SM - Earnings call transcript Q3 2017

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Operator

Good day and welcome to the SM Energy Third Quarter 2017 Earnings Q&A Conference Call. All participants will be in listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Jennifer Samuels, Senior Director of Investor Relations. Please go ahead.

Jennifer Martin Samuels

Nicole. you, Thank and Q&A everyone, for us joining Good thank today's call. for morning you you the accompanying I our have all hope had earnings was yesterday slide that third opportunity release, deck discussion and prerecorded posted afternoon. quarter review to

our pleased pleased challenges South performance momentum helped with presented how certainly team performance, serious two going our quarter the with this are notwithstanding third into We storms, Texas by very the to and XXXX. are has

forward-looking make risks during forward-looking and results reminder, As cause the this or in from posted plans, morning. be future quarter our we statements may the third results our year in our earlier materially about question-and-answer was yesterday, in filed may expectations this risks implied statements a assumptions statements. forward-looking performance. session, discussion about our These that actual our of found materials regarding Further Form XX-Q that or these differ expressed statements this to involve may XX-K the Form filed information and cautionary

also these in certain for GAAP Reconciliation are performance. quarter. measures in financial to useful are discuss metrics information non-GAAP that release our believe those other about most and we directly evaluating measures measures the our comparable earnings non-GAAP described of will this We

without Now, further started. will get delay, we

are for friends Houston, brief here comments, and some Pursell Jay turn opening have present I over a believe, it parade then Herb Our your to in to questions. Wade answer will to attend. Vogel I and Jay? ready also

Javan D. Ottoson

for for Good about joining Thanks the forgotten that. thanks, too. everyone. pointing parade, out Jennifer. Thanks I'd us. morning, Well,

needs that of tend releasing calls be to we clarified frankly people's questions finding have feedback questions to that about confusing it pre-recording even or get benefits early the address. commentary of and other lot be One and might we our said from people that to anything on can a we're we is quarterly

coming guidance quarter lower our be appears in previous about than our This guidance. production question to jour du the a quarter, fourth little

lowered is So year of lower essentially we of asset. look that our by from Ford revision production we full our production at guidance, barrels our if estimate NGL you million And Eagle the from expected oil equivalent. and gas all made to X.X

that great to number, some that Now spending excited Eagle half it. Ford happy Boes, oil will in is last it, of to due capital deal XXX,XXX impacts that to is we're talk this really happen efficiency more are moving X.X about sharing be a couple It's really items a to partner we It's we some over. signed barrels our of remainder about with million We're this non-recurring a than quarter The great small volumes in of X.X temporary expected, from to more exchange And million deal. the JV quarter. of which about adds which That capital just JV experienced. number up about improving for and of going our fantastic storms barrels. equivalent due the to and Permian.

guided numbers new XX.X year the make for XX.X you of and our million get you quarter. right for if So million adjustments, to those the fourth

the much people obviously, need though but Now and changes understand small growth, numbers gas business of and rate business, up. right really margin don't understand that big now I add is the oil driver have volume on our to impact how our

suspect But well their these about I have off get that people guidance ours, well numbers for they by are how optimistic above guidance. timing. really never I analysts so certain our making to come in numbers assumptions XQ Now, far and understand

money, right our right of Permian a track the multi-well I wells the now will the about but January. in even with that are early money of they into may all prepared discussed December. Most December, in we're get scheduled on our And potentially think number come to come pads, late this plan XX so, as Herb on quarter, spent but and operations, Wade late remarks, has

wells developments. going of here, big the ramping lumpy our be right much won't multi-pad for when contribute XXXX up program production. It's those our to And at especially these schedule to are So we're beginning on it rate.

So I the think that's disconnect source of people. potential that some probably with

this, in means in it, you to crew frac fourth to So coming way eighth investor been great fourth it Permian now, I a again, free at look slight have rig an should like the Eagle of and at this any the up look from XXXX. That into going this really looks year acceleration start got should is in capital able before we're you that's bringing from, think we've activity the the crew, a to end. Permian Frankly, Ford. we're

So about to excited forward looking and we're that that.

questions. So with I just it we'll that, open up think for

Operator

Thank you.

from comes Michael question of ahead. Glick first Our go JPMorgan. Please

Michael A. Glick

Hey. guys. Good morning,

Javan D. Ottoson

Hey.

