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3Q 2018 Earnings Presentation – SM Energy Company

SM Energy Company · Nov 1, 2018 · 33 slides

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Slides

  1. 3Q 2018 Earnings Presentation – SM Energy Company – slide 1
    3Q18 EARNINGS GREAT WELLS, HIGH MARGINS & BIG CASH FLOW GROWTH NOVEMBER 1, 2018
  2. 3Q 2018 Earnings Presentation – SM Energy Company – slide 2
    THIRD QUARTER 2018 HIGHLIGHTS GREAT WELLS, HIGH MARGINS, BIG CASH FLOW GROWTH OPERATIONAL EXECUTION: NEW WELLS OUTPERFORMING PLAN 130.2 Mboe/d, 62% liquids 25 new RockStar wells average 1,300 Boe/d (88% oil) 30-day IP Midland…
  3. 3Q 2018 Earnings Presentation – SM Energy Company – slide 3
    DISCRETIONARY CASH FLOW GROWTH(1) BY QUARTER 73% CASH FLOW GROWTH 3Q18 223MM 3Q17 3Q18 1Q17 118MM Discretionary Cash Flow BIG CASH FLOW MM GREAT WELLS HIGH MARGINS GROWTH (1) See Appendix for definition of…
  4. 3Q 2018 Earnings Presentation – SM Energy Company – slide 4
    3Q18 REALIZATIONS BY REGION Benchmark Pricing NYMEX WTI Oil (/Bbl) 69.50 NYMEX LLS Oil (/Bbl) 74.13 NYMEX Henry Hub Gas (/MMBtu) 2.90 Hart Composite NGL (/Bbl) 37.97 Production Volumes Eagle Ford(1) Permian Total Oil (MBbls) 282 4,765…
  5. 3Q 2018 Earnings Presentation – SM Energy Company – slide 5
    3RD QUARTER AND YTD 2018 PERFORMANCE CONTINUED EXECUTIONAL EXCELLENCE Production & Pricing 3Q18 2018 YTD Total Production (MMBoe / MBoe/d) 12.0/130.2 32.6/119.4 Oil Percentage 42% 42% Pre-Hedge Realized Price (/Boe) 38.26 38.15…
  6. 3Q 2018 Earnings Presentation – SM Energy Company – slide 6
    BALANCE SHEET OFFERS FINANCIAL FLEXIBILITY LIQUIDITY OF 1.2B(1); NO NEAR-TERM MATURITIES Redeemed 345 million in 6.5% senior notes due 2021 Extended 480MM in near-term maturities to 2027 Net debt:TTM Adjusted EBITDAX(3) 2.9 times…
  7. 3Q 2018 Earnings Presentation – SM Energy Company – slide 7
    WELL HEDGED PERCENTAGE OF EXPECTED PRODUCTION HEDGED Production Hedged(1) 85% of expected 4Q18 production volumes hedged; 85% of oil volumes, 70% of gas volumes (NGLs hedged by product) 85% 60% of expected 2019 production…
  8. 3Q 2018 Earnings Presentation – SM Energy Company – slide 8
    2018 PLAN GUIDANCE(1) Capital & Production FY 2018 Total Capital Spend (MM)(2) (before acquisitions) 1,310 Total Production (MMBoe) 43.9 44.3 Total Production (MBoe/d) 120 121 Oil % 42% Costs LOE (/Boe) 4.75 Ad Valorem taxes…
  9. 3Q 2018 Earnings Presentation – SM Energy Company – slide 9
    OUTSTANDING OPERATIONAL EXECUTION FOCUSED ON CAPITAL EFFICIENCY AND RETURNS CAPITAL EFFICIENCY AND MARGIN IMPROVEMENTS DISCRETIONARY CASH FLOW(1) Increased use of local sand Up more than 70% (3Q18 / 3Q17) Reduced drill and…
  10. 3Q 2018 Earnings Presentation – SM Energy Company – slide 10
    MIDLAND BASIN CAPITAL DISCIPLINE + TIER 1 INVENTORY Executing On Our Plan Midland Basin 82,500 net acres RockStar 2018 PLAN 103 net well completions HOWARD COMPLETIONS EXECUTION MARTIN RockStar 83 net wells completed through…
  11. 3Q 2018 Earnings Presentation – SM Energy Company – slide 11
    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 180% 1.1 160% Indexed to Northern…
  12. 3Q 2018 Earnings Presentation – SM Energy Company – slide 12
    MIDLAND BASIN ROCKSTAR NEW WELL RESULTS GREAT RESULTS - NEW WELLS AVERAGE 1,300 BOE/D, 88% OIL (10,021 LL) Dawson Borden Big Iron Martin Howard 15 Wells 30 Day Avg. Peak Rate: 1,350 Boe/d (87% oil) Coyote Valley C o y o t e…
  13. 3Q 2018 Earnings Presentation – SM Energy Company – slide 13
    MIDLAND BASIN ROCKSTAR NEW WELL RESULTS SM AMONG RSEG IDENTIFIED TOP 4 PERMIAN PERFORMERS YTD(1) 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…
  14. 3Q 2018 Earnings Presentation – SM Energy Company – slide 14
    MIDLAND BASIN PRODUCTION GROWTH FASTER PACED D&C + WELL PERFORMANCE DRIVE PRODUCTION BEATS Expected Permian production growth up 90% 2018/2017 Production outperformance drives Production margin growth (MBoe) Company…
  15. 3Q 2018 Earnings Presentation – SM Energy Company – slide 15
    EAGLE FORD TIER 1 ASSET WITH EXPECTED ROOM TO GROW E n h a n c i n g I n v e n t o r y Va l u e INCREASING VALUE Up-spacing / increasing lateral length Optimizing completions Assessing new intervals DIMMIT COUNTY WEBB COUNTY…
