SM Energy: Proceeds from notes offering will backstop capital program

By Jennifer Lanning Drey

Savannah, Ga., April 12 - Proceeds from SM Energy Co.'s $350 million senior notes offering in February will be used as a backstop for the company's 2011 capital program, Tony Best, SM Energy's chief executive officer, said during a Tuesday presentation at the IPAA Oil & Gas Investment Symposium in New York.

SM Energy's capital plans call for spending of just over $1 billion, 80% of which will be focused on drilling, he said. The company's focus will be on oil- and gas-rich projects.

SM Energy expects 20% growth in production in 2011 as a result of the capital plan.

In addition to focusing on its capital program, SM Energy will also be pursuing three strategic transactions in 2011, Best said.

Specifically, the company is looking to sell down a portion of its Eagle Ford position, find additional joint venture opportunities in its Haynesville shale position and continue looking for opportunities to exit its position in the Marcellus shale.

The company has nearly $1 billion of liquidity, made up of $630 million available under its credit facility, the net proceeds from the bond offering and cash, Best said.

SM Energy, formerly named St. Mary Land & Exploration Co., is a Denver-based independent energy company.

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