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What changed in SM Energy Co's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SM Energy Co's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+374 added−330 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-20)

Top changes in SM Energy Co's 2025 10-K

374 paragraphs added · 330 removed · 261 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

92 edited+64 added−11 removed166 unchanged
Biggest changeOil and gas operations are subject to many risks, including human error and accidents, that could cause personal injury, death, property damage, well blowouts, craterings, explosions, uncontrollable flows of oil, gas and NGLs, or well fluids, releases or spills of completion fluids, spills or releases from facilities and equipment used to deliver or store these materials, spills or releases of brine or other produced or flowback water, subsurface conditions that prevent us from stimulating the planned number of completion stages, accessing the entirety of the wellbore with our tools during completion, or removing materials from the wellbore to allow production to begin, fires, adverse weather such as hurricanes or tornadoes, freezing conditions, wildfires, floods, droughts, formations with abnormal pressures, pipeline ruptures or spills, train derailments, pollution, seismic events, releases of toxic gas such as hydrogen sulfide, and other environmental risks and hazards.
Biggest changeFires, adverse weather such as hurricanes or tornadoes, freezing conditions, wildfires, floods, droughts, formations with abnormal pressures, pipeline ruptures or spills, train derailments, pollution, seismic events, releases of toxic gas such as hydrogen sulfide, and other environmental risks and hazards may impact operations. If any of these types of events occur, we could sustain substantial losses.
Scientists have predicted that increasing concentrations of GHGs in the earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climatic events. If such effects were to occur, our operations could be adversely affected.
Scientists have predicted that increasing concentrations of GHGs in the earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods, and other climatic events. If such effects were to occur, our operations could be adversely affected.
Downgrades of our credit ratings could have material adverse consequences on our business and future prospects and could: • limit our ability to access capital markets, including for the purpose of refinancing our existing debt; • cause us to refinance or issue debt with less favorable terms and conditions, which may restrict, among other things, our ability to make any dividend payments or repurchase shares; • negatively impact lenders’ willingness to transact business with us, which could impact our ability to obtain favorable terms and conditions under our Credit Agreement; • negatively impact current and prospective customers’ willingness to transact business with us; • impose additional insurance, guarantee, bonding, and collateral requirements; • limit our access to bank and third-party guarantees, surety bonds, and letters of credit; and • cause our suppliers and financial institutions to lower or eliminate the level of credit provided through payment terms or intraday funding when dealing with us, thereby increasing the need for higher levels of cash on hand, which would decrease our ability to repay outstanding indebtedness.
Downgrades of our credit ratings could have material adverse consequences on our business and future prospects and could: • limit our ability to access capital markets, including for the purpose of refinancing our existing debt; • cause us to refinance or issue debt with less favorable terms and conditions, which may restrict, among other things, our ability to make any dividend payments or repurchase shares; • negatively impact lenders’ willingness to transact business with us, which could impact our ability to obtain favorable terms and conditions under our Credit Agreement; • negatively impact current and prospective customers’ willingness to transact business with us; 39 • impose additional insurance, guarantee, bonding, and collateral requirements; • limit our access to bank and third-party guarantees, surety bonds, and letters of credit; and • cause our suppliers and financial institutions to lower or eliminate the level of credit provided through payment terms or intraday funding when dealing with us, thereby increasing the need for higher levels of cash on hand, which would decrease our ability to repay outstanding indebtedness.
Wide fluctuations in oil, gas, and NGL prices often result from relatively minor changes in the supply of and demand for oil, gas, and NGLs, market uncertainty, and other factors that are beyond our control, including: • global and domestic supplies of oil, gas, and NGLs, and the productive capacity of the industry as a whole; • the level of consumer demand for oil, gas, and NGLs; • overall global and domestic economic conditions; • inflation and other economic factors that contribute to market volatility including tariffs and trade restrictions; • weather conditions; • the availability and capacity of gathering, transportation, processing, storage, and/or refining facilities in asset-specific or localized areas; • liquefied natural gas deliveries to and from the United States; • the increased demand for, price, and availability of alternative fuels or sources of energy; • technological advances in, and regulations affecting, energy consumption and conservation; • the ability of the members of OPEC+ to maintain effective oil price and production controls; • War and Geopolitical Instability; • shipping channel constraints and disruptions to and from oil and gas producing countries or regions; • actual or perceived epidemic or pandemic risks; • strengthening and weakening of the United States dollar relative to other currencies; 22 • stockholder activism or activities by non-governmental organizations to limit sources of funding or restrict the exploration and production of oil, gas, and NGLs and related infrastructure; and • governmental regulations and taxes.
Wide fluctuations in oil, gas, and NGL prices often result from relatively minor changes in the supply of and demand for oil, gas, and NGLs, market uncertainty, and other factors that are beyond our control, including: • global and domestic supplies of oil, gas, and NGLs, and the productive capacity of the industry as a whole; • the level of consumer demand for oil, gas, and NGLs; • overall global and domestic economic conditions; • inflation and other economic factors that contribute to market volatility including tariffs and trade restrictions; • weather conditions; • the availability and capacity of gathering, transportation, processing, storage, and/or refining facilities in asset-specific or localized areas; 27 • liquefied natural gas deliveries to and from the United States; • the increased demand for, price, and availability of alternative fuels or sources of energy; • technological advances in, and regulations affecting, energy consumption and conservation; • the ability of the members of OPEC+ to maintain effective oil price and production controls; • War and Geopolitical Instability; • shipping channel constraints and disruptions to and from oil and gas producing countries or regions; • actual or perceived epidemic or pandemic risks; • strengthening and weakening of the United States dollar relative to other currencies; • stockholder activism or activities by non-governmental organizations to limit sources of funding or restrict the exploration and production of oil, gas, and NGLs and related infrastructure; and • governmental regulations and taxes.
War and Geopolitical Instability could lead to significant market and other disruptions, including, but not limited to: significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, shipping channel constraints and disruptions, political and social instability, political and economic sanctions, geopolitical shifts, embargoes, 23 changes in consumer or purchaser preferences, the potential destruction of critical oil-related infrastructure, as well as increases in cyberattacks and espionage.
War and Geopolitical Instability could lead to significant market and other disruptions, including, but not limited to: significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, shipping channel constraints and disruptions, political and social instability, political and economic sanctions, geopolitical shifts, embargoes, changes in consumer or purchaser preferences, the potential destruction of critical oil-related infrastructure, as well as increases in cyberattacks and espionage.
We may incur joint and several, and/or strict liability under applicable United States federal and state environmental laws in connection with releases of hazardous substances at, on, under, or from our leased or owned properties, some of which have been used for oil and gas exploration and production activities for a number of years, often by third-parties not under our control.
We may incur joint and several, and/or strict liability under applicable United States federal and state environmental laws in connection 35 with releases of hazardous substances at, on, under, or from our leased or owned properties, some of which have been used for oil and gas exploration and production activities for a number of years, often by third-parties not under our control.
Delays in obtaining regulatory approvals and drilling permits, including delays that jeopardize our ability 27 to realize the potential benefits from leased properties within the applicable lease periods, the failure to obtain a drilling permit for a well, or the receipt of a permit with unreasonable conditions or costs could have a material adverse effect on our ability to explore or develop our properties.
Delays in obtaining regulatory approvals and drilling permits, including delays that jeopardize our ability to realize the potential benefits from leased properties within the applicable lease periods, the failure to obtain a drilling permit for a well, or the receipt of a permit with unreasonable conditions or costs could have a material adverse effect on our ability to explore or develop our properties.
