Transaction Overview - The transaction represents an enterprise value of approximately $12.8 billion[10] - The deal is a stock-for-stock transaction with an exchange ratio of 1.45 shares of SM Energy for each Civitas share[10] - Pro forma ownership will be 48% for SM Energy and 52% for Civitas[10, 12] Scale and Production - The combined company will have approximately 823,000 net acres[13] - Q2'25 net production is estimated to be 526 Mboe/d[13] - Year-end 2024 estimated net proved reserves are 1,476 MMBoe[13] Synergies and Financial Impact - The merger is expected to generate annual run-rate synergies of approximately $200 million to $300 million by 2027[30, 42] - The synergies are expected to come from overhead/G&A, D&C/Operational costs, and cost of capital[30] - The combined company aims to achieve a net leverage ratio of 1.0x by year-end 2027[32] Capital Allocation - The company plans to maintain a sustainable quarterly fixed dividend of $0.20 per share[35]

Financial Performance - For the three months ended September 30, 2025, oil, gas, and NGL production revenue was $811,009,000, an increase of 26.3% compared to $642,380,000 for the same period in 2024[15] - Total operating revenues and other income for the nine months ended September 30, 2025, reached $2,449,078,000, up from $1,838,038,000 in 2024, reflecting a growth of 33.3%[15] - Net income for the three months ended September 30, 2025, was $155,088,000, a decrease of 35.5% from $240,523,000 in the same period of 2024[15] - Net income for the nine months ended September 30, 2025, was $539,022,000, compared to $582,015,000 for the same period in 2024, reflecting a decrease of approximately 7.4%[24] - Total operating revenues for the three months ended September 30, 2025, were $811.6 million, a 26.1% increase from $643.6 million in the same period of 2024[74] - Net income for the E&P Segment for the three months ended September 30, 2025, was $155.1 million, a decrease of 35.5% from $240.5 million in the same period of 2024[74] Assets and Liabilities - The company reported total current assets of $632,958,000 as of September 30, 2025, compared to $434,699,000 at the end of 2024, representing a 45.6% increase[13] - Total assets increased to $9,089,500,000 as of September 30, 2025, from $8,576,647,000 at the end of 2024, marking a growth of 5.9%[13] - The company’s total liabilities decreased from $4,339,390,000 at the end of 2024 to $4,376,413,000 as of September 30, 2025, indicating a slight increase of 0.9%[13] - The total stockholders' equity as of September 30, 2025, was $4,713,087,000, an increase from $4,061,546,000 as of September 30, 2024[21] Cash Flow and Capital Expenditures - Total cash provided by operating activities for the nine months ended September 30, 2025, was $1,559,088,000, an increase of 29.5% from $1,204,645,000 in 2024[24] - Capital expenditures for the nine months ended September 30, 2025, were $1,221,736,000, up from $957,156,000 in 2024, indicating a 27.6% increase[24] - The company declared net cash dividends of $0.20 per share, totaling $68,776,000 for the nine months ended September 30, 2025, compared to $62,136,000 in 2024[24] Stock and Compensation - The Company finalized the Uinta Basin Acquisition with a purchase price of $2.1 billion during the first quarter of 2025[76] - The 2025 Equity Incentive Compensation Plan authorized an increase of approximately 2.0 million shares available for grant, with 2.5 million shares available as of September 30, 2025[77] - A total of 374,692 Performance Share Units (PSUs) were granted in 2025, with a grant date fair value of $10.3 million[79] - Total compensation expense for PSUs was $1.8 million for the three months ended September 30, 2025, compared to $1.1 million in 2024[80] - The Company granted 981,046 Restricted Stock Units (RSUs) with a grant date fair value of $25.8 million during the nine months ended September 30, 2025[84] - Total compensation expense for RSUs was $5.1 million for the three months ended September 30, 2025, compared to $4.5 million in 2024[85] - The Company issued 90,314 shares under the Employee Stock Purchase Plan (ESPP) during the nine months ended September 30, 2025, generating total proceeds of $1.9 million[88] Mergers and Acquisitions - The company anticipates benefits from the pending merger with Civitas, although risks related to the merger's consummation and integration were highlighted[10] - The Company entered into a Merger Agreement with Civitas Resources, Inc., where Civitas shareholders will receive 1.45 shares of the Company's common stock for each share of Civitas[89] Derivative Contracts and Financial Instruments - The Company has commodity derivative contracts in place with terms through the third quarter of 2027, including oil and gas swaps and collars[55] - As of September 30, 2025, the weighted-average contract price for NYMEX WTI oil swaps was $67.91 per barrel for the fourth quarter of 2025[58] - The Company’s total derivative liabilities were $14.740 million as of September 30, 2025, slightly up from $14.200 million as of December 31, 2024[61] - The company does not designate its commodity derivative contracts as hedging instruments, which affects the accounting treatment of these contracts[60] Other Financial Metrics - Basic net income per common share for the three months ended September 30, 2025, was $1.35, down from $2.10 in the same period of 2024[15] - The effective tax rate for the three months ended September 30, 2025, was 24.1%, compared to 19.2% for the same period in 2024[39] - The Company recorded an income tax expense of $49.2 million for the three months ended September 30, 2025, compared to $57.1 million in 2024[39] - The Company was in compliance with all financial and non-financial covenants as of September 30, 2025[49]

