SM Energy (NYSE: SM) inks $950M South Texas asset sale to cut debt
Rhea-AI Filing Summary
SM Energy Company agreed to sell certain South Texas assets in its southern Maverick Basin position to Caturus Energy for a cash purchase price of
These properties are expected to produce roughly 37–39 MBoe/d in 2026 and generate about
SM Energy plans to prioritize debt reduction with the proceeds in order to accelerate deleveraging and strengthen its balance sheet, and it intends to share an updated return-of-capital program when it reports earnings the following week.
Positive
- $950 million divestiture to cut debt – SM Energy agreed to sell South Texas assets for a cash purchase price of $950 million and states it expects to prioritize debt reduction, supporting faster deleveraging and a stronger balance sheet.
- Potential enhancement of shareholder returns – Management highlights that the divestiture supports balance-sheet improvement and indicates it will share an updated return-of-capital program when reporting earnings, tying the transaction to future capital return planning.
Negative
- None.
Insights
Large non-core asset sale aimed at debt reduction and balance-sheet strength.
SM Energy is divesting South Texas assets for a cash purchase price of
Management states that proceeds will be used to accelerate deleveraging and strengthen the capital structure, signaling a clear focus on balance-sheet quality. Because closing is expected in the second quarter of
The company also plans to outline an updated return-of-capital program when it reports earnings the following week, linking this transaction to future capital returns. Investors can later compare that framework with ongoing production and cash flow from remaining assets once the transaction has closed.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On February 17, 2026, SM Energy Company (the “Company”) entered into a Purchase and Sale Agreement (the “PSA”) with Caturus Energy, LLC, a Delaware limited liability company (“Purchaser”) and, solely for the purposes of Section 7.8 therof, Caturus Holdco, LLC, pursuant to which the Company agreed to sell all of its rights, titles and interests in certain producing and non-producing assets encompassing approximately 61,000 net acres located in the Company’s southern Maverick Basin position in Webb County, Texas (the “Assets”). Upon the closing of the transaction contemplated by the PSA (the “Transaction”), the Company will receive aggregate cash consideration of $950,000,000 (the “Purchase Price”), subject to certain customary purchase price adjustments set forth in the PSA. Upon execution of the PSA, the Purchaser deposited cash with an escrow agent equal to seven and one-half percent of the unadjusted Purchase Price pursuant to an escrow agreement among the Company, the Purchaser and the escrow agent.
The PSA includes customary representations, warranties, covenants and agreements. The obligations of the parties to complete the Transaction, which is expected to close during the second quarter of 2026, are subject to the satisfaction or waiver of customary closing conditions set forth in the PSA, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and obtaining certain required consents, among others. The Company can make no guarantee that such closing conditions will be satisfied by the expected closing date, or at all. Upon the closing of the Transaction, the deposit will be applied as a credit toward the Purchase Price.
The foregoing description of the PSA and the Transaction is not complete and is qualified in its entirety by reference to the full text of the PSA, a copy of which is filed herewith as Exhibit 10.1, and is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
In accordance with General Instruction B.2 of Form 8-K, the following information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On February 18, 2026, the Company issued a press release announcing the Transaction. A copy of the press release is furnished hereto as Exhibit 99.1.
FORWARD LOOKING STATEMENTS
This current report on Form 8-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Forward-looking statements in this report include the Company’s statements relating to the Transaction, including the estimated timing of the closing of the Transaction and final Purchase Price, the Company’s ability to obtain certain required consents to the transfer of the assets that are the subject of the Transaction, and the Company’s expectation that the remaining conditions to the closing of the Transaction will be satisfied or waived. There are a number of risks and uncertainties associated with the Transaction, including the risk that the Transaction is not consummated on the terms expected or on the anticipated schedule, or at all, that could cause actual results to differ materially from the forward-looking statements included in this communication. These statements involve known and unknown risks and uncertainties, and may be impacted by the risks discussed in the Risk Factors section of the Company’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 the Company believes to be reasonable but that may not prove to be accurate. Such forward-looking statements are based on assumptions and analyses made by the Company in light of perceptions of current conditions, expected future developments, and other factors that the Company believes are appropriate under the circumstances. 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.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number | Description |
| 10.1* | Purchase and Sale Agreement, dated as of February 17, 2026, by and between SM Energy Company, a Delaware corporation, as Seller, and (i) Caturus Energy, LLC, a Delaware limited liability company, as Purchaser, and (ii) solely for purposes of Section 7.8 thereof, Caturus Holdco, LLC, a Delaware limited liability company |
| 99.1 | Press Release of SM Energy Company dated February 18, 2026, entitled "SM Energy Announces Agreement to Sell $950 Million in Assets" |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and included as Exhibit 101) |
| * | Certain of the schedules and exhibits to the agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the SEC upon request. |
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SM ENERGY COMPANY | |||
| Date: | February 18, 2026 | By: | /s/ JAMES B. LEBECK |
| James B. Lebeck | |||
| Executive Vice President – Chief Corporate Development Officer, General Counsel and Corporate Secretary |
Exhibit 99.1
| News Release |  |
SM ENERGY ANNOUNCES AGREEMENT TO SELL $950 MILLION IN ASSETS
Proceeds to accelerate deleveraging and strengthen balance sheet
DENVER -- Feb. 18, 2026 -- 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 |
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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
FAQ
What assets is SM (SM Energy Company) selling in South Texas?
How much is SM Energy receiving from the South Texas asset sale?
When is the SM Energy South Texas asset sale expected to close?
How will SM Energy use the $950 million of proceeds from this sale?
What production and cash flow are associated with the SM South Texas assets?
What reserves are tied to the SM Energy assets being sold to Caturus?
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