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42nd Annual Howard Weil Energy Conference – SM Energy Company

SM Energy Company · Mar 24, 2014 · 37 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 1
    42nd Annual Howard Weil Energy Conference Tony Best, CEO March 24, 2014
  2. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 2
    Key Messages SM Energy has a track record of strong operational performance and financial discipline. The Company expects to deliver on its business plan in 2014 and beyond through: Continued execution of development programs…
  3. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 3
    Track Record of Absolute Growth 150 Production In 2013, SM Energy set records for production, MBOE/d 75 100 132 proved reserves, and 78 50 50 0 EBITDAX. 2009 2010 2011 2012 2013 Proved Reserves Strong annual growth for…
  4. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 4
    And Debt-Adj/Share Growth Production The Company has a MBOE/d per D.A. sh. 0.6 0.4 0.62 proven record of 0.47 0.2 0.30 0.31 0.42 growing on a debt- 0 2009 2010 2011 2012 2013 adjusted per share Proved Reserves 5.0…
  5. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 5
    Reserve Metrics Reserve Metrics Reserve Replacement % 25.00 450% 405% 400% 20.00 F&D /BOE 350% 20.64 300% 15.00 17.10 250% 200% 10.00 12.84 150% 10.44 5.00 7.77 100% 50% 0.00 0% 2009 2010 2011 2012 2013 Drilling…
  6. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 6
    2014 Capital Budget 65 200 Development New Ventures 2014 capital budget Non Drilling of 1.9 billion ( in millions) 1,660 Other 60 East Texas Focused EFS and 55 Bakken programs account for 75% of PRB 140 development budget.…
  7. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 7
    Production Outlook 2014 production guidance midpoint of 52.3 MMBOE; 16% projected annual production growth on retained properties in 2014. Production growth in 2015 estimated to be 15%. 65 61.6 60 55 53.5 MMBOE 50 48.3 45…
  8. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 8
    Operated Eagle Ford The Company plans to make approximately 100 flowing completions in 2014. SM Energys 2014 program will focus on improving well design to enhance 145,000 total net acres 65,000 net acres - Briscoe Ranch 15,000 net…
  9. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 9
    Enhancing Well Performance Increasing average lateral length to 6,400 in 2014 from 5,000 in 2013. Increasing sand loading in frac designs up to 2,500 lbs. of sand per lateral foot. Modifying designs to reduce frac impacts on offset…
  10. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 10
    Non-operated Eagle Ford SM Energys 2014 budget assumes 20% production growth year over year. The operator recently guided to a higher level of activity in its Eagle Ford program. 11
  11. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 11
    Bakken/Three Forks The Company expects to make 45 flowing GOOSENECK 36,000 acres completions in 2014. A number of tests are planned RAVEN/BEAR DEN in 2014 that are expected to 43,000acres add inventory including: Increased sand…
  12. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 12
    Powder River Basin WY SM Energy currently has 140,000 net acres (100,000 net Loco (Frontier) acres prospective for the 30 Day IP: 1,408 BOE/d Frontier). Moving from 1 to 2 rigs by 2Q14. Bridger (Shannon) Plan to drill 10…
  13. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 13
    Midland Basin Focus Map Sweetie Peck The Company completed 2 wells in 1Q14. Preliminary results of new wells look to be in line Buffalo 47,500 Net acres with other Sweetie Peck horizontal wells. SM Energy plans to drill and…
  14. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 14
    2014 East Texas Program 215,000 net acres The Company plans for 8 test wells throughout 2014 2014 program will focus on delineating the acreage in order to prove up resource and establish infrastructure requirements. 15
  15. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 15
    Recap: How We Continue to Grow Inventory Continue to execute and deliver on established development programs. Eagle Ford Bakken/Three Forks Enhance inventory through longer Increase inventory through laterals and improved completion…
  16. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 16
    Financial Position TOTAL BOOK At December 31, 2013, the CAPITALIZATION (in millions) Companys net debt to 3,500 trailing EBITDAX was 0.9 3,000 and net debt to book 2,500 capitalization was 45%. 1,607 2,000 Current revolver…
  17. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 17
    Debt to TTM EBITDAX 8.0x As of December 31, 2013 7.0x 6.0x 5.0x 4.0x 3.0x Median: 2.3x 2.0x 1.0x 1.1 0.0x SM SM Energys debt to trailing twelve-month EBITDAX is below its peer median average of 2.3x. Note: Balance sheet…
  18. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 18
    Going Forward We have momentum to continue top level performance on measurements that matter. We are focused on significant inventory growth and we have the resource base to achieve this objective. Near-term catalysts include:…