As discussed above, our Credit Agreement is subject to periodic borrowing base redeterminations. At times when we have an outstanding balance, we could be forced to repay a portion of our bank borrowings in the event of a downward redetermination of our borrowing base, and we may not have sufficient funds to make such repayment at that time.
As discussed above, our Credit Agreement is subject to periodic borrowing base redeterminations. At times when we have an outstanding balance, we could be forced to repay a portion of our bank borrowings in the event of a downward redetermination of our 40 borrowing base, and we may not have sufficient funds to make such repayment at that time.
If we are unable to replace any significant volume declines with additional volumes from other sources, our results of operations and cash flows could be materially and adversely impacted. 28 The results of our operations are subject to drilling and completion technique risks, and results may not meet our expectations for reserves or production.
If we are unable to replace any significant volume declines with additional volumes from other sources, our results of operations and cash flows could be materially and adversely impacted. The results of our operations are subject to drilling and completion technique risks, and results may not meet our expectations for reserves or production.
Our ability to produce oil, gas, and NGLs economically and in commercial quantities could be impaired if we are unable to acquire adequate supplies of water for our drilling and/or completions operations or are unable to dispose of or recycle the water we produce at a reasonable cost and in accordance with applicable environmental rules.
Our ability to produce oil, gas, and NGLs economically and in commercial quantities could be impaired if we are unable to acquire adequate supplies of water for our drilling and/or completions operations or are unable to dispose of or recycle the water we produce at a reasonable cost and in accordance with applicable environmental rules and regulations.
We will continue to be subject to uncertainty associated with new regulatory suspensions, revisions or rescissions and inconsistent state and federal regulatory mandates that could adversely affect our production. 32 Federal and state regulatory initiatives relating to air quality and greenhouse gas emissions could result in increased costs and additional operating restrictions or delays.
We will continue to be subject to uncertainty associated with new regulatory suspensions, revisions or rescissions and inconsistent state and federal regulatory mandates that could adversely affect our production. Federal and state regulatory initiatives relating to air quality and greenhouse gas emissions could result in increased costs and additional operating restrictions or delays.
As a result, we may not be successful in acquiring and developing profitable properties. In addition, other companies may have a greater 25 ability to continue drilling activities during periods of low oil or gas prices and to absorb the burden of current and future governmental regulations and taxation.
As a result, we may not be successful in acquiring and developing profitable properties. In addition, other companies may have a greater ability to continue drilling activities during periods of low oil or gas prices and to absorb the burden of current and future governmental regulations and taxation.
Risks we face while drilling include, but are not limited to, landing our well bore outside the desired drilling zone, deviating from the desired drilling zone while drilling horizontally through the formation, the inability to run our casing the entire length of the well bore, and the inability to run tools and recover equipment consistently through the horizontal well bore.
Risks we face while drilling include, but are not limited to, landing our well bore outside the desired drilling zone, deviating from the 33 desired drilling zone while drilling horizontally through the formation, the inability to run our casing the entire length of the well bore, and the inability to run tools and recover equipment consistently through the horizontal well bore.
Any insurance we might obtain in the future may not provide adequate protection from these risks. Any such events could damage our reputation and lead to financial losses from remedial actions, loss of business or potential liability.
Any insurance we might obtain in the future may not provide adequate protection from these risks. Any such events could damage our reputation and lead to financial losses from remedial actions, loss of business or potential 29 liability.
Our success in drilling and 24 completing new wells and the success of other activities integral to our operations will depend, in part, on our ability to attract and retain experienced geologists, engineers, landmen, and other professionals. Competition for many of these professionals can be intense.
Our success in drilling and completing new wells and the success of other activities integral to our operations will depend, in part, on our ability to attract and retain experienced geologists, engineers, landmen, and other professionals. Competition for many of these professionals can be intense.
In the event of a rail system accident or derailment, there could be significant delays in the delivery of oil to processing facilities, or impacts to rail system access or capacity, which may disrupt our business operations and could adversely affect our financial condition.
In the event of a rail system accident or derailment, there 30 could be significant delays in the delivery of oil to processing facilities, or impacts to rail system access or capacity, which may disrupt our business operations and could adversely affect our financial condition.
The capitalized costs of our oil and gas properties, on a depletion pool basis, cannot exceed the estimated undiscounted future net cash flows of that depletion pool. If net capitalized costs exceed undiscounted future net cash flows, we generally must write down the costs of each depletion pool to the estimated discounted future net cash flows of that depletion pool.
The capitalized costs of our oil and gas properties, on a depletion pool basis, cannot exceed the estimated undiscounted future net cash flows of that depletion pool. If net capitalized costs exceed undiscounted future net cash flows, we generally must write down the costs to the estimated discounted future net cash flows of that depletion pool.
At times, we may be required to retain certain liabilities or agree to indemnify buyers in connection with such asset sales, or we may have to rely on third parties to perpetuate leases we intend to develop in the future.
At times, we may be required to retain certain liabilities or agree to indemnify buyers in connection with such asset sales, or we may have to rely on third 34 parties to perpetuate leases we intend to develop in the future.
These laws and regulations, including potential future regulations that may impose further restrictions on flaring, could limit the amount of oil and gas we can produce from our wells or may limit the number of wells or the locations that we can drill.
These laws and regulations, including potential future regulations that may impose further restrictions on flaring, could limit the amount of oil and gas we can produce from our wells or may 38 limit the number of wells or the locations that we can drill.
Future periods of sustained 26 low commodity prices could occur and could cause third-party service providers to consolidate or declare bankruptcy, which could limit our options for engaging such providers.
Future periods of sustained low commodity prices could occur and could cause third-party service providers to consolidate or declare bankruptcy, which could limit our options for engaging such providers.
Many of our competitors have financial, technical, and other resources exceeding those available to us, and many oil and gas properties are sold in a competitive bidding process in which our competitors may be able and willing to pay more for exploratory and development prospects and productive properties, or in which our competitors have technological information or expertise that is not available to us to evaluate and successfully bid for properties.
Many of our competitors have financial, technical, and other resources exceeding those available to us, and many oil and gas properties are sold in a competitive bidding process in which our competitors may be able and willing to pay more for exploratory and development prospects and producing properties, or in which our competitors have technological information or expertise that is not available to us to evaluate and successfully bid for properties.
In addition to state laws, local land use restrictions, such as city ordinances, may restrict, or prohibit the performance of drilling in general and/or hydraulic fracturing in particular. Recently, municipalities have passed or proposed zoning ordinances that ban or strictly regulate hydraulic fracturing within city boundaries, setting the stage for challenges by state regulators and third-parties.
In addition to state laws, local land use restrictions, such as city ordinances or memoranda of understanding, may restrict, or prohibit the performance of drilling in general and/or hydraulic fracturing in particular. Recently, municipalities have passed or proposed zoning ordinances that ban or strictly regulate hydraulic fracturing within city boundaries, setting the stage for challenges by state regulators and third-parties.
As these cyber risks continue to evolve and our dependence on digital technologies grows, we may be required to expend significant additional resources to continue to modify or enhance our protective measures and remediate cyber vulnerabilities. Refer to Cybersecurity in Item 1C of this report for discussion of the Audit Committee’s role in cybersecurity governance.
As these cyber risks continue to evolve and our dependence on digital technologies grows, we may be required to expend significant additional resources to continue to modify or enhance our protective measures and remediate cyber vulnerabilities. Refer to Cybersecurity in Part 1, Item 1C of this report for discussion of the Audit Committee’s role in cybersecurity governance.
