SM Energy Co (SM) 2024 Q1 法說會逐字稿

No in I mean AND Great. Yes. Okay. Yes, or are you or are or the? So. So yes, a a the Greetings and welcome to the SM Energy's first quarter 2020 for financial and operating results. Q&a. At this time, all participants are in a listen only. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. Is now my pleasure to introduce your host, Jennifer Senior Vice President, Investor Relations and ESG stewardship. Thank you. You may begin.

不，我的意思是而且很好。是的。好的。是的，或者是你還是是？所以。所以，是的，歡迎來到 SM Energy 2020 年第一季的財務和營運業績。問答。此時，所有參與者都處於聆聽狀態。正式演講後將舉行簡短的問答環節。如果有人在會議期間需要接線員協助，請按下電話鍵盤上的星號零。提醒一下，本次會議正在錄製中。現在我很高興向您介紹主持人、投資者關係和 ESG 管理高級副總裁 Jennifer。謝謝。你可以開始了。

Thank you, Maria, and good morning, everyone. In today's call, we may reference the earnings release, IR presentation or prepared remarks of which are posted to our website. Thank you for joining us to answer your questions. Today, we have our President and CEO, Herb Vogel, and CFO, Wade Pursell. Before we get started, I need to remind you that our discussion today may include forward-looking statements and discussion of non-GAAP measures. I direct you to Slide 2 of the accompanying slide deck, Page five of the accompanying earnings release and the Risk Factors section of our most recently filed 10 K, which describe risk associated with forward-looking statements that could cause actual results to differ. We may also refer to non-GAAP measures. Please see the slide deck appendix and earnings release for definitions and reconciliations of non-GAAP measures to the most directly comparable GAAP measures and discussion of forward-looking non-GAAP measures cut that out of the way. Also, look forward look for our first quarter 10 Q filed this morning. And with that, I will turn it over to her for just a brief opening comment further. But

謝謝你，瑪麗亞，大家早安。在今天的電話會議中，我們可能會參考發佈在我們網站上的收益發布、IR 演示或準備好的評論。感謝您加入我們來回答您的問題。今天，我們的總裁兼執行長 Herb Vogel 和財務長韋德珀塞爾 (Wade Pursell)。在我們開始之前，我需要提醒您，我們今天的討論可能包括前瞻性陳述和非公認會計原則措施的討論。我將引導您查看隨附幻燈片的幻燈片2、隨附收益發布的第五頁以及我們最近提交的10 K 的風險因素部分，其中描述了與可能導致實際結果不同的前瞻性陳述相關的風險。我們也可能參考非公認會計原則措施。請參閱投影片附錄與效益發布，以了解非 GAAP 衡量標準與最直接可比較的 GAAP 衡量標準的定義與調節，以及前瞻性非 GAAP 衡量標準的討論。另外，請期待我們今天早上提交的第一季 10 Q 報告。至此，我將把它交給她，讓她做一個簡短的開場評論。但

Thanks, Jennifer, and good morning. Thanks for joining us were obviously very excited about 2024 is shaping up for SM Energy. So let's go ahead and get started. I'll turn the call back to Maria to start taking your questions for you.

謝謝，詹妮弗，早安。感謝您加入我們，我們顯然對 SM Energy 即將到來的 2024 年感到非常興奮。那麼就讓我們開始吧。我會將電話轉回瑪麗亞，開始回答您的問題。

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two. If you would like to remove your question from the queue For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. one moment, please. While we poll for questions. Our first question comes from Zack arm with JP. Morgan. Please proceed with your question.

謝謝。我們現在將進行問答環節。如果您想提問，請按電話鍵盤上的星號一。確認音將表示您的線路已在問題佇列中。您可以按星二號。如果您想從佇列中刪除您的問題 對於使用揚聲器裝置的與會者，可能需要在按星號鍵之前拿起聽筒。稍等一會兒。當我們投票詢問問題時。我們的第一個問題來自 Zack Arm 和 JP。摩根。請繼續你的問題。

Thanks for taking my questions. I just wanted to ask on the buyback First, you've talked about in the prepared remarks ratable pace through the buyback for the remainder of the year. That would imply roughly $60 million in buybacks per quarter. The current commodity prices, it seems like you'll have a significant amount of free cash flow that will allow you to build a lot of cash even after paying the base dividend finishing off that buyback authorization. How do you think about using that excess cash could could further accelerating that buybacks make sense? Just to get a sense of what happens with that cash?

