Forecast - Production | Capital Markets | Capital Expenditure | Capital Expenditure - 2019 | Capital Expenditure - 2020

SM Energy Gives Peek at 2020 Plans; Adjusts Guidance for 2019

Email    |    Print    |    Bookmark

You Need to login first

   |    Thursday,July 18,2019

SM Energy Co. has detailed a Q2 2019 update, including a peek at what it plans to do in 2020.

2020 to be 'Similar to 2019'

SM noted that it expects its 2020 operations to be similar to its 2019 plans. For reference, the company's 2019 plan includes capital spending of $1.0-1.05 billion and expected production of 47.0 - 47.8 MMBoe.

In 2020, spending will be at the 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.

• President and CEO Jay Ottoson said: "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."

2019 Plan Changes: Ups Production Guidance, Lowers Capex

The Company is increasing its expected mid-point production guidance and lowering expected mid-point total capital spend.

• 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.