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2Q 2022 Earnings Presentation – SM Energy Company

SM Energy Company · Aug 4, 2022 · 35 slides

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Slides

  1. 2Q 2022 Earnings Presentation – SM Energy Company – slide 1
    SECOND QUARTER 2022 F I N A N C I A L A N D O P E R AT I N G R E S U LT S NYSE: SM SM-ENERGY.COM
  2. 2Q 2022 Earnings Presentation – SM Energy Company – slide 2
    SM ENERGY IS A PREMIER OPERATOR OF TOP TIER ASSETS Fast Approaching Low Leverage Premier Operator Capital Efficiency Top Tier Assets Inventory Quality with Long Runway Leader in ESG Stewardship 3
  3. 2Q 2022 Earnings Presentation – SM Energy Company – slide 3
    ACHIEVING 2022 OBJECTIVES WE ARE ON OR AHEAD OF SCHEDULE IN MEETING PRIORITIES 2022 Strategic Priorities Grow FCF(1) and: Reduce leverage ratio(1) to 1X Reduce net debt (1) to 1B Build NAV by: Demonstrating value of Austin Chalk…
  4. 2Q 2022 Earnings Presentation – SM Energy Company – slide 4
    SECOND QUARTER 2022 HIGHLIGHTS EXECUTING ON OUR PRIORITIES BALANCE SHEET WELL C A P I TA L E N V I R O N M E N TA L STRENGTH & CASH PERFORMANCE EFFICIENCY STEWAR D SH IP F L O W G E N E R AT I O N Redeemed 551 million total Second…
  5. 2Q 2022 Earnings Presentation – SM Energy Company – slide 5
    BALANCE SHEET RAPIDLY MOVING TOWARDS BALANCE SHEET INFLECTION POINT As of June 30, 2022: As of August 2, 2022: 551 million D e b t M a t u r i t i e s - N e w A g r e e m e n t (3) in millions 1,500 total debt reduction in…
  6. 2Q 2022 Earnings Presentation – SM Energy Company – slide 6
    SECOND QUARTER 2022 PERFORMANCE Key Metrics 2Q22 2Q22 Production Production and Pricing 146.6 Total Production (MMBoe) 13.3 Total Production (MBoe/d) 146.6 Oil percentage / Liquids 46% / 61% MBoe/d Pre-Hedge Realized Price…
  7. 2Q 2022 Earnings Presentation – SM Energy Company – slide 7
    2022 PLAN GUIDANCE(1) REVISED FULL-YEAR GUIDANCE Guidance Key Metrics FY 2022 Capital Expenditures(2) (MM) 870 - 900 2022 Total Production (MMBoe) Total Production (MBoe/d) 54 - 55 148 - 151 Capital Expenditures(2) Oil percentage…
  8. 2Q 2022 Earnings Presentation – SM Energy Company – slide 8
    2022 PROJECTED FCF(1) UP, REINVESTMENT RATE(1) DOWN HIGHER COMMODITY PRICES AND PRODUCTION DRIVE CASH FLOW GROWTH Higher expected FCF (1) February Guidance vs. Mid-Year Outlook Declining Reinvestment Rate (1) Cash Flow(1)…
  9. 2Q 2022 Earnings Presentation – SM Energy Company – slide 9
    HEDGING SUMMARY HEDGED VOLUMES DECLINING WITH LOWER LEVERAGE Q3-Q4 2022 Oil Volumes Hedged(1) 2022 Hedge Program Oil 48% 6,100 MBbls(1), or approximately 48% of expected Q3-Q4 2022 oil production, hedged to WTI at an average…
  10. 2Q 2022 Earnings Presentation – SM Energy Company – slide 10
    YEAR-END 2021 INVENTORY COMPELLING ECONOMICS EVEN AT LOW COMMODITY PRICES 13 (2) Total Company expected inventory(1) + years 12 Midland Basin years 55% Total Company Inventory SM Inventory Leads SMIDS 9 expected…
  11. 2Q 2022 Earnings Presentation – SM Energy Company – slide 11
    TOP TIER ASSETS VERY HIGH QUALITY RESERVE BASE Among Highest Standardized Measure per Boe High Quality Reserves SMOG/Proved Reserves (/BOE)(1)(2) 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 - Peer 1 Peer 2…
