SM Energy Co., Denver, further reduced its 2020 capital expenditures budget to $605-610 million, allotting $203-208 million for fourth-quarter spending, which will include the addition of a second completions crew in the Midland basin and a partial quarter crew in South Texas. Capital will include costs associated with wells that will be turned-in-line in January 2021.
Full-year 2020 production is expected to be 45.2-46.2 MMboe, or 123,500-126,200 boe/d, at 49% oil. Fourth-quarter production is expected to be 10.0-11.0 MMboe, or 109,000-120,000 boe/d, at 48% oil.
The company recorded a net loss for the year’s third quarter of $98.3 million, compared with net income of $42.2 million, in the same period in 2019. The current period included a $63.9 million net derivative loss, while the prior year period included a $100.9 million net derivative gain.
Third-quarter 2020 net cash provided by operating activities of $201.6 million before net change in working capital of $16.8 million totaled $184.8 million, which was down $28.1 million, or 13%, from $212.8 million in the comparable prior year period.
Third-quarter 2020 adjusted net loss was $5.5 million, which compares with adjusted net loss of $12.1 million, for the same period in 2019.
Total production volumes for the quarter were down 6% compared with the same period in 2019 and up 4% sequentially. Production during the quarter was positively affected by South Texas Austin Chalk well performance exceeding expectations and reduced flaring in the Midland basin.
Production for the quarter was 11.617 MMboe, or 126,300 boe/d. Total production volumes of 35.2 MMboe for the first 9 months of 2020 were relatively flat with the same period in 2019.
On Sept. 30, the outstanding principal amount of the company’s long-term debt was $2.42 billion, down from $2.77 billion at yearend 2019.
On Sept. 30, the company’s borrowing base and commitments under its senior secured revolving credit facility were $1.1 billion. Available liquidity was $880 million, which includes $178 million drawn and a $42-million letter of credit. The cash balance was approximately zero.
Capital expenditures before capital accruals for the third quarter were $121.1 million. During the quarter, the company drilled 19 net wells and added 24 net flowing completions. For the first 9 months of 2020 the company drilled 72 net wells and added 54 net flowing completions.