SecProbe.io

November 9, 2012

Via E -mail
A. Wade Pursell
Executive Vice President and Chief Financial Officer
SM Energy Company
1775 Sherman Street, Suite 1200
Denver , Colorado 80203

Re: SM Energy Company
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed February 23, 2012
Form 10 -Q for Fiscal Quarter Ended September 30, 2012
Filed November 1, 2012
File No. 001 -31539

Dear Mr. Pursell :

We have reviewed your filing s and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comments.

Form 10 -K for  Fiscal Year Ended December 31, 2011

Proved Undeveloped Reserves, page 11

1. We note you converted 8% of yo ur proved undeveloped reserves (“PUDs”) to proved
developed reserves in 2011 .  Please tell us about your development pl ans in sufficient
detail to explain how you intend to convert your PUDs within five years from initial
booking .

2. We note you r statement that “As of December 31, 2011, we had no material proved
undeveloped reserves that have been on our books in excess of f ive years .”  Please note
that Rule 4 -10(a)(31)(ii) of Regulation S -X specifies a five year limit after booking for
the development of PUD reserves.  Please be more specific in your disclosure and affirm

A. Wade Pursell
SM Energy Company
November 9, 2012
Page 2

 to us , if true, that none of your PUD reserves are sc heduled to be developed beyond  five
years after first booking, or otherwise advise.

Notes to Consolidated Financial Statements

Note 12 – Acquisition and Development Agreement and Carry and Earning Agreement,
page 126

3. We note you entered into an Acquisition and Development Agreement with Mitsui E &P
Texas LP wherein you agreed to transfer a 12.5% working interest in certain non -
operated oil and gas assets for Mitsui’s agreement to carry 90% of certain drilling and
completion costs attributable to your remaining interest in these assets, until Mitsu i has
paid a total of $680 million on your behalf.  The agreement also included the conveyance
of 50% of your ownership in gathering assets in exchange for reimbursement by Mitsui
of 50% of the costs you have incurred.  Please clarify for us how you accoun ted for this
transaction on day one.    Additionally, please clarify the nature of the terms once payout
has been reached.

Supplemental Oil and Gas Information (unaudited), page 128

Costs Incurred in Oil and Gas Producing Activities, page 128

4. We note your disclosure under this heading includes separate line items for “ Facility
costs ” and “Leasing activity.”   Please revise your presentation to reflect the disclosure
specifically required by FASB ASC 932 -235-50-18 and reflected in Example 3 in ASC
932-235-55-4.

Form 10 -Q for Fiscal Quarter Ended September  30, 2012

Notes to Condensed Consolidated Financial Statements

Note 12 – Acquisition and Development Agreement, page 21

5. We note you hold $93.8 million in cash payments from Mitsui and that $201.3  million of
the $680.0 million carry amount has been spen t as of September 30, 2012 .  Please expand
your disclosure here to address the factors that impact the amount and timing of receipt of
these carry amounts, such as whether the drilling carry amounts are to be funded on a
predetermined schedule or will be r eimbursed to you  as they are billed by the operator.
In addition, please expand your disclosure to discuss how these drilling carries impact
your results of operations, if applicable .

A. Wade Pursell
SM Energy Company
November 9, 2012
Page 3

 Management’s Discussion and Analysis of Financial Condition and Resul ts of Operations,
page 24

Non-GAAP Financial Measures, page 43

6. We note your disclosure and reconciliation of EBITDAX as a non -GAAP financial
measure used by management to evaluate operating performance and to evaluate
compliance with a financial covenan t required by your credit facility.  As EBITDAX is
used as a measure of liquidity as it relates to the outstanding credit facility, please amend
your disclosure to also  include a reconciliation of the non -GAAP financial measure to the
most directly compara ble GAAP financial measure, or net cash provided by operating
activities, as required by Item 10(e)(1)(i)(B) of Regulation S -K.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be c ertain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceedin g initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Jennifer O’Brien  at (202) 551 -3721  or Kimberly Calder, Assistant
Chief Accountant, at (202) 551 -3701  if you have questions regarding commen ts on the financial
statements and related matters.  Please contact me at (202) 551 -3311 with any other questions.

        Sincerely,

        /s/ Ethan Horowitz

        Ethan Horowitz
        Branch Chief