SM · SM Energy Company

SM Energy's first quarter 2026 results reflect a transformative period post the January 30, 2026, merger with Civitas Resources, delivering average net daily production of 371.2 MBoe/d, including 190.3 MBbl/d of oil, surpassing mid-point guidance amid two months of legacy Civitas assets in Permian and DJ Basins. This strong execution drove a raised full-year production outlook to 410–430 MBoe/d (222–228 MBbl/d oil) with a second-half run rate of ~430 MBoe/d, while reaffirming $2.65–$2.85 billion capital expenditures. GAAP net loss of $335 million ($1.68 per diluted share) stemmed primarily from a $697 million non-cash derivative mark-to-market loss due to rising forward oil prices, offset by Adjusted EBITDAX of $970 million and Adjusted net income of $309 million ($1.55 per share). Operating cash flow reached $640 million ($692 million before working capital changes), with capex at $555 million ($672 million before accruals), yielding $20 million adjusted free cash flow after ~$180 million one-time merger and divestiture costs. Balance sheet actions included closing a $950 million South Texas Divestiture on April 30 for ~$900 million net proceeds to redeem $819 million 2026 Senior Notes, refinancing ~$900 million 8.375% debt with $1.0 billion 6.625% notes due 2034, and maintaining $2.9 billion liquidity with no revolver draws. Synergies accelerated to $375 million annualized target ($300 million actioned), with $135 million Q1 transaction/integration costs against $180 million full-year guide. Management emphasized integration, execution, and bolstering returns, hiking the fixed dividend 10% to $0.88/share and targeting 20% post-dividend free cash flow for repurchases, positioning SM as a scaled multi-basin operator focused on returns.