DENVER, April 29, 2021 /PRNewswire/ -- SM Energy
Company (the "Company") (NYSE: SM) today announced operating and
financial results for the first quarter 2021 and provided certain
second quarter 2021 guidance.
During the first quarter of 2021:
- Cash flows included net cash provided by operating
activities of $105.6 million before
net change in working capital of ($51.4)
million totaling $157.1
million. Adjusted EBITDAX, (a non-GAAP measure reconciled
below) was $215.0 million.
- Production was 10.05 MMBoe or 111.6 MBoe/d and was 54%
oil. Production volumes were affected by the severe winter storm in
Texas during February 2021, which resulted in 14 days of
reduced production and delayed completions of new wells.
- Capital expenditures reflected continued capital
efficiencies with costs maintained at approximately $520 per lateral foot. Capital expenditures of
$147.6 million adjusted for increased
capital accruals of $37.4 million
totaled $185.0 million.
Chief Executive Officer Herb
Vogel comments: "While unprecedented first quarter weather
presented exceptional challenges, the SM Energy team prioritized
safety, collaborated with suppliers and we are back on track toward
achieving our long-term objectives. We remain focused on key
priorities of generating free cash flow, reducing absolute debt and
demonstrating top tier ESG stewardship, and we maintain our
full-year guidance for production, capital expenditures and
generating free cash flow."
FIRST QUARTER OF 2021
PRODUCTION:
|
|
|
|
|
|
|
Midland
Basin
|
South
Texas
|
Total
|
Oil (MBbl /
MBbl/d)
|
5,088 /
56.5
|
341 / 3.8
|
5,428 /
60.3
|
Natural Gas (MMcf /
MMcf/d)
|
10,560 /
117.3
|
10,981 /
122.0
|
21,542 /
239.4
|
NGLs (MBbl /
MBbl/d)
|
4 / -
|
1,026 /
11.4
|
1,030 /
11.4
|
Total (MBoe /
MBoe/d)
|
6,852 /
76.1
|
3,197 /
35.5
|
10,048 /
111.6
|
Note: Totals may
not calculate due to rounding.
|
|
|
- Total production volumes of 10.05 MMBoe or 111.6 MBoe/d were
down 19% compared with the prior year period and down 11%
sequentially. Production was 54% oil. Lower production volumes
resulted from:
-
- The impacts of severe winter weather in Texas during February
2021 that led to interruptions in third-party power supply
and third-party gas gathering, causing production shut-ins. The
Company experienced 14 days of reduced production.
- Storm related delays in the timing of planned well completions
as well as continued delays (into March) in the supply chain for
sand and technical services that pushed certain planned flowing
completions into April. No new wells were brought on production in
January or February.
- A planned decline in South
Texas due to the completion of only two new wells in the
second half of 2020.
REALIZED
PRICES:
|
|
|
|
|
|
|
Midland
Basin
|
South
Texas
|
Total (Pre/Post-hedge)
|
Oil
($/Bbl)
|
$56.24
|
$57.71
|
$56.33 /
$45.95
|
Natural Gas
($/Mcf)
|
$5.47
|
$2.90
|
$4.16 /
$2.28
|
NGLs
($/Bbl)
|
nm
|
$26.94
|
$26.93 /
$16.14
|
Per Boe
|
$50.21
|
$24.76
|
$42.11 /
$31.37
|
Note: Totals may not sum due to rounding
- The average realized price before the effect of hedges was
$42.11 per Boe and the average
realized price after the effect of hedges was $31.37 per Boe.
-
- Benchmark pricing for the quarter included NYMEX WTI at
$57.84/Bbl, NYMEX Henry Hub natural
gas at $2.69/MMBtu and Hart Composite
NGLs at $30.47/Bbl.
- The average realized price per Boe of $42.11 before the effect of hedges was up 47%
compared with the prior year period and up 48% sequentially.
- The effect of realized hedges was a loss of $10.74 per Boe, or $107.9
million. Natural gas hedge losses were magnified during the
Texas weather event as shut-in
supplies across the state caused multiple days of extreme spot
price spikes, up to more than $300
per MMBtu. The Company's natural gas hedge volumes exceeded
production volumes (due to shut-ins) for the month of February,
resulting in increased hedge losses.
