SM Energy(SM)2023-02-23 17:42Financial Data and Key Metrics Changes - The company ended the year with nearly 500 million through 2024, which will be methodical and responsive to commodity prices and free cash flow generation [3][4]. Business Line Data and Key Metrics Changes - The increase in Lease Operating Expenses (LOE) guidance for the year was attributed to several factors, including workovers, water costs, and general inflation, with labor costs also integrated into the estimates [5][9]. Market Data and Key Metrics Changes - Diesel prices have significantly decreased, which is expected to positively impact both capital and operating expenses moving forward [9]. Company Strategy and Development Direction - The company is focused on a prudent balance sheet strategy, maintaining cash reserves to navigate uncertainties in the market as it enters 2023 [4]. - The management emphasized the importance of monitoring market conditions to make informed decisions regarding cash allocation and debt management [4]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for an outstanding 2023, indicating confidence in the company's strategic direction and operational capabilities [11]. Other Important Information - The company highlighted the potential for upside in free cash flow generation based on commodity price fluctuations, which will influence future capital return strategies [4]. Q&A Session Summary Question: Plans for cash return and allocation - The CFO confirmed the continuation of the return of capital program, including dividends and stock buybacks, while monitoring market conditions [3][4]. Question: Drivers of increased LOE - The CEO identified workovers, water costs, and labor as primary contributors to the increase in LOE, while noting the positive impact of lower diesel prices [5][9].