Denver-based independent SM Energy Co., focused mostly on Texas, reported higher than expected production and improved well performance from the Permian Basin and its Midland sub-basin during 2Q2018, while output from the Eagle Ford Shale also ticked upward.
Total production was 10.5 million boe (115,000 boe/d) during the second quarter, with oil (4.36 million bbl) accounting for 41.6% of the total, followed by natural gas at 40.3% (25.3 Bcf) and natural gas liquids at 18.1% (1.9 million bbl). Broken down by play, Eagle Ford production totaled 5.36 million boe while Permian production totaled 4.77 million boe.
"Production for the quarter exceeded our expectations and commenced a steep upward trajectory for production growth following our recent asset divestitures," said CEO Jay Ottoson. "Liquids volumes were 60% of total production and operating margins were particularly strong. We expect that our high investment returns, driven by outstanding well results and execution, will allow us to deliver significant cash flow growth per debt-adjusted share going forward."
Last April, SM completed selling some assets in the Williston Basin and properties in West Texas for a combined $292.3 million. Production from the retained assets totaled 10.1 million boe, with Permian output increasing 14% sequentially while Eagle Ford production was up 5% from the first quarter
SM plans to release its quarterly report on Aug. 1, with a conference call scheduled the following day.