Current SM Stock Info

Out of the Williston

Midland- and Eagle Ford-focused SM Energy Company (ticker: SM) sold its remaining assets in the Williston Basin and third-party operated assets in Upton County, Texas. The combined sale generated $292.3 million, but the buyers have not been disclosed.

President and CEO Jay Ottoson said, “We are committed to our strategy to focus on development of our core top-tier Midland Basin and Eagle Ford assets and improving our balance sheet by reducing debt. This is a significant step on both those fronts. In combination with the recent divestiture of our non-core Powder River Basin assets, year-to-date we have announced the expected divestiture of approximately $792 million of non-core assets, which results in an expected reduction in net debt pro forma for year-end 2017 by 30%.”

The assets expected to be sold in Divide County include approximately 119,400 predominantly contiguous net acres, 28.8 MMBOE net proved reserves as of year-end 2017 (52% PUD), with December 2017 net production of approximately 6,100 BOEPD (83% oil).

The assets expected to be sold in Upton County include a 60% working interest in third-party operated assets, approximately 5,400 net acres, 1.6 MMBOE net proved reserves as of year-end 2017 (0% PUD), with December 2017 net production of approximately 1,025 BOEPD (72% oil).

The transactions are each expected to close in the second quarter of 2018, and each have an effective date of January 1, 2018. The company plans to use the expected sale proceeds for general corporate purposes, including debt reduction.

The estimated effect on 2018 production from both transactions is a reduction of 1.2 MMBOE, 81% oil and 19% natural gas. The company will no longer record production associated with its Powder River Basin divestiture as of the second quarter of 2018.


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