Worth-Enhancing Scale
Premier portfolio throughout the highest-return U.S. shale basins drives important free money move and enhanced stockholder worth
Professional forma second quarter of 2025 manufacturing totaled 526 MBoe/d
Professional forma full-year 2025 consensus free money move of greater than $1.4 billion
Step-change in free money move helps sustained return of capital
Worth-Pushed Synergies
Confirmed administration and a world-class technical workforce positioned to ship recognized and achievable annual synergies of roughly $200 million with upside potential
Synergies create potential for accelerated debt reimbursement and improved through-cycle returns
Worth-Accretive Substance
Vital accretion on key per share monetary metrics, earlier than synergies
Free money move to be prioritized for debt discount and sustainable quarterly mounted dividend of $0.20 per share
Dedicated to main in sustainability and environmental stewardship whereas increasing our constructive affect within the communities the place we function
Firms to host a dwell Q&A name at this time at 8:00 a.m. Mountain time/10:00 a.m. Japanese time
DENVER, Nov. 3, 2025 /PRNewswire/ — SM Power Firm (“SM Power”) (NYSE: SM) and Civitas Sources, Inc. (“Civitas”) (NYSE: CIVI) at this time introduced they’ve entered right into a definitive merger settlement involving an all-stock transaction (the “Transaction”).
Underneath the phrases of the Transaction, every widespread share of Civitas might be exchanged for 1.45 shares of SM Power widespread inventory. The mixed firm’s enterprise worth of roughly $12.8 billion is inclusive of every firm’s internet debt.
The mixed firm can have a premier portfolio of roughly 823,000 internet acres, with the Permian place being the cornerstone. Professional forma full-year 2025 consensus free money move era of greater than $1.4 billion allows sustained capital returns, and elevated market capitalization enhances buying and selling liquidity with broader funding enchantment.
Transformational Mixture Delivering Superior Worth
- Worth-Enhancing Scale . The mixed firm will function a premier asset portfolio consisting of roughly 823,000 internet acres throughout the highest-return U.S. shale basins, instantly remodeled right into a top-10 U.S. impartial oil-focused producer. We anticipate that this premier portfolio will ship a step-change in free money move enabling sustained capital returns.
- Synergy-Enhanced Free Money Circulation. Recognized and achievable annual synergies totaling $200 million, with upside potential to $300 million, is predicted to boost stockholder worth. Recognized synergies embody alternatives throughout the mixed group consisting of overhead and G&A, drilling and completion and operational prices, and value of capital. These synergies are anticipated to speed up deleveraging and help a sustainable returns technique.
- Confirmed Administration. A trusted management workforce, supported by a mixed world-class technical workforce, outfitted with the processes and infrastructure to ship a profitable integration.
- Vital Accretion on Key Monetary Per Share Metrics, Earlier than Synergies. The mixture is predicted to be instantly accretive to key per share monetary metrics, together with working money move, debt-adjusted money move, free money move, and internet asset worth.
- Monetary Self-discipline. Free money move might be prioritized for debt discount with path to 1.0x internet leverage by YE 2027 at $65/Bbl WTI and $3.50/MMBtu Henry Hub with substantial liquidity and an improved credit score profile.
- Sustainable Quarterly Fastened Dividend Maintained at $0.20/Share. The mixed firm will ship sustainable dividends, a program that SM Power has grown on a per share foundation by 33% for the reason that program was launched in 2022.
- Advancing Our Collective Dedication to Sustainability and Stewardship . The mixed firm will uphold its long-standing concentrate on accountable operations, security, and environmental excellence, whereas integrating finest practices.
SM Power Chief Govt Officer Herb Vogel feedback: “This strategic mixture creates a number one oil and fuel firm with enhanced scale, quite a few value-adding synergies, and important free money move, driving superior worth to stockholders. Congratulations to the Civitas workforce on constructing a number one sustainable power firm within the Permian and DJ basins since its inception in 2021. Their operational excellence and expertise are mirrored in at this time’s transaction. Collectively, we sit up for unlocking stockholder worth as a unified group.”
