The Oil and Gas Conference Tony Best August 17, 2011 President and CEO Denver, CO
Key Messages Positioned for significant production growth over the next several years Capital program respects balance sheet SM anticipates double digit production growth within cash flow in 2013 3
SM Energy Reported Production Summary Net production Product Mix 2Q11 A (MMCFE/d) 436.9 450.0 12% 401.4 28% 400.0 52.1 MMCFE/d 344.4 122.2 350.0 298.4 437 300.0 276.4 250.0 262.7 60% 200.0 2Q10 3Q10 4Q10 1Q11 2Q11…
Total Eagle Ford Shale Position SM Energy has a 196,000 net acre position (post- transactions) in the Eagle Ford shale 150,000 net operated acres (after completed LaSalle sale) located almost entirely in rich gas window Sold…
Operated Eagle Ford Shale Operating Highlights 150,000 net acres at 100% W.I. Four (4) operated drilling rigs running in play currently Own water rights in Rio Grande River; provide secure source of water for Rio completions…
Galvan Ranch Performance Galvan 14H Cum. Gross Wet Gas Production To Date Proved EURs (Bcf) (BCFE) Galvan 12H 2.1 7.5 Galvan 14H 1.5 6.9 Galvan 10H 1.6 6.6 8
Non-operated Eagle Ford Shale Overview Operating Highlights Roughly 27% WI partner in Anadarko (APC) operated acreage; have agreed to transfer 12.5% WI to Mitsui for 680 MM carry and SM will retain 14.5% WI 46,000 net acres…
Bakken/Three Forks Overview Operating Highlights 204,000 net acres with Bakken/TFS exposure Divide 85,000 net acres include Raven, Bear Den, and Gooseneck Bear Den Raven prospects in McKenzie and Divide Counties, North…
Bakken Flooding Impact Approximately 1,500 BOE/d was shut-in at peak Now approximately 750 BOE/d shut-in All remaining production expected to be restored in 3Q11 11
Haynesville Shale Continue to see strong well results in the Shelby Trough area of East Texas Ericsson 1H (SM 100% WI) - 7-day IP rate of 14.8 MMcf/d 8,900 psi Cortes 1H (SM 100% WI) - 7-day IP rate of 11.8 MMcf/d 8,700 psi SM…
Niobrara Completed Polaris well (SM 38% WI) in 2Q11; average 7- day IP rate of approximately 950 BOE/d (80% oil); two (2) additional wells in DJ Basin awaiting completion Added acreage in the Powder River Basin with Niobrara…
Granite Wash Operated a one (1) rig program throughout 2Q11 Recent successful Cottage Grove formation test Ruth 4-60H (SM 44% WI) - Average 7-day IP rate of approximately 1,400 BOE/d (82% oil) Expect to run two (2) operated…
Permian Continuing testing of Wolfberry tight oil down- spacing pilots; have drilled eight (8) 20-acre tests with average results exceeding expected type curve One (1) operated drilling rig scheduled to run in 2H11 to test…
Revised 2011 Capital Forecast ( in millions) 265 Niobrara / Permian Basin Other Oil, 25 Oil, 50 Granite Wash, Total Capex 1,285 60 of 1,550 for 2011 Non Drilling Drilling Haynesville Shale, 165 Over 85% of Total Eagle Ford,…
Preliminary 2012 Capital Forecast ( in millions) 2012 capex range of 200 Outside 1,400 1,500 Operated 75 - 100 million 1,200 - 1,300 Operated Granite Wash 70% of drilling Other Operated 70 - 75 capital is Non Drilling 130 - 150…
2011 & 2012 Production Outlook 250 200 150 BCFE 228 100 164 50 110 0 2010 Actual Updated 2011 Preliminary 2012 Production * Production Production * 2010 production was reported on a two 18 stream wellhead…
2011 & 2012 Funding Proceeds from 2011 divestitures contribute ( in thousands) 2011 2012 significantly to closing the funding gap for 2011 Capital 1,550 1,400 - 1,500 A strong balance sheet, Less: Operating including an undrawn Cash…
Financial Position 2Q11 TOTAL BOOK CAPITALIZATION (in millions) 2,000 Stockholders' Equity 1,500 3.50% Senior Convertible Notes 1,349 6.625% Senior Notes 1,000 Secured Credit Facility 500 280 32% Debt to Book Cap 350 0…
Long-term Credit Facility As of June 30, 2011 Borrowing base is (in millions) 1,400 1.3 billion with 1,200 300 commitments of 1,000 1.0 billion 800 Current 600 Borrowing Base No borrowings 400 1,000 drawn on credit 200…
Key Takeaways Remaining year 11 guidance and preliminary 12 guidance give clarity to growth potential of SM Energy Expected 50% production growth YoY in 2011 Projected 35 - 40% production growth YoY in 2012 Nearly 500 million…
Appendix 23
Guidance Update 3Q11 4Q11 FY 2011 Production (BCFE) 42.0 44.5 44.0 47.0 162.0 167.0 Average daily production (MMCFE/d) 453 481 479-509 437 464 Oil production (as % of total) 30% 31% 30% Natural gas production (as % of total) 55% 55% 57%…
SM Energy Reported Production Summary Net production A Product Mix 2Q11 436.9 450.0 401.4 (MMCFE/d) 400.0 12% 344.4 MMCFE/d 28% 350.0 52.1 276.4 298.4 122.2 Oil 300.0 250.0 437 Gas 200.0 262.7 NGL 2Q10 3Q10 4Q10 1Q11…
2011 & 2012 Funding ( in thousands) 2011 2012 Proceeds from 2011 Capital 1,550 1,400 - 1,500 divestitures contribute Less: Operating Cash Flow * 860 1,200 1,300 significantly to closing the funding gap for Gap 690 200 2011 Less:…
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