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Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company

SM Energy Company · Feb 19, 2020 · 39 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. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 1
    4Q19 EARNINGS AND 2020 OPERATING PLAN FEBRUARY 19, 2020
  2. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 2
    PREMIER OPERATOR OF TOP-TIER ASSETS 2019 PLAN RESULTS EXCEED PLAN OBJECTIVES February 2019 Plan Objectives 2019 Actual Results 1 29MM of free cash flow Generate free cash flow in 2H19 generated, 2% free cash flow yield in 2H19(1) 2…
  3. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 3
    PRODUCTION 2017 2019 EXCEEDED PLAN MIDLAND BASIN PRODUCTION GROWTH DRIVES MARGIN EXPANSION & CASH FLOW MIDLAND BASIN PRODUCTION UP 150% 2017-2019(1) 50,000 40,000 Production 30,000 (MBoe) 20,000 10,000 2019…
  4. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 4
    BALANCE SHEET FOCUS(1) LEVERAGE METRICS IMPROVED Liquidity of 1.1B; borrowing base re-affirmed in October Net debt to adjusted EBITDAX at 2.8x(2) Debt Maturities(1) (in millions) 1,750 Borrowing Base: 1.6B 1,500 1,250…
  5. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 5
    Plan Overview & Guidance NYSE: SM 6
  6. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 6
    PREMIER OPERATOR OF TOP TIER ASSETS 2020 PRIORITIES FOCUSED ON SHAREHOLDER VALUE CREATION 2020 PRIORITIES VALUE CREATION CASH FLOW IMPROVE LEVERAGE GROWTH METRICS + + FREE CASH FLOW CASH FLOW FUNDED DEBT GROWTH PER DEBT…
  7. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 7
    2020 2020 PLAN HIGHLIGHTS MIDLAND BASIN PLANNED PRODUCTION GROWTH DRIVES EXPECTED MARGIN EXPANSION & CASH FLOW MIDLAND BASIN EXPECTED PRODUCTION UP 180% 2017-2020(1) COMPANY EXPECTED PRODUCTION MARGIN UP 75% 2017-2020(1) 60,000…
  8. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 8
    2020 2021 PLAN HIGHLIGHTS KEY METRICS IMPROVE Free Cash Flow 20% Adjusted EBITDAX Free Cash Flow Yield(1) Total Capital Spend 0% -20% 1,200 Total Capital Spend(1) Adjusted EBITDAX(1) -40% 800 (MM)…
  9. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 9
    2020 CAPITAL PROGRAM FOCUS ON HIGH-MARGIN GROWTH EXPECTED TOTAL CAPITAL SPEND(1) REDUCED NEARLY 20%(2) Total Capital Spend 825 - 850MM Midland Basin: plan 80 net wells drilled and 85 net wells completed 5% Drilling and…
  10. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 10
    2020 PLAN GUIDANCE(1) Capital & Production FY 2020 Total capital spend (MM)(2) (before acquisitions) 825 - 850 Total production (MMBoe) 45 - 48 Total production (MBoe/d) 123 - 131 Oil percentage 50% Costs FY 2020 LOE (/Boe) 5.25…
  11. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 11
    WELL HEDGED PERCENTAGE OF OIL PRODUCTION HEDGED 2020 2020 Oil Volumes Expected Revenue Hedged(1) NGLs Gas 5% 15% 80% Oil 80% 80% of expected 2020 oil production hedged; swaps at 58/Bbl, collar floors at 55/Bbl…
  12. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 12
    2019 Regional Results and 2020 Operations Plan NYSE: SM 13
  13. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 13
    MIDLAND BASIN TOP-TIER EXECUTION, WELL PERFORMANCE AND CAPITAL EFFICIENCY 2020 Plan Objectives 2020 PLAN DETAILS 85 net completions and 80 net drilled wells planned HOWARD Deliver 10% production growth (2020/2019) RockStar 11,750…
  14. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 14
    MIDLAND BASIN: TOP-TIER CAPITAL EFFICIENCY INCREASE IN CAPITAL EFFICIENCY 2020 PLAN BASED ON 650 / LATERAL FOOT Drilling Faster Completing Faster Lateral Ft Drilled per Day(1) Lateral Ft Completed per Day(2) 1,503 645 Increase in…
  15. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 15
    MIDLAND BASIN: GREAT NEW ROCKSTAR RESULTS OUTSTANDING NEW WELL PERFORMANCE 250,000 Cumulative Production (Boe)(1) 200,000 150,000 100,000 50,000 0 0 50 100 150 200 250 300 350 Days on Production (2) (3)…
  16. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 16
    MIDLAND BASIN HIGH QUALITY INVENTORY COMPARISON RSEG data supports 100% of SM inventory breakeven(1) at < 45/Bbl oil % of Permian Inventory…
  17. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 17
    SOUTH TEXAS FOCUSED ON EXECUTION AND RETURNS ENHANCEMENT 2020 Plan Objectives 2020 PLAN DETAILS 16 net wells expected to be drilled 9 net completions planned, all targeting the Austin Chalk, and weighted towards the second half of…
  18. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 18
    SOUTH TEXAS: EXCELLENT CAPITAL EFFICIENCY LONGER LATERALS & NEW WELL DESIGN 2020 PLAN BASED ON 650 / LAT. F.T. Drilling Faster Completing Faster Lateral Ft Drilled per Day(1) Lateral Feet Completed per Day(2) 824 1,663 Increase in…
  19. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 19
    SOUTH TEXAS: AUSTIN CHALK SUCCESS NEW AUSTIN CHALK WELL: 1,581 BOPD 30-DAY PEAK IP RATE HIGHER OIL CONTENT = HIGHER RETURNS Briscoe G GU11 State (SA4) 109H 180 DEMONSTRATING GEOGRAPHIC EXPANSE 160 Total Production Briscoe G GU11…
  20. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 20
    ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) MAKING PEOPLES LIVES BETTER BY RESPONSIBLY PRODUCING OIL & NATURAL GAS SMS BOARD OF DIRECTORS IS ACTIVELY ENGAGED IN ESG OVERSIGHT E Member in API Environmental Partnership energy companies…
  21. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 21
    Appendix NYSE: SM 22
  22. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 22
    Fourth Quarter and Full Year Performance NYSE: SM 23
  23. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 23
    FOURTH QUARTER 2019 PERFORMANCE Production & Pricing 4Q19 2019 Total Production (MMBoe / MBoe/d) 12.8/138.8 48.3/132.3 Oil Percentage 48% 45% Pre-Hedge Realized Price (/Boe) 35.17 32.84 Post-Hedge Realized Price (/Boe) 36.38 33.65…
  24. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 24
    4Q19 REALIZATIONS BY REGION SIMPLIFIED PORTFOLIO: 2 TOP-TIER AREAS OF OPERATION Benchmark Pricing NYMEX WTI Oil (/Bbl) 56.96 NYMEX LLS Oil (/Bbl) 60.63 NYMEX Henry Hub Gas (/MMBtu) 2.50 Hart Composite NGL (/Bbl) 21.96 Production…
  25. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 25
    2019 ACTIVITY BY REGION WELLS DRILLED, FLOWING COMPLETIONS AND DUC COUNT Wells Drilled Flowing Completions DUC Count 4th Quarter 2019 2019 YTD 4th Quarter 2019 2019 YTD As of December 31, 2019 Region Gross Net Gross Net Gross Net…
  26. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 26
    2019 PROVED RESERVES: ADDITIONS AND REVISIONS Reserve adds of 101.5 MMBoe before revisions Oil reserves increased from 35% to 40% of total reserves due to increased Midland reserves 600 98 25 500 Proved Reserves (MMBoe) 70…
  27. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 27
    2019 PROVED RESERVES BY REGION YE 2018 (MMBoe) 214.3 289.1 503.4 Midland South YE 2019 Total Basin Texas Oil (MMBbl) 167.5 16.6 184.1 SEC Pricing 2019 2018 % change Oil (/Bbl) 55.69 65.56 (15)% Gas (Bcf) 398.8 824.4 1,223.2 Gas…
  28. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 28
    LEASEHOLD SUMMARY NO LEASEHOLD ON FEDERAL LANDS IN THE MIDLAND BASIN OR SOUTH TEXAS Net Acres(1) Region December 31, 2019 Midland Basin RockStar 63,800 Sweetie Peck(2) 18,000 Midland Basin Total 81,800 South Texas(3)…
  29. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 29
    NGL REALIZATIONS NGL price realizations are predominantly tied to Mont Belvieu, fee- based contracts Differential reflects composite NGL barrel product mix, transportation and fractionation fees SM Typical NGL Bbl(1) 4Q18 1Q19…
  30. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 30
    Hedges NYSE: SM 31
  31. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 31
    OIL, GAS, AND NGL DERIVATIVE POSITIONS(1) BY QUARTER Oil Midland - Cushing NYMEX WTI ICE Brent Oil Swaps Oil Collars Oil Basis Swaps Oil Basis Swaps Volume Volume Ceiling Floor Price Differential Volume Price Differential Period…
  32. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 32
    Fourth Quarter & Full Year 2019 Non-GAAP Reconciliations and Disclosures NYSE: SM 33
  33. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 33
    ADJUSTED EBITDAX(1) RECONCILIATION TO NET INCOME (LOSS) (GAAP) & NET CASH PROVIDED BY OPERATING ACTIVITIES (GAAP) Reconciliation of net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to adjusted For the…
  34. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 34
    ADJUSTED NET LOSS(1) RECONCILIATION TO NET INCOME (LOSS) (GAAP) Reconciliation of net income (loss) (GAAP) to adjusted net loss (non-GAAP): Three Months Ended Twelve Months Ended (in thousands, except per share data) December 31, 2019…
  35. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 35
    DISCRETIONARY CASH FLOW(1) RECONCILIATION TO NET CASH PROVIDED BY OPERATING ACTIVITIES (GAAP) Reconciliation of net cash provided by operating For the Years Ended December 31, activities (GAAP) to discretionary cash flow Six Months…
  36. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 36
    TOTAL CAPITAL SPEND(1) RECONCILIATION TO COSTS INCURRED (GAAP) Reconciliation of costs incurred in oil and gas For the Years Ended December 31, producing activities (GAAP) to total capital Six Months Ended spend (non-GAAP): (in…
  37. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 37
    FREE CASH FLOW AND FREE CASH FLOW YIELD(1) For the Years Ended December 31, Six Months Ended (in millions) December 31, 2019 2019 2018 2017 Discretionary cash flow 477.1 853.7 756.6 494.2 Total capital spend 448.3 1,025.1 1,329.1…
  38. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 38
    NET DEBT(1) For the Years Ended December 31, (in millions) 2019 2018 2017 Senior Notes (principal value from Note 5 of Form 10-K) 2,476.8 2.476.8 2,801.4 Senior Convertible Notes (principal value from Note 5 of Form 10-K) 172.5 172.5…
  39. Q4 2019 Earnings and 2020 Operationg Plan – SM Energy Company – slide 39
    CONTACT INFORMATION Jennifer Martin Samuels Vice President - Investor Relations 303-864-2507 jsamuelssm-energy.com NYSE: SM 41

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