Sm Energy Company · NYSE:SM
Sm Energy — Q1 2025 Earnings Presentation
29 slides from Sm Energy's earnings presentation, May 2, 2025
Slide 1: First Quarter 2025 Financial & Operating Results
NYSE: SM SM-Energy.com First Quarter 2025 Financial & Operating Results May 1, 2025
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 Uinta Basin Denver | Corporate Headquarters A PREMIER OPERATOR: Capital Efficiency OWNER OF TOP-TIER ASSETS: High-Quality Inventory with Long Runway A LEADER: Permian Basin Sustainability and Stewardship South Texas 3
Slide 4: Top-Tier Assets
Top-Tier Assets UINTA BASIN | MIDLAND BASIN | SOUTH TEXAS South Texas ~155,000 NET ACRES Uinta Basin DIMMIT ~63,600 NET ACRES Midland Basin ~111,000 NET ACRES DAWSON WEBB UINTAH MARTIN DUCHESNE HOWARD MIDLAND UPTON CRANE Note: Midland Basin and South Texas are as of September 30, 2024. Uinta Basin i
Slide 5: 2025 Core Strategic Objectives
2025 Core Strategic Objectives 1ST QUARTER RESULTS SUPPORT 2025 CORE OBJECTIVES Expand our portfolio of 1 Focus on operational execution 2 Return capital to stockholders 3 top-tier economic drilling inventory ▪ Successful Uinta Basin ▪ $0.20 per share cash dividend ▪ Uinta Basin Upper Cube integrati
Slide 6: Why invest in SM Energy?
Why invest in SM Energy? WHAT DIFFERENTIATES US FROM PEERS 1 Premier operator with track record of capital efficiency and innovation 10+ years of high-quality, low breakeven, resilient inventory(1) with > 65% 2 average projected return(1) 3 Strong balance sheet 4 Sustainable return of capital progra
Slide 7: Focus on Operational Execution
Focus on Operational Execution SUCCESSFUL UINTA BASIN INTEGRATION | ENVERUS ADDS 57 SUB-$50/BBL BREAKEVEN LOCATIONS Uinta Upper Cube Oil Production Competitive with Other Basins(2) Douglas Creek 350 “SM … holds the most at 57 300 (locations) … which is a material shift in Avg. Cumulative Oil Product
Slide 8: Focus on Operational Execution
Focus on Operational Execution NEW WELLS REACH IP30 IN UINTA BASIN AND SOUTH TEXAS OIL DIMMIT WEBB DUCHESNE UINTAH LIQUIDS-RICH GAS New Wells that Reached IP30 New Wells that Reached IP30 ▪ 6 Lower Cube wells ▪ 4 Austin Chalk wells ▪ 1,193 Avg. Boe/d per well ▪ 1,061 Avg. Boe/d per well ▪ 91% Oil ▪
Slide 9: Focus on Operational Execution
Focus on Operational Execution CONTINUED SIGNIFICANT OIL PRODUCTION OUTPERFORMANCE COMPARED TO PEERS SM Energy Wells v. Howard County Peers(1) SM Energy Wells v. Austin Chalk Peers(2) 250 250 Avg. Cumulative Oil Production Avg. Cumulative Oil Production 200 ~32% 200 ~42% (MBbl/10,000 ft) (MBbl/10,00
Slide 10: Focus on Operational Execution
Focus on Operational Execution DRIVING CAPITAL EFFICIENCIES ACROSS ALL THREE CORE BASINS ▪ Success in drilling 3-mile laterals UINTA INTEGRATION ▪ Record footage completed in March ▪ Record oil takeaway PERMIAN DESIGN ▪ Cost savings with design changes focused on treating pressures ▪ Enhanced produc
Slide 11: Focus on Operational Execution
Focus on Operational Execution TECHNOLOGY IS PART OF OUR DNA Employee empowerment and innovation drives differential performance Computer Machine Learning Algorithms Vision ▪ Scale for acquisitions and exploration Machine ▪ Completion design and well spacing Text optimization Learning Analytics Algo
Slide 12: 1Q25 Performance
1Q25 Performance SUCCESSFUL UINTA BASIN INTEGRATION DRIVES STRONG 1Q RESULTS Key Metrics 1Q25 Net Production and Pricing 1Q25 NET 197.3 MBoe/d Total Net Production (MMBoe) 17.8 Total Net Production (MBoe/d) 197.3 Oil / Liquids Percentage Pre-Hedge Realized Price ($/Boe) 53% / 66% $47.29 PRODUCTION P
Slide 13: Empowered by a Strong Balance Sheet
Empowered by a Strong Balance Sheet REDUCED DEBT $31MM | PROGRESSING TOWARDS 1X LEVERAGE Debt Maturities (millions) as of March 31, 2025: $2,000 As of March 31, 2025: $1,750 $3.0B Borrowing Base $1,500 1.3x NET DEBT-TO- ADJUSTED EBITDAX(1) $2.0B $1,250 LIQUIDITY: $2.0 billion Aggregate Revolving $1,
Slide 14: Hedging Summary
Hedging Summary STRATEGY IS TO ALIGN HEDGING WITH LEVERAGE 2Q25 – 4Q25 SWAPS AND COLLARS:(1) 2Q25 – 4Q25 BASIS SWAPS: Oil volumes hedged(2) Basis Swaps Volumes Price ~10,200 MBbls of expected 2Q25-4Q25 Oil MBbls $/Bbl net oil production(1) is hedged at a 34% Midland Basin differential ~3,400 $1.18 w
