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3Q 2013 EARNINGS CALL – SM Energy Company

SM Energy Company · Oct 30, 2013 · 31 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. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 1
    3rd Quarter 2013 Earnings Call and Operational Update October 30, 2013
  2. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 2
    Key Messages Record quarterly production of 12.8 MMBOE; product mix 50% liquids in 3Q13. Record quarterly EBITDAX in excess of capital expenditures. Strong Wolfcamp B result; increased acreage position in the Midland Basin.…
  3. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 3
    3rd Quarter 2013 Performance Production 3Q13 Actual Performance 3Q13 Guidance Net Income GAAP net income of Average daily production (MBOE/d) 138.8 132 - 139 70.7 million, or 1.04 Total production (MMBOE) 12.77 12.2 - 12.8 per…
  4. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 4
    3Q13 Operational Update 5
  5. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 5
    Production 160 138.8 140 131.8 120 115.0 27.5 110.0 24.6 103.3 100 20.8 20.5 18.0 35.5 41.6 NGL MBOE/d 80 34.8 28.6 31.3 Oil 60 Gas 40 71.7 59.7 69.7 56.7 57.9 20 0 3Q12 4Q12 1Q13 2Q13 3Q13 3Q13 production mix…
  6. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 6
    Operated Eagle Ford Operational Highlights Net Production 80 3% sequential production 68.1 70 66.1 growth quarter over quarter; MBOE/d 60 21.1 18.9 68% quarterly production 50 45.2 51.8 40.5 15.1 5.5 growth from 3Q12 to…
  7. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 7
    Non-operated Eagle Ford Net Production Operational Highlights 18 14% sequential 16 production growth MBOE/d 14 12 quarter over quarter. 10 19.8 17.4 8 6 14.0 15.5 16.0 The operator ran 4 approximately 9 drilling 2 0…
  8. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 8
    Bakken/Three Forks Net Production Operational Highlights 16 9% sequential growth quarter over 14 quarter; 35% quarterly production MBOE/d 12 growth 3Q12 to 3Q13. 10 8 14.9 6 11.9 12.2 13.7 The Company operated 3 rigs…
  9. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 9
    Permian Region Net Production Operational Highlights 8 7 3% sequential production growth MBOE/d 6 5 4 6.6 6.8 quarter over quarter; 3 2 5.4 5.5 5.3 26% quarterly 1 0 production growth 3Q12 4Q12 1Q13 2Q13 3Q13 from…
  10. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 10
    Permian Net Acreage Tredway PDU/ESDU 54,500 Net acres 2,750 Net acres Midland Basin Buffalo 53,500 Net acres Sweetie Peck Delaware Basin 13,500 Net acres 129,750 TOTAL NET ACRES INCLUDES 32,500 NET ACRES RECENTLY…
  11. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 11
    Midland Basin Wolfcamp Shale Activity Midland Basin Diamondback Pioneer (4 wells drilling) UL 4-III 1H Wolfcamp B, Cline, Jo Mill, Buffalo Wolfcamp B Lower Spraberry No 30 day rate reported Pioneer, Mabee K 1H Avg. 30 day rate:…
  12. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 12
    Wolfcamp B Decline Curve Discussion Completion Summary Lateral Length - 5,000 Frac Stages 25 Hybrid Fluid System 220 Mbbls Fluid & 7 MM lbs sand AFE Curve AFE Curve Base Upside b-factor 1.3 1.6 Di % 80 90 Dt % 8 6 EUR…
  13. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 13
    Sweetie Peck Wolfcamp B Development 67 potential Wolfcamp B wells at 107 acre spacing. Effective lateral lengths based on lease conditions. Evaluating completion design. Proppant type. Stage spacing. Vertical well…
  14. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 14
    Additional Intervals at Sweetie Peck TYPE LOG: LANDING FORMATION Sweetie Peck ZONES U. Spraberry Sd. Dorcus 3035H M. Spraberry Sh. Britain 3133H L. Spraberry Sd Jo Mill Sd Type Log L. Spraberry Sh CVX 4134H Dean…
  15. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 15
    Buffalo Prospect Tatonka 1H Wolfcamp B Spud date: 4Q13 SM Energy has leased or committed to acquire approximately 53,500 net acres in Buffalo Prospect. Diamondback Core and log of Tatonka well UL4-III 1H Wolfcamp B…
  16. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 16
