SM Energy rises amid acquisition news despite market decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 18 2024
0mins
Should l Buy SM?
Source: NASDAQ.COM
SM Energy Co saw a price increase of 5.01%, crossing above the 5-day SMA, while the broader market faced declines with the Nasdaq-100 down 0.81% and the S&P 500 down 0.14%.
This rise is attributed to the announcement of the acquisition of Civitas Resources, where shareholders will receive 1.45 shares of SM Energy for each share of Civitas. This deal has raised concerns about the fairness of the transaction, but it reflects a strategic move by SM Energy to expand its portfolio, which may attract investor interest despite the overall market weakness.
The implications of this acquisition could lead to increased investor confidence in SM Energy's growth potential, especially if the transaction is perceived positively by Civitas shareholders and the market at large.
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Analyst Views on SM
Wall Street analysts forecast SM stock price to rise
8 Analyst Rating
4 Buy
4 Hold
0 Sell
Moderate Buy
Current: 23.400
Low
23.00
Averages
30.00
High
42.00
Current: 23.400
Low
23.00
Averages
30.00
High
42.00
About SM
SM Energy Company is an independent energy company. The Company is engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids (NGLs) in the states of Texas and Utah. Its asset portfolio comprises assets in the Midland Basin of West Texas, the Maverick Basin of South Texas, and the Uinta Basin of northeastern Utah. Its Midland Basin assets are located in the Permian Basin in West Texas, are comprised of over 110,000 net acres, and include its RockStar assets in Howard and Martin counties, Sweetie Peck assets in Upton and Midland counties, and Klondike assets in Dawson and northern Martin counties. Its South Texas assets are comprised of over 155,000 net acres located in Dimmit and Webb counties, Texas. Its overlapping acreage position in South Texas covers a portion of the western Eagle Ford shale and Austin Chalk formations. Its Uinta Basin assets comprise over 63,300 net acres located in northeastern Utah.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
SM Energy Accelerates Deleveraging with $950 Million Asset Sale in South Texas
- Asset Sale Agreement: SM Energy has entered into an agreement to sell certain South Texas assets to Caturus Energy for $950 million, achieving a key priority of exceeding $1 billion in asset sales, which will significantly reduce debt and strengthen its capital structure.
- Production Overview: The transaction includes approximately 61,000 net acres and 260 producing wells, with expected average production of 37-39 MBoe per day in 2026, comprising 45% liquids and 9% oil, projected to generate about $160 million in asset-level cash flows for the year, enhancing financial flexibility.
- Transaction Timeline: The deal is expected to close in Q2 2026 with an effective date of February 1, 2026, allowing SM Energy to prioritize debt reduction with the proceeds, reinforcing its commitment to a strong balance sheet.
- Advisory Support: RBC Capital Markets is serving as the exclusive financial advisor to SM Energy, while Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor, ensuring a smooth transaction process and mitigating potential risks.
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Analysis of SM Stock's 52-Week Highs and Lows
- Price Fluctuation Analysis: SM's stock has a 52-week low of $17.45 and a high of $39.40, with the last trade at $23.39, indicating significant price volatility within this range and reflecting market interest and investor sentiment changes.
- Market Trend Observation: The current price of $23.39, close to the 52-week low, may suggest a lack of investor confidence in the stock, necessitating close monitoring of future market trends and company fundamentals to assess its investment value.
- Technical Indicator Reference: The relationship between SM's stock performance and the 200-day moving average is noteworthy, as a breakout above this average could attract more investor attention, potentially influencing future price movements.
- Industry Comparison Perspective: SM's price volatility in comparison to other energy stocks may impact its competitive position within the industry, prompting investors to consider both overall industry performance and individual stock characteristics when making investment decisions.
See More
SM Energy Sells South Texas Assets for $950M to Caturus Energy
- Asset Sale Agreement: SM Energy has agreed to sell certain South Texas assets for $950 million in cash, aiming to reduce debt and strengthen its capital structure, which is expected to positively impact the company's financial health.
