DENVER, Oct. 31, 2019 /PRNewswire/ -- SM Energy
Company (the "Company" or "SM Energy") (NYSE: SM) today announced
financial and operating results for the third quarter of 2019.
Highlights include:
- Production exceeded expectations - Third quarter 2019
total production was 12.4 MMBoe (134.9 MBoe/d), 44% oil and 61%
liquids. Production exceeded the Company's guidance range by 0.2
MMBoe, or 2,250 Boe/d, driven by better than expected well
performance and two accelerated Austin Chalk wells in South Texas.
- Permian operations continue to rank top tier - The
Company's high oil content assets generate among the highest
realized price per Boe in the Basin, averaging $44.77 in the third quarter, while capital
efficiencies continue to reduce the current average RockStar drill,
complete and equip costs to approximately $700 per lateral foot.
- New South Texas wells
generating higher oil/liquids production - Two recent Austin
Chalk wells each delivered on average more than 800 Bbls/d oil peak
30-day IP rates. Twelve new design wells (Lower Eagle Ford) in the
Briscoe area reached peak 30-day
IP rates averaging 2,532 Boe/d (3-stream), including 463 Bbls/d
oil.
President and Chief Executive Officer Jay Ottoson comments: "Our third quarter results
continue to demonstrate the quality of our Midland Basin assets and execution. Our
efforts to prove up oily economic drilling inventory in our large
South Texas operating area are
showing success. As we go forward, we expect to allocate a
high percentage of our capital to the Midland Basin, while focusing our investment
in South Texas on these higher
margin opportunities. Our capital efficiency continues to
improve, and we have taken steps to streamline our organization and
reduce cash costs. We expect to generate free cash flow in the
fourth quarter of 2019 and our corporate objective is to generate
free cash flow, reducing absolute debt and leverage in 2020."
SUMMARY WELL RESULTS
ROCKSTAR
New well results include RockStar area wells that reached their
peak 30-day IP rates subsequent to the Company's August 2019 update: 11 new RockStar wells drilled
into the Wolfcamp A and Lower Spraberry intervals, at locations
that span the acreage position, having an average lateral length of
10,150 feet, delivered peak 30-day IP rates that averaged
1,180 Boe/d per well and 90% oil. All of the wells were half or
fully bounded.
SOUTH TEXAS
In the South Texas, efforts to
drive value and inventory through more efficient well design and
testing the higher liquids content/higher margin Austin Chalk are
showing success.
- The Galvan Ranch B904H Austin Chalk test is the best Company
oil well drilled to date in South
Texas, based on its peak 24-hour IP rate of 3,900 Boe
(3-stream), with approximately 1,100 Bbls oil. The two new Austin
Chalk wells were drilled in the eastern and northern areas of the
Company's South Texas acreage,
intended to demonstrate the geographic extensions of the Austin
Chalk across the Company's acreage position. The wells were drilled
with approximately 11,300' laterals. While results are early stage,
the oil content of these wells is particularly encouraging.
- As reported during the quarter, four new design Lower Eagle
Ford wells reached peak 30-day IP rates averaging approximately
3,000 Boe/d (3-stream) each with 560 Bbls/d oil, or 19% oil and 41%
NGLs. The wells are part of the Company's joint development
program. With more than 90 days of production, these wells
demonstrate cumulative production curves consistent with
expectations.
- Eight additional new design Lower Eagle Ford wells (also part
of the joint development program) with average lateral lengths
ranging between 8,200' and 15,000' reached peak 30-day IP rates
during the quarter that averaged approximately 2,300 Boe/d
(3-stream) each, with 18% oil and 42% liquids.
THIRD QUARTER
PRODUCTION AND REALIZED PRICES
|
|
|
PRODUCTION:
|
|
|
|
Permian
|
South
Texas
|
Total
|
|
Oil - MBbl
|
5,076
|
348
|
5,424
|
|
Natural gas -
MMcf
|
9,079
|
20,417
|
29,496
|
|
NGLs -
MBbl
|
5
|
2,061
|
2,067
|
|
Total -
MBoe
|
6,595
|
5,812
|
12,407
|
|
Total -
MBoe/d
|
71.7
|
63.2
|
134.9
|
|
Note: amounts may not
calculate due to rounding
|
- Permian volumes increased 11% year-over-year and were flat
sequentially.
- Oil sales comprised 75% of production revenue.
- As projected, there were shut-in volumes during the quarter
related to offset well completion activity and other impacts.
REALIZED
PRICES:
|
|
|
|
|
Permian
|
South
Texas
|
Totals
Pre/Post-
Hedge
|
Oil/$Bbl
|
$54.64
|
$44.50
|
$53.99/$53.57
|
Natural
gas/$Mcf
|
1.96
|
2.27
|
2.17/2.59
|
NGLs/$Bbl
|
nm
|
15.71
|
15.73/22.87
|
Per Boe
|
$44.77
|
$16.20
|
$31.39/$33.38
|
- Benchmark pricing for the quarter included NYMEX WTI at
$56.45/Bbl, NYMEX Henry Hub natural
gas at $2.23/MMBtu and Hart Composite
NGLs at $18.89/Bbl.
- In the Permian Basin, the Midland-Cushing oil differential improved to
approximately ($0.61)/Bbl on average
for the three months while the WAHA-NYMEX natural gas differential
improved to approximately ($1.43)/MMBtu.
- The average realized price per Boe of $31.39 is before the effect of hedges. Including
the effect of realized hedges, the average price was $33.38 per Boe, resulting in approximately
$24.7 million of realized net hedge
gains for the quarter.
THIRD QUARTER FINANCIAL RESULTS
Third quarter of 2019 net income was $42.2 million, or $0.37 per diluted common share, compared with a
net loss of ($135.9) million, or
($1.21) per diluted common share, in
the third quarter of 2018. For the first nine months of 2019,
net loss was ($84.9) million or
($0.76) per diluted common share.
Third quarter of 2019 net cash provided by operating activities
was $203.2 million. For the
first nine months of 2019, net cash provided by operating
activities was $581.6 million.
The following paragraphs discuss adjusted EBITDAX, adjusted net
income (loss), and adjusted net income (loss) per diluted common
share, all of which are non-GAAP measures. Please reference
the definitions and reconciliations of these measures to the most
directly comparable GAAP financial measures at the end of this
release.
