May 2017 Investor Presentation PREMIER OPERATOR OF TOP TIER ASSETS 1
SM Energy 3-Year Plan Focused on Two Core Assets Top tier oil in Midland + top tier NGLs and gas in Eagle Ford Midland Basin Sweetie Peck/RockStar 88,000 net acres Maverick Basin Eagle Ford 167,000 net acres Successful…
SM Energy A Premier Operator of Top Tier Assets 3 Year Plan Expected Outcomes: Big growth in Big growth in Debt:EBITDAX Top Tier high-margin cash flow 2x in 2019 portfolio production 4
Big Cash Flow Growth Driven by Expected Margin Expansion Operating margin expected to increase 80% 4Q16 2019 Production growth expected within cash flow in 2019 Adjusted plan results in increased cash flow, decreased outspend Adjusted…
Financial Discipline Strengthening the Balance Sheet On track with 2017 financial strategy Liquidity of 1.6 billion (as of March 31, 2017) 747 million net cash proceeds from non-operated Eagle Ford sale March 2017 Net debt reduced to…
3-Year Plan Prefunded by Cash Flow and Divestiture Proceeds from non-operated Eagle Ford sale 2017-2018 expected outspend Non-operated 2017 2018 Eagle Ford Projected sale OutspendFacilities 6% (2) (1) Other 2018 8% Midland…
Financial Discipline Hedging Provides Cash Flow Stability 75% of expected 2017 production volumes hedged (at the midpoint of guidance) 70% of oil, 80% of natural gas and 80% of NGLs Approximately 1/2 of expected 2018 volumes hedged…
SM Energy A Premier Operator of Top Tier Assets 2017 Priorities: Midland Basin Focus capital Complete Strong development on drivers of portfolio balance sheet acceleration value creation transition and liquidity 10
Midland Basin Setting Up for Expanded 2018 Program Excellent vendor relationships and continued improvements in operating efficiencies set the stage for expansion in 2018 Significant experience Sufficient takeaway in the basin -…
Midland Basin 1Q17 Ramping up quickly setting up for 2018 Midland Basin 88,000 net acres 6 horizontal rigs and 1 data gathering rig; 3 completions crews active Production up 55% sequentially; RockStar wells significantly…
Midland Basin Premier Operator Applying technology to optimize development 140,000 Example: Venkman wells in RockStar Area Acquiring core and log data 120,000 Cumulative Production (BOE) Improved 100,000 Completion…
Howard County Significant Increase in Activity Industry confidence drives increased drilling activity across the county January 2017: 18 Rigs April 2017: 28 Rigs 14
Howard County Positive Peer Well Results Peer wells extend confirmed geologic assessment to east and south Thumper 14-23 7,500 lateral 24-hour rate: 1,357 Boe Thumper 14-23 (91% oil) Tubb A 1HA 9,366 lateral produced…
RockStar Top Tier Well Performance Continues Initial production rates on SM completed wells soundly beating acquisition assumptions 240,000 220,000 Gross Cumulative Production (BOE) 200,000 RockStar wells average 90% oil at 40…
Howard County Recent Well Results Recent wells targeting three intervals: Wolfcamp A, Wolfcamp B, and Lower Spraberry 1Q17 Wells Lateral IP Rate IP Well Name Interval Length (BOE/d) Days Guitar North 2722LS(1) LS 9,692 1,093+ 20…
Eagle Ford Increasing Value With More Wells Per Section All three areas support UEF/LEF co-development East Operated Eagle Ford Recent Well Results 4Q16 Completions 50 Continued Outperformance at 312 plan view spacing Gross…
SM Energy A Premier Operator of Top Tier Assets 3 Year Plan Expected Outcomes: Big growth in Big growth in Debt:EBITDAX Top Tier high-margin cash flow 2x in 2019 portfolio production 2017 Priorities: Midland Basin Focus…
Appendix 20
