Press Release: SM ENERGY REPORTS RECORD 2024 RESULTS AND TRANSFORMATIVE 2025 OPERATING PLAN; AND ANNOUNCES OFFICER RETIREMENT AND NEW APPOINTMENTS

Dow Jones
Feb 20, 2025

SM ENERGY REPORTS RECORD 2024 RESULTS AND TRANSFORMATIVE 2025 OPERATING PLAN; AND ANNOUNCES OFFICER RETIREMENT AND NEW APPOINTMENTS

PR Newswire

DENVER, Feb. 19, 2025

DENVER, Feb. 19, 2025 /PRNewswire/ -- SM Energy Company (the "Company") $(SM)$ today announces certain fourth quarter and full year 2024 operating and financial results, year-end 2024 estimated net proved reserves and its 2025 operating plan.

In 2024, SM Energy met all of its strategic objectives and delivered certain record results. Financial and operational highlights included:

   -- Record oil production for the full year 2024 of 29.4 MMBbls, or 80.2 
      MBbls/d, up 23% from 2023. Total net production for the full year 2024 
      was 62.4 MMBoe, or 170.5 MBoe/d, up 12% from 2023. 
 
   -- Record year-end estimated net proved reserves of 678 MMBoe, up 12% from 
      year-end 2023. The ratio of estimated net proved reserves at year-end 
      2024 to 2024 net production was 10.9 years. 
 
   -- Record dividends paid. The Company's sustainable fixed dividend was 
      increased to an annualized rate of $0.80 per share, commencing in the 
      fourth quarter of 2024. The fixed dividend combined with share buybacks 
      returned $169.0 million to stockholders in 2024, an approximate 4% yield 
      to current market capitalization. The Company has repurchased 
      approximately 10.1 million shares from announcement of its return of 
      capital program on September 7, 2022, through year-end 2024. 
 
   -- Inventory/gross drilling locations increased by approximately 40% at 
      year-end 2024 from year-end 2023, primarily driven by the Uinta Basin 
      acquisitions, organic growth in the Woodford-Barnett and continued 
      expansion of the South Texas Austin Chalk. 
 
   -- Reduced the balance on the revolving credit facility by $121.5 
      million from $190.0 million at October 1, 2024, to $68.5 million at 
      year-end 2024, making progress towards the Company's target leverage. 
 
   -- Substantial production growth expected in 2025 with the addition of the 
      Uinta Basin program. The 2025 operating plan is designed to optimize 
      capital efficiency across the Company's three core assets and results in 
      a step-change in scale. The addition of the Uinta Basin program is 
      expected to increase year-over-year net production by more than 20% on a 
      Boe basis and increase oil production by more than 30%. 
 
   -- Net income for the full year 2024 was $770.3 million, or $6.67 per 
      diluted common share, and for the fourth quarter 2024 was $188.3 million, 
      or $1.64 per diluted common share. Adjusted net income(1) was $6.80 per 
      diluted common share for the full year 2024 and $1.91 per diluted common 
      share for the fourth quarter 2024. Adjusted EBITDAX(1) was $2.0 billion 
      for the full year 2024 and $610.8 million for the fourth quarter 2024. 
 
   -- At SM Energy, employees are recognized as the Company's most valuable 
      asset. In 2024, the Company was honored with two distinguished Leadership 
      Development awards from the Brandon Hall Group. The Gold Award recognized 
      our innovative approach to building competencies and skills, while the 
      Bronze Award celebrated overall excellence in leadership development. 
      These accolades underscore the Company's commitment to cultivating a 
      thriving corporate culture and leadership values that rank among the 
      nation's best. 

The Company's 2025 strategy and operational plan is intended to support long-term profitability and value creation by:

   -- Focusing on operational execution to realize a step change in scale 
      through the successful integration of the Company's recently acquired 
      Uinta Basin assets; delivering low breakeven, high return wells across 
      the portfolio by optimizing capital efficiency; demonstrating innovation; 
      and remaining a leader in stewardship. 
 
   -- Returning capital to stockholders by generating free cash flow to support 
      our increased $0.80 per share annual fixed dividend, transferring 
      enterprise value to equity holders by pursuing reduced debt to a target 
      of 1 times leverage; and resuming the Company's share buyback program, as 
      appropriate, given $500.0 million in authorization. 
 
