SM Energy Co. (NYSE: SM) is intensifying efforts in the Powder River Basin (PBR), upping its rig count in the second-quarter 2014 and announcing the acquisition of 28,000 net acres adjacent to the company’s existing acreage.

The company agreed to pay $100 million for the land and trade 7,000 net acres in other portions of the basin in a deal made after the close of the first-quarter.

When completed, the acquisitions will increase SM Energy's PBR acreage to a total of about 161,000 net acres, with an estimated 122,000 net acres prospective in the Frontier formation.

SM expects to add a third rig in the second-quarter to accelerate delineation of its PRB play area and now expects to complete nine Frontier and two Shannon wells during 2014.

SM’s quarterly results were solid, with earnings per share beat and production slightly ahead of estimates.

Operational results in key plays were either in line or better than expectations, with Eagle Ford volumes lining up and positive Sweetie Peck and East Texas results.

In February, SM shares lost 17% after releasing fourth-quarter and 2013 results that it had beat production, missed earnings and cash flow and updated its Eagle Ford acreage resources to reduce its unrisked resource potential by 17%.

“After the company’s Eagle Ford revisions last quarter, SM has been put in the penalty box by the Street and the only way out will be continued execution, which happened this quarter,” said David Tameron, senior analyst for Wells Fargo Securities. “After the bloody week in February, which we understood but viewed as a bit of an overreaction, SM has underperformed. While still down and still out of favor, shares have stabilized.”

SM reported adjusted earnings per share of $1.58 vs. Bloomberg consensus of $1.50 and Wells Fargo’s $1.48 estimate.

Mike Kelly, senior analyst for Global Hunter Securities, said SM should get out of the doghouse after first-quarter production fell at the top end of the company’s guidance range and margins showed improvement.

Kelly outlined the company’s results by play.

Operated Eagle Ford: Production was up 2% sequentially to 76.3 thousand barrels of oil equivalent per day (Mboe/d) with 20 completions made in the first-quarter. SM has increased lateral length by 25% compared to its 2013 average.

Non-op Eagle Ford: Production was up 17% quarter-over-quarter to 23.4 Mboe/d, with 107 gross completions during the quarter.

Bakken: Production was flat compared to the fourth-quarter, at 16 Mboe/d, due to severe weather.

Permian: Two wells were completed in northern Upton County, Texas with 5,000-foot laterals and 25 stages. The Dorcus 3036H peaked at 1,226 boe/d (IP-30). In southwest Dawson County, SM’s first Wolfcamp D test is slated to spud in the second quarter.

PRB: SM made one completion during the quarter, which peaked at 917 boe/d (87% oil).

East Texas: Two Woodbine wells were completed (both 100% WI). SM plans eight tests in the play in 2014.

Gabriele Sorbara, an analyst with Topeka Capital Markets, was seemingly unimpressed.

“SM reported mixed first-quarter results with no real exciting news, although we believe the current valuation, along with its 66,500 net acres in the Midland Basin is a compelling reason to own shares,” he said.