SM Energy raises production guidance, provides new well results
DENVER -- SM Energy Company has announced that second-quarter 2019 production is exceeding expectations and the Company is raising guidance for second quarter and full year production volumes by 0.4 MMboe, at the mid-point, due to better than expected well performance and completion timing. Second quarter and full year production is expected to be approximately 43%-44% oil.
The Company also announces strong 30-day peak IP rates on two wells testing new intervals, the Dean and the Wolfcamp D in the RockStar area of the Permian basin, which produced approximately 1,550 boed and 1,400 boed, respectively. In addition, at the previously reported Watson State Austin Chalk test in South Texas, the well reached a 30-day peak IP rate of nearly 3,200 boed (three-stream). These intervals have the potential to add significantly to the Company's inventory in the Midland basin and South Texas, respectively.
"I continue to congratulate our team on truly outstanding execution, which includes optimizing capital expenditures, in achieving our results to date," said President and CEO Jay Ottoson. "Higher than expected production volumes in the Permian reflect strong early performance from a number of new wells, including the Wolfcamp D and Dean tests, as well as completion timing. In South Texas, production is benefiting from our newly-designed development wells, as well as a better than expected decline rate at a recently completed Austin Chalk test. Better well performance, while maintaining capital discipline, further supports our goal to be free cash flow positive in the second half of this year."
Ottoson continued, "We are very pleased with results to date on several well tests into new intervals, including the 30-day peak rates we are reporting today for the Wolfcamp D and Dean in the Permian basin and the Austin Chalk in South Texas. These intervals, in addition to our recent Middle Spraberry test in RockStar, are potential catalysts to drive inventory growth and value creation from our existing footprint."