- Asset Details: The deal includes 61,000 net acres and approximately 260 producing wells, with expected production of 37,000 to 39,000 boe/day by 2026, of which 45% will be liquids, laying a foundation for future revenue growth.
- Cash Flow Projections: The properties are projected to generate $160 million in asset-level cash flow during 2026, further enhancing SM Energy's financial stability and providing funding for future investments.
- Strategic Implications: Caturus Energy's acquisition positions it to deliver low-nitrogen natural gas to key LNG hubs in Louisiana, demonstrating its strategic positioning in the LNG market, which may enhance its competitive edge.
See More
SM Energy to Sell South Texas Assets for $950 Million
- Transaction Value: SM Energy announced an agreement to sell its South Texas assets to Caturus Energy for $950 million in cash, with the transaction expected to close in Q2 2026, marking a significant step in the company's strategic restructuring.
- Asset Scale: The sale involves approximately 61,000 net acres and about 260 producing wells in the southern Maverick Basin of Webb County, Texas, demonstrating the company's commitment to optimizing its asset portfolio.
- Cash Flow Expectations: These assets are projected to produce 37-39 MBoe/d in 2026 and generate roughly $160 million in asset-level cash flow for the full year, thereby enhancing the company's financial stability.
- Debt Management: SM Energy intends to use the proceeds primarily to reduce debt and strengthen its balance sheet, reflecting the company's focus on financial health in the current market environment.
See More
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- Active Stocks: ProShares UltraPro QQQ (TQQQ) saw a trading volume of 6,654,681 shares at a price of $47.83, representing a 173.31% increase from its 52-week low, reflecting strong investor interest in tech stocks.
- Earnings Forecasts: Apple Inc. (AAPL) has had six upward revisions in its earnings forecast for Q1 FY2026 over the past four weeks, with a consensus EPS forecast of $1.88, indicating optimistic market sentiment regarding its future performance.
- Competitor Dynamics: Alibaba Group (BABA) is currently priced at $151.59, down $7.14 from the previous trading day, and is expected to report earnings on February 19, 2026, with a projected EPS of $1.73, reflecting a 277% increase year-over-year.
See More
SM Energy Increases Credit Facility to $5 Billion
- Credit Facility Increase: SM Energy has increased its existing credit facility to $5 billion, with lender commitments rising to $2.5 billion, providing the company with greater financial flexibility to support future capital expenditures and operational needs.
- Bank Group Expansion: The amendment expands the company's bank group to 18 lenders with the addition of three banks, enhancing the diversity of financing channels, thereby reducing financing risks and improving relationships with financial institutions.
- Maturity Date Extension: The maturity date of the credit facility has been extended to January 30, 2031, providing a long-term financing arrangement that will offer a stable source of funds to support the company's long-term strategic goals and business development.
- No Outstanding Borrowings: At the time of the amendment, the company reported no outstanding borrowings, indicating a strong financial position and effective debt management, which enhances investor confidence in its future growth potential.
See More
SM Energy Accelerates Deleveraging with $950 Million Asset Sale in South Texas
- Asset Sale Agreement: SM Energy has entered into an agreement to sell certain South Texas assets to Caturus Energy for $950 million, achieving a key priority of exceeding $1 billion in asset sales, which will significantly reduce debt and strengthen its capital structure.
- Production Overview: The transaction includes approximately 61,000 net acres and 260 producing wells, with expected average production of 37-39 MBoe per day in 2026, comprising 45% liquids and 9% oil, projected to generate about $160 million in asset-level cash flows for the year, enhancing financial flexibility.
- Transaction Timeline: The deal is expected to close in Q2 2026 with an effective date of February 1, 2026, allowing SM Energy to prioritize debt reduction with the proceeds, reinforcing its commitment to a strong balance sheet.
- Advisory Support: RBC Capital Markets is serving as the exclusive financial advisor to SM Energy, while Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor, ensuring a smooth transaction process and mitigating potential risks.
See More
Analysis of SM Stock's 52-Week Highs and Lows
- Price Fluctuation Analysis: SM's stock has a 52-week low of $17.45 and a high of $39.40, with the last trade at $23.39, indicating significant price volatility within this range and reflecting market interest and investor sentiment changes.
