Energy Prospectus

SM Energy (SM): The company beat my production forecast for Q2 and they have increased their production guidance for 2013. My updated forecast model and increased Fair Value Estimate can be found under the Sweet 16 Tab.

I have gained more confidence in my forecast model and in the production outlook for this company. Their outstanding results in the Eagle Ford and the Bakken have convinced me to increase the multiple I'm using to arrive at my Fair Value Estimate. EPG Members can find it at the bottom of the forecast model.

First Call's Target Price is $78.02, but I expect that to go up significantly after the analysts digest the Q2 results and adjust their models for the increased guidance.

I highly recommend that you take a hard look at my new forecast model for SM. Listen to their conference call and you will understand why I believe there will be a lot of upgrades coming forward on this stock.

They have incredible upside in the Eagle Ford and their new "Eaglebine" play in East Texas.

It is very important to understand that they have zero in their production guidance for the Eaglebine. It has the potential to layer on another Core Area for then in 2014.