Denver-based SM Energy said last week it agreed to purchase 20,000 net acres in Dawson and northern Martin counties in west Texas for $93.5 million and an additional 2,800 net acres adjacent to its previously announced acquisition in 2023Q1 of 6,300 net acres in Midland Basin. Current production on the Dawson/Martin purchase is 1,250 boed (90 percent oil), not including undeveloped acreage.
Herb Vogel, president and CEO, said June 21, “We set forth three strategic objectives for 2023, and our second quarter activities deliver on all of them – increasing the return of capital to our stockholders, elevating operational execution and driving inventory growth. Our operations, geosciences, land and finance teams are collaborating to drive excellent results and value growth.”
SM Energy also increased production guidance for 2Q and fullyear 2023 “driven by higher oil, natural gas and NGL volumes from both new and existing wells in its south Texas program.” The company added, “Second quarter performance to date reflects higher than expected production in south Texas, lower than expected costs as a result of deflation, and earlier than anticipated completion of additional oil handling capacity in south Texas.” SM Energy raised 2023 production guidance by 1 million boe, lowered capital expenses by $50 million, and said it will add a rig in Midland Basin in October.