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SM Energy Reports Results For The First Quarter Of 2014; Provides Operations Update

Stocks in this article: SM

SM Energy Company (NYSE: SM) announces its financial results for the first quarter of 2014 and provides an operations update. In addition, a new presentation concerning the Company's first 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 April 30, 2014. Information for the call can be found below.

FIRST QUARTER 2014 RESULTS

SM Energy reported net income for the first quarter of 2014 of $65.6 million, or $0.96 per diluted share. This compares to a net income of $16.7 million, or $0.25 per diluted share, for the same period of 2013.

Adjusted net income for the first quarter of 2014 was $107.6 million, or $1.58 per diluted share, compared to adjusted net income of $55.3 million, or $0.82 per diluted share, for the same period of 2013. 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 $398.9 million for the first quarter of 2014, an increase of 21% from $328.8 million for the same period of 2013.

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 first quarter of 2014 were $632.7 million compared to $484.2 million for the same period of 2013, a 31% increase from period to period. The table below provides the average realized prices received by product, 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 March 31, 2014
 
      Before the effect of     After the effect of
derivative cash derivative cash
settlements settlements
 
Oil ($/Bbl) $ 88.96 $ 87.11
Gas ($/Mcf) $ 5.22 $ 4.84
Natural gas liquids ($/Bbl) $ 38.79 $ 35.76
Equivalent ($/BOE) $ 49.96 $ 47.64
 

The table below presents key performance measures and metrics, as well as previously provided guidance for the first quarter of 2014:

         
Production Reported 1Q14 Guidance
 
Average daily production (MBOE/d) 138.6 133 - 140
Total production (MMBOE) 12.47 12.0 - 12.6
 
Costs
LOE ($/BOE) $4.58 $5.25 - $5.50
Transportation ($/BOE) $6.35 $5.75 - $6.05
Production taxes (% of pre-derivative oil, gas, and NGL revenue) 4.4% 5.0% - 5.5%
 
G&A - Cash ($/BOE) $2.18 $2.00 - $2.20
G&A - Cash NPP ($/BOE) $0.24 $0.20 - $0.35
G&A - Non-cash ($/BOE) $0.39 $0.35 - $0.50
Total G&A ($/BOE) $2.81 $2.55 - $3.05
 
DD&A ($/BOE) $14.21 $15.10 - $15.90
 

On retained properties, the Company's average daily production grew 2% sequentially from the fourth quarter of 2013. Reported average daily production decreased by 4% from production of 143.8 MBOE per day in the fourth quarter of 2013 due to the sale of Anadarko Basin properties at the end of 2013. In the first quarter of 2014, SM Energy's reported production mix was 29% oil/condensate, 23% NGLs, and 48% natural gas.

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