Third quarter of 2019 adjusted EBITDAX was $257.8 million. Adjusted EBITDAX is largely
unchanged year-over-year as higher production in the 2019 period
was offset by higher realized (post-hedge) prices in the 2018
period. Sequentially, adjusted EBITDAX was largely unchanged
given comparable production and operating margins.
Third quarter of 2019 adjusted net loss was ($12.1) million, or ($0.11) per diluted common share, compared with
adjusted net loss of ($1.0) million,
or ($0.01) per diluted common share,
in the third quarter of 2018. For the first nine months of
2019, adjusted net loss was ($48.5)
million, or ($0.43) per
diluted common share.
COMMODITY DERIVATIVES
As of October 30, 2019, the
Company had commodity derivatives in place for the fourth quarter
of 2019 that included:
- WTI oil hedges for approximately 90% of expected oil
production;
- HSC natural gas hedges for approximately 70% of expected
natural gas production;
- Midland-Cushing differential hedges for approximately
60-65% of expected Permian oil production; and
- WAHA natural gas hedges for approximately 40% of expected
Permian residue natural gas production (assumes ethane
rejection.)
Detailed data on derivatives are provided in the accompanying IR
presentation and the Company's Quarterly Report on Form 10-Q for
the third quarter of 2019.
FINANCIAL POSITION, LIQUIDITY AND TOTAL CAPITAL SPEND
On September 30, 2019, the
outstanding principal amount of the Company's long-term debt was
$2.5 billion in senior notes plus
$172.5 million in senior convertible
notes, and $129.0 million drawn on
the Company's senior secured revolving credit facility.
Amounts drawn under this facility increased by $11 million sequentially, keeping total net debt
nearly flat compared with the second quarter of 2019.
Subsequent to quarter-end, the Company's lenders reaffirmed the
senior secured revolving credit facility borrowing base of
$1.6 billion and commitment level of
$1.2 billion. The Company had
$1.1 billion of liquidity at
quarter-end.
Costs incurred in oil and gas activities for the third quarter
of 2019 were $270.9 million.
Total capital spend (a non-GAAP measure defined and reconciled
below) for the quarter was $263.4
million. During the third quarter, the Company drilled
22 net wells and had 19 net flowing completions in the Permian and
drilled six net wells and completed six net wells in South Texas.
- During the third quarter, the Company continued to realize
capital efficiencies in the form of increased lateral feet drilled
per day and more stages completed per day. As a result, the Company
completed more wells in the first nine months of 2019 than expected
(including completed wells that have not been put on production),
reduced the number of completion crews in the Permian to two, and
Company-operated South Texas well
completions have been concluded for the year.
- A number of wells in the Permian at quarter-end were completed
but not yet producing in order to manage and reduce flowback
costs.
UPDATED GUIDANCE - FOURTH QUARTER & FULL YEAR
2019
- Full year expected production: raised at the mid-point to 47.5
- 47.9 MMBoe, or 130-131 MBoe/d, with approximately 44% oil in the
commodity mix. Implied fourth quarter production is 12.0-12.4 MMBoe
or 130.4-134.8 MBoe/d and assumes ethane rejection for NGL volumes
and certain shut-in volumes related to maintenance, offset activity
and other.
- Full year expected total capital spend: unchanged at
$1,000 - 1,050 million. Implied
fourth quarter total capital spend is $160-210 million. Expected net completions for
2019 are unchanged at 100+ in the Permian and 19 in South Texas.
- Full year expected general and administrative expense: the
Company expects to continue to concentrate capital in the
Midland Basin and has initiated a
reorganization to eliminate duplicate regional functions and reduce
overhead costs. As a result, the Company expects to take an
associated charge to G&A in the fourth quarter of 2019.
Guidance is revised to $125-130
million including non-cash compensation and reorganization
charge.
- Full year expected LOE per Boe is reduced to $4.70-$4.80. The
implied fourth quarter LOE per Boe is $4.80-$5.15.
- Full year expected transportation expense per Boe is reduced to
$4.05-$4.15. The implied fourth quarter transportation
per Boe is $4.15-$4.40.
SCHEDULE FOR THIRD QUARTER REPORTING
This release is accompanied by an investor presentation and
pre-recorded call with transcript, all of which are posted to the
Company's website. Please visit the Company's website at
ir.sm-energy.com to access this additional third quarter
detail.
November 1, 2019 - Please join SM
Energy management at 8:00 a.m. Mountain
time/10:00 a.m. Eastern time
for the Company's third quarter 2019 financial and operating
results Q&A session. This discussion will be accessible
via webcast (available live and for replay) on the Company's
website at ir.sm-energy.com or by telephone at:
- Live (conference ID 7069506) - Domestic toll
free/International: 844-343-4183/647-689-5129
- Replay (conference ID 7069506) - Domestic toll
free/International: 800-585-8367/416-621-4642
The call replay will be available approximately one hour after
the call and until November 8,
2019.
UPCOMING CONFERENCE PARTICIPATION
- November 5, 2019 - Baird's Global Industrial Conference.
President and Chief Executive Officer Jay
Ottoson will present at 9:30 a.m.
Central time. The presentation will be webcast, accessible
from the Company's website, and available for replay for a limited
period. An investor presentation for this event will be posted to
the Company's website before market open on November 5, 2019.
- November 14, 2019 - Stephens
Nashville Investment Conference. President and Chief Executive
Officer Jay Ottoson will participate
in a panel discussion at 9:00 a.m. Central
time. This event will not be webcast.
- November 14, 2019 - BAML Global
Energy Conference. EVP and Chief Financial Officer Wade Pursell will present at 2:00 p.m. Eastern time. The presentation will be
webcast, accessible from the Company's website, and available for
replay for a limited period. An investor presentation for this
event will be posted to the Company's website before market open on
November 14, 2019.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of securities laws. The words "assumes,"
"anticipate," "estimate," "expect," "forecast," "guidance,"
"implied," "plan," "project," "objectives," "target," "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: projections for production, certain operating costs,
general and administrative expenses and expected savings, and total
capital spend; the expectation that the Company will spend within
discretionary cash flow in the fourth quarter of 2019 and beyond;
the potential to reduce absolute debt and leverage in 2020; and,
the Company's expectations regarding capital allocation.
General risk factors include the availability, proximity and
capacity of gathering, processing and transportation facilities;
the volatility and level of oil, natural gas, and natural gas
liquids prices and related differentials, including any impact on
the Company's asset carrying values or reserves arising from price
declines; uncertainties inherent in projecting future timing and
rates of production or other results from drilling and completion
activities; the imprecise nature of estimating oil and natural gas
reserves; uncertainties inherent in projecting future drilling and
completion activities, costs or results; 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; and other such matters discussed in the
Risk Factors section of SM Energy's most recent 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 release. 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.