Michael A. Glick

talk you that greatest So latest should how in the results the remiss the and how fits about ultimately I of ask asset terms in into about I'd basin, the be plan portfolio? if believe there you evolve PRB. in and the Could XXXX, didn't

Javan D. Ottoson

I'll Jay. we're Yeah. to talk strategic what Herb, tell you doing you about more of I'll right long-term the then now is what, address want kind piece. and this

Herbert S. Vogel

XX of in phase with that second of then by we phase. set And completing with have and now, on are of got another track drilling of the which on between XX first two, well right producing flowback. wells, second We've and seven that We're we're is that wells. a them are three another Yeah. phase on

on great results last shared well on all we're progress. the outstanding JV drilling plan the So, then And been as been making we particularly have with the quarter. we've the with track partner, strides, and

Javan D. Ottoson

those an it. we assets about and questions the done. to And get asked a occasionally deal an Powder I'll comments JVs, a the or make in whether impediment particularly the JV selling couple on to getting impediment is

in want not. that so They're see that no when to doing are we value clearly getting to deals that And those. You those we want people for These sure a absolutely assets, make doing done. we impediments there's make, deals. can impediment not drivers know, deal to see the to actually deals

a minute a talk about and take just me general divestitures as Let topic.

think when divestitures at we got liquidity. potential point, even Powder in to portion a Ford we've or $X.X of have we billion some about currently I like the remember, talk Eagle the

secured We no We debt. debt, on have near-term maturities hedged. no got well our we're unsecured and

over go asset our acreage. Our order Permian Eagle we're develop to assume think, and leverage to And going divestitures, make to that and don't lower business to would prudent I that we're the core any make as plan doesn't moving need in any further as levels to Ford fast, frankly, operator in our we time. get of any

So on growth. current drag leverage a isn't our our

about value think value effort. appropriate, think get these and of that we're Now sell to then things, efficiently speed periodically here are up we our going we'll understand, sheet. with And positions a I acreage we've these we're if property benefits of is assets very And market, a We're drillable prioritize once, can parts in and here execution. inventory the in think we're that appropriate strengthening assets achieve shy that doing we I we stay with attractive selling test over we going of and said, working balance for the you achieving value those things all and and other we're only the underappreciated. JVs But to that prove understand not transact. to for demonstrated to we're and to potential going in-house active

in and Now particular going consistent But timeframe. can't to anybody values any this done we persistent we're be give that at be obviously, point. assurance for acreage appropriate looking some and will deal any at particular for

Michael A. Glick

and then And well Howard them? are on the about a test and of give the more you early you. Thank you how in drilled those B and completed back in line performing on you talked Lower time that data. Viper a back flow color and bit Wolfcamp it. Got the in transcript, Spraberry with northeastern Could flowing wells

Herbert S. Vogel

this is Michael Herb. Okay.

So, pretty really days, yeah, wells. into the But the And design Spraberry, right and next XX-day right; probably the on line. two detail a in are those lot completion they're of performing we're we'll were laterals on to standard in better yeah, and they have it's we'll at that quarter close but, XX,XXX-foot they're this. completion giving peak on designs B early there. weeks Wolfcamp our we're least out the Lower not Obviously know whole

Michael A. Glick

Got it. Okay. you, Thank guys.

Operator

Our next ahead. question comes from go Mike Scialla Stifel. of Please

Michael Stephen Scialla

everybody. Morning,

A. Wade Pursell

Hey. Morning, Mike.

Michael Stephen Scialla

results in County, your acreage and Spraberry. the now A and what both you terms Howard Lower at Wolfcamp look say de-risked you you've yours of in the competitors, there, When of think maybe

Herbert S. Vogel

we'd we're to last and the February. Yeah, were where and in to that where go going do confirmed and Mike, we is far. showed those all maps really spots showed what we things February Herb. over so We're sweet January the this going

be there, was doing Howard in running of right, were a sharing there February. XX of zones didn't been where rigs worthwhile We each as we'll lot that's that multiple it think de-risking as many we'll so in be. call, There's You're County. incrementally and

Michael Stephen Scialla

makes it That as at your point this has a Is large broad like that brush, guess, been mean I essentially acreage looks I fair? just sense. percentage of a derisked.

