SM Energy Company (SM, $18.52, Buy; Target $42.00) (https://stifel2.bluematrix.com/sellside ... ource=mail)
- 2Q Beats, New Chalk Wells Positive - Michael S. Scialla - We view the release as positive. The positives include: i) 2Q21 was FCF neutral vs a consensus outspend of $51MM as CFPS/capex beat by 12%/9%; ii) 3 new Chalk wells had an IP-30 of 288 Boe/kft, 50% our TC; iii) 3Q21 oil production guidance was 3% above consensus. The negatives include: i) 3Q21 capex guidance was 39% above consensus while the 2021 budget may be leaning toward the high end of the range. In summary, SM delivered another wide FCF beat supported by solid execution and strong well performance, including new Austin Chalk wells.
Dan may be adding SM back to our Small-Cap Portfolio.