For additional operating metrics and regional detail, please see
the Financial Highlights section below and the accompanying 1Q21
slide deck.
NET LOSS, LOSS PER SHARE AND NET CASH PROVIDED BY OPERATING
ACTIVITIES
First quarter 2021 net loss was $251.3
million, or $2.19 per diluted
common share, which compared with a net loss of $411.9 million, or $3.64 per diluted common share, in the same
period in 2020. The current period included a $344.7 million net derivative loss, while the
prior year period included a $989.8
million impairment, partially offset by a $545.3 million net derivative gain.
First quarter 2021 net cash provided by operating activities of
$105.6 million before net change in
working capital of ($51.4) million
totaled $157.1 million, which was
down 34% from $236.6 million in the
comparable prior year period. While the first quarter 2021
operating margin (before the effects of hedge settlements) was up
77% compared with the prior year period, the decline in cash flow
before net change in working capital was primarily due to an 18%
decline in daily production volumes and $107.9 million realized hedge loss.
ADJUSTED EBITDAX, ADJUSTED NET LOSS AND NET DEBT-TO-ADJUSTED
EBITDAX
The following paragraphs discuss non-GAAP measures including
Adjusted EBITDAX, adjusted net loss, adjusted net loss per diluted
share and net debt-to-Adjusted EBITDAX. Please reference the
definitions and reconciliations of these measures to the most
directly comparable GAAP financial measures at the end of this
release.
First quarter 2021 Adjusted EBITDAX was $215.0 million, down 25% from the same period in
2020. The decrease in Adjusted EBITDAX was predominantly due to
lower production volumes and the realized hedge loss.
First quarter 2021 adjusted net loss was $5.7 million, or $0.05 per diluted common share, which compares
with adjusted net loss of $5.6
million, or $0.05 per diluted
common share, for the same period in 2020.
At March 31, 2021, net
debt-to-Adjusted EBITDAX was 2.6 times.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL EXPENDITURES
On March 31, 2021, the outstanding
principal amount of the Company's long-term debt was $2.32 billion. Long-term debt was comprised of
$1.67 billion in unsecured senior
notes, $446.7 million in secured
senior notes, $65.5 million in
secured senior convertible notes, plus $135.0 million drawn on the Company's senior
secured revolving credit facility.
In March 2021, the Company's
borrowing base and commitments under its senior secured revolving
credit facility were reaffirmed by its lenders at $1.1 billion. At March 31,
2021, the Company's available liquidity was $965.0 million. The cash balance was
approximately zero. During the Spring 2021 redetermination process,
the Company did not request an extension of second lien
capacity.
First quarter 2021 capital expenditures of $147.6 million, adjusted for increased capital
accruals of $37.4 million, totaled
$185.0 million. During the quarter,
the Company drilled 13 net wells and completed 14 net wells in the
Midland Basin and drilled 5 net wells and completed 3 net wells in
South Texas. The Company fracture
stimulated two more wells than planned during March, and those
wells are expected to come on production mid-year.
COMMODITY DERIVATIVES
Commodity hedge positions as of April 29,
2021:
- OIL: Approximately 75-80% of expected 2Q-4Q oil production is
hedged to WTI at an average price of $40.66/Bbl.
- OIL, Midland Basin differential: Approximately 60-65% of
expected 2Q-4Q Midland Basin oil production is hedged to the local
price point at a positive $0.76/Bbl
basis.
- NATURAL GAS: Approximately 85% of expected 2Q-4Q natural gas
production is hedged. 38,659 BBtu is hedged to HSC at an average
price of $2.42/MMBtu, and 22,943 BBtu
is hedged to WAHA at an average price of $1.82/MMBtu.
- NGL hedges are by individual product and include propane and
normal butane swaps for the remainder of 2021.
A detailed schedule of these and other hedge positions are
provided in the 1Q21 accompanying slide deck.
GUIDANCE
- Full year 2021 guidance is unchanged.
- Second quarter 2021 guidance includes:
-
- Production 11.8-12.2 MMBoe or 130-134 MBoe/d. The second
quarter production range reflects timing of new wells being
turned-in-line.
