SM Energy Co. (NYSE: SM) said in regulatory filings that it recently added to its core Midland Basin position with a bolt-on acreage acquisition.
The Denver-based E&P acquired about 760 contiguous net acres of unproved properties in Martin County, Texas, for $24.6 million, according to the company’s regulatory filings on May 4.
The bolt-on was driven by “outstanding” well results from the company’s RockStar assets, Herbert S. Vogel, executive vice president of operations at SM Energy, said during the company’s May 4 earnings call.
During the first quarter, SM Energy brought 19 new RockStar wells online that reached peak 30-day IP rates. The wells averaged 1,440 boe/d per well (88% oil).
Overall, the company’s production for the quarter exceeded production guidance with production from the Midland Basin up 18% sequentially and 100% year-over-year.
SM Energy also reported first-quarter net income of $317.4 million, up from $74.4 million a year ago.
Additionally, the company said it has closed or is in the process of closing about $800 million in asset sales year-to-date and, pro forma for the second-quarter divestitures closing, reduced its net debt to around $2 billion.
By June, SM Energy expects all producing assets to be located in the Midland Basin or Eagle Ford Shale, Vogel said.
SM Energy has nine rigs and five frack fleets currently running on its Midland Basin position, which covers about 82,500 net acres across two development areas—RockStar and Sweetie Peck. In the Eagle Ford, the company is running two rigs and one frack fleet on its roughly 165,000-net-acre position.