BARCLAYS CEO ENERGY-POWER CONFERENCE SEPTEMBER 4, 2018
OUR VISION CREATING DIFFERENTIAL VALUE FOR OUR STAKEHOLDERS 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…
SM ENERGY: A TRANSFORMED PORTFOLIO FOCUSED ON TWO BASINS IN TEXAS MIDLAND BASIN 82,500 net acres 6 Rigs / 3 Frac Crews EAGLE FORD 165,000 net acres 1 Rig / 1 Frac Crew 35% 4
RAPID IMPROVEMENT PRODUCTION UP, LEVERAGE DOWN Cash flow growth, up 60% year over year(1) Big Midland production growth Rapid margin expansion; highest in 15 quarters Operational execution: New wells outperforming Record RockStar…
MIDLAND BASIN EXECUTING ON OUR PLAN Midland Basin 82,500 net acres 38 net completions in 2Q18 - 30 in RockStar area RockStar 6 rigs currently 3 frac fleets operating at high efficiency 37 net completions expected in 3Q18;…
MIDLAND BASIN PRODUCTION GROWTH TRAJECTORY WELL PERFORMANCE + EFFICIENCY DRIVES PRODUCTION BEATS Expected Permian production growth up 90% 2018/2017 Production outperformance drives margin growth Outperformance v. original plan…
MIDLAND BASIN TOP WELL RESULTS SM RANKS 1 IN REVENUE PER WELL(1) (1) Baird Equity Research 8/13/18 Joseph Allman 8
MIDLAND BASIN ROCKSTAR NEW WELL RESULTS GREAT RESULTS - MULTIPLE INTERVALS - ACROSS ACREAGE NEW WELLS AVERAGE 1,330 BOE/D, 87% OIL (10,180 LATERAL LENGTH) Spackler 3326LS Big Daddy A 1844WA Spackler 3346WA Big Daddy B 1845WA…
MIDLAND BASIN ROCKSTAR NEW WELL RESULTS NEW WELLS AT TIGHTER AVERAGE SPACING 250,000 200,000 Cumulative Production (BOE) 150,000 100,000 50,000 0 0 30 60 90 120 150 180 210 240 270 300 330 360 Days on…
MIDLAND BASIN DRIVING CAPITAL EFFICIENCY COMPLETIONS EFFICIENCY AND LOCAL SAND USAGE Percent Improvement in Current Sand Costs(1) Stages Pumped Per Day Since 3Q16 Indexed to January 2018 120% 1.1 Indexed to Northern White Jan…
MIDLAND BASIN DRIVING CAPITAL EFFICIENCY LOCAL SAND ARRANGEMENT WITH US SILICA & SANDBOX LOGISTICS New sand mines close to SM operations 55 miles(1) Substantial 48 miles(1) capital savings per well Lamesa (3Q18) Crane…
MIDLAND BASIN WATER MANAGEMENT INFRASTRUCTURE BACKBONE OF INFRASTRUCTURE IN PLACE Currently 95%+ Midland water on pipe Expected cost Accelerates System savings development control (LOE + Capital) 13
PERMIAN OIL TAKEAWAY AND PRICING TAKEAWAY COMMITMENTS + PRICING PROTECTION Takeaway commitments Firm sales agreements in place with multiple purchasers that cover current and projected oil production over the next year Midland…
EAGLE FORD ENHANCING INVENTORY VALUE Eagle Ford 165,000 net acres Assessing new intervals Up-spacing / increasing lateral length Optimizing completions Currently running 1 rig and 1 frac fleet Expect to complete 4 net…
BALANCE SHEET OFFERS FINANCIAL FLEXIBILITY LIQUIDITY OF 1.3B(1) 345 million in 6.5% senior notes due 2021 redeemed subsequent to quarter-end Extended 480MM in earlier maturities to 2027 Net debt:TTM Adjusted EBITDAX 3.1 times at…
WELL HEDGED PERCENTAGE OF EXPECTED PRODUCTION HEDGED Production Hedged(1) 80% of expected 2H18 production volumes hedged; 80% of oil volumes, 70% of gas volumes (NGLs hedged by product) 80% 45% of expected 2019 production volumes…
SM ENERGY WHY INVEST IN SM Opportunity to participate in high rate of change story at compelling value. Assets: SM wells ranked best in Midland Basin Execution: Exceptional track record Rapidly de-levering with ample liquidity…
Appendix 19
Operational Detail 20
2Q18 REALIZATIONS BY REGION Benchmark Pricing NYMEX WTI Oil (/Bbl) 67.88 NYMEX LLS Oil (/Bbl) 71.20 NYMEX Henry Hub Gas (/MMBtu) 2.80 Hart Composite NGL (/Bbl) 33.10 Production Volumes Eagle Ford(1) Permian Rocky Mountain Total Oil…
NGL REALIZATIONS 40% increase in realized price (before hedges) from 2Q17 to 2Q18 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(3) 2nd Quarter 2018 2018 YTD 2nd Quarter 2018 2018 YTD As of June 30, 2018 Region Gross Net Gross Net Gross Net…
LEASEHOLD SUMMARY 760 NET ACRE BOLT-ON AT ROCKSTAR IN 2Q18 Net Acres(1) Region 6/30/2018 Midland Basin RockStar 65,580 Sweetie Peck(2) 16,880 Midland Basin Total 82,460 Eagle Ford 164,680 Rocky Mountain Other(3) 186,845…
Financial Detail 25
2ND QUARTER 2018 AND 1H18 PERFORMANCE SOLID EXECUTION Production & Pricing 2Q18 1H18 Total Production (MMBoe/MBoe/d) 10.5/115.2 20.6/113.9 Oil Percentage 42% 42% Pre-Hedge Realized Price (/Boe) 38.40 38.09 Post-Hedge Realized Price…
2018 PLAN GUIDANCE(1) Capital & Production FY 2018 Total Capital Spend (MM)(2) (before acquisitions) 1,310 Total Production (MMBoe) 43.5 45.0 2018 Production by Quarter Total Production (MBoe/d) 119 123 140 Oil % 42% 120…
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 3Q18 1,033 10.99 3Q18 610 24.27 3Q18 70 35.07 4Q18 1,146…
ADJUSTED EBITDAX RECONCILIATION Reconciliation of net income (GAAP) and net cash provided by operating activities (GAAP) to adjusted Three Months Ended Six Months Ended EBITDAX (non-GAAP): (in thousands) June 30, 2018 June 30, 2018…
ADJUSTED NET INCOME RECONCILIATION Reconciliation of net income (GAAP) to adjusted net income (non-GAAP): Three Months Ended Six Months Ended (in thousands, except per share data) June 30, 2018 June 30, 2018 Net income (GAAP) 17,197…
DISCRETIONARY CASH FLOW RECONCILIATION TO NET CASH PROVIDED BY OPERATING ACTIVITIES (GAAP) Reconciliation of net cash provided by operating activities (GAAP) to discretionary cash flow Three Months Ended Six Months Ended (Non-GAAP)(1)…
Maps 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…
ROCKSTAR OPERATORS SM Energy Callon Encana Surge/Yantai Xinchao Diamondback Oxy Energen Endeavor Sabalo Grenadier Birch Permian Note: Peer acreage obtained from 1Derrick 37
SWEETIE PECK OPERATORS SM Energy Apache Chevron Concho Devon Diamondback Discovery Endeavor Exxon Legacy Oxy Pioneer Summit Note: Peer acreage obtained from 1Derrick 38
EAGLE FORD OPERATORS Dimmit Maverick Dimmit Webb Area North Fasken Area East Area South 39
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