- Capital expenditures of $230-240
million. Capital expenditures are weighted to the first half of
2021, taking advantage of lower contracted costs. Second quarter
capital anticipates approximately 20 net wells drilled and 50 net
flowing completions, which includes wells that were fracture
stimulated in the first quarter and will turn-in-line in the second
quarter.
SCHEDULE FOR FIRST QUARTER REPORTING
April 29, 2021 - In conjunction
with this release, the Company posts to its website a pre-recorded
webcast discussion, a written transcript of the webcast, and an
associated IR presentation. Please visit ir.sm-energy.com.
April 30, 2021 – Please join SM
Energy management at 8:00 a.m. Mountain
time/10:00 a.m. Eastern time
for the first quarter 2021 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
www.ir.sm-energy.com or by telephone. In order to join the live
conference call, please register at the link below for dial-in
information.
- Live Conference Call Registration:
http://www.directeventreg.com/registration/event/2889264
- Replay (conference ID 2889264) - Domestic toll
free/International: 800-585-8367/416-621-4642
The call replay will be available approximately one hour after
the call and until May 7, 2021.
UPCOMING CONFERENCE PARTICIPATION
- June 9, 2021 – Stifel 2021
Virtual Cross Sector Insight Conference. President and Chief
Executive Officer Herb Vogel will be
present at 3:20 p.m. Eastern time.
This event 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.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of securities laws. The words "assumes," "anticipate,"
"estimate," "expect," "forecast," "generate," "guidance,"
"implied," "maintain," "plan," "project," "objectives," "outlook,"
"sustainable," "target," "will" and similar expressions are
intended to identify forward-looking statements.
Forward-looking statements in this release include, among other
things, certain guidance for the full year and second quarter 2021,
including second quarter capital expenditures and production, and
the timing of bringing newly fracture stimulated wells on
production. 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.
Future results may be impacted by the risks 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, specifically the 2020 Form 10-K. 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 NGLs in the state of Texas. 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 CONTACTS
Jennifer Martin Samuels,
jsamuels@sm-energy.com, 303-864-2507
Jeremy Kline, jkline@sm-energy.com,
303-863-4313
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
March 31,
2021
|
|
Production
Data
|
|
|
|
|
|
|
For the Three
Months Ended March 31,
|
|
2021
|
|
2020
|
|
Percent
Change
|
Realized sales
price (before the effects of derivative
settlements):
|
|
|
|
|
|
Oil (per
Bbl)
|
$
|
56.33
|
|
|
$
|
45.96
|
|
|
23
|
%
|
Gas (per
Mcf)
|
$
|
4.16
|
|
|
$
|
1.54
|
|
|
170
|
%
|
NGLs (per
Bbl)
|
$
|
26.93
|
|
|
$
|
13.62
|
|
|
98
|
%
|
Equivalent (per
Boe)
|
$
|
42.11
|
|
|
$
|
28.64
|
|
|
47
|
%
|
Realized sales
price (including the effects of derivative
settlements):
|
|
|
|
|
|
Oil (per
Bbl)
|
$
|
45.95
|
|
|
$
|
54.40
|
|
|
(16)
|
%
|
Gas (per
Mcf)
|
$
|
2.28
|
|
|
$
|
2.09
|
|
|
9
|
%
|
NGLs (per
Bbl)
|
$
|
16.14
|
|
|
$
|
16.89
|
|
|
(4)
|
%
|
Equivalent (per
Boe)
|
$
|
31.37
|
|
|
$
|
34.58
|
|
|
(9)
|
%
|
Net production
volumes: (1)
|
|
|
|
|
|
Oil (MMBbl)
|
5.4
|
|
|
6.3
|
|
|
(14)
|
%
|
Gas (Bcf)
|
21.5
|
|
|
26.5
|
|
|
(19)
|
%
|
