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TheStreet Open House

SM Energy Reports Results For The Second Quarter Of 2014; Announces Significant Bakken/Three Forks Acquisition

SM Energy Company (NYSE: SM) announces its financial results for the second quarter of 2014 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 30, 2014. Information for the call can be found below.

SECOND QUARTER 2014 RESULTS

SM Energy reported net income for the second quarter of 2014 of $59.8 million, or $0.88 per diluted share. This compares to net income of $76.5 million, or $1.13 per diluted share, for the same period of 2013.

Adjusted net income for the second quarter of 2014 was $106.5 million, or $1.56 per diluted share, compared to adjusted net income of $51.8 million, or $0.76 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 ("adjusted EBITDAX") set a new quarterly record of $423.4 million in the second quarter of 2014, an increase of 24% from $342.5 million for the same period of 2013.

Adjusted net income and adjusted 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 2014 were $675.0 million compared to $559.4 million for the same period of 2013, a 21% 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 June 30, 2014
 

Before the effect ofderivative cashsettlements

         

After the effectof derivative cashsettlements

 
Oil ($/Bbl) $   91.78 $   86.60
Gas ($/Mcf) $ 4.87 $ 4.51
Natural gas liquids ($/Bbl) $ 35.61 $ 35.59
Equivalent ($/BOE) $ 48.93 $ 46.41
 

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

           
Production Reported 2Q14 Guidance
 
Average daily production (MBOE/d) 147.0 136 - 143
Total production (MMBOE) 13.38 12.4 - 13.0
 
Costs
LOE ($/BOE) $4.69 $4.80 - $5.05
Transportation ($/BOE) $6.20

$6.10 - $6.50

Production taxes (% of pre-derivative oil, gas, and NGL revenue) 4.9% 4.5% - 5.0%
 
G&A - Cash ($/BOE) $2.24 $2.25 - $2.45
G&A - Cash NPP ($/BOE) $0.15 $0.25 - $0.40
G&A - Non-cash ($/BOE) $0.46 $0.40 - $0.60
Total G&A ($/BOE) $2.85 $2.90 - $3.45
 
DD&A ($/BOE) $14.03 $14.00 - $14.75
 

Reported average daily production increased by 6% from production of 138.6 MBOE per day in the first quarter of 2014. In the second quarter of 2014, SM Energy's reported production mix was 29% oil/condensate, 24% NGLs, and 47% natural gas.

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