Exploration & Production | Quarterly / Earnings Reports
SM Nearly Doubles Income in Q3; Talks Unconventionals
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SM Energy Company has reported its financial results for the third quarter of 2013 and an operations update.
Operations Update
SM Energy has updated its E&P activities, which can be accessed below:
Third Quarter 2013 Results
SM Energy reported net income for the third quarter of 2013 of $70.7 million, or $1.04 per diluted share. This compares to a net loss of $38.3 million, or $0.58 per diluted share, for the same period of 2012.
Adjusted net income for the third quarter of 2013 was $105.4 million, or $1.54 per diluted share, compared to adjusted net income of $9.7 million, or $0.14 per diluted share, for the same period of 2012. 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 (EBITDAX) was $410.4 million for the third quarter of 2013, a quarterly record, and an increase of 57% from $260.9 million for the same period of 2012.
Adjusted net income and 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 2013 were $613.1 million compared to $379.0 million for the same period of 2012, a 62% increase from period to period.
Reported average daily production increased by 5% from production of 131.8 MBOE per day in the second quarter of 2013. In the third quarter, SM Energy's reported production mix was 30% oil/condensate, 20% NGLs, and 50% natural gas.
In the third quarter, the Company reported per unit cost metrics within or below the previously provided guidance ranges. Cash G&A per unit costs were 16% below the midpoint of the provided guidance range due to lower than expected compensation related expenses. DD&A was below the provided guidance range due to improving finding and development costs in the Company's core development programs.
Financial Position and Liquidity
As of the end of the quarter, the Company's long-term debt balance was unchanged from the previous quarter. At September 30, 2013, outstanding borrowings were $1.6 billion, comprised of $28.0 million drawn on its revolving credit facility and an aggregate amount of $1.6 billion of senior notes. As of September 30, 2013, the Company's debt to twelve month trailing EBITDAX decreased to 1.2 times and its debt-to-book capitalization ratio was 51%. As of the end of the third quarter, the Company had $1.3 billion in undrawn commitments on its revolving credit facility. During the third quarter, the Company had net cash provided by operating activities of $404.5 million, exceeding quarterly capital expenditures of $387.4 million.
Updated Production and Performance Guidance
The Company is providing updated production and performance guidance for the fourth quarter and full year 2013 in the table below:
