SM ENERGY ANNOUNCES AGREEMENT TO SELL $950 MILLION IN ASSETS

Rhea-AI Summary

SM Energy (NYSE: SM) agreed to sell certain South Texas assets to Caturus Energy for a cash purchase price of $950 million, subject to customary adjustments. The sale covers ~61,000 net acres, ~260 producing wells and related facilities, effective Feb 1, 2026.

Production from the assets is expected at 37–39 MBoe/d in 2026 (45% liquids), asset-level cash flow of ~$160 million for the year, and net proved reserves of ~168 MMBoe as of Dec 31, 2025. The transaction is expected to close in Q2 2026 and proceeds will be prioritized for debt reduction and a refreshed return-of-capital program.

Positive

• Sale proceeds of $950 million to strengthen balance sheet
• Expected $160 million asset-level cash flow in 2026
• Asset package includes 168 MMBoe net proved reserves
• Production of 37–39 MBoe/d (45% liquids) in 2026

Negative

• Disposition removes ~260 producing wells from SM's portfolio
• Loss of ~37–39 MBoe/d production contribution going forward

Key Figures

Asset sale price: $950 million Asset sale target: More than $1.0 billion Production rate: 37–39 MBoe/d +5 more

8 metrics

Asset sale price $950 million Cash purchase price for South Texas assets

Asset sale target More than $1.0 billion Company priority for total asset sales

Production rate 37–39 MBoe/d Expected 2026 average from sold assets

Asset-level cash flow $160 million Expected 2026 cash flow from sold assets, pre-corporate

Proved reserves 168 MMBoe Net proved reserves as of Dec 31, 2025 for properties sold

Acreage sold 61,000 net acres Southern Maverick Basin position in Webb County, Texas

Producing wells 260 wells Number of producing wells included in the sale

Liquids mix 45% liquids, 9% oil Expected 2026 production mix from divested assets

Market Reality Check

Price: $21.68 Vol: Volume 6,908,805 is below...

normal vol

$21.68 Last Close

Volume Volume 6,908,805 is below the 20-day average of 8,074,827, suggesting no outsized trading response ahead of earnings. normal

Technical Shares at $21.68 are trading below the 200-day MA of $23.16, and about 45.78% under the 52-week high of $39.985.

Peers on Argus

SM gained 1.03% while key peers like CIVI (-4.86%), MUR (-4.4%), GPOR (-3.81%) a...

SM gained 1.03% while key peers like CIVI (-4.86%), MUR (-4.4%), GPOR (-3.81%) and NOG (-2.63%) declined, indicating the move was stock-specific rather than sector-driven.

Historical Context

5 past events · Latest: Jan 30 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 30	Credit facility amendment	Positive	+3.2%	Expanded borrowing base and commitments with extended maturity and no borrowings.
Jan 30	Merger closing	Positive	+3.2%	Closed all-stock Civitas merger with large synergies and divestiture targets.
Jan 27	Merger approval vote	Positive	+0.5%	Strong shareholder approval for merger and share authorization increase.
Dec 16	Dividend declaration	Positive	-4.5%	Announced $0.20 per-share quarterly cash dividend and key record dates.
Nov 17	Merger details & outlook	Positive	-2.5%	Provided merger synergies, divestiture targets, and positive ratings signals.

Pattern Detected

Recent corporate actions (merger, credit facility amendment, divestiture plans) often saw positive reactions, though shareholder-return news like dividends and some merger detail updates drew negative responses, indicating mixed alignment between positive headlines and price moves.

Recent Company History

Over the past six months, SM Energy has focused on balance sheet and portfolio repositioning. On Nov 17, 2025, it outlined Civitas merger details, planned $1.0 billion of divestitures, and synergies of $200–$300 million. Stockholders approved the merger on Jan 27, 2026, and the deal closed with a credit facility expansion to a $5.0 billion borrowing base on Jan 30, 2026. A $0.20 dividend was declared in December. Today’s South Texas asset sale directly advances the previously stated divestiture and deleveraging goals.

Market Pulse Summary

This announcement details a $950 million South Texas asset sale that helps fulfill SM Energy’s goal ...

Analysis

This announcement details a $950 million South Texas asset sale that helps fulfill SM Energy’s goal of more than $1.0 billion in divestitures set around the Civitas merger. The transaction removes 37–39 MBoe/d of 2026 production and 168 MMBoe of reserves, while management plans to prioritize debt reduction. Investors may track updated return-of-capital plans at upcoming earnings and how portfolio quality, production mix, and leverage trend post-transaction.

Key Terms

MBoe/d, MMBoe, WTI

3 terms

MBoe/d technical

"Production from these assets is expected to average approximately 37-39 MBoe/d in 2026"

Mboe/d stands for "million barrels of oil equivalent per day." It measures how much energy from oil and other sources a company produces or consumes each day, kind of like counting how many large bottles of energy drink you could fill in a day. This helps everyone understand how big or active an energy company is.

MMBoe technical

"net proved reserves associated with these properties were approximately 168 MMBoe"

mmboe stands for million barrels of oil equivalent, a unit that converts different forms of energy (natural gas, condensates and other hydrocarbons) into the energy value of one million barrels of crude oil. Investors use mmboe to compare production, reserves and project size across companies and assets—like using a single currency to add apples and oranges—so it helps gauge potential supply, future revenue and company scale.

