SM Energy Company (SM) Investor presentation summary

Strategic transformation and value creation

• Completed merger with Civitas, establishing a scaled four-basin operator with ~700k net acres across Permian, DJ, South Texas, and Uinta basins, each offering high-margin, high-return assets and quality inventory.

• Raised synergy capture target to $375MM (NPV-10 of $1.8B), with $300MM already actioned and full realization expected by year-end 2026.

• Closed $950MM South Texas divestiture, accelerating progress toward a $1B+ divestiture target and enabling significant debt reduction.

• Achieved credit upgrades from S&P and Fitch, reaffirmed credit facility, and set a clear path to low-1x leverage by year-end 2026, supporting an investment-grade trajectory.

• Enhanced capital return program with a 10% dividend increase and plans for increased share repurchases as leverage targets are met.

Operational and financial performance

• 1Q26 production exceeded guidance by 6%, with oil production up 5% and capital expenditures 12% below guidance due to efficiency gains and deferred projects.

• 1Q26 adjusted EBITDAX reached $970MM, and underlying cash generation remained strong despite ~$180MM in one-time integration and transaction costs.

• Portfolio optimization and operational excellence drove improved cycle times, higher completion efficiency, and strong early well results across all basins.

• FY26 production guidance raised to 410–430 MBoe/d, with capital guidance maintained at $2.65–$2.85B, and a focus on maximizing free cash flow.

• Asset-level highlights include record drilling speeds, high-value oil margins, and continued high-grading of the portfolio post-divestiture.

Risk management and financial discipline

• Hedged 54% of FY26 oil volumes at $61.16–$65.18/Bbl and 52% of gas volumes at $3.63–$4.16/MMBtu, with additional basis swaps to manage regional price differentials.

• Executed $1B senior notes offering at 6.625%, retired $894MM high-coupon debt, and deployed $900MM divestiture proceeds to retire 2026 notes, reducing refinancing risk.

• Net debt as of March 31, 2026, was $7.35B, with a $5B borrowing base and $2.5B credit commitment, and no outstanding draws on the revolver.

• Non-GAAP financial metrics such as adjusted EBITDAX, adjusted free cash flow, and net debt-to-EBITDAX are used to assess performance and capital structure.

• Active portfolio management and accretive divestitures are positioned as ongoing levers for value creation and increased capital returns.