Q3 2024 SM Energy Co Earnings Call (Q&A Session) Transcript
Key Points
- SM Energy Co (SM) reported an outstanding quarter with excellent operational execution.
- The company is excited about the addition of the Uinta Basin, which is expected to enhance capital efficiency and value generation.
- SM Energy Co (SM) has a diverse asset base with significant inventory at low breakevens, allowing for strong returns even at lower oil prices.
- The company has a healthy buyback authorization of $500 million through 2027, providing flexibility for shareholder returns.
- Initial results from the Klondike wells exceeded expectations, confirming the geologic model and offering highly productive wells.
- There is a delay in volumes due to fewer wells turned in line by the seller in the Uinta Basin, impacting fourth-quarter production.
- The fourth-quarter production guidance is wider than usual due to uncertainties with the newly acquired Utah assets.
- SM Energy Co (SM) is prioritizing debt reduction over share buybacks, which may limit immediate shareholder returns.
- The company faces higher LOE (Lease Operating Expenses) as it transitions to being an oilier company, impacting margins.
- The integration of the Uinta Basin assets involves complexities, including a transition service agreement and increased G&A expenses.
Greetings, and welcome to SM Energy's third quarter 2024, financial operating results Q&A. (Operator Instructions) As a reminder, this conference is being recorded.
It's now my pleasure to introduce your host, Jennifer Martin Samuels, Vice President, Investor Relations and ESG Stewardship. Please go ahead, Jennifer.
Thank you, Kevin. Good morning, everyone. I hope you've recovered from a festive Halloween.
In today's call, we may reference the earnings release, IR presentation or prepared remarks, all of which are posted to our website.
Thank you for joining us this morning to answer your questions today. We have our President and CEO, Herb Vogel, our CFO, Wade Pursell; and we are also joined this morning by Beth McDonald, our new Chief Operating Officer.
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 the accompanying slide deck, earnings release and Risk
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