SM Energy(US:SM)2025-11-03 11:32Production and Operations - Third quarter 2025 production totaled 19.7 MMBoe, or 213.8 MBoe/d, with net daily oil production increasing by 47% year-over-year to 113.9 MBbl/d[6] - Full-year 2025 production guidance is set at 207-208 MBoe/d, with approximately 53-54% expected to be oil[22] - The company plans to drill approximately 115 net wells and complete around 150 net wells for the full year 2025[22] - Production guidance for Q4 2025 is approximately 206-212 Mboe/d with an oil mix of 52-53%[27] - Net production volumes for oil reached 10.5 million barrels, a 47% increase compared to 7.1 million barrels in the same quarter last year[51] - Average net daily production of oil was 113.9 MBbl per day, a 47% increase from 77.4 MBbl per day in the same quarter last year[51] - The company experienced a 6% increase in net production volumes of gas, reaching 38.5 Bcf for the three months ended September 30, 2025, compared to 34.5 Bcf in the same quarter last year[51] Financial Performance - Net income for the third quarter 2025 was $155.1 million, or $1.35 per diluted common share, a decrease from $240.5 million, or $2.09 per diluted common share, in the same period in 2024[10] - Adjusted EBITDAX for the third quarter 2025 was $588.2 million, a 22% increase from $481.5 million in the same period in 2024[13] - Total operating revenues for Q3 2025 reached $811.6 million, a 26% increase from $643.6 million in Q3 2024[33] - Net income for Q3 2025 was $155.1 million, compared to $240.5 million in Q3 2024, reflecting a decrease of 35%[33] - Basic net income per common share for Q3 2025 was $1.35, down from $2.10 in Q3 2024[33] - For the three months ended September 30, 2025, the net income (GAAP) was $155,088,000, a decrease from $240,523,000 for the same period in 2024, representing a decrease of 35.5%[39] - For the nine months ended September 30, 2025, the net income (GAAP) was $539,022 thousand, down from $582,015 thousand in 2024[57] Cash Flow and Capital Expenditures - Adjusted free cash flow for the third quarter 2025 was $234.3 million, representing an 80% increase compared to the same period in 2024[15] - Capital expenditures for the third quarter 2025 totaled $397.7 million, with $323.2 million after adjustments, including $14.0 million for acquiring working interests in economic wells[14] - Capital expenditures for Q4 2025 are projected to be between $225 million and $245 million, excluding acquisitions[27] - Total cash provided by operating activities for the nine months ended September 30, 2025, was $1,559,088,000, an increase from $1,204,645,000 in 2024, reflecting a growth of 29.5%[39] - The net cash provided by operating activities (GAAP) for the three months ended September 30, 2025, was $504,960 thousand, up from $452,263 thousand in 2024, indicating an increase of 11.6%[61] - The net cash used in investing activities for the nine months ended September 30, 2025, was $1,243,774,000, compared to $957,912,000 in 2024, reflecting an increase of 29.8%[39] Shareholder Returns and Equity - The company returned $35.1 million to stockholders in the third quarter 2025 through dividends and share repurchases[16] - The company declared net cash dividends of $0.20 per share for the three months ended September 30, 2025, totaling $22,991,000, compared to $20,595,000 in 2024, which is an increase of 11.5%[39] - Total stockholders' equity increased to $4.71 billion as of September 30, 2025, compared to $4.24 billion at the end of 2024[31] - The total stockholders' equity as of September 30, 2025, was $4,713,087,000, up from $4,061,546,000 as of September 30, 2024, marking an increase of 16.0%[37] Debt and Financial Ratios - The company ended the quarter with a cash balance of $162.3 million, contributing to a net debt of $2.57 billion and a net debt-to-adjusted EBITDAX ratio of 1.1 times[18] - The total principal amount of debt (GAAP) as of September 30, 2025, was $2,736,026 thousand, with net debt (non-GAAP) at $2,573,775 thousand after accounting for cash and cash equivalents of $162,251 thousand[60] - The company aims to achieve a target leverage ratio of 1.0x and plans to return capital to stockholders through dividends and share repurchases[24] Market and Pricing - The company has hedged approximately 5,100 MBbls of expected fourth quarter 2025 net oil production at an average price of $63.14/Bbl to $69.36/Bbl[21] - For the three months ended September 30, 2025, the realized sales price for oil was $63.83 per barrel, a 3% increase from $62.04 in the previous quarter, but a 15% decrease from $74.72 in the same quarter last year[51] - The average realized price for gas was $2.19 per Mcf, reflecting a 50% increase from $1.46 in the same quarter last year[51] Other Financial Metrics - Operating expenses for Q3 2025 totaled $565.1 million, significantly higher than $312.7 million in Q3 2024[33] - The company reported a net derivative gain of $45,479,000 for the three months ended September 30, 2025, compared to a loss of $86,283,000 in 2024[39] - The company reported stock-based compensation expense of $8,124,000 for the three months ended September 30, 2025, compared to $6,587,000 in 2024, an increase of 23.4%[39] - Adjusted EBITDAX is a key non-GAAP measure used to assess the company's ability to generate funds for exploration and development, with specific calculations detailed in the financial highlights[44] - Adjusted free cash flow is calculated as net cash provided by operating activities before net change in working capital, highlighting the cash available for discretionary uses[45] - The adjusted net income (non-GAAP) for the three months ended September 30, 2025, was $153,698 thousand, down from $186,429 thousand in 2024[57]