You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: We are very pleased to report exceptional second-quarter financial and operational results.
The quarter exceeded expectations on several measures and puts us ahead of schedule in meeting our key priorities.
Turning to Slide 3.
I will reiterate our long-term objectives and progress in meeting them.
First, maximize cash flow over the next five years sustaining a reinvestment rate of less than 75%.
During the second quarter, we accelerated certain capital activity to effectively make up for lost time as a result of the Texas weather event in the first quarter.
Production came in ahead of expectations and capital came in lower, delivering free cash flow neutrality.
Our outlook from here for free cash flow and free cash flow yield is highly competitive for our sector and favorable compared to other market sectors.
Our second long-term objective is to improve the balance sheet by applying free cash flow to absolute debt reduction, targeting less than two times leverage by year-end 2022 and generating sufficient cash flow to exceed bond maturities due through 2024.
Our outlook on leverage is more favorable on two fronts.
Given the strength and price outlook for all three commodities since we constructed our plan in February, the target of less than two times leverage by the end of 2022 is now looking like less than one and a half times levered at the end of 2022.
Secondly, our second-quarter bond tender and new issuance reduced near-term maturities by nearly $400 million.
We now believe that free cash flow generation through 2024 will be sufficient to cover bond maturity through 2026.
I'll let Wade expand upon that great outcome.
Our third long-term objective is to maintain top-tier high-return inventory.
Our success here may be the most exciting of all.
Despite a particularly challenging 2020 and weather-related bumps during the first quarter, our team has continued to delineate and develop the Austin Chalk.
This is real value creation, as I will elaborate on later.
And the fourth long-term objective is to report differential ESG stewardship.
Today, we've posted our responses to the 2020 CDP questionnaire as well as posted the data in the format of the task force on climate-related financial disclosures or TCFD.
We will be posting additional ESG disclosures in the coming days including the Sustainability Accounting Standards Board, or SASB, framework updated for 2020 data.
Among reported ESG metrics, most notable are our reported 37% decline in greenhouse gas emissions intensity in 2020 versus 2019 and a 20% decline in methane intensity.
Turning briefly to Slide 4.
This chart depicts our highly competitive free cash flow yield as projected for 2022.
I'll start on Slide 5.
I think you'll find most of the information straightforward, so I'll just add some context to a few items.
Starting with production, we beat the top end of guidance with production at 12.4 million BOE or 136,500 BOE per day.
And this was due mainly to performance from the Austin Chalk, where both base production and new wells were stronger than we had modeled.
For the quarter, oil production percentage was a healthy 54%.
Capex of $214 million came in under our guidance range of $230 million to $240 million.
This related to timing as our capital expenditure estimate for the full year remains unchanged.
Drilling and completion activity is on schedule.
We drilled 22 and completed 45 net wells in the quarter.
For the first half of 2021, capital expenditures totaled $399 million, and we drilled 40 net wells and completed 62 net wells.
So we're roughly 60% through our capital program for the year.
In general, line item costs are tracking guidance, but I would expect LOE per BOE to tick up to the high end of the range in the third quarter as we have more workover scheduled during the quarter.
Turning to the balance sheet on Slide 7.
Here, we see the substantial reduction in near-term maturities due through 2024 which at second quarter end stood at $223 million including the revolver.
I'll also note that since quarter end, we redeemed the converts.
So for modeling purposes, assume that went on the revolver.
We termed out approximately $400 million in debt with the issuance of new six and a half percent notes due 2028.
The tender offer and issuance transactions went extremely well, was actually oversubscribed by 10 times.
It served the purpose of strengthening the balance sheet by removing any perceived risk associated with near-term maturities and positions us to reduce the highest cost debt sooner.
Updating our hedge positions on Slide 8, we have 75% to 80% of oil production and about 85% of natural gas production hedged the second half of 2021, details by quarter in the appendix.
As we previously stated, our methodology for hedging is aligned with our outlook for leverage, so you can expect a directionally lower percentage of production to be hedged in 2022.
