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4Q 2012 Earnings Call – SM Energy Company

SM Energy Company · Feb 21, 2013 · 35 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. 4Q 2012 Earnings Call – SM Energy Company – slide 1
    4th Quarter 2012 Earnings Call and Operational Update February 21, 2013
  2. 4Q 2012 Earnings Call – SM Energy Company – slide 2
    KEY MESSAGES Record year, record quarter. Proved reserves increased by 40% to 1.8 TCFE. Drilling reserve replacement of 411%; drilling F&D costs of 1.74 per MCFE. Annual production increased by 29% to 219 BCFE; 4Q12 production…
  3. 4Q 2012 Earnings Call – SM Energy Company – slide 3
    FINANCIAL UPDATE 4
  4. 4Q 2012 Earnings Call – SM Energy Company – slide 4
    FOURTH QUARTER 2012 PERFORMANCE Performance versus Guidance 4Q12 Actual Production Performance 4Q12 Guidance Net Income Average daily production (MMCFE/d) 660 625 - 658 GAAP net loss of 67.1 Total production (BCFE) 60.7 57.5 - 60.5…
  5. 4Q 2012 Earnings Call – SM Energy Company – slide 5
    FINANCIAL POSITION 4Q12 TOTAL BOOK DEBT MATURITIES CAPITALIZATION (in millions) (in millions) 3,000 2013 2,500 2015 1,415 2,000 2017 1,500 Total borrowing base 1.55 B; 1.0 B in commitments 400 2019 1,000 50% 350 Debt to 2021…
  6. 4Q 2012 Earnings Call – SM Energy Company – slide 6
    REVOLVING CREDIT FACILITY (in millions) Borrowing base currently 1.55 1,500 billion. 550 1,000 SM Energy maintains lender 660 500 commitments at 1.0 billion. 340 0 December 31, 2012 Substantial Incremental borrowing base…
  7. 4Q 2012 Earnings Call – SM Energy Company – slide 7
    OPERATIONAL UPDATE 8
  8. 4Q 2012 Earnings Call – SM Energy Company – slide 8
    PROVED RESERVE ROLL-FORWARD BCFE 2,500 53% Liquids/ 900.2 1.6 16.9 91.9 47% Gas 72.7 218.9 2,000 47% Liquids/ 53% Gas 1,760.6 1,500 1,259.2 761.5 1,000 415.2 1,743.8 Proved Developed Proved Undeveloped 500 844.0 999.1 0…
  9. 4Q 2012 Earnings Call – SM Energy Company – slide 9
    RESERVE METRICS Reserve Replacement % 4.50 411% 450% F&D /MCFE 4.00 400% 3.50 4.00 350% 3.00 3.44 300% 2.50 2.85 250% 2.00 200% 2.14 1.50 1.74 150% 1.00 100% 0.50 50% 0.00 0% 2008 2009 2010 2011 2012 Drilling F&D…
  10. 4Q 2012 Earnings Call – SM Energy Company – slide 10
    PRODUCTION UPDATE Average Daily Volumes Fourth quarter 820 production grew 6% from the third MMCFE/d 620 420 quarter. 620 660 220 557 556 Growth driven 20 primarily by 1Q12 2Q12 3Q12 4Q12 Eagle Ford shale 100% Product Mix…
  11. 4Q 2012 Earnings Call – SM Energy Company – slide 11
    OPERATED EAGLE FORD SHALE Net Production Operational Highlights 4Q12 production increased by 11% 300 sequentially from 3Q12. 271.3 250 243.4 22.5 23.3 Company made 23 flowing completions 207.1 200 91.3 during 4Q12. MMCFE/d…
  12. 4Q 2012 Earnings Call – SM Energy Company – slide 12
    NON-OPERATED EAGLE FORD SHALE Net Production Operational Highlights 18 SM Energy anticipates that the 16 14.0 15.5 operators drilling program will MBOE/d 14 12.9 run approximately 8 drilling rigs. 12 11.7 6.0 5.4 10 4.7…
  13. 4Q 2012 Earnings Call – SM Energy Company – slide 13
