
Exploration expense | $ | 1,205 | $ | 1,316 | |||
General and administrative expense | 4,633 | 4,096 | |||||
Total non-cash stock-based compensation | $ | 5,838 | $ | 5,412 | |||
(2) The net derivative loss line item consists of the following: | |||||||
Settlement loss | $ | 4,969 | $ | 24,528 | |||
(Gain) loss on fair value changes | 172,112 | (16,999) | |||||
Total net derivative loss | $ | 177,081 | $ | 7,529 | |||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
March 31, 2019 | ||||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | ||||||||||||||||||||||
Additional | Accumulated | Total | ||||||||||||||||||||
Common Stock | Retained | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2018 | 112,241,966 | $ | 1,122 | $ | 1,765,738 | $ | 1,165,842 | $ | (12,380) | $ | 2,920,322 | |||||||||||
Net loss | — | — | — | (177,568) | — | (177,568) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 263 | 263 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,612) | — | (5,612) | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 2,579 | — | (18) | — | — | (18) | ||||||||||||||||
Stock-based compensation expense | — | — | 5,838 | — | — | 5,838 | ||||||||||||||||
Balances, March 31, 2019 | 112,244,545 | $ | 1,122 | $ | 1,771,558 | $ | 982,662 | $ | (12,117) | $ | 2,743,225 | |||||||||||
Additional | Accumulated | Total | ||||||||||||||||||||
Common Stock | Retained | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2017 | 111,687,016 | $ | 1,117 | $ | 1,741,623 | $ | 665,657 | $ | (13,789) | $ | 2,394,608 | |||||||||||
Net income | — | — | — | 317,401 | — | 317,401 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 260 | 260 | ||||||||||||||||
Cash dividends declared, $0.05 per share | — | — | — | (5,584) | — | (5,584) | ||||||||||||||||
Stock-based compensation expense | — | — | 5,412 | — | — | 5,412 | ||||||||||||||||
Cumulative effect of accounting change | — | — | — | 2,969 | (2,969) | — | ||||||||||||||||
Other | — | — | — | 1 | (1) | — | ||||||||||||||||
Balances, March 31, 2018 | 111,687,016 | $ | 1,117 | $ | 1,747,035 | $ | 980,444 | $ | (16,499) | $ | 2,712,097 | |||||||||||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2019 | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(in thousands) | For the Three Months | ||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (177,568) | $ | 317,401 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Net gain on divestiture activity | (61) | (385,369) | |||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 177,746 | 130,473 | |||||
Abandonment and impairment of unproved properties | 6,338 | 5,625 | |||||
Stock-based compensation expense | 5,838 | 5,412 | |||||
Net derivative loss | 177,081 | 7,529 | |||||
Derivative settlement loss | (4,969) | (24,528) | |||||
Amortization of debt discount and deferred financing costs | 3,789 | 3,866 | |||||
Deferred income taxes | (47,003) | 98,366 | |||||
Other, net | (2,530) | (2,527) | |||||
Net change in working capital | (20,159) | (16,113) | |||||
Net cash provided by operating activities | 118,502 | 140,135 | |||||
Cash flows from investing activities: | |||||||
Net proceeds from the sale of oil and gas properties | 6,114 | 490,780 | |||||
Capital expenditures | (249,340) | (301,521) | |||||
Other, net | 291 | — | |||||
Net cash provided by (used in) investing activities | (242,935) | 189,259 | |||||
Cash flows from financing activities: | |||||||
Proceeds from credit facility | 172,000 | — | |||||
Repayment of credit facility | (125,500) | — | |||||
Other, net | (18) | — | |||||
Net cash provided by financing activities | 46,482 | — | |||||
Net change in cash, cash equivalents, and restricted cash | (77,951) | 329,394 | |||||
Cash, cash equivalents, and restricted cash at beginning of period | 77,965 | 313,943 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 14 | $ | 643,337 | |||
DEFINITIONS OF NON-GAAP MEASURES AS CALCULATED BY THE COMPANY
The following non-GAAP measures are presented in addition to financial statements as the Company believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and compare investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. Non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies.
Adjusted EBITDAX: Adjusted EBITDAX is calculated as net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, and certain other items. Adjusted EBITDAX excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that the Company presents because management believes it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. Adjusted EBITDAX is also important as it is considered among financial covenants under the Company's Credit Agreement, a material source of liquidity for the Company. Please reference the Company's first quarter of 2019 Form 10-Q and 2018 Form 10-K for discussion of the Credit Agreement and its covenants.
Adjusted net income (loss): Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, and materials inventory loss. Adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of the Company's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) attributable to common shareholders is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of upstream oil and gas companies.
Total capital spend: Total capital spend is calculated as costs incurred, less asset retirement obligations ("ARO"), capitalized interest and acquisitions. Total capital spend is presented because management believes that it provides useful information to investors in the analysis of SM Energy Company and is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. Total capital spend should not be used in isolation or as a substitute to costs incurred or other capital spending measures under GAAP.
Discretionary cash flow: Discretionary cash flow is calculated as net cash provided by operating activities excluding changes in current assets and current liabilities, and exploration. Exploration expense is added back in the calculation because, for peer comparison purposes, this number is included in our total capital spend. The Company believes this measure is important to investors because it provides useful additional information to investors for analysis of the Company's ability to generate cash to fund exploration and development, and to service indebtedness. In addition, management believes that discretionary cash flows is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of upstream oil and gas companies.
FORWARD-LOOKING NON-GAAP MEASURES
The Company is unable to present a reconciliation of forward-looking Total Capital Spend because components of the calculation, such as potential acquisitions, are inherently unpredictable. Moreover, estimating the most directly comparable GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort.
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2019 | |||||||
Adjusted EBITDAX Reconciliation(1) | |||||||
(in thousands) | |||||||
Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to adjusted EBITDAX (non-GAAP) | For the Three Months Ended | ||||||
2019 | 2018 | ||||||
Net income (loss) (GAAP) | $ | (177,568) | $ | 317,401 | |||
Interest expense | 37,980 | 43,085 | |||||
Income tax expense (benefit) | (46,038) | 98,991 | |||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 177,746 | 130,473 | |||||
Exploration(2) | 10,143 | 12,411 | |||||
Abandonment and impairment of unproved properties | 6,338 | 5,625 | |||||
Stock-based compensation expense | 5,838 | 5,412 | |||||
Net derivative loss | 177,081 | 7,529 | |||||
Derivative settlement loss | (4,969) | (24,528) | |||||
Net gain on divestiture activity | (61) | (385,369) | |||||
Other, net | 4 | (842) | |||||
Adjusted EBITDAX (non-GAAP) | 186,494 | 210,188 | |||||
Interest expense | (37,980) | (43,085) | |||||
Income tax (expense) benefit | 46,038 | (98,991) | |||||
Exploration(2) | (10,143) | (12,411) | |||||
Amortization of debt discount and deferred financing costs | 3,789 | 3,866 | |||||
Deferred income taxes | (47,003) | 98,366 | |||||
Other, net | (2,534) | (1,685) | |||||
Net change in working capital | (20,159) | (16,113) | |||||
Net cash provided by operating activities (GAAP) | $ | 118,502 | $ | 140,135 | |||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
March 31, 2019 | |||||||
Adjusted Net Income (Loss) Reconciliation(1) | |||||||
(in thousands, except per share data) | |||||||
Reconciliation of net income (loss) (GAAP) to Adjusted net income (loss) (non-GAAP): | For the Three Months Ended | ||||||
2019 | 2018 | ||||||
Net income (loss) (GAAP) | $ | (177,568) | $ | 317,401 | |||
Net derivative loss | 177,081 | 7,529 | |||||
Derivative settlement loss | (4,969) | (24,528) | |||||
Net gain on divestiture activity | (61) | (385,369) | |||||
Abandonment and impairment of unproved properties | 6,338 | 5,625 | |||||
Other, net(2) | 213 | 807 | |||||
Tax effect of adjustments(3) | (38,757) | 86,710 | |||||
Adjusted net income (loss) (non-GAAP) | $ | (37,723) | $ | 8,175 | |||
Diluted net income (loss) per common share (GAAP) | $ | (1.58) | $ | 2.81 | |||
Net derivative loss | 1.58 | 0.07 | |||||
Derivative settlement loss | (0.04) | (0.22) | |||||
Net gain on divestiture activity | — | (3.41) | |||||
Abandonment and impairment of unproved properties | 0.06 | 0.05 | |||||
Other, net(2) | — | 0.01 | |||||
Tax effect of adjustments(3) | (0.36) | 0.76 | |||||
Adjusted net income (loss) per diluted common share (non-GAAP) | $ | (0.34) | $ | 0.07 | |||
Basic weighted-average common shares outstanding | 112,252 | 111,696 | |||||
Diluted weighted-average common shares outstanding | 112,252 | 112,879 | |||||
Note: Amounts may not calculate due to rounding. | |||||||
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||||||
(2) For the three-month period ended March 31, 2019, the adjustment relates to bad debt expense and impairment on materials inventory. For the three-month period ended March 31, 2018, the adjustment relates to bad debt expense and an accrual for a non-recurring matter. These items are included in other operating expenses, net on the Company's condensed consolidated statements of operations. | |||||||
(3) The tax effect of adjustments is calculated using a tax rate of 21.7% and 21.9% for the three-month periods ended March 31, 2019, and 2018, respectively. These rates approximate the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||
SM ENERGY COMPANY | |||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||
March 31, 2019 | |||
Total Capital Spend Reconciliation(1) | |||
(in millions) | |||
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (non-GAAP) | For the Three Months | ||
2019 | |||
Costs incurred in oil and gas activities (GAAP): | $ | 322.0 | |
Asset retirement obligations | (0.5) | ||
Capitalized interest | (4.9) | ||
Proved property acquisitions(2) | 0.3 | ||
Other | (1.4) | ||
Total capital spend (non-GAAP): | $ | 315.5 | |
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||
(2) The Company completed several primarily non-monetary acreage trades in the Midland Basin during the first quarter of 2019 totaling $65.8 million of value attributed to the properties surrendered. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. | |||
Discretionary Cash Flow Reconciliation(1) | |||
(in millions) | |||
Reconciliation of net cash provided by operating activities (GAAP) to discretionary cash flow (Non-GAAP) | For the Three Months | ||
2019 | |||
Net cash provided by operating activities (GAAP): | $ | 118.5 | |
Net change in working capital | 20.2 | ||
Exploration(2)(3) | 10.1 | ||
Discretionary cash flow (non-GAAP): | $ | 148.8 | |
(1) See "Definitions of non-GAAP Measures as Calculated by the Company" above. | |||
(2) Exploration expense is added back in the calculation of discretionary cash flow because, for peer comparison purposes, this number is included in our reported total capital spend. | |||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense as it is non-cash. | |||
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SOURCE SM Energy Company
Article Date
5/1/2019SM Energy Reports First Quarter 2019 Production, Pricing And Capital Expenditures
Source: PR Newswire
DENVER, April 17, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced certain operating and financial results for the first quarter of 2019, including production, realized pricing and total capital spend. Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "Successful execution at the Merlin Maximus development underpins our full year objective of approximately 20% growth in Permian production. In addition, with over 60% liquids production and more than one-half of total production for the quarter from our Permian assets, we continue marching towards higher overall operating margins and cash flow."
At 10.7 MMBoe/118.7 MBoe/d, first quarter production was at the mid-point of guidance. As previously reported, first quarter production volumes met expectations despite impacts totaling (0.2) MMBoe in March from severe weather and from third-party processing plant delays in reaching full capacity following a force majeure event.
Realized pricing during the first quarter of 2019 benefited from improved regional oil differentials in the Permian Basin, which were offset by lower regional natural gas prices and a lower realized NGL uplift from Permian production impacted by force majeure events. For the next two quarters, the Company expects pricing for both oil and natural gas in the Permian Basin to be volatile as a result of tight pipeline capacity. The Company sells its Permian oil and natural gas production to purchasers (that are obligated to take forecast volumes) who own or have access to firm transportation. In addition, the Company has put in place Midland-Cushing basis hedges for approximately 60-65% of Permian oil production and has hedged Waha gas prices for approximately 85% of Permian natural gas production through the next two quarters.
FIRST QUARTER OF 2019 PRODUCTION AND REALIZED PRICES | |||
PRODUCTION: | |||
Permian | South Texas | Total | |
Oil - MBbl | 4,546 | 286 | 4,832 |
Natural gas - MMcf | 6,884 | 17,009 | 23,893 |
NGLs - MBbl | 1 | 1,871 | 1,872 |
Total - MBoe | 5,695 | 4,992 | 10,687 |
Total - MBoe/d | 63.3 | 55.5 | 118.7 |
Note: Totals may not sum due to rounding |
REALIZED PRICES: | |||
Permian | South Texas | Totals | |
Oil/$Bbl | $49.54 | $48.30 | $49.47/$49.19 |
Natural gas/$Mcf | 2.27 | 2.91 | 2.73/2.55 |
NGLs/$Bbl | nm | 19.39 | 19.39/19.67 |
Per Boe | $42.29 | $19.96 | $31.86/$31.39 |
FINANCIAL POSITION, LIQUIDITY AND TOTAL CAPITAL SPEND
On March 31, 2019, the outstanding principal amount of the Company's long-term debt was $2.5 billion in senior notes plus $172.5 million in senior convertible notes, with $46.5 million drawn on the Company's senior secured credit facility.
Costs incurred in oil and gas activities for the first quarter of 2019 were $322 million. Total capital spend (a non-GAAP measure defined as costs incurred less asset retirement obligations, capitalized interest and proved property acquisitions, is reconciled below) for the quarter was $316 million. During the first quarter, the Company drilled 28 net wells and completed 27 net wells in the Permian, and drilled seven net wells and completed two net wells in its South Texas region.
TOTAL CAPITAL SPEND RECONCILIATION: | ||
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (non-GAAP)(1) | ||
($ in millions) | For the Three Months Ended | |
Costs incurred in oil and gas activities (GAAP): | $ | 322.0 |
Less: | ||
Asset retirement obligation | (0.5) | |
Capitalized interest | (4.9) | |
Proved property acquisitions | 0.3 | |
Other | (1.4) | |
Total capital spend (non-GAAP): | $ | 315.5 |
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. |
SCHEDULE FOR FIRST QUARTER REPORTING
May 1, 2019 – After market close, the Company plans to issue its first quarter 2019 earnings release, a pre-recorded webcast discussion of the first quarter 2019 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
May 2, 2019 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the first quarter 2019 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until May 9, 2019.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "objectives," "target," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things: projections for price volatility in the Permian Basin based on related pipeline capacity, and the status of a third-party gas processing facility force majeure event and the impacts on production volumes. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; and other such matters discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
4/17/2019SM Energy Announces Updated Presentation Time At IPAA OGIS
Source: PR Newswire
DENVER, April 5, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announces that its presentation time at the IPAA Oil & Gas Symposium (OGIS) was changed to Tuesday, April 9, 2019 at 10:05 a.m. Eastern time.
The presentation will be webcast, accessible from the Company's website, and available for replay for a limited time. The Company will post an investor presentation before the market opens on April 9.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
4/5/20193/27/2019 - SM Energy Declares Semi-Annual Cash Dividend
SM Energy Declares Semi-Annual Cash Dividend
Source: PR Newswire
DENVER, March 27, 2019 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that its Board of Directors has approved a semi-annual cash dividend of $0.05 per share of common stock outstanding. The dividend will be paid on May 8, 2019, to stockholders of record as of the close of business on April 26, 2019. The Company currently has approximately 112.2 million shares of common stock outstanding.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
3/27/2019SM Energy Provides First Quarter Update And Announces Participation At IPAA Conference
Source: PR Newswire
DENVER, March 21, 2019 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today provides certain operational updates for the first quarter of 2019 and announces participation in an upcoming investor event.
OPERATIONAL UPDATES
The 25-well Merlin Maximus development located in the heart of the RockStar area is off to a successful start. All 25 wells were drilled and completed as planned and on budget. 24 of the 25 wells (one well intentionally shut-in to monitor sub-surface pressure) are on production as scheduled. While it is very early data, all wells are meeting or exceeding production expectations. The 25-well development includes nine Lower Spraberry, 11 Wolfcamp A and five Wolfcamp B wells located across a 1.1-by-2 mile development area. The wells have an average lateral length of 10,300 feet. Water production from the wells feeds into the Company's recently constructed water management system, which transports produced water either to Company-operated disposal wells or to be recycled for new well completions.
"This is a tremendous project that includes co-development of three intervals while applying and testing some of the latest science and technologies for landing zones and completions. It is absolutely a testament to our ability to execute and to our exceptional operations team," commented President and Chief Executive Officer Jay Ottoson. "Success in the co-development of multiple intervals with larger development pads sets the stage for continued improvement in capital efficiency in the Permian Basin as we seek to optimize returns."
Additional first quarter 2019 updates include:
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "target," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things: certain impacts to first quarter 2019 production volumes and pricing; the status of a third-party gas processing facility force majeure event and the effect on production volumes; and the Company's pre-hedge net differentials in the Permian Basin. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; and other such matters discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
3/21/2019SM Energy Reports Year-End 2018 Results and 2019 Operating Plan
Source: PR Newswire
DENVER, Feb. 20, 2019 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announces year-end 2018 financial and operating results, year-end 2018 proved reserves, new RockStar well results and its 2019 operating plan. Highlights include:
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "2018 was a very successful year. During the second year of our three-year portfolio transition plan we completed the coring-up of our portfolio to focus on our two high return assets, generated a 66% increase in our operating margin (pre-hedge) driven by a 97% increase in core Permian production (based on retained assets), delivered significant value creation as measured by proved reserve additions and pre-tax PV-10, and set the foundation for long-term profitable growth. In 2019, we expect to continue our upward trajectory for production and cash flows while targeting cash flow neutrality in the second half of the year."
2018 IN REVIEW
YEAR-END 2018 PROVED RESERVES
Year-end 2018 proved reserves of 503 MMBoe are calculated in accordance with SEC pricing at $65.56 per barrel of oil NYMEX, $3.10 per MMBtu of natural gas at Henry Hub, and $33.45 per barrel of NGLs at Mt. Belvieu. Year-end proved reserves were 35% oil, 21% NGLs and 44% natural gas. Proved reserves were 49% proved developed.
The table below provides a reconciliation of changes in the Company's proved reserves from year-end 2017 to year-end 2018:
Proved reserves at year-end 2017 (MMBoe) | 468 |
Divestitures completed in 2018 | (40) |
Proved reserves at year-end 2017 pro forma sold properties | 428 |
Production | (44) |
Reserve additions from drilling | 188 |
Reserve additions through acquisitions | — |
Reserve revisions including price and 5-year rule | (69) |
Proved reserves year-end 2018 (MMBoe) | 503 |
A hypothetical sensitivity to the Company's proved reserves at strip pricing as of December 31, 2018 (oil averaged $50.02/Bbl, natural gas averaged $2.70/MMBtu and NGLs averaged $23.67/Bbl) reduced proved reserves by only (12) MMBoe, as the Company's core Permian and Eagle Ford assets support high returns and low breakeven points.
The standardized measure of discounted future net cash flows was $4.7 billion at year-end 2018, up $1.6 billion from $3.0 billion at year-end 2017. Pre-tax PV-10 (a non-GAAP measure, reconciled to the standardized measure below) was $5.1 billion, up $2.0 billion from $3.1 billion at year-end 2017. Pro forma for sold properties, pre-tax PV-10 increased $2.3 billion or 79% compared with the pre-tax PV-10 of retained assets at year-end 2017. This sizable increase in pre-tax PV-10 reflects a $0.64 billion increase in the Company's Eagle Ford assets and a $1.63 billion increase in the Company's Permian assets. The higher Eagle Ford value reflects capital efficiencies associated with new well design, including longer laterals, better well placement, up-spacing and improved completions, as well as higher pricing. The higher Permian value is driven predominantly by successful delineation drilling and associated reserve additions.
A hypothetical sensitivity to pre-tax PV-10 applying a flat $55/Bbl WTI oil and $3.00/MMBtu Henry Hub natural gas supports a year-over-year pre-tax PV-10 increase of $1.0 billion.
SUMMARY WELL RESULTS
Twenty-nine new wells in the RockStar area reached peak 30-day IP rates in the latest reporting period. Highlights include:
FOURTH QUARTER AND FULL YEAR RESULTS
See the Financial Highlights section below for production and per Boe detail, summary financial statements and non-GAAP reconciliations.
PRODUCTION AND CERTAIN PER BOE RESULTS
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||
2018 | 2017 | Percent | 2018 | 2017 | Percent | ||||||||||||
Production (MMBoe) | 11.3 | 10.4 | 9 | % | 43.9 | 44.5 | (1) | % | |||||||||
Production (MBoe/d) | 122.8 | 112.6 | 9 | % | 120.3 | 121.8 | (1) | % | |||||||||
Production from retained assets (MMBoe) | 11.3 | 9.4 | 20 | % | 42.7 | 38.5 | 11 | % | |||||||||
$/Boe | $/Boe | $/Boe | $/Boe | ||||||||||||||
Average realized price (pre-hedge) | 34.74 | 32.95 | 5 | % | 37.27 | 28.20 | 32 | % | |||||||||
Average realized price (post-hedge) | 31.74 | 32.16 | (1) | % | 34.18 | 28.68 | 19 | % | |||||||||
Lease operating expense | 4.98 | 5.10 | (2) | % | 4.74 | 4.43 | 7 | % | |||||||||
Transportation costs | 4.19 | 5.01 | (16) | % | 4.36 | 5.48 | (20) | % | |||||||||
Production and ad valorem taxes | 1.58 | 1.74 | (9) | % | 2.00 | 1.52 | (32) | % | |||||||||
General and administrative | 2.69 | 3.15 | (15) | % | 2.65 | 2.64 | — | % | |||||||||
Operating margin (pre-hedge) | 21.30 | 17.95 | 19 | % | 23.52 | 14.13 | 66 | % | |||||||||
Full year 2018 net income was $508.4 million, or EPS of $4.48 (per diluted common share). Net income for the fourth quarter of 2018 was $309.7 million, or EPS of $2.73 (per diluted common share).
Full year and fourth quarter 2018 net cash provided by operating activities (GAAP) was $720.6 million and $179.5 million, respectively.
As discussed in the following paragraphs, adjusted net income (loss), adjusted net income (loss) per diluted common share, adjusted EBITDAX, and net debt-to-adjusted EBITDAX are non-GAAP measures. Please reference the reconciliations of these measures to the most directly comparable GAAP financial measures at the end of this release.
Full year 2018 adjusted net income was $3.3 million, or $0.03 per diluted common share, up from an adjusted net loss of ($91.2) million, or ($0.82) per diluted common share in 2017. For the fourth quarter of 2018, adjusted net loss was ($20.0) million, or ($0.18) per diluted common share.
For full year 2018, adjusted EBITDAX was $900.4 million compared with $663.2 million in 2017. The 36% increase in adjusted EBITDAX was primarily driven by more than 90% growth in production from the Company's high margin Permian Basin assets and higher benchmark commodity prices that resulted in a 66% increase in the Company's operating margin per Boe (pre-hedge), which was partially offset by ($135.8) million realized loss on derivatives in 2018 versus a gain of $21.2 million in 2017. Fourth quarter 2018 adjusted EBITDAX was $209.2 million compared with $172.9 million in the prior year period. Similarly, the increase was primarily driven by production growth from high margin Permian assets supporting a 19% increase in the operating margin (pre-hedge), despite lower oil and NGL prices compared with the same period in 2017.
COSTS INCURRED AND TOTAL CAPITAL SPEND
As previously reported, costs incurred in oil and gas activities for full year 2018 were $1.4 billion and total capital spend (a non-GAAP measure, reconciled below) was $1.3 billion. Highlights of the 2018 capital program included:
2019 OPERATING PLAN AND GUIDANCE
Total capital spend and discretionary cash flow are non-GAAP measures. The Company is unable to present a reconciliation of forward-looking total capital spend and discretionary cash flow because components of the calculations, such as potential acquisitions and changes in current assets and liabilities, are inherently unpredictable. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort.
Strategic priorities remain unchanged and on track as the Company enters the third year of its three-year plan to transition its asset portfolio to focus on its two high return assets in the Permian Basin and Eagle Ford. In 2019, the Company will continue to prioritize the growth and development of its Permian Basin assets, in order to optimize cash flow growth, and to target total capital spend within discretionary cash flow (a non-GAAP measure reconciled below for 2018) during the second half of 2019. By year-end 2019, the Company projects that it will be positioned for sustainable and profitable growth in production and cash flows (debt adjusted), generating free cash flow, based on its 2019 plan at $55/Bbl WTI oil and $3/MMBtu Henry Hub long-term plan. Key components of the 2019 plan include:
2019 GUIDANCE
FIRST QUARTER 2019 GUIDANCE
SCHEDULE FOR YEAR-END 2018 REPORTING
February 20, 2019 - In conjunction with this release, a pre-recorded webcast discussion of the fourth quarter and full year 2018 financial and operating results, transcript, and an associated presentation, will be posted to the Company's website at ir.sm-energy.com.
February 21, 2019 - Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the fourth quarter and full year 2018 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until February 28, 2019.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "target," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things: guidance for full-year 2019 and the first quarter of 2019, including projected production volumes, lease operating expenses, transportation expenses, taxes, general and administrative costs and capital expenditures; projections for the timing of achieving cash flow neutrality; and the status of a third-party force majeure event affecting production volumes. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertain nature of joint venture or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected joint venture or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | |||||||||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||
Production Data | |||||||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||
2018 | 2017 | Percent | 2018 | 2017 | Percent | ||||||||||||||||
Average realized sales price, before the effects of derivative settlements: | |||||||||||||||||||||
Oil (per Bbl) | $ | 49.29 | $ | 53.32 | (8) | % | $ | 56.80 | $ | 47.88 | 19 | % | |||||||||
Gas (per Mcf) | $ | 3.71 | $ | 3.09 | 20 | % | $ | 3.43 | $ | 3.00 | 14 | % | |||||||||
NGL (per Bbl) | $ | 24.01 | $ | 26.01 | (8) | % | $ | 27.22 | $ | 22.35 | 22 | % | |||||||||
Per Boe | $ | 34.74 | $ | 32.95 | 5 | % | $ | 37.27 | $ | 28.20 | 32 | % | |||||||||
Average realized sales price, including the effects of derivative settlements: | |||||||||||||||||||||
Oil (per Bbl) | $ | 47.94 | $ | 48.90 | (2) | % | $ | 53.13 | $ | 45.60 | 17 | % | |||||||||
Gas (per Mcf) | $ | 3.01 | $ | 4.03 | (25) | % | $ | 3.31 | $ | 3.72 | (11) | % | |||||||||
NGL (per Bbl) | $ | 19.36 | $ | 18.84 | 3 | % | $ | 20.44 | $ | 18.91 | 8 | % | |||||||||
Equivalent (per Boe) | $ | 31.74 | $ | 32.16 | (1) | % | $ | 34.18 | $ | 28.68 | 19 | % | |||||||||
Production (1): | |||||||||||||||||||||
Oil (MMBbls) | 5.1 | 3.8 | 33 | % | 18.8 | 13.7 | 37 | % | |||||||||||||
Gas (Bcf) | 25.5 | 26.0 | (2) | % | 103.2 | 123.0 | (16) | % | |||||||||||||
NGL (MMBbls) | 2.0 | 2.2 | (11) | % | 7.9 | 10.3 | (23) | % | |||||||||||||
MMBoe | 11.3 | 10.4 | 9 | % | 43.9 | 44.5 | (1) | % | |||||||||||||
Average daily production (1): | |||||||||||||||||||||
Oil (MBbls/d) | 55.3 | 41.5 | 33 | % | 51.4 | 37.4 | 37 | % | |||||||||||||
Gas (MMcf/d) | 277.0 | 282.5 | (2) | % | 282.7 | 337.0 | (16) | % | |||||||||||||
NGL (MBbls/d) | 21.3 | 24.0 | (11) | % | 21.8 | 28.2 | (23) | % | |||||||||||||
MBoe/d | 122.8 | 112.6 | 9 | % | 120.3 | 121.8 | (1) | % | |||||||||||||
Per Boe Data: | |||||||||||||||||||||
Realized price before the effects of derivative settlements | $ | 34.74 | $ | 32.95 | 5 | % | $ | 37.27 | $ | 28.20 | 32 | % | |||||||||
Lease operating expense | 4.98 | 5.10 | (2) | % | 4.74 | 4.43 | 7 | % | |||||||||||||
Transportation costs | 4.19 | 5.01 | (16) | % | 4.36 | 5.48 | (20) | % | |||||||||||||
Production taxes | 1.19 | 1.41 | (16) | % | 1.52 | 1.18 | 29 | % | |||||||||||||
Ad valorem tax expense | 0.39 | 0.33 | 18 | % | 0.48 | 0.34 | 41 | % | |||||||||||||
General and administrative (2) (3) | 2.69 | 3.15 | (15) | % | 2.65 | 2.64 | — | % | |||||||||||||
Operating margin, before the effects of derivative settlements (3) | 21.30 | 17.95 | 19 | % | 23.52 | 14.13 | 66 | % | |||||||||||||
Derivative settlement gain (loss) | (3.00) | (0.79) | 280 | % | (3.09) | 0.48 | (744) | % | |||||||||||||
Operating margin, including the effects of derivative settlements (3) | $ | 18.30 | $ | 17.16 | 7 | % | $ | 20.43 | $ | 14.61 | 40 | % | |||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 16.10 | $ | 12.69 | 27 | % | $ | 15.15 | $ | 12.53 | 21 | % | |||||||||
(1) Amounts and percentage changes may not calculate due to rounding. | |||||||||||||||||||||
(2) Includes non-cash stock-based compensation expense per Boe of $0.42 and $0.40 for the three months ended December 31, 2018, and 2017, respectively, and $0.42 and $0.37 for the twelve months ended December 31, 2018, and 2017, respectively. | |||||||||||||||||||||
(3) Certain prior period amounts have been adjusted to conform to the current period presentation due to an accounting standards update. |
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS | |||||||
December 31, 2018 | |||||||
Consolidated Balance Sheets | |||||||
(in thousands, except share data) | December 31, | ||||||
2018 | 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 77,965 | $ | 313,943 | |||
Accounts receivable | 167,536 | 160,154 | |||||
Derivative assets | 175,130 | 64,266 | |||||
Prepaid expenses and other | 8,632 | 10,752 | |||||
Total current assets | 429,263 | 549,115 | |||||
Property and equipment (successful efforts method): | |||||||
Proved oil and gas properties | 7,278,362 | 6,139,379 | |||||
Accumulated depletion, depreciation, and amortization | (3,417,953) | (3,171,575) | |||||
Unproved oil and gas properties | 1,581,401 | 2,047,203 | |||||
Wells in progress | 295,529 | 321,347 | |||||
Properties held for sale, net | 5,280 | 111,700 | |||||
Other property and equipment, net of accumulated depreciation of $57,102 and $49,985, respectively | 88,546 | 106,738 | |||||
Total property and equipment, net | 5,831,165 | 5,554,792 | |||||
Noncurrent assets: | |||||||
Derivative assets | 58,499 | 40,362 | |||||
Other noncurrent assets | 33,935 | 32,507 | |||||
Total noncurrent assets | 92,434 | 72,869 | |||||
Total assets | $ | 6,352,862 | $ | 6,176,776 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 403,199 | $ | 386,630 | |||
Derivative liabilities | 62,853 | 172,582 | |||||
Total current liabilities | 466,052 | 559,212 | |||||
Noncurrent liabilities: | |||||||
Revolving credit facility | — | — | |||||
Senior Notes, net of unamortized deferred financing costs | 2,448,439 | 2,769,663 | |||||
Senior Convertible Notes, net of unamortized discount and deferred financing costs | 147,894 | 139,107 | |||||
Asset retirement obligations | 91,859 | 103,026 | |||||
Asset retirement obligations associated with oil and gas properties held for sale | — | 11,369 | |||||
Deferred income taxes | 223,278 | 79,989 | |||||
Derivative liabilities | 12,496 | 71,402 | |||||
Other noncurrent liabilities | 42,522 | 48,400 | |||||
Total noncurrent liabilities | 2,966,488 | 3,222,956 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,241,966 and 111,687,016 shares, respectively | 1,122 | 1,117 | |||||
Additional paid-in capital | 1,765,738 | 1,741,623 | |||||
Retained earnings (1) | 1,165,842 | 665,657 | |||||
Accumulated other comprehensive loss (1) | (12,380) | (13,789) | |||||
Total stockholders' equity | 2,920,322 | 2,394,608 | |||||
Total liabilities and stockholders' equity | $ | 6,352,862 | $ | 6,176,776 | |||
(1) The Company reclassified $3.0 million of tax effects stranded in accumulated other comprehensive loss to retained earnings as of January 1, 2018 due to an accounting standards update. |
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
December 31, 2018 | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share data) | For the Three Months | For the Twelve Months | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(as adjusted) | (as adjusted) | ||||||||||||||
Operating revenues and other income: | |||||||||||||||
Oil, gas, and NGL production revenue | $ | 392,531 | $ | 341,187 | $ | 1,636,357 | $ | 1,253,783 | |||||||
Net gain (loss) on divestiture activity | 1,261 | 537 | 426,917 | (131,028) | |||||||||||
Other operating revenues, net | 400 | (1,186) | 3,798 | 6,621 | |||||||||||
Total operating revenues and other income | 394,192 | 340,538 | 2,067,072 | 1,129,376 | |||||||||||
Operating expenses: | |||||||||||||||
Oil, gas, and NGL production expense | 121,450 | 122,833 | 487,367 | 507,906 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 181,970 | 131,393 | 665,313 | 557,036 | |||||||||||
Exploration(1) | 14,322 | 15,794 | 55,166 | 54,713 | |||||||||||
Impairment of proved properties | — | — | — | 3,806 | |||||||||||
Abandonment and impairment of unproved properties | 23,274 | 12,115 | 49,889 | 12,272 | |||||||||||
General and administrative(1) | 30,438 | 32,665 | 116,504 | 117,283 | |||||||||||
Net derivative (gain) loss(2) | (411,136) | 115,778 | (161,832) | 26,414 | |||||||||||
Other operating expenses, net | 4,109 | 7,364 | 18,328 | 13,667 | |||||||||||
Total operating expenses | (35,573) | 437,942 | 1,230,735 | 1,293,097 | |||||||||||
Income (loss) from operations | 429,765 | (97,404) | 836,337 | (163,721) | |||||||||||
Interest expense | (38,056) | (43,618) | (160,906) | (179,257) | |||||||||||
Loss on extinguishment of debt | (18) | — | (26,740) | (35) | |||||||||||
Other non-operating income (expense), net | 69 | (2,381) | 3,086 | (800) | |||||||||||
Income (loss) before income taxes | 391,760 | (143,403) | 651,777 | (343,813) | |||||||||||
Income tax (expense) benefit | (82,028) | 117,145 | (143,370) | 182,970 | |||||||||||
Net income (loss) | $ | 309,732 | $ | (26,258) | $ | 508,407 | $ | (160,843) | |||||||
Basic weighted-average common shares outstanding | 112,138 | 111,611 | 111,912 | 111,428 | |||||||||||
Diluted weighted-average common shares outstanding | 113,286 | 111,611 | 113,502 | 111,428 | |||||||||||
Basic net income (loss) per common share | $ | 2.76 | $ | (0.24) | $ | 4.54 | $ | (1.44) | |||||||
Diluted net income (loss) per common share | $ | 2.73 | $ | (0.24) | $ | 4.48 | $ | (1.44) | |||||||
(1) Non-cash stock-based compensation component included in: | |||||||||||||||
Exploration expense | $ | 1,463 | $ | 2,402 | $ | 5,539 | $ | 6,300 | |||||||
General and administrative expense | 4,765 | 4,138 | 18,369 | 16,400 | |||||||||||
Total non-cash stock-based compensation | $ | 6,228 | $ | 6,540 | $ | 23,908 | $ | 22,700 | |||||||
(2) The net derivative (gain) loss line item consists of the following: | |||||||||||||||
Settlement (gain) loss | $ | 33,892 | $ | 8,168 | $ | 135,803 | $ | (21,234) | |||||||
(Gain) loss on fair value changes | (445,028) | 107,610 | (297,635) | 47,648 | |||||||||||
Net derivative (gain) loss | $ | (411,136) | $ | 115,778 | $ | (161,832) | $ | 26,414 | |||||||
SM ENERGY COMPANY | ||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||
December 31, 2018 | ||||||||||||||||||||||
Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||||
(in thousands, except share data and dividends per share) | Additional | Accumulated | Total | |||||||||||||||||||
Common Stock | Retained | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, January 1, 2016 | 68,075,700 | $ | 681 | $ | 305,607 | $ | 1,559,515 | $ | (13,402) | $ | 1,852,401 | |||||||||||
Net loss | — | — | — | (757,744) | — | (757,744) | ||||||||||||||||
Other comprehensive loss | — | — | — | — | (1,154) | (1,154) | ||||||||||||||||
Cash dividends, $ 0.10 per share | — | — | — | (7,751) | — | (7,751) | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 218,135 | 2 | 4,196 | — | — | 4,198 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs and settlement of PSUs, net of shares used for tax withholdings | 199,243 | 2 | (2,356) | — | — | (2,354) | ||||||||||||||||
Stock-based compensation expense | 53,473 | 1 | 26,896 | — | — | 26,897 | ||||||||||||||||
Issuance of common stock from stock offerings, net of tax | 42,710,949 | 427 | 1,382,666 | — | — | 1,383,093 | ||||||||||||||||
Equity component of 1.50% Senior Convertible Notes due 2021 issuance, net of tax | — | — | 33,575 | — | — | 33,575 | ||||||||||||||||
Purchase of capped call transactions | — | — | (24,195) | — | — | (24,195) | ||||||||||||||||
Other | — | — | (9,833) | — | — | (9,833) | ||||||||||||||||
Balances, December 31, 2016 | 111,257,500 | $ | 1,113 | $ | 1,716,556 | $ | 794,020 | $ | (14,556) | $ | 2,497,133 | |||||||||||
Net loss | — | — | — | (160,843) | — | (160,843) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 767 | 767 | ||||||||||||||||
Cash dividends, $0.10 per share | — | — | — | (11,144) | — | (11,144) | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 186,665 | 2 | 2,621 | — | — | 2,623 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 171,278 | 1 | (1,241) | — | — | (1,240) | ||||||||||||||||
Stock-based compensation expense | 71,573 | 1 | 22,699 | — | — | 22,700 | ||||||||||||||||
Cumulative effect of accounting change | — | — | 1,108 | 43,624 | — | 44,732 | ||||||||||||||||
Other | — | — | (120) | — | — | (120) | ||||||||||||||||
Balances, December 31, 2017 | 111,687,016 | $ | 1,117 | $ | 1,741,623 | $ | 665,657 | $ | (13,789) | $ | 2,394,608 | |||||||||||
Net income | — | — | — | 508,407 | — | 508,407 | ||||||||||||||||
Other comprehensive income | — | — | — | — | 4,378 | 4,378 | ||||||||||||||||
Cash dividends, $0.10 per share | — | — | — | (11,191) | — | (11,191) | ||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 199,464 | 2 | 3,185 | — | — | 3,187 | ||||||||||||||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings | 291,745 | 3 | (2,978) | — | — | (2,975) | ||||||||||||||||
Stock-based compensation expense | 63,741 | — | 23,908 | — | — | 23,908 | ||||||||||||||||
Cumulative effect of accounting change | — | — | — | 2,969 | (2,969) | — | ||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||
Balances, December 31, 2018 | 112,241,966 | $ | 1,122 | $ | 1,765,738 | $ | 1,165,842 | $ | (12,380) | $ | 2,920,322 | |||||||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
December 31, 2018 | |||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||
(in thousands) | For the Three Months | For the Twelve Months | |||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | 309,732 | $ | (26,258) | $ | 508,407 | $ | (160,843) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Net (gain) loss on divestiture activity | (1,261) | (537) | (426,917) | 131,028 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 181,970 | 131,393 | 665,313 | 557,036 | |||||||||||
Impairment of proved properties | — | — | — | 3,806 | |||||||||||
Abandonment and impairment of unproved properties | 23,274 | 12,115 | 49,889 | 12,272 | |||||||||||
Stock-based compensation expense | 6,228 | 6,540 | 23,908 | 22,700 | |||||||||||
Net derivative (gain) loss | (411,136) | 115,778 | (161,832) | 26,414 | |||||||||||
Derivative settlement gain (loss) | (33,892) | (8,168) | (135,803) | 21,234 | |||||||||||
Amortization of debt discount and deferred financing costs | 3,716 | 3,798 | 15,258 | 16,276 | |||||||||||
Loss on extinguishment of debt | 18 | — | 26,740 | 35 | |||||||||||
Deferred income taxes | 81,036 | (124,608) | 141,708 | (192,066) | |||||||||||
Other, net | 2,371 | 5,267 | 287 | 7,885 | |||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable | (2,526) | (7,505) | (30,152) | 13,997 | |||||||||||
Prepaid expenses and other | 7,234 | 7,002 | (729) | (1,953) | |||||||||||
Accounts payable and accrued expenses | (2,055) | 23,425 | 23,819 | 44,985 | |||||||||||
Accrued derivative settlements | 14,743 | 6,538 | 20,733 | 12,584 | |||||||||||
Net cash provided by operating activities | 179,452 | 144,780 | 720,629 | 515,390 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Net proceeds from the sale of oil and gas properties | 5,310 | (1,646) | 748,509 | 776,719 | |||||||||||
Capital expenditures | (270,600) | (263,384) | (1,303,188) | (888,353) | |||||||||||
Acquisition of proved and unproved oil and gas properties | (8,684) | (2,507) | (33,255) | (89,896) | |||||||||||
Net cash used in investing activities | (273,974) | (267,537) | (587,934) | (201,530) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from credit facility | — | — | — | 406,000 | |||||||||||
Repayment of credit facility | — | — | — | (406,000) | |||||||||||
Net proceeds from senior notes | — | — | 492,079 | — | |||||||||||
Cash paid to repurchase Senior Notes, including premium | (18) | — | (845,002) | (2,357) | |||||||||||
Net proceeds from sale of common stock | 1,306 | 885 | 3,187 | 2,623 | |||||||||||
Dividends paid | (5,607) | (5,581) | (11,191) | (11,144) | |||||||||||
Other, net | — | (19) | (7,746) | (1,411) | |||||||||||
Net cash used in financing activities | (4,319) | (4,715) | (368,673) | (12,289) | |||||||||||
Net change in cash, cash equivalents, and restricted cash | (98,841) | (127,472) | (235,978) | 301,571 | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 176,806 | 441,415 | 313,943 | 12,372 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 77,965 | $ | 313,943 | $ | 77,965 | $ | 313,943 | |||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
December 31, 2018 | |||||||||||||||
Adjusted EBITDAX (1) | |||||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) to adjusted EBITDAX (non-GAAP) to net cash provided by operating activities (GAAP): | For the Three Months | For the Twelve Months | |||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) (GAAP) | $ | 309,732 | $ | (26,258) | $ | 508,407 | $ | (160,843) | |||||||
Interest expense | 38,056 | 43,618 | 160,906 | 179,257 | |||||||||||
Interest income (2) | (596) | (1,067) | (5,191) | (3,968) | |||||||||||
Income tax expense (benefit) | 82,028 | (117,145) | 143,370 | (182,970) | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 181,970 | 131,393 | 665,313 | 557,036 | |||||||||||
Exploration (3)(4) | 12,859 | 13,392 | 49,627 | 48,413 | |||||||||||
Impairment of proved properties | — | — | — | 3,806 | |||||||||||
Abandonment and impairment of unproved properties | 23,274 | 12,115 | 49,889 | 12,272 | |||||||||||
Stock-based compensation expense | 6,228 | 6,540 | 23,908 | 22,700 | |||||||||||
Net derivative (gain) loss | (411,136) | 115,778 | (161,832) | 26,414 | |||||||||||
Derivative settlement gain (loss) | (33,892) | (8,168) | (135,803) | 21,234 | |||||||||||
Net (gain) loss on divestiture activity | (1,261) | (537) | (426,917) | 131,028 | |||||||||||
Loss on extinguishment of debt | 18 | — | 26,740 | 35 | |||||||||||
Other, net | 1,901 | 3,200 | 1,977 | 8,820 | |||||||||||
Adjusted EBITDAX (4) (non-GAAP) | $ | 209,181 | $ | 172,861 | $ | 900,394 | $ | 663,234 | |||||||
Interest expense | (38,056) | (43,618) | (160,906) | (179,257) | |||||||||||
Interest income (2) | 596 | 1,067 | 5,191 | 3,968 | |||||||||||
Income tax (expense) benefit | (82,028) | 117,145 | (143,370) | 182,970 | |||||||||||
Exploration (3)(4) | (12,859) | (13,392) | (49,627) | (48,413) | |||||||||||
Amortization of debt discount and deferred financing costs | 3,716 | 3,798 | 15,258 | 16,276 | |||||||||||
Deferred income taxes | 81,036 | (124,608) | 141,708 | (192,066) | |||||||||||
Other, net (4) | 470 | 2,067 | (1,690) | (935) | |||||||||||
Changes in current assets and liabilities | 17,396 | 29,460 | 13,671 | 69,613 | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 179,452 | $ | 144,780 | $ | 720,629 | $ | 515,390 | |||||||
(1) Adjusted EBITDAX represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we failed to comply with the covenants that establish a maximum permitted ratio of total funded debt, as defined in the Credit Agreement, to adjusted EBITDAX, we would be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we are in default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under the indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. | |||||||||||||||
(2) Interest income is included within the other non-operating income, net line item on the Company's consolidated statements of operations. | |||||||||||||||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's accompanying consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||||||||||
(4) Certain prior period amounts have been adjusted to conform to the current period presentation on the consolidated financial statements due to accounting standards updates. |
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
December 31, 2018 | |||||||||||||||
Adjusted Net Income (Loss) | For the Three Months | For the Twelve Months | |||||||||||||
(in thousands, except per share data) | Ended December 31, | Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) (GAAP) | $ | 309,732 | $ | (26,258) | $ | 508,407 | $ | (160,843) | |||||||
Net derivative (gain) loss | (411,136) | 115,778 | (161,832) | 26,414 | |||||||||||
Derivative settlement gain (loss) | (33,892) | (8,168) | (135,803) | 21,234 | |||||||||||
Net (gain) loss on divestiture activity | (1,261) | (537) | (426,917) | 131,028 | |||||||||||
Impairment of proved properties | — | — | — | 3,806 | |||||||||||
Abandonment and impairment of unproved properties | 23,274 | 12,115 | 49,889 | 12,272 | |||||||||||
Loss on extinguishment of debt | 18 | — | 26,740 | 35 | |||||||||||
Other, net(1) | 1,901 | 8,200 | 2,777 | 13,820 | |||||||||||
Tax effect of adjustments(2) | 91,378 | (45,987) | 139,997 | (75,308) | |||||||||||
US tax reform(3) | — | (63,675) | — | (63,675) | |||||||||||
Adjusted net income (loss) (non-GAAP)(4) | $ | (19,986) | $ | (8,532) | $ | 3,258 | $ | (91,217) | |||||||
Net income (loss) per diluted common share (GAAP) | $ | 2.73 | $ | (0.24) | $ | 4.48 | $ | (1.44) | |||||||
Net derivative (gain) loss | (3.63) | 1.04 | (1.43) | 0.24 | |||||||||||
Derivative settlement gain (loss) | (0.30) | (0.07) | (1.20) | 0.19 | |||||||||||
Net gain (loss) on divestiture activity | (0.01) | — | (3.76) | 1.18 | |||||||||||
Impairment of proved properties | — | — | — | 0.03 | |||||||||||
Abandonment and impairment of unproved properties | 0.21 | 0.11 | 0.44 | 0.11 | |||||||||||
Loss on extinguishment of debt | — | — | 0.24 | — | |||||||||||
Other, net(1) | 0.02 | 0.07 | 0.02 | 0.12 | |||||||||||
Tax effect of adjustments(2) | 0.80 | (0.42) | 1.24 | (0.68) | |||||||||||
US tax reform(3) | — | (0.57) | — | (0.57) | |||||||||||
Adjusted net income (loss) per diluted common share (non-GAAP) | $ | (0.18) | $ | (0.08) | $ | 0.03 | $ | (0.82) | |||||||
Basic weighted-average shares outstanding (GAAP) | 112,138 | 111,611 | 111,912 | 111,428 | |||||||||||
Diluted weighted-average shares outstanding (GAAP) | 113,286 | 111,611 | 113,502 | 111,428 | |||||||||||
Note: Amounts and percentage changes may not calculate due to rounding. | |||||||||||||||
(1) For the three months ended December 31, 2018, the adjustment is related to impairment on materials inventory, the change in Net Profits Plan liability, and bad debt expense. For the twelve months ended December 31, 2018, the adjustment is related to impairment on materials inventory, the change in Net Profits Plan liability, bad debt expense and an accrual for a non-recurring matter. For the three-month and twelve-month periods ended December 31, 2017, the adjustment is related to impairment on materials inventory, pension settlement expense, the change in Net Profits Plan liability, bad debt expense, and an accrual for a non-recurring matter. | |||||||||||||||
(2) For the three and twelve-month periods ended December 31, 2018, adjustments are shown before tax effect which is calculated using a tax rate of 21.7%, which approximates the Company's statutory tax rate adjusted for ordinary permanent differences. For the three and twelve-month periods ended December 31, 2017, adjustments are shown before tax effect which is calculated using a tax rate of 36.1%, which approximates the Company's statutory tax rate adjusted for ordinary permanent differences. | |||||||||||||||
(3) US tax reform adjustment primarily relates to the enactment of the 2017 Tax Act on December 22, 2017, which reduced the Company's federal tax rate for 2018 and future years from 35 percent to 21 percent. | |||||||||||||||
(4) Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, materials inventory loss, and gains or losses on extinguishment of debt. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others as a performance measure in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. |
SM ENERGY COMPANY | |||||||||
FINANCIAL HIGHLIGHTS | |||||||||
December 31, 2018 | |||||||||
Regional proved oil and gas reserve quantities: | |||||||||
Permian | Eagle Ford(1) | Total | |||||||
Year-end 2018 proved reserves | |||||||||
Oil (MMBbl) | 159.4 | 16.3 | 175.7 | ||||||
Gas (Bcf) | 328.4 | 993.4 | 1,321.8 | ||||||
NGL (MMBbl) | 0.2 | 107.2 | 107.4 | ||||||
Total (MMBoe) | 214.3 | 289.1 | 503.4 | ||||||
% Proved developed | 40% | 55% | 49% | ||||||
(1) Includes nominal amounts outside of the Eagle Ford. |
Total Capital Spend Reconciliation: | |||
(in millions) | |||
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (non-GAAP)(1)(3) | For the Year Ended December 31, 2018 | ||
Costs incurred in oil and gas activities (GAAP): | $ | 1,389.5 | |
Asset retirement obligations | (6.8) | ||
Capitalized interest | (20.6) | ||
Proved property acquisitions(2) | (1.3) | ||
Unproved property acquisitions | (32.3) | ||
Other | 0.6 | ||
Total capital spend (non-GAAP): | $ | 1,329.1 | |
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. | |||
(2) Includes approximately $0.3 million of ARO associated with proved property acquisitions for the year ended December 31, 2018. | |||
(3) The Company completed several primarily non-monetary acreage trades in the Midland Basin during 2018 totaling $95.1 million of value attributed to the properties surrendered. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. | |||
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS | |||||||
December 31, 2018 | |||||||
Discretionary Cash Flow Reconciliation: | |||||||
(in millions) | |||||||
Reconciliation of net cash provided by operating activities (GAAP) to discretionary cash flow (Non-GAAP)(1) | For the Three Months Ended | For the Twelve Months Ended | |||||
Net cash provided by operating activities (GAAP): | $ | 179.5 | $ | 720.6 | |||
Net change in working capital | (17.4) | (13.7) | |||||
Exploration (2)(3) | 12.9 | 49.6 | |||||
Discretionary cash flow (non-GAAP): | $ | 174.9 | $ | 756.6 | |||
Note: Amounts may not calculate due to rounding. | |||||||
(1) Discretionary cash flow is defined as net cash provided by operating activities excluding changes in assets and liabilities, and exploration (included in our capital spend guidance). Discretionary cash flow is widely accepted as a financial indicator of an oil and gas company's ability to generate cash which is used to internally fund exploration and development activities, pay dividends, and service debt. Discretionary cash flow is presented because management believes it provides useful information to investors when comparing our cash flows with the cash flows of other companies that use the full cost method of accounting for oil and gas producing activities, or have different financing and capital structures or tax rates. Discretionary cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating activities, as defined by GAAP, or as a measure of liquidity, or an alternative to net income. | |||||||
(2) Exploration expense is added back in the calculation of discretionary cash flow because, for peer comparison purposes, this number is included in our reported total capital spend. | |||||||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
PV-10 Reconciliation: | |||||||
(in millions) | |||||||
Reconciliation of standardized measure (GAAP) to PV-10 (non-GAAP)(1) | As of December 31, | ||||||
2018 | 2017 | ||||||
Standardized measure of discounted future net cash flows (GAAP): | $ | 4,654.4 | $ | 3,024.1 | |||
Add: 10 percent annual discount, net of income taxes | 3,847.1 | 2,573.2 | |||||
Add: future undiscounted income taxes | 1,012.2 | 205.7 | |||||
Undiscounted future net cash flows | 9,513.7 | 5,803.0 | |||||
Less: 10 percent annual discount without tax effect | (4,409.4) | (2,746.5) | |||||
PV-10 (non-GAAP): | $ | 5,104.3 | $ | 3,056.5 | |||
PV-10 value of assets sold in 2018: | n/a | (207.3) | |||||
PV-10 pro-forma assets sold: | $ | 5,104.3 | $ | 2,849.2 | |||
(1) The non-GAAP measure of PV-10 is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that PV-10 is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. PV-10 should not be considered in isolation or as a substitute for other measures prepared under GAAP. |
SM ENERGY COMPANY | |||
FINANCIAL HIGHLIGHTS | |||
December 31, 2018 | |||
Reconciliation of Net Debt | |||
(in thousands) | |||
As of | |||
Senior Notes (principal value from Note 5 of Form 10-K) | $ | 2,476,796 | |
Senior Convertible Notes (principal value from Note 5 of Form 10-K) | 172,500 | ||
Revolving credit facility | — | ||
Total funded debt | 2,649,296 | ||
Less: Cash and cash equivalents | (77,965) | ||
Net Debt | $ | 2,571,331 | |
Additional non-GAAP Measures Defined:
The Company defines Total capital spend as costs incurred, less ARO, capitalized interest and acquisitions. Total capital spend is presented because management believes that it provides useful information to investors in the analysis of SM Energy and is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. Total capital spend should not be used in isolation or as a substitute to costs incurred or other capital spending measures under GAAP. Total capital spend may not be comparable to similarly titled measures of other companies. We are unable to provide a reconciliation of this forward-looking non-GAAP measure to the most comparable GAAP financial measure because certain information needed to reconcile this measure is dependent on future events, some of which are outside of the control of the Company. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort.
The Company defines Net debt as the total principal value of outstanding senior notes, senior convertible notes plus balances drawn on the revolving credit facility (also referred to as total funded debt) less cash and cash equivalents. The Company presents this metric to help evaluate its capital structure and financial leverage and believes that it is widely used by professional research analysts, including credit analysts, and others in the evaluation of total leverage.
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-year-end-2018-results-and-2019-operating-plan-300799133.html
SOURCE SM Energy Company
Article Date
2/20/2019SM Energy Reports Year-End 2018 Production, Pricing And Certain Metrics
Source: PR Newswire
DENVER, Feb. 4, 2019 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announces 2018 production, pricing and certain financial metrics. Highlights include:
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "Our strategic priorities in 2018 were to drive cash flow growth through development of our high-margin Permian Basin assets, reduce our debt leverage, and progress toward operating within our cash flows in late 2019. We accomplished all of these goals by nearly doubling Permian Basin production while maintaining capital discipline, and by reducing the principal outstanding on our long-term debt by $325 million."
Mr. Ottoson continues: "Fourth quarter operations continued to demonstrate our leadership in operational capabilities in the Permian, particularly as our team was faced with several challenges in the form of two weather-related events and two force majeure events at third party gas processing plants. We commend our team's outstanding effort in re-directing production volumes during these events. However, the temporary effects of these events, combined with a dip in oil and NGL commodity prices, did impact our production and realizations for the quarter. Our Permian well performance and operational execution remain top tier."
2018 IN REVIEW
FOURTH QUARTER AND FULL YEAR RESULTS
PRODUCTION | ||||
Fourth Quarter 2018 | Full Year 2018 | |||
Oil (MMBbls) | 5.1 | 18.8 | ||
Natural gas (Bcf) | 25.5 | 103.2 | ||
NGLs (MMBbls) | 2.0 | 7.9 | ||
Total MMBoe | 11.3 | 43.9 | ||
Total (MBoe/d) | 122.8 | 120.3 | ||
REGIONAL PRODUCTION | ||||
Fourth Quarter 2018 | Full Year 2018 | |||
Eagle Ford (MMBoe) | 5.4 | 21.8 | ||
Permian Basin (MMBoe) | 5.9 | 20.9 | ||
Rocky Mountain (MMBoe) | 0.0 | 1.1 | ||
Total MMBoe | 11.3 | 43.9 | ||
• Amounts may not calculate due to rounding |
• Eagle Ford includes nominal other production from the region |
• Assets divested in 2018 included Rocky Mountain and non-operated Permian, which contributed combined 2018 production of 1.2 MMBoe |
Full year 2018 Permian Basin production was up 97%, based on retained assets.
Comments on fourth quarter production:
The Company no longer has any Permian oil production shut-in due to third party gas plant force majeure events; however, impacts to natural gas sales are expected to continue at a reduced level until the end of February 2019.
Given the notable outside influences on fourth quarter production, the Company estimates that its normalized exit rate production (December production normalized for shut-in volumes) would have been approximately 4.1 MMBoe (132 MBoe/d) and 43-44% oil. Normalized exit rate production is expected to exceed the first quarter 2019 average due to curtailed natural gas sales through February (discussed above), and due to the scheduled timing of completions (the 25-well Merlin Maximus development in RockStar and no active crews in Eagle Ford).
Realized prices (before and after the effect of derivative settlements) for the fourth quarter and full year 2018 were:
COMMODITY PRICES | |||
4Q18 Pre/Post Hedge | Full Year 2018 Pre/Post Hedge | ||
Oil - $/Bbl | 49.29/47.94 | 56.80/53.13 | |
Natural gas - $/Mcf | 3.71/3.01 | 3.43/3.31 | |
NGLs - $/Bbl | 24.01/19.36 | 27.22/20.44 | |
Boe - $/Boe | 34.74/31.74 | 37.27/34.18 | |
FINANCIAL POSITION, LIQUIDITY AND TOTAL CAPITAL SPEND
As of December 31, 2018, the outstanding principal balance on the Company's long-term debt was $2.48 billion in senior notes plus $172.5 million in senior convertible notes, with zero drawn on the Company's senior secured credit facility. The Company's undrawn credit facility ($1.0 billion in commitments) plus cash on hand provided $1.1 billion in liquidity at December 31, 2018.
Costs incurred for the full year 2018 were $1.4 billion. Total capital spend (a non-GAAP measure see reconciliation below) for the full year 2018 was $1.3 billion.
TOTAL CAPITAL SPEND RECONCILIATION | |||
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (Non-GAAP)(1)(3) | |||
($ in millions) | For the Year Ended | ||
Costs incurred in oil and gas activities (GAAP): | $ | 1,389.5 | |
Asset retirement obligations | (6.8) | ||
Capitalized interest | (20.6) | ||
Proved property acquisitions(2) | (1.3) | ||
Unproved property acquisitions | (32.3) | ||
Other | 0.6 | ||
Total capital spend (Non-GAAP): | $ | 1,329.1 | |
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. | |||
(2) Includes approximately $0.3 million of ARO associated with proved property acquisitions for the year ended December 31, 2018. | |||
(3) The Company completed several primarily non-monetary acreage trades in the Midland Basin during 2018 totaling $95.1 million of value attributed to the properties surrendered. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. |
SCHEDULE FOR YEAR-END 2018 REPORTING
February 20, 2019 - After market close, the Company plans to release its fourth quarter and full year 2018 earnings release, a pre-recorded webcast discussion of the fourth quarter and full year 2018 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
February 21, 2019 - Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the fourth quarter and full year 2018 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until February 28, 2019.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things: the expectation that third-party force majeure events should be resolved by the end of February 2019. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertain nature of joint venture or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected joint venture or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content to download multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-year-end-2018-production-pricing-and-certain-metrics-300788757.html
SOURCE SM Energy Company
Article Date
2/4/201911/1/2018 - SM Energy Reports Third Quarter 2018 Results: Great Wells, High Margins And Solid Cash Flow Growth
SM Energy Reports Third Quarter 2018 Results: Great Wells, High Margins And Solid Cash Flow Growth
Source: PR Newswire
DENVER, Nov. 1, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced financial and operating results for the third quarter of 2018. Highlights include:
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "In the first nine months of 2018, we met or exceeded our plan objectives for production growth, capital efficiency and debt reduction while maintaining our planned level of drilling and completion activity. Our exceptional operational execution and prudent balance sheet management position our Company to meet our targeted total capital spend-to-cash flow neutrality by mid-year 2019 and competitive growth in cash flow per debt-adjusted-share."
SUMMARY WELL RESULTS
Results from 25 new RockStar wells, having an average 10,021 foot lateral, that have reached their 30-day peak IP rates include:
In 2018 year-to-date, the Company has reported results for all 2018 RockStar wells with 30-day peak IP rates. This has included 84 wells located across the acreage position in three intervals. These wells have average 30-day rates of more than 1,300 Boe/d per well, at an average 88% oil, and have average lateral lengths of 10,070 feet.
THIRD QUARTER 2018 RESULTS
As previously announced, third quarter production and realized prices were strong. Production was 12.0 MMBoe, or 130.2 MBoe/d, exceeding the Company's expectations primarily due to strong well performance and increased processed NGL volumes. Realized pricing (before the effects of hedges) averaged $38.26 per Boe, benefiting from high benchmark oil and NGL prices and despite an increased Midland-WTI differential. For the first nine months of 2018, production was 32.6 MMBoe, or 119.4 MBoe/d and realized pricing (before the effects of hedges) averaged $38.15 per Boe.
Third quarter of 2018 net loss was ($135.9) million, or ($1.21) per diluted common share, compared with a loss of ($89.1) million, or ($0.80) per diluted common share, in the third quarter of 2017. Third quarter of 2018 net loss includes a net derivative loss of ($178.0) million and loss on extinguishment of debt of ($26.7) million. For the first nine months of 2018, net income was $198.7 million, or $1.75 per diluted common share.
Third quarter of 2018 net cash provided by operating activities (GAAP) was $229.7 million.
Adjusted net income, adjusted net income per diluted common share, adjusted EBITDAX and net debt-to-adjusted EBITDAX are non-GAAP measures. Please reference the reconciliations to the most directly comparable GAAP financial measures at the end of this release.
Third quarter of 2018 adjusted net loss was ($1.0) million, or ($0.01) per diluted common share, compared with an adjusted net loss of ($27.5) million, or ($0.25) per diluted common share, in the third quarter of 2017. The calculation of adjusted net income excludes non-recurring items and items difficult to estimate, in order to present results that can be more consistently compared with prior periods and peer results. Specifically, third quarter adjustments remove the loss on extinguishment of debt, non-cash derivative losses and abandonment and impairment charges. Third quarter adjusted net income does not adjust for a $9.0 million (tax adjusted) out of period DD&A expense or $5.2 million (tax adjusted) non-recurring contingent liability expenses. In addition, third quarter DD&A expense increased in total and on a per unit basis compared with the prior year period and sequentially due to higher Permian volumes, which have higher depletion rates, as well as capital spend on facilities/Midland water management system in the first half of the year. For the first nine months of 2018, adjusted net income was $23.2 million, or $0.20 per diluted common share.