- Market Trend Observation: The current price of $23.39, close to the 52-week low, may suggest a lack of investor confidence in the stock, necessitating close monitoring of future market trends and company fundamentals to assess its investment value.
- Technical Indicator Reference: The relationship between SM's stock performance and the 200-day moving average is noteworthy, as a breakout above this average could attract more investor attention, potentially influencing future price movements.
- Industry Comparison Perspective: SM's price volatility in comparison to other energy stocks may impact its competitive position within the industry, prompting investors to consider both overall industry performance and individual stock characteristics when making investment decisions.
See More
SM Energy Sells South Texas Assets for $950M to Caturus Energy
- Asset Sale Agreement: SM Energy has agreed to sell certain South Texas assets for $950 million in cash, aiming to reduce debt and strengthen its capital structure, which is expected to positively impact the company's financial health.
- Asset Details: The deal includes 61,000 net acres and approximately 260 producing wells, with expected production of 37,000 to 39,000 boe/day by 2026, of which 45% will be liquids, laying a foundation for future revenue growth.
- Cash Flow Projections: The properties are projected to generate $160 million in asset-level cash flow during 2026, further enhancing SM Energy's financial stability and providing funding for future investments.
- Strategic Implications: Caturus Energy's acquisition positions it to deliver low-nitrogen natural gas to key LNG hubs in Louisiana, demonstrating its strategic positioning in the LNG market, which may enhance its competitive edge.
See More
SM Energy to Sell South Texas Assets for $950 Million
- Transaction Value: SM Energy announced an agreement to sell its South Texas assets to Caturus Energy for $950 million in cash, with the transaction expected to close in Q2 2026, marking a significant step in the company's strategic restructuring.
- Asset Scale: The sale involves approximately 61,000 net acres and about 260 producing wells in the southern Maverick Basin of Webb County, Texas, demonstrating the company's commitment to optimizing its asset portfolio.
- Cash Flow Expectations: These assets are projected to produce 37-39 MBoe/d in 2026 and generate roughly $160 million in asset-level cash flow for the full year, thereby enhancing the company's financial stability.
- Debt Management: SM Energy intends to use the proceeds primarily to reduce debt and strengthen its balance sheet, reflecting the company's focus on financial health in the current market environment.
See More
NASDAQ 100 Pre-Market Activity Overview
- Market Performance: The NASDAQ 100 Pre-Market Indicator rose by 49.27 points to 24,736.88, indicating a positive shift in market sentiment that may attract more investor interest.
- Active Stocks: ProShares UltraPro QQQ (TQQQ) saw a trading volume of 6,654,681 shares at a price of $47.83, representing a 173.31% increase from its 52-week low, reflecting strong investor interest in tech stocks.
- Earnings Forecasts: Apple Inc. (AAPL) has had six upward revisions in its earnings forecast for Q1 FY2026 over the past four weeks, with a consensus EPS forecast of $1.88, indicating optimistic market sentiment regarding its future performance.
- Competitor Dynamics: Alibaba Group (BABA) is currently priced at $151.59, down $7.14 from the previous trading day, and is expected to report earnings on February 19, 2026, with a projected EPS of $1.73, reflecting a 277% increase year-over-year.
See More
SM Energy Increases Credit Facility to $5 Billion
- Credit Facility Increase: SM Energy has increased its existing credit facility to $5 billion, with lender commitments rising to $2.5 billion, providing the company with greater financial flexibility to support future capital expenditures and operational needs.
- Bank Group Expansion: The amendment expands the company's bank group to 18 lenders with the addition of three banks, enhancing the diversity of financing channels, thereby reducing financing risks and improving relationships with financial institutions.
- Maturity Date Extension: The maturity date of the credit facility has been extended to January 30, 2031, providing a long-term financing arrangement that will offer a stable source of funds to support the company's long-term strategic goals and business development.
- No Outstanding Borrowings: At the time of the amendment, the company reported no outstanding borrowings, indicating a strong financial position and effective debt management, which enhances investor confidence in its future growth potential.
See More
