SM Energy Co. and Civitas Resources Inc. have agreed to merge in an all-stock transaction valued at approximately $12.8 billion, creating one of the largest independent oil-focused producers in the United States.
Under the terms of the agreement, Civitas shareholders will receive 1.45 shares of SM Energy common stock for each Civitas share. Upon completion, Civitas shareholders will own roughly 52% of the combined company, while SM Energy shareholders will hold 48%. The merged entity will continue trading under SM Energy’s NYSE ticker, SM.
The combination unites approximately 823,000 net acres across the Permian and DJ basins, with pro forma second-quarter 2025 production of 526,000 boed and expected full-year free cash flow exceeding $1.4 billion. The companies estimate $200 million in annual synergies, with potential upside to $300 million, driven by operational, G&A, and capital efficiencies.
“This strategic combination creates a leading oil and gas company with enhanced scale, numerous value-adding synergies, and significant free cash flow,” said Herb Vogel, CEO of SM Energy.
Civitas interim CEO Wouter van Kempen added that the merger “unlocks new potential to deliver enhanced stockholder value and achieve outcomes beyond the reach of either company alone.”
The transaction is expected to close in the first half of 2026, subject to shareholder and regulatory approvals.