SM ENERGY INVESTOR CONTACT
Jennifer Martin Samuels,
jsamuels@sm-energy.com, 303-864-2507
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
Production
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30,
|
|
For the Nine
Months Ended September 30,
|
|
2019
|
|
2018
|
|
Percent
Change
|
|
2019
|
|
2018
|
|
Percent
Change
|
Realized sales
price (before the effects of derivative
settlements):
|
|
|
|
|
|
|
|
|
|
|
|
Oil (per
Bbl)
|
$
|
53.99
|
|
|
$
|
56.96
|
|
|
(5)
|
%
|
|
$
|
53.31
|
|
|
$
|
59.60
|
|
|
(11)
|
%
|
Gas (per
Mcf)
|
$
|
2.17
|
|
|
$
|
3.56
|
|
|
(39)
|
%
|
|
$
|
2.38
|
|
|
$
|
3.35
|
|
|
(29)
|
%
|
NGLs (per
Bbl)
|
$
|
15.73
|
|
|
$
|
30.77
|
|
|
(49)
|
%
|
|
$
|
17.09
|
|
|
$
|
28.28
|
|
|
(40)
|
%
|
Per Boe
|
$
|
31.39
|
|
|
$
|
38.26
|
|
|
(18)
|
%
|
|
$
|
32.00
|
|
|
$
|
38.15
|
|
|
(16)
|
%
|
Realized sales
price (including the effects of derivative
settlements):
|
|
|
|
|
|
|
|
|
|
|
|
Oil (per
Bbl)
|
$
|
53.57
|
|
|
$
|
53.64
|
|
|
—
|
%
|
|
$
|
52.39
|
|
|
$
|
55.06
|
|
|
(5)
|
%
|
Gas (per
Mcf)
|
$
|
2.59
|
|
|
$
|
3.53
|
|
|
(27)
|
%
|
|
$
|
2.55
|
|
|
$
|
3.41
|
|
|
(25)
|
%
|
NGLs (per
Bbl)
|
$
|
22.87
|
|
|
$
|
21.16
|
|
|
8
|
%
|
|
$
|
21.01
|
|
|
$
|
20.79
|
|
|
1
|
%
|
Per Boe
|
$
|
33.38
|
|
|
$
|
34.86
|
|
|
(4)
|
%
|
|
$
|
32.68
|
|
|
$
|
35.02
|
|
|
(7)
|
%
|
Net production
volumes: (1)
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(MMBbl)
|
5.4
|
|
|
5.0
|
|
|
7
|
%
|
|
15.7
|
|
|
13.7
|
|
|
15
|
%
|
Gas (Bcf)
|
29.5
|
|
|
27.2
|
|
|
9
|
%
|
|
81.7
|
|
|
77.7
|
|
|
5
|
%
|
NGLs
(MMBbl)
|
2.1
|
|
|
2.4
|
|
|
(14)
|
%
|
|
6.2
|
|
|
6.0
|
|
|
4
|
%
|
Equivalent
(MMBoe)
|
12.4
|
|
|
12.0
|
|
|
4
|
%
|
|
35.5
|
|
|
32.6
|
|
|
9
|
%
|
Average net daily
production: (1)
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbl per
day)
|
59.0
|
|
|
54.9
|
|
|
7
|
%
|
|
57.5
|
|
|
50.1
|
|
|
15
|
%
|
Gas (MMcf per
day)
|
320.6
|
|
|
295.3
|
|
|
9
|
%
|
|
299.2
|
|
|
284.7
|
|
|
5
|
%
|
NGLs (MBbl per
day)
|
22.5
|
|
|
26.2
|
|
|
(14)
|
%
|
|
22.8
|
|
|
21.9
|
|
|
4
|
%
|
Equivalent (MBoe per
day)
|
134.9
|
|
|
130.2
|
|
|
4
|
%
|
|
130.1
|
|
|
119.4
|
|
|
9
|
%
|
Per Boe
data:
|
|
|
|
|
|
|
|
|
|
|
|
Realized price
(before the effects of derivative settlements)
|
$
|
31.39
|
|
|
$
|
38.26
|
|
|
(18)
|
%
|
|
$
|
32.00
|
|
|
$
|
38.15
|
|
|
(16)
|
%
|
Lease operating
expense
|
4.73
|
|
|
4.41
|
|
|
7
|
%
|
|
4.67
|
|
|
4.66
|
|
|
—
|
%
|
Transportation
costs
|
4.00
|
|
|
4.20
|
|
|
(5)
|
%
|
|
4.02
|
|
|
4.42
|
|
|
(9)
|
%
|
Production
taxes
|
1.29
|
|
|
1.58
|
|
|
(18)
|
%
|
|
1.30
|
|
|
1.64
|
|
|
(21)
|
%
|
Ad valorem tax
expense
|
0.39
|
|
|
0.45
|
|
|
(13)
|
%
|
|
0.52
|
|
|
0.51
|
|
|
2
|
%
|
General and
administrative (2)
|
2.63
|
|
|
2.46
|
|
|
7
|
%
|
|
2.69
|
|
|
2.64
|
|
|
2
|
%
|
Operating margin
(before the effects of derivative settlements)
|
18.35
|
|
|
25.16
|
|
|
(27)
|
%
|
|
18.80
|
|
|
24.28
|
|
|
(23)
|
%
|
Derivative settlement
gain (loss)
|
1.99
|
|
|
(3.40)
|
|
|
159
|
%
|
|
0.67
|
|
|
(3.13)
|
|
|
121
|
%
|
Operating margin
(including the effects of derivative settlements)
|
$
|
20.34
|
|
|
$
|
21.76
|
|
|
(7)
|
%
|
|
$
|
19.47
|
|
|
$
|
21.15
|
|
|
(8)
|
%
|
Depletion,
depreciation, amortization, and
asset retirement
obligation liability accretion
|
$
|
17.02
|
|
|
$
|
16.78
|
|
|
1
|
%
|
|
$
|
16.76
|
|
|
$
|
14.82
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts and percentage changes
may not calculate due to rounding.
|
(2) Includes non-cash stock-based
compensation expense per Boe of $0.44 and $0.45 for the three
months ended September 30, 2019, and 2018, respectively, and $0.42
for each of the nine months ended September 30, 2019, and
2018.
