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SM Energy Reports Results For The Second Quarter Of 2013; Provides Operations Update On Key Programs; Increases Full-Year 2013 Production Guidance

SM Energy Company (NYSE: SM) announces its financial results for the second quarter of 2013 and provides an operations update. In addition, a new presentation concerning the Company's second quarter earnings and operations update will be posted on the Company's website at www.sm-energy.com. This presentation will be referenced during the conference call scheduled for 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) on July 31, 2013. Information for the call can be found below.

SECOND QUARTER 2013 RESULTS

SM Energy reported net income for the second quarter of 2013 of $76.5 million, or $1.13 per diluted share. This compares to net income of $24.9 million, or $0.37 per diluted share, for the same period of 2012.

Adjusted net income for the second quarter of 2013 was $51.8 million, or $0.76 per diluted share, compared to adjusted net income of $5.9 million, or $0.09 per diluted share, for the same period of 2012. Adjusted net income excludes certain items that the Company believes affect the comparability of operating results and are generally items whose timing and/or amount cannot be reasonably estimated.

Earnings before interest, taxes, depreciation, depletion, amortization, accretion, and exploration expense ("EBITDAX") was $342.5 million for the second quarter of 2013, a record level, and an increase of 60% from $213.7 million for the same period of 2012.

Adjusted net income and EBITDAX are non-GAAP financial measures. Please refer to the respective reconciliations in the Financial Highlights section at the end of this release for additional information about these measures.

Total operating revenues for the second quarter of 2013 were $559.4 million compared to $304.4 million for the same period of 2012, an 84% increase from period to period. The table below provides the average realized prices received by product for the Company, as well as the adjusted prices received after taking into account cash settlements for derivative transactions:

Average Realized Commodity Prices for the Three Months Ended June 30, 2013
 

Before the effect ofderivative cashsettlements

       

After the effect ofderivative cashsettlements

 
Oil ($/Bbl) $ 90.00 $ 89.64
Gas ($/Mcf) $ 4.28 $ 4.23
Natural gas liquids ($/Bbl) $ 34.09 $ 36.00
Equivalent ($/BOE) $ 44.57 $ 44.66
 

The table below presents key performance measures and metrics, as well as previously provided guidance for the second quarter of 2013:

Production   Reported         2Q13 Guidance
 
Average daily production (MBOE/d) 131.8 115 - 121
Total production (MMBOE) 11.99 10.5 - 11.0
 
Costs
LOE ($/BOE) $ 4.69 $ 5.00 - $5.25
Transportation ($/BOE) $ 5.59 $ 4.65 - $4.90

Production taxes (% of pre-derivative oil, gas,and NGL revenue)

5.0% 5.0% - 5.5%
 
G&A - Cash ($/BOE) $ 2.02 $ 2.25 - $2.45
G&A - Cash NPP ($/BOE) $ 0.29 $ 0.35 - $0.50
G&A - Non-cash ($/BOE) $ 0.64 $ 0.75 - $0.90
Total G&A ($/BOE) $ 2.95 $ 3.35 - $3.85
 
DD&A ($/BOE) $ 18.82 $ 19.20 - $20.40
 

For the second quarter of 2013, SM Energy reported quarterly production of 11.99 MMBOE, resulting in average daily production of 131.8 MBOE per day, which is 12% above the midpoint of the Company's guidance range of 115 to 121 MBOE per day. Reported average daily production increased by 15% from quarterly production of 115.0 MBOE per day in the first quarter of 2013. Reported production in the second quarter was comprised of 27% oil/condensate, 19% NGLs, and 54% natural gas. The increase in the quarterly natural gas percentage reflects a backlog of wells in oilier portions of the Eagle Ford shale play that the Company expects to be placed on production in the third quarter of 2013.

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