SM Energy Co. said its three-year growth plan was ramping up quickly, with new wells performing stronger than expected, while completing an $800 million sale of noncore assets in the Eagle Ford Shale helped to reduce net debt by more than 20%.

The Denver-based company, which also raised its full-year production guidance for 2017, added that it plans to close on the sale of its assets in Divide County, ND, at the end of the second quarter.

“The priorities of the company going forward are unchanged,” CEO Jay Ottoson said during a conference call to discuss 1Q2017 on Wednesday. “Our 2017 priorities and plan focus on helping us optimize our development plans in order to maximize the value of our assets. We believe that the quality growth we’re going to generate during our multi-year plan period in both cash flow and economic drilling inventory should result in differential performance for our shareholders.”

SM Energy produced 12.1 million boe in 1Q2017, above its production guidance of 11-11.4 million boe. It attributed the besting of its guidance to higher than expected initial production rates from its operated wells in the Eagle Ford, as well as early completion timing and outperforming wells in the Permian Basin’s Midland sub-basin.

Broken down by play, the company produced 7.3 million boe on its operated acreage in the Eagle Ford, 2.1 million boe in the Permian Basin, and 300,000 boe in the Powder River Basin (PRB). Total production was 9.7% lower from the year-ago quarter (13.4 million boe).

As a result of the higher realized production in 1Q2017, the company raised its full-year production guidance by 1.5 million boe, to a range of 41.5-44.5 million boe. The new range reflects the expected sale of the assets in Divide County.

SM Energy is currently running an eight-rig drilling program, all but one of them horizontal, and has deployed four completion crews. Six horizontal rigs are deployed in the Midland — two in the Sweetie Peck area and four in the RockStar area — while one horizontal rig is in the Eagle Ford. Meanwhile, a vertical rig is taking core samples in the Midland.

Operations chief Herbert Vogel said that in the last three months the industry has increased its rig count in the RockStar area by nearly 60%, from 18 rigs in January to 28 rigs in April.

“[That] is an acknowledgement of the excellent returns — the Tier 1 returns or top-tier returns — that many operators are achieving from the wells completed in this area,” Vogel said. On the issue of core samples in the Midland, he said the company expects to collect “around 4,400 feet of core from the Middle Spraberry to the Lower Wolfcamp zones at the RockStar, and another 1,500 feet of core in open-hole logs at Sweetie Peck. This data will enable us to assess additional prospective intervals and optimize our landing zones and completion designs.”

During the question-and-answer portion of the call, Vogel said the producer has “quite a bit of core data, and we’ve got a lot of log data already. The additional core data is really for certain areas so that we can see additional prospective horizons at core data where we don’t have them, and also to hone in on landing zones with some specific details.

“This is going to be under optimization from here, but we really want this to drive up our inventory.”

SM Energy drilled a total of 26 net wells in 1Q2017, including 19 in the Permian Basin and five operated wells in the Eagle Ford.

Pro forma for planned transactions, SM Energy held 749,895 net acres at the end of the first quarter including 166,760 in the Eagle Ford, 88,060 in the Midland and 190,330 net acres in the Rockies. The Midland figure includes 66,195 net acres for its RockStar area, while 156,260 net acres from the Rockies overlay the PRB.

The Rockies portfolio also includes the 123,570 net acres in Divide County that is being sold. When the company first announced its plans to sell the acreage last January, it said it was doing so to focus on the Midland and Eagle Ford. SM Energy has “extended the bid date and data room access due to new entrants to the process, but continues to assume a mid-year close for planning purposes.”

Capital expenditures for 2017 remain unchanged at $875 million.

Last month, SM Energy closed on the $800 million gross sale of its assets in the Eagle Ford, including an ownership interest in associated midstream infrastructure, to a unit of Venado Oil and Gas LLC, an affiliate of KKR. CFO Wade Pursell said the company used $747 million in proceeds from the sale to help reduce its net debt by 22% and establish $1.6 billion in liquidity at the end of the quarter.

“We’ve run a number of sensitivities on lower oil prices and higher costs, and we believe that this sale largely prefunds our expected two-year outspend,” Pursell said.

SM Energy reported net income of $74.4 million (67 cents/share) in 1Q2017, with income from operations totaling $165.6 million. By comparison, the company had a net loss of $347.2 million (minus $5.10) in the year-ago quarter, with a loss of $526.7 million from operations.