With producing acreage in the Midland basin and Maverick basin, SM Energy (ticker: SM) is zoning in on its most lucrative acreage. SM holds approximately 88,000 net acres in the Midland basin and another approximately 167,000 net acres in the Maverick basin.
SM closed the sale of non-operated assets within the Eagle Ford for $800 million gross. Venado EF L.P. purchased the assets in November, 2016 with a closing date in March, 2017. The company added the proceeds of the divestiture to its capital budget for 2017.
Within the first quarter of 2017, the company produced a total of 9.7 MMBOE, not including the production from the assets it sold in the previous quarter, which closed in Q1, 2017. SM drilled 26 net wells and completed 33 net wells during Q1, and spent $192.9 million in capital costs.
Permian
Production out of SM’s Permian assets totaled 2.1 MMBOE during Q1, and was comprised of 77% oil. The production grew by 55% since Q4, 2016. Without giving a number, the company noted that its capital budget is concentrated in the Permian basin. As of early May, SM was running six drilling rigs in the Permian basin as a whole, with two in its Sweetie Peck location, and the remaining four in its Rockstar assets. The company noted that it was also running a vertical rig strictly for data acquisition.
Three completion crews are also active in the Permian basin.
Eagle Ford
A significant proportion of SM’s total production was sourced from the company’s Eagle Ford assets, which produced 7.3 MMBOE during Q1. One drilling rig and one completion crew were active in the region, as of May. As of June, the company had completed 31 wells in the Eagle Ford, and noted that it currently had plans to complete a total of 39 wells by the end of 2017.
Plans for 2017
SM reported that it expected total production for 2017 to be between 43.2 and 46.2 MMBOE and that its capital expenditure will total approximately $875 million.
SM Energy is presenting at EnerCom’s The Oil & Gas Conference® 22
SM will be a presenting company at the upcoming EnerCom conference in Denver, Colorado—The Oil & Gas Conference® 22.
The conference is EnerCom’s 22nd Denver-based oil and gas focused investor conference, bringing together publicly traded E&Ps and oilfield service and technology companies with institutional investors. The conference will be at the Denver Downtown Westin Hotel, August 13-17, 2017. To register for The Oil & Gas Conference® 22 please visit the conference website.
