SM Energy details Civitas merger leadership and $1 billion divestiture plan

SM Energy Company (NYSE: SM) and Civitas Resources Inc. (NYSE: CIVI) announced additional details for their planned merger, including post-closing management structure and targeted asset sales of at least $1 billion within the first year following completion.

Upon closing, Beth McDonald will serve as President and Chief Executive Officer of the combined company, with Wade Pursell as Executive Vice President and Chief Financial Officer, Blake McKenna as Executive Vice President and Chief Operating Officer, and James Lebeck as Executive Vice President for Corporate Development and General Counsel.

The merged entity's Board of Directors will consist of 11 members, with six representatives from SM Energy and five from Civitas. Julio Quintana will serve as Non-Executive Chairman.

The companies expect to achieve annual synergies totaling $200 million, with potential upside to $300 million. These synergies break down into three categories: drilling, completion and operational savings of $100-$150 million; general and administrative cost reductions of $70-$95 million; and cost of capital improvements of $30-$55 million. The companies stated synergies are expected to be implemented in 2026, with at least $200 million realized in 2027.

S&P Global Ratings placed SM Energy on CreditWatch Positive, while Fitch Ratings assigned a Rating Watch Positive, reflecting confidence in the post-merger credit profile.

SM Energy announced participation in several upcoming investor conferences, including the Stephens Annual Investment Conference on November 20, the Bank of America Leveraged Finance Conference on December 2, and conferences hosted by Mizuho and Capital One Securities on December 9.

The information is based on a press release statement from the companies. The merger remains subject to regulatory approvals and stockholder approval from both companies.

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