FINWIRES · TerminalLIVE
FINWIRES

SM Energy Seen Beating Oil Production Expectations, TPH Energy Says

By

SM Energy (SM) could produce more oil than previously expected through the rest of the year, even as recent asset transactions complicate comparisons in the company's near-term financial results, TPH Energy Research analyst Oliver Huang said in a Friday note.

Huang said the independent US oil and gas producer appears positioned to outperform both company guidance and Wall Street expectations on oil production in the coming quarters.

The forecast comes after SM Energy completed several portfolio changes, including a partial acquisition tied to Civitas Resources earlier this year and the sale of certain natural gas-focused South Texas assets at the end of April.

Despite those moving pieces, TPH estimates Q1 oil production at about 238,500 barrels per day, above the company's guidance range of 228,000 b/d to 235,000 b/d and slightly ahead of broader analyst expectations.

For the second half of 2026, the firm expects oil output to average roughly 240,000 b/d, modestly above both company guidance and consensus estimates.

TPH also expects SM Energy's capital spending to land toward the high end of its projected annual range as the company continues development activity.

The research firm said additional asset sales aimed at reducing debt could serve as a catalyst for the shares. SM Energy is viewed by investors as a company with significant exposure to oil prices because of its relatively high leverage and large crude oil production base, making the stock more sensitive to swings in oil markets.

The company's shares have outperformed since oil prices strengthened amid geopolitical tensions and war-related disruptions, supported by what TPH described as a strong first-quarter performance.

TPH maintained a "Hold" rating on the stock with a $38 price target.

Price: $30.53, Change: $-0.63, Percent Change: -2.02%

Related Articles

Commodities

Oil Stockpiles Nearing 'Unheard of' Levels, Prices to Rise Further, Exxon Mobil's Chapman Says

Oil inventories are nearing "unheard of" levels that will lead to increased prices in the next few weeks, Neil Chapman, senior vice president of Exxon Mobil (XOM), said Thursday at the Bernstein Strategic Decisions Conference in New York."I mean, really, really low levels," he said, according to a transcript of the event. "You can debate whether that's going to hit those really low levels in two weeks or three weeks. Once you get to that point, then you'll see price shoot up."Dated Brent futures will rise to $150 or $160 per barrel when inventories hit their lowest, Chapman said. That will ultimately lead to demand destruction."Prices go so high, becomes unaffordable, and that's what happens," he said.Rising crude futures naturally inflate the price consumers pay at the pump, but the cost of everything from fertilizers to plastics to food to will increase as oil prices climb, Chapman said."People think of crude oil as the source of gasoline. Well, of course it is," he said. "And people say, when crude oil goes to $150, gasoline price will be $9 in California, and that will be a serious issue. It's much, much more than that."He added that crude is an important feedstock for many other products."Crude oil goes into virtually everything around us. Fertilizers comes from crude oil and gas. Food prices, they will reflect the absence or the lack. Plastics, everything you see in the world is plastics. Delivery. Amazon. Still a lot of trucks around the country are running on diesel. So the crude oil price impacts so many parts of society," he said.

$XOM
Commodities

US Natural Gas Update: Prices Climb Nearly 7% on Small Storage Build, Hotter Forecasts

US natural gas futures extended gains in after-hours trading on Thursday after government data showed a smaller-than-expected storage build and forecasts pointed to higher temperatures ahead.The front-month Henry Hub contract and the continuous contract both rose 6.72% to $3.303 per million British thermal units.The US Energy Information Administration said working gas in storage increased by 92 billion cubic feet for the week ended May 22, bringing inventories to 2,483 Bcf. The build came in slightly below analyst expectations of 93-98 Bcf and under the 104 Bcf injection seen in the same week a year earlier.Stocks now stand 6.2% above the five-year average, narrowing from a 149 Bcf surplus the prior week to 144 Bcf. On a year-over-year basis, inventories are up about 0.9%.Weather models added further support, with updated forecasts turning hotter. Commodity Weather Group data cited by Barchart indicate above-normal temperatures are expected across the West and Midwest from Jun. 2-11, raising expectations for higher power sector demand driven by air-conditioning load.Electricity demand trends also remained firm. The Edison Electric Institute reported US electricity output rose 5.2% year over year to 81,890 GWh for the week ended May 23. Over the past 52 weeks, output increased 2.0% year over year to 4.34 million GWh.Barchart, citing BNEF data, reported US dry gas production at 110.4 Bcf/d on Thursday, up 0.6 Bcf/d from the prior day and 2.6% higher year over year.It said lower-48 demand was pegged at 70.2 Bcf/d, up 0.1 Bcf/d day over day and 2.1% higher year over year. Power burn slipped slightly to 24.9 Bcf, down 0.4 Bcf from the previous day but up 2.3 Bcf from a year earlier, according to Celsius Energy.On the export side, estimated LNG feedgas flows to export terminals were 18.5 Bcf/d, down 0.1 Bcf/d day over day but up 2.2% week over week amid ongoing maintenance. EIA data showed LNG vessel loadings totaled 121 Bcf for the week ended Wednesday, down 7 Bcf from the prior week, with 32 vessels departing US ports, two fewer than the previous week.Gelber & Associates said the market remains focused on whether tightening LNG demand can offset looser near-term storage fundamentals. LNG feedgas continues to provide structural support, with flows near recent highs and commissioning activity at Golden Pass gradually ramping higher. Mexican pipeline exports also remain elevated as seasonal cooling demand builds.

Commodities

Market Chatter: Alberta Coast Pipeline Would Need Over $72 Billion in Investment, Imperial Oil CEO Says

Canada's oil industry will need to attract over CA$100 billion ($72.5 billion) in investment to support Alberta's proposed 1 million-barrel-per-day pipeline to the British Columbia coast, Bloomberg reported on Thursday, citing Imperial Oil Chief Executive John Whelan.Speaking at the Energy Roundtable conference in Calgary, Whelan reportedly said the industry would need to invest in expanding oil production to supply the new pipeline, secure shipping commitments and help fund a federally mandated carbon capture project."The total cost is north of a hundred billion [Canadian] dollars that we will need to attract to this industry," Whelan said. "Now I think we can do that, but that's kind of scale of what we're talking about."Imperial Oil did not immediately respond to a request for comment from.Alberta Premier Danielle Smith has proposed the new West Coast pipeline as part of a broader plan to eventually double the province's oil production.Canadian Prime Minister Mark Carney has said Ottawa would support the project in exchange for measures, including a higher industrial carbon tax and the development of the long-delayed Pathways carbon capture and storage project, aimed at reducing emissions from Canada's oil sands industry.The Alberta government plans to unveil additional details on the project, including the proposed route to the coast, by July and aims to secure federal approval by October.The province's preferred northwestern route is expected to face opposition from Indigenous groups in BC and from BC Premier David Eby. The project could also require the federal government to lift a moratorium on oil tankers along BC's northern coast, a step Smith has reportedly advocated.Construction could begin as early as late next year, according to the Alberta government.Imperial Oil, majority-owned by Exxon Mobil (XOM), is one of Canada's largest oil sands producers, operating the Kearl mine and the Cold Lake in situ oil sands project in Alberta.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

$XOM