Enercoms London Oil & Gas Conference June 13, 2012 Tony Best President and CEO
MANAGEMENT PARTICIPANTS Tony Best President and CEO Wade Pursell Executive Vice President and CFO Brent Collins Senior Director of Planning and Investor Relations 3
OVERVIEW SM Energy Company is a Denver-based independent energy company focused on the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America Experienced…
ASSET OVERVIEW Rocky Mountain Region Bakken/Three Forks Niobrara/Frontier Mid-Continent Region Granite Wash, Woodford, Haynesville/Bossier shale Permian Region Wolfberry South Texas & Gulf Coast Region Mississippian lime…
COMPANY PROFILE Ticker: SM (NYSE) Market Value (1) Operational Metrics (2) (In millions except per share data) Production Share Price 51.91 MMBOE 8.5 Market Cap 3,330 Production Mix (% liquids) 44% Enterprise Value 4,341…
2012 CAPITAL FORECAST ( in millions) Non Drilling Drilling 200 - 300 Outside 1,200 - 1,300 Operated Total capital managed to 125 - 150 1.4 1.5 billion Other Operated Approximately 90% of planned drilling capital to 130 -…
2012 OPERATIONS Operated Rigs 0.25 Eagle Ford 1 Bakken/Three 1 Forks Granite Wash 5.5 3 Southern Rockies Permian 3.75 Haynesville Activity in 2012 is focused on oil and NGL-rich gas programs 8
PRODUCTION MIX The Company expects a production mix of 50/50 liquids to gas in 2014 Expected Average Production Mix 2012 2014 45% Liquids 50% Liquids 55% Gas 50% Gas 9
2012 GROWTH OUTLOOK SM is positioned to grow production by approximately 32% in 2012 based on the midpoint of 1Q12 guidance assumptions Represents 43% compounded annual growth over 2 year period 235 227 Production 215 220 195…
EAGLE FORD SHALE 196,000 total net acres APC JV acreage 46,000 net acres SM operated acreage 149,000 net acres Mexico Texas 11
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 Operational Highlights 1Q12 production impacted by shift to pad drilling and completion related…
NON-OPERATED EAGLE FORD SHALE Operational Highlights 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…
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 Operational Highlights Currently operating…
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…
STRONG CREDIT PROFILE VS. PEERS Total Debt / LTM EBITDAX Total Debt / Book Capital 3.5x 70% 3.0x 60% 2.5x 50% Average: 45.4% Average: 2.1x 40.4% 2.0x 40% 1.5x 30% 1.0x 1.0x 20% 0.5x 10% 0.0x 0% SM QEP CLR CXO DNR NFX BBG PXP…
FINANCIAL POSITION 1Q12 TOTAL BOOK DEBT MATURITIES CAPITALIZATION (in millions) (in millions) 2012 3,000 As of 5/21/12, SM Energy had completed redemption/ 2014 conversion of the 3.50% Senior 2,500 Convertible Notes Year 2,000…
LONG-TERM CREDIT FACILITY (in millions) Borrowing base recently increased to 1,500 1.5 billion from 1.3 500 billion 313 1,000 Growth in oil and NGL projects drove increase 500 1,000 1,000 SM elected to maintain commitments at 1.0…
KEY INVESTMENT HIGHLIGHTS Multi-year inventories with scalable positions in high-return plays Premier Eagle Ford Shale: 196,000 net acres Unconventional Bakken / Three Forks: 202,000 net acres Resource Exposure Granite Wash: 34,000…
APPENDIX 20
GUIDANCE PROVIDED AT 1Q12 EARNINGS CALL 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…
EBITDAX RECONCILIATION EBITDAX (1) Reconciliation of net income (GAAP) to EBITDAX (Non-GAAP) For the Twelve Months Ended March 31, (In thousands) 2012 2011 Reported net income (GAAP) 260,255 52,156 Adjustments: Net Interest…
SM ENERGY ASSET OVERVIEW Billings, MT ROCKY MOUNTAIN Regional Office YE 2011 Proved Reserves (BCFE) 303.4 1Q12 Net Production (BCFE) 9.2 MID-CONTINENT Plays: YE 2011 Proved Reserves (BCFE) 365.2 Bakken/Three Forks 1Q12 Net Production…
FISCAL CONSERVATISM Debt / TTM EBITDAX Debt / Book Capital 1.20 50% 1.10 1.00 40% 0.90 0.80 0.70 30% 0.60 0.50 20% 0.40 5 Year Average = 0.82x 5 Year Average = 33% 0.30 0.20 2011 = 1.10x 10% 2011 = 40% 0.10 - 0% 2007…
PRUDENT RISK MANAGEMENT Hedge Policies Future Hedged Daily Volumes as of 4/27/12 35 Typically hedge at least * Assumes conversion of 6:1 Mcf to BOE Equiv. Daily Volumes Hedged (MBOE/d) 50% of forecasted PDP 30 Vol.: 3.6 MBOE/d…
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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