v3.26.3
Mergers, Acquisitions, and Divestitures (Tables)
 9 Months Ended
Sep. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combination
The following table presents consideration transferred and the preliminary purchase price allocation to the identifiable assets acquired and liabilities assumed based on respective estimated fair values as of the Closing Date of the Merger:
Preliminary Purchase Price Allocation
(in millions, except shares and per share amount)
Consideration transferred
Cash consideration transferred (1)
$226 
Shares of common stock issued
123,715,771
Closing price per share (2)
$19.47 
Equity consideration transferred (3)
$2,409 
Replacement equity award consideration transferred (attributable to pre-combination service)
$29 
Total consideration transferred
$2,664 
Assets acquired
Proved oil and gas properties
$7,537 
Unproved oil and gas properties
622 
Accounts receivable
433 
Wells in progress
386 
Other assets
251 
Cash and cash equivalents
177 
Derivative assets
167 
Total identifiable assets acquired
9,573 
Liabilities assumed
Senior Notes5,090 
Accounts payable and accrued expenses1,314 
Other noncurrent liabilities351 
Asset retirement obligations326 
Other current liabilities90 
Derivative liabilities62 
Deferred tax liabilities (assets), net (4)
(324)
Total liabilities assumed
6,909 
Net identifiable assets acquired
$2,664 
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(1)    Cash consideration transferred consists of $201 million of cash paid to extinguish Civitas’ revolving credit facility balance on the Closing Date, and $25 million of cash paid related to an employee retention program contemplated by the Merger Agreement which required no post-closing service condition and was fully earned prior to the Closing Date.
(2)    Based on the closing stock price of SM Energy common stock on January 30, 2026.
(3)    Amount represents non-cash investing activity and is calculated using actual shares issued, rounded to the nearest million.
(4)    Deferred tax amounts are recorded on a net basis by jurisdiction. Civitas’ deferred tax assets have been offset against our deferred tax liabilities, resulting in a net deferred tax liability balance.
Business Combination, Pro Forma Information Future results may vary significantly from the results reflected in the following pro forma information because of normal production declines, changes in commodity prices, future acquisitions and divestitures, future development and exploration activities, and other factors.
For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
2026202520262025
(in millions, except per share data)
Pro forma oil, gas, and NGL production revenue$2,160 $1,971 $6,097 $5,842 
Pro forma net income$93 $488 $898 $1,330 
Pro forma basic net income per common share$0.39 $2.03 $3.79 $5.55 
Pro forma diluted net income per common share$0.39 $2.02 $3.77 $5.53 
Disposal Groups, Including Discontinued Operations
The following table presents earnings before income taxes attributable to the assets included in the South Texas Divestiture. Earnings before income taxes reflect oil, gas, and NGL production revenue, less oil, gas, and NGL production expense; DD&A expense; and exploration expense. Depletion expense ceased upon classification of the assets as held for sale during the first quarter of 2026.
For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
2026202520262025
(in millions)
Earnings before income taxes attributable to the South Texas Divestiture assets (1)
$— $29 $61 $98 
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(1)    As the South Texas Divestiture closed on April 30, 2026, the earnings amount presented reflects four months of activity during the nine months ended September 30, 2026.