WTI financial

"Based on $60/bbl WTI oil, $3.50/Mcf HH natural gas, and $24/BBL OPIS Mt. Belvieu NGL"

West Texas Intermediate (WTI) is a widely used grade of crude oil and one of the main global benchmarks for oil prices, serving as a common yardstick that buyers and sellers use to set contracts. Investors watch WTI because its price influences energy company profits, fuel and transport costs, inflation expectations and broad market sentiment—similar to how a central market price for apples would shape decisions for growers, grocery stores and consumers.

AI-generated analysis. Not financial advice.

Proceeds to accelerate deleveraging and strengthen balance sheet

DENVER, Feb. 18, 2026 /PRNewswire/ -- SM Energy Company (NYSE: SM) today announced that it has entered into an agreement to sell certain South Texas assets to Caturus Energy, LLC for a cash purchase price of $950 million (the "Transaction"), subject to customary adjustments.

"This timely asset sale largely accomplishes one of our key priorities of selling more than $1.0 billion in assets, which will enable us to reduce debt and strengthen our capital structure," said President and CEO Beth McDonald. "We are excited about the impact this divestiture has on our balance sheet and look forward to sharing our updated return‑of‑capital program when we report earnings next week."

SM Energy has agreed to sell approximately 61,000 net acres and approximately 260 producing wells in its southern Maverick Basin position in Webb County, Texas, along with related support facilities. Production from these assets is expected to average approximately 37-39 MBoe/d in 2026 (45% liquids, 9% oil) and generate approximately $160 million of asset-level cash flows for the full year, excluding corporate burdens⁽¹⁾. As of December 31, 2025, net proved reserves associated with these properties were approximately 168 MMBoe.

The Transaction is expected to close in the second quarter of 2026 with an effective date of February 1, 2026. SM Energy expects to prioritize debt reduction with the proceeds, reinforcing its commitment to balance sheet strength and financial flexibility.

RBC Capital Markets is serving as exclusive financial advisor to SM Energy and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to SM Energy.

(1) Based on $60/bbl WTI oil, $3.50/Mcf HH natural gas, and $24/BBL OPIS Mt. Belvieu NGL

FORWARD LOOKING STATEMENTS

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this press release that address events, or developments that SM Energy expects, believes, or anticipates will or may occur in the future are forward-looking statements. The words "anticipate," "believe," "budget," "continue," "could," "effort," "estimate," "expect," "forecast," "goal," "guidance," "identify," "intend," "may," "might," "objective," "opportunity," "outlook," "path," "plan," "potential," "possibly," "predict," "projection," "prospect," "seek," "should," "target," "upside," "will," "would," and other similar words can be used to identify forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding the Transaction, including the estimated timing and final purchase price, the Company's expectation that the remaining conditions to the closing of the Transaction will be satisfied or waived, the Company's expectations regarding the application of the proceeds from the Transaction, and the expected production of, and free cash flow to be generated from, the assets being divested. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. These include the expected timing and likelihood of completion of the Transaction, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the Transaction that could reduce anticipated benefits or cause the parties to abandon the Transaction, the occurrence of any event, change or other circumstances that could give rise to the termination of the purchase and sale agreement, the risk that the parties may not be able to satisfy the conditions to the Transaction in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the Transaction, the risk that any announcements relating to the Transaction could have adverse effects on the market price of SM Energy's common stock or on the ability of SM Energy to retain customers and retain and hire key personnel and maintain relationships with its suppliers and customers and on its operating results and businesses generally, and other important factors that could cause actual results to differ materially from those projected. All such factors are difficult to predict and are beyond SM Energy's control, including those detailed in SM Energy's annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that are available on its website at www.sm-energy.com/investors and on the SEC's website at www.sec.gov. All forward-looking statements are based on assumptions that SM Energy believes to be reasonable but that may not prove to be accurate. Such forward-looking statements are based on assumptions and analyses made by SM Energy in light of its perceptions of current conditions, expected future developments, and other factors that SM Energy believes are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance and actual events may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this press release speak as of the date of this press release.

ABOUT THE COMPANY

SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the states of Colorado, New Mexico, Texas and Utah. SM Energy routinely posts important information about the Company on its website. For more information about SM Energy, please visit its website at www.sm-energy.com.

INVESTOR CONTACTS

Patrick Lytle, plytle@sm-energy.com, 303-864-2502

Meghan Dack, mdack@sm-energy.com, 303-837-2426

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SOURCE SM Energy Company

FAQ

What assets is SM (NYSE: SM) selling to Caturus Energy on Feb 18, 2026?

SM is selling South Texas assets including ~61,000 net acres and ~260 producing wells. According to the company, the package includes related support facilities and covers its southern Maverick Basin position in Webb County, Texas.

How much cash will SM (SM) receive and how will it use the proceeds?

SM will receive a cash purchase price of $950 million, subject to adjustments. According to the company, proceeds are expected to prioritize debt reduction and support an updated return-of-capital program to strengthen the balance sheet.

What production and cash flow will the sold SM (NYSE: SM) assets generate in 2026?

The assets are expected to average 37–39 MBoe/d in 2026 and generate about $160 million of asset-level cash flow. According to the company, those figures exclude corporate burdens and assume stated commodity price assumptions.

When will the SM (SM) asset sale close and what is the effective date?

The transaction is expected to close in the second quarter of 2026 with an effective date of February 1, 2026. According to the company, closing remains subject to customary adjustments and closing conditions.

How large were the net proved reserves tied to the assets SM is selling?

Net proved reserves associated with the properties were approximately 168 MMBoe as of December 31, 2025. According to the company, that reserve figure reflects the properties included in the divestiture.