Barclays Initiates Coverage on SM Energy (SM) with an Overweight; Offers Exposure to Strong Production and Reserve Growth

Barclays initiates coverage on SM Energy (NYSE: SM) with an Overweight. PT $109.00.

Barclays analyst says, "We believe SM offers exposure to strong production and reserve growth in the Eagle Ford Shale and Rocky Mountains over the next several years at an attractive valuation."

"Strong balance sheet and liquidity position to fund active capital program - Pro forma for completed and pending asset sales, SM has a net debt to capital ratio of 11% and ~$1.5 billion of total liquidity, including an undrawn credit facility with a $1 billion borrowing base. We estimate a cash flow shortfall of ~$450 through 2H11 to fund remaining expenditures under the current $1,550-million budget and a deficit of ~$370 million in 2012 under a preliminary $1.45 billion capital budget."

SM Energy was formerly known as St. Mary Land & Exploration Company.

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