<SEC-DOCUMENT>0001104659-19-051232.txt : 20191106
<SEC-HEADER>0001104659-19-051232.hdr.sgml : 20191106
<ACCEPTANCE-DATETIME>20190924190130
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001104659-19-051232
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20190924

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SM Energy Co
		CENTRAL INDEX KEY:			0000893538
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				410518430
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1775 SHERMAN STREET
		STREET 2:		SUITE 1200
		CITY:			DENVER
		STATE:			CO
		ZIP:			80203
		BUSINESS PHONE:		303-861-8140

	MAIL ADDRESS:	
		STREET 1:		1775 SHERMAN STREET
		STREET 2:		SUITE 1200
		CITY:			DENVER
		STATE:			CO
		ZIP:			80203

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ST MARY LAND & EXPLORATION CO
		DATE OF NAME CHANGE:	19940228
</SEC-HEADER>
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<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<p align="center" style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CONFIDENTIAL TREATMENT REQUESTED BY SM ENERGY COMPANY.</font></p>
<p align="center" style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CERTAIN PORTIONS OF THIS LETTER AS FILED VIA EDGAR HAVE BEEN </font></p>
<p align="center" style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OMITTED AND FILED SEPARATELY WITH THE COMMISSION.&#160; CONFIDENTIAL </font></p>
<p align="center" style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">September&nbsp;24, 2019</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Division of Corporation Finance<br> Office of Natural Resources <br> United States Securities and Exchange Commission<br> 100 F. Street, N.E.<br> Washington, D.C. 20549</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;punctuation-wrap:simple;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Re:</font></b><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b>SM Energy Company<br> Form&nbsp;10-K for the Fiscal Year Ended December&nbsp;31, 2018<br> Filed February&nbsp;21, 2019<br> File No.&nbsp;001-31539</b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dear Ladies and Gentlemen:</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Set forth below are the responses of SM Energy Company, a Delaware corporation (the &#147;<b><i style="font-weight:bold;">Company</i></b>,&#148; &#147;<b><i style="font-weight:bold;">we</i></b>,&#148; &#147;<b><i style="font-weight:bold;">us</i></b>&#148; or &#147;<b><i style="font-weight:bold;">our</i></b>&#148;), to comments received from the staff of the Division of Corporation Finance, Office of Natural Resources (the &#147;<b><i style="font-weight:bold;">Staff</i></b>&#148;) of the Securities and Exchange Commission (the &#147;<b><i style="font-weight:bold;">Commission</i></b>&#148;) by letter dated September&nbsp;13, 2019, with respect to the review of the Company&#146;s Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2018 (File No.&nbsp;001-31539) filed with the Commission on February&nbsp;21, 2019 (the &#147;<b><i style="font-weight:bold;">2018 Form&nbsp;10-K</i></b>&#148;<i>)</i>.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to 17 C.F.R. &#167; 200.83 (&#147;Rule&nbsp;83&#148;), the Company requests confidential treatment from disclosure under the Freedom of Information Act or otherwise for portions of its responses to the Staff&#146;s comments 1 and 2.&#160; These responses are being provided to the Commission in their entirety in hard copy under separate cover along with the request for confidential treatment. If any request is made for disclosure of these items, we would appreciate being notified promptly, so that we may provide further support for our request for confidentiality.</font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For your convenience, each response is prefaced by the exact text of the Staff&#146;s corresponding comment in bold text. Please note the version of this letter filed via EDGAR omits confidential information included in the unredacted version delivered to the Staff, and the redactions are denoted in the EDGAR version by bracketed asterisks (&#147;[***]&#148;).</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;punctuation-wrap:simple;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">*</font></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b>*</b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b>*</b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b>*</b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b>*</b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b>*</b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Form&nbsp;10-K for the Fiscal Year Ended December&nbsp;31, 2018</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Reserves</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Proved Undeveloped Reserves, page&nbsp;9</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;punctuation-wrap:simple;text-indent:-.25in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.</font></b><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b>You state in your Form&nbsp;10-K that you reduced capital investment in the Eagle Ford during 2018 and that the majority of capital will be spent elsewhere in 2019 (i.e., approximately 80% of your 2019 capital will be allocated to the Midland Basin). Separately, comments attributed to your CEO as part of the earnings call regarding your results for the period ended June&nbsp;30, 2019 suggest that capital activity will be shifted away from your operations in the Eagle Ford if commodity prices do not improve. Provide us with supplemental information showing the progress made in developing your proved undeveloped reserves (&#147;PUDs&#148;) in the Eagle Ford, both during the fiscal year ended December&nbsp;31, 2018 and the interim period ended June&nbsp;30, 2019, along with a discussion of any delays in development that occurred during these periods. In addition, explain how decisions to reduce capital investment affected your reported quantities of PUDs in the Eagle Ford. Refer to Item 1203(c)&nbsp;of Regulation S-K and Rule&nbsp;4-10(a)(22) of Regulation S-X.