SM Energy Company (SM) SEC Filings & Earnings Calls

Large derivative loss may pressure cash flow

“net derivative settlement loss of $207 million” · word for word

Debt reduction reduces interest expense and leverage; positive for credit profile.

“Full redemption of 2027 notes; no new debt incurred.”

Integration risk from Civitas merger

“risks related to the Merger, including our ability to successfully integrate Civitas’ business, operations, systems and personnel” · word for word

Commodity price volatility

“commodity price volatility” · word for word

High debt levels post-merger

“Senior Notes, net $6,620 million noncurrent as of June 30, 2026”

Low natural gas realized price ($0.17/Mcf) poses risk to gas-weighted production.

“Realized gas price (before hedges) $0.17 per Mcf in Q2 2026, down 90% from Q1 2026.”

Integration risk from Civitas merger; one-time costs of $172M year-to-date.

“Year-to-date transaction and integration costs are $172 million compared to full-year guidance of $180 million.” · word for word

Debt reduction achieved via asset sales; future cash flow dependent on commodity prices.

“Closed $950M sale of South Texas assets; net proceeds used to redeem debt.”

Very low realized gas price ($0.17/Mcf) and large derivative loss ($220M) pressure earnings.

“Realized price (before the effect of net derivative settlements): Gas (per Mcf) $0.17; net derivative settlement loss of approximately $220 million”

Derivative Losses from Rising Oil Prices

“Net derivative loss $697 $17”

Integration Risk from Civitas Merger

“Transaction and integration costs (3) $135 $6 $—”

Natural Gas Basis Differential Pressure

“Gas (per Mcf) $1.72 $1.81 $3.30”

Net loss of $335M due to non-cash mark-to-market loss on derivatives from rising oil prices.

“Net loss was $1.68 per diluted share, primarily related to a non-cash mark-to-market loss on the Company’s commodity derivatives at period end due to a sharp rise in forward oil prices” · word for word

Integration and transaction costs of $135M in Q1, with remaining costs expected in Q2.

“Incurred $135 million of transaction and integration costs against full-year guidance of approximately $180 million” · word for word

Derivative loss of $30M reduces realized prices; commodity price volatility remains a risk.

“Net derivative settlement loss of $30 million.” · word for word

Oil Price Volatility

“While the oil business remains volatile, our expanded portfolio provides flexibility in capital allocation and risk management.” · word for word

Integration Risk

“This headcount reflects the combined workforce immediately following the Merger and may change as the Company completes post-closing integration activities.” · word for word

Debt reduction reduces interest expense and financial risk

“Tender offer for high-coupon 8.375% Senior Notes due 2028 reduces future interest obligations.”

High leverage from merger with Civitas, but active debt reduction mitigates risk

“Tender offer for $1B of 8.375% notes, assumed from Civitas merger”

Increased leverage from new debt issuance

“Creation of direct financial obligation under indenture”

Increased debt burden from new note issuance

“$1B 6.625% senior notes due 2034”

Commodity Price Volatility

“Realized prices before the effect of net derivative settlements for oil and NGLs decreased 15 percent and three percent, respectively” · word for word

Reserve Replacement Risk

“40.7 MMBOE of revisions of previous estimates related to the removal of certain net proved undeveloped reserve cases that are no longer expected to be developed within the five-year period from initial booking” · word for word

Merger Integration Risk

“risks related to the Civitas Merger, including our ability to successfully integrate Civitas’ business, operations, systems and personnel; potential disruptions to our business resulting from the transaction; and our ability to realize the anticipated benefits, synergies, efficiencies or cost savings from the Merger” · word for word

Integration risk from Civitas merger, but synergy targets provide upside

“Merger with Civitas closed Jan 30, 2026; synergy target $200-300M annually”

Oil price sensitivity remains a key risk, but resilient margins demonstrated

“Offsetting a 14% decline in benchmark oil price” · word for word

Execution risk on closing conditions, but expected Q2 2026

“Transaction expected to close in Q2 2026, subject to customary conditions”

Low risk; auditor change appears routine with no disagreements or reportable events.

“no disagreements between the Company and EY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure”

Integration risk from combining two large E&P companies

“Merger with Civitas closed; synergy target $200-300M annually; divestiture target $1B”

Increased leverage from assumed Civitas debt, but offset by divestiture plan

“Assumption of outstanding Civitas senior unsecured notes; borrowing base increased to $5B” · word for word

Merger approval removes key uncertainty, but integration risks remain

“Stockholders resoundingly approve SM Energy and Civitas merger” · word for word

Merger integration risk and potential governance disruption from board and officer changes.

“Resignations of four directors and appointment of six new directors, plus CEO and COO changes, all contingent on merger closing.”

Litigation risk from stockholder demands regarding merger disclosure; potential delay or adverse effect on merger consummation.

“Demand letters received; company voluntarily supplementing disclosures to avoid litigation risk.”

Merger integration risk and potential management transition.

“Key executive departure post-merger; integration and transition matters.”

Integration risk; synergy realization dependent on execution

“Synergies to be actioned in 2026, realized in 2027; execution risk.”

Merger execution and integration risk

“Large transformational merger; subject to closing conditions.”

Integration risk; synergy realization dependent on execution

“Large merger; synergies to be realized over time.”

Lower realized oil prices year-over-year

“NYMEX WTI at $64.93/Bbl, down >$10/Bbl YoY.”

Merger completion risk

“The consummation of the Merger is subject to a number of conditions that may not be satisfied or completed on a timely basis or at all.” · word for word

Share dilution risk

“The Company anticipates issuing approximately 126.3 million shares of Company common stock pursuant to the Merger Agreement.” · word for word

Integration risk

“Even if the Merger is completed, we may be unable to successfully integrate Civitas’ business into our business or achieve the anticipated benefits of the Merger.” · word for word

Commodity price volatility

“Global commodity and financial markets, which remain subject to heightened levels of uncertainty and volatility, affect our financial performance.” · word for word

Waha basis differential risk

“The second and third quarters of 2025 were impacted by weak Waha pricing, which we expect will continue to impact our realized price into 2026.” · word for word