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SM Energy(SM) - 2024 Q3 - Quarterly Results
SMSM Energy(SM)2024-10-31 20:16

Production and Operations - Net production for Q3 2024 was 15.6 MMBoe (170.0 MBoe/d), with 46% oil (77.4 MBbl/d), exceeding guidance due to strong performance in the Midland Basin and South Texas[2] - The company expects Q4 2024 oil and total production volumes to grow by 40% and 25%, respectively, driven by the integration of Utah operations[4] - Full year 2024 net production guidance is 62.2-63.5 MMBoe, or 170-174 MBoe/d, including Uinta Basin operations[15] - Oil production is expected to account for 47% of total production in 2024, with higher oil content from Uinta Basin in Q4[16] - Q4 2024 net production guidance is 18.9-20.2 MMBoe, or 205-220 MBoe/d, with 51% oil content[16] - Net production volumes for oil in Q3 2024 were 7.1 MMBbl, an 8% increase from Q2 2024 and a 15% increase from Q3 2023[33] - Average net daily production for oil in Q3 2024 was 77.4 MBbl per day, a 6% increase from Q2 2024 and a 15% increase from Q3 2023[33] Financial Performance - Net income for Q3 2024 was 240.5million,or240.5 million, or 2.09 per diluted share, with Adjusted EBITDAX of 481.5million,drivenbystrongoilproductionandloweroperatingcosts[2]−AdjustedfreecashflowforQ32024was481.5 million, driven by strong oil production and lower operating costs[2] - Adjusted free cash flow for Q3 2024 was 129.8 million, up 32% from Q2 2024[2] - Net income for the three months ended September 30, 2024, was 240.52million,comparedto240.52 million, compared to 222.34 million in the same period in 2023[24] - Diluted net income per common share for the nine months ended September 30, 2024, was 5.03,upfrom5.03, up from 4.75 in the same period in 2023[24] - Net income for the nine months ended September 30, 2024, was 582.02million,comparedto582.02 million, compared to 570.77 million in the same period in 2023[24] - Net income for Q3 2024 was 240.5million,comparedto240.5 million, compared to 222.3 million in Q3 2023[29] - Adjusted EBITDAX for the three months ended September 30, 2024, was 481.5million,comparedto481.5 million, compared to 475.6 million in the same period in 2023[35] - Adjusted net income for the three months ended September 30, 2024, was 186.4million,comparedto186.4 million, compared to 205.0 million in the same period in 2023[37] - Net cash provided by operating activities for the nine months ended September 30, 2024, was 1.20billion,comparedto1.20 billion, compared to 1.10 billion in the same period in 2023[42] - Adjusted free cash flow for the three months ended September 30, 2024, was 129.8million,downfrom129.8 million, down from 207.7 million in the same period in 2023[42] Capital Expenditures and Investments - Q3 2024 capital expenditures totaled 290.4million,with37netwellsdrilledand35netflowingcompletionsadded[7]−Fullyear2024capitalexpendituresareprojectedtobe290.4 million, with 37 net wells drilled and 35 net flowing completions added[7] - Full year 2024 capital expenditures are projected to be 1.24-1.26billion,with137netwellsdrilledand134completed[16]−Q42024capitalexpendituresareexpectedtorangebetween1.26 billion, with 137 net wells drilled and 134 completed[16] - Q4 2024 capital expenditures are expected to range between 320-340million,with40netwellsdrilledand36turned−in−line[16]−CapitalexpendituresforQ32024were340 million, with 40 net wells drilled and 36 turned-in-line[16] - Capital expenditures for Q3 2024 were 302.1 million, compared to 216.7millioninQ32023[29]−CapitalexpendituresfortheninemonthsendedSeptember30,2024,were216.7 million in Q3 2023[29] - Capital expenditures for the nine months ended September 30, 2024, were 957.2 million, up from 766.8millioninthesameperiodin2023[42]AcquisitionsandDebt−Thecompanycompleteda766.8 million in the same period in 2023[42] Acquisitions and Debt - The company completed a 2.1 billion acquisition of an 80% interest in the Uinta Basin, adding 63,300 net acres and high oil content production, expected to be accretive to financial metrics[2] - The company issued 1.5billioninseniornotestofundtheUintaBasinAcquisitions,withlong−termdebtat1.5 billion in senior notes to fund the Uinta Basin Acquisitions, with long-term debt at 2.93 billion post-acquisition[11] - Net debt-to-Adjusted EBITDAX stood at 0.5 times as of September 30, 2024[7] - Total principal amount of debt as of September 30, 2024, was 2.74billion,withnetdebtat2.74 billion, with net debt at 1.00 billion[41] - Net cash provided by financing activities for Q3 2024 was 1.098billion,drivenby1.098 billion, driven by 1.477 billion in net proceeds from Senior Notes[29] - A 102.0milliondepositrelatedtotheUintaBasinAcquisitionswasheldinathird−partyescrowaccountasofSeptember30,2024[31]HedgingandDerivatives−ForQ42024,40102.0 million deposit related to the Uinta Basin Acquisitions was held in a third-party escrow account as of September 30, 2024[31] Hedging and Derivatives - For Q4 2024, 40% of