SM Energy Company has announced the closing of its previously announced sale of certain South Texas assets for a cash purchase price of $950 million (the 'South Texas Divestiture'). Net cash proceeds from the sale totaled approximately $900 million, after preliminary purchase price adjustments and estimated transaction costs. The final purchase price remains subject to customary post-closing adjustments. With the closing of the South Texas Divestiture, SM has demonstrated strong momentum towards its $1.0 billion-plus divestiture target. Concurrently with the closing, the Company instructed the trustees under the Company's 6.75% Senior Notes due 2026 and 5.0% Senior Notes due 2026 (collectively, the '2026 Senior Notes') to issue notices of full redemption to holders of the 2026 Senior Notes.
'The closing of our South Texas asset sale and the redemption of our high-yield debt due this year mark decisive progress on our 2026 strategic priority to bolster the balance sheet,' said Beth McDonald, President and CEO. 'Together with the early actions we've taken on our merger integration and synergy capture, these steps accelerate our path to a lower-leverage, investment-grade-quality capital structure.'
Redemption of 2026 Senior Notes
The Company intends to redeem in full the $819 million aggregate principal amount outstanding of its 2026 Senior Notes at par, plus accrued and unpaid interest, as follows:
- $419 million aggregate principal amount of its outstanding 6.75% Senior Notes due September 15, 2026, with a planned redemption date of June 1, 2026; and
- $400 million aggregate principal amount of its outstanding 5.0% Senior Notes due October 15, 2026, with a planned redemption date of May 11, 2026; originally issued by Civitas Resources, Inc. ("Civitas") and assumed by the Company in connection with the closing of its merger with Civitas on January 30, 2026.
Credit Facility Reaffirmed
Subsequent to March 31, 2026, the Company completed its semi-annual borrowing base redetermination, with both the borrowing base and aggregate lender commitments reaffirmed at $5.0 billion and $2.5 billion, respectively, after giving effect to the South Texas Divestiture.
Source: SM Energy
