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Capital One Securities 16th Annual Energy Conference – SM Energy Company

SM Energy Company · Dec 6, 2021 · 38 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. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 1
    CORRECTION: THIS CONFERENCE IS NOT WEBCAST Capital One Securities 16th Annual Energy Conference DECEM BER 6 , 2 0 2 1 NYSE: SM SM-ENERGY.COM
  2. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 2
    PREMIER OPERATOR OF TOP-TIER ASSETS FOCUSED ON TWO BASINS IN TEXAS ENTERPRISE VALUE: 6.5 Billion(1) MIDLAND BASIN PRODUCTION: 82,000 net acres 2 Rigs…
  3. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 3
    PREMIER OPERATOR OF TOP-TIER ASSETS THE FOUNDATION FOR VALUE CREATION Value Creation Momentum Intrinsic increase in NAV/EV from confirmation of Austin Chalk Conversion of EV from debt to equity Multiple expansion as leverage…
  4. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 4
    PREMIER OPERATOR OF TOP-TIER ASSETS EXECUTING ON OUR PRIORITIES Third Quarter 2021 Highlights WELL CAPITAL CASH BALANCE SHEET PERFORMANCE EFFICIENCY FLOWS IMPROVEMENT Production of 14.3 MMBoe Capital expenditures of 180.1 Generated…
  5. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 5
    2022 J.P. MORGAN ESTIMATED FCF YIELD(1) COMPARISON SM ENERGY: TOP-TIER FCF YIELD IN 2022, BASED ON JPM ESTIMATES 35% 30% 25% J.P. Morgan 20% 2022 Free Cash Flow Yield (1) Estimates 15% Source: J.P. Morgan Research; July…
  6. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 6
    BALANCE SHEET FOCUSED ON IMPROVING BALANCE SHEET STRENGTH As of September 30, 2021: D e b t M a t u r i t i e s (2) Net debt-to-Adjusted EBITDAX (1) 1.96x in millions Liquidity 1.1 billion 1.1B 1,250 Borrowing Base &…
  7. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 7
    MIDLAND BASIN FOCUSED ON EXECUTION, WELL PERFORMANCE AND CAPITAL EFFICIENCY 2 0 2 1 O P E R AT I N G P L A N 2021 PLAN DETAILS 3Q21: 24 net wells completed and 14 net wells drilled HOWARD YTD 3Q21: 78 net wells completed and 38…
  8. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 8
    MIDLAND BASIN FIRST SIMUL-FRAC A TESTAMENT TO OPERATIONS LEADERSHIP First Simul-Fracs Completing pads faster and at same cost as base design without Completed a max of compromising fluid and/or proppant loadings 26 stages per…
  9. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 9
    MIDLAND BASIN FOUR-MILE LATERAL: LONGEST LATERAL IN THE INDUSTRY IN STATE OF TEXAS 4 Clarice Starling Sundown D 4542 WA Utilized highly experienced and long-time mile lateral partnered rig contractor and service providers 20…
  10. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 10
    MIDLAND BASIN NEW COMPLETION DESIGN DRIVING HIGHER EUR AND NPV PER WELL Miracle Max Optimizing EUR and NPV by . 3 wells with new completion design employing data analytics Aggressive test of completion size over the 500,000…
  11. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 11
    MIDLAND BASIN TOP-TIER BREAKEVEN PRICES DRIVEN BY CAPITAL EFFICIENCY 1,500 2H19 2021E Lowest Permian well costs 1,000 (Per lateral foot) Peers include CDEV, CPE, ESTE, FANG, LPI, MTDR, OVV, PDCE, PXD, XEC 500 Source: Enverus…
  12. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 12
    SOUTH TEXAS FOCUSED ON EXECUTION AND RETURNS ENHANCEMENT 2 0 2 1 O P E R AT I N G P L A N 2021 PLAN DETAILS 3Q21: 11 net wells completed and 10 net wells drilled YTD 3Q21: 19 net wells completed and 26 net wells drilled; full year…
  13. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 13
    SOUTH TEXAS: AUSTIN CHALK SUCCESS CONTINUES SUCCESSFUL TEST RESULTS ACROSS ACREAGE POSITION South Texas: 155,000 total net acres; significant area delineated for Austin Chalk development, supporting Austin Chalk Wells Currently…
  14. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 14
    SOUTH TEXAS: NEW AC WELLS AT DEVELOPMENT SPACING STRONG PERFORMANCE AND HIGH OIL CONTENT New Austin Chalk Well Results Performance at development spacing First 6 Austin Chalk wells completed at consistent with wells to date…
  15. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 15
    HIGH QUALITY INVENTORY SM ENERGY AUSTIN CHALK BREAKEVEN OIL PRICE COMPETITIVE WITH PERMIAN PEERS Permian Breakeven oil price(1) at 20:1 WTI to NYMEX Low breakeven costs translate to more free 56 cash flow (per Boe produced) at…
  16. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 16
    ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) MAKING PEOPLES LIVES BETTER BY RESPONSIBLY PRODUCING OIL & NATURAL GAS 1 Rystad Energy: SM Energy top Environmental score among Permian Basin operators(1) 2020 ESG Performance and…
  17. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 17
