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SM Energy sees lower March gas sales due to force majeure at processing plant


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SM Energy sees lower March gas sales due to force majeure at processing plant

SM Energy Co. said March 21 that it expects lower Permian Basin natural gas sales for March due to the slower ramp-up of a third-party gas processing facility and electrical outages in West Texas that caused temporary production shut-ins. The company previously said natural gas sales were only expected to be reduced until February.

However, the company kept its first-quarter production guidance of 10.5 million to 10.9 million barrels of oil equivalent.

The firm said its contracted third-party gas processing facility was shutdown due to a force majeure, but was restarted at the end of February and is expected to reach normal production soon.

SM Energy also reported the Merlin Maximus production is on track after drilling 25 wells. Twenty-four wells have met or surpassed production expectations, but one was shut-in to monitor sub-surface pressure.

The 25-well development includes 11 Wolfcamp A wells, nine Lower Spraberry wells and five Wolfcamp B wells that have an average lateral length of 10,300 feet.

Based in Denver, SM Energy is engaged in the acquisition, exploration, development and production of crude oil, condensate, natural gas and natural gas liquids in onshore North America.