  16. 3Q 2018 Earnings Presentation – SM Energy Company – slide 16
    OUR VISION CREATING DIFFERENTIAL VALUE FOR OUR STAKEHOLDERS PREMIER O P E R A T O R TOP TIER A S S E T S MIDLAND BASIN 82,500 net acres 6 Rigs / 3 Completion Crews 35% CAGR 2017-19 EXPECTED (1) EAGLE FORD 164,500 net…
  17. 3Q 2018 Earnings Presentation – SM Energy Company – slide 17
    Appendix 18
  18. 3Q 2018 Earnings Presentation – SM Energy Company – slide 18
    MIDLAND BASIN WELL RESULTS PREMIER OPERATOR GROSS PRODUCTION First Three Full Months 1 (1) Baird Equity Research 10/31/2018 Joseph Allman 19
  19. 3Q 2018 Earnings Presentation – SM Energy Company – slide 19
    Operational Detail 20
  20. 3Q 2018 Earnings Presentation – SM Energy Company – slide 20
    2018 PLANNED RIG ACTIVITY AND COMPLETIONS BY MONTH 14 100 90 12 80 10 70 Total Net DUCs(1) Operated Rigs 60 8 50 6 40 4 30 20 2 10 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Completion 5 7…
  21. 3Q 2018 Earnings Presentation – SM Energy Company – slide 21
    NGL REALIZATIONS Nearly 40% increase in realized price (before hedges) from 3Q17 to 3Q18 SM NGL price realizations are predominantly tied to Mont Belvieu, fee based contracts Differential reflects NGL barrel product mix,…
  22. 3Q 2018 Earnings Presentation – SM Energy Company – slide 22
    2018 ACTIVITY BY REGION WELLS DRILLED, FLOWING COMPLETIONS, AND DUC COUNT Wells Drilled Flowing Completions DUC Count As of September 30, 3rd Quarter 2018 2018 YTD 3rd Quarter 2018 2018 YTD 2018 Region Gross Net Gross Net Gross…
  23. 3Q 2018 Earnings Presentation – SM Energy Company – slide 23
    LEASEHOLD SUMMARY Net Acres(1) Region 9/30/2018 Midland Basin RockStar 65,410 Sweetie Peck(2) 16,880 Midland Basin Total 82,290 Eagle Ford 164,400 Rocky Mountain Other(3) 187,260 Other Areas/Exploration 24,915 Total…
  24. 3Q 2018 Earnings Presentation – SM Energy Company – slide 24
    Financial Detail 25
  25. 3Q 2018 Earnings Presentation – SM Energy Company – slide 25
    OIL AND GAS DERIVATIVE POSITIONS BY QUARTER THROUGH 2020 Midland - Cushing WTI - Brent Oil Swaps Oil Collars Oil Basis Swaps Oil Basis Swaps Price Price Volume Volume Ceiling Floor Volume Differential Volume Differential Period…
  26. 3Q 2018 Earnings Presentation – SM Energy Company – slide 26
    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 4Q18 1,146 11.18 4Q18 762 26.92 4Q18 76 35.07 2018 Total…
  27. 3Q 2018 Earnings Presentation – SM Energy Company – slide 27
    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 Nine Months Ended (non-GAAP)(1) (in millions) September 30, 2018…
  28. 3Q 2018 Earnings Presentation – SM Energy Company – slide 28
    ADJUSTED EBITDAX RECONCILIATION TO NET CASH PROVIDED BY OPERATING ACTIVITIES (GAAP) Reconciliation of net income (GAAP) and net cash provided by operating activities (GAAP) to adjusted Three Months Ended Nine Months Ended EBITDAX…
  29. 3Q 2018 Earnings Presentation – SM Energy Company – slide 29
    ADJUSTED NET INCOME (LOSS) RECONCILIATION TO NET INCOME (LOSS) (GAAP) Reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non-GAAP): Three Months Ended Nine Months Ended (in thousands, except per share data)…
  30. 3Q 2018 Earnings Presentation – SM Energy Company – slide 30
    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 Nine Months Ended (non-GAAP)(1)…
  31. 3Q 2018 Earnings Presentation – SM Energy Company – slide 31
    DEFINITIONS AND RECONCILIATION OF NET DEBT : TTM ADJUSTED EBITDAX The Company defines Net debt as the total principal value of outstanding senior notes, senior convertible notes plus balances drawn on the revolving credit facility (also…
  32. 3Q 2018 Earnings Presentation – SM Energy Company – slide 32
    TTM ADJUSTED EBITDAX RECONCILIATION TO NET CASH PROVIDED BY OPERATING ACTIVITIES (GAAP) Reconciliation of net income (GAAP) and net cash For the Trailing Twelve- provided by operating activities (GAAP) to adjusted Month Period Ended…
  33. 3Q 2018 Earnings Presentation – SM Energy Company – slide 33
    CONTACT INFORMATION Jennifer Martin Samuels Vice President - Investor Relations 303-864-2507 jsamuelssm-energy.com 35

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