SM Power President and Chief Working Officer Beth McDonald feedback: “This merger combines two premier operators and establishes an organization with transformative scale within the highest-return U.S. shale basins. By combining two complementary portfolios, we anticipate to unlock important free money move to strengthen our stability sheet, speed up stockholder returns, and place us for sustainable progress by way of each cycle.”
Civitas Interim Chief Govt Officer Wouter van Kempen feedback: “Right now marks a pivotal second for Civitas and SM Power as we announce a merger that unlocks new potential to ship enhanced stockholder worth and obtain outcomes past the attain of both firm alone. By combining our sturdy technical groups and complementary property, we acquire scale, sharpen our aggressive edge, and strengthen our capacity to responsibly produce power that contributes to power safety and prosperity. This merger positions us to guide with operational and environmental excellence, generate significant synergies, and speed up worth creation.”
“This transformative transaction will instantly create a number one impartial E&P firm, with a powerful asset place throughout the premium oil oriented basins within the U.S.,” stated Ben Dell from Kimmeridge. “The step-change in scale coupled with recognized operational synergies ought to improve long-term worth to all shareholders for years to come back.”
TRANSACTION DETAILS
Underneath the phrases of the settlement, Civitas stockholders will obtain 1.45 shares of SM Power widespread inventory at closing. After closing, the corporate will proceed to commerce as SM Power (NYSE: SM). Upon completion of the Transaction, SM Power stockholders will personal roughly 48% of the mixed firm and Civitas stockholders will personal roughly 52% on a completely diluted foundation. At this change ratio, and the respective corporations’ closing share costs on October 31, 2025, inclusive of internet debt, the mixed firm would have an enterprise worth of roughly $12.8 billion. SM Power will challenge roughly 126.3 million shares of widespread inventory as consideration to the holders of Civitas widespread shares in accordance with the phrases of the merger settlement.
GOVERNANCE AND LEADERSHIP
Following the merger, the Board of Administrators will whole 11 members and might be comprised of 6 representatives from SM Power and 5 representatives from Civitas. Julio Quintana will function Non-Govt Chairman. The mixed firm might be headquartered in Denver, Colorado.
Herb Vogel will function Chief Govt Officer of the mixed firm, and the beforehand introduced anticipated CEO transition to Beth McDonald stays on-track.
TIMING AND APPROVALS
The mixture has been unanimously permitted by the boards of administrators of each corporations. The Transaction is predicted to shut within the first quarter of 2026. The Transaction is topic to customary closing circumstances, together with approvals by SM Power and Civitas stockholders and regulatory clearances.
ADVISORS
Evercore is serving as monetary advisor and Gibson, Dunn & Crutcher LLP as authorized advisor to SM Power.
J.P. Morgan is serving as monetary advisor and Kirkland & Ellis LLP as authorized advisor to Civitas Sources.
CONFERENCE CALL AND ADDITIONAL MATERIALS
November 3, 2025 – Please be part of SM Power and Civitas administration at 8:00 a.m. Mountain time/10:00 a.m. Japanese time at this time for a joint convention name to debate the Transaction.
The dialogue might be accessible by way of:
An investor presentation concerning the Transaction may also be discovered at www.sm-energy.com and www.civitasresources.com.
SM Power’s third quarter 2025 earnings pre-recorded webcast initially scheduled for November 4, 2025, and the dwell Q&A session initially scheduled for November 5, 2025, have been cancelled and changed with at this time’s joint convention name.
ABOUT SM ENERGY
SM Power Firm is an impartial power firm engaged within the acquisition, exploration, improvement, and manufacturing of crude oil, pure fuel, and NGLs within the states of Texas and Utah. SM Power routinely posts necessary details about the Firm on its web site. For extra details about SM Power, please go to its web site at www.sm-energy.com.
