SM ENERGY PREMIER OPERATOR OF TOP TIER ASSETS FOCUSED ON TWO BASINS IN TEXAS (1) Market capitalization: 3.0B Production: 113 MBoe/d; 42% oil, 41% natural gas, 17% MIDLAND BASIN NGLs (1Q18) 82,500 net acres 8 Rigs / 4 Frac…
2017-2019 DRIVING DIFFERENTIAL VALUE OFF TO A GREAT START IN 2018 CASH FLOW GROWTH PER PREMIER OPERATOR 35% CAGR 2017-19 DEBT ADJUSTED SHARE IS THE METRIC WITH THE Expected HIGHEST CORRELATION TO CASH FLOW GROWTH INTRA SECTOR…
FIRST QUARTER 2018 HIGHLIGHTS Cash flow growth, up 30% sequentially Rapid margin expansion, highest in 14 quarters Big Midland production growth Operational execution: New wells outperforming expectations 19 new RockStar wells…
MIDLAND BASIN EXECUTING ON OUR PLAN Midland Basin 82,500 net acres 17 net completions in 1Q18 - 15 in RockStar area RockStar 8 rigs currently 4 frac fleets operating at high efficiency 36 net completions expected in…
MIDLAND BASIN TOP WELL RESULTS SM RANKS 1 IN REVENUE PER WELL & REVENUE PER LATERAL FOOT(1) (1) Baird Equity Research 3/28/18 Joseph Allman 7
2017-2019 PERMIAN HIGH RATE OF CHANGE EXPECTED BIG PERMIAN PRODUCTION GROWTH & MARGIN EXPANSION Permian projected production growth up 135% 2017-2019 Company projected cash operating margin up over 45% 2017-2019 Production…
ROCKSTAR NEW WELL RESULTS GREAT RESULTS IN MULTIPLE INTERVALS ACROSS ACREAGE POSITION NEW WELLS AVERAGE 1,440 BOE/D, 88% OIL (10,200 LATERAL LENGTH) Fezzik A 2443WA Fezzik A 2444WA 30 Day Avg Peak Rate: Guitar North 2850WA Guitar…
ROCKSTAR NEW WELL RESULTS NEW WELLS CONTINUE OUTPERFORMANCE TREND 300,000 250,000 Cumulative Production (BOE) 200,000 150,000 100,000 50,000 0 0 30 60 90 120 150 180 210 240 270 300 330 360 Days on…
MIDLAND BASIN INFRASTRUCTURE WATER MANAGEMENT INVESTING 70MM IN FRESH AND PRODUCED WATER INFRASTRUCTURE IN 2018 Currently 95%+ Midland water on pipe Expected cost Accelerates System savings development control (LOE +…
MIDLAND BASIN INFRASTRUCTURE REGIONAL SAND POSITIVE ARRANGEMENT WITH US SILICA & SANDBOX LOGISTICS New sand mines close to SM operations 55 miles(1) 400K 48 miles(1) expected capital savings per well Lamesa (3Q18) Crane…
MIDLAND BASIN INFRASTRUCTURE TAKEAWAY MULTIPLE PURCHASERS WITH FT ASSURE RELIABLE SM TAKEAWAY High quality WTI Multiple purchasers Sales at wellhead; used by TX 90% of oil on pipe with FT; excellent gathering is firm refineries; SM…
EAGLE FORD ENHANCING VALUE OF INVENTORY Eagle Ford 165,000 net acres Up-spacing to improve returns Assessing new intervals Optimizing completions JV Area Running 2 rigs and 1 frac fleet Expect to complete 9 net wells in…
BALANCE SHEET OFFERS FINANCIAL FLEXIBILITY LIQUIDITY OF 1.6B, INCLUDING 643MM CASH ON HAND(1) Rapidly reducing net debt with 792MM non-core asset sales year-to-date Net debt:TTM Adjusted EBITDAX 3.3 times at 3/31/18; below 3.0 times…
WELL HEDGED PERCENTAGE OF EXPECTED PRODUCTION HEDGED Production Hedged(1) 80% of expected 2Q18 4Q18 production volumes hedged; 85% of oil volumes, 65% of gas volumes (NGLs hedged by product) 75% of expected 2Q18 production volumes…
SM ENERGY WHY INVEST IN SM OBJECTIVE; DELIVER LONG-TERM GROWTH IN CASH FLOW PER DEBT ADJUSTED SHARE Unique opportunity to participate in competitively high rate of change in oil production, margin expansion and cash flow growth…
Appendix 18
Operational Detail 19
1Q18 REALIZATIONS BY REGION Benchmark Pricing NYMEX WTI Oil (/Bbl) 62.87 NYMEX Henry Hub Gas (/MMBtu) 3.00 Hart Composite NGL (/Bbl) 30.87 Production Volumes Eagle Ford(1) Permian Rocky Mountain Total Oil (MBbls) 354 3,315 592 4,262 Gas…