感謝您回答我的問題。我只是想問關於回購的問題 首先，您在準備好的演講中談到了今年剩餘時間的回購步伐。這意味著每季回購約 6,000 萬美元。目前的大宗商品價格看來，您將擁有大量的自由現金流，即使在支付基本股息並完成回購授權後，您也可以累積大量現金。您如何看待使用多餘的現金可以進一步加速回購的意義？只是為了了解這些現金會發生什麼事？

Yes, good questions at this is Wes and good morning. Yes, we just looked at the guidance on assuming ratable buybacks. I think it's just the best way to model it right now. Obviously, things never happen that ratably, right? And as we go through the quarters, which we opportunistically repurchased during the open windows and you could see a bigger scenario with higher commodity prices that's generating more free cash flow, you could see us buying back at a little bit more accelerated pace than that, given what the operator REDUCE-IT is before us. So that could happen. And, you know, many people have asked what are you going to do when you get through the commitment and the Board will consider that. And I can imagine it being possible that we would continue on with it with a new buyback, but certainly no guarantees of that at this point.

是的，韋斯問得很好，早安。是的，我們剛剛查看了有關假設按比例回購的指導。我認為這是目前建模的最佳方式。顯然，事情永遠不會發生得那麼順利，對吧？當我們經歷各個季度時，我們在開放窗口期間機會主義地回購了這些產品，你可以看到一個更大的場景，大宗商品價格上漲，產生更多的自由現金流，你可以看到我們回購買的速度比這更快，考慮到我們面前的運算子 REDUCE-IT 是什麼。所以這可能會發生。而且，你知道，很多人都問過，當你完成承諾後，你會做什麼，董事會會考慮這一點。我可以想像我們有可能繼續進行新的回購，但目前還不能保證這一點。

Just to follow up in the prepared remarks, you mentioned flattish production in 3Q and then kind of another step up in 4Q. That seems to indicate you would exit the year with oil in the upper 70s that a fair number. Just trying to get a little bit more color on what that trajectory of volumes would look like through the back half of the year?

只是為了跟進準備好的評論，您提到了第三季度的產量持平，然後第四季度的產量又有所上升。這似乎表明今年結束時石油價格將在 70 多美元左右，這是一個相當大的數字。只是想對今年下半年的銷售軌跡有更多了解嗎？

Yes. I think that's reasonable. Mid 70s is given given what we said, what we said about the third quarter being flattish. I mean that it will be up. I think what's changed a little bit is the second quarter is obviously with acceleration higher than it was before in our guidance. So you're I think you're reading that pretty well, but you can assume the third quarter is up somewhat over the with the second quarter.

是的。我認為這是合理的。鑑於我們所說的，我們所說的第三季表現平淡，70 年代中期已經到來。我的意思是它會上升。我認為有一點變化的是第二季的加速明顯高於我們先前的指引。所以我認為你讀得很好，但你可以假設第三季比第二季有所成長。

Thanks. We appreciate the color there.

謝謝。我們欣賞那裡的顏色。

Thanks. Good morning, guys. Thanks for the time. Maybe I was hoping if we could start to Klondike. You mentioned you did some signs there during the quarter. And maybe starting to complete those eight to nine wells where I think results should be ready by the third quarter call. But just curious if you could maybe talk a little bit about some of the science work there, some of the deals in the area look quite prolific on oil productivity per foot basis. So just trying to get a sense if we could assume or expect similar results out of your program.

謝謝。早上好傢伙。謝謝你的時間。也許我希望我們能出發去克朗代克。您提到您在本季在那裡做了一些標誌。也許開始完成那八到九口井，我認為結果應該在第三季電話會議之前準備好。但只是好奇，如果你能談談那裡的一些科學工作，該地區的一些交易看起來以每英尺石油生產率為基礎非常多。因此，只是想了解我們是否可以假設或期望從您的程序中得到類似的結果。

Yes, Gabe, this is Herb. Yes, we're quite excited about Klondike acreage, and we've already drilled four well pad and completing your right now. I will say on the science side, we did take a vertical pilot hole down quite deep and did a lot of sidewall cores and the high end logs through that interval. So we could assess all the intervals that are potentially perspective out there. But we're focused now on the development of those initially, the dean and those eight nine wells this year, and the first four will be online during the second quarter. So it looks like a great, great play for us. And you know, we have quite a few wells offsetting into the Southeast plus the wells. We that came with the acquisition of Reliance from airlines, Jeff military.

