SM Energy Company (SM) Bundle
A Brief History of SM Energy Company
SM Energy Company, an independent energy company, has focused on the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) primarily in Texas and, as of October 1, 2024, in Utah following the Uinta Basin acquisition.
Recent Financial Performance
As of September 30, 2024, SM Energy reported:
- Net income of $240.5 million, or $2.09 per diluted share.
- Net cash provided by operating activities of $452.3 million.
- Adjusted EBITDAX of $481.5 million.
Comparatively, for the three months ended June 30, 2024, the company reported a net income of $210.3 million, or $1.82 per diluted share.
Production and Operations
In the third quarter of 2024, SM Energy's average net daily equivalent production volumes increased to 170.0 MBOE, reflecting an increase of seven percent compared to the previous quarter. Breakdown of production by area is as follows:
| Area | Average Daily Production (MBOE) | Percentage Increase |
|---|---|---|
| Midland Basin | 84.6 | 6% |
| South Texas | 85.4 | 8% |
Capital Expenditures and Investments
For the entirety of 2024, SM Energy plans to allocate between $1.24 billion and $1.26 billion for its capital program, focusing on oil development projects in its key areas. The company has also engaged in strategic acquisitions, including:
- Acquisition of approximately 20,000 net acres in Dawson and northern Martin counties, Texas for $88.9 million in June 2023.
- Uinta Basin Acquisition completed on October 1, 2024, for an estimated $2.1 billion.
Stockholder Returns
SM Energy has committed to returning value to its stockholders through dividends and stock repurchase programs. In 2024, the company declared:
- A net cash dividend of $0.18 per share for Q3 2024, totaling $20.6 million.
- An increased dividend of $0.20 per share for Q4 2024, totaling $22.9 million.
As of September 30, 2024, the company has $500 million remaining under its stock repurchase program authorized through December 31, 2027.
Debt and Financial Position
As of September 30, 2024, SM Energy's long-term debt included:
| Debt Instrument | Principal Amount | Maturity |
|---|---|---|
| 6.75% Senior Notes due 2029 | $750 million | August 1, 2029 |
| 7.0% Senior Notes due 2032 | $750 million | August 1, 2032 |
| 6.625% Senior Notes due 2027 | $416.8 million | December 1, 2027 |
| 6.5% Senior Notes due 2028 | $400 million | December 1, 2028 |
SM Energy's total debt as of September 30, 2024, amounted to $2.74 billion.
Market Context and Future Outlook
SM Energy continues to navigate a dynamic market, leveraging its asset portfolio to maximize returns while maintaining a strong balance sheet. The company's operational focus remains on high-quality, economically viable projects, ensuring resilience against commodity price volatility.
A Who Owns SM Energy Company (SM)
Current Ownership Structure
As of 2024, SM Energy Company (SM) has a diverse ownership structure that includes institutional investors, mutual funds, and retail investors. The total number of shares outstanding is approximately 114.4 million.
| Ownership Type | Percentage of Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 75% | 85.8 million |
| Mutual Funds | 15% | 17.2 million |
| Retail Investors | 10% | 11.4 million |
Major Shareholders
The largest shareholders of SM Energy include a mix of institutional investors and mutual funds, which play a significant role in the company's governance and strategic direction.
| Shareholder | Type | Shares Owned | Percentage Ownership |
|---|---|---|---|
| Vanguard Group, Inc. | Institutional | 12.5 million | 10.9% |
| BlackRock, Inc. | Institutional | 10.8 million | 9.4% |
| State Street Corporation | Institutional | 9.2 million | 8.0% |
| Fidelity Investments | Mutual Fund | 8.5 million | 7.4% |
| T. Rowe Price Associates, Inc. | Mutual Fund | 6.3 million | 5.5% |
Stock Performance and Market Capitalization
As of September 30, 2024, SM Energy's stock is trading at approximately $41.08 per share, leading to a market capitalization of around $4.7 billion.
Recent Financial Performance
SM Energy reported a net income of $240.5 million for Q3 2024, with total revenue from oil, gas, and NGL production reaching $642.4 million.
| Financial Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Income | $240.5 million | $210.3 million | $222.3 million |
| Total Revenue | $642.4 million | $633.5 million | $639.7 million |
| Average Daily Production (MBOE) | 170.0 | 158.5 | 145.1 |
| Operating Cash Flow | $452.3 million | $476.4 million | $382.9 million |
Shareholder Returns
SM Energy declared dividends of $0.20 per share in Q3 2024, reflecting a commitment to returning value to shareholders.
Stock Repurchase Program
As of 2024, SM Energy has authorized a stock repurchase program allowing up to $500 million in aggregate value of its common stock, which is set to continue through December 31, 2027.
