(MENAFNEditorial) DENVER, Feb. 21, 2018 /PRNewswire/ --SM Energy Company ("SM Energy" or the "Company") (NYSE: ) today announces fourth quarter and full year 2017 financial and operating results, year-end 2017 reserves and the Company's 2018 operating plan. Highlights include:
2017 net production totaled 44.5 MMBoe, delivering 165% production growth from top tier Midland Basin assets and 47% operating margin growth per Boe 4Q16 to 4Q17 as the Company successfully continues its portfolio transition. 2017 year-end proved reserves increased to 468 MMBoe, adding 47% reserve growth on a retained asset basis, nearly tripling Midland Basin reserves and increasing the standardized measure of discounted future net cash flows by 2.5 times from $1.2B to $3.0B. 2018-2019 operating plan targets competitive growth in debt adjusted cash flow and aligns expected total capital spend with expected cash flow by mid-year 2019. Outstanding performance from new wells in Howard County ranks SM top Midland Basin operator by revenue per well and results in significant value creation on RockStar properties. New RockStar wells announced today include two Maverick pad wells with 30-day IP rates that each approximated 200 Boe/d per 1,000 lateral feet, continuing the Company's strong performance record. MANAGEMENT COMMENTARY President and Chief Executive Officer Jay Ottoson comments: "At this time last year we set forth an aggressive three-year plan to grow debt adjusted cash flow --our preferred measure of returns-- implementing a strategy that included driving value creation on our newly acquired Howard County assets through optimizing drilling and completion operations, generating margin expansion through a capital program focused on growth on our Midland Basin assets, and further coring up our portfolio to maximize the present value of assets and de-lever the balance sheet. 2017 was a highly successful year in meeting and exceeding our announced objectives, and I thank our SM team across the board for successful execution.
"We commence 2018 well positioned to continue this strategy and meet our planned growth trajectory. While 2017 was a transitional year for production and cash flow growth, 2018 and 2019 target substantial growth in cash flow along with a reduction in net debt:EBITDAX to approximately 2.5 times. This year we move into development mode on our RockStar assets. We have increased the rig count in the Midland Basin from four in early 2017 to nine currently, while continuing to demonstrate top tier efficiency metrics. I believe our operations are top tier as is our asset base, and we look forward to generating increased value for our shareholders in 2018 and beyond."
"Lastly, I want to congratulate Jennifer Martin Samuels on her well deserved promotion to Vice President - Investor Relations in recognition of her outstanding work in leading our investor relations efforts."
2017 IN REVIEW
YEAR-END 2017 PROVED RESERVES
Year-end 2017 proved reserves of 468 MMBoe are calculated in accordance with SEC pricing at $51.34 per barrel of oil NYMEX, $3.00 per MMBtu of natural gas at Henry Hub, and $27.69 per barrel of NGLs at Mt. Belvieu. Year-end proved reserves were 34% oil, 20% NGLs and 46% natural gas. Proved reserves were 46% proved developed.
Adjusting year-end 2016 reserves for divestitures, proved reserves increased 47% on a retained asset basis. Net proved reserve additions were 192 MMBoe, or 4.3 times production. Midland Basin proved reserves nearly tripled to 160 MMBoe. The table below provides a reconciliation of changes in the Company's proved reserves from year-end 2016 to year-end 2017 (numbers are rounded):
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