NGLs
(MMBbl)
|
1.0
|
|
|
1.6
|
|
|
(36)
|
%
|
MMBoe
|
10.0
|
|
|
12.4
|
|
|
(19)
|
%
|
Average net daily
production: (1)
|
|
|
|
|
|
Oil
(MBbls/d)
|
60.3
|
|
|
69.8
|
|
|
(14)
|
%
|
Gas
(MMcf/d)
|
239.4
|
|
|
291.2
|
|
|
(18)
|
%
|
NGLs
(MBbls/d)
|
11.4
|
|
|
17.6
|
|
|
(35)
|
%
|
MBoe/d
|
111.6
|
|
|
135.9
|
|
|
(18)
|
%
|
Per Boe
data:
|
|
|
|
|
|
Realized price (before
the effects of derivative settlements)
|
$
|
42.11
|
|
|
$
|
28.64
|
|
|
47
|
%
|
Lease operating
expense
|
4.64
|
|
|
4.75
|
|
|
(2)
|
%
|
Transportation
costs
|
2.94
|
|
|
3.11
|
|
|
(5)
|
%
|
Production
taxes
|
1.94
|
|
|
1.20
|
|
|
62
|
%
|
Ad valorem tax
expense
|
0.52
|
|
|
0.60
|
|
|
(13)
|
%
|
General and
administrative (2)
|
2.46
|
|
|
2.22
|
|
|
11
|
%
|
Operating margin
(before the effects of derivative settlements)
|
29.61
|
|
|
16.76
|
|
|
77
|
%
|
Derivative settlement
gain (loss)
|
(10.74)
|
|
|
5.94
|
|
|
(281)
|
%
|
Operating margin
(including the effects of derivative settlements)
|
$
|
18.87
|
|
|
$
|
22.70
|
|
|
(17)
|
%
|
Depletion,
depreciation, amortization, and asset retirement obligation
liability accretion
|
$
|
16.62
|
|
|
$
|
18.88
|
|
|
(12)
|
%
|
|
|
|
|
|
|
(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 $0.37 for the three
months ended March 31, 2021, and 2020,
respectively.
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
March 31,
2021
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
(in thousands, except
share data)
|
March
31,
|
|
December
31,
|
ASSETS
|
2021
|
|
2020
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
—
|
|
|
$
|
10
|
|
Accounts
receivable
|
199,631
|
|
|
162,455
|
|
Derivative
assets
|
20,859
|
|
|
31,203
|
|
Prepaid expenses and
other
|
9,792
|
|
|
10,001
|
|
Total current
assets
|
230,282
|
|
|
203,669
|
|
Property and
equipment (successful efforts method):
|
|
|
|
Proved oil and gas
properties
|
8,735,538
|
|
|
8,608,522
|
|
Accumulated depletion,
depreciation, and amortization
|
(5,051,876)
|
|
|
(4,886,973)
|
|
Unproved oil and gas
properties
|
705,822
|
|
|
714,602
|
|
Wells in
progress
|
291,146
|
|
|
233,498
|
|
Other property and
equipment, net of accumulated depreciation of $64,242 and
$63,662,
respectively
|
31,986
|
|
|
32,217
|
|
Total property and
equipment, net
|
4,712,616
|
|
|
4,701,866
|
|
Noncurrent
assets:
|
|
|
|
Derivative
assets
|
13,567
|
|
|
23,150
|
|
Other noncurrent
assets
|
59,180
|
|
|
47,746
|
|
Total noncurrent
assets
|
72,747
|
|
|
70,896
|
|
Total
assets
|
$
|
5,015,645
|
|
|
$
|
4,976,431
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
394,226
|
|
|
$
|
371,670
|
|
Derivative
liabilities
|
371,802
|
|
|
200,189
|
|
Other current
liabilities
|
10,591
|
|
|
11,880
|
|
Total current
liabilities
|
776,619
|
|
|
583,739
|
|
Noncurrent
liabilities:
|
|
|
|
Revolving credit
facility
|
135,000
|
|
|
93,000
|
|
Senior Notes,
net
|
2,125,651
|
|
|
2,121,319
|
|
Asset retirement
obligations
|
84,206
|
|
|
83,325
|
|
Derivative
liabilities
|
67,595
|
|
|
22,331
|
|
Other noncurrent
liabilities
|
56,902
|
|
|
56,557
|
|
Total noncurrent
liabilities
|
2,469,354
|
|
|
2,376,532
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.01
par value - authorized: 200,000,000 shares; issued and
outstanding: 114,742,304 shares as of March 31, 2021, and December
31, 2020
|
1,147
|
|
|
1,147
|
|
Additional paid-in
capital
|
1,833,651
|
|
|
1,827,914
|
|
Retained earnings
(deficit)
|
(51,719)
|
|
|
200,697
|
|
Accumulated other
comprehensive loss
|
(13,407)
|
|
|
(13,598)
|