ABOUT CIVITAS
Civitas Sources, Inc. is an impartial exploration and manufacturing firm targeted on the acquisition, improvement, and manufacturing of crude oil and liquids-rich pure fuel from its premier property within the Permian Basin in Texas and New Mexico and the DJ Basin in Colorado. Civitas’ confirmed enterprise mannequin to maximise shareholder returns is targeted on 4 key strategic pillars: producing important free money move, sustaining a premier stability sheet, returning capital to shareholders, and demonstrating ESG management. For extra details about Civitas, please go to www.civitasresources.com.
NOTICE REGARDING INFORMATION CONTAINED IN THIS RELEASE
FORWARD LOOKING STATEMENTS
This press launch comprises “forward-looking statements” inside the which means of Part 27A of the Securities Act of 1933, as amended, and Part 21E of the Securities Trade Act of 1934, as amended. All statements, aside from statements of historic truth, included on this press launch that tackle occasions, or developments that SM Power and Civitas anticipate, consider, or anticipate will or might happen sooner or later are forward-looking statements. The phrases “intend,” “anticipate,” and comparable expressions are meant to establish forward-looking statements. Ahead-looking statements on this press launch embody, however should not restricted to, statements concerning the Transaction, professional forma descriptions of the mixed firm and its operations, integration and transition plans, synergies, alternatives and anticipated future efficiency. There are a variety of dangers and uncertainties that would trigger precise outcomes to vary materially from the forward-looking statements included on this communication. These embody the anticipated timing and probability of completion of the Transaction, together with the timing, receipt and phrases and circumstances of any required governmental and regulatory approvals of the Transaction that would scale back anticipated advantages or trigger the events to desert the Transaction, the power to efficiently combine the companies, the incidence of any occasion, change or different circumstances that would give rise to the termination of the merger settlement, the chance that stockholders of SM Power or Civitas might not approve the Transaction, the danger that the events might not be capable to fulfill the circumstances to the Transaction in a well timed method or in any respect, dangers associated to disruption of administration time from ongoing enterprise operations as a result of Transaction, the danger that any bulletins referring to the Transaction might have opposed results available on the market worth of SM Power’s widespread inventory or Civitas widespread inventory, the danger that the Transaction and its announcement might have an opposed impact on the power of SM Power and Civitas to retain prospects and retain and rent key personnel and keep relationships with their suppliers and prospects and on their working outcomes and companies typically, the danger the pending Transaction might distract administration of each entities and they’re going to incur substantial prices, the danger that issues might come up in efficiently integrating the companies of the businesses, which can outcome within the mixed firm not working as successfully and effectively as anticipated, the danger that the mixed firm could also be unable to realize synergies or it could take longer than anticipated to realize these synergies and different necessary elements that would trigger precise outcomes to vary materially from these projected. All such elements are tough to foretell and are past SM Power’s or Civitas’ management, together with these detailed in SM Power’s annual reviews on Type 10-Ok, quarterly reviews on Type 10-Q and present reviews on Type 8-Ok which can be accessible on its web site at www.sm-energy.com/buyers and on the SEC’s web site at www.sec.gov, and people detailed in Civitas’ annual reviews on Type 10-Ok, quarterly reviews on Type 10-Q and present reviews on Type 8-Ok which can be accessible on Civitas’ web site at ir.civitasresources.com/investor-relations and on the SEC’s web site at www.sec.gov. All forward-looking statements are primarily based on assumptions that SM Power or Civitas consider to be cheap however that will not show to be correct. Such forward-looking statements are primarily based on assumptions and analyses made by SM Power and Civitas in mild of their perceptions of present circumstances, anticipated future developments, and different elements that SM Power and Civitas consider are acceptable below the circumstances. These statements are topic to quite a few identified and unknown dangers and uncertainties. Ahead-looking statements should not ensures of future efficiency and precise occasions could also be materially completely different from these expressed or implied within the forward-looking statements. The forward-looking statements on this press launch converse as of the date of this press launch.
