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RBC Global Energy and Power Executive Conference – SM Energy Company

SM Energy Company · Jun 2, 2015 · 31 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. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 1
    RBC Global Energy and Power Executive Conference Wade Pursell Executive Vice President and CFO June 2, 2015
  2. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 2
    Outline o Recent Performance o Strong Balance Sheet o Update on 2015 Activity o Significant Economic Inventory 3
  3. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 3
    An Industry Leader 3 YR CAGR EBITDA(X)/DA Share 75% 50% 25% 0% SM -25% -50% -75% -100% o SM Energy is consistently a top-quartile performer on key debt-adjusted per share measures: Production Proved…
  4. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 4
    Strong Balance Sheet o Total Debt currently 1.7x TTM EBITDAX; expected to be 2.3 at YE15 o Liquidity Borrowing base maintained at 2.4 billion o Maturities None until 2021 (ex-revolver) PRO-FORMA* DEBT MATURITIES AS OF March 31,…
  5. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 5
    2015 Reducing Activity and Building WOC Inventory o Capital Expenditure budget for 2015 is 1.2 billion Investment is primarily focused on Eagle Ford & Bakken/TFS 20 100 18 90 16 80 Wells Waiting on Completion 14 70 12…
  6. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 6
    Driving Costs Down o 2015 capital budget assumed 15% - 20% service cost deflation by year-end. o Company-wide costs currently are in-line with budgeted deflation assumptions. Drilling costs currently down 10% - 20%. Completions costs…
  7. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 7
    Accretive Divestiture & Production Increase SM Energy has entered into agreements to divest its Mid-Continent assets. Approximately 324 MM in expected cash proceeds. Expected to close in 2Q15. Mid-Continent assets generated 11.1…
  8. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 8
    Significant Economic Inventory Economic inventory(1) of approx. 1.0 BBOE in operated Eagle Ford and Bakken/Three Forks; nearly 20 times 2014 corporate production Operated Programs Williston Basin 90 MMBOE (net) 500 gross…
  9. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 9
    Operated Eagle Ford Program 144,000 total net acres Dimmit Webb TEXAS Net Production 100 80 60 40 20 0 2009 2010 2011 2012 2013 2014 MBOE/d 10
  10. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 10
    Operated Eagle Ford East Strong asset continues to provide top-tier returns. Dimmit Webb 70% IRR Sensitivity(1) 60% 50% Mexico 40% 30% 100 20% 90 10% CUMULATIVE 2-STREAM PRODUCTION 80 0% 70 50 60 70…
  11. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 11
    Operated Eagle Ford North Improved completions have enhanced this asset. Dimmit Webb 40% IRR Sensitivity(1) 30% Mexico 20% 60 10% CUMULATIVE 2-STREAM PRODUCTION 50 0% 40 50 60 70 (MBOE/1000FT) NYMEX WTI 30…
  12. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 12
    Operated Eagle Ford South Wells in southern acreage provide an economic dry gas option. Dimmit Webb 60% IRR Sensitivity(1) 50% Mexico 40% 30% 20% 70 10% 60 CUMULATIVE 2-STREAM PRODUCTION 0% 50 3.00 3.50 4.00 NYMEX…
  13. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 13
    Thick Total Eagle Ford Shale Interval Austin Chalk o Identified several targets within the Upper and Upper EF Lower Eagle Ford. o Opportunity for increased inventory through stacking laterals. o Testing Plan Lower EF Prove…
  14. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 14
    Upper Eagle Ford East Testing EAST UPPER EAGLE FORD WELLS CUMLATIVE BOE PRODUCTION 50 45 2-STREAM CUMLATIVE PRODUCTION 40 35 (MBOE/1000) 30 25 20 15 10 5 0 0 2 4 6 8 10 12 Producing Months Galvan Ranch B311H…
  15. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 15
    Upper Eagle Ford North Testing NORTH UPPER EAGLE FORD WELLS 45 CUMULATIVE BOE PRODUCTION 2-STREAM CUMULATIVE PRODUCTION 40 35 30 (MBOE/1000) 25 20 15 10 5 0 0 2 4 6 8 10 12 Producing Months Briscoe…
  16. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 16
