SM Energy Company (NYSE:SM) recently declared the pricing of $500 million aggregate principal amount of senior unsecured notes. The notes are scheduled to mature by 2026 and carry an interest rate of 6.75%.
The notes will be issued at face value and the offering is expected to be completed by Sep 12, 2016, upon the fulfillment of customary closing conditions. The proceeds from the offering will be utilized by the company to make partial payment for the purchase of an entity that holds undeveloped leasehold interests, producing wells and related infrastructure properties in the Midland Basin of west Texas. The remainder, if any, will likely be used for general corporate activities. Nonetheless, the net proceeds will be allotted solely for general corporate activities if the buyout deal falls though.
Denver, CO-based SM Energy is an independent oil and gas firm involved in upstream operations like exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. Last month, the company reported second-quarter 2016 results. SM Energy posted second-quarter adjusted loss of 44 cents per share, significantly narrower than the Zacks Consensus Estimate of a loss of 69 cents.
However, the persistent weakness in oil prices has been dragging down the company’s profit. Though the commodity recovered from lows it slipped to in mid-February, it still remains way below the level attained in mid-2014. As a result, SM Energy currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
SM ENERGY COMPANY Price
Nonetheless, investors interested in the energy sector can look at better-ranked players like Matador Resources Company (NYSE:MTDR) , NGL Energy Partners LP (NYSE:NGL) and Midcoast Energy Partners, L.P. (NYSE:MEP) . All the players sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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MIDCOAST EN PTN (MEP): Free Stock Analysis Report
SM ENERGY CO (SM): Free Stock Analysis Report
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