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
(in thousands, except
share data)
|
September
30,
|
|
December
31,
|
ASSETS
|
2019
|
|
2018
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
10
|
|
|
$
|
77,965
|
|
Accounts
receivable
|
146,211
|
|
|
167,536
|
|
Derivative
assets
|
143,142
|
|
|
175,130
|
|
Prepaid expenses and
other
|
21,751
|
|
|
8,632
|
|
Total current
assets
|
311,114
|
|
|
429,263
|
|
Property and
equipment (successful efforts method):
|
|
|
|
Proved oil and gas
properties
|
8,143,381
|
|
|
7,278,362
|
|
Accumulated
depletion, depreciation, and amortization
|
(3,953,181)
|
|
|
(3,417,953)
|
|
Unproved oil and gas
properties
|
1,434,435
|
|
|
1,581,401
|
|
Wells in
progress
|
325,230
|
|
|
295,529
|
|
Properties held for
sale, net
|
—
|
|
|
5,280
|
|
Other property and
equipment, net of accumulated depreciation of $64,971 and $57,102,
respectively
|
79,278
|
|
|
88,546
|
|
Total property and
equipment, net
|
6,029,143
|
|
|
5,831,165
|
|
Noncurrent
assets:
|
|
|
|
Derivative
assets
|
38,571
|
|
|
58,499
|
|
Other noncurrent
assets
|
74,255
|
|
|
33,935
|
|
Total noncurrent
assets
|
112,826
|
|
|
92,434
|
|
Total
assets
|
$
|
6,453,083
|
|
|
$
|
6,352,862
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
431,440
|
|
|
$
|
403,199
|
|
Derivative
liabilities
|
37,798
|
|
|
62,853
|
|
Other current
liabilities
|
21,804
|
|
|
—
|
|
Total current
liabilities
|
491,042
|
|
|
466,052
|
|
Noncurrent
liabilities:
|
|
|
|
Revolving credit
facility
|
129,000
|
|
|
—
|
|
Senior Notes, net of
unamortized deferred financing costs
|
2,451,886
|
|
|
2,448,439
|
|
Senior Convertible
Notes, net of unamortized discount and deferred financing
costs
|
154,883
|
|
|
147,894
|
|
Asset retirement
obligations
|
95,806
|
|
|
91,859
|
|
Deferred income
taxes
|
217,469
|
|
|
223,278
|
|
Derivative
liabilities
|
6,014
|
|
|
12,496
|
|
Other noncurrent
liabilities
|
63,233
|
|
|
42,522
|
|
Total noncurrent
liabilities
|
3,118,291
|
|
|
2,966,488
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.01
par value - authorized: 200,000,000 shares; issued and outstanding:
112,857,163 and 112,241,966 shares, respectively
|
1,129
|
|
|
1,122
|
|
Additional paid-in
capital
|
1,784,787
|
|
|
1,765,738
|
|
Retained
earnings
|
1,069,642
|
|
|
1,165,842
|
|
Accumulated other
comprehensive loss
|
(11,808)
|
|
|
(12,380)
|
|
Total stockholders'
equity
|
2,843,750
|
|
|
2,920,322
|
|
Total liabilities
and stockholders' equity
|
$
|
6,453,083
|
|
|
$
|
6,352,862
|
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
|
Condensed
Consolidated Statements of Operations
|
(in thousands, except
per share data)
|
For the Three
Months Ended September 30,
|
|
For the Nine
Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Operating revenues
and other income:
|
|
|
|
|
|
|
|
Oil, gas, and NGL
production revenue
|
$
|
389,419
|
|
|
$
|
458,382
|
|
|
$
|
1,136,749
|
|
|
$
|
1,243,826
|
|
Net gain on
divestiture activity
|
—
|
|
|
786
|
|
|
323
|
|
|
425,656
|
|
Other operating
revenues
|
898
|
|
|
201
|
|
|
1,347
|
|
|
3,398
|
|
Total operating
revenues and other income
|
390,317
|
|
|
459,369
|
|
|
1,138,419
|
|
|
1,672,880
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Oil, gas, and NGL
production expense
|
129,042
|
|
|
127,638
|
|
|
373,397
|
|
|
365,917
|
|
Depletion,
depreciation, amortization, and asset retirement obligation
liability accretion
|
211,125
|
|
|
201,105
|
|
|
595,201
|
|
|
483,343
|
|
Exploration(1)
|
11,626
|
|
|
13,061
|
|
|
33,851
|
|
|
40,844
|
|
Abandonment and
impairment of unproved properties
|
6,337
|
|
|
9,055
|
|
|
25,092
|
|
|
26,615
|
|
General and
administrative(1)
|
32,578
|
|
|
29,464
|
|
|
95,584
|
|
|
86,066
|
|
Net derivative (gain)
loss(2)
|
(100,889)
|
|
|
178,026
|
|
|
(3,463)
|
|
|
249,304
|
|
Other operating
expenses, net
|
1,021
|
|
|
9,664
|
|
|
422
|
|
|
14,219
|
|
Total operating
expenses
|
290,840
|
|
|
568,013
|
|
|
1,120,084
|
|
|
1,266,308
|
|
Income (loss) from
operations
|
99,477
|
|
|
(108,644)
|
|
|
18,335
|
|
|
406,572
|
|
Interest
expense
|
(40,584)
|
|
|
(38,111)
|
|
|
(118,191)
|
|
|
(122,850)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
(26,722)
|
|
|
—
|
|
|
(26,722)
|
|
Other non-operating
income (expense), net
|
(548)
|
|
|
806
|
|
|
(1,427)
|
|
|
3,017
|
|
Income (loss)
before income taxes
|
58,345
|
|
|
(172,671)
|
|
|
(101,283)
|
|
|
260,017
|
|
Income tax (expense)
benefit
|
(16,111)
|
|
|
36,748
|
|
|
16,337
|
|
|
(61,342)
|
|
Net income
(loss)
|
$
|
42,234
|
|
|
$
|
(135,923)
|
|
|
$
|
(84,946)
|
|
|
$
|
198,675
|
|
|
|
|
|
|
|
|
|
Basic
weighted-average common shares outstanding
|
112,804
|
|
|
112,107
|
|
|
112,441
|
|
|
111,836
|
|
Diluted
weighted-average common shares outstanding
|
113,334
|
|
|
112,107
|
|
|
112,441
|
|
|
113,600
|
|
Basic net income
(loss) per common share
|
$
|
0.37
|
|
|
$
|
(1.21)
|
|
|
$
|
(0.76)
|
|
|
$
|
1.78
|
|
Diluted net income
(loss) per common share
|
$
|
0.37
|
|
|
$
|
(1.21)
|
|
|
$
