SM Energy announces East Texas exploration success, increased borrowing base
DENVER -- Independent operator SM Energy announced today the successful completion of an exploratory test well in San Jacinto County, Texas. The Horizon Properties 2H, a horizontal completion in the Woodbine interval, produced approximately 740 boepd in a 24-hour test, flowing at 1,520 PSIG casing pressure on a 27/64-in. choke, while cleaning up after fracture stimulation. Production consisted of 305 bopd of 42° API gravity oil and 2,600 Mcfd of rich gas. The well will be shut-in to await construction of a gathering system.
SM Energy has increased its acreage position in East Texas to approximately 105,000 net acres and expects to drill additional test wells targeting the Woodbine formation, as well as other intervals of interest beginning in the third quarter of 2013. SM Energy expects to construct the necessary gathering system once several of these wells have been drilled. Capital for the 2013 delineation program will be funded largely from the company’s existing New Ventures budget.
SM Energy also announced that the borrowing base under its existing revolving credit facility has been increased to $1.9 billion, from $1.55 billion, as a result of its lenders’ regularly scheduled semi-annual redetermination process. The company also amended the terms of its credit facility to increase the commitment amount from the bank group to $1.3 billion, from $1.0 billion, and to extend the maturity of the facility by approximately two years to April of 2018.