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SM Energy (SM) Gains 13.6% as Q4 Earnings Beat Estimates
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SM Energy Company (SM - Free Report) has rallied 13.6% since it reported strong fourth-quarter 2021 results on Feb 24. The stock price appreciation was also backed by the upstream firm’s increased proved reserves.
SM Energy reported fourth-quarter adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate of 82 cents. The bottom line also improved from earnings of 2 cents in the year-ago period.
Quarterly revenues of $855 million increased from $320 million in the year-ago quarter and beat the Zacks Consensus Estimate of $632 million.
The strong quarterly results can be attributed to an increase in realized commodity prices and higher oil equivalent production volumes.
Operational Performance:
Production
SM Energy’s fourth-quarter production totaled 158.3 thousand barrels of oil equivalent per day (MBoe/d) (53.4% oil), up 29% from the year-ago level of 122.4 MBoe/d. Higher volumes from South Texas favored the increased production.
Oil production of SM Energy increased 34% year over year to 84.5 thousand barrels per day (MBbls/d). The company produced 339.7 million cubic feet per day of natural gas for the quarter, up 23% year over year. Yet, natural gas liquids contributed 17.2 MBbls/d to total production volume, up 26% from the fourth-quarter 2020 level.
Realized Prices
Before the effects of derivative settlements, the average realized price per Boe was $58.54 compared with $28.42 in the year-ago quarter. Average realized price of natural gas surged 158% year over year to $6.35 per thousand cubic feet. Also, average realized oil prices increased 88% to $76.08 per barrel and that of natural gas liquids grew 115% from the prior-year quarter to $39.63.
Cost & Expenses
On the cost front, unit lease operating expenses of SM Energy increased 3% year over year to $4.21 per Boe. Transportation expenses, however, fell to $2.61 per Boe from $2.89 in the year-ago quarter. General and administrative expenses increased 43% to $2.55 per Boe from the prior-year level of $1.78.
Total hydrocarbon production expenses of SM Energy for the quarter were recorded at $143.3 million compared with the year-ago level of $95.9 million. Total exploration expenses were $12.6 million, higher than the year-ago figure of $11.3 million.
Total operating expenses for the fourth quarter decreased to $380.5 million from the year-ago period’s $492.3 million.
Capex
Capital expenditure for the December quarter was recorded at $124.6 million. It generated free cash flow of $259.5 million in the quarter.
Balance Sheet
As of Dec 31, 2021, the company had cash and cash equivalents of $332.7 million. It had net debt of $2,081.2 million. It had total liquidity of more than $1.43 billion and long-term debt to capital of 50.2%.
Reserves Grow
SM Energy estimated its proved reserves at 2021-end at 492 MMBoe, increasing 22% year over year.
Guidance
SM Energy's 2022 capital expenditure guidance has been reported at roughly $750 million. Total production guidance for this year is in the band of 51 to 54 MMBoe, with the proportion of oil to be in the range of 46% to 47%.
For the March quarter of this year, SM Energy projects its capital spending in the band of $180 million to $190 million. The upstream player expects its production for the first quarter at 13.5 to 13.8 MMBoe, with oil proportion estimated to be at 46%.
Zacks Rank & Other Stocks to Consider
SM Energy sports a Zacks Rank #1 (Strong Buy). Other prospective players in the energy space include Exxon Mobil Corporation (XOM - Free Report) , ConocoPhillips (COP - Free Report) and Chevron Corporation (CVX - Free Report) . While ExxonMobil and ConocoPhillips sport a Zacks Rank #1, Chevron carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ExxonMobil is banking on its key upstream projects centered around Permian – the most prolific basing in the United States – and offshore Guyana resources.
ExxonMobil reported strong fourth-quarter results, thanks to improved realized oil and natural gas prices as well as higher refining and chemical margins. In the past seven days, ExxonMobil has witnessed upward earnings estimate revisions for 2022.
Considering production and proved reserves, ConocoPhillips is one of the leading upstream energy players. In the past 30 days, ConocoPhillips has witnessed upward earnings estimate revisions in the past 30 days.
ConocoPhillips’ estimate for earnings for 2022 is pegged at $9.74 per share, suggesting a year-over-year increase of 62.1%.
In the Permian basin, Chevron has a strong footprint. The majority of Chevron’s assets in the most prolific basin of the United States have minimal royal payments, thereby securing handsome cashflows in the long run.
In the past 30 days, Chevron has witnessed upward earnings estimate revisions for 2022.
