SM ENERGY CLOSES $950 MILLION SOUTH TEXAS DIVESTITURE; ANNOUNCES REDEMPTION OF ALL OUTSTANDING 2026 SENIOR NOTES

Rhea-AI Summary

SM Energy (NYSE: SM) closed the sale of certain South Texas assets for $950 million, generating approximately $900 million of net cash proceeds after preliminary adjustments and costs. The company instructed trustees to redeem in full the $819 million aggregate principal of its 2026 Senior Notes.

The company plans redemptions on May 11, 2026 ($400 million) and June 1, 2026 ($419 million). Following a borrowing base redetermination, lender commitments were reaffirmed at $5.0 billion and aggregate commitments at $2.5 billion.

Positive

• Closed South Texas asset sale for $950 million
• Net cash proceeds of approximately $900 million
• Planned redemption of $819 million 2026 Senior Notes reduces outstanding high-yield debt
• Borrowing base reaffirmed at $5.0 billion with aggregate lender commitments of $2.5 billion

Negative

• Planned near-term cash outflows of $819 million for redemptions in May and June 2026
• Final purchase price remains subject to customary post-closing adjustments

News Market Reaction – SM

-1.80%

14 alerts

-1.80% Session close to close

$7.14B Market Cap

0.1x Rel. Volume

In the May 1 session, SM declined 1.80%, reflecting a mild negative market reaction. Our momentum scanner triggered 14 alerts that day, indicating notable trading interest and price volatility.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement highlights a major step in SM’s balance sheet strategy. The company closed a $950 ...

Analysis

This announcement highlights a major step in SM’s balance sheet strategy. The company closed a $950 million South Texas asset sale, generating $900 million in net cash to fully redeem $819 million of 2026 Senior Notes, while its borrowing base remained at $5.0 billion. Together with earlier tender offers for 2028 notes, this reduces near-term debt and emphasizes capital structure quality alongside ongoing merger integration efforts.

Key Figures

South Texas sale price: $950 million Net cash proceeds: $900 million Divestiture target: $1.0 billion-plus +5 more

8 metrics

South Texas sale price $950 million Cash purchase price for South Texas assets in divestiture

Net cash proceeds $900 million Net proceeds after adjustments and transaction costs

Divestiture target $1.0 billion-plus Stated asset sale target toward which this deal contributes

2026 notes redeemed $819 million Aggregate principal of 2026 Senior Notes to be redeemed in full

6.75% 2026 notes $419 million Principal of 6.75% Senior Notes due September 15, 2026

5.0% 2026 notes $400 million Principal of 5.0% Senior Notes due October 15, 2026

Credit facility borrowing base $5.0 billion Reaffirmed borrowing base after South Texas divestiture

Lender commitments $2.5 billion Aggregate lender commitments under reaffirmed credit facility

Historical Context

5 past events · Latest: Apr 07 (Neutral)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Apr 07	Earnings call schedule	Neutral	-8.1%	Announced timing and access details for Q1 2026 earnings call.
Apr 02	Tender offer results	Positive	+3.8%	Reported final results of cash tender offer for 2028 senior notes.
Mar 18	Tender offer update	Positive	+1.7%	Announced early tender results and upsized cash tender offer for 2028 notes.
Mar 04	Debt offering	Positive	+4.2%	Priced upsized $1.0B 6.625% senior notes due 2034 for refinancing.
Mar 04	Tender offer launch	Positive	+1.9%	Launched cash tender offer for up to $750M of 8.375% 2028 notes.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent liability management actions, including multiple senior note tenders and offerings, have generally seen positive price alignment, suggesting investors have been receptive to balance sheet-focused news.

Recent Company History

Over the past two months, SM has focused heavily on balance sheet management. On Mar 4, it launched a cash tender offer for 8.375% 2028 notes, supported by a $1.0 billion 2034 senior notes offering the same day. Subsequent early tender and final tender results on Mar 18 and Apr 2 showed strong noteholder participation with mostly positive share reactions. A Apr 7 conference call scheduling headline saw a negative move, making today’s divestiture-funded 2026 notes redemption consistent with the broader deleveraging narrative.

Key Terms

senior notes, aggregate principal amount, borrowing base, credit facility

4 terms

senior notes financial

"the Company's 6.75% Senior Notes due 2026 and 5.0% Senior Notes due 2026"

Senior notes are a type of loan that a company borrows from investors, promising to pay it back with interest. They are called "senior" because in case the company faces financial trouble, these lenders are paid back before others. This makes senior notes safer for investors compared to other types of loans or bonds.

aggregate principal amount financial

"redeem in full the $819 million aggregate principal amount outstanding"

The aggregate principal amount is the total amount of money borrowed through a bond or loan that the borrower promises to repay. It’s like the original price tag on a loan or bond, showing how much money is involved in the deal. This number matters because it indicates the size of the debt and helps investors understand the scale of the borrowing.

borrowing base financial

"completed its semi-annual borrowing base redetermination, with both the borrowing base"

A borrowing base is the amount a lender will allow a company to borrow based on the value of assets the company offers as security, typically things like accounts receivable and inventory. It matters to investors because it sets a practical ceiling on short-term financing and influences a company’s liquidity and risk: if the borrowing base falls, the company may lose access to cash or be forced to sell assets, which can affect operations and share value.

