SM Energy Co. expects capital expenditure (net of the change in capital accruals), excluding acquisitions, of $295-315 million in this year’s second quarter with plans to drill about 17 net wells (10 South Texas, 7 Midland basin) and to turn-in-line about 22 net wells (8 South Texas, 14 Midland basin).
Production of 13.3-13.5 MMboe (146,000-148,000 boe/d), at 42-43% oil and 59-60% liquids is expected for second-quarter 2023.
Second-quarter 2023 guidance was provided with the company’s first-quarter earnings report released Apr. 27.
For first-quarter 2023, SM Energy had net income of $198.6 million, up more than 300% compared with $48.8 million in the prior year period. First-quarter 2023 adjusted net income was $162.2 million, down from adjusted net income of $245.9 million for the same period in 2022.
Net cash provided by operating activities was $331.6 million.
Production for first-quarter 2023 was 13.2 MMboe, or 146,400 boe/d. Volumes were about 51% from the Midland basin and 49% from South Texas, and were 43% oil.
Production was about 178,000 boe above the mid-point of guidance, primarily due to outperformance from all 16 new South Texas wells, including outperformance from a seven-well pad that turned-in-line 1 week earlier than initially planned.
First quarter capital expenditures of $240.7 million, adjusted for an increase in capital accruals of $66.9 million, totaled $307.6 million. Capital expenditures included $9.9 million for leasehold acquisitions in the Midland basin of about 6,300 net acres in the Rockstar area for $10 million that were not considered in guidance.