   -- Expanding our portfolio of top-tier economic drilling inventory through 
      acquisition and exploration, and the application of advanced analytics, 
      new technologies and development optimization. 

Chief Executive Officer Herb Vogel comments: "2024 was an outstanding year. The SM Energy team delivered a significant increase in scale as measured by the 23% increase in daily oil production, 12% increase in estimated net proved reserves, approximate 40% increase in gross drilling locations and 24% expansion in our core portfolio net acreage. We remained focused on operational execution, continuing to deliver superior well performance and organically growing our portfolio while also delivering return of capital equating to an approximate 4% yield to market capitalization.

As we commence 2025, we are first focused on the integration of our Utah operations where results are expected to be accretive to all financial metrics. The balance sheet is in excellent shape, and we intend to prioritize the generation of free cash flow to pay our fixed dividend and reduce debt, followed by share repurchases once we achieve target leverage. We designed our 2025 operational plan to optimize free cash flow, considering a multi-year period, which will employ our differential technical capabilities to deliver superior well performance and drive capital efficiency. We are well poised for an excellent 2025."

OFFICER RETIREMENT AND NEW APPOINTMENTS

The Company announces the retirement of Jennifer Martin Samuels, the Company's Vice President - Investor Relations and ESG Stewardship. Ms. Samuels' retirement from her current position will be effective March 7, 2025, and she plans to remain with the Company in an advisory capacity until later this year.

The Company also announces several officer appointments, all of which are effective March 2, 2025.

   -- Dean Lutey was promoted to the position of Senior Vice President - Chief 
      Information Officer. Mr. Lutey has served in the role of Vice President - 
      Chief Information Officer since 2021 and previously Vice President - 
      Information Technology since 2013. Mr. Lutey joined the Company in 2008 
      as Manager of Production Services. Mr. Lutey has more than 28 years of 
      experience in information technology. 
 
   -- Pat Lytle was promoted to the position of Senior Vice President - 
      Finance. Mr. Lytle has served in the role of Vice President - Chief 
      Accounting Officer and Controller since 2021 and joined the Company in 
      2007 as a Senior Accountant. Mr. Lytle has more than 20 years of 
      accounting and finance experience in the energy industry. He will assume 
      the Investor Relations and ESG Stewardship responsibilities as well as 
      oversee the financial planning and treasury functions. 
 
   -- Richard Jenkins was promoted to the position of Senior Vice President - 
      Utah. Mr. Jenkins has served as Vice President - Utah since 2024 and 
      previously Vice President - Operations since 2023. Mr. Jenkins joined the 
      Company in 2010 as a Senior Reservoir Engineer. Mr. Jenkins has more than 
      17 years of experience in the oil and gas industry. 
 
   -- Alan Bennett was promoted to the position of Vice President and 
      Controller. Mr. Bennett most recently served as Senior Director of 
      Financial Planning and Analysis and joined the Company in 2011 as a 
      Senior Accountant. Mr. Bennett previously served as Director of 
      Operations Accounting and has more than 18 years of accounting and 
      finance experience in the energy industry. Mr. Bennett will serve as the 
      Company's principal accounting officer. 

ESTIMATED NET PROVED RESERVES AT YEAR-END 2024

 
                                                          MMBoe 
                                                          ----- 
Estimated net proved reserves year-end 2023                 605 
Net acquisitions and divestitures                           102 
Net infill/revisions (excluding 5 year rule and price)       67 
Discovery/extensions                                         11 
Net production                                             (62) 
Revisions -- 5 year rule                                   (31) 
Revisions -- price                                         (14) 
                                                          ----- 
Estimated net proved reserves year-end 2024                 678 
                                                          ===== 
 

Estimated net proved reserves at year-end 2024 were 678 MMBoe. Estimated net proved reserves were 51% in South Texas, 34% in the Midland Basin, and 15% in the Uinta Basin, and were comprised of 44% oil, 38% natural gas and 18% NGLs. Net proved reserves were 60% developed and 40% undeveloped.

   -- The ratio of estimated net proved reserves at year-end 2024 to 2024 net 
      production is 10.9 years. 
 
   -- 2024 SEC pricing was $75.48 per Bbl oil, $2.13 per MMBtu natural gas and 
      $28.29 per Bbl NGLs, down 4% and 19% and up 2%, respectively, compared to 
      2023 SEC pricing. 
 
