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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