Subsequent to quarter-end, the Company called for redemption its 3.50% Senior Convertible Notes. Holders of these notes were eligible to surrender the notes for conversion into shares of the Company's common stock prior to May 1, 2012. For those holders that surrendered their notes for conversion, the Company has and will continue to settle the conversions by payment of the principal amount in cash and any excess conversion value in shares of the Company's common stock. On May 2, 2012, the Company redeemed the remaining 3.50% Senior Convertible Notes that were not surrendered for conversion. The Company has and will utilize its credit facility to fund the redemption and the cash portion of the conversion price.
SM Energy reported quarterly production of 50.7 BCFE, or an average of 557.0 MMCFE per day for the first quarter of 2012, which is within the previously provided production guidance range of 533 to 571 MMCFE per day. Reported production declined slightly from the record quarterly production of 51.3 BCFE in the fourth quarter of 2011, primarily as a result of the December 2011 consummation of the Company's Acquisition and Development Agreement with Mitsui E&P Texas LP concerning the Company's outside-operated Eagle Ford shale position. Adjusting for such transaction and other minor divestiture activity, retained quarterly production grew 4% from the fourth quarter of 2011 to the first quarter of 2012.Production Mix The Company's production mix in the first quarter of 2012 was approximately 30% oil, 14% NGLs, and 56% gas, which is comparable to the fourth quarter 2011 product mix of 29% oil, 15% NGLs, and 56% gas. The Company expects its production mix to shift toward liquids as it continues to direct capital to oily and NGL-rich projects. In 2012, the Company expects to allocate over 95% of its drilling and completion capital toward these projects. For 2012, the Company expects the production mix to average approximately 28% oil, 17% NGLs, and 55% gas. Based on its current projections, SM Energy expects its production mix to average 50% liquids and 50% gas in 2014.