   -- Our Uinta Basin acquisitions added estimated net proved reserves of 
      approximately 100 MMBoe, 38% of which were developed. 

STANDARDIZED MEASURE

The standardized measure of discounted future net cash flows from estimated net proved reserves was $7.27 billion at year-end 2024, up from $6.28 billion at year-end 2023. The 16% increase in the standardized measure compared with year-end 2023 is predominantly due to the increase in estimated net proved reserves, partially offset by lower SEC pricing for oil and gas used in the calculation. Pre-tax PV-10(1) was $8.36 billion.

FOURTH QUARTER AND FULL YEAR 2024 RESULTS

Details and discussions of fourth quarter and full year 2024 net production and commodity pricing are given below, along with summary tables:

 
NET PRODUCTION BY OPERATING AREA 
                                      Fourth Quarter 2024 
                  Midland Basin    South Texas    Uinta Basin       Total 
                  --------------  --------------  ------------  -------------- 
Oil (MBbl / 
 MBbl/d)           4,957 / 53.9    2,011 / 21.9   2,870 / 31.2  9,838 / 106.9 
Natural Gas 
 (MMcf / 
 MMcf/d)          16,028 / 174.2  20,352 / 221.2  2,703 / 29.4  39,084 / 424.8 
NGLs (MBbl / 
 MBbl/d)              9 / --       2,775 / 30.2     -- / --      2,784 / 30.3 
                  --------------  --------------  ------------  -------------- 
Total (MBoe / 
 MBoe/d)           7,637 / 83.0    8,178 / 88.9   3,321 / 36.1  19,136 / 208.0 
                  --------------  --------------  ------------  -------------- 
 Note: Totals may not calculate 
        due to rounding. 
 
 
                                         Full Year 2024 
                  ------------------------------------------------------------ 
                  Midland Basin    South Texas    Uinta Basin       Total 
                  --------------  --------------  -----------  --------------- 
Oil (MBbl / 
 MBbl/d)          19,090 / 52.2    7,407 / 20.2   2,870 / 7.8   29,367 / 80.2 
Natural Gas 
 (MMcf / 
 MMcf/d)          62,009 / 169.4  72,267 / 197.5  2,703 / 7.4  136,979 / 374.3 
NGLs (MBbl / 
 MBbl/d)             24 / --      10,178 / 27.8     -- / --     10,202 / 27.9 
                  --------------  --------------  -----------  --------------- 
Total (MBoe / 
 MBoe/d)          29,449 / 80.5   29,629 / 81.0   3,321 / 9.1  62,399 / 170.5 
                  --------------  --------------  -----------  --------------- 
 Note: Totals may not calculate 
  due to rounding. Uinta Basin 
  full year volumes include one 
     quarter of production; 
 subsequent to the close of the 
    Uinta Basin Acquisitions 
 
   -- Fourth quarter production volumes were 19.1 MMBoe, or 208.0 MBoe/d, and 
      were 51% oil. Production volumes increased 22% sequentially and oil 
      production volumes increased 38% sequentially with the addition of the 
      Uinta Basin assets acquired on October 1, 2024. Fourth quarter volumes 
      were affected by approximately 3 MBoe/d as a result of downtime from 
      third-party crude takeaway and the decision to reject ethane at certain 
      gas processing plants due to better economics with strong natural gas 
      prices. 
 
   -- Full year production volumes of 62.4 MMBoe (170.5 MBoe/d) were up 12% 
      from 2023. Production volumes were 48% from South Texas, 47% from the 
      Midland Basin, and 5% from the Uinta Basin. Volumes were 47% oil, 37% 
      natural gas and 16% NGLs. 
 
REALIZED PRICES BY OPERATING AREA 
                                      Fourth Quarter 2024 
                 ------------------------------------------------------------- 
                                                                  Total 
                 Midland Basin   South Texas  Uinta Basin  (Pre/Post-hedge)(1) 
                 --------------  -----------  -----------  ------------------- 
Oil ($/Bbl)          $70.56        $67.31       $68.66       $69.34 / $70.54 
Natural Gas 
 ($/Mcf)             $2.23          $2.10        $2.56        $2.19 / $2.50 
NGLs ($/Bbl)           nm          $24.48         nm         $24.49 / $24.01 
                 --------------  -----------  -----------  ------------------- 
Per Boe              $50.52        $30.08       $61.44       $43.68 / $44.85 
                 --------------  -----------  -----------  ------------------- 
Note: Totals may not calculate 
        due to rounding. 
 
