Skip to main content 2017 Results and 2018 Operating Plan – SM Energy Company Investor Presentation | Shale Experts
Loading...
Pm

2017 Results and 2018 Operating Plan – SM Energy Company

SM Energy Company · Feb 21, 2018 · 54 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. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 1
    2017 Results and 2018 Operating Plan FEBRUARY 21, 2018 PREMIER OPERATOR OF TOP TIER ASSETS 1
  2. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 2
    2017 2019 Driving Differential Value Measuring returns: cash flow growth per debt adjusted share(1) Cash flow growth per debt adjusted share is the metric with the highest correlation to intra sector relative performance Credit Suisse…
  3. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 3
    Premier Operator of Top Tier Assets 2017 marked by outstanding execution Top operatorSM ranks 1 in Key differentiator is the Midland Basin on a Howard County acreage revenues per lateral foot basis - Deutsche Bank(2) - Baird(1)…
  4. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 4
    2018-2019 Plan Overview & Guidance 5
  5. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 5
    2018 2019 Plan Highlights Big cash flow growth per debt adjusted share near 35% projected CAGR Expected to nearly double cash flow per debt adjusted share in two years Expected to cut Net Debt : TTM EBITDAX by approximately 1.5 turns…
  6. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 6
    2018 2019 Plan Highlights Big Midland production growth driving expected margin expansion Midland projected production growth up 135% 2017-2019 Company projected cash operating margin up over 45% 2017-2019 60,000 22 50,000…
  7. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 7
    SM Energy A Premier Operator of Top Tier Assets Objective: to deliver long-term growth in cash flow per debt adjusted share 2 Year Plan Expected Outcomes: Big growth in Cash flow Net high-margin neutrality by Debt:EBITDAX…
  8. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 8
    2018 Capital Program Aggressive growth expected in the Midland Basin Total Capital Spend D&C Budget 1.27B 1.04B Eagle Ford 14% Facilities 10% Drilling and Other(1) Completion 8% 82% Midland Basin 86% Currently running 9…
  9. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 9
    2018 Plan Guidance(1) Capital & Production FY 2018 Total Capital Spend (MM)(2) (before acquisitions) 1,270 2018 Production Guidance Total Production (MMBoe) 42 - 46 by Quarter 150 Oil % 41% 125 Costs Production (Boe/d) LOE…
  10. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 10
    2017 Reserves at Year-End 11
  11. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 11
    2017 Proved Reserves Additions and Revisions Proved reserves of retained assets up 47% Net proved reserve additions of 192MM Boe equaled 4.3 times production More than doubled proved reserve PV-10 to 3.1B(1) 500 7 450 23 14…
  12. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 12
    2017 Proved Reserves By Region Coring up the portfolio to top tier assets YE 2016(1) (MMBoe) 228.9 53.0 36.3 318.2 Rocky YE 2017 Eagle Ford Permian Total Mountain Oil (MMBbl) 13.3 117.5 27.4 158.2 Gas (Bcf) 998.1 252.8 29.2…
  13. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 13
    2018 Operations Plan 14
  14. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 14
    Eagle Ford 2018 Plan Objectives Value creation through better wells, longer laterals, and optimum number of wells per section Eagle Ford Employ new technology and optimized spacing 165,000 net acres to drive improved well…
  15. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 15
    Midland Basin 2018 Plan Objectives Value creation through better wells, longer laterals, and increasing wells per section Midland Basin 88,000 net acres Initiate development stage in western RockStar, continue delineation in…
  16. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 16
    Top Midland Basin Operator SM Energy Ranks 1 in revenue per well and revenue per lateral foot (1) Baird Equity Research 1/18/18 Joseph Allman 17
  17. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 17
    Premier Operator Permian Top tier capital efficiency Drilling Costs Completion Costs 800 12,000 1,200 3,000 Completion Cost Per Lateral Foot (/ft) Drilling Cost Per Lateral Foot (/ft) Proppant Per Lateral Foot (lb/ft) 700…
  18. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 18