Herbert S. Vogel

We're all expectations drilled we've measure. with pleased we've that yeah. real acquisition large a Well, places by definitely the our exceeded

Michael Stephen Scialla

order I like said completion just essentially and but in they know general and the the funding to I some somebody's in then, in JV there, in drilling as it that agreement prepared these coming remarks, you earn Herb, in properties? sounds wells your confidential, details Okay. terms are And of guess are the interest all

Herbert S. Vogel

number have River be in at Yeah. a we It's to the a we one hadn't of improving found the anticipated. arrangement Basin Powder just in ways exceptionally which very similar to things we

a but with arrangement, it different similar very So party. is

venture Just services the bring think was want everybody technology they'll bring and to joint on and make But for bring area. funding sure they'll that. that we clear they'll

Michael Stephen Scialla

capital much with you Can how JV by route? say saving going you're the

Javan D. Ottoson

into. get those probably do doing lot a we're they're really one hard of up we spend. But an capital. being what a to get in When years, our providing can't going so areas a it. that. little in this, out end is to reduction That's of see you'll will guide it's get and you When next in we to We'll that put Mike, Yeah. couple it guidance exact the our services,

So, of us. it that's and important an for aspect

Michael Stephen Scialla

good. you. Thank Very

Operator

comes question from next of Our ahead. Bank Please of go America Merrill Asit Sen Lynch.

Asit Sen

guys. morning, Thanks. Good

Javan D. Ottoson

Morning.

Asit Sen

this So Permian or on there is production, function of a reduction, other in factors play? LOE are the higher

Herbert S. Vogel

large put lot A that to this related wells we're Permian. Asit, handling share as are we on handling, trucking It's of Herb. straightforward pretty a the water more is LOE And water. in our remote, particular. produced of Yeah, on water is initially

larger build we more more have out, As pads, pipe. that's and put on get we

we some pipe. leads water to more go to significant as got And reduction, to more LOE progressively move that ways on and even in so pipe, we've really getting

LOE. to largest single area the to that's contribute So lower

we've as gone some Another side them area drops some us, wells over vertical to number and standards up and expense that's there, we the done through them a And get but long-term of been around inherited to time. that acquisitions, there's with work for off then XXX.

So the are two key areas. those

Asit Sen

the Jester Thanks. proppant you Could wells, didn't necessarily And cost loads comment per IPXX just you there? that potentially looks uplift on basis. the stepped like and on on a and spacing but get X,XXX-foot the productivity up

Herbert S. Vogel

rather the but on those also we'll they're Asit, six first in, changes know oil. you things water how IPXX. year also sand higher really wells, to see that locations, the cumulative in in and mixes, Jester influence months Okay, a they're at like we after got higher it the loading more the than And some year those just look behavior, done loading. at to much say, looking chemical We've

those driving so a we'll view, even see A separated a So those what's that's is one distance. between and the B other Note plan how though is in of they're a on one is really are much vertically Jester. Jester thing, that XXX-foot the spacing Wolfcamp the by there quite pad, they communication Wolfcamp

Asit Sen

Great. Thank you.

Operator

ahead. comes Ford Paul Eagle to northern the Permian we the Is to how Hi. be Eagle of Capital still in area and just Paul Macquarie. question about activity of give should reallocated from Macquarie think - starting within next (USA), I Ford? morning, Good Grigel off realizing full there want on but XXXX capital, guys. outside activity Inc. go guidance, guess, that Please Our guys in XXXX? Grigel don't the you going

Herbert S. Vogel

Hi, Paul. Yeah. is This Herb again. Yeah.

there. the Inc. NGL gas Tier Paul Eagle the I our prices in NGL continue meeting are, operations, will economics and that where is, great leasehold operate to they helps (USA), commitments out and some really Macquarie per regular our East wells. - mean X getting Ford that We Grigel our Capital

Okay.

