DENVER, Jan. 3, 2017 /PRNewswire/ -- SM Energy
Company (NYSE: SM) today announced that it has entered into a
definitive agreement with a subsidiary of Venado Oil and Gas, LLC,
an affiliate of KKR, for the sale of the Company's third party
operated assets in the Eagle Ford, including its ownership interest
in related midstream assets, for a purchase price of $800 million (subject to customary
adjustments).
President and Chief Executive Officer Jay Ottoson comments: "We are pleased to
announce the signing of this agreement as we kick off 2017. This
sale supports SM's strategy to be a premier operator of top tier
assets. Our 2017 capital program will focus on our top tier
oil position in the Midland Basin, consisting of approximately
87,600 net acres, and our top tier operated natural gas and NGL
position in the Eagle Ford, consisting of approximately 161,500 net
acres. The proceeds from this sale will provide us with
additional flexibility to pursue aggressive growth from our Midland
Basin assets, with related capital expenditures in excess of cash
flow over the next few years, while at the same time improving our
debt metrics and maintaining strong liquidity."
The assets expected to be sold include approximately 37,500 net
acres in the Maverick Basin/Eagle Ford area of south Texas and a 12.5% interest in the Springfield
Gathering System. As of year-end 2015, net proved reserves
associated with these assets were 65 MMBoe (38% oil, 31% natural
gas and 31% NGLs). In the third quarter of 2016, these assets
produced approximately 27,260 net Boe per day (33% oil, 33% natural
gas and 34% NGLs.) The transaction is expected to close in
the first quarter of 2017, with an effective date of November 1, 2016, and the purchase price will be
subject to certain closing price adjustments. The transaction is
subject to the satisfaction of customary closing conditions, and
there can be no assurance that the transaction will close on time
or at all.
Scotia Waterous served as the Company's financial advisor in
this transaction.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of securities laws. 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 proceeds, timing and
expected use of funds from pending asset sales. General risk
factors include 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 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 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. For more information about SM
Energy, please visit its website at www.sm‑energy.com.
SM ENERGY CONTACTS
INVESTORS - Jennifer Martin
Samuels, jsamuels@sm-energy.com, 303-864-2507
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SOURCE SM Energy Company