    BAKKEN/THREE FORKS Net Production Operational Highlights The Company is currently operating 4 rigs 14 in its Bakken/Three Forks program. 11.9 12 10.3 10.4 11.0 SM Energy completed 8 wells during 4Q12 10 and 30 wells in FY12.…
  14. 4Q 2012 Earnings Call – SM Energy Company – slide 14
    MISSISSIPPIAN LIMESTONE Operational Highlights Company is currently operating 2 rigs in the play. Dana 1202H and Melanie 1501H had complications resulting in lower 30-day rates. SM Energy continues to be encouraged by results in…
  15. 4Q 2012 Earnings Call – SM Energy Company – slide 15
    PERMIAN SHALES The Company currently has 120,000 net acres with shale potential across the Midland Basin. The Company is monitoring offset operators that have commenced drilling adjacent to SM Energys Tredway position targeting the…
  16. 4Q 2012 Earnings Call – SM Energy Company – slide 16
    EAST TEXAS EXPLORATION SM Energy currently has 95,000 net acres in its East Texas Prospects. The Company is targeting various formations in this exploratory play. 17
  17. 4Q 2012 Earnings Call – SM Energy Company – slide 17
    2013 CAPITAL BUDGET ( in millions) Non Drilling 2013 capital budget of 200 - Drilling 300 300 1.5 billion Non- Other Operated Operated, 1,200 Other, 25 65 Approximately 90% of drilling and Operated Permian, completion…
  18. 4Q 2012 Earnings Call – SM Energy Company – slide 18
    GROWTH OUTLOOK SM Energy grew production by approximately 29% in 2012 over 2011. Production growth in 2013 estimated to be 20%. Compounded annual growth of 26% over 5 year period. 375 353 325 Production 307 337 275 267 293…
  19. 4Q 2012 Earnings Call – SM Energy Company – slide 19
    APPENDIX 20
  20. 4Q 2012 Earnings Call – SM Energy Company – slide 20
    OPERATED EAGLE FORD AREA MAP Area 1A: Net Acreage: 26,108 Area 1A 450 Dev. Spacing: 450; 52 ac/well Gross/Net Locations: 483/483 Expected EUR: 3.6 BCFE/well 38% Oil, 31% Gas, 31% NGL Area 1B 625 Area 1B: Net Acreage: 22,179…
  21. 4Q 2012 Earnings Call – SM Energy Company – slide 21
    OPERATED EAGLE FORD RESOURCE POTENTIAL AREA 1A AREA 1B AREA 2 AREA 3 AREA 4 AREA 5 Acreage (ac) 26,108 22,179 22,657 38,293 10,288 25,279 Exp. EUR/well 3.6 BCFE 3.6 BCFE 5.0 BCFE 8.0 BCFE 3.9 BCFE 3.9 BCFE Spacing 52 72 103 103 103 143…
  22. 4Q 2012 Earnings Call – SM Energy Company – slide 22
    OPERATED EAGLE FORD - AREA 1 Type Curve (First 24 Months) 360 6,000 Gas Type 30 Day IP b Di Dt 300 Curve (Mcf/d) factor (%) (%) 5,000 Oil/NGL (Bbls/d) AREA 1 1,566 1.4 69 10 Gas (Mcf/d) 240 4,000 NGL (BBLS/D) 180 3,000…
  23. 4Q 2012 Earnings Call – SM Energy Company – slide 23
    OPERATED EAGLE FORD - AREA 3 Type Curve (First 24 Months) 750 6,000 Gas Type 30 Day IP b Di Dt 625 Curve (Mcf/d) factor (%) (%) 5,000 Oil/NGL (Bbls/d) AREA 3 4,892 1.0 56 10 Gas (Mcf/d) 500 4,000 NGL (BBLS/D) 375 3,000…
  24. 4Q 2012 Earnings Call – SM Energy Company – slide 24
    OPERATED BAKKEN/THREE FORKS RESOURCE POTENTIAL Gooseneck Three Forks: Net Acreage: 35,688 Dev. Spacing: 380 acres/well Operated Gross/Net Locations: 105/72 Non-op Gross/Net Locations: 74/10.7 Expected EUR:** 380 MBOE/well 93%…