  12. 2Q 2022 Earnings Presentation – SM Energy Company – slide 12
    TOP TIER ASSETS LONG RUNWAY OF VERY HIGH QUALITY INVENTORY 49 50 50 45 46 46 47 43 44 45 40 40 41 41 42 36 37 38 33 35 28 29 30 Basin Level Breakeven(1) SM inventory in top basins 10.00 8.00 Inventory Life…
  13. 2Q 2022 Earnings Presentation – SM Energy Company – slide 13
    PREMIER OPERATOR CAPITAL EFFICIENCY & TECHNICAL EXPERTISE Well Cost/Lateral Ft(1) 1,200 Total Well Cost/Lateral Foot 1,000 800 TOP 5% 600 Capital Efficiency 400 200 - Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7…
  14. 2Q 2022 Earnings Presentation – SM Energy Company – slide 14
    MIDLAND BASIN FOCUSED ON EXECUTION, WELL PERFORMANCE AND CAPITAL EFFICIENCY 2 0 2 2 O P E R AT I N G P L A N 2 0 2 2 P L A N D E TA I L S HOWARD 2022 net wells: drill 56 complete 38 2Q22: drilled 13 completed 7 3Q22: drill 13…
  15. 2Q 2022 Earnings Presentation – SM Energy Company – slide 15
    MIDLAND BASIN INVENTORY UPSIDE ON EXISTING ACREAGE UP TO 8 PROSPECTIVE INTERVALS MIDLAND BASIN I N V E N TO RY U P S I D E LEONARD LEONARD 6,500 First test 560 days on production, 236 MBoe produced to MIDDLE date from 9,900…
  16. 2Q 2022 Earnings Presentation – SM Energy Company – slide 16
    MIDLAND BASIN SUPERIOR WELL RESULTS IN THE DEAN D E A N W E L L R E S U LT S E X C E E D I N G E X P E C TAT I O N S 3 DEAN WELLS Average 30-day peak IP rate 2,370 Boe/d per well 400 at 88% oil Avg. Cumulative Oil Production…
  17. 2Q 2022 Earnings Presentation – SM Energy Company – slide 17
    SOUTH TEXAS FOCUSED ON EXECUTION AND RETURNS ENHANCEMENT 2 0 2 2 O P E R AT I N G P L A N 2 0 2 2 P L A N D E TA I L S 2022 net wells: drill 42 complete 43 2Q22: drilled 10 completed 2 3Q22: drill 11 complete 21 11,000 expected…
  18. 2Q 2022 Earnings Presentation – SM Energy Company – slide 18
    SOUTH TEXAS: AUSTIN CHALK SUCCESS CONTINUES AUSTIN CHALK SUPPORTS RAPID GROWTH IN OIL/LIQUIDS PRODUCTION Austin Chalk Wells Currently Producing B A C K B O N E C O N D E N S AT E S Y S T E M 800 days in & EXPORT SITE 46 wells…
  19. 2Q 2022 Earnings Presentation – SM Energy Company – slide 19
    SOUTH TEXAS CONFIDENCE IN THE AUSTIN CHALK: REPEATABLE & PREDICTABLE Not Your Old Austin Chalk: 1988-2010 Wells Much Different Than Todays EUR P10:P90 Ratio(1) 1988 400 Expected 50 2010 Wells Locations 41 40 Austin Chalk…
  20. 2Q 2022 Earnings Presentation – SM Energy Company – slide 20
    RYSTAD ENERGY ESG RANKING ESG SCORE PER OPERATOR - MAY 2022 2 of 35 Note: Rystad Energy ESG ranking provided May 4, 2022. Peers include: APA, AR, BP, CHK, CNQ, CNX, COG, COP, CPE, CPG, CVE, CVX, DVN, EOG, EQT, ERF, FANG, HES, MRO,…
  21. 2Q 2022 Earnings Presentation – SM Energy Company – slide 21
    ACHIEVING 2022 OBJECTIVES WE ARE ON OR AHEAD OF SCHEDULE IN MEETING PRIORITIES 2022 Strategic Priorities Grow FCF(1) and: Reduce leverage ratio to 1X Reduce net debt to 1B Build NAV by: Demonstrating value of Austin Chalk…
  22. 2Q 2022 Earnings Presentation – SM Energy Company – slide 22
    Appendix 23
  23. 2Q 2022 Earnings Presentation – SM Energy Company – slide 23