Herbert S. Vogel

XXXX? on potential locally So yeah, for the you as made bit early $XXX,XXX today, savings continuing about then more especially detail Great. throughout there. in guys you've Permian. And cost that how the on Macquarie that testing in the (USA), as Could general And we'll Grigel of service there, Does sourced the Is into little is year? ramped be - I what then in year? you of that guess the Inc. stand Capital just on on seen general the the on and well things Paul sand Permian. outlook the come comment see kind that you've as within a explain then

Herbert S. Vogel

several Yeah. there put there. you things in There's

on So almost first County the all in really of have the Howard Local sand works of we and all, I've Peck. tech-spec over Sweetie transcript gone side the for on intervals things.

So real optimistic we're there.

more capacity. with underway million there's mines are currently In terms There's with per XX tons. about mines million two capacity, of operating local more about annum sand three X of tons more,

few after ramp a see a more do we up, projected quite and there's that. So big

as suppliers, We informed And what mines Capital talk view that sand savings with Paul cost are be local Macquarie through sand - ramp Inc. to our when got the likely $XXX,XXX about achieve (USA), a heavily these of use local in sand really that'll increasing good about XXXX. sand quite an and us those that able future. completions we're percentage we we'll we feeling so Grigel engaged in will plus, up,

service now? more then outlook general And on cost right Okay. the broadly in

Herbert S. Vogel

cost, were some XX% service some higher little we on it's some projected dropped We So actually a and completions the had cost bit increase level. then pretty and and efficiency. in a areas

for year. projected came together what So we in at of the kind everything aggregate,

Herb. (USA), whatever for really XXXX. about that. Thanks - pleased market's see efficiency that We and into we'll we will we're But Great. Grigel some now, room the right nice right see Paul stable hit offset as for Capital here gains additional we the do escalations if of that see. So Macquarie kind color, go continues a Inc. place

Operator

comes Please Our Perincheril ahead. of Biju from next Susquehanna. question go

Biju Perincheril

Quick those JV. in Hi. incremental? the original that Good the Hey, morning. were these or you're great and question for Ford are fourth about Howard in completed results this the completing, wells County. the Eagle quarter in third quarter, the year Are plans

Herbert S. Vogel

seven fourth is either no our the quarter September. Ford and this Biju, other Herb. those the and completions were were August completions There's plans. side, Yeah. Those in in in in Eagle

Javan D. Ottoson

were as in impact down remove that our that why our That's with the see volume, Absolutely. we original associated plan, and sharing takes is them we they that guidance.

Biju Perincheril

Got it.

Herbert S. Vogel

were those completions we over a and negotiating discussions the after And months, JV obviously, number arrangement started commenced. the of

Biju Perincheril

it's it. data. the say Got two production the And Griswold time those in very the of then how or anything wells pilots? early on performing terms can you Iceman pilot, are I about But know in bounded

Herbert S. Vogel

Yeah. That's interesting.

to It a be You to way, it's worse on always explain. the to the simple. It's than out middle be, turn be always oh, to bit outside. going the difficult very one's going doesn't going always it's two think, and that little

year handle this to on where Really to a no wait are drawing and to mixed. months it's get is really So really different. headed, concluded spacing, things on you need for six conclusion we've a

Javan D. Ottoson

bounded far. best in One the so well is the pad of the wells

Herbert S. Vogel

Right. Right.

Javan D. Ottoson

to. So it's just hard to come

Biju Perincheril

Yes.

Herbert S. Vogel

Hard reach a there, yet. to conclusion

Biju Perincheril

Got it. Thanks.