In addition, shortages of equipment, labor, or materials as a result of intense competition may result in increased costs or the inability to obtain those resources as needed. Our inability to compete effectively with companies in any area of our business could have a material adverse impact on our business activities, financial condition, and results of operations.
In addition, shortages of equipment, labor, or materials resulting from intense competition may result in increased costs or the inability to obtain those resources as needed. Our inability to compete effectively with companies in any area of our business could have a material adverse impact on our business activities, financial condition, and results of operations.
These properties and the wastes disposed thereon or therefrom could be subject to stringent and costly investigatory or remedial requirements under applicable laws, some of which are strict liability laws without regard to fault or the legality of the original conduct, including CERCLA or the Superfund law, RCRA, the Clean Water Act, the CAA, the OPA, and analogous state laws.
These properties and the wastes disposed thereon or therefrom could be subject to stringent and costly investigatory or remedial requirements under applicable laws, some of which are strict liability laws without regard to fault or the legality of the original conduct, including CERCLA , RCRA, the Clean Water Act, the CAA, the OPA, and analogous state laws.
Refer to Reserves in Part I, Items 1 and 2 of this report for discussion regarding the prices used in estimating the present value of our proved reserves as of December 31, 2024, and to the caption Oil and Gas Reserve Quantities under Critical Accounting Estimates in Part II, Item 7 of this report for additional information.
Refer to Reserves in Part I, Items 1 and 2 of this report for discussion regarding the prices used in estimating the present value of our proved reserves as of December 31, 2025, and to the caption Oil and Gas Reserve Quantities under Critical Accounting Estimates in Part II, Item 7 of this report for additional information.
Public interest in environmental protection has increased over time, and environmental and other public interest organizations have opposed, with some success, certain projects.
Public interest in environmental protection has increased over time, and environmental and other public interest organizations have opposed, with some success, 36 certain projects.
As of December 31, 2024, we had $2.7 billion of aggregate principal amount outstanding of Senior Notes with maturities through 2032, as further discussed and defined in Note 5 – Long-Term Debt in Part II, Item 8 of this report.
As of December 31, 2025, we had $2.7 billion of aggregate principal amount outstanding of Senior Notes with maturities through 2032, as further discussed and defined in Note 5 – Long-Term Debt in Part II, Item 8 of this report.
Many of our properties are in areas that may have been partially depleted or drained by offset wells and certain of our wells may be adversely affected by actions other operators may take when drilling, completing, or operating wells that they own.
Many of our properties are in areas that may have been partially depleted or drained by offset wells and certain of our wells or future locations may be adversely affected by actions other operators may take when drilling, completing, or operating wells that they own.
These factors may include, but are not limited to: • supply chain issues, including cost increases and availability of equipment or materials; • unexpected adverse drilling or completion conditions; • title problems; • disputes with owners or holders of surface interests on or near areas where we operate; • pressure or geologic irregularities in formations; • engineering and construction delays; • equipment failures or accidents; • hurricanes, tornadoes, flooding, wildfires, seasonal weather, or other adverse weather conditions; • operational restrictions resulting from seismicity concerns; • governmental permitting delays; • compliance with environmental and other governmental requirements; and • shortages or delays in the availability of or increases in the cost of drilling rigs and crews, fracture stimulation crews and equipment, pipe, chemicals, water, sand, and other supplies.
These factors may include, but are not limited to: • supply chain issues, including cost increases and availability of equipment or materials; • unexpected adverse drilling or completion conditions; • title problems; • disputes with owners or holders of surface interests on or near areas where we operate; • pressure or geologic irregularities in formations; • engineering and construction delays; • equipment failures or accidents; • hurricanes, tornadoes, flooding, wildfires, seasonal weather, or other adverse weather conditions; • operational restrictions resulting from seismicity concerns; • compliance with and changes in federal, state, and local environmental and other governmental regulatory requirements; • governmental permitting delays; and • shortages or delays in the availability of or increases in the cost of drilling rigs and crews, fracture stimulation crews and equipment, pipe, chemicals, water, sand, and other supplies.
Our commodity derivative contracts typically include price 34 swaps and collar arrangements for oil, gas, and NGLs.
Our commodity derivative contracts typically include price swaps and collar arrangements for oil, gas, and NGLs.
Moreover, the imposition of new environmental initiatives and regulations could include restrictions on our ability to conduct certain operations such as hydraulic fracturing or disposal of wastes, including, but not limited to, produced water, drilling fluids, and other wastes associated with the exploration, development, or production of oil, gas, and NGLs.
Moreover, the imposition of new federal, state, or local environmental initiatives and regulations could include restrictions on our ability to conduct certain operations such as hydraulic fracturing or disposal of wastes, including, but not limited to, produced water, drilling fluids, and other wastes associated with the exploration, development, or production of oil, gas, and NGLs.
Refer to Significant Developments in 2024 and Reserves in Part I, Items 1 and 2, Comparison of Financial Results and Trends Between 2024 and 2023 and Between 2023 and 2022 and Overview of Liquidity and Capital Resources in Part II, Item 7, and Note 1 – Summary of Significant Accounting Policies , Note 8 – Fair Value Measurements , and Supplemental Oil and Gas Information (unaudited) in Part II, Item 8 for specific discussion.
Refer to Significant Developments in 2025 and Reserves in Part I, Items 1 and 2, Comparison of Financial Results and Trends Between 2025 and 2024 and Overview of Liquidity and Capital Resources in Part II, Item 7, and Note 1 – Summary of Significant Accounting Policies , Note 8 – Fair Value Measurements , and Supplemental Oil and Gas Information (unaudited) in Part II, Item 8 for specific discussion.
Historically, the United States and global economies and financial systems have experienced turmoil and upheaval characterized by extreme volatility in prices of equity and debt securities, periods of diminished liquidity and credit availability, inability to access capital markets, the bankruptcy, failure, collapse, or sale of financial institutions, inflation, tariffs or trade restrictions, and heightened levels of intervention by the United States federal government and other governments.
The United States and global economies and financial systems regularly experience turmoil and upheaval characterized by extreme volatility in prices of equity and debt securities, periods of diminished liquidity and credit availability, inability to access capital markets, the bankruptcy, failure, collapse, or sale of financial institutions, inflation, tariffs or trade restrictions, and heightened levels of intervention by the United States federal government and other governments.
We could incur substantial losses or otherwise fail to realize reserves in particular formations as a result of the need to shut down, abandon, or relocate drilling operations, the need to modify drill sites to lessen the risk of spills or releases, the need to investigate and/or remediate any spills, releases or ground water contamination that might have occurred, and the need to suspend our operations.
We could incur substantial losses or otherwise fail to realize reserves in particular formations resulting from the need to shut down, abandon, or relocate drilling operations, the need to modify drill sites to lessen the risk of spills or releases, the need to investigate and/or remediate any spills, releases or ground water contamination that might have occurred, and the need to suspend our operations.
The anticipated benefits of the Uinta Basin Acquisition may not be realized fully or at all or may take longer to realize than expected. Actual operating, technological, strategic, and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated.
The anticipated benefits of the transaction may not be realized fully or at all, or may take longer to realize than expected. Actual operating, technological, strategic and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated.
Under various implementing regulations, we could be required to remove or remediate previously disposed wastes (including wastes disposed of or released by prior owners or operators) or property contamination (including groundwater contamination), to perform natural resource mitigation or restoration practices, or to perform remedial plugging or closure operations to prevent future contamination.
Under various federal, state, and local regulations, we could be required to remove or remediate previously disposed wastes (including wastes disposed of or released by prior owners or operators) or property contamination (including groundwater contamination), to perform natural resource mitigation or restoration practices, or to perform remedial plugging or closure operations to prevent future contamination.