2018 PLANNED RIG ACTIVITY AND COMPLETIONS BY MONTH 14 120 12 100 10 80 Total Net DUCs(1) Operated Rigs 8 60 6 40 4 20 2 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Midland Basin Eagle Ford…
NGL REALIZATIONS 16% increase in realized price (before hedges) from 1Q17 to 1Q18 SM NGL price realizations are predominantly tied to Mont Belvieu, fee based contracts Differential reflects NGL barrel product mix, and transportation…
2018 ACTIVITY BY REGION WELLS DRILLED, FLOWING COMPLETIONS, AND DUC COUNT Wells Drilled Flowing Completions DUC Count 1st Quarter 2018 1st Quarter 2018 1st Quarter 2018 Region Gross Net Gross Net Gross Net Permian Sweetie Peck 3 3…
LEASEHOLD SUMMARY PRO-FORMA FOR PENDING TRANSACTIONS Net Acres(1) 2Q Sales / Pro-forma Region 3/31/18 Additions Net Acres Midland Basin RockStar 64,855 760 65,615 Sweetie Peck(2) 16,900 - 16,900 Halff East 5,420 (5,420) - Midland…
Financial Detail 25
OIL AND GAS DERIVATIVE POSITIONS BY QUARTER THROUGH 2019 Midland - Cushing Oil Swaps Oil Collars Oil Basis Swaps Price Volume Volume Ceiling Floor Volume Differential Period (MBbls) /Bbl(1) (MBbls) /Bbl(1) /Bbl(1) (MBbls) /Bbl(1)…
NGL DERIVATIVE SWAP POSITIONS OPIS MT. BELVIEU Ethane Purity Propane Iso Butane Volume Volume Volume (2) (2) (2) Period (MBbls) /Bbl Period (MBbls) /Bbl Period (MBbls) /Bbl 2Q18 915 10.87 2Q18 554 24.94 2Q18 66 35.07 3Q18 1,033…
1ST QUARTER 2018 SOLID EXECUTION Production & Pricing 1Q18 Total Production (MMBoe/MBoe/d) 10.1/112.7 Oil Percentage 42% Pre-Hedge Realized Price (/Boe) 37.76 Post-Hedge Realized Price (/Boe) 35.34 210.2 MM Adjusted EBITDAX(1) Costs…
TOTAL CAPITAL SPEND RECONCILIATION TO COSTS INCURRED (GAAP) Reconciliation of costs incurred in oil and gas activities (GAAP) to total capital spend Three Months Ended (Non-GAAP)(1) (in millions) March 31, 2018 Costs incurred in oil…
ADJUSTED EBITDAX RECONCILIATION Reconciliation of net income (GAAP) and net cash provided by operating Three Months Ended activities (GAAP) to adjusted EBITDAX (non-GAAP): (in thousands) March 31, 2018 Net income (GAAP) 317,401…
ADJUSTED NET INCOME RECONCILIATION Reconciliation of net income (GAAP) to adjusted net income Three Months Ended (non-GAAP): (in thousands, except per share data) March 31, 2018 Net income (GAAP) 317,401 Net derivative loss 7,529…
DISCRETIONARY CASH FLOW RECONCILIATION TO NET CASH PROVIDED BY OPERATING ACTIVITIES (GAAP) Reconciliation of net cash provided by operating activities Three Months (GAAP) to discretionary cash flow (Non-GAAP)(1) Ended (in millions)…
Inventory and Returns 33
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…
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…
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…
MIDLAND BASIN DRILLING INVENTORY INCREASING INVENTORY AND NPV PER SECTION 4,000 3,500 Average Lateral Average Working 3,000 Length Interest 9,600 72% Drilling Locations (gross operated) 2,500 2,000 (up 13% from 2016)…
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…
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%…
Maps 40
ROCKSTAR OPERATORS SM Energy Callon Encana Surge/Yantai Xinchao Diamondback Oxy Energen Endeavor Sabalo Grenadier Note: Peer acreage obtained from 1Derrick 41
SWEETIE PECK OPERATORS SM Energy Apache Chevron Concho Devon Diamondback Discovery Endeavor Exxon Legacy Oxy Pioneer Summit Note: Peer acreage obtained from 1Derrick 42
EAGLE FORD OPERATORS Dimmit Maverick Dimmit Webb Area North Fasken Area East Area South 43
CONTACT INFORMATION Jennifer Martin Samuels Vice President - Investor Relations 303-864-2507 jsamuelssm-energy.com 45
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