是的，加布，這是赫伯。是的，我們對克朗代克的面積感到非常興奮，我們已經鑽探了四個井場並完成了您的任務。我要說的是，在科學方面，我們確實在很深的地方挖了一個垂直導向孔，並在該區間做了很多側壁岩心和高端原木。因此我們可以評估所有可能有前景的區間。但我們現在的重點是最初的開發，今年的 Dean 井和那八個九口井，前四個將在第二季上線。所以這對我們來說看起來是一場非常棒的比賽。你知道，我們有相當多的油井向東南方向偏移，再加上這些油井。我們是從航空公司、傑夫軍事公司收購信實公司而來的。

Hopefully that's helpful. I guess as a quick follow-up to that, just sticking to Klondike 20,000 net acres, if you were to progress towards its through development program, is there any type of infrastructure spend that we should be thinking about it there, but there is quite a bit of infrastructure there, but mainly it's the getting the gathering lines in place. So we don't have to truck as much and getting the gas lines built to the scale, which is a lot of the midstream. And and then But otherwise, it's just pretty much normal equipment up there. Okay.

希望有幫助。我想作為對此的快速跟進，僅堅持克朗代克 20,000 淨英畝，如果您要通過開發計劃取得進展，是否有任何類型的基礎設施支出是我們應該考慮的，但有相當多的支出那裡有一些基礎設施，但主要是把收集線安裝到位。因此，我們不必運輸那麼多卡車，也不必按照規模建造天然氣管道，這在中游中佔很大一部分。然後但是除此之外，上面的設備只是非常普通的設備。好的。

Okay, great. And just the last one, the South Texas drill to earn any additional color you can provide on that. Thanks, guys.

好的，太好了。最後一個是南德克薩斯鑽探，您可以在此基礎上獲得任何額外的顏色。多謝你們。

Yes, a lot of people are wondering, you know, how does the drill to earn works that they're not familiar with it and generally drilled or and is where you have agreed to drill a well or wells in return for acreage. In this case, we're going to operate and drill wells to gain of 50% working interest in around 16,000 acre block. So that will get us about 8,000 net acres. The other details around that drilled are really are kept confidential between us and the company that farmed out to us.

是的，很多人都想知道，你知道，他們不熟悉的鑽探是如何進行的，通常是在你同意鑽一口或多口井以換取面積的地方進行鑽探。在這種情況下，我們將在大約 16,000 英畝的區塊中進行運作和鑽探以獲得 50% 的工作權益。這樣我們就可以獲得大約 8,000 英畝的淨土地。有關鑽探的其他細節實際上是我們和外包給我們的公司之間的機密。

Okay. Okay. Got it. Thanks, guys.

好的。好的。知道了。多謝你們。

Our next question comes from Tim Rezvan with KeyBanc Capital Markets. Please proceed with your question.

我們的下一個問題來自 KeyBanc Capital Markets 的 Tim Rezvan。請繼續你的問題。

Good morning, folks. Thanks for taking the question. I want to follow up on Dave's question on Klondike. We did analysis of the area and I know you all have talked about the Middle Spraberry, Dean, on the Wolfcamp A. looks extremely strong with sort of offset results. And I'm just curious, kind of among these three initial wells being completed, excluding the science 12, can you talk about what intervals you're targeting and kind of maybe why you have been talking about the Wolfcamp A. is a primary target for that acreage certain, but what I want to correct you on that. They were there before producers. I just wondered when we took a pilot hole down first than we plugged back and drill the lateral. So there are four wells there, just one of them. We have that okay, vertical that we just gather data on.

早安，夥計們。感謝您提出問題。我想跟進戴夫關於克朗代克的問題。我們對該地區進行了分析，我知道你們都討論過 Wolfcamp A 上的中斯普拉貝裡 (Middle Spraberry)，迪安 (Dean)。我只是很好奇，在這三個最初完成的井中，不包括科學 12，你能談談你的目標間隔是什麼，以及為什麼你一直在談論 Wolfcamp A. 是主要目標對於那個面積是肯定的，但我想糾正你這一點。他們比製片人早到那裡。我只是想知道我們什麼時候先打一個導向孔，然後再塞回去並鑽橫向孔。所以那裡有四口井，只有其中一口。我們有很好的垂直方向，我們只是收集數據。

So it's great to hear that there's prospectivity in the Wolfcamp A., I would say we are not counting that if we're surprised in the thermal maturity is higher for some reason there than we expected to be. That'd be great news. But we're really counting on us being more have migrated oil play, which I've talked about before, which is oil comes from the deeper in the basin and migrates into the sandstone examples. And that's why they are so prolific.

因此，很高興聽到 Wolfcamp A 具有前景，我想說，如果我們對熱成熟度由於某種原因比我們預期的要高感到驚訝，我們並沒有算在內。那將是個好消息。但我們確實指望我們有更多的石油遷移，我之前已經談過，即石油來自盆地深處並遷移到砂岩中。這就是為什麼他們如此多產。

Okay. And then are these initial four wells team holding or? Y

好的。那麼最初的四口井團隊是持有還是持有？是

Yes, they are. They're all being wells.

