1st Quarter 2012 Earnings Call and Operational Update May 3, 2012
KEY MESSAGES 2012 off to a solid start Production and cost performance met or beat 1Q12 guidance Development programs focused on high return projects 95% of the 2012 allocated D&C capital is expected to be deployed toward oil and…
FINANCIAL UPDATE 4
FIRST QUARTER 2012 PERFORMANCE Performance versus Guidance 1Q12 Actual Production Performance 1Q12 Guidance Net Income Average daily production (MMCFE/d) 557.0 533- 571 GAAP net income of Total production (BCFE) 50.7 48.5 - 52.0 26.3…
FINANCIAL POSITION 1Q12 TOTAL BOOK DEBT MATURITIES CAPITALIZATION (in millions) (in millions) 2012 3,000 SM issued redemption notice to call the 3.50% Senior 2014 Convertible Notes. Conversion 2,500 right expired on 4/30/12…
LONG-TERM CREDIT FACILITY (in millions) Borrowing base increased to 1.5 1,500 billion from 1.3 billion 500 Growth in oil and NGL 313 projects drove increase 1,000 SM elected to maintain 500 1,000 1,000 commitments at 1.0 billion…
PRODUCTION MIX 95% of 2012 drilling and completion capital is allocated to liquids-rich projects The Company expects a production mix of 50/50 liquids to gas in 2014 Expected Average Production Mix 2012 2014 45% Liquids 50% Liquids…
2012 OPERATIONS Liquids vs. Dry Gas Operated Rigs Operated Rigs 0.25 Eagle Ford Bakken/Three 1 Forks 1 Granite Wash Oil/Liquid 5.5 focused 3 Southern Dry gas Rockies focused Permian 3.75 Haynesville Activity in 2012 is…
OPERATED EAGLE FORD SHALE Net Production 200 150 MMCFE/d 100 180.5 178.3 128.1 50 91.6 96.8 0 1Q11 2Q11 3Q11 4Q11 1Q12 2012 Plan Decrease in 1Q12 production due to shift to pad drilling and completion related…
NON-OPERATED EAGLE FORD SHALE 2012 Plan Production increase of 9% from 4Q11 to 1Q12 despite transfer of interests to Mitsui SM anticipates that the APC drilling program will run Net Production approximately 10 drilling 14 rigs…
BAKKEN/THREE FORKS Net Production 12 10 GOOSENECK 8 35,000 acres MBOE/d 6 10.3 4 8.2 BEAR DEN 5.4 RAVEN 15,000 acres 2 4.2 4.0 Canada 37,000 acres 0 1Q11 2Q11 3Q11 4Q11 1Q12 2012 Plan Currently operating 3 drilling…
OTHER ACTIVITY Granite Wash Currently running three rigs, focused on Marmaton and Missourian washes Permian Currently one rig running in the Permian focused on Mississippian lime South Rockies Currently running one rig…
2012 GROWTH OUTLOOK SM is positioned to grow production by approximately 32% in 2012 based on the midpoint of current guidance assumptions 240 227 Production 220 220 200 BCFE 180 160 169.7 140 120 100 2011 Reported…
KEY TAKEAWAYS First quarter results position the Company for success with its 2012 plan Met or beat all guided production and cost measures The Companys production continues to become more liquids-rich The Company expects 50/50…
APPENDIX 18
GUIDANCE UPDATE 2Q12 FY 2012 Production (BCFE) 50.0 54.0 220 227 Average daily production (MMCFE/d) 549 593 601 620 Oil production (as % of total) 28% Natural gas production (as % of total) 55% NGL production (as % of total) 17% LOE…
ADJUSTED NET INCOME RECONCILIATION Reconciliation of net income (GAAP) to adjusted net income (Non-GAAP): For the Three Months Ended March 31, (in thousands, except per share data) 2012 2011 Reported Net Income (GAAP) 26,336 (18,503)…
EBITDAX RECONCILIATION EBITDAX (1) Reconciliation of net income (GAAP) to EBITDAX (Non-GAAP) For the Three Months Ended March 31, (In thousands) 2012 2011 Reported net income (GAAP) 26,336 (18,503) Adjustments: Interest income…
NATURAL GAS REALIZATIONS 6.00 110% 105% SM Realized Price SM Realization as % of 5.00 100% 4.00 Benchmark Henry Hub 95% /Mcf Benchmark 3.00 90% 2.00 Realization % 85% Compared to Benchmark 1.00 80% 0.00…
EAGLE FORD TAKEAWAY CAPACITY VOLUMES 700 Gross Wet Gas and Net Equivalent Production Capacities 600 Average Takeaway/Production Capacity Equivalent net 502 502 504 504 500 production capacity 468 468 (MMCFE/d) 411 411 411…
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