|
(0.76)
|
|
|
$
|
1.75
|
|
Dividends per common
share
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
(1)
Non-cash stock-based compensation included in:
|
|
|
|
|
|
|
|
Exploration
expense
|
$
|
1,285
|
|
|
$
|
1,571
|
|
|
$
|
3,781
|
|
|
$
|
4,076
|
|
General and
administrative expense
|
5,481
|
|
|
5,433
|
|
|
14,977
|
|
|
13,604
|
|
Total non-cash
stock-based compensation
|
$
|
6,766
|
|
|
$
|
7,004
|
|
|
$
|
18,758
|
|
|
$
|
17,680
|
|
|
|
|
|
|
|
|
|
(2)
The net derivative (gain) loss line item consists of the
following:
|
|
|
|
|
|
|
|
Settlement (gain)
loss
|
$
|
(24,722)
|
|
|
$
|
40,718
|
|
|
$
|
(23,843)
|
|
|
$
|
101,911
|
|
(Gain) loss on fair
value changes
|
(76,167)
|
|
|
137,308
|
|
|
20,380
|
|
|
147,393
|
|
Total net derivative
(gain) loss
|
$
|
(100,889)
|
|
|
$
|
178,026
|
|
|
$
|
(3,463)
|
|
|
$
|
249,304
|
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
|
Condensed
Consolidated Statements of Stockholders' Equity
|
(in thousands, except
share data and dividends per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders'
Equity
|
Shares
|
|
Amount
|
Balances, December
31, 2018
|
112,241,966
|
|
|
$
|
1,122
|
|
|
$
|
1,765,738
|
|
|
$
|
1,165,842
|
|
|
$
|
(12,380)
|
|
|
$
|
2,920,322
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(177,568)
|
|
|
—
|
|
|
(177,568)
|
|
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|
263
|
|
Cash dividends
declared, $0.05 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,612)
|
|
|
—
|
|
|
(5,612)
|
|
Issuance of common
stock upon vesting of RSUs, net of shares used for tax
withholdings
|
2,579
|
|
|
—
|
|
|
(18)
|
|
|
—
|
|
|
—
|
|
|
(18)
|
|
Stock-based
compensation expense
|
—
|
|
|
—
|
|
|
5,838
|
|
|
—
|
|
|
—
|
|
|
5,838
|
|
Balances, March
31, 2019
|
112,244,545
|
|
|
$
|
1,122
|
|
|
$
|
1,771,558
|
|
|
$
|
982,662
|
|
|
$
|
(12,117)
|
|
|
$
|
2,743,225
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
50,388
|
|
|
—
|
|
|
50,388
|
|
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119
|
|
|
119
|
|
Issuance of common
stock under Employee Stock Purchase Plan
|
184,079
|
|
|
2
|
|
|
1,957
|
|
|
—
|
|
|
—
|
|
|
1,959
|
|
Issuance of common
stock upon vesting of RSUs, net of shares used for tax
withholdings
|
290
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Stock-based
compensation expense
|
96,719
|
|
|
1
|
|
|
6,153
|
|
|
—
|
|
|
—
|
|
|
6,154
|
|
Other
|
—
|
|
|
—
|
|
|
(1)
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Balances, June 30,
2019
|
112,525,633
|
|
|
$
|
1,125
|
|
|
$
|
1,779,665
|
|
|
$
|
1,033,051
|
|
|
$
|
(11,998)
|
|
|
$
|
2,801,843
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
42,234
|
|
|
—
|
|
|
42,234
|
|
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|
190
|
|
Cash dividends
declared, $0.05 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,643)
|
|
|
—
|
|
|
(5,643)
|
|
Issuance of common
stock upon vesting of RSUs, net of shares used for tax
withholdings
|
331,530
|
|
|
4
|
|
|
(1,644)
|
|
|
—
|
|
|
—
|
|
|
(1,640)
|
|
Stock-based
compensation expense
|
—
|
|
|
—
|
|
|
6,766
|
|
|
—
|
|
|
—
|
|
|
6,766
|
|
Balances,
September 30, 2019
|
112,857,163
|
|
|
$
|
1,129
|
|
|
$
|
1,784,787
|
|
|
$
|
1,069,642
|
|
|
$
|
(11,808)
|
|
|
$
|
2,843,750
|
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Stockholders' Equity
(Continued)
|
(in thousands, except
share data and dividends per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders'
Equity
|
Shares
|
|
|
Amount
|
Balances, December
31, 2017
|
111,687,016
|
|
|
$
|
1,117
|
|
|
$
|
1,741,623
|
|
|
$
|
665,657
|
|
|
$
|
(13,789)
|
|
|
$
|
2,394,608
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
317,401
|
|
|
—
|
|
|
317,401
|
|
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
260
|
|
|
260
|
|
Cash dividends
declared, $0.05 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,584)
|
|
|
—
|
|
|
(5,584)
|
|
Stock-based
compensation expense
|
|
|
—
|
|
|
5,412
|
|
|
—
|
|
|
—
|
|
|
5,412
|
|
Cumulative effect of
accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
2,969
|
|
|
(2,969)
|
|
|
—
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1)
|
|
|
—
|
|
Balances, March
31, 2018
|
111,687,016
|
|
|
$
|
1,117
|
|
|
$
|
1,747,035
|
|
|
$
|
980,444
|
|
|
$
|
(16,499)
|
|
|
$
|
2,712,097
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
17,197
|
|
|
—
|
|
|
17,197
|
|
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
198
|
|
|
198
|
|
Issuance of common
stock under Employee Stock Purchase Plan
|
100,249
|
|
|
1
|
|
|
1,880
|
|
|
—
|
|
|
—
|
|
|
1,881
|
|
Issuance of common
stock upon vesting of RSUs, net of shares used for tax
withholdings
|
1,161
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
—
|
|
|
(10)
|
|
Stock-based
compensation expense
|
58,572
|
|
|
—
|
|
|
5,264
|
|
|
—
|
|
|
—
|
|
|
5,264
|
|
Balances, June 30,
2018
|
111,846,998
|
|
|
$
|
1,118
|
|
|
$
|
1,754,169
|
|
|
$
|
997,641
|
|
|
$
|
(16,301)
|
|
|
$
|
2,736,627