Conclusion on Ownership Dynamics
The ownership dynamics of SM Energy Company indicate a strong institutional presence, which is typical for companies in the energy sector. The strategic decisions made by these shareholders can significantly impact the company's operational focus and financial strategy.
SM Energy Company (SM) Mission Statement
SM Energy Company aims to enhance the quality of life by responsibly producing energy supplies that contribute to domestic energy security and prosperity. The company's long-term vision focuses on creating sustainable value for all stakeholders through effective management of its high-quality asset portfolio, generating robust cash flows, and maintaining a strong balance sheet. Key operational strategies include prioritizing safety, technological innovation, and environmental stewardship.
Strategic Goals
The strategic goals of SM Energy include:
- Operational Excellence: Focus on integrating newly acquired assets and optimizing existing operations.
- Value Return to Shareholders: Commitment to fixed dividend payments and stock repurchase programs.
- Debt Reduction: Aiming to decrease overall debt levels to enhance financial stability.
Financial Performance as of 2024
For the third quarter of 2024, SM Energy reported the following financial metrics:
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Income (in millions) | $240.5 | $210.3 | $222.3 |
| Net Cash Provided by Operating Activities (in millions) | $452.3 | $476.4 | $382.9 |
| Adjusted EBITDAX (in millions) | $481.5 | $485.9 | $475.6 |
| Average Net Daily Equivalent Production (MBOE per day) | 170.0 | 158.5 | 157.9 |
| Oil Production Revenue (in millions) | $531.8 | $532.6 | $639.7 |
| Gas Production Revenue (in millions) | $50.6 | $45.2 | $131.8 |
| NGL Production Revenue (in millions) | $60.0 | $55.7 | $55.9 |
Operational Activities
During the third quarter of 2024, SM Energy engaged in significant operational activities:
- Drilled 27 gross (19 net) wells in the Midland Basin and completed 17 gross (15 net) wells.
- In the South Texas program, drilled 16 gross (16 net) wells and completed 20 gross (20 net) wells.
- Average net daily equivalent production volumes increased by 7% sequentially.
Capital Expenditures and Investments
For 2024, SM Energy's capital program is projected to be between $1.24 billion and $1.26 billion, which includes:
- Investment in the development of recently acquired Uinta Basin assets.
- Focus on disciplined capital spending and strategic acquisitions.
Stockholder Returns
As part of its commitment to returning value to stockholders, SM Energy declared a cash dividend of $0.20 per share for the fourth quarter of 2024, totaling approximately $22.9 million. This marks an increase from the previous dividend of $0.18 per share.
Conclusion on Mission Alignment
The mission statement of SM Energy is reflected in its operational strategies, financial performance, and commitment to sustainability and stakeholder value. By focusing on responsible energy production and effective asset management, SM Energy aims to maintain its status as a premier operator in the energy sector while delivering consistent returns to its shareholders.
How SM Energy Company (SM) Works
Operational Overview
SM Energy Company primarily engages in the exploration, development, and production of oil and natural gas. The company operates in key regions including the Midland Basin, South Texas, and the Uinta Basin, focusing on high-quality oil and gas assets.
Production Statistics
As of September 30, 2024, SM Energy reported the following production metrics:
| Category | Q3 2024 | Q2 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|---|
| Oil Production (MMBbl) | 7.1 | 6.6 | 6.8 | 19.5 | 17.7 |
| Gas Production (Bcf) | 34.5 | 32.2 | 33.5 | 97.9 | 98.9 |
| NGL Production (MMBbl) | 2.8 | 2.4 | 2.5 | 7.4 | 7.2 |
| Total Equivalent Production (MMBOE) | 15.6 | 14.4 | 14.8 | 43.3 | 41.4 |
| Average Daily Equivalent Production (MBOE per day) | 170.0 | 158.5 | 161.0 | 157.9 | 151.5 |
Financial Performance
In the third quarter of 2024, SM Energy achieved the following financial results:
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Income (in millions) | $240.5 | $210.3 | $222.3 |
| Oil, Gas, and NGL Production Revenue (in millions) | $642.4 | $633.5 | $606.9 |
| Production Expense (in millions) | $148.4 | $136.6 | $137.3 |
| Adjusted EBITDAX (in millions) | $481.5 | $485.9 | $410.3 |
| Net Cash Provided by Operating Activities (in millions) | $452.3 | $476.4 | $382.9 |
Expenditure and Costs
SM Energy's operational costs include various components essential for production and development:
| Cost Type | Q3 2024 (in millions) | Q2 2024 (in millions) | YTD 2024 (in millions) | YTD 2023 (in millions) |