|
Total stockholders'
equity
|
1,769,672
|
|
|
2,016,160
|
|
Total liabilities
and stockholders' equity
|
$
|
5,015,645
|
|
|
$
|
4,976,431
|
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
March 31,
2021
|
|
Condensed
Consolidated Statements of Operations
|
(in thousands, except
per share data)
|
For the Three
Months Ended
March 31,
|
|
2021
|
|
2020
|
Operating revenues
and other income:
|
|
|
|
Oil, gas, and NGL
production revenue
|
$
|
423,165
|
|
|
$
|
354,233
|
|
Other operating
income
|
20,681
|
|
|
1,501
|
|
Total operating
revenues and other income
|
443,846
|
|
|
355,734
|
|
Operating
expenses:
|
|
|
|
Oil, gas, and NGL
production expense
|
100,930
|
|
|
119,552
|
|
Depletion,
depreciation, amortization, and asset retirement obligation
liability accretion
|
166,960
|
|
|
233,489
|
|
Exploration
(1)
|
9,323
|
|
|
11,349
|
|
Impairment
|
8,750
|
|
|
989,763
|
|
General and
administrative (1)
|
24,714
|
|
|
27,447
|
|
Net derivative (gain)
loss (2)
|
344,689
|
|
|
(545,340)
|
|
Other operating
expense, net
|
(599)
|
|
|
566
|
|
Total operating
expenses
|
654,767
|
|
|
836,826
|
|
Loss from
operations
|
(210,921)
|
|
|
(481,092)
|
|
Interest
expense
|
(39,871)
|
|
|
(41,512)
|
|
Gain on
extinguishment of debt
|
—
|
|
|
12,195
|
|
Other non-operating
expense, net
|
(371)
|
|
|
(494)
|
|
Loss before income
taxes
|
(251,163)
|
|
|
(510,903)
|
|
Income tax (expense)
benefit
|
(106)
|
|
|
99,008
|
|
Net
loss
|
$
|
(251,269)
|
|
|
$
|
(411,895)
|
|
|
|
|
|
Basic
weighted-average common shares outstanding
|
114,759
|
|
|
113,009
|
|
Diluted
weighted-average common shares outstanding
|
114,759
|
|
|
113,009
|
|
Basic net loss per
common share
|
$
|
(2.19)
|
|
|
$
|
(3.64)
|
|
Diluted net loss per
common share
|
$
|
(2.19)
|
|
|
$
|
(3.64)
|
|
Dividends per common
share
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
|
|
|
(1)
Non-cash stock-based compensation included in:
|
|
|
|
Exploration
expense
|
$
|
1,284
|
|
|
$
|
957
|
|
General and
administrative expense
|
4,453
|
|
|
4,604
|
|
Total non-cash
stock-based compensation
|
$
|
5,737
|
|
|
$
|
5,561
|
|
|
|
|
|
(2)
The net derivative (gain) loss line item consists of the
following:
|
|
|
|
Derivative settlement
(gain) loss
|
$
|
107,885
|
|
|
$
|
(73,437)
|
|
(Gain) loss on fair
value changes
|
236,804
|
|
|
(471,903)
|
|
Total net derivative
(gain) loss
|
$
|
344,689
|
|
|
$
|
(545,340)
|
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
March 31,
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Stockholders' Equity
|
(in thousands, except
share data and dividends per share)
|
|
|
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
(Deficit)
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders'
Equity
|
|
Common
Stock
|
|
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|
Balances, December
31, 2020
|
114,742,304
|
|
|
$
|
1,147
|
|
|
$
|
1,827,914
|
|
|
$
|
200,697
|
|
|
$
|
(13,598)
|
|
|
$
|
2,016,160
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(251,269)
|
|
|
—
|
|
|
(251,269)
|
|
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191
|
|
|
191
|
|
Cash dividends
declared, $0.01 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,147)
|
|
|
—
|
|
|
(1,147)
|
|
Stock-based
compensation expense
|
—
|
|
|
—
|
|
|
5,737
|
|
|
—
|
|
|
—
|
|
|
5,737
|
|
Balances, March
31, 2021
|
114,742,304
|
|
|
$
|
1,147
|
|
|
$
|
1,833,651
|
|
|
$
|
(51,719)
|
|
|
$
|
(13,407)
|
|
|
$
|
1,769,672
|
|
|
|
|
Additional
Paid-in
Capital
|