Third quarter of 2018 adjusted EBITDAX was $256.1 million, up a significant 56% from $164.3 million in the third quarter of 2017. The increase in adjusted EBITDAX was primarily driven by the 12% increase in total production and 86% increase in the operating margin per Boe (pre-hedge). For the first nine months of 2018, adjusted EBITDAX was $691.2 million.
COMMODITY DERIVATIVES
For the fourth quarter of 2018, the Company currently has commodity derivatives in place for approximately 85% of expected oil production and 70% of expected natural gas production (NGLs are hedged by product). Additionally for the fourth quarter of 2018, the Company has Midland-NYMEX WTI basis hedges in place for approximately 70-75% of expected Midland oil production based on current Company estimates.
GUIDANCE UPDATE
The Company previously announced that fourth quarter production would be affected by a force majeure incident at a third-party gas processing facility, as well as regional storms. Subsequent to that announcement, the RockStar area was further impacted by heavy rains associated with Hurricane Willa and also experienced isolated curtailments related to a leak at a third-party oil pipeline used by one of the Company's purchasers. The effect on fourth quarter production related to the temporary shut-in of some wells and delayed installation of pipeline connections on certain new wells is now estimated to be 0.6 MMBoe. While the Company expects that these matters are being resolved or mitigated, it expects certain effects to last through year-end.
Expected full year 2018 production guidance is narrowed to a range of 43.9-44.3 MMBoe (120.3-121.4 MBoe/d) from 43.5-45.0 MMBoe (119.2-123.3 MBoe/d) and is expected to average approximately 42% oil in the commodity mix. This includes the estimated effects of the temporary issues discussed above.
Total capital spend (before acquisitions) is a non-GAAP measure, see below for additional information. The Company is unable to present a quantitative reconciliation of this forward-looking, non-GAAP financial measure without unreasonable effort because acquisition costs are inherently unpredictable.
Expected full year 2018 total capital spend guidance is unchanged at $1.31 billion and expected full year net well completions are unchanged at 103 in the Permian and 25 in the Eagle Ford.
Full year 2018 guidance is updated for LOE, which is now expected to approximate $4.75/Boe for the full year (down from approximately $5.00/Boe) and for DD&A/Boe, which is now expected to range between $15.00-$15.25 (increased from a range of $13.00-$15.00/Boe) to include increased rates in the second half of 2018. Other guidance line items remain unchanged.
SCHEDULE FOR THIRD QUARTER REPORTING
This release is accompanied by an investor presentation and pre-recorded call with transcript all posted to the Company's website. Please visit the Company's website at ir.sm-energy.com to access this additional third quarter detail.
Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time on November 2, 2018 for the third quarter 2018 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until November 9, 2018.
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things: guidance for production volumes and total capital spend for the fourth quarter and full year 2018 and projected effects on production volumes from regional storms and from a force majeure event at a third-party gas processing facility and an event at a third-party pipeline. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertain nature of joint venture or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected joint venture or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SM ENERGY COMPANY | |||||||||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||||||||
September 30, 2018 | |||||||||||||||||||||
Production Data | |||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||
2018 | 2017 | Percent Change | 2018 | 2017 | Percent Change | ||||||||||||||||
Average realized sales price, before the effects of derivative settlements: | |||||||||||||||||||||
Oil (per Bbl) | $ | 56.96 | $ | 45.20 | 26 | % | $ | 59.60 | $ | 45.77 | 30 | % | |||||||||
Gas (per Mcf) | $ | 3.56 | $ | 2.96 | 20 | % | $ | 3.35 | $ | 2.98 | 12 | % | |||||||||
NGLs (per Bbl) | $ | 30.77 | $ | 22.40 | 37 | % | $ | 28.28 | $ | 21.36 | 32 | % | |||||||||
Per Boe | $ | 38.26 | $ | 27.59 | 39 | % | $ | 38.15 | $ | 26.76 | 43 | % | |||||||||
Average realized sales price, including the effects of derivative settlements: | |||||||||||||||||||||
Oil (per Bbl) | $ | 53.64 | $ | 44.47 | 21 | % | $ | 55.06 | $ | 44.32 | 24 | % | |||||||||
Gas (per Mcf) | $ | 3.53 | $ | 3.79 | (7) | % | $ | 3.41 | $ | 3.63 | (6) | % | |||||||||
NGLs (per Bbl) | $ | 21.16 | $ | 18.86 | 12 | % | $ | 20.79 | $ | 18.93 | 10 | % | |||||||||
Equivalent (per Boe) | $ | 34.86 | $ | 28.82 | 21 | % | $ | 35.02 | $ | 27.62 | 27 | % | |||||||||
Production: | |||||||||||||||||||||
Oil (MMBbl) | 5.0 | 3.4 | 48 | % | 13.7 | 9.8 | 39 | % | |||||||||||||
Gas (Bcf) | 27.2 | 29.1 | (7) | % | 77.7 | 97.0 | (20) | % | |||||||||||||
NGLs (MMBbl) | 2.4 | 2.4 | — | % | 6.0 | 8.1 | (26) | % | |||||||||||||
MMBoe | 12.0 | 10.7 | 12 | % | 32.6 | 34.1 | (4) | % | |||||||||||||
Average daily production: | |||||||||||||||||||||
Oil (MBbl/d) | 54.9 | 37.1 | 48 | % | 50.1 | 36.1 | 39 | % | |||||||||||||
Gas (MMcf/d) | 295.3 | 316.1 | (7) | % | 284.7 | 355.4 | (20) | % | |||||||||||||
NGLs (MBbl/d) | 26.2 | 26.2 | — | % | 21.9 | 29.6 | (26) | % | |||||||||||||
MBoe/d | 130.2 | 116.0 | 12 | % | 119.4 | 124.9 | (4) | % | |||||||||||||
Per Boe data: | |||||||||||||||||||||
Realized price, before the effects of derivative settlements | $ | 38.26 | $ | 27.59 | 39 | % | $ | 38.15 | $ | 26.76 | 43 | % | |||||||||
Lease operating expense | 4.41 | 4.81 | (8) | % | 4.66 | 4.22 | 10 | % | |||||||||||||
Transportation costs | 4.20 | 5.24 | (20) | % | 4.42 | 5.62 | (21) | % | |||||||||||||
Production taxes | 1.58 | 1.15 | 37 | % | 1.64 | 1.11 | 48 | % | |||||||||||||
Ad valorem tax expense | 0.45 | 0.29 | 55 | % | 0.51 | 0.34 | 50 | % | |||||||||||||
General and administrative(1) (2) | 2.46 | 2.58 | (5) | % | 2.64 | 2.48 | 6 | % | |||||||||||||
Operating margin, before the effects of derivative settlements(2) | 25.16 | 13.52 | 86 | % | 24.28 | 12.99 | 87 | % | |||||||||||||
Derivative settlement gain (loss) | (3.40) | 1.23 | (376) | % | (3.13) | 0.86 | (464) | % | |||||||||||||
Operating margin, including the effects of derivative settlements(2) | $ | 21.76 | $ | 14.75 | 48 | % | $ | 21.15 | $ | 13.85 | 53 | % | |||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | $ | 16.78 | $ | 12.61 | 33 | % | $ | 14.82 | $ | 12.48 | 19 | % | |||||||||
(1) Includes non-cash stock-based compensation expense per Boe of $0.45 for both the three months ended September 30, 2018, and 2017, and $0.42 and $0.36 for the nine months ended September 30, 2018, and 2017, respectively. | |||||||||||||||||||||
(2) Certain prior period amounts have been adjusted to conform to the current period presentation due to an accounting standards update. |
SM ENERGY COMPANY | |||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
September 30, 2018 | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands, except share data) | September 30, | December 31, | |||||
ASSETS | 2018 | 2017 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 176,806 | $ | 313,943 | |||
Accounts receivable | 179,347 | 160,154 | |||||
Derivative assets | 81,163 | 64,266 | |||||
Prepaid expenses and other | 15,826 | 10,752 | |||||
Total current assets | 453,142 | 549,115 | |||||
Property and equipment (successful efforts method): | |||||||
Proved oil and gas properties | 6,686,922 | 6,139,379 | |||||
Accumulated depletion, depreciation, and amortization | (3,240,124) | (3,171,575) | |||||
Unproved oil and gas properties | 1,892,557 | 2,047,203 | |||||
Wells in progress | 328,808 | 321,347 | |||||
Properties held for sale, net | 5,040 | 111,700 | |||||
Other property and equipment, net of accumulated depreciation of $56,067 and $49,985, respectively | 102,984 | 106,738 | |||||
Total property and equipment, net | 5,776,187 | 5,554,792 | |||||
Noncurrent assets: | |||||||
Derivative assets | 8,853 | 40,362 | |||||
Other noncurrent assets | 35,539 | 32,507 | |||||
Total noncurrent assets | 44,392 | 72,869 | |||||
Total assets | $ | 6,273,721 | $ | 6,176,776 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 429,698 | $ | 386,630 | |||
Derivative liabilities | 304,159 | 172,582 | |||||
Total current liabilities | 733,857 | 559,212 | |||||
Noncurrent liabilities: | |||||||
Revolving credit facility | — | — | |||||
Senior Notes, net of unamortized deferred financing costs | 2,447,290 | 2,769,663 | |||||
Senior Convertible Notes, net of unamortized discount and deferred financing costs | 145,662 | 139,107 | |||||
Asset retirement obligations | 88,149 | 103,026 | |||||
Asset retirement obligations associated with oil and gas properties held for sale | — | 11,369 | |||||
Deferred income taxes | 140,949 | 79,989 | |||||
Derivative liabilities | 72,605 | 71,402 | |||||
Other noncurrent liabilities | 45,810 | 48,400 | |||||
Total noncurrent liabilities | 2,940,465 | 3,222,956 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,137,582 and 111,687,016 shares, respectively | 1,121 | 1,117 | |||||
Additional paid-in capital | 1,758,205 | 1,741,623 | |||||
Retained earnings(1) | 856,111 | 665,657 | |||||
Accumulated other comprehensive loss(1) | (16,038) | (13,789) | |||||
Total stockholders' equity | 2,599,399 | 2,394,608 | |||||
Total liabilities and stockholders' equity | $ | 6,273,721 | $ | 6,176,776 | |||
(1) The Company reclassified $3.0 million of tax effects stranded in accumulated other comprehensive loss to retained earnings as of January 1, 2018 due to an accounting standards update. |
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2018 | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share data) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(as adjusted) | (as adjusted) | ||||||||||||||
Operating revenues and other income: | |||||||||||||||
Oil, gas, and NGL production revenue | $ | 458,382 | $ | 294,459 | $ | 1,243,826 | $ | 912,596 | |||||||
Net gain (loss) on divestiture activity | 786 | (1,895) | 425,656 | (131,565) | |||||||||||
Other operating revenues | 201 | 2,815 | 3,398 | 7,807 | |||||||||||
Total operating revenues and other income | 459,369 | 295,379 | 1,672,880 | 788,838 | |||||||||||
Operating expenses: | |||||||||||||||
Oil, gas, and NGL production expense | 127,638 | 122,651 | 365,917 | 385,073 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 201,105 | 134,599 | 483,343 | 425,643 | |||||||||||
Exploration(1) | 13,061 | 14,119 | 40,844 | 38,919 | |||||||||||
Abandonment and impairment of unproved properties | 9,055 | — | 26,615 | 157 | |||||||||||
General and administrative(1) | 29,464 | 27,564 | 86,066 | 84,618 | |||||||||||
Net derivative (gain) loss(2) | 178,026 | 80,599 | 249,304 | (89,364) | |||||||||||
Other operating expenses, net | 9,664 | 999 | 14,219 | 10,109 | |||||||||||
Total operating expenses | 568,013 | 380,531 | 1,266,308 | 855,155 | |||||||||||
Income (loss) from operations | (108,644) | (85,152) | 406,572 | (66,317) | |||||||||||
Interest expense | (38,111) | (44,091) | (122,850) | (135,639) | |||||||||||
Loss on extinguishment of debt | (26,722) | — | (26,722) | (35) | |||||||||||
Other non-operating income, net | 806 | 861 | 3,017 | 1,581 | |||||||||||
Income (loss) before income taxes | (172,671) | (128,382) | 260,017 | (200,410) | |||||||||||
Income tax (expense) benefit | 36,748 | 39,270 | (61,342) | 65,825 | |||||||||||
Net income (loss) | $ | (135,923) | $ | (89,112) | $ | 198,675 | $ | (134,585) | |||||||
Basic weighted-average common shares outstanding | 112,107 | 111,575 | 111,836 | 111,366 | |||||||||||
Diluted weighted-average common shares outstanding | 112,107 | 111,575 | 113,600 | 111,366 | |||||||||||
Basic net income (loss) per common share | $ | (1.21) | $ | (0.80) | $ | 1.78 | $ | (1.21) | |||||||
Diluted net income (loss) per common share | $ | (1.21) | $ | (0.80) | $ | 1.75 | $ | (1.21) | |||||||
Dividends per common share | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | 0.10 | |||||||
(1) Non-cash stock-based compensation included in: | |||||||||||||||
Exploration expense | $ | 1,571 | $ | 1,495 | $ | 4,076 | $ | 3,898 | |||||||
General and administrative expense | 5,433 | 4,852 | 13,604 | 12,262 | |||||||||||
Total non-cash stock-based compensation | $ | 7,004 | $ | 6,347 | $ | 17,680 | $ | 16,160 | |||||||
(2) The net derivative (gain) loss line item consists of the following: | |||||||||||||||
Settlement (gain) loss | $ | 40,718 | $ | (13,092) | $ | 101,911 | $ | (29,402) | |||||||
(Gain) loss on fair value changes | 137,308 | 93,691 | 147,393 | (59,962) | |||||||||||
Total net derivative (gain) loss | $ | 178,026 | $ | 80,599 | $ | 249,304 | $ | (89,364) | |||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2018 | |||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(in thousands) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(as adjusted) | (as adjusted) | ||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | (135,923) | $ | (89,112) | $ | 198,675 | $ | (134,585) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Net (gain) loss on divestiture activity | (786) | 1,895 | (425,656) | 131,565 | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 201,105 | 134,599 | 483,343 | 425,643 | |||||||||||
Abandonment and impairment of unproved properties | 9,055 | — | 26,615 | 157 | |||||||||||
Stock-based compensation expense | 7,004 | 6,347 | 17,680 | 16,160 | |||||||||||
Net derivative (gain) loss | 178,026 | 80,599 | 249,304 | (89,364) | |||||||||||
Derivative settlement gain (loss) | (40,718) | 13,092 | (101,911) | 29,402 | |||||||||||
Amortization of debt discount and deferred financing costs | 3,792 | 3,799 | 11,542 | 12,478 | |||||||||||
Loss on extinguishment of debt | 26,722 | — | 26,722 | 35 | |||||||||||
Deferred income taxes | (36,833) | (36,668) | 60,672 | (67,458) | |||||||||||
Other, net | 218 | 1,960 | (2,084) | 6,424 | |||||||||||
Net change in working capital | 17,997 | 11,971 | (3,725) | 40,153 | |||||||||||
Net cash provided by operating activities | 229,659 | 128,482 | 541,177 | 370,610 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Net proceeds from the sale of oil and gas properties | 984 | 12,118 | 743,199 | 778,365 | |||||||||||
Capital expenditures | (309,269) | (258,226) | (1,032,588) | (624,969) | |||||||||||
Acquisition of proved and unproved oil and gas properties | 44 | 751 | (24,571) | (87,389) | |||||||||||
Net cash provided by (used in) investing activities | (308,241) | (245,357) | (313,960) | 66,007 | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from credit facility | — | — | — | 406,000 | |||||||||||
Repayment of credit facility | — | — | — | (406,000) | |||||||||||
Debt issuance costs related to credit facility | (4,647) | — | (4,771) | — | |||||||||||
Net proceeds from Senior Notes | 492,079 | — | 492,079 | — | |||||||||||
Cash paid to repurchase Senior Notes, including premium | (844,984) | — | (844,984) | (2,357) | |||||||||||
Net proceeds from sale of common stock | — | — | 1,881 | 1,738 | |||||||||||
Dividends paid | — | — | (5,584) | (5,563) | |||||||||||
Other, net | (2,966) | (1,231) | (2,975) | (1,392) | |||||||||||
Net cash used in financing activities | (360,518) | (1,231) | (364,354) | (7,574) | |||||||||||
Net change in cash, cash equivalents, and restricted cash | (439,100) | (118,106) | (137,137) | 429,043 | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 615,906 | 559,521 | 313,943 | 12,372 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 176,806 | $ | 441,415 | $ | 176,806 | $ | 441,415 | |||||||
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2018 | |||||||||||||||
Adjusted EBITDAX (non-GAAP)(1) | |||||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to adjusted EBITDAX (non-GAAP) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) (GAAP) | $ | (135,923) | $ | (89,112) | $ | 198,675 | $ | (134,585) | |||||||
Interest expense | 38,111 | 44,091 | 122,850 | 135,639 | |||||||||||
Interest income(2) | (1,332) | (1,301) | (4,595) | (2,901) | |||||||||||
Income tax expense (benefit) | (36,748) | (39,270) | 61,342 | (65,825) | |||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 201,105 | 134,599 | 483,343 | 425,643 | |||||||||||
Exploration(3)(4) | 11,490 | 12,624 | 36,768 | 35,021 | |||||||||||
Abandonment and impairment of unproved properties | 9,055 | — | 26,615 | 157 | |||||||||||
Stock-based compensation expense | 7,004 | 6,347 | 17,680 | 16,160 | |||||||||||
Net derivative (gain) loss | 178,026 | 80,599 | 249,304 | (89,364) | |||||||||||
Derivative settlement gain (loss) | (40,718) | 13,092 | (101,911) | 29,402 | |||||||||||
Net (gain) loss on divestiture activity | (786) | 1,895 | (425,656) | 131,565 | |||||||||||
Loss on extinguishment of debt | 26,722 | — | 26,722 | 35 | |||||||||||
Other, net | 67 | 785 | 76 | 9,426 | |||||||||||
Adjusted EBITDAX (non-GAAP)(4) | 256,073 | 164,349 | 691,213 | 490,373 | |||||||||||
Interest expense | (38,111) | (44,091) | (122,850) | (135,639) | |||||||||||
Interest income(2) | 1,332 | 1,301 | 4,595 | 2,901 | |||||||||||
Income tax (expense) benefit | 36,748 | 39,270 | (61,342) | 65,825 | |||||||||||
Exploration(3)(4) | (11,490) | (12,624) | (36,768) | (35,021) | |||||||||||
Amortization of debt discount and deferred financing costs | 3,792 | 3,799 | 11,542 | 12,478 | |||||||||||
Deferred income taxes | (36,833) | (36,668) | 60,672 | (67,458) | |||||||||||
Other, net (4) | 151 | 1,175 | (2,160) | (3,002) | |||||||||||
Net change in working capital | 17,997 | 11,971 | (3,725) | 40,153 | |||||||||||
Net cash provided by operating activities (GAAP)(4) | $ | 229,659 | $ | 128,482 | $ | 541,177 | $ | 370,610 | |||||||
(1) Adjusted EBITDAX represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we failed to comply with the covenants that establish a maximum permitted ratio of total funded debt, as defined in the Credit Agreement, to adjusted EBITDAX, we would be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we are in default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under the indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. | |||||||||||||||
(2) Interest income is included within the other non-operating income, net line item on the Company's condensed consolidated statements of operations. | |||||||||||||||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's accompanying condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||||||||||
(4) Certain prior period amounts have been adjusted to conform to the current period presentation on the condensed consolidated financial statements due to accounting standards updates. |
SM ENERGY COMPANY | |||||||||||||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
September 30, 2018 | |||||||||||||||
Adjusted Net Income (Loss) (non-GAAP) | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) (GAAP) | $ | (135,923) | $ | (89,112) | $ | 198,675 | $ | (134,585) | |||||||
Net derivative (gain) loss | 178,026 | 80,599 | 249,304 | (89,364) | |||||||||||
Derivative settlement gain (loss) | (40,718) | 13,092 | (101,911) | 29,402 | |||||||||||
Net (gain) loss on divestiture activity | (786) | 1,895 | (425,656) | 131,565 | |||||||||||
Abandonment and impairment of unproved properties | 9,055 | — | 26,615 | 157 | |||||||||||
Loss on extinguishment of debt | 26,722 | — | 26,722 | 35 | |||||||||||
Other, net(1) | 67 | 785 | 876 | 9,426 | |||||||||||
Tax effect of adjustments(2) | (37,403) | (34,790) | 48,619 | (29,321) | |||||||||||
Adjusted net income (loss) (non-GAAP)(3) | $ | (960) | $ | (27,531) | $ | 23,244 | $ | (82,685) | |||||||
Diluted net income (loss) per common share (GAAP) | $ | (1.21) | $ | (0.80) | $ | 1.75 | $ | (1.21) | |||||||
Net derivative (gain) loss | 1.59 | 0.72 | 2.19 | (0.80) | |||||||||||
Derivative settlement gain (loss) | (0.36) | 0.12 | (0.90) | 0.27 | |||||||||||
Net (gain) loss on divestiture activity | (0.01) | 0.02 | (3.75) | 1.18 | |||||||||||
Abandonment and impairment of unproved properties | 0.08 | — | 0.23 | — | |||||||||||
Loss on extinguishment of debt | 0.24 | — | 0.24 | — | |||||||||||
Other, net(1) | — | — | 0.01 | 0.08 | |||||||||||
Tax effect of adjustments(2) | (0.34) | (0.31) | 0.43 | (0.26) | |||||||||||
Adjusted net income (loss) per diluted common share (non-GAAP)(4) | $ | (0.01) | $ | (0.25) | $ | 0.20 | $ | (0.74) | |||||||
Basic weighted-average common shares outstanding | 112,107 | 111,575 | 111,836 | 111,366 | |||||||||||
Diluted weighted-average common shares outstanding | 112,107 | 111,575 | 113,600 | 111,366 | |||||||||||
Note: Amounts may not calculate due to rounding. | |||||||||||||||
(1) For the three-month and nine-month periods ended September 30, 2018, the adjustment is related to bad debt expense. Additionally, for the nine-month period ended September 30, 2018, an accrual for a non-recurring matter is included. For the three-month and nine-month periods ended September 30, 2017, the adjustment is related to impairment on materials inventory, impairment of proved properties, the change in Net Profits Plan liability, and bad debt expense. These items are included in other operating expenses on the Company's condensed consolidated statements of operations. | |||||||||||||||
(2) The tax effect of adjustments is calculated using a tax rate of 21.7% for the three-month and nine-month periods ended September 30, 2018, and a tax rate of 36.1% for the three-month and nine-month periods ended September 30, 2017. These rates approximate the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||||||||||
(3) Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, materials inventory loss, and gains or losses on extinguishment of debt. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. | |||||||||||||||
(4) For periods where the Company reports adjusted net loss, basic weighted-average common shares outstanding are used in the calculation of adjusted net loss per diluted common share. |
Additional non-GAAP Measures Defined:
The Company defines Total capital spend as costs incurred, less ARO, capitalized interest and acquisitions. Total capital spend is presented because management believes that it provides useful information to investors in the analysis of SM Energy and is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. Total capital spend should not be used in isolation or as a substitute to costs incurred or other capital spending measures under GAAP. Total capital spend may not be comparable to similarly titled measures of other companies.
The Company defines Net debt as the total principal value of outstanding senior notes, senior convertible notes plus balances drawn on the revolving credit facility (also referred to as total funded debt) less cash and cash equivalents. The Company presents this metric to help evaluate its capital structure and financial leverage and believes that it is widely used by professional research analysts, including credit analysts, and others in the evaluation of total leverage.
Reconciliation of Net Debt | |||
(in thousands) | September 30, | ||
2018 | |||
Senior Notes (principal value from Note 5 of Form 10-Q) | $ | 2,476,796 | |
Senior Convertible Notes (principal value from Note 5 of Form 10-Q) | 172,500 | ||
Revolving credit facility | — | ||
Total funded debt | $ | 2,649,296 | |
Less: Cash and cash equivalents | (176,806) | ||
Net Debt | $ | 2,472,490 | |
The Company defines Net debt-to-adjusted EBITDAX as Net Debt (defined above) divided by adjusted EBITDAX (reconciled below) for the prior twelve-month period. The Company presents this metric to show trends that investors may find useful in understanding the Company's ability to service its debt. This metric is widely used by professional research analysts, including credit analysts, in the valuation and comparison of companies in the oil and gas exploration and production industry. A variation of this calculation is a financial covenant under the Company's credit agreement for its revolving credit facility beginning in the fourth quarter of 2018. Please see below for a reconciliation of trailing twelve months adjusted EBITDAX to net income (GAAP).
SM ENERGY COMPANY | ||||
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||
September 30, 2018 | ||||
Adjusted EBITDAX (non-GAAP)(1) | ||||
(in thousands) | ||||
Reconciliation of net income (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDAX (non-GAAP) | For the Trailing Twelve Month | |||
2018 | ||||
Net income (GAAP) | $ | 172,417 | ||
Interest expense | 166,468 | |||
Interest income(2) | (5,662) | |||
Income tax benefit | (55,803) | |||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion | 614,736 | |||
Exploration(3)(4) | 50,160 | |||
Abandonment and impairment of unproved properties | 38,730 | |||
Stock-based compensation expense | 24,220 | |||
Net derivative loss | 365,082 | |||
Derivative settlement loss | (110,079) | |||
Net gain on divestiture activity | (426,193) | |||
Loss on extinguishment of debt | 26,722 | |||
Other, net | 3,276 | |||
Adjusted EBITDAX (non-GAAP)(4) | 864,074 | |||
Interest expense | (166,468) | |||
Interest income(2) | 5,662 | |||
Income tax benefit | 55,803 | |||
Exploration(3)(4) | (50,160) | |||
Amortization of debt discount and deferred financing costs | 15,340 | |||
Deferred income taxes | (63,936) | |||
Other, net(4) | (93) | |||
Net change in working capital | 25,735 | |||
Net cash provided by operating activities (GAAP)(4) | $ | 685,957 | ||
(1) Adjusted EBITDAX represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we failed to comply with the covenants that establish a maximum permitted ratio of total funded debt, as defined in the Credit Agreement, to adjusted EBITDAX, we would be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we are in default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under the indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. | ||||
(2) Interest income is included within the other non-operating income, net line item on the Company's condensed consolidated statements of operations. | ||||
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's accompanying condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | ||||
(4) Certain prior period amounts have been adjusted to conform to the current period presentation on the condensed consolidated financial statements due to accounting standards updates. |
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SOURCE SM Energy Company
Article Date
11/1/201810/18/2018 - SM Energy Announces Third Quarter Preview: Midland Basin Production Outperformance Continues
SM Energy Announces Third Quarter Preview: Midland Basin Production Outperformance Continues
Source: PR Newswire
DENVER, Oct. 18, 2018 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced certain operating results for the third quarter of 2018, including production, realized pricing and total capital spend. Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "The combination of great rock quality and excellent operational execution continue to support a solid production growth trajectory that, in turn, supports our long-term objective for competitive growth in cash flow per debt adjusted share."
THIRD QUARTER OF 2018 PRODUCTION AND REALIZED PRICES
PRODUCTION: | |||
Permian | Eagle Ford | Total | |
Oil - MBbl | 4,765 | 282 | 5,047 |
Natural gas - MMcf | 7,078 | 20,090 | 27,168 |
NGLs - MBbl | 19 | 2,388 | 2,407 |
Total - MBoe | 5,964 | 6,019 | 11,982 |
Total - MBoe/d | 64.8 | 65.4 | 130.2 |
Note: Totals may not sum due to rounding |
REALIZED PRICES: | |||
Permian | Eagle Ford | Totals | |
Oil/$Bbl | 56.68 | 61.79 | 56.96/53.64 |
Natural gas/$Mcf | 5.70 | 2.81 | 3.56/3.53 |
NGLs/$Bbl | nm | 30.77 | 30.77/21.16 |
Per Boe | $52.15 | $24.49 | $38.26/$34.86 |
FOURTH QUARTER 2018 UPDATE
During the month of October to date, a portion of Permian production from western Howard County and eastern Martin County has been curtailed due to a force majeure incident at a third-party gas processing facility. The third-party gas processor expects to restore full processing capability for SM Energy's production volumes by month-end. In addition to the incident at the gas processing facility, regional storms in early October have caused temporary flooding and loss of electrical power at certain locations in the Company's RockStar area. This led to temporary shut-in of some wells and delays installing some pipeline connections for new wells. Quantification of the production impact from these ongoing events will be provided with the Company's fourth quarter 2018 guidance update, which will be included in its third quarter earnings release. At this time, we expect the impact of deferred production to be approximately 0.3 MMBoe for the fourth quarter.
COSTS INCURRED AND TOTAL CAPITAL SPEND
Costs incurred for the third quarter of 2018 were $276 million. Total capital spend (a non-GAAP measure defined as costs incurred less ARO, capitalized interest and acquisitions, reconciled below) for the quarter was $272 million. During the third quarter, the Company drilled 34 net wells and completed 28 net wells in the Permian, and drilled 5 net wells and completed 5 net wells in the South Texas region. As discussed above, regional weather has affected the timing of certain completions.
TOTAL CAPITAL SPEND RECONCILIATION: | ||||||||||||
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (non-GAAP)(1) | ||||||||||||
($ in millions) | For the Three Months Ended | For the Nine Months Ended | ||||||||||
Costs incurred in oil and gas activities (GAAP): | $ | 276.4 | $ | 1,108.8 | ||||||||
Less: | ||||||||||||
Asset retirement obligation | (0.7) | (2.6) | ||||||||||
Capitalized interest | (5.2) | (15.7) | ||||||||||
Unproved property acquisitions | - | (24.6) | ||||||||||
Other | 1.8 | 2.2 | ||||||||||
Total capital spend (non-GAAP): | $ | 272.3 | $ | 1,068.1 | ||||||||
Note: Totals may not sum due to rounding | ||||||||||||
(1) | The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for costs incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. |
CASH, DEBT AND LIQUIDITY
As of September 30, 2018, the Company's cash balance was $177 million. On September 28, 2018, the Company amended its revolving credit facility to, among other things, increase the borrowing base to $1.5 billion and extend the maturity date. Commitments remain at $1.0 billion. The credit facility remains undrawn and, combined with the quarter-end cash balance, provided liquidity of $1.2 billion.
As previously announced, during the third quarter the Company repurchased all of its $344.6 million in 6.5% senior notes due 2021, repurchased all of its $395.0 million in 6.5% senior notes due 2023, and repurchased $85.0 million of its 6.125% senior notes due 2022. The Company also issued $500.0 million of 6.625% senior notes due 2027. The current principal value of the Company's senior notes outstanding (including convertible notes) is $2.65 billion.
SCHEDULE FOR THIRD QUARTER REPORTING
November 1, 2018 – After market close, the Company plans to release its third quarter 2018 earnings release, a pre-recorded webcast discussion of the third quarter 2018 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
November 2, 2018 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the third quarter 2018 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until November 9, 2018.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, projected effects on production volumes from regional storms and from a force majeure event at a third-party gas processing facility. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
10/18/201810/10/2018 - SM Energy Announces Appointment Of Director
SM Energy Announces Appointment Of Director
Source: PR Newswire
DENVER, Oct. 10, 2018 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that Carla J. Bailo has been appointed to serve as a director of the Company. Ms. Bailo will serve as an independent director and as a member of the Audit Committee of the Board of Directors.
Bill Sullivan, Chairman of the Board, comments, "We are pleased to have an individual of Carla's reputation and experience joining SM Energy. Her diverse technical and executive leadership background and unique perspective on the future of transportation fuels will be valuable additions, and will enrich the knowledge and skills brought by our board to our Company and its stockholders. We look forward to her advice and counsel as we continue to execute our growth strategy."
Ms. Bailo served as Senior Vice President, R&D Americas for Nissan North America, Inc. from 2011 – 2014. She joined Nissan in 1989 and held various engineering and management positions prior to her appointment as Senior Vice President. Ms. Bailo currently serves as the Chief Executive Officer for the Center for Automotive Research.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
10/10/20189/28/2018 - SM Energy Declares Semi-Annual Cash Dividend
SM Energy Declares Semi-Annual Cash Dividend
Source: PR Newswire
DENVER, Sept. 28, 2018 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that its Board of Directors has approved a semi-annual cash dividend of $0.05 per share of common stock outstanding. The dividend will be paid on November 7, 2018, to stockholders of record as of the close of business on October 26, 2018. The Company currently has approximately 112.1 million shares of common stock outstanding.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACTS
INVESTORS - Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
9/28/2018SM Energy Company Announces Early Results Of Tender Offer And Consent Solicitation
Source: PR Newswire
DENVER, Aug. 20, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy") (NYSE: SM) announced today early results for its previously announced tender offer (the "Offers") to purchase (i) any and all of its 6.500% Senior Notes due 2023 (the "2023 Notes"), and (ii) up to an aggregate principal amount not to exceed $85,000,000 (the "Tender Cap"), of its 6.125% Senior Notes due 2022 (the "2022 Notes" and, together with the 2023 Notes, the "Notes"), subject to the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated August 6, 2018 (as it may be amended or supplemented from time to time, the "Offer to Purchase"), and related solicitation of consents (the "Consent Solicitation") from holders of the 2023 Notes to certain proposed amendments (the "Proposed Amendments") to the indenture governing the 2023 Notes (the "Consents").
The following table sets forth, among other things, the principal amount of Notes validly tendered and accepted for purchase as of the Early Participation Date:
|
Title of Notes |
CUSIP Numbers /
ISIN |
Aggregate Principal |
Tender Cap |
Principal Amount |
Principal Amount |
|
6.500% Senior Notes due 2023 |
78454L AF7 / US78454LAF76 |
$394,985,000 |
N/A |
$384,424,000 |
$384,424,000 |
|
6.125% Senior Notes due 2022 |
78454L AK6 / US78454LAK61 |
$561,796,000 |
$85,000,000 |
$337,261,000 |
$85,000,000 |
In addition, the requisite Consents to effect the Proposed Amendments (the "Requisite Consents") with respect to the 2023 Notes, as described in the Offer to Purchase, have been received. Accordingly, SM Energy expects to execute and deliver a supplement to the indenture governing the 2023 Notes (the "Supplemental Indenture") with respect to the Proposed Amendments. The Proposed Amendments will amend the indenture with respect to the 2023 Notes to, among other things, eliminate certain covenants and certain events of default under the Indenture and amend or eliminate certain provisions with respect to the 2023 Notes, and reduce the minimum notice of optional redemption by SM Energy required to be given to holders of the 2023 Notes from 30 days to three business days. The Supplemental Indenture will become operative today upon SM Energy accepting for purchase the 2023 Notes tendered in the Offers.
Because the aggregate amount of 2022 Notes validly tendered (and not validly withdrawn) at or prior to 5:00 p.m., New York City time, on August 17, 2018 (such date, the "Early Tender Date") exceeded the Tender Cap, the 2022 Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date will be accepted on a pro rata basis, subject to a proration factor of approximately 25.2%, and no additional 2022 Notes tendered after the Early Tender Date will be accepted by SM Energy.
All Notes accepted for purchase will be purchased by SM Energy on the "Early Payment Date," which is currently expected to occur today. Payment for the Notes that are purchased will include accrued and unpaid interest from and including the last interest payment date applicable to the relevant series of Notes up to, but not including, the Early Payment Date.
SM Energy intends to redeem any of the 2023 Notes that remain outstanding following the expiration of the Offers. This press release does not constitute a notice of redemption under the 2023 Indenture and the redemption of any 2023 Notes that remain outstanding following the expiration of the Offers will be made only pursuant to the terms of the applicable notice of redemption delivered pursuant to the terms of the 2023 Indenture.
The Offers are scheduled to expire at 11:59 p.m., New York City time on August 31, 2018, unless extended or earlier terminated. Withdrawal and revocation rights expired at 5:00 p.m., New York City time, on August 17, 2018. Notes that have been tendered may no longer be withdrawn and consents that have been delivered may no longer be revoked.
This press release does not constitute an offer to purchase or redeem or the solicitation of an offer to sell the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The dealer manager for the Tender Offer is BofA Merrill Lynch. Questions regarding the Tender Offer may be directed to BofA Merrill Lynch, at (888) 292-0070 (toll-free) and (980) 388-3646 (collect). Requests for documentation regarding the Offer should be directed to the Information Agent, D.F. King & Co., Inc. at (800) 821-2712 (toll-free) and (212) 269-5550 (collect) or by e-mail at sm@dfking.com.
INFORMATION ON FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that we expect, believe, or anticipate will or may occur in the future are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, among other things, the completion of the Offers and the redemption of the 2023 Notes. Such forward-looking statements are based on assumptions and analyses made by SM Energy's in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties, which may cause SM Energy's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Some of these risks are described in the "Risk Factors" section in Part I, Item 1A of SM Energy's Annual Report on Form 10-K for the year ended December 31, 2017. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
8/20/2018SM Energy Prices $500 Million Public Offering Of Senior Notes Due 2027
Source: PR Newswire
DENVER, Aug. 6, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy") (NYSE: SM) announced today that it has priced an offering of $500.0 million aggregate principal amount of its 6.625% senior unsecured notes due 2027 (the "Notes"). The Notes will be issued at par. The offering is expected to close on August 20, 2018, subject to customary closing conditions. SM Energy intends to use the net proceeds from the offering to fund the consideration payable in its announced cash tender offer to purchase any and all of its 6.500% Senior Notes due 2023 (CUSIP No. 78454L AK6) and up to an aggregate principal amount not to exceed $85,000,000 of its 6.125% Senior Notes due 2022 (CUSIP No. 78454L AF7).
BofA Merrill Lynch, Wells Fargo Securities, J.P. Morgan, Barclays, BBVA and RBC Capital Markets are acting as joint book-running managers. The Notes are being offered and will be sold pursuant to an effective shelf registration statement that was filed with the Securities and Exchange Commission on August 6, 2018. This offering is being made only by means of a prospectus dated August 6, 2018 and related prospectus supplement dated August 6, 2018. Before you invest, you should read the preliminary prospectus supplement and accompanying base prospectus in that registration statement for more complete information about this offering. A copy of the prospectus supplement and accompanying base prospectus relating to this offering may be obtained from the representatives of the several underwriters by contacting:
BofA Merrill Lynch
NC1-004-03-43
200 North College Street, 3rd floor
Charlotte, NC 28255-0001
Attn: Prospectus Department
E-mail: dg.prospectus_requests@baml.com
Wells Fargo Securities, LLC
608 2nd Ave. S, Suite 1000
Minneapolis, MN 55402
Attn: WFS Customer Service
E-mail: wfscustomerservice@wellsfargo.com
J.P. Morgan Securities LLC
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Attn: Post-Sale Fulfillment
E-mail: prospectus-eq_fi@jpmchase.com
You may also obtain these documents free of charge when they are available by visiting the Securities and Exchange Commission's website at www.sec.gov.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
INFORMATION ON FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements as defined under the federal securities laws, including statements regarding the intended use of offering proceeds and other aspects of the Notes offering. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control, including market conditions, customary offering closing conditions and other factors described in the prospectus and accompanying prospectus supplement for the offering. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Company's actual results may vary materially from what management anticipated, estimated, projected or expected.
Investors are encouraged to closely consider the disclosures and risk factors contained in the Company's annual and quarterly reports filed from time to time with the Securities and Exchange Commission and in the prospectus and related prospectus supplement. The statements herein speak only as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America.
SM ENERGY CONTACTS:
INVESTORS: Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
8/6/2018SM Energy Company Announces Cash Tender Offer For Any And All Of Its 6.500% Senior Notes Due 2023 And Up To $85 Million Aggregate Principal Amount Of Its 6.125% Senior Notes Due 2022 And Related Solicitation Of Consent
Source: PR Newswire
DENVER, Aug. 6, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy") (NYSE: SM) today announced that it has commenced cash tender offers to purchase (the "Offers") (i) any and all of its outstanding 6.500% Senior Notes due 2023 (the "2023 Notes") (CUSIP No. 78454L AF7), and (ii) up to an aggregate principal amount not to exceed $85,000,000 (as it may be modified by SM Energy, the "Tender Cap"), of its 6.125% Senior Notes due 2022 (CUSIP No. 78454L AK6) (the "2022 Notes" and, together with the 2023 Notes, the "Notes"), subject to the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated August 6, 2018 (as it may be amended or supplemented from time to time, the "Offer to Purchase"), and related solicitation of consents (the "Consent Solicitation" and, together with the Offers, the "Tender Offer") from holders of the 2023 Notes to certain proposed amendments to the indenture governing the 2023 Notes (the "Consents").
The following table set forth certain terms of the Tender Offer:
|
Title of Notes |
CUSIP |
Aggregate |
Tender |
Tender Offer |
Early Tender |
Total |
|
6.500% Senior Notes due 2023 |
78454L AF7 US78454LAF76 |
$394,985,000 |
N/A |
$995.00 |
$30.00 |
$1,025.00 |
|
6.125% Senior Notes due 2022 |
78454L AK6 US78454LAK61 |
$561,796,000 |
$85,000,000 |
$1,006.25 |
$30.00 |
$1,036.25 |
|
(1) |
As of the date of this press release. |
|
(2) |
Dollars per $1,000 aggregate principal amount of Notes. |
|
(3) |
Holders will also receive accrued and unpaid interest from the applicable last interest payment with respect to the Notes accepted for purchase to, but not including, the Early Settlement Date or the Final Settlement Date, as applicable. Includes, with respect to the 2023 Notes, a payment for the Consents. No separate Consent payment or fee is being offered or will be paid to Holders of 2022 Notes in the Consent Solicitation. |
|
(4) |
Includes the Early Tender Premium and, with respect to the 2023 Notes, a payment for Consents. |
The Tender Offer will expire at 11:59 P.M., New York City time, on August 31, 2018, unless extended (such date and time, as the same may be extended, the "Expiration Date"). Holders who validly tender their Notes, if applicable, prior to 5:00 p.m., New York City time, on August 17, 2018, unless such date is extended or earlier terminated (the "Early Tender Date"), will be eligible to receive the "Total Consideration" set forth in the table above for each $1,000 principal amount of Notes. The Total Consideration includes the "Early Tender Premium" set forth in the table above, which includes a consent payment related to the 2023 Notes. Holders who validly tender their Notes after the Early Tender Date, but on or prior to the Expiration Date, and do not validly withdraw such Notes, will only be eligible to receive the "Tender Offer Consideration" as set forth in the table above, which does not include the Early Tender Premium. In addition to the Total Consideration or the Tender Offer Consideration, as applicable, holders who validly tender and not validly withdraw Notes and whose Notes are accepted for purchase will receive accrued and unpaid interest, up to, but not including, the applicable settlement date. The settlement date with respect to all Notes validly tendered prior to the Early Tender Date and not validly withdrawn and accepted for purchase is expected to be the first business day after the Early Tender Date, or as promptly as practicable thereafter (such date, as the same may be extended, the "Early Settlement Date"). The Early Settlement Date is currently expected to be on August 20, 2018. If the Tender Offer is not fully subscribed as of the Early Settlement Date, the settlement date with respect to all Notes validly tendered after the Early Tender Date, but on or prior to the Expiration Date, and not validly withdrawn, is expected to be on the first business day after the Expiration Date, or promptly thereafter (such date, as the same may be extended, the "Final Settlement Date"). The Final Settlement Date is currently expected to be September 4, 2018.
The Notes tendered at or prior to the Early Tender Date will be accepted for purchase with priority over the Notes tendered after the Early Tender Date, but at or prior to the Expiration Date.
Acceptance for tenders of the 2022 Notes may be subject to proration if the aggregate principal amount of the 2022 Notes validly tendered and not validly withdrawn is greater than the Tender Cap. Furthermore, if the Tender Offer to purchase 2022 Notes is fully subscribed as of the Early Tender Date, holders who validly tender 2022 Notes after the Early Tender Date will not have any of their 2022 Notes accepted for purchase and there will be no Final Settlement Date.
The Company reserves the right, but is under no obligation, to increase the Tender Cap at any time, subject to compliance with applicable law. If the Company increases the Tender Cap, it does not expect to extend the Withdrawal Date, subject to applicable law. Notes validly tendered and Consents validly delivered may not be withdrawn or revoked after 5:00 p.m., New York City time, on August 17, 2018, except as may be required by law.
Holders tendering their 2023 Notes will be deemed to have delivered their Consent to certain proposed amendments to the indentures governing the 2023 Notes, which will eliminate certain covenants with respect to the 2023 Notes, and certain events of default, amend certain other provisions with respect to the 2023 Notes, and reduce the minimum notice of optional redemption required to be given to holders of the 2023 Notes from 30 to 3 business days (the "Proposed Amendments"). Following receipt of Consents of at least a majority in aggregate principal amount of the outstanding 2023 Notes, SM Energy will execute supplemental indentures effecting the Proposed Amendments with respect to such 2023 Notes.
The completion of the Tender Offer is subject to a number conditions that are set forth in the Offer to Purchase, including, among other things, the successful completion by SM Energy of a new senior debt offering. The Consent Solicitation is conditioned on the receipt of the required Consents to amend and supplement the indenture governing the 2023 Notes and the execution by the applicable parties of the supplemental indenture effecting such amendments. The Tender Offer is not conditioned on any minimum amount of Notes being tendered.
The terms and conditions of the Tender Offer, including SM Energy's obligation to accept the Notes tendered and pay the purchase price therefor, are set forth in the Offer to Purchase. SM Energy may, at its own discretion, amend, extend or, subject to certain conditions, terminate the Tender Offer.
SM Energy has retained BofA Merrill Lynch as dealer manager and solicitation agent. Questions regarding the Tender Offer may be directed to BofA Merrill Lynch, at (888) 292-0070 (toll-free) and (980) 388-3646 (collect), Attention: Debt Advisory. For questions concerning delivery by means of the Automated Tender Offer Program and to obtain copies of the Offer to Purchase, please contact the Information Agent, D.F. King & Co., Inc. at (800) 821-2712 (toll-free) and (212) 269-5550 or by e-mail at sm@dfking.com.
This press release does not constitute an offer to purchase or redeem or the solicitation of an offer to sell the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America.
SM ENERGY INVESTOR CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that we expect, believe, or anticipate will or may occur in the future are forward-looking statements. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements include, but are not limited to, among other things, the completion of the Tender Offer. Such forward-looking statements are based on assumptions and analyses made by SM Energy's in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties, which may cause SM Energy's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Some of these risks are described in the "Risk Factors" section in Part I, Item 1A of SM Energy's Annual Report on Form 10-K for the year ended December 31, 2017. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.
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SOURCE SM Energy Company
Article Date
8/6/2018SM Energy Announces Public Offering Of $500 Million Of Senior Notes Due 2027
Source: PR Newswire
DENVER, Aug. 6, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy") (NYSE: SM) announced today that it intends, subject to market and other conditions, to offer $500.0 million in aggregate principal amount of a series of senior unsecured notes due 2027 (the "Notes"). SM Energy intends to use the net proceeds from the offering to fund the consideration payable in its announced cash tender offer to purchase any and all of its 6.500% Senior Notes due 2023 (CUSIP No. 78454L AK6) and up to an aggregate principal amount not to exceed $85,000,000 of its 6.125% Senior Notes due 2022 (CUSIP No. 78454L AF7).
BofA Merrill Lynch, Wells Fargo Securities, J.P. Morgan, Barclays, BBVA and RBC Capital Markets are acting as joint book-running managers. The Notes are being offered and will be sold pursuant to an effective shelf registration statement that was filed with the Securities and Exchange Commission on August 6, 2018. This offering is being made only by means of a prospectus dated August 6, 2018 and related prospectus supplement dated August 6, 2018. Before you invest, you should read the preliminary prospectus supplement and accompanying base prospectus in that registration statement for more complete information about this offering. When available, copies of these documents may be obtained from any of the underwriters by contacting:
BofA Merrill Lynch
NC1-004-03-43
200 North College Street, 3rd floor
Charlotte, NC 28255-0001
Attn: Prospectus Department
E-mail: dg.prospectus_requests@baml.com
Wells Fargo Securities, LLC
608 2nd Ave. S, Suite 1000
Minneapolis, MN 55402
Attn: WFS Customer Service
E-mail: wfscustomerservice@wellsfargo.com
J.P. Morgan Securities LLC
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Attn: Post-Sale Fulfillment
E-mail: prospectus-eq_fi@jpmchase.com
You may also obtain these documents free of charge when they are available by visiting the Securities and Exchange Commission's website at www.sec.gov.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
INFORMATION ON FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements as defined under the federal securities laws, including statements regarding the intended use of offering proceeds and other aspects of the Notes offering. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control, including market conditions, customary offering closing conditions and other factors described in the prospectus and accompanying prospectus supplement for the offering. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Company's actual results may vary materially from what management anticipated, estimated, projected or expected.
Investors are encouraged to closely consider the disclosures and risk factors contained in the Company's annual and quarterly reports filed from time to time with the Securities and Exchange Commission and in the prospectus and related prospectus supplement. The statements herein speak only as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America.
SM ENERGY CONTACTS:
INVESTORS:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
8/6/2018SM Energy Reports Second Quarter 2018 Results
Source: PR Newswire
DENVER, Aug. 1, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced financial and operating results for the second quarter of 2018. Highlights include:
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "In the first half of 2018, we made significant improvements in capital efficiency and operating margins as a result of outstanding operations execution and great well results. Our cash flows have been higher than anticipated, and we are raising full year production guidance without changing our expected full year activity level. We remain on track to meet our targeted total capital spend-to-cash flow neutrality by mid-year 2019."
SUMMARY WELL RESULTS
Results from 24 new RockStar wells, having an average 10,180 foot lateral, that have reached their 30-day peak IP rates include:
SECOND QUARTER 2018 RESULTS
As previously announced, production and realized prices came in particularly strong. Production was 10.5 MMBoe, or 115 MBoe/d, exceeding the Company's expectations primarily due to strong well performance from new and existing wells. Realized pricing (before the effects of hedges) averaged $38.40 per Boe, benefiting from higher benchmark oil and NGL prices.
Second quarter of 2018 net income was $17.2 million or $0.15 per diluted common share, up from a loss of ($119.9) million or ($1.08) per diluted common share in the second quarter of 2017. Second quarter of 2018 net income includes a $39.5 million net gain on divestiture activity and a net derivative loss of $63.7 million.
Second quarter of 2018 net cash provided by operating activities (GAAP) was $171.4 million.
Adjusted net income, adjusted net income per diluted common share and adjusted EBITDAX are non-GAAP measures. Please reference the reconciliations to the most directly comparable GAAP financial measures at the end of this release.
Second quarter of 2018 adjusted net income was $16.8 million, or $0.15 per diluted common share, up from an adjusted net loss of ($35.5) million, or ($0.32) per diluted common share, in the second quarter of 2017. The calculation of adjusted net income excludes non-recurring items and items difficult to estimate, in order to present results that can be more consistently compared with prior periods and peer results. Specifically, second quarter adjustments remove the net gain on divestitures, non-cash derivative losses and abandonment and impairment charges.
Second quarter of 2018 adjusted EBITDAX was $225.0 million, up 46% from $154.0 million in the second quarter of 2017. The increase in adjusted EBITDAX was primarily driven by the 110% increase in the operating margin per Boe (pre-hedge), partially offset by an 8% decline in production due to asset divestitures.
COMMODITY DERIVATIVES
For the second half of 2018, the Company currently has commodity derivatives in place for approximately 80% of expected oil production and 70% of expected natural gas production (NGLs are hedged by product). Additionally, the Company has Midland-NYMEX WTI basis hedges in place for approximately 70% of expected Midland oil production through the remainder of the year.
GUIDANCE UPDATE
Full year 2018 production guidance is increased to a range of 43.5-45.0 MMBoe from 40.9-44.9 MMBoe and is expected to average approximately 42% oil in the commodity mix, up from approximately 40%. The increase in production is attributable to better than expected well performance in the Midland Basin from new and existing wells and higher average working interests in new wells compared to the original plan.
Full year total capital spend is slightly increased by $40 million to $1.31 billion primarily to account for increased working interests (with corresponding increased net revenue interests) in new Howard County wells. Higher than expected working interests increased first half 2018 capital by approximately $30 million and expected full year net well completions in the Permian Basin from approximately 100 to 103. Additional future working interest increases are anticipated. Eagle Ford completions for the full year are unchanged at approximately 25 net wells.
As previously stated, the Company's 2018 capital expenditure program is weighted to the first half of the year. Due to the accelerated timing of drilling and completion activity, the Company is currently running seven rigs and three completion crews in the Midland Basin (down from nine rigs and five crews, with plans to release an additional rig during the third quarter). In the Eagle Ford, the Company is running two rigs and one completion crew (with plans to drop one Eagle Ford rig during August 2018) for both Company and third-party carried activity.
Total capital spend (before acquisitions) is a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking, non-GAAP financial measure without unreasonable effort because acquisition costs are inherently unpredictable.
SCHEDULE FOR SECOND QUARTER REPORTING
This release is accompanied by an investor presentation and pre-recorded call with transcript all posted to the Company's website. Please visit the Company's website at ir.sm-energy.com to access this additional second quarter detail.
Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time on August 2, 2018 for the second quarter 2018 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until August 9, 2018.