    Wolfcamp B Program for 4Q13 Sweetie Peck Continue flowback of Britain 3133H. Complete CVX 4134H in November. Drill two additional Wolfcamp B wells. Buffalo Prospect Drill Tatonka 1H horizontal and frac late December. 17
  17. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 17
    New Ventures Update Powder River Basin SM Energy has obtained 10 drilling permits for its Powder River Basin Frontier program with 22 additional applications submitted. The Company expects to operate one drilling rig in the PRB…
  18. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 18
    Financial Update 19
  19. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 19
    Financial Position TOTAL BOOK Net cash provided by CAPITALIZATION operations exceeded (in millions) 3,500 capital expenditures in 3,000 3Q13; total debt balance 2,500 unchanged from previous 1,587 2,000 quarter. 1,500 500 Current…
  20. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 20
    Financial Position Debt Maturities (in millions) 2,500 2,000 1,500 1,000 500 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revolving Credit Facility Senior Notes due 2019 Senior Notes due 2021 Senior Notes due…
  21. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 21
    Debt to TTM EBITDAX 5.0x 4.5x 4.0x 3.5x 3.0x Average: 2.5x 2.5x 2.0x 1.5x 1.0x 0.5x 1.2 1.4 0.0x SM SM 9/30/13 6/30/13 SM Energys debt to trailing twelve-month EBITDAX is below its peer average of 2.5x. Note: 9/30/13…
  22. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 22
    Key Takeaways Excellent quarter Record quarterly production. Record quarterly EBITDAX. Strong balance sheet 1.3 billion of undrawn revolver at 3Q13. Debt to TTM EBITDAX improved to 1.2x. Growing oily inventory Strong Wolfcamp…
  23. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 23
    APPENDIX 24
  24. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 24
    3Q13 Regional Realizations Benchmark NYMEX WTI OIL (Bbl) 105.82 Hart Composite NGL (Bbl) 40.23 NYMEX Henry Hub Gas (MMBTU) 3.55 Production Volumes STGC Rockies Mid-Con Permian SM Total Oil (MBbls) 1,498 1,688 171 468 3,825 Gas (MMcf)…
  25. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 25
    EBITDAX Reconciliation EBITDAX (1) (in thousands) Reconciliation of net income (loss) (GAAP) to EBITDAX (non-GAAP) to net cash For the Three Months Ended provided by operating activities (GAAP): September 30, 2013 2012 Net income…
  26. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 26
    Adjusted Net Income Reconciliation Reconciliation of net income (loss) (GAAP) to adjusted net income (Non-GAAP): For the Three Months Ended September 30, (in thousands, except per share data) 2013 2012 Reported Net Income (loss)…
  27. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 27
    4Q13 Guidance 4Q13 FY 2013 Production (MMBOE) 12.8 13.5 47.9 48.6 Average daily production (MBOE/d) 139 146 129 135 LOE (/BOE) 4.65 4.90 4.75 5.00 Transportation (/BOE) 5.40 5.65 5.15 5.45 Production taxes (% of pre-derivative oil…
  28. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 28
    Oil Derivative Position* Oil Swaps - NYMEX Equivalent Oil Swaps WTI swap with LLS basis Differential Bbls /Bbl Bbls /Bbl 2013 2013 Q4 657,000 93.98 Q4 461,000 101.51 2013 Total 657,000 2013 Total 461,000 2014 2014 Q1 1,197,000…
  29. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 29
    Oil Derivative Position* Oil Collars - NYMEX Equivalent Ceiling Floor Bbls /Bbl /Bbl 2013 Q4 1,480,000 114.12 88.14 2013 Total 1,480,000 2014 Q1 694,000 115.07 80.97 Q2 431,000 102.50 85.00 Q3 974,000 102.58 85.00 Q4 923,000…
  30. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 30
    Gas Derivative Position* Natural Gas Swaps - NYMEX Equivalent Natural Gas Collars - NYMEX Equivalent Ceiling Floor MMBTU /MMBTU MMBTU /MMBTU /MMBTU 2013 2013 Q4 19,047,000 4.13 Q4 1,640,000 5.37 4.45 2013 Total 19,047,000 2013…
  31. 3Q 2013 EARNINGS CALL – SM Energy Company – slide 31
    NGL Derivative Position* Natural Gas Liquid Swaps - Mont. Belvieu Bbls /Bbl 2013 Q4 511,000 53.16 2013 Total 511,000 2014 Q1 404,000 58.42 Q2 0 Q3 0 Q4 0 2014 Total 404,000 Grand Total 915,000 *As of 10/23/13 32

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