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders'
Equity
|
|
Common
Stock
|
|
|
Retained
Earnings
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|
Balances, December
31, 2019
|
112,987,952
|
|
|
$
|
1,130
|
|
|
$
|
1,791,596
|
|
|
$
|
967,587
|
|
|
$
|
(11,319)
|
|
|
$
|
2,748,994
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(411,895)
|
|
|
—
|
|
|
(411,895)
|
|
Other comprehensive
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|
190
|
|
Cash dividends
declared, $0.01 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,130)
|
|
|
—
|
|
|
(1,130)
|
|
Issuance of common
stock upon vesting of
RSUs, net of shares used for tax
withholdings
|
730
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
Stock-based
compensation expense
|
—
|
|
|
—
|
|
|
5,561
|
|
|
—
|
|
|
—
|
|
|
5,561
|
|
Balances, March
31, 2020
|
112,988,682
|
|
|
$
|
1,130
|
|
|
$
|
1,797,154
|
|
|
$
|
554,562
|
|
|
$
|
(11,129)
|
|
|
$
|
2,341,717
|
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
March 31,
2021
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
(in
thousands)
|
For the Three
Months Ended
March 31,
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
|
(251,269)
|
|
|
$
|
(411,895)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depletion,
depreciation, amortization, and asset retirement obligation
liability accretion
|
166,960
|
|
|
233,489
|
|
Impairment
|
8,750
|
|
|
989,763
|
|
Stock-based
compensation expense
|
5,737
|
|
|
5,561
|
|
Net derivative (gain)
loss
|
344,689
|
|
|
(545,340)
|
|
Derivative settlement
gain (loss)
|
(107,885)
|
|
|
73,437
|
|
Amortization of debt
discount and deferred financing costs
|
4,723
|
|
|
3,992
|
|
Gain on extinguishment
of debt
|
—
|
|
|
(12,195)
|
|
Deferred income
taxes
|
(52)
|
|
|
(99,347)
|
|
Other, net
|
(14,592)
|
|
|
(816)
|
|
Net change in working
capital
|
(51,437)
|
|
|
(18,517)
|
|
Net cash provided
by operating activities
|
105,624
|
|
|
218,132
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(147,563)
|
|
|
(139,306)
|
|
Other
|
(71)
|
|
|
—
|
|
Net cash used in
investing activities
|
(147,634)
|
|
|
(139,306)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
revolving credit facility
|
440,000
|
|
|
425,500
|
|
Repayment of revolving
credit facility
|
(398,000)
|
|
|
(476,000)
|
|
Cash paid to
repurchase Senior Notes
|
—
|
|
|
(28,318)
|
|
Other
|
—
|
|
|
(3)
|
|
Net cash provided
by (used in) financing activities
|
42,000
|
|
|
(78,821)
|
|
|
|
|
|
Net change in cash,
cash equivalents, and restricted cash
|
(10)
|
|
|
5
|
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
10
|
|
|
10
|
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
|
—
|
|
|
$
|
15
|
|
|
|
|
|
Supplemental
schedule of additional cash flow information and non-cash
activities:
|
|
|
|
Operating
activities:
|
|
|
|
Cash paid for
interest, net of capitalized interest
|
$
|
(53,449)
|
|
|
$
|
(47,469)
|
|
|
|
|
|
Investing
activities:
|
|
|
|
Increase in capital
expenditure accruals and other
|
$
|
37,409
|
|
|
$
|
16,802
|
|
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. A non-GAAP measure 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, gains
and losses on extinguishment of debt, 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 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
2020 Form 10-K and first quarter 2021 Form 10-Q 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,
gains and losses on extinguishment of debt, and accruals for
non-recurring matters.
