SM Energy Company (NYSE:SM) Q4 2015 Earnings Conference Call - Final Transcript
Feb 24, 2016 • 10:00 am ET
Good day, ladies and gentlemen and welcome to the SM Energy Fourth Quarter and Full Year 2015 Earnings Conference call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]
I would now like to turn the conference over to Jennifer Samuels, Director of Investor Relations. Please go ahead.
Jennifer Martin Samuels
Thank you, Abigail. Good morning, everyone, and thank you for joining us. A few housekeeping items before we get started. First, I need to remind everyone that we will be making forward-looking statements during this call about our plans, expectations, and assumptions regarding our future performance, including discussing full year guidance. These statements involve risks that may cause our actual results to differ materially from the results expressed or implied in our forward-looking statements. For a discussion of these risks, you should refer to the cautionary information about forward-looking statements in our press release from yesterday, the presentation posted to our website for this call, and the Risk Factors section of our Form 10-K that we filed, I guess about an hour ago, that is posted to our website.
We will also discuss certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliation of those measures to the most directly-comparable GAAP measures and other information about these non-GAAP metrics are also described in our earnings release from yesterday. Following the call today, we will head up to Vail for the Credit Suisse conference, where we hope to see many of you. We will also attend the Simmons and Raymond James conferences in the coming weeks and again hope to see many of you there.
Speaking this morning will be, Jay Ottoson, President and Chief Executive[Phonetics] Officer; Wade Pursell, Executive Vice President and Chief Financial Officer; and I am very pleased to introduce Herb Vogel, our EVP of Operations, who will cover certain operational accomplishments in 2015 and how, what we learned in 2015 shapes our 2016 plans, as well as reserves in economic inventory. Herb is covering a lot of good information today, so get out your notepads. After the prepared remarks, we may be time-limited for Q&A, so in order to stay within an hour, I ask you to limit your questions to one or two.
And with that, I will turn the call over to Jay.
Javan D. Ottoson
Well, thank you, Jennifer. Good morning. Thank you to everyone for calling in today. Well, I'm going to address just right upfront what seems to be a key issue for people following our release last night. We do expect our production volumes to be down sharply this quarter and down year-over-year, because in both our operated and non-operated Eagle Ford programs, discretionary capital was cut starting late last year.
We are transitioning to spending more in the Permian because at current product prices, our program in the Permian generates better cash-on-cash returns and higher operating margins than our Eagle Ford programs. Our Eagle