SM Energy Provides 2018 Production & Capital Spending Data

SM Energy Company (NYSE:SM) provided details on 2018 production and capital spending.

Total production for 2018 was 43.9 million barrels of oil equivalent (MMBoe) or 120.3 thousand barrels of oil equivalent per day (MBoe/d). Production growth was mainly backed by 97% growth from core Permian Basin assets.

Total production for the fourth quarter of 2018 was 11.3 MMBoe or 122.8 MBoe/d. Of the total production, oil was 45%. Production volumes were at par with the initial fourth-quarter guidance of 11.3-11.7 MMBoe.

During the fourth quarter of 2018, Eagle Ford and Permian regions accounted for 48% and 52%, respectively. However, Rocky Mountain did not make contributions to total production.

During 2018, SM Energy realized oil price, natural gas price and natural gas liquids price (including hedging) amounted to $53.13 per barrel, $3.31 per thousand cubic feet (Mcf) and $20.44 per barrel, respectively. Price realizations for oil, natural gas and natural gas liquids (including hedging) for the fourth quarter of 2018 were $47.94 per barrel, $3.01 per thousand cubic feet (Mcf) and $19.36 per barrel, respectively. Total price realized (including hedging) for the fourth quarter and 2018 was $34.18 per barrel of oil equivalent (Boe) and $31.74 per Boe, respectively.

For 2018, SM Energy incurred total costs of $1.4 billion, while total capital spending was $1.3 billion.

As of Dec 31, 2018, the outstanding principal balance on the company's long-term debt was $2.48 billion in senior notes and $172.5 million in senior convertible notes. No amount was drawn on the company's senior secured credit facility. At Dec 31, 2018, SM Energy's undrawn credit facility ($1.0 billion in commitments) plus cash on hand provided $1.1 billion in liquidity.

In 2018, the company achieved the goal of lowering debt leverage and increasing operations by funding through internal cash flows. The high-growth Permian assets contributed significantly toward achieving the target through production boost of nearly two-folds.

Zacks Rank & Key Picks

SM Energy carries a Zacks Rank #5 (Strong sell).

A few better-ranked players in the energy space are Evergy, Inc (NYSE:EVRG) , Sunoco L.P (NYSE:SUN) and Contura Energy (NYSE:CTRA) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Evergy, through its operating subsidiaries Kansas City Power & Light Company (KCP&L) and Westar Energy, Inc, provides clean, safe and reliable energy in Kansas and Missouri. The company delivered average negative earnings surprise of 11.1% in the last four quarters.

Headquartered in Houston, TX, Sunoco operates as a wholesale fuel distributor. The company is expected to witness year-over-year earnings decline of 38.9% in 2018.

Bristol, U.S-based Contura Energy is a mining company. The company generated average negative surprise of 17.9% in the trailing four quarters.

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