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SM Energy raises production guidance

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Oilfield Technology,

SM Energy Company has announced that 2Q19 production is exceeding expectations and it is raising guidance for 2Q19 and full year production volumes by 0.4 million boe, at the mid-point, due to better than expected well performance and completion timing. 2Q19 and full year production is expected to be approximately 43-44% oil.

The company has also announced strong 30-day peak IP rates on two wells testing new intervals, the Dean and the Wolfcamp D in the RockStar area of the Permian Basin, which produced approximately 1550 boe/d and 1400 boe/d, respectively. In addition, at the previously reported Watson State Austin Chalk test in South Texas, the well reached a 30-day peak IP rate of nearly 3200 boe/d (three-stream). These intervals have the potential to add significantly to the company's inventory in the Midland Basin and South Texas, respectively.

"I continue to congratulate our team on truly outstanding execution, which includes optimising capital expenditures, in achieving our results to date," commented President and CEO Jay Ottoson. "Higher than expected production volumes in the Permian reflect strong early performance from a number of new wells including the Wolfcamp D and Dean tests, as well as completion timing. In South Texas, production is benefiting from our newly-designed development wells, as well as a better than expected decline rate at a recently completed Austin Chalk test. Better well performance while maintaining capital discipline further supports our goal to be free cash flow positive in the second half of this year."

Ottoson continued: "We are very pleased with results to date on several well tests into new intervals, including the 30-day peak rates we are reporting today for the Wolfcamp D and Dean in the Permian Basin and the Austin Chalk in South Texas. These intervals, in addition to our recent Middle Spraberry test in RockStar, are potential catalysts to drive inventory growth and value creation from our existing footprint."

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