SM Energy In South Texas -- An Update -- The Right Kind Of Oil In The Permian -- June 24, 2023

Locator: 45037WTI.

Link here.

Or direct to Oil & Gas Journal. 

Thanks to higher production in South Texas, two acquisitions and an easing in cost pressures, the leaders of SM Energy Co. have raised their output forecast for 2023 by 1 MMboe and lowered their capital spending guidance by $50 million.

The team led by president and chief executive officer Herb Vogel also has finalized a deal to pay $93.5 million for 20,000 net acres in Dawson and Martin counties in the Permian basin and bought 2,800 acres in the Midland basin adjacent to the roughly 6,300 it acquired earlier this year.

The lift in SM Energy’s production forecast from South Texas—which has the company on track to come in 4% higher than its initial second-quarter expectations—is being driven by both well performance and the faster-than-expected completion of additional oil handling capacity.

Vogel said SM’s Austin Chalk oil-heavy production is now flowing through larger pipes and able to handle the better-than-expected performance from both older wells and those put into service more recently.

Back-of-the-envelope:

• $93.5 million / 20,000 net acres = <$5,000 / acre.
• is that correct? My math has to be wrong.

Location:

• Martin County: directly north of Midland by a couple of Texas miles;
• Dawson: borders Martin County to the northwest, again, due north of Midland-Odessa