SM Energy Company (SM) Q4 2024 (Q&A) earnings summary

Executive summary

• Achieved record proved reserves of 678 MMBoe at year-end 2024, up 12% year-over-year, with oil reserves up 29% and total production up 12% to 170.5 MBoe/d; record oil production of 80.2 MBbls/d, up 23% year-over-year.

• Uinta Basin acquisition expanded inventory by about 40%, achieved cash production margins comparable to Midland at $40/BOE, and is expected to drive over 20% production growth in 2025.

• Returned $169 million to shareholders in 2024 via $84 million in share repurchases and $85 million in dividends; increased annual fixed dividend to $0.80 per share.

• Redeemed $349 million of 2025 Senior Notes, reducing debt and supporting a strong balance sheet.

• Outperformed regional peers in oil production and capital efficiency, with significant operational improvements across all basins.

Financial highlights

• 2024 adjusted EBITDAX reached $2.0 billion, up 16% year-over-year; adjusted EPS was $6.80.

• Adjusted free cash flow for 2024 was $485 million, with an 11% free cash flow yield to market capitalization.

• Lease operating expense for 2024 was $5.11/Boe; total production expense was $10.21/Boe.

• Pre-tax PV-10 of proved reserves at year-end 2024 was $8.4 billion.

• Capital expenditures totaled $1.29 billion in 2024, with 142 net wells drilled and 135 net completions.

Outlook and guidance

• 2025 net production expected at 200–215 MBoe/d (51–52% oil), implying 22% total and 33% oil growth year-over-year.

• 2025 capital expenditures projected at ~$1.3 billion, with 105 net wells to be drilled and 150 net wells completed.

• LOE guidance for 2025: $5.30–$5.50/Boe; G&A includes $7 million in one-time Uinta Basin integration costs.

• Free cash flow generation prioritized to support dividends, share buybacks, and further debt reduction.

• Hedges in place for 30–35% of 2025 estimated net oil and gas volumes at favorable prices.