Sm Energy Company · NYSE:SM
Sm Energy — Capital One Conference 2014
20 slides from Sm Energy's conference presentation, Dec 10, 2014
Slide 1: Capital One Conference
Capital One Conference Jay Ottoson President and COO December 11, 2014
Slide 2: Forward Looking Statements - Cautionary Language
2 Forward Looking Statements - Cautionary Language Except for historical information contained herein, statements in this presentation, including information regarding the business of the Company, contain forward looking statements within the meaning of securities laws, including forecasts and proje
Slide 3: Strategy and Asset Overview
Strategy and Asset Overview 3 Economic inventory consists of projects achieve at least a 20% rate of return at $70/bbl WTI, $4/mmbtu gas, and expected well costs. Leverage operational efficiencies/scale Utilize industry leading technology to increase well performance Continue to increase the value a
Slide 4: Eagle Ford Acreage
Eagle Ford Acreage 4 Dimmit Maverick Webb Mexico SM Operated APC Operated Operated: ~144,000 net acres Non-operated: ~46,000 net acres TEXAS
Slide 5: Operated Eagle Ford – North
Current type curve Operated Eagle Ford – North 5 Improved completions have enhanced this asset Under current assumptions, SM Energy has identified more than 500 locations on its operated Eagle Ford North area Assumes $4/mmbtu gas, and 40% WTI NGL realizations. Upper band represents 15% reduction in
Slide 6: Operated Eagle Ford – East
Operated Eagle Ford – East 6 Strong asset continues to provide top-tier returns Under current assumptions, SM Energy has identified more than 300 locations on its operated Eagle Ford East area Webb Mexico Dimmit Type curve 2014 well results Economics(2) Well Cost (6,500’ lateral) $6.7 MM IRR ~60% NP
Slide 7: Operated Eagle Ford – South
Operated Eagle Ford – South 7 Wells in southern acreage provide an economic dry gas option Under current assumptions, SM Energy has identified more than 200 locations on its operated Eagle Ford South area Webb Mexico Dimmit Type curve Historical well results Upper band represents 15% reduction in CW
Slide 8: Opportunity for Stacked Laterals
TEXAS Opportunity for Stacked Laterals 8 ~400’ UPPER LOWER Buda Austin Chalk SM Energy’s operated and non-op acreage has some of the thickest section of total Eagle Ford (200-400’) across the entire trend Several tests planned and in progress Total Eagle Ford Thickness Stacked Test Non-Operated SM O
Slide 9: Williston Basin Acreage
Williston Basin Acreage 9 Total Williston Basin acreage: ~238,000 net acres Divide Golden Valley Billings Dunn McKenzie Williams Roosevelt Sheridan Richland Wibaux Gooseneck: ~110,000 net acres Raven/Bear Den: ~42,000 net acres
Slide 10: Raven/Bear Den – Bakken
Raven/Bear Den – Bakken 10 Under current assumptions, SM Energy has identified more than 75 Bakken locations on its operated Raven/Bear Den acreage Williams McKenzie Economics(2) Well Cost (~10,000’ lateral) $7.7 MM IRR ~35% NPV10 ~$4.2 MM Assumes $4/mmbtu gas, and 40% WTI NGL realizations. Upper ba
Slide 11: Gooseneck – Three Forks
Gooseneck – Three Forks 11 Under current assumptions, SM Energy has identified more than 400 Three Forks locations on its operated Gooseneck acreage Divide Williams Substantial remaining inventory in our most economic Williston program Economics(2) Well Cost (~10,000’ lateral) $4.7 MM IRR ~40% NPV10
Slide 12: Gooseneck Bakken Potential
First wells D&C’d ~$5.0MM Initial Bakken results are inline with Gooseneck Three Forks type curve Acreage located in a geologically favorable area Gooseneck Bakken Potential 12 Bakken Wells Gooseneck Three Forks Curve Gooseneck Bakken Results Potential to significantly increase economic inventory Im
Slide 13: Debt to TTM adjusted EBITDAX
13 Debt to TTM adjusted EBITDAX Note: 9/30/14 SM Pro-forma TTM adjusted EBITDAX is calculated by Company per Bloomberg definition. 9/30/14 Balance sheet and TTM EBITDAX data sourced from Bloomberg. Peer Group includes CLR, COG, CXO, DNR, EGN, NFX, OAS, PXD, QEP, ROSE, RRC, UPL, WLL, WPX, XCO, and XE
Slide 14: Pro-Forma Financial Position
Pro-Forma* Financial Position 14 Revolving Credit Facility Senior Notes due 2019 Senior Notes due 2021 Strong balance sheet with ample liquidity First debt maturity is in 2019 The Company recently amended its credit facility: Matures in 2019 Borrowing base remains at $2.4 billion Commitments increas
Slide 15: 2015 Budgeting Process
Strong balance sheet, supported by solid hedge book Minimal commitments to new venture activities Flexible rig programs 15 2015 Budgeting Process Well positioned entering 2015: 2015 thoughts: Focus on returns – push on costs Protect the balance sheet Continue our peer leading performance EXPECT 2015
Slide 16: Takeaways
16 Takeaways Well positioned financially with strong balance sheet and significant liquidity Deep inventory of economic projects 10 years of drilling inventory in each core development program Current inventory equates to nearly 20 times current year production Focus on Shareholder Value
Slide 17: Appendix
| Appendix a, oa
Slide 18: Oil Derivative Position
18 Oil Derivative Position* Oil Swaps - NYMEX Equivalent Bbls $/Bbl 2014 Q4 631,000 $ 95.54 2014 Total 631,000 2015 Q1 1,711,000 $ 91.96 Q2 1,639,000 $ 91.26 Q3 1,254,000 $ 90.78 Q4 1,137,000 $ 90.15 2015 Total 5,741,000 2016 Q1 1,868,000 $ 86.93 Q2 1,752,000 $ 86.73 Q3 1,170,000 $ 90.29 Q4 780,000
Slide 19: Gas Derivative Position
19 Gas Derivative Position* Natural Gas Swaps - NYMEX Equivalent Natural Gas Collars - NYMEX Equivalent Ceiling Floor MMBTU $/MMBTU MMBTU $/MMBTU $/MMBTU 2014 2014 Q4 7,095,000 $ 4.11 Q4 - 2014 Total 7,095,000 2014 Total - 2015 2015 Q1 23,548,000 $ 4.27 Q1 2,525,000 $ 4.31 $ 4.01 Q2 15,985,000 $ 3.9
Slide 20: NGL Derivative Position
20 NGL Derivative Position* Natural Gas Liquid Swaps - Mont. Belvieu Bbls $/Bbl 2014 Q4 314,000 $ 61.55 2014 Total 314,000 2015 Q1 781,000 $ 55.42 2015 Total 781,000 Grand Total 1,095,000 *As of 12/8/14