SM Energy (SM) to Sell Galvan Ranch Assets in $950 Million Deal

Core Viewpoint - SM Energy Company has made significant strides in its capital structure by agreeing to sell its Galvan Ranch assets for $950 million, which is expected to reduce debt and enhance financial stability [2][4]. Group 1: Company Overview - SM Energy Company (NYSE:SM) is an independent energy company focused on the exploration, exploitation, development, acquisition, and production of natural gas and crude oil in the United States [2]. - The company has seen its share price increase by 10.25% from February 13 to February 20, 2026, ranking it among the top-performing energy stocks for that week [1]. Group 2: Asset Sale Details - The company has decided to sell approximately 61,000 net acres and around 260 producing wells in the southern Maverick Basin position in Texas, along with related support facilities [3]. - These assets are projected to produce an average output of approximately 37-39 MBoe/d in 2026 and generate around $160 million in asset-level cash flows, excluding corporate burdens [3]. - As of the end of 2025, the net proved reserves associated with these assets were approximately 168 MMBoe [3]. Group 3: Management Commentary and Market Response - Beth McDonald, President and CEO of SM Energy, stated that the asset sale aligns with the company's priority of selling over $1.0 billion in assets, which will aid in debt reduction and capital structure strengthening [4]. - Following the announcement of the asset sale, Roth Capital raised its price target on SM Energy from $23 to $24 while maintaining a 'Buy' rating, and Stephens increased its price target from $48 to $49, viewing the divestiture positively [4].