SM Energy Posts Higher Net Income on the Back of Higher Volumes

SM Energy Co., an independent oil and gas exploration and production company operating primarily in North America, saw higher volumes bump its third-quarter net income. The company reported a net income of $240.5 million for the quarter ended September 30, 2024, up from $222.3 million for the corresponding quarter of 2023.

Besides production growth, the company also recorded lower operating depreciation, depletion, and amortization (DD&A) expenses per unit. The positive drivers were partially offset by lower realized prices and higher interest expenses net of interest income.

Net production was 15.6 million barrels of oil equivalent (MMboe), or 170,000 barrels of oil equivalent per day (boe/d), at 46 percent oil or 77,400 barrels a day, which exceeded guidance. The company's strong performance in the Midland Basin and South Texas, especially higher-than-anticipated production and well completions, contributed to overall production exceeding expectations. This positive trend is expected to continue, with full-year production volumes for these regions projected to be at the higher end of expectations, it said.

"2024 is proving to be a highly successful year for SM Energy. Exceptional operational performance, magnified by increased top-tier portfolio scale and substantial oil production growth, supports a strong balance sheet and upside value creation opportunity”, President and Chief Executive Officer Herb Vogel, said.

For the first nine months of 2024, SM Energy reported a net income of $582.0 million, compared with a net income of $570.8 million for the same period in 2023.

"Looking ahead, we are keenly focused on our Utah operations. Along with the investment community, we are invigorated by the opportunity to unlock value in an overlooked basin, and we expect to deliver results attributable to the crude profile, high margins, and substantial scale that the Uinta Basin Acquisitions provide”, Vogel said. “In the fourth quarter, we expect to sequentially grow our oil and total production volumes by around 40 percent and 25 percent, respectively, and execute a smooth integration of the Utah operations. We will diligently work to develop a 2025-2027 operating plan that will optimize capital efficiency and demonstrate the value of our expanded portfolio”.

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