SM Energy Company (SM) J.P. Morgan 2025 Energy, Power, Renewables & Mining Conference summary

Strategic Focus and Operational Highlights

• Emphasis on high-return asset development, capital efficiency, and sustainability leadership in the lower 48 states, with a focus on expanding top-tier inventory across Uinta, Midland, and South Texas basins.

• Differentiation through deep geoscience and engineering expertise, leveraging advanced analytics, machine learning, and automation to optimize well design and completions.

• Rapid expansion in Howard County from 79 to over 4,900 horizontal wells in under a decade, and significant break-even improvements in Austin Chalk and Uinta Basin.

• Uinta Basin now features competitive margins, high-quality inventory, and record-setting wells with longest and deepest completions, supported by operated sand mine and conveyor system.

• Recognized as a sustainability leader among peers, with improved safety and ESG performance.

Well Performance and Portfolio Development

• SM-operated wells in Howard County and Austin Chalk outperform peers by 32% and 42% respectively in oil production per lateral foot, with machine learning-driven completions boosting performance in Woodford-Barnett.

• Initial wells in the Woodford Barnett play show 50% better performance than nearby peers, with ongoing delineation in Klondike and expansion in Douglas Creek.

• Uinta Basin lower cube wells deliver higher early oil production than Midland and Gulf Coast wells, with a 28% inventory uptick recognized by Enverus and 57 sub-$50/bbl breakeven locations added.

• Integration of Uinta operations has yielded record pumping times, cost reductions via a new sand mine and conveyor system, and improved ESG outcomes.

• Technology and data-driven optimization underpin well design and performance, with 25,000 unique completion designs tested in the Midland Basin.

Financial Performance, Strategy, and Capital Allocation

• Reduced debt by $31 million in Q1 2025, progressing toward 1x leverage, with net debt-to-adjusted EBITDAX at 1.3x and maturities in 2026 and 2027.

• Maintained strong liquidity of $2.0 billion, reaffirmed $3.0 billion borrowing base, and returned over $567 million to stockholders through increased dividends and share repurchases.

• Maintained budget despite industry pullbacks, reducing from nine to six rigs to maximize free cash flow over the next three years.

• Increased oil hedging to over 40% for the next year, with 40% of expected oil and 41% of gas production for 2Q25–4Q25 hedged at favorable prices.

• 1Q25 adjusted EBITDAX of $588.9 million and adjusted free cash flow of $73.8 million.