SM Energy(US:SM)2024-02-21 23:56Financial Data and Key Metrics Changes - The company generated substantial free cash flow of $509 million and returned $300 million to stockholders, representing an approximate 7% yield and about 60% of the free cash flow generated [2][21] - Net proved reserves increased by 13% year-over-year to a record 605 million barrels of oil equivalent (MMBoe), with a net increase in reserves replacing production by more than 2.2 times [14][21] - The company achieved net debt of less than $1 billion, with a net debt-to-adjusted EBITDAX ratio of 0.57x, providing flexibility for free cash flow allocation in 2024 [14] Business Line Data and Key Metrics Changes - Production was up approximately 5% year-over-year, driven by well performance from the Austin Chalk program, which exceeded expectations [7] - The gross inventory in the Austin Chalk increased by 16% to 465 locations, reflecting confidence in the economic performance of previously drilled wells [15] Market Data and Key Metrics Changes - Production guidance for 2024 is set at 56-59 million barrels of oil equivalent (MMBoe), an increase of 3-4% year-over-year, with oil volumes expected to rise around 6% [13] - The company expects to drill and complete 115-120 total net wells in 2024, with approximately 60% in the Midland Basin and 40% in South Texas [26] Company Strategy and Development Direction - The company aims to execute operationally to deliver low breakeven, high-return wells through new technologies and maintain leadership in environmental, social, and governance (ESG) stewardship [10] - Strategic objectives for 2024 include returning capital to stockholders through share repurchases and dividends, while also expanding portfolio quality and depth using advanced analytics [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in slightly increasing activity levels in 2024 and maintaining low leverage, positioning the company for attractive returns of capital [6] - The company anticipates a favorable commodity price outlook, which supports increased oil-directed activity [10] Other Important Information - The company reported a total shareholder return of 13% in 2023, despite declines in oil and gas prices [16] - The company received a leadership level score of A minus in CDP scores, highlighting its commitment to safety and environmental stewardship [23] Q&A Session Summary - No specific questions and answers were provided in the content, indicating that the Q&A session may have occurred but was not included in the provided text [33]