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, guidance for production volumes and total capital spend for the third quarter and full year 2018. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
|
SM ENERGY COMPANY | |||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||||||||
|
June 30, 2018 | |||||||||||||||||||||
|
Production Data | |||||||||||||||||||||
|
For the Three Months Ended |
For the Six Months Ended | ||||||||||||||||||||
|
2018 |
2017 |
Percent |
2018 |
2017 |
Percent | ||||||||||||||||
|
Average realized sales price, before the effects of derivative settlements: |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
61.02 |
$ |
44.30 |
38 |
% |
$ |
61.14 |
$ |
46.08 |
33 |
% | |||||||||
|
Gas (per Mcf) |
$ |
3.32 |
$ |
2.99 |
11 |
% |
$ |
3.23 |
$ |
2.99 |
8 |
% | |||||||||
|
NGLs (per Bbl) |
$ |
27.55 |
$ |
19.71 |
40 |
% |
$ |
26.60 |
$ |
20.92 |
27 |
% | |||||||||
|
Per Boe |
$ |
38.40 |
$ |
25.13 |
53 |
% |
$ |
38.09 |
$ |
26.38 |
44 |
% | |||||||||
|
Average realized sales price, including the effects of derivative settlements: |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
55.42 |
$ |
43.36 |
28 |
% |
$ |
55.90 |
$ |
44.24 |
26 |
% | |||||||||
|
Gas (per Mcf) |
$ |
3.29 |
$ |
3.63 |
(9) |
% |
$ |
3.34 |
$ |
3.56 |
(6) |
% | |||||||||
|
NGLs (per Bbl) |
$ |
21.51 |
$ |
18.73 |
15 |
% |
$ |
20.54 |
$ |
18.96 |
8 |
% | |||||||||
|
Equivalent (per Boe) |
$ |
34.91 |
$ |
26.57 |
31 |
% |
$ |
35.12 |
$ |
27.08 |
30 |
% | |||||||||
|
Production: |
|||||||||||||||||||||
|
Oil (MMBbl) |
4.4 |
2.9 |
50 |
% |
8.6 |
6.4 |
34 |
% | |||||||||||||
|
Gas (Bcf) |
25.3 |
34.0 |
(26) |
% |
50.5 |
67.9 |
(26) |
% | |||||||||||||
|
NGLs (MMBbl) |
1.9 |
2.8 |
(31) |
% |
3.6 |
5.7 |
(37) |
% | |||||||||||||
|
MMBoe |
10.5 |
11.3 |
(8) |
% |
20.6 |
23.4 |
(12) |
% | |||||||||||||
|
Average daily production: |
|||||||||||||||||||||
|
Oil (MBbl/d) |
47.9 |
32.0 |
50 |
% |
47.6 |
35.5 |
34 |
% | |||||||||||||
|
Gas (MMcf/d) |
278.3 |
374.1 |
(26) |
% |
279.3 |
375.3 |
(26) |
% | |||||||||||||
|
NGLs (MBbl/d) |
20.9 |
30.3 |
(31) |
% |
19.7 |
31.4 |
(37) |
% | |||||||||||||
|
MBoe/d |
115.2 |
124.6 |
(8) |
% |
113.9 |
129.5 |
(12) |
% | |||||||||||||
|
Per Boe data: |
|||||||||||||||||||||
|
Realized price, before the effects of derivative settlements |
$ |
38.40 |
$ |
25.13 |
53 |
% |
$ |
38.09 |
$ |
26.38 |
44 |
% | |||||||||
|
Lease operating expense |
4.66 |
4.11 |
13 |
% |
4.80 |
3.96 |
21 |
% | |||||||||||||
|
Transportation costs |
4.47 |
5.71 |
(22) |
% |
4.55 |
5.79 |
(21) |
% | |||||||||||||
|
Production taxes |
1.66 |
1.00 |
66 |
% |
1.67 |
1.09 |
53 |
% | |||||||||||||
|
Ad valorem tax expense |
0.41 |
0.16 |
156 |
% |
0.54 |
0.36 |
50 |
% | |||||||||||||
|
General and administrative(1) (2) |
2.76 |
2.49 |
11 |
% |
2.74 |
2.43 |
13 |
% | |||||||||||||
|
Operating margin, before the effects of derivative settlements(2) |
24.44 |
11.66 |
110 |
% |
23.79 |
12.75 |
87 |
% | |||||||||||||
|
Derivative settlement loss |
(3.49) |
1.44 |
(342) |
% |
(2.97) |
0.70 |
(524) |
% | |||||||||||||
|
Operating margin, including the effects of derivative settlements(2) |
$ |
20.95 |
$ |
13.10 |
60 |
% |
$ |
20.82 |
$ |
13.45 |
55 |
% | |||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
$ |
14.48 |
$ |
13.52 |
7 |
% |
$ |
13.69 |
$ |
12.42 |
10 |
% | |||||||||
|
(1) Includes non-cash stock-based compensation expense per Boe of $0.39 and $0.30 for the three months ended June 30, 2018 and 2017, respectively, and $0.40 and $0.32 for the six months ended June 30, 2018 and 2017, respectively. | |||||||||||||||||||||
|
(2) Certain prior period amounts have been adjusted to conform to the current period presentation due to an accounting standards update. |
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
June 30, 2018 | |||||||
|
Condensed Consolidated Balance Sheets |
|||||||
|
(in thousands, except share data) |
June 30, |
December 31, | |||||
|
ASSETS |
2018 |
2017 | |||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
615,906 |
$ |
313,943 |
|||
|
Accounts receivable |
178,682 |
160,154 |
|||||
|
Derivative assets |
146,329 |
64,266 |
|||||
|
Prepaid expenses and other |
14,293 |
10,752 |
|||||
|
Total current assets |
955,210 |
549,115 |
|||||
|
Property and equipment (successful efforts method): |
|||||||
|
Proved oil and gas properties |
6,372,956 |
6,139,379 |
|||||
|
Accumulated depletion, depreciation, and amortization |
(3,041,653) |
(3,171,575) |
|||||
|
Unproved oil and gas properties |
1,917,883 |
2,047,203 |
|||||
|
Wells in progress |
361,238 |
321,347 |
|||||
|
Oil and gas properties held for sale, net |
5,040 |
111,700 |
|||||
|
Other property and equipment, net of accumulated depreciation of $53,483 and $49,985, respectively |
102,986 |
106,738 |
|||||
|
Total property and equipment, net |
5,718,450 |
5,554,792 |
|||||
|
Noncurrent assets: |
|||||||
|
Derivative assets |
31,151 |
40,362 |
|||||
|
Other noncurrent assets |
31,674 |
32,507 |
|||||
|
Total noncurrent assets |
62,825 |
72,869 |
|||||
|
Total assets |
$ |
6,736,485 |
$ |
6,176,776 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued expenses |
$ |
446,318 |
$ |
386,630 |
|||
|
Current portion of Senior Notes, net of unamortized deferred financing costs |
342,301 |
— |
|||||
|
Derivative liabilities |
259,338 |
172,582 |
|||||
|
Total current liabilities |
1,047,957 |
559,212 |
|||||
|
Noncurrent liabilities: |
|||||||
|
Revolving credit facility |
— |
— |
|||||
|
Noncurrent portion of Senior Notes, net of unamortized deferred financing costs |
2,429,994 |
2,769,663 |
|||||
|
Senior Convertible Notes, net of unamortized discount and deferred financing costs |
143,430 |
139,107 |
|||||
|
Asset retirement obligations |
87,279 |
103,026 |
|||||
|
Asset retirement obligations associated with oil and gas properties held for sale |
— |
11,369 |
|||||
|
Deferred income taxes |
177,709 |
79,989 |
|||||
|
Derivative liabilities |
67,583 |
71,402 |
|||||
|
Other noncurrent liabilities |
45,906 |
48,400 |
|||||
|
Total noncurrent liabilities |
2,951,901 |
3,222,956 |
|||||
|
Stockholders' equity: |
|||||||
|
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 111,846,998 and 111,687,016 shares, respectively |
1,118 |
1,117 |
|||||
|
Additional paid-in capital |
1,754,169 |
1,741,623 |
|||||
|
Retained earnings(1) |
997,641 |
665,657 |
|||||
|
Accumulated other comprehensive loss(1) |
(16,301) |
(13,789) |
|||||
|
Total stockholders' equity |
2,736,627 |
2,394,608 |
|||||
|
Total liabilities and stockholders' equity |
$ |
6,736,485 |
$ |
6,176,776 |
|||
|
(1) The Company reclassified $3.0 million of tax effects stranded in accumulated other comprehensive loss to retained earnings as of January 1, 2018 due to an accounting standards update. |
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
June 30, 2018 | |||||||||||||||
|
Condensed Consolidated Statements of Operations | |||||||||||||||
|
(in thousands, except per share data) |
For the Three Months |
For the Six Months | |||||||||||||
|
Ended June 30, |
Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
(as adjusted) |
(as adjusted) | ||||||||||||||
|
Operating revenues and other income: |
|||||||||||||||
|
Oil, gas, and NGL production revenue |
$ |
402,558 |
$ |
284,939 |
$ |
785,444 |
$ |
618,137 |
|||||||
|
Net gain (loss) on divestiture activity |
39,501 |
(167,133) |
424,870 |
(129,670) |
|||||||||||
|
Other operating revenues |
1,857 |
2,915 |
3,197 |
4,992 |
|||||||||||
|
Total operating revenues and other income |
443,916 |
120,721 |
1,213,511 |
493,459 |
|||||||||||
|
Operating expenses: |
|||||||||||||||
|
Oil, gas, and NGL production expense |
117,400 |
124,376 |
238,279 |
262,422 |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
151,765 |
153,232 |
282,238 |
291,044 |
|||||||||||
|
Exploration(1) |
14,056 |
12,983 |
27,783 |
24,800 |
|||||||||||
|
Abandonment and impairment of unproved properties |
11,935 |
157 |
17,560 |
157 |
|||||||||||
|
General and administrative(1) |
28,920 |
28,237 |
56,602 |
57,054 |
|||||||||||
|
Net derivative (gain) loss(2) |
63,749 |
(55,189) |
71,278 |
(169,963) |
|||||||||||
|
Other operating expenses, net |
(57) |
4,251 |
4,555 |
9,110 |
|||||||||||
|
Total operating expenses |
387,768 |
268,047 |
698,295 |
474,624 |
|||||||||||
|
Income (loss) from operations |
56,148 |
(147,326) |
515,216 |
18,835 |
|||||||||||
|
Interest expense |
(41,654) |
(44,595) |
(84,739) |
(91,548) |
|||||||||||
|
Loss on extinguishment of debt |
— |
— |
— |
(35) |
|||||||||||
|
Other non-operating income, net |
1,802 |
953 |
2,211 |
720 |
|||||||||||
|
Income (loss) before income taxes |
16,296 |
(190,968) |
432,688 |
(72,028) |
|||||||||||
|
Income tax (expense) benefit |
901 |
71,061 |
(98,090) |
26,555 |
|||||||||||
|
Net income (loss) |
$ |
17,197 |
$ |
(119,907) |
$ |
334,598 |
$ |
(45,473) |
|||||||
|
Basic weighted-average common shares outstanding |
111,701 |
111,277 |
111,698 |
111,274 |
|||||||||||
|
Diluted weighted-average common shares outstanding |
113,630 |
111,277 |
113,267 |
111,274 |
|||||||||||
|
Basic net income (loss) per common share |
$ |
0.15 |
$ |
(1.08) |
$ |
3.00 |
$ |
(0.41) |
|||||||
|
Diluted net income (loss) per common share |
$ |
0.15 |
$ |
(1.08) |
$ |
2.95 |
$ |
(0.41) |
|||||||
|
Dividends per common share |
$ |
— |
$ |
— |
$ |
0.05 |
$ |
0.05 |
|||||||
|
(1) Non-cash stock-based compensation included in: |
|||||||||||||||
|
Exploration expense |
$ |
1,189 |
$ |
995 |
$ |
2,505 |
$ |
2,403 |
|||||||
|
General and administrative expense |
4,075 |
3,363 |
8,171 |
7,410 |
|||||||||||
|
Total non-cash stock-based compensation |
$ |
5,264 |
$ |
4,358 |
$ |
10,676 |
$ |
9,813 |
|||||||
|
(2) The net derivative (gain) loss line item consists of the following: |
|||||||||||||||
|
Settlement (gain) loss |
$ |
36,665 |
$ |
(16,303) |
$ |
61,193 |
$ |
(16,310) |
|||||||
|
(Gain) loss on fair value changes |
27,084 |
(38,886) |
10,085 |
(153,653) |
|||||||||||
|
Total net derivative (gain) loss |
$ |
63,749 |
$ |
(55,189) |
$ |
71,278 |
$ |
(169,963) |
|||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
June 30, 2018 | |||||||||||||||
|
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
|
(in thousands) |
For the Three Months |
For the Six Months | |||||||||||||
|
Ended June 30, |
Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
(as adjusted) |
(as adjusted) | ||||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net income (loss) |
$ |
17,197 |
$ |
(119,907) |
$ |
334,598 |
$ |
(45,473) |
|||||||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||||||||||||||
|
Net (gain) loss on divestiture activity |
(39,501) |
167,133 |
(424,870) |
129,670 |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
151,765 |
153,232 |
282,238 |
291,044 |
|||||||||||
|
Abandonment and impairment of unproved properties |
11,935 |
157 |
17,560 |
157 |
|||||||||||
|
Stock-based compensation expense |
5,264 |
4,358 |
10,676 |
9,813 |
|||||||||||
|
Net derivative (gain) loss |
63,749 |
(55,189) |
71,278 |
(169,963) |
|||||||||||
|
Derivative settlement gain (loss) |
(36,665) |
16,303 |
(61,193) |
16,310 |
|||||||||||
|
Amortization of debt discount and deferred financing costs |
3,884 |
3,733 |
7,750 |
8,679 |
|||||||||||
|
Loss on extinguishment of debt |
— |
— |
— |
35 |
|||||||||||
|
Deferred income taxes |
(861) |
(64,015) |
97,505 |
(30,790) |
|||||||||||
|
Other, net |
225 |
1,088 |
(2,302) |
4,464 |
|||||||||||
|
Net change in working capital |
(5,609) |
256 |
(21,722) |
28,182 |
|||||||||||
|
Net cash provided by operating activities |
171,383 |
107,149 |
311,518 |
242,128 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Net proceeds from the sale of oil and gas properties |
251,435 |
21,914 |
742,215 |
766,247 |
|||||||||||
|
Capital expenditures |
(421,798) |
(212,342) |
(723,319) |
(366,743) |
|||||||||||
|
Acquisition of proved and unproved oil and gas properties |
(24,615) |
(13,035) |
(24,615) |
(88,140) |
|||||||||||
|
Net cash provided by (used in) investing activities |
(194,978) |
(203,463) |
(5,719) |
311,364 |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Proceeds from credit facility |
— |
8,500 |
— |
406,000 |
|||||||||||
|
Repayment of credit facility |
— |
(8,500) |
— |
(406,000) |
|||||||||||
|
Cash paid to repurchase Senior Notes |
— |
— |
— |
(2,344) |
|||||||||||
|
Cash paid for extinguishment of debt |
— |
— |
— |
(13) |
|||||||||||
|
Net proceeds from sale of common stock |
1,881 |
1,738 |
1,881 |
1,738 |
|||||||||||
|
Dividends paid |
(5,584) |
(5,563) |
(5,584) |
(5,563) |
|||||||||||
|
Other, net |
(133) |
(1) |
(133) |
(161) |
|||||||||||
|
Net cash used in financing activities |
(3,836) |
(3,826) |
(3,836) |
(6,343) |
|||||||||||
|
Net change in cash, cash equivalents, and restricted cash |
(27,431) |
(100,140) |
301,963 |
547,149 |
|||||||||||
|
Cash, cash equivalents, and restricted cash at beginning of period |
643,337 |
659,661 |
313,943 |
12,372 |
|||||||||||
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
615,906 |
$ |
559,521 |
$ |
615,906 |
$ |
559,521 |
|||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
June 30, 2018 | |||||||||||||||
|
Adjusted EBITDAX (Non-GAAP)(1) | |||||||||||||||
|
(in thousands) | |||||||||||||||
|
Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to adjusted EBITDAX (Non-GAAP) |
For the Three Months |
For the Six Months Ended | |||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
Net income (loss) (GAAP) |
$ |
17,197 |
$ |
(119,907) |
$ |
334,598 |
$ |
(45,473) |
|||||||
|
Interest expense |
41,654 |
44,595 |
84,739 |
91,548 |
|||||||||||
|
Interest income(2) |
(2,414) |
(1,265) |
(3,263) |
(1,600) |
|||||||||||
|
Income tax expense (benefit) |
(901) |
(71,061) |
98,090 |
(26,555) |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
151,765 |
153,232 |
282,238 |
291,044 |
|||||||||||
|
Exploration(3)(4) |
12,867 |
11,988 |
25,278 |
22,397 |
|||||||||||
|
Abandonment and impairment of unproved properties |
11,935 |
157 |
17,560 |
157 |
|||||||||||
|
Stock-based compensation expense |
5,264 |
4,358 |
10,676 |
9,813 |
|||||||||||
|
Net derivative (gain) loss |
63,749 |
(55,189) |
71,278 |
(169,963) |
|||||||||||
|
Derivative settlement gain (loss) |
(36,665) |
16,303 |
(61,193) |
16,310 |
|||||||||||
|
Net (gain) loss on divestiture activity |
(39,501) |
167,133 |
(424,870) |
129,670 |
|||||||||||
|
Loss on extinguishment of debt |
— |
— |
— |
35 |
|||||||||||
|
Other, net |
2 |
3,655 |
9 |
8,641 |
|||||||||||
|
Adjusted EBITDAX (Non-GAAP)(4) |
224,952 |
153,999 |
435,140 |
326,024 |
|||||||||||
|
Interest expense |
(41,654) |
(44,595) |
(84,739) |
(91,548) |
|||||||||||
|
Interest income(2) |
2,414 |
1,265 |
3,263 |
1,600 |
|||||||||||
|
Income tax (expense) benefit |
901 |
71,061 |
(98,090) |
26,555 |
|||||||||||
|
Exploration(3)(4) |
(12,867) |
(11,988) |
(25,278) |
(22,397) |
|||||||||||
|
Amortization of debt discount and deferred financing costs |
3,884 |
3,733 |
7,750 |
8,679 |
|||||||||||
|
Deferred income taxes |
(861) |
(64,015) |
97,505 |
(30,790) |
|||||||||||
|
Other, net (4) |
223 |
(2,567) |
(2,311) |
(4,177) |
|||||||||||
|
Net change in working capital |
(5,609) |
256 |
(21,722) |
28,182 |
|||||||||||
|
Net cash provided by operating activities (GAAP)(4) |
$ |
171,383 |
$ |
107,149 |
$ |
311,518 |
$ |
242,128 |
|||||||
|
(1) Adjusted EBITDAX represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we failed to comply with the covenants that establish a maximum permitted ratio of senior secured debt to adjusted EBITDAX and a minimum permitted ratio of adjusted EBITDAX to interest, we would be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we are in default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under the indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. | |||||||||||||||
|
(2) Interest income is included within the other non-operating income, net line item on the Company's condensed consolidated statements of operations. | |||||||||||||||
|
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's accompanying condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||||||||||
|
(4) Certain prior period amounts have been adjusted to conform to the current period presentation on the condensed consolidated financial statements due to accounting standards updates. |
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
June 30, 2018 | |||||||||||||||
|
Adjusted Net Income (Loss) (Non-GAAP) | |||||||||||||||
|
(in thousands, except per share data) | |||||||||||||||
|
For the Three Months |
For the Six Months | ||||||||||||||
|
Ended June 30, |
Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
Net income (loss) (GAAP) |
$ |
17,197 |
$ |
(119,907) |
$ |
334,598 |
$ |
(45,473) |
|||||||
|
Net derivative (gain) loss |
63,749 |
(55,189) |
71,278 |
(169,963) |
|||||||||||
|
Derivative settlement gain (loss) |
(36,665) |
16,303 |
(61,193) |
16,310 |
|||||||||||
|
Net (gain) loss on divestiture activity |
(39,501) |
167,133 |
(424,870) |
129,670 |
|||||||||||
|
Abandonment and impairment of unproved properties |
11,935 |
157 |
17,560 |
157 |
|||||||||||
|
Loss on extinguishment of debt |
— |
— |
— |
35 |
|||||||||||
|
Other, net(1) |
2 |
3,655 |
809 |
8,641 |
|||||||||||
|
Tax effect of adjustments(2) |
104 |
(47,673) |
86,022 |
5,469 |
|||||||||||
|
Adjusted net income (loss) (Non-GAAP)(3) |
$ |
16,821 |
$ |
(35,521) |
$ |
24,204 |
$ |
(55,154) |
|||||||
|
Diluted net income (loss) per common share (GAAP) |
$ |
0.15 |
$ |
(1.08) |
$ |
2.95 |
$ |
(0.41) |
|||||||
|
Net derivative (gain) loss |
0.56 |
(0.50) |
0.63 |
(1.53) |
|||||||||||
|
Derivative settlement gain (loss) |
(0.32) |
0.15 |
(0.54) |
0.15 |
|||||||||||
|
Net (gain) loss on divestiture activity |
(0.35) |
1.50 |
(3.75) |
1.17 |
|||||||||||
|
Abandonment and impairment of unproved properties |
0.11 |
— |
0.16 |
— |
|||||||||||
|
Loss on extinguishment of debt |
— |
— |
— |
— |
|||||||||||
|
Other, net(1) |
— |
0.03 |
0.01 |
0.07 |
|||||||||||
|
Tax effect of adjustments(2) |
— |
(0.42) |
0.75 |
0.05 |
|||||||||||
|
Adjusted net income (loss) per diluted common share (Non-GAAP)(4) |
$ |
0.15 |
$ |
(0.32) |
$ |
0.21 |
$ |
(0.50) |
|||||||
|
Basic weighted-average common shares outstanding (GAAP) |
111,701 |
111,277 |
111,698 |
111,274 |
|||||||||||
|
Diluted weighted-average common shares outstanding (GAAP) |
113,630 |
111,277 |
113,267 |
111,274 |
|||||||||||
|
Note: Amounts may not calculate due to rounding. | |||||||||||||||
|
(1) For the three-month and six-month periods ended June 30, 2018, the adjustment is related to bad debt expense. Additionally, for the six-month period ended June 30, 2018, an accrual for a non-recurring matter is included. For the three-month and six-month periods ended June 30, 2017, the adjustment is related to the change in Net Profits Plan liability and impairment of proved properties. Additionally, for the six-month period ended June 30, 2017, an adjustment related to materials inventory loss is included. These items are included in other operating expenses on the Company's condensed consolidated statements of operations. | |||||||||||||||
|
(2) The tax effect of adjustments is calculated using a tax rate of 21.7% for the three-month and six-month periods ended June 30, 2018, and a tax rate of 36.1% for the three-month and six-month periods ended June 30, 2017. Note that the rate used for the three-month period ended March 31, 2018 was 21.9%. These rates approximate the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||||||||||
|
(3) Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, materials inventory loss, and gains or losses on extinguishment of debt. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. | |||||||||||||||
|
(4) For periods where the Company reports adjusted net loss, basic weighted-average common shares outstanding are used in the calculation of adjusted net loss per diluted common share. |
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-second-quarter-2018-results-300690483.html
SOURCE SM Energy Company
Article Date
8/1/201890 Public and Private Oil and Gas Company Leaders and Experts to Speak at the 23rd Annual EnerCom - The Oil & Gas Conference®
Source: PR Newswire
DENVER, Aug. 1, 2018 /PRNewswire/ -- Regardless of whether your area of interest in the U.S. energy sector is the shale plays and companies drilling the U.S. basins, offshore drilling in the Gulf of Mexico, oil pipelines, LNG exports, Texas-sourced frac sand, oilfield services or new oilfield technologies, the 23rd annual EnerCom conference will deliver the best of the industry to the Denver Downtown Westin Hotel Denver Aug. 19-22, 2018.
The combined market value of the presenting public companies is more than $220 billion and the publicly-traded energy companies represent a combined enterprise value of more than $275 billion—55% higher than last year.
Several privately held E&Ps and related energy service companies will be at the conference in force as well this year, participating in a variety of panels at the conference. Conference attendees have a rare opportunity to hear from several large private operators who—unlike their publicly traded counterparts—often say nothing in public about their operations.
Among the private oil companies participating in the conference is Anschutz Exploration, a large operator with assets in the Powder River and Washakie Basins of Wyoming, the Piceance and DJ Basins of Colorado and the Unita Basin of Utah. Other private drillers include Permian producer Felix Energy, DJ Basin producer Great Western Oil & Gas, conventional Piceance gas producer Caerus Oil and Gas, and Powder River and Green River Basin operator Samson Resources II.
Who Attends the Conference: More than 2,000 institutional, private equity and hedge fund investors, energy research analysts, retail brokers, trust officers, high net worth investors, investment bankers and energy industry professionals gather in Denver for the conference.
One-on-One Meetings: EnerCom works in advance with presenting company management teams to arrange one-on-one meetings with the attending institutional investors and research analysts at the conference venue. In 2017, EnerCom managed more than 2,100 one-on-one meeting requests. Buyside investors may request meetings on the conference website or contact EnerCom for more information at 303-296-8834.
How to Register: Investment professionals and oil and gas companies can register for the event through the conference website.
2018 Presenting Companies: The Oil & Gas Conference® 2018 presenting companies consist of the following:
Looking at basin and sector, the 2018 EnerCom conference presenting companies and companies participating in panels break out as follows (list is subject to change prior to the conference– please refer to The Oil & Gas Conference website for an updated schedule of presenting companies):
Exploration & Production and Other Energy Companies by Focus Area and Sector
Bakken/Three Forks
Eagle Ford
Permian Basin
Woodford & Other Mid-Continent – SCOOP/STACK
Marcellus/Utica
Niobrara
Gulf of Mexico/Offshore
Haynesville
Pinedale – Jonah Field – Uinta Basin
Enhanced Oil Recovery
Canadian E&Ps
International E&Ps
LNG Export Projects
Oilfield Service Companies
Midstream
Mineral, Royalty, Infrastructure Holders, Acquisition Companies
Private Companies – E&Ps, Midstream, Energy Data and Technology, Energy Capital, Government Energy Agencies
A work-in-progress schedule of the 2018 presenting companies is posted on the conference website and is regularly updated.
Sponsors of The Oil & Gas Conference®
EnerCom History and Sponsors: EnerCom, Inc. founded The Oil & Gas Conference® in 1996. It is the oldest and largest independent energy investment conference in Denver.
Global sponsors of EnerCom's conferences are Netherland, Sewell & Associates; RS Energy Group; Moss Adams; and Preng & Associates.
Sponsors of The Oil & Gas Conference® 23 are Bank of America Merrill Lynch; AssuredPartners; DNB Bank ASA; Fifth Third Bank; CIBC; Haynes and Boone; Credit Agricole CIB; Natixis; PJ SOLOMON; PNC Financial Services Group; Wells Fargo; MUFG; SMBC; Opportune LLP; Petrie Partners; EnergyNet; McGriff, Seibels & Williams, Inc.; Energy Intelligence; and TGS.
About EnerCom, Inc.
Since 1994 EnerCom, Inc. has developed into a nationally recognized oil and gas-focused investor relations consultancy advising oil and gas industry clients on corporate strategy, asset valuations, investor communications, media relations and providing visual communications design.
EnerCom offers services and produces and publishes numerous data products and external communications tools for public and private energy companies including:
EnerCom's professionals have more than 170 years of industry and business experience and a proven track record of success.
Headquartered in Denver, with senior consultants in Dallas and Houston, EnerCom uses the team approach for delivering its wide range of services to public and private companies, large and small, operating in the global exploration and production, OilService, capital markets, and associated advanced-technology industries.
EnerCom's upcoming oil and gas investment conferences include:
EnerCom Denver (The Oil & Gas Conference®) – August 19-22, 2018
EnerCom Dallas – Feb. 27-28, 2019
For more information about EnerCom and its services, please visit http://www.enercominc.com/ or call +1 303-296-8834 to speak with the management team or one of our consultants.
About Netherland, Sewell & Associates, Inc.
Netherland, Sewell & Associates, Inc. (NSAI) was founded in 1961 to provide the highest quality engineering and geological consulting to the petroleum industry. Today they are recognized as the worldwide leader of petroleum property analysis to industry and financial organizations and government agencies. With offices in Dallas and Houston, NSAI provides a complete range of geological, geophysical, petrophysical, and engineering services and has the technical experience and ability to perform these services in any of the onshore and offshore oil and gas producing areas of the world. They provide reserves reports and audits, acquisition and divestiture evaluations, simulation studies, exploration resources assessments, equity determinations, and management and advisory services. For a complete list of services or to learn more about Netherland, Sewell & Associates, Inc. please visit www.netherlandsewell.com.
For more information about NSAI, call C.H. (Scott) Rees, Chief Executive Officer, at 214-969-5401 or send an email to info@nsai-petro.com.
About RS Energy Group
RS Energy Group (RSEG) provides data-driven intelligence: evaluate assets, weigh valuable M&A opportunities and benchmark your business for more precise decision-making.
RSEG officially released its data solution in April 2017. RS Data™ provides clients with corrected, multi-sourced permit, completion and production data of unparalleled completeness and quality.
Today, RSEG's intelligence covers more than 150 companies operating in every key North American and many international energy plays with a powerful combination of practical insights at the asset level and a long-standing participation in capital markets. RSEG's independent, unbiased and accurate analysis forms a foundation of trust with its clients. Its collaborative approach, both internally and as an extension of its clients' research efforts, promotes innovation and fosters intimate, long term partnerships.
RS Energy Group (RSEG) is headquartered in Calgary, Alberta, with strategic locations in Houston, New York City, Philadelphia, San Francisco and Los Angeles. Contact RS Energy Group by phone at (403) 294-9111, or email info@rseg.com.
About Moss Adams LLP
For more than 30 years, Hein & Associates has been recognized throughout the industry as a leading oil and gas accounting and advisory firm. In late 2017, Hein combined with Moss Adams LLP, one of the largest accounting, consulting and wealth management firms in the nation, creating a $600 million middle-market accounting/tax/audit leader in the western U.S. with a strong oil & gas practice group.
With more than 2,900 professionals and staff across more than 25 locations in the West and beyond, Moss Adams works with many of the world's most innovative companies and leaders. Our strength in the middle market enables us to advise clients at all intervals of development—from start-up, to rapid growth and expansion, to transition. Today, we help over 2,300 companies doing business in more than 100 countries and territories.
For more information, please contact Joe Blice, Partner, National Practice Leader, Oil & Gas, CPA joe.blice@mossadams.com, (972) 687-7818.
Moss Adams LLP provides details at https://www.mossadams.com/home .
About Preng & Associates
Preng & Associates, founded in 1980, is the only retainer-based, international executive search firm specializing solely in the energy industry. Its number one priority is to assist clients with their executive selection, organization development, and human resource needs by providing the highest quality service. Preng's record of accomplishment is directly attributable to their experienced staff, worldwide network of industry contacts, proven search methodology, and high standards of professionalism. Preng has conducted over 3000 searches for board, executive, management, and professional positions in its 35-year history and has the highest success and repeat client track record.
Preng's practice is based on the premise that the search process is most effective when conducted by professionals with significant search industry experience. The company has earned a reputation for combining professional search disciplines with an in-depth industry and market understanding and has succeeded in some of the industry's most challenging and high-profile searches. Preng's international reach allows it to effectively conduct global engagements; and as a member of the Association of Executive Search Consultants, Preng practices and promotes its high standards of conduct and professionalism.
For more information about Preng & Associates, contact Charles Carpenter, Partner at 713-243-2610 or ccarpenter@preng.com.
About Bank of America Merrill Lynch
Bank of America Merrill Lynch Oil and Gas Group
The Bank of America Merrill Lynch (BofAML) Oil and Gas practice is comprised of a global team of bankers dedicated to covering the energy industry, dating back to the 1920s when Texas predecessor banks pioneered reserve-based lending. The practice includes an experienced in-house Petroleum Engineering team with over 150 years of combined experience. With one of the only full-service financial energy platforms in the industry, the BofAML oil and gas team manages significant capital commitments in the energy sector with dedicated bankers based in Calgary, Denver, Dallas, Houston, London and New York.
The BofA Merrill Lynch Global Research platform offers clients access to information and actionable ideas on stocks, bonds, economics and investment strategies. With approximately 700 analysts in more than 20 countries, we offer our clients knowledge about economic and business developments that are having an impact on the markets, so that they can work with their financial advisors to make the most of opportunities. BofA Merrill Lynch Global Research was ranked No. 1 for the fourth consecutive year on the 2014 list of Top Global Research Firms, Institutional Investor.
About AssuredPartners
AssuredPartners Colorado (AP CO) combines 30+ years of experience with leading-edge products to provide exceptional service and value to our customers. We provide a full range of brokerage services including employee benefits, property and casualty, and retirement. Headquartered in Colorado, we think globally but act locally, with personal services designed specifically for each individual client. AP CO utilizes resources with national networks of brokers to ensure we can meet your every need and find answers to your questions quickly and efficiently.
Our goal is to achieve a long-term relationship focused on bringing value to your employee benefits management and insurance programs. We are committed to utilizing our collective talent to support your insurance goals. We work to identify activities that drive claim frequency, and implement an action plan to control health care costs and promote a healthy work environment for your employees.
Securing the best insurance package for your business begins with planning. Analyzing all your risks is critical to successful implementation of your insurance plan. AP CO will partner with you by providing ongoing assistance, consultation and service that will help you control your insurance expenses, choose the best plan to fit your company's needs and promote health care consumerism.
For more information on Assured Partners, please visit the website, call (800) 322-9773 or email info@assuredptrco.com.
About DNB ASA
DNB is Norway's largest financial services provider, with total assets approaching $400 billion. The bank has for years been a major provider of capital to the oil & gas industry, growing up literally side by side with the highly prolific fields developed in the Norwegian Sector of the North Sea. The Oslo Energy Office maintains a global financing strategy, and serves this market through multiple offices around the world including Houston, London and Singapore.
Energy Americas, based in Houston, comprises approximately 20 seasoned energy finance professionals. Aside from facilitating the bank's global business strategies, the office concentrates primarily on serving middle market and larger customers in the four principal oil & gas sectors — upstream, midstream, downstream and service — as well as in Power and Renewables. The bank offers a variety of financial products, from traditional oil & gas reserve financing, to longer-term capital markets transactions and merger/acquisition advisory services through its broker-dealer arm, DNB Markets, Inc. Ancillary service capabilities include cash management/depository services, as well as commodity and interest rate hedging.
For information on DNB's energy services, please visit the DNB energy website.
About Fifth Third Bancorp
Fifth Third Bank is a diversified financial services company with over $120 billion in assets. The Bank's energy group is comprised of experienced and knowledgeable individuals that can assist in providing and structuring financial solutions to meet their clients' needs across the upstream, midstream, downstream and services sectors. Solutions and capabilities include commodity hedging, interest rate management, foreign exchange, debt capital markets, treasury management, and depository/investment products.
For more information, please contact Richard Butler at 713-401-6101 or richard.butler@53.com.
About CIBC
CIBC is a leading North American bank headquartered in Canada and with offices around the world. CIBC was originally founded nearly 150 years ago, and has supported and financed the energy industry for many decades. CIBC was recently ranked as the strongest publicly traded bank in North America by Bloomberg, and is rated A+/Aa3 by S&P and Moody's, respectively.
Our energy specialists draw on the breadth of CIBC's capabilities to provide market insights and creative solutions for our clients. Services include corporate banking, commodity and interest rate hedging and strategy, A&D advisory, and capital markets.
CIBC is publicly traded on the NYSE and Toronto Stock Exchange under the symbol "CM" and has a market cap of $36 billion and nearly $400 billion in total assets. For more information, please visit the CIBC energy website.
About Haynes and Boone
Haynes and Boone, LLP is an energy-focused corporate law firm, providing a full spectrum of legal services to our clients across the oil and gas industry, including the upstream, midstream, and downstream sectors. We serve energy clients from our offices in Texas, Colorado, New York, California, Washington, D.C., London, Mexico City and Shanghai. We work as a team representing U.S. and foreign public and private companies engaged in the dynamic day-to-day work of finding and extracting oil and gas, and the banks, investment funds and other investors that support them.
Our team of more than 100 energy lawyers and landmen understands the U.S. and international physical and financial energy markets, and the firm has been helping operators and lenders complete some of the largest financings and M&A transactions in recent years. With more than 600 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal, and our energy lawyers have been ranked by publications such as Best Lawyers in America, Chambers and Partners and Who's Who in Energy.
For more info, please visit www.haynesboone.com.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group, the world's eighth largest bank by total assets (The Banker, July 2014). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking, and international private banking.
The Bank provides support to clients in large international markets through its network, with a presence in major countries in Europe, the Americas, Asia and the Middle East.
With headquarters in New York City, and U.S. offices in Houston and Chicago, Credit Agricole CIB Americas offers its corporate and institutional clients financial products and services and made-to-order structuring, origination and distribution, through both its banking unit Credit Agricole CIB, and the full-service broker-dealer Credit Agricole Securities (USA) Inc., which is a member of the NYSE and NASD. Credit Agricole CIB is also present in Montreal, Canada, and in Latin America with offices in Argentina, Brazil, and Mexico.
The Energy Industry represents the single largest concentration of industry exposure at Credit Agricole Corporate and Investment Bank, whose specialty focus dates back over 100 years. Our Energy practice for North America, located in Houston, focuses on all segments of the business and covers it on a truly global basis.
For more information, visit www.ca-cib.com.
About Natixis
Natixis is the international corporate and investment banking, asset management, insurance and financial services arm of Groupe BPCE, the second-largest banking group in France.
Natixis Corporate & Investment Banking advises and assists corporations, financial institutions, institutional investors, financial sponsors, public-sector organizations and the networks of Groupe BPCE.
We furnish a diversified array of financing solutions, provide access to capital markets and transaction banking services.
Areas of expertise include Advisory: M&A, primary equity, capital & rating advisory; Financing: vanilla and structured; Capital Markets: equities, fixed income, credit, forex and commodities; Global Transaction Banking: trade finance, cash management, liquidity management and correspondent banking; Research: economic, credit, equity and quantitative.
The Bank leverages the expertise and highly technical skills of its teams, and provides industry-recognized research to build innovative and mix-and-matchable solutions. Corporate and Investment Banking is present on the main financial markets via three international platforms: Americas, Asia-Pacific, and EMEA (Europe, Middle East, Africa).
About PJ SOLOMON
PJ SOLOMON is an investment banking advisory firm that provides strategic advisory services to chief executive officers and senior management, owners of public and private companies, boards of directors, and special committees.
Our full suite of advisory services includes Mergers and Acquisitions, Restructuring and Capital Markets across a range of industry verticals.
The PJ SOLOMON Energy Advisory Group provides strategic investment banking advisory services to public and private clients across the energy chain. Drawing upon our extensive sector relationships and deep strategic and operational expertise, we can offer a unique and valued advisory platform for the upstream, upstream A&D, midstream and the utility sectors.
Based in our Houston office, the PJ SOLOMON Energy team holds more than 100 years of experience on a broad range of domestic and cross-border transactions including mergers and acquisitions, A&D, restructurings, bankruptcies, and public and private capital raisings.
Industry sectors/sub-sectors include: Upstream, Upstream A&D, Midstream, Energy related and Utilities.
About PNC Financial Services Group
PNC is one of the largest, best-regarded and best-capitalized financial services companies in the country, with approximately $325 billion in assets and offices in 33 states, Canada and the United Kingdom.
PNC's Energy Group, headed by Tom Byargeon, is a significant capital and service provider to energy companies, with approximately $6.5 billion in commitments to the industry. The Energy office in Houston houses a team with extensive experience and deep relationships across the entire energy supply chain. This group also offers strategic corporate finance advice and delivers PNC's comprehensive set of solutions and capabilities, including commodity and interest rate hedging, debt capital markets, loan syndications, treasury management, asset securitization, equipment finance and institutional investments.
For more information, please contact Tom Byargeon at 713-353-8782 or tom.byargeon@pnc.com. You can also visit www.pnc.com.
About MUFG
Mitsubishi UFJ Financial Group (MUFG) has been a leading provider of banking services to the oil and gas industry in the Americas for more than 30 years, consistently ranking in the Top 10 Lead Arrangers and Top 10 Bond Arrangers in the Thomson Reuters Oil and Gas League Tables.
We support clients across the industry—from regional exploration and production to global diversified services companies—that benefit from our focused approach, strong execution, and customized services. Whether you are looking to expand existing reserves, make an acquisition, or streamline operations, we can support your growth with services, including: underwriting and syndications; U.S./Canadian cross-border funding; securities underwriting and placements; leasing and tax equity financing; and commodities, interest rate, and foreign exchange risk management.
For more information, visit: www.mufgamericas.com/oil-gas.
About Wells Fargo & Company
Wells Fargo & Company is a nationwide, diversified, community-based financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.
The Energy Banking Group, headed by Bart Schouest, provides corporate banking products and services to the energy sector, including upstream, midstream, oilfield services, and diversified industries. With offices in Houston, Dallas, Denver, Calgary, and Aberdeen the group's success is driven by in-depth industry expertise and longstanding relationships with key industry participants. The group has over $45 billion of credit commitments to public and private companies across the upstream, midstream, downstream, services, and power and utilities sectors.
The Energy & Power Investment Banking Group, headed by James Kipp, provides strategic advisory and corporate finance expertise to energy and power clients, including upstream, midstream, oilfield services, downstream, coal and the power & utilities sectors. Areas of focus include equity, equity-linked and debt underwritings, private placements, syndications, and mergers and acquisitions. The Energy & Power Investment Banking Group has offices in Houston and Charlotte.
These teams work together to offer clients industry and product expertise, in addition to sharing their understanding of internal and external forces that drive both industry trends and financial markets. For additional information, contact us at 713-319-1350 or Energy@wellsfargo.com.
To learn more about Wells Fargo & Company, please visit the company's web site at www.wellsfargo.com.
About SMBC
Sumitomo Mitsui Banking Corporation (SMBC) is a core member of Sumitomo Mitsui Financial Group (SMFG), a Tokyo-based bank holding company that is ranked among the largest 25 banks globally by assets under management.
SMBC Americas Division, with more than 2,500 employees, oversees operations in the U.S., Canada, Mexico, and South America. We work across SMFG to offer corporate and institutional clients sophisticated and comprehensive financial services around the globe.
SMBC's roots in Japan trace back more than 400 years to 1590. The Americas Division of SMBC has more than a century of experience in the United States, beginning when the San Francisco branch of Sumitomo Bank was established in 1919. Sumitomo Mitsui Financial Group (NYSE: SMFG) was listed on the New York Stock Exchange in 2010.
For more information please visit the corporate website: www.smbcgroup.com/americas/group-companies/
About Opportune LLP
Founded in 2005, Opportune is a leading global energy consulting firm specializing in adding value to clients across the energy industry, including upstream, midstream, downstream, power and gas, commodities trading and oilfield services.
Since we are not an audit firm, we are advocates of our clients and are not subject to the restrictions placed on other firms by regulatory bodies. Using our extensive knowledge of all sectors of the energy industry, we work with clients to provide comprehensive solutions to their operational and financial challenges.
Our practice areas include complex financial reporting, dispute resolution, enterprise risk, outsourcing, process and technology, reserve engineering and geosciences, restructuring, strategy and organization, tax, transactional due diligence and valuation. Opportune LLP is not a CPA firm.
Opportune's corporate headquarters are in Houston, Texas. The firm also has offices in Dallas, Denver, New York City, Tulsa, and the UK. For more information please call Ashley Hunt, Marketing Coordinator,
713.490.5050 and visit the web site https://opportune.com/.
About Petrie Partners, LLC
Petrie Partners, LLC is a boutique investment banking firm offering financial advisory services to the oil and gas industry. We provide specialized advice on mergers, divestitures and acquisitions and private placements.
The firm was formed in 2011 (as Strategic Energy Advisors) by senior bankers formerly with Bank of America Merrill Lynch and Petrie Parkman & Co., an investment bank that built a reputation as a most trusted advisor to energy clients during the nearly two decades leading up to its merger into Merrill Lynch in 2006.
Through tenure with Petrie Parkman, Merrill Lynch and Bank of America Merrill Lynch, the senior members of the Petrie team bring to bear an average of more than 25 years of energy investment banking experience, including over 300 energy M&A and capital raising transactions representing over $350 billion of aggregate consideration.
For information about the firm, please visit www.petrie.com or call the firm's Denver office (303.953.6768) or the Houston office (713.659.0760).
About EnergyNet
EnergyNet is the only continuous oil and gas auction and sealed bid transaction service that facilitates the sale of producing working interests (operated and non-operated), overrides, royalties, mineral interests, and non-producing leasehold. EnergyNet is a continuous oil and gas property marketplace with due diligence and bidding available 24/7/365, where auctions and sealed bid packages close weekly. Most of the properties EnergyNet sells are located in the lower 48 United States and typically range in value from $1,000 to $100,000,000.
Details about how to buy and sell oil and gas properties using the EnergyNet online auction service are available on the website at https://www.energynet.com/.
About McGriff, Seibels & Williams, Inc.
McGriff, Seibels & Williams is one of the most progressive insurance brokerage firms in the United States, leading the way with innovative programs to protect clients' financial interests. Services include construction risk, energy and marine, surety, employee benefits and financial services. McGriff's Energy & Marine Division offers specialty services for clients with worldwide operations and potentially catastrophic exposures. Our expertise in this niche industry has made us one of the largest independent energy brokers in the U.S. and one of the top five energy brokers worldwide.
Our client base includes more than 50 electric/gas utility and merchant energy companies, several coal mining companies, and more than 70 E&P companies. It also includes the Strategic Petroleum Reserve and numerous oilfield service companies, including vessel operators, offshore drilling companies, and international marine construction companies.
We will structure and implement a domestic or foreign program for virtually any type of energy-related risk. We have more than 125 professionals in our energy division. Using alternative risk transfer and traditional insurance solutions, we determine the appropriate combination of coverage and risk assumption.
Please contact the company through the website or by calling 800 476 - 2211.
About Energy Intelligence
Energy Intelligence has been a leading independent provider of objective insight, unbiased analysis and reliable data for over 60 years. With offices in New York, London, Houston, Dubai, Moscow, Washington, Singapore and Brussels, we provide decision-makers with critically important information on issues and events affecting the global energy complex.
Our benchmark Information Services, Petroleum Intelligence Weekly, Oil Daily, Natural Gas Week, World Gas Intelligence and Energy Compass, are produced by highly experienced journalists, and our research reports and advisory services are provided by highly regarded analysts and economists.
Information on Energy Intelligence is available at the company website: https://www.energyintel.com/pages/non-subscriber.aspx
About TGS
TGS was founded in Houston in 1981 and over time built the dominant 2D multi-client data library in the Gulf of Mexico. The company expanded further into North America and West Africa and added a substantial 3D portfolio in the Gulf of Mexico.
Also in 1981, NOPEC was founded in Oslo and began building an industry-leading multi-client 2D database in the North Sea, with additional operations in Australia and the Far East. In 1997, NOPEC went public on the Oslo Stock Exchange. In 1998, the companies merged to form TGS-NOPEC Geophysical Company (TGS), creating a winning combination for investors, customers and employees. Since then, TGS has set the standard for geoscientific data around the world.
Additional information is available at the company website: http://www.tgs.com/about-tgs/company-history/ .
View original content:http://www.prnewswire.com/news-releases/90-public-and-private-oil-and-gas-company-leaders-and-experts-to-speak-at-the-23rd-annual-enercom---the-oil--gas-conference-300689920.html
SOURCE EnerCom, Inc.
Article Date
8/1/20187/19/2018 - SM Energy Announces Second Quarter Preview: Strong Production And Realized Prices Drive High Margin Growth
SM Energy Announces Second Quarter Preview: Strong Production And Realized Prices Drive High Margin Growth
Source: PR Newswire
DENVER, July 19, 2018 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced certain operating results for the second quarter of 2018 including production, realized pricing and total capital spend. Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "Production for the quarter exceeded our expectations and commenced a steep upward trajectory for production growth following our recent asset divestitures. Liquids volumes were 60% of total production and operating margins were particularly strong. We expect that our high investment returns, driven by outstanding well results and execution, will allow us to deliver significant cash flow growth per debt-adjusted share going forward."
|
SECOND QUARTER OF 2018 PRODUCTION AND REALIZED PRICES | |||||||
|
PRODUCTION: |
|||||||
|
Permian |
Eagle Ford |
Rocky |
Total |
Production from |
Production | ||
|
Oil - MBbl |
3,731 |
332 |
298 |
4,361 |
(321) |
4,040 | |
|
Natural gas - MMcf |
6,201 |
18,807 |
316 |
25,323 |
(370) |
24,953 | |
|
NGLs - MBbl |
5 |
1,894 |
1 |
1,900 |
(1) |
1,899 | |
|
Total - MBoe |
4,770 |
5,360 |
352 |
10,482 |
(384) |
10,098 | |
Note: Totals may not sum due to rounding
|
REALIZED PRICES: | ||||
|
Permian |
Eagle Ford |
Rocky |
Totals | |
|
Oil/$Bbl |
61.01 |
58.20 |
64.29 |
61.02/55.42 |
|
Natural gas/$Mcf |
5.12 |
2.78 |
0.30 |
3.32/3.29 |
|
NGLs/$Bbl |
nm |
27.59 |
nm |
27.55/21.51 |
|
Per Boe |
$54.41 |
$23.10 |
$54.61 |
$38.40/$34.91 |
COSTS INCURRED AND TOTAL CAPITAL SPEND
Costs incurred for the second quarter of 2018 were $460 million. Costs incurred included the acquisition of 720 contiguous net acres of unproved properties adjacent to our RockStar acreage in Martin County, Texas for $24.6 million.
Total capital spend (a non-GAAP measure defined as costs incurred less ARO, capitalized interest and acquisitions, reconciled below) for the quarter was $429 million. During the second quarter, the Company drilled 28 net wells and completed 38 net wells in the Permian and drilled 6 net wells and completed 9 net wells in the Eagle Ford. Total capital spend was aligned with recent guidance of $400-$440 million, reflecting the acceleration of the Company's drilling and completion expenditures due to a faster than expected pace.
|
TOTAL CAPITAL SPEND RECONCILIATION: | ||||||||
|
($ in millions) | ||||||||
|
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (Non-GAAP)(1) |
For the Three Months Ended |
For the Six Months Ended |
||||||
|
2018 |
2018 |
|||||||
|
Costs incurred in oil and gas activities (GAAP): |
$ |
460.2 |
$ |
832.4 |
||||
|
Less: |
||||||||
|
Asset retirement obligation |
(1.0) |
(1.9) |
||||||
|
Capitalized interest |
(6.0) |
(10.5) |
||||||
|
Unproved property acquisitions |
(24.6) |
(24.6) |
||||||
|
Other |
0.4 |
0.4 |
||||||
|
Total capital spend (Non-GAAP): |
$ |
429.1 |
$ |
795.8 |
||||
|
Note: Totals may not sum due to rounding | ||||||||
|
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. |
CASH AND LIQUIDITY
As of June 30, 2018, the Company's cash balance was $616 million and, when combined with the Company's undrawn credit facility, provided $1.6 billion in liquidity.
Subsequent to quarter-end, the Company completed the redemption of $344.6 million of 6.5% senior notes due 2021. The current principal value of senior notes outstanding (including the convertible notes) is $2.63 billion, down from $2.97 billion at quarter-end.
SCHEDULE FOR SECOND QUARTER REPORTING
August 1, 2018 – After market close, the Company plans to release its second quarter 2018 earnings release, a pre-recorded webcast discussion of the second quarter 2018 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
August 2, 2018 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the second quarter 2018 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until August 9, 2018.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, projected growth in cash flow per debt adjusted share. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company
Article Date
7/19/20187/12/2018 - $251 Billion in Public Oil & Gas Companies Will Be in Denver for the 23rd Annual EnerCom Conference
$251 Billion in Public Oil & Gas Companies Will Be in Denver for the 23rd Annual EnerCom Conference
Source: PR Newswire
The Oil & Gas Conference® 2018 presenting companies:
- 40 North American shale E&Ps
- 7 international E&Ps
- 10 other producers
- 9 oilfield service providers
- 9 private E&Ps, midstream and data providers
- $202 billion in market value
- 3.2 million barrels of oil equivalent production per day
- $251 billion in enterprise value
DENVER, July 12, 2018 /PRNewswire/ -- An impressive roster of publicly traded oil and gas company senior leadership teams will be telling their companies' stories and presenting operational and financial updates to investors at the 2018 edition of EnerCom's The Oil & Gas Conference®.
CEOs across the upstream and oilfield service spectrum will be at the Denver Downtown Westin Hotel Aug. 20-23, 2018 to make financial presentations and meet with buyside investors and analysts for the 2018 EnerCom conference.
Market Cap: The presenting North American shale E&Ps, other explorers and producers, international E&Ps, and global oilfield service companies represent a combined market value of $202 billion, 71% higher than last year.
Enterprise Value: The 2018 presenting companies represent a combined enterprise value of $251 billion—53% higher than last year.
Production: EnerCom conference E&Ps are producing more than 3.2 million barrels of oil per day, slightly more than last year.
As to basin and sector, the 2018 EnerCom conference presenting companies break out as follows (list is subject to change prior to conference– please refer to The Oil & Gas Conference website for an updated schedule of presenting companies):
Exploration & Production Companies by Focus Area
Bakken/Three Forks
Eagle Ford
Permian Basin
Woodford & Other Mid-Continent – SCOOP/STACK
Marcellus/Utica
Niobrara
Gulf of Mexico/Offshore
Haynesville
Pinedale – Jonah Field – Uinta Basin
Enhanced Oil Recovery
Canadian E&Ps
International E&Ps
Oilfield Service Companies
Mineral, Royalty, Infrastructure Holders
Private Companies – E&Ps, Midstream, Energy Data and Technology Providers
Public and Private Company Presenters: The 2018 edition of EnerCom's The Oil & Gas Conference® will feature public and private oil and gas companies with operations spanning 40 countries and six continents, including all U.S. shale basins, the Gulf of Mexico, Canada, Latin America, Europe, and Australasia.
A work-in-progress schedule of the 2018 presenting companies is posted on the conference website and will be regularly updated.
Who Attends the Conference: More than 2,000 institutional, private equity and hedge fund investors, energy research analysts, retail brokers, trust officers, high net worth investors, investment bankers and energy industry professionals gather in Denver for the conference.
One-on-One Meetings: EnerCom works in advance with presenting company management teams to arrange one-on-one meetings with the attending institutional investors and research analysts at the conference venue. In 2017, EnerCom managed more than 2,100 one-on-one meeting requests. Buyside investors may request meetings on the conference website or contact EnerCom for more information at 303-296-8834.
How to Register: Investment professionals and oil and gas companies can register for the event through the conference website.
EnerCom History and Sponsors: EnerCom, Inc. founded The Oil & Gas Conference® in 1996. It is the oldest and largest energy investment conference in Denver.
Global sponsors of EnerCom's conferences are Netherland, Sewell & Associates; RS Energy Group; Moss Adams; and Preng & Associates. Sponsors of The Oil & Gas Conference® 23 are Bank of America Merrill Lynch; AssuredPartners; DNB Bank ASA; Fifth Third Bank; CIBC; Haynes and Boone; Credit Agricole CIB; Natixis; PJ SOLOMON; PNC Financial Services Group; Wells Fargo; MUFG; SMBC; and Opportune LLP.
About EnerCom, Inc.
Since 1994 EnerCom, Inc. has developed into a nationally recognized oil and gas-focused investor relations consultancy advising oil and gas industry clients on corporate strategy, asset valuations, investor communications, media relations and providing visual communications design.
EnerCom offers services and produces and publishes numerous data products and external communications tools for public and private energy companies including:
EnerCom's professionals have more than 170 years of industry and business experience and a proven track record of success.
Headquartered in Denver, with senior consultants in Dallas and Houston, EnerCom uses the team approach for delivering its wide range of services to public and private companies, large and small, operating in the global exploration and production, OilService, capital markets, and associated advanced-technology industries.
EnerCom's upcoming oil and gas investment conferences include:
EnerCom Denver (The Oil & Gas Conference®) – August 19-22, 2018
EnerCom Dallas – Feb. 27-28, 2019
For more information about EnerCom and its services, please visit http://www.enercominc.com/ or call +1 303-296-8834 to speak with the management team or one of our consultants.
About Netherland, Sewell & Associates, Inc.
Netherland, Sewell & Associates, Inc. (NSAI) was founded in 1961 to provide the highest quality engineering and geological consulting to the petroleum industry. Today they are recognized as the worldwide leader of petroleum property analysis to industry and financial organizations and government agencies. With offices in Dallas and Houston, NSAI provides a complete range of geological, geophysical, petrophysical, and engineering services and has the technical experience and ability to perform these services in any of the onshore and offshore oil and gas producing areas of the world. They provide reserves reports and audits, acquisition and divestiture evaluations, simulation studies, exploration resources assessments, equity determinations, and management and advisory services. For a complete list of services or to learn more about Netherland, Sewell & Associates, Inc. please visit www.netherlandsewell.com.
For more information about NSAI, call C.H. (Scott) Rees, Chief Executive Officer, at 214-969-5401 or send an email to info@nsai-petro.com.
About RS Energy Group
RS Energy Group (RSEG) provides data-driven intelligence: evaluate assets, weigh valuable M&A opportunities and benchmark your business for more precise decision-making.
RSEG officially released its data solution in April 2017. RS Data™ provides clients with corrected, multi-sourced permit, completion and production data of unparalleled completeness and quality.
Today, RSEG's intelligence covers more than 150 companies operating in every key North American and many international energy plays with a powerful combination of practical insights at the asset level and a long-standing participation in capital markets. RSEG's independent, unbiased and accurate analysis forms a foundation of trust with its clients. Its collaborative approach, both internally and as an extension of its clients' research efforts, promotes innovation and fosters intimate, long term partnerships.
RS Energy Group (RSEG) is headquartered in Calgary, Alberta, with strategic locations in Houston, New York City, Philadelphia, San Francisco and Los Angeles. Contact RS Energy Group by phone at (403) 294-9111, or email info@rseg.com.
About Moss Adams LLP
For more than 30 years, Hein & Associates has been recognized throughout the industry as a leading oil and gas accounting and advisory firm. In late 2017, Hein combined with Moss Adams LLP, one of the largest accounting, consulting and wealth management firms in the nation, creating a $600 million middle-market accounting/tax/audit leader in the western U.S. with a strong oil & gas practice group.
With more than 2,900 professionals and staff across more than 25 locations in the West and beyond, Moss Adams works with many of the world's most innovative companies and leaders. Our strength in the middle market enables us to advise clients at all intervals of development—from start-up, to rapid growth and expansion, to transition. Today, we help over 2,300 companies doing business in more than 100 countries and territories.
For more information, please contact Joe Blice, Partner, National Practice Leader, Oil & Gas, CPA joe.blice@mossadams.com, (972) 687-7818.
Moss Adams LLP provides details at https://www.mossadams.com/home .
About Preng & Associates
Preng & Associates, founded in 1980, is the only retainer-based, international executive search firm specializing solely in the energy industry. Its number one priority is to assist clients with their executive selection, organization development, and human resource needs by providing the highest quality service. Preng's record of accomplishment is directly attributable to their experienced staff, worldwide network of industry contacts, proven search methodology, and high standards of professionalism. Preng has conducted over 3000 searches for board, executive, management, and professional positions in its 35-year history and has the highest success and repeat client track record.
Preng's practice is based on the premise that the search process is most effective when conducted by professionals with significant search industry experience. The company has earned a reputation for combining professional search disciplines with an in-depth industry and market understanding and has succeeded in some of the industry's most challenging and high-profile searches. Preng's international reach allows it to effectively conduct global engagements; and as a member of the Association of Executive Search Consultants, Preng practices and promotes its high standards of conduct and professionalism.
For more information about Preng & Associates, contact Charles Carpenter, Partner at 713-243-2610 or ccarpenter@preng.com.
About Bank of America Merrill Lynch
Bank of America Merrill Lynch Oil and Gas Group
The Bank of America Merrill Lynch (BofAML) Oil and Gas practice is comprised of a global team of bankers dedicated to covering the energy industry, dating back to the 1920s when Texas predecessor banks pioneered reserve-based lending. The practice includes an experienced in-house Petroleum Engineering team with over 150 years of combined experience. With one of the only full-service financial energy platforms in the industry, the BofAML oil and gas team manages significant capital commitments in the energy sector with dedicated bankers based in Calgary, Denver, Dallas, Houston, London and New York.
The BofA Merrill Lynch Global Research platform offers clients access to information and actionable ideas on stocks, bonds, economics and investment strategies. With approximately 700 analysts in more than 20 countries, we offer our clients knowledge about economic and business developments that are having an impact on the markets, so that they can work with their financial advisors to make the most of opportunities. BofA Merrill Lynch Global Research was ranked No. 1 for the fourth consecutive year on the 2014 list of Top Global Research Firms, Institutional Investor.
About AssuredPartners
AssuredPartners Colorado (AP CO) combines 30+ years of experience with leading-edge products to provide exceptional service and value to our customers. We provide a full range of brokerage services including employee benefits, property and casualty, and retirement. Headquartered in Colorado, we think globally but act locally, with personal services designed specifically for each individual client. AP CO utilizes resources with national networks of brokers to ensure we can meet your every need and find answers to your questions quickly and efficiently.
Our goal is to achieve a long-term relationship focused on bringing value to your employee benefits management and insurance programs. We are committed to utilizing our collective talent to support your insurance goals. We work to identify activities that drive claim frequency, and implement an action plan to control health care costs and promote a healthy work environment for your employees.
Securing the best insurance package for your business begins with planning. Analyzing all your risks is critical to successful implementation of your insurance plan. AP CO will partner with you by providing ongoing assistance, consultation and service that will help you control your insurance expenses, choose the best plan to fit your company's needs and promote health care consumerism.
For more information on Assured Partners, please visit the website, call (800) 322-9773 or email info@assuredptrco.com.
About DNB ASA
DNB is Norway's largest financial services provider, with total assets approaching $400 billion. The bank has for years been a major provider of capital to the oil & gas industry, growing up literally side by side with the highly prolific fields developed in the Norwegian Sector of the North Sea. The Oslo Energy Office maintains a global financing strategy, and serves this market through multiple offices around the world including Houston, London and Singapore.
Energy Americas, based in Houston, comprises approximately 20 seasoned energy finance professionals. Aside from facilitating the bank's global business strategies, the office concentrates primarily on serving middle market and larger customers in the four principal oil & gas sectors — upstream, midstream, downstream and service — as well as in Power and Renewables. The bank offers a variety of financial products, from traditional oil & gas reserve financing, to longer-term capital markets transactions and merger/acquisition advisory services through its broker-dealer arm, DNB Markets, Inc. Ancillary service capabilities include cash management/depository services, as well as commodity and interest rate hedging.
For information on DNB's energy services, please visit the DNB energy website.
About Fifth Third Bancorp
Fifth Third Bank is a diversified financial services company with over $120 billion in assets. The Bank's energy group is comprised of experienced and knowledgeable individuals that can assist in providing and structuring financial solutions to meet their clients' needs across the upstream, midstream, downstream and services sectors. Solutions and capabilities include commodity hedging, interest rate management, foreign exchange, debt capital markets, treasury management, and depository/investment products.
For more information, please contact Richard Butler at 713-401-6101 or richard.butler@53.com.
About CIBC
CIBC is a leading North American bank headquartered in Canada and with offices around the world. CIBC was originally founded nearly 150 years ago, and has supported and financed the energy industry for many decades. CIBC was recently ranked as the strongest publicly traded bank in North America by Bloomberg, and is rated A+/Aa3 by S&P and Moody's, respectively.
Our energy specialists draw on the breadth of CIBC's capabilities to provide market insights and creative solutions for our clients. Services include corporate banking, commodity and interest rate hedging and strategy, A&D advisory, and capital markets.
CIBC is publicly traded on the NYSE and Toronto Stock Exchange under the symbol "CM" and has a market cap of $36 billion and nearly $400 billion in total assets. For more information, please visit the CIBC energy website.
About Haynes and Boone
Haynes and Boone, LLP is an energy-focused corporate law firm, providing a full spectrum of legal services to our clients across the oil and gas industry, including the upstream, midstream, and downstream sectors. We serve energy clients from our offices in Texas, Colorado, New York, California, Washington, D.C., London, Mexico City and Shanghai. We work as a team representing U.S. and foreign public and private companies engaged in the dynamic day-to-day work of finding and extracting oil and gas, and the banks, investment funds and other investors that support them.
Our team of more than 100 energy lawyers and landmen understands the U.S. and international physical and financial energy markets, and the firm has been helping operators and lenders complete some of the largest financings and M&A transactions in recent years. With more than 600 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal, and our energy lawyers have been ranked by publications such as Best Lawyers in America, Chambers and Partners and Who's Who in Energy.
For more info, please visit www.haynesboone.com.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group, the world's eighth largest bank by total assets (The Banker, July 2014). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking, and international private banking.
The Bank provides support to clients in large international markets through its network, with a presence in major countries in Europe, the Americas, Asia and the Middle East.
With headquarters in New York City, and U.S. offices in Houston and Chicago, Credit Agricole CIB Americas offers its corporate and institutional clients financial products and services and made-to-order structuring, origination and distribution, through both its banking unit Credit Agricole CIB, and the full-service broker-dealer Credit Agricole Securities (USA) Inc., which is a member of the NYSE and NASD. Credit Agricole CIB is also present in Montreal, Canada, and in Latin America with offices in Argentina, Brazil, and Mexico.
The Energy Industry represents the single largest concentration of industry exposure at Credit Agricole Corporate and Investment Bank, whose specialty focus dates back over 100 years. Our Energy practice for North America, located in Houston, focuses on all segments of the business and covers it on a truly global basis.
For more information, visit www.ca-cib.com.
About Natixis
Natixis is the international corporate and investment banking, asset management, insurance and financial services arm of Groupe BPCE, the second-largest banking group in France.
Natixis Corporate & Investment Banking advises and assists corporations, financial institutions, institutional investors, financial sponsors, public-sector organizations and the networks of Groupe BPCE.
We furnish a diversified array of financing solutions, provide access to capital markets and transaction banking services.
Areas of expertise include Advisory: M&A, primary equity, capital & rating advisory; Financing: vanilla and structured; Capital Markets: equities, fixed income, credit, forex and commodities; Global Transaction Banking: trade finance, cash management, liquidity management and correspondent banking; Research: economic, credit, equity and quantitative.
The Bank leverages the expertise and highly technical skills of its teams, and provides industry-recognized research to build innovative and mix-and-matchable solutions. Corporate and Investment Banking is present on the main financial markets via three international platforms: Americas, Asia-Pacific, and EMEA (Europe, Middle East, Africa).
About PJ SOLOMON
PJ SOLOMON is an investment banking advisory firm that provides strategic advisory services to chief executive officers and senior management, owners of public and private companies, boards of directors, and special committees.
Our full suite of advisory services includes Mergers and Acquisitions, Restructuring and Capital Markets across a range of industry verticals.
The PJ SOLOMON Energy Advisory Group provides strategic investment banking advisory services to public and private clients across the energy chain. Drawing upon our extensive sector relationships and deep strategic and operational expertise, we can offer a unique and valued advisory platform for the upstream, upstream A&D, midstream and the utility sectors.
Based in our Houston office, the PJ SOLOMON Energy team holds more than 100 years of experience on a broad range of domestic and cross-border transactions including mergers and acquisitions, A&D, restructurings, bankruptcies, and public and private capital raisings.
Industry sectors/sub-sectors include: Upstream, Upstream A&D, Midstream, Energy related and Utilities.
About PNC Financial Services Group
PNC is one of the largest, best-regarded and best-capitalized financial services companies in the country, with approximately $325 billion in assets and offices in 33 states, Canada and the United Kingdom.
PNC's Energy Group, headed by Tom Byargeon, is a significant capital and service provider to energy companies, with approximately $6.5 billion in commitments to the industry. The Energy office in Houston houses a team with extensive experience and deep relationships across the entire energy supply chain. This group also offers strategic corporate finance advice and delivers PNC's comprehensive set of solutions and capabilities, including commodity and interest rate hedging, debt capital markets, loan syndications, treasury management, asset securitization, equipment finance and institutional investments.
For more information, please contact Tom Byargeon at 713-353-8782 or tom.byargeon@pnc.com. You can also visit www.pnc.com.
About MUFG
Mitsubishi UFJ Financial Group (MUFG) has been a leading provider of banking services to the oil and gas industry in the Americas for more than 30 years, consistently ranking in the Top 10 Lead Arrangers and Top 10 Bond Arrangers in the Thomson Reuters Oil and Gas League Tables.
We support clients across the industry—from regional exploration and production to global diversified services companies—that benefit from our focused approach, strong execution, and customized services. Whether you are looking to expand existing reserves, make an acquisition, or streamline operations, we can support your growth with services, including: underwriting and syndications; U.S./Canadian cross-border funding; securities underwriting and placements; leasing and tax equity financing; and commodities, interest rate, and foreign exchange risk management.
For more information, visit: www.mufgamericas.com/oil-gas.
About Wells Fargo & Company
Wells Fargo & Company is a nationwide, diversified, community-based financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.
The Energy Banking Group, headed by Bart Schouest, provides corporate banking products and services to the energy sector, including upstream, midstream, oilfield services, and diversified industries. With offices in Houston, Dallas, Denver, Calgary, and Aberdeen the group's success is driven by in-depth industry expertise and longstanding relationships with key industry participants. The group has over $45 billion of credit commitments to public and private companies across the upstream, midstream, downstream, services, and power and utilities sectors.
The Energy & Power Investment Banking Group, headed by James Kipp, provides strategic advisory and corporate finance expertise to energy and power clients, including upstream, midstream, oilfield services, downstream, coal and the power & utilities sectors. Areas of focus include equity, equity-linked and debt underwritings, private placements, syndications, and mergers and acquisitions. The Energy & Power Investment Banking Group has offices in Houston and Charlotte.
These teams work together to offer clients industry and product expertise, in addition to sharing their understanding of internal and external forces that drive both industry trends and financial markets. For additional information, contact us at 713-319-1350 or Energy@wellsfargo.com.
To learn more about Wells Fargo & Company, please visit the company's web site at www.wellsfargo.com.
About SMBC
Sumitomo Mitsui Banking Corporation (SMBC) is a core member of Sumitomo Mitsui Financial Group (SMFG), a Tokyo-based bank holding company that is ranked among the largest 25 banks globally by assets under management.
SMBC Americas Division, with more than 2,500 employees, oversees operations in the U.S., Canada, Mexico, and South America. We work across SMFG to offer corporate and institutional clients sophisticated and comprehensive financial services around the globe.
SMBC's roots in Japan trace back more than 400 years to 1590. The Americas Division of SMBC has more than a century of experience in the United States, beginning when the San Francisco branch of Sumitomo Bank was established in 1919. Sumitomo Mitsui Financial Group (NYSE: SMFG) was listed on the New York Stock Exchange in 2010.
For more information please visit the corporate website: www.smbcgroup.com/americas/group-companies/
About Opportune LLP
Founded in 2005, Opportune is a leading global energy consulting firm specializing in adding value to clients across the energy industry, including upstream, midstream, downstream, power and gas, commodities trading and oilfield services.
Since we are not an audit firm, we are advocates of our clients and are not subject to the restrictions placed on other firms by regulatory bodies. Using our extensive knowledge of all sectors of the energy industry, we work with clients to provide comprehensive solutions to their operational and financial challenges.
Our practice areas include complex financial reporting, dispute resolution, enterprise risk, outsourcing, process and technology, reserve engineering and geosciences, restructuring, strategy and organization, tax, transactional due diligence and valuation. Opportune LLP is not a CPA firm.
Opportune's corporate headquarters are in Houston, Texas. The firm also has offices in Dallas, Denver, New York City, Tulsa, and the UK. For more information please call Ashley Hunt, Marketing Coordinator, 713.490.5050, and visit the web site https://opportune.com/.
View original content:http://www.prnewswire.com/news-releases/251-billion-in-public-oil--gas-companies-will-be-in-denver-for-the-23rd-annual-enercom-conference-300680266.html
SOURCE EnerCom, Inc.
Article Date
7/12/2018EnerCom Posts Presenting Company Schedule for The Oil & Gas Conference® 23
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, June 27, 2018 /PRNewswire/ -- EnerCom, Inc. has posted the list of oil and gas companies and energy sector experts who will be presenters at the 23rd annual edition of The Oil & Gas Conference®, coming August 19-22, 2018, to the Westin Denver Downtown.
Public and Private Company Presenters: The 2018 edition of EnerCom's The Oil & Gas Conference® will feature public and private oil and gas companies with operations spanning 40 countries and six continents, including all U.S. shale basins, the Gulf of Mexico, Canada, Latin America and Africa.
A work-in-progress schedule of the 2018 presenting companies is now posted on the conference website and will be regularly updated.
Some of the companies that are scheduled to present in August at EnerCom's The Oil & Gas Conference® include, but are not limited to:
Who Attends the Conference: More than 2,000 institutional, private equity and hedge fund investors, energy research analysts, retail brokers, trust officers, high net worth investors, investment bankers and energy industry professionals gather in Denver for the conference.
One-on-One Meetings: EnerCom works in advance with presenting company management teams to arrange one-on-one meetings with the attending institutional investors and research analysts at the conference venue. In 2017, EnerCom managed more than 2,100 one-on-one meeting requests. Buyside investors may request meetings on the conference website or contact EnerCom for more information at 303-296-8834.
How to Register: Investment professionals and oil and gas companies can register for the event through the conference website.
EnerCom History and Sponsors: EnerCom, Inc. founded The Oil & Gas Conference® in 1996. It is the oldest and largest energy investment conference in Denver.
Global sponsors of EnerCom's conferences are Netherland, Sewell & Associates; RS Energy Group; Moss Adams; and Preng & Associates. Sponsors of The Oil & Gas Conference® 23 are Bank of America Merrill Lynch; AssuredPartners; DNB Bank ASA; Fifth Third Bank; CIBC; Haynes and Boone; Credit Agricole CIB; Natixis; PJ SOLOMON; PNC Financial Services Group; Wells Fargo; MUFG; and SMBC.
