SM Energy Company 2023 GUIDANCE

SM Energy Company is a company engaged in hydrocarbon exploration and headquartered in Denver, Colorado. SM Energy Company ranks #25 in wells drilled in 2022 with 83 wells drilled in the Mid Continent of the US. The Mid Continent region includes Texas, Oklahoma, New Mexico and Louisiana. SM Energy Company ranks #4 in air permits approved in 2022 with 67 permits in Texas.

2023 OPERATING PLAN AND GUIDANCE

Production volumes year-over-year are expected to remain flat to low single digit growth at 52.5-54.5 MMBoe, or 144-150 MBoe/d at 43% oil.
Capital expenditures adjusted for capital accruals are expected to be approximately $1.1 billion, excluding acquisitions.
- The capital program increased the allocation to Midland Basin activity due to the expectation of lower natural gas prices in 2023. The allocation of drilling and completion capital is expected to be roughly 60% to the Midland Basin and 40% to South Texas.
- The capital program includes approximately $45 million for facilities, including extension of the South Texas oil facilities, as well as $22 million for capitalized interest.
- Total net wells drilled is expected to approximate 85-90, roughly split equally between Midland Basin and South Texas. Total net wells completed is expected to approximate 50 in Midland Basin and 40 in South Texas.
  - Midland Basin operations are expected to continue to co-develop zones and is expected to include activity across the RockStar position as well as in Sweetie Peck. The scheduling of the Guitar consolidated development, a previously discussed project that includes 20 wells on four adjacent pads, has been modified with all wells completed by the end of the second quarter and turned-in-line by early in the third quarter.
  - South Texas activity is expected to be concentrated on Austin Chalk development.