SM - SM Energy sinks after lower than expected Q3 production

SM Energy ( NYSE: SM ) -9.3% in Monday's trading after reporting Q3 production of 137.8K boe/day , citing the impact of lower than expected September volumes, which was caused by delayed well completions largely related to the supply chain and higher than expected impacts associated with offset activity.

SM Energy ( SM ) said it expects the events will carry over into Q4, including completion delays related to broader supply chain problems that affect the company's service providers, shut-ins associated with offset activity and the rolling effect of completions pushed into Q4.

The company foresees full-year production of 52.5M-53M boe, or 144K-145K boe/day, while it expects to complete 81 net wells as planned; revised guidance relates to third party events and temporary delays, as base production continues to meet or exceed expectations in South Texas and the Midland Basin.

SM Energy ( SM ) has lowered its leverage to 0.7x with $1.318 billion in net debt and should be able to generate $500M-plus in free cash flow during H2, Elephant Analytics writes in an analysis published on Seeking Alpha .

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