    2Q 2022 REALIZATIONS BY REGION TWO TOP-TIER AREAS OF OPERATION Benchmark Pricing NYMEX WTI Oil (/Bbl) 108.41 Midland South NYMEX Henry Hub Gas (/MMBtu) 7.17 Hart Composite NGL (/Bbl) 50.05 Basin Texas Total Production Volumes Oil…
  24. 2Q 2022 Earnings Presentation – SM Energy Company – slide 24
    SM ENERGY AUSTIN CHALK: TOP-TIER ECONOMICS Transportation per Boe 2021: Austin Chalk operating 10.00 Total South Texas 8.00 6.00 costs per Boe were 30% 4.00 2.00 AC only lower than blended South 0.00 2020Q1 2020Q2 2020Q3…
  25. 2Q 2022 Earnings Presentation – SM Energy Company – slide 25
    ACTIVITY BY REGION WELLS DRILLED, FLOWING COMPLETIONS, AND DUC COUNT Wells Drilled Flowing Completions DUC Count(1)(2) 2Q22 2022 YTD 2Q22 2022 YTD As of June 30, 2022 Gross Net Gross Net Gross Net Gross Net Gross Net Midland…
  26. 2Q 2022 Earnings Presentation – SM Energy Company – slide 26
    LEASEHOLD SUMMARY NO LEASEHOLD ON FEDERAL LANDS IN THE MIDLAND BASIN OR SOUTH TEXAS MIDLAND BASIN Net Acres (1) NET ACRES 82,000 Midland Basin Sweetie Peck(2) 18,000 RockStar 63,600 Midland Basin total 81,600 South Texas…
  27. 2Q 2022 Earnings Presentation – SM Energy Company – slide 27
    NGL REALIZATIONS Realizations by Quarter 2Q 2021 3Q 2021 4Q 2021 1Q 2022(1) 2Q 2022 Mont Belvieu Benchmark Price (/Bbl) 31.52 40.39 44.21 48.36 50.05 SM NGL Realization (/Bbl) 28.41 36.87 39.63 38.56 42.08 NGL price realizations tied…
  28. 2Q 2022 Earnings Presentation – SM Energy Company – slide 28
    YEAR-END 2021 PROVED RESERVES PROVED RESERVES UP 22% COMPARED TO PRIOR YEAR Pre-tax PV-10(1) (proved reserves) 8 B 492 Reserves life index (proved reserves / 2021 production) 10 years 405 Production Replacement…
  29. 2Q 2022 Earnings Presentation – SM Energy Company – slide 29
    Hedges 30
  30. 2Q 2022 Earnings Presentation – SM Energy Company – slide 30
    OIL, GAS, AND NGL DERIVATIVE POSITIONS (1) BY QUARTER Midland - Cushing NYMEX WTI - ICE Brent MEH WTI NYMEX WTI Roll ICE Brent Oil Oil Swaps Oil Collars Oil Basis Swaps Price Oil Basis Swaps Oil Basis Swaps Price Basis Swaps…
  31. 2Q 2022 Earnings Presentation – SM Energy Company – slide 31
    Second Quarter 2022 Non-GAAP Reconciliations and Disclosures 32
  32. 2Q 2022 Earnings Presentation – SM Energy Company – slide 32
    NON-GAAP RECONCILIATIONS Three Months Six Months Ended Adjusted EBITDAX (1) Three Months Ended June 30, Six Months Ended June 30, Trailing Twelve Months at June 30, Adjusted Net Income(1) Ended June 30, June 30, (in thousands)…
  33. 2Q 2022 Earnings Presentation – SM Energy Company – slide 33
    NON-GAAP RECONCILIATIONS Three Months Ended Six Months Ended Free Cash Flow (1) June 30, June 30, (in thousands) 2022 2022 Net cash provided by operating activities (GAAP) 542,569 884,661 Net change in working capital (28,214) 109,748…
  34. 2Q 2022 Earnings Presentation – SM Energy Company – slide 34
    NON-GAAP RECONCILIATIONS Adjusted Operating Margin(1) Three Months Ended June 30, 2022 Adjusted Operating Margin(1) Six Months Ended June 30, 2022 (in thousands) (/Boe) (in thousands) (/Boe) Oil, gas, and NGL production revenue…
  35. 2Q 2022 Earnings Presentation – SM Energy Company – slide 35
    SM ENERGY CONTACTS Jennifer Martin Samuels Vice President - Investor Relations 303.864.2507 jsamuelssm-energy.com 37

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