SM Energy Q1 2025 Financial and Operating Results

SM Energy Company has released its financial and operating results for the first quarter of 2025, showcasing significant growth and successful integration of its Uinta Basin assets. The company has also provided guidance for the full year and second quarter of 2025.

Financial Highlights

For the first quarter of 2025, SM Energy reported net production of 17.8 MMBoe, or 197.3 MBoe/d, with 53% of this being oil. This production level is at the high end of the company's guidance, driven largely by the Uinta Basin assets outperforming expectations. The company achieved a net income of $182.3 million, or $1.59 per diluted common share, and an adjusted net income of $1.76 per diluted common share. Net cash provided by operating activities was $483.0 million before net change in working capital, totaling $514.5 million. Adjusted EBITDAX was $588.9 million, reflecting strong production performance.

Business and Operational Highlights

SM Energy's net production volumes for the first quarter were 17.8 MMBoe, with 41% from the Midland Basin, 39% from South Texas, and 20% from the Uinta Basin. The company's daily oil production increased by 63% compared to the first quarter of 2024, largely due to the addition of the Uinta Basin assets. The company also reported capital expenditures of $413.9 million, adjusted for a change in capital expenditure accruals, totaling $440.8 million. This includes $15 million in accelerated spend for production equipment in Texas and $5 million in non-operated capital expenditures in the Midland Basin.

Strategic Initiatives and Corporate Developments

SM Energy utilized $73.8 million of adjusted free cash flow for dividend payments, reduction of its revolving credit facility balance, and final cash settlement of the Uinta Basin acquisition. The company's borrowing base and commitments on its senior secured revolving credit facility were reaffirmed at $3.0 billion and $2.0 billion, respectively, providing available liquidity of approximately $2.0 billion. Additionally, Rystad Energy recognized SM Energy among the top three operators excelling in sustainability in 2023.

Management's Perspective

Herb Vogel, President and CEO, commented on the successful integration of the Uinta Basin operations, highlighting the strong production margin and the addition of a third core area. Vogel emphasized the company's long-term strategy to be a premier operator of top-tier assets, focusing on low breakeven cost assets and returning capital to stockholders through dividends and share repurchase programs.

Future Outlook

For the full year 2025, SM Energy maintains its guidance with an expected increase in LOE to approximately $5.90 per Boe. For the second quarter of 2025, the company expects capital expenditures to range between $375 and $385 million, with net production expected to be approximately 197 to 203 MBoe/d at 54% to 55% oil. The company also anticipates higher LOE due to increased workover activity and higher water disposal costs.

SEC Filing: SM Energy Co [ SM ] - 8-K - May. 01, 2025