SM Energy reported third‑quarter 2025 results with net income of $155.1 million, or $1.35 per diluted share, and net cash provided by operating activities of $557.5 million. Adjusted free cash flow rose 80 % from the same period in 2024 to $234.3 million. Capital expenditures for the quarter were $397.7 million, adjusted for a change in capital expenditure accruals. Operating expenses totaled $568.48 million, and a net derivative settlement gain of $78.3 million contributed to cash flow. Realized prices were $63.83 per barrel of oil, $2.19 per Mcf of gas, and $20.79 per barrel of NGLs, slightly below the previous quarter’s $65.40, $2.77, and $20.79, respectively. Production reached 213.8 MBOE/d, with oil accounting for 55 % (115.7 MBbl/d).
In comparison to Q3 2024, net income fell from $240.5 million to $155.1 million, and revenue declined from $643.61 million to $? (the article does not provide Q3 2025 revenue, but the focus is on net income and cash flow). Production increased 26 % year‑over‑year to 213.8 MBOE/d from 170.0 MBOE/d, driven by a 47 % rise in net daily oil production. Production tax expense per BOE fell 23 % sequentially, reflecting lower commodity prices and a reduced tax rate in the Uinta Basin.
SM Energy maintained its full‑year 2025 guidance, targeting 200,000–215,000 BOE/d and a net debt‑to‑adjusted EBITDAX of 1.1× as of September 30 2025. Capital‑expenditure guidance was increased to $1.375 billion–$1.395 billion to account for additional working‑interest acquisitions in high‑value wells. The company returned $35.1 million to shareholders, comprising $23.0 million in fixed dividend payments and $12.1 million in share repurchases of 445,000 shares.
SM Energy entered into a definitive all‑stock merger agreement with Civitas Resources, valuing the transaction at approximately $12.8 billion. Under the deal, Civitas shareholders will receive 1.45 SM Energy shares for each Civitas share, giving Civitas owners about 52 % of the combined company and SM Energy owners about 48 %. The merger is expected to close in the first quarter of 2026 and will create a larger, more efficient oil and gas operator with a broadened asset base, including significant Permian Basin holdings.
The merger and the company’s continued focus on operational excellence and disciplined capital allocation position SM Energy to enhance free‑cash‑flow generation and reduce leverage toward a target of 1.0×. The company’s strategy emphasizes cost control, higher‑margin production from the Uinta Basin, and strategic investments in high‑return wells, supporting its long‑term growth prospects.
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