Slide 15: 2025 Plan Guidance
2025 Plan Guidance 2Q25 GUIDANCE AND REGIONAL DETAILS Uinta Basin (6) ▪ ~ 35 drills | 50 completions Key Metrics Guidance 2Q25 Guidance FY25 ▪ ~ 11,200’ average lateral length Capital Expenditures(1)(2) $375 – $385 million $1.3 billion ▪ 3 rigs | 1 crew Drills (net wells) 25 105 Midland Basin (6) Co
Slide 16: Operational Excellence
Operational Excellence RECOGNIZED BY RYSTAD AS A LEADER IN SUSTAINABILITY AMONG PEERS Overall ESG Scores for Top 15 Operators(1) Peer 1 Peer 2 SM Peer 3 Peer 4 SM Energy #1 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 among oil-focused Peer 11 Peer 12 operators(1) Peer 13 Peer 14 0 50 100 150 200 250
Slide 17: 2025 Core Strategic Objectives
2025 Core Strategic Objectives CORE OBJECTIVES SUPPORT LONG-TERM PROFITABILITY AND VALUE CREATION Focus on operational Expand our portfolio of 1 execution 2 Return capital to stockholders 3 top-tier economic drilling inventory To realize a step change in By generating free cash flow to scale through
Slide 18: Appendix
Appendix
Slide 19: 1Q25 Realizations by Region
1Q25 Realizations by Region THREE TOP TIER AREAS OF OPERATION Uinta Basin Midland Basin South Texas Total Net Production Volumes Oil (MBbls) 2,997 4,664 1,670 9,332 Benchmark Pricing Gas (MMcf) 2,751 15,992 17,634 36,376 NGL (MBbls) — 5 2,356 2,361 NYMEX WTI Oil ($/Bbl) $ 71.42 Total (MBoe) 3,456 7,
Slide 20: Activity by Region
Activity by Region WELLS DRILLED, FLOWING COMPLETIONS & DUC COUNT Wells Drilled Flowing Completions DUC Count 1Q25 1Q25 As of March 31, 2025 Gross Net Gross Net Gross Net Uinta Basin Uinta Basin total 14 10 30 24 32 24 Midland Basin RockStar 16 14 5 3 30 24 Sweetie Peck 9 7 15 9 20 16 Midland Basin
Slide 21: Leasehold Summary
Leasehold Summary THREE CORE BASINS WITH SUBSTANTIAL ACREAGE POSITIONS Net Acres(1) At March 31, 2025 Midland Basin RockStar Sweetie Peck(2) 83,200 27,500 ~111,000 Midland Basin total 110,700 MIDLAND BASIN NET ACRES South Texas 155,000 Uinta Basin 63,600 ~155,000 SOUTH TEXAS NET ACRES Rocky Mountain
Slide 22: NGL Realizations
NGL Realizations 2025 PLAN ASSUMES ETHANE PROCESSING IN 2Q AND 3Q; REJECTING ETHANE IN 4Q Realizations by Quarter 1Q 2025 4Q 2024 3Q 2024 2Q 2024 1Q 2024 AUSTIN CHALK: High Liquids Content OPIS Benchmark(1) Price ($/Bbl) $31.29 $29.29 $26.68 $27.96 $29.28 SM Energy NGL Realization ($/Bbl) $25.86 $24
Slide 23: Oil Derivative Positions
Oil Derivative Positions(1) BY QUARTER NYMEX WTI NYMEX WTI Midland - Cushing MEH – WTI NYMEX WTI Weighted-Average Price of Oil Oil Swaps Oil Collars Oil Basis Swaps Oil Basis Swaps Roll Basis Swaps Swaps and Collars Price Price Price Volume Volume Ceiling Floor Volume Volume Volume Ceiling Floor Per
Slide 24: Gas and NGL Derivative Positions
Gas and NGL Derivative Positions(1) BY QUARTER NYMEX Henry Hub IF WAHA IF WAHA NYMEX Henry Hub IF HSC Weighted-Average Price of Gas Gas Swaps Gas Swaps Gas Basis Swaps Gas Collars Gas Swaps Swaps and Collars Volume Volume Volume Volume Ceiling Floor Volume Ceiling Floor Period $/MMBtu(2) $/MMBtu(2)
Slide 25: First Quarter 2025 Non-GAAP Definitions, Reconciliations and Disclosures
First Quarter 2025 Non-GAAP Definitions, Reconciliations and Disclosures
Slide 26: 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 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDAX(1) Three Months Ended Trailing Twelve Months Ended Adjusted Net Income(1) Three Months Ended (in thousands, except per share data) March 31, 2025 March 31, 2025 (in thousands, except per share data) March 31, 2025 Net income (GAAP) $ 182,269 $ 821,363 Net in
Slide 28: Non-GAAP Reconciliations, continued
Non-GAAP Reconciliations, continued Adjusted Free Cash Flow(1) Three Months Ended (in thousands) March 31, 2025 Net cash provided by operating activities (GAAP) $ 482,985 Net change in working capital 31,564 Cash flow from operations before net change in working capital (non-GAAP) $ 514,549 Capital
Slide 29: Contact Information
Contact Information Patrick A. Lytle Senior Vice President – Finance 303.864.2502 plytle@sm-energy.com