Transaction Overview - The transaction involves a combination of SM Energy and Civitas Resources, with an enterprise value of approximately $12.8 billion[10] - The deal is a stock-for-stock transaction, with 1.45 shares of SM Energy exchanged for each share of Civitas[10] - Pro forma ownership will be 48% for SM Energy and 52% for Civitas[10, 12] Scale and Portfolio - The combined company will have approximately 823,000 net acres across key U.S shale basins[13] - Q2'25 net production is estimated at 526 Mboe/d for the pro forma entity[13] - Year-end 2024 estimated net proved reserves are projected to be 1,476 MMBoe[13] Synergies and Financial Impact - The merger aims to achieve annual run-rate synergies of approximately $200 million to $300 million by 2027[30, 42] - Synergies are expected to come from overhead/G&A, D&C/Operational costs, and cost of capital efficiencies[30] - The combined company will prioritize debt reduction, targeting a 1.0x net leverage ratio by year-end 2027, assuming $65 NYMEX WTI and $3.50 Henry Hub prices[32, 33]

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, 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 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]