SM Energy Reports 1% Revenue Growth, Net Income Increase in Q3 2024, Completes Uinta Basin Acquisition

SM Energy Company reported significant financial performance for the third quarter and the first nine months of 2024, reflecting a robust operational strategy and market conditions. For the three months ended September 30, 2024, the company generated oil, gas, and NGL production revenue of $642.4 million, a slight increase of 1% from $639.7 million in the same period of 2023. Total operating revenues and other income for the quarter reached $643.6 million, while net income was reported at $240.5 million, up from $222.3 million year-over-year. Basic net income per share increased to $2.10 from $1.89 in the prior year.

For the nine months ended September 30, 2024, total production revenue amounted to $1.835 billion, compared to $1.757 billion in the same period of 2023. Net income for this period was $582 million, a modest increase from $570.8 million in 2023. The company’s cash flow from operating activities also improved, totaling $1.205 billion, up from $1.098 billion year-over-year.

The company’s total assets increased to $8.028 billion as of September 30, 2024, compared to $6.380 billion at the end of 2023. This growth was supported by a significant rise in cash and cash equivalents, which reached $1.735 million, up from $616 million at the end of the previous fiscal year. However, senior notes net increased to $2.707 billion from $1.575 billion, reflecting the issuance of new debt to finance acquisitions.

Strategically, SM Energy completed the acquisition of an 80% interest in Uinta Basin assets on October 1, 2024, for approximately $2.1 billion, funded through a combination of cash and new senior notes. This acquisition is expected to enhance the company’s asset portfolio and production capabilities. The company also executed amendments to its credit agreement, increasing lender commitments and extending maturity dates, which bolsters its financial flexibility.

Operationally, the company reported an average net daily equivalent production of 170.0 MBOE for Q3 2024, a 7% increase from the previous quarter, driven by strong performance in both the Midland and South Texas regions. Production expenses rose to $148.4 million, primarily due to higher transportation and lease operating costs.

Overall, SM Energy's financial results and strategic initiatives reflect a strong position in the energy sector, with continued focus on growth and operational efficiency amidst fluctuating market conditions.