Herbert S. Vogel

wider in spacing that's wells But of right were did that we with for about that XXX-foot obviously. eight ones period that bounded that on time. show spacing slide, what we and on we that line were performing previous the and They're wells are average, middle the are in those that showing talked

Biju Perincheril

it. Got

it if sort like need is of that separation? so So we do you any is think, or to six-months there a time see

Herbert S. Vogel

We've got degradation the kind tell should key The that looking production at we're not reservoir about us expect. we is Yeah. just thing simulations data. what

that our been. us tells rate completions have transit how have analysis effective We

well, well of can because stimulation performing great is we it's but performing one poorer so well this this and the it was say, because is worse stimulation. And okay,

So where we around solid data use data, actually us. database have parties we our a quite but we just we analysis lot other a actually And have trades from of big vast with not data correlations. where have

if feet around got And you've It's handle. of good to it a got plus call at pretty down if linear. data can a XXX, then spacing it, and XXX and IPXX not X,XXX and XXX. picture with data, down to lot XXX an then got got we've you So a, you you feet

to So see reduction. XXX don't feet, as you much move from of you X,XXX a

off, XXX As at level drops down it impacts. you type see getting where that start of but down, bigger foot you'll

this pretty big on ourself, a database. in But looks like have correlation from we okay, we good expected at But how wells that area, we So about and we in these that as how then range. general. looks is tell are a it coming in that's there really look it

Biju Perincheril

That's Thank Great. helpful. you.

Herbert S. Vogel

bet. You

Operator

KeyBanc. Stevens question of ahead. next Chris from Please go Our comes

Chris S. Stevens

testing a guess acreage talk Eagle of mean, if new just also unlock And or you Would Ford thoughts just entire some some you northern acreage able enhanced that JV of bit for that are testing of northern possibly acreage the the I kind sell part of the Can go there? some then the value? Ford? out you Eagle new what's of the little sell improving areas? the I completions and that off you guys. Morning, economics objectives And then about to to there? mostly are are the bias What the some

Herbert S. Vogel

Okay. on then start things Chris, jump asked. and in a number this will Jay you've I'll of

the of pretty sparsely First it's Eagle North, drilled. so Ford all,

would it. which dollars cost take there'd time first. to risk associated some ones best should some it be sort few seeing the performance with lot So of together which we and better started and and would and and better us money, things getting we were would an And a too, that inventory there we to of increasingly of the that a see wells we But improve the out list work considerably. the economics we opportunity north put some ones was try potential seeing started clearly, to just would quite where

things, did identify partner So and they can And particular potential list a but some you of if in money won't see chemical of spend lot your just this in data you the on several a about the will belabor first those these brought things and we've I options. the the great. more is lot data inform these, And and of that we whole have applied willing wells, stage get one a in we to you're thing that a performance a saw, partners. few the but includes wells number spacing, designs. you fundamental to get is completion can

what that's we So saw.

way line you doing. get acreage. put inventory and economic to large is try we a to over that's we're completions what see bit So got to different and a a the to bottom the results, to see And got you it,

Javan D. Ottoson

me, Jay. let This Chris. So, is

Let that bit. issue a strategic me overall address little

had doing we're really So, and we southern what probably outside core our what Eagle we're very, very the what on position which with Basin high where Midland our doing we've these development areas, area is JVs returns. call would Ford and

So the to we would strategy of to company inventory. The those own call develop top-tier is top-tier assets. and top-tier assets

both So ourselves, for Powder what just the northern trying and in we're areas, top-tier doing Eagle really understand is inventory. these Ford this we're the to areas, in

truly years were you best look activity If just back probably in Ford a in few In understanding, lot the using our activity top-tier too put had couple the and had areas we had really was last in frac we into Eagle years, of a at very drilling of make jobs. foot forward ago this the both We inventory. when big the tight we can we hadn't Powder, on either spacing. these never over them we weren't

long-term. be That's Right. stuff own. top-tier so bunch we acreage flow would that full-cycle the be few we're it already a we already a All awesome. ton in if need the years, in inventory cash economics. is, great develop of acreage, a so We inventory get in need And makes And positive inventory, going here and Now, we would top-tier of that to sense. own great. we that

someone you our kind we kind this be shy fit better we're and we else, us do own made great look We're If with to activists say, a balance what do going with make things delever and has of it could here. us by done not like okay, over to the We're I'll about do sheet. Permian something. that to it we it in stuff. think We've lot time they're to the going that looks selling value that if and to business it thing of we're just we category. anything put I we at can know our when I have in could other will can we say, sell we've do. it, that compete selling right mean, we're hand, help to to that. it we Then we're And to inventory, doesn't that can we that once going value is makes sell value demonstrate what going a for do once so not On and example. But we wells, the decent, at a we we the if it of for we things know of but that piece it. it. get look sense can understand do really the it that, If us and we going

I think about can as I as clear that's be.

