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2Q 2014 Earning Call – SM Energy Company

SM Energy Company · Jul 30, 2014 · 28 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. 2Q 2014 Earning Call – SM Energy Company – slide 1
    2nd Quarter Earnings Call and Operational Update July 30, 2014
  2. 2Q 2014 Earning Call – SM Energy Company – slide 2
    Key Messages Record quarter Record quarterly production of 147.0 MBOE/d Record quarterly adjusted EBITDAX* of 423.4 million Pending acquisition in Divide and Williams Counties, North Dakota expected to add significant inventory in…
  3. 2Q 2014 Earning Call – SM Energy Company – slide 3
    2nd Quarter 2014 Performance 2Q14 Actual Production Performance 2Q14 Guidance Production Record quarterly production Average daily production (MBOE/d) 147.0 136 - 143 of 147 MBOE/d Total production (MMBOE) 13.38 12.4 - 13.0 Net…
  4. 2Q 2014 Earning Call – SM Energy Company – slide 4
    Operational Update 5
  5. 2Q 2014 Earning Call – SM Energy Company – slide 5
    Operated Eagle Ford Operational Highlights SM Energy made 23 flowing completions in 2Q14; 9% sequential production growth. The Company is shifting to a program with longer lateral wells with higher sand loadings. Net Production…
  6. 2Q 2014 Earning Call – SM Energy Company – slide 6
    Improving Eagle Ford Completions Improved Completion Designs Tested in Area 2 Area Net Acres Tested increased sand 1 2 35,082 21,879 loadings on a per 3A 22,226 3B 29,726 lateral foot basis on 4 8,268 5 25,124 wells of…
  7. 2Q 2014 Earning Call – SM Energy Company – slide 7
    Improved Completion Design Higher Pressures Area 2: Casing Pressure vs. Cumulative Production Pressure (psi) 1,000 PSI Increase Improved Completion Old Completion Cumulative Gas (MMCF) 8
  8. 2Q 2014 Earning Call – SM Energy Company – slide 8
    Improved Completion Design Higher IPs Area Area2:2:Gas Rate Rate perper Well Well vs.vsTime Time 5000 4000 Gas Rate / well (MCFD) 3000 2000 1000 Improved Completion Old Completion 0 0 20 40 60 80 100 120…
  9. 2Q 2014 Earning Call – SM Energy Company – slide 9
    Improved Completion Design Improved Condensate Yield Area 2: Condensate Yield vs. Cumulative Production Condensate Yield (bbl/MMcf)* 50% Increase Improved Completion Old Completion Cumulative Gas (MMCF) *First Stage…
  10. 2Q 2014 Earning Call – SM Energy Company – slide 10
    Improved Completion Design Increasing Value Improved Completions 5,176 average lateral length 2,025 average lbs/foot sand 6.84MM average cost Old Completions 5,008 average lateral length 1,128 average lbs/foot sand 6.73MM…
  11. 2Q 2014 Earning Call – SM Energy Company – slide 11
    Non-operated Eagle Ford Operational Highlights Net Production APC made 95 flowing 25 MBOE/d completions in 2Q14. 20 15 Carry by Mitsui completed 10 19.8 20.0 23.4 23.8 17.4 as of June 30, 2014. 5 0 2Q13 3Q13 4Q13 1Q14…
  12. 2Q 2014 Earning Call – SM Energy Company – slide 12
    Bakken/Three Forks Net Production 18 16 GOOSENECK MBOE/d 14 97,000 acres 12 10 8 16.1 16.0 16.5 13.7 14.9 6 RAVEN/BEAR DEN 4 42,000 acres 2 0 2Q13 3Q13 4Q13 1Q14 2Q14 Operational Highlights SM Energy made 12 gross…
  13. 2Q 2014 Earning Call – SM Energy Company – slide 13
    Pending Gooseneck Acquisition SM Energy has entered into an agreement to acquire SM Legacy Acreage Pending Acquisition additional acreage in Divide and Williams Counties, North Dakota. Significant acquisition fits perfectly with…
  14. 2Q 2014 Earning Call – SM Energy Company – slide 14
    Improving Three Forks Results Optimization in Gooseneck Acreage Sand Loading Tests Improving economics Gooseneck through: Decreased drilling times Increased sand loading in completions ND * Map and acreage total include…
