SM Energy Co Q2 2020 Earnings Call - Q&A Session Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Bradley Barrett Heffern - RBC Capital Markets, Research Division - Analyst : I have a couple on South Texas. For the Austin Chalk results, sometimes farther to the east, you see this relatively rapid phase shift. I know you -- it seems like you have something of a sweet spot but maybe it's a little different geologically. So I was just wondering if you could talk about how the oil rates hold up over time and if you do indeed see a rapid phase shift.

Question: Bradley Barrett Heffern - RBC Capital Markets, Research Division - Analyst : Okay. Got it. I -- sorry, I maybe used the wrong language there. I was more talking about the productivity of the well over time. Do you see like a significantly more rapid oil decline than you see from the liquids and gas? Or is it sort of more steady in this area?

Question: Bradley Barrett Heffern - RBC Capital Markets, Research Division - Analyst : Okay. Great. And just a couple sort of administrative things on South Texas as well. So I know you guys have called out that in mid-2021 you have the transportation contracts rolling off. But the last couple quarters, the transportation expense has been quite low relative to where it sort of used REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Bradley Barrett Heffern - RBC Capital Markets, Research Division - Analyst : Okay. Yes. I was more looking at like just on a nominal basis, like typically, the transportation expense for South Texas is like $45 million a quarter or something like that, and it's gone down into sort of the mid-30s, but maybe the Austin Chalk is the explanation for that.