SM Energy to use asset sale proceeds to reduce this year's funding gap

By Aleesia Forni

Columbus, Ohio, Aug. 17 - SM Energy Co. will use proceeds from divestitures to help close its 2011 funding gap, said president and chief executive officer, Tony Best, during a presentation at The Oil and Gas Conference.

The announced $476 million in asset sales will reduce the funding gap to $214 million in 2011, according to Best.

"We have a strong balance sheet ... so I think we can manage through this very comfortably over the next couple of years," Best said.

SM Energy expects operating cash flows of $860 million in 2011, due to production growth.

With expectations of similar production growth, the company projects 2012 cash flows to be between $1.2 billion and $1.3 billion.

"One of our goals was to take this company to a place where we could provide double digit production growth on a consistent year-in, year-out basis within cash flow," Best said. "I can tell you today that it's in sight. We believe in 2013 we will reach that off-stated goal."

SM Energy is a Denver, Colo., independent energy company, focused on the acquisition and production of natural gas and crude oil.

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