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(135,923)
|
|
|
—
|
|
|
(135,923)
|
|
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|
263
|
|
Cash dividends
declared, $0.05 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,607)
|
|
|
—
|
|
|
(5,607)
|
|
Issuance of common
stock upon vesting of RSUs, net of shares used for tax
withholdings
|
290,584
|
|
|
3
|
|
|
(2,968)
|
|
|
—
|
|
|
—
|
|
|
(2,965)
|
|
Stock-based
compensation expense
|
|
|
—
|
|
|
7,004
|
|
|
—
|
|
|
—
|
|
|
7,004
|
|
Balances,
September 30, 2018
|
112,137,582
|
|
|
$
|
1,121
|
|
|
$
|
1,758,205
|
|
|
$
|
856,111
|
|
|
$
|
(16,038)
|
|
|
$
|
2,599,399
|
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
(in
thousands)
|
For the Three
Months
Ended September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
42,234
|
|
|
$
|
(135,923)
|
|
|
$
|
(84,946)
|
|
|
$
|
198,675
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Net gain on
divestiture activity
|
—
|
|
|
(786)
|
|
|
(323)
|
|
|
(425,656)
|
|
Depletion,
depreciation, amortization, and asset retirement obligation
liability accretion
|
211,125
|
|
|
201,105
|
|
|
595,201
|
|
|
483,343
|
|
Abandonment and
impairment of unproved properties
|
6,337
|
|
|
9,055
|
|
|
25,092
|
|
|
26,615
|
|
Stock-based
compensation expense
|
6,766
|
|
|
7,004
|
|
|
18,758
|
|
|
17,680
|
|
Net derivative (gain)
loss
|
(100,889)
|
|
|
178,026
|
|
|
(3,463)
|
|
|
249,304
|
|
Derivative settlement
gain (loss)
|
24,722
|
|
|
(40,718)
|
|
|
23,843
|
|
|
(101,911)
|
|
Amortization of debt
discount and deferred financing costs
|
3,921
|
|
|
3,792
|
|
|
11,554
|
|
|
11,542
|
|
Loss on
extinguishment of debt
|
—
|
|
|
26,722
|
|
|
—
|
|
|
26,722
|
|
Deferred income
taxes
|
19,617
|
|
|
(36,833)
|
|
|
(13,620)
|
|
|
60,672
|
|
Other, net
|
(1,004)
|
|
|
218
|
|
|
(2,291)
|
|
|
(2,084)
|
|
Net change in working
capital
|
(9,673)
|
|
|
17,997
|
|
|
11,781
|
|
|
(3,725)
|
|
Net cash provided
by operating activities
|
203,156
|
|
|
229,659
|
|
|
581,586
|
|
|
541,177
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Net proceeds from the
sale of oil and gas properties (1)
|
—
|
|
|
984
|
|
|
12,520
|
|
|
743,199
|
|
Capital
expenditures
|
(212,515)
|
|
|
(309,269)
|
|
|
(788,642)
|
|
|
(1,032,588)
|
|
Acquisition of proved
and unproved oil and gas properties
|
(2,900)
|
|
|
44
|
|
|
(2,581)
|
|
|
(24,571)
|
|
Net cash used in
investing activities
|
(215,415)
|
|
|
(308,241)
|
|
|
(778,703)
|
|
|
(313,960)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from credit
facility
|
428,000
|
|
|
—
|
|
|
1,124,500
|
|
|
—
|
|
Repayment of credit
facility
|
(417,000)
|
|
|
—
|
|
|
(995,500)
|
|
|
—
|
|
Net proceeds from
Senior Notes
|
—
|
|
|
492,079
|
|
|
—
|
|
|
492,079
|
|
Cash paid to
repurchase Senior Notes, including premium
|
—
|
|
|
(844,984)
|
|
|
—
|
|
|
(844,984)
|
|
Net proceeds from
sale of common stock
|
—
|
|
|
—
|
|
|
1,959
|
|
|
1,881
|
|
Dividends
paid
|
—
|
|
|
—
|
|
|
(5,612)
|
|
|
(5,584)
|
|
Other, net
|
(1,640)
|
|
|
(7,613)
|
|
|
(2,684)
|
|
|
(7,746)
|
|
Net cash provided
by (used in) financing activities
|
9,360
|
|
|
(360,518)
|
|
|
122,663
|
|
|
(364,354)
|
|
|
|
|
|
|
|
|
|
Net change in cash,
cash equivalents, and restricted cash
|
(2,899)
|
|
|
(439,100)
|
|
|
(74,454)
|
|
|
(137,137)
|
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
6,410
|
|
|
615,906
|
|
|
77,965
|
|
|
313,943
|
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
|
3,511
|
|
|
$
|
176,806
|
|
|
$
|
3,511
|
|
|
$
|
176,806
|
|
Less: Restricted cash
(1)
|
(3,501)
|
|
|
—
|
|
|
(3,501)
|
|
|
—
|
|
Cash and cash
equivalents
|
$
|
10
|
|
|
$
|
176,806
|
|
|
$
|
10
|
|
|
$
|
176,806
|
|
|
|
|
|
|
|
|
|
(1) As of September 30, 2019, a
portion of net proceeds from the sale of oil and gas properties was
restricted for future property acquisitions. Restricted cash
is included in the other noncurrent assets line item on the
accompanying unaudited condensed consolidated balance
sheets.
|
DEFINITIONS OF NON-GAAP MEASURES AS CALCULATED BY THE
COMPANY
The following non-GAAP measures are presented in addition to
financial statements as the Company believes these metrics and
performance measures are widely used by the investment community,
including investors, research analysts and others, to evaluate and
compare investments among upstream oil and gas companies in making
investment decisions or recommendations. These measures, as
presented, may have differing calculations among companies and
investment professionals and may not be directly comparable to the
same measures provided by others. Non-GAAP measures should
not be considered in isolation or as a substitute for the related
GAAP measure or any other measure of a company's financial or
operating performance presented in accordance with GAAP. A
reconciliation of each of these non-GAAP measures to the most
directly comparable GAAP measure or measures is presented
below. These measures may not be comparable to similarly
titled measures of other companies.
