Sm Energy Company · NYSE:SM
Sm Energy — FY2024 Earnings Presentation
39 slides from Sm Energy's earnings presentation, Feb 19, 2025
Slide 1: 2024 Results & 2025 Operating Plan
2024 Results & 2025 Operating Plan February 19, 2025 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 Midland Basin | South Texas | Uinta Basin Uinta Basin ~63,300 NET ACRES Midland Basin South Texas ~111,000 NET ACRES ~155,000 NET ACRES 4 Note | Acreage held as of December 31, 2024.
Slide 5: 2024 Core Strategic Objectives Accomplished
2024 Core Strategic Objectives Accomplished Outstanding 2024 Results Met or Exceeded Plan Goals 2024 Core Objectives 2024 Results Record Proved Reserves!(1) ↑12% from YE23 | 678 MMBoe 1 Maintain and expand portfolio quality and depth, applying advanced analytics Core net acreage ↑24% from YE23 a
Slide 6: 2025 Core Strategic Objectives
2025 Core Strategic Objectives Core Objectives Support Long-Term Profitability and Value Creation 1 FOCUS ON 2 RETURN CAPITAL 3 EXPAND OUR PORTFOLIO OPERATIONAL EXECUTION TO STOCKHOLDERS OF TOP-TIER ECONOMIC to realize a step change in by generating free cash flow DRILLING INVENTORY scale through th
Slide 7: Record Proved Reserves YE 2024
Record Proved Reserves(1) YE 2024 Oil Reserves ↑29% YE2024 over YE2023 Proven Track Record of Production Replacement and Reserve Growth! Year End Proved Reserves(1)(5) 800 Proved Reserves(1)(5) 678 MMBoe 700 678 Pre-tax PV-10(2) $8.4B 605 600 537 Reserves Life Index(3) 10.9 years 492 Net Produ
Slide 8: High-Quality, Long-Duration Inventory
High-Quality, Long-Duration Inventory High Average Expected Return | Low Expected Breakeven Cost | Nearly 90% 3P NEARLY ~10+ YEARS 90% 3P TOTAL COMPANY(1) HIGH QUALITY INVENTORY(1) Inventory Upside(2) Uinta Basin Deep Cube >65% RETURN Uinta Basin Downspacing Dry Gas Wells (at higher TOTAL COMP
Slide 9: 2025 Plan - Capital Program
2025 Plan - Capital Program Flat Capital Expenditures Delivers Expected ↑20+% Production and ↑10+% Completions Capital Allocation by Region Uinta Basin Midland Basin 35%-40% 35%-40% Capital Expenditures(1)(2) ~1.3B 38% DC&E | Facilities Split 90% | 10% Drilling & Completion Activity ~105 | ~15
Slide 10: 2025 Plan – Capital Program, continued
2025 Plan – Capital Program, continued Delineate New Assets | Optimize Costs | Grow Free Cash Flow Uinta Basin Plan Details(1) Midland Basin Plan Details(1) South Texas Plan Details(1) 2025 Net wells planned: ~35 drills 2025 Net wells planned: ~40 drills 2025 Net wells planned: ~30 drills and
Slide 11: Operational Excellence: Capital Efficiency
Operational Excellence: Capital Efficiency Faster Drilling + Faster Completions = Lower Costs | Improvements 2022 to 2024 Midland Basin Avg. per Day + Avg. per Day = Avg. per Foot Drilling Footage Completed Footage D&C Cost ↑20% ↑99% 10% South Texas Avg. per Day + Avg. per Day = Avg. per Foot Drill
Slide 12: Operational Excellence: Capital Efficiency
Operational Excellence: Capital Efficiency Uinta Basin Sand Mine | Low-Cost Local Sand | 2024 Produced Half-Million+ Tons of Sand Raw Material Separate Rocks and Sand Storage Piles of “Wet” Sand 12
Slide 13: Operational Excellence: Texas
Operational Excellence: Texas Significant Oil Production Outperformance Compared to Regional Peers SM Energy Wells v. Howard County Peers(1) SM Energy Wells v. Austin Chalk Peers(2) 250 250 Avg. Cumulative Oil Production Avg. Cumulative Oil Production 200 ~30% 200 ~40% (MBbl/10,000 ft) (MBbl/10,000
Slide 14: Operational Excellence: Uinta Basin
Operational Excellence: Uinta Basin 18 Wells Reached Peak IP30 | 93% Oil! ‘‘ SM has a long track record of operational excellence and this should lead to further enhancements moving forward. Given the depth of the inventory and contiguous acreage, we expect longer lateral and wider spacing to contin
Slide 15: Expanded Top-Tier Portfolio
