SM Energy(SM) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Record daily oil production increased by 23% year-over-year, with total production up 12%, resulting in $2 billion in adjusted EBITDAX and$485 million in adjusted free cash flow [45][99] - The sustainable annual fixed dividend was increased to $0.80 per share, marking a record high [45][99] - The 2025 budget is based on$70 WTI, $3.25 gas, and$27 NGLs, with a forecasted year-over-year increase in free cash flow of more than 40% [45][99] Business Line Data and Key Metrics Changes - The addition of Utah assets is expected to generate over 20% production growth and over 30% oil production growth year-over-year [71] - Year-end estimated net proved reserves totaled 678 million barrels of oil equivalent, a 12% increase from 2023, with oil reserves growing by 29% [73] - The 2025 capital program is expected to approximate $1.3 billion, with plans to drill approximately 105 net wells and complete approximately 150 net wells [76][81] Market Data and Key Metrics Changes - Production is forecasted to average between 200,000 to 215,000 BOE per day in 2025, up approximately 20$121.5 million, demonstrating a commitment to debt reduction [106] - Since the inception of the return of capital program, the company has returned over $540 million, which is more than 40$1.3 billion, with a focus on drilling and completion capital allocation across core assets [76][81] Question: What is the company's approach to debt management? - The company aims to prioritize debt reduction to meet leverage targets before directing free cash flow towards share buybacks [106][107]