 
                                        Full Year 2024 
                 ------------------------------------------------------------- 
                                                                  Total 
                 Midland Basin   South Texas  Uinta Basin  (Pre/Post-hedge)(1) 
                 --------------  -----------  -----------  ------------------- 
Oil ($/Bbl)          $75.83        $73.27       $68.66       $74.49 / $74.92 
Natural Gas 
 ($/Mcf)             $1.91          $1.71        $2.56        $1.82 / $2.25 
NGLs ($/Bbl)           nm          $23.00         nm         $23.01 / $22.76 
                 --------------  -----------  -----------  ------------------- 
Per Boe              $53.20        $30.39       $61.44       $42.81 / $43.91 
                 --------------  -----------  -----------  ------------------- 
Note: Totals may not calculate 
        due to rounding. 
 
   -- In the fourth quarter, benchmark pricing included NYMEX WTI at $70.27/Bbl, 
      NYMEX Henry Hub natural gas at $2.79/MMBtu and OPIS Composite NGLs at 
      $29.29/Bbl. For the full year, benchmark pricing included NYMEX WTI at 
      $75.72/Bbl, NYMEX Henry Hub natural gas at $2.27/MMBtu and OPIS Composite 
      NGLs at $28.30/Bbl. 
 
   -- In the fourth quarter, the average realized price before the effect of 
      hedges was $43.68 per Boe, and the average realized price after the 
      effect of hedges was $44.85 per Boe.(1) For the full year, the average 
      realized price before the effect of hedges was $42.81 per Boe, and the 
      average realized price after the effect of hedges was $43.91 per Boe.(1) 
 
   -- The effect of commodity derivative settlements for the fourth quarter and 
      full year was a gain of $1.17 per Boe, or $22.4 million, and a gain of 
      $1.10 per Boe, or $68.7 million, respectively. 

For additional operating metrics and regional detail, please see the Financial Highlights section below and the accompanying slide deck.

CAPITAL EXPENDITURES AND ACTIVITY

In the fourth quarter 2024, capital expenditures of $353.5 million before change in accruals of $8.8 million totaled $362.3 million.(1) During the fourth quarter of 2024, the Company drilled 45 net wells and added 37 net flowing completions. During the fourth quarter, faster than expected drilling and completion times accelerated certain costs into the fourth quarter 2024. For the full year 2024, capital expenditures of $1.31 billion before change in accruals of $24.3 million totaled $1.29 billion(1) and the Company drilled 142 net wells and added 135 net flowing completions.

NET INCOME AND NET INCOME PER SHARE

Fourth quarter 2024 net income was $188.3 million, or $1.64 per diluted common share, compared with net income of $247.1 million, or $2.12 per diluted common share, for the same period in 2023. The current year period benefited on a per share basis from 36% higher production volumes, a 3% increase in the realized price per Boe after the effect of net derivative settlements and fewer shares outstanding, offset by certain higher per unit expenses and increased income tax and net interest expense. For the full year 2024, net income was $770.3 million, or $6.67 per diluted common share, compared with net income of $817.9 million, or $6.86 per diluted common share, for the full year 2023. Full year net income compared with the prior year reflects a 12% increase in production volumes, a 2% increase in the realized price per Boe after the effect of net derivative settlements, and fewer shares outstanding, offset predominantly by net interest and tax expenses.

NET CASH PROVIDED BY OPERATING ACTIVITIES

Fourth quarter 2024 net cash provided by operating activities of $577.9 million before net change in working capital of $(26.6) million totaled $551.2 million,(1) representing an increase of $127.5 million, or 30%, from $423.7 million(1) in the same period in 2023. The increase from the prior year period was primarily due to higher production volumes and a higher realized price per Boe after the effect of net derivative settlements, partially offset by certain higher per unit expenses and higher cash taxes. For the full year 2024, net cash provided by operating activities of $1.78 billion before net changes in working capital of $(11.2) million totaled $1.77 billion,(1) representing an increase of $192.4 million, or 12%, from $1.58 billion(1) in 2023. The increase in 2024 is predominantly due to higher production volumes and a higher realized price per Boe after the effect of net derivative settlements, partially offset by higher cash taxes.