Net Debt: The total principal amount of
outstanding senior secured notes and senior unsecured notes plus
amounts drawn on the revolving credit facility (also referred to as
total funded debt) less cash and cash equivalents.
Free cash flow: Free cash flow is calculated as
net cash provided by operating activities before net change in
working capital less capital expenditures before increase
(decrease) in capital expenditure accruals and other.
Net debt-to-Adjusted EBITDAX: Net
debt-to-Adjusted EBITDAX is calculated as Net Debt (defined above)
divided by Adjusted EBITDAX (defined above). A variation of
this calculation is a financial covenant under the Company's Credit
Agreement for its revolving credit facility beginning in the fourth
quarter of 2018.
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
March 31,
2021
|
|
Adjusted EBITDAX
Reconciliation (1)
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
Reconciliation of net
loss (GAAP) and net cash provided by operating activities (GAAP)
to
Adjusted EBITDAX (non-GAAP)
|
For the Three
Months Ended
March 31,
|
|
2021
|
|
2020
|
Net loss
(GAAP)
|
$
|
(251,269)
|
|
|
$
|
(411,895)
|
|
Interest
expense
|
39,871
|
|
|
41,512
|
|
Income tax expense
(benefit)
|
106
|
|
|
(99,008)
|
|
Depletion,
depreciation, amortization, and asset retirement obligation
liability accretion
|
166,960
|
|
|
233,489
|
|
Exploration
(2)
|
8,039
|
|
|
10,392
|
|
Impairment
|
8,750
|
|
|
989,763
|
|
Stock-based
compensation expense
|
5,737
|
|
|
5,561
|
|
Net derivative (gain)
loss
|
344,689
|
|
|
(545,340)
|
|
Derivative settlement
gain (loss)
|
(107,885)
|
|
|
73,437
|
|
Gain on extinguishment
of debt
|
—
|
|
|
(12,195)
|
|
Other, net
|
(10)
|
|
|
333
|
|
Adjusted EBITDAX
(non-GAAP)
|
$
|
214,988
|
|
|
$
|
286,049
|
|
Interest
expense
|
(39,871)
|
|
|
(41,512)
|
|
Income tax (expense)
benefit
|
(106)
|
|
|
99,008
|
|
Exploration
(2)
|
(8,039)
|
|
|
(10,392)
|
|
Amortization of debt
discount and deferred financing costs
|
4,723
|
|
|
3,992
|
|
Deferred income
taxes
|
(52)
|
|
|
(99,347)
|
|
Other, net
|
(14,582)
|
|
|
(1,149)
|
|
Net change in working
capital
|
(51,437)
|
|
|
(18,517)
|
|
Net cash provided
by operating activities (GAAP)
|
$
|
105,624
|
|
|
$
|
218,132
|
|
|
|
|
|
(1) See "Definitions of non-GAAP
Measures as Calculated by the Company" above.
|
(2)
Stock-based compensation expense is a component of the exploration
expense and general and administrative expense line items on the
accompanying unaudited
condensed consolidated statements of operations. Therefore,
the exploration line items shown in the reconciliation above will
vary from the amount shown on the
accompanying unaudited condensed consolidated statements of
operations for the component of stock-based compensation expense
recorded to exploration expense.
