JUNE 2019 INVESTOR PRESENTATION PLEASE READ THIS PRESENTATION - PowerPoint PPT Presentation

JUNE 2019 INVESTOR PRESENTATION

PLEASE READ THIS PRESENTATION MAKES REFERENCE TO: FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of securities laws. The words "anticipate," "budget," "estimate," "expect," "forecast," "guidance," "plan," "project," “objectives," "target," “on track," "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 presentation include, among other things: leverage ratios for full year 2019 and beyond; second quarter and full year 2019 planned drilling and completion activity; the percentage of expected production that is hedged; the timing and results of new wells relating to 30-day peak IP rates; and, the potential for optimized well performance. 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 carrying 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 uncertain nature of joint venture or similar efforts and the ability to complete any such transactions; the uncertain nature of expected benefits from the actual or expected joint venture or similar efforts; 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; uncertainty regarding the ultimate impact of potentially dilutive securities; and other such matters discussed in the Risk Factors section of SM Energy's 2018 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 announcement. 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: See Appendix for reconciliations non-GAAP forward-looking metrics: See Appendix for definitions NYSE: SM 2

PREMIER OPERATOR OF TOP-TIER ASSETS FOCUSED ON TWO BASINS IN TEXAS ENTERPRISE VALUE: $4+ Billion PRODUCTION: ~119 MBoe/d; 45% oil (1Q19) MIDLAND BASIN ▪ ~82,000 net acres ▪ 6 Rigs / 4 completion crews PROVED RESERVES: SOUTH TEXAS 503 MMBoe (YE 2018) ▪ ~163,000 net acres ▪ 1-2 Rigs / 1-2 completion crews 2019 CAPITAL SPEND: ~1,035 MM (1) (1) Mid-point of full-year 2019 guidance NYSE: SM 3

ON TRACK WITH OUR 2019 PRIORITIES Grow within cash flow Reduce leverage • FCF leads to absolute debt reduction Prove-up and grow inventory • Value creation through testing of new intervals in South Texas and Permian NYSE: SM 4

BALANCE SHEET FOCUS 2019 AND BEYOND: IMPROVING DEBT METRICS • Liquidity of $1.2B (1) ; no near-term maturities • Borrowing Base increased to $1.6B; lender commitments increased to $1.2B (2) • Net debt to trailing twelve-month adjusted EBITDAX projected to be ~3 times at year-end; targeting ~2 times at year-end 2020 Debt Maturities as of March 31, 2019 (in millions) $1,750 Borrowing Base: $1.6B (2) $1,500 $1,250 Commitments: $1.2B (2) $1,000 $750 $500 $250 $500 $500 $500 $500 $476.8 $46.5 $172.5 $0 2019 2020 2021 2022 2023 2024 2025 2026 2027 Coupon 1.500% 6.125% 5.000% 5.625% 6.750% 6.625% Yield to worst (3) - 6.99% 8.02% 8.08% 8.85% 8.77% Initial call date - 11/2018 7/2018 6/2020 9/2021 1/2022 Initial call price - 103.06% 102.50% 102.81% 103.38% 104.97% (1) Liquidity as of March 31, 2019, pro-forma for amended credit facility. (2) Borrowing base and commitment amount as of April 18, 2019. (3) YTW as of May 30, 2019. NYSE: SM 5

WELL HEDGED PERCENTAGE OF PRODUCTION HEDGED Waha Gas Swaps (1) REGIONAL WAHA AND MIDLAND-CUSHING • ~70-75% of expected 2Q19 – 4Q19 Permian gas production hedged at WAHA (2Q19 at $0.70/MMBtu, 70-75% 3Q19 at $1.30/MMBtu, 4Q19 at $1.75/MMBtu) • ~60% of expected 2Q19 – 4Q19 Permian oil production covered by Midland to Cushing Basis (2) Midland to Cushing basis hedges at ~$3.30/Bbl • ~75% (3) of expected 2Q19 – 4Q19 production volumes hedged ~60% • ~80% oil volumes • ~65% gas volumes • (NGLs hedged by product) Note: Hedging data as of May 30, 2019 (1) Permian gas hedges at WAHA based on February 2019 plan Permian residue/tailgate volumes. (2) Permian Midland to Cushing basis hedges based on February 2019 plan oil volumes. (3) Total Company; percentage includes oil swaps and collars at NYMEX WTI, natural gas swaps and collars at HSC, and NGL swaps (excludes WAHA swaps and basis hedges). NYSE: SM 6

