SM Energy Q3 Earnings Beat Estimates on Higher Oil Production

Core Viewpoint - SM Energy Company reported third-quarter 2024 adjusted earnings of $1.62 per share, exceeding the Zacks Consensus Estimate of $1.52, but down from $1.73 in the same quarter last year. Total revenues of $644 million increased slightly from $641 million year-over-year but fell short of the Zacks Consensus Estimate of $651 million [1]. Operational Performance - SM Energy's production for the third quarter reached 170 thousand barrels of oil equivalent per day (MBoe/d), a nearly 11% increase from 153.7 MBoe/d in the previous year, surpassing the Zacks Consensus Estimate of 166 MBoe/d [3]. - Oil production rose 15% year-over-year to 77.4 thousand barrels per day (MBbls/d), exceeding the Zacks Consensus Estimate of 76 MBbls/d [3]. - Natural gas production was 375.4 million cubic feet per day, up 5% year-over-year, while natural gas liquids contributed 30.1 MBbls/d, an 11% increase from the previous year [4]. Realized Prices - The average realized price per Boe before derivative settlements was $41.08, down from $45.24 in the prior year. The average realized oil price decreased by 8% to $74.72 per barrel, while the average realized price of natural gas fell 41% to $1.46 per thousand cubic feet [5]. Costs & Expenses - Unit lease operating expenses decreased by 7% year-over-year to $4.73 per Boe. General and administrative expenses increased by 9% to $2.25 per Boe, and transportation expenses rose by 3% to $2.13 per Boe [6]. - Total hydrocarbon production expenses were $148.4 million, compared to $138.3 million in the previous year, while total exploration expenses increased to $12.1 million from $10.2 million [6]. Capital Expenditure - Capital expenditure for the quarter totaled $302.1 million, with adjusted free cash flow amounting to $129.8 million [7]. Balance Sheet - As of September 30, 2024, SM Energy had cash and cash equivalents of $1.7 billion and a net debt of $1.1 billion [8]. Guidance - For the fourth quarter of 2024, SM Energy expects production to be between 18.9-20.2 MMBoe, with oil expected to contribute 51% of total production. Capital expenditures are estimated to be in the range of $320-$340 million [9]. - For the full year 2024, the company anticipates net production volume between 62.2-63.5 MMBoe, with oil accounting for 47% of total production [10].