    Stack/Stagger Testing Road Map 12 well stacked/staggered 15 well LEF 3Q15 completion infill spacing test (625 & 450) 2Q15 completion 3 well stacked/staggered 3Q15 completion 2 well LEF W test 2Q15 completion 5 well…
  17. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 17
    Eagle Ford North Stack/Stagger Pilot Upper and Lower EF development well spacing in targeted facies Austin Chalk Upper Eagle Ford 1 PAD 120 200 ft 1 PAD 120 85 110 85 Lower Eagle Ford 175 ft 70 525 263 262 525…
  18. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 18
    Williston Basin Program Sheridan Divide North Dakota Gooseneck: 120,000 net acres Williams Net Production Raven/Bear Den: 20 Roosevelt 40,000 net acres 15 10 5 0 2009 2010 2011 2012 2013 2014 MBOE/d McKenzie Total…
  19. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 19
    Raven/Bear Den Bakken Williams 50% IRR Sensitivity(1) 40% 30% McKenzie 20% 25 10% 0% CUMULATIVE 2-STREAM PRODUCTION 20 50 60 70 NYMEX WTI 15 (MBOE/1000FT) 10 Under current assumptions, SM Economics(2) Well…
  20. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 20
    Gooseneck Three Forks Substantial remaining inventory in our most economic Williston program. Divide 50% IRR Sensitivity(1) 40% 30% Williams 20% 16 CUMULATIVE 2- STREAM PRODUCTION 10% 14 12 0% 50 60 70…
  21. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 21
    Gooseneck Sweet Spot Sizeable acreage position in the sweet spot of Divide County, ND Divide Burke Sheridan, MT Decreasing Decreasing reservoir quality reservoir quality Williams o The geology deteriorates as you move east…
  22. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 22
    Outperforming Offset Operators Gooseneck Three Forks program vs. offset operators 16 CUMULATIVE PRODUCTION 14 (MBOE/1000FT) 12 10 8 6 4 2 0 1 3 5 7 9 11 13 15 17 19 21 23 PRODUCING MONTHS Three Forks Type Curve…
  23. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 23
    Proving up the Bakken in Gooseneck Bakken wells in Gooseneck are outperforming the Three Forks type curve. 8 7 CUMULATIVE PRODUCTION 6 (MBOE/1000FT) 5 4 3 2 1 Middle Bakken Wells 0 2015 Planned Bakken…
  24. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 24
    Takeaways o Top quartile performer o Strong balance sheet o Decades of economic inventory in two basins with potential to more than double o Focus is on creating shareholder value and outperforming the peer group 25
  25. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 25
    Appendix 26
  26. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 26
    1st Quarter 2015 Performance Production better than forecast due to strong Eagle Ford program performance; sequential production growth of 6%. Operations Outperformance to guided costs offset by weaker price realizations. Pace of…
  27. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 27
    1st Quarter 2015 Performance 1Q15 Production Reported Average daily production (MBOE/d) 186.4 Total production (MMBOE) 16.8 Costs LOE (/BOE) 3.96 Ad Valorem (/BOE) 0.52 Transportation (/BOE) 6.08 Production taxes (% of…
  28. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 28
    2015 Guidance FY 2015 Production (MMBOE) 60.4 63.5 Average daily production (MBOE/d) 165 174 LOE (/BOE) 4.40 4.65 Ad Valorem (/BOE) 0.50 0.55 Transportation (/BOE) 6.25 6.55 Production taxes (% of pre-derivative oil and gas…
  29. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 29
    1Q15 Regional Realizations NYMEX WTI OIL (Bbl) 48.55 Hart Composite NGL (Bbl) 21.53 NYMEX Henry Hub Gas (MMBTU) 2.87 Production Volumes STGC Rockies Mid-Con Permian SM Total Oil (MBbls) 2,332 2,304 17 571 5,224 Gas (MMcf) 36,786…
  30. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 30
    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) 2014 2013 Reported Net Income (loss) (GAAP)…
  31. RBC Global Energy and Power Executive Conference – SM Energy Company – slide 31
    Adjusted EBITDAX Reconciliation Adjusted EBITDAX (1) (in thousands) Reconciliation of net income (GAAP) to Adjusted EBITDAX (non-GAAP) to net cash For the Three Months Ended provided by operating activities (GAAP): March 31, 2015 2014…

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