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2Q 2013 Earnings Call – SM Energy Company

SM Energy Company · Jul 31, 2013 · 27 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. 2Q 2013 Earnings Call – SM Energy Company – slide 1
    2nd Quarter 2013 Earnings Call and Operational Update July 31, 2013
  2. 2Q 2013 Earnings Call – SM Energy Company – slide 2
    2nd Quarter 2013 Performance Production 2Q13 Actual Performance 2Q13 Guidance Net Income GAAP net income of Average daily production (MBOE/d) 131.8 115 - 121 76.5 million, or 1.13 Total production (MMBOE) 11.99 10.5 - 11.0 per…
  3. 2Q 2013 Earnings Call – SM Energy Company – slide 3
    Production Outlook 2013 production guidance increased by 10% to 47.3 48.6 MMBOE, yielding 30% annual production growth in 2013. Production growth in 2014 and 2015 estimated to be 15% on retained properties based upon a higher 2013…
  4. 2Q 2013 Earnings Call – SM Energy Company – slide 4
    2013 Updated Capital Budget ( in millions) Development 60 2013 capital budget New Ventures of 1.65 billion 180 Non Drilling PRB 170 Acquisition Focused EFS and 1,240 Other, Bakken programs 90 account for over 75% of…
  5. 2Q 2013 Earnings Call – SM Energy Company – slide 5
    New Ventures Why do we have a New Ventures program To self-generate economic inventory for future growth. Modest capital commitments throughout the process. CONCEPT Strong geologic REFINE TEST concept Drill test Stacked pay…
  6. 2Q 2013 Earnings Call – SM Energy Company – slide 6
    Business Strategy Core Development Concentrate capital on highest return projects (DPI15 1.2). Control quality and pace of development through operatorship. Focus on debt-adjusted per share metrics. New Ventures Program…
  7. 2Q 2013 Earnings Call – SM Energy Company – slide 7
    2Q13 Operational Update 8
  8. 2Q 2013 Earnings Call – SM Energy Company – slide 8
    Production 140 131.8 120 115.0 110.0 103.3 100 92.6 71.7 80 57.9 59.7 56.7 Gas MBOE/d 51.5 NGL 60 24.6 Oil 40 20.8 20.5 15.2 18.0 20 34.8 35.5 25.9 28.6 31.3 0 2Q12 3Q12 4Q14 1Q13 2Q13 Average daily production…
  9. 2Q 2013 Earnings Call – SM Energy Company – slide 9
    Operated Eagle Ford Operational Highlights Net Production 70 66.1 28% sequential production 60 51.8 growth quarter over quarter; MBOE/d 50 45.2 40.5 41.7 92% quarterly production 40 34.5 30.4 26.1 growth from 2Q12 to…
  10. 2Q 2013 Earnings Call – SM Energy Company – slide 10
    Non-operated Eagle Ford Net Production Operational Highlights 18 9% sequential growth quarter 16 over quarter. MBOE/d 14 12 The operator ran 10 8 15.5 16.0 17.4 approximately 9 drilling rigs 14.0 6 during 2Q13. 4 9.5 2…
  11. 2Q 2013 Earnings Call – SM Energy Company – slide 11
    Bakken/Three Forks Net Production Operational Highlights 16 The Company operated 3 rigs during 14 2Q13 and made 12 gross flowing MBOE/d 12 completions. 10 8 Gooseneck well costs have 13.7 decreased to 6.5 million from 7.0…
  12. 2Q 2013 Earnings Call – SM Energy Company – slide 12
    Permian Region Net Production Operational Highlights 7 6 SM Energy made multiple MBOE/d 5 flowing completions in its 4 Mississippian limestone 6.6 3 4.9 5.4 5.5 5.3 program during 2Q13. 2 1 The Company is currently 0…
  13. 2Q 2013 Earnings Call – SM Energy Company – slide 13
    New Ventures Update Powder River Basin During the second quarter, SM Energy closed on the previously announced acquisition of approximately 40,000 net acres in the PRB. The Company plans to run one rig in the basin in the second…