We did not experience any material cybersecurity incidents during 2024, however there can be no assurance that the measures we have taken to address information technology (“IT”) and cybersecurity risks will prove effective in the future. We are incorporating artificial intelligence technologies into our processes and these technologies may present business, compliance, and reputational risks.
We did not experience any material cybersecurity incidents during 2025, however there can be no assurance that the measures we have taken to address IT and cybersecurity risks will prove effective in the future. We are incorporating artificial intelligence technologies into our processes and these technologies may present business, compliance, and reputational risks.
Any of these issues could adversely affect our ability to maintain relationships with customers, suppliers, employees, and other constituencies. We may fail to realize the anticipated benefits expected from the Uinta Basin Acquisition.
Any of these issues could adversely affect our ability to maintain relationships with customers, suppliers, employees, and other constituencies. We may fail to realize the anticipated benefits expected from the Merger.
The next borrowing base redetermination date is scheduled to occur on April 1, 2025.
The next borrowing base redetermination date is scheduled to occur on April 1, 2026.
These factors include, in addition to the other risk factors set forth herein, the following: • changes in oil, gas, or NGL prices; • changes in the outlook for regional, national, or global commodity supply and demand; • variations in drilling, recompletion, and operating activity; • inflation; • changes in financial estimates by securities analysts; • changes in market valuations of comparable companies; • additions or departures of key personnel; • increased volatility due to the impacts of algorithmic trading practices; • future sales of our common stock; • negative public perception and investor sentiment regarding our business and the oil and gas industry as a whole; • changes in the national and global economic outlook, including potential impacts from trade agreements or tariffs; and • international trade relationships, potentially including the effects of trade restrictions or tariffs affecting the raw materials we utilize and the commodities we produce in our business.
These factors include, in addition to the other risk factors set forth herein, the following: • changes in oil, gas, or NGL price; • changes in the outlook for regional, national, or global commodity supply and demand; • variations in drilling, recompletion, and operating activity; • inflation; • changes in financial estimates by securities analysts; • changes in market valuations of comparable companies; • additions or departures of key personnel; • increased volatility due to the impacts of algorithmic trading practices; • future sales of our common stock; • negative public perception and investor sentiment regarding our business and the oil and gas industry as a whole; • changes in the national and global economic outlook, including potential impacts from trade agreements or tariffs; and • international trade relationships, potentially including the effects of trade restrictions or tariffs affecting the raw materials we utilize and the commodities we produce in our business. 41 We may not meet the expectations of our stockholders and/or of securities analysts at some time in the future, and our stock price could decline as a result.
In addition, completion operations and other activities conducted on adjacent or nearby wells could cause production from our wells to be shut in for indefinite periods of time, result in increased lease operating expenses and adversely affect the production and reserves from our wells after they re-commence production. We have no control over the operations or activities of offsetting operators.
In addition, completion operations and other activities conducted on adjacent or nearby wells could cause production from our wells to be shut in for indefinite periods of time, result in increased lease operating expenses and adversely affect the production and reserves from our wells after they re-commence production.
Judicial decisions could also lead to increased regulation, permitting requirements, enforcement actions, and penalties. Additional legislation or regulation could also lead to operational delays or restrictions or increased costs in the exploration for, and production of, oil, gas, and NGLs, including from the development of shale plays, or could make it more difficult to perform hydraulic fracturing.
Additional legislation or regulation could also lead to operational delays or restrictions or increased costs in the exploration for, and production of, oil, gas, and NGLs, including from the development of shale plays, or could make it more difficult to perform hydraulic fracturing.
Hydraulic fracturing is a common practice in the oil and gas industry used to stimulate the production of oil, gas, and NGLs from dense subsurface rock formations. We routinely apply hydraulic fracturing techniques to many of our oil and gas properties, including our unconventional resource plays within our Midland Basin, South Texas, and Uinta Basin assets.
Hydraulic fracturing is a common practice in the oil and gas industry used to stimulate the production of oil, gas, and NGLs from dense subsurface rock formations. We routinely apply hydraulic fracturing techniques to many of our oil and gas properties, including our unconventional resource plays.
If any of these events were to materialize, they could lead to losses of sensitive information, critical infrastructure, personnel, or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations, or cash flows.
If any of these events were to materialize, they could lead to losses of sensitive information, critical infrastructure, personnel, or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations, or cash flows. Further, our insurance may not protect against such occurrences.
For example: • inflation has increased certain costs of our drilling and completion activities, and the costs of oilfield services, equipment, and materials in recent years and could continue or worsen and further impact our financial condition, liquidity, and results of operations, and could limit our pool of economic development opportunities; • a potential economic recession could impact demand for oil, gas, and NGLs, and cause commodity price volatility; • the tightening of credit or lack of credit availability to our customers could adversely affect our ability to collect our trade receivables; • the liquidity available under our Credit Agreement could be reduced if any of our lenders is unable to fund its commitment; • our ability, or the ability of our suppliers or contractors, to access the capital markets may be restricted or non-existent at a time when we or they would like, or need, to raise capital for our or their business, including for the exploration and/or development of reserves; • our commodity derivative contracts could become economically ineffective if our counterparties are unable to perform their obligations or seek bankruptcy protection; • the Federal Reserve may change interest rates, as they did in 2024, 2023, and 2022, which could impact borrowing costs; • variable interest rate spread levels, including for SOFR and the prime rate, could increase significantly, resulting in higher interest costs for unhedged variable interest rate-based borrowings under our Credit Agreement; and • changes in tax laws and regulations could require us to adjust our business plan.
For example: • market conditions, lack of buyer interest, regulatory delays or unforeseen economic issues could impede achieving our divestiture target of at least $1.0 billion and delay our ability to reach long term strategic goals; • inflation has increased certain costs of our drilling and completion activities, and the costs of oilfield goods, services, personnel, equipment, and materials in recent years and could continue or worsen and further impact our financial condition, liquidity, and results of operations, and could limit our pool of economic development opportunities; • economic recession could impact demand for oil, gas, and NGLs, and cause commodity price volatility; • the tightening of credit or lack of credit availability to our customers could adversely affect our ability to collect our trade receivables; • the liquidity available under our Credit Agreement could be reduced if any of our lenders is unable to fund its commitment; • our ability, or the ability of our suppliers or contractors, to access the capital markets may be restricted or non-existent at a time when we or they would like, or need, to raise capital for our or their business, including for the exploration and/or development of reserves; • our commodity derivative contracts could become economically ineffective if our counterparties are unable to perform their obligations or seek bankruptcy protection; 28 • the Federal Reserve may change interest rates, as they have in recent years, which could impact borrowing costs and suppress economic growth; • variable interest rate spread levels, including for SOFR and the prime rate, could increase significantly, resulting in higher interest costs for unhedged variable interest rate-based borrowings under our Credit Agreement; and • changes in tax laws and regulations could require us to adjust our business plan.
We expect our stock to continue to be subject to fluctuations as a result of a variety of factors, including factors beyond our control.
We expect our stock to continue to be subject to fluctuations resulting from a variety of factors, including factors beyond our control.
Payment of future dividends remains at the discretion of our Board of Directors, and common stock repurchases under our Stock Repurchase Program remain at the discretion of our Board of Directors and certain authorized officers of the Company.
We may not always pay dividends on our common stock or repurchase common stock under our Stock Repurchase Program. Payment of future dividends remains at the discretion of our Board of Directors, and common stock repurchases under our Stock Repurchase Program remain at the discretion of our Board of Directors and certain authorized officers of the Company.
