SM Energy to Expand Production with Uinta Acquisition; Forecasted Revenue Recovery in 2024

SM Energy

In June 2024, SM Energy (NYSE: SM), a U.S. independent energy company, and Northern Oil and Gas (NYSE: NOG) announced plans to acquire oil and gas assets located in the Uinta Basin, Utah from XCL Resources. SM Energy will serve as the operator of the assets currently operated by XCL, with Northern Oil and Gas being its non-operating partner. The acquisition, anticipated to be finalized by September, is poised to bolster SM Energy’s production capabilities. According to Visible Alpha consensus, the Uinta Basin acquisition is projected to contribute the following to SM Energy’s total production in 2024: 3.8 million barrels (MMbbl) of crude oil and natural gas liquids (NGL), 3.1 billion cubic feet (bcf) of natural gas, and 4.3 million barrels of oil equivalent (MMboe). By 2025, production from the Uinta Basin is forecasted to increase to 12.9 MMbbl of crude oil and NGL, 11 bcf of natural gas, and 14.7 MMboe of oil equivalents. In terms of revenue, analysts expect SM Energy to see a recovery in its 2024 revenues. After a -29% year over year decline last year, analysts estimate a +14% increase in SM Energy’s total production revenue, reaching $2.7 billion.