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SM Energy (SM) Gains 13.6% as Q4 Earnings Beat Estimates
SM Energy Company (SM - Free Report) has rallied 13.6% since it reported strong fourth-quarter 2021 results on Feb 24. The stock price appreciation was also backed by the upstream firm’s increased proved reserves.
SM Energy reported fourth-quarter adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate of 82 cents. The bottom line also improved from earnings of 2 cents in the year-ago period.
Quarterly revenues of $855 million increased from $320 million in the year-ago quarter and beat the Zacks Consensus Estimate of $632 million.
The strong quarterly results can be attributed to an increase in realized commodity prices and higher oil equivalent production volumes.
Operational Performance:
Production
SM Energy’s fourth-quarter production totaled 158.3 thousand barrels of oil equivalent per day (MBoe/d) (53.4% oil), up 29% from the year-ago level of 122.4 MBoe/d. Higher volumes from South Texas favored the increased production.
Oil production of SM Energy increased 34% year over year to 84.5 thousand barrels per day (MBbls/d). The company produced 339.7 million cubic feet per day of natural gas for the quarter, up 23% year over year. Yet, natural gas liquids contributed 17.2 MBbls/d to total production volume, up 26% from the fourth-quarter 2020 level.
Realized Prices
Before the effects of derivative settlements, the average realized price per Boe was $58.54 compared with $28.42 in the year-ago quarter. Average realized price of natural gas surged 158% year over year to $6.35 per thousand cubic feet. Also, average realized oil prices increased 88% to $76.08 per barrel and that of natural gas liquids grew 115% from the prior-year quarter to $39.63.
Cost & Expenses
On the cost front, unit lease operating expenses of SM Energy increased 3% year over year to $4.21 per Boe. Transportation expenses, however, fell to $2.61 per Boe from $2.89 in the year-ago quarter. General and administrative expenses increased 43% to $2.55 per Boe from the prior-year level of $1.78.
Total hydrocarbon production expenses of SM Energy for the quarter were recorded at $143.3 million compared with the year-ago level of $95.9 million. Total exploration expenses were $12.6 million, higher than the year-ago figure of $11.3 million.
Total operating expenses for the fourth quarter decreased to $380.5 million from the year-ago period’s $492.3 million.
Capex
Capital expenditure for the December quarter was recorded at $124.6 million. It generated free cash flow of $259.5 million in the quarter.
Balance Sheet
As of Dec 31, 2021, the company had cash and cash equivalents of $332.7 million. It had net debt of $2,081.2 million. It had total liquidity of more than $1.43 billion and long-term debt to capital of 50.2%.
Reserves Grow
SM Energy estimated its proved reserves at 2021-end at 492 MMBoe, increasing 22% year over year.
Guidance
SM Energy's 2022 capital expenditure guidance has been reported at roughly $750 million. Total production guidance for this year is in the band of 51 to 54 MMBoe, with the proportion of oil to be in the range of 46% to 47%.
For the March quarter of this year, SM Energy projects its capital spending in the band of $180 million to $190 million. The upstream player expects its production for the first quarter at 13.5 to 13.8 MMBoe, with oil proportion estimated to be at 46%.
Zacks Rank & Other Stocks to Consider
SM Energy sports a Zacks Rank #1 (Strong Buy). Other prospective players in the energy space include Exxon Mobil Corporation (XOM - Free Report) , ConocoPhillips (COP - Free Report) and Chevron Corporation (CVX - Free Report) . While ExxonMobil and ConocoPhillips sport a Zacks Rank #1, Chevron carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ExxonMobil is banking on its key upstream projects centered around Permian – the most prolific basing in the United States – and offshore Guyana resources.
ExxonMobil reported strong fourth-quarter results, thanks to improved realized oil and natural gas prices as well as higher refining and chemical margins. In the past seven days, ExxonMobil has witnessed upward earnings estimate revisions for 2022.
Considering production and proved reserves, ConocoPhillips is one of the leading upstream energy players. In the past 30 days, ConocoPhillips has witnessed upward earnings estimate revisions in the past 30 days.
ConocoPhillips’ estimate for earnings for 2022 is pegged at $9.74 per share, suggesting a year-over-year increase of 62.1%.
In the Permian basin, Chevron has a strong footprint. The majority of Chevron’s assets in the most prolific basin of the United States have minimal royal payments, thereby securing handsome cashflows in the long run.
In the past 30 days, Chevron has witnessed upward earnings estimate revisions for 2022.