Mergers and Acquisitions - SM Energy and Civitas Resources agreed to combine in an all-stock transaction [1]

News Release EXHIBIT 99.1 SM ENERGY REPORTS THIRD QUARTER 2025 FINANCIAL AND OPERATING RESULTS; CONTINUED OPERATIONAL EXCELLENCE DRIVES FINANCIAL BEAT DENVER, CO November 3, 2025 - SM Energy Company (the "Company") (NYSE: SM) today reported financial and operating results for the third quarter 2025 and provided certain full year and fourth quarter 2025 guidance. Highlights include: Additionally, on October 13, 2025, the Company's lender group unanimously reaffirmed the Company's borrowing base at $3.0 billi ...

Core Insights - SM Energy Company reported record production for the third quarter of 2025, achieving net production volumes of 19.7 million barrels of oil equivalent (MMBoe), with over 53% being oil [4][10] - The company maintained strong cash production margins despite lower oil prices, demonstrating operational efficiencies and disciplined capital allocation [3][10] - The company returned $35.1 million to stockholders through dividends and share repurchases, reflecting its commitment to stockholder returns [3][17] Financial Performance - Net income for the third quarter of 2025 was $155.1 million, or $1.35 per diluted share, down from $240.5 million, or $2.09 per diluted share, in the same period of 2024 [7][10] - Net cash provided by operating activities increased by 33% year-over-year to $557.5 million, driven by higher production volumes and a favorable net derivative settlement gain [8][10] - Adjusted EBITDAX for the third quarter was $588.2 million, a 22% increase from $481.5 million in the same period of 2024 [12] Production and Pricing - The company’s oil production averaged 113.9 thousand barrels per day (MBbl/d), with total production comprising 39% from the Midland Basin, 40% from South Texas, and 21% from the Uinta Basin [4][10] - Realized prices for oil were $63.83 per barrel before hedges, while natural gas averaged $2.19 per thousand cubic feet (Mcf) [5][11] - The company experienced a 26% increase in total net daily production and a 47% increase in net daily oil production compared to the third quarter of 2024 [10] Capital Expenditures and Activity - Capital expenditures for the third quarter totaled $397.7 million, with $323.2 million after adjustments, including investments in high-return wells expected to come online in 2026 [14][16] - The company drilled 24 net wells during the quarter, with significant activity in the Midland Basin, South Texas, and Uinta Basin [14][15] Guidance and Future Outlook - For the fourth quarter of 2025, the company expects production between 207-208 MBoe/d, with approximately 50% of expected net oil production hedged at an average price of $63.14 per barrel [23] - Full-year capital expenditures are projected to range from $1.375 billion to $1.395 billion, reflecting ongoing investments in high-quality assets [23]

