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News Release SM ENERGY REPORTS THIRD QUARTER 2021 RESULTS : CASH FLOW BEAT AND PRODUCTION OUTPERFORMANCE SM ENERGY DENVER , CO October 28 , 2021 - SM Energy Company ( the “ Company ” ) ( NYSE : SM ) today announced operating and financial results for the third quarter 2021 and provided certain fourth quarter and updated full year 2021 guidance . Third quarter 2021 highlights : • • • • • Production was 14.3 MMBoe ( 155.8 MBoe / d ) and was 56 % oil . Production volumes exceeded expectations , benefiting from higher base production , reduced flaring and the effect of larger fracture stimulations in the Midland Basin and the successful early completion of certain wells in South Texas . As a result , the Company is increasing guidance for 2021 production volumes to 49.5-50.0 MMBoe ( 135.6-137.0 MBoe / d ) . Net income and Earnings per share were $ 85.6 million and $ 0.69 per diluted common share , respectively . Capital expenditures reflected stable drilling and completion costs at approximately $ 520 per lateral foot . Capital expenditures of $ 180.1 million adjusted for decreased capital accruals of $ 20.1 million totaled $ 160.0 million . Cash flows beat expectations due to higher - than - expected production volumes and realized prices . Net cash provided by operating activities of $ 328.1 million before net change in working capital of $ ( 21.1 ) million totaled $ 307.0 million , up 66 % year - over - year and up 44 % sequentially . Free cash flow and Adjusted EBITDAX ( non - GAAP measures defined and reconciled below ) were $ 147.1 million and $ 346.7 million , respectively . New Austin Chalk wells drilled at development spacing demonstrate consistent performance . Six wells drilled at spacing ranging between 675 and 1,000 feet had average 30 - day peak IP rates of 2,000 Boe / d ( 3 - stream ) with 1,100 Bo / d oil , or 51-54 % oil and 74-78 % liquids . Balance sheet strengthened and year - end 2022 leverage target met more than one year early . At quarter - end , net debt - to - Adjusted EBITDAX ( non - GAAP measure defined and reconciled below ) was less than 2 times , a target set for year - end 2022. As a result of a reduction in principal amount of long- term debt and a cash and cash equivalents balance at September 30 , 2021 , net debt ( a non - GAAP measure defined and reconciled below ) was reduced by $ 147.8 million during the quarter . ESG disclosure for 2020 was completed in August with publication of the 2020 Sustainability Accounting Standards Board ( SASB ) report as well as tear sheets with updated metrics relevant to understanding the Company's 2020 ESG performance . Chief Executive Officer Herb Vogel comments : " Outstanding operational performance underscores a terrific quarter . The SM Energy team successfully completed six Austin Chalk wells at development spacing , delivered further improved well performance in the Midland Basin employing significantly larger completions in the majority of wells year - to - date , and solved a casing issue experienced last fall enabling five Austin Chalk wells