Sm Energy Company · NYSE:SM
Sm Energy — Q3 2024 Earnings Presentation
32 slides from Sm Energy's earnings presentation, Nov 1, 2024
Slide 1: Third Quarter 2024 Financial and Operating Results
Third Quarter 2024 Financial and Operating Results October 31, 2024 NYSE: SM WEB: sm-energy.com 1
Slide 2: Disclaimers
Disclaimers Forward-looking Statements This presentation contains forward-looking statements within the meaning of securities laws. The words “believes,” “demonstrate,” “estimate,” “expect,” “intends,” “plan,” “preliminary,” “target,” and similar expressions are intended to identify forward-looking
Slide 3: SM Energy Is…
SM Energy Is… A Premier Operator of Top-Tier Assets A Premier Operator Capital Efficiency Owner of Top-Tier Assets High-Quality Inventory with Long Runway A Leader Sustainability and Stewardship Denver | Corporate Headquarters 3
Slide 4: Top-Tier Assets
Top-Tier Assets Austin Chalk | Midland Basin | Uinta Basin Uinta Basin ~63,300 NET ACRES Midland Basin South Texas ~111,000 NET ACRES ~155,000 NET ACRES Note | Midland Basin and South Texas are as of September 30, 2024. 4 Uinta Basin is as of October 1, 2024, upon closing of the Uinta Basin Acquisit
Slide 5: Excellent Operational Execution
Excellent Operational Execution Meeting or Exceeding 2024 Core Objectives 2024 Core Objectives 3Q24 Results Uinta Acquisitions increased acreage ~63,300 net acres 1 Maintain and expand portfolio quality and depth, applying advanced analytics Company acreage ↑ ~40% over last 12 – 18 months and te
Slide 6: Expanded Top-Tier Portfolio
Expanded Top-Tier Portfolio Uinta Basin ...we believe SM stands out as retaining multiple resource catalysts – at a time when that’s largely nonexistent in E&P – that can shape a more capital efficient ’25 v what’s appreciated.”(1) (1) TD Cowen | Gabe Daoud, Jr. | SM - Upgrading to Buy; Uinta & Klon
Slide 7: Expanded Top-Tier Portfolio: Uinta Basin Returns
Expanded Top-Tier Portfolio Uinta Basin Returns | Competitive with the Best ...we believe there are sufficient data points to acknowledge that the Uinta is a prolific, stacked- pay oil play.... We come away impressed by the overall rock quality in the Uinta....”(1) Compared to SM Energy(2) Compared
Slide 8: Operational Excellence: Uinta Basin
Operational Excellence: Uinta Basin 3 Douglas Creek Wells Reached IP30 | 94% Oil! New Upper Cube Wells that Reached IP30 3 Douglas Creek wells 870 Avg. Boe/d per well 94% Oil 10,316’+ Avg. Laterals 8
Slide 9: Operational Excellence: Midland Basin
Operational Excellence: Midland Basin Inventory Upside in Greater Sweetie Peck What are the most significant asset- and basin-level trends for North American E&Ps?... (SM Energy’s) recent Woodford well within its Sweetie Peck region... could signal additional upside in the ... Midland Basin....”(1)
Slide 10: Operational Excellence: Midland Basin
Operational Excellence: Midland Basin Klondike Wells Reached IP30 | Outperforming the Acquisition Model New Wells that Reached IP30 New Wells Outperform Acquisition Model 140 120 Avg. Cumulative Oil Production 100 (MBbl/10,000 ft) 80 60 40 20 2 New SM Wells Acquisition Model 0 0 50 100 150 200 Days
Slide 11: Operational Excellence: Austin Chalk
Operational Excellence: Austin Chalk Fully-Bounded Tests Continue to Outperform | Prolific New Wells Online in 3Q SM’s Briscoe C spacing pilot in the Austin Chalk is performing in line with more conservatively spaced offsets and could add over New Wells that Reached IP30 60 locations to our existing
Slide 12: Operational Excellence
Operational Excellence Significant Oil Production Outperformance Compared to Regional Peers ... SM is ... focused on being the most technically proficient operator. SM utilizes larger fracs and wider spacing than most peers, with a focus on optimizing the value of each completion. ”(1) SM Energy Wel
Slide 13: 3Q 2024 Performance
3Q 2024 Performance Key Metrics 3Q24 Net Production and Pricing Total Net Production (MMBoe) Total Net Production (MBoe/d) Oil / Liquids percentage 15.6 170.0 46% / 63% 170.0 MBoe/d 3Q24 NET PRODUCTION Pre-Hedge Realized Price ($/Boe) $41.08 Post-Hedge Realized Price(1) ($/Boe) $42.13 Costs (per Boe
Slide 14: Empowered by a Strong Balance Sheet
Empowered by a Strong Balance Sheet Low Leverage and Balance Sheet Flexibility Debt Maturities (millions) as of September 30, 2024: $2.5B As of September 30, 2024: Borrowing Base LIQUIDITY $3.0 billion $1.25B CASH BALANCE $1.7 billion Aggregate Lender NET DEBT(1)(2) $1.0 billion Commitments Debt Mat
Slide 15: Hedging Summary
Hedging Summary Oil Volumes Hedged Increased in Conjunction with Uinta Basin Acquisitions 2024 Hedge Program SWAPS AND COLLARS: Oil: ~3,820 MBbls,(1) or ~40+% of expected 4Q net oil production(2) is hedged to benchmark prices at an average price of $72.08/Bbl (weighted-average of collar floors and