Chris S. Stevens

there, there? kind of the do compete color formation? or Guess upside gap might move It think some some still wells Biscuit like a test of seven terms a the months for seems of Any appreciated. of looks Basin. uplifts you on is in wells drilled the relative of have driver older you of these I of mean, out nice some wide you've Permian productivity point, at when And there. could asset. the this big there value the well is probably some Definitely be the that That economics six data there. then Powder Maybe Niobrara like update pretty is like with showing on the over, pretty the I there the pretty can you appreciate could to wells. just out that River newer or

Herbert S. Vogel

first go Yeah, the Niobrara. to Chris, let me

a pretty out get Niobrara lined or been to but we yet. there do permitted hard, want we've a the well Niobrara that specific soon. we So But tested location working haven't obviously,

be noted few know around off just our We the industry have there's acreage, a quite will delineating that's and Niobrara permits always beneficial. that it so we

You pleased lot and Powder, obviously we wells way with hesitates in Shannon we're of me to the the Frontier Permian as competitive their that. have Powder On wells from they're here yeah, River the doing Basin wells people And learn how team a as are some and real coming. never wells. well the show

get we Permian if at and there's no they level costs then a they significantly, So doubt can could the have dropped cost the competitive. be

liking we're So not really to pleased our seeing. I'm with We're we're brought it's say to portfolio, far. see with the wells. they're yet what rank to JV full we so we're really what but the what and in encouraged where going going

Chris S. Stevens

out at well And this on any are the costs there update what latest point?

Herbert S. Vogel

there's interesting this in it's improvement wells. order as because acquisition subsequent in Well, going considerable data to JV, part on of the the enable

were it's significantly we to will say hard I years out. data from that year and down gathering where it's But So a ago. pull two

Chris S. Stevens

color, the guys. Okay, appreciate

Operator

questions Stark Stark, Remeny Our comes is your open. go ahead. next of question from line RBC. Please

Stark Remeny

Sorry.

think hear you I mute. Can guys was I me? on

Javan D. Ottoson

bet. You

Stark Remeny

Well, quarter right. taking solid on appreciate a All question. my congrats you Perfect. and

Javan D. Ottoson

You bet.

Stark Remeny

assuming kind same It so of very not you when Can operated asset a attracting start you are looks sale the guys seeing. is a results thing on seeing capital, a of I follow-up Obviously, PRB. players idea other SM give transacted? of us just lot far. an the have quick are the like impressive would

Javan D. Ottoson

the and sure JV get first in you there's well run second this on make phase quite the right if phase. – Herb, completing in we or left basically, have in drilling like We're I I couple think a the place eighth – the there. the about Well, we're to ninth we year, year not think a first about

get free So own comment, we thing it where, to it a my that made before about like and put we'll a the in. do we starting putting mean we And hope in our that time, hey, to in to point next think Herb's you'll substantial year to it's standpoint. get accelerate Obviously, I in point own there look is is Permian least frankly, cash can the point that same this money going a direction. plan where I could different would it our a we to we in probably from works end But not our there on out decision the capital lot compete, that money. at would got and so to start Or on can great a flow. we get see a lot to still the the decision quite we business make don't get have of

test the You going of us exploration here into mode, see money a other probably Niobrara may own the in put least lot that, see at you in kind in next a won't XX an But mode. than our there of capital months.

Stark Remeny

or the And on the or the so combination? well I capital on side weighted some being performance just guess is expectation for potential side improvement

Herbert S. Vogel

and mean, both. it's performance well working I really the costs to we're the we're Stark, get driving down also up.

stop we there. anything at So don't

Stark Remeny

guys. Excellent. Thank you,

Javan D. Ottoson

You bet.