Core Viewpoint - SM Energy and Civitas Resources have announced a definitive merger agreement involving an all-stock transaction, creating a leading independent oil and gas company with significant free cash flow and enhanced stockholder value [2][3][5] Transaction Details - Each common share of Civitas will be exchanged for 1.45 shares of SM Energy common stock, resulting in a combined enterprise value of approximately $12.8 billion, inclusive of net debt [3][7] - Upon completion, SM Energy stockholders will own approximately 48% and Civitas stockholders will own approximately 52% of the combined company [7] Financial Metrics - Pro forma second quarter of 2025 production is projected to total 526 MBoe/d, with full-year 2025 consensus free cash flow expected to exceed $1.4 billion [1][4] - The merger is anticipated to be immediately accretive to key per share financial metrics, including operating cash flow and free cash flow [10] Synergies and Value Creation - Identified annual synergies of approximately $200 million, with potential upside to $300 million, are expected to enhance stockholder value and support accelerated debt repayment [5][10] - The combined company will operate a premier asset portfolio of approximately 823,000 net acres across high-return U.S. shale basins, positioning it as a top-10 independent oil-focused producer [4][5] Governance and Leadership - The Board of Directors will consist of 11 members, with 6 from SM Energy and 5 from Civitas, and Herb Vogel will serve as CEO of the combined company [8] - The merger has been unanimously approved by the boards of both companies and is expected to close in the first quarter of 2026, subject to customary closing conditions [11]

Core Viewpoint - SM Energy is positioned well to potentially beat earnings estimates in its upcoming quarterly report, continuing a strong trend of surpassing expectations in previous quarters [1][6]. Earnings Performance - SM Energy has consistently exceeded earnings estimates, with an average surprise of 15.98% over the last two quarters [2]. - In the last reported quarter, the company achieved earnings of $1.5 per share, surpassing the Zacks Consensus Estimate of $1.23 per share by 21.95% [3]. - In the previous quarter, SM Energy reported earnings of $1.76 per share against an expected $1.6 per share, resulting in a surprise of 10.00% [3]. Earnings Estimates and Predictions - Recent estimates for SM Energy have been revised upward, indicating a positive outlook for the company's earnings [6]. - The Zacks Earnings ESP for SM Energy is currently +4.97%, suggesting analysts are optimistic about the company's earnings prospects [9]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) indicates a high likelihood of another earnings beat [9]. Earnings ESP Insights - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [7]. - The Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [8]. - It is crucial to check a company's Earnings ESP before its quarterly release to enhance the probability of success [11].

Core Insights - The energy sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1] - The Relative Strength Index (RSI) is a key indicator for identifying oversold conditions, typically below 30 [1] Company Summaries - **Mach Natural Resources LP (NYSE:MNR)**: Filed for a mixed shelf of up to $250 million; stock fell approximately 12% over the past month with a 52-week low of $11.91; RSI value is 27.3; shares closed at $12.07, down 1.6% [7] - **Global Partners LP (NYSE:GLP)**: Reported weaker-than-expected Q2 results; stock declined around 14% in the last month with a 52-week low of $43.20; RSI value is 25.8; shares closed at $43.89, down 2.4% [7] - **SM Energy Co (NYSE:SM)**: Analyst maintained a Sector Perform rating and raised the price target from $34 to $35; stock fell about 21% over the past month with a 52-week low of $19.67; RSI value is 29.9; shares closed at $21.79, down 1.5% [7]

Core Insights - The energy sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1] - The Relative Strength Index (RSI) is a key indicator for identifying oversold conditions, typically below 30 [1] Company Summaries - **Mach Natural Resources LP (NYSE:MNR)**: Filed for a mixed shelf of up to $250 million; stock fell approximately 12% over the past month with a 52-week low of $11.91; RSI value is 27.3; shares closed at $12.07, down 1.6% [7] - **Global Partners LP (NYSE:GLP)**: Reported weaker-than-expected Q2 results; stock declined around 14% in the last month, reaching a 52-week low of $43.20; RSI value is 25.8; shares closed at $43.89, down 2.4% [7] - **SM Energy Co (NYSE:SM)**: Analyst maintained a Sector Perform rating and raised the price target from $34 to $35; stock fell about 21% over the past month with a 52-week low of $19.67; RSI value is 29.9; shares closed at $21.79, down 1.5% [7]

Core Points - SM Energy Company announced the completion of its semi-annual borrowing base redetermination, reaffirming the borrowing base at $3.0 billion and maintaining the elected commitment amount at $2.0 billion [1][2] - An amendment to the existing Credit Agreement was made, replacing the prior springing maturity provision with a more flexible structure based on short-term debt and borrowing availability [1][2] - The Executive Vice President and Chief Financial Officer expressed satisfaction with the reaffirmed borrowing base and unchanged commitment levels, indicating continued trust from banking partners in SM Energy's strategy and financial strength [2] Company Overview - SM Energy Company is an independent energy company involved in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs, primarily in Texas and Utah [2]