SM Energy (SM) announced today that it closed the previously announced sale of its third party operated assets in the Eagle Ford, including ownership interest in midstream assets, for $800.0 million gross or $754.0 million net cash proceeds adjusted for post-effective date revenue and expenses, before final customary purchase price adjustments.
Fourth quarter 2016 production associated with these assets was 24,250 Boe per day (33% oil). The Company plans to apply proceeds from this divestiture towards its 2017 capital program, general debt reduction and general corporate purposes.
SM's 2017 capital program is $875 million, this sale combined with Q1 cash flow from operations funds the entire year's drilling program.
As a result of this sale, SM's production will dip in the first half of this year and then accelerate into year end.
Q4 2017 production s/b ~124,000 Boe per day (46% natural gas, 28% crude oil and 26% NGLs)
First Call's price target for SM is $42.55.
SM Energy closes sale
SM Energy closes sale
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group