About EnerCom, Inc.
Since 1994 EnerCom, Inc. has developed into a nationally recognized oil and gas-focused investor relations consultancy advising oil and gas industry clients on corporate strategy, asset valuations, investor communications, media relations and providing visual communications design.
EnerCom offers services and produces and publishes numerous data products and external communications tools for public and private energy companies including:
EnerCom's professionals have more than 170 years of industry and business experience and a proven track record of success.
Headquartered in Denver, with senior consultants in Dallas and Houston, EnerCom uses the team approach for delivering its wide range of services to public and private companies, large and small, operating in the global exploration and production, OilService, capital markets, and associated advanced-technology industries.
EnerCom's upcoming oil and gas investment conferences include:
EnerCom Denver (The Oil & Gas Conference®) – August 19-22, 2018
EnerCom Dallas – Feb. 27-28, 2019
For more information about EnerCom and its services, please visit http://www.enercominc.com/ or call +1 303-296-8834 to speak with the management team or one of our consultants.
About Netherland, Sewell & Associates, Inc.
Netherland, Sewell & Associates, Inc. (NSAI) was founded in 1961 to provide the highest quality engineering and geological consulting to the petroleum industry. Today they are recognized as the worldwide leader of petroleum property analysis to industry and financial organizations and government agencies. With offices in Dallas and Houston, NSAI provides a complete range of geological, geophysical, petrophysical, and engineering services and has the technical experience and ability to perform these services in any of the onshore and offshore oil and gas producing areas of the world. They provide reserves reports and audits, acquisition and divestiture evaluations, simulation studies, exploration resources assessments, equity determinations, and management and advisory services. For a complete list of services or to learn more about Netherland, Sewell & Associates, Inc. please visit www.netherlandsewell.com.
For more information about NSAI, call C.H. (Scott) Rees, Chief Executive Officer, at 214-969-5401 or send an email to info@nsai-petro.com.
About RS Energy Group
RS Energy Group (RSEG) provides data-driven intelligence: evaluate assets, weigh valuable M&A opportunities and benchmark your business for more precise decision-making.
RSEG officially released its data solution in April 2017. RS Data™ provides clients with corrected, multi-sourced permit, completion and production data of unparalleled completeness and quality.
Today, RSEG's intelligence covers more than 150 companies operating in every key North American and many international energy plays with a powerful combination of practical insights at the asset level and a long-standing participation in capital markets. RSEG's independent, unbiased and accurate analysis forms a foundation of trust with its clients. Its collaborative approach, both internally and as an extension of its clients' research efforts, promotes innovation and fosters intimate, long term partnerships.
RS Energy Group (RSEG) is headquartered in Calgary, Alberta, with strategic locations in Houston, New York City, Philadelphia, San Francisco and Los Angeles. Contact RS Energy Group by phone at (403) 294-9111, or email info@rseg.com.
About Moss Adams LLP
For more than 30 years, Hein & Associates has been recognized throughout the industry as a leading oil and gas accounting and advisory firm. In late 2017, Hein combined with Moss Adams LLP, one of the largest accounting, consulting and wealth management firms in the nation, creating a $600 million middle-market accounting/tax/audit leader in the western U.S. with a strong oil & gas practice group.
With more than 2,900 professionals and staff across more than 25 locations in the West and beyond, Moss Adams works with many of the world's most innovative companies and leaders. Our strength in the middle market enables us to advise clients at all intervals of development—from start-up, to rapid growth and expansion, to transition. Today, we help over 2,300 companies doing business in more than 100 countries and territories.
For more information, please contact Joe Blice, Partner, National Practice Leader, Oil & Gas, CPA
joe.blice@mossadams.com, (972) 687-7818.
Moss Adams LLP provides details at https://www.mossadams.com/home.
About Preng & Associates
Preng & Associates, founded in 1980, is the only retainer-based, international executive search firm specializing solely in the energy industry. Its number one priority is to assist clients with their executive selection, organization development, and human resource needs by providing the highest quality service. Preng's record of accomplishment is directly attributable to their experienced staff, worldwide network of industry contacts, proven search methodology, and high standards of professionalism. Preng has conducted over 3000 searches for board, executive, management, and professional positions in its 35-year history and has the highest success and repeat client track record.
Preng's practice is based on the premise that the search process is most effective when conducted by professionals with significant search industry experience. The company has earned a reputation for combining professional search disciplines with an in-depth industry and market understanding and has succeeded in some of the industry's most challenging and high-profile searches. Preng's international reach allows it to effectively conduct global engagements; and as a member of the Association of Executive Search Consultants, Preng practices and promotes its high standards of conduct and professionalism.
For more information about Preng & Associates, contact Charles Carpenter, Partner at 713-243-2610 or ccarpenter@preng.com.
About Bank of America Merrill Lynch
Bank of America Merrill Lynch Oil and Gas Group
The Bank of America Merrill Lynch (BofAML) Oil and Gas practice is comprised of a global team of bankers dedicated to covering the energy industry, dating back to the 1920s when Texas predecessor banks pioneered reserve-based lending. The practice includes an experienced in-house Petroleum Engineering team with over 150 years of combined experience. With one of the only full-service financial energy platforms in the industry, the BofAML oil and gas team manages significant capital commitments in the energy sector with dedicated bankers based in Calgary, Denver, Dallas, Houston, London and New York.
The BofA Merrill Lynch Global Research platform offers clients access to information and actionable ideas on stocks, bonds, economics and investment strategies. With approximately 700 analysts in more than 20 countries, we offer our clients knowledge about economic and business developments that are having an impact on the markets, so that they can work with their financial advisors to make the most of opportunities. BofA Merrill Lynch Global Research was ranked No. 1 for the fourth consecutive year on the 2014 list of Top Global Research Firms, Institutional Investor.
About AssuredPartners
AssuredPartners Colorado (AP CO) combines 30+ years of experience with leading-edge products to provide exceptional service and value to our customers. We provide a full range of brokerage services including employee benefits, property and casualty, and retirement. Headquartered in Colorado, we think globally but act locally, with personal services designed specifically for each individual client. AP CO utilizes resources with national networks of brokers to ensure we can meet your every need and find answers to your questions quickly and efficiently.
Our goal is to achieve a long-term relationship focused on bringing value to your employee benefits management and insurance programs. We are committed to utilizing our collective talent to support your insurance goals. We work to identify activities that drive claim frequency, and implement an action plan to control health care costs and promote a healthy work environment for your employees.
Securing the best insurance package for your business begins with planning. Analyzing all your risks is critical to successful implementation of your insurance plan. AP CO will partner with you by providing ongoing assistance, consultation and service that will help you control your insurance expenses, choose the best plan to fit your company's needs and promote health care consumerism.
For more information on Assured Partners, please visit the website, call (800) 322-9773 or email info@assuredptrco.com.
About DNB ASA
DNB is Norway's largest financial services provider, with total assets approaching $400 billion. The bank has for years been a major provider of capital to the oil & gas industry, growing up literally side by side with the highly prolific fields developed in the Norwegian Sector of the North Sea. The Oslo Energy Office maintains a global financing strategy, and serves this market through multiple offices around the world including Houston, London and Singapore.
Energy Americas, based in Houston, comprises approximately 20 seasoned energy finance professionals. Aside from facilitating the bank's global business strategies, the office concentrates primarily on serving middle market and larger customers in the four principal oil & gas sectors — upstream, midstream, downstream and service — as well as in Power and Renewables. The bank offers a variety of financial products, from traditional oil & gas reserve financing, to longer-term capital markets transactions and merger/acquisition advisory services through its broker-dealer arm, DNB Markets, Inc. Ancillary service capabilities include cash management/depository services, as well as commodity and interest rate hedging.
For information on DNB's energy services, please visit the DNB energy website.
About Fifth Third Bancorp
Fifth Third Bank is a diversified financial services company with over $120 billion in assets. The Bank's energy group is comprised of experienced and knowledgeable individuals that can assist in providing and structuring financial solutions to meet their clients' needs across the upstream, midstream, downstream and services sectors. Solutions and capabilities include commodity hedging, interest rate management, foreign exchange, debt capital markets, treasury management, and depository/investment products.
For more information, please contact Richard Butler at 713-401-6101 or richard.butler@53.com.
About CIBC
CIBC is a leading North American bank headquartered in Canada and with offices around the world. CIBC was originally founded nearly 150 years ago, and has supported and financed the energy industry for many decades. CIBC was recently ranked as the strongest publicly traded bank in North America by Bloomberg, and is rated A+/Aa3 by S&P and Moody's, respectively.
Our energy specialists draw on the breadth of CIBC's capabilities to provide market insights and creative solutions for our clients. Services include corporate banking, commodity and interest rate hedging and strategy, A&D advisory, and capital markets.
CIBC is publicly traded on the NYSE and Toronto Stock Exchange under the symbol "CM" and has a market cap of $36 billion and nearly $400 billion in total assets. For more information, please visit the CIBC energy website.
About Haynes and Boone
Haynes and Boone, LLP is an energy-focused corporate law firm, providing a full spectrum of legal services to our clients across the oil and gas industry, including the upstream, midstream, and downstream sectors. We serve energy clients from our offices in Texas, Colorado, New York, California, Washington, D.C., London, Mexico City and Shanghai. We work as a team representing U.S. and foreign public and private companies engaged in the dynamic day-to-day work of finding and extracting oil and gas, and the banks, investment funds and other investors that support them.
Our team of more than 100 energy lawyers and landmen understands the U.S. and international physical and financial energy markets, and the firm has been helping operators and lenders complete some of the largest financings and M&A transactions in recent years. With more than 600 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal, and our energy lawyers have been ranked by publications such as Best Lawyers in America, Chambers and Partners and Who's Who in Energy.
For more info, please visit www.haynesboone.com.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group, the world's eighth largest bank by total assets (The Banker, July 2014). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking, and international private banking.
The Bank provides support to clients in large international markets through its network, with a presence in major countries in Europe, the Americas, Asia and the Middle East.
With headquarters in New York City, and U.S. offices in Houston and Chicago, Credit Agricole CIB Americas offers its corporate and institutional clients financial products and services and made-to-order structuring, origination and distribution, through both its banking unit Credit Agricole CIB, and the full-service broker-dealer Credit Agricole Securities (USA) Inc., which is a member of the NYSE and NASD. Credit Agricole CIB is also present in Montreal, Canada, and in Latin America with offices in Argentina, Brazil, and Mexico.
The Energy Industry represents the single largest concentration of industry exposure at Credit Agricole Corporate and Investment Bank, whose specialty focus dates back over 100 years. Our Energy practice for North America, located in Houston, focuses on all segments of the business and covers it on a truly global basis.
For more information, visit www.ca-cib.com.
About Natixis
Natixis is the international corporate and investment banking, asset management, insurance and financial services arm of Groupe BPCE, the second-largest banking group in France.
Natixis Corporate & Investment Banking advises and assists corporations, financial institutions, institutional investors, financial sponsors, public-sector organizations and the networks of Groupe BPCE.
We furnish a diversified array of financing solutions, provide access to capital markets and transaction banking services.
Areas of expertise include Advisory: M&A, primary equity, capital & rating advisory; Financing: vanilla and structured; Capital Markets: equities, fixed income, credit, forex and commodities; Global Transaction Banking: trade finance, cash management, liquidity management and correspondent banking; Research: economic, credit, equity and quantitative.
The Bank leverages the expertise and highly technical skills of its teams, and provides industry-recognized research to build innovative and mix-and-matchable solutions. Corporate and Investment Banking is present on the main financial markets via three international platforms: Americas, Asia-Pacific, and EMEA (Europe, Middle East, Africa).
About PJ SOLOMON
PJ SOLOMON is an investment banking advisory firm that provides strategic advisory services to chief executive officers and senior management, owners of public and private companies, boards of directors, and special committees.
Our full suite of advisory services includes Mergers and Acquisitions, Restructuring and Capital Markets across a range of industry verticals.
The PJ SOLOMON Energy Advisory Group provides strategic investment banking advisory services to public and private clients across the energy chain. Drawing upon our extensive sector relationships and deep strategic and operational expertise, we can offer a unique and valued advisory platform for the upstream, upstream A&D, midstream and the utility sectors.
Based in our Houston office, the PJ SOLOMON Energy team holds more than 100 years of experience on a broad range of domestic and cross-border transactions including mergers and acquisitions, A&D, restructurings, bankruptcies, and public and private capital raisings.
Industry sectors/sub-sectors include: Upstream, Upstream A&D, Midstream, Energy related and Utilities.
About PNC Financial Services Group
PNC is one of the largest, best-regarded and best-capitalized financial services companies in the country, with approximately $325 billion in assets and offices in 33 states, Canada and the United Kingdom.
PNC's Energy Group, headed by Tom Byargeon, is a significant capital and service provider to energy companies, with approximately $6.5 billion in commitments to the industry. The Energy office in Houston houses a team with extensive experience and deep relationships across the entire energy supply chain. This group also offers strategic corporate finance advice and delivers PNC's comprehensive set of solutions and capabilities, including commodity and interest rate hedging, debt capital markets, loan syndications, treasury management, asset securitization, equipment finance and institutional investments.
For more information, please contact Tom Byargeon at 713-353-8782 or tom.byargeon@pnc.com. You can also visit www.pnc.com.
About MUFG
Mitsubishi UFJ Financial Group (MUFG) has been a leading provider of banking services to the oil and gas industry in the Americas for more than 30 years, consistently ranking in the Top 10 Lead Arrangers and Top 10 Bond Arrangers in the Thomson Reuters Oil and Gas League Tables.
We support clients across the industry—from regional exploration and production to global diversified services companies—that benefit from our focused approach, strong execution, and customized services. Whether you are looking to expand existing reserves, make an acquisition, or streamline operations, we can support your growth with services, including: underwriting and syndications; U.S./Canadian cross-border funding; securities underwriting and placements; leasing and tax equity financing; and commodities, interest rate, and foreign exchange risk management.
For more information, visit: www.mufgamericas.com/oil-gas.
About Wells Fargo & Company
Wells Fargo & Company is a nationwide, diversified, community-based financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.
The Energy Banking Group, headed by Bart Schouest, provides corporate banking products and services to the energy sector, including upstream, midstream, oilfield services, and diversified industries. With offices in Houston, Dallas, Denver, Calgary, and Aberdeen the group's success is driven by in-depth industry expertise and longstanding relationships with key industry participants. The group has over $45 billion of credit commitments to public and private companies across the upstream, midstream, downstream, services, and power and utilities sectors.
The Energy & Power Investment Banking Group, headed by James Kipp, provides strategic advisory and corporate finance expertise to energy and power clients, including upstream, midstream, oilfield services, downstream, coal and the power & utilities sectors. Areas of focus include equity, equity-linked and debt underwritings, private placements, syndications, and mergers and acquisitions. The Energy & Power Investment Banking Group has offices in Houston and Charlotte.
These teams work together to offer clients industry and product expertise, in addition to sharing their understanding of internal and external forces that drive both industry trends and financial markets. For additional information, contact us at 713-319-1350 or Energy@wellsfargo.com.
To learn more about Wells Fargo & Company, please visit the company's web site at www.wellsfargo.com.
About SMBC
Sumitomo Mitsui Banking Corporation (SMBC) is a core member of Sumitomo Mitsui Financial Group (SMFG), a Tokyo-based bank holding company that is ranked among the largest 25 banks globally by assets under management.
SMBC Americas Division, with more than 2,500 employees, oversees operations in the U.S., Canada, Mexico, and South America. We work across SMFG to offer corporate and institutional clients sophisticated and comprehensive financial services around the globe.
SMBC's roots in Japan trace back more than 400 years to 1590. The Americas Division of SMBC has more than a century of experience in the United States, beginning when the San Francisco branch of Sumitomo Bank was established in 1919. Sumitomo Mitsui Financial Group (NYSE: SMFG) was listed on the New York Stock Exchange in 2010.
For more information please visit the corporate website: www.smbcgroup.com/americas/group-companies/
View original content:http://www.prnewswire.com/news-releases/enercom-posts-presenting-company-schedule-for-the-oil--gas-conference-23-300673468.html
SOURCE EnerCom, Inc.
Article Date
6/27/2018EnerCom Updates List of Presenters for The Oil & Gas Conference® 23
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, June 13, 2018 /PRNewswire/ -- EnerCom, Inc. is pleased to update the list of oil and gas companies and energy sector experts who will be presenters at the 23rd annual edition of The Oil & Gas Conference®, coming August 19-22, 2018, to the Westin Denver Downtown.
Public and Private Company Presenters: The 2018 edition of EnerCom's The Oil & Gas Conference® will feature public and private oil and gas companies with operations spanning 40 countries and six continents, including all U.S. shale basins, the Gulf of Mexico, Canada, Latin America and Africa. A work-in-progress list of the 2018 presenting companies will be posted and updated on the conference website.
The EnerCom Denver 2018 presenting companies include but are not limited to:
Who Attends the Conference: More than 2,000 institutional, private equity and hedge fund investors, energy research analysts, retail brokers, trust officers, high net worth investors, investment bankers and energy industry professionals gather in Denver for the conference.
One-on-One Meetings: EnerCom works in advance with presenting company management teams to arrange one-on-one meetings with the attending institutional investors and research analysts at the conference venue. In 2017, EnerCom managed more than 2,100 one-on-one meeting requests.
How to Register: Investment professionals and oil and gas companies can register for the event through the conference website.
EnerCom History and Sponsors: EnerCom, Inc. founded The Oil & Gas Conference® in 1996. It is the oldest and largest energy investment conference in Denver.
Global sponsors of EnerCom's conferences are Netherland, Sewell & Associates; RS Energy Group; Moss Adams; and Preng & Associates. Sponsors of The Oil & Gas Conference® 23 are Bank of America Merrill Lynch; AssuredPartners; DNB Bank ASA; Fifth Third Bank; CIBC; Haynes and Boone; Credit Agricole CIB; Natixis; PJ SOLOMON; PNC Financial Services Group; Wells Fargo; MUFG; and SMBC.
About EnerCom, Inc.
Since 1994 EnerCom, Inc. has developed into a nationally recognized oil and gas-focused investor relations consultancy advising oil and gas industry clients on corporate strategy, asset valuations, investor communications, media relations and providing visual communications design.
EnerCom offers services and produces and publishes numerous data products and external communications tools for public and private energy companies including:
EnerCom's professionals have more than 170 years of industry and business experience and a proven track record of success.
Headquartered in Denver, with senior consultants in Dallas and Houston, EnerCom uses the team approach for delivering its wide range of services to public and private companies, large and small, operating in the global exploration and production, OilService, capital markets, and associated advanced-technology industries.
EnerCom's upcoming oil and gas investment conferences include:
EnerCom Denver (The Oil & Gas Conference®) – August 19-22, 2018
EnerCom Dallas – Feb. 27-28, 2019
For more information about EnerCom and its services, please visit http://www.enercominc.com/ or call +1 303-296-8834 to speak with the management team or one of our consultants.
About Netherland, Sewell & Associates, Inc.
Netherland, Sewell & Associates, Inc. (NSAI) was founded in 1961 to provide the highest quality engineering and geological consulting to the petroleum industry. Today they are recognized as the worldwide leader of petroleum property analysis to industry and financial organizations and government agencies. With offices in Dallas and Houston, NSAI provides a complete range of geological, geophysical, petrophysical, and engineering services and has the technical experience and ability to perform these services in any of the onshore and offshore oil and gas producing areas of the world. They provide reserves reports and audits, acquisition and divestiture evaluations, simulation studies, exploration resources assessments, equity determinations, and management and advisory services. For a complete list of services or to learn more about Netherland, Sewell & Associates, Inc. please visit www.netherlandsewell.com.
For more information about NSAI, call C.H. (Scott) Rees, Chief Executive Officer, at 214-969-5401 or send an email to info@nsai-petro.com.
About RS Energy Group
RS Energy Group (RSEG) provides data-driven intelligence: evaluate assets, weigh valuable M&A opportunities and benchmark your business for more precise decision-making.
RSEG officially released its data solution in April 2017. RS Data™ provides clients with corrected, multi-sourced permit, completion and production data of unparalleled completeness and quality.
Today, RSEG's intelligence covers more than 150 companies operating in every key North American and many international energy plays with a powerful combination of practical insights at the asset level and a long-standing participation in capital markets. RSEG's independent, unbiased and accurate analysis forms a foundation of trust with its clients. Its collaborative approach, both internally and as an extension of its clients' research efforts, promotes innovation and fosters intimate, long term partnerships.
RS Energy Group (RSEG) is headquartered in Calgary, Alberta, with strategic locations in Houston, New York City, Philadelphia, San Francisco and Los Angeles. Contact RS Energy Group by phone at (403) 294-9111, or email info@rseg.com.
About Moss Adams LLP
For more than 30 years, Hein & Associates has been recognized throughout the industry as a leading oil and gas accounting and advisory firm. In late 2017, Hein combined with Moss Adams LLP, one of the largest accounting, consulting and wealth management firms in the nation, creating a $600 million middle-market accounting/tax/audit leader in the western U.S. with a strong oil & gas practice group.
With more than 2,900 professionals and staff across more than 25 locations in the West and beyond, Moss Adams works with many of the world's most innovative companies and leaders. Our strength in the middle market enables us to advise clients at all intervals of development—from start-up, to rapid growth and expansion, to transition. Today, we help over 2,300 companies doing business in more than 100 countries and territories.
For more information, please contact Joe Blice, Partner, National Practice Leader, Oil & Gas, CPA joe.blice@mossadams.com, (972) 687-7818.
Moss Adams LLP provides details at https://www.mossadams.com/home.
About Preng & Associates
Preng & Associates, founded in 1980, is the only retainer-based, international executive search firm specializing solely in the energy industry. Its number one priority is to assist clients with their executive selection, organization development, and human resource needs by providing the highest quality service. Preng's record of accomplishment is directly attributable to their experienced staff, worldwide network of industry contacts, proven search methodology, and high standards of professionalism. Preng has conducted over 3000 searches for board, executive, management, and professional positions in its 35-year history and has the highest success and repeat client track record.
Preng's practice is based on the premise that the search process is most effective when conducted by professionals with significant search industry experience. The company has earned a reputation for combining professional search disciplines with an in-depth industry and market understanding and has succeeded in some of the industry's most challenging and high-profile searches. Preng's international reach allows it to effectively conduct global engagements; and as a member of the Association of Executive Search Consultants, Preng practices and promotes its high standards of conduct and professionalism.
For more information about Preng & Associates, contact Charles Carpenter, Partner at 713-243-2610 or ccarpenter@preng.com.
About Bank of America Merrill Lynch
Bank of America Merrill Lynch Oil and Gas Group
The Bank of America Merrill Lynch (BofAML) Oil and Gas practice is comprised of a global team of bankers dedicated to covering the energy industry, dating back to the 1920s when Texas predecessor banks pioneered reserve-based lending. The practice includes an experienced in-house Petroleum Engineering team with over 150 years of combined experience. With one of the only full-service financial energy platforms in the industry, the BofAML oil and gas team manages significant capital commitments in the energy sector with dedicated bankers based in Calgary, Denver, Dallas, Houston, London and New York.
The BofA Merrill Lynch Global Research platform offers clients access to information and actionable ideas on stocks, bonds, economics and investment strategies. With approximately 700 analysts in more than 20 countries, we offer our clients knowledge about economic and business developments that are having an impact on the markets, so that they can work with their financial advisors to make the most of opportunities. BofA Merrill Lynch Global Research was ranked No. 1 for the fourth consecutive year on the 2014 list of Top Global Research Firms, Institutional Investor.
About AssuredPartners
AssuredPartners Colorado (AP CO) combines 30+ years of experience with leading-edge products to provide exceptional service and value to our customers. We provide a full range of brokerage services including employee benefits, property and casualty, and retirement. Headquartered in Colorado, we think globally but act locally, with personal services designed specifically for each individual client. AP CO utilizes resources with national networks of brokers to ensure we can meet your every need and find answers to your questions quickly and efficiently.
Our goal is to achieve a long-term relationship focused on bringing value to your employee benefits management and insurance programs. We are committed to utilizing our collective talent to support your insurance goals. We work to identify activities that drive claim frequency, and implement an action plan to control health care costs and promote a healthy work environment for your employees.
Securing the best insurance package for your business begins with planning. Analyzing all your risks is critical to successful implementation of your insurance plan. AP CO will partner with you by providing ongoing assistance, consultation and service that will help you control your insurance expenses, choose the best plan to fit your company's needs and promote health care consumerism.
For more information on Assured Partners, please visit the website, call (800) 322-9773 or email info@assuredptrco.com.
About DNB ASA
DNB is Norway's largest financial services provider, with total assets approaching $400 billion. The bank has for years been a major provider of capital to the oil & gas industry, growing up literally side by side with the highly prolific fields developed in the Norwegian Sector of the North Sea. The Oslo Energy Office maintains a global financing strategy, and serves this market through multiple offices around the world including Houston, London and Singapore.
Energy Americas, based in Houston, comprises approximately 20 seasoned energy finance professionals. Aside from facilitating the bank's global business strategies, the office concentrates primarily on serving middle market and larger customers in the four principal oil & gas sectors — upstream, midstream, downstream and service — as well as in Power and Renewables. The bank offers a variety of financial products, from traditional oil & gas reserve financing, to longer-term capital markets transactions and merger/acquisition advisory services through its broker-dealer arm, DNB Markets, Inc. Ancillary service capabilities include cash management/depository services, as well as commodity and interest rate hedging.
For information on DNB's energy services, please visit the DNB energy website.
About Fifth Third Bancorp
Fifth Third Bank is a diversified financial services company with over $120 billion in assets. The Bank's energy group is comprised of experienced and knowledgeable individuals that can assist in providing and structuring financial solutions to meet their clients' needs across the upstream, midstream, downstream and services sectors. Solutions and capabilities include commodity hedging, interest rate management, foreign exchange, debt capital markets, treasury management, and depository/investment products.
For more information, please contact Richard Butler at 713-401-6101 or richard.butler@53.com.
About CIBC
CIBC is a leading North American bank headquartered in Canada and with offices around the world. CIBC was originally founded nearly 150 years ago, and has supported and financed the energy industry for many decades. CIBC was recently ranked as the strongest publicly traded bank in North America by Bloomberg, and is rated A+/Aa3 by S&P and Moody's, respectively.
Our energy specialists draw on the breadth of CIBC's capabilities to provide market insights and creative solutions for our clients. Services include corporate banking, commodity and interest rate hedging and strategy, A&D advisory, and capital markets.
CIBC is publicly traded on the NYSE and Toronto Stock Exchange under the symbol "CM" and has a market cap of $36 billion and nearly $400 billion in total assets. For more information, please visit the CIBC energy website.
About Haynes and Boone
Haynes and Boone, LLP is an energy-focused corporate law firm, providing a full spectrum of legal services to our clients across the oil and gas industry, including the upstream, midstream, and downstream sectors. We serve energy clients from our offices in Texas, Colorado, New York, California, Washington, D.C., London, Mexico City and Shanghai. We work as a team representing U.S. and foreign public and private companies engaged in the dynamic day-to-day work of finding and extracting oil and gas, and the banks, investment funds and other investors that support them.
Our team of more than 100 energy lawyers and landmen understands the U.S. and international physical and financial energy markets, and the firm has been helping operators and lenders complete some of the largest financings and M&A transactions in recent years. With more than 600 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal, and our energy lawyers have been ranked by publications such as Best Lawyers in America, Chambers and Partners and Who's Who in Energy.
For more info, please visit www.haynesboone.com.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group, the world's eighth largest bank by total assets (The Banker, July 2014). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking, and international private banking.
The Bank provides support to clients in large international markets through its network, with a presence in major countries in Europe, the Americas, Asia and the Middle East.
With headquarters in New York City, and U.S. offices in Houston and Chicago, Credit Agricole CIB Americas offers its corporate and institutional clients financial products and services and made-to-order structuring, origination and distribution, through both its banking unit Credit Agricole CIB, and the full-service broker-dealer Credit Agricole Securities (USA) Inc., which is a member of the NYSE and NASD. Credit Agricole CIB is also present in Montreal, Canada, and in Latin America with offices in Argentina, Brazil, and Mexico.
The Energy Industry represents the single largest concentration of industry exposure at Credit Agricole Corporate and Investment Bank, whose specialty focus dates back over 100 years. Our Energy practice for North America, located in Houston, focuses on all segments of the business and covers it on a truly global basis.
For more information, visit www.ca-cib.com.
About Natixis
Natixis is the international corporate and investment banking, asset management, insurance and financial services arm of Groupe BPCE, the second-largest banking group in France.
Natixis Corporate & Investment Banking advises and assists corporations, financial institutions, institutional investors, financial sponsors, public-sector organizations and the networks of Groupe BPCE.
We furnish a diversified array of financing solutions, provide access to capital markets and transaction banking services.
Areas of expertise include Advisory: M&A, primary equity, capital & rating advisory; Financing: vanilla and structured; Capital Markets: equities, fixed income, credit, forex and commodities; Global Transaction Banking: trade finance, cash management, liquidity management and correspondent banking; Research: economic, credit, equity and quantitative.
The Bank leverages the expertise and highly technical skills of its teams, and provides industry-recognized research to build innovative and mix-and-matchable solutions. Corporate and Investment Banking is present on the main financial markets via three international platforms: Americas, Asia-Pacific, and EMEA (Europe, Middle East, Africa).
About PJ SOLOMON
PJ SOLOMON is an investment banking advisory firm that provides strategic advisory services to chief executive officers and senior management, owners of public and private companies, boards of directors, and special committees.
Our full suite of advisory services includes Mergers and Acquisitions, Restructuring and Capital Markets across a range of industry verticals.
The PJ SOLOMON Energy Advisory Group provides strategic investment banking advisory services to public and private clients across the energy chain. Drawing upon our extensive sector relationships and deep strategic and operational expertise, we can offer a unique and valued advisory platform for the upstream, upstream A&D, midstream and the utility sectors.
Based in our Houston office, the PJ SOLOMON Energy team holds more than 100 years of experience on a broad range of domestic and cross-border transactions including mergers and acquisitions, A&D, restructurings, bankruptcies, and public and private capital raisings.
Industry sectors/sub-sectors include: Upstream, Upstream A&D, Midstream, Energy related and Utilities.
About PNC Financial Services Group
PNC is one of the largest, best-regarded and best-capitalized financial services companies in the country, with approximately $325 billion in assets and offices in 33 states, Canada and the United Kingdom.
PNC's Energy Group, headed by Tom Byargeon, is a significant capital and service provider to energy companies, with approximately $6.5 billion in commitments to the industry. The Energy office in Houston houses a team with extensive experience and deep relationships across the entire energy supply chain. This group also offers strategic corporate finance advice and delivers PNC's comprehensive set of solutions and capabilities, including commodity and interest rate hedging, debt capital markets, loan syndications, treasury management, asset securitization, equipment finance and institutional investments.
For more information, please contact Tom Byargeon at 713-353-8782 or tom.byargeon@pnc.com. You can also visit www.pnc.com.
About MUFG
Mitsubishi UFJ Financial Group (MUFG) has been a leading provider of banking services to the oil and gas industry in the Americas for more than 30 years, consistently ranking in the Top 10 Lead Arrangers and Top 10 Bond Arrangers in the Thomson Reuters Oil and Gas League Tables.
We support clients across the industry—from regional exploration and production to global diversified services companies—that benefit from our focused approach, strong execution, and customized services. Whether you are looking to expand existing reserves, make an acquisition, or streamline operations, we can support your growth with services, including: underwriting and syndications; U.S./Canadian cross-border funding; securities underwriting and placements; leasing and tax equity financing; and commodities, interest rate, and foreign exchange risk management.
For more information, visit: www.mufgamericas.com/oil-gas.
About Wells Fargo & Company
Wells Fargo & Company is a nationwide, diversified, community-based financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.
The Energy Banking Group, headed by Bart Schouest, provides corporate banking products and services to the energy sector, including upstream, midstream, oilfield services, and diversified industries. With offices in Houston, Dallas, Denver, Calgary, and Aberdeen the group's success is driven by in-depth industry expertise and longstanding relationships with key industry participants. The group has over $45 billion of credit commitments to public and private companies across the upstream, midstream, downstream, services, and power and utilities sectors.
The Energy & Power Investment Banking Group, headed by James Kipp, provides strategic advisory and corporate finance expertise to energy and power clients, including upstream, midstream, oilfield services, downstream, coal and the power & utilities sectors. Areas of focus include equity, equity-linked and debt underwritings, private placements, syndications, and mergers and acquisitions. The Energy & Power Investment Banking Group has offices in Houston and Charlotte.
These teams work together to offer clients industry and product expertise, in addition to sharing their understanding of internal and external forces that drive both industry trends and financial markets. For additional information, contact us at 713-319-1350 or Energy@wellsfargo.com.
To learn more about Wells Fargo & Company, please visit the company's web site at www.wellsfargo.com.
About SMBC
Sumitomo Mitsui Banking Corporation (SMBC) is a core member of Sumitomo Mitsui Financial Group (SMFG), a Tokyo-based bank holding company that is ranked among the largest 25 banks globally by assets under management.
SMBC Americas Division, with more than 2,500 employees, oversees operations in the U.S., Canada, Mexico, and South America. We work across SMFG to offer corporate and institutional clients sophisticated and comprehensive financial services around the globe.
SMBC's roots in Japan trace back more than 400 years to 1590. The Americas Division of SMBC has more than a century of experience in the United States, beginning when the San Francisco branch of Sumitomo Bank was established in 1919. Sumitomo Mitsui Financial Group (NYSE: SMFG) was listed on the New York Stock Exchange in 2010.
For more information please visit the corporate website: www.smbcgroup.com/americas/group-companies/
View original content:http://www.prnewswire.com/news-releases/enercom-updates-list-of-presenters-for-the-oil--gas-conference-23-300665469.html
SOURCE EnerCom, Inc.
Article Date
6/13/2018North American Shale Producers, International Operators Join Roster of Presenting Companies for EnerCom's The Oil & Gas Conference®
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, June 5, 2018 /PRNewswire/ -- EnerCom, Inc. is pleased to update the list of presenting oil and gas companies for the 23rd annual edition of The Oil & Gas Conference®, coming August 19-22, 2018, at the Westin Denver Downtown. Investment and oil and gas professionals may register for the event now through the conference website.
Conference Details: The Oil & Gas Conference® 23 offers investment professionals the opportunity to listen to senior management teams in the oil and gas industry present operational and financial strategies and learn about important energy topics affecting the global oil and gas industry. The forum fosters healthy dialogue and informal networking opportunities for attendees.
Public and Private Company Presenters: The 2018 edition of EnerCom's The Oil & Gas Conference® will feature public and private oil and gas companies with operations spanning 40 countries and six continents, including all U.S. shale basins, the Gulf of Mexico, Canada, Latin America and Africa. A work-in-progress list of the 2018 presenting companies will be posted and updated on the conference website.
The EnerCom Denver 2018 presenting companies include but are not limited to:
Additional Speakers: Global energy industry leaders, economists, market strategists, government officials and other energy experts will provide their insights on topics such as global commodities markets, the U.S. becoming a net energy exporter, and capital sources for energy development.
Who Attends the Conference: More than 2,000 institutional, private equity and hedge fund investors, energy research analysts, retail brokers, trust officers, high net worth investors, investment bankers and energy industry professionals gather in Denver for the conference.
One-on-One Meetings: EnerCom works in advance with presenting company management teams to arrange one-on-one meetings with the attending institutional investors and research analysts at the conference venue. In 2017, EnerCom managed more than 2,100 one-on-one meeting requests.
How to Register: Investment professionals and oil and gas companies can register for the event through the conference website.
EnerCom History and Sponsors: EnerCom, Inc. founded The Oil & Gas Conference® in 1996. It is the oldest and largest energy investment conference in Denver.
Global sponsors of EnerCom's conferences are Netherland, Sewell & Associates; RS Energy Group; Moss Adams; and Preng & Associates. Sponsors of The Oil & Gas Conference® 23 are Bank of America Merrill Lynch; AssuredPartners; DNB Bank ASA; Fifth Third Bank; CIBC; Haynes and Boone; Credit Agricole CIB; Natixis; PJ SOLOMON; PNC Financial Services Group; Wells Fargo; MUFG; and SMBC.
About EnerCom, Inc.
Since 1994 EnerCom, Inc. has developed into a nationally recognized oil and gas-focused investor relations consultancy advising oil and gas industry clients on corporate strategy, asset valuations, investor communications, media relations and providing visual communications design.
EnerCom offers services and produces and publishes numerous data products and external communications tools for public and private energy companies including:
EnerCom's professionals have more than 170 years of industry and business experience and a proven track record of success.
Headquartered in Denver, with senior consultants in Dallas and Houston, EnerCom uses the team approach for delivering its wide range of services to public and private companies, large and small, operating in the global exploration and production, OilService, capital markets, and associated advanced-technology industries.
EnerCom's upcoming oil and gas investment conferences include:
EnerCom Denver (The Oil & Gas Conference®) – August 19-22, 2018
EnerCom Dallas – Q1 - 2019
For more information about EnerCom and its services, please visit http://www.enercominc.com/ or call +1 303-296-8834 to speak with the management team or one of our consultants.
About Netherland, Sewell & Associates, Inc.
Netherland, Sewell & Associates, Inc. (NSAI) was founded in 1961 to provide the highest quality engineering and geological consulting to the petroleum industry. Today they are recognized as the worldwide leader of petroleum property analysis to industry and financial organizations and government agencies. With offices in Dallas and Houston, NSAI provides a complete range of geological, geophysical, petrophysical, and engineering services and has the technical experience and ability to perform these services in any of the onshore and offshore oil and gas producing areas of the world. They provide reserves reports and audits, acquisition and divestiture evaluations, simulation studies, exploration resources assessments, equity determinations, and management and advisory services. For a complete list of services or to learn more about Netherland, Sewell & Associates, Inc. please visit www.netherlandsewell.com.
For more information about NSAI, call C.H. (Scott) Rees, Chief Executive Officer, at 214-969-5401 or send an email to info@nsai-petro.com.
About RS Energy Group
RS Energy Group (RSEG) provides data-driven intelligence: evaluate assets, weigh valuable M&A opportunities and benchmark your business for more precise decision-making.
RSEG officially released its data solution in April 2017. RS Data™ provides clients with corrected, multi-sourced permit, completion and production data of unparalleled completeness and quality.
Today, RSEG's intelligence covers more than 150 companies operating in every key North American and many international energy plays with a powerful combination of practical insights at the asset level and a long-standing participation in capital markets. RSEG's independent, unbiased and accurate analysis forms a foundation of trust with its clients. Its collaborative approach, both internally and as an extension of its clients' research efforts, promotes innovation and fosters intimate, long term partnerships.
RS Energy Group (RSEG) is headquartered in Calgary, Alberta, with strategic locations in Houston, New York City, Philadelphia, San Francisco and Los Angeles. Contact RS Energy Group by phone at (403) 294-9111, or email info@rseg.com.
About Moss Adams LLP
For more than 30 years, Hein & Associates has been recognized throughout the industry as a leading oil and gas accounting and advisory firm. In late 2017, Hein combined with Moss Adams LLP, one of the largest accounting, consulting and wealth management firms in the nation, creating a $600 million middle-market accounting/tax/audit leader in the western U.S. with a strong oil & gas practice group.
With more than 2,900 professionals and staff across more than 25 locations in the West and beyond, Moss Adams works with many of the world's most innovative companies and leaders. Our strength in the middle market enables us to advise clients at all intervals of development—from start-up, to rapid growth and expansion, to transition. Today, we help over 2,300 companies doing business in more than 100 countries and territories.
For more information, please contact Joe Blice, Partner, National Practice Leader, Oil & Gas, CPA joe.blice@mossadams.com, (972) 687-7818.
Moss Adams LLP provides details at https://www.mossadams.com/home .
About Preng & Associates
Preng & Associates, founded in 1980, is the only retainer-based, international executive search firm specializing solely in the energy industry. Its number one priority is to assist clients with their executive selection, organization development, and human resource needs by providing the highest quality service. Preng's record of accomplishment is directly attributable to their experienced staff, worldwide network of industry contacts, proven search methodology, and high standards of professionalism. Preng has conducted over 3000 searches for board, executive, management, and professional positions in its 35-year history and has the highest success and repeat client track record.
Preng's practice is based on the premise that the search process is most effective when conducted by professionals with significant search industry experience. The company has earned a reputation for combining professional search disciplines with an in-depth industry and market understanding and has succeeded in some of the industry's most challenging and high-profile searches. Preng's international reach allows it to effectively conduct global engagements; and as a member of the Association of Executive Search Consultants, Preng practices and promotes its high standards of conduct and professionalism.
For more information about Preng & Associates, contact Charles Carpenter, Partner at 713-243-2610 or ccarpenter@preng.com.
About Bank of America Merrill Lynch
Bank of America Merrill Lynch Oil and Gas Group
The Bank of America Merrill Lynch (BofAML) Oil and Gas practice is comprised of a global team of bankers dedicated to covering the energy industry, dating back to the 1920s when Texas predecessor banks pioneered reserve-based lending. The practice includes an experienced in-house Petroleum Engineering team with over 150 years of combined experience. With one of the only full-service financial energy platforms in the industry, the BofAML oil and gas team manages significant capital commitments in the energy sector with dedicated bankers based in Calgary, Denver, Dallas, Houston, London and New York.
The BofA Merrill Lynch Global Research platform offers clients access to information and actionable ideas on stocks, bonds, economics and investment strategies. With approximately 700 analysts in more than 20 countries, we offer our clients knowledge about economic and business developments that are having an impact on the markets, so that they can work with their financial advisors to make the most of opportunities. BofA Merrill Lynch Global Research was ranked No. 1 for the fourth consecutive year on the 2014 list of Top Global Research Firms, Institutional Investor.
About AssuredPartners
AssuredPartners Colorado (AP CO) combines 30+ years of experience with leading-edge products to provide exceptional service and value to our customers. We provide a full range of brokerage services including employee benefits, property and casualty, and retirement. Headquartered in Colorado, we think globally but act locally, with personal services designed specifically for each individual client. AP CO utilizes resources with national networks of brokers to ensure we can meet your every need and find answers to your questions quickly and efficiently.
Our goal is to achieve a long-term relationship focused on bringing value to your employee benefits management and insurance programs. We are committed to utilizing our collective talent to support your insurance goals. We work to identify activities that drive claim frequency, and implement an action plan to control health care costs and promote a healthy work environment for your employees.
Securing the best insurance package for your business begins with planning. Analyzing all your risks is critical to successful implementation of your insurance plan. AP CO will partner with you by providing ongoing assistance, consultation and service that will help you control your insurance expenses, choose the best plan to fit your company's needs and promote health care consumerism.
For more information on Assured Partners, please visit the website, call (800) 322-9773 or email info@assuredptrco.com.
About DNB ASA
DNB is Norway's largest financial services provider, with total assets approaching $400 billion. The bank has for years been a major provider of capital to the oil & gas industry, growing up literally side by side with the highly prolific fields developed in the Norwegian Sector of the North Sea. The Oslo Energy Office maintains a global financing strategy, and serves this market through multiple offices around the world including Houston, London and Singapore.
Energy Americas, based in Houston, comprises approximately 20 seasoned energy finance professionals. Aside from facilitating the bank's global business strategies, the office concentrates primarily on serving middle market and larger customers in the four principal oil & gas sectors — upstream, midstream, downstream and service — as well as in Power and Renewables. The bank offers a variety of financial products, from traditional oil & gas reserve financing, to longer-term capital markets transactions and merger/acquisition advisory services through its broker-dealer arm, DNB Markets, Inc. Ancillary service capabilities include cash management/depository services, as well as commodity and interest rate hedging.
For information on DNB's energy services, please visit the DNB energy website.
About Fifth Third Bancorp
Fifth Third Bank is a diversified financial services company with over $120 billion in assets. The Bank's energy group is comprised of experienced and knowledgeable individuals that can assist in providing and structuring financial solutions to meet their clients' needs across the upstream, midstream, downstream and services sectors. Solutions and capabilities include commodity hedging, interest rate management, foreign exchange, debt capital markets, treasury management, and depository/investment products.
For more information, please contact Richard Butler at 713-401-6101 or richard.butler@53.com.
About CIBC
CIBC is a leading North American bank headquartered in Canada and with offices around the world. CIBC was originally founded nearly 150 years ago, and has supported and financed the energy industry for many decades. CIBC was recently ranked as the strongest publicly traded bank in North America by Bloomberg, and is rated A+/Aa3 by S&P and Moody's, respectively.
Our energy specialists draw on the breadth of CIBC's capabilities to provide market insights and creative solutions for our clients. Services include corporate banking, commodity and interest rate hedging and strategy, A&D advisory, and capital markets.
CIBC is publicly traded on the NYSE and Toronto Stock Exchange under the symbol "CM" and has a market cap of $36 billion and nearly $400 billion in total assets. For more information, please visit the CIBC energy website.
About Haynes and Boone
Haynes and Boone, LLP is an energy-focused corporate law firm, providing a full spectrum of legal services to our clients across the oil and gas industry, including the upstream, midstream, and downstream sectors. We serve energy clients from our offices in Texas, Colorado, New York, California, Washington, D.C., London, Mexico City and Shanghai. We work as a team representing U.S. and foreign public and private companies engaged in the dynamic day-to-day work of finding and extracting oil and gas, and the banks, investment funds and other investors that support them.
Our team of more than 100 energy lawyers and landmen understands the U.S. and international physical and financial energy markets, and the firm has been helping operators and lenders complete some of the largest financings and M&A transactions in recent years. With more than 600 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by The National Law Journal, and our energy lawyers have been ranked by publications such as Best Lawyers in America, Chambers and Partners and Who's Who in Energy.
For more info, please visit www.haynesboone.com.
About Crédit Agricole Corporate and Investment Bank
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group, the world's eighth largest bank by total assets (The Banker, July 2014). Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking, and international private banking.
The Bank provides support to clients in large international markets through its network, with a presence in major countries in Europe, the Americas, Asia and the Middle East.
With headquarters in New York City, and U.S. offices in Houston and Chicago, Credit Agricole CIB Americas offers its corporate and institutional clients financial products and services and made-to-order structuring, origination and distribution, through both its banking unit Credit Agricole CIB, and the full-service broker-dealer Credit Agricole Securities (USA) Inc., which is a member of the NYSE and NASD. Credit Agricole CIB is also present in Montreal, Canada, and in Latin America with offices in Argentina, Brazil, and Mexico.
The Energy Industry represents the single largest concentration of industry exposure at Credit Agricole Corporate and Investment Bank, whose specialty focus dates back over 100 years. Our Energy practice for North America, located in Houston, focuses on all segments of the business and covers it on a truly global basis.
For more information, visit www.ca-cib.com.
About Natixis
Natixis is the international corporate and investment banking, asset management, insurance and financial services arm of Groupe BPCE, the second-largest banking group in France.
Natixis Corporate & Investment Banking advises and assists corporations, financial institutions, institutional investors, financial sponsors, public-sector organizations and the networks of Groupe BPCE.
We furnish a diversified array of financing solutions, provide access to capital markets and transaction banking services.
Areas of expertise include Advisory: M&A, primary equity, capital & rating advisory; Financing: vanilla and structured; Capital Markets: equities, fixed income, credit, forex and commodities; Global Transaction Banking: trade finance, cash management, liquidity management and correspondent banking; Research: economic, credit, equity and quantitative.
The Bank leverages the expertise and highly technical skills of its teams, and provides industry-recognized research to build innovative and mix-and-matchable solutions. Corporate and Investment Banking is present on the main financial markets via three international platforms: Americas, Asia-Pacific, and EMEA (Europe, Middle East, Africa).
About PJ SOLOMON
PJ SOLOMON is an investment banking advisory firm that provides strategic advisory services to chief executive officers and senior management, owners of public and private companies, boards of directors, and special committees.
Our full suite of advisory services includes Mergers and Acquisitions, Restructuring and Capital Markets across a range of industry verticals.
The PJ SOLOMON Energy Advisory Group provides strategic investment banking advisory services to public and private clients across the energy chain. Drawing upon our extensive sector relationships and deep strategic and operational expertise, we can offer a unique and valued advisory platform for the upstream, upstream A&D, midstream and the utility sectors.
Based in our Houston office, the PJ SOLOMON Energy team holds more than 100 years of experience on a broad range of domestic and cross-border transactions including mergers and acquisitions, A&D, restructurings, bankruptcies, and public and private capital raisings.
Industry sectors/sub-sectors include: Upstream, Upstream A&D, Midstream, Energy related and Utilities.
About PNC Financial Services Group
PNC is one of the largest, best-regarded and best-capitalized financial services companies in the country, with approximately $325 billion in assets and offices in 33 states, Canada and the United Kingdom.
PNC's Energy Group, headed by Tom Byargeon, is a significant capital and service provider to energy companies, with approximately $6.5 billion in commitments to the industry. The Energy office in Houston houses a team with extensive experience and deep relationships across the entire energy supply chain. This group also offers strategic corporate finance advice and delivers PNC's comprehensive set of solutions and capabilities, including commodity and interest rate hedging, debt capital markets, loan syndications, treasury management, asset securitization, equipment finance and institutional investments.
For more information, please contact Tom Byargeon at 713-353-8782 or tom.byargeon@pnc.com. You can also visit www.pnc.com.
About MUFG
Mitsubishi UFJ Financial Group (MUFG) has been a leading provider of banking services to the oil and gas industry in the Americas for more than 30 years, consistently ranking in the Top 10 Lead Arrangers and Top 10 Bond Arrangers in the Thomson Reuters Oil and Gas League Tables.
We support clients across the industry—from regional exploration and production to global diversified services companies—that benefit from our focused approach, strong execution, and customized services. Whether you are looking to expand existing reserves, make an acquisition, or streamline operations, we can support your growth with services, including: underwriting and syndications; U.S./Canadian cross-border funding; securities underwriting and placements; leasing and tax equity financing; and commodities, interest rate, and foreign exchange risk management.
For more information, visit: www.mufgamericas.com/oil-gas.
About Wells Fargo & Company
Wells Fargo & Company is a nationwide, diversified, community-based financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.
The Energy Banking Group, headed by Bart Schouest, provides corporate banking products and services to the energy sector, including upstream, midstream, oilfield services, and diversified industries. With offices in Houston, Dallas, Denver, Calgary, and Aberdeen the group's success is driven by in-depth industry expertise and longstanding relationships with key industry participants. The group has over $45 billion of credit commitments to public and private companies across the upstream, midstream, downstream, services, and power and utilities sectors.
The Energy & Power Investment Banking Group, headed by James Kipp, provides strategic advisory and corporate finance expertise to energy and power clients, including upstream, midstream, oilfield services, downstream, coal and the power & utilities sectors. Areas of focus include equity, equity-linked and debt underwritings, private placements, syndications, and mergers and acquisitions. The Energy & Power Investment Banking Group has offices in Houston and Charlotte.
These teams work together to offer clients industry and product expertise, in addition to sharing their understanding of internal and external forces that drive both industry trends and financial markets. For additional information, contact us at 713-319-1350 or Energy@wellsfargo.com.
To learn more about Wells Fargo & Company, please visit the company's web site at www.wellsfargo.com.
About SMBC
Sumitomo Mitsui Banking Corporation (SMBC) is a core member of Sumitomo Mitsui Financial Group (SMFG), a Tokyo-based bank holding company that is ranked among the largest 25 banks globally by assets under management.
SMBC Americas Division, with more than 2,500 employees, oversees operations in the U.S., Canada, Mexico, and South America. We work across SMFG to offer corporate and institutional clients sophisticated and comprehensive financial services around the globe.
SMBC's roots in Japan trace back more than 400 years to 1590. The Americas Division of SMBC has more than a century of experience in the United States, beginning when the San Francisco branch of Sumitomo Bank was established in 1919. Sumitomo Mitsui Financial Group ( NYSE : SMFG ) was listed on the New York Stock Exchange in 2010.
For more information please visit the corporate website: www.smbcgroup.com/americas/group-companies/
View original content:http://www.prnewswire.com/news-releases/north-american-shale-producers-international-operators-join-roster-of-presenting-companies-for-enercoms-the-oil--gas-conference-300659710.html
SOURCE EnerCom, Inc.
Article Date
6/5/20185/31/2018 - SM Energy Announces Closing Of Non-Core Asset Sales And Participation In Upcoming Conferences
SM Energy Announces Closing Of Non-Core Asset Sales And Participation In Upcoming Conferences
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, May 31, 2018 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) announced today that it closed the previously announced sales of its remaining assets in the Williston Basin located in Divide County, North Dakota, and third-party operated assets known as Halff East located in Upton County, Texas, for an aggregate of $292.3 million. After taking into account the January 1, 2018 effective date for each transaction, the net cash proceeds received by the Company was $249.2 million, subject to final purchase price adjustments. Both divestitures closed during May 2018 and have an effective date of January 1, 2018. First quarter 2018 net production from these assets averaged approximately 7,300 Boe per day (82% oil). The Company plans to use the sale proceeds for general corporate purposes, including debt reduction.
UPCOMING CONFERENCE PARTICIPATION
The investor presentation for the following events will be posted to the Company's website at www.sm-energy.com.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, expected use of divestiture proceeds. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-announces-closing-of-non-core-asset-sales-and-participation-in-upcoming-conferences-300657655.html
SOURCE SM Energy Company
Article Date
5/31/20185/3/2018 - SM Energy Reports First Quarter 2018 Results
SM Energy Reports First Quarter 2018 Results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, May 3, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announced financial and operating results for the first quarter of 2018. Highlights include:
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "New well results are positive across the board, continuing to demonstrate the quality of our Midland Basin assets and our excellent track record for strong operational execution. First quarter successes in reducing net debt and driving margin expansion underscore our long-term objectives to reduce leverage and drive a competitively high rate of cash flow growth."
SUMMARY WELL RESULTS
Results from new RockStar wells (18 of 19 have 10,000 foot laterals) that have reached their 30-day peak IP rates include:
FIRST QUARTER 2018 RESULTS
First quarter of 2018 net income was $317.4 million or $2.81 per diluted common share, up from $74.4 million or $0.67 per diluted common share in the first quarter of 2017. Net income includes a $385.4 million gain on divestiture activity, following the sale of the majority of the Company's Powder River Basin assets for $500 million. Net income also includes a net derivative loss of $7.5 million, which includes $24.5 million in realized hedge losses.
First quarter of 2018 net cash provided by operating activities (GAAP) was $140.1 million.
Adjusted net income, adjusted net income per diluted common share and adjusted EBITDAX are non-GAAP measures. Please reference the reconciliations to the most directly comparable GAAP financial measures at the end of this release.
First quarter of 2018 adjusted net income was $8.2 million, or $0.07 per diluted common share, up from a net loss of ($19.6) million, or ($0.18) per diluted common share in the first quarter of 2017. The calculation of adjusted net loss excludes non-recurring items and items difficult to estimate, in order to present results that can be more consistently compared with prior periods and peer results. Specifically, first quarter adjustments remove the net gain on divestitures, non-cash derivative losses and abandonment and impairment charges.
First quarter of 2018 adjusted EBITDAX was $210.2 million, up from $172.0 million in the first quarter of 2017. Increased adjusted EBITDAX was primarily driven by a 68% increase in the operating margin compared with the prior year, partially offset by a 16% decline in production due to asset divestitures. Adjusted EBITDAX includes an accrual of $0.8 million to other expense that was a non-recurring charge.
FINANCIAL POSITION AND LIQUIDITY
At March 31, 2018, the outstanding principal balance on the Company's long-term debt included $2.8 billion in senior notes plus $172.5 million in senior convertible notes, with zero drawn on the Company's senior secured credit facility. At quarter-end, the Company had a cash balance of $643.3 million, providing for net debt of $2.3 billion. The Company's undrawn credit facility plus cash on hand provided $1.6 billion in liquidity.
Pro forma for the expected sales of the Company's North Dakota and Texas assets for $292.3 million, net debt at quarter-end would have been $2.0 billion.
Subsequent to quarter-end, the lenders on the Company's credit facility increased the borrowing base to $1.4 billion and aggregate lender commitments to $1.0 billion.
COMMODITY DERIVATIVES
For the last nine months of 2018, the Company currently has commodity derivatives in place for approximately 85% of expected oil production and 65% of expected gas production (NGLs are hedged by product). Additionally, the Company has Midland-Cushing basis hedges in place for approximately 70% of expected Permian oil production for the remainder of 2018 at just over $1.00 per Bbl.
SCHEDULE FOR FIRST QUARTER REPORTING
This release is accompanied by an investor presentation and pre-recorded call with transcript all posted to the Company's website. Please visit the Company's website at ir.sm-energy.com to access this additional first quarter detail.
Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time on May 4, 2018, for the first quarter 2018 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until May 11, 2018.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, consummation of and expected proceeds from pending divestitures. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
|
SM ENERGY COMPANY | ||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||
|
March 31, 2018 | ||||||||||
|
Production Data |
||||||||||
|
For the Three Months Ended |
Percent | |||||||||
|
2018 |
2017 |
|||||||||
|
Average realized sales price, before the effects of derivative settlements: |
||||||||||
|
Oil (per Bbl) |
$ |
61.25 |
$ |
47.55 |
29 |
% | ||||
|
Gas (per Mcf) |
$ |
3.14 |
$ |
2.98 |
5 |
% | ||||
|
NGLs (per Bbl) |
$ |
25.53 |
$ |
22.06 |
16 |
% | ||||
|
Per Boe |
$ |
37.76 |
$ |
27.55 |
37 |
% | ||||
|
Average realized sales price, including the effects of derivative settlements: |
||||||||||
|
Oil (per Bbl) |
$ |
56.39 |
$ |
44.97 |
25 |
% | ||||
|
Gas (per Mcf) |
$ |
3.39 |
$ |
3.50 |
(3) |
% | ||||
|
NGLs (per Bbl) |
$ |
19.44 |
$ |
19.18 |
1 |
% | ||||
|
Equivalent (per Boe) |
$ |
35.34 |
$ |
27.55 |
28 |
% | ||||
|
Production: |
||||||||||
|
Oil (MMBbl) |
4.3 |
3.5 |
21 |
% | ||||||
|
Gas (Bcf) |
25.2 |
33.9 |
(26) |
% | ||||||
|
NGLs (MMBbl) |
1.7 |
2.9 |
(43) |
% | ||||||
|
MMBoe |
10.1 |
12.1 |
(16) |
% | ||||||
|
Average daily production: |
||||||||||
|
Oil (MBbl/d) |
47.4 |
39.2 |
21 |
% | ||||||
|
Gas (MMcf/d) |
280.2 |
376.6 |
(26) |
% | ||||||
|
NGLs (MBbl/d) |
18.6 |
32.5 |
(43) |
% | ||||||
|
MBoe/d |
112.7 |
134.4 |
(16) |
% | ||||||
|
Per Boe data: |
||||||||||
|
Realized price, before the effects of derivative settlements |
$ |
37.76 |
$ |
27.55 |
37 |
% | ||||
|
Lease operating expense |
4.95 |
3.82 |
30 |
% | ||||||
|
Transportation costs |
4.63 |
5.88 |
(21) |
% | ||||||
|
Production taxes |
1.68 |
1.17 |
44 |
% | ||||||
|
Ad valorem tax expense |
0.67 |
0.55 |
22 |
% | ||||||
|
General and administrative(1) (2) |
2.73 |
2.38 |
15 |
% | ||||||
|
Operating margin, before the effects of derivative settlements (2) |
23.10 |
13.75 |
68 |
% | ||||||
|
Derivative settlement loss |
(2.42) |
— |
(100) |
% | ||||||
|
Operating margin, including the effects of derivative settlements (2) |
$ |
20.68 |
$ |
13.75 |
50 |
% | ||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
$ |
12.87 |
$ |
11.39 |
13 |
% | ||||
|
(1) Includes non-cash stock-based compensation expense per Boe of $0.40 and $0.34 for the three-month periods ending March 31, 2018 and 2017, respectively. | ||||||||||
|
(2) Certain prior period amounts have been adjusted to conform to the current period presentation due to an accounting standards update. | ||||||||||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
March 31, 2018 | |||||||
|
Condensed Consolidated Balance Sheets |
|||||||
|
(in thousands, except share data) |
March 31, |
December 31, | |||||
|
ASSETS |
2018 |
2017 | |||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
643,337 |
$ |
313,943 |
|||
|
Accounts receivable |
192,562 |
160,154 |
|||||
|
Derivative assets |
77,296 |
64,266 |
|||||
|
Prepaid expenses and other |
9,997 |
10,752 |
|||||
|
Total current assets |
923,192 |
549,115 |
|||||
|
Property and equipment (successful efforts method): |
|||||||
|
Proved oil and gas properties |
5,824,014 |
6,139,379 |
|||||
|
Accumulated depletion, depreciation, and amortization |
(2,893,674) |
(3,171,575) |
|||||
|
Unproved oil and gas properties |
1,986,070 |
2,047,203 |
|||||
|
Wells in progress |
405,549 |
321,347 |
|||||
|
Oil and gas properties held for sale, net |
234,618 |
111,700 |
|||||
|
Other property and equipment, net of accumulated depreciation of $52,483 and $49,985, respectively |
112,972 |
106,738 |
|||||
|
Total property and equipment, net |
5,669,549 |
5,554,792 |
|||||
|
Noncurrent assets: |
|||||||
|
Derivative assets |
35,128 |
40,362 |
|||||
|
Other noncurrent assets |
32,119 |
32,507 |
|||||
|
Total noncurrent assets |
67,247 |
72,869 |
|||||
|
Total assets |
$ |
6,659,988 |
$ |
6,176,776 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued expenses |
$ |
468,108 |
$ |
386,630 |
|||
|
Derivative liabilities |
181,068 |
172,582 |
|||||
|
Total current liabilities |
649,176 |
559,212 |
|||||
|
Noncurrent liabilities: |
|||||||
|
Revolving credit facility |
— |
— |
|||||
|
Senior Notes, net of unamortized deferred financing costs |
2,770,979 |
2,769,663 |
|||||
|
Senior Convertible Notes, net of unamortized discount and deferred financing costs |
141,269 |
139,107 |
|||||
|
Asset retirement obligations |
85,407 |
103,026 |
|||||
|
Asset retirement obligations associated with oil and gas properties held for sale |
23,139 |
11,369 |
|||||
|
Deferred income taxes |
178,423 |
79,989 |
|||||
|
Derivative liabilities |
53,712 |
71,402 |
|||||
|
Other noncurrent liabilities |
45,786 |
48,400 |
|||||
|
Total noncurrent liabilities |
3,298,715 |
3,222,956 |
|||||
|
Stockholders' equity: |
|||||||
|
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 111,687,016 and 111,687,016 shares, respectively |
1,117 |
1,117 |
|||||
|
Additional paid-in capital |
1,747,035 |
1,741,623 |
|||||
|
Retained earnings (1) |
980,444 |
665,657 |
|||||
|
Accumulated other comprehensive loss (1) |
(16,499) |
(13,789) |
|||||
|
Total stockholders' equity |
2,712,097 |
2,394,608 |
|||||
|
Total liabilities and stockholders' equity |
$ |
6,659,988 |
$ |
6,176,776 |
|||
|
1) The Company reclassified $3.0 million of tax effects stranded in accumulated other comprehensive loss to retained earnings as of January 1, 2018 due to an accounting standards update. |
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
March 31, 2018 | |||||||
|
Condensed Consolidated Statements of Operations | |||||||
|
(in thousands, except per share data) |
For the Three Months Ended | ||||||
|
2018 |
2017 | ||||||
|
(as adjusted) | |||||||
|
Operating revenues and other income: |
|||||||
|
Oil, gas, and NGL production revenue |
$ |
382,886 |
$ |
333,198 |
|||
|
Net gain on divestiture activity |
385,369 |
37,463 |
|||||
|
Other operating revenues |
1,340 |
2,077 |
|||||
|
Total operating revenues and other income |
769,595 |
372,738 |
|||||
|
Operating expenses: |
|||||||
|
Oil, gas, and NGL production expense |
120,879 |
138,046 |
|||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
130,473 |
137,812 |
|||||
|
Exploration(1) |
13,727 |
11,817 |
|||||
|
Abandonment and impairment of unproved properties |
5,625 |
— |
|||||
|
General and administrative(1) |
27,682 |
28,817 |
|||||
|
Net derivative (gain) loss(2) |
7,529 |
(114,774) |
|||||
|
Other operating expenses |
4,612 |
4,859 |
|||||
|
Total operating expenses |
310,527 |
206,577 |
|||||
|
Income from operations |
459,068 |
166,161 |
|||||
|
Interest expense |
(43,085) |
(46,953) |
|||||
|
Loss on extinguishment of debt |
— |
(35) |
|||||
|
Other non-operating income (expense), net |
409 |
(233) |
|||||
|
Income before income taxes |
416,392 |
118,940 |
|||||
|
Income tax expense |
(98,991) |
(44,506) |
|||||
|
Net income |
$ |
317,401 |
$ |
74,434 |
|||
|
Basic weighted-average common shares outstanding |
111,696 |
111,258 |
|||||
|
Diluted weighted-average common shares outstanding |
112,879 |
111,329 |
|||||
|
Basic net income per common share |
$ |
2.84 |
$ |
0.67 |
|||
|
Diluted net income per common share |
$ |
2.81 |
$ |
0.67 |
|||
|
Dividends per common share |
$ |
0.05 |
$ |
0.05 |
|||
|
(1) Non-cash stock-based compensation included in: |
|||||||
|
Exploration expense |
$ |
1,316 |
$ |
1,408 |
|||
|
G&A expense |
4,096 |
4,047 |
|||||
|
Total non-cash stock-based compensation |
$ |
5,412 |
$ |
5,455 |
|||
|
(2) The net derivative (gain) loss line item consists of the following: |
|||||||
|
Settlement (gain) loss |
$ |
24,528 |
$ |
(7) |
|||
|
Gain on fair value changes |
(16,999) |
(114,767) |
|||||
|
Total net derivative (gain) loss |
$ |
7,529 |
$ |
(114,774) |
|||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
March 31, 2018 | |||||||
|
Condensed Consolidated Statements of Cash Flows |
|||||||
|
(in thousands) |
For the Three Months Ended | ||||||
|
2018 |
2017 | ||||||
|
(as adjusted) | |||||||
|
Cash flows from operating activities: |
|||||||
|
Net income |
$ |
317,401 |
$ |
74,434 |
|||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
|
Net (gain) loss on divestiture activity |
(385,369) |
(37,463) |
|||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
130,473 |
137,812 |
|||||
|
Abandonment and impairment of unproved properties |
5,625 |
— |
|||||
|
Stock-based compensation expense |
5,412 |
5,455 |
|||||
|
Net derivative (gain) loss |
7,529 |
(114,774) |
|||||
|
Derivative settlement gain (loss) |
(24,528) |
7 |
|||||
|
Amortization of debt discount and deferred financing costs |
3,866 |
4,946 |
|||||
|
Loss on extinguishment of debt |
— |
35 |
|||||
|
Deferred income taxes |
98,366 |
33,225 |
|||||
|
Other, net |
(2,527) |
3,376 |
|||||
|
Changes in current assets and liabilities: |
|||||||
|
Accounts receivable |
(4,464) |
30,407 |
|||||
|
Prepaid expenses and other |
755 |
178 |
|||||
|
Accounts payable and accrued expenses |
(8,825) |
(5,497) |
|||||
|
Accrued derivative settlements |
(3,579) |
2,838 |
|||||
|
Net cash provided by operating activities |
140,135 |
134,979 |
|||||
|
Cash flows from investing activities: |
|||||||
|
Net proceeds from the sale of oil and gas properties |
490,780 |
744,333 |
|||||
|
Capital expenditures |
(301,521) |
(154,401) |
|||||
|
Acquisition of proved and unproved oil and gas properties |
— |
(75,105) |
|||||
|
Net cash provided by investing activities |
189,259 |
514,827 |
|||||
|
Cash flows from financing activities: |
|||||||
|
Proceeds from credit facility |
— |
397,500 |
|||||
|
Repayment of credit facility |
— |
(397,500) |
|||||
|
Cash paid to repurchase Senior Notes |
— |
(2,344) |
|||||
|
Cash paid for extinguishment of debt |
— |
(13) |
|||||
|
Other, net |
— |
(160) |
|||||
|
Net cash used in financing activities |
— |
(2,517) |
|||||
|
Net change in cash, cash equivalents, and restricted cash |
329,394 |
647,289 |
|||||
|
Cash, cash equivalents, and restricted cash at beginning of period |
313,943 |
12,372 |
|||||
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
643,337 |
$ |
659,661 |
|||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
March 31, 2018 | |||||||
|
Adjusted EBITDAX (Non-GAAP)(1) |
|||||||
|
(in thousands) |
|||||||
|
Reconciliation of net income (GAAP) and net cash provided by operating activities (GAAP) to adjusted EBITDAX (Non-GAAP) |
For the Three Months Ended | ||||||
|
2018 |
2017 | ||||||
|
Net income (GAAP) |
$ |
317,401 |
$ |
74,434 |
|||
|
Interest expense |
43,085 |
46,953 |
|||||
|
Interest income(2) |
(849) |
(335) |
|||||
|
Income tax expense |
98,991 |
44,506 |
|||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
130,473 |
137,812 |
|||||
|
Exploration(3)(4) |
12,411 |
10,409 |
|||||
|
Abandonment and impairment of unproved properties |
5,625 |
— |
|||||
|
Stock-based compensation expense |
5,412 |
5,455 |
|||||
|
Net derivative (gain) loss |
7,529 |
(114,774) |
|||||
|
Derivative settlement gain (loss) |
(24,528) |
7 |
|||||
|
Net gain on divestiture activity |
(385,369) |
(37,463) |
|||||
|
Loss on extinguishment of debt |
— |
35 |
|||||
|
Other |
7 |
4,986 |
|||||
|
Adjusted EBITDAX (Non-GAAP)(4) |
210,188 |
172,025 |
|||||
|
Interest expense |
(43,085) |
(46,953) |
|||||
|
Interest income(2) |
849 |
335 |
|||||
|
Income tax expense |
(98,991) |
(44,506) |
|||||
|
Exploration(3)(4) |
(12,411) |
(10,409) |
|||||
|
Amortization of debt discount and deferred financing costs |
3,866 |
4,946 |
|||||
|
Deferred income taxes |
98,366 |
33,225 |
|||||
|
Other, net (4) |
(2,534) |
(1,610) |
|||||
|
Changes in current assets and liabilities |
(16,113) |
27,926 |
|||||
|
Net cash provided by operating activities (GAAP)(4) |
$ |
140,135 |
$ |
134,979 |
|||
|
(1) Adjusted EBITDAX represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we failed to comply with the covenants that establish a maximum permitted ratio of senior secured debt to adjusted EBITDAX and a minimum permitted ratio of adjusted EBITDAX to interest, we would be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we are in default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under the indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. |
|||||||||
|
(2) Interest income is included within the other non-operating income (expense), net line item on the Company's condensed consolidated statements of operations. |
|||||||||
|
(3) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's accompanying condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
|||||||||
|
(4) Certain prior period amounts have been adjusted to conform to the current period presentation on the condensed consolidated financial statements due to accounting standards updates. |
|||||||||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
March 31, 2018 | |||||||
|
Adjusted Net Income (Loss) (Non-GAAP) |
|||||||
|
(in thousands, except per share data) |
|||||||
|
For the Three Months Ended | |||||||
|
2018 |
2017 | ||||||
|
Net income (GAAP) |
$ |
317,401 |
$ |
74,434 |
|||
|
Net derivative (gain) loss |
7,529 |
(114,774) |
|||||
|
Derivative settlement gain (loss) |
(24,528) |
7 |
|||||
|
Net gain on divestiture activity |
(385,369) |
(37,463) |
|||||
|
Abandonment and impairment of unproved properties |
5,625 |
— |
|||||
|
Loss on extinguishment of debt |
— |
35 |
|||||
|
Other, net(1) |
807 |
4,986 |
|||||
|
Tax effect of adjustments(2) |
86,710 |
53,142 |
|||||
|
Adjusted net income (loss) (Non-GAAP)(3) |
$ |
8,175 |
$ |
(19,633) |
|||
|
Diluted net income per common share (GAAP) |
$ |
2.81 |
$ |
0.67 |
|||
|
Net derivative (gain) loss |
0.07 |
(1.03) |
|||||
|
Derivative settlement gain (loss) |
(0.22) |
— |
|||||
|
Net gain on divestiture activity |
(3.41) |
(0.34) |
|||||
|
Abandonment and impairment of unproved properties |
0.05 |
— |
|||||
|
Loss on extinguishment of debt |
— |
— |
|||||
|
Other, net(1) |
0.01 |
0.04 |
|||||
|
Tax effect of adjustments(2) |
0.76 |
0.48 |
|||||
|
Adjusted net income (loss) per diluted common share (Non-GAAP)(4) |
$ |
0.07 |
$ |
(0.18) |
|||
|
Basic weighted-average common shares outstanding (GAAP) |
111,696 |
111,258 |
|||||
|
Diluted weighted-average common shares outstanding (GAAP) |
112,879 |
111,329 |
|||||
|
Note: Amounts may not calculate due to rounding. |
|||||||
|
(1) For the three-month period ended March 31, 2018, the adjustment is related to bad debt expense and an accrual for a non-recurring matter. For the three-month period ended March 31, 2017, the adjustment is related to impairment of materials inventory and the change in the Net Profits Plan liability. These items are included in other operating expenses on the Company's condensed consolidated statements of operations. | |||||||
|
(2) The tax effect of adjustments is calculated using a tax rate of 21.9% and 36.1% for the three-month periods ended March 31, 2018, and March 31, 2017, respectively. These rates approximate the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||
|
(3) Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, materials inventory loss, and gains or losses on extinguishment of debt. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. | |||||||
|
(4) For periods where the Company reports adjusted net loss, basic weighted-average common shares outstanding are used in the calculation of adjusted net loss per diluted common share. | |||||||
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-first-quarter-2018-results-300642322.html
SOURCE SM Energy Company
Article Date
5/3/20184/17/2018 - SM Energy Announces First Quarter Preview, Permian Outperformance, And Realized Pricing Above Expectations
SM Energy Announces First Quarter Preview, Permian Outperformance, And Realized Pricing Above Expectations
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, April 17, 2018 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced certain operating results for the first quarter of 2018 including production, realized pricing and total capital spend. Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "Combine our exceptional operations team with some of the best assets in the Midland Basin and the result is continued outperformance. We have ramped up our Midland operations to nine rigs and five completions crews with extremely impressive execution. 2018 is off to a great start."
FIRST QUARTER OF 2018 PRODUCTION AND REALIZED PRICES
|
PRODUCTION: |
||||||
|
Permian |
Eagle Ford |
Rocky |
Total |
Production from |
Production | |
|
Oil - MBbl |
3,315 |
354 |
592 |
4,262 |
(661) |
3,601 |
|
Natural gas - MMcf |
5,631 |
18,731 |
861 |
25,222 |
(1,022) |
24,200 |
|
NGLs - MBbl |
5 |
1,641 |
27 |
1,673 |
(27) |
1,646 |
|
Total - MBoe |
4,259 |
5,117 |
763 |
10,139 |
(858) |
9,281 |
|
Note: Totals may not sum due to rounding |
|
REALIZED PRICES: | ||||
|
Permian |
Eagle Ford |
Rocky |
Totals | |
|
Oil/$Bbl |
62.07 |
55.27 |
60.27 |
61.25/56.39 |
|
Natural gas/$Mcf |
4.42 |
2.82 |
1.74 |
3.14/3.39 |
|
NGLs/$Bbl |
nm |
25.45 |
30.36 |
25.53/19.44 |
|
Per Boe |
$54.19 |
$22.29 |
$49.84 |
$37.76/$35.34 |
COSTS INCURRED AND TOTAL CAPITAL SPEND
Costs incurred for the first quarter of 2018 were $372 million. During the quarter, total capital spend (a non-GAAP measure defined as costs incurred less ARO, capitalized interest and acquisitions, reconciled below) was $367 million. The Company drilled 33 net wells and completed approximately 17 net wells in the Permian and drilled 8 net wells and completed 5 net wells in the Eagle Ford, during the first quarter. Total capital spend was aligned with guidance of approximately $350 million, coming in slightly high primarily due to higher ownership interests in certain wells than initially budgeted.
CASH AND LIQUIDITY
The Company's cash balance as of March 31, 2018 was $643.3 million. The Company's undrawn credit facility plus cash on hand provided $1.6 billion in liquidity as of the end of the first quarter.
GUIDANCE UPDATE
As previously announced, the pending asset sales in North Dakota and Texas are expected to reduce 2018 production volumes (partial 2Q18-4Q18) by 1.2 MMBoe, 81% oil and 19% natural gas. Combined with first quarter production that came in 0.1 MMBoe above the guidance range, with a higher weighting of oil production, full year 2018 production guidance is adjusted from 42-46 MMBoe to 40.9-44.9 MMBoe having an average of just over 40% oil in the mix.
Second quarter 2018 production is projected to be 9.7-10.1 MMBoe and include 40% oil in the commodity mix. Second quarter production guidance considers:
Second quarter 2018 total capital spend is projected to be similar to the first quarter of 2018, and includes approximately double the number of net well completions. As previously stated, the Company's 2018 capital expenditure program is weighted to the first half of the year. Total capital spend (before acquisitions) is a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking, non-GAAP financial measure without unreasonable effort because acquisition costs are inherently unpredictable.
SCHEDULE FOR FIRST QUARTER REPORTING
May 3, 2018 – After market close, the Company plans to release its complete first quarter 2018 results, along with the Company's first quarter 2018 earnings release, a pre-recorded webcast discussion of first quarter 2018 financial and operating results, and an associated presentation, all of which will be posted to the Company's website at ir.sm-energy.com.
May 4, 2018 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the first quarter 2018 financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at ir.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until May 11, 2018.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, operational and capital spend guidance, the effect of pending transactions on production guidance, and consummation of pending divestitures. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
|
TOTAL CAPITAL SPEND RECONCILIATION | |||
|
(in millions) |
|||
|
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (Non-GAAP)(1) |
For the Three Months Ended | ||
|
2018 | |||
|
Costs incurred in oil and gas activities (GAAP): |
$ |
372.2 |
|
|
Asset retirement obligation |
(0.9) |
||
|
Capitalized interest |
(4.5) |
||
|
Total capital spend (Non-GAAP): |
$ |
366.7 |
|
|
Note: Totals may not sum due to rounding | |||
|
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. |
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-announces-first-quarter-preview-permian-outperformance-and-realized-pricing-above-expectations-300631728.html
SOURCE SM Energy Company
Article Date
4/17/2018SM Energy Announces Agreements To Sell Additional Non-Core Assets For $292 Million, Coring Up And Bringing Down Net Debt
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, April 4, 2018 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced that it has entered into two definitive agreements, one for the sale of the Company's remaining assets in the Williston Basin located in Divide County, North Dakota, and one for the sale of its third-party operated assets known as Halff East located in Upton County, Texas for combined proceeds of $292.3 million (subject to certain agreed upon closing price adjustments). The buyers are not disclosed.
President and Chief Executive Officer Jay Ottoson comments: "We are committed to our strategy to focus on development of our core top tier Midland Basin and Eagle Ford assets and improving our balance sheet by reducing debt. This is a significant step on both those fronts. In combination with the recent divestiture of our non-core Powder River Basin assets, year-to-date we have announced the expected divestiture of approximately $792 million of non-core assets, which results in an expected reduction in net debt pro forma for year-end 2017 by 30%."(1)
The assets expected to be sold in Divide County include approximately 119,400 predominantly contiguous net acres, 28.8 MMBoe net proved reserves as of year-end 2017 (52% PUD), with December 2017 net production of approximately 6,100 Boe per day (83% oil). The assets expected to be sold in Upton County include a 60% working interest in third-party operated assets, approximately 5,400 net acres, 1.6 MMBoe net proved reserves as of year-end 2017 (0% PUD) with December 2017 net production of approximately 1,025 Boe per day (72% oil). The transactions are each expected to close in the second quarter of 2018, and each have an effective date of January 1, 2018. The purchase price of each transaction will be subject to certain agreed upon closing price adjustments. Each transaction is subject to the satisfaction of required closing conditions, and there can be no assurance that either transaction will close on time or at all. The Company plans to use the expected sale proceeds for general corporate purposes, including debt reduction.
The estimated effect on 2018 production from both transactions is a reduction of 1.2 MMBoe, 81% oil and 19% natural gas. Also as recently announced, the Company will no longer record production associated with its Powder River Basin divestiture as of the second quarter of 2018.
RBC Richardson Barr served as exclusive financial advisor to the Company in the Halff East divestiture and Tudor, Pickering, Holt & Co. served as exclusive financial advisor to the Company in the Divide County divestiture.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, expected use of divestiture proceeds, timing and expected use of funds from pending transactions, the effect of pending transactions on production guidance, and consummation of pending divestitures. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
NON-GAAP MEASURES
(1) Net debt as reported at the end of the fourth quarter of 2017 was $2.7 billion. Pro forma for $792 million in expected proceeds from divestitures year-to-date, net debt would have been $1.9 billion.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm‑energy.com.
SM ENERGY CONTACTS
INVESTORS - Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-announces-agreements-to-sell-additional-non-core-assets-for-292-million-coring-up-and-bringing-down-net-debt-300624006.html
SOURCE SM Energy Company
Article Date
4/4/20183/29/2018 - SM Energy Declares Semi-annual Cash Dividend
SM Energy Declares Semi-annual Cash Dividend
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, March 29, 2018 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that its Board of Directors has approved a semi-annual cash dividend of $0.05 per share of common stock outstanding. The dividend will be paid on May 9, 2018, to stockholders of record as of the close of business on April 27, 2018. The Company currently has approximately 111.7 million shares of common stock outstanding.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACTS
INVESTORS - Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-declares-semi-annual-cash-dividend-300621765.html
SOURCE SM Energy Company
Article Date
3/29/20183/26/2018 - SM Energy Announces Closing Of Powder River Basin Asset Sale And Provides Additional Updates
SM Energy Announces Closing Of Powder River Basin Asset Sale And Provides Additional Updates
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, March 26, 2018 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced that it completed the previously announced sale of the majority of its assets in the Powder River Basin for $500 million ($491.5 million net cash proceeds, subject to final purchase price adjustments). Assets sold include approximately 112,200 predominantly contiguous net acres with average December 2017 net production of approximately 2,200 Boe per day (51% oil, 18% NGLs and 31% natural gas). The buyer is Northwoods Operating LLC, a portfolio company of certain funds managed by affiliates of Apollo Global Management, LLC. The effective date of the transaction is October 1, 2017. The Company plans to use proceeds from this divestiture for general corporate purposes, including debt reduction.
ADDITIONAL UPDATES:
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, expected use of divestiture proceeds, financial and operational performance guidance, expectations about future cost inflation, expected lower costs for facilities and sand, and the expected benefits from joint venture arrangements. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm‑energy.com.
SM ENERGY CONTACTS
INVESTORS - Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-announces-closing-of-powder-river-basin-asset-sale-and-provides-additional-updates-300619710.html
SOURCE SM Energy Company
Article Date
3/26/2018SM Energy Reports 2017 Results And 2018 Operating Plan: Permian Execution Outstanding, Cash Flow Growth Ahead
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, Feb. 21, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announces fourth quarter and full year 2017 financial and operating results, year-end 2017 reserves and the Company's 2018 operating plan. Highlights include:
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "At this time last year we set forth an aggressive three-year plan to grow debt adjusted cash flow --our preferred measure of returns-- implementing a strategy that included driving value creation on our newly acquired Howard County assets through optimizing drilling and completion operations, generating margin expansion through a capital program focused on growth on our Midland Basin assets, and further coring up our portfolio to maximize the present value of assets and de-lever the balance sheet. 2017 was a highly successful year in meeting and exceeding our announced objectives, and I thank our SM team across the board for successful execution.
"We commence 2018 well positioned to continue this strategy and meet our planned growth trajectory. While 2017 was a transitional year for production and cash flow growth, 2018 and 2019 target substantial growth in cash flow along with a reduction in net debt:EBITDAX to approximately 2.5 times. This year we move into development mode on our RockStar assets. We have increased the rig count in the Midland Basin from four in early 2017 to nine currently, while continuing to demonstrate top tier efficiency metrics. I believe our operations are top tier as is our asset base, and we look forward to generating increased value for our shareholders in 2018 and beyond."
"Lastly, I want to congratulate Jennifer Martin Samuels on her well deserved promotion to Vice President - Investor Relations in recognition of her outstanding work in leading our investor relations efforts."
2017 IN REVIEW
YEAR-END 2017 PROVED RESERVES
Year-end 2017 proved reserves of 468 MMBoe are calculated in accordance with SEC pricing at $51.34 per barrel of oil NYMEX, $3.00 per MMBtu of natural gas at Henry Hub, and $27.69 per barrel of NGLs at Mt. Belvieu. Year-end proved reserves were 34% oil, 20% NGLs and 46% natural gas. Proved reserves were 46% proved developed.
The table below provides a reconciliation of changes in the Company's proved reserves from year-end 2016 to year-end 2017 (numbers are rounded):
|
Proved reserves year-end 2016 (MMBoe) |
396 |
|
|
Divestitures completed in 2017 |
(76) |
|
|
Proved reserves 2016 pro forma sold properties |
320 |
|
|
Production |
(44) |
|
|
Reserve additions from drilling and performance |
182 |
|
|
Reserve additions through acquisition |
1 |
|
|
Reserve revisions net of price and 5-year rules |
9 |
|
|
Proved reserves year-end 2017 (MMBoe) |
468 |
Proved reserves at year-end include approximately 4.2 MMBoe associated with the announced agreement to sell certain Powder River Basin assets.
The standardized measure of discounted future net cash flows was $3.0 billion at year-end 2017, up from $1.2 billion at year-end 2016. PV-10 (a non-GAAP measure, reconciled to the standardized measure, see Financial Highlights below) was up more than 2.5 times at $3.1 billion at year-end 2017, compared with $1.2 billion at year-end 2016.
FOURTH QUARTER AND FULL YEAR RESULTS
See the Financial Highlights section below for production and per Boe detail, summary financial statements and non-GAAP reconciliations.
Production volumes for the fourth quarter and full year 2017 were:
|
PRODUCTION | ||||
|
Fourth Quarter 2017 |
Full Year 2017 | |||
|
Oil (MMBbls) |
3.9 |
13.7 | ||
|
Natural gas (Bcf) |
26.0 |
123.0 | ||
|
NGLs (MMBbls) |
2.2 |
10.3 | ||
|
Total MMBoe |
10.4 |
44.5 | ||
By region:
|
REGIONAL PRODUCTION | ||||
|
Fourth Quarter 2017 |
Full Year 2017 | |||
|
Eagle Ford |
6.0 |
29.5 | ||
|
Permian Basin |
3.6 |
11.0 | ||
|
Rocky Mountain |
0.8 |
4.1 | ||
|
Total MMBoe |
10.4 |
44.5 | ||
|
|
Realized prices (before and after the effect of derivative settlements) for the fourth quarter and full year 2017 were:
|
COMMODITY PRICES | |||
|
4Q17 Pre/post Hedge |
Full Year 2017 Pre/post Hedge | ||
|
Oil - $/Bbl |
53.32/48.90 |
47.88/45.60 | |
|
Natural gas - $/Mcf |
3.09/4.03 |
3.00/3.72 | |
|
NGLs - $/Bbl |
26.01/18.84 |
22.35/18.91 | |
|
Boe - $/Boe |
32.95/32.16 |
28.20/28.68 | |
Operating costs for the fourth quarter and full year were:
|
OPERATING COSTS $ PER BOE | |||||||
|
Fourth Quarter 2017 |
Full Year 2017 | ||||||
|
Total LOE, incl. ad valorem tax |
$ |
5.43 |
$ |
4.77 |
|||
|
Transportation |
5.01 |
5.48 |
|||||
|
Production tax |
1.41 |
1.18 |
|||||
|
General and administrative |
3.38 |
2.71 |
|||||
|
Total |
$ |
15.23 |
$ |
14.14 |
|||
|
|
NET LOSS AND LOSS PER SHARE
The Company's GAAP net loss for the fourth quarter of 2017 was $26.3 million or $0.24 per diluted common share compared with the fourth quarter of 2016 net loss of $200.9 million, or $2.20 per diluted common share. For the full year 2017, net loss was $160.8 million, or $1.44 per diluted common share, compared with a net loss in 2016 of $757.7 million or $9.90 per diluted common share.
Net cash provided by operating activities was $144.8 million in the fourth quarter of 2017 and $515.4 million for the full year 2017.
ADJUSTED EBITDAX AND ADJUSTED NET INCOME
Adjusted EBITDAX, adjusted net income (loss) and adjusted net income (loss) per diluted common share are non-GAAP measures. Please reference the reconciliations to the most directly comparable GAAP financial measures in the Financial Highlights section at the end of this release.
The Company's adjusted EBITDAX for the fourth quarter of 2017 was $174.0 million, compared with $186.2 million in the prior year period. For the full year 2017, adjusted EBITDAX was $664.7 million, compared with $790.8 million in the prior year.
The Company's adjusted net loss for the fourth quarter was $8.5 million, or $0.08 per diluted common share, compared with adjusted net loss of $28.7 million, or $0.31 per diluted common share, in the fourth quarter of 2016. For the full year 2017, adjusted net loss was $91.2 million, or $0.82 per diluted common share, compared with adjusted net loss of $142.4 million or $1.86 per diluted common share in 2016.
FINANCIAL POSITION AND LIQUIDITY
At December 31, 2017, the outstanding principal balance on the Company's long-term debt was $2.8 billion in senior notes plus $172.5 million in senior convertible notes, with zero drawn on the Company's senior secured credit facility. The Company's undrawn credit facility plus cash on hand provided $1.2 billion in liquidity at December 31, 2017.
COSTS INCURRED AND TOTAL CAPITAL SPEND
Total capital spend discussed below is a non-GAAP measure and is defined as costs incurred less ARO, capitalized interest and acquisitions. See the Financial Highlights section below for the GAAP reconciliation.
Costs incurred for 2017 were $1,040 million, which included $80.2 million of proved and unproved property acquisitions. Full year 2017 total capital spend was $936 million. Allocated by region, total capital spend was invested 78% in the Permian Basin, 18% in the Eagle Ford, and 4% in the Rocky Mountain region. Allocated by expenditure, total capital spend was invested 88% in development, 5% in infrastructure, 1% in leasehold and 6% in corporate and exploration costs.
2018 OPERATING PLAN AND GUIDANCE
The Company's objective is to deliver competitive long-term growth in debt adjusted cash flow. Over the next two years, it is the Company's goal to generate substantial growth in cash flow, end 2019 with net debt:EBITDAX approximating 2.5 times and exit 2019 positioned to deliver continued cash flow growth while keeping total capital spend aligned with cash flow. The Company's two-year strategy to meet these objectives includes:
Key assumptions in the Company's 2018 operating plan include:
Full Year 2018 Guidance:
Total capital spend (before acquisitions) is a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking, non-GAAP financial measure without unreasonable effort because acquisition costs are inherently unpredictable.
First quarter of 2018 Guidance:
OFFICER APPOINTMENT
On February 16, 2018, the Board of Directors of the Company appointed Jennifer Martin Samuels to Vice President - Investor Relations.
UPCOMING EVENTS
EARNINGS WEBCAST AND CALL
As previously announced, SM Energy is posting a pre-recorded discussion and presentation in conjunction with this earnings release. Please look for the additional detail on the Company's website at www.sm-energy.com. Tomorrow morning, the Company will host an associated Q&A session via webcast and conference call. Please join management February 22, 2018 at 8:00 a.m. Mountain Time/10:00 a.m. Eastern Time. Join us via webcast at www.sm-energy.com or by telephone 877-870-4263 (toll free) or 412-317-0790 (international), and indicate SM Energy earnings call. The webcast and call will also be available for replay. The dial-in replay number is 877-344-7529 (toll free) or 412-317-0088, and the replay access code is 10116628.
UPCOMING CONFERENCE PARTICIPATION
The Company is not scheduled to participate in any industry conferences during the first quarter of 2018.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "guidance," "pending," "intend," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, full year 2018 guidance, first quarter of 2018 guidance, expectations concerning the planned closing of a previously announced divestiture, expectations about future cost inflation, and the expected benefits from joint venture arrangements. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions (including any delay in the Company's pending Powder River Basin asset divestiture as a result of litigation); the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2017 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.SM-Energy.com.
SM ENERGY CONTACTS
INVESTORS: Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
|
SM ENERGY COMPANY | |||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||
|
December 31, 2017 | |||||||||||||||||||||
|
For the Three Months Ended |
For the Twelve Months Ended | ||||||||||||||||||||
|
Production Data: |
2017 |
2016 |
Percent |
2017 |
2016 |
Percent | |||||||||||||||
|
Average realized sales price, before the effects of derivative settlements: |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
53.32 |
$ |
43.58 |
22 |
% |
$ |
47.88 |
$ |
36.85 |
30 |
% | |||||||||
|
Gas (per Mcf) |
$ |
3.09 |
$ |
2.86 |
8 |
% |
$ |
3.00 |
$ |
2.30 |
30 |
% | |||||||||
|
NGL (per Bbl) |
$ |
26.01 |
$ |
20.02 |
30 |
% |
$ |
22.35 |
$ |
16.16 |
38 |
% | |||||||||
|
Equivalent (per BOE) |
$ |
32.95 |
$ |
25.86 |
27 |
% |
$ |
28.20 |
$ |
21.32 |
32 |
% | |||||||||
|
Average realized sales price, including the effects of derivative settlements: |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
48.90 |
$ |
48.96 |
— |
% |
$ |
45.60 |
$ |
51.48 |
(11) |
% | |||||||||
|
Gas (per Mcf) |
$ |
4.03 |
$ |
3.21 |
26 |
% |
$ |
3.72 |
$ |
2.94 |
27 |
% | |||||||||
|
NGL (per Bbl) |
$ |
18.84 |
$ |
16.92 |
11 |
% |
$ |
18.91 |
$ |
15.56 |
22 |
% | |||||||||
|
Equivalent (BOE) |
$ |
32.16 |
$ |
27.59 |
17 |
% |
$ |
28.68 |
$ |
27.28 |
5 |
% | |||||||||
|
Production: |
|||||||||||||||||||||
|
Oil (MMBbls) |
3.8 |
4.0 |
(5) |
% |
13.7 |
16.6 |
(18) |
% | |||||||||||||
|
Gas (Bcf) |
26.0 |
35.2 |
(26) |
% |
123.0 |
146.9 |
(16) |
% | |||||||||||||
|
NGL (MMBbls) |
2.2 |
3.5 |
(37) |
% |
10.3 |
14.2 |
(27) |
% | |||||||||||||
|
MMBOE (6:1) |
10.4 |
13.4 |
(23) |
% |
44.5 |
55.3 |
(20) |
% | |||||||||||||
|
Average daily production: |
|||||||||||||||||||||
|
Oil (MBbls/d) |
41.5 |
43.9 |
(5) |
% |
37.4 |
45.4 |
(17) |
% | |||||||||||||
|
Gas (MMcf/d) |
282.5 |
382.7 |
(26) |
% |
337.0 |
401.5 |
(16) |
% | |||||||||||||
|
NGL (MBbls/d) |
24.0 |
37.9 |
(37) |
% |
28.2 |
38.8 |
(27) |
% | |||||||||||||
|
MBOE/d (6:1) |
112.6 |
145.6 |
(23) |
% |
121.8 |
151.0 |
(19) |
% | |||||||||||||
|
Per BOE Data: |
|||||||||||||||||||||
|
Realized price before the effects of derivative settlements |
$ |
32.95 |
$ |
25.86 |
27 |
% |
$ |
28.20 |
$ |
21.32 |
32 |
% | |||||||||
|
Lease operating expense |
5.10 |
3.67 |
39 |
% |
4.43 |
3.51 |
26 |
% | |||||||||||||
|
Transportation costs |
5.01 |
6.39 |
(22) |
% |
5.48 |
6.16 |
(11) |
% | |||||||||||||
|
Production taxes |
1.41 |
1.11 |
27 |
% |
1.18 |
0.94 |
26 |
% | |||||||||||||
|
Ad valorem tax expense |
0.33 |
0.17 |
94 |
% |
0.34 |
0.21 |
62 |
% | |||||||||||||
|
General and administrative |
3.38 |
2.49 |
36 |
% |
2.71 |
2.29 |
18 |
% | |||||||||||||
|
Operating profit, before the effects of derivative settlements |
$ |
17.72 |
$ |
12.03 |
47 |
% |
$ |
14.06 |
$ |
8.21 |
71 |
% | |||||||||
|
Derivative settlement gain (loss) |
(0.79) |
1.73 |
(146) |
% |
0.48 |
5.96 |
(92) |
% | |||||||||||||
|
Operating profit, including the effects of derivative settlements |
$ |
16.93 |
$ |
13.76 |
23 |
% |
$ |
14.54 |
$ |
14.17 |
3 |
% | |||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
$ |
12.69 |
$ |
12.81 |
(1) |
% |
$ |
12.53 |
$ |
14.30 |
(12) |
% | |||||||||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS | |||||||
|
December 31, 2017 | |||||||
|
Consolidated Balance Sheets |
|||||||
|
(in thousands, except share data) |
December 31, |
December 31, | |||||
|
ASSETS |
2017 |
2016 | |||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
313,943 |
$ |
9,372 |
|||
|
Accounts receivable |
160,154 |
151,950 |
|||||
|
Derivative assets |
64,266 |
54,521 |
|||||
|
Prepaid expenses and other |
10,752 |
8,799 |
|||||
|
Total current assets |
549,115 |
224,642 |
|||||
|
Property and equipment (successful efforts method): |
|||||||
|
Proved oil and gas properties |
6,139,379 |
5,700,418 |
|||||
|
Less - accumulated depletion, depreciation, and amortization |
(3,171,575) |
(2,836,532) |
|||||
|
Unproved oil and gas properties |
2,047,203 |
2,471,947 |
|||||
|
Wells in progress |
321,347 |
235,147 |
|||||
|
Oil and gas properties held for sale, net |
111,700 |
372,621 |
|||||
|
Other property and equipment, net of accumulated depreciation of $49,985 and $42,882, respectively |
106,738 |
137,753 |
|||||
|
Total property and equipment, net |
5,554,792 |
6,081,354 |
|||||
|
Noncurrent assets: |
|||||||
|
Derivative assets |
40,362 |
67,575 |
|||||
|
Other noncurrent assets |
32,507 |
19,940 |
|||||
|
Total other noncurrent assets |
72,869 |
87,515 |
|||||
|
Total assets |
$ |
6,176,776 |
$ |
6,393,511 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued expenses |
$ |
386,630 |
$ |
299,708 |
|||
|
Derivative liabilities |
172,582 |
115,464 |
|||||
|
Total current liabilities |
559,212 |
415,172 |
|||||
|
Noncurrent liabilities: |
|||||||
|
Revolving credit facility |
— |
— |
|||||
|
Senior Notes, net of unamortized deferred financing costs |
2,769,663 |
2,766,719 |
|||||
|
Senior Convertible Notes, net of unamortized discount and deferred financing costs |
139,107 |
130,856 |
|||||
|
Asset retirement obligations |
103,026 |
96,134 |
|||||
|
Asset retirement obligations associated with oil and gas properties held for sale |
11,369 |
26,241 |
|||||
|
Deferred income taxes |
79,989 |
315,672 |
|||||
|
Derivative liabilities |
71,402 |
98,340 |
|||||
|
Other noncurrent liabilities |
48,400 |
47,244 |
|||||
|
Total noncurrent liabilities |
3,222,956 |
3,481,206 |
|||||
|
Stockholders' equity: |
|||||||
|
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 111,687,016 and 111,257,500 shares, respectively |
1,117 |
1,113 |
|||||
|
Additional paid-in capital |
1,741,623 |
1,716,556 |
|||||
|
Retained earnings |
665,657 |
794,020 |
|||||
|
Accumulated other comprehensive loss |
(13,789) |
(14,556) |
|||||
|
Total stockholders' equity |
2,394,608 |
2,497,133 |
|||||
|
Total liabilities and stockholders' equity |
$ |
6,176,776 |
$ |
6,393,511 |
|||
|
SM ENERGY COMPANY | |||||||||||||||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||||||||
|
December 31, 2017 | |||||||||||||||||||||||||||||||||||
|
Consolidated Statements of Operations |
|||||||||||||||||||||||||||||||||||
|
(in thousands, except per share data) |
For the Three Months |
For the Twelve Months | |||||||||||||||||||||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||||||||||||||||||||||
|
Operating revenues and other income: |
|||||||||||||||||||||||||||||||||||
|
Oil, gas, and NGL production revenue |
$ |
341,187 |
$ |
346,296 |
$ |
1,253,783 |
$ |
1,178,426 |
|||||||||||||||||||||||||||
|
Net gain (loss) on divestiture activity |
537 |
33,661 |
(131,028) |
37,074 |
|||||||||||||||||||||||||||||||
|
Other operating revenues, net |
(1,186) |
(57) |
6,621 |
1,950 |
|||||||||||||||||||||||||||||||
|
Total operating revenues and other income |
340,538 |
379,900 |
1,129,376 |
1,217,450 |
|||||||||||||||||||||||||||||||
|
Operating expenses: |
|||||||||||||||||||||||||||||||||||
|
Oil, gas, and NGL production expense |
122,833 |
151,907 |
507,906 |
597,565 |
|||||||||||||||||||||||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
131,393 |
171,552 |
557,036 |
790,745 |
|||||||||||||||||||||||||||||||
|
Exploration(1) |
16,886 |
23,699 |
56,179 |
65,641 |
|||||||||||||||||||||||||||||||
|
Impairment of proved properties |
— |
76,780 |
3,806 |
354,614 |
|||||||||||||||||||||||||||||||
|
Abandonment and impairment of unproved properties |
12,115 |
74,450 |
12,272 |
80,367 |
|||||||||||||||||||||||||||||||
|
General and administrative (including stock-based compensation)(1) |
35,021 |
33,311 |
120,585 |
126,428 |
|||||||||||||||||||||||||||||||
|
Net derivative loss(2) |
115,778 |
129,547 |
26,414 |
250,633 |
|||||||||||||||||||||||||||||||
|
Other operating expenses |
7,364 |
3,041 |
13,667 |
10,772 |
|||||||||||||||||||||||||||||||
|
Total operating expenses |
441,390 |
664,287 |
1,297,865 |
2,276,765 |
|||||||||||||||||||||||||||||||
|
Loss from operations |
(100,852) |
(284,387) |
(168,489) |
(1,059,315) |
|||||||||||||||||||||||||||||||
|
Non-operating income (expense): |
|||||||||||||||||||||||||||||||||||
|
Interest expense |
(43,618) |
(46,356) |
(179,257) |
(158,685) |
|||||||||||||||||||||||||||||||
|
Gain (loss) on extinguishment of debt |
— |
— |
(35) |
15,722 |
|||||||||||||||||||||||||||||||
|
Other, net |
1,067 |
130 |
3,968 |
362 |
|||||||||||||||||||||||||||||||
|
Loss before income taxes |
(143,403) |
(330,613) |
(343,813) |
(1,201,916) |
|||||||||||||||||||||||||||||||
|
Income tax benefit |
117,145 |
129,667 |
182,970 |
444,172 |
|||||||||||||||||||||||||||||||
|
Net loss |
$ |
(26,258) |
$ |
(200,946) |
$ |
(160,843) |
$ |
(757,744) |
|||||||||||||||||||||||||||
|
Basic weighted-average common shares outstanding |
111,611 |
91,440 |
111,428 |
76,568 |
|||||||||||||||||||||||||||||||
|
Diluted weighted-average common shares outstanding |
111,611 |
91,440 |
111,428 |
76,568 |
|||||||||||||||||||||||||||||||
|
Basic net loss per common share |
$ |
(0.24) |
$ |
(2.20) |
$ |
(1.44) |
$ |
(9.90) |
|||||||||||||||||||||||||||
|
Diluted net loss per common share |
$ |
(0.24) |
$ |
(2.20) |
$ |
(1.44) |
$ |
(9.90) |
|||||||||||||||||||||||||||
|
(1) Non-cash stock-based compensation component included in: |
|||||||||||||||||||||||||||||||||||
|
Exploration expense |
$ |
2,402 |
$ |
1,410 |
$ |
6,300 |
$ |
6,447 |
|||||||||||||||||||||||||||
|
General and administrative expense |
$ |
5,021 |
$ |
5,002 |
$ |
17,283 |
$ |
20,450 |
|||||||||||||||||||||||||||
|
(2) The net derivative loss line item consists of the following: |
|||||||||||||||||||||||||||||||||||
|
Settlement (gain) loss |
$ |
8,168 |
$ |
(23,244) |
$ |
(21,234) |
$ |
(329,478) |
|||||||||||||||||||||||||||
|
Loss on fair value changes |
107,610 |
152,791 |
47,648 |
580,111 |
|||||||||||||||||||||||||||||||
|
Net derivative loss |
$ |
115,778 |
$ |
129,547 |
$ |
26,414 |
$ |
250,633 |
|||||||||||||||||||||||||||
|
SM ENERGY COMPANY | |||||||||||||||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||||||||
|
December 31, 2017 | |||||||||||||||||||||||||||||||||||
|
Consolidated Statements of Stockholders' Equity |
|||||||||||||||||||||||||||||||||||
|
(in thousands, except share data and dividends per share) |
Additional |
Accumulated |
Total | ||||||||||||||||||||||||||||||||
|
Common Stock |
Retained |
||||||||||||||||||||||||||||||||||
|
Shares |
Amount |
||||||||||||||||||||||||||||||||||
|
Balances, January 1, 2015 |
67,463,060 |
$ |
675 |
$ |
283,295 |
$ |
2,013,997 |
$ |
(11,312) |
$ |
2,286,655 |
||||||||||||||||||||||||
|
Net loss |
— |
— |
— |
(447,710) |
— |
(447,710) |
|||||||||||||||||||||||||||||
|
Other comprehensive loss |
— |
— |
— |
— |
(2,090) |
(2,090) |
|||||||||||||||||||||||||||||
|
Cash dividends, $ 0.10 per share |
— |
— |
— |
(6,772) |
— |
(6,772) |
|||||||||||||||||||||||||||||
|
Issuance of common stock under Employee Stock Purchase Plan |
197,214 |
2 |
4,842 |
— |
— |
4,844 |
|||||||||||||||||||||||||||||
|
Issuance of common stock upon vesting of RSUs and settlement of PSUs, net of shares used for tax withholdings |
375,523 |
4 |
(8,682) |
— |
— |
(8,678) |
|||||||||||||||||||||||||||||
|
Stock-based compensation expense |
39,903 |
— |
27,467 |
— |
— |
27,467 |
|||||||||||||||||||||||||||||
|
Other |
— |
— |
(1,315) |
— |
— |
(1,315) |
|||||||||||||||||||||||||||||
|
Balances, December 31, 2015 |
68,075,700 |
$ |
681 |
$ |
305,607 |
$ |
1,559,515 |
$ |
(13,402) |
$ |
1,852,401 |
||||||||||||||||||||||||
|
Net loss |
— |
— |
— |
(757,744) |
— |
(757,744) |
|||||||||||||||||||||||||||||
|
Other comprehensive loss |
— |
— |
— |
— |
(1,154) |
(1,154) |
|||||||||||||||||||||||||||||
|
Cash dividends, $ 0.10 per share |
— |
— |
— |
(7,751) |
— |
(7,751) |
|||||||||||||||||||||||||||||
|
Issuance of common stock under Employee Stock Purchase Plan |
218,135 |
2 |
4,196 |
— |
— |
4,198 |
|||||||||||||||||||||||||||||
|
Issuance of common stock upon vesting of RSUs and settlement of PSUs, net of shares used for tax withholdings |
199,243 |
2 |
(2,356) |
— |
— |
(2,354) |
|||||||||||||||||||||||||||||
|
Stock-based compensation expense |
53,473 |
1 |
26,896 |
— |
— |
26,897 |
|||||||||||||||||||||||||||||
|
Issuance of common stock from stock offerings, net of tax |
42,710,949 |
427 |
1,382,666 |
— |
— |
1,383,093 |
|||||||||||||||||||||||||||||
|
Equity component of 1.50% Senior Convertible Notes due 2021 issuance, net of tax |
— |
— |
33,575 |
— |
— |
33,575 |
|||||||||||||||||||||||||||||
|
Purchase of capped call transactions |
— |
— |
(24,195) |
— |
— |
(24,195) |
|||||||||||||||||||||||||||||
|
Other |
— |
— |
(9,833) |
— |
— |
(9,833) |
|||||||||||||||||||||||||||||
|
Balances, December 31, 2016 |
111,257,500 |
$ |
1,113 |
$ |
1,716,556 |
$ |
794,020 |
$ |
(14,556) |
$ |
2,497,133 |
||||||||||||||||||||||||
|
Net loss |
— |
— |
— |
(160,843) |
— |
(160,843) |
|||||||||||||||||||||||||||||
|
Other comprehensive income |
— |
— |
— |
— |
767 |
767 |
|||||||||||||||||||||||||||||
|
Cash dividends, $0.10 per share |
— |
— |
— |
(11,144) |
— |
(11,144) |
|||||||||||||||||||||||||||||
|
Issuance of common stock under Employee Stock Purchase Plan |
186,665 |
2 |
2,621 |
— |
— |
2,623 |
|||||||||||||||||||||||||||||
|
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings |
171,278 |
1 |
(1,241) |
— |
— |
(1,240) |
|||||||||||||||||||||||||||||
|
Stock-based compensation expense |
71,573 |
1 |
22,699 |
— |
— |
22,700 |
|||||||||||||||||||||||||||||
|
Cumulative effect of accounting change |
— |
— |
1,108 |
43,624 |
— |
44,732 |
|||||||||||||||||||||||||||||
|
Other |
— |
— |
(120) |
— |
— |
(120) |
|||||||||||||||||||||||||||||
|
Balances, December 31, 2017 |
111,687,016 |
$ |
1,117 |
$ |
1,741,623 |
$ |
665,657 |
$ |
(13,789) |
$ |
2,394,608 |
||||||||||||||||||||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||
|
December 31, 2017 | |||||||||||||||
|
Consolidated Statements of Cash Flows |
|||||||||||||||
|
(in thousands) |
For the Three Months |
For the Twelve Months | |||||||||||||
|
Ended December 31, |
Ended December 31, | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
(as adjusted) |
(as adjusted) | ||||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net loss |
$ |
(26,258) |
$ |
(200,946) |
$ |
(160,843) |
$ |
(757,744) |
|||||||
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||||||||||||||
|
Net (gain) loss on divestiture activity |
(537) |
(33,661) |
131,028 |
(37,074) |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
131,393 |
171,552 |
557,036 |
790,745 |
|||||||||||
|
Exploratory dry hole expense |
2,381 |
— |
2,381 |
(16) |
|||||||||||
|
Impairment of proved properties |
— |
76,780 |
3,806 |
354,614 |
|||||||||||
|
Abandonment and impairment of unproved properties |
12,115 |
74,450 |
12,272 |
80,367 |
|||||||||||
|
Impairment of other property and equipment |
— |
— |
— |
— |
|||||||||||
|
Stock-based compensation expense |
6,540 |
6,412 |
22,700 |
26,897 |
|||||||||||
|
Net derivative loss |
115,778 |
129,547 |
26,414 |
250,633 |
|||||||||||
|
Derivative settlement gain (loss) |
(8,168) |
23,244 |
21,234 |
329,478 |
|||||||||||
|
Amortization of debt discount and deferred financing costs |
3,798 |
4,251 |
16,276 |
9,938 |
|||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
35 |
(15,722) |
|||||||||||
|
Deferred income taxes |
(124,608) |
(133,873) |
(192,066) |
(448,643) |
|||||||||||
|
Plugging and abandonment |
(640) |
(992) |
(2,735) |
(6,214) |
|||||||||||
|
Other, net |
3,526 |
5,140 |
8,239 |
(3,701) |
|||||||||||
|
Changes in current assets and liabilities: |
|||||||||||||||
|
Accounts receivable |
(7,505) |
(11,783) |
13,997 |
(10,562) |
|||||||||||
|
Prepaid expenses and other |
7,002 |
826 |
(1,953) |
8,478 |
|||||||||||
|
Accounts payable and accrued expenses |
23,425 |
11,956 |
44,985 |
(53,210) |
|||||||||||
|
Accrued derivative settlements |
6,538 |
14,889 |
12,584 |
34,540 |
|||||||||||
|
Net cash provided by operating activities |
144,780 |
137,792 |
515,390 |
552,804 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Net proceeds from the sale of oil and gas properties |
(1,646) |
744,233 |
776,719 |
946,062 |
|||||||||||
|
Capital expenditures |
(263,384) |
(137,117) |
(888,353) |
(629,911) |
|||||||||||
|
Acquisition of proved and unproved oil and gas properties |
(2,507) |
(2,161,937) |
(89,896) |
(2,183,790) |
|||||||||||
|
Net cash used in investing activities |
(267,537) |
(1,554,821) |
(201,530) |
(1,867,639) |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Proceeds from credit facility |
— |
204,000 |
406,000 |
947,000 |
|||||||||||
|
Repayment of credit facility |
— |
(204,000) |
(406,000) |
(1,149,000) |
|||||||||||
|
Debt issuance costs related to credit facility |
— |
— |
— |
(3,132) |
|||||||||||
|
Net proceeds from Senior Notes |
— |
(757) |
— |
491,640 |
|||||||||||
|
Cash paid to repurchase Senior Notes |
— |
— |
(2,344) |
(29,904) |
|||||||||||
|
Cash paid for extinguishment of debt |
— |
— |
(13) |
— |
|||||||||||
|
Net proceeds from Senior Convertible Notes |
— |
(64) |
— |
166,617 |
|||||||||||
|
Cash paid for capped call transactions |
— |
(86) |
— |
(24,195) |
|||||||||||
|
Net proceeds from sale of common stock |
885 |
405,002 |
2,623 |
938,268 |
|||||||||||
|
Dividends paid |
(5,581) |
(4,347) |
(11,144) |
(7,751) |
|||||||||||
|
Net share settlement from issuance of stock awards |
(1) |
(13) |
(1,240) |
(2,354) |
|||||||||||
|
Other, net |
(18) |
— |
(171) |
— |
|||||||||||
|
Net cash provided by (used in) financing activities |
(4,715) |
399,735 |
(12,289) |
1,327,189 |
|||||||||||
|
Net change in cash, cash equivalents, and restricted cash |
(127,472) |
(1,017,294) |
301,571 |
12,354 |
|||||||||||
|
Cash, cash equivalents, and restricted cash at beginning of period |
441,415 |
1,029,666 |
12,372 |
18 |
|||||||||||
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
313,943 |
$ |
12,372 |
$ |
313,943 |
$ |
12,372 |
|||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||
|
December 31, 2017 | |||||||||||||||
|
Adjusted EBITDAX (1) |
|||||||||||||||
|
(in thousands) |
|||||||||||||||
|
Reconciliation of net loss (GAAP) to adjusted EBITDAX (non-GAAP) to net cash provided by operating activities (GAAP): |
For the Three Months |
For the Twelve Months | |||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Net loss (GAAP) |
$ |
(26,258) |
$ |
(200,946) |
$ |
(160,843) |
$ |
(757,744) |
|||||||
|
Interest expense |
43,618 |
46,356 |
179,257 |
158,685 |
|||||||||||
|
Interest income |
(1,067) |
(130) |
(3,968) |
(362) |
|||||||||||
|
Income tax benefit |
(117,145) |
(129,667) |
(182,970) |
(444,172) |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
131,393 |
171,552 |
557,036 |
790,745 |
|||||||||||
|
Exploration (2) |
14,484 |
22,289 |
49,879 |
59,194 |
|||||||||||
|
Impairment of proved properties |
— |
76,780 |
3,806 |
354,614 |
|||||||||||
|
Abandonment and impairment of unproved properties |
12,115 |
74,450 |
12,272 |
80,367 |
|||||||||||
|
Stock-based compensation expense |
6,540 |
6,412 |
22,700 |
26,897 |
|||||||||||
|
Net derivative loss |
115,778 |
129,547 |
26,414 |
250,633 |
|||||||||||
|
Derivative settlement gain (loss) |
(8,168) |
23,244 |
21,234 |
329,478 |
|||||||||||
|
Net (gain) loss on divestiture activity |
(537) |
(33,661) |
131,028 |
(37,074) |
|||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
35 |
(15,722) |
|||||||||||
|
Other, net |
3,200 |
(7) |
8,820 |
(4,764) |
|||||||||||
|
Adjusted EBITDAX (Non-GAAP) |
$ |
173,953 |
$ |
186,219 |
$ |
664,700 |
$ |
790,775 |
|||||||
|
Interest expense |
(43,618) |
(46,356) |
(179,257) |
(158,685) |
|||||||||||
|
Interest income |
1,067 |
130 |
3,968 |
362 |
|||||||||||
|
Income tax benefit |
117,145 |
129,667 |
182,970 |
444,172 |
|||||||||||
|
Exploration (2) |
(14,484) |
(22,289) |
(49,879) |
(59,194) |
|||||||||||
|
Exploratory dry hole expense |
2,381 |
— |
2,381 |
(16) |
|||||||||||
|
Amortization of debt discount and deferred financing costs |
3,798 |
4,251 |
16,276 |
9,938 |
|||||||||||
|
Deferred income taxes |
(124,608) |
(133,873) |
(192,066) |
(448,643) |
|||||||||||
|
Plugging and abandonment |
(640) |
(992) |
(2,735) |
(6,214) |
|||||||||||
|
Other, net |
326 |
5,147 |
(581) |
1,063 |
|||||||||||
|
Changes in current assets and liabilities |
29,460 |
15,888 |
69,613 |
(20,754) |
|||||||||||
|
Net cash provided by operating activities (GAAP) |
$ |
144,780 |
$ |
137,792 |
$ |
515,390 |
$ |
552,804 |
|||||||
|
(1) Adjusted EBITDAX represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we failed to comply with the covenants that establish a maximum permitted ratio of senior secured debt to adjusted EBITDAX and a minimum permitted ratio of adjusted EBITDAX to interest, we would be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we are in default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under the indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. | |||||||||||||||
|
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the accompanying statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
|
SM ENERGY COMPANY | |||||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||||
|
December 31, 2017 | |||||||||||||||||
|
Adjusted Net Loss |
For the Three Months |
For the Twelve Months | |||||||||||||||
|
(in thousands, except per share data) | |||||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||||
|
Net loss (GAAP) |
$ |
(26,258) |
$ |
(200,946) |
$ |
(160,843) |
$ |
(757,744) |
|||||||||
|
Net derivative loss |
115,778 |
129,547 |
26,414 |
250,633 |
|||||||||||||
|
Derivative settlement gain (loss) |
(8,168) |
23,244 |
21,234 |
329,478 |
|||||||||||||
|
Net (gain) loss on divestiture activity |
(537) |
(33,661) |
131,028 |
(37,074) |
|||||||||||||
|
Impairment of proved properties |
— |
76,780 |
3,806 |
354,614 |
|||||||||||||
|
Abandonment and impairment of unproved properties |
12,115 |
74,450 |
12,272 |
80,367 |
|||||||||||||
|
Termination fee on temporary second lien facility |
— |
— |
— |
10,000 |
|||||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
35 |
(15,722) |
|||||||||||||
|
Other, net(1) |
8,200 |
(306) |
13,820 |
(7,731) |
|||||||||||||
|
Tax effect of adjustments(2) |
(45,987) |
(97,760) |
(75,308) |
(349,173) |
|||||||||||||
|
US tax reform(3) |
(63,675) |
— |
(63,675) |
— |
|||||||||||||
|
Adjusted net loss (Non-GAAP)(4) |
$ |
(8,532) |
$ |
(28,652) |
$ |
(91,217) |
$ |
(142,352) |
|||||||||
|
Diluted net loss per common share (GAAP) |
$ |
(0.24) |
$ |
(2.20) |
$ |
(1.44) |
$ |
(9.90) |
|||||||||
|
Net derivative loss |
1.04 |
1.42 |
0.24 |
3.27 |
|||||||||||||
|
Derivative settlement gain (loss) |
(0.07) |
0.25 |
0.19 |
4.30 |
|||||||||||||
|
Net gain (loss) on divestiture activity |
— |
(0.37) |
1.18 |
(0.48) |
|||||||||||||
|
Impairment of proved properties |
— |
0.84 |
0.03 |
4.63 |
|||||||||||||
|
Abandonment and impairment of unproved properties |
0.11 |
0.81 |
0.11 |
1.05 |
|||||||||||||
|
Termination fee on temporary second lien facility |
— |
— |
— |
0.13 |
|||||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
— |
(0.21) |
|||||||||||||
|
Other, net(1) |
0.07 |
(0.01) |
0.12 |
(0.10) |
|||||||||||||
|
Tax effect of adjustments(2) |
(0.42) |
(1.05) |
(0.68) |
(4.55) |
|||||||||||||
|
US tax reform(3) |
(0.57) |
— |
(0.57) |
— |
|||||||||||||
|
Adjusted net loss per diluted common share (Non-GAAP)(4) |
$ |
(0.08) |
$ |
(0.31) |
$ |
(0.82) |
$ |
(1.86) |
|||||||||
|
Diluted weighted-average shares outstanding (GAAP) |
111,611 |
91,440 |
111,428 |
76,568 |
|||||||||||||
|
(1) For the three-month and twelve-month periods ended December 31, 2017, the adjustment is related to impairment on materials inventory, pension settlement expense, the change in Net Profits Plan liability, bad debt expense, and an accrual for a non-recurring matter. For the three-month and twelve-month periods ended December 31, 2016, the adjustment relates to the change in Net Profits Plan liability, impairment of materials inventory, and an adjustment relating to claims on royalties on certain Federal and Indian leases. Pension settlement expense is included within exploration expenses and general and administrative expense on the Company's consolidated statements of operations. Other noted items are included in other operating expenses on the Company's consolidated statements of operations. | |||||||||||||||||
|
(2) For the three and twelve-month periods ended December 31, 2017, adjustments are shown before tax effect which is calculated using a tax rate of 36.1%, which approximates the Company's statutory tax rate adjusted for ordinary permanent differences. For the three and twelve-month periods ended December 31, 2016, adjustments are shown before tax effect and are calculated using a tax rate of 36.2%, which approximates the Company's statutory tax rate adjusted for ordinary permanent differences. | |||||||||||||||||
|
(3) US tax reform adjustment primarily relates to the enactment of the 2017 Tax Act on December 22, 2017, which reduced the Company's federal tax rate for 2018 and future years from 35 percent to 21 percent. | |||||||||||||||||
|
(4) Adjusted net loss excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, materials inventory loss, and gains or losses on extinguishment of debt. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. | |||||||||||||||||
|
Regional proved oil and gas reserve quantities: |
||||||||||||
|
Permian |
Eagle Ford(1) |
Rocky |
Total | |||||||||
|
Year-end 2017 proved reserves |
||||||||||||
|
Oil (MMBbl) |
117.5 |
13.3 |
27.4 |
158.2 | ||||||||
|
Gas (Bcf) |
252.8 |
998.1 |
29.2 |
1,280.1 | ||||||||
|
NGL (MMBbl) |
0.2 |
95.6 |
0.7 |
96.5 | ||||||||
|
Total (MMBOE) |
159.9 |
275.2 |
33.0 |
468.1 | ||||||||
|
% Proved developed |
34% |
52% |
53% |
46% | ||||||||
|
Note: Totals may not sum due to rounding | ||||||||||||
|
(1) Includes nominal amounts outside of the Eagle Ford. |
|
SM ENERGY COMPANY | |||
|
FINANCIAL HIGHLIGHTS | |||
|
December 31, 2017 | |||
|
Total Capital Spend Reconciliation: | |||
|
(in millions) |
|||
|
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (Non-GAAP)(1)(3) |
For the Year Ended December 31, 2017 | ||
|
Costs incurred in oil and gas activities (GAAP): |
$ |
1,040.0 |
|
|
Asset retirement obligations |
(12.1) |
||
|
Capitalized interest |
(12.6) |
||
|
Proved property acquisitions(2) |
(1.6) |
||
|
Unproved property acquisitions |
(78.6) |
||
|
Other |
1.3 |
||
|
Total capital spend (Non-GAAP): |
$ |
936.4 |
|
|
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. | |||
|
(2) Includes approximately $1.4 million of ARO associated with proved property acquisitions for the year ended December 31, 2017. | |||
|
(3) The Company completed several primarily non-monetary acreage trades in the Midland Basin during 2017 totaling $294.0 million of value attributed to the properties surrendered. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. |
|
SM ENERGY COMPANY | |||
|
FINANCIAL HIGHLIGHTS | |||
|
December 31, 2017 | |||
|
PV-10 Reconciliation: | |||
|
(in millions) |
|||
|
Reconciliation of standardized measure (GAAP) to PV-10 (Non-GAAP)(1) |
As of December 31, 2017 | ||
|
Standardized measure of discounted future net cash flows (GAAP): |
$ |
3,024.1 |
|
|
Add: 10 percent annual discount, net of income taxes |
2,573.2 |
||
|
Add: future undiscounted income taxes |
205.7 |
||
|
Undiscounted future net cash flows |
5,803.0 |
||
|
Less: 10 percent annual discount without tax effect |
(2,746.5) |
||
|
PV-10 (Non-GAAP): |
$ |
3,056.5 |
|
|
(1) The non-GAAP measure of PV-10 is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that PV-10 is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. PV-10 should not be considered in isolation or as a substitute for other measures prepared under GAAP. | |||
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-2017-results-and-2018-operating-plan-permian-execution-outstanding-cash-flow-growth-ahead-300602352.html
SOURCE SM Energy Company
Article Date
2/21/2018SM Energy Schedules Fourth Quarter And Full Year 2017 Earnings Release And Call
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, Jan. 29, 2018 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announces that it expects to release its fourth quarter and full year 2017 operating and financial results and 2018 plan after market on February 21, 2018. See schedule below:
February 21, 2018 – After market close, the Company plans to release its fourth quarter and full year 2017 financial and operating results and 2018 plan. This will include the earnings release, a pre-recorded webcast discussing fourth quarter and full year 2017 financial and operating results and the Company's 2018 plan, and an associated presentation, all of which will be posted to the Company's website at www.sm-energy.com.
February 22, 2018 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for a live Q&A session covering fourth quarter and full year 2017 financial and operating results and the Company's 2018 plan. This discussion will be accessible via webcast (available live and for replay) on the Company's website at www.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until March 1, 2018.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-schedules-fourth-quarter-and-full-year-2017-earnings-release-and-call-300589727.html
SOURCE SM Energy Company
Article Date
1/29/2018SM Energy Announces Agreement To Sell 112,200 Acre Leasehold In The Powder River Basin For $500 Million
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, Jan. 9, 2018 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) today announced that it has entered into a definitive agreement for the sale of a majority of the Company's Powder River Basin assets for a cash purchase price of $500 million (subject to customary closing price adjustments).
