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Investing.com -- SM Energy Co (NYSE:SM) reported second quarter earnings that exceeded analyst expectations, driving shares up 2.5% as the company achieved record production levels and significant debt reduction.
The oil and gas producer posted adjusted earnings of $1.50 per share, surpassing the analyst estimate of $1.27. Revenue reached $792.94 million, above the consensus estimate of $785.7 million. The company reported record quarterly production of 19.0 MMBoe (209.1 MBoe/d), exceeding guidance by 5% with oil comprising 55% of total production. Compared to the second quarter of 2024, total production increased 32% while oil production jumped 59%.
"This was a standout quarter for SM Energy and highlighted the top-tier quality of our Uinta Basin assets," said President and CEO Herb Vogel. "Record production combined with our low breakeven cost assets delivered excellent bottom line results."
The strong performance enabled SM Energy to pay down its revolving credit facility to zero and end the quarter with a $101.9 million cash balance. The company generated $113.9 million in adjusted free cash flow, primarily driven by outperformance from its Uinta Basin assets.
SM Energy raised its full-year oil production guidance to 53-54% of total production, up from previous guidance of 51-52%. The company also increased its 2025 capital expenditure forecast to approximately $1.375 billion from $1.3 billion to accommodate additional non-operated capital projects.
For the third quarter, SM Energy expects production of approximately 209-215 MBoe/d with oil comprising 53-54% of the total. The company anticipates reaching its target leverage metric of 1.0x by year-end at current commodity prices.
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