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2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company

SM Energy Company · Feb 24, 2015 · 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. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 1
    2015 Outlook, Operational Update, and 4th Quarter Earnings Call February 25, 2015
  2. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 2
    Strategy and Asset Overview How SM Energy will differentially grow shareholder value Continue to increase the value and Significant existing development quantity of core program inventory inventory in each core program Leverage…
  3. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 3
    4th Quarter 2014 Performance 4Q14 Actual Production Performance 4Q14 Guidance Net Income GAAP net income of 331.7 Average daily production (MBOE/d) 175.8 152 - 159 million, or 4.91 per diluted Total production (MMBOE) 16.2 13.9 - 14.7…
  4. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 4
    2014 Proved Reserve Roll-Forward Drilling reserve replacement of 261%; 5th consecutive year of drilling RR% 250%. MMBOE 55% Liquids/ 700 45% Gas 54% Liquids/ 10.4 2.1 55.1 600 46% Gas 143.9 21.9 547.7 500 428.7 400 260.9 300…
  5. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 5
    Debt to TTM adjusted EBITDAX 5.0x 4.5x 4.0x 3.5x 3.0x 2.5x Peer Median: 2.0x 2.0x 1.5x 1.0x 0.5x 0.0x SM SM 9/30 12/31 SM Energys December 31, 2014 debt to trailing twelve-month adjusted EBITDAX is below its…
  6. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 6
    Financial Position DEBT MATURITIES AS OF December 31, 2014 (in millions) 2,500 Strong balance sheet Borrowing Base - 2.4 billion 2,000 with significant liquidity. Commitment - 1,500 First debt maturity is in 1.5 billion 2019.…
  7. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 7
    2015 Plan Objectives Protect the balance sheet. Slow down activity and allow the cost environment to adjust. Focus on improving operational efficiencies and support functions. 8
  8. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 8
    2015 Operated Activity Reducing expected rig count by approximately 60% in 2015. 20 18 16 14 12 Rigs 10 8 6 4 2 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Eagle Ford Bakken/Three Forks Powder River Basin Permian…
  9. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 9
    Deferring 2015 Completions Wells WOC expected to increase from 45 at YE14 to 95 at YE15. 2015 Wells Waiting on Completion 100 90 80 70 60 50 40 30 Building WOC inventory to 20 take advantage of completion cost reductions.…
  10. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 10
    2015 Capital Expenditures Planned CAPEX budget of 1.2 billion. 185 Drilling and Completion Highlights of 2015 program: (in millions) Scale back activity to higher 1,045 return environment as costs adjust to price environment.…
  11. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 11
    Production Annual Production (MMBOE) 12% projected annual 70 60.4 63.5 production growth at 60 55.1 midpoint for 2015. 30% 50 30% Product mix expected to 40 remain essentially 23% 30 24% unchanged. 20 Quarterly production 46%…
  12. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 12
    Financial Outlook Debt to TTM Adjusted 5.0 EBITDAX 2015 CAPEX is expected to be 4.5 150 million in excess of Total debt covenant 4.0 2015 adjusted EBITDAX.* 3.5 Expecting quarterly adjusted 3.0 2.5 EBITDAX to exceed…
  13. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 13
    Operated Eagle Ford Program 100 93.6 90 83.2 80 74.8 76.3 76.2 29.7 MBOE/d TEXAS 70 27.2 24.2 23.3 26.1 60 9.7 50 8.2 7.9 7.8 7.1 Operated 40 30 54.2 20 42.8 44.8 48.1 43.0 10 144,000 total net acres 0 4Q13 1Q14 2Q14…