President and Chief Executive Officer Jay Ottoson comments: "We are very pleased to announce the signing of this agreement. Divestiture of these assets is consistent with our strategy of focusing on development of our top tier Midland Basin and Eagle Ford assets and improving our balance sheet by reducing debt. Pro forma for this transaction, as of the end of the third quarter 2017, net debt is reduced by approximately 20% and net debt:EBITDAX is reduced to less than 3 times."(1)
The assets to be sold include approximately 112,200 predominantly contiguous net acres located in northwest Converse County and portions of southeast Johnson and southwest Campbell Counties, Wyoming. These assets represent approximately 80% of the Company's current Powder River Basin acreage position. Net production as of December 2017 was approximately 2,200 Boe/d (51% oil, 18% NGLs and 31% natural gas) and preliminary estimates of proved reserves for year-end 2017 are 4.2 MMBoe (82% PDP). The transaction is expected to close in the first quarter of 2018, with an effective date of October 1, 2017. The purchase price will be subject to certain closing price adjustments. The transaction is subject to the satisfaction of required closing conditions, and there can be no assurance that the transaction will close on time or at all. The Company plans to use the expected sale proceeds for general corporate purposes, including debt reduction.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, consummation of pending divestitures, expected benefits and likelihood of completing divestitures, and expectations regarding the proceeds, timing and expected use of funds from pending asset sales. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
NON-GAAP MEASURES
Net debt as reported at the end of the third quarter of 2017 was $2.5 billion. Pro forma for $500 million in proceeds, net debt would have been $2.0 billion.
(1) EBITDAX for the trailing twelve months as of the end of the third quarter of 2017 was $676 million. Please refer to the Company's prior 10-Q filings for the reconciliation of EBITDAX to GAAP financial measures.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm‑energy.com.
SM ENERGY CONTACTS
INVESTORS - Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-announces-agreement-to-sell-112200-acre-leasehold-in-the-powder-river-basin-for-500-million-300580250.html
SOURCE SM Energy Company
Article Date
1/9/201811/2/2017 - SM Energy Reports Third Quarter 2017 Results
SM Energy Reports Third Quarter 2017 Results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, Nov. 2, 2017 /PRNewswire/ --
SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) announced today financial results and operations highlights from the third quarter of 2017. This earnings release is accompanied by an investor presentation and pre-recorded call with transcript all posted to the Company's website. Please visit the Company's website at sm-energy.com to access this additional third quarter detail. The Company will host a webcast and conference call at 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) tomorrow, November 3, 2017, to answer questions. Further information on the earnings webcast and conference call can be found below.
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "The third quarter of 2017 marked a significant turning point in our transformation with a large increase in Permian production. In particular, our Howard County area wells in the Midland Basin, with high oil percentages and associated high margins, are generating outstanding returns, and continued delineation of our acreage in that area is yielding encouraging results.
"Overall, we are executing with excellence, resulting in a high level of capital efficiency as indicated by our higher than expected production and cash flows so far in 2017 (adjusted for divested/retained assets), despite lower commodity prices than anticipated, without change in our guided capital spending. Our operational performance keeps us on track to drive significant growth in cash flow, and we have substantial liquidity to fund our projected two-year cash flow outspend.
"We are also announcing today the signing of a joint venture agreement in a portion of our Eagle Ford North area that will result in a further increase in our capital efficiency. This partnership, which is similar to our existing Powder River Basin joint venture, will allow us to test new technologies and completion designs at varied well spacing on a portion of our acreage that does not currently generate substantial cash flow, potentially enhancing the asset value while reducing our required capital outlay for acreage holding."
THIRD QUARTER 2017 RESULTS
PRODUCTION
|
Oil |
Natural Gas |
NGLs |
Total | ||||||||
|
MMBbls |
Bcf |
MMBbls |
MMBoe | ||||||||
|
Permian |
2.3 |
3.9 |
— |
3.0 | |||||||
|
Eagle Ford |
0.4 |
24.2 |
2.4 |
6.7 | |||||||
|
Rockies |
0.7 |
1.0 |
— |
1.0 | |||||||
|
Total |
3.4 |
29.1 |
2.4 |
10.7 | |||||||
Third quarter production totaled 10.7 MMBoe, comprised of 32% oil, 45% natural gas and 23% NGLs. Oil production of 3.4 MMBbls exceeded the Company's guidance, driven by a 31% sequential increase in Permian Basin production. As previously reported, natural gas and NGL production was affected early in September by Hurricane Harvey, which resulted in the curtailment of 0.2 MMBoe due to downstream, third party facilities that were impacted by the storm. Natural gas and NGL production was within the updated guidance despite further production curtailments late in the quarter that were predominantly due to severe rain storms in South Texas. During the last week of September, more than 18 inches of rain fell in portions of the Company's Eagle Ford producing areas forcing the shut-in of a number of wells because certain roads were closed or impassable. Natural gas and NGL production was also affected by reduced working interests in certain wells due to the Eagle Ford North JV (discussed below). On a retained asset basis, third quarter production was up 7% compared with the third quarter of 2016. On a retained asset basis, for the first nine months of 2017, production was up 11% compared with the first nine months of 2016.
REALIZED PRICING
|
Oil |
Natural Gas |
NGLs |
Average | |||||||
|
$/Bbl |
$/Mcf |
$/Bbl |
$/Boe | |||||||
|
Permian |
46.26 |
4.13 |
23.36 |
41.53 | ||||||
|
Eagle Ford |
38.90 |
2.86 |
22.42 |
20.14 | ||||||
|
Rockies |
44.87 |
1.09 |
20.71 |
36.87 | ||||||
|
Average Pre-Hedge |
45.20 |
2.96 |
22.40 |
27.59 | ||||||
|
Average Post-Hedge |
44.47 |
3.79 |
18.86 |
28.82 |
Benchmark pricing for the third quarter of 2017 was: WTI at $48.20 per barrel; NYMEX natural gas at $3.00 per MMBtu; and Hart Composite NGLs at $27.55 per barrel.
In the third quarter of 2017, the average realized price per Boe before the effects of commodity hedges was $27.59 per Boe, which is at its highest level since the fourth quarter of 2014 and demonstrates the margin expansion that results from the Company's portfolio transition. Cash production costs totaled $11.49 per Boe, which included LOE of $4.81 per Boe (before ad valorem tax of $0.29 per Boe). Eagle Ford LOE per Boe came in above expectations largely due to non-recurring costs and lower overall volumes, while Permian LOE per Boe was down sequentially by approximately $1 as the Company gains efficiencies of scale with new wells coming on production. Transportation costs continued to decline, averaging $5.24 per Boe for the third quarter, as Permian production, which has low transportation costs, becomes an increasing portion of the production mix. Cash production costs are up 6.6% compared with the third quarter of 2016 and up 6.1% for the first nine months of 2017 compared with the first nine months of 2016.
Net loss for the third quarter of 2017 was $89.1 million, or $0.80 per diluted common share, compared with a net loss of $40.9 million or $0.52 per diluted common share in the third quarter of 2016. Net loss in the third quarter of 2017 reflects a 25% decrease in production as a result of asset sales and a $44.4 million decrease in realized hedge gains, partially offset by a higher third quarter 2017 pre-hedge operating margin and lower depletion, depreciation and amortization expenses. The 2017 period also includes a loss on divestiture activity versus a gain in the prior year period.
Net cash provided by operating activities was $128.5 million in the third quarter of 2017 and $370.6 million for the first nine months of 2017.
As discussed below, adjusted EBITDAX, adjusted net income (loss) and adjusted net income (loss) per diluted common share are non-GAAP measures. Please reference the reconciliations to the most directly comparable GAAP financial measures at the end of this release.
Adjusted EBITDAX for the third quarter of 2017 was $164.5 million, which is up 7% sequentially predominantly due to the higher operating margin partially offset by lower production and lower realized derivative gains. Adjusted EBITDAX was down 20% from the prior year period. The prior year period benefited from higher production (prior to non-core asset sales) and significantly higher realized derivative gains. For the first nine months of 2017, adjusted EBITDAX was $490.7 million.
Adjusted net loss for the third quarter was $27.5 million, or $0.25 per diluted common share, compared with an adjusted net loss of $29.0 million, or $0.37 per diluted common share, in the third quarter of 2016. For the first nine months of 2017, adjusted net loss was $82.7 million, or $0.74 per diluted common share. The calculation of adjusted net loss excludes non-recurring items and items difficult to estimate in order to present results that can be more consistently compared with prior periods and peer results.
FINANCIAL POSITION AND LIQUIDITY
At September 30, 2017, the outstanding principal balance on the Company's long-term debt included $2.8 billion in senior notes plus $172.5 million in senior convertible notes, with zero drawn on the Company's senior secured credit facility. At quarter-end, the Company had a cash balance of $441.4 million, providing for net debt of $2.5 billion. The Company's undrawn credit facility plus cash on hand provided $1.4 billion in liquidity.
CAPITAL ACTIVITY AND OPERATIONS
Please refer to the Total Capital Spend Reconciliation at the end of this release for a reconciliation to Costs Incurred in oil and gas activities (GAAP).
Costs incurred for the third quarter of 2017 were $226.6 million. Third quarter total capital spend was $226.8 million. During the quarter, the Company drilled or participated in 31 net wells and completed or participated in 28 net wells. For the first nine months of 2017, costs incurred were $741.6 million and total capital spend was $657.0 million. Year-to-date, the Company has drilled or participated in 88 net wells and completed or participated in 87 net wells.
PERMIAN - MIDLAND BASIN
In the third quarter of 2017, production from the Company's Midland Basin assets was 3.0 MMBoe and was 78% oil. Midland Basin production is up 31% sequentially as the Company had 23 (operated) flowing completions in the quarter. The Company is currently running seven horizontal rigs in the basin, with one in the Sweetie Peck area and six in the RockStar area, and plans to add an eighth rig to the area by year-end. The Company recently added a fourth completions crew to the area. The third quarter production margin for the Midland Basin assets was $30.62 per Boe.
The Company's Midland Basin operations continue to be characterized by high capital efficiency and strong well performance. New well results include the Iceman and Griswold pads, each drilled at 420 foot well spacing. At the Iceman pad, three Wolfcamp A wells averaged a peak 30-day rate of 1,453 Boe/d per well (Lower Spraberry wells also producing on the Iceman pad have not yet reached a peak rate), and at the three-well Griswold pad, located on the south-east flank of the Company's RockStar acreage, the Wolfcamp A wells averaged a peak 30-day rate of 1,191 Boe/d per well. At the Jester pad, one Wolfcamp A and one Wolfcamp B well averaged a peak 30-day rate of 1,333 Boe/d per well. (Please refer to the 3Q17 Earnings Presentation for further detail on new well results). Capital efficiency is evidenced by several drilling and completion metrics. For example, the Company is currently drilling at an average rate of 1,100 feet per day (based on spud to rig release), which is up approximately 14% from the second quarter and places the Company in the top quartile among Midland Basin operators. Completions operations have achieved pumping efficiencies of more than 80% as a result of excellent performance from the Company's pumping service providers.
The Company currently has approximately 89,000 net acres in the Midland Basin, which includes approximately 5,000 net acres acquired year-to-date through acreage trades and other transactions.
EAGLE FORD
In the third quarter of 2017, production from the Company's Eagle Ford assets was 6.7 MMBoe and included 60% natural gas, 35% NGLs, and 5% oil. Third quarter production was affected by curtailments following Hurricane Harvey and a second storm late in the quarter, as well as a reduction in the Company's working interest in new wells as a result of the Eagle Ford North JV (see below). The Company is currently running two horizontal rigs in the area and no completions crews. The Company drilled six and completed four net wells in the third quarter (all completions were part of the Eagle Ford North JV) and drilled 17 and completed 35 net wells in the area in the first nine months of 2017.
The Company has approximately 165,000 net acres in its operated Eagle Ford program.
EAGLE FORD NORTH JOINT VENTURE
In September 2017, the Company entered into a joint venture (JV) agreement with a third party to drill 16 wells and complete 23 wells in a focused portion of its Eagle Ford North area. This partnership allows the Company to use third party resources to test cutting edge technology, accelerate the capture of technical data and hold acreage in this area, potentially expanding economic drilling inventory and acreage value. Moreover, the Company expects this partnership will result in further optimizations outside of the JV area, enhancing the overall value of its Eagle Ford asset. The objectives of this agreement are similar to the Company's highly successful, ongoing JV arrangement in the Powder River Basin. Per the terms of the agreement, the Company's working interest was reduced in seven wells completed during the quarter, which affected Eagle Ford production by approximately (0.1) MMBoe for the quarter. The partnership expects to drill six carried wells in the area in the fourth quarter of 2017. The effect of the partnership on fourth quarter production is estimated at up to (0.5) MMBoe, depending upon actual well performance.
GUIDANCE
Full year 2017 guidance is revised as follows:
|
Full Year 2017 |
Implied 4Q17 at | |||
|
Total Capital Spend |
~$875 MM |
unchanged |
~$218 MM | |
|
Total Production |
44.2-44.6 |
updated: to reflect Eagle |
10.1-10.5 MMBoe | |
|
Percent Oil in Mix |
~30% |
slightly increased |
~35% | |
|
LOE (including ad valorem tax) |
$4.60-4.80/Boe |
additional storm related |
$5.20/Boe | |
|
Transportation |
$5.40-5.60/Boe |
narrowed |
$5.00/Boe | |
|
Production Taxes |
4.0-4.5% |
unchanged |
||
|
G&A (includes ~$20MM non-cash, |
$116-120 MM |
reduced |
$32.4 MM | |
|
Exploration/capitalized overhead |
~$55-60 MM |
reclassified certain |
$18.2 MM | |
|
DD&A |
$12-14/Boe |
unchanged |
$14.66/Boe | |
|
Total capital spend (before acquisitions) is a non-GAAP measure. The Company is unable to |
COMMODITY DERIVATIVES
As of November 1, 2017.
The Company remains well-hedged into the fourth quarter of 2017 with approximately 80% of production hedged (at the mid-point of guidance). For 2018, hedged volumes are approximately 31 MMBoe, of which 36% is oil, 39% is natural gas and 25% is NGLs.
|
OIL SWAPS |
OIL COLLARS |
NATURAL GAS SWAPS |
NGL SWAPS | |
|
Volume/Average Price |
Volume/Avg. Ceiling - Floor |
Volume /Average Price |
Volume/Average Price | |
|
Period |
(MBbls/$Bbl) |
(MBbls/$Bbl) |
(BBtu/$MMBtu) |
(MBbls/$Bbl) |
|
4Q17 |
1,510/$47.11 |
1,086/$56.05 - $47.51 |
22,001/$3.98 |
2,210/$22.05 |
|
1Q18 |
1,075/$50.16 |
1,026/$58.46 - $50.00 |
20,788/$3.25 |
2,113/$31.07 |
|
2Q18 |
1,534/$49.57 |
1,004/$58.37 - $50.00 |
15,712/$2.85 |
1,642/$28.08 |
|
3Q18 |
1,769/$49.77 |
1,393/$57.93 - $50.00 |
17,147/$2.88 |
1,831/$28.14 |
|
4Q18 |
1,894/$49.87 |
1,607/$57.75 - $50.00 |
18,646/$2.91 |
2,021/$28.13 |
|
Notes: The volumes above represent fixed swap and collar contracts the Company has in place through 4Q18. Volumes for 4Q17 include all commodity contracts for settlement any time during the fourth quarter of 2017; prices are weighted averages; natural gas contracts reflect regional contract positions and are no longer adjusted to a NYMEX equivalent; NGL prices are at Mt. Belvieu and reflect specific NGL components. 2017 and 2018 quarters include ethane, propane, butanes and gasoline. In addition to the volumes above, the Company has oil basis swaps in place. See 3Q17 Earnings Presentation for contract details on the oil basis swaps. |
UPCOMING EVENTS
EARNINGS WEBCAST AND CALL
As previously announced, SM Energy is posting a pre-recorded discussion and presentation in conjunction with this earnings release. Please look for the additional detail on our website at www.sm-energy.com. Tomorrow morning, the Company will host a third quarter financial and operating results Q&A session via webcast and conference call. Please join management at 8:00 a.m. Mountain Time/10:00 a.m. Eastern Time November 3, 2017. Join us via webcast at www.sm-energy.com or by telephone 877-870-4263 (toll free) or 412-317-0790 (international), and indicate SM Energy earnings call. The webcast and call will also be available for replay. The dial-in replay number is 877-344-7529 (toll free), and the replay access code is 10112207.
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "guidance," "intend," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, projected changes in production volumes and cash flows and the expected benefits from joint venture arrangements. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability and quality of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACTS
INVESTORS: Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
|
SM ENERGY COMPANY | |||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||||||||
|
September 30, 2017 | |||||||||||||||||||||
|
For the Three Months Ended |
For the Nine Months Ended | ||||||||||||||||||||
|
Production Data |
2017 |
2016 |
Percent |
2017 |
2016 |
Percent | |||||||||||||||
|
Average realized sales price, before |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
45.20 |
$ |
38.81 |
16% |
$ |
45.77 |
$ |
34.69 |
32% | |||||||||||
|
Gas (per Mcf) |
2.96 |
2.71 |
9% |
2.98 |
2.12 |
41% | |||||||||||||||
|
NGLs (per Bbl) |
22.40 |
16.58 |
35% |
21.36 |
14.91 |
43% | |||||||||||||||
|
Equivalent (per BOE) |
$ |
27.59 |
$ |
23.25 |
19% |
$ |
26.76 |
$ |
19.87 |
35% | |||||||||||
|
Average realized sales price, including |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
44.47 |
$ |
50.15 |
(11)% |
$ |
44.32 |
$ |
52.31 |
(15)% | |||||||||||
|
Gas (per Mcf) |
3.79 |
2.98 |
27% |
3.63 |
2.86 |
27% | |||||||||||||||
|
NGLs (per Bbl) |
18.86 |
16.08 |
17% |
18.93 |
15.12 |
25% | |||||||||||||||
|
Equivalent (per BOE) |
$ |
28.82 |
$ |
27.31 |
6% |
$ |
27.62 |
$ |
27.18 |
2% | |||||||||||
|
Production: |
|||||||||||||||||||||
|
Oil (MMBbl) |
3.4 |
4.3 |
(21)% |
9.8 |
12.6 |
(22)% | |||||||||||||||
|
Gas (Bcf) |
29.1 |
37.1 |
(22)% |
97.0 |
111.7 |
(13)% | |||||||||||||||
|
NGLs (MMBbl) |
2.4 |
3.6 |
(34)% |
8.1 |
10.7 |
(24)% | |||||||||||||||
|
MMBOE (6:1) |
10.7 |
14.2 |
(25)% |
34.1 |
41.9 |
(19)% | |||||||||||||||
|
Average daily production: |
|||||||||||||||||||||
|
Oil (MBbl/d) |
37.1 |
47.2 |
(21)% |
36.1 |
45.9 |
(21)% | |||||||||||||||
|
Gas (MMcf/d) |
316.1 |
403.0 |
(22)% |
355.4 |
407.8 |
(13)% | |||||||||||||||
|
NGLs (MBbl/d) |
26.2 |
39.5 |
(34)% |
29.6 |
39.0 |
(24)% | |||||||||||||||
|
MBOE/d (6:1) |
116.0 |
153.9 |
(25)% |
124.9 |
152.9 |
(18)% | |||||||||||||||
|
Per BOE data: |
|||||||||||||||||||||
|
Realized price, before the effects of derivative |
$ |
27.59 |
$ |
23.25 |
19% |
$ |
26.76 |
$ |
19.87 |
35% | |||||||||||
|
Lease operating expense |
4.81 |
3.29 |
46% |
4.22 |
3.46 |
22% | |||||||||||||||
|
Transportation costs |
5.24 |
6.24 |
(16)% |
5.62 |
6.08 |
(8)% | |||||||||||||||
|
Production taxes |
1.15 |
1.04 |
11% |
1.11 |
0.88 |
26% | |||||||||||||||
|
Ad valorem tax expense |
0.29 |
0.21 |
38% |
0.34 |
0.22 |
55% | |||||||||||||||
|
General and administrative (excluding stock-compensation) |
2.16 |
1.96 |
10% |
2.15 |
1.85 |
16% | |||||||||||||||
|
Net, before the effects of derivative settlements |
$ |
13.94 |
$ |
10.51 |
33% |
$ |
13.32 |
$ |
7.38 |
80% | |||||||||||
|
Derivative settlement gain |
1.23 |
4.06 |
(70)% |
0.86 |
7.31 |
(88)% | |||||||||||||||
|
Margin, including the effects of derivative settlements |
$ |
15.17 |
$ |
14.57 |
4% |
$ |
14.18 |
$ |
14.69 |
(3)% | |||||||||||
|
Depletion, depreciation, amortization, |
$ |
12.61 |
$ |
13.70 |
(8)% |
$ |
12.48 |
$ |
14.78 |
(16)% | |||||||||||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
September 30, 2017 | |||||||
|
Condensed Consolidated Balance Sheets |
|||||||
|
(in thousands, except share amounts) |
September 30, |
December 31, | |||||
|
ASSETS |
2017 |
2016 | |||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
441,415 |
$ |
9,372 |
|||
|
Accounts receivable |
146,056 |
151,950 |
|||||
|
Derivative asset |
63,685 |
54,521 |
|||||
|
Prepaid expenses and other |
17,756 |
8,799 |
|||||
|
Total current assets |
668,912 |
224,642 |
|||||
|
Property and equipment (successful efforts method): |
|||||||
|
Proved oil and gas properties |
5,938,351 |
5,700,418 |
|||||
|
Less - accumulated depletion, depreciation, and amortization |
(3,243,072) |
(2,836,532) |
|||||
|
Unproved oil and gas properties |
2,321,508 |
2,471,947 |
|||||
|
Wells in progress |
287,106 |
235,147 |
|||||
|
Oil and gas properties held for sale, net |
7,144 |
372,621 |
|||||
|
Other property and equipment, net of accumulated depreciation of $50,468 and |
106,046 |
137,753 |
|||||
|
Total property and equipment, net |
5,417,083 |
6,081,354 |
|||||
|
Noncurrent assets: |
|||||||
|
Derivative asset |
60,035 |
67,575 |
|||||
|
Other noncurrent assets |
32,896 |
19,940 |
|||||
|
Total other noncurrent assets |
92,931 |
87,515 |
|||||
|
Total Assets |
$ |
6,178,926 |
$ |
6,393,511 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued expenses |
$ |
348,885 |
$ |
299,708 |
|||
|
Derivative liability |
87,791 |
115,464 |
|||||
|
Total current liabilities |
436,676 |
415,172 |
|||||
|
Noncurrent liabilities: |
|||||||
|
Revolving credit facility |
— |
— |
|||||
|
Senior Notes, net of unamortized deferred financing costs |
2,768,346 |
2,766,719 |
|||||
|
Senior Convertible Notes, net of unamortized discount and deferred financing costs |
137,012 |
130,856 |
|||||
|
Asset retirement obligation |
100,958 |
96,134 |
|||||
|
Asset retirement obligation associated with oil and gas properties held for sale |
— |
26,241 |
|||||
|
Deferred income taxes |
208,720 |
315,672 |
|||||
|
Derivative liability |
67,676 |
98,340 |
|||||
|
Other noncurrent liabilities |
47,497 |
47,244 |
|||||
|
Total noncurrent liabilities |
3,330,209 |
3,481,206 |
|||||
|
Stockholders' equity: |
|||||||
|
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and |
1,116 |
1,113 |
|||||
|
Additional paid-in capital |
1,734,217 |
1,716,556 |
|||||
|
Retained earnings |
691,915 |
794,020 |
|||||
|
Accumulated other comprehensive loss |
(15,207) |
(14,556) |
|||||
|
Total stockholders' equity |
2,412,041 |
2,497,133 |
|||||
|
Total Liabilities and Stockholders' Equity |
$ |
6,178,926 |
$ |
6,393,511 |
|||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
September 30, 2017 | |||||||||||||||
|
Condensed Consolidated Statements of Operations | |||||||||||||||
|
(in thousands, except per share amounts) |
For the Three Months Ended |
For the Nine Months Ended | |||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Operating revenues and other income: |
|||||||||||||||
|
Oil, gas, and NGL production revenue |
$ |
294,459 |
$ |
329,165 |
$ |
912,596 |
$ |
832,130 |
|||||||
|
Net gain (loss) on divestiture activity |
(1,895) |
22,388 |
(131,565) |
3,413 |
|||||||||||
|
Other operating revenues |
2,815 |
1,107 |
7,807 |
2,007 |
|||||||||||
|
Total operating revenues and other income |
295,379 |
352,660 |
788,838 |
837,550 |
|||||||||||
|
Operating expenses: |
|||||||||||||||
|
Oil, gas, and NGL production expense |
122,651 |
152,524 |
385,073 |
445,658 |
|||||||||||
|
Depletion, depreciation, amortization, and asset |
134,599 |
193,966 |
425,643 |
619,193 |
|||||||||||
|
Exploration |
14,243 |
13,482 |
39,293 |
41,942 |
|||||||||||
|
Impairment of proved properties |
— |
8,049 |
3,806 |
277,834 |
|||||||||||
|
Abandonment and impairment of unproved properties |
— |
3,568 |
157 |
5,917 |
|||||||||||
|
General and administrative(1) |
27,880 |
32,679 |
85,564 |
93,117 |
|||||||||||
|
Net derivative (gain) loss(2) |
80,599 |
(28,037) |
(89,364) |
121,086 |
|||||||||||
|
Other operating expenses, net |
999 |
(5,917) |
6,303 |
7,731 |
|||||||||||
|
Total operating expenses |
380,971 |
370,314 |
856,475 |
1,612,478 |
|||||||||||
|
Loss from operations |
(85,592) |
(17,654) |
(67,637) |
(774,928) |
|||||||||||
|
Non-operating income (expense): |
|||||||||||||||
|
Interest expense |
(44,091) |
(47,206) |
(135,639) |
(112,329) |
|||||||||||
|
Gain (loss) on extinguishment of debt |
— |
— |
(35) |
15,722 |
|||||||||||
|
Other, net |
1,301 |
221 |
2,901 |
232 |
|||||||||||
|
Loss before income taxes |
(128,382) |
(64,639) |
(200,410) |
(871,303) |
|||||||||||
|
Income tax benefit |
39,270 |
23,732 |
65,825 |
314,505 |
|||||||||||
|
Net loss |
$ |
(89,112) |
$ |
(40,907) |
$ |
(134,585) |
$ |
(556,798) |
|||||||
|
Basic weighted-average common shares outstanding |
111,575 |
78,468 |
111,366 |
71,574 |
|||||||||||
|
Diluted weighted-average common shares outstanding |
111,575 |
78,468 |
111,366 |
71,574 |
|||||||||||
|
Basic net loss per common share |
$ |
(0.80) |
$ |
(0.52) |
$ |
(1.21) |
$ |
(7.78) |
|||||||
|
Diluted net loss per common share |
$ |
(0.80) |
$ |
(0.52) |
$ |
(1.21) |
$ |
(7.78) |
|||||||
|
(1) Non-cash stock-based compensation component |
|||||||||||||||
|
Exploration expense |
$ |
1,495 |
$ |
1,590 |
$ |
3,898 |
$ |
5,037 |
|||||||
|
G&A expense |
$ |
4,852 |
$ |
4,980 |
$ |
12,262 |
$ |
15,448 |
|||||||
|
(2) The net derivative (gain) loss line item consists of |
|||||||||||||||
|
Settlement gain |
$ |
(13,092) |
$ |
(57,496) |
$ |
(29,402) |
$ |
(306,234) |
|||||||
|
(Gain) loss on fair value changes |
$ |
93,691 |
$ |
29,459 |
$ |
(59,962) |
$ |
427,320 |
|||||||
|
Total net derivative (gain) loss |
$ |
80,599 |
$ |
(28,037) |
$ |
(89,364) |
$ |
121,086 |
|||||||
|
SM ENERGY COMPANY | ||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
|
September 30, 2017 | ||||||||||||||||||||||
|
Condensed Consolidated Statement of Stockholders' Equity | ||||||||||||||||||||||
|
(in thousands, except share amounts) | ||||||||||||||||||||||
|
Additional |
Accumulated |
Total | ||||||||||||||||||||
|
Common Stock |
Retained Earnings |
|||||||||||||||||||||
|
Shares |
Amount |
|||||||||||||||||||||
|
Balances, December 31, 2016 |
111,257,500 |
$ |
1,113 |
$ |
1,716,556 |
$ |
794,020 |
$ |
(14,556) |
$ |
2,497,133 |
|||||||||||
|
Net loss |
— |
— |
— |
(134,585) |
— |
(134,585) |
||||||||||||||||
|
Other comprehensive loss |
— |
— |
— |
— |
(651) |
(651) |
||||||||||||||||
|
Dividends, $0.10 per share |
— |
— |
— |
(11,144) |
— |
(11,144) |
||||||||||||||||
|
Issuance of common stock under Employee Stock Purchase Plan |
123,678 |
1 |
1,737 |
— |
— |
1,738 |
||||||||||||||||
|
Issuance of common stock upon vesting of restricted stock units, net of shares used for tax withholdings |
171,278 |
1 |
(1,241) |
— |
— |
(1,240) |
||||||||||||||||
|
Stock-based compensation expense |
71,573 |
1 |
16,159 |
— |
— |
16,160 |
||||||||||||||||
|
Cumulative effect of accounting change |
— |
— |
1,108 |
43,624 |
— |
44,732 |
||||||||||||||||
|
Other |
— |
— |
(102) |
— |
— |
(102) |
||||||||||||||||
|
Balances, September 30, 2017 |
111,624,029 |
$ |
1,116 |
$ |
1,734,217 |
$ |
691,915 |
$ |
(15,207) |
$ |
2,412,041 |
|||||||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
September 30, 2017 | |||||||||||||||
|
Condensed Consolidated Statements of Cash Flows |
|||||||||||||||
|
(in thousands) |
For the Three Months |
For the Nine Months | |||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net loss |
$ |
(89,112) |
$ |
(40,907) |
$ |
(134,585) |
$ |
(556,798) |
|||||||
|
Adjustments to reconcile net loss to net cash provided by operating |
|||||||||||||||
|
Net (gain) loss on divestiture activity |
1,895 |
(22,388) |
131,565 |
(3,413) |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement |
134,599 |
193,966 |
425,643 |
619,193 |
|||||||||||
|
Impairment of proved properties |
— |
8,049 |
3,806 |
277,834 |
|||||||||||
|
Abandonment and impairment of unproved properties |
— |
3,568 |
157 |
5,917 |
|||||||||||
|
Stock-based compensation expense |
6,347 |
6,570 |
16,160 |
20,485 |
|||||||||||
|
Net derivative (gain) loss |
80,599 |
(28,037) |
(89,364) |
121,086 |
|||||||||||
|
Derivative settlement gain |
13,092 |
57,496 |
29,402 |
306,234 |
|||||||||||
|
Amortization of debt discount and deferred financing costs |
3,799 |
3,757 |
12,478 |
5,687 |
|||||||||||
|
Non-cash (gain) loss on extinguishment of debt, net |
— |
— |
22 |
(15,722) |
|||||||||||
|
Deferred income taxes |
(36,668) |
(23,756) |
(67,458) |
(314,770) |
|||||||||||
|
Plugging and abandonment |
(486) |
(2,506) |
(2,095) |
(5,222) |
|||||||||||
|
Other, net |
2,446 |
(11,374) |
4,713 |
(8,857) |
|||||||||||
|
Changes in current assets and liabilities: |
|||||||||||||||
|
Accounts receivable |
(25,491) |
12,441 |
21,502 |
1,221 |
|||||||||||
|
Prepaid expenses and other |
366 |
(835) |
(8,955) |
7,652 |
|||||||||||
|
Accounts payable and accrued expenses |
30,533 |
(3,439) |
21,560 |
(65,166) |
|||||||||||
|
Accrued derivative settlements |
6,563 |
5,534 |
6,046 |
19,651 |
|||||||||||
|
Net cash provided by operating activities |
128,482 |
158,139 |
370,597 |
415,012 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Net proceeds from the sale of oil and gas properties |
12,118 |
188,862 |
778,365 |
201,829 |
|||||||||||
|
Capital expenditures |
(258,226) |
(147,224) |
(624,969) |
(492,794) |
|||||||||||
|
Acquisition of proved and unproved oil and gas properties |
751 |
(4,102) |
(87,389) |
(21,853) |
|||||||||||
|
Acquisition deposit held in escrow |
— |
(49,000) |
3,000 |
(49,000) |
|||||||||||
|
Other, net |
— |
900 |
— |
— |
|||||||||||
|
Net cash provided by (used in) investing activities |
(245,357) |
(10,564) |
69,007 |
(361,818) |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Proceeds from credit facility |
— |
158,000 |
406,000 |
743,000 |
|||||||||||
|
Repayment of credit facility |
— |
(488,500) |
(406,000) |
(945,000) |
|||||||||||
|
Debt issuance costs related to credit facility |
— |
— |
— |
(3,132) |
|||||||||||
|
Net proceeds from Senior Notes |
— |
492,397 |
— |
492,397 |
|||||||||||
|
Cash paid to repurchase Senior Notes |
— |
— |
(2,344) |
(29,904) |
|||||||||||
|
Net proceeds from Senior Convertible Notes |
— |
166,681 |
— |
166,681 |
|||||||||||
|
Cash paid for capped call transactions |
— |
(24,109) |
— |
(24,109) |
|||||||||||
|
Net proceeds from sale of common stock |
— |
530,912 |
1,738 |
533,266 |
|||||||||||
|
Dividends paid |
— |
— |
(5,563) |
(3,404) |
|||||||||||
|
Other, net |
(1,231) |
(2,308) |
(1,392) |
(2,341) |
|||||||||||
|
Net cash provided by (used in) financing activities |
(1,231) |
833,073 |
(7,561) |
927,454 |
|||||||||||
|
Net change in cash and cash equivalents |
(118,106) |
980,648 |
432,043 |
980,648 |
|||||||||||
|
Cash and cash equivalents at beginning of period |
559,521 |
18 |
9,372 |
18 |
|||||||||||
|
Cash and cash equivalents at end of period |
$ |
441,415 |
$ |
980,666 |
$ |
441,415 |
$ |
980,666 |
|||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
September 30, 2017 | |||||||||||||||
|
Adjusted EBITDAX(1) |
|||||||||||||||
|
(in thousands) |
|||||||||||||||
|
Reconciliation of net loss (GAAP) to adjusted EBITDAX (Non-GAAP) to |
For the Three Months Ended |
For the Nine Months Ended | |||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Net loss (GAAP) |
$ |
(89,112) |
$ |
(40,907) |
$ |
(134,585) |
$ |
(556,798) |
|||||||
|
Interest expense |
44,091 |
47,206 |
135,639 |
112,329 |
|||||||||||
|
Other non-operating income, net |
(1,301) |
(221) |
(2,901) |
(232) |
|||||||||||
|
Income tax benefit |
(39,270) |
(23,732) |
(65,825) |
(314,505) |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation |
134,599 |
193,966 |
425,643 |
619,193 |
|||||||||||
|
Exploration(2) |
12,748 |
11,892 |
35,395 |
36,905 |
|||||||||||
|
Impairment of proved properties |
— |
8,049 |
3,806 |
277,834 |
|||||||||||
|
Abandonment and impairment of unproved properties |
— |
3,568 |
157 |
5,917 |
|||||||||||
|
Stock-based compensation expense |
6,347 |
6,570 |
16,160 |
20,485 |
|||||||||||
|
Net derivative (gain) loss |
80,599 |
(28,037) |
(89,364) |
121,086 |
|||||||||||
|
Derivative settlement gain |
13,092 |
57,496 |
29,402 |
306,234 |
|||||||||||
|
Net (gain) loss on divestiture activity |
1,895 |
(22,388) |
131,565 |
(3,413) |
|||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
35 |
(15,722) |
|||||||||||
|
Other |
785 |
(8,314) |
5,620 |
(4,757) |
|||||||||||
|
Adjusted EBITDAX (Non-GAAP) |
$ |
164,473 |
$ |
205,148 |
$ |
490,747 |
$ |
604,556 |
|||||||
|
Interest expense |
(44,091) |
(47,206) |
(135,639) |
(112,329) |
|||||||||||
|
Other non-operating income, net |
1,301 |
221 |
2,901 |
232 |
|||||||||||
|
Income tax benefit |
39,270 |
23,732 |
65,825 |
314,505 |
|||||||||||
|
Exploration(2) |
(12,748) |
(11,892) |
(35,395) |
(36,905) |
|||||||||||
|
Amortization of debt discount and deferred financing costs |
3,799 |
3,757 |
12,478 |
5,687 |
|||||||||||
|
Deferred income taxes |
(36,668) |
(23,756) |
(67,458) |
(314,770) |
|||||||||||
|
Plugging and abandonment |
(486) |
(2,506) |
(2,095) |
(5,222) |
|||||||||||
|
Other, net |
1,661 |
(3,060) |
(920) |
(4,100) |
|||||||||||
|
Changes in current assets and liabilities |
11,971 |
13,701 |
40,153 |
(36,642) |
|||||||||||
|
Net cash provided by operating activities (GAAP) |
$ |
128,482 |
$ |
158,139 |
$ |
370,597 |
$ |
415,012 |
|||||||
|
(1) Adjusted EBITDAX represents net loss before interest expense, other non-operating income and expense, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property abandonment and impairment expense, non-cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, and certain other items. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we failed to comply with the covenants that establish a maximum permitted ratio of senior secured debt to adjusted EBITDAX and a minimum permitted ratio of adjusted EBITDAX to interest, we would be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we are in default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under the indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. | |||||||||||||||
|
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
September 30, 2017 | |||||||||||||||
|
Adjusted Net Loss (Non-GAAP) |
|||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||
|
For the Three Months Ended |
For the Nine Months Ended | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Net loss (GAAP) |
$ |
(89,112) |
$ |
(40,907) |
$ |
(134,585) |
$ |
(556,798) |
|||||||
|
Net derivative (gain) loss |
80,599 |
(28,037) |
(89,364) |
121,086 |
|||||||||||
|
Derivative settlement gain |
13,092 |
57,496 |
29,402 |
306,234 |
|||||||||||
|
Net (gain) loss on divestiture activity |
1,895 |
(22,388) |
131,565 |
(3,413) |
|||||||||||
|
Impairment of proved properties |
— |
8,049 |
3,806 |
277,834 |
|||||||||||
|
Abandonment and impairment of unproved properties |
— |
3,568 |
157 |
5,917 |
|||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
35 |
(15,722) |
|||||||||||
|
Termination fee on temporary second lien facility |
— |
10,000 |
— |
10,000 |
|||||||||||
|
Other, net(2) |
785 |
(10,008) |
5,620 |
(7,425) |
|||||||||||
|
Tax effect of adjustments(1) |
(34,790) |
(6,818) |
(29,321) |
(253,497) |
|||||||||||
|
Adjusted net loss (Non-GAAP)(3) |
$ |
(27,531) |
$ |
(29,045) |
$ |
(82,685) |
$ |
(115,784) |
|||||||
|
Diluted net loss per common share (GAAP) |
$ |
(0.80) |
$ |
(0.52) |
$ |
(1.21) |
$ |
(7.78) |
|||||||
|
Net derivative (gain) loss |
0.72 |
(0.36) |
(0.80) |
1.69 |
|||||||||||
|
Derivative settlement gain |
0.12 |
0.73 |
0.27 |
4.28 |
|||||||||||
|
Net (gain) loss on divestiture activity |
0.02 |
(0.29) |
1.18 |
(0.05) |
|||||||||||
|
Impairment of proved properties |
— |
0.10 |
0.03 |
3.88 |
|||||||||||
|
Abandonment and impairment of unproved properties |
— |
0.05 |
— |
0.08 |
|||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
— |
(0.22) |
|||||||||||
|
Termination fee on temporary second lien facility |
— |
0.13 |
— |
0.14 |
|||||||||||
|
Other, net(2) |
— |
(0.12) |
0.05 |
(0.10) |
|||||||||||
|
Tax effect of adjustments(1) |
(0.31) |
(0.09) |
(0.26) |
(3.54) |
|||||||||||
|
Adjusted net loss per diluted common share (Non-GAAP)(4) |
$ |
(0.25) |
$ |
(0.37) |
$ |
(0.74) |
$ |
(1.62) |
|||||||
|
Diluted weighted-average common shares outstanding (GAAP) |
111,575 |
78,468 |
111,366 |
71,574 |
|||||||||||
|
(1) The tax effect of adjustments is calculated using a tax rate of 36.1% for the three-month and nine-month periods ended September 30, 2017, and a tax rate of 36.5% for the three-month and nine-month periods ended September 30, 2016. These rates approximate the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||||||||||
|
(2) For the three-month and nine-month periods ended September 30, 2017, the adjustment is related to impairment on materials inventory, the change in Net Profits Plan liability, and bad debt expense. For the three-month and nine-month periods ended September 30, 2016, the adjustment relates to the change in Net Profits Plan liability, impairment of materials inventory, and an adjustment relating to claims on royalties on certain Federal and Indian leases. These items are included in other operating expenses on the Company's condensed consolidated statements of operations. | |||||||||||||||
|
(3) Adjusted net loss excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, materials inventory loss, and gains or losses on extinguishment of debt. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. | |||||||||||||||
|
(4) For periods where the Company reports adjusted net loss, basic weighted-average common shares outstanding are used in the calculation of adjusted net loss per diluted common share. |
|
SM ENERGY COMPANY |
||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) |
||||||||
|
September 30, 2017 |
||||||||
|
Total Capital Spend Reconciliation |
||||||||
|
(in millions) |
||||||||
|
Reconciliation of costs incurred in oil & gas activities |
For the Three Months Ended |
For the Nine Months Ended |
||||||
|
2017 |
2017 |
|||||||
|
Costs incurred in oil and gas activities (GAAP): |
$ |
226.6 |
$ |
741.6 |
||||
|
Asset retirement obligation |
0.4 |
(1.0) |
||||||
|
Capitalized interest |
(3.5) |
(8.6) |
||||||
|
Proved property acquisitions(2) |
0.4 |
(1.0) |
||||||
|
Unproved property acquisitions |
— |
(75.6) |
||||||
|
Other |
2.9 |
1.6 |
||||||
|
Total capital spend (Non-GAAP): |
$ |
226.8 |
$ |
657.0 |
||||
|
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. |
|||||||||
|
(2) Includes approximately $0 and $887,000 of ARO associated with proved property acquisitions for the three and nine months ended September 30, 2017, respectively. |
|||||||||
|
(3) The Company completed several primarily non-monetary acreage trades in the Midland Basin during the first nine months of 2017 totaling $283.7 million of value attributed to the properties surrendered. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. |
|||||||||
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-third-quarter-2017-results-300548739.html
SOURCE SM Energy Company
Article Date
11/2/2017SM Energy Declares Semi-Annual Cash Dividend, Announces Participation In Upcoming Investor Conference, And Schedules Third Quarter 2017 Earnings Release And Call
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Sept. 27, 2017 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announces that its Board of Directors has approved a semi-annual cash dividend of $0.05 per share of common stock outstanding. The dividend will be paid on November 1, 2017, to stockholders of record as of the close of business on October 20, 2017. The Company currently has approximately 111.6 million shares of common stock outstanding.
UPCOMING INVESTOR CONFERENCE
SM Energy Company also announces that the Company will be participating in the following upcoming investor event. An investor presentation will be posted to the Company's website on the morning of October 3, 2017, at www.sm-energy.com.
THIRD QUARTER 2017 EARNINGS RELEASE AND WEBCAST
SM Energy expects to release its third quarter 2017 results after market on November 2, 2017. See schedule below:
The call replay will be available approximately one hour after the call until November 10, 2017.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-declares-semi-annual-cash-dividend-announces-participation-in-upcoming-investor-conference-and-schedules-third-quarter-2017-earnings-release-and-call-300526417.html
SOURCE SM Energy Company
Article Date
9/27/20179/14/2017 - SM Energy Update On Effects Of Hurricane Harvey
SM Energy Update On Effects Of Hurricane Harvey
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Sept. 14, 2017 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE:SM) announced today updated information regarding the effects of Hurricane Harvey on the Company's operations. Most importantly, all of the Company's employees and families were safe during the disaster. The Company's Houston office remains closed due to flooding of the lower floors of the building, and employees are able to work from home. Eagle Ford daily operations are run from the Company's field office in Catarina, Texas, which was not affected by the storm.
All of the Company's producing assets are located outside the storm's path and were unharmed. While the Company had intermittent curtailments in certain production due to downstream, third-party facilities that were impacted by the storm, all of the Company's operations have returned to pre-Harvey production levels.
The total effect on production from the hurricane is estimated at 0.2 MMBoe, which effectively reduces previously provided third quarter 2017 guidance to 10.6-11.0 MMBoe. This temporary effect on production was distributed approximately 58% natural gas, 32% NGLs and 10% oil. Again, all of the Company's production, drilling and completion operations have returned to normal.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-update-on-effects-of-hurricane-harvey-300520132.html
SOURCE SM Energy Company
Article Date
9/14/2017SM Energy Reports Second Quarter Of 2017 Results - Focus On Capital Efficiency Driving Value, Production Beats, Raising Guidance
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Aug. 3, 2017 /PRNewswire/ --
SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) announced today financial results and operations highlights from the second quarter of 2017. The Company has revised its quarterly reporting format to include posting both an investor presentation and pre-recorded call in conjunction with this release. Please visit the Company's website at sm-energy.com to access this additional second quarter detail. The Company will host a webcast and conference call at 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) tomorrow, August 4, 2017, to answer questions. Further information on the earnings webcast and conference call can be found below.
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "Our team continues to meet or exceed our operational objectives year-to-date. Our relentless pursuit of improved well performance and detailed approach to cost management have delivered high levels of efficiency in our capital investment program. As a result, year-to-date we have generated more production than we expected with less capital investment than we planned, and we are further increasing 2017 production guidance to reflect our projections for continued outperformance."
SECOND QUARTER 2017 RESULTS
PRODUCTION - SEQUENTIAL COMPARISON:
|
COMPANY PRODUCTION |
||||||||
|
Second Quarter |
First Quarter |
% Change | ||||||
|
Total Company (MMBoe) |
11.3 |
12.1 |
||||||
|
Assets sold (MMBoe) |
— |
(1.5) |
||||||
|
Retained Assets (MMBoe) |
11.3 |
10.6 |
||||||
|
By commodity |
||||||||
|
Oil (MMBbls) |
2.9 |
3.0 |
(4)% | |||||
|
Natural gas (Bcf) |
34.0 |
30.8 |
10% | |||||
|
NGLs (MMBbls) |
2.8 |
2.4 |
13% | |||||
|
Retained Assets (MMBoe) |
11.3 |
10.6 |
7% | |||||
|
By region (MMBoe) |
||||||||
|
Eagle Ford (operated) |
8.0 |
7.3 |
10% | |||||
|
Permian Basin |
2.3 |
2.1 |
8% | |||||
|
Rocky Mountain |
1.1 |
1.2 |
(12)% | |||||
|
Retained Assets (MMBoe) |
11.3 |
10.6 |
7% | |||||
|
• |
Total Company production includes production from assets sold (through the closing date) |
|
• |
Eagle Ford (operated) includes nominal other production from the region |
Second quarter production of 11.3 MMBoe is up 7% sequentially and up 11% compared with the second quarter of 2016, on a retained asset basis. Production in the second quarter of 2017 reflects the acceleration of 11 well completions in the Eagle Ford (as announced on June 6, 2017), and further exceeds guidance due to continued production outperformance from new wells in both the Permian Basin and Eagle Ford. As a result of second quarter production outperformance, the Company is raising full year production guidance by 0.8 MMBoe. For the first six months of 2017, production was 23.4 MMBoe.
In the second quarter of 2017, the average realized price per Boe before the effects of commodity hedges was $25.13 and after the effects of commodity hedges was $26.57. Cash production costs totaled $10.98 per Boe, down sequentially from $11.42 per Boe in the first quarter of 2017 and up from $10.38 per Boe in the second quarter of 2016. The Company is updating its guidance for the second half of 2017 to reflect modified LOE and transportation costs associated with retaining its Divide County, North Dakota assets. Please see guidance below.
Net loss for the second quarter of 2017 was $119.9 million, or $1.08 per diluted common share, compared with a net loss of $168.7 million, or $2.48 per diluted common share, in the second quarter of 2016. Net loss in the second quarter of 2017 reflects a 43% increase in the Company's pre-hedge cash operating margin per Boe from the prior year period. The 2017 period also includes a reduction in DD&A expense per Boe from $14.75 to $13.52, a loss on divestiture activity of $167.1 million and a non-cash derivative gain of $38.9 million. Net cash provided by operating activities in the second quarter of 2017 was $107.1 million. For the first six months of 2017, net loss was $45.5 million, or $0.41 per diluted common share, and net cash provided by operating activities was $242.1 million.
As discussed below, adjusted EBITDAX, adjusted net income (loss) and adjusted net income (loss) per diluted common share are non-GAAP measures. Please reference the reconciliations to the most directly comparable GAAP financial measures at the end of this release.
Adjusted EBITDAX for the second quarter of 2017 was $154.1 million, compared with $217.1 million in the prior year period. While the pre-hedge operating margin was significantly higher in the second quarter of 2017, the prior year period benefited from a $101.7 million derivative settlement gain. For the first six months of 2017, adjusted EBITDAX was $326.3 million.
Adjusted net loss for the second quarter was $35.5 million, or $0.32 per diluted common share, compared with an adjusted net loss of $30.2 million, or $0.44 per diluted common share, in the second quarter of 2016. For the first six months of 2017, adjusted net loss was $55.2 million, or $0.50 per diluted common share. The calculation of adjusted net loss excludes non-recurring items and items difficult to estimate in order to present results that can be more consistently compared with prior periods and peer results.
FINANCIAL POSITION AND LIQUIDITY
At June 30, 2017, the outstanding principal balance on the Company's long-term debt included $2.8 billion in senior notes plus $172.5 million in senior convertible notes, with zero drawn on the Company's senior secured credit facility. At quarter-end, the Company had a cash balance of $559.5 million, providing for net debt of $2.4 billion. The Company's undrawn credit facility plus cash on hand provide $1.5 billion in liquidity.
CAPITAL ACTIVITY AND OPERATIONS
Costs incurred for the second quarter of 2017 were $258.0 million, which included $15.7 million of primarily unproved property acquisitions. Second quarter total capital spend (see below for GAAP reconciliation) was $237.3 million. During the quarter, the Company drilled or participated in 30 net wells and completed or participated in 25 net wells. For the first six months of 2017, costs incurred were $515.0 million and total capital spend was $430.2 million.
Please refer to the Total Capital Spend Reconciliation at the end of this release for a reconciliation to Costs Incurred in oil and gas activities (GAAP).
PERMIAN BASIN
In the second quarter of 2017, production from the Company's Midland Basin assets was 2.3 MMBoe and was 75% oil. The Company is currently running seven horizontal rigs in the basin, with two in the Sweetie Peck area and five in the RockStar area. The Company recently converted the single vertical rig operating in the RockStar area to horizontal drilling, and is currently running three completion crews. During the second quarter, the Company drilled 23 net operated wells and had nine net flowing completions. The second quarter production margin for this area was $28.75 per Boe.
Subsequent to quarter-end, the Viper well, located in the northern portion of the Company's RockStar acreage, reached a 24-hour peak initial production rate of 1,316 Boe/d. The Viper well is drilled into the Wolfcamp A with a 10,400 foot lateral. Similar to peer wells in the area, the Viper well demonstrates a lower peak rate combined with a flatter production profile. In combination with nearby peer wells, the area now supports economic wells in the Wolfcamp A (SM, Sabalo), Wolfcamp B (Apache) and Lower Spraberry (Sabalo).
The Company remains focused on optimizing drilling and completion operations across the basin in order to identify the appropriate number of wells per section and optimize production performance in preparation for increased development activity in 2018. Over the past year, the Company has collected approximately 3,500 feet of core to better understand the entire Spraberry through Wolfcamp column, gather geomechanical rock properties necessary to support reservoir simulation efforts, and evaluate untested intervals. Efforts to drive capital efficiency and optimization also include drilling longer laterals and pad drilling. The Company has just completed the first 10,000 foot laterals at Sweetie Peck and has just completed the first six well pad at RockStar that co-develops the Lower Spraberry and Wolfcamp A.
The Company currently has approximately 89,000 net acres in the Midland Basin, which includes approximately 5,400 additional net acres acquired year-to-date through acreage trades and other transactions.
EAGLE FORD
In the second quarter of 2017, production from the Company's operated Eagle Ford assets was 8.0 MMBoe and included 62% natural gas, 34% NGLs, and 4% oil. Production was up 9.5% sequentially as the Company accelerated activity in the area. The Company is currently running one horizontal rig with plans to add a second horizontal rig during the third quarter in the Eagle Ford. During the second quarter, the Company drilled six and completed 14 net wells, including acceleration of 11 completions into the second quarter.
The Company's focus on drilling and completion optimization continues to drive better results in the Eagle Ford where completions year-to-date are exceeding type curve expectations and driving higher production. For example in the North Area, pad completions in the first half of 2017 included tighter stage and cluster spacing with increased fluid. The Company's current drilling plan co-develops the lower and upper Eagle Ford (see associated investor presentation for graph). In the East Area, pad completions included higher sand loadings and tighter stage spacing. Wells are downspaced to 625 feet (from 900 feet) and continue to outperform the 900 foot spacing type curve.
The Company operates approximately 167,500 net acres in its Eagle Ford program.
ROCKY MOUNTAIN
In the Powder River Basin, the Company is working with a third party to test newer generation drilling and completion techniques in the Shannon and Frontier zones. To-date, well results are very positive and the Company anticipates continuing its relationship with the third party into 2018.
During the second quarter, the Company decided to retain its Divide County assets (previously held for sale) rather than sell the assets due to market conditions.
GUIDANCE
Full year 2017 guidance is revised as follows:
Third quarter of 2017 production is expected to range between 10.8 and 11.2 MMBoe, which will vary depending upon the ultimate timing of capital activity, at approximately 29-30% oil in the commodity mix.
Total capital spend (before acquisitions) is a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking non-GAAP financial measure without unreasonable effort because acquisition costs are inherently unpredictable.
COMMODITY DERIVATIVES
As of August 1, 2017.
For the second half of 2017, the Company has commodity derivatives in place for approximately 60% of expected oil production, 75% of expected natural gas production and 80% of expected NGL production. For 2018, approximately one-half of total expected production volumes are hedged.
|
OIL SWAPS |
OIL COLLARS |
NATURAL GAS SWAPS |
NGL SWAPS | |
|
Volume/Average |
Volume/Avg. Ceiling - Floor |
Volume /Average Price |
Volume/Average | |
|
Period |
(MBbls/$Bbl) |
(MBbls/$Bbl) |
(BBtu/$MMBtu) |
(MBbls/$Bbl) |
|
3Q17 |
1,340/$46.66 |
583/$54.05 - $45.00 |
23,657/$4.01 |
2,019/$20.89 |
|
4Q17 |
1,254/$46.35 |
1,086/$56.05 - $47.51 |
22,001/$3.98 |
1,996/$20.18 |
|
1Q18 |
535/$49.32 |
1,026/$58.46 - $50.00 |
19,628/$3.25 |
1,829/$21.45 |
|
2Q18 |
910/$48.57 |
1,004/$58.37 - $50.00 |
13,052/$2.85 |
1,437/$16.26 |
|
3Q18 |
993/$48.79 |
1,393/$57.93 - $50.00 |
14,241/$2.87 |
1,662/$16.47 |
|
4Q18 |
1,034/$48.89 |
1,607/$57.75 - $50.00 |
15,487/$2.90 |
1,828/$16.54 |
|
Notes: The volumes above represent fixed swap and collar contracts the Company has in place through 4Q18. Volumes for 3Q17 include all commodity contracts for settlement any time during the third quarter of 2017; prices are weighted averages; natural gas contracts reflect regional contract positions and are no longer adjusted to a NYMEX equivalent; NGL prices are at Mt. Belvieu and reflect specific NGL components, 2017 and 2018 quarters include ethane, propane, butanes and gasoline. In addition to the volumes above, the Company has oil basis swaps in place. See 2Q17 Earnings Presentation for contract details on the oil basis swaps. |
UPCOMING EVENTS
EARNINGS WEBCAST AND CALL
As previously announced, SM Energy is posting a pre-recorded discussion and presentation in conjunction with this earnings release. Please look for the additional detail on our website at www.sm-energy.com. Tomorrow morning, the Company will host a second quarter financial and operating results Q&A session via webcast and conference call. Please join management at 8:00 a.m. Mountain Time/10:00 a.m. Eastern Time August 4, 2017. Join us via webcast at www.sm-energy.com or by telephone 877-870-4263 (toll free) or 412-317-0790 (international), and indicate SM Energy earnings call. The webcast and call will also be available for replay. The dial-in replay number is 877-344-7529 (toll free).
UPCOMING CONFERENCE PARTICIPATION
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, guidance estimates for the third quarter and full year 2017. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertain nature of divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.SM-Energy.com.