ADJUSTED EBITDAX(1) AND ADJUSTED NET INCOME(1)

Fourth quarter 2024 Adjusted EBITDAX(1) was $610.8 million, up $165.6 million, or 37%, from $445.1 million in the same period in 2023. For the full year 2024, Adjusted EBITDAX(1) was $1.99 billion, compared with $1.71 billion in 2023.

Fourth quarter 2024 adjusted net income(1) was $220.2 million, or $1.91 per diluted common share, which compares with adjusted net income(1) of $181.5 million, or $1.56 per diluted common share, for the same period in 2023. For the full year 2024, adjusted net income(1) was $785.1 million, or $6.80 per diluted common share, compared with adjusted net income(1) of $702.5 million, or $5.89 per diluted common share, in 2023.

ADJUSTED FREE CASH FLOW(1)

Fourth quarter 2024 cash flow from operations before net change in working capital totaled $551.2 million,(1) and capital expenditures before changes in accruals totaled $362.3 million,(1) delivering Adjusted free cash flow of $188.9 million.(1) For the full year 2024, cash flow from operations before net change in working capital totaled $1.77 billion,(1) and capital expenditures before changes in accruals totaled $1.29 billion,(1) delivering Adjusted free cash flow of $485.0 million.(1)

FINANCIAL POSITION, LIQUIDITY AND NET DEBT-TO-ADJUSTED EBITDAX(1)

At year-end 2024, the outstanding principal amount of the Company's long-term debt was $2.80 billion including $68.5 million drawn on the Company's senior secured revolving credit facility. At year-end 2024, cash and cash equivalents were zero and net debt(1) was $2.80 billion, up $1.84 billion from year-end 2023.

As of December 31, 2024, the Company's borrowing base and commitments under its senior secured revolving credit facility were $3.00 billion and $2.00 billion, respectively, and combined with the balance drawn on the Company's senior secured revolving credit facility, available liquidity was $1.93 billion.

At year-end 2024, the Net debt-to-Adjusted EBITDAX(1) ratio was 1.4.

COMMODITY DERIVATIVES

As of February 14, 2025, commodity derivative positions for 2025 include:

SWAPS & COLLARS:

   -- Oil: Approximately 12,600 MBbls, or slightly more than 30%, of expected 
      2025 net oil production is hedged at a weighted-average price of 
      $69.02/Bbl (collar floors and swaps) to $74.89/Bbl (collar ceilings and 
      swaps), excludes basis swaps. 
 
   -- Natural gas: Approximately 43,200 BBtu, or slightly less than 30%, of 
      expected 2025 net natural gas production is hedged at an average price of 
      $3.43/MMBtu (weighted-average of collar floors and swaps) to $4.44/MMBtu 
      (weighted-average of collar ceilings and swaps), excludes basis swaps. 

BASIS SWAPS:

   -- Oil, Midland Basin differential: Approximately 4,600 MBbls of expected 
      2025 net oil Midland Basin oil production are hedged to the local price 
      point at a positive weighted-average price of $1.18/Bbl. 
 
   -- Oil, MEH differential: Approximately 2,100 MBbls of expected 2025 net 
      South Texas oil production are hedged to the local price point at a 
      positive weighted-average price of $1.86/Bbl. 
 
   -- Gas, WAHA differential: Approximately 20,500 BBtu of expected 2025 net 
      Midland Basin natural gas production are hedged to WAHA at a 
      weighted-average price of ($0.66)/MMBtu. 
 
   -- Gas, HSC differential: Approximately 900 BBtu of expected 2025 net South 
      Texas natural gas production are hedged to HSC at a weighted-average 
      price of $0.0025/MMBtu. 

A detailed schedule of these and other hedge positions are provided in the accompanying slide deck.

2025 OPERATING PLAN AND GUIDANCE

Discussion in this release of the Company's 2025 operating plan guidance includes the term "capital expenditures," which is defined to include adjustments for capital accruals, and is a non-GAAP measure. In reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, the Company is unable to provide a reconciliation of forward-looking non-GAAP capital expenditures because components of the calculations are inherently unpredictable, such as changes to, and the timing of, capital accruals, unknown future events, and estimating certain future GAAP measures. The inability to project certain components of the calculation could significantly affect the accuracy of a reconciliation.

