SM Energy Announces Sales Agreements on Two Divestiture Packages with Proceeds Totaling $172.5 Million
SM Energy Company (NYSE: SM) today announced that it has entered into
definitive agreements for the sale of two separate packages of non-core
assets for a combined price of $172.5 million. The transactions are
expected to close late in the third quarter of 2016 with expected cash
proceeds subject to customary purchase price adjustments. The closings
of these transactions are subject to the satisfaction of customary
closing conditions, and there can be no assurance that either of these
transactions will close on the expected closing dates or at all.
One package is composed primarily of waterflood assets in New Mexico and
the second package includes producing assets in North Dakota and
Montana. Year-end 2015 net proved reserves associated with these assets
totaled approximately 9.5 MMBoe, 87% oil and 13% natural gas and was all
proved developed. Second quarter of 2016 net production from these
assets was approximately 3,300 Boe/d and was 82% oil and 18% natural
gas. Net acreage associated with these sales is approximately 79,000
acres.
President and Chief Executive Officer Jay Ottoson comments: “These
transactions were well-timed and well executed. We are committed to
improving liquidity and debt metrics while managing our portfolio to
focus on our highest return assets. Proceeds from these sales will be
applied to the outstanding balance on our revolving credit facility and
for general corporate purposes.”
These property sales make-up the majority of non-core asset sales
anticipated during 2016, as announced in February of 2016.
RBC Richardson Barr and UBS Securities LLC advised the Company in the
divestiture processes for New Mexico and Williston Basin, respectively.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of
securities laws. 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, expectations
regarding the proceeds, receipt timing and expected use of funds from
asset sales. 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, 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 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 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 2015 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.
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Copyright Business Wire 2016
Source: Business Wire
(August 1, 2016 - 6:00 AM EDT)
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