SM Energy nets $900M from South Texas sale, redeems $819M notes
SM Energy closed the sale of its South Texas assets for $950 million, generating approximately $900 million in net proceeds and advancing toward its $1.0 billion-plus divestiture target. The company will redeem $819 million of 6.75% and 5.0% Senior Notes due 2026 at par and reaffirmed a $5.0 billion borrowing base with $2.5 billion in lender commitments.
1. South Texas Divestiture Closes
SM Energy completed the sale of its South Texas assets for a cash purchase price of $950 million, with net proceeds of approximately $900 million after preliminary adjustments and transaction costs. This transaction brings the company closer to its goal of divesting more than $1.0 billion in noncore assets.
2. Full Redemption of 2026 Senior Notes
Concurrently, SM Energy instructed trustees to fully redeem the $819 million aggregate principal of its 6.75% and 5.0% Senior Notes due in 2026 at par plus accrued interest. The $419 million of 6.75% notes will be redeemed on June 1, 2026, and the $400 million of 5.0% notes (assumed from Civitas Resources) will be redeemed on May 11, 2026.
3. Credit Facility Reaffirmed
Following its semi-annual borrowing base redetermination, SM Energy maintained a $5.0 billion borrowing base and $2.5 billion of aggregate lender commitments. The reaffirmation reflects lender confidence after the South Texas divestiture and supports the company’s path to a lower-leverage, investment-grade-quality capital structure.