SM ENERGY REPORTS FOURTH QUARTER AND FULL-YEAR 2025 FINANCIAL AND OPERATING RESULTS

Core Viewpoint - SM Energy reported record financial and operational results for the full year 2025, including record production and operating cash flow, while also announcing a significant asset divestiture to strengthen its balance sheet and enhance capital returns [1]. Full-Year 2025 Summary - The company achieved record net production of 75.5 million barrels of oil equivalent (MMBoe), a 21% increase year-over-year, with 53% of production being oil [1]. - Adjusted free cash flow rose by 28% year-over-year to $620 million [1]. - Capital expenditures totaled $1.44 billion, adjusted for changes in accruals, with a final total of $1.40 billion [1]. - The company reduced net debt by $437 million, achieving a leverage ratio of 1.05x net debt-to-adjusted EBITDAX at year-end [1]. - SM Energy returned $104 million to shareholders through dividends and share buybacks, with a cumulative return of $648 million since 2022 [1]. - The company signed an agreement to sell certain South Texas assets for $950 million, contributing to its $1.0 billion divestiture target [1]. Fourth Quarter 2025 Summary - Net production for Q4 2025 was 19.0 MMBoe, or 206.9 MBoe/d, with 52% being oil [1]. - Adjusted free cash flow for the quarter was $198 million [1]. - Capital expenditures for Q4 totaled $216 million, reflecting accelerated facility investments [1]. - Operating cash flow was $452 million, with net income of $109 million, or $0.95 per diluted share [1]. Production and Financial Metrics - Estimated net proved reserves as of December 31, 2025, totaled 673.0 MMBoe, with 42% being oil and 61% proved developed [1]. - Record adjusted EBITDAX for the year was $2.26 billion, a 13% increase from 2024, despite a 14% decline in benchmark oil prices [1]. - The average realized sales price for oil in 2025 was $63.52 per barrel, down 15% from 2024 [5]. Strategic Initiatives - The company is focused on integrating its combined business and unlocking synergies following its merger with Civitas Resources, which closed on January 30, 2026 [1]. - SM Energy aims to maximize free cash flow through disciplined capital allocation and strategic priorities for 2026 [6].