是的，他們是。他們都是井。

Okay. That's great. Appreciate that. And then a follow-up. I think the comments on the Briscoe pad and the stacked pay opportunities are a pretty interesting some some other public companies are talking about that. I know it's early days for from one pad, but a big marketplace debate was on the validity of your claims that you had 300 locations there. And I guess just to help kind of frame the resource, if this stack pay proves to be something you can replicate that 300 location count kind of move up dramatically. And just trying to understand sort of what the significance of this test that you do in that you disclosed. Thank you.

好的。那太棒了。感謝。然後是後續行動。我認為對 Briscoe pad 的評論和堆積的薪酬機會非常有趣，其他一些上市公司正在談論這一點。我知道現在還處於早期階段，但市場上的一場大爭論是關於您聲稱在那裡擁有 300 個地點的說法的有效性。我想只是為了幫助建立資源，如果這個堆疊支付被證明是可以複製的，那麼 300 個位置計數會大幅增加。只是想了解您所披露的這項測試的意義。謝謝。

Yes, Tim, I would I would say it's not that much of a big increment and test. The only difference is really that lower wells are fully bounded versus in our other places. They've been have founded, but we've had fully bounded in the upper interval several other pads. The thing to note as these are space is about 625 feet. And we've done that before. These have a growth between two different subtle differences in a landing zone in the upper Austin Chalk or the middle Austin Chalk and Upper interval that we've developed. So it's it's it's just really exciting because of how productive they are, how oily they are and how NGL rich they are. And those wells on that one pad are between 11,614 thousand 500 feet long. So we didn't have difficulty executing there. And the other three are between 11,914 thousand feet. So they're long laterals to and that just really helps the economics also. And there are oil-rich. So really excited about it on on that area. And you can see the strength of the wells and just how they started. But it's not like they're a really big step in any way other than the founding of the lower Austin Chalk wells.

是的，提姆，我想說這並不是一個很大的增量和測試。唯一的區別實際上是，與我們其他地方相比，較低的井是完全有界的。它們已經建立，但我們已經在上部間隔中完全限制了其他幾個墊。值得注意的是，這些空間大約有 625 英尺。我們以前就這麼做過。這些在我們開發的上部奧斯汀粉筆或中部奧斯汀粉筆和上部間隔的著陸區中的兩個不同的細微差別之間有增長。所以這真的很令人興奮，因為它們的生產力有多高，它們的油性有多高，以及它們的 NGL 有多豐富。該平台上的油井長度為 11,614,000 500 英尺。所以我們在那裡執行沒有困難。其他三個高度在 11,914 千英尺之間。所以它們是長支線，這也確實對經濟有幫助。而且那裡盛產石油。我對這個領域非常興奮。您可以看到這些井的強度以及它們是如何開始的。但除了奧斯汀白堊下游井的建立之外，這在任何方面都不是真正的重大一步。

I appreciate the color. Thank you. You bet.

我很欣賞它的顏色。謝謝。你打賭。

As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Oliver home with Tudor, Pickering, Holt & Co., please proceed with your question.

提醒一下，如果您想提問，請按電話鍵盤上的星號一。我們的下一個問題來自 Oliver 家與 Tudor, Pickering, Holt & Co.，請繼續您的問題。

Good morning all and thanks for taking my questions. Just wanted to start on the efficiency is certainly good to see it continue to capture. There was just kind of wondering what your kind of achieved in Q1. Is it something that's already been baked in for new plant activity starting in Q2 when you're kind of providing the quarter ahead of full-year outlooks? Or is there kind of a wait and see aspect is to it since kind of only a quarter before kind of thinking that fully on that incrementally a Class one page that we saw?

大家早安，感謝您提出我的問題。一開始就想效率肯定不錯，看它繼續捕捉。只是想知道你們在第一季取得了什麼成就。當您在全年展望之前提供季度展望時，是否已經為第二季開始的新工廠活動做好了準備？或者是否有觀望的態度，因為只有四分之一的時間，我們才完全在我們看到的一級頁面上逐步思考？

Although we know when we change guidance, that means we've got a lot of confidence that it's appropriate to include it. So we're continually working new aspects of efficiencies. And and we have quite a laundry list that our team to running through right now that looks quite attractive, but we're not counting ones. Yes, we see them working. So the big ticket items for us right now are the increased substitution of natural gas or diesel and pressure pumping operations, those DGB.s car fleets that we're employing. And Wade mentioned those on the prepared remarks, and that has the added benefit of reduced. We're seeing quite a bit in the way of efficiency gains in drilling. So this translates to a number of the we drilled per day. They're really it's more advanced and reliable downhole equipment. So you don't have to trip the bit as much. And we're using rotary steerable assembly so we can keep the bid on bottom longer. That helps also and on the efficiency of a cost efficient side, a big one is using existing central production facilities that now are sitting there with some latent capacity and that avoids the need for capital into new facilities. And we knew all along about what's going to happen, and we're just starting to see it really happen a pretty significant way now.

