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Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company

SM Energy Company · Oct 3, 2017 · 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. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 1
    Deutsche Banks 25th Annual Leveraged Finance Conference OCTOBER 3-4, 2017 PREMIER OPERATOR OF TOP TIER ASSETS 1
  2. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 2
    SM Energy Focused 3-Year Plan Top tier oil in Midland Basin + top tier NGLs and gas in Eagle Ford Midland Basin 89,000 net acres 7 Rigs / 3 Frac Crews Eagle Ford 167,500 net acres 2 Rigs 3 3
  3. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 3
    SM Energy Premier Operator of Top Tier Assets Capital efficiency driving value Value proposition Well results and production continue to exceed expectations Permian and Eagle Ford results Drilling demonstrate top tier asset…
  4. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 4
    First Half of 2017 Financial Highlights Outstanding execution 2017 plan on track or better EBITDAX ahead of plan despite notably lower commodity prices CAPEX less than plan despite more lateral feet completed The balance sheet…
  5. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 5
    Well Hedged Through 2018 Oil Natural Gas NGLs 2H17 2H17 2H17 60% 75% 85% 75% of expected 2H17 production volumes hedged(1) 70% of expected 2018 volumes hedged(2) Credit Agreement allows hedging of up to 85% of projected…
  6. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 6
    Balance Sheet Financial Position Liquidity of 1.5 billion, including 560MM cash on hand(1) Balance Sheet offers financial flexibility(1) Senior Secured Debt:TTM Adjusted EBITDAX at 0.0 times; max ratio allowed 2.75 times TTM Adjusted…
  7. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 7
    Premier Operator of Top-Tier Assets 8
  8. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 8
    Premier Operator Midland Basin Midland Basin Midland Basin Program 89,000 net acres Currently operating 7 horizontal rigs Currently operating 3 completions RockStar crews; 9 net completions during 2Q17 Production up 8% 1Q17 to…
  9. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 9
    Premier Operator Midland Basin Top Operator Well productivity SM ENERGY RANKS 1 BMO data 8/7/17 BMO research Phillip Jungwirth August 7, 2017 10
  10. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 10
    Outstanding Well Results Based on our in-depth analysis of historic well data we see Howard County as one of the most valuable parts of the Midland Basin given higher oil cuts that decline slower than other areas -Credit…
  11. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 11
    Premier Operator Midland Basin Applying seismic, core, and geo-chem data to optimize development Planned 3-D Seismic Acquisition Modern 3-D Seismic Grid 12
  12. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 12
    Premier Operator Midland Basin Top assets Howard County Highest oil content, flattest curve HOWARD COUNTY RANKS 1 BMO data 8/7/17 BMO research Phillip Jungwirth August 7, 2017 13
  13. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 13
    Howard County New Well Results Additional Details Peak IP 24 Hour Clusters Lateral IP per Proppant Oil Well Name Interval Rate IP Days Peak IP Stages per Length 1,000 (lbs./ft) % (BOE/d) Rate Stage Tackleberry 43-42 A 1LS LS 7,873…
  14. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 14
    Outstanding Results Howard County Great results in multiple intervals across acreage position Eastland 15 2WH (Apache) Thumper 14-23 (Sabalo) Mr. Phillips 11-2 1SH Viper 14-09 1WA (Sabalo) 24hr IP: 1,316 BOE/d (91% oil) IP30:…
  15. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 15
    Outstanding Results Viper 14-9 WA Viper results to date exceeding expectations 10,000 Viper 14-09 1WA Production Rate (BOEPD) 1,000 Western Howard County Well Average 100 10 0 50 100 150 200 Days on…
  16. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 16
    Premier Operator Eagle Ford Eagle Ford Operated 167,500 net acres Eagle Ford Program Currently operating 2 horizontal rigs North Production up 9.5% 1Q17 to 2Q17 Area (retained properties) East Area 14 wells completed during…
  17. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 17
    Premier Operator Eagle Ford Capital efficiency - better wells and lower costs Drilling Costs Completion Costs 500 9,000 1,000 2,500 Proppant Per Lateral Foot (lb/ft) Completion Cost Per Foot (/ft) 450 8,000 900 Average…
  18. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 18