SM ENERGY CONTACTS
INVESTORS: Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
|
SM ENERGY COMPANY | |||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||||||||
|
June 30, 2017 | |||||||||||||||||||||
|
For the Three Months Ended |
For the Six Months Ended | ||||||||||||||||||||
|
Production Data |
2017 |
2016 |
Percent Change |
2017 |
2016 |
Percent Change | |||||||||||||||
|
Average realized sales price, before the effects of derivative settlements: |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
44.30 |
$ |
39.38 |
12% |
$ |
46.08 |
$ |
32.51 |
42% |
|||||||||||
|
Gas (per Mcf) |
2.99 |
1.79 |
67% |
2.99 |
1.83 |
63% |
|||||||||||||||
|
NGLs (per Bbl) |
19.71 |
16.12 |
22% |
20.92 |
14.05 |
49% |
|||||||||||||||
|
Equivalent (per BOE) |
$ |
25.13 |
$ |
20.35 |
23% |
$ |
26.38 |
$ |
18.14 |
45% |
|||||||||||
|
Average realized sales price, including the effects of derivative settlements: |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
43.36 |
$ |
56.97 |
(24)% |
$ |
44.24 |
$ |
53.45 |
(17)% |
|||||||||||
|
Gas (per Mcf) |
3.63 |
2.60 |
40% |
3.56 |
2.80 |
27% |
|||||||||||||||
|
NGLs (per Bbl) |
18.73 |
15.61 |
20% |
18.96 |
14.63 |
30% |
|||||||||||||||
|
Equivalent (per BOE) |
$ |
26.57 |
$ |
27.45 |
(3)% |
$ |
27.08 |
$ |
27.11 |
—% |
|||||||||||
|
Production: |
|||||||||||||||||||||
|
Oil (MMBbl) |
2.9 |
4.1 |
(29)% |
6.4 |
8.2 |
(22)% |
|||||||||||||||
|
Gas (Bcf) |
34.0 |
39.0 |
(13)% |
67.9 |
74.7 |
(9)% |
|||||||||||||||
|
NGLs (MMBbl) |
2.8 |
3.7 |
(26)% |
5.7 |
7.1 |
(20)% |
|||||||||||||||
|
MMBOE (6:1) |
11.3 |
14.3 |
(21)% |
23.4 |
27.7 |
(15)% |
|||||||||||||||
|
Average daily production: |
|||||||||||||||||||||
|
Oil (MBbl/d) |
32.0 |
45.1 |
(29)% |
35.5 |
45.2 |
(21)% |
|||||||||||||||
|
Gas (MMcf/d) |
374.1 |
428.2 |
(13)% |
375.3 |
410.2 |
(9)% |
|||||||||||||||
|
NGLs (MBbl/d) |
30.3 |
40.8 |
(26)% |
31.4 |
38.8 |
(19)% |
|||||||||||||||
|
MBOE/d (6:1) |
124.6 |
157.2 |
(21)% |
129.5 |
152.4 |
(15)% |
|||||||||||||||
|
Per BOE data: |
|||||||||||||||||||||
|
Realized price, before the effects of derivative settlements |
$ |
25.13 |
$ |
20.35 |
23% |
$ |
26.38 |
$ |
18.14 |
45% |
|||||||||||
|
Lease operating expense |
4.11 |
3.31 |
24% |
3.96 |
3.54 |
12% |
|||||||||||||||
|
Transportation costs |
5.71 |
5.95 |
(4)% |
5.79 |
6.00 |
(4)% |
|||||||||||||||
|
Production taxes |
1.00 |
0.93 |
8% |
1.09 |
0.80 |
36% |
|||||||||||||||
|
Ad valorem tax expense |
0.16 |
0.19 |
(16)% |
0.36 |
0.23 |
57% |
|||||||||||||||
|
General and administrative (excluding stock-compensation) |
2.21 |
1.60 |
38% |
2.15 |
1.80 |
19% |
|||||||||||||||
|
Net, before the effects of derivative settlements |
$ |
11.94 |
$ |
8.37 |
43% |
$ |
13.03 |
$ |
5.77 |
126% |
|||||||||||
|
Derivative settlement gain |
1.44 |
7.10 |
(80)% |
0.70 |
8.97 |
(92)% |
|||||||||||||||
|
Margin, including the effects of derivative settlements |
$ |
13.38 |
$ |
15.47 |
(14)% |
$ |
13.73 |
$ |
14.74 |
(7)% |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
$ |
13.52 |
$ |
14.75 |
(8)% |
$ |
12.42 |
$ |
15.34 |
(19)% |
|||||||||||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
June 30, 2017 | |||||||
|
Condensed Consolidated Balance Sheets |
|||||||
|
(in thousands, except share amounts) |
June 30, |
December 31, | |||||
|
ASSETS |
2017 |
2016 | |||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
559,521 |
$ |
9,372 |
|||
|
Accounts receivable |
105,713 |
151,950 |
|||||
|
Derivative asset |
85,962 |
54,521 |
|||||
|
Prepaid expenses and other |
18,121 |
8,799 |
|||||
|
Total current assets |
769,317 |
224,642 |
|||||
|
Property and equipment (successful efforts method): |
|||||||
|
Total property and equipment, net |
5,346,411 |
6,081,354 |
|||||
|
Noncurrent assets: |
|||||||
|
Derivative asset |
82,194 |
67,575 |
|||||
|
Other noncurrent assets |
14,683 |
19,940 |
|||||
|
Total other noncurrent assets |
96,877 |
87,515 |
|||||
|
Total Assets |
$ |
6,212,605 |
$ |
6,393,511 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued expenses |
$ |
311,476 |
$ |
299,708 |
|||
|
Derivative liability |
36,296 |
115,464 |
|||||
|
Total current liabilities |
347,772 |
415,172 |
|||||
|
Noncurrent liabilities: |
|||||||
|
Revolving credit facility |
— |
— |
|||||
|
Senior Notes, net of unamortized deferred financing costs |
2,767,030 |
2,766,719 |
|||||
|
Senior Convertible Notes, net of unamortized discount and deferred financing costs |
134,918 |
130,856 |
|||||
|
Asset retirement obligation |
100,304 |
96,134 |
|||||
|
Asset retirement obligation associated with oil and gas properties held for sale |
234 |
26,241 |
|||||
|
Deferred income taxes |
245,506 |
315,672 |
|||||
|
Derivative liability |
69,915 |
98,340 |
|||||
|
Other noncurrent liabilities |
45,098 |
47,244 |
|||||
|
Total noncurrent liabilities |
3,363,005 |
3,481,206 |
|||||
|
Stockholders' equity: |
|||||||
|
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 111,453,476 and 111,257,500 shares, respectively |
1,115 |
1,113 |
|||||
|
Additional paid-in capital |
1,729,104 |
1,716,556 |
|||||
|
Retained earnings |
786,608 |
794,020 |
|||||
|
Accumulated other comprehensive loss |
(14,999) |
(14,556) |
|||||
|
Total stockholders' equity |
2,501,828 |
2,497,133 |
|||||
|
Total Liabilities and Stockholders' Equity |
$ |
6,212,605 |
$ |
6,393,511 |
|||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
June 30, 2017 | |||||||||||||||
|
Condensed Consolidated Statements of Operations | |||||||||||||||
|
(in thousands, except per share amounts) |
For the Three Months Ended |
For the Six Months Ended | |||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Operating revenues and other income: |
|||||||||||||||
|
Oil, gas, and NGL production revenue |
$ |
284,939 |
$ |
291,142 |
$ |
618,137 |
$ |
502,965 |
|||||||
|
Net gain (loss) on divestiture activity |
(167,133) |
50,046 |
(129,670) |
(18,975) |
|||||||||||
|
Other operating revenues |
2,915 |
626 |
4,992 |
900 |
|||||||||||
|
Total operating revenues and other income |
120,721 |
341,814 |
493,459 |
484,890 |
|||||||||||
|
Operating expenses: |
|||||||||||||||
|
Oil, gas, and NGL production expense |
124,376 |
148,591 |
262,422 |
293,134 |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
153,232 |
211,020 |
291,044 |
425,227 |
|||||||||||
|
Exploration |
13,072 |
13,187 |
25,050 |
28,460 |
|||||||||||
|
Impairment of proved properties |
3,806 |
— |
3,806 |
269,785 |
|||||||||||
|
Abandonment and impairment of unproved properties |
157 |
38 |
157 |
2,349 |
|||||||||||
|
General and administrative |
28,460 |
28,200 |
57,684 |
60,438 |
|||||||||||
|
Net derivative (gain) loss |
(55,189) |
163,351 |
(169,963) |
149,123 |
|||||||||||
|
Other operating expenses |
445 |
7,976 |
5,304 |
13,648 |
|||||||||||
|
Total operating expenses |
268,359 |
572,363 |
475,504 |
1,242,164 |
|||||||||||
|
Income (loss) from operations |
(147,638) |
(230,549) |
17,955 |
(757,274) |
|||||||||||
|
Non-operating income (expense): |
|||||||||||||||
|
Interest expense |
(44,595) |
(34,035) |
(91,548) |
(65,123) |
|||||||||||
|
Gain (loss) on extinguishment of debt |
— |
— |
(35) |
15,722 |
|||||||||||
|
Other, net |
1,265 |
5 |
1,600 |
11 |
|||||||||||
|
Loss before income taxes |
(190,968) |
(264,579) |
(72,028) |
(806,664) |
|||||||||||
|
Income tax benefit |
71,061 |
95,898 |
26,555 |
290,773 |
|||||||||||
|
Net loss |
$ |
(119,907) |
$ |
(168,681) |
$ |
(45,473) |
$ |
(515,891) |
|||||||
|
Basic weighted-average common shares outstanding |
111,277 |
68,102 |
111,274 |
68,090 |
|||||||||||
|
Diluted weighted-average common shares outstanding |
111,277 |
68,102 |
111,274 |
68,090 |
|||||||||||
|
Basic net loss per common share |
$ |
(1.08) |
$ |
(2.48) |
$ |
(0.41) |
$ |
(7.58) |
|||||||
|
Diluted net loss per common share |
$ |
(1.08) |
$ |
(2.48) |
$ |
(0.41) |
$ |
(7.58) |
|||||||
|
(1) Non-cash stock-based compensation component included in: |
|||||||||||||||
|
Exploration expense |
$ |
995 |
$ |
1,785 |
$ |
2,403 |
$ |
3,447 |
|||||||
|
G&A expense |
$ |
3,363 |
$ |
5,262 |
$ |
7,410 |
$ |
10,468 |
|||||||
|
(2) The net derivative (gain) loss line item consists of the following: |
|||||||||||||||
|
Settlement gain |
$ |
(16,303) |
$ |
(101,710) |
$ |
(16,310) |
$ |
(248,738) |
|||||||
|
(Gain) loss on fair value changes |
$ |
(38,886) |
$ |
265,061 |
$ |
(153,653) |
$ |
397,861 |
|||||||
|
Total net derivative (gain) loss |
$ |
(55,189) |
$ |
163,351 |
$ |
(169,963) |
$ |
149,123 |
|||||||
|
SM ENERGY COMPANY | ||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
|
June 30, 2017 | ||||||||||||||||||||||
|
Condensed Consolidated Statement of Stockholders' Equity | ||||||||||||||||||||||
|
(in thousands, except share amounts) | ||||||||||||||||||||||
|
Additional |
Accumulated |
Total Stockholders' | ||||||||||||||||||||
|
Common Stock |
Retained |
|||||||||||||||||||||
|
Shares |
Amount |
|||||||||||||||||||||
|
Balances, December 31, 2016 |
111,257,500 |
$ |
1,113 |
$ |
1,716,556 |
$ |
794,020 |
$ |
(14,556) |
$ |
2,497,133 |
|||||||||||
|
Net loss |
— |
— |
— |
(45,473) |
— |
(45,473) |
||||||||||||||||
|
Other comprehensive loss |
— |
— |
— |
— |
(443) |
(443) |
||||||||||||||||
|
Cash dividends, $ 0.05 per share |
— |
— |
— |
(5,563) |
— |
(5,563) |
||||||||||||||||
|
Issuance of common stock under Employee Stock Purchase Plan |
123,678 |
1 |
1,737 |
— |
— |
1,738 |
||||||||||||||||
|
Issuance of common stock upon vesting of restricted stock units, net of shares used for tax withholdings |
725 |
— |
(11) |
— |
— |
(11) |
||||||||||||||||
|
Stock-based compensation expense |
71,573 |
1 |
9,812 |
— |
— |
9,813 |
||||||||||||||||
|
Cumulative effect of accounting change |
— |
— |
1,108 |
43,624 |
— |
44,732 |
||||||||||||||||
|
Other |
— |
— |
(98) |
— |
— |
(98) |
||||||||||||||||
|
Balances, June 30, 2017 |
111,453,476 |
$ |
1,115 |
$ |
1,729,104 |
$ |
786,608 |
$ |
(14,999) |
$ |
2,501,828 |
|||||||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
June 30, 2017 | |||||||||||||||
|
Condensed Consolidated Statements of Cash Flows |
|||||||||||||||
|
(in thousands) |
For the Three Months |
For the Six Months | |||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net loss |
$ |
(119,907) |
$ |
(168,681) |
$ |
(45,473) |
$ |
(515,891) |
|||||||
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||||||||||||||
|
Net (gain) loss on divestiture activity |
167,133 |
(50,046) |
129,670 |
18,975 |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
153,232 |
211,020 |
291,044 |
425,227 |
|||||||||||
|
Impairment of proved properties |
3,806 |
— |
3,806 |
269,785 |
|||||||||||
|
Abandonment and impairment of unproved properties |
157 |
38 |
157 |
2,349 |
|||||||||||
|
Stock-based compensation expense |
4,358 |
7,047 |
9,813 |
13,915 |
|||||||||||
|
Net derivative (gain) loss |
(55,189) |
163,351 |
(169,963) |
149,123 |
|||||||||||
|
Derivative settlement gain |
16,303 |
101,710 |
16,310 |
248,738 |
|||||||||||
|
Amortization of debt discount and deferred financing costs |
3,733 |
2,850 |
8,679 |
1,930 |
|||||||||||
|
Non-cash (gain) loss on extinguishment of debt, net |
— |
— |
22 |
(15,722) |
|||||||||||
|
Deferred income taxes |
(64,015) |
(95,975) |
(30,790) |
(291,014) |
|||||||||||
|
Plugging and abandonment |
(418) |
(2,112) |
(1,609) |
(2,716) |
|||||||||||
|
Other, net |
(2,300) |
3,668 |
2,267 |
2,517 |
|||||||||||
|
Changes in current assets and liabilities: |
|||||||||||||||
|
Accounts receivable |
16,586 |
(38,142) |
46,993 |
(11,220) |
|||||||||||
|
Prepaid expenses and other |
(9,499) |
3,503 |
(9,321) |
8,487 |
|||||||||||
|
Accounts payable and accrued expenses |
(3,476) |
(9,433) |
(8,973) |
(61,727) |
|||||||||||
|
Accrued derivative settlements |
(3,355) |
9,799 |
(517) |
14,117 |
|||||||||||
|
Net cash provided by operating activities |
107,149 |
138,597 |
242,115 |
256,873 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Net proceeds from the sale of oil and gas properties |
21,914 |
11,761 |
766,247 |
12,967 |
|||||||||||
|
Capital expenditures |
(212,342) |
(169,200) |
(366,743) |
(345,570) |
|||||||||||
|
Acquisition of proved and unproved oil and gas properties |
(13,035) |
(2,707) |
(88,140) |
(17,751) |
|||||||||||
|
Other, net |
514 |
(1,785) |
3,000 |
(900) |
|||||||||||
|
Net cash provided by (used in) investing activities |
(202,949) |
(161,931) |
314,364 |
(351,254) |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Proceeds from credit facility |
8,500 |
268,000 |
406,000 |
585,000 |
|||||||||||
|
Repayment of credit facility |
(8,500) |
(230,500) |
(406,000) |
(456,500) |
|||||||||||
|
Debt issuance costs related to credit facility |
— |
(3,132) |
— |
(3,132) |
|||||||||||
|
Cash paid to repurchase Senior Notes |
— |
(9,987) |
(2,344) |
(29,904) |
|||||||||||
|
Net proceeds from sale of common stock |
1,738 |
2,354 |
1,738 |
2,354 |
|||||||||||
|
Dividends paid |
(5,563) |
(3,404) |
(5,563) |
(3,404) |
|||||||||||
|
Other, net |
(1) |
(30) |
(161) |
(33) |
|||||||||||
|
Net cash provided by (used in) financing activities |
(3,826) |
23,301 |
(6,330) |
94,381 |
|||||||||||
|
Net change in cash and cash equivalents |
(99,626) |
(33) |
550,149 |
— |
|||||||||||
|
Cash and cash equivalents at beginning of period |
659,147 |
51 |
9,372 |
18 |
|||||||||||
|
Cash and cash equivalents at end of period |
$ |
559,521 |
$ |
18 |
$ |
559,521 |
$ |
18 |
|||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
June 30, 2017 | |||||||||||||||
|
Adjusted EBITDAX(1) |
|||||||||||||||
|
(in thousands) |
|||||||||||||||
|
Reconciliation of net loss (GAAP) to adjusted EBITDAX (Non-GAAP) to net cash provided by operating activities (GAAP) |
For the Three Months Ended |
For the Six Months Ended | |||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Net loss (GAAP) |
$ |
(119,907) |
$ |
(168,681) |
$ |
(45,473) |
$ |
(515,891) |
|||||||
|
Interest expense |
44,595 |
34,035 |
91,548 |
65,123 |
|||||||||||
|
Other non-operating income, net |
(1,265) |
(5) |
(1,600) |
(11) |
|||||||||||
|
Income tax benefit |
(71,061) |
(95,898) |
(26,555) |
(290,773) |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
153,232 |
211,020 |
291,044 |
425,227 |
|||||||||||
|
Exploration(2) |
12,077 |
11,402 |
22,647 |
25,013 |
|||||||||||
|
Impairment of proved properties |
3,806 |
— |
3,806 |
269,785 |
|||||||||||
|
Abandonment and impairment of unproved properties |
157 |
38 |
157 |
2,349 |
|||||||||||
|
Stock-based compensation expense |
4,358 |
7,047 |
9,813 |
13,915 |
|||||||||||
|
Net derivative (gain) loss |
(55,189) |
163,351 |
(169,963) |
149,123 |
|||||||||||
|
Derivative settlement gain |
16,303 |
101,710 |
16,310 |
248,738 |
|||||||||||
|
Net (gain) loss on divestiture activity |
167,133 |
(50,046) |
129,670 |
18,975 |
|||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
35 |
(15,722) |
|||||||||||
|
Other |
(151) |
3,125 |
4,835 |
3,557 |
|||||||||||
|
Adjusted EBITDAX (Non-GAAP) |
$ |
154,088 |
$ |
217,098 |
$ |
326,274 |
$ |
399,408 |
|||||||
|
Interest expense |
(44,595) |
(34,035) |
(91,548) |
(65,123) |
|||||||||||
|
Other non-operating income, net |
1,265 |
5 |
1,600 |
11 |
|||||||||||
|
Income tax benefit |
71,061 |
95,898 |
26,555 |
290,773 |
|||||||||||
|
Exploration(2) |
(12,077) |
(11,402) |
(22,647) |
(25,013) |
|||||||||||
|
Amortization of debt discount and deferred financing costs |
3,733 |
2,850 |
8,679 |
1,930 |
|||||||||||
|
Deferred income taxes |
(64,015) |
(95,975) |
(30,790) |
(291,014) |
|||||||||||
|
Plugging and abandonment |
(418) |
(2,112) |
(1,609) |
(2,716) |
|||||||||||
|
Other, net |
(2,149) |
543 |
(2,581) |
(1,040) |
|||||||||||
|
Changes in current assets and liabilities |
256 |
(34,273) |
28,182 |
(50,343) |
|||||||||||
|
Net cash provided by operating activities (GAAP) |
$ |
107,149 |
$ |
138,597 |
$ |
242,115 |
$ |
256,873 |
|||||||
|
(1) Adjusted EBITDAX represents net income (loss) before interest expense, other non-operating income and expense, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property impairments, non-cash stock-based compensation expense, derivative gains and losses net of settlements, change in the Net Profits Plan liability, gains and losses on divestitures, gains and losses on extinguishment of debt, and materials inventory impairments and losses on sale. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we failed to comply with the covenants that establish a maximum permitted ratio of senior secured debt to adjusted EBITDAX and a minimum permitted ratio of adjusted EBITDAX to interest, we would be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we are in default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under the indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. | |||||||||||||||
|
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the Company's condensed consolidated statements of operations for the component of stock-based compensation expense recorded to exploration expense.
|
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|
June 30, 2017 | |||||||||||||||
|
Adjusted Net Loss (Non-GAAP) |
|||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||
|
For the Three Months Ended |
For the Six Months Ended | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Net loss (GAAP) |
$ |
(119,907) |
$ |
(168,681) |
$ |
(45,473) |
$ |
(515,891) |
|||||||
|
Net derivative (gain) loss |
(55,189) |
163,351 |
(169,963) |
149,123 |
|||||||||||
|
Derivative settlement gain |
16,303 |
101,710 |
16,310 |
248,738 |
|||||||||||
|
Net (gain) loss on divestiture activity |
167,133 |
(50,046) |
129,670 |
18,975 |
|||||||||||
|
Impairment of proved properties |
3,806 |
— |
3,806 |
269,785 |
|||||||||||
|
Abandonment and impairment of unproved properties |
157 |
38 |
157 |
2,349 |
|||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
35 |
(15,722) |
|||||||||||
|
Other, net(2) |
(151) |
3,091 |
4,835 |
2,583 |
|||||||||||
|
Tax effect of adjustments(1) |
(47,673) |
(79,622) |
5,469 |
(246,678) |
|||||||||||
|
Adjusted net loss (Non-GAAP)(3) |
$ |
(35,521) |
$ |
(30,159) |
$ |
(55,154) |
$ |
(86,738) |
|||||||
|
Diluted net loss per common share (GAAP) |
$ |
(1.08) |
$ |
(2.48) |
$ |
(0.41) |
$ |
(7.58) |
|||||||
|
Net derivative gain |
(0.50) |
2.40 |
(1.53) |
2.19 |
|||||||||||
|
Derivative settlement gain |
0.15 |
1.49 |
0.15 |
3.65 |
|||||||||||
|
Net (gain) loss on divestiture activity |
1.50 |
(0.73) |
1.17 |
0.28 |
|||||||||||
|
Impairment of proved properties |
0.03 |
— |
0.03 |
3.96 |
|||||||||||
|
Abandonment and impairment of unproved properties |
— |
— |
— |
0.03 |
|||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
— |
(0.23) |
|||||||||||
|
Other, net(2) |
— |
0.05 |
0.04 |
0.04 |
|||||||||||
|
Tax effect of adjustments(1) |
(0.42) |
(1.17) |
0.05 |
(3.61) |
|||||||||||
|
Adjusted net loss per diluted common share (Non-GAAP)(4) |
$ |
(0.32) |
$ |
(0.44) |
$ |
(0.50) |
$ |
(1.27) |
|||||||
|
Basic weighted-average common shares outstanding (GAAP) |
111,277 |
68,102 |
111,274 |
68,090 |
|||||||||||
|
(1) The tax effect of adjustments is calculated using a tax rate of 36.1% for the three-month and six-month periods ended June 30, 2017, and a tax rate of 36.5% for the three-month and six-month periods ended June 30, 2016. These rates approximate the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. | |||||||||||||||
|
(2) For the three-month and six-month periods ended June 30, 2017, the adjustment is related to the change in Net Profits Plan liability. Additionally, for the six-month period ended June 30, 2017, an adjustment related to materials inventory loss is included. For the three-month and six-month periods ended June 30, 2016, the adjustment relates to the change in Net Profits Plan liability, impairment of materials inventory, and an adjustment relating to claims on royalties on certain Federal and Indian leases. These items are included in other operating expenses on the Company's condensed consolidated statements of operations. | |||||||||||||||
|
(3) Adjusted net loss excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, materials inventory loss, and gains or losses on extinguishment of debt. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. | |||||||||||||||
|
(4) For periods where the Company reports adjusted net loss, basic weighted-average common shares outstanding are used in the calculation of adjusted net loss per diluted common share. |
|
SM ENERGY COMPANY |
||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) |
||||||||
|
June 30, 2017 |
||||||||
|
Total Capital Spend Reconciliation |
||||||||
|
(in millions) |
||||||||
|
Reconciliation of costs incurred in oil & gas activities (GAAP) to total capital spend (Non-GAAP)(1)(3) |
For the Three Months Ended |
For the Six Months Ended |
||||||
|
2017 |
2017 |
|||||||
|
Costs incurred in oil and gas activities (GAAP): |
$ |
258.0 |
$ |
515.0 |
||||
|
Less: |
||||||||
|
Asset retirement obligation |
(0.5) |
(1.4) |
||||||
|
Capitalized interest |
(2.9) |
(5.1) |
||||||
|
Proved property acquisitions(2) |
0.8 |
(1.4) |
||||||
|
Unproved property acquisitions |
(16.5) |
(75.6) |
||||||
|
Other |
(1.6) |
(1.3) |
||||||
|
Total capital spend (Non-GAAP): |
$ |
237.3 |
$ |
430.2 |
||||
|
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. |
||||||||
|
(2) Includes approximately $76,000 and $887,000 of ARO associated with proved property acquisitions for the three and six months ended June 30, 2017, respectively. |
||||||||
|
(3) The Company completed several primarily non-monetary acreage trades in the Midland Basin during the first half of 2017 totaling $279.8 million of value attributed to the properties surrendered. This non-monetary consideration is not reflected in the costs incurred or capital spend amounts presented above. |
||||||||
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-reports-second-quarter-of-2017-results---focus-on-capital-efficiency-driving-value-production-beats-raising-guidance-300499188.html
SOURCE SM Energy Company
Article Date
8/3/2017SM Energy Schedules Second Quarter 2017 Earnings Release And Call
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, July 12, 2017 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) today announces that it expects to release its second quarter 2017 results after market on August 3, 2017. Please note that the Company is modifying the format and timing of its webcast and conference call. See schedule below:
August 3, 2017 – After market close, the Company plans to release its second quarter 2017 results. This will include the earnings release, a pre-recorded discussion of second quarter financial and operating results via webcast, and an associated presentation, all of which will be posted to the Company's website at www.sm-energy.com.
August 4, 2017 – Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for a second quarter financial and operating results Q&A session. This discussion will be accessible via webcast (available live and for replay) on the Company's website at www.sm-energy.com or by telephone at:
The call replay will be available approximately one hour after the call until August 18, 2017.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
View original content with multimedia:http://www.prnewswire.com/news-releases/sm-energy-schedules-second-quarter-2017-earnings-release-and-call-300487030.html
SOURCE SM Energy Company
Article Date
7/12/2017SM Energy Announces Participation In Upcoming Investor Conferences
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, June 14, 2017 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that the Company will be participating in the following upcoming investor events. An investor presentation for these events will be posted to the Company's website on the morning of June 19, 2017 at www.SM-Energy.com.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm‑energy.com.
SM ENERGY CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
6/14/2017SM Energy Announces Operations Update - Increasing Production Guidance And Positive Early Viper Well Results
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, June 6, 2017 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE:SM) announced today it is increasing production guidance by approximately 0.4 MMBoe, all of which is attributable to the second quarter of 2017, due to acceleration of completion activity at its core Eagle Ford program. The pace of completions in the Eagle Ford was accelerated during the quarter by 11 wells. The Company has completed 31 wells in its Eagle Ford program year-to-date and the current full year plan is to complete 39 wells. Production guidance is revised to 10.7-11.1 MMBoe for the second quarter and 43.2-46.2 MMBoe for the full year 2017.
President and Chief Executive Officer Jay Ottoson comments: "Due to the favorable terms and performance under our pumping services agreement for the Eagle Ford, we are pleased to accelerate this activity, which we believe will result in higher cash flow and capital cost savings in 2017."
"I would also like to add that production from our highly anticipated Viper 14-9 1WA well in Howard County, Texas, with an approximate 10,400 foot lateral drilled in the Wolfcamp A, has just passed 1,000 Boe/d production at 92% oil during completion flowback with oil rates still increasing. It will be some time yet before we have a 30-day peak rate for this well, but this is clearly an encouraging early indication of productivity."
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "guidance," "intend," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, projected changes in production volumes and cash flows. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.SM-Energy.com.
INVESTOR CONTACT
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
6/6/2017SM Energy Announces Update On Divestiture Process
Source: PR Newswire
DENVER, May 16, 2017 /PRNewswire/ -- SM Energy Company (the "Company") (NYSE: SM) announced today that it has postponed indefinitely the planned sale of its Divide County, North Dakota assets as valuations in the sales process did not reach the Company's threshold to meaningfully reduce its leverage.
President and Chief Executive Officer Jay Ottoson comments: "We have successfully pre-funded the expected outspend for our capital program for 2017 and 2018 with the completed sale of our third party-operated Eagle Ford assets, and we do not need to sell our Divide County assets. We have concluded that current market uncertainty around forward oil prices is not conducive to realizing a sales price that meets our deleveraging objective. We remain committed to our long-term financial strategy, which is best served by retaining the cash flow generated by the Divide County assets and supported by a solid balance sheet, significant liquidity and continuing hedging strategy.
"As a result of retaining our Divide County assets, we have positively revised our production guidance for the year to add 1.3 MMBoe, which is applied to the second half of the year, thereby increasing projected cash flow and reducing projected outspend."
The Company is posting slides to its website in conjunction with this release, revising its 2017 guidance and three-year plan metrics to be consistent with this change.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "guidance," "intend," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, projected changes in production volumes, cash flows, operating costs and commodity mix. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.SM-Energy.com.
INVESTOR CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
5/16/2017SM Energy Reports First Quarter Of 2017 Results - Higher Production, Lower Capital Versus Plan, Production Guidance Raised
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, May 2, 2017 /PRNewswire/ --
SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) announced today financial results and operations highlights from the first quarter of 2017. In conjunction with this release, the Company posts an investor presentation to its website at sm-energy.com with additional first quarter results and operational detail. This presentation will be referenced during the earnings webcast and conference call scheduled for 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) on May 3, 2017. Further information on the earnings webcast and conference call can be found below.
MANAGEMENT COMMENTARY
President and Chief Executive Officer Jay Ottoson comments: "We have laid out a solid three year plan that we expect to create substantial value for our shareholders, and the first quarter results demonstrate our commitment and ability to execute on this plan. We have met or exceeded expectations across the board to-date in 2017 and are confident in our ability to meet or exceed plan expectations going forward. On the operations front, new Midland Basin wells continue to outperform, with all SM-completed RockStar wells to date exceeding acquisition performance metrics, and we are only months into our expanded Midland Basin program. In addition, our financial strategy is right on track with the closing of the sale of our third party-operated Eagle Ford assets, which provided the Company with $1.6 billion of liquidity at quarter-end."
FIRST QUARTER 2017 RESULTS
PRODUCTION – SEQUENTIAL COMPARISON:
|
TOTAL COMPANY PRODUCTION - MMBoe | ||
|
First Quarter 2017 |
Fourth Quarter 2016 | |
|
Oil (MMBbls) |
3.5 |
4.0 |
|
Natural gas (Bcf) |
33.9 |
35.2 |
|
NGLs (MMBbls) |
2.9 |
3.5 |
|
Total MMBoe |
12.1 |
13.4 |
|
• |
Production includes production from assets sold (through the closing date) or pending sale |
|
REGIONAL PRODUCTION - MMBoe | ||
|
First Quarter 2017 |
Fourth Quarter 2016 | |
|
Eagle Ford (operated) |
7.3 |
7.6 |
|
Permian Basin |
2.1 |
1.4 |
|
Rocky Mountain (PRB) |
0.3 |
0.2 |
|
Production – Retained Assets |
9.7 |
9.2 |
|
Assets sold and for sale |
2.4 |
4.2 |
|
Total MMBoe |
12.1 |
13.4 |
|
• |
Eagle Ford (operated) includes nominal other production from the region |
First quarter production of 12.1 MMBoe significantly exceeded guidance of 11.0-11.4 MMBoe, due to higher than expected initial rates from new operated Eagle Ford wells, early completion timing and continued outperformance from wells in the Midland Basin. Midland Basin production increased 55% sequentially and production from retained assets increased 5% sequentially. As a result of first quarter production outperformance, the Company is raising full year production guidance by 1.5 MMBoe.
Total Company production of 12.1 MMBoe was down 10% compared with both the fourth quarter of 2016 and the first quarter of 2016, affected by producing asset sales completed in December 2016 and early March 2017.
REALIZED PRICES – 1Q17 PRE/POST-HEDGE:
|
REALIZED PRICES | ||
|
Pre-Hedge |
Post-Hedge | |
|
Oil (per Bbl) |
$ 47.55 |
$44.97 |
|
Natural gas (per Mcf) |
2.98 |
3.50 |
|
NGLs (per Bbl) |
22.06 |
19.18 |
|
Average per Boe |
$ 27.55 |
$ 27.55 |
The average realized price per Boe before the effects of commodity hedges was $27.55, the highest average realized in nine quarters due to higher benchmark prices for oil and NGLs, as well as an increasing percentage of higher value oil produced in the Midland Basin where differentials averaged less than $2 per Bbl.
Cash production costs totaled $11.42 per Boe, compared with $11.34 per Boe in the fourth quarter of 2016 and up $0.64, or 6%, from $10.78 per Boe in the first quarter of 2016, due primarily to higher taxes associated with higher commodity prices. Production costs per unit are expected to decline in the second half of 2017, due to both the completion of asset divestitures that consist of higher cost assets and also the benefits of increased scale in the Midland Basin program.
Net income for the first quarter was $74.4 million, or $0.67 per diluted common share, compared with a net loss of $347.2 million, or ($5.10) per diluted common share, in the first quarter of 2016. Net income in the first quarter of 2017 reflects a near four-fold increase in the Company's pre-hedge cash operating margin from the prior year period, which increased from $40.1 million to $169.9 million. The 2017 period also includes a significant reduction in DD&A expense per Boe from $15.96 to $11.39 and a non-cash derivative gain of $114.8 million. Net cash provided by operating activities was $135.0 million.
As discussed below, adjusted EBITDAX, adjusted net income (loss) and adjusted net income (loss) per diluted common share are non-GAAP measures. Please reference the reconciliations to the most directly comparable GAAP financial measures at the end of this release.
Adjusted EBITDAX for the first quarter was $172.2 million, compared with $182.3 million in the prior year period. While the pre-hedge operating margin was significantly higher in the first quarter of 2017, the prior year period benefited from a $147 million derivative settlement gain.
Adjusted net loss for the first quarter was $19.6 million, or $0.18 per diluted common share, compared with an adjusted net loss of $56.6 million, or $0.83 per diluted common share, in the first quarter of 2016. The calculation of adjusted net loss excludes non-recurring items and items difficult to estimate in order to present results that can be more consistently compared with prior periods and peer results.
FINANCIAL POSITION AND LIQUIDITY
At March 31, 2017, the outstanding principal balance on the Company's long-term debt included $2.8 billion in senior notes plus $172.5 million in senior convertible notes, with zero drawn on the Company's senior secured credit facility. At quarter-end, the Company had a cash balance of $659.1 million, providing for net debt of $2.3 billion. During the quarter, as part of the regularly scheduled redetermination process, the lenders on the Company's credit facility set the borrowing base and aggregate commitments at $925 million. In addition, the lenders agreed to certain modifications to the credit agreement, including permission to hedge up to 85% of projected production volumes for 36 months.
CAPITAL ACTIVITY AND OPERATIONS
Costs incurred for the first quarter of 2017 were $281.5 million, which included $85.8 million (of which $24.5 million was non-cash) of proved and unproved property acquisitions. First quarter total capital spend (see below for GAAP reconciliation) was $192.9 million. During the quarter, the Company drilled or participated in 26 net wells and completed 33 net wells. The Company completed a number of wells ahead of schedule at quarter-end.
Please refer to the Total Capital Spend Reconciliation at the end of this release for a reconciliation to Costs Incurred in oil and gas activities (GAAP).
The Company is conducting a sales process for its Divide County, North Dakota assets. The Company has extended the bid date and data room access due to new entrants to the process but continues to assume a mid-year close date for planning purposes.
PERMIAN BASIN
In the first quarter of 2017, production from the Company's Midland Basin assets was 2.1 MMBoe and was 77% oil. Production was up 55% sequentially as the Company's capital program is concentrated in the region. The Company is currently running six horizontal rigs in the basin, with two in the Sweetie Peck area and four in the RockStar area, and one vertical rig dedicated to data acquisition, as well as running three completion crews. The first quarter production margin for this area was $33.05 per Boe.
The Company is focused on optimizing drilling and completion operations across the basin in order to identify the appropriate number of wells per section and optimize production performance in preparation for increased development activity in 2018. The Company is actively testing different pay intervals, well spacing per interval, fracture stimulation stage spacing, perforation cluster configurations, fluid volumes and sand volumes. In addition, the Company seeks to drill 10,000 foot laterals to maximize net asset value per well and is actively trading and acquiring bolt-on land positions to enable longer laterals.
The Company currently has approximately 88,000 net acres in the Midland Basin, which includes approximately 1,300 additional net acres acquired year-to-date through acreage trades and other transactions.
EAGLE FORD
In the first quarter of 2017, production from the Company's operated Eagle Ford assets was 7.3 MMBoe and included 61% natural gas, 33% NGLs, and 6% oil. Production was down slightly from the fourth quarter of 2016 as the Company re-initiated drilling activity in the quarter. The Company is currently running one horizontal rig in the Eagle Ford and has a dedicated completion crew reducing its inventory of drilled but uncompleted wells.
First quarter activity in the Eagle Ford is highlighted by a six-well pad in the Company's northern acreage area brought on-line in the quarter with drilling and completion costs 8% under budget. The pad included completions in the Upper Eagle Ford and Lower Eagle Ford in a stacked configuration at 625 foot spacing, implementing co-development in the area.
The Company has approximately 166,760 net acres in its operated Eagle Ford program.
GUIDANCE
Full year 2017 guidance is revised as follows:
Second quarter of 2017 production is expected to range between 10.3 and 10.7 MMBoe (or 113-118, MBoe/d), which will vary depending upon the ultimate timing of capital activity.
Total capital spend (before acquisitions) is a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking non-GAAP financial measure without unreasonable effort because acquisition costs are inherently unpredictable.
COMMODITY DERIVATIVES
As of April 26, 2017.
For the last nine months of 2017, the Company has commodity derivatives in place for approximately 70% of expected oil production, 85% of expected natural gas production and 80% of expected NGL production.
|
OIL SWAPS |
OIL COLLARS |
NATURAL GAS SWAPS |
NGL SWAPS | |
|
Volume/Average Price |
Volume/Avg. Ceiling - Floor |
Volume /Average Price |
Volume/Average Price | |
|
Period |
(MBbls/$Bbl) |
(MBbls/$Bbl) |
(BBtu/$MMBtu) |
(MBbls/$Bbl) |
|
2Q17 |
1,444/$46.44 |
636/$54.10 - $45.00 |
26,205/$3.98 |
2,114/$21.40 |
|
3Q17 |
1,340/$46.66 |
583/$54.05 - $45.00 |
23,657/$4.01 |
2,019/$20.89 |
|
4Q17 |
1,254/$46.35 |
1,086/$56.05 - $47.51 |
22,001/$3.98 |
1,996/$20.18 |
|
1Q18 |
- |
1,026/$58.46 - $50.00 |
19,628/$3.25 |
1,828/$21.45 |
|
2Q18 |
- |
1,004/$58.37 - $50.00 |
13,052/$2.85 |
1,438/$16.26 |
|
3Q18 |
- |
1,393/$57.93 - $50.00 |
14,241/$2.87 |
1,414/$16.53 |
|
4Q18 |
- |
1,607/$57.75 - $50.00 |
15,487/$2.90 |
1,416/$16.72 |
|
Notes: The volumes above represent fixed swap and collar contracts the Company has in place through 4Q18. Volumes for 2Q17 include all commodity contracts for settlement any time during the second quarter of 2017; prices are weighted averages; natural gas contracts reflect regional contract positions and are no longer adjusted to a NYMEX equivalent; NGL prices are at Mt. Belvieu and reflect specific NGL components, 2017 and 2018 quarters include ethane, propane, butanes and gasoline. In addition to the volumes above, the Company has oil basis swaps in place through 4Q18. See 1Q17 Earnings Presentation for contract details on the oil basis swaps. |
UPCOMING EVENTS
EARNINGS WEBCAST AND CALL
As previously announced, SM Energy will host a webcast and conference call to discuss first quarter 2017 results at 8:00 a.m. Mountain Time/10:00 a.m. Eastern Time tomorrow, May 3, 2017. Please join us via webcast at www.SM-Energy.com or by telephone 877-870-4263 (toll free) or 412-317-0790 (international), and indicate SM Energy earnings call. The webcast and call will also be available for replay. The dial-in replay number is 877-344-7529 (toll free) or 412-317-0088 (international) with passcode 10104227 and is available through May 10, 2017.
A presentation will be posted to the Company's website to accompany this call at www.SM-Energy.com
UPCOMING CONFERENCE PARTICIPATION
An investor presentation for these events will be posted to the Company's website on June 5, 2017 at www.SM-Energy.com.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, guidance estimates for the second quarter and full year 2017. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.SM-Energy.com.
SM ENERGY CONTACTS
INVESTORS: Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
|
SM ENERGY COMPANY |
||||||||||||||
|
FINANCIAL HIGHLIGHTS |
||||||||||||||
|
March 31, 2017 |
||||||||||||||
|
For the Three Months |
||||||||||||||
|
Production Data |
2017 |
2016 |
Percent |
|||||||||||
|
Average realized sales price, before the effects of derivative settlements: |
||||||||||||||
|
Oil (per Bbl) |
$ |
47.55 |
$ |
25.67 |
85 |
% | ||||||||
|
Gas (per Mcf) |
2.98 |
1.87 |
59 |
% | ||||||||||
|
NGLs (per Bbl) |
22.06 |
11.76 |
88 |
% | ||||||||||
|
Equivalent (per BOE) |
$ |
27.55 |
$ |
15.78 |
75 |
% | ||||||||
|
Average realized sales price, including the effects of derivative settlements: |
||||||||||||||
|
Oil (per Bbl) |
$ |
44.97 |
$ |
49.94 |
(10) |
% | ||||||||
|
Gas (per Mcf) |
3.50 |
3.02 |
16 |
% | ||||||||||
|
NGLs (per Bbl) |
19.18 |
13.54 |
42 |
% | ||||||||||
|
Equivalent (per BOE) |
$ |
27.55 |
$ |
26.74 |
3 |
% | ||||||||
|
Production: |
||||||||||||||
|
Oil (MMBbl) |
3.5 |
4.1 |
(14) |
% | ||||||||||
|
Gas (Bcf) |
33.9 |
35.7 |
(5) |
% | ||||||||||
|
NGLs (MMBbl) |
2.9 |
3.3 |
(13) |
% | ||||||||||
|
MMBOE (6:1) |
12.1 |
13.4 |
(10) |
% | ||||||||||
|
Average daily production: |
||||||||||||||
|
Oil (MBbl/d) |
39.2 |
45.3 |
(13) |
% | ||||||||||
|
Gas (MMcf/d) |
376.6 |
392.2 |
(4) |
% | ||||||||||
|
NGLs (MBbl/d) |
32.5 |
36.8 |
(12) |
% | ||||||||||
|
MBOE/d (6:1) |
134.4 |
147.5 |
(9) |
% | ||||||||||
|
Per BOE data: |
||||||||||||||
|
Realized price, before the effects of derivative settlements |
$ |
27.55 |
$ |
15.78 |
75 |
% | ||||||||
|
Lease operating expense |
3.82 |
3.79 |
1 |
% | ||||||||||
|
Transportation costs |
5.88 |
6.06 |
(3) |
% | ||||||||||
|
Production taxes |
1.17 |
0.66 |
77 |
% | ||||||||||
|
Ad valorem tax expense |
0.55 |
0.27 |
104 |
% | ||||||||||
|
General and administrative (excluding stock-compensation) |
2.08 |
2.01 |
3 |
% | ||||||||||
|
Net, before the effects of derivative settlements |
$ |
14.05 |
$ |
2.99 |
370 |
% | ||||||||
|
Derivative settlement gain |
— |
10.96 |
(100) |
% | ||||||||||
|
Margin, including the effects of derivative settlements |
$ |
14.05 |
$ |
13.95 |
1 |
% | ||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
$ |
11.39 |
$ |
15.96 |
(29) |
% | ||||||||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
March 31, 2017 | |||||||
|
Condensed Consolidated Balance Sheets |
|||||||
|
(in thousands, except share amounts) |
March 31, |
December 31, | |||||
|
ASSETS |
2017 |
2016 | |||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
659,147 |
$ |
9,372 |
|||
|
Accounts receivable |
108,368 |
151,950 |
|||||
|
Derivative asset |
73,978 |
54,521 |
|||||
|
Prepaid expenses and other |
8,053 |
8,799 |
|||||
|
Total current assets |
849,546 |
224,642 |
|||||
|
Property and equipment (successful efforts method): |
|||||||
|
Total property and equipment, net |
5,450,120 |
6,081,354 |
|||||
|
Noncurrent assets: |
|||||||
|
Derivative asset |
84,195 |
67,575 |
|||||
|
Other noncurrent assets |
15,847 |
19,940 |
|||||
|
Total other noncurrent assets |
100,042 |
87,515 |
|||||
|
Total Assets |
$ |
6,399,708 |
$ |
6,393,511 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued expenses |
$ |
299,676 |
$ |
299,708 |
|||
|
Derivative liability |
53,809 |
115,464 |
|||||
|
Total current liabilities |
353,485 |
415,172 |
|||||
|
Noncurrent liabilities: |
|||||||
|
Revolving credit facility |
— |
— |
|||||
|
Senior Notes, net of unamortized deferred financing costs |
2,765,714 |
2,766,719 |
|||||
|
Senior Convertible Notes, net of unamortized discount and deferred financing costs |
132,889 |
130,856 |
|||||
|
Asset retirement obligation |
83,160 |
96,134 |
|||||
|
Asset retirement obligation associated with oil and gas properties held for sale |
16,056 |
26,241 |
|||||
|
Deferred income taxes |
304,331 |
315,672 |
|||||
|
Derivative liability |
81,306 |
98,340 |
|||||
|
Other noncurrent liabilities |
47,252 |
47,244 |
|||||
|
Total noncurrent liabilities |
3,430,708 |
3,481,206 |
|||||
|
Stockholders' equity: |
|||||||
|
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 111,258,225 and 111,257,500 shares, respectively |
1,113 |
1,113 |
|||||
|
Additional paid-in capital |
1,723,010 |
1,716,556 |
|||||
|
Retained earnings |
906,515 |
794,020 |
|||||
|
Accumulated other comprehensive loss |
(15,123) |
(14,556) |
|||||
|
Total stockholders' equity |
2,615,515 |
2,497,133 |
|||||
|
Total Liabilities and Stockholders' Equity |
$ |
6,399,708 |
$ |
6,393,511 |
|||
SM ENERGY COMPANY | |||||||||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||||||||||||||||
|
March 31, 2017 | |||||||||||||||||||||||||||||
|
Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||||||
|
(in thousands, except per share amounts) |
For the Three Months Ended | ||||||||||||||||||||||||||||
|
2017 |
2016 | ||||||||||||||||||||||||||||
|
Operating revenues and other income: |
|||||||||||||||||||||||||||||
|
Oil, gas, and NGL production revenue |
$ |
333,198 |
$ |
211,823 |
|||||||||||||||||||||||||
|
Net gain (loss) on divestiture activity |
37,463 |
(69,021) |
|||||||||||||||||||||||||||
|
Other operating revenues |
2,077 |
274 |
|||||||||||||||||||||||||||
|
Total operating revenues and other income |
372,738 |
143,076 |
|||||||||||||||||||||||||||
|
Operating expenses: |
|||||||||||||||||||||||||||||
|
Oil, gas, and NGL production expense |
138,046 |
144,543 |
|||||||||||||||||||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
137,812 |
214,207 |
|||||||||||||||||||||||||||
|
Exploration(1) |
11,978 |
15,273 |
|||||||||||||||||||||||||||
|
Impairment of proved properties |
— |
269,785 |
|||||||||||||||||||||||||||
|
Abandonment and impairment of unproved properties |
— |
2,311 |
|||||||||||||||||||||||||||
|
General and administrative (including stock-based compensation)(1) |
29,224 |
32,238 |
|||||||||||||||||||||||||||
|
Net derivative gain(2) |
(114,774) |
(14,228) |
|||||||||||||||||||||||||||
|
Other operating expenses |
4,859 |
5,672 |
|||||||||||||||||||||||||||
|
Total operating expenses |
207,145 |
669,801 |
|||||||||||||||||||||||||||
|
Income (loss) from operations |
165,593 |
(526,725) |
|||||||||||||||||||||||||||
|
Non-operating income (expense): |
|||||||||||||||||||||||||||||
|
Interest expense |
(46,953) |
(31,088) |
|||||||||||||||||||||||||||
|
Gain (loss) on extinguishment of debt |
(35) |
15,722 |
|||||||||||||||||||||||||||
|
Other, net |
335 |
6 |
|||||||||||||||||||||||||||
|
Income (loss) before income taxes |
118,940 |
(542,085) |
|||||||||||||||||||||||||||
|
Income tax (expense) benefit |
(44,506) |
194,875 |
|||||||||||||||||||||||||||
|
Net income (loss) |
$ |
74,434 |
$ |
(347,210) |
|||||||||||||||||||||||||
|
Basic weighted-average common shares outstanding |
111,258 |
68,077 |
|||||||||||||||||||||||||||
|
Diluted weighted-average common shares outstanding |
111,329 |
68,077 |
|||||||||||||||||||||||||||
|
Basic net income (loss) per common share |
$ |
0.67 |
$ |
(5.10) |
|||||||||||||||||||||||||
|
Diluted net income (loss) per common share |
$ |
0.67 |
$ |
(5.10) |
|||||||||||||||||||||||||
|
(1) Non-cash stock-based compensation component included in: |
|||||||||||||||||||||||||||||
|
Exploration expense |
$ |
1,408 |
$ |
1,662 |
|||||||||||||||||||||||||
|
G&A expense |
$ |
4,047 |
$ |
5,206 |
|||||||||||||||||||||||||
|
(2) The net derivative gain line item consists of the following: |
|||||||||||||||||||||||||||||
|
Settlement gain |
$ |
(7) |
$ |
(147,028) |
|||||||||||||||||||||||||
|
(Gain) loss on fair value changes |
$ |
(114,767) |
$ |
132,800 |
|||||||||||||||||||||||||
|
Total net derivative gain: |
$ |
(114,774) |
$ |
(14,228) |
|||||||||||||||||||||||||
|
SM ENERGY COMPANY | ||||||||||||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||||||||||||
|
March 31, 2017 | ||||||||||||||||||||||||||||||||
|
Condensed Consolidated Statement of Stockholders' Equity | ||||||||||||||||||||||||||||||||
|
(in thousands, except share amounts) | ||||||||||||||||||||||||||||||||
|
Additional |
Accumulated |
Total Stockholders' Equity | ||||||||||||||||||||||||||||||
|
Common Stock |
Retained Earnings |
|||||||||||||||||||||||||||||||
|
Shares |
Amount |
|||||||||||||||||||||||||||||||
|
Balances, December 31, 2016 |
111,257,500 |
$ |
1,113 |
$ |
1,716,556 |
$ |
794,020 |
$ |
(14,556) |
$ |
2,497,133 |
|||||||||||||||||||||
|
Net income |
— |
— |
— |
74,434 |
— |
74,434 |
||||||||||||||||||||||||||
|
Other comprehensive loss |
— |
— |
— |
— |
(567) |
(567) |
||||||||||||||||||||||||||
|
Dividends declared, $ 0.05 per share |
— |
— |
— |
(5,563) |
— |
(5,563) |
||||||||||||||||||||||||||
|
Issuance of common stock upon vesting of restricted stock units, net of shares used for tax withholdings |
725 |
— |
(11) |
— |
— |
(11) |
||||||||||||||||||||||||||
|
Stock-based compensation expense |
— |
— |
5,455 |
— |
— |
5,455 |
||||||||||||||||||||||||||
|
Cumulative effect of accounting change |
— |
— |
1,108 |
43,624 |
— |
44,732 |
||||||||||||||||||||||||||
|
Other |
— |
— |
(98) |
— |
— |
(98) |
||||||||||||||||||||||||||
|
Balances, March 31, 2017 |
111,258,225 |
$ |
1,113 |
$ |
1,723,010 |
$ |
906,515 |
$ |
(15,123) |
$ |
2,615,515 |
|||||||||||||||||||||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||
|
March 31, 2017 | |||||||
|
Condensed Consolidated Statements of Cash Flows |
|||||||
|
(in thousands) |
For the Three Months | ||||||
|
2017 |
2016 | ||||||
|
Cash flows from operating activities: |
|||||||
|
Net income (loss) |
$ |
74,434 |
$ |
(347,210) |
|||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||||||
|
Net (gain) loss on divestiture activity |
(37,463) |
69,021 |
|||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
137,812 |
214,207 |
|||||
|
Impairment of proved properties |
— |
269,785 |
|||||
|
Abandonment and impairment of unproved properties |
— |
2,311 |
|||||
|
Stock-based compensation expense |
5,455 |
6,868 |
|||||
|
Net derivative gain |
(114,774) |
(14,228) |
|||||
|
Derivative settlement gain |
7 |
147,028 |
|||||
|
Amortization of discount and deferred financing costs |
4,946 |
(920) |
|||||
|
Non-cash (gain) loss on extinguishment of debt, net |
22 |
(15,722) |
|||||
|
Deferred income taxes |
33,225 |
(195,039) |
|||||
|
Plugging and abandonment |
(1,191) |
(604) |
|||||
|
Other, net |
4,567 |
(1,151) |
|||||
|
Changes in current assets and liabilities: |
|||||||
|
Accounts receivable |
30,407 |
26,922 |
|||||
|
Prepaid expenses and other |
178 |
4,984 |
|||||
|
Accounts payable and accrued expenses |
(5,497) |
(52,294) |
|||||
|
Accrued derivative settlements |
2,838 |
4,318 |
|||||
|
Net cash provided by operating activities |
134,966 |
118,276 |
|||||
|
Cash flows from investing activities: |
|||||||
|
Net proceeds from the sale of oil and gas properties |
744,333 |
1,206 |
|||||
|
Capital expenditures |
(154,401) |
(176,370) |
|||||
|
Acquisition of proved and unproved oil and gas properties |
(75,105) |
(15,044) |
|||||
|
Other, net |
2,486 |
885 |
|||||
|
Net cash provided by (used in) investing activities |
517,313 |
(189,323) |
|||||
|
Cash flows from financing activities: |
|||||||
|
Proceeds from credit facility |
397,500 |
317,000 |
|||||
|
Repayment of credit facility |
(397,500) |
(226,000) |
|||||
|
Cash paid to repurchase Senior Notes |
(2,344) |
(19,917) |
|||||
|
Other, net |
(160) |
(3) |
|||||
|
Net cash provided by (used in) financing activities |
(2,504) |
71,080 |
|||||
|
Net change in cash and cash equivalents |
649,775 |
33 |
|||||
|
Cash and cash equivalents at beginning of period |
9,372 |
18 |
|||||
|
Cash and cash equivalents at end of period |
$ |
659,147 |
$ |
51 |
|||
|
SM ENERGY COMPANY | |||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||||||
|
March 31, 2017 | |||||||||||||||||||
|
Adjusted EBITDAX(1) |
|||||||||||||||||||
|
(in thousands) |
|||||||||||||||||||
|
Reconciliation of net income (loss) (GAAP) to adjusted EBITDAX (Non-GAAP) to net cash provided by operating activities (GAAP) |
For the Three Months Ended | ||||||||||||||||||
|
2017 |
2016 | ||||||||||||||||||
|
Net income (loss) (GAAP) |
$ |
74,434 |
$ |
(347,210) |
|||||||||||||||
|
Interest expense |
46,953 |
31,088 |
|||||||||||||||||
|
Other non-operating income, net |
(335) |
(6) |
|||||||||||||||||
|
Income tax expense (benefit) |
44,506 |
(194,875) |
|||||||||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
137,812 |
214,207 |
|||||||||||||||||
|
Exploration(2) |
10,570 |
13,611 |
|||||||||||||||||
|
Impairment of proved properties |
— |
269,785 |
|||||||||||||||||
|
Abandonment and impairment of unproved properties |
— |
2,311 |
|||||||||||||||||
|
Stock-based compensation expense |
5,455 |
6,868 |
|||||||||||||||||
|
Net derivative gain |
(114,774) |
(14,228) |
|||||||||||||||||
|
Derivative settlement gain |
7 |
147,028 |
|||||||||||||||||
|
Net (gain) loss on divestiture activity |
(37,463) |
69,021 |
|||||||||||||||||
|
(Gain) loss on extinguishment of debt |
35 |
(15,722) |
|||||||||||||||||
|
Other |
4,986 |
432 |
|||||||||||||||||
|
Adjusted EBITDAX (Non-GAAP) |
$ |
172,186 |
$ |
182,310 |
|||||||||||||||
|
Interest expense |
(46,953) |
(31,088) |
|||||||||||||||||
|
Other non-operating income, net |
335 |
6 |
|||||||||||||||||
|
Income tax (expense) benefit |
(44,506) |
194,875 |
|||||||||||||||||
|
Exploration(2) |
(10,570) |
(13,611) |
|||||||||||||||||
|
Amortization of discount and deferred financing costs |
4,946 |
(920) |
|||||||||||||||||
|
Deferred income taxes |
33,225 |
(195,039) |
|||||||||||||||||
|
Plugging and abandonment |
(1,191) |
(604) |
|||||||||||||||||
|
Other, net |
(432) |
(1,583) |
|||||||||||||||||
|
Changes in current assets and liabilities |
27,926 |
(16,070) |
|||||||||||||||||
|
Net cash provided by operating activities (GAAP) |
$ |
134,966 |
$ |
118,276 |
|||||||||||||||
|
(1) Adjusted EBITDAX represents net income (loss) before interest expense, other non-operating income and expense, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property impairments, non-cash stock-based compensation expense, derivative gains and losses net of settlements, change in the Net Profits Plan liability, gains and losses on divestitures, gains or losses on extinguishment of debt, and materials inventory impairments and losses on sale. Adjusted EBITDAX excludes certain items that the Company believes affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that is presented because the Company believes it provides useful additional information to investors and analysts, as a performance measure, for analysis of the Company's ability to internally generate funds for exploration, development, acquisitions, and to service debt. The Company is also subject to financial covenants under its Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Under the terms of the Company's credit agreement, if the Company fails to comply with the covenants that establish a maximum permitted ratio of senior secured debt to adjusted EBITDAX and a minimum permitted ratio of adjusted EBITDAX to interest, it will be in default, an event that would prevent it from borrowing under its credit facility and would therefore materially limit the Company's sources of liquidity. In addition, if the Company was in default under its credit facility and unable to obtain a waiver of that default from its lenders, the lenders under that facility and under the indentures governing the Company's outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for a default. | |||||||||||||||||||
|
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the accompanying statements of operations for the component of stock-based compensation expense recorded to exploration expense. |
|
SM ENERGY COMPANY |
|||||||||||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) |
|||||||||||||||||||
|
March 31, 2017 |
|||||||||||||||||||
|
Adjusted Net Loss (Non-GAAP) |
|||||||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||||||
|
For the Three Months Ended |
|||||||||||||||||||
|
2017 |
2016 |
||||||||||||||||||
|
Net income (loss) (GAAP) |
$ |
74,434 |
$ |
(347,210) |
|||||||||||||||
|
Net derivative gain |
(114,774) |
(14,228) |
|||||||||||||||||
|
Derivative settlement gain |
7 |
147,028 |
|||||||||||||||||
|
Net (gain) loss on divestiture activity |
(37,463) |
69,021 |
|||||||||||||||||
|
Impairment of proved properties |
— |
269,785 |
|||||||||||||||||
|
Abandonment and impairment of unproved properties |
— |
2,311 |
|||||||||||||||||
|
(Gain) loss on extinguishment of debt |
35 |
(15,722) |
|||||||||||||||||
|
Other, net(2) |
4,986 |
(508) |
|||||||||||||||||
|
Tax effect of adjustments(1) |
53,142 |
(167,056) |
|||||||||||||||||
|
Adjusted net loss (Non-GAAP)(3) |
$ |
(19,633) |
$ |
(56,579) |
|||||||||||||||
|
Diluted net income (loss) per common share (GAAP) |
$ |
0.67 |
$ |
(5.10) |
|||||||||||||||
|
Net derivative gain |
(1.03) |
(0.21) |
|||||||||||||||||
|
Derivative settlement gain |
— |
2.16 |
|||||||||||||||||
|
Net (gain) loss on divestiture activity |
(0.34) |
1.01 |
|||||||||||||||||
|
Impairment of proved properties |
— |
3.96 |
|||||||||||||||||
|
Abandonment and impairment of unproved properties |
— |
0.03 |
|||||||||||||||||
|
(Gain) loss on extinguishment of debt |
— |
(0.23) |
|||||||||||||||||
|
Other, net(2) |
0.04 |
(0.01) |
|||||||||||||||||
|
Tax effect of adjustments(1) |
0.48 |
(2.44) |
|||||||||||||||||
|
Adjusted net loss per diluted common share (Non-GAAP)(4) |
$ |
(0.18) |
$ |
(0.83) |
|||||||||||||||
|
Basic weighted-average common shares outstanding (GAAP) |
111,258 |
68,077 |
|||||||||||||||||
|
Diluted weighted-average common shares outstanding (GAAP) |
111,329 |
68,077 |
|||||||||||||||||
|
(1) The tax effect of adjustments is calculated using a tax rate of 36.1% and 36.5% for the three-month periods ended March 31, 2017 and March 31, 2016, respectively. These rates approximate the Company's statutory tax rate for the respective periods, as adjusted for ordinary permanent differences. |
|
|
(2) For the three-month periods ended March 31, 2017 and March 31, 2016 the adjustment is related to materials inventory loss and the change in the Net Profits Plan liability. Additionally, for the three-month period ended March 31, 2016, adjustments relating to claims on royalties on certain Federal and Indian leases are included. These items are included in other operating expenses on the Company's condensed consolidated statements of operations. |
|
|
(3) Adjusted net loss excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, net (gain) loss on divestiture activity, materials inventory loss, and gains or losses on extinguishment of debt. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. |
|
|
(4) For periods where the Company reports adjusted net loss, basic weighted-average common shares outstanding are used in the calculation of adjusted net loss per diluted common share. |
|
SM ENERGY COMPANY | |||||||||||
|
FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||
|
March 31, 2017 | |||||||||||
|
Total Capital Spend Reconciliation |
|||||||||||
|
(in millions) |
|||||||||||
|
Reconciliation of costs incurred in oil & gas activities (GAAP) |
For the Three Months | ||||||||||
|
to total capital spend (Non-GAAP)(1) | |||||||||||
|
2017 | |||||||||||
|
Costs incurred in oil and gas activities (GAAP): |
$ |
281.5 |
|||||||||
|
Less: |
|||||||||||
|
Asset retirement obligation |
(0.9) |
||||||||||
|
Capitalized interest |
(2.2) |
||||||||||
|
Proved property acquisitions(2) |
(2.2) |
||||||||||
|
Unproved property acquisitions(3) |
(83.6) |
||||||||||
|
Other |
0.3 |
||||||||||
|
Total capital spend (Non-GAAP): |
$ |
192.9 |
|||||||||
|
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Total capital spend should not be considered in isolation or as a substitute for Costs Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. | |||||||||||
|
(2) Includes approximately $800,000 of ARO associated with proved property acquisitions for the three-month period ended March 31, 2017. | |||||||||||
|
(3) Includes approximately $24.5 million related to the fair value attributed to the properties surrendered in the non-monetary acreage trade that completed during the three-month period ended March 31, 2017. | |||||||||||
SOURCE SM Energy Company
Article Date
5/2/2017SM Energy Declares Semi-Annual Cash Dividend, Announces Participation In IPAA's 23rd OGIS New York Conference, and Schedules First Quarter 2017 Earnings Call
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, March 29, 2017 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announces that its Board of Directors has approved a semi-annual cash dividend of $0.05 per share of common stock outstanding. The dividend will be paid on May 3, 2017, to stockholders of record as of the close of business on April 21, 2017. The Company currently has approximately 111.3 million shares of common stock outstanding.
SM Energy Company also announces that the Company will be participating in the following upcoming investor event:
April 4, 2017 – IPAA's 23rd OGIS New York. President and Chief Executive Officer Jay Ottoson will present at 10:50 a.m. ET. The presentation will be webcast, accessible from the Company's website, and available for replay for a limited period. The Company will post an investor presentation after the market closes on April 3 on its website at www.sm-energy.com.
FIRST QUARTER 2017 EARNINGS RELEASE AND WEBCAST
SM Energy expects to release its first quarter 2017 results after market on May 2, 2017 and hold a webcast and conference call the following morning. The Company will post a presentation to accompany the call prior to the start of the call.
Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time on Wednesday, May 3, 2017 for a discussion of first quarter financial and operating results via webcast (available live and for replay) on the Company's website at www.sm-energy.com.
Alternatively, you may join by telephone at:
The call replay will be available approximately one hour after the call until May 17, 2017.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
3/29/2017SM Energy Announces Closing The Sale Of Non-Operated Eagle Ford Assets
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, March 13, 2017 /PRNewswire/ -- SM Energy Company (NYSE: SM) announced today that it closed the previously announced sale of its third party operated assets in the Eagle Ford, including ownership interest in midstream assets, for $800.0 million gross or $754.0 million net cash proceeds adjusted for post-effective date revenue and expenses, before final customary purchase price adjustments. The buyer is Venado EF L.P., an affiliate of KKR, and the effective date of the transaction is November 1, 2016. Fourth quarter 2016 production associated with these assets was 24,250 Boe per day (33% oil). The Company plans to apply proceeds from this divestiture towards its 2017 capital program, general debt reduction and general corporate purposes.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "guidance," "intend," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, planned use of proceeds. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.SM-Energy.com.
INVESTOR CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
3/13/20172/23/2017 - SM Energy Reports 2016 Results And 2017 Operating Plan: Driving Growth From Top Tier Assets
SM Energy Reports 2016 Results And 2017 Operating Plan: Driving Growth From Top Tier Assets
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Feb. 22, 2017 /PRNewswire/ -- SM Energy Company ("SM Energy" or the "Company") (NYSE: SM) announces today fourth quarter and full year 2016 financial and operating results, year-end 2016 reserves and the Company's 2017 operating plan. Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "It is an understatement that 2016 was an exciting and transformational year for our Company, accomplished in a challenging macro-economic environment. We commence 2017 with a plan focused entirely on development of top tier oil, natural gas and NGL assets. During 2016, we acquired substantial assets in the Midland Basin, where we believe we have the ability to create value through optimized drilling and completions and to drive margin expansion that we expect will deliver growing cash flows per debt-adjusted share in the coming years.
"Our Midland Basin assets are already demonstrating value creation through the outstanding performance of our recently completed wells. Our current 2017 operating plan focuses on completion optimization, testing to prepare for increased density drilling, and further delineation of our acreage position. This plan, combined with increasing our activity in 2018 and beyond, is expected to be the primary driver of accelerating value creation.
"During 2017, we anticipate completing the process of coring up our asset portfolio, which will result in short term contraction of our production profile in favor of long term, higher margin production growth. We expect that proceeds from planned assets sales will help fund our accelerated drilling program and allow us to maintain high levels of liquidity while reducing debt. We have a clear strategy and visible path to our objective of being a highly focused premier operator of top tier assets."
2017 OPERATING PLAN AND GUIDANCE
The Company's strategy in 2017 is to drive growth in production from its highest margin assets and to deliver increasing cash flow, while reducing its outstanding debt. Key assumptions in the Company's 2017 operating plan include:
*Total capital spend is a non-GAAP measure. The Company is unable to present quantitative reconciliation of this forward-looking non-GAAP financial measure to costs incurred in oil and gas producing activities without unreasonable effort, because acquisition costs are inherently unpredictable. Acquisition costs could be significant in future periods and would depend on a wide variety of factors outside the Company's control. Accordingly, investors are cautioned not to place undue reliance on this number.
2017 guidance:
First quarter of 2017 guidance:
2016 IN REVIEW
FOURTH QUARTER AND FULL YEAR RESULTS
As previously announced, fourth quarter and full year 2016 production were:
|
PRODUCTION - MMBoe | ||
|
Fourth Quarter 2016 |
Full Year 2016 | |
|
Oil (MMBbls) |
4.0 |
16.6 |
|
Natural gas (Bcf) |
35.2 |
146.9 |
|
NGLs (MMBbls) |
3.5 |
14.2 |
|
Total MMBoe |
13.4 |
55.3 |
|
• |
Production includes production from assets sold (through the closing date) or pending sale |
By region:
|
REGIONAL PRODUCTION - MMBoe | ||
|
Fourth Quarter 2016 |
Full Year 2016 | |
|
Eagle Ford (operated) |
7.6 |
31.5 |
|
Eagle Ford (third-party operated) |
2.2 |
9.7 |
|
Permian Basin |
1.4 |
3.8 |
|
Rocky Mountain |
2.2 |
10.3 |
|
Total MMBoe |
13.4 |
55.3 |
|
• |
Permian Basin full year includes ~275 MBoe outside the Midland Basin sold in the third quarter of 2016 |
|
• |
Eagle Ford (operated) includes nominal other production from the region |
Fourth quarter production of 13.4 MMBoe was down sequentially from the third quarter of 2016, primarily due to transaction timing, including various non-core asset sales completed late in the third quarter of 2016 and the closing of the Raven/Bear Den asset sale on December 1, 2016, which were partly offset by a partial quarter of production from acquired assets. Production from retained assets included increased production from Midland Basin assets offset by slowed activity in the Eagle Ford at both operated and third-party operated assets. Fourth quarter of 2016 production was down from 14.9 MMBoe in the fourth quarter of 2015, primarily due to reduced activity in the Eagle Ford and asset sales, partially offset by a 160% increase in Permian Basin production. Full year 2016 production totaled 55.3 MMBoe, down from 64.2 MMboe in 2015. Production from retained assets (Midland Basin, Operated Eagle Ford and retained Powder River Basin) was 36.0 MMBoe in 2016.