儘管我們知道何時更改指導意見，但這意味著我們非常有信心將其納入其中。因此，我們不斷致力於提高效率的新面向。我們的團隊現在正在整理一份清單，看起來很有吸引力，但我們沒有計算這些清單。是的，我們看到他們在工作。因此，目前對我們來說最重要的項目是增加天然氣或柴油的替代品以及壓力泵操作，也就是我們正在使用的 DGB.s 車隊。韋德在準備好的演講中提到了那些，這有減少的額外好處。我們看到鑽井效率顯著提高。因此，這相當於我們每天鑽探的數量。它們確實是更先進、更可靠的井下設備。所以你不必那麼頻繁地絆倒。我們正在使用旋轉可操縱組件，因此我們可以將出價保持在底部更長時間。這也有助於提高成本效益，其中一個重要因素是使用現有的中央生產設施，這些設施現在擁有一些潛在的產能，並且避免了對新設施的資金需求。我們一直都知道將會發生什麼，而且我們現在才開始看到它以一種非常重要的方式真正發生。

And then we're also bundling some services between South Texas and Permian. So we've got the benefits of the scale of a full operation between the two areas. That helps then you know how activity as reduced. So rig counts are down, frac-spread counts are down. So we're actively rebidding services and seeing discounts that way. And I can't tell you when that will stop or how much more we'll get there, but that obviously the computer. So that unless that's a list of things that I'd say we're highly confident and not a list of things that we're still pursuing.

然後我們還在德克薩斯州南部和二疊紀之間捆綁了一些服務。因此，我們從兩個區域之間全面運作的規模中獲益。這有助於您了解活動如何減少。因此，鑽機數量減少了，壓裂擴散數量也減少了。因此，我們正在積極重新招標服務並以這種方式看到折扣。我無法告訴你這種情況何時會停止，或者我們還會達到多少程度，但顯然是計算機。因此，除非這是我認為我們非常有信心的事情清單，而不是我們仍在追求的事情清單。

Okay. That's super helpful. And maybe for follow-up. And then you mentioned earlier, some of the details are confidential on Agile there. But I just wanted to clarify, are you all responsible for 100% of the DMC for that 50% working interest that you kind of referenced? And is there any sort of details in terms of how many wells you're planning to do on that acreage this year? And if that's already embedded within the full year? Well count out in the South Texas region? Yes. Okay.

好的。這非常有幫助。也許是為了後續行動。然後你之前提到，敏捷的一些細節是保密的。但我只是想澄清一下，你們都對你們提到的 50% 工作權益承擔 100% 的 DMC 責任嗎？今年您計劃在該地區打多少口井，有詳細資訊嗎？如果這已經嵌入全年？那麼在德州南部地區算不算？是的。好的。

You got two questions there that we can't reveal that are developed details on the deal. But I'd say I know is the simple answer to your first question there. We're not saying everything for fit for the 50%. And then the second question was have we baked in? Yes, we knew the deal was far enough along when we set the budget in February that we integrated that into our plans for the year. The three wells that we'll drill there this year.

您有兩個問題我們無法透露，它們是有關交易的詳細資訊。但我想說我知道這是你第一個問題的簡單答案。我們並不是說一切都適合 50% 的人。然後第二個問題是我們已經融入了嗎？是的，當我們在二月制定預算時，我們就知道這筆交易已經進行得足夠遠了，因此我們將其納入了今年的計劃中。今年我們將在那裡鑽三口井。

Awesome. Thanks for the time, guys. So you do it.

驚人的。謝謝你們抽出時間。所以你就這麼做。

There are no further questions at this time. I would now like to turn the floor back over to Volker for closing comments.

目前沒有其他問題。我現在想把發言權交還給沃爾克以徵求結束意見。

Thanks, Maria, and thank you for joining us, and we look forward to seeing a number you at upcoming events. This concludes today's teleconference. You may disconnect your lines at this time. You for your participation.

謝謝瑪麗亞，感謝您加入我們，我們期待在即將舉行的活動中見到您。今天的電話會議到此結束。此時您可以斷開線路。您的參與。