Barclays Energy- Power Conference Jay Ottoson President and COO September 4, 2014
Overview SM Energy is a returns-focused company with core positions in the Eagle Ford and Bakken / Three Forks. Eagle Ford Annual Production Bakken / Three Forks Annual Production 30 6 25 5 MMBOE MMBOE 20 4 15 30.5 3 5.2…
Production Outlook Recently increased 2014 production guidance; 2015 annual production growth target increased to 20% from 15%. 2015 oil growth expected to be between 30% and 40%. 2016 production growth target set at 15%. 80…
Peer-Leading Corporate Returns 45% 3-Year Average Cash Return on Average Capital Employed 40% SM 35% 30% 25% 20% 15% 10% 5% 0% Note: Cash return on average capital employed is calculated by SM Energy as GAAP cash flow from…
Eagle Ford Maverick Dimmit APC Operated Webb SM Operated Operated: 144,000 net acres Non-operated: 46,000 net acres Mexico Operated and non-operated programs are focused on improving and expanding economic drilling inventory. 2014…
Improved Drilling Time SM Energy has decreased its average per well drilling time and increased the consistency of drilling time, leading to lower program costs. 7
Eagle Ford Area 2 Improvements Recap Substantial increase in sand loading resulting in: Higher flowing pressures Increased production rates Increased condensate yield Area Net Acres 1 35,082 2 21,879 3A 22,226 3B 29,726 4 8,268 5…
Improving Eagle Ford Completions SM Energy has Improved completion increased sand design in Area 1 loading and lateral length in its recent Area 1 wells. Improved Completions: Average length 7,032 8MM/well Average sand loading 2,046…
Improved Completion Design Higher Pressures Area 1: Casing Pressure vs. Cumulative Equivalent Production 2,500 New Completions: Average Length 7032 8MM/well 2,000 Average Sand Loading - 2046 lbs/ft Old Completions: Average…
Improved Completion Design Higher IPs Area 1: Equivalent Rate Per Well vs. Time 1,000 900 800 Equivalent Rate (BOE/d) 700 600 500 400 300 200 100 Old Completions Improved Completions 0 1 2 3 4 5 6 7 8 9 10 11…
Improved Completion Design Higher Yield Area 1: Condensate Yield vs. Cumulative Equivalent Production 450 400 350 Yield (Bbls/Mmcf) 300 250 200 150 100 50 Old Completions Improved Completions 0 0 5,000…
Bakken/Three Forks Operational Highlights During 2Q14, the Company GOOSENECK 97,000 acres operated 2 rigs in Raven/Bear Den and 1 rig in Gooseneck. RAVEN/BEAR DEN Pending acquisition adjacent to 42,000 acres Gooseneck adds 61,000 net…
Pending Gooseneck Acquisition Significant acquisition fits Divide perfectly with existing acreage and provides ND substantial running room for this program. Upon closing, the Company will have 97,000 net acres in its Gooseneck focus…
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 Note: Data sourced from North Dakota Industrial…
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…
Permian Sweetie Peck Wolfcamp B 30-day rates 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 bench evaluation looks very…
Strong, Simple 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.…
Key Takeaways Peer-leading corporate returns. Drilling inventory is growing in size and quality. Production growth is continuing and getting oilier. 19
Appendix 20
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…
Cash Returns on Average Capital Employed Calculation Cash Returns on Average Capital Employed (non-GAAP) (in thousands) For the Years Ending December 31, 2013 2012 2011 2010 Cash flow from operating activities (GAAP) 1,338.5 922.0…
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