Enercom Jay Ottoson President and COO August 18, 2014
Overview SM Energy Company is a returns-focused independent energy company with core positions in two of North Americas premier resource plays, the Eagle Ford Shale and Bakken / Three Forks. Eagle Ford Annual Production Bakken / Three…
Eagle Ford Maverick Dimmit APC Operated Webb SM Operated Operated: 144,000 net acres Non-operated: 46,000 net acres Mexico Operated Highlights Non-operated Highlights Updated 2014 program assumes The operator is expected to trim its 85…
Completions Thesis Data show greater sand loadings increase frac complexity near the well bore. Analyze rate and pressure data to EUR vs. Complexity assess complexity during initial production. Increased frac EUR complexity…
Area 2 Improvements Recap 80% increase in sand loading resulting in higher pressure, productivity, and condensate yield. Improved performance resulting in: 40 percentage point increase in ROR 2MM increase in NPV15 Area Net…
Bakken/Three Forks Operational Highlights Currently operating 2 rigs in GOOSENECK 97,000 acres Raven/Bear Den and 1 rig in Gooseneck. Pending acquisition adjacent to RAVEN/BEAR DEN Gooseneck adds 61,000 net 42,000 acres acres…
Pending Gooseneck Acquisition Significant acquisition fits perfectly with existing SM Legacy Acreage Pending Acquisition acreage and provides substantial running room for this program. Upon Closing, the Company will have 97,000…
SM Gooseneck vs. Offset Operators 200,000 180,000 160,000 140,000 Cumulative Oil (bbls) 120,000 100,000 80,000 60,000 40,000 20,000 0 0 12 24 36 48 Months SM Energy is the premier operator in western Divide…
Improving Three Forks Results Optimization in Gooseneck Acreage Sand Loading Improving economics Tests through: Decreased drilling times Gooseneck Increased sand loading in completions ROR increased by 25 percentage points…
Powder River Basin Update WY In 2014, the Company 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…
Permian Sweetie Peck Wolfcamp B 30-day rates exceeding most competitors: Avg. 5,000 lateral well 30-day IP rate: 1,011 BOE/d Avg. 7,600 lateral well 30-day IP rate: 1,456 BOE/d Total D&C well costs down 13% since 1/14 Additional…
Production Outlook 2015 annual production growth target increased to 20% from 15%; 2016 production growth target set at 15%. 80 Production (MMBOE) 70 60 50 40 *Retained property production. 2013* 2014 2015 2016 13
2014 Capital Update 2014 capital increase reflects significant acquisitions and related activity and allows the Company to maintain momentum into 2015. 85% of 2014 capital increase results from acquisitions and 2H14 activity related…
Simple Strong Balance Sheet 4.0x Debt to TTM Adjusted EBITDAX 3.0x Median: 2.0x 2.0x 1.0x 1.2 0.0x SM 6/30/14* SM Energys pro forma debt to trailing twelve-month adjusted EBITDAX is below its peer median average of 2.0x. As…
Key Takeaways Enhanced performance in the Eagle Ford and Bakken/Three Forks leading to increased inventory value. Pending acquisition in Gooseneck expected to increase inventory in a core asset. Production growth increased for…
Appendix 17
Gooseneck 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…
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…
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…
Adjusted Net Income Reconciliation Reconciliation of net income (GAAP) to adjusted net income (Non-GAAP): For the Three Months Ended June 30, (in thousands, except per share data) 2014 2013 Reported Net Income (GAAP) 59,780 76,522…
3Q14 Guidance 3Q14 FY 2014 Production (MMBOE) 13.1 13.8 53.5 54.9 Average daily production (MBOE/d) 143 150 146 150 LOE (/BOE) 4.60 4.85 4.60 4.75 Transportation (/BOE) 5.90 6.20 6.05 6.25 Production taxes (% of pre-derivative oil…
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