  14. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 14
    Operated Eagle Ford East Strong asset continues to provide top-tier returns. Dimmit Webb IRR Sensitivity(1) 70% 60% 50% Mexico 40% 30% 100 20% 90 10% 80 0% CUMULATIVE PRODUCTION 70 50 60 70 NYMEX WTI (BOE/1000FT)…
  15. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 15
    Operated Eagle Ford North Improved completions have enhanced this asset. Dimmit Webb IRR Sensitivity(1) 40% 35% 30% Mexico 25% 20% 15% 60 10% 50 5% 0% CUMULATIVE PRODUCTION 40 50 60 70 NYMEX WTI (BOE/1000FT) 30…
  16. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 16
    Operated Eagle Ford South Wells in southern acreage provide an economic dry gas option. Dimmit Webb IRR Sensitivity(1) 60% 50% Mexico 40% 30% 20% 70 10% 60 0% CUMULATIVE PRODUCTION 50 3.00 3.50 4.00 NYMEX Henry Hub…
  17. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 17
    Williston Basin Acreage Sheridan Divide 25 20 MBOE/d Gooseneck: 15 120,000 net acres 23.4 10 16.1 16.0 16.5 17.5 Raven/Bear Den: 5 40,000 net acres Roosevelt 0 Williams 4Q13 1Q14 2Q14 3Q14 4Q14 Richland McKenzie In…
  18. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 18
    Gooseneck Three Forks Substantial remaining inventory in our most economic Williston program. Divide IRR Sensitivity(1) 50% 40% 30% Williams 20% 16 10% 14 CUMULATIVE PRODUCTION 12 0% 50 60 70 10 NYMEX WTI…
  19. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 19
    Raven/Bear Den Bakken Williams IRR Sensitivity(1) 50% 40% McKenzie 30% 20% 25 10% 20 CUMULATIVE PRODUCTION 0% 50 60 70 15 NYMEX WTI (BOE/1000FT) 10 Economics(2) Under current assumptions, Well Cost (10,000…
  20. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 20
    Takeaways SM Energy enters 2015 with a strong balance sheet, significant liquidity, and robust inventory in core programs. Potential to add meaningful inventory in core programs in current pricing environment. 2015 program…
  21. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 21
    Appendix 22
  22. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 22
    4Q14 Regional Realizations NYMEX WTI OIL (Bbl) 73.16 Hart Composite NGL (Bbl) 29.53 NYMEX Henry Hub Gas (MMBTU) 3.77 Production Volumes STGC Rockies Mid-Con Permian SM Total Oil (MBbls) 2,164 2,326 27 582 5,099 Gas (MMcf) 34,961…
  23. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 23
    2015 Guidance FY 2015 Production (MMBOE) 60.4 63.5 Average daily production (MBOE/d) 165 174 LOE (/BOE) 4.40 4.65 Ad Valorem (/BOE) 0.50 0.55 Transportation (/BOE) 6.25 6.55 Production taxes (% of pre-derivative oil and gas…
  24. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 24
    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): December 31, 2014…
  25. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 25
    Adjusted Net Income Reconciliation Reconciliation of net income (GAAP) to adjusted net income (Non-GAAP): For the Three Months Ended December 31, (in thousands, except per share data) 2014 2013 Reported Net Income (GAAP) 331,726 6,996…
  26. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 26
    Oil Derivative Position* Oil Swaps - NYMEX Equivalent Oil Collars - NYMEX Equivalent Ceiling Floor Bbls /Bbl Bbls /Bbl /Bbl 2015 2015 Q1 1,711,000 91.96 Q1 882,000 99.53 85.00 Q2 1,639,000 91.26 Q2 709,000 94.06 85.00 Q3…
  27. 2015 Outlook and 4Q 2014 Earnings 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 2015 2015 Q1 23,548,000 4.25 Q1 2,525,000 4.31 4.01 Q2 15,985,000 3.97 Q2 2,296,000…
  28. 2015 Outlook and 4Q 2014 Earnings Call – SM Energy Company – slide 28
    NGL Derivative Position* Natural Gas Liquid Swaps - Mont. Belvieu Bbls /Bbl 2015 Q1 781,000 55.42 2015 Total 781,000 Grand Total 781,000 *As of 2/18/15 29

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