Adjusted EBITDAX: Adjusted EBITDAX is calculated as
net income (loss) before interest expense, interest income, income
taxes, depletion, depreciation, amortization and asset retirement
obligation liability accretion expense, exploration expense,
property abandonment and impairment expense, non-cash stock-based
compensation expense, derivative gains and losses net of
settlements, gains and losses on divestitures, and certain other
items. Adjusted EBITDAX excludes certain items that the
Company believes affect the comparability of operating results,
including items that are generally non-recurring in nature or whose
timing and/or amount cannot be reasonably estimated. Adjusted
EBITDAX is a non-GAAP measure that the Company presents because
management believes it provides useful additional information to
investors and analysts, as a performance measure, for analysis of
our ability to internally generate funds for exploration,
development, acquisitions, and to service debt. Adjusted
EBITDAX is also important as it is considered among financial
covenants under the Company's Credit Agreement, a material source
of liquidity for the Company. Please reference the Company's
third quarter of 2019 Form 10-Q and 2018 Form 10-K for discussion
of the Credit Agreement and its covenants.
Adjusted net income (loss): Adjusted net
income (loss) excludes certain items that the Company believes
affect the comparability of operating results, including items that
are generally non-recurring in nature or whose timing and/or amount
cannot be reasonably estimated. These items include non-cash
and other adjustments, such as derivative gains and losses net of
settlements, impairments, net (gain) loss on divestiture activity,
and accruals for non-recurring matters. Adjusted net income
(loss) is presented because management believes it provides useful
additional information to investors for analysis of the Company's
fundamental business on a recurring basis. In addition, management
believes that adjusted net income (loss) attributable to common
shareholders is widely used by professional research analysts and
others in the valuation, comparison, and investment recommendations
of upstream oil and gas companies.
Total capital spend: Total capital spend is
calculated as costs incurred, less asset retirement obligations
("ARO"), capitalized interest and acquisitions. Total capital
spend is presented because management believes that it provides
useful information to investors in the analysis of SM Energy
Company and is widely used by professional research analysts and
others in the valuation, comparison and investment recommendations
of companies in the oil and gas exploration and production
industry. Total capital spend should not be used in isolation
or as a substitute to costs incurred or other capital spending
measures under GAAP.
Discretionary cash flow: Discretionary cash flow is
calculated as net cash provided by operating activities excluding
changes in current assets and current liabilities, and
exploration. Exploration expense is added back in the
calculation because, for peer comparison purposes, this number is
included in our total capital spend. The Company believes this
measure is important to investors because it provides useful
additional information to investors for analysis of the Company's
ability to generate cash to fund exploration and development, and
to service indebtedness. In addition, management believes
that discretionary cash flows is widely used by professional
research analysts and others in the valuation, comparison, and
investment recommendations of upstream oil and gas companies.
FORWARD-LOOKING NON-GAAP MEASURES
The Company is unable to present a reconciliation of
forward-looking Total Capital Spend because components of the
calculation, such as potential acquisitions, are inherently
unpredictable. Moreover, estimating the most directly
comparable GAAP measures with the required precision necessary to
provide a meaningful reconciliation is extremely difficult and
could not be accomplished without unreasonable effort.
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX
Reconciliation (1)
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net
income (loss) (GAAP) and net cash provided by operating activities
(GAAP) to adjusted EBITDAX (non-GAAP)
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income (loss)
(GAAP)
|
$
|
42,234
|
|
|
$
|
(135,923)
|
|
|
$
|
(84,946)
|
|
|
$
|
198,675
|
|
Interest
expense
|
40,584
|
|
|
38,111
|
|
|
118,191
|
|
|
122,850
|
|
Income tax expense
(benefit)
|
16,111
|
|
|
(36,748)
|
|
|
(16,337)
|
|
|
61,342
|
|
Depletion,
depreciation, amortization, and asset retirement obligation
liability accretion
|
211,125
|
|
|
201,105
|
|
|
595,201
|
|
|
483,343
|
|
Exploration
(2)
|
10,341
|
|
|
11,490
|
|
|
30,070
|
|
|
36,768
|
|
Abandonment and
impairment of unproved properties
|
6,337
|
|
|
9,055
|
|
|
25,092
|
|
|
26,615
|
|
Stock-based
compensation expense
|
6,766
|
|
|
7,004
|
|
|
18,758
|
|
|
17,680
|
|
Net derivative (gain)
loss
|
(100,889)
|
|
|
178,026
|
|
|
(3,463)
|
|
|
249,304
|
|
Derivative settlement
gain (loss)
|
24,722
|
|
|
(40,718)
|
|
|
23,843
|
|
|
(101,911)
|
|
Net gain on
divestiture activity
|
—
|
|
|
(786)
|
|
|
(323)
|
|
|
(425,656)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
26,722
|
|
|
—
|
|
|
26,722
|
|
Other, net
|
434
|
|
|
(1,265)
|
|
|
1,129
|
|
|
(4,519)
|
|
Adjusted EBITDAX
(non-GAAP)
|
257,765
|
|
|
256,073
|
|
|
707,215
|
|
|
691,213
|
|
Interest
expense
|
(40,584)
|
|
|
(38,111)
|
|
|
(118,191)
|
|
|
(122,850)
|
|
Income tax (expense)
benefit
|
(16,111)
|
|
|
36,748
|
|
|
16,337
|
|
|
(61,342)
|
|
Exploration
(2)
|
(10,341)
|
|
|
(11,490)
|
|
|
(30,070)
|
|
|
(36,768)
|
|
Amortization of debt
discount and deferred financing costs
|
3,921
|
|
|
3,792
|
|
|
11,554
|
|
|
11,542
|
|
Deferred income
taxes
|
19,617
|
|
|
(36,833)
|
|
|
(13,620)
|
|
|
60,672
|
|
Other, net
|
(1,438)
|
|
|
1,483
|
|
|
(3,420)
|
|
|
2,435
|
|
Net change in working
capital
|
(9,673)
|
|
|
17,997
|
|
|
11,781
|
|
|
(3,725)
|
|
Net cash provided
by operating activities (GAAP)
|
$
|
203,156
|
|
|
$
|
229,659
|
|
|
$
|
581,586
|
|
|
$
|
541,177
|
|
|
|
|
|
|
|
|
|
(1) See "Definitions of non-GAAP
Measures as Calculated by the Company" above.
|
(2) Stock-based compensation expense
is a component of exploration expense and general and
administrative expense on the unaudited condensed consolidated
statements of operations. Therefore, the exploration line
items shown in the reconciliation above will vary from the amount
shown on the Company's unaudited condensed consolidated statements
of operations for the component of stock-based compensation expense
recorded to exploration expense.
