3Q19 EARNINGS TOP-TIER OPERATIONAL EXECUTION CONTINUES O C T O B E - PowerPoint PPT Presentation

3Q19 EARNINGS TOP-TIER OPERATIONAL EXECUTION CONTINUES O C T O B E R 3 1 , 2 0 1 9

PLEASE READ THIS PRESENTATION MAKES REFERENCE TO: FORWARD LOOKING STATEMENTS This presentation contains forward- looking statements within the meaning of securities laws. The words “assumes,” "anticipate," "estimate," "expect," "forecast," "guidance," “implied,” "plan," "project," "objectives," "target," "will" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, which may cause SM Energy's actual results to differ materially from results expressed or implied by the forward-looking statements. Forward-looking statements in this release include: projections for production, certain operating costs, general and administrative expenses and expected savings, and total capital spend; the expectation that the Company will spend within discretionary cash flow in the fourth quarter of 2019 and beyond; the potential to reduce absolute debt and leverage in 2020; and, the Company’s expectation s regarding capital allocation. General risk factors include the availability, proximity and capacity of gathering, processing and transportation facilities; the volatility and level of oil, natural gas, and natural gas liquids prices and related differentials, including any impact on the Company’s asset ca rrying values or reserves arising from price declines; uncertainties inherent in projecting future timing and rates of production or other results from drilling and completion activities; the imprecise nature of estimating oil and natural gas reserves; uncertainties inherent in projecting future drilling and completion activities, costs or results; the availability of additional economically attractive exploration, development, and acquisition opportunities for future growth and any necessary financings; unexpected drilling conditions and results; unsuccessful exploration and development drilling results; the availability of drilling, completion, and operating equipment and services; the risks associated with the Company's commodity price risk management strategy; and other such matters discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained herein speak as of the date of this presentation. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws. non-GAAP financial measures and forward-looking metrics: See Appendix for reconciliations and definitions NYSE: SM 2

COMMITMENT TO GENERATING FREE CASH FLOW  CAPITAL COSTS DOWN G R E AT W E L L  P E R F O R M AN C E LOWER OPERATING  COSTS NYSE: SM 3

3Q19 FINANCIAL & OPERATING RESULTS UPDATE NYSE: SM 4

MIDLAND BASIN TOP-TIER EXECUTION, WELL PERFORMANCE AND CAPITAL EFFICIENCY E x e c u t i n g O n O u r P l a n COMPLETIONS EXECUTION HOWARD • ~100+ net completions planned for 2019 RockStar • 19 net completions in 3Q19; 78 net completions YTD MARTIN GREAT NEW WELLS • 11 new RockStar wells reached their 30-day peak rates that averaged approximately 1,180 Boe/d (90% oil) TOP TIER CAPITAL EFFICIENCY • Drilling/completing faster, longer laterals, lower sand costs YE 2018 INVENTORY: 12 – 16 YEARS O p e r a t i n g D e t a i l s ( 1 ) Rigs Running: Sweetie Peck Completion Crews: MIDLAND ~81,500 UPTON N E T A C R E S (1) As of October, 2019. NYSE: SM 5

MIDLAND BASIN: GREAT NEW ROCKSTAR RESULTS NEW WELL PERFORMANCE CONSISTENT WITH PRIOR WELLS 250,000 Cumulative Production (Boe) 200,000 150,000 100,000 50,000 0 0 30 60 90 120 150 180 210 240 270 300 330 360 Days on Production (1) (2) . . Previously Reported Well Avg New Well Avg* • 11 new wells at RockStar tracking in-line with Previously Reported Well Avg. • New Well Avg. includes 4 Lower Spraberry wells; approximately half of the new wells are located along the eastern edge of our position (Lower Spraberry and wells in the eastern area typically have lower IPs with flatter declines than wells farther west) (1) Previously Reported Well Average includes all (182) previously reported SM operated wells at RockStar on production since 11/3/2016. (2) New Well Average includes 11 new wells at RockStar that have not been previously reported. NYSE: SM 6

MIDLAND BASIN: TOP-TIER CAPITAL EFFICIENCY INCREASE IN CAPITAL EFFICIENCY RECENT DC&E WELL COSTS AT ~$700 PER LATERAL FOOT Drilling Faster Completing Faster Lateral Ft Drilled per Day (1) Lateral Ft Completed per Day (2) Increase in 618 1,536 Lateral Feet +21% 562 Drilled / Day 510 (YTD19 / 2017) 1,025 765 Increase in Lateral Feet +101% Completed / Day (YTD19 / 2017) 2017 2018 YTD19 2017 2018 YTD19 Increase in Avg. Longer Laterals Lower Sand Costs Lateral Length +13% Avg Lateral Length Completed (3) Indexed to January 2018 (4) 1.1 Completed 10,500 1.0 10,100 (2019 Plan / 2017) 0.9 9,300 0.8 0.7 0.6 Decrease in -74% 0.5 Sand Costs 0.4 (Sep. 19 / Jan. 18) 0.3 0.2 0.1 - 2017 2018 2019 Jan Apr Jul Oct Jan Apr Jul (1) Total lateral feet delivered per day, spud to rig release. (3) 2019 includes drilled and planned wells. NYSE: SM 7 (2) Lateral feet completed per fleet per day. (4) Excludes last mile logistics as there is variability in these charges.

