DENVER, May 16, 2017 /PRNewswire/ -- SM Energy
Company (the "Company") (NYSE: SM) announced today that it has
postponed indefinitely the planned sale of its Divide County, North Dakota assets as
valuations in the sales process did not reach the Company's
threshold to meaningfully reduce its leverage.
President and Chief Executive Officer Jay Ottoson comments: "We have successfully
pre-funded the expected outspend for our capital program for 2017
and 2018 with the completed sale of our third party-operated Eagle
Ford assets, and we do not need to sell our Divide County assets. We have
concluded that current market uncertainty around forward oil prices
is not conducive to realizing a sales price that meets our
deleveraging objective. We remain committed to our long-term
financial strategy, which is best served by retaining the cash flow
generated by the Divide County
assets and supported by a solid balance sheet, significant
liquidity and continuing hedging strategy.
"As a result of retaining our Divide
County assets, we have positively revised our production
guidance for the year to add 1.3 MMBoe, which is applied to the
second half of the year, thereby increasing projected cash flow and
reducing projected outspend."
The Company is posting slides to its website in conjunction with
this release, revising its 2017 guidance and three-year plan
metrics to be consistent with this change.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of securities laws. The words "anticipate," "assume,"
"believe," "budget," "estimate," "expect," "forecast," "guidance,"
"intend," "plan," "project," "will" and similar expressions are
intended to identify forward-looking statements. These statements
involve known and unknown risks, which may cause SM Energy's actual
results to differ materially from results expressed or implied by
the forward-looking statements. Forward-looking statements in this
release include, among other things, projected changes in
production volumes, cash flows, operating costs and commodity mix.
General risk factors include the availability of and access to
capital markets; the availability, proximity and capacity of
gathering, processing and transportation facilities; the volatility
and level of oil, natural gas, and natural gas liquids prices,
including any impact on the Company's asset carrying values or
reserves arising from price declines; uncertainties inherent in
projecting future rates of production or other results from
drilling and completion activities; the imprecise nature of
estimating oil and gas reserves; uncertainties inherent in
projecting future drilling and completion activities, costs or
results, including from pilot tests; the uncertainty of
negotiations to result in an agreement or a completed transaction;
the uncertain nature of acquisition, divestiture, joint venture,
farm down or similar efforts and the ability to complete any such
transactions; the uncertain nature of expected benefits from the
actual or expected acquisition, divestiture, joint venture, farm
down or similar efforts; the availability of additional
economically attractive exploration, development, and acquisition
opportunities for future growth and any necessary financings;
unexpected drilling conditions and results; unsuccessful
exploration and development drilling results; the availability of
drilling, completion, and operating equipment and services; the
risks associated with the Company's commodity price risk management
strategy; uncertainty regarding the ultimate impact of potentially
dilutive securities; and other such matters discussed in the "Risk
Factors" section of SM Energy's 2016 Annual Report on Form 10-K, as
such risk factors may be updated from time to time in the Company's
other periodic reports filed with the Securities and Exchange
Commission. The forward-looking statements contained herein speak
as of the date of this announcement. Although SM Energy may from
time to time voluntarily update its prior forward-looking
statements, it disclaims any commitment to do so except as required
by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in
the acquisition, exploration, development, and production of crude
oil, natural gas, and natural gas liquids in onshore North
America. 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.
INVESTOR CONTACT:
Jennifer Martin Samuels,
jsamuels@sm-energy.com, 303-864-2507
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sm-energy-announces-update-on-divestiture-process-300457992.html
SOURCE SM Energy Company