|
SM ENERGY
COMPANY
|
FINANCIAL
HIGHLIGHTS (UNAUDITED)
|
March 31,
2021
|
|
Adjusted Net Loss
Reconciliation (1)
|
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
Reconciliation of net
loss (GAAP) to adjusted net loss (non-GAAP):
|
For the Three
Months Ended
March 31,
|
|
2021
|
|
2020
|
Net loss
(GAAP)
|
$
|
(251,269)
|
|
|
$
|
(411,895)
|
|
Net derivative (gain)
loss
|
344,689
|
|
|
(545,340)
|
|
Derivative settlement
gain (loss)
|
(107,885)
|
|
|
73,437
|
|
Impairment
|
8,750
|
|
|
989,763
|
|
Gain on extinguishment
of debt
|
—
|
|
|
(12,195)
|
|
Other, net
(2)
|
17
|
|
|
386
|
|
Tax effect of
adjustments (3)
|
(53,289)
|
|
|
(109,813)
|
|
Valuation allowance on
deferred tax assets
|
53,289
|
|
|
10,017
|
|
Adjusted net loss
(non-GAAP)
|
$
|
(5,698)
|
|
|
$
|
(5,640)
|
|
|
|
|
|
Diluted net loss
per common share (GAAP)
|
$
|
(2.19)
|
|
|
$
|
(3.64)
|
|
Net derivative (gain)
loss
|
3.00
|
|
|
(4.83)
|
|
Derivative settlement
gain (loss)
|
(0.94)
|
|
|
0.65
|
|
Impairment
|
0.08
|
|
|
8.76
|
|
Gain on extinguishment
of debt
|
—
|
|
|
(0.11)
|
|
Other, net
(2)
|
—
|
|
|
—
|
|
Tax effect of
adjustments (3)
|
(0.46)
|
|
|
(0.97)
|
|
Valuation allowance on
deferred tax assets
|
0.46
|
|
|
0.09
|
|
Adjusted net loss
per diluted common share (non-GAAP)
|
$
|
(0.05)
|
|
|
$
|
(0.05)
|
|
|
|
|
|
Basic
weighted-average common shares outstanding
|
114,759
|
|
|
113,009
|
|
Diluted
weighted-average common shares outstanding
|
114,759
|
|
|
113,009
|
|
|
|
|
|
Note: Amounts may not
calculate due to rounding.
|
|
|
|
|
|
|
|
(1) See "Definitions of non-GAAP
Measures as Calculated by the Company" above.
|
(2) For each of the three months
ended March 31, 2021, and 2020, other adjustments related to
bad debt expense and impairments of other property. Other
adjustments for the three months ended March 31, 2020, also
includes impairment of materials inventory.
|
(3) The tax effect of adjustments for
each of the three months ended March 31, 2021, and 2020, 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)
|
March 31,
2021
|
|
Reconciliation of
Total Long-Term Debt to Net Debt (1)
|
|
(in
thousands)
|
|
|
As of March 31,
2021
|
Senior Secured Notes
(2)
|
$
|
512,160
|
|
Senior Unsecured
Notes (2)
|
1,674,581
|
|
Revolving credit
facility (2)
|
135,000
|
|
Total funded
debt
|
2,321,741
|
|
Less: Cash and cash
equivalents
|
—
|
|
Net
Debt
|
$
|
2,321,741
|
|
|
|
(1) See "Definitions of non-GAAP
Measures as Calculated by the Company" above.
|
(2) Amounts are from Note 5 -
Long-term Debt in Part I, Item I of the Company's Form 10-Q for the
three months ended March 31, 2021.
|
Free Cash Flow
(1)
|
|
|
|
(in
thousands)
|
|
|
|
|
For the Three
Months Ended
March 31,
|
|
2021
|
|
2020
|
Net cash provided by
operating activities (GAAP)
|
$
|
105,624
|
|
|
$
|
218,132
|
|
Net change in working
capital
|
51,437
|
|
|
18,517
|
|
Cash flow from
operations before net change in working capital
|
$
|
157,061
|
|
|
$
|
236,649
|
|
|
|
|
|
Capital expenditures
(GAAP)
|
$
|
147,563
|
|
|
$
|
139,306
|
|
Increase in capital
expenditure accruals and other
|
37,409
|
|
|
16,802
|
|
Capital expenditures
before accruals and other
|
$
|
184,972
|
|
|
$
|
156,108
|
|
|
|
|
|
Free cash
flow
|
$
|
(27,911)
|
|
|
$
|
80,541
|
|
|
|
|
|
(1) See "Definitions of non-GAAP
Measures as Calculated by the Company" above.
|
|
|
|
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SOURCE SM Energy Company