credit facility financial

"Credit Facility Reaffirmed Subsequent to March 31, 2026, the Company completed"

A credit facility is a flexible loan arrangement that allows a borrower to access funds up to a set limit whenever needed, similar to a company having an overdraft option on a bank account. It matters to investors because it indicates how easily a business can secure cash when required, affecting its ability to manage expenses, invest, or respond to financial challenges.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Demonstrates strong momentum toward $1.0 billion-plus asset sale target and advances 2026 priority to bolster the balance sheet

DENVER, April 30, 2026 /PRNewswire/ -- SM Energy Company (the "Company" or "SM") (NYSE: SM) today announced the closing of its previously announced sale of certain South Texas assets for a cash purchase price of $950 million (the "South Texas Divestiture"). Net cash proceeds from the sale totaled approximately $900 million, after preliminary purchase price adjustments and estimated transaction costs. The final purchase price remains subject to customary post-closing adjustments. With the closing of the South Texas Divestiture, SM has demonstrated strong momentum towards its $1.0 billion-plus divestiture target. Concurrently with the closing, the Company instructed the trustees under the Company's 6.75% Senior Notes due 2026 and 5.0% Senior Notes due 2026 (collectively, the "2026 Senior Notes") to issue notices of full redemption to holders of the 2026 Senior Notes.

"The closing of our South Texas asset sale and the redemption of our high-yield debt due this year mark decisive progress on our 2026 strategic priority to bolster the balance sheet," said Beth McDonald, President and CEO. "Together with the early actions we've taken on our merger integration and synergy capture, these steps accelerate our path to a lower-leverage, investment-grade-quality capital structure."

Redemption of 2026 Senior Notes

The Company intends to redeem in full the $819 million aggregate principal amount outstanding of its 2026 Senior Notes at par, plus accrued and unpaid interest, as follows:

• $419 million aggregate principal amount of its outstanding 6.75% Senior Notes due September 15, 2026, with a planned redemption date of June 1, 2026; and
• $400 million aggregate principal amount of its outstanding 5.0% Senior Notes due October 15, 2026, with a planned redemption date of May 11, 2026; originally issued by Civitas Resources, Inc. ("Civitas") and assumed by the Company in connection with the closing of its merger with Civitas on January 30, 2026.

Credit Facility Reaffirmed

Subsequent to March 31, 2026, the Company completed its semi-annual borrowing base redetermination, with both the borrowing base and aggregate lender commitments reaffirmed at $5.0 billion and $2.5 billion, respectively, after giving effect to the South Texas Divestiture.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of securities laws. The words "anticipate," "deliver," "demonstrate," "establish," "estimate," "expects," "goal," "generate," "maintain," "objectives," "optimize," "plan," "target," and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this release include, among other things, the Company's 2026 plans and strategic priorities; the Company's intention to redeem in full its 2026 Senior Notes; expectations regarding lower-leverage, investment-grade-quality capital structure; integration and synergies; plans to achieve the Company's $1.0 billion-plus divestiture target; and statements regarding the South Texas Divestiture. These statements involve known and unknown risks, which may cause the Company's actual results to differ materially from results expressed or implied by the forward-looking statements. Future results may be impacted by the risks discussed in the Risk Factors section of the Company's most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company's other periodic reports filed with the Securities and Exchange Commission, specifically the 2025 Form 10-K. The forward-looking statements contained herein speak as of the date of this release. Although the Company may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws.

About SM Energy Company

SM is a premier, scaled operator of top-tier oil and gas assets across four leading U.S. shale basins, the Permian Basin, DJ Basin, South Texas, and Uinta Basin. SM routinely posts important information about the Company on its website. SM is focused on operational excellence, disciplined capital allocation, and delivering growing returns to stockholders. For more information, visit www.sm-energy.com.

Investor Relations

Megan Hays, Vice President, Investor Relations, mhays@sm-energy.com
Meghan Dack, Director, Investor Relations, mdack@sm-energy.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/sm-energy-closes-950-million-south-texas-divestiture-announces-redemption-of-all-outstanding-2026-senior-notes-302759315.html

SOURCE SM Energy Company

FAQ

What did SM (NYSE: SM) receive from the South Texas asset sale on April 30, 2026?

SM received a $950 million cash purchase price and approximately $900 million net cash proceeds after preliminary adjustments and transaction costs, according to the company.

How much 2026 Senior Notes will SM redeem and when will redemptions occur?

SM plans to redeem $819 million aggregate principal of 2026 Senior Notes, with redemptions planned on May 11, 2026 and June 1, 2026, according to the company.

How does the South Texas divestiture affect SM's divestiture target and balance sheet?

The sale advances SM toward a $1.0 billion-plus divestiture target and supplies proceeds used to reduce leverage, including the planned redemption of 2026 notes, according to the company.

What was reaffirmed in SM's borrowing base redetermination after the sale?

Following the divestiture, SM's borrowing base was reaffirmed at $5.0 billion and aggregate lender commitments at $2.5 billion, according to the company.

Will the South Texas sale price change after closing for SM (NYSE: SM)?

The company stated the final purchase price remains subject to customary post-closing adjustments, so the net proceeds could change after settlement, according to the company.

Were the redeemed 2026 Senior Notes originally issued by another firm assumed by SM?

Yes. The $400 million 5.0% notes were originally issued by Civitas and assumed by SM in connection with the January 30, 2026 merger, according to the company.