Energy Prospectus

SM Energy Reports Results for the Third Quarter of 2013; Provides Operations Update

•Record quarterly average daily production of 138.8 MBOE per day at top end of guidance range of 132 - 139 MBOE per day; quarterly production mix of 50% liquids/50% natural gas
•Quarterly GAAP net income of $70.7 million, or $1.04 per diluted share; adjusted quarterly net income of $105.4 million, or $1.54 per diluted share
•Record quarterly EBITDAX of $410.4 million; GAAP net cash provided by operating activities of $404.5 million exceeds capital expenditures of $387.4 million
•Successful Wolfcamp B well (30-day peak initial production 1,226 BOE per day); Company adds acreage in Midland Basin with potential in multiple benches of the Wolfcamp interval

Last point is good news for AREX, XEC and CXO

The Permian Basin is becoming another significant growth area for SM.

During the third quarter of 2013, the Company successfully completed its first horizontal Wolfcamp B shale well, the Dorcus 3035H (SM 100% WI), in Upton County, Texas with a 30-day initial peak production rate of 1,226 BOE/d (82% oil). The Dorcus well was completed with an effective lateral section of approximately 5,000 feet and 25 completion stages.

In Upton County, Texas, SM Energy has completed and is flowing back its second horizontal well, the Britain 3133H well (SM 100% WI), and is completing a third horizontal well, the CVX 4134H (SM 100% WI). Both of the aforementioned wells are targeting the Wolfcamp B interval. The Company expects to drill a horizontal Wolfcamp B well in Dawson County, Texas in the fourth quarter of 2013.

SM Energy now has approximately 72,500 net acres leased or committed in the Midland Basin prospective for multiple benches of the Wolfcamp shale including approximately 32,500 net acres of recently acquired leasehold. Of this amount, approximately 19,000 net acres are associated with the Company’s legacy assets in the Sweetie Peck and Halff East fields in Upton County, Texas. The remaining 53,500 Midland Basin net acres are primarily located in Gaines and Dawson Counties, Texas. The Company now has approximately 130,000 total net acres in the Permian Basin comprised of the aforementioned Midland Basin acreage, approximately 55,000 net acres in its Tredway Mississippian program, and approximately 2,750 in southeastern New Mexico. This acreage total excludes the Company's approximate 14,000 net acres that are being marketed for sale in Andrews County, Texas.

SM Energy (SM): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab.

My Fair Value Estimate has been increased to $135/share.