    Midland Basin Infrastructure Regional Sand Deal Best in basin arrangement with US Silica and Sandbox Logistics New sand mines close to SM locations 55 miles(1) 48 miles(1) 400K expected capital Lamesa (3Q18) savings per…
  19. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 19
    Midland Basin Infrastructure Water Management Invest 70MM in fresh and produced water infrastructure Expected cost Accelerates System savings development control (LOE + Capital) 20
  20. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 20
    New Well Results 21
  21. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 21
    New Well Results Howard County Great results in multiple intervals across acreage position Sundown 4566WB Sundown 4524LS Iceman 2-10A 1LS Iceman 2-10A 2LS Iceman 2-10A 3LS Papagiorgio 33-40 B 1LS Maverick 0341WA…
  22. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 22
    Howard County New Well Results 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 Maverick 0341WA(1) WCA 10,418 2,079 30-day 200 2,316…
  23. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 23
    Howard County Top Tier Well Performance Continues New Wolfcamp wells continue outperformance trend 300,000 Gross Cumulative Production (BOE) 250,000 200,000 150,000 100,000 50,000 0 0 30 60 90 120 150 180 210…
  24. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 24
    Howard County Average Production by Formation All intervals exceed peer 1 MMBoe type curve 300,000 Gross Cumulative Production (BOE) 250,000 200,000 150,000 100,000 50,000 0 0 50 100 150 200 250 300 Days on…
  25. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 25
    Differing Decline Characteristics of LS and WCA Wells % of Peak Initial Production (IP) Rates vs Time, Jester and Papagiorgio Pads Jester Pad Wells Papagiorgio Pad Wells 120% 120% 100% 100% 80% 80% % of IP % of IP 60%…
  26. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 26
    Inventory & Returns 27
  27. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 27
    Howard County Wolfcamp A Evolution of SM Sweet Spot Mapping January 2017 February 2018 Higginbotham Unit B 30-19 1AH Cassidy 26-23 1H Tall City 6,397 Tall City 7,314 Hyden 47-38 WA 1H 24hrIP = 403 BOEPD 24hrIP = 398 BOEPD…
  28. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 28
    Howard County Wolfcamp B Evolution of SM Sweet Spot Mapping January 2017 February 2018 Sundown 4566WB SM 10,336 24hrIP = 1,435 BOEPD Prichard J 10BH Legacy 7,644 24hrIP = 602 BOEPD Maverick 0361WB SM 10,412 24hrIP = 1,683…
  29. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 29
    Howard County Lower Spraberry Evolution of SM Sweet Spot Mapping January 2017 February 2018 Sundown 4524 LS Moby Dick 31-30 8SH SM 10,352 Surge 7,362 24hrIP = 959 BOEPD 24hrIP = 319 BOEPD Mr. Phillips 11-2 1SH Sabalo…
  30. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 30
    Drilling Inventory Midland Basin Increasing inventory and NPV per section 4,000 3,500 Average Lateral Average Working Length Interest 3,000 9,600 72% Drilling Locations (gross operated) 2,500 (up 13% from 2016) (up 10%…
  31. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 31
    Drilling Inventory 15 Years at Current Activity Level Approximately 45 years including upside resources Midland Basin and Eagle Ford 6,000 5,000 Drilling Locations 4,000 (gross operated) 3,000 2,000 1,000…
  32. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 32
    Top-Tier Assets Regional Well Projected Economics RockStar Sweetie Peck Wells(1) across all intervals (WCA, WCB, LS) in the 2018 drilling program Wells(1) across all intervals (WCA, WCB, LS) in the 2018 drilling program 120% 100%…
  33. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 33
    2018 Planned Rig Activity and Completions By Month 2018: expected 100 net completions Midland Basin; expected 25 net completions Eagle Ford 14 120 12 100 Drilled But Uncompleted Wells 10 80 Operated Rigs 8 60 (1)…
  34. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 34
    SM Energy Premier Operator of Top Tier Assets 4 recent analyst initiation reports, 4 great recommendations Value proposition SM undervalued based on CF growth per debt adjusted share - Credit Suisse 12/11/17 - William Featherston…
  35. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 35
    Appendix 36
  36. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 36
    2017 Financial & Operating Results 37
  37. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 37
    4th Quarter and FY 2017 Performance Solid Execution Production 4Q17 FY 2017 Total Production (MMBoe) 10.4 44.5 Average Daily Production (MBoe/d) 112.6 121.8 Pre-Hedge Realized Price (/Boe) 32.95 28.20 Post-Hedge Realized Price (/Boe)…