KEY ASSUMPTIONS

   -- Benchmark pricing assumptions are $70.00 per Bbl WTI; $3.25 per MMBtu 
      natural gas; $27.00 per Bbl NGLs. 
 
   -- Hedges currently in place. 
 
   -- Processing ethane in the second and third quarters, rejecting ethane in 
      the first and fourth quarters. Rejecting ethane reduces overall volumes 
      by approximately 3.5-4.0 MBoe/d during those periods. 

GUIDANCE FULL YEAR 2025:

   -- Net production volumes are expected to range between 200-215 MBoe/d, and 
      net oil production is expected to comprise 51%-52%, or average 
      approximately 102-112 MBbls/d. At the midpoint, this implies a 
      year-over-year increase in production of 22% on a Boe basis and increase 
      in oil production of 33%. 
 
   -- Capital expenditures adjusted for capital accruals(1) are expected to 
      approximate $1.3 billion, excluding acquisitions and certain non-operated 
      activity to be confirmed later in the year. 
 
          -- Drill, complete and equip ("DC&E") expenditures are expected to be 
             allocated approximately 35%-40% to Utah, 35%-40% to the Midland 
             Basin and 25% to South Texas. The program assumes DC&E makes up 
             approximately 90% of the budget and facilities, land and other 
             make up the remainder. The capital program also assumes $25 
             million for capitalized interest. 
 
          -- The Company expects to drill approximately 105 net wells and 
             complete approximately 150 net wells. 
 
   -- Net production costs: 
 
          -- LOE is expected to average between $5.30-$5.50/Boe, which includes 
             workover activity; 
 
          -- Transportation is expected to average between $4.10-$4.40/Boe; 
 
          -- Production and ad valorem taxes are expected to average between 
             $2.50-$2.70/Boe. 
 
   -- G&A is expected to be approximately $160 million, including approximately 
      $25 million of non-cash costs. This includes approximately $7 million in 
      one-time expenses associated with the Uinta Basin integration efforts. 
 
   -- Exploration/capitalized overhead is expected to approximate $75 million. 
 
   -- DD&A is expected to be approximately $15/Boe. 
 
   -- Cash taxes are expected to range between $75-$95 million. 

GUIDANCE FIRST QUARTER 2025:

   -- Capital expenditures are expected to range between $425-435 million. This 
      includes drilling approximately 40 net wells and completing approximately 
      45 net wells, which constitutes approximately one-third of the full year 
      program. Capital expenditures are weighted to the first half of the year 
      as the Company completes the near-term Uinta Basin plan initiated by the 
      seller. 
 
   -- Net production is expected to be approximately 191-198 MBoe/d at 52%-53% 
      oil. 
 
   -- LOE is expected to average between $5.45-$5.55/Boe. 
 
   -- G&A is expected to be approximately $40-$42 million and includes $3-$4 
      million in one-time expenses related to the Uinta Basin integration 
      efforts. 

UPCOMING EVENTS

EARNINGS Q&A WEBCAST AND CONFERENCE CALL

February 20, 2025 -- Please join SM Energy management at 8:00 a.m. Mountain time/10:00 a.m. Eastern time for the 2024 financial and operating results/2025 operating plan Q&A session. This discussion will be accessible via:

   -- Webcast (available live and for replay) -- on the Company's website at 
      sm-energy.com/investors (replay accessible approximately 1 hour after the 
      live call); or 
 
   -- Telephone - join the live conference call by registering at 
      https://event.choruscall.com/mediaframe/webcast.html?webcastid=I0Wr8SaS. 
      Dial-in for domestic toll free/International is 877-407-6050 / +1 
      201-689-8022. 

CONFERENCE PARTICIPATION

   -- February 25, 2025 -- J.P. Morgan 2024 Global High Yield & Leveraged 
      Finance Conference. Executive Vice President and Chief Financial Officer 
      Wade Pursell will present at 6:00 a.m. Mountain time/8:00 a.m. Eastern 
      time and will participate in investor meetings at the event. Executive 
      Vice President and Chief Operating Officer Beth McDonald will join Mr. 
      Pursell in investor meetings at the event. The Company plans to post an 
      investor presentation to the Company's website at sm-energy.com/investors 
      before the event. The presentation will not be webcast. 
 
