SM Energy Company (SM) investor relations material

Executive summary

• Achieved record operating cash flow, adjusted EBITDAX, and production in 2025, with oil comprising 53% of total production and successful integration of Uinta Basin assets; completed merger with Civitas in January 2026, expanding scale and inventory.

• Reduced net debt by $437 million, ending 2025 at a 1.05x leverage ratio, and returned $104 million to stockholders via dividends and buybacks.

• Entered 2026 with a strategy to integrate Civitas, maximize free cash flow, and bolster the balance sheet through divestitures and capital returns.

• Strategic priorities for 2026 include capturing $200–$300 million in synergies, executing for sustainable free cash flow, and strengthening the balance sheet.

Financial highlights

• Record operating cash flow and adjusted EBITDAX in 2025, with adjusted EBITDAX reaching $2.26 billion, up 13% year-over-year.

• FY25 net income per diluted share was $5.64; adjusted free cash flow for 2025 rose 28% year-over-year to $620 million.

• Net debt reduced by $437 million; leverage ended at 1.05x; $104 million returned to stockholders through dividends and share repurchases.

• Announced $950 million sale of South Texas assets, expected to close in Q2 2026, advancing deleveraging and capital return goals.

• Estimated net proved reserves at year-end 2025 totaled 673 MMBoe, with 61% proved developed.

Outlook and guidance

• 2026 plan targets maximizing free cash flow in a $60 oil and $3.50 gas environment, with production guidance of 146–153 MMBoe (~54% oil) and 11 months of Civitas contribution.

• Capital investments guided at $2.65–$2.85 billion, about 14% lower than pro forma 2025, including $70 million in one-time integration costs and $50 million in expected synergies.

• Activity levels reset to 11 rigs (down from 14), prioritizing value over volume; second half 2026 volumes expected at 420,000–430,000 BOE/d with 55% oil.

• Maintenance CapEx for 2027 expected to be similar or slightly less than 2026 guidance.

• 2026 FCF sensitivities: each $5/Bbl WTI change impacts FCF by ~$300 million; each $0.50/MMBtu gas change by ~$75 million.