DENVER, May 16, 2017 /PRNewswire/ — SM Energy Company (the “Company”) (NYSE: SM) announced today that it has postponed indefinitely the planned sale of its Divide County, North Dakota assets as valuations in the sales process did not reach the Company’s threshold to meaningfully reduce its leverage.
President and Chief Executive Officer Jay Ottoson comments: “We have successfully pre-funded the expected outspend for our capital program for 2017 and 2018 with the completed sale of our third party-operated Eagle Ford assets, and we do not need to sell our Divide County assets. We have concluded that current market uncertainty around forward oil prices is not conducive to realizing a sales price that meets our deleveraging objective. We remain committed to our long-term financial strategy, which is best served by retaining the cash flow generated by the Divide County assets and supported by a solid balance sheet, significant liquidity and continuing hedging strategy.
“As a result of retaining our Divide County assets, we have positively revised our production guidance for the year to add 1.3 MMBoe, which is applied to the second half of the year, thereby increasing projected cash flow and reducing projected outspend.”
The Company is posting slides to its website in conjunction with this release, revising its 2017 guidance and three-year plan metrics to be consistent with this change.