Exploration & Production | Quarterly / Earnings Reports | Third Quarter (3Q) Update
SM Energy's 3Q Production Volumes Hit by Shut-Ins
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SM Energy Company has reported results for the third quarter of 2014 and provides an operations update.
SM reported average daily production decreased sequentially from the prior quarter by 3% due to an unusually large number of well shut-ins for offset completion work in the operated Eagle Ford. In the third quarter of 2014, SM Energy's reported production mix was 31% oil/condensate, 24% NGLs, and 45% natural gas. The Company reported record quarterly oil/condensate production of 4.0 million barrels of oil in the third quarter of 2014.
Lower production volumes in the third quarter of 2014 led to higher costs on a per unit basis. Higher than anticipated workover activity in the Company's Bakken/Three Forks program also contributed to LOE per BOE being above the Company's guidance for the quarter.
Operations Update
The company has reported an update on its operations, which can be accessed below.
SM: Enhanced Completions Strengthen Eagle Ford Results
SM Plans to Up Bakken Rig Count; Adds Gooseneck Acreage
SM Hits 890 BOE/d at Powder River Well; Talks Permian Completions
3Q Financial Results
SM Energy reported net income for the third quarter of 2014 of $208.9 million, or $3.05 per diluted share. This compares to net income of $70.7 million, or $1.04 per diluted share, for the same period of 2013.
Adjusted net income for the third quarter of 2014 was $98.6 million, or $1.44 per diluted share, compared to adjusted net income of $107.6 million, or $1.58 per diluted share, for the same period of 2013. Adjusted net income excludes certain items that the Company believes affect the comparability of operating results and are generally items whose timing and/or amount cannot be reasonably estimated.
Earnings before interest, taxes, depreciation, depletion, amortization, accretion, and exploration expense ("adjusted EBITDAX") was $406.2 million for the third quarter of 2014, compared to adjusted EBITDAX of $410.4 million for the same period of 2013.
Adjusted net income and adjusted EBITDAX are non-GAAP financial measures. Please refer to the respective reconciliations in the Financial Highlights section at the end of this release for additional information about these measures.
Total operating revenues for the third quarter of 2014 were $618.8 million, compared to $613.1 million for the same period of 2013.
Financial Position & Liquidity
As of September 30, 2014, the Company's debt to twelve month trailing adjusted EBITDAX was 1.2 times. The Company had outstanding borrowings of approximately $2.0 billion, which were comprised of $1.6 billion in long-term notes and the remainder was drawn on the Company's senior secured revolving credit facility. On October 6, 2014, the Company's borrowing base under its senior secured revolving credit facility was increased to $2.4 billion from $2.2 billion following its lenders’ regularly scheduled semi-annual redetermination.