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 • ~100 net completions planned for 2019 HOWARD RockStar • 27 net completions in 1Q19 • 35 net completions planned for 2Q19 MARTIN GREAT NEW WELLS • Merlin Maximus: 19 wells across three intervals have reached 30-day peak IP rates in excess of 1,400 Boe/d (87% oil) • Middle Spraberry well reached its 30-day peak IP rate of approximately 1,000 Boe/d (86% oil) • New intervals: Dean and Wolfcamp D wells now producing 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 Rigs Running: Sweetie Peck Completion Crews: ~82,000 UPTON N E T A C R E S NYSE: SM 7

MIDLAND BASIN: MERLIN MAXIMUS RESULTS SUCCESSFUL CO-DEVELOPMENT SIGNIFICANTLY OUTPACING PEER Merlin Maximus (1) vs. Merlin Maximus (1) vs. Previously Reported Wells Peer Co-Development 300,000 150 (Average Well Normalized to 10,000’) Cumulative Production (MBoe) 250,000 Cumulative Production (Boe) 120 Merlin 200,000 Maximus 90 150,000 60 100,000 30 50,000 0 0 - 60 120 180 240 300 360 - 0 30 60 90 120 Days on Production Days on Production (1) (1) Previously Reported Wells (2) Merlin Maximus Merlin Maximus WCA Avg Peer A Current 2017 Peer Benchmark LS Avg Peer A Initial WCB Avg Includes all 24 Merlin Maximus wells on production (25 th well intentionally shut-in to monitor sub-surface pressure). (1) (2) Previously Reported Well Average by interval includes all (133) previously reported SM operated wells on production since 11/3/2016. NYSE: SM 8

MIDLAND BASIN: GREAT NEW ROCKSTAR RESULTS NEW WELL PERFORMANCE CONSISTENT WITH PRIOR WELLS (1)(2) 250,000 Cumulative Production (Boe) 200,000 150,000 ALL NEW WELLS FULLY OR HALF BOUNDED 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 (1) Previously Reported Well Average includes all (133) previously reported SM operated wells on production since 11/3/2016. (2) New Well Average includes 20 new wells that have not been previously reported. NYSE: SM 9

MIDLAND BASIN: TOP-TIER CAPITAL EFFICIENCY RECENT DC&E WELL COSTS AT ~$765 PER LATERAL FOOT Drilling Faster Completing Faster Lateral Ft Drilled per Day (1) Lateral Feet Completed per Day (2) Increase in 1,256 599 Lateral Feet +17% 562 1,025 Drilled / Day 510 (1Q19 / 2017) 765 Increase in Lateral Feet +64% Completed / Day (1Q19 / 2017) 2017 2018 1Q19 2017 2018 1Q19 Increase in Avg. Longer Laterals Lower Sand Costs Avg Lateral Length Completed Indexed to January 2018 (3) Lateral Length +15% 1.1 Completed 10,700 1.0 10,100 (1Q19 / 2017) 0.9 9,300 0.8 0.7 0.6 Decrease in 0.5 -73% Sand Costs 0.4 0.3 (Mar. 19 / Jan. 18) 0.2 0.1 - Jan Mar May Jul Sep Nov Jan Mar 2017 2018 1Q19 (1) Total lateral feet delivered per day, spud to rig release. (3) Excludes last mile logistics as there is variability in these NYSE: SM 10 (2) Lateral feet completed per fleet per day. charges among vendors.

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 • ~18 net completions planned for 2019 • 2 net completions in 1Q19 • 14 net completions planned for 2Q19 DIMMIT COUNTY AUSTIN CHALK SUCCESS WEBB COUNTY • Second Austin Chalk test well with peak IP-24 rate of more than 3,500 Boe/d (>55% liquids, 3-stream) VALUE ENHANCEMENT THROUGH HIGHER RETURN North WELLS Area • Progress toward optimal well design implementation East YE 2018 INVENTORY: 12 – 14 YEARS Area O p e r a t i n g D e t a i l s South Area Rigs Running: Completion Crews: ~163,000 N E T A C R E S NYSE: SM 11