</b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Response:</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Related to our Eagle Ford assets: (1)&nbsp;during the fiscal year ended December&nbsp;31, 2018, we developed [***] million barrels of oil equivalent (&#147;</font><b><i style="font-weight:bold;">MMBOE</i></b>&#148;) of a total of 132.9 MMBOE of estimated PUDs as of December&nbsp;31, 2017, resulting in a conversion rate of [***]%, and (2)&nbsp;during the six-month period ended June&nbsp;30, 2019, we developed [***] MMBOE of a total of 131.0 MMBOE of estimated PUDs as of December&nbsp;31, 2018, resulting in a partial year conversion rate of [***]%.&#160; For the nine-month period ending September&nbsp;30, 2019, we expect to have developed [***] MMBOE of a total of 131.0 MMBOE of estimated PUDs as of December&nbsp;31, 2018 related to our Eagle Ford assets, resulting in a year-to-date conversion rate of [***]% through September&nbsp;30, 2019.</p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CONFIDENTIAL TREATMENT REQUESTED BY SM ENERGY COMPANY</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">2<a name="PB_2_083956_7794"></a></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During the fiscal year ended December&nbsp;31, 2018, and during the period from January&nbsp;1, 2019 through the date of this letter, we have not experienced any material delays in development of our Eagle Ford PUDs.&#160; As of the date of this letter, we have not materially changed our plans for the development of Eagle Ford PUDs recorded as of December&nbsp;31, 2018.&#160; The forward-looking statement regarding shifting capital activity away from our operations in the Eagle Ford signaled a potential change in future development plans in a lower commodity price environment than that which existed as of December&nbsp;31, 2018, and as of the filing date of our 2018 Form&nbsp;10-K.&#160; As of the date of this letter, there has been no change to our previously made final investment decision regarding allocated capital to the Eagle Ford.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Overview of the Company</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt .5in;punctuation-wrap:simple;text-indent:-.5in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2018 Financial and Operational Highlights</font></u></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt .5in;punctuation-wrap:simple;text-indent:-.5in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Operational Activities, page&nbsp;45</font></u></b></p>
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<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;punctuation-wrap:simple;text-indent:-.25in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2.</font></b><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b>We note that you had 23 and 20 net wells drilled but not completed as of December&nbsp;31, 2018 and June&nbsp;30, 2019, respectively, in your South Texas&nbsp;&amp; Gulf Coast region.&#160; In light of the statement in your Form&nbsp;8-K dated July&nbsp;18, 2019 that you plan &#147;to wrap-up 2019 planned net completions&#148; in South Texas in the quarter ended September&nbsp;30, 2019, tell us the expected number of net wells drilled but not completed as of September&nbsp;30, 2019 and quantify the associated PUDs.&#160; As part of your response, address your plans for any wells drilled but not completed as of December&nbsp;31, 2018 remaining at September&nbsp;30, 2019</b><b>.</b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Response:</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As of December&nbsp;31, 2018, we had 23 net drilled but not completed wells in our South Texas and Gulf Coast Region (the &#147;</font><b><i style="font-weight:bold;">YE&#146;18 DUCs</i></b>&#148;), <b>[***]</b> of which had associated estimated proved undeveloped reserves of <b>[***]</b> MMBOE, and <b>[***]</b> of which had no associated proved undeveloped reserves.&#160; During the nine-month period ending September&nbsp;30, 2019, the <b>[***]</b> YE&#146;18 DUCs with proved undeveloped reserves are expected to remain uncompleted; however, we expect to complete these wells within five years of their initial PUD booking.&#160; Of the <b>[***]</b> YE&#146;18 DUCs with no associated proved undeveloped reserves, <b>[***]</b> were completed during the nine-month period ending September&nbsp;30, 2019.</p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As of September&nbsp;30, 2019, we expect to have a total of </font><b>[***]</b> drilled but not completed net wells in our South Texas&nbsp;&amp; Gulf Coast region, inclusive of <b>[***]</b> YE&#146;18 DUCs that</p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CONFIDENTIAL TREATMENT REQUESTED BY SM ENERGY COMPANY</font></p>