  14. 2Q 2013 Earnings Call – SM Energy Company – slide 14
    Financial Update 15
  15. 2Q 2013 Earnings Call – SM Energy Company – slide 15
    Financial Position TOTAL BOOK CURRENT DEBT CAPITALIZATION MATURITIES (in millions) (in millions) 3,500 3,000 2014 Total borrowing base 1.8 B; 2,500 2016 1.3 B in commitments 1,527 2,000 2018 1,500 500 2020 1,000 400 2022 500 350…
  16. 2Q 2013 Earnings Call – SM Energy Company – slide 16
    Debt to TTM EBITDAX 6.0x 5.0x 4.0x 3.0x Average: 2.5x 2.0x 1.0x 1.4x 1.3x 0.0x SM SM 6/30/13 3/31/13 SM Energys debt to trailing twelve-month EBITDAX is 50% below its peer average of 2.5x. The Company expects to…
  17. 2Q 2013 Earnings Call – SM Energy Company – slide 17
    Key Takeaways Reported second quarter production volumes above the provided guidance range. SM Energy increased production guidance for full year 2013 by approximately 10%, increasing expected production volumes in 2014 and…
  18. 2Q 2013 Earnings Call – SM Energy Company – slide 18
    APPENDIX 19
  19. 2Q 2013 Earnings Call – SM Energy Company – slide 19
    Condensate Update South Texas & Gulf Coast Eagle Ford condensate realizations % Oil Realization to LLS were 98% of average NYMEX WTI 90% during the second quarter. 88% Oil Realization % 86% Substantially all of SM Energys…
  20. 2Q 2013 Earnings Call – SM Energy Company – slide 20
    2Q13 Regional Realizations Benchmark NYMEX WTI OIL (Bbl) 94.14 Hart Composite NGL (Bbl) 37.76 NYMEX Henry Hub Gas (MMBTU) 4.02 Production Volumes STGC Rockies Mid-Con Permian SM Total Oil (MBbls) 1,111 1,571 82 465 3,229 Gas (MMcf)…
  21. 2Q 2013 Earnings Call – SM Energy Company – slide 21
    EBITDAX Reconciliation EBITDAX (1) (in thousands) Reconciliation of net income (GAAP) to EBITDAX (non-GAAP) to net cash For the Three Months Ended provided by operating activities (GAAP): June 30, 2013 2012 Net income (GAAP) 76,522…
  22. 2Q 2013 Earnings Call – SM Energy Company – slide 22
    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) 2013 2012 Reported Net Income (GAAP) 76,522 24,889…
  23. 2Q 2013 Earnings Call – SM Energy Company – slide 23
    3Q13 Guidance 3Q13 FY 2013 Production (MMBOE) 12.2 12.8 47.3 48.6 Average daily production (MBOE/d) 132 139 128 134 LOE (/BOE) 4.55 4.80 4.65 4.90 Transportation (/BOE) 5.50 5.75 5.30 5.60 Production taxes (% of pre-derivative oil…
  24. 2Q 2013 Earnings Call – SM Energy Company – slide 24
    Oil Derivative Position* Oil Swaps - NYMEX Equivalent Oil Swaps ARGUS WTI vs. LLS Differential Bbls /Bbl Bbls /Bbl 2013 2013 Q3 1,265,000 94.88 Q3 508,000 7.46 Q4 1,118,000 93.98 Q4 461,000 7.52 2013 Total 2,383,000 2013 Total…
  25. 2Q 2013 Earnings Call – SM Energy Company – slide 25
    Oil Derivative Position* Oil Collars - NYMEX Equivalent Ceiling Floor Bbls /Bbl /Bbl 2013 Q3 765,000 107.98 74.89 Q4 726,000 116.09 81.02 2013 Total 1,491,000 2014 Q1 694,000 115.07 80.97 Q2 431,000 102.50 85.00 Q3 974,000…
  26. 2Q 2013 Earnings Call – SM Energy Company – slide 26
    Gas Derivative Position* Natural Gas Swaps - NYMEX Equivalent Natural Gas Collars - NYMEX Equivalent Ceiling Floor MMBTU /MMBTU MMBTU /MMBTU /MMBTU 2013 2013 Q3 21,288,000 4.03 Q3 1,770,000 5.41 4.48 Q4 19,047,000 4.16 Q4…
  27. 2Q 2013 Earnings Call – SM Energy Company – slide 27
    NGL Derivative Position* Natural Gas Liquid Swaps - Mont. Belvieu Bbls /Bbl 2013 Q3 565,000 53.35 Q4 512,000 53.16 2013 Total 1,077,000 2014 Q1 404,000 58.42 Q2 0 Q3 0 Q4 0 2014 Total 404,000 Grand Total 1,481,000 *As…

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