Expanded Top-Tier Portfolio Uinta Basin Returns | Competitive with the Best Utah Compared to Texas(1) Compared to Industry in Other Basins(2) 350 350 300 300 Avg Cumulative Production Avg Cumulative Production 250 250 MBbl/10,000 Ft MBbls/10,000 Ft 200 200 150 150 100 SM Lower Cube 100 Delaware Basi
Slide 16: Operational Excellence: Midland Basin
Operational Excellence: Midland Basin Klondike Wells Reached Peak IP30 | Outperforming the Acquisition Model New Wells that Reached IP30 New Wells Outperform Acquisition Model 140 Avg. Cumulative Oil Production 120 100 (MBbl/10,000 ft) 80 60 40 8 New SM Wells 20 Acquisition Model 0 0 50 100 150 200
Slide 17: Operational Excellence: Midland Basin
Operational Excellence: Midland Basin Outperformance Drives Value Creation SM Energy Woodford-Barnett Wells v. Peers(1) 140 120 20,000+ net acres Avg. Cumulative Oil Production at Sweetie Peck prospective for 100 50+% Woodford-Barnett development (Mbbl/10,000 ft) 80 60 40 SM Well 1 20 SM Well 2 2025
Slide 18: Operational Excellence: Austin Chalk
Operational Excellence: Austin Chalk Prolific New Wells Reach Peak IP30 ’22-’24 SM Energy Austin Chalk Wells to Date(1) 80 70 Liquids-rich Gas Number of wells: 54 (Mboe per 1,000' / 3-stream) 60 Cumulative Production 50 40 30 Oil Number of wells: 58 20 10 0 0 100 200 300 400 500 600 700 800 900 1,00
Slide 19: Full Year 2024 Performance Highlights
Full Year 2024 Performance Highlights Increasing Scale | Increasing Cash Flow 2024 NET PRODUCTION 170.5 MBoe/d ↑12% 2024 ADJ. EBITDAX(1) $2.0 billion ↑16% 2024 ADJ. EPS(1) $6.80 5.7 ADJ. EPS MULTIPLE(2) 2024 ADJ. FREE CASH FLOW(1) $ 485.0 million 11% FREE CASH FLOW YIELD(1)(3) Note | All metrics sho
Slide 20: 2025 Plan Guidance
2025 Plan Guidance Optimizing Free Cash Flow Over a Multi-Year Plan Key Metrics Guidance FY 2025 Guidance 1Q25 Capital Expenditures(1)(2) ~$1.3 billion $425–$435 million Total Net Production (MBoe/d) 200–215 191–198 Total Net Oil Production (MBbls/d) 102–112 Key Assumptions Oil percentage 51%-52% 52
Slide 21: Hedging Summary
Hedging Summary Hedge Volumes Aligned with Leverage 2025 Hedge Program Targets 30%-35% OF 2025 ESTIMATED NET OIL AND GAS VOLUMES 2025 Hedge Program SWAPS AND COLLARS: Oil: ~12,600 MBbls,(1) or slightly more than 30%, of expected 2025 net oil production(2) is hedged to benchmark prices at a weighte
Slide 22: Empowered by a Strong Balance Sheet
Empowered by a Strong Balance Sheet Low Leverage and Balance Sheet Flexibility Debt Maturities (millions): $3.0B Borrowing Base 1.4x NET DEBT-TO- ADJUSTED EBITDAX(1) $2.0B LIQUIDITY $1.9 billion Aggregate NET DEBT(1)(2) $2.8 billion Revolving Lender Commitments Credit rating agency senior unsecured
Slide 23: Sustainable Return of Capital Program
Sustainable Return of Capital Program Sustainable Fixed Dividend | 10.1 Million Shares Repurchased(1) Annual Dividend Increased from Cumulative Capital $0.02 to $0.80 Returned to Stockholders(1) per share(2) $544.2 million Stock Repurchase Authorization(2) % FCF(3) Returned to $500 million Stockhold
Slide 24: Operational Excellence
Operational Excellence Building Competencies and Skills SM Energy | A Leader in Stewardship 2025 EHS Safety Calendar Winner Eisley Swarts | Daughter of Geologist Overall Excellence in Leadership Development 24
Slide 25: 2025 Core Strategic Objectives
2025 Core Strategic Objectives Core Objectives Support Long-Term Profitability and Value Creation 1 FOCUS ON 2 RETURN CAPITAL 3 EXPAND OUR PORTFOLIO OPERATIONAL EXECUTION TO STOCKHOLDERS OF TOP-TIER ECONOMIC to realize a step change in by generating free cash flow DRILLING INVENTORY scale through th
Slide 26: Appendix
Appendix
Slide 27: 2024 Company Record Proved Reserves
2024 Company Record Proved Reserves!(1) Proved Reserves ↑12% Year Over Year Proved Reserves(1) by Region Uinta Midland South YE 2024 Total Basin Basin Texas Oil (MMBbl) 82.5 134.3 79.2 296.0 Gas (Bcf) NGL (MMBbl) 104.6 — 576.4 0.1 868.1 124.0 1,549.1 124.1 Proved Total (MMBoe) % Proved Developed 99.
