Full year production guidance has narrowed at the high end of the previous guidance range to 55.1 million to 55.4 million BOE or 151,000 to 152,000 BOE per day at 42% to 43% oil. Implied fourth quarter production then is 13.7 million to 14.0 million BOE or 149,000 to 152,000 BOE per day at approximately 42% oil. The increased working interest in the 9 DUC wells gained in the Sweetie Peck asset exchange will come online early in 2024, benefiting first quarter ’24 production volumes. Capital guidance is unchanged other than to add the cost associated with the increased working interest in the 9 DUC wells from the Sweetie Peck asset exchange. The full year guidance is now $1.1 billion. This puts the fourth quarter at $290 million to $305 million and is expected to include drilling 30 net wells, 17 in Midland and 13 in South Texas and completing 11 net wells in Midland.
LOE guidance for the full year is reduced. We’ve picked up a workover rig and expect the fourth quarter to range around $5.55 to $5.65 per BOE and the full year to come in between $5.20 to $5.25 per BOE. Transportation expense could come in around $2.25 in the fourth quarter, keeping full year guidance around $2.50 per BOE. So in summary, a great quarter, great execution by the team. Solid cash flow generation resulting in significant return of capital to stockholders. I’ll now turn it back to Herb to walk you through a few highlights from the field. Herb?
Herbert Vogel : Thank you, Wade. At SM, we differentiate ourselves with the high quality of our asset base and the high caliber of our geoscience team targeting the best reservoir intervals, our engineering team using cutting-edge simulation and data-driven analytics to optimize completion designs, and that is followed by flawless execution from our operations team. The following slides present third-party data from JPMorgan, Enverus, Rystad and TD Cowen, who all agree with us that our optimization efforts over the years continue to deliver improved performance. Skipping to Slide 13 and Midland Basin well performance relative to peers. On the left, Gabe Daoud at TD Cowen looks at oil production per foot over the past 3 years from SM compared to 20 other Midland peers, a full set of peers, and pointed out in his words, “SM is Numero Uno.” On the right side, we see Enverus data that shows EURs by operator in the Midland Basin and compares SM to 12 peers.
Again, SM is the leader. This didn’t just happen. Our investment in people and cutting-edge data and technologies ultimately leads to the differential bottom line performance that is demonstrated here. Turning now to Slide 14 and capital efficiency. On the left, we again see Enverus data. This time, looking at capital efficiency or capital cost per barrel of EUR by operator in the Midland Basin. Here, SM is among the top 4 leaders. On the right side, we present Rystad data for efficiency and proppant pumping. SM ranks #2 among 27 Permian peers for proppant pump per day. Behind the data, comparing SM to the top listed peer SM laterals are about 5% longer and SM pumps on average 15% to 20% more proppant per foot. Again, our application of data and technology leads to these demonstrated peer-leading efficiencies.
Turning to Slide 15. Here, we show a graph from a JPMorgan report that incorporates Enverus data. JPMorgan points out in their report that SM has shown solid trends in both our Midland and South Texas programs. In this figure, we focus on JPMorgan’s presentation of SM’s well performance in the Midland Basin. This shows cumulative performance on a BOE basis by year in an effort to detect programs that may be high-grading zones drilled or otherwise detect declining asset quality. This is not the case with SM as we have been codeveloping multiple zones over the entire time period, not just high grading to the best single zones and we developed a customized spacing for each drilling spacing unit and each interval. Our production forecasts have been quite accurate and results will vary predictably based on the actual mix of zones drilled and the location of the pads being developed.
