SM Energy Company has completed its all-stock merger with Civitas Resources, creating a combined entity that will retain the name SM Energy Company and be headquartered in Denver, Colorado, US.
The merger received shareholder approval from both companies last month, following the signing of a definitive agreement in November 2025 for a transaction valued at around $12.8bn, which includes net debt.
In accordance with the merger terms, each Civitas share is exchanged for 1.45 SM Energy shares, resulting in SM Energy issuing approximately 126.3 million new shares of common stock.
Following the merger, SM Energy shareholders will own approximately 48% of the combined company, while Civitas shareholders will hold around 52%.
The merged entity's leadership team will include Beth McDonald as president and CEO, and Blake McKenna as executive vice-president and chief operating officer (COO).
The Board of Directors comprises 11 members, six from SM Energy and five from Civitas.
The combined entity manages a portfolio of around 823,000 net acres with a significant focus on the Permian Basin.
With expected free cash flow surpassing $1.4bn for the full year 2025, the company aims to provide sustained capital returns and broaden its investment appeal through increased market capitalisation and liquidity.
The transaction received unanimous approval from both boards and is expected to be finalised in the first quarter of 2026, subject to necessary shareholder and regulatory approvals.
McDonald said: “Today's close marks the start of our work together as one SM, a top ten US independent oil-focused producer, with a larger, complementary footprint across the highest‑return US shale basins, including a premier Permian position.
“We are focused on effectively integrating the two companies to unlock additional free cash flow by achieving our previously announced annual synergy target of $200–300m and executing our previously announced divestiture target of at least $1bn over the next year.
“We expect these steps to further strengthen our balance sheet, accelerate our return of capital to stockholders and drive considerable upside in our equity. We look forward to sharing our 2026 operating plan and our updated return of capital framework on our upcoming conference call in late February.”