Our business increasingly utilizes artificial intelligence (“AI”), machine learning, and automated decision making to improve our processes.
Our business increasingly utilizes AI, machine learning, and automated decision making to improve our processes.
Under certain circumstances, regulatory authorities may deny a proposed permit or right-of-way grant or impose conditions of approval to mitigate potential environmental impacts, which could, in either case, negatively affect our ability to explore or develop certain properties.
Under certain circumstances, regulatory authorities may deny a proposed permit or right-of-way grant or impose conditions of approval to mitigate potential environmental impacts, which could, in either case, negatively affect our ability to explore or develop certain properties. Any such delay, suspension, or termination could have a material adverse effect on our operations.
If the EPA implements further regulations of hydraulic fracturing, we may incur additional costs to comply with such requirements that may be significant in nature, experience delays or curtailment in the pursuit of exploration, development, or production activities, and could even be prohibited from drilling and/or completing certain wells.
Although the Trump administration has signaled a desire for fewer environmental regulations, if the EPA were to implement further regulations of hydraulic fracturing, we may incur additional costs to comply with such requirements that may be significant in nature, experience delays or curtailment in the pursuit of exploration, development, or production activities, and could even be prohibited from drilling and/or completing certain wells.
If we are unable to replace reserves, we will not be able to sustain production. Our future operations depend on our ability to find or acquire and develop oil, gas, and NGL reserves that are economically producible. Our properties produce oil, gas, and NGLs at a declining rate over time.
Our future operations depend on our ability to find or acquire and develop oil, gas, and NGL reserves that are economically producible. Our properties produce oil, gas, and NGLs at a declining rate over time.
As of December 31, 2024, 40 percent, or 274.3 MMBOE, of our estimated proved reserves were proved undeveloped. In order to develop our net proved undeveloped reserves, as of December 31, 2024, we estimate approximately $2.8 billion of capital expenditures would be required.
As of December 31, 2025, 39 percent, or 260.7 MMBOE, of our estimated proved reserves were proved undeveloped. In order to develop our net proved undeveloped reserves, as of December 31, 2025, we estimate approximately $2.6 billion of capital expenditures would be required.
Compliance with environmental regulations, oil and gas leases, surface use agreements, and permit requirements governing the withdrawal, storage, and use of surface water and disposal or recycling of produced water or groundwater necessary for hydraulic fracturing of wells may increase our operating costs and cause delays, interruptions, or termination of our operations, the extent of which cannot be predicted, all of which could have an adverse effect on our operations and financial condition.
Compliance with environmental regulations, oil and gas leases, surface use agreements, and permit requirements governing the withdrawal, storage, and use of surface water and disposal or recycling of produced water or groundwater necessary for hydraulic fracturing of wells may increase our operating costs and cause delays, interruptions, or termination of our operations.
Oil and gas drilling, completion, and production activities are subject to numerous risks, including the risk that no commercially producible oil, gas, or NGLs will be found.
We have no control over the operations or activities of offsetting operators. 31 Oil and gas drilling, completion, and production activities are subject to numerous risks, including the risk that no commercially producible oil, gas, or NGLs will be found.
In addition, the 10 percent discount factor required by the SEC to calculate PV-10 for reporting purposes is not necessarily the most appropriate discount factor given actual interest rates, costs of capital, and other risks to which our business and the oil and gas industry in general are subject. 29 Our disposition activities may be subject to factors beyond our control, and in certain cases we may retain unforeseen liabilities for certain matters .
In addition, the 10 percent discount factor required by the SEC to calculate PV-10 for reporting purposes is not necessarily the most appropriate discount factor given actual interest rates, costs of capital, and other risks to which our business and the oil and gas industry in general are subject.
The oil and gas industry, and our business, are increasingly dependent on digital technology. We use digital technology to conduct certain aspects of our drilling development, production and gathering activities, manage drilling rigs and completion equipment, gather and interpret seismic data, conduct reservoir modeling, record financial and operating data, and maintain employee and other databases.
We use digital technology, including information technology (“IT”) and operational technology (“OT”), to conduct certain aspects of our drilling development, production and gathering activities, manage drilling rigs and completion equipment, gather and interpret seismic data, conduct reservoir modeling, record financial and operating data, and maintain employee and other databases.
We had $68.5 million outstanding balance on our revolving credit facility and had $1.9 billion of available borrowing capacity under our Credit Agreement as of December 31, 2024. Our long-term debt represented 40 percent of our total book capitalization as of December 31, 2024.
We had no outstanding balance on our revolving credit facility and we had $2.0 billion of available borrowing capacity under our Credit Agreement as of December 31, 2025. Our long-term debt represented 36 percent of our total book capitalization as of December 31, 2025.
Certain states, including Texas and Utah, have adopted or may adopt, regulations that could impose more stringent permitting, public disclosure, waste disposal, and well construction requirements on hydraulic fracturing operations or otherwise seek to ban fracturing activities altogether.
A slowdown in federal regulation of hydraulic fracturing could encourage states, tribes, or localities to implement more or stricter regulations. Certain states have adopted or may adopt, regulations that could impose more stringent permitting, public disclosure, waste disposal, and well construction requirements on hydraulic fracturing operations or otherwise seek to ban fracturing activities altogether.
Any such delay, suspension, or termination could have a material adverse effect on our operations. 31 Our operations are also subject to complex and constantly changing environmental laws and regulations adopted by federal, state, tribal, and local governmental authorities in jurisdictions where we are engaged in exploration or production operations.
Our operations are also subject to complex and constantly changing environmental laws and regulations adopted by federal, state, tribal, and local governmental authorities in jurisdictions where we are engaged in exploration or production operations.
If any of these types of events occur, we could sustain substantial losses. In response to increased seismic activity in the Permian Basin in Texas, the Railroad Commission of Texas (“RRC”) has developed a seismic review process for injection wells near qualifying seismic activity.
In response to increased seismic activity in the Permian Basin in Texas, the Railroad Commission of Texas (“RRC”) has developed a seismic review process for injection wells near qualifying seismic activity.
We do not have sufficient working capital to satisfy our debt obligations in the event of an acceleration of all or a significant portion of our outstanding indebtedness. 35 Risks Related to Corporate Governance and Ownership of Public Equity Securities Our certificate of incorporation and by-laws have provisions that discourage corporate takeovers and could prevent stockholders from receiving a takeover premium on their investment, which could adversely affect the price of our common stock.
Risks Related to Corporate Governance and Ownership of Public Equity Securities Our certificate of incorporation and by-laws have provisions that discourage corporate takeovers and could prevent stockholders from receiving a takeover premium on their investment, which could adversely affect the price of our common stock.
As of December 31, 2024, we were contractually committed to deliver a minimum of 46 MMBbl of oil through December of 2028 and 3 MMBbl of produced water to certain disposal facilities through June of 2027. We may enter into additional firm transportation agreements as we expand the development of our resource plays.
As of December 31, 2025, we were contractually committed to deliver a minimum of 49 MMBbl of oil through December of 2032. We may enter into additional firm transportation agreements as we expand the development of our resource plays.
From January 1, 2024, to January 31, 2025, the intraday trading prices per share of our common stock as reported by the New York Stock Exchange ranged from a low of $34.76 per share in January 2024 to a high of $53.26 per share in April 2024.
From January 1, 2025, to February 2, 2026, the intraday trading prices per share of our common stock as reported by the New York Stock Exchange ranged from a low of $17.45 per share in January 2026 to a high of $44.95 per share in January 2025.
