SM Energy

[dan_s]

Based on my forecast model, SM Energy is trading 40% below its break-up value. The company uses the Successful Efforts method of accounting which is more conservative than the Full Cost method used by most E&P companies. They took a big non-cash impairment charge against their proven properties last quarter, as a result of the low natural gas prices at year. Smart investors like us know those writedowns are BS, especially since the company still holds those assets and the price of natural gas is now much higher. [the SEC does not allow a company to write-up the assets again, but it does lower future DD&A expense.] I think the company will report $0.65 to $0.70 EPS for the 1st quarter, well above the First Call estimate. - Dan

I will update my forecast model on Wednesday morning after I listen to their CC.
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SM Energy Company (SM) is scheduled to release details regarding its earnings for the first quarter 2013 after the close of trading on April 30, 2013. A teleconference to discuss these results and other operational matters is scheduled for May 1, 2013, at 8:00 a.m. Mountain time (10:00 a.m. Eastern time). The call participation number is 877-445-0811, and the conference ID number is 55776538. An audio replay of the call will be available approximately two hours after the call at 855-859-2056, with the conference ID number 55776538. International participants can dial 617-401-8115 to take part in the conference call, using the conference ID number 55776538, and can access a replay of the call at 404-537-3406, using conference ID number 55776538. Replays can be accessed through May 15, 2013.

This call is being webcast live and can be accessed at SM Energy Company's website at www.sm-energy.com. An audio recording of the conference call will be available at that site through May 15, 2013.

ABOUT THE COMPANY

SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in onshore North America. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.

[dan_s]

SM crushed my forecast and First Call's. Remember, "Adjusted Earnings" are what you compare to the First Call EPS forecast. GAAP EPS include those silly mark-to-mark adjustments on hedges. - Dan

SM Energy beats by $0.24, beats on revs (SM) 61.00 -0.27 : Reports Q1 (Mar) earnings of $0.82 per share, excluding non-recurring items, $0.24 better than the Capital IQ Consensus Estimate of $0.58; revenues rose 28.3% year/year to $484.2 mln vs the $461.3 mln consensus. Q1 production was 10.35 MMBOE with average daily production of 115.0 MBOE/d.

> Record quarterly production of 10.35 MMBOE, an average of 115.0 MBOE/d; production at the top of the quarterly guidance range of 110 - 116 MBOE/d
•Quarterly GAAP net income of $16.7 million, or $0.25 per diluted share; adjusted net income of $55.3 million, or $0.82 per diluted share
•Record quarterly EBITDAX of $328.8 million represents 10% sequential growth over fourth quarter of 2012 and 27% growth over first quarter of 2012
•New ventures leasehold expanding significantly with expected additions in East Texas and the Powder River Basin

I will have an updated forecast model and Fair Value Estimate posted to the website tomorrow.

[dan_s]

I did a quick update on my forecast and it looks like analysts are going to upgrade this one a lot tomorrow. As I mentioned several times on this Forum, SM is going to get a big boost to its top line revenues from the increasing natural gas prices. Looks like First Call's revenue estimate for this year is over $100 million too low.

I will listen to the CC tomorrow and dig into the details, but this one really looks good.

[setliff]

this is the one analyst's mention of sm after it took a $3+ haircut today on very high volume.

oil and gas are unloved unless a promise of tripling production is there.



COVERAGE REITERATED: SM Energy (SM) reiterated by UBS. Reiterated rating Neutral. 05/01 09:25 AM

[dan_s]

When oil is down big nothing in this sector is going to do well. SM had a fantastic quarter and they are definitely on-track to reach the high end of their production forecast for the year. Plus, they get a HUGE boost if I am right that natural gas will top $5/mmbtu by year-end.