SM Energy Co., Denver, expects total capital spend in 2020 to be $825-850 million, nearly 20% lower year-over-year, with drilling and completion costs making up 90% of the total.
The company anticipates drilling 80 net wells in the Midland basin and completing some 85 net wells at an average lateral of 11,750 ft while running five rigs and two completion crews. Midland basin activity will continue to co-develop zones and will include activity across the RockStar position as well as in Sweetie Peck.
In South Texas, the company anticipates drilling 16 net wells and completing 9 net wells with one rig. Activity will be focused in higher oil content areas and in the Austin Chalk, which the company expects to be economically competitive with the Midland basin program.
Production guidance for full-year 2020 is 45-48 MMboe or 123,000-131,000 boe/d; which assumes ethane rejection for the full year. Oil is expected to account for 50% of production, up 5-10% year-over-year.
Production for first-quarter 2020 is expected to be 11.9-12.4 MMboe or 131,000-136,000 boe/d. Total capital spend for the first quarter is expected to be $180-200 million. In the quarter, the company anticipates 20 net completions in the Midland basin and one in South Texas.
2019
Fourth quarter 2019 production was 12.8 MMboe (138,800 boe/d) at 48% oil, which exceeded the midpoint of fourth quarter guidance by 5% and was driven by 13% sequential growth in Midland basin production. Full year 2019 production was 48.3 MMboe (132,300 boe/d) at 45% oil.
Fourth quarter 2019 net loss was ($102.1) million. Net cash provided by operating activities was $242.0 million. For the fourth quarter and full year 2019, costs incurred in oil and gas activities were $178.8 million and $1.04 billion, respectively. Continued drilling and completion efficiencies during the fourth quarter allowed for more completions by year-end within the expected capital budget, the company said.
