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Howard Weil 40th Annual Energy Conference – SM Energy Company

SM Energy Company · Mar 25, 2012 · 23 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. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 1
    Howard Weil 40th Annual Energy Conference March 25-29, 2012 Tony Best President and CEO
  2. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 2
    STRATEGY AND CURRENT FOCUS Pursue resource plays in North America Enter early & build significant position Focus on full-cycle returns Maintain a strong balance sheet Remain inquisitive to new plays Current development focus…
  3. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 3
    2011 YEAR IN REVIEW - PRODUCTION Record production in 2011 of 169.7 BCFE (28.3 MMBOE), a 54% increase over 2010 55 Reported 51.3 FY11 50 Production Mix Retained 45 42.5 39.8 BCFE NGL 40 12% 36.1 Oil 35 48.8 29% 31.7 30…
  4. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 4
    YEAR IN REVIEW 2011 PROVED RESERVES 1,800 47% Liquids/ 53% Gas 1,600 35% Liquids/ 65% Gas (93.1) 36.8 (25.3) 1,400 (169.7) 1,259 1,200 526.0 985 1,000 415.2 800 297.2 600 BCFE Proved Developed Proved Undeveloped…
  5. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 5
    OPERATED EAGLE FORD SHALE Net Production 200 180.5 150 59.1 A 128.1 MMCFE/d 100 96.8 38.5 91.6 27.0 31.9 101.7 60.3 75.0 50 38.8 51.9 26.5 51.9 19.1 12.7 13.0 14.6 19.7 0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Oil…
  6. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 6
    OPERATED EAGLE FORD SPACING TESTS Down Spacing Tests Currently have two down- spacing tests with at least 6 months of data Results to date: Test 1: Galvan Ranch testing 625 or 72 acre 22 1 1 spacing Results show a 30%…
  7. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 7
    NON-OPERATED EAGLE FORD SHALE OVERVIEW Operating Highlights SM closed transaction with Mitsui on December 2, 2011 SM retains approximately 46,000 net acres in its non-operated position 90% carry on most drilling and completion…
  8. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 8
    BAKKEN/THREE FORKS OVERVIEW Net Production 9 8.2 8 0.8 7 A GOOSENECK 6 35,000 acres 5.3 MBOE/d 5 0.5 4.2 4.0 4 3.5 0.5 0.5 7.4 3 2.3 4.8 BEAR DEN 2 1.5 1.7 3.7 RAVEN 15,000 acres 3.0 3.5 Canada 37,000 acres 1 1.5…
  9. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 9
    HORIZONTAL GRANITE WASH Total Net Acreage = 34,575 Marmaton = 34,575 * Missourian = 19,360* Year-End 2011 Statistics Net Proved Reserves Marmaton = 2.4 MMBOE Missourian = 0.3 MMBOE Gross/Net Well Count Marmaton: PDP = 40 /…
  10. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 10
    FINANCIAL POSITION 4Q11 TOTAL BOOK DEBT MATURITIES CAPITALIZATION (in millions) (in millions) 2012 3,000 287.5MM of convertible debt is first callable in April of 2012 2014 2,500 Year 2,000 2016 1,463 Total borrowing base 1.3…
  11. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 11
    LONG -TERM CREDIT FACILITY (in millions) 1,500 Borrowing base 313 stands at 1.3 billion 1,000 post November HY debt offering Current Borrowing 500 1,000 Base 1.3B No borrowings drawn on credit facility as of 0 0 December…
  12. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 12
    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 -…
  13. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 13
    2012 GROWTH OUTLOOK SM is positioned to grow production by approximately 32% in 2012 based on the midpoint of current guidance assumptions 240 Production 227 220 220 200 BCFE 180 160 169.7 140 120 100 2011 Reported…
  14. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 14
    KEY TAKEAWAYS Record production and proved reserves in 2011 SM has multi-year inventory of economic projects in its two largest plays Company is anticipating robust production growth in 2012 while preserving a strong balance…
  15. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 15
    APPENDIX 16
  16. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 16
    GUIDANCE UPDATE 1Q12 FY 2012 Production (BCFE) 48.5 52.0 220 227 Average daily production (MMCFE/d) 533 571 601 620 LOE (/MCFE) 0.90 0.96 0.90 0.96 Transportation (/MCFE) 0.65 0.70 0.73 0.77 Production taxes (% of pre- 5.5% 5.5%…
  17. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 17
    EAGLE FORD TAKEAWAY CAPACITY VOLUMES 700 Gross Wet Gas and Net Equivalent Production Capacities 600 534 534 536 536 Average Takeaway/Production Capacity Equivalent net 498 498 500 production capacity (MMCFE/d) 437 437 437…
  18. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 18
    OPERATED EAGLE FORD SPACING AND TYPE CURVES Total Remaining Resource: 5.3 TCFE Total Gross/Net Remaining Locations: 1,455/1,455 Area 3: Net Acreage: 36,626 Dev. Spacing: 900; 103 ac/well Gross/Net Locations: 330/330 Expected EUR:…
  19. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 19
    OPERATED EAGLE FORD RESOURCE POTENTIAL AREA 1 AREA 2 AREA 3 AREA 4 AREA 5 Net Acreage 48,287 22,651 36,626 19,508 22,085 Expected EUR/well 3.7 BCFE 4.9 BCFE 8.0 BCFE 4.4 BCFE 3.4 BCFE Development Spacing (ac/well) 72 103 103 143…
  20. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 20
    BAKKEN/THREE FORKS SPACING AND TYPE CURVES GOOSENECK Total Remaining Gooseneck - Three Forks: Resource: 140 MMBOE Net Acreage: 35,143 Dev. Spacing: 320 acres/well Total Gross/Net Remaining Gross/Net Locations: 189/95 Locations:…
  21. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 21
    BAKKEN/THREE FORKS RESOURCE POTENTIAL Gooseneck Raven Bakken Raven Three Bear Den Bakken Bear Den Three Three Forks Forks Forks Net Acreage 35,143 36,534* 36,534* 15,281* 15,281* Expected EUR/well 365 MBOE 498 MBOE 409 MBOE 554…
  22. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 22
    2011 PROVED RESERVES Proved oil and gas reserve quantities For the Year Ended December 31, 2011 Oil or Proved Proved Condensate Gas NGL Equivalents Developed Undeveloped (MMBbl) (Bcf) (MMBbl) (BCFE) (BCFE) (BCFE) Total proved…
  23. Howard Weil 40th Annual Energy Conference – SM Energy Company – slide 23
    2011 IN REVIEW RESERVE METRICS 6.00 400% Reserve Replacement % Finding Costs /MCFE 5.00 5.32 350% 300% 4.00 250% 4.00 3.00 3.44 200% 2.85 2.00 150% 2.14 100% 1.00 50% 0.00 0% 2007 2008 2009 2010 2011 Drilling F&D,…

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