SM Energy Co., Denver, reported a first-quarter 2020 net loss of $411.9 million compared with a net loss of $177.6 million in first-quarter 2019. The quarter included an impairment of $989.8 million ($775.0 million net of tax) related predominantly to the write-down of South Texas proved oil and gas properties and related support facilities as a result of the decrease in commodity prices at the end of the quarter.
First quarter 2020 adjusted EBITDAX was $286.0 million, up $99.5 million, or 53%, from $186.5 million in the comparable prior year period. The increase was due to 32% net daily production growth in the Midland basin and realized hedge gains.
First quarter 2020 adjusted net loss was $5.6 million which compares with adjusted net loss of $37.7 million in the comparable prior year period.
Production volumes for the quarter of 12.4 MMboe were 51% oil, driven by growth in oil production from both the Midland basin and South Texas. Total net daily production is up 14% compared with the first quarter of 2019 and down 2% sequentially. Net daily oil production is up 30% compared with the first quarter of 2019 and up 4% sequentially.
The company has reduced its well completion and drilling pace and expects capital spending for the remainder of 2020 to drop by 30% versus its original plan, which is expected to result in a full year decrease in capital spending of 20% (OGJ Online, Feb. 19, 2020). Second quarter capital expenditures are expected to be $165-175 million.
Five rigs are currently operating in the Midland basin with one completions crew and one rig is operating in South Texas with no completions crew. One rig is expected to be dropped from the Midland basin in July.
Capital expenditures for the first quarter of 2020 were $139.3 million, or $156.1 million before accruals. During the first quarter 2020, the company drilled 25 net wells and completed 20 net wells.