Furthermore, other influential stakeholders have pressured commercial and investment banks and other service providers to reduce or cease financing of oil and gas companies and related infrastructure projects.
Furthermore, other influential stakeholders have pressured commercial and investment banks and other service providers to reduce or cease financing of oil and gas companies and related infrastructure projects. Such developments could result in downward pressure on the stock prices of oil and gas companies, including ours.
Our total net acreage as of January 31, 2025, that is scheduled to expire over the next three years, represents approximately 34 percent of our total net undeveloped acreage as of December 31, 2024.
Our total net acreage as of February 2, 2026, that is scheduled to expire over the next three years, represents approximately 30 percent of our total net undeveloped acreage as of that date.
The integration process may result in the disruption of ongoing business and there could be potential unknown liabilities and unforeseen expenses associated with the Uinta Basin Acquisition that were not discovered in the course of performing due diligence.
The integration process may result in the disruption of ongoing business and there could be potential unknown liabilities and unforeseen expenses associated with the Merger that were not discovered in the course of performing due diligence. Integration may also require significant time and focus from management following the Merger that may disrupt our business and results of operations.
As of December 31, 2024, the borrowing base and aggregate revolving lender commitments under our Credit Agreement were $3.0 billion and $2.0 billion, respectively. The borrowing base is subject to semi-annual redetermination based on the bank group’s assessment of the value of our proved reserves, which in turn is impacted by oil, gas, and NGL prices.
The borrowing base is subject to semi-annual redetermination based on the bank group’s assessment of the value of our proved reserves, which in turn is impacted by oil, gas, and NGL prices.
Potential risks or difficulties include: • operating assets in the Uinta Basin, an area in which we have not previously owned assets or conducted operations; • operating assets that are partially within the exterior boundaries of the Uinta and Ouray Reservation, and we have no recent experience operating on tribal lands; • complexities associated with integrating our existing complex systems, technologies, and other workflows with new assets in a new region; • the inability to retain the services of key management and personnel; • the accuracy of our assessments of the Uinta Basin Assets, including recoverable reserves, transportation costs and availability, drilling and completion equipment cost and availability, regulatory, permitting, and related matters; • establishing business relationships with new third-party contractors and other service providers with whom we have no prior experience; • operating in less familiar geological formations, with different legal and regulatory environments, different completion techniques, different transportation methods and operators, and unfamiliar operating conditions; and • potential unknown liabilities and unforeseen increased expenses or delays associated with the Uinta Basin Acquisition.
Potential risks or difficulties include, among others: • complexities associated with integrating our existing complex systems, technologies and other workflows with new assets; • the inability to retain the services of key management and personnel; • the accuracy of our assessments of the assets acquired in the Merger, including recoverable reserves, transportation costs and availability, drilling and completion equipment cost and availability, regulatory, permitting, and related matters; • establishing business relationships with new third party contractors and other service providers with whom we have no prior experience; and • potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the Merger.
We periodically sell non-core assets in order to increase capital resources available for core assets and other purposes and to create organizational and operational efficiencies. We also occasionally sell interests in core assets for the purpose of accelerating the development and increasing efficiencies in other core assets.
We also occasionally sell interests in core assets for the purpose of accelerating the development and increasing efficiencies in other core assets.
Any future laws or commitments may increase our operational costs, or restrict our production, which could have a material adverse effect on our financial condition, results of operations and cash flows. 33 Risks Related to Debt, Liquidity, and Access to Capital Lower oil, gas, or NGL prices could limit our ability to borrow under our Credit Agreement.
Any future laws or commitments may increase our operational costs, or restrict our production, which could have a material adverse effect on our financial condition, results of operations and cash flows.
Risks Related to Government Regulations Our operations are subject to complex laws and regulations, including environmental regulations, which result in substantial costs and other risks. Federal, state, tribal, and local authorities extensively regulate the oil and gas industry.
As a result, such matters could have a material adverse effect on our business, reputation, financial condition, results of operations or liquidity. Our operations are subject to complex laws and regulations, including environmental regulations, which result in substantial costs and other risks. Federal, state, tribal, and local authorities extensively regulate the oil and gas industry.
As part of the Uinta Basin Acquisition, our operations expanded to include the use of rail systems operated by third-parties to transport our crude oil to market which involves inherent risk, including the potential for accidents and derailments.
If a substantial amount of our production is interrupted at the same time, it could adversely affect our cash flows and results of operations. Our Uinta Basin operations include the use of rail systems operated by third-parties to transport our crude oil to market which involves inherent risk, including the potential for accidents and derailments.
We do not believe the loss of any single purchaser would materially impact our operating results, as we have numerous options for purchasers in each of our operating areas for our oil, gas, and NGL production.
We do not believe the loss of any single purchaser would materially impact our operating results, as we have numerous options for purchasers in each of our operating areas for our oil, gas, and NGL production; however, if adverse market conditions or other economic decline affected a substantial number of our customers or joint interest owners, our operations and financial results could be impacted.
The success of the Uinta Basin Acquisition will depend, in significant part, on our ability to successfully complete the integration of the acquired assets, grow the revenue, and realize the anticipated strategic benefits from the Uinta Basin Acquisition.
The success of the Merger will depend, in significant part, on our ability to successfully complete the integration of the acquired assets and realize the anticipated strategic benefits from the Merger. The anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected.
ITEM 1A. RISK FACTORS In addition to the other information included in this report, the following risk factors should be carefully considered when evaluating an investment in SM Energy.
ITEM 1A. RISK FACTORS In addition to the other information included in this report, the risk factors discussed below should be carefully considered when evaluating an investment in SM Energy. For the purposes of this section, “we,” “our,” “us,” “Company” and “SM Energy” refer to the post-Merger company following the Civitas Merger .
Non-compliance with statutes and regulations and more vigorous enforcement of such statutes and regulations by regulatory agencies may lead to increased operational and compliance costs, substantial administrative, civil, and criminal penalties, including the assessment of natural resource damages, the imposition of significant investigatory and remedial obligations and may also result in the suspension or termination of our operations.
Non-compliance with statutes and regulations and more vigorous enforcement of such statutes and regulations by regulatory agencies may lead to increased operational and compliance costs, substantial administrative penalties, civil penalties, and criminal prosecution.
Additionally, we could be subject to third-party claims and liability based on allegations that our operations caused or contributed to seismic events that resulted in damage to property or personal injury, or that are otherwise related to seismic events. 30 If we experience any of the problems with well stimulation, completion activities, and disposal referenced above, our ability to explore for and produce oil, gas, and NGLs may be adversely affected.
Additionally, we could be subject to third-party claims and liability based on allegations that our operations caused or contributed to seismic events that resulted in damage to property or personal injury, or that are otherwise related to seismic events.
If we are not able to realize the anticipated benefits expected from the Uinta Basin Acquisition within the anticipated timing or at all, our business and operating results may be adversely affected. We have incurred additional costs in connection with the Uinta Basin Acquisition, which may continue in 2025.
If we are not able to achieve these objectives and realize the anticipated synergies and other benefits expected from the Merger within the anticipated timing or at all, our business, financial condition and operating results may be adversely affected.
The overall regulatory burden on the industry increases the cost to place, design, drill, complete, install, operate, and abandon wells and related facilities and, in turn, decreases profitability.