    ESG - HUMAN CAPITAL COLLABORATION AND INCLUSIVE CULTURE ARE CORE TO OUR BUSINESS Workforce Metrics: Number of Employees 504 Board Diversity (as of 12/31/20) 57% (as of 9/27/21) Women Employees 33% 2020 Charitable…
  18. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 18
    PREMIER OPERATOR OF TOP-TIER ASSETS THE EXPERTS AGREE Post SMs strong 3Q21 results (dare I say print of the season), which included sizable volume and FCF beatsWe continue to view SM as a combo producer (leverage to all 3 commodities:…
  19. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 19
    Appendix 20
  20. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 20
    THIRD QUARTER 2021 PERFORMANCE Key Metrics 3Q21 Production and Pricing Production Total Production (MMBoe) 14.3 Total Production (MBoe/d) Oil percentage Pre-Hedge Realized Price (/Boe) Post-Hedge Realized Price (/Boe) 155.8 56%…
  21. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 21
    3Q 2021 REALIZATIONS BY REGION TWO TOP-TIER AREAS OF OPERATION Benchmark Pricing NYMEX WTI Oil (/Bbl) 70.56 Midland South Basin Texas Total NYMEX Henry Hub Gas (/MMBtu) 4.01 Hart Composite NGL (/Bbl) 40.39 Production Volumes Oil…
  22. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 22
    (1) 2021 GOALS AND PLAN GUIDANCE FULL-YEAR PRODUCTION GUIDANCE RAISED AND NARROWED Guidance Change Key Metrics 2021 Goals FY 2021 (v. July Guidance) Capital Expenditures(3) (MM) 670 - 675 2% Generate positive free cash flow(2)…
  23. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 23
    ACTIVITY BY REGION WELLS DRILLED, FLOWING COMPLETIONS, AND DUC COUNT Wells Drilled Flowing Completions DUC Count(1) 3Q21 2021 YTD 3Q21 2021 YTD As of September 30, 2021 Gross Net Gross Net Gross Net Gross Net Gross Net Midland…
  24. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 24
    LEASEHOLD SUMMARY NO LEASEHOLD ON FEDERAL LANDS IN THE MIDLAND BASIN OR SOUTH TEXAS MIDLAND BASIN Net Acres (1) NET ACRES Midland Basin Sweetie Peck(2) RockStar Midland Basin total 18,000 63,500 81,500 82,000 South Texas…
  25. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 25
    HIGH QUALITY MULTI-FORMATION INVENTORY COMPELLING ECONOMICS AT LOW COMMODITY PRICES Total Company Midland Basin expected inventory(1): expected inventory(1): Enverus Research(2) 13+ years 9 years Years of Sub 40 WTI and 2.25 HH…
  26. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 26
    NGL REALIZATIONS Realizations by Quarter 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Mont Belvieu Benchmark Price (/Bbl) 19.13 21.68 30.47 31.52 40.39 NGL price realizations tied to SM NGL Realization (/Bbl) 14.07 18.43 26.93 28.41…
  27. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 27
    SM ENERGY AUSTIN CHALK VS. DELAWARE BASIN NOT THE OLD EAST TEXAS AUSTIN CHALK 600,000 Austin Chalk SM Austin Chalk wells have superior liquids 500,000 content compared to average Delaware Delaware Basin(1) Basin well Cumulative…
  28. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 28
    Hedges 29
  29. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 29
    HEDGING SUMMARY HEDGE VOLUMES EXPECTED TO DECLINE WITH LEVERAGE Oil volumes hedged(1) SM Energy Hedge Program Oil Q4 2021 5,052 MBbls(1), or approximately 70-75% of expected 4Q 2021 oil production, 70-75% hedged to WTI at an…
  30. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 30
    (1) OIL, GAS, AND NGL DERIVATIVE POSITIONS BY QUARTER Oil Oil Swaps Oil Collars Midland - Cushing Oil Basis Swaps NYMEX WTI - ICE Brent Oil Basis Swaps MEH WTI Basis Swaps NYMEX WTI Roll Basis Swaps Price Price Price Price…
  31. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 31
    Third Quarter 2021 Non-GAAP Reconciliations and Disclosures 32
  32. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 32
    NON-GAAP RECONCILIATIONS Adjusted EBITDAX(1) Three Months Ended Nine Months Ended September 30, September 30, Adjusted Net Income(1) Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2021 (in…
  33. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 33
    NON-GAAP RECONCILIATIONS Free Cash Flow(1) Three Months Ended Nine Months Ended September 30, September 30, Net Debt(1) As of September 30, (in thousands) (in thousands) 2021 2021 2021 Net cash provided by operating activities…
  34. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 34
    Regional Maps 36
  35. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 35
    MIDLAND BASIN OPERATORS 37
  36. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 36
    SWEETIE PECK OPERATORS 38
  37. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 37
    SOUTH TEXAS OPERATORS 39
  38. Capital One Securities 16th Annual Energy Conference – SM Energy Company – slide 38
    SM ENERGY CONTACTS Jennifer Martin Samuels Vice President - Investor Relations 303.864.2507 jsamuelssm-energy.com Jeremy Kline Manager - Investor Relations 303.863.4313 jklinesm-energy.com 40

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