Energy Prospectus

SM Energy Reports Results for the Third Quarter of 2014; Provides Operations Update

• Quarterly GAAP net income of $208.9 million, or $3.05 per diluted share; adjusted quarterly net income of $98.6 million, or $1.44 per diluted share.
> Adjusted earnings per share compare to my forecast of $1.10/share
• Quarterly adjusted EBITDAX of $406.2 million; quarterly GAAP cash provided by operating activities of $360.0 million.
> My Q3 cash flow from operations forecast was $319 million
• Continued strong performance from enhanced completions in operated Eagle Ford program.
• Acreage added in Bakken/Three Forks and Powder River Basin programs.

I am updating the forecast model now and will post further comments this afternoon.

An updated Net Income & Cash Flow Forecast for SM has been posted under the Sweet 16.

Q3 results beat my forecast, so I cannot explain today's selloff other than investors were disappointed in the slight dip in production, which was previously announced. They had to shut-in some wells at a couple pads to complete more horizontal wells. This is common practice. Production should be up to around 155,000 boepd in Q4.

Production mix (45.2% natural gas, 30.5% crude oil & 24.3% NGLs) was better than my forecast and they are getting a good price ($4.49/mcf) for their high btu gas. The recent Bakken acquisition should add more oil production going forward.

SM is on-track to generate ~$21.50 per share in operating cash flows this year and more next year even if oil & gas prices stay around current levels. I am assuming NYMEX prices of $3.50/mcf and $80.00/bbl of oil. I am using $35/bbl for SM's NGL production.

My Fair Value Estimate went up slightly to $149.75.

Dan,

When I click on the SM icon at the Sweet 16 tab there is no forecast worksheet nor write up there. Also when I click on the View from Houston latest issue I get an error message. Advise.

same here----

apparently all the view from Houston articles' links are bad.

The SM Energy "bucket" is empty now. Send me an e-mail and I will send it to you. dmsteffens@comcast.net

Apparently they are working on the website today. I have a call into them.

Profile and forecast model are now under the SM logo. That was my screw-up, not the website issue.