These may include the assessment of natural resource damages and the imposition of significant investigatory and remedial obligations, potentially resulting in the suspension or termination of our operations. The overall regulatory burden on the industry increases the cost to place, design, drill, complete, install, operate, and abandon wells and related facilities and, in turn, decreases profitability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee receives a quarterly cybersecurity report and regular updates from our Vice President and Chief Information Officer and our Director of Cybersecurity Risk and Business Continuity, which includes, among other information, the steps management has taken, and the specific guidelines and policies that have been established, to monitor, control, mitigate and report exposure to IT and cybersecurity risk. 37 We have established a Cyber Incident Response Team (“CIRT”) to provide an efficient, effective, and orderly response to technology related incidents and our Cybersecurity Incident Response Plan contains protocols for communication within this team and reporting to executive management and the Audit Committee.
Biggest changeThe Audit Committee receives cybersecurity reports and regular updates from our Vice President and Chief Information Officer and our Director of Cybersecurity Risk and Business Continuity (“IT Management”), which includes, among other information, the steps management has taken and the specific guidelines and policies that have been established to monitor, control, mitigate and report exposure to cybersecurity risk.
Our processes for assessing, identifying, and managing material risks from cybersecurity threats include: • monitoring the threat landscape and taking measures to enhance our cybersecurity program to adapt to new and developing risks; • ongoing training, testing, and utilizing other forms of social engineering awareness and education for our employees; • using cybersecurity systems and tools to monitor endpoints and environment logs in a centralized security information and event management system with capabilities for reporting and alerting on known threats and anomalous behaviors; • assessing the cybersecurity practices and external ratings and assessments of certain of our third-party technology and data vendors and service providers, and maintaining preventative controls and monitoring systems related to these partners; • creating and testing various incident response plans to hypothetical cybersecurity attacks in order to quickly assess and respond to potential and actual threats; • engaging third-party cybersecurity experts and consultants to perform penetration testing and scanning of our systems for vulnerabilities; • obtaining third-party security maturity assessments, benchmarking, and security effectiveness ratings of our cybersecurity program; and • maintaining a retainer for incident response services with a trusted cybersecurity partner in order to quickly respond, investigate, contain, and recover in the event of a cybersecurity incident.
Our processes for assessing, identifying, and managing material risks from cybersecurity threats include: • monitoring the threat landscape and taking measures to enhance our cybersecurity program to adapt to new and developing risks; • ongoing mandatory training and testing, and utilizing other forms of social engineering awareness and education for our employees; • using cybersecurity tools to monitor endpoints and environment logs in a centralized security information and event management system with capabilities for detecting and alerting on known threats and anomalous behaviors; • assessing the cybersecurity practices and external ratings and assessments of certain of our third-party technology and data vendors and service providers, and maintaining preventative controls and monitoring systems related to these partners; • creating and testing various incident response plans to hypothetical cybersecurity attacks in order to quickly assess and respond to potential and actual threats; • engaging third-party cybersecurity experts and consultants to perform penetration testing and scanning of our systems for vulnerabilities; • obtaining third-party security maturity assessments, benchmarking, and security effectiveness ratings of our cybersecurity program; and • maintaining a retainer for incident response services with a trusted cybersecurity partner in order to quickly respond, investigate, contain, and recover in the event of a cybersecurity incident.
We have integrated our cybersecurity processes into our overall risk management program, thereby establishing a comprehensive approach by which we determine and implement strategies designed to manage external, strategic, operational and financial risks to our business, including cybersecurity threats.
We have integrated our cybersecurity processes into our overall enterprise risk management program, thereby establishing a comprehensive approach by which we determine and implement strategies designed to manage external, strategic, operational and financial risks to our business, including cybersecurity threats.
During 2024, we did not experience any cybersecurity incidents that materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, however, there can be no assurance that the measures we have taken to address IT and cybersecurity risks will prove effective in the future.
During 2025, 2024, and 2023, we did not experience any cybersecurity incidents that materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, however, there can be no assurance that the measures we have taken to address IT and cybersecurity risks will prove effective in the future.
Our Director of Cybersecurity Risk and Business Continuity has over 24 years of experience in the IT field with a majority of that time focused on designing, building and maintaining technology systems. His experience includes implementing security solutions and processes with a focus on adapting to the evolving cybersecurity threat landscape.
Our Director of Cybersecurity Risk and Business Continuity has over 25 years of experience in the IT field with a majority of that time focused on designing, building and maintaining technology systems. His experience includes implementing security solutions and processes with a focus on adapting to the evolving cybersecurity threat landscape.
For additional discussion of the IT and cybersecurity risks facing our business, refer to Risk Factors in Part 1, Item 1A of this report. We prioritize investment in cybersecurity risk management and governance. We continually assess the adequacy of our resources and capabilities to address emerging threats, regulatory requirements, and changes in technology.
For additional discussion of the IT and cybersecurity risks facing our business, refer to Risk Factors in Part I, Item 1A of this report. We prioritize investment in cybersecurity risk management and governance. We continually assess the adequacy of our resources and capabilities to address emerging threats, regulatory requirements, and changes in technology.
Our Vice President and Chief Information Officer is a seasoned IT professional with over 29 years of experience encompassing all facets of IT within the energy industry. His extensive background comprises managing IT service delivery, designing and administering secure solutions, establishing robust IT and Internet of Things infrastructures, and effectively managing technology-related risks.
During 2025, our Vice President and Chief Information Officer was a seasoned IT professional with over 30 years of experience encompassing all facets of IT within the energy industry. His extensive background comprises managing IT service delivery, designing and administering secure solutions, establishing robust IT and Internet of Things infrastructures, and effectively managing technology-related risks.
His skill set includes proficiency in threat mitigation, comprehensive risk assessment, and integration of cybersecurity strategies into business operations designed to safeguard critical assets and sensitive data. He reports to our Executive Vice President and Chief Financial Officer.
His skill set includes proficiency in threat mitigation, comprehensive risk assessment, and integration of cybersecurity strategies into business operations designed to safeguard critical assets and sensitive data. He reported to our Executive Vice President and Chief Financial Officer until his retirement in January 2026.
We strive to employ cybersecurity best practices, including implementing new technologies to proactively monitor new threats and vulnerabilities and reduce risk; maintaining a Cybersecurity Incident Response Plan, Disaster Recovery Plan, and Business Continuity Plan; and regularly updating our response planning and protocols.
Our cybersecurity risk management program leverages the National Institute of Standards and Technology’s Cybersecurity Framework. We strive to employ cybersecurity best practices, including implementing new technologies to proactively monitor new threats and vulnerabilities and reduce risk; maintaining a Cybersecurity Incident Response Plan, Disaster Recovery Plan, and Business Continuity Plan; and regularly updating our response planning and protocols.
As cybersecurity threats evolve, we may need to further enhance our processes and technologies, which could require additional financial resources. Governance Our Board of Directors receives regular updates on relevant IT matters affecting the Company, including cybersecurity risks and mitigation strategies.
As cybersecurity threats evolve, we may need to further enhance our processes and technologies, which could require additional financial resources.
The CIRT is led by our Vice President and Chief Information Officer and Director of Cybersecurity Risk and Business Continuity. Together, these professionals are responsible for assessing and managing cybersecurity risks and they lead a team of specialized technologists entrusted with ensuring the functionality, continuity, and security of our technology infrastructure and data.
The Audit Committee regularly reports to the Board of Directors on relevant IT matters affecting the Company, including cybersecurity risks and mitigation strategies. IT Management is responsible for assessing and managing cybersecurity risks and leads a team of specialized technologists entrusted with ensuring the functionality, continuity, and security of our technology infrastructure and data.
In addition to the general oversight provided by the full Board of Directors, the Audit Committee is responsible for oversight of our risk assessment and management processes, including with respect to IT and cybersecurity risks.