  25. 4Q 2012 Earnings Call – SM Energy Company – slide 25
    OPERATED BAKKEN/THREE FORKS RESOURCE POTENTIAL Gooseneck Raven/Bear Den - Raven/Bear Den Bakken Three Forks Acreage (ac) 35,688 44,842* 44,842* Exp. EUR/well** 380 MBOE 458 MBOE 395 MBOE Spacing (ac/well) 320 320 320 DCC/well…
  26. 4Q 2012 Earnings Call – SM Energy Company – slide 26
    NON-OPERATED BAKKEN/THREE FORKS RESOURCE POTENTIAL Gooseneck Raven/Bear Den - Raven/Bear Den Bakken Three Forks Acreage (ac) 35,688 44,842* 44,842* Exp. EUR/well 380 MBOE 458 MBOE 395 MBOE Spacing (ac/well) 320 320 320 DCC/well…
  27. 4Q 2012 Earnings Call – SM Energy Company – slide 27
    THREE FORKS OPERATED GOOSENECK Type Curve (First 24 Months) 800 200 Oil Type 30 Day Max b Di Dt 700 Curve IP (Bo/d) factor (%) (%) 175 600 150 Oil/NGL (Bbls/d) Three Forks 358 1.2 62.1 10 Gas (Mcf/d) 500 125 400 100 OIL…
  28. 4Q 2012 Earnings Call – SM Energy Company – slide 28
    BAKKEN/THREE FORKS OPERATED RAVEN/BEAR DEN Type Curve (First 24 Months) 800 800 Oil Type 30 Day IP b factor Di (%) Dt (%) 700 Curve (Bo/d) 700 BAKKEN - OIL (BBLS/D) Oil/NGL (Bbls/d) 600 Bakken 671 1.4 80 10 600 Gas…
  29. 4Q 2012 Earnings Call – SM Energy Company – slide 29
    4Q12 REGIONAL REALIZATION RATES Benchmark NYMEX WTI OIL (Bbl) 87.95 Hart Composite NGL (Bbl) 41.58 NYMEX Henry Hub Gas (MMBTU) 3.40 Production Volumes STGC Rockies Mid-Con Permian SM Total Oil (MBbls) 928 1,453 128 367 2,876 Gas…
  30. 4Q 2012 Earnings Call – SM Energy Company – slide 30
    GUIDANCE UPDATE 1Q13 FY 2013 Production (BCFE) 59.5 62.5 255 267 Average daily production (MMCFE/d) 661 695 699 732 LOE (/MCFE) 0.78 0.82 0.82 0.87 Transportation (/MCFE) 0.72 0.75 0.80 0.85 Production taxes (% of pre-derivative…
  31. 4Q 2012 Earnings Call – SM Energy Company – slide 31
    EBITDAX (1) EBITDAX RECONCILIATION (in thousands) Reconciliation of net income (loss) (GAAP) to EBITDAX (non-GAAP) to net cash For the Three Months provided by operating activities (GAAP): Ended December 31, 2012 2011 Net income (loss)…
  32. 4Q 2012 Earnings Call – SM Energy Company – slide 32
    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) 2012 2011 Reported Net Income (GAAP) (67,138)…
  33. 4Q 2012 Earnings Call – SM Energy Company – slide 33
    SUMMARIZED OIL DERIVATIVE POSITION* Oil Swaps - NYMEX Equivalent Oil Collars - NYMEX Equivalent Ceiling Floor Bbls /Bbl Bbls /Bbl /Bbl 2013 2013 Q1 734,000 92.38 Q1 755,000 107.36 79.87 Q2 1,093,000 93.72 Q2 620,000 109.08 76.65…
  34. 4Q 2012 Earnings Call – SM Energy Company – slide 34
    SUMMARIZED GAS DERIVATIVE POSITION* Natural Gas Swaps - NYMEX Equivalent Natural Gas Collars - NYMEX Equivalent Ceiling Floor MMBTU /MMBTU MMBTU /MMBTU /MMBTU 2013 2013 Q1 8,611,000 4.43 Q1 1,330,000 5.55 4.49 Q2 7,205,000 4.08 Q2…
  35. 4Q 2012 Earnings Call – SM Energy Company – slide 35
    SUMMARIZED NGL DERIVATIVE POSITION* Natural Gas Liquid Swaps - Mont. Belvieu Bbls /Bbl 2013 Q1 496,000 49.72 Q2 552,000 53.13 Q3 375,000 60.17 Q4 342,000 59.77 2013 Total 1,765,000 2014 Q1 208,000 75.87 Q2 0 Q3 0 Q4 0 2014…

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