SM ENERGY INVESTOR CONTACT
Patrick Lytle, plytle@sm-energy.com, 303-864-2502
CIVITAS INVESTOR CONTACT
Brad Whitmarsh, bwhitmarsh@civiresources.com, 832-736-8909
NO OFFER OR SOLICITATION
This communication is for informational functions solely and isn’t meant to, and shall not, represent a suggestion to purchase or promote or the solicitation of a suggestion to purchase or promote any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction through which such supply, solicitation or sale could be illegal previous to registration or qualification below the securities legal guidelines of any such jurisdiction. No providing of securities shall be made, besides by the use of a prospectus assembly the necessities of Part 10 of the Securities Act of 1933, as amended.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In reference to the proposed Transaction, SM Power intends to file with the SEC a registration assertion on Type S-4 (the “Registration Assertion”) that can embody a joint proxy assertion of SM Power and Civitas and a prospectus of SM Power (the “Joint Proxy Assertion/Prospectus”). Every of SM Power and Civitas may additionally file different related paperwork with the SEC concerning the proposed Transaction. This communication will not be an alternative choice to the Joint Proxy Assertion/Prospectus or Registration Assertion or some other doc that SM Power or Civitas, as relevant, might file with the SEC in reference to the proposed Transaction. After the Registration Assertion has been declared efficient by the SEC, a definitive Joint Proxy Assertion/Prospectus might be mailed to the stockholders of every of SM Power and Civitas. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF SM ENERGY AND CIVITAS ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT SM ENERGY, CIVITAS, THE PROPOSED TRANSACTION AND RELATED MATTERS. Buyers and safety holders will be capable to get hold of free copies of the Registration Assertion and the Joint Proxy Assertion/Prospectus, in addition to different filings containing necessary details about SM Power, Civitas and the proposed Transaction, as soon as such paperwork are filed with the SEC by way of the web site maintained by the SEC at www.sec.gov. Copies of the paperwork filed with the SEC by SM Power might be accessible freed from cost on SM Power’s web site at www.sm-energy.com/buyers. Copies of the paperwork filed with the SEC by Civitas might be accessible freed from cost on Civitas’ web site at ir.civitasresources.com/investor-relations. The knowledge included on, or accessible by way of, SM Power’s or Civitas’ web site will not be included by reference into this communication.
PARTICIPANTS IN THE SOLICITATION
SM Power, Civitas and sure of their respective administrators and government officers could also be deemed to be individuals within the solicitation of proxies in respect of the proposed Transaction. Details about the administrators and government officers of SM Power, together with an outline of their direct or oblique pursuits, by safety holdings or in any other case, is ready forth in SM Power’s proxy assertion for its 2025 Annual Assembly of Stockholders, which was filed with the SEC on April 7, 2025 (and which is out there at www.sec.gov/Archives/edgar/knowledge/893538/000089353825000032/sm-20250404.htm) and a Type 8-Ok filed by SM Power on September 8, 2025 (and which is out there at www.sec.gov/Archives/edgar/knowledge/893538/000089353825000116/sm-20250904.htm). Details about the administrators and government officers of Civitas, together with an outline of their direct or oblique pursuits, by safety holdings or in any other case, is ready forth in a Type 8-Ok filed by Civitas on August 6, 2025 (and which is out there at www.sec.gov/Archives/edgar/knowledge/1509589/000110465925074774/tm2522747d1_8k.htm), a Type 8-Ok filed by Civitas on Could 7, 2025 (and which is out there at www.sec.gov/Archives/edgar/knowledge/1509589/000110465925045550/tm2514090d1_8k.htm), and Civitas’ proxy assertion for its 2025 Annual Assembly of Stockholders, which was filed with the SEC on April 21, 2025 (and which is out there at www.sec.gov/Archives/edgar/knowledge/1509589/000155837025005077/civi-20241231xdef14a.htm). Different info concerning the individuals within the proxy solicitations and an outline of their direct and oblique pursuits, by safety holdings or in any other case, might be contained within the Joint Proxy Assertion/Prospectus and different related supplies to be filed with the SEC concerning the proposed Transaction when such supplies change into accessible. Buyers ought to learn the Joint Proxy Assertion/Prospectus rigorously when it turns into accessible earlier than making any voting or funding selections. Chances are you’ll get hold of free copies of those paperwork from SM Power and Civitas utilizing the sources indicated above.
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SOURCE SM Power Firm