Slide 16: 2024 Plan Guidance
2024 Plan Guidance Guidance Update | Including Uinta Basin Guidance | Texas + Utah Key Metrics 4th Quarter 2024 Full Year 2024 Capital Expenditures(1) $320–$340 million $1.24–$1.26 billion Total Net Production (MMBoe) 18.9–20.2 62.2–63.5 Total Net Production (MBoe/d) 205–220 170–174 Oil percentage ~
Slide 17: Operational Excellence
Operational Excellence SM Energy | A Leader in Stewardship 2023 Results 2024 Sustainability Reports and Data Published October 21, 2024 ― 2024 Letter from Our CEO to Stakeholders ― 2024 Performance Highlights and Quick Reference Metrics ― 2024 Corporate Sustainability Report ― 2024 Sustainability Ac
Slide 18: Uinta Basin Operations
Uinta Basin Operations SM Energy 3 Active Rigs at Sunrise 18
Slide 19: Appendix
Appendix
Slide 20: 3Q 2024 Realizations by Region
3Q 2024 Realizations by Region Two Top-Tier Areas of Operation Net Production Volumes Midland Basin South Texas Total Benchmark Pricing Oil (MBbls) 5,099 2,019 7,118 Gas (MMcf) 16,067 18,472 34,540 NYMEX WTI Oil ($/Bbl) $ 75.10 NGL (MBbls) 7 2,758 2,765 NYMEX Henry Hub Gas ($/MMBtu) $ 2.16 Total (MB
Slide 21: Activity by Region
Activity by Region Wells Drilled, Flowing Completions & DUC Count Wells Drilled Flowing Completions DUC Count 3Q24 2024 YTD 3Q24 2024 YTD As of September 30, 2024 Gross Net Gross Net Gross Net Gross Net Gross Net Midland Basin RockStar 15 11 46 38 15 13 44 35 27 22 Sweetie Peck 17 10 29 21 2 2 21 17
Slide 22: Leasehold Summary
Leasehold Summary Growing Core Acreage Position with Uinta Basin Acquisitions Net Acres(1) At October 1, 2024 ~111,000 Midland Basin RockStar 83,500 Sweetie Peck(2) 27,100 MIDLAND BASIN NET ACRES Midland Basin total 110,600 South Texas 154,800 ~155,000 Uinta Basin 63,300 SOUTH TEXAS NET ACRES ~63,30
Slide 23: Uinta Basin: Marketing
Uinta Basin: Marketing High-Value Products Realize Price Premiums Expanded Takeaway Capacity CRUDE OIL - Supports Growth Majority of crude is transported by BNSF and Union Pacific on rail to multiple destinations (Gulf Coast, Cushing & Rockies) with some barrels trucked to Salt Lake City refinerie
Slide 24: Empowered by a Strong Balance Sheet
Empowered by a Strong Balance Sheet Senior Notes Detail Principal Amount Coupon Initial Call Date Current Call Price Maturity Date Outstanding 2024 - - - - - Credit rating agency senior 2025 - - - - - unsecured debt ratings 2026 $419 6.750% 9/2021 100.000% 9/2026 S&P: BB- Outlook: Stable 2027 $417 6
Slide 25: NGL Realizations
NGL Realizations 2024 Plan Assumes Ethane Processing All Year Austin Chalk – Realizations by Quarter 3Q 2024 2Q 2024 1Q 2024 4Q 2023 3Q 2023 High Liquids Content OPIS Benchmark(1) Price ($/Bbl) $26.68 $27.96 $29.28 $26.89 $27.81 SM Energy NGL Realization ($/Bbl) $21.70 $22.86 $22.94 $21.92 $23.61 %
Slide 26: Oil Derivative Positions
Oil Derivative Positions(1) By Quarter NYMEX WTI NYMEX WTI Midland - Cushing MEH – WTI NYMEX WTI Weighted-Average Price Oil Oil Swaps Oil Collars Oil Basis Swaps Oil Basis Swaps Roll Basis Swaps of Swaps and Collars Price Price Price Volume Volume Ceiling Floor Volume Volume Volume Ceiling Floor Per
Slide 27: Gas and NGL Derivative Positions
Gas and NGL Derivative Positions(1) By Quarter NYMEX Henry Hub IF WAHA IF WAHA IF HSC NYMEX Henry Hub Weighted-Average Price Gas Gas Swaps Gas Swaps Gas Basis Swaps Gas Basis Swaps Gas Collars of Swaps and Collars Volume Volume Volume Volume Volume Ceiling Floor Ceiling Floor Period $/MMBtu(2) $/MMB
Slide 28: Third Quarter 2024 Non-GAAP Reconciliations and Disclosures
Third Quarter 2024 Non-GAAP Reconciliations and Disclosures
Slide 29: Definitions of Non-GAAP Measures and Metrics as Calculated by the Company
Definitions of Non-GAAP Measures and Metrics as Calculated by the Company To supplement the presentation of its financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides certain non-GAAP measures and metrics, which are used by management
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Trailing Twelve Adjusted EBITDAX(1) Three Months Ended Months Ended (1) Adjusted Net Income Three Months Ended (in thousands) September 30, 2024 September 30, 2024 (in thousands, except per share data) September 30, 2024 Net income (GAAP) $ 240,523 $ 829,126 Net income (GAAP
Slide 31: Non-GAAP Reconciliations, continued
Non-GAAP Reconciliations, continued Adjusted Free Cash Flow(1) Three Months Ended Nine Months Ended (in thousands) September 30, 2024 September 30, 2024 Net cash provided by operating activities (GAAP) $ 452,263 $ 1,204,645 Net change in working capital (32,040) 15,433 Cash flow from operations befo
Slide 32: Contact Information
Contact Information Jennifer Martin Samuels Lindsay Miller Vice President – Investor Relations Manager – Investor Relations and ESG and ESG Stewardship 303.864.2507 303.830.5860 jsamuels@sm-energy.com lmiller@sm-energy.com