FORT WORTH, Texas—The only certainty in the oil patch right now is uncertainty with WTI prices down 16% since January.

But the industry has weathered through volatility before, SM Energy President and CEO Herb Vogel reiterated May 14 during Hart Energy’s 2025 SUPER DUG Conference & Expo.

“Necessity is the mother of invention,” Vogel said during a keynote address. “Low price cycles make us stronger.”

SM Energy itself has been through many ups and downs during its 117-year history in the U.S. oil and gas space. The “SM” in SM Energy comes from St. Mary Parish, Louisiana, where in 1908 a Minnesota entrepreneur acquired 25,000 acres of coastland with an eye toward the cattle business.

Raising cattle on the flood-prone land proved difficult. But those 25,000 acres turned out to be a diamond in the rough for SM: Commercial oil development started there in the 1930s. By the 1960s, EUR from the legacy St. Mary Parish asset was pegged at around 800 MMboe (25% oil).

Cash flows from southern Louisiana fueled SM’s expansion into other U.S. basins over time. Today, SM is an E&P focused on unconventional plays in South Texas, the Permian Basin and Utah.

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Oil strength in Permian, Utah

Generating a profit with oil prices at or below $60/bbl requires an inventory of high-quality assets, Vogel said.

SM has worked to build a fortress of a portfolio spread across key unconventional basins. The company’s positions in the Permian and in Utah’s Uinta Basin are chiefly oil-producing assets.

SM is a new entrant to the Uinta, where the basin’s famous waxy crude—or infamous, from a transportation standpoint—makes up over 85% of production.

SM teamed up with non-operated partner Northern Oil & Gas (NOG) to acquire Uinta producer XCL Resources for $2.6 billion last year. NOG took a 20% non-op stake in XCL’s assets.

SM has placed test wells throughout the Uinta Basin’s “upper cube” and “lower cube” zones, targeting multiple intervals within the basin’s 17 identified subsurface benches.

The upper cube includes the lower Garden Gulch, three Douglas Creek benches and an underlying, unnamed black shale, ranging from 9,000 ft to 10,000 ft in depth.

The lower cube consists of the Castle Peak, the Castle Peak limestone, Uteland Butte, the Wasatch 5 upper and lower and the Wasatch 4 between 10,000 ft and 11,500 ft.

In first-quarter earnings this month, SM highlighted six new lower cube wells with average 30-day IPs of 1,193 boe/d (91% oil). Lateral lengths averaged around 12,000 ft.

SM has around 63,600 net acres in the Uinta Basin.

In the Permian, oil makes up between 65% to 80% of SM’s overall production mix. SM is a leading developer in the Midland Basin, where it’s testing the Dean sands bench in Dawson County.

SM has around 110,000 net acres in the Midland Basin.

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South Texas gas, NGL

With oil prices falling sharply since the start of the year, natural gas has emerged as a relative bright spot in many E&Ps’ portfolios.

SM’s position in the South Texas Maverick Basin, where it holds 155,000 net acres, includes a mix of condensate, NGL and natural gas, Vogel said.

Natural gas production from South Texas totaled 17.1 Bcf in the first quarter, or 190 MMcf/d, the highest of SM’s three operating areas.

SM is primarily tapping the Austin Chalk, overlying the deeper Eagle Ford zones, on its South Texas land.

SM touted results from four new Austin Chalk wells in first-quarter earnings. The four Austin Chalk wells averaged a 30-day IP of 1,061 boe/d ( 55% oil and 78% total liquids). The wells, drilled with an average lateral length of 11,935 ft, are classified as liquids-rich gas producers.

Vogel said SM is closely watching demand from LNG and AI data centers and is well positioned to capitalize on elevated natural gas prices.

“We have a long history of having produced gas in many gas basins and we can do more in South Texas along those lines,” Vogel said.

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