  15. 2Q 2014 Earning Call – SM Energy Company – slide 15
    Optimizing Reducing Drill Time SM Energy Gooseneck Drilling 25 20 Spud to Rig Release (Days) 15 10 5 0 2012 2013 2014 16
  16. 2Q 2014 Earning Call – SM Energy Company – slide 16
    Optimizing Improving Completion Design SM Energy Three Forks Increased Sand Loading Results 500 450 Increased sand loading on a per lateral foot basis by 40% 400 33% Increase in peak Daily Production (BOEPD) 350 BOE/d rate…
  17. 2Q 2014 Earning Call – SM Energy Company – slide 17
    Optimizing Increasing Value Improved Completions 10,026 average lateral length 265 average lbs./foot sand 6.19MM average cost Older Completions 10,137 average lateral length 192 average lbs./foot sand 7.04MM average cost…
  18. 2Q 2014 Earning Call – SM Energy Company – slide 18
    Powder River Basin Update WY In 2014, the Company has added approximately 33,000 net acres to its Rush Peak 30-day IP 737 BOE/d (3800 lateral) Powder River Basin position. The Company now holds approximately Loco Peak 30-day IP…
  19. 2Q 2014 Earning Call – SM Energy Company – slide 19
    Financial Position TOTAL BOOK CAPITALIZATION At June 30, 2014, 4,000 (in millions) the Companys 3,500 debt to trailing 3,000 adjusted EBITDAX 2,500 1,746 2,000 was 1.0 and net 1,500 500 debt to book 1,000 400 capitalization…
  20. 2Q 2014 Earning Call – SM Energy Company – slide 20
    Debt to TTM adjusted EBITDAX 4.0x 3.5x 3.0x 2.5x Median: 2.2x 2.0x 1.5x 1.0x 0.5x 1.0 1.0 0.0x SM SM 6/30/14 3/31/14 SM Energys debt to trailing twelve-month adjusted EBITDAX is below its peer median average of 2.2x.…
  21. 2Q 2014 Earning Call – SM Energy Company – slide 21
    Key Takeaways SM Energy had a strong quarter with record quarterly production and adjusted EBITDAX. Pending Three Forks / Bakken acquisition is expected to add significant inventory in its core Williston Basin program. Improved…
  22. 2Q 2014 Earning Call – SM Energy Company – slide 22
    Appendix 23
  23. 2Q 2014 Earning Call – SM Energy Company – slide 23
    Acquisition Deal Terms Net Acres added 61,000 net acres Acquisition price 330 million Associated net production 3,200 BOE/d (91% oil, 1,500 BTU gas) % operated 90 % HBP 70 Acquired spacing units Interests in 126 spacing units, 81 of…
  24. 2Q 2014 Earning Call – SM Energy Company – slide 24
    2Q14 Regional Realizations NYMEX WTI OIL (Bbl) 103.06 Hart Composite NGL (Bbl) 41.21 NYMEX Henry Hub Gas (MMBTU) 4.60 Production Volumes STGC Rockies Mid-Con Permian SM Total Oil (MBbls) 1,673 1,703 15 499 3,893 Gas (MMcf) 30,337…
  25. 2Q 2014 Earning Call – SM Energy Company – slide 25
    Adjusted EBITDAX Reconciliation Adjusted EBITDAX (1) (in thousands) Reconciliation of net income(GAAP) to Adjusted EBITDAX (non-GAAP) to net cash For the Three Months Ended provided by operating activities (GAAP): June 30, 2014 2013 Net…
  26. 2Q 2014 Earning Call – SM Energy Company – slide 26
    Oil Derivative Position* Oil Swaps - NYMEX Equivalent Oil Collars - NYMEX Equivalent Ceiling Floor Bbls /Bbl Bbls /Bbl /Bbl 2014 2014 Q3 1,729,000 96.41 Q3 973,000 102.58 85.00 Q4 1,880,000 95.85 Q4 923,000 102.63 85.00 2014…
  27. 2Q 2014 Earning Call – SM Energy Company – slide 27
    Gas Derivative Position* Natural Gas Swaps - NYMEX Equivalent Natural Gas Collars - NYMEX Equivalent Ceiling Floor MMBTU /MMBTU MMBTU /MMBTU /MMBTU 2014 2014 Q3 24,541,000 4.03 Q3 - Q4 22,014,000 4.07 Q4 - 2014 Total 46,555,000…
  28. 2Q 2014 Earning Call – SM Energy Company – slide 28
    NGL Derivative Position* Natural Gas Liquid Swaps - Mont. Belvieu Bbls /Bbl 2014 Q3 960,000 58.06 Q4 861,000 58.06 2014 Total 1,821,000 2015 Q1 781,000 55.42 2015 Total 781,000 Grand Total 2,602,000 *As of 7/28/14 30

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