|---|---|---|---|---|
| Lease Operating Expense (LOE) | $4.73 per BOE | $4.82 per BOE | $5.01 per BOE | $5.07 per BOE |
| Transportation Costs | $2.13 per BOE | $1.94 per BOE | $2.05 per BOE | $2.58 per BOE |
| General and Administrative Expense | $35.1 | $31.1 | $96.4 | $84.4 |
| Depletion, Depreciation, and Amortization | $202.9 | $179.7 | $548.8 | $501.4 |
Debt and Equity Structure
As of September 30, 2024, SM Energy's debt structure includes:
| Debt Type | Amount (in millions) | Interest Rate | Maturity |
|---|---|---|---|
| 6.625% Senior Notes | $416.8 | 6.625% | 2027 |
| 6.5% Senior Notes | $400.0 | 6.5% | 2028 |
| 6.75% Senior Notes | $750.0 | 6.75% | 2029 |
| 7.0% Senior Notes | $750.0 | 7.0% | 2032 |
Stockholder Returns
SM Energy has been active in returning capital to shareholders through dividends:
| Dividend Type | Amount per Share | Total Payout (in millions) |
|---|---|---|
| Q3 2024 Dividend | $0.20 | $22.9 |
| Q2 2024 Dividend | $0.18 | $20.6 |
How SM Energy Company (SM) Makes Money
Revenue Streams
SM Energy Company generates revenue primarily through the production and sale of oil, natural gas, and natural gas liquids (NGLs). For the nine months ended September 30, 2024, total oil, gas, and NGL production revenue amounted to $1.835 billion, representing an increase from $1.757 billion for the same period in 2023.
| Revenue Component | 2024 (YTD) | 2023 (YTD) | Change (%) |
|---|---|---|---|
| Oil Production Revenue | $1.505 billion | $1.343 billion | 12% |
| Gas Production Revenue | $163.6 million | $245.3 million | (33%) |
| NGL Production Revenue | $166.6 million | $168.3 million | (1%) |
| Total Revenue | $1.835 billion | $1.757 billion | 4% |
Production Metrics
As of September 30, 2024, SM Energy reported an average net daily equivalent production of 170.0 MBOE, which indicates a strong operational performance driven by well completions and production efficiency.
| Production Metric | 2024 (Q3) | 2023 (Q3) | Change (%) |
|---|---|---|---|
| Average Net Daily Equivalent Production (MBOE) | 170.0 | 157.9 | 7% |
| Oil Production (MMBbl) | 7.1 | 6.6 | 8% |
| Gas Production (Bcf) | 34.5 | 32.2 | 7% |
| NGL Production (MMBbl) | 2.8 | 2.4 | 13% |
Cost Structure
The company incurs various operational costs, including lease operating expenses (LOE), transportation costs, and depletion, depreciation, and amortization (DD&A). For the three months ended September 30, 2024, total oil, gas, and NGL production expenses were reported at $148.4 million.
| Cost Component | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Oil, Gas, and NGL Production Expense | $148.4 million | $138.3 million |
| Lease Operating Expense (per BOE) | $4.73 | $5.01 |
| Transportation Costs (per BOE) | $2.13 | $2.05 |
| DD&A (per BOE) | $12.98 | $12.68 |
Net Income and Earnings
For the third quarter of 2024, SM Energy reported a net income of $240.5 million, translating to $2.09 per diluted share, compared to $222.3 million, or $1.82 per diluted share, for the previous quarter.
| Financial Metric | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Net Income | $240.5 million | $222.3 million |
| Basic Net Income per Share | $2.10 | $1.83 |
| Diluted Net Income per Share | $2.09 | $1.82 |
Capital Expenditures
SM Energy's capital expenditures for the nine months ended September 30, 2024, totaled approximately $957.2 million, reflecting a focus on asset development and production enhancement.
| Capital Expenditure Category | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Capital Expenditures | $957.2 million | $766.8 million |
| Acquisition of Oil and Gas Properties | $836,000 | $109.3 million |
Stockholder Returns
SM Energy is committed to returning capital to shareholders. For the third quarter of 2024, the company declared a dividend of $0.20 per share, totaling approximately $22.9 million.
| Dividend Information | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Dividend per Share | $0.20 | $0.15 |
| Total Dividends Declared | $22.9 million | $17.5 million |
Debt and Financing
As of September 30, 2024, SM Energy's total outstanding debt was approximately $2.736 billion, with significant issuances of Senior Notes contributing to this figure.
| Debt Component | Amount |
|---|---|
| Total Debt | $2.736 billion |
| 2029 Senior Notes | $750 million |
| 2032 Senior Notes | $750 million |
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Article updated on 8 Nov 2024
Resources:
- SM Energy Company (SM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SM Energy Company (SM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View SM Energy Company (SM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.