Regional Well Projected Economics 2017 capital program focusing on areas with top tier returns RockStar Wolfcamp A Sweetie Peck Lower Spraberry 120% 120% 100% 100% 80% 80% IRR 60% 60% IRR 40% 40% 20% 20% 0% 0% 40…
1st Quarter 2017 Performance Production 1Q17 Total Production (MMBoe) 12.1 Average Daily Production (MBoe/d) 134.4 Pre-Hedge Realized Price (/Boe) 27.55 Post-Hedge Realized Price (/Boe) 27.55 Costs LOE (/Boe) 3.82 Ad Valorem…
1Q17 Regional Realizations Pricing NYMEX WTI Oil (/Bbl) 51.91 NYMEX LLS Oil (/Bbl) 53.39 NYMEX Henry Hub Gas (/MMBTU) 3.32 Hart Composite NGL (/Bbl) 26.74 Eagle Ford Production Volumes Eagle Ford Op(1) Rocky Mountain Permian…
2017 Activity Wells Drilled, Flowing Completions & DUC Count Wells Drilled Flowing Completions DUC Count 1st Quarter 2017 1st Quarter 2017 1st Quarter 2017 Region Gross Net Gross Net Gross Net Permian Sweetie Peck 7 7 11 11 7 7…
Leasehold Summary As of March 31, 2017 Net Acres(1) 3/31/17 Midland Basin Sweetie Peck(2) 15,880 Halff East (Upton County) 5,985 RockStar 66,195 Eagle Ford Operated 166,760 Rocky Mountain Divide 123,570 Powder River Basin…
Adjusted EBITDAX Reconciliation Reconciliation of net income (GAAP) to Adjusted EBITDAX (non-GAAP) to Three Months Ended net cash provided by operating activities (GAAP): (in thousands) March 31, 2017 Net income (GAAP) 74,434…
Adjusted Net Loss Reconciliation Reconciliation of net income (GAAP) to adjusted net loss (non-GAAP): Three Months Ended (in thousands, except per share data) March 31, 2017 Net income (GAAP) 74,434 Net derivative gain (114,774)…
Total Capital Spend Reconciliation Three Months Reconciliation of Costs Incurred in Oil and Gas Activities (GAAP) Ended to Total Capital Spend (Non-GAAP)(1) (in millions) March 31, 2017 Costs incurred in oil and gas activities…
Derivative Positions Summary By Quarter Through 2018 As of April 26, 2017 Fixed Swaps Oil Gas NGL(3) Volume Volume Volume (2) Period (MBbls) /Bbl(1) (BBTU) /MMBTU(1) (MBbls) /Bbl 2Q17 1,444 46.44 26,205 3.98 2,114 21.40 3Q17 1,340…
NGL Derivative Position Detail(1) NGL Swaps OPIS Eth Purity Mt Belv NGL Swaps OPIS Propane Mt Belv Non-TET NGL Swaps Natural Gasoline Mt Belv Non TET Volume Volume Volume (2) (2) (2) Period (MBbls) /Bbl Period (MBbls) /Bbl Period…
NGL Realizations Nearly 90% increase in realized price (before hedges) from 1Q16 to 1Q17 SM NGL price realizations are predominately tied to Mont Belvieu, fee based contracts Differential reflects NGL barrel product mix and…
2017 Capital Program Aggressive growth expected in the Midland Basin Total Capital Budget 875MM Operated Eagle Ford 20% Facilities 6% Drilling and (2) Completion (1) Other Midland 8% 86% Other Basin 86% 8% 80% Average…
Setting Up for Expanded 2018 Program Excellent vendor relationships and continued improvements in operating efficiencies set the stage for expansion in 2018 Significant Use multiple contractors experience in Eagle Ford: Rigs and frac…
Midland Basin Infrastructure Excellent proximity to gathering/processing and takeaway with significant capacity Oil Gas NGLs 100% sold at wellhead 100% sold at wellhead 100% sold at wellhead 65% on pipeline (35% trucked) 100% third…
Howard County Operators SM Energy Callon Encana Surge/Yantai Xinchao Diamondback Oxy Energen Breitburn Sabalo 35
Sweetie Peck Operators SM Energy Apache Chevron Concho Devon Diamondback Discovery Endeavor Exxon Legacy Oxy Pioneer Summit Miscellaneous 36
Eagle Ford Operators APC APC APC CHK Dimmit APC SN Lewis APC SM EF North CHK NBL (ROSE) SM EF East SM EF South SFY 37
Contact Information Jennifer Martin Samuels Senior Director, Investor Relations 303-864-2507 jsamuelssm-energy.com 38
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