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<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">existed as of December&nbsp;31, 2018 and have not been completed.&#160; Of the expected </font><b>[***]</b> drilled but not completed net wells as of September&nbsp;30, 2019, <b>[***] </b>net wells are projected to have estimated proved undeveloped reserves of <b>[***]</b> MMBOE as of September&nbsp;30, 2019. We expect that each of these <b>[***]</b> net wells will be completed within five years of their initial PUD booking.&#160; The remaining <b>[***]</b> drilled but not completed net wells that do not have associated proved undeveloped reserves will be considered in future development plans as we continue to evaluate and execute our South Texas&nbsp;&amp; Gulf Coast capital program.</p>
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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;punctuation-wrap:simple;text-align:center;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">*</font></i></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b><i style="font-weight:bold;">*</i></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b><i style="font-weight:bold;">*</i></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b><i style="font-weight:bold;">*</i></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b><i style="font-weight:bold;">*</i></b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <b><i style="font-weight:bold;">*</i></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Please contact A. Wade Pursell, Executive Vice President and Chief Financial Officer, who can be reached at&#160; (303) 864-2555 or David W. Copeland, Executive Vice President and General Counsel, who can be reached at (303) 863-4325, if you should have any questions regarding the responses contained herein.</font></p>
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<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
<td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.1%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>    </td>
<td width="43%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:43.9%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ A. Wade Pursell</font></p>    </td>   </tr>
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<td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.0%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
<td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.1%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
<td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.9%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>   </tr>
<tr>
<td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.0%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
<td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.1%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>    </td>
<td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.9%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A. Wade Pursell</font></p>    </td>   </tr>
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<td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.0%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
<td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.1%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Its:</font></p>    </td>
<td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.9%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial Officer</font></p>    </td>   </tr>
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<td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.0%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
<td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.1%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At:</font></p>    </td>
<td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.9%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1775 Sherman St. Suite&nbsp;1200</font></p>    </td>   </tr>
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<td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.0%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
<td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.1%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
<td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.9%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Denver, CO 80203</font></p>    </td>   </tr>
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<td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.0%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
<td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.1%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fax:</font></p>    </td>
<td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.9%;">
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">303-839-3304</font></p>    </td>   </tr>  </table>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">cc:&#160; Jeannette Wong, Staff Accountant</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-indent:.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ethan Horowitz, Accounting Branch Chief</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-indent:.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">David W. Copeland, SM Energy Company</font></p>
<p style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-indent:.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Lucy Stark, Holland&nbsp;&amp; Hart LLP</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;punctuation-wrap:simple;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CONFIDENTIAL TREATMENT REQUESTED BY SM ENERGY COMPANY</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">4<a name="PB_4_084301_5335"></a></p>
<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade align="left" style="color:#010101;"></div>
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