To say it again, we now see debt-to-EBITDAX trending below one and a half times by the end of next year, and that is based on current strip and estimated cost.
So now turning to guidance on Slide 9.
Guidance for the year remains unchanged.
We did narrow the range around production to 47.5 million to 49.5 million BOE, and that range really relates to ultimate timing of wells coming on.
Third-quarter production is expected to range between 13 million to 13.2 million BOE or 141,000 to 143,000 BOE per day 53% to 54% oil.
This implies fourth-quarter production to be relatively flat with the third quarter.
In terms of cadence, the remaining capital activity will be heavier weighted to the third quarter, with the third-quarter capital guidance range forecasted to be between $170 million to $190 million.
I think we will lean toward the high end of full-yea capital guidance, accounting for some inflation that may kick in.
We're now expecting full-yea activity to include about 85 net wells drilled and 100 to 110 net wells completed.
This sets us up to low single-digit production growth in 2022 and of course substantial growth in free cash flow.
I'd just like to highlight a few operational accomplishments, skipping to Slide 11.
In the Midland Basin, I have to boast about the longest lateral ever in the state of Texas.
While we have previously confirmed drilling the 20,900 foot almost 4-mile long lateral which we drilled in 20 days, we now have the well on production.
And I can tell you and anyone with field experience would know, drilling out the plugs and cleaning out a well with a lateral this long is no easy feat.
The project went smoothly and the well has been on production since June 25.
Keep an eye out for the performance of the Clarice Starling Sundown D 4542WA well in Howard County, an aptly long name for a really long lateral.
Also in Midland, we just finished our first two simul frac operations on two pads located in Sweetie Peck and North Martin.
These operations went smoothly, and we were able to complete an average of 16 stages per day about twice the pace of a typical zipper frac, and we're able to complete as many as 24 stages in a day.
I think many of you already recognize that we are always in pursuit of commercially astute technical advancements.
I will also draw your attention to Slide 12, showing that SM is already recognized for drilling the longest laterals on average in the Midland Basin.
Our ability to do this is a result of our contiguous land positions and really good work by our land department in blocking up positions.
Longer laterals present a tangible benefit in terms of capital efficiency.
Wrapping these concepts together, longer laterals and simul frac operations in areas where the development design is amenable, we clearly have the potential to offer additional capital efficiencies.
We are often asked if we expect to keep improving our already efficient operations which we continue to run at around $520 per lateral foot.
It's hard to imagine material improvements, but this is a great example.
We will be working with the longer lateral and time effect concepts as successfully tested as we put together our 2022 operations plan.
Turning to Slide 14.
In South Texas, we have updated the Austin Chalk cumulative production plot which continue very favorably.
And on Slide 15, I will reiterate the great Austin Chalk 30-day peak rates we announced in June.
Three new wells averaged 3,300 BOE per day.
And the wells have an estimated breakeven oil price of just $24 per barrel.
We should have additional Austin Chalk results in the third quarter, and we look forward to sharing more with you.
Also, I will remind you that our transportation costs for natural gas in South Texas dropped by about $0.25 per mcf starting this month, another factor contributing to better economics in the South Texas program.
In summary, second-quarter results were outstanding, and we are on track to return to free cash flow generation starting in the third quarter and on track to deliver highly competitive free cash flow as measured by yield to market capitalization going forward.
Operationally, we have been able to keep costs flat and through our successful testing of longer laterals and simul-frac completions, we will seek to drive increased capital efficiencies through technology.
Keep watching for updates on our Austin Chalk results as we continue to successfully build grassroots inventory and asset value.
Again, we have posted CDP and TCFD responses which you can access on our website and expect more ESG-related disclosures in the coming days.

user
qtrly production was 12.4 mmboe (136.5 mboe/d) and was 54% oil.
qtrly production volumes exceeded expectations due to outperformance from new wells and base production in austin chalk.
full year 2021 production guidance range is narrowed to 47.5-49.5 mmboe, or 130.1-135.6 mboe/d.
except production, all other 2021 guidance metrics are unchanged.

assistant