SM Energy Announces Closing of Permian Basin Acquisition and Increased Borrowing Base to $1.35 Billion
05 October 2016 - 9:30PM
Business Wire
SM Energy Company (NYSE: SM) announced today that the Company
closed the previously announced acquisition of 24,783 net acres in
Howard County, Texas, from Rock Oil Holdings LLC for $980 million,
before customary purchase price adjustments.
The largely contiguous acreage position expands the Company’s
Midland Basin footprint to approximately 46,750 net acres. The
effective date of the transaction is September 1, 2016, and the
Company’s preliminary estimate of net production from the acquired
acreage for the month of September is approximately 5,300 Boe per
day (3-stream).
Subsequent to the close of the transaction and as part of the
regularly scheduled redetermination process under its credit
agreement, the Company’s borrowing base has been increased to $1.35
billion, with bank commitments of $1.25 billion, providing the
Company with substantial liquidity.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of securities laws. The words “anticipate,” “assume,”
“believe,” “budget,” “estimate,” “expect,” “forecast,” “guidance,”
“intend,” “plan,” “project,” “will” and similar expressions are
intended to identify forward-looking statements. These statements
involve known and unknown risks, which may cause SM Energy's actual
results to differ materially from results expressed or implied by
the forward-looking statements. Forward-looking statements in this
release include, among other things, expectations regarding the
acquired Permian Basin assets and the Company’s liquidity position.
General risk factors include the availability of and access to
capital markets; the availability, proximity and capacity of
gathering, processing and transportation facilities; the volatility
and level of oil, natural gas, and natural gas liquids prices,
including any impact on the Company’s asset carrying values or
reserves arising from price declines; uncertainties inherent in
projecting future rates of production or other results from
drilling and completion activities; the imprecise nature of
estimating oil and gas reserves; uncertainties inherent in
projecting future drilling and completion activities, costs or
results, including from pilot tests; the uncertainty of
negotiations to result in an agreement or a completed transaction;
the uncertain nature of acquisition, divestiture, joint venture,
farm down or similar efforts and the ability to complete any such
transactions; the uncertain nature of expected benefits from the
actual or expected acquisition, divestiture, joint venture, farm
down or similar efforts; the availability of additional
economically attractive exploration, development, and acquisition
opportunities for future growth and any necessary financings;
unexpected drilling conditions and results; unsuccessful
exploration and development drilling results; the availability of
drilling, completion, and operating equipment and services; the
risks associated with the Company's commodity price risk management
strategy; uncertainty regarding the ultimate impact of potentially
dilutive securities; and other such matters discussed in the “Risk
Factors” section of SM Energy's 2015 Annual Report on Form 10-K, as
such risk factors may be updated from time to time in the Company's
other periodic reports filed with the Securities and Exchange
Commission. The forward-looking statements contained herein speak
as of the date of this announcement. Although SM Energy may from
time to time voluntarily update its prior forward-looking
statements, it disclaims any commitment to do so except as required
by securities laws.
ABOUT THE COMPANY
SM Energy Company is an independent energy company engaged in
the acquisition, exploration, development, and production of crude
oil, natural gas, and natural gas liquids in onshore North America.
SM Energy routinely posts important information about the
Company on its website.
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version on businesswire.com: http://www.businesswire.com/news/home/20161005005131/en/
SM Energy CompanyInvestor Contact:Jennifer Martin
Samuels, 303-864-2507jsamuels@sm-energy.com
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