Denver-based SM Energy said in its latest earnings report that it will spend 60 percent of its $1.1 billion capital expense budget in Midland Basin in 2023 after a 50-50 split with its operations in south Texas of $880 million last year. Midland Basin is receiving a larger share this year because of “the expectation of lower natural gas prices in 2023.” Spending will be front-loaded with 60 percent of costs of completions and facilities allocated for first half of the year.
SM Energy plans to drill 40-to-45 wells each in Midland Basin and south Texas with 50 net completions in Midland Basin and 40 in south Texas. Production is expected to be flat or low single-digit growth at 144,000-to-150,000 boed (43 percent oil). Midland Basin activity will be focused on co-development in RockStar and Sweetie Peck. Production in 2022 was 145,000 boed (56 percent from Midland Basin) – up 3 percent from 2021. Proved reserves at yearend 2022 increased to 537 million boe (52 percent in south Texas; 38 percent oil and 44 percent natural gas).
Herb Vogel, CEO, said Feb. 23, “Our strategy is to be a premier operator of top tier assets, and our 2023 objectives are intended to drive value creation, differential performance and increased stockholder returns.”