SM Energy and Civitas to Merge in $12.8 Billion Deal
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SM Energy and Civitas Resources have entered into a definitive merger agreement involving an all-stock transaction with an enterprise value of approximately $12.8 billion.
The combined company will have a premier portfolio of approximately 823,000 net acres, with the Permian position being the cornerstone. Pro forma full-year 2025 consensus free cash flow generation of more than $1.4 billion enables sustained capital returns, and increased market capitalization enhances trading liquidity with broader investment appeal.
“This strategic combination creates a leading oil and gas company with enhanced scale, numerous value-adding synergies, and significant free cash flow, driving superior value to stockholders,” said SM Energy Chief Executive Officer Herb Vogel.
“Congratulations to the Civitas team on building a leading sustainable energy company in the Permian and DJ basins since its inception in 2021. Their operational excellence and talent are reflected in today’s transaction. Together, we look forward to unlocking stockholder value as a unified organization,” added Vogel.
“This merger combines two premier operators and establishes a company with transformative scale in the highest-return U.S. shale basins. By combining two complementary portfolios, we expect to unlock significant free cash flow to strengthen our balance sheet, accelerate stockholder returns, and position us for sustainable growth through every cycle,” said SM Energy President and Chief Operating Officer Beth McDonald.
“Today marks a pivotal moment for Civitas and SM Energy as we announce a merger that unlocks new potential to deliver enhanced stockholder value and achieve outcomes beyond the reach of either company alone. By combining our strong technical teams and complementary assets, we gain scale, sharpen our competitive edge, and strengthen our ability to responsibly produce energy that contributes to energy security and prosperity. This merger positions us to lead with operational and environmental excellence, generate meaningful synergies, and accelerate value creation,” said Civitas Interim Chief Executive Officer Wouter van Kempen.
The transaction is expected to close in the first quarter of 2026.
GOVERNANCE AND LEADERSHIP
Following the merger, the board of directors will total 11 members and will be comprised of six representatives from SM Energy and five representatives from Civitas. Julio Quintana will serve as non-executive chairman. The combined company will be headquartered in Denver, Colorado.
Herb Vogel will serve as chief executive officer of the combined company, and the expected CEO transition to Beth McDonald remains on-track.
SM Energy is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and NGLs in the states of Texas and Utah.
Civitas Resources is an independent exploration and production company focused on the acquisition, development, and production of crude oil and liquids-rich natural gas from its premier assets in the Permian Basin in Texas and New Mexico and the DJ Basin in Colorado. Civitas’ proven business model to maximize shareholder returns is focused on four key strategic pillars: generating significant free cash flow, maintaining a premier balance sheet, returning capital to shareholders, and demonstrating ESG leadership.
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