expected oil production is hedged at an average price of 72.08/Bbl to 78.27/Bbl,and2078.27/Bbl, and 20% of natural gas production is hedged at 3.32/MMBtu[12] - Net derivative (gain) loss for the three months ended September 30, 2024, was (86.28)million,comparedto(86.28) million, compared to 75.36 million in the same period in 2023[24] - Net derivative settlement gain in Q3 2024 was 1.05perBoe,a91.05 per Boe, a 9% decrease from Q2 2024 but a 5,350% increase from Q3 2023[33] Shareholder Returns and Equity - The company returned 20.6 million to stockholders through dividends in Q3 2024 and has repurchased 10.1 million shares since September 2022, returning 521.3millionintotal[10]−Totalstockholders′equityasofSeptember30,2024,was521.3 million in total[10] - Total stockholders' equity as of September 30, 2024, was 4.06 billion, up from 3.62billionasofDecember31,2023[26]−NetcashdividendsdeclaredpercommonshareforthethreemonthsendedSeptember30,2024,were3.62 billion as of December 31, 2023[26] - Net cash dividends declared per common share for the three months ended September 30, 2024, were 0.20, compared to 0.15inthesameperiodin2023[24]−Thecompanyrepurchased0.15 in the same period in 2023[24] - The company repurchased 97.2 million worth of common stock under its Stock Repurchase Program in Q3 2023[28] - The company paid 20.6millionindividendsinQ32024,upfrom20.6 million in dividends in Q3 2024, up from 17.8 million in Q3 2023[29] Costs and Expenses - Q4 2024 LOE is projected to be 4.90−4.90-5.10 per Boe, transportation expense 4.30−4.30-4.60 per Boe, and ad valorem and production taxes 2.40−2.40-2.50 per Boe[16] - Q4 2024 G&A expenses, including non-cash compensation, are expected to be 35−35-38 million[16] - Lease operating expense per Boe in Q3 2024 was 4.73,a24.73, a 2% decrease from Q2 2024 and a 7% decrease from Q3 2023[33] - Depletion, depreciation and amortization expenses for Q3 2024 were 202.9 million, compared to 189.4millioninQ32023[29]−Totalnon−cashstock−basedcompensationfortheninemonthsendedSeptember30,2024,was189.4 million in Q3 2023[29] - Total non-cash stock-based compensation for the nine months ended September 30, 2024, was 17.39 million, compared to 14.52millioninthesameperiodin2023[24]−Stock−basedcompensationexpenseforthethreemonthsendedSeptember30,2024,was14.52 million in the same period in 2023[24] - Stock-based compensation expense for the three months ended September 30, 2024, was 6.59 million[26] Cash and Liquidity - As of September 30, 2024, the company's cash and cash equivalents were 1,735,313thousand,upfrom1,735,313 thousand, up from 616,164 thousand at the end of 2023[23] - Total assets as of September 30, 2024 were 8,027,772thousand,comparedto8,027,772 thousand, compared to 6,379,985 thousand at the end of 2023[23] - Retained earnings increased to 2,570,108thousandasofSeptember30,2024,upfrom2,570,108 thousand as of September 30, 2024, up from 2,052,279 thousand at the end of 2023[23] - Cash, cash equivalents and restricted cash at the end of Q3 2024 was 1.837billion,upfrom1.837 billion, up from 402.0 million at the end of Q3 2023[29] - Total cash provided by operating activities for Q3 2024 was 452.3million,upfrom452.3 million, up from 383.0 million in Q3 2023[29] Revenue and Sales - Oil, gas, and NGL production revenue for the three months ended September 30, 2024, was 642.38million,comparedto642.38 million, compared to 639.70 million in the same period in 2023[24] - Total operating revenues and other income for the nine months ended September 30, 2024, reached 1.84billion,upfrom1.84 billion, up from 1.77 billion in the same period in 2023[24] - Realized sales price for oil before derivative settlements was $74.72 per Bbl in Q3 2024, a 7% decrease from Q2 2024 and an 8% decrease from Q3 2023[33] Financial Metrics and Definitions - Adjusted EBITDAX is calculated as net income before interest expense, interest income, income taxes, depletion, depreciation, amortization, and other specific items, providing a performance measure for the company's ability to generate funds for exploration, development, acquisitions, and debt servicing[32] - Adjusted free cash flow is calculated as net cash provided by operating activities before net change in working capital less capital expenditures, representing liquidity to fund discretionary obligations such as debt reduction or business expansion[32] - Adjusted net income and Adjusted net income per diluted common share exclude certain non-recurring items to evaluate the company's ongoing operational results and trends[32] - Net debt is calculated as total principal amount of outstanding senior notes plus amounts drawn on the revolving credit facility less cash and cash equivalents, used to evaluate the company's capital structure and financial leverage[32] - Net debt-to-Adjusted EBITDAX is calculated as Net Debt divided by Adjusted EBITDAX for the trailing twelve-month period, used to assess the company's ability to service its debt[32]