  19. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 19
    Appendix 20
  20. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 20
    2013 Proved Reserve Roll-Forward MMBOE 54% Liquids/ 600 46% Gas 53% Liquids/ 195.5 1.3 5.0 18.2 500 47% Gas 48.3 428.7 400 293.4 300 219.9 126.9 200 Proved Developed Proved Undeveloped 100 166.5 208.9 0 Beginning…
  21. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 21
    Condensate Update South Texas & Gulf Coast % Oil Realization to LLS 100% 50 Substantially all of SM 90% 45 Energys Eagle Ford 80% 88% 86% 86% 40 condensate trades off of an SM Oil Realization % of LLS 85% 81% LLS…
  22. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 22
    Eagle Ford 5 Year Development Plan Area 6 Area 1 Area 4 Area 3A Area 2 Area 3B Area 5 2014 2015 2016 2017 2018 23
  23. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 23
    Gooseneck TFS 2014 Activity Gooseneck 2014 planned activity = 2014 BAKKEN WELL = 2014 THREE FORKS WELL Raven/Bear Den Well Type Curve Area Count Gooseneck TFS 13 / 8 Well Type Curve Area Count Raven/Bear Den Bakken 14 /…
  24. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 24
    Sweetie Peck Hz. Well Performance Well Name Target Interval Lateral Length Stages Proppant Lift Mechanism Dorcus 3035H Wolfcamp B 4,960 25 White Sand ESP Britain 3133H Wolfcamp B 4,960 25 RCP Gas Lift CVX 4134H Wolfcamp B 4,932 25 LWC…
  25. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 25
    Geology Sweetie Peck to Buffalo Buffalo Sweetie Peck 26
  26. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 26
    SM Energy East Texas Prospect Areas Total Net Acreage: 215,000 Three Geologic Concepts Deep Pines Central 91,000 Net acres Eagle Ford Resource Play (East Texas) Extension of the South Texas Lower Eagle Ford Play Deep Pines West…
  27. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 27
    SM Energy East Texas Prospect Areas Target Effective Lateral Fluid Volume 7-Day IP BTU Well Name Interval Length Stages (Bbl/Stage) (BOE/d) %Oil Gas FCP (PSI) Horizon 2H Woodbine 2,500 11 7,775 873 41 1,278 1,540 Brollier 1H Eagle Ford…
  28. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 28
    2014 East Texas Program Drill additional test wells in each of the four prospect areas to delineate and high-grade acreage position. Well Target Est. Frac Date Well Target Est. Frac Date Cameron Austin 3Q14 Matt Dillon Woodbine 1Q14…
  29. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 29
    Woodbine Trap Model Over-Pressured Normally Pressured Hydrocarbon-Saturated Conventional Woodbine Shaley Sandstones Hydrocarbon Traps (Woodbine Rim Play) Unconventional Trap Conventional Trap Austin Chalk Woodbine Porous,…
  30. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 30
    4Q13 Regional Realizations Benchmark NYMEX WTI OIL (Bbl) 97.41 Hart Composite NGL (Bbl) 43.13 NYMEX Henry Hub Gas (MMBTU) 3.82 Production Volumes STGC Rockies Mid-Con Permian SM Total Oil (MBbls) 1,449 1,699 113 493 3,756 Gas (MMcf)…
  31. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 31
    EBITDAX Reconciliation EBITDAX (1) (in thousands) Reconciliation of net income (loss) (GAAP) to EBITDAX (non-GAAP) to net cash For the Three Months Ended provided by operating activities (GAAP): December 31, 2013 2012 Net income (loss)…
  32. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 32
    Adjusted Net Income Reconciliation Reconciliation of net income (loss) (GAAP) to adjusted net income (Non-GAAP): For the Three Months Ended December 31, (in thousands, except per share data) 2013 2012 Reported Net Income (loss) (GAAP)…
  33. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 33
    2014 Guidance (as of Feb. 18, 2014) 1Q14 FY 2014 Production (MMBOE) 12.0 12.6 51.0 53.5 Average daily production (MBOE/d) 133 140 140 147 LOE (/BOE) 5.25 5.50 5.25 5.50 Transportation (/BOE) 5.75 6.05 5.75 6.05 Production taxes (%…
  34. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 34
    Oil Derivative Position* Oil Swaps - NYMEX Equivalent Oil Swaps WTI swap with LLS basis Differential Bbls /Bbl Bbls /Bbl 2014 2014 Q1 2,175,000 96.13 Q1 425,000 100.91 Q2 2,373,000 94.95 2014 Total 425,000 Q3 973,000 95.25 Q4…
  35. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 35
    Oil Derivative Position* Oil Collars - NYMEX Equivalent Ceiling Floor Bbls /Bbl /Bbl 2014 Q1 694,000 115.07 80.97 Q2 431,000 102.50 85.00 Q3 973,000 102.58 85.00 Q4 923,000 102.63 85.00 2014 Total 3,021,000 2015 Q1 882,000…
  36. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 36
    Gas Derivative Position* Natural Gas Swaps - NYMEX Equivalent Natural Gas Collars - NYMEX Equivalent Ceiling Floor MMBTU /MMBTU MMBTU /MMBTU /MMBTU 2014 2014 Q1 32,266,000 4.24 Q1 1,540,000 5.59 4.40 Q2 23,758,000 4.06 Q2 4,194,000…
  37. 42nd Annual Howard Weil Energy Conference – SM Energy Company – slide 37
    NGL Derivative Position* Natural Gas Liquid Swaps - Mont. Belvieu Bbls /Bbl 2014 Q1 1,429,000 57.96 Q2 1,096,000 58.04 Q3 960,000 58.06 861,0 Q4 00 58.06 2014 Total 4,346,000 Grand Total 4,346,000 *As of 2/12/14 38

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