   -- March 5-6, 2025 -- DEP Thrive Energy Conference. President and Chief 
      Executive Officer Herb Vogel, and Executive Vice President and Chief 
      Operating Officer Beth McDonald, will participate in investor meetings at 
      the event. 
 
   -- March 17, 2025 -- 37th Annual ROTH Conference. Executive Vice President 
      and Chief Financial Officer Wade Pursell will participate in investor 
      meetings at the event. 

DISCLOSURES

FORWARD LOOKING STATEMENTS

This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "deliver," "demonstrate," "establish," "estimate," "expects," "goal," "generate," "maintain," "objectives," "optimize," "target," and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this release include, among other things, estimated net proved reserves at year-end 2024 and the ratio of estimated net proved reserves at year-end 2024 to 2024 net production, expected future commodity prices, assumptions and projections for the first quarter and full year 2025 regarding guidance for production, production growth and oil mix as a percentage of total production (including net production and percentage oil increases attributable to the Company's Uinta Basin assets), capital expenditures, operating costs (including lease operating expenses, transportation costs and taxes), general and administrative expenses, exploration expenses and DD&A, the number of net wells to be drilled and completed, the percentage of future production that is hedged, the allocation of activity and capital expenditures among our operating areas and activities, and the Company's 2025 strategic objectives and operational plan, including plans successfully integrate the Company's recently acquired Uinta Basin assets, delivering low breakeven and high-return wells, and optimizing capital efficiency; returning capital to stockholders through dividends, debt reduction to a target of one times leverage, and share repurchases; increasing scale; and expanding the Company's portfolio through acquisition and exploration, and the application of new technologies. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Future results may be impacted by the risks discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission, specifically the 2024 Form 10-K. The forward-looking statements contained herein speak as of the date of this release. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required

by securities laws.

RESERVE DISCLOSURE

The SEC requires oil and natural gas companies, in their filings with the SEC, to disclose estimated net proved reserves, which are those quantities of oil, natural gas and NGLs, that, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs and under existing economic conditions (using the trailing 12-month average first-day-of-the-month prices), operating methods and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The SEC also permits the disclosure of separate estimates of probable or possible reserves that meet SEC definitions for such reserves; however, the Company currently does not disclose probable or possible reserves in its SEC filings.

Estimated net proved reserves attributable to the Company at December 31, 2024, are estimated utilizing SEC reserve recognition standards and pricing assumptions based on the trailing 12-month average first-day-of-the-month prices of $75.48 per Bbl of oil, $2.13 per MMBtu of natural gas, and $28.29 per Bbl of NGLs. At least 80% of the PV-10 of the Company's estimate of its total estimated net proved reserves as of December 31, 2024, was audited by Ryder Scott Company, L.P.

FOOTNOTE 1: Indicates a non-GAAP measure or metric. Please refer to the "Definitions of non-GAAP Measures and Metrics as Calculated by the Company" section in Financial Highlights, and the corresponding reconciliations to the most directly-comparable GAAP financial measures for additional information.

ABOUT THE COMPANY

SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the states of Texas and Utah. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.