    Outstanding Results Eagle Ford North Outperformance: new generation completion includes tighter stage and cluster spacing with increased fluid per foot Operated Eagle Ford Recent Well Results 2Q17 Completions 2Q17 Completions 30…
  19. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 19
    PRB Creating Value Through Successful JV Tests New completion technology driving 40% improvement in wells Powder River Basin Sussex 10,100 TVD Utilizing partner services and capital in current Shannon development activity(1)…
  20. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 20
    Appendix 22
  21. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 21
    2nd Quarter and YTD(1) 2017 Performance Solid Execution Production 2Q17 2017 YTD Total Production (MMBoe) 11.3 23.4 Average Daily Production (MBoe/d) 124.6 129.5 Pre-Hedge Realized Price (/Boe) 25.13 26.38 Post-Hedge Realized Price…
  22. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 22
    2Q17 Regional Realizations Benchmark Pricing NYMEX WTI Oil (/Bbl) 48.28 NYMEX LLS Oil (/Bbl) 50.18 NYMEX Henry Hub Gas (/MMBTU) 3.18 Hart Composite NGL (/Bbl) 24.11 Production Volumes Eagle Ford Op(1) Permian Rocky Mountain SM Total Oil…
  23. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 23
    2017 Activity Wells Drilled, Flowing Completions & DUC Count Wells Drilled Flowing Completions DUC Count 2nd Quarter 2017 2017 YTD(2) 2nd Quarter 2017 2017 YTD(2) As of 6/30/17 Region Gross Net Gross Net Gross Net Gross Net Gross…
  24. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 24
    Leasehold Summary As of June 30, 2017 Net Acres(1) 6/30/17 Midland Basin Sweetie Peck 17,255 RockStar(2) 65,950 Halff East (Upton County) 5,985 Midland Basin Total 89,190 Eagle Ford Operated 167,465 Rocky Mountain Divide…
  25. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 25
    Adjusted EBITDAX Reconciliation Reconciliation of net loss (GAAP) to Adjusted EBITDAX (non-GAAP) to Three Months Ended Six Months Ended net cash provided by operating activities (GAAP): (in thousands) June 30, 2017 June 30, 2017 Net…
  26. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 26
    Adjusted Net Loss Reconciliation Reconciliation of net loss (GAAP) to adjusted net loss Three Months Ended Six Months Ended (non-GAAP): (in thousands, except per share data) June 30, 2017 June 30, 2017 Net loss (GAAP) (119,907)…
  27. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 27
    Total Capital Spend Reconciliation Reconciliation of Costs Incurred in Oil and Gas Activities (GAAP) to Total Capital Spend Three Months Ended Six Months Ended (Non-GAAP)(1)(3) (in millions) June 30, 2017 June 30, 2017 Costs…
  28. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 28
    Derivative Positions Summary By Quarter Through 2018 As of September 29, 2017 Fixed Swaps Oil Gas NGL(3) Volume Volume Volume (2) Period (MBbls) /Bbl(1) (BBTU) /MMBTU(1) (MBbls) /Bbl 3Q17 1,340 46.66 23,657 4.01 2,019 20.89 4Q17…
  29. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 29
    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…
  30. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 30
    NGL Realizations 22% increase in realized price (before hedges) from 2Q16 to 2Q17 SM NGL price realizations are predominately tied to Mont Belvieu, fee based contracts Differential reflects NGL barrel product mix and transportation…
  31. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 31
    Top-Tier Assets 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%…
  32. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 32
    Howard County Operators SM Energy Callon Encana Surge/Yantai Xinchao Diamondback Oxy Energen Breitburn Sabalo 34
  33. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 33
    Sweetie Peck Operators SM Energy Apache Chevron Concho Devon Diamondback Discovery Endeavor Exxon Legacy Oxy Pioneer Summit Miscellaneous 35
  34. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 34
    Eagle Ford Operators Dimmit Maverick Dimmit Webb Area North Fasken Area East Area South 36
  35. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 35
    Divide County Operators Canada CPEG RE RE HES CPEG RE MV MV CLR MRX HNT NP Divide Williams KKN CLR HES CPEG 37
  36. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 36
    Powder River Basin Operators Johnson Campbell SM ENERGY (SME) Natrona Converse ANSCHUTZ (ANS) CHESAPEAKE (SHK) DENBURY (DEN) DEVON (DEV) EOG FLEUR DE LIS (FDL) HELIS (HEL) LIBERTY RESOURCES (LIB) SAMSON (SSN) WOLD (WLD)…
  37. Deutsche Banks 25th Annual Leveraged Finance Conference – SM Energy Company – slide 37
    Contact Information Jennifer Martin Samuels Senior Director, Investor Relations 303-864-2507 jsamuelssm-energy.com 39

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