SM Energy (SM) Announces Record 2024 Earnings Results And Transformative 2025 Operating Plan; And Reports Officer Retirement And New Appointments

SM Energy Company (SM) today announced its financial results for the latest quarter, revealing a miss on both earnings and revenue estimates. The company reported earnings per share of $1.64, falling short of the estimated $1.92. Additionally, SM Energy’s revenue came in at $783,000, significantly below the anticipated $858.6 million. These results highlight challenges the company faced during the quarter.

Key Highlights:

• Record oil production in 2024 of 29.4 MMBbls, a 23% increase from 2023.
• Total net production for 2024 was 62.4 MMBoe, up 12% from 2023.
• Year-end 2024 estimated net proved reserves reached a record 678 MMBoe, a 12% increase from 2023.
• The company increased its sustainable fixed dividend to $0.80 per share annually and returned $169 million to stockholders in 2024.
• Inventory and gross drilling locations increased by 40% due to acquisitions and organic growth.
• Reduced revolving credit facility balance by $121.5 million, aiming for target leverage.
• 2025 operating plan expects over 20% increase in net production and over 30% increase in oil production.
• Net income for 2024 was $770.3 million, with adjusted EBITDAX of $2.0 billion.
• CEO Herb Vogel emphasized operational execution and capital efficiency for 2025, focusing on integrating Uinta Basin assets.

Summary:

SM Energy Company reported record results for 2024, achieving significant growth in oil production and reserves. The company produced 29.4 million barrels of oil, marking a 23% increase from the previous year, and total net production rose by 12% to 62.4 million barrels of oil equivalent. The year-end estimated net proved reserves also reached a record 678 million barrels of oil equivalent, a 12% increase from 2023. Financially, the company increased its sustainable fixed dividend to $0.80 per share annually and returned $169 million to stockholders through dividends and share buybacks. The company also made strides in reducing its revolving credit facility balance by $121.5 million, aligning with its target leverage goals.

Looking ahead, SM Energy’s 2025 operating plan is set to optimize capital efficiency and scale, with expectations of over 20% growth in net production and more than 30% growth in oil production, driven by the integration of Uinta Basin assets. CEO Herb Vogel highlighted the company’s focus on operational execution and capital efficiency, stating, “We designed our 2025 operational plan to optimize free cash flow, considering a multi-year period, which will employ our differential technical capabilities to deliver superior well performance and drive capital efficiency.” The company aims to generate free cash flow to support dividends, reduce debt, and resume share repurchases once target leverage is achieved.

SM Energy Company (SM) has experienced a turbulent period in terms of stock price performance, with a notable decline of 13.71% over the past six months and a slight dip of 0.08% over the past year. This downward trend is further highlighted by a significant 9.70% drop in the past month alone. Despite these price challenges, SM Energy’s fundamental metrics paint a more nuanced picture. The company boasts a robust net profit margin of 33.67%, indicating strong profitability relative to its revenue. However, the negative two-year compound annual growth rates (CAGR) for earnings per share, revenue, and free cash flow suggest underlying challenges in sustaining growth. The price-to-earnings ratio of 5.30 reflects a potentially undervalued stock, especially when considering the return on invested capital of 17.36%, which signals efficient use of capital. Overall, while the stock price has faced headwinds, SM Energy’s financial fundamentals suggest a complex landscape of both challenges and opportunities.

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in the state of Texas. As of February 24, 2022, it had 492.0 million barrels of oil equivalent of estimated proved reserves. It also has working interests in 825 gross productive oil wells and 483 gross productive gas wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.