SM ENERGY INVESTOR CONTACTS

Jennifer Martin Samuels, jsamuels@sm-energy.com, 303-864-2507

Lindsay Miller, lmiller@sm-energy.com, 303-830-5860

 
                             SM ENERGY COMPANY 
                            FINANCIAL HIGHLIGHTS 
                             December 31, 2024 
 
Consolidated Balance Sheets 
------------------------------ 
(in thousands, except share 
data)                                           December 31, 
            ASSETS                        2024                   2023 
                                ------------------------  ------------------ 
Current assets: 
 Cash and cash equivalents      $                     --  $          616,164 
 Accounts receivable                             360,976             231,165 
 Derivative assets                                48,522              56,442 
 Prepaid expenses and other                       25,201              12,668 
                                ------------------------  ------------------ 
     Total current assets                        434,699             916,439 
                                ------------------------  ------------------ 
Property and equipment 
(successful efforts method): 
 Proved oil and gas properties                14,301,502          11,477,358 
 Accumulated depletion, 
  depreciation, and 
  amortization                               (7,603,195)         (6,830,253) 
 Unproved oil and gas 
  properties, net of valuation 
  allowance of $32,680 and 
  $35,362, respectively                          764,924             335,620 
 Wells in progress                               481,893             358,080 
 Other property and equipment, 
  net of accumulated 
  depreciation of $61,737 and 
  $59,669, respectively                           47,585              35,615 
                                ------------------------  ------------------ 
     Total property and 
      equipment, net                           7,992,709           5,376,420 
                                ------------------------  ------------------ 
Noncurrent assets: 
 Derivative assets                                 3,973               8,672 
 Other noncurrent assets                         145,266              78,454 
                                ------------------------  ------------------ 
     Total noncurrent assets                     149,239              87,126 
                                ------------------------  ------------------ 
Total assets                           $       8,576,647   $       6,379,985 
                                ========================  ================== 
LIABILITIES AND STOCKHOLDERS' 
            EQUITY 
Current liabilities: 
 Accounts payable and accrued 
  expenses                            $          760,473  $          611,598 
 Derivative liabilities                            7,058               6,789 
 Other current liabilities                        22,419              15,425 
                                ------------------------  ------------------ 
     Total current liabilities                   789,950             633,812 
                                ------------------------  ------------------ 
Noncurrent liabilities: 
 Revolving credit facility                        68,500                  -- 
 Senior Notes, net                             2,708,243           1,575,334 
 Asset retirement obligations                    145,313             118,774 
 Net deferred tax liabilities                    545,295             369,903 
 Derivative liabilities                            7,142               1,273 
 Other noncurrent liabilities                     74,947              65,039 
                                ------------------------  ------------------ 
     Total noncurrent 
      liabilities                              3,549,440           2,130,323 
                                ------------------------  ------------------ 
Stockholders' equity: 
 Common stock, $0.01 par value 
  - authorized: 200,000,000 
  shares; issued and 
  outstanding: 114,461,934 and 
  115,745,393 shares, 
  respectively                                     1,145               1,157 
 Additional paid-in capital                    1,501,779           1,565,021 
 Retained earnings                             2,735,494           2,052,279 
 Accumulated other 
  comprehensive loss                             (1,161)             (2,607) 
                                ------------------------  ------------------ 
     Total stockholders' 
      equity                                   4,237,257           3,615,850 
                                ------------------------  ------------------ 
Total liabilities and 
 stockholders' equity                  $       8,576,647   $       6,379,985 
                                ========================  ================== 
 
 
                                           SM ENERGY COMPANY 
                                          FINANCIAL HIGHLIGHTS 
                                           December 31, 2024 
 
Consolidated Statements of Operations 
-------------------------------------------------------------------------------------------------------- 
(in thousands, 
except per share           For the Three Months Ended                For the Twelve Months Ended 
data)                             December 31,                               December 31, 
                    ----------------------------------------  ------------------------------------------ 
                           2024                 2023                  2024                  2023 
                    -------------------  -------------------  --------------------  -------------------- 
Operating revenues 
and other income: 
 Oil, gas, and NGL 
  production 
  revenue               $       835,858      $       606,857       $     2,671,285       $     2,363,889 
 Other operating 
  income, net                    16,363                1,869                18,974                 9,997 
                    -------------------  -------------------  --------------------  -------------------- 
     Total 
      operating 
      revenues and 
      other 
      income                    852,221              608,726             2,690,259             2,373,886 
                    -------------------  -------------------  --------------------  -------------------- 
Operating 
expenses: 
 Oil, gas, and NGL 
  production 
  expense                       214,594              137,343               636,971               563,543 
 Depletion, 
  depreciation, 
  and 
  amortization                  260,524              189,107               809,305               690,481 
 Exploration (1)                 16,349               15,847                64,121                59,480 
 General and 
  administrative 
  (1)                            41,913               36,639               138,344               121,063 
 Net derivative 
  (gain) loss (2)                20,298             (80,506)              (49,958)              (68,154) 
 Other operating 
  expense, net                   11,575                  385                15,781                20,567 
                    -------------------  -------------------  --------------------  -------------------- 
     Total 
      operating 
      expenses                  565,253              298,815             1,614,564             1,386,980 
                    -------------------  -------------------  --------------------  -------------------- 
Income from 
 operations                     286,968              309,911             1,075,695               986,906 
Interest expense               (46,297)             (23,917)             (140,659)              (91,630) 
Interest income                     783                6,052                31,903                19,854 
Loss on 
extinguishment of 

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February 19, 2025 16:15 ET (21:15 GMT)

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