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
|
|
|
|
Adjusted Net
Income (Loss)
Reconciliation (1)
|
|
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net
income (loss) (GAAP) to adjusted net income (loss)
(non-GAAP):
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income (loss)
(GAAP)
|
$
|
42,234
|
|
|
$
|
(135,923)
|
|
|
$
|
(84,946)
|
|
|
$
|
198,675
|
|
Net derivative (gain)
loss
|
(100,889)
|
|
|
178,026
|
|
|
(3,463)
|
|
|
249,304
|
|
Derivative settlement
gain (loss)
|
24,722
|
|
|
(40,718)
|
|
|
23,843
|
|
|
(101,911)
|
|
Net gain on
divestiture activity
|
—
|
|
|
(786)
|
|
|
(323)
|
|
|
(425,656)
|
|
Abandonment and
impairment of unproved properties
|
6,337
|
|
|
9,055
|
|
|
25,092
|
|
|
26,615
|
|
Loss on
extinguishment of debt
|
—
|
|
|
26,722
|
|
|
—
|
|
|
26,722
|
|
Other, net
(2)
|
435
|
|
|
67
|
|
|
1,347
|
|
|
876
|
|
Tax effect of
adjustments (3)
|
15,058
|
|
|
(37,403)
|
|
|
(10,090)
|
|
|
48,619
|
|
Adjusted net
income (loss) (non-GAAP)
|
$
|
(12,103)
|
|
|
$
|
(960)
|
|
|
$
|
(48,540)
|
|
|
$
|
23,244
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per common share (GAAP)
|
$
|
0.37
|
|
|
$
|
(1.21)
|
|
|
$
|
(0.76)
|
|
|
$
|
1.75
|
|
Net derivative (gain)
loss
|
(0.89)
|
|
|
1.59
|
|
|
(0.03)
|
|
|
2.19
|
|
Derivative settlement
gain (loss)
|
0.22
|
|
|
(0.36)
|
|
|
0.21
|
|
|
(0.90)
|
|
Net gain on
divestiture activity
|
—
|
|
|
(0.01)
|
|
|
—
|
|
|
(3.75)
|
|
Abandonment and
impairment of unproved properties
|
0.06
|
|
|
0.08
|
|
|
0.22
|
|
|
0.23
|
|
Loss on
extinguishment of debt
|
—
|
|
|
0.24
|
|
|
—
|
|
|
0.24
|
|
Other, net
(2)
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
Tax effect of
adjustments (3)
|
0.13
|
|
|
(0.34)
|
|
|
(0.09)
|
|
|
0.43
|
|
Adjusted net
income (loss) per diluted common share (non-GAAP)
|
$
|
(0.11)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.43)
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
Basic
weighted-average common shares outstanding
|
112,804
|
|
|
112,107
|
|
|
112,441
|
|
|
111,836
|
|
Diluted
weighted-average common shares outstanding
|
113,334
|
|
|
112,107
|
|
|
112,441
|
|
|
113,600
|
|
|
|
|
|
|
|
|
|
Note: Amounts may not
calculate due to rounding.
|
|
|
|
|
|
|
|
(1) See "Definitions of non-GAAP
Measures as Calculated by the Company" above.
|
(2) For the three and nine month
periods ended September 30, 2019, the adjustment relates to bad
debt expense and impairments on materials inventory and other
property. For the three-month period ended September 30,
2018, the adjustment relates to bad debt expense. For the
nine-month period ended September 30, 2018, the adjustment relates
to bad debt expense and an accrual for a non-recurring matter.
These items are included in other operating expenses, net on the
Company's condensed consolidated statements of
operations.
|
(3) The tax effect of adjustments for
the three and nine month periods ended September 30, 2019, and
2018, was calculated using a tax rate of 21.7%. This rate
approximates the Company's statutory tax rate for the respective
periods, as adjusted for ordinary permanent differences.
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
September 30,
2019
|
|
Total Capital
Spend Reconciliation (1)
|
(in
millions)
|
|
|
|
|
|
|
|
Reconciliation of
costs incurred in oil & gas activities
(GAAP) to total capital spend (non-GAAP)
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2019
|
|
2019
|
Costs incurred in
oil and gas activities (GAAP):
|
$
|
270.9
|
|
|
$
|
861.4
|
|
Asset retirement
obligations
|
(0.3)
|
|
|
(1.1)
|
|
Capitalized
interest
|
(4.2)
|
|
|
(14.1)
|
|
Proved and unproved
property acquisitions (2)
|
(2.9)
|
|
|
(2.6)
|
|
Other
|
—
|
|
|
(3.4)
|
|
Total capital
spend (non-GAAP):
|
$
|
263.4
|
|
|
$
|
840.2
|
|
|
|
|
|
Note: Amounts may not
sum due to rounding.
|
|
|
|
(1)
See "Definitions of non-GAAP Measures as Calculated by the Company"
above.
|
(2) The Company completed several
non-monetary acreage trades in the Midland Basin during the first
nine months of 2019 totaling $70.8 million of value attributed to
the properties transferred. This non-monetary consideration
is not reflected in the costs incurred or capital spend amounts
presented above.
|
Discretionary Cash
Flow Reconciliation (1)
|
(in
millions)
|
|
|
|
|
|
|
|
Reconciliation of net
cash provided by operating activities
(GAAP) to discretionary cash flow (non-GAAP)
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2019
|
|
2019
|
Net cash provided
by operating activities (GAAP):
|
$
|
203.2
|
|
|
$
|
581.6
|
|
Net change in working
capital
|
9.7
|
|
|
(11.8)
|
|
Exploration
(2)(3)
|
10.3
|
|
|
30.1
|
|
Discretionary cash
flow (non-GAAP):
|
$
|
223.3
|
|
|
$
|
599.9
|
|
|
|
|
|
Note: Amounts may not
sum due to rounding.
|
|
|
|
|
|
|
|
(1) See
"Definitions of non-GAAP Measures as Calculated by the Company"
above.
|
(2)
Exploration expense is added back in the calculation of
discretionary cash flow because, for peer comparison purposes, this
number is included in our reported total capital spend.
|
(3) Stock-based compensation expense
is a component of exploration expense and general and
administrative expense on the unaudited condensed consolidated
statements of operations. Therefore, the exploration line items
shown in the reconciliation above will vary from the amount shown
on the Company's unaudited condensed consolidated statements of
operations for the component of stock-based compensation expense
recorded to exploration expense.
|
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SOURCE SM Energy Company