Operating costs for the fourth quarter and full year were:
|
CASH PRODUCTION COSTS $ PER BOE | ||
|
Fourth Quarter 2016 |
Full Year 2016 | |
|
Total LOE, incl. ad valorem tax |
3.84 |
3.72 |
|
Transportation |
6.39 |
6.16 |
|
Production tax |
1.11 |
0.94 |
|
Total $ Per Boe |
11.34 |
10.82 |
Cash production costs totaled $11.34 per Boe in the fourth quarter, up sequentially from the third quarter at $10.78 per Boe, primarily due to higher LOE expense in the Permian Basin due to one-time costs associated with integrating the Rock Oil operations to SM Energy's systems and standards, as well as significantly increased charges from the third-party operator in the Eagle Ford for both LOE and transportation. Cash production costs declined slightly from $11.36 per Boe in the prior year period. Full year 2016 cash production costs averaged $10.82 per Boe compared with $11.27 per Boe in 2015.
Fourth quarter of 2016 general and administrative expense was $33.3 million and included $5.0 million in non-cash stock-based compensation and $2.2 million in one-time charges associated with office closure and re-organization. Full year 2016 general and administrative expense was $126.4 million and included $20.5 million in non-cash stock-based compensation and $5.1 million in one-time charges associated with office closures and re-organization. General and administrative expenses declined in 2016 compared with 2015, primarily due to consolidation of regional offices and reduced headcount.
The Company's GAAP net loss for the fourth quarter of 2016 was $200.9 million or $2.20 per diluted common share compared with the fourth quarter of 2015 net loss of $340.3 million, or $5.01 per diluted common share. The year-over-year lower fourth quarter net loss is primarily due to lower impairment and abandonment charges taken in the 2016 period at $151.2 million versus $448.2 million in the 2015 period. In addition, the cash production margin increased 67% in the fourth quarter of 2016 compared with the fourth quarter of 2015 due to higher commodity prices and lower costs. Full year 2016 net loss was $757.7 million, or $9.90 per diluted common share, compared with $447.7 million, or $6.61 per diluted common share in 2015.
As discussed below, adjusted EBITDAX, adjusted net income (loss) and adjusted net income (loss) per diluted common share are non-GAAP measures. Please reference the reconciliations to the most directly comparable GAAP financial measures at the end of this release.
The Company's adjusted EBITDAX for the fourth quarter of 2016 was $186.2 million, compared with $216.3 million in the prior year period. The 2015 period benefited from significantly higher realized gains from hedging activity, $124.8 million in the fourth quarter of 2015 versus $23.2 million in fourth quarter of 2016, which more than offset the higher production revenue and production margins realized in 2016. For the full year 2016, adjusted EBITDAX was $790.8 million compared with $1,124.8 million in 2015. Higher 2015 adjusted EBITDAX was predominantly driven by 14% higher full year production, a higher pre-hedge margin per Boe and $512.6 million in realized hedge gains (versus $329.5 million in 2016).
The Company's adjusted net loss for the fourth quarter was $28.7 million, or $0.31 per diluted common share, compared with $61.1 million, or $0.90 per diluted common share, in the fourth quarter of 2015. The 2016 period benefited from a 20% decline in DD&A per Boe. Full year 2016 adjusted net loss was $142.4 million, or $1.86 per diluted common share, compared with $35.9 million, or $0.53 per diluted common share, in 2015.
CAPITAL SPEND
Costs incurred for 2016 were $3,374 million, which included $2,660 million of proved and unproved property acquisitions. Full year 2016 total capital spend (see below for GAAP reconciliation) was $687 million and was allocated 32% to the Permian Basin, 37% to the Eagle Ford, 31% to the Bakken/Three Forks and Powder River Basin. Total capital spend included $590 million for development, $8 million for leasehold, $23 million for infrastructure and $66 million for corporate and exploration costs. Total capital spend was less than guidance primarily as a result of cost savings and operating efficiencies. During 2016, the Company drilled 70 net wells and completed 137 net wells (including third-party operated wells), and acquired assets in the Midland Basin for a total of $2.6 billion.
YEAR-END 2016 PROVED RESERVES
Year-end 2016 proved reserves of 396 MMBoe are calculated in accordance with SEC pricing at $42.75 per barrel of oil NYMEX, $2.47 per MMBtu of natural gas at Henry Hub and $19.50 per barrel of NGLs at Mt. Belvieu. Year-end proved reserves were 27% oil, 27% NGLs and 46% natural gas. 53% were proved developed.
Year-end 2016 proved reserves declined 16%, reflecting a significant reduction in drilling and completion activity compared to the prior year, sales of producing assets and a change in the Company's long-term plan to focus development activity in the Midland Basin (resulting in 5-year rule revisions). Adjusting for divestitures, price revisions and 5-year rule revisions, proved reserves would have increased 11%. During the year, the Company shifted investment to the Midland Basin where proved reserves increased more than 250%. The Company expects its 2017 capital program will focus on development of this area to drive continued, substantial growth in reserves and production.
The table below provides a reconciliation of changes in the Company's proved reserves from year-end 2015 to year-end 2016 (numbers are rounded):
|
Proved reserves year-end 2015 |
471 |
MMBoe |
|
Production |
(55) |
|
|
Divestitures |
(48) |
|
|
Reserve additions through drilling |
108 |
|
|
Reserve additions through acquisition |
16 |
|
|
Reserve revisions primarily price and 5-year rule |
(96) |
|
|
Proved reserves year-end 2016 |
396 |
MMBoe |
UPCOMING EVENTS
EARNINGS WEBCAST AND CALL
As previously announced, SM Energy will host a webcast and conference call to discuss the 2016 results and the 2017 operating plan at 8:00 a.m. Mountain time/10:00 a.m. Eastern time tomorrow, February 23, 2017. Please join us via webcast at www.SM-Energy.com or by telephone 877-303-1292 (toll free) or 315-625-3086 (international) with passcode 57100689. The webcast and call will also be available for replay. The dial-in replay number is 855-859-2056 (toll free) or 404-537-3406 (international) with passcode 57100689 and is available through March 2, 2017.
A presentation will be posted to the Company's website to accompany this call at www.SM-Energy.com
UPCOMING CONFERENCE PARTICIPATION
Investor presentations for these events will be posted to the Company's website at www.SM-Energy.com.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, guidance estimates for the first quarter and full year 2017, timing of pending and expected asset sales and expected results from a three-year operating and financial plan and future cash flows per share. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.SM-Energy.com.
SM ENERGY CONTACTS
INVESTORS: Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
|
SM ENERGY COMPANY | |||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||
|
December 31, 2016 | |||||||||||||||||||||
|
For the Three Months Ended |
For the Twelve Months | ||||||||||||||||||||
|
Production Data: |
2016 |
2015 |
Percent |
2016 |
2015 |
Percent | |||||||||||||||
|
Average realized sales price, before the effects of derivative settlements: |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
43.58 |
$ |
34.93 |
25 |
% |
$ |
36.85 |
$ |
41.49 |
(11) |
% | |||||||||
|
Gas (per Mcf) |
$ |
2.86 |
$ |
2.19 |
31 |
% |
$ |
2.30 |
$ |
2.57 |
(11) |
% | |||||||||
|
NGL (per Bbl) |
$ |
20.02 |
$ |
14.99 |
34 |
% |
$ |
16.16 |
$ |
15.92 |
2 |
% | |||||||||
|
Equivalent (per BOE) |
$ |
25.86 |
$ |
20.03 |
29 |
% |
$ |
21.32 |
$ |
23.36 |
(9) |
% | |||||||||
|
Average realized sales price, including the effects of derivative settlements: |
|||||||||||||||||||||
|
Oil (per Bbl) |
$ |
48.96 |
$ |
55.81 |
(12) |
% |
$ |
51.48 |
$ |
60.34 |
(15) |
% | |||||||||
|
Gas (per Mcf) |
$ |
3.21 |
$ |
2.96 |
8 |
% |
$ |
2.94 |
$ |
3.28 |
(10) |
% | |||||||||
|
NGL (per Bbl) |
$ |
16.92 |
$ |
15.60 |
8 |
% |
$ |
15.56 |
$ |
17.61 |
(12) |
% | |||||||||
|
Equivalent (BOE) |
$ |
27.59 |
$ |
28.40 |
(3)% |
$ |
27.28 |
$ |
31.34 |
(13) |
% | ||||||||||
|
Production: |
|||||||||||||||||||||
|
Oil (MMBbls) |
4.0 |
4.4 |
(8) |
% |
16.6 |
19.2 |
(14) |
% | |||||||||||||
|
Gas (Bcf) |
35.2 |
40.2 |
(12) |
% |
146.9 |
173.6 |
(15) |
% | |||||||||||||
|
NGL (MMBbls) |
3.5 |
3.8 |
(9) |
% |
14.2 |
16.1 |
(12) |
% | |||||||||||||
|
MMBOE (6:1) |
13.4 |
14.9 |
(10) |
% |
55.3 |
64.2 |
(14) |
% | |||||||||||||
|
Average daily production: |
|||||||||||||||||||||
|
Oil (MBbls/d) |
43.9 |
47.7 |
(8) |
% |
45.4 |
52.7 |
(14) |
% | |||||||||||||
|
Gas (MMcf/d) |
382.7 |
436.6 |
(12) |
% |
401.5 |
475.7 |
(16) |
% | |||||||||||||
|
NGL (MBbls/d) |
37.9 |
41.6 |
(9) |
% |
38.8 |
44.0 |
(12) |
% | |||||||||||||
|
MBOE/d (6:1) |
145.6 |
162.1 |
(10) |
% |
151.0 |
175.9 |
(14) |
% | |||||||||||||
|
Per BOE Data: |
|||||||||||||||||||||
|
Realized price before the effects of derivative settlements |
$ |
25.86 |
$ |
20.03 |
29 |
% |
$ |
21.32 |
$ |
23.36 |
(9) |
% | |||||||||
|
Lease operating expense |
3.67 |
3.85 |
(5) |
% |
3.51 |
3.73 |
(6) |
% | |||||||||||||
|
Transportation costs |
6.39 |
6.10 |
5 |
% |
6.16 |
6.02 |
2 |
% | |||||||||||||
|
Production taxes |
1.11 |
1.03 |
8 |
% |
0.94 |
1.13 |
(17) |
% | |||||||||||||
|
Ad valorem tax expense |
0.17 |
0.38 |
(55) |
% |
0.21 |
0.39 |
(46) |
% | |||||||||||||
|
General and administrative |
2.49 |
2.26 |
10 |
% |
2.29 |
2.46 |
(7) |
% | |||||||||||||
|
Operating profit, before the effects of derivative settlements |
$ |
12.03 |
$ |
6.41 |
88 |
% |
$ |
8.21 |
$ |
9.63 |
(15) |
% | |||||||||
|
Derivative settlement gain |
1.73 |
8.37 |
(79) |
% |
5.96 |
7.98 |
(25) |
% | |||||||||||||
|
Operating profit, including the effects of derivative settlements |
$ |
13.76 |
$ |
14.78 |
(7) |
% |
$ |
14.17 |
$ |
17.61 |
(20) |
% | |||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
$ |
12.81 |
$ |
16.10 |
(20) |
% |
$ |
14.30 |
$ |
14.34 |
— |
% | |||||||||
|
SM ENERGY COMPANY | |||||||
|
FINANCIAL HIGHLIGHTS | |||||||
|
December 31, 2016 | |||||||
|
Consolidated Balance Sheets |
|||||||
|
(in thousands, except share amounts) |
December 31, |
December 31, | |||||
|
ASSETS |
2016 |
2015 | |||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
9,372 |
$ |
18 |
|||
|
Accounts receivable |
151,950 |
134,124 |
|||||
|
Derivative asset |
54,521 |
367,710 |
|||||
|
Prepaid expenses and other |
8,799 |
17,137 |
|||||
|
Total current assets |
224,642 |
518,989 |
|||||
|
Property and equipment (successful efforts method): |
|||||||
|
Proved oil and gas properties |
5,700,418 |
7,606,405 |
|||||
|
Less - accumulated depletion, depreciation, and amortization |
(2,836,532) |
(3,481,836) |
|||||
|
Unproved oil and gas properties |
2,471,947 |
284,538 |
|||||
|
Wells in progress |
235,147 |
387,432 |
|||||
|
Oil and gas properties held for sale, net |
372,621 |
641 |
|||||
|
Other property and equipment, net of accumulated depreciation of $42,882 and $32,956, respectively |
137,753 |
153,100 |
|||||
|
Total property and equipment, net |
6,081,354 |
4,950,280 |
|||||
|
Noncurrent assets: |
|||||||
|
Derivative asset |
67,575 |
120,701 |
|||||
|
Other noncurrent assets |
19,940 |
31,673 |
|||||
|
Total other noncurrent assets |
87,515 |
152,374 |
|||||
|
Total Assets |
$ |
6,393,511 |
$ |
5,621,643 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued expenses |
$ |
299,708 |
$ |
302,517 |
|||
|
Derivative liability |
115,464 |
8 |
|||||
|
Total current liabilities |
415,172 |
302,525 |
|||||
|
Noncurrent liabilities: |
|||||||
|
Revolving credit facility |
— |
202,000 |
|||||
|
Senior Notes, net of unamortized deferred financing costs |
2,766,719 |
2,315,970 |
|||||
|
Senior Convertible Notes, net of unamortized discount and deferred financing costs |
130,856 |
— |
|||||
|
Asset retirement obligation |
96,134 |
137,284 |
|||||
|
Asset retirement obligation associated with oil and gas properties held for sale |
26,241 |
241 |
|||||
|
Deferred income taxes |
315,672 |
758,279 |
|||||
|
Derivative liability |
98,340 |
— |
|||||
|
Other noncurrent liabilities |
47,244 |
52,943 |
|||||
|
Total noncurrent liabilities |
3,481,206 |
3,466,717 |
|||||
|
Stockholders' equity: |
|||||||
|
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 111,257,500 and 68,075,700 shares, respectively |
1,113 |
681 |
|||||
|
Additional paid-in capital |
1,716,556 |
305,607 |
|||||
|
Retained earnings |
794,020 |
1,559,515 |
|||||
|
Accumulated other comprehensive loss |
(14,556) |
(13,402) |
|||||
|
Total stockholders' equity |
2,497,133 |
1,852,401 |
|||||
|
Total Liabilities and Stockholders' Equity |
$ |
6,393,511 |
$ |
5,621,643 |
|||
|
SM ENERGY COMPANY | ||||||||||||||||
|
FINANCIAL HIGHLIGHTS | ||||||||||||||||
|
December 31, 2016 | ||||||||||||||||
|
Consolidated Statements of Operations | ||||||||||||||||
|
(in thousands, except share amounts) |
For the Three Months |
For the Twelve Months | ||||||||||||||
|
2016 |
2015 |
2016 |
2015 |
|||||||||||||
|
Operating revenues and other income: |
||||||||||||||||
|
Oil, gas, and NGL production revenue |
$ |
346,296 |
$ |
298,719 |
$ |
1,178,426 |
$ |
1,499,905 |
||||||||
|
Net gain on divestiture activity |
33,661 |
4,534 |
37,074 |
43,031 |
||||||||||||
|
Marketed gas system revenue |
— |
4 |
— |
9,485 |
||||||||||||
|
Other operating revenues |
(57) |
477 |
1,950 |
4,544 |
||||||||||||
|
Total operating revenues and other income |
379,900 |
303,734 |
1,217,450 |
1,556,965 |
||||||||||||
|
Operating expenses: |
||||||||||||||||
|
Oil, gas, and NGL production expense |
151,907 |
169,229 |
597,565 |
723,633 |
||||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
171,552 |
240,025 |
790,745 |
921,009 |
||||||||||||
|
Exploration(1) |
23,699 |
37,942 |
65,641 |
120,569 |
||||||||||||
|
Impairment of proved properties |
76,780 |
344,249 |
354,614 |
468,679 |
||||||||||||
|
Abandonment and impairment of unproved properties |
74,450 |
54,597 |
80,367 |
78,643 |
||||||||||||
|
Impairment of other property and equipment |
— |
49,369 |
— |
49,369 |
||||||||||||
|
General and administrative (including stock-based compensation)(1) |
33,311 |
33,642 |
126,428 |
157,668 |
||||||||||||
|
Change in Net Profits Plan liability |
(751) |
(6,351) |
(7,200) |
(19,525) |
||||||||||||
|
Net derivative (gain) loss(2) |
129,547 |
(123,340) |
250,633 |
(408,831) |
||||||||||||
|
Marketed gas system expense |
— |
(7) |
— |
13,922 |
||||||||||||
|
Other operating expenses |
3,792 |
9,952 |
17,972 |
30,612 |
||||||||||||
|
Total operating expenses |
664,287 |
809,307 |
2,276,765 |
2,135,748 |
||||||||||||
|
Loss from operations |
(284,387) |
(505,573) |
(1,059,315) |
(578,783) |
||||||||||||
|
Non-operating income (expense): |
||||||||||||||||
|
Interest expense |
(46,356) |
(31,566) |
(158,685) |
(128,149) |
||||||||||||
|
Gain (loss) on extinguishment of debt |
— |
— |
15,722 |
(16,578) |
||||||||||||
|
Other, net |
130 |
26 |
362 |
649 |
||||||||||||
|
Loss before income taxes |
(330,613) |
(537,113) |
(1,201,916) |
(722,861) |
||||||||||||
|
Income tax benefit |
129,667 |
196,855 |
444,172 |
275,151 |
||||||||||||
|
Net loss |
$ |
(200,946) |
$ |
(340,258) |
$ |
(757,744) |
$ |
(447,710) |
||||||||
|
Basic weighted-average common shares outstanding |
91,440 |
67,976 |
76,568 |
67,723 |
||||||||||||
|
Diluted weighted-average common shares outstanding |
91,440 |
67,976 |
76,568 |
67,723 |
||||||||||||
|
Basic net loss per common share |
$ |
(2.20) |
$ |
(5.01) |
$ |
(9.90) |
$ |
(6.61) |
||||||||
|
Diluted net loss per common share |
$ |
(2.20) |
$ |
(5.01) |
$ |
(9.90) |
$ |
(6.61) |
||||||||
|
(1) Non-cash stock-based compensation component included in: |
||||||||||||||||
|
Exploration expense |
$ |
1,410 |
$ |
2,082 |
$ |
6,447 |
$ |
7,411 |
||||||||
|
General and administrative expense |
$ |
5,002 |
$ |
4,893 |
$ |
20,450 |
$ |
20,056 |
||||||||
|
(2) The net derivative (gain) loss line item consists of the following: |
||||||||||||||||
|
Settlement gain |
$ |
(23,244) |
$ |
(124,847) |
$ |
(329,478) |
$ |
(512,566) |
||||||||
|
Loss on fair value changes |
152,791 |
1,507 |
580,111 |
103,735 |
||||||||||||
|
Net derivative (gain) loss |
$ |
129,547 |
$ |
(123,340) |
$ |
250,633 |
$ |
(408,831) |
||||||||
|
SM ENERGY COMPANY | |||||||||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||
|
December 31, 2016 | |||||||||||||||||||||||||||||
|
Consolidated Statements of Stockholders' Equity |
Additional |
Accumulated |
Total | ||||||||||||||||||||||||||
|
(in thousands, except share amounts) |
|||||||||||||||||||||||||||||
|
Common Stock |
Treasury Stock |
Retained |
|||||||||||||||||||||||||||
|
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||
|
Balances, January 1, 2014 |
67,078,853 |
$ |
671 |
$ |
257,720 |
(22,412) |
$ |
(823) |
$ |
1,354,669 |
$ |
(5,416) |
$ |
1,606,821 |
|||||||||||||||
|
Net income |
— |
— |
— |
— |
— |
666,051 |
— |
666,051 |
|||||||||||||||||||||
|
Other comprehensive loss |
— |
— |
— |
— |
— |
— |
(5,896) |
(5,896) |
|||||||||||||||||||||
|
Cash dividends, $ 0.10 per share |
— |
— |
— |
— |
— |
(6,723) |
— |
(6,723) |
|||||||||||||||||||||
|
Issuance of common stock under Employee Stock Purchase Plan |
83,136 |
1 |
4,060 |
— |
— |
— |
— |
4,061 |
|||||||||||||||||||||
|
Issuance of common stock upon vesting of RSUs and settlement of PSUs, net of shares used for tax withholdings |
256,718 |
3 |
(10,627) |
— |
— |
— |
— |
(10,624) |
|||||||||||||||||||||
|
Issuance of common stock upon stock option exercises |
39,088 |
— |
816 |
— |
— |
— |
— |
816 |
|||||||||||||||||||||
|
Stock-based compensation expense |
5,265 |
— |
31,871 |
22,412 |
823 |
— |
— |
32,694 |
|||||||||||||||||||||
|
Other income tax expense |
— |
— |
(545) |
— |
— |
— |
— |
(545) |
|||||||||||||||||||||
|
Balances, December 31, 2014 |
67,463,060 |
$ |
675 |
$ |
283,295 |
— |
$ |
— |
$ |
2,013,997 |
$ |
(11,312) |
$ |
2,286,655 |
|||||||||||||||
|
Net loss |
— |
— |
— |
— |
— |
(447,710) |
— |
(447,710) |
|||||||||||||||||||||
|
Other comprehensive loss |
— |
— |
— |
— |
— |
— |
(2,090) |
(2,090) |
|||||||||||||||||||||
|
Cash dividends, $ 0.10 per share |
— |
— |
— |
— |
— |
(6,772) |
— |
(6,772) |
|||||||||||||||||||||
|
Issuance of common stock under Employee Stock Purchase Plan |
197,214 |
2 |
4,842 |
— |
— |
— |
— |
4,844 |
|||||||||||||||||||||
|
Issuance of common stock upon vesting of RSUs and settlement of PSUs, net of shares used for tax withholdings |
375,523 |
4 |
(8,682) |
— |
— |
— |
— |
(8,678) |
|||||||||||||||||||||
|
Stock-based compensation expense |
39,903 |
— |
27,467 |
— |
— |
— |
— |
27,467 |
|||||||||||||||||||||
|
Other income tax expense |
— |
— |
(1,315) |
— |
— |
— |
— |
(1,315) |
|||||||||||||||||||||
|
Balances, December 31, 2015 |
68,075,700 |
$ |
681 |
$ |
305,607 |
— |
$ |
— |
$ |
1,559,515 |
$ |
(13,402) |
$ |
1,852,401 |
|||||||||||||||
|
Net loss |
— |
— |
— |
— |
— |
(757,744) |
— |
(757,744) |
|||||||||||||||||||||
|
Other comprehensive loss |
— |
— |
— |
— |
— |
— |
(1,154) |
(1,154) |
|||||||||||||||||||||
|
Cash dividends, $ 0.10 per share |
— |
— |
— |
— |
— |
(7,751) |
— |
(7,751) |
|||||||||||||||||||||
|
Issuance of common stock under Employee Stock Purchase Plan |
218,135 |
2 |
4,196 |
— |
— |
— |
— |
4,198 |
|||||||||||||||||||||
|
Issuance of common stock upon vesting of RSUs and settlement of PSUs, net of shares used for tax withholdings |
199,243 |
2 |
(2,356) |
— |
— |
— |
— |
(2,354) |
|||||||||||||||||||||
|
Stock-based compensation expense |
53,473 |
1 |
26,896 |
— |
— |
— |
— |
26,897 |
|||||||||||||||||||||
|
Issuance of common stock from stock offerings, net of tax |
42,710,949 |
427 |
1,382,666 |
— |
— |
— |
— |
1,383,093 |
|||||||||||||||||||||
|
Equity component of 1.50% Senior Convertible Notes due 2021 issuance, net of tax |
— |
— |
33,575 |
— |
— |
— |
— |
33,575 |
|||||||||||||||||||||
|
Purchase of capped call transactions |
— |
— |
(24,195) |
— |
— |
— |
— |
(24,195) |
|||||||||||||||||||||
|
Other income tax expense |
— |
— |
(9,833) |
— |
— |
— |
— |
(9,833) |
|||||||||||||||||||||
|
Balances, December 31, 2016 |
111,257,500 |
$ |
1,113 |
$ |
1,716,556 |
— |
$ |
— |
$ |
794,020 |
$ |
(14,556) |
$ |
2,497,133 |
|||||||||||||||
|
SM ENERGY COMPANY | |||||||||||||||
|
FINANCIAL HIGHLIGHTS | |||||||||||||||
|
December 31, 2016 | |||||||||||||||
|
Consolidated Statements of Cash Flows |
|||||||||||||||
|
(in thousands) |
For the Three Months |
For the Twelve Months | |||||||||||||
|
Ended December 31, |
Ended December 31, | ||||||||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net loss |
$ |
(200,946) |
$ |
(340,258) |
$ |
(757,744) |
$ |
(447,710) |
|||||||
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||||||||||||||
|
Net gain on divestiture activity |
(33,661) |
(4,534) |
(37,074) |
(43,031) |
|||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
171,552 |
240,025 |
790,745 |
921,009 |
|||||||||||
|
Exploratory dry hole expense |
— |
13,752 |
(16) |
36,612 |
|||||||||||
|
Impairment of proved properties |
76,780 |
344,249 |
354,614 |
468,679 |
|||||||||||
|
Abandonment and impairment of unproved properties |
74,450 |
54,597 |
80,367 |
78,643 |
|||||||||||
|
Impairment of other property and equipment |
— |
49,369 |
— |
49,369 |
|||||||||||
|
Stock-based compensation expense |
6,412 |
6,975 |
26,897 |
27,467 |
|||||||||||
|
Change in Net Profits Plan liability |
(751) |
(6,351) |
(7,200) |
(19,525) |
|||||||||||
|
Net derivative (gain) loss |
129,547 |
(123,340) |
250,633 |
(408,831) |
|||||||||||
|
Derivative settlement gain |
23,244 |
124,847 |
329,478 |
(512,566) |
|||||||||||
|
Amortization of discount and deferred financing costs |
4,251 |
1,907 |
9,938 |
7,710 |
|||||||||||
|
Non-cash (gain) loss on extinguishment of debt |
— |
— |
(15,722) |
4,123 |
|||||||||||
|
Deferred income taxes |
(133,873) |
(196,334) |
(448,643) |
(276,722) |
|||||||||||
|
Plugging and abandonment |
(992) |
(1,956) |
(6,214) |
(7,496) |
|||||||||||
|
Other, net |
5,891 |
10,091 |
3,499 |
13,761 |
|||||||||||
|
Changes in current assets and liabilities: |
|||||||||||||||
|
Accounts receivable |
(11,783) |
34,864 |
(10,562) |
140,200 |
|||||||||||
|
Prepaid expenses and other |
826 |
1,976 |
8,478 |
2,563 |
|||||||||||
|
Accounts payable and accrued expenses |
11,956 |
(12,020) |
(53,210) |
(86,267) |
|||||||||||
|
Accrued derivative settlements |
14,889 |
(4,356) |
34,540 |
5,232 |
|||||||||||
|
Net cash provided by operating activities |
137,792 |
193,503 |
552,804 |
978,352 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Net proceeds from the sale of oil and gas properties |
744,233 |
22,835 |
946,062 |
357,938 |
|||||||||||
|
Capital expenditures |
(137,117) |
(231,737) |
(629,911) |
(1,493,608) |
|||||||||||
|
Acquisition of proved and unproved oil and gas properties |
(2,161,937) |
(896) |
(2,183,790) |
(7,984) |
|||||||||||
|
Other, net |
46,000 |
5 |
(3,000) |
(985) |
|||||||||||
|
Net cash used in investing activities |
(1,508,821) |
(209,793) |
(1,870,639) |
(1,144,639) |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Proceeds from credit facility |
204,000 |
268,000 |
947,000 |
1,872,500 |
|||||||||||
|
Repayment of credit facility |
(204,000) |
(250,000) |
(1,149,000) |
(1,836,500) |
|||||||||||
|
Debt issuance costs related to credit facility |
— |
— |
(3,132) |
— |
|||||||||||
|
Net proceeds from Senior Notes |
(757) |
— |
491,640 |
490,951 |
|||||||||||
|
Cash paid to repurchase Senior Notes |
— |
— |
(29,904) |
(350,000) |
|||||||||||
|
Net proceeds from Senior Convertible Notes |
(64) |
— |
166,617 |
— |
|||||||||||
|
Cash paid for capped call transactions |
(86) |
— |
(24,195) |
— |
|||||||||||
|
Net proceeds from sale of common stock |
405,002 |
1,687 |
938,268 |
4,844 |
|||||||||||
|
Dividends paid |
(4,347) |
(3,399) |
(7,751) |
(6,772) |
|||||||||||
|
Net share settlement from issuance of stock awards |
(13) |
(176) |
(2,354) |
(8,678) |
|||||||||||
|
Other, net |
— |
(1) |
— |
(160) |
|||||||||||
|
Net cash provided by financing activities |
399,735 |
16,111 |
1,327,189 |
166,185 |
|||||||||||
|
Net change in cash and cash equivalents |
(971,294) |
(179) |
9,354 |
(102) |
|||||||||||
|
Cash and cash equivalents at beginning of period |
980,666 |
197 |
18 |
120 |
|||||||||||
|
Cash and cash equivalents at end of period |
$ |
9,372 |
$ |
18 |
$ |
9,372 |
$ |
18 |
|||||||
|
SM ENERGY COMPANY |
|||||||||||||||||
|
FINANCIAL HIGHLIGHTS |
|||||||||||||||||
|
December 31, 2016 |
|||||||||||||||||
|
Adjusted EBITDAX(1) |
|||||||||||||||||
|
(in thousands) |
|||||||||||||||||
|
Reconciliation of net loss (GAAP) to adjusted EBITDAX (non-GAAP) to net cash provided by operating activities (GAAP): |
For the Three Months |
For the Twelve Months | |||||||||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||||||||
|
Net loss (GAAP) |
$ |
(200,946) |
$ |
(340,258) |
$ |
(757,744) |
$ |
(447,710) |
|||||||||
|
Interest expense |
46,356 |
31,566 |
158,685 |
128,149 |
|||||||||||||
|
Other non-operating income, net |
(130) |
(26) |
(362) |
(649) |
|||||||||||||
|
Income tax benefit |
(129,667) |
(196,855) |
(444,172) |
(275,151) |
|||||||||||||
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion |
171,552 |
240,025 |
790,745 |
921,009 |
|||||||||||||
|
Exploration(2) |
22,289 |
35,860 |
59,194 |
113,158 |
|||||||||||||
|
Impairment of proved properties |
76,780 |
344,249 |
354,614 |
468,679 |
|||||||||||||
|
Abandonment and impairment of unproved properties |
74,450 |
54,597 |
80,367 |
78,643 |
|||||||||||||
|
Impairment of other property and equipment |
— |
49,369 |
— |
49,369 |
|||||||||||||
|
Stock-based compensation expense |
6,412 |
6,975 |
26,897 |
27,467 |
|||||||||||||
|
Net derivative (gain) loss |
129,547 |
(123,340) |
250,633 |
(408,831) |
|||||||||||||
|
Derivative settlement gain(3) |
23,244 |
124,847 |
329,478 |
512,566 |
|||||||||||||
|
Change in Net Profits Plan liability |
(751) |
(6,351) |
(7,200) |
(19,525) |
|||||||||||||
|
Net gain on divestiture activity |
(33,661) |
(4,534) |
(37,074) |
(43,031) |
|||||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
(15,722) |
16,578 |
|||||||||||||
|
Materials inventory impairment |
744 |
153 |
2,436 |
4,054 |
|||||||||||||
|
Adjusted EBITDAX (Non-GAAP) |
$ |
186,219 |
$ |
216,277 |
$ |
790,775 |
$ |
1,124,775 |
|||||||||
|
Interest expense |
(46,356) |
(31,566) |
(158,685) |
(128,149) |
|||||||||||||
|
Other non-operating income, net |
130 |
26 |
362 |
649 |
|||||||||||||
|
Income tax benefit |
129,667 |
196,855 |
444,172 |
275,151 |
|||||||||||||
|
Exploration(2) |
(22,289) |
(35,860) |
(59,194) |
(113,158) |
|||||||||||||
|
Exploratory dry hole expense |
— |
13,752 |
(16) |
36,612 |
|||||||||||||
|
Amortization of discount and deferred financing costs |
4,251 |
1,907 |
9,938 |
7,710 |
|||||||||||||
|
Deferred income taxes |
(133,873) |
(196,334) |
(448,643) |
(276,722) |
|||||||||||||
|
Plugging and abandonment |
(992) |
(1,956) |
(6,214) |
(7,496) |
|||||||||||||
|
Loss on extinguishment of debt |
— |
— |
— |
(12,455) |
|||||||||||||
|
Other, net |
5,147 |
9,938 |
1,063 |
9,707 |
|||||||||||||
|
Changes in current assets and liabilities |
15,888 |
20,464 |
(20,754) |
61,728 |
|||||||||||||
|
Net cash provided by operating activities (GAAP) |
$ |
137,792 |
$ |
193,503 |
$ |
552,804 |
$ |
978,352 |
|||||||||
|
(1) Adjusted EBITDAX represents net income (loss) before interest expense, other non-operating income or expense, income taxes, depletion, depreciation, amortization and asset retirement obligation liability accretion expense, exploration expense, property impairments, non-cash stock-based compensation expense, derivative gains and losses net of settlements, change in the Net Profits Plan liability, gains and losses on divestitures, gains or losses on extinguishment of debt, and materials inventory impairments. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally one-time in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that we present because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our Credit Agreement based on adjusted EBITDAX ratios. In addition, adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by operating activities, or profitability or liquidity measures prepared under GAAP. Because adjusted EBITDAX excludes some, but not all items that affect net income (loss) and may vary among companies, the adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies. Our credit facility provides a material source of liquidity for us. Under the terms of our Credit Agreement, if we fail to comply with the covenants that establish a maximum permitted ratio of senior secured debt to adjusted EBITDAX and a minimum permitted ratio of adjusted EBITDAX to interest, we will be in default, an event that would prevent us from borrowing under our credit facility and would therefore materially limit our sources of liquidity. In addition, if we default under our credit facility and are unable to obtain a waiver of that default from our lenders, lenders under that facility and under indentures governing our outstanding Senior Notes and Senior Convertible Notes would be entitled to exercise all of their remedies for default. | |||||||||||||||||
|
(2) Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the accompanying statements of operations for the component of stock-based compensation expense recorded to exploration expense. | |||||||||||||||||
|
(3) Derivative settlement gain for the year ended December 31, 2015, includes $15.3 million of gains on the early settlement of futures contracts as a result of divesting our Mid-Continent assets during the second quarter of 2015. |
|
SM ENERGY COMPANY |
||||||||||||||||||||||||||
|
FINANCIAL HIGHLIGHTS |
||||||||||||||||||||||||||
|
December 31, 2016 |
||||||||||||||||||||||||||
|
Adjusted Net Loss |
||||||||||||||||||||||||||
|
(in thousands, except per share data) |
For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
||||||||||||||||||||||||
|
2016 |
2015 |
2016 |
2015 |
|||||||||||||||||||||||
|
Net loss (GAAP) |
$ |
(200,946) |
$ |
(340,258) |
$ |
(757,744) |
$ |
(447,710) |
||||||||||||||||||
|
Change in Net Profits Plan liability |
(751) |
(6,351) |
(7,200) |
(19,525) |
||||||||||||||||||||||
|
Derivative (gain) loss |
129,547 |
(123,340) |
250,633 |
(408,831) |
||||||||||||||||||||||
|
Derivative settlement gain |
23,244 |
124,847 |
329,478 |
512,566 |
||||||||||||||||||||||
|
Net gain on divestiture activity |
(33,661) |
(4,534) |
(37,074) |
(43,031) |
||||||||||||||||||||||
|
Impairment of proved properties |
76,780 |
344,249 |
354,614 |
468,679 |
||||||||||||||||||||||
|
Abandonment and impairment of unproved properties |
74,450 |
54,597 |
80,367 |
78,643 |
||||||||||||||||||||||
|
Impairment of other property and equipment |
— |
49,369 |
— |
49,369 |
||||||||||||||||||||||
|
Termination fee on temporary second lien facility |
— |
— |
10,000 |
— |
||||||||||||||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
(15,722) |
16,578 |
||||||||||||||||||||||
|
Unwinding of derivatives contracts related to Mid-continent |
— |
— |
— |
(15,329) |
||||||||||||||||||||||
|
Other(3) |
445 |
850 |
(531) |
9,390 |
||||||||||||||||||||||
|
Tax effect of adjustments(1) |
(97,760) |
(160,486) |
(349,173) |
(236,707) |
||||||||||||||||||||||
|
Adjusted net loss (Non-GAAP)(2) |
$ |
(28,652) |
$ |
(61,057) |
$ |
(142,352) |
$ |
(35,908) |
||||||||||||||||||
|
Diluted net loss per common share (GAAP) |
$ |
(2.20) |
$ |
(5.01) |
$ |
(9.90) |
$ |
(6.61) |
||||||||||||||||||
|
Change in Net Profits Plan liability |
(0.01) |
(0.09) |
(0.09) |
(0.29) |
||||||||||||||||||||||
|
Derivative (gain) loss |
1.42 |
(1.81) |
3.27 |
(6.04) |
||||||||||||||||||||||
|
Derivative settlement gain |
0.25 |
1.84 |
4.30 |
7.57 |
||||||||||||||||||||||
|
Net gain on divestiture activity |
(0.37) |
(0.07) |
(0.48) |
(0.64) |
||||||||||||||||||||||
|
Impairment of proved properties |
0.84 |
5.06 |
4.63 |
6.92 |
||||||||||||||||||||||
|
Abandonment and impairment of unproved properties |
0.81 |
0.80 |
1.05 |
1.16 |
||||||||||||||||||||||
|
Impairment of other property and equipment |
— |
0.73 |
— |
0.73 |
||||||||||||||||||||||
|
Termination fee on temporary second lien facility |
— |
— |
0.13 |
— |
||||||||||||||||||||||
|
(Gain) loss on extinguishment of debt |
— |
— |
(0.21) |
0.24 |
||||||||||||||||||||||
|
Unwinding of derivatives contracts related to Mid-continent |
— |
— |
— |
(0.23) |
||||||||||||||||||||||
|
Other(3) |
— |
0.01 |
(0.01) |
0.14 |
||||||||||||||||||||||
|
Tax effect of adjustments(1) |
(1.05) |
(2.36) |
(4.55) |
(3.48) |
||||||||||||||||||||||
|
Adjusted net loss per diluted common share (Non-GAAP)(2) |
$ |
(0.31) |
$ |
(0.90) |
$ |
(1.86) |
$ |
(0.53) |
||||||||||||||||||
|
Diluted weighted-average shares outstanding (GAAP) |
91,440 |
67,976 |
76,568 |
67,723 |
||||||||||||||||||||||
|
(1) For the three and twelve-month periods ended December 31, 2016, adjustments are shown before tax effect which is calculated using a tax rate of 36.2%, which approximates the Company's statutory tax rate adjusted for ordinary permanent differences. For the three and twelve-month periods ended December 31, 2015, adjustments are shown before tax effect and are calculated using a tax rate of 36.5%, which approximates the Company's statutory tax rate adjusted for ordinary permanent differences. | ||||||||||||||||||||||||||
|
(2) Adjusted net income (loss) excludes certain items that the Company believes affect the comparability of operating results. Items excluded generally are non-recurring items or are items whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as the change in the Net Profits Plan liability, derivative gain, net of derivative settlement gains, impairments, and net gain on divestiture activity. The non-GAAP measure of adjusted net income (loss) is presented because management believes it provides useful additional information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) should not be considered in isolation or as a substitute for net income (loss), income (loss) from operations, cash provided by operating activities, or other income, profitability, cash flow, or liquidity measures prepared under GAAP. Since adjusted net income (loss) excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted net income (loss) amounts presented may not be comparable to similarly titled measures of other companies. | ||||||||||||||||||||||||||
|
(3) For the three and twelve-month periods ended December 31, 2016 and December 31, 2015, the adjustments are related to the impairment of materials inventory and estimated adjustments relating to claims on royalties on certain Federal and Indian leases, which are included in other operating expenses on the Company's consolidated statements of operations. These items are included as a portion of other operating revenues and non-operating income (expense), other, net, on the Company's consolidated statements of operations. |
|
Regional proved oil and gas reserve quantities: | ||||||||||||||||||||||||||
|
South Texas & Gulf |
Permian |
Rocky Mountain |
Total | |||||||||||||||||||||||
|
Year-end 2016 proved reserves |
||||||||||||||||||||||||||
|
Oil (MMBbl) |
35.4 |
37.9 |
31.6 |
104.9 | ||||||||||||||||||||||
|
Gas (Bcf) |
989.3 |
94.6 |
27.2 |
1,111.1 | ||||||||||||||||||||||
|
NGL (MMBbl) |
105.2 |
0.1 |
0.5 |
105.7 | ||||||||||||||||||||||
|
Total (MMBOE) |
305.4 |
53.8 |
36.5 |
395.8 | ||||||||||||||||||||||
|
% Proved developed |
55 % |
40 % |
53 % |
53 % | ||||||||||||||||||||||
|
SM ENERGY COMPANY | |||
|
FINANCIAL HIGHLIGHTS | |||
|
December 31, 2016 | |||
|
Costs incurred in oil and gas producing activities(1): | |||
|
(in thousands) |
|||
|
Reconciliation of Cost Incurred in Oil and Gas Producing Activities (GAAP) to Total Capital Spend (Non-GAAP) |
For the Year Ended | ||
|
Development costs (2) |
$ |
595,331 |
|
|
Exploration costs |
118,224 |
||
|
Acquisition costs: |
|||
|
Proved properties |
201,672 |
||
|
Unproved properties |
2,458,667 |
||
|
Total, including asset retirement obligation |
$ |
3,373,894 |
|
|
Less: Asset retirement obligation |
(15,574) |
||
|
Less: Capitalized interest |
(17,004) |
||
|
Less: Proved property acquisitions |
(201,672) |
||
|
Less: Unproved property acquisitions |
(2,451,152) |
||
|
Less: Other |
(1,938) |
||
|
Total Capital Spend |
$ |
686,554 |
|
|
(1) The non-GAAP measure of total capital spend is presented because management believes it provides useful information to investors for analysis of SM Energy's fundamental business on a recurring basis. In addition, management believes that total capital spend is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. total capital spend should not be considered in isolation or as a substitute for Cost Incurred or other capital spending measures prepared under GAAP. The total capital spend amounts presented may not be comparable to similarly titled measures of other companies. |
|
(2) Includes facility costs of $25.9 million. |
SOURCE SM Energy Company
Article Date
2/23/20171/31/2017 - SM Energy Announces Results on 8 New Howard County Wells and Certain Year-End 2016 Metrics
SM Energy Announces Results on 8 New Howard County Wells and Certain Year-End 2016 Metrics
Source: PR Newswire
DENVER, Jan. 31, 2017 /PRNewswire/ -- SM Energy Company (NYSE: SM) announced today results on eight new wells located in Howard County in the Midland Basin, Texas. Highlights include:
President and Chief Executive Officer Jay Ottoson comments: "We are very pleased to share the results of eight new wells on our acreage recently acquired from Rock Oil and QStar, all of which are demonstrating strong initial production rates. These eight wells include five wells drilled into the Wolfcamp A, two in the Lower Spraberry and one well in the Wolfcamp B, indicating the multi-pay potential of our acreage position. Results from the three wells drilled and completed on the southeast edge of our acreage position are an important confirmation of our geologic model in that area.
"Our objective is to be a premier operator of top tier assets, and we are in the process of high-grading our asset portfolio. During 2017, we expect that our capital program will focus on drilling and completing wells like those we are announcing today, resulting in accelerated high margin production growth on our retained assets. In addition, we will be working to improve completion techniques and further delineate our Midland Basin position to ensure that our future development plans are optimized."
Please visit the Company's homepage at www.sm-energy.com to access the RockStar Results January 31, 2017 slide deck, which provides additional detail and mapping. The Company will host a webcast and call today at 8:00 MT/10:00 ET to discuss this data. The webcast will be accessible from the homepage and the conference call at dial-in 877-303-1292 (315-625-3086 international) or for replay at 855-859-2056 (404-537-3406 international) with passcode 56327674.
CERTAIN YEAR-END 2016 METRICS
PRODUCTION AND PRICE REALIZATIONS
Fourth quarter of 2016 production was in-line with guidance, adjusted for the completion of a number of transactions that closed during the quarter, including the Rock Oil and QStar acquisitions in the Midland Basin and the completed sale of assets in the Williston Basin.
The Company enters 2017 focused on its top-tier oil assets in the Midland Basin and top-tier natural gas and NGL assets in the operated Eagle Ford, with the sale of the Company's third-party operated Eagle Ford assets expected to close in the first quarter of 2017 and the sale of the Company's remaining Williston Basin assets expected around mid-year 2017. The Company starts 2017 with production from core assets (excluding the Williston Basin and third-party operated Eagle Ford assets) of approximately 100 MBoe/d, which will serve as the basis for growth and development plans going forward.
Fourth quarter and full year production were:
|
PRODUCTION - MMBoe | ||
|
Fourth Quarter 2016 |
Full Year 2016 | |
|
Oil (MMBbls) |
4.0 |
16.6 |
|
Natural gas (Bcf) |
35.2 |
146.9 |
|
NGLs (MMBbls) |
3.5 |
14.2 |
|
MMBoe |
13.4 |
55.3 |
|
• |
Production includes production from assets sold (through the closing date) or pending sale |
Pro forma for asset sales, including the third-party operated Eagle Ford asset sale expected to close this quarter, exit rate production was 111,700 Boe per day and was 26% oil.
|
PRO FORMA PRODUCTION - DAILY | ||
|
Exit Rate 2016 |
Full Year 2016 | |
|
Midland Basin |
16,500/d |
9,500/d |
|
Eagle Ford - operated |
82,100/d |
85,500/d |
|
Divide County & Powder River |
13,100/d |
13,400/d |
|
Pro Forma Boe |
111,700/d |
108,400/d |
|
• |
Subsequent to quarter-end, the Company announced its intention to sell its Divide County assets with an expected close date around mid-year 2017 and exit rate production for 2016 of approximately 11 MBoe/d |
|
• |
Exit rate production refers to December 2016 |
|
• |
Eagle Ford - operated includes nominal other production from the area |
|
REALIZED COMMODITY PRICES | ||
|
Fourth Quarter 2016 |
Full Year 2016 | |
|
$Pre/Post Hedge |
$Pre/Post Hedge | |
|
Oil (per Bbl) |
$43.58/$48.96 |
$36.85/$51.49 |
|
Natural gas (per Mcf) |
$2.86/$3.21 |
$2.30/$2.94 |
|
NGLs (per Bbl) |
$20.02/$16.92 |
$16.16/$15.56 |
|
Per Boe |
$25.86/$27.59 |
$21.32/$27.28 |
COMMODITY DERIVATIVE CONTRACTS
As of January 30, 2017, the Company had the following commodity hedge positions in place for settlement in 2017:
|
OIL SWAPS |
OIL COLLARS |
NATURAL GAS SWAPS |
NGL SWAPS | |
|
Volume/Average Price |
Volume/Avg. Ceiling -Floor |
Volume/Average Price |
Volume/Average Price | |
|
Period |
(MBbls/$Bbl) |
(MBbls/$Bbl) |
(BBtu/$MMBtu) |
(MBbls/$Bbl) |
|
1Q17 |
1,574/$46.41 |
704/$54.17 - $45.00 |
29,420/$3.76 |
1,911/$19.12 |
|
2Q17 |
1,445/$46.44 |
636/$54.10 - $45.00 |
26,205/$3.98 |
1,762/$19.18 |
|
3Q17 |
1,340/$46.66 |
583/$54.05 - $45.00 |
23,657/$4.01 |
1,640/$19.26 |
|
4Q17 |
1,253/$46.35 |
540/$54.01 - $45.00 |
22,001/$3.98 |
1,539/$19.22 |
|
• |
Includes derivatives contracts for settlement anytime during the current quarter and later periods through 2017 |
|
• |
Prices are weighted averages; natural gas prices reflect the weighted average of regional contract positions |
|
• |
NGL positions are butanes, propane, gasoline, and ethane |
|
• |
This table excludes commodity hedge positions the Company entered into and will novate at closing to Venado EF LLC in connection with the pending sale of the Company's third party-operated position in the Eagle Ford |
DEBT AND LIQUIDITY
The Company ended 2016 with long-term debt of $2.98 billion, consisting of the principal balance of its outstanding senior notes, with no outstanding balance on its revolving credit facility.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, timing of pending asset sales. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2015 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACT - INVESTORS:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
1/31/20171/26/2017 - SM Energy Announces Upcoming Events
SM Energy Announces Upcoming Events
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Jan. 26, 2017 /PRNewswire/ -- SM Energy Company (NYSE: SM) plans to host two upcoming investor webcasts/conference calls.
January 31, 2017 at 8:00 a.m. MT/10:00 a.m. ET: Please join SM executive management via webcast or conference call for an update on Midland Basin well results. Please access the webcast and associated slide deck from the Company's homepage at www.sm-energy.com. The call will be accessible live at 877-303-1292 (315-625-3086 international) or for replay at 855-859-2056 (404-537-3406 international) with passcode 56327674.
February 22, 2017 after market: Release fourth quarter and full year 2016 financial and operating results and 2017 plan.
February 23, 2017 at 8:00 a.m. MT/10:00 a.m. ET: Please join SM executive management via webcast or conference call for a discussion of fourth quarter and full year 2016 financial and operating results and review of the 2017 operating plan. Please access the webcast and associated slide deck from the Company's homepage at www.sm-energy.com. The call will be accessible live at 877-303-1292 (315-625-3086 international) or for replay at 855-859-2056 (404-537-3406 international) with passcode 57100689.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.
SM ENERGY CONTACT - INVESTORS:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
1/26/20171/10/2017 - SM Energy Announces Plans To Further Core-Up Portfolio With The Sale Of Divide County Assets
SM Energy Announces Plans To Further Core-Up Portfolio With The Sale Of Divide County Assets
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Jan. 10, 2017 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announced that it has engaged Tudor, Pickering, Holt & Co. to run a formal bid process for sale of the Company's Divide County area assets in the Williston Basin. Assuming an acceptable offer is received, the Company expects to close the sale transaction around mid-year of 2017. Associated December 2016 production for the Divide County assets was 10,700 Boe/d.
President and Chief Executive Officer Jay Ottoson comments: "This sale process continues our drive to generate differential shareholder value through concentrating our capital spending on top tier asset development. Over the next few years, we intend to focus on generating significant high margin production growth from our operated acreage positions in the Midland Basin and Eagle Ford. We expect that the sale proceeds from this planned exit of the Williston Basin and from the pending sale of our non-operated Eagle Ford assets will allow us to fully fund our drilling program, while providing us with significant liquidity and the ability to reduce our outstanding debt."
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, timing and expected use of funds from pending asset sales. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2015 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm‑energy.com.
SM ENERGY CONTACTS
INVESTORS - Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
1/10/2017SM Energy Announces Sale Of Non-Operated Eagle Ford Assets For $800 Million
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Jan. 3, 2017 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announced that it has entered into a definitive agreement with a subsidiary of Venado Oil and Gas, LLC, an affiliate of KKR, for the sale of the Company's third party operated assets in the Eagle Ford, including its ownership interest in related midstream assets, for a purchase price of $800 million (subject to customary adjustments).
President and Chief Executive Officer Jay Ottoson comments: "We are pleased to announce the signing of this agreement as we kick off 2017. This sale supports SM's strategy to be a premier operator of top tier assets. Our 2017 capital program will focus on our top tier oil position in the Midland Basin, consisting of approximately 87,600 net acres, and our top tier operated natural gas and NGL position in the Eagle Ford, consisting of approximately 161,500 net acres. The proceeds from this sale will provide us with additional flexibility to pursue aggressive growth from our Midland Basin assets, with related capital expenditures in excess of cash flow over the next few years, while at the same time improving our debt metrics and maintaining strong liquidity."
The assets expected to be sold include approximately 37,500 net acres in the Maverick Basin/Eagle Ford area of south Texas and a 12.5% interest in the Springfield Gathering System. As of year-end 2015, net proved reserves associated with these assets were 65 MMBoe (38% oil, 31% natural gas and 31% NGLs). In the third quarter of 2016, these assets produced approximately 27,260 net Boe per day (33% oil, 33% natural gas and 34% NGLs.) The transaction is expected to close in the first quarter of 2017, with an effective date of November 1, 2016, and the purchase price will be subject to certain closing price adjustments. The transaction is subject to the satisfaction of customary closing conditions, and there can be no assurance that the transaction will close on time or at all.
Scotia Waterous served as the Company's financial advisor in this transaction.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, expectations regarding the proceeds, timing and expected use of funds from pending asset sales. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2015 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm‑energy.com.
SM ENERGY CONTACTS
INVESTORS - Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
1/3/201712/21/2016 - SM Energy Announces Closing Of QStar Acquisition
SM Energy Announces Closing Of QStar Acquisition
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Dec. 21, 2016 /PRNewswire/ -- SM Energy Company (NYSE: SM) announced today that the Company closed the previously announced acquisition of oil and natural gas assets in Howard and Martin Counties, Texas, from QStar LLC and a related entity for $1.6 billion, before customary purchase price adjustments.
The Company estimates its Midland Basin footprint to approximate 87,600 net acres, including the pending acquisition of additional leasehold interests announced in early December 2016. The acquisition was funded predominantly with cash proceeds from recent asset divestitures and the issuance to the sellers of 13.4 million shares of SM Energy common stock. The effective date of the transaction is September 1, 2016. The Company intends to operate two rigs on this leasehold position during 2017, starting in the first quarter.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "guidance," "intend," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2015 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm‑energy.com.
INVESTOR CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
12/21/2016SM Energy Announces Closing Of Common Stock Offering And Exercise Of Option
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Dec. 7, 2016 /PRNewswire/ -- SM Energy Company ("SM Energy") (NYSE: SM) announced today the closing of its previously announced underwritten public offering of 10,925,000 shares of common stock, which includes the full exercise by the underwriters of their option to purchase an additional 1,425,000 shares of common stock. Net proceeds from the sale of the shares of common stock, including as a result of the option exercise, after deducting fees and estimated expenses, were approximately $403.0 million.
SM Energy intends to use the net proceeds from the offering to acquire approximately 4,100 net acres of additional oil and gas assets in the Midland Basin, to reduce indebtedness, and for general corporate purposes.
J.P. Morgan, BofA Merrill Lynch, and Wells Fargo Securities are acting as joint book-running managers for the offering.
INFORMATION ON FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements as defined under the federal securities laws, including statements regarding the intended use of offering proceeds. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control, including market conditions, customary offering closing conditions and other factors described in the prospectus and accompanying prospectus supplement for the offering. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, SM Energy's actual results may vary materially from what management anticipated, estimated, projected or expected.
Investors are encouraged to closely consider the disclosures and risk factors contained in SM Energy's annual and quarterly reports filed from time to time with the Securities and Exchange Commission and in the prospectus and related prospectus supplement. The statements herein speak only as of the date of this press release. SM Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ABOUT SM ENERGY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about SM Energy on its website.
SM ENERGY CONTACTS:
Investors: Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
Logo - http://photos.prnewswire.com/prnh/20161201/444958LOGO
SOURCE SM Energy Company
Article Date
12/7/2016SM Energy Announces Pricing Of Upsized Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Dec. 1, 2016 /PRNewswire/ -- SM Energy Company ("SM Energy") (NYSE: SM) announced today that it priced an upsized underwritten public offering of 9,500,000 shares of common stock for gross proceeds of approximately $363.4 million. SM Energy also granted the underwriters a 30-day option to purchase up to 1,425,000 additional shares of common stock. The offering is expected to close on December 7, 2016, subject to customary closing conditions. SM Energy intends to use the net proceeds from the offering to acquire approximately 4,100 net acres of additional oil and gas assets in the Midland Basin, to reduce indebtedness, and for general corporate purposes.
J.P. Morgan, BofA Merrill Lynch, and Wells Fargo Securities are acting as joint book-running managers for the offering. The shares of common stock are being offered and will be sold pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission. Before you invest, you should read the preliminary prospectus supplement and accompanying base prospectus in that registration statement for more complete information about this offering. When available, a copy of the preliminary prospectus supplement and accompanying base prospectus relating to this offering may be obtained from the underwriters by contacting:
J.P. Morgan Securities LLC
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Attn: Post-Sale Fulfillment
E-mail: prospectus-eq_fi@jpmchase.com
BofA Merrill Lynch
NC1-004-03-43
200 North College Street, 3rd floor
Charlotte, NC 28255-0001
Attn: Prospectus Department
E-mail: dg.prospectus_requests@baml.com
Wells Fargo Securities
Attention: Equity Syndicate Department
375 Park Avenue
New York, New York, 10152
Email: cmclientsupport@wellsfargo.com
Telephone: 1 (800) 326-5897
You may also obtain these documents free of charge when they are available by visiting the Securities and Exchange Commission's website at www.sec.gov.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. This offering may be made only by means of a prospectus and related prospectus supplement.
INFORMATION ON FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements as defined under the federal securities laws, including statements regarding the intended use of offering proceeds and other aspects of the common stock offering. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control, including market conditions, customary offering closing conditions and other factors described in the prospectus and accompanying prospectus supplement for the offering. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, SM Energy's actual results may vary materially from what management anticipated, estimated, projected or expected.
Investors are encouraged to closely consider the disclosures and risk factors contained in SM Energy's annual and quarterly reports filed from time to time with the Securities and Exchange Commission and in the prospectus and related prospectus supplement. The statements herein speak only as of the date of this press release. SM Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ABOUT SM ENERGY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about SM Energy on its website.
SM ENERGY CONTACTS:
INVESTORS:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
Logo - http://photos.prnewswire.com/prnh/20161201/444958LOGO
SOURCE SM Energy Company
Article Date
12/2/2016SM Energy Announces Public Offering Of Common Stock
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Dec. 1, 2016 /PRNewswire/ -- SM Energy Company ("SM Energy") (NYSE: SM) announced today that it has commenced an underwritten public offering of 8,000,000 shares of its common stock. SM Energy expects to grant the underwriters in the offering a 30-day option to purchase up to 1,200,000 additional shares of common stock. SM Energy intends to use the net proceeds from the offering to acquire approximately 4,100 net acres of additional oil and gas assets in the Midland Basin, to reduce indebtedness, and for general corporate purposes.
J.P. Morgan, BofA Merrill Lynch, and Wells Fargo Securities are acting as joint book-running managers for the offering. The shares of common stock are being offered and will be sold pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission. Before you invest, you should read the preliminary prospectus supplement and accompanying base prospectus in that registration statement for more complete information about this offering. When available, a copy of the preliminary prospectus supplement and accompanying base prospectus relating to this offering may be obtained from any of the underwriters by contacting:
J.P. Morgan Securities LLC
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Attn: Post-Sale Fulfillment
E-mail: prospectus-eq_fi@jpmchase.com
BofA Merrill Lynch
NC1-004-03-43
200 North College Street, 3rd floor
Charlotte, NC 28255-0001
Attn: Prospectus Department
E-mail: dg.prospectus_requests@baml.com
Wells Fargo Securities
Attention: Equity Syndicate Department
375 Park Avenue
New York, New York, 10152
Email: cmclientsupport@wellsfargo.com
Telephone: 1 (800) 326-5897
You may also obtain these documents free of charge when they are available by visiting the Securities and Exchange Commission's website at www.sec.gov.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. This offering may be made only by means of a prospectus and related prospectus supplement.
INFORMATION ON FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements as defined under the federal securities laws, including statements regarding the intended use of offering proceeds and other aspects of the common stock offering. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control, including market conditions, customary offering closing conditions and other factors described in the prospectus and accompanying prospectus supplement for the offering. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, SM Energy's actual results may vary materially from what management anticipated, estimated, projected or expected.
Investors are encouraged to closely consider the disclosures and risk factors contained in SM Energy's annual and quarterly reports filed from time to time with the Securities and Exchange Commission and in the prospectus and related prospectus supplement. The statements herein speak only as of the date of this press release. SM Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ABOUT SM ENERGY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about SM Energy on its website.
SM ENERGY CONTACTS:
INVESTORS:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
12/1/2016SM Energy Announces Closing Of Williston Basin Divestiture
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Dec. 1, 2016 /PRNewswire/ -- SM Energy Company (NYSE: SM) announced today that the Company closed the previously announced divestiture of its Williston Basin assets located outside of Divide County, North Dakota to Oasis Petroleum North America LLC for $765.8 million of net cash proceeds, subject to customary post-closing purchase price adjustments. This divestiture had an effective date of October 1, 2016, and was completed on December 1, 2016. Third quarter 2016 production associated with these assets was approximately 14,350 Boe/d (78% oil). The Company plans to apply the proceeds from this divestiture towards its acquisition of assets from QStar LLC and a related entity, a transaction that the Company expects to close later in December, and for general corporate purposes.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "guidance," "intend," "plan," "project," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include, among other things, expectations concerning the Company's pending acquisition of Permian Basin assets and the Company's liquidity position. General risk factors include the availability of and access to capital markets; the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices, including any impact on the Company's asset carrying values or reserves arising from price declines; uncertainties inherent in projecting future rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results, including from pilot tests; the uncertainty of negotiations to result in an agreement or a completed transaction; the uncertain nature of acquisition, divestiture, joint venture, farm down or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected acquisition, divestiture, joint venture, farm down or similar efforts; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the "Risk Factors" section of SM Energy's 2015 Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this announcement. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website.
INVESTOR CONTACT:
Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507
SOURCE SM Energy Company
Article Date
12/1/2016Riverstone Holdings LLC Announces Sale of Rock Oil Holdings LLC to SM Energy Company
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NEW YORK, Aug. 8, 2016 /PRNewswire/ -- Riverstone Holdings LLC ("Riverstone") has announced today the signing of a definitive agreement pursuant to which Riverstone Global Energy and Power Fund V, L.P. ("Fund V") and minority partners have agreed to sell Rock Oil Holdings LLC ("Rock Oil" or the "Company"), a Houston- and Denver-based oil and gas company focused in the Permian Basin, to SM Energy Company (NYSE: SM, "SM Energy"), a Denver-based oil and gas company, for $980 million in cash. The transaction is subject to customary closing conditions and is expected to close in early October.
Rock Oil was formed in March 2014 with the strategy of applying Rock Oil's land and technical expertise to the acquisition and development of assets in top-tier North American unconventional oil plays. Since its formation, the Company has entered into a series of acquisitions to establish a position of approximately 24,783 net acres in the Midland Basin component of the Permian. The Company, which has been actively executing upon a horizontal development program in Howard County, TX, currently produces approximately 4,900 boepd.
Rock Oil is led by Chairman and CEO Kyle R. Miller, who has an outstanding track record leading exploration and production companies including a predecessor Rock Oil entity, and by President Jason Cansler, who had over 15 years of industry experience with Chevron and Wells Fargo before joining the Company at its inception.
Mr. Miller commented: "We are very pleased by the successful execution of our stated strategy of building and developing a concentrated position in the core of a leading North American producing basin. Our ability to drive value in a challenging commodity price environment is a testament to the quality and technical expertise of the Rock Oil team and our strong and supportive working relationship with Riverstone. We wish SM Energy success with these world class Permian assets."
John Lancaster, Partner and Managing Director at Riverstone, commented: "We at Riverstone have been thrilled to work in partnership with Kyle Miller, Jason Cansler and their colleagues in building Rock Oil and its excellent position in the Midland Basin. The team relied on its deep wealth of industry relationships and its technical expertise to define and assemble a core acreage position in Howard County, which offers some of the most attractive upstream returns in North America."
Jefferies served as lead financial advisor to Rock Oil and Riverstone Holdings LLC on this transaction. Petrie Partners also acted as a financial advisor to Rock Oil. Latham & Watkins LLP acted as legal counsel to Rock Oil and Riverstone.
About Riverstone Holdings LLC
Riverstone Holdings LLC is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with over $34 billion of capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power, and renewable sectors of the energy industry. With offices in New York, London, Houston, and Mexico City, Riverstone has committed over $32 billion to more than 120 investments in North America, Latin America, Europe, Africa, and Asia.
Contacts:
Jeffrey Taufield or Daniel Yunger
KEKST
212.521.4800
SOURCE Riverstone Holdings LLC
Article Date
8/8/2016Projects & Assets
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