Message to Shareholders
SM Energy Chief Executive Officer Herb Vogel comments: “While unprecedented first quarter weather presented exceptional challenges, the SM Energy team prioritized safety, collaborated with suppliers and we are back on track toward achieving our long-term objectives. We remain focused on key priorities of generating free cash flow, reducing absolute debt and demonstrating top tier ESG stewardship, and we maintain our full-year guidance for production, capital expenditures and generating free cash flow.”
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SM Energy FIRST QUARTER 2021 UPDATE
SM Energy first Quarter 2021 update
- Cash flows included net cash provided by operating activities of $105.6 million before net change in working capital of ($51.4) million totaling $157.1 million. Adjusted EBITDAX, (a non-GAAP measure reconciled below) was $215.0 million.
- Production was 10.05 MMBoe or 111.6 MBoe/d and was 54% oil. Production volumes were affected by the severe winter storm in Texas during February 2021, which resulted in 14 days of reduced production and delayed completions of new wells.
- Capital expenditures reflected continued capital efficiencies with costs maintained at approximately $520 per lateral foot. Capital expenditures of $147.6 million adjusted for increased capital accruals of $37.4 million totaled $185.0 million.
Guidance
- Full year 2021 guidance is unchanged.
- Second quarter 2021 guidance includes:
- Production 11.8-12.2 MMBoe or 130-134 MBoe/d. The second quarter production range reflects timing of new wells being turned-in-line.
- Capital expenditures of $230-240 million. Capital expenditures are weighted to the first half of 2021, taking advantage of lower contracted costs. Second quarter capital anticipates approximately 20 net wells drilled and 50 net flowing completions, which includes wells that were fracture stimulated in the first quarter and will turn-in-line in the second quarter.
Oil & Gas News
SM Energy Well Permits & Wells Spud
The oil and gas industry is highly regulated by Government agencies. One of the responsibilities is to approve well permits. A well permit is the intent of an oil & gas operator to drill a new well. Well permits include oil wells, gas wells, water wells and more..
Spudding is the process of beginning to drill a well in the oil and gas industry. … After the surface hole is completed, the main drill bit—which performs the task of drilling to the total depth—is inserted and this process can also be referred to as “spudding in.” Source SM Energy first Quarter 2021 update
SM Energy Operations Area Q1 2021
Spraberry Trend covers a large area – around 2,500 square miles. As most often defined, the Spraberry includes portions of Irion, Reagan, Upton, Glasscock, Midland, and Martin Counties. In 2007, the U.S. Department of Energy ranked The Spraberry Trend third in the United States by total proved reserves, and seventh in total production.
Austin Chalk 650-mile long geological formation, stretching underground from the Mexico-Texas border, through central Louisiana and into Mississippi. Austin Chalk holds about 4.1 billion barrels of crude, 18 trillion cubic feet of gas and 1 billion barrels of natural-gas liquids. Austin Chalk oil recoveries since 2018 averaged 60% higher than those of the Lower Eagle Ford
Eagle Ford in Texas is the most mature tight oil play in the Lower 48 current, oil and natural gas production of 2.5 million barrels of oil equivalent per day. Measuring 400 miles long and 50 miles wide along the Texas Gulf Coast, the Eagle Ford basin is spread over 12,000 square miles in South and central Texas.
Data Source – SM Energy first Quarter 2021 update
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About SM Energy
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 state of Texas. 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.