  38. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 38
    Well Hedged(1) 2018 percentage of expected production hedged 85% of expected 1Q18 production Production Hedged volumes hedged(2); 65% of oil volumes, 85% of gas volumes (NGLs hedged by product) 75% of expected 2018 production95%…
  39. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 39
    Balance Sheet Solid Position Entering 2018 Liquidity of 1.2B, including 314MM cash on hand(1) Balance Sheet offers financial flexibility No bond maturities until 2021 Senior Secured Debt:TTM Adjusted EBITDAX at 0.0 times; max ratio…
  40. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 40
    4Q17 Regional Realizations Benchmark Pricing NYMEX WTI Oil (/Bbl) 55.40 NYMEX LLS Oil (/Bbl) 60.98 NYMEX Henry Hub Gas (/MMBTU) 2.93 Hart Composite NGL (/Bbl) 32.12 Production Volumes Eagle Ford(1) Permian Rocky Mountain SM Total Oil…
  41. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 41
    2017 Activity Wells Drilled, Flowing Completions & DUC Count Wells Drilled Flowing Completions DUC Count 4th Quarter 2017 2017 YTD 4th Quarter 2017 2017 YTD As of 12/31/17 Region Gross Net Gross Net Gross Net Gross Net Gross Net…
  42. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 42
    Leasehold Summary Pro-forma for pending transactions Net Acres(1) Pro-forma 12/31/17 Pending Sales Net Acres Midland Basin RockStar 65,150 - 65,150 Sweetie Peck(2) 17,265 - 17,265 Halff East (Upton County) 5,420 - 5,420 Midland…
  43. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 43
    Adjusted EBITDAX Reconciliation Reconciliation of net loss (GAAP) to adjusted EBITDAX (non-GAAP) to Three Months Ended Twelve Months Ended net cash provided by operating activities (GAAP): (in thousands) December 31, 2017 December 31,…
  44. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 44
    Adjusted Net Loss Reconciliation Reconciliation of net loss (GAAP) to adjusted net loss Three Months Ended Twelve Months Ended (non-GAAP): (in thousands, except per share data) December 31, 2017 December 31, 2017 Net loss (GAAP)…
  45. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 45
    Total Capital Spend Reconciliation Reconciliation of costs incurred in oil and gas activities (GAAP) to Total capital spend Twelve Months Ended (Non-GAAP)(1)(3) (in millions) December 31, 2017 Costs incurred in oil and gas…
  46. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 46
    PV-10 Reconciliation Reconciliation of standardized measure (GAAP) to As of PV-10 (Non-GAAP)(1) (in millions) December 31, 2017 Standardized measure of discounted future net cash flows (GAAP): 3,024.1 Add: 10 percent annual…
  47. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 47
    Oil and Gas Derivative Positions By quarter through 2019 Fixed Swaps Oil Gas Volume Volume Period (MBbls) /Bbl(1) (BBTU) /MMBTU(1) 1Q18 1,075 50.16 20,788 3.25 2Q18 1,534 49.57 15,712 2.85 3Q18 1,769 49.77 17,147 2.88 4Q18 1,894…
  48. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 48
    NGL Derivative Position Detail(1) NGL Swaps OPIS Eth Purity Mt Belv NGL Swaps OPIS Propane Mt Belv Non-TET NGL Swaps OPIS IsoButane Mt Belv Non TET Volume Volume Volume (2) (2) (2) Period (MBbls) /Bbl Period (MBbls) /Bbl Period…
  49. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 49
    NGL Realizations 30% increase in realized price (before hedges) from 4Q16 to 4Q17 SM NGL price realizations are predominately tied to Mont Belvieu, fee based contracts Differential reflects NGL barrel product mix and transportation…
  50. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 50
    Howard County Operators SM Energy Callon Encana Surge/Yantai Xinchao Diamondback Oxy Energen Breitburn Sabalo Grenadier 51
  51. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 51
    Sweetie Peck Operators SM Energy Apache Chevron Concho Devon Diamondback Discovery Endeavor Exxon Legacy Oxy Pioneer Summit Miscellaneous 52
  52. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 52
    Eagle Ford Operators Dimmit Maverick Dimmit Webb Area North Fasken Area East Area South 53
  53. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 53
    Divide County Operators Canada CPEG RE RE HES CPEG RE FAC FAC CLR MRX HNT NP Divide Williams KKN CLR HES CPEG 54
  54. 2017 Results and 2018 Operating Plan – SM Energy Company – slide 54
    Contact Information Jennifer Martin Samuels Vice President - Investor Relations 303-864-2507 jsamuelssm-energy.com 57

From the store

Browse maps, data & reports in the Shale Experts store