Jun 29, 2011
SM Energy Company (NYSE:SM) announced today the sale of a 12.5% interest in its non-operated Eagle Ford shale position to a subsidiary of Mitsui & Co for $680 million.
After the close of this sale, as well as the previously announced divestiture of assets in LaSalle and Dimmit Counties, SM Energy will have roughly 196,000 net acres in the Eagle Ford shale, of which about 75% will be operated by the company.
Because the transactions are expected to close later in the year than originally anticipated and SM Energy is retaining a larger position in Eagle Ford than was originally assumed, reported production and capital expenditures for the year will exceed the company's previously announced guidance.
A full update to capital, production, and cost guidance for the remainder of 2011, as well as preliminary capital and production guidance for FY 2012, will be included in the company's second quarter earnings release.
Tony Best, President and CEO, remarked, "I am pleased to announce the final phase of our planned Eagle Ford sell down effort. Combined with our previously announced LaSalle and Dimmit Counties Eagle Ford divestiture, we are generating nearly $1 billion in funds that will allow us to further develop our Eagle Ford assets while locking in some solid returns and maintaining a strong balance sheet. This specific transaction allows us to continue participating in the development of high value Eagle Ford assets, while providing us more control over our capital investment decisions."
Shares of SM Energy are trading up 7.81% at $71.9.
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