Slide 28: 4Q and Full Year 2024 Performance
4Q and Full Year 2024 Performance Outstanding 2024 Results Key Metrics 4Q24 2024 Key Metrics 4Q24 2024 Net Production and Pricing Earnings Total net production (MMBoe) 19.1 62.4 GAAP earnings (per diluted share) $1.64 $6.67 Total net production (MBoe/d) 208.0 170.5 Adjusted net income(1) (per dilute
Slide 29: 4Q 2024 Realizations by Region
4Q 2024 Realizations by Region Three Top-Tier Areas of Operation Net Production Volumes Uinta Basin Midland Basin South Texas Total Benchmark Pricing Oil (MBbls) 2,870 4,957 2,011 9,838 NYMEX WTI Oil ($/Bbl) $ 70.27 Gas (MMcf) 2,703 16,028 20,352 39,084 NGL (MBbls) — 9 2,775 2,784 NYMEX Henry Hub Ga
Slide 30: Activity by Region
Activity by Region Wells Drilled, Flowing Completions & DUC Count Wells Drilled Flowing Completions DUC Count 4Q24 2024 YTD 4Q24 2024 YTD As of December 31, 2024 Gross Net Gross Net Gross Net Gross Net Gross Net Uinta Basin Uinta Basin total 19 15 19 15 12 8 12 8 48 38 Midland Basin RockStar 10 8 56
Slide 31: Leasehold Summary
Leasehold Summary Growing Core Acreage Position with Uinta Basin Acquisitions Net Acres(1) At December 31, 2024 ~111,000 Midland Basin RockStar 83,500 Sweetie Peck(2) 27,500 MIDLAND BASIN NET ACRES Midland Basin total 111,000 South Texas 154,800 ~155,000 Uinta Basin 63,300 SOUTH TEXAS NET ACRES ~63,
Slide 32: NGL Realizations
NGL Realizations 2025 Plan Assumes Ethane Processing in 2Q and 3Q; Rejecting Ethane in 1Q and 4Q Realizations by Quarter 4Q 2024 3Q 2024 2Q 2024 1Q 2024 4Q 2023 Austin Chalk – OPIS Benchmark(1) Price ($/Bbl) $29.29 $26.68 $27.96 $29.28 $26.89 High Liquids Content SM Energy NGL Realization ($/Bbl) $2
Slide 33: Oil Derivative Positions
Oil Derivative Positions(1) By Quarter NYMEX WTI NYMEX WTI Midland - Cushing MEH – WTI Weighted-Average Price Oil Oil Swaps Oil Collars Oil Basis Swaps Oil Basis Swaps of Swaps and Collars Price Price Volume Volume Ceiling Floor Volume Volume Ceiling Floor Period $/Bbl(2) Differential Differential (
Slide 34: 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 IF HSC Swap of Swaps and Collars Volume Volume Volume Volume Volume Ceiling Floor Volume Ceiling Floor Peri
Slide 35: Fourth Quarter 2024 Non-GAAP Reconciliations and Disclosures
Fourth Quarter 2024 Non-GAAP Reconciliations and Disclosures
Slide 36: 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 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDAX(1) Three Months Ended Twelve Months Ended Adjusted Net Income(1) Three Months Ended Twelve Months Ended (in thousands) December 31, 2024 December 31, 2024 (in thousands, except per share data) December 31, 2024 December 31, 2024 Net income (GAAP) $ 188,278 $
Slide 38: Non-GAAP Reconciliations, continued
Non-GAAP Reconciliations, continued Adjusted Free Cash Flow(1) Three Months Ended Twelve Months Ended (in thousands) December 31, 2024 December 31, 2024 Net cash provided by operating activities (GAAP) $ 577,869 $ 1,782,514 Net change in working capital (26,641) (11,208) Cash flow from operations be
Slide 39: 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