SM Energy Company (NYSE: SM) announces that production for the third
quarter of 2014 is expected to be 13.1 MMBOE, or 142.5 MBOE/d, which is
at the low end of the Company’s previously issued guidance. SM Energy
has moved to an enhanced completion program in its Eagle Ford producing
area using higher sand loading and longer laterals. These enhanced
completions, while improving well economics, resulted in longer than
anticipated downtime due to required well shut-ins for offset
completions during the quarter. Weather-related delays in the Williston
Basin also negatively impacted production for the quarter. Production in
both the Eagle Ford and Bakken/Three Forks has been increasing over the
past few weeks and production guidance for the fourth quarter of 2014 is
13.9 – 14.7 MMBOE, which at the mid-point represents 9% growth over the
third quarter of 2014. The outlook for production growth in 2015 and
2016 remains unchanged at 20% and 15%, respectively.
The Company also announces that the borrowing base under its senior
secured revolving credit facility increased to $2.4 billion, from its
previous borrowing base of $2.2 billion following its lenders’ regularly
scheduled semi-annual redetermination. The increase in the borrowing
base is largely due to the increase in the Company’s mid-year proved
developed reserves. SM Energy has elected to leave the aggregate
commitment amount from the bank group unchanged at $1.3 billion. The
redetermination was made under the terms of the existing facility and
there were no other changes to the terms of the credit facility
resulting from this borrowing base redetermination.
INFORMATION ABOUT FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of
securities laws, including forecasts and projections. The words
“anticipate,” “assume,” “believe,” “budget,” “estimate,” “expect,”
“forecast,” “intend,” “plan,” “project,” “will” and similar expressions
are intended to identify forward-looking statements. These statements
involve known and unknown risks, which may cause SM Energy's actual
results to differ materially from results expressed or implied by the
forward-looking statements. These risks include factors such as the
availability, proximity and capacity of gathering, processing and
transportation facilities; the uncertainty of negotiations to result in
an agreement or a completed transaction; the uncertain nature of
announced acquisitions, and the ability to complete any such
transactions; the uncertain nature of expected benefits from the actual
or expected acquisition, divestiture, joint venture, farm down or
similar efforts; the volatility and level of oil, natural gas, and
natural gas liquids prices; uncertainties inherent in projecting future
rates of production from drilling activities and acquisitions; the
imprecise nature of estimating oil and gas reserves; the availability of
additional economically attractive exploration, development, and
acquisition opportunities for future growth and any necessary
financings; unexpected drilling conditions and results; unsuccessful
exploration and development drilling results; the availability of
drilling, completion, and operating equipment and services; the risks
associated with the Company's commodity price risk management strategy;
uncertainty regarding the ultimate impact of potentially dilutive
securities; and other such matters discussed in the “Risk Factors”
section of SM Energy's 2013 Annual Report on Form 10-K. The
forward-looking statements contained herein speak as of the date of this
announcement. Although SM Energy may from time to time voluntarily
update its prior forward-looking statements, it disclaims any commitment
to do so except as required by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in the
acquisition, exploration, development, and production of crude oil,
natural gas, and natural gas liquids in onshore North America. SM Energy
routinely posts important information about the Company on its website.
For more information about SM Energy, please visit its website at www.sm-energy.com.
Copyright Business Wire 2014