Operator

ahead. Our of Please MUFG. next from question comes go McAllister Michael

Michael McAllister

morning, guys. Good

Javan D. Ottoson

morning. Good

Michael McAllister

held a do while the Viper if up with to little something for very well? deals the bit question My – you it's with count. has talk and and It's a it been robustly on about can stage the

Herbert S. Vogel

done to increased stage fully tell Yeah. count. a don't of Obviously, I benefit wouldn't and a is to have that Viper to stage attribute can of longer we offset X,XXX-some, it now count yet no, But a from little number that. it'll bit for count. We've where directed see stage this we big probably think tests XX,XXX-foot Michael, we with Herb. X,XXX increasing lateral, to take an

have in that's had position perform about a the that before. I do and there's think what we're we're and benefited in we rock well, the talked a with acreage area, eastern tight of And mudrock. of part And how our where that pleased carbonate, we've carbonate, before lot missed the seeing really porous there's, that location and carbonate that's really people of us. wells porous in lot

So, no, solely additional that to I stages. attribute wouldn't the

Michael McAllister

of it's a the rock. So function

Herbert S. Vogel

Yeah. design. good completion a And coupled with

Michael McAllister

Sure.

Javan D. Ottoson

on comment get design completion design. – a And we're we're Herb, just many at to how is on stage it you kind levels stage how kind pumping count of that Yeah, idea particular, in various it? essentially is great looking at of could an

Herbert S. Vogel

Yeah.

key design have calibrate and some And we we the improvement same then here models of typically the it can that three-well run pad, typically, the the much So will test and difference on in we'll we well middle then well, if say, other is thing so them. doing and we how see one side bounded run one, a edge completion makes. a either on we're

So that way, we can really calibrate.

we some in So when some got out rock. that draw wells. we the do before just location. in always are we've We'll And conclusion, ideas. of one firm don't things conclusion, probably happen normalize are because slightly inflows that different want in the you pretty do are we'll four what There reach to a a it it

we're systematic about design assessing So, very changes. completion

Michael McAllister

be would that to Sundown approach And the the pad?

Herbert S. Vogel

so a just Yeah, of other's pads, B and from, And the just Spraberry. one's up Sundown obviously a Wolfcamp it's Lower so the north Viper.

Wolfcamp Lower our lateral. of Spraberry the have Apache obviously there acreage although wells A, edge, that We there's a So, delineation already They're another well, then Eastland a confidence because and west operator but got Lower that that first and and increased. Well, that of those online, I'd drilled Spraberry. out that's just in wells our also our those has short the we to are Wolfcamp well really, are wells. the call both them B good those at with

Michael McAllister

you. Thank Great. Okay.

Operator

Jay session. remarks. back for closing question-and-answer the would our conference to concludes Ottoson any I like to over turn This

Javan D. Ottoson

company going her really know happy And left from you margins. direction the there's and on with really don't but flow results introduction, as Well, we being the certainly anybody the this standpoint, I with started if us a Jennifer is cash in our appreciate morning. we're call

And well Just of forward things a a are a XXXX going frankly, and whole now. us right look for big first quarter fourth lot really to quarter solid here. we to

Thanks. So, look the conference forward thanks you to we again around and seeing Bye-bye. circuit.

Operator

you has conference today's now presentation. attending Thank The for concluded.

You now disconnect. may

Jennifer Martin Samuels	SM Energy Co.
Javan D. Ottoson	SM Energy Co.
Herbert S. Vogel	SM Energy Co.
A. Wade Pursell	SM Energy Co.
Michael A. Glick	JPMorgan Securities LLC
Michael Stephen Scialla	Stifel, Nicolaus & Co., Inc.
Asit Sen	Merrill Lynch, Pierce, Fenner & Smith, Inc.
Paul Grigel	Macquarie Capital (NYSE:USA), Inc.
Biju Perincheril	Susquehanna Financial Group LLLP
Chris S. Stevens	KeyBanc Capital Markets, Inc.
Stark Remeny	RBC Capital Markets LLC
Michael McAllister	MUFG Securities America, Inc.

SM Energy (SM) 3 Nov 172017 Q3 Earnings call transcript