SOUTH TEXAS FOCUSED ON EXECUTION AND RETURNS ENHANCEMENT E n h a n c i n g I n v e n t o r y Va l u e COMPLETIONS EXECUTION • 6 net completions in 3Q19; South Texas 2019 program concluded with 19 net completions for the year • Completed 12 gross wells during the third quarter in the JV-funded area DIMMIT COUNTY AUSTIN CHALK SUCCESS WEBB COUNTY • Two Austin Chalk wells completed during the third quarter reached an average 30-day peak rate of ~2,655 Boe/d (>55% liquids, 3-stream) North VALUE ENHANCEMENT THROUGH HIGHER RETURN Area WELLS • 12 JV-funded wells reached an average 30-day peak rate East of ~2,530 Boe/d (~50% liquids, 3-stream) Area YE 2018 INVENTORY: 12 – 14 YEARS O p e r a t i n g D e t a i l s ( 1 ) South Area Rigs Running: ~163,000 N E T A C R E S (1) As of October, 2019. NYSE: SM 8

SOUTH TEXAS: AUSTIN CHALK SUCCESS TWO NEW TESTS: ~1,100 BOPD PEAK 24 HR RATES EACH HIGHER OIL CONTENT = HIGHER RETURNS 4,500 4,000 DEMONSTRATING GEOGRAPHIC EXPANSE Surface equipment repairs 3,500 Boe/Day (3-stream) 3,000 Briscoe C (SA1) State 108H Galvan Ranch B904H 2,500 IP30: 1,710 Boe/d (preliminary) IP30: 3,599 Boe/d IP30 oil: 787 Bbl/d IP30 oil: 896 Bbl/d Lateral Length: 11,269’ 2,000 Lateral Length: 11,306’ % liquids: 74% % liquids: 61% API Gravity: 50.0 API Gravity: 53.5 1,500 1,000 Watson (SA2) State 167H IP30: 3,179 Boe/d 500 IP30 oil: 651 Bbl/d Lateral Length: 12,875’ Galvan Ranch C917H Well shut-in for tubing installation % liquids: 58% IP30: 2,133 Boe/d - API Gravity: 56.7 IP30 oil: 310 Bbl/d 0 50 100 150 200 250 300 350 400 450 500 Lateral Length: 7,886’ % liquids: 52% Days Online API Gravity: 61.9 Galvan Ranch C 917H Watson (SA2) State 167H Galvan Ranch B904H Briscoe C (SA1) State 108H Note: Boe rates provided are 3-stream. NYSE: SM 9

SOUTH TEXAS: VALUE ENHANCEMENT POSITIVE RESULTS FROM NEW WELL DESIGN • Wider spacing and new completion design • Increasing lateral length with less capex per lateral foot • Increasing production volumes at lower cost with more liquids higher expected returns A C T U A L P R O D U C T I O N P E R L A T E R A L F T T O T A L W E L L P R O D U C T I O N Cumulative Production 30 200 2019 JV Wells Cumulative Production 150 Per Well (Mboe) (Mboe /1,000’) 20 2019 JV Wells 100 2016 Wells 2016 Wells 10 50 - - 0 50 100 150 200 250 300 350 0 100 200 300 Producing Days Producing Days NYSE: SM 10

SOUTH TEXAS: EXCELLENT CAPITAL EFFICIENCY RECENT EAGLE FORD D&C WELL COSTS LESS THAN $650 PER LATERAL FOOT Drilling Faster Completing Faster Lateral Ft Drilled per Day (1) Lateral Feet Completed per Day (2) Increase in 1,663 824 +24% Lateral Feet 721 666 Drilled / Day 1,256 1,210 (YTD19 / 2017) Increase in +37% Lateral Feet Completed / Day (YTD19 / 2017) 2017 2018 YTD19 2017 2018 YTD19 Increase in Avg. Drilling Longer Lower Costs +49% Lateral Length Avg. Lateral Length Completed (3) D&C Cost / Lateral Foot (4) Completed 851 12,531 (2019 Plan / 2017) 737 10,483 632 8,392 Decrease in -26% Well Costs (YTD19 / 2017) Note: Excludes Austin Chalk wells. 2017 2018 2019 2017 2018 YTD19 (1) Total lateral feet delivered per day, spud to rig release. (3) 2019 includes drilled and planned wells. NYSE: SM 11 (2) Lateral feet completed per fleet per day. (4) Includes drilling, toe-prep, stim, drill-out & flowback.