ITEM 1C. CYBERSECURITY Governance Our Board of Directors, with assistance from the Audit Committee, oversees the Company’s enterprise risk management process, including with respect to relevant IT matters affecting the Company and management of risks arising from cybersecurity threats.
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ITEM 1C. CYBERSECURITY Risk Management and Strategy We believe that mitigating cybersecurity risks is the responsibility of every employee. We take a preventative approach with respect to cybersecurity threats by building a resilient cybersecurity culture and strong IT infrastructure.
Added
Our Board of Directors has delegated the primary responsibility to oversee relevant IT matters affecting the Company, including cybersecurity risks and mitigations strategies, to the Audit Committee.
Removed
We have structured our cybersecurity risk management program according to the National Institute of Standards and Technology Cybersecurity Framework.
Added
This team regularly reports to IT Management, and IT Management regularly reviews risk management measures implemented by the Company to identify and mitigate data protection and cybersecurity risks. IT Management works closely with our legal department to oversee compliance with legal, regulatory and contractual security requirements.
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He is a skilled leader and reports to our Executive Vice President and Chief Financial Officer.
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He is a skilled leader and reports to our Executive Vice President and Chief Financial Officer. In January 2026, upon his retirement, our Vice President and Chief Information Officer,’s role was been assumed by our new Vice President of Information Technology who has over 20 years of IT experience,12 of which have been at the Company in progressive leadership roles.
Added
We have adopted a Cybersecurity Incident Response Plan that applies in the event of a cybersecurity threat or incident (the “IRP”) to provide a standardized framework for responding to security incidents. The IRP outlines protocols by which certain cybersecurity incidents are escalated within the Company and, where appropriate, reported to executive management Audit Committee in a timely manner.
Added
We have also established a Cyber Incident Response Team (“CIRT”) led by IT Management, to provide an efficient, effective, and orderly response to technology related incidents.
Added
The IRP applies to all Company personnel (including third-party contractors, vendors and partners) that perform functions or services require access to secure Company information, and to all devices and network services that are owned or managed by the Company. 42 Risk Management and Strategy We believe that mitigating cybersecurity risks is the responsibility of every employee.
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We are focused on building a resilient cybersecurity culture and strong IT and OT infrastructure.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of the filing of this report, no legal proceedings are pending against us that we believe individually or collectively are likely to have a material adverse effect upon our financial condition, results of operations, or cash flows. ITEM 4.
Biggest changeAs of the filing of this report, no legal proceedings are pending against us that we believe individually or collectively are likely to have a material adverse effect upon our financial condition, results of operations, or cash flows.
MINE SAFETY DISCLOSURES The required disclosure under Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this report. 38 PART II
MINE SAFETY DISCLOSURES The required disclosure under Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this report. 44 PART II
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With respect to administrative or judicial proceedings involving the environment, we have determined that we will disclose any such proceeding if we reasonably believe such proceeding will result in monetary sanctions, exclusive of interest and costs, of $1 million or more. 43 ITEM 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides information about purchases made by us and any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the indicated quarters and months, and the year ended December 31, 2024, of shares of our common stock, which is the sole class of equity securities registered by us pursuant to Section 12 of the Exchange Act: PURCHASES OF EQUITY SECURITIES BY ISSUER AND AFFILIATED PURCHASERS Period Total Number of Shares Purchased (1) Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (2) Maximum Number or Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (as of the period end date) (2) First quarter of 2024 712,844 $ 45.98 712,235 $ 182,101,195 Second quarter of 2024 1,058,956 $ 48.35 1,058,956 $ 500,000,000 Third quarter of 2024 157,643 $ 43.23 — $ 500,000,000 10/01/2024 - 10/31/2024 — $ — — $ 500,000,000 11/01/2024 - 11/30/2024 — $ — — $ 500,000,000 12/01/2024 - 12/31/2024 — $ — — $ 500,000,000 Total 1,929,443 $ 47.06 1,771,191 ____________________________________________ (1) 158,252 shares purchased by us in 2024 were to offset tax withholding obligations that occurred upon the delivery of outstanding shares underlying Restricted Stock Units (“RSU” or “RSUs”) issued under the terms of award agreements granted under the Equity Plan.
Biggest changeThe following table provides information about purchases made by us and any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the indicated quarters and months, and the year ended December 31, 2025, of shares of our common stock, which is the sole class of equity securities registered by us pursuant to Section 12 of the Exchange Act: PURCHASES OF EQUITY SECURITIES BY ISSUER AND AFFILIATED PURCHASERS Period Total Number of Shares Purchased Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (as of the period end date) (1) 10/01/2025 - 10/31/2025 — $ — — $ 487,881,090 11/01/2025 - 11/30/2025 — $ — — $ 487,881,090 12/01/2025 - 12/31/2025 — $ — — $ 487,881,090 Total — $ — — ____________________________________________ (1) Our Stock Repurchase Program, approved by the Board of Directors in September 2022 and reauthorized by the Board of Directors in June 2024, authorizes us to repurchase up to $500 million in aggregate value of our common stock through December 31, 2027 (“Stock Repurchase Program”), and permits us to repurchase our shares from time to time in open market transactions, through privately negotiated transactions or by other means in accordance with federal securities laws and subject to certain provisions of our Credit Agreement and the indentures governing our Senior Notes.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is currently traded on the New York Stock Exchange under the ticker symbol “SM.” For dividend information, refer to the caption Uses of Cash in Overview of Liquidity and Capital Resources in Item 7 of this report.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is currently traded on the New York Stock Exchange under the ticker symbol “SM.” For dividend information, refer to the caption Uses of Cash in Overview of Liquidity and Capital Resources in Part II, Item 7 of this report.
A substantially greater number of holders of our common stock are beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. 39 Purchases of Equity Securities by Issuer and Affiliated Purchasers.
A substantially greater number of holders of our common stock are beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. 45 Purchases of Equity Securities by Issuer and Affiliated Purchasers.
PERFORMANCE GRAPH The following performance graph compares the cumulative return on our common stock, for the period beginning December 31, 2019, and ending December 31, 2024, with the cumulative total returns of the Dow Jones Exploration and Production Index (“DJUSOS”), and the Standard & Poor’s 500 Stock Index (“SPX”).
PERFORMANCE GRAPH The following performance graph compares the cumulative return on our common stock, for the period beginning December 31, 2020, and ending December 31, 2025, with the cumulative total returns of the Dow Jones Exploration and Production Index (“DJUSOS”), and the Standard & Poor’s 500 Stock Index (“SPX”).
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURNS The preceding information under the caption Performance Graph shall be deemed to be furnished, but not filed with the SEC. Holders. As of January 31, 2025, the number of record holders of our common stock was 111.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURNS The preceding information under the caption Performance Graph shall be deemed to be furnished, but not filed with the SEC. Holders. As of February 2, 2026, the number of record holders of our common stock was 219.
During the year ended December 31, 2024, we paid $85.0 million in dividends to our stockholders. Dividends paid reflect $0.74 per share during the year ended December 31, 2024.
During the year ended December 31, 2025, we paid $92 million in dividends to our stockholders reflecting $0.80 paid per share.
Our payment of cash dividends to our stockholders and repurchases of our common stock are each subject to certain covenants under the terms of our Credit Agreement and Senior Notes.
No assurance can be given that any particular number or dollar value of our shares will be repurchased. Our payment of cash dividends to our stockholders and repurchases of our common stock are each subject to certain covenants under the terms of our Credit Agreement and Senior Notes.
Removed
Information regarding the SM Energy Equity Incentive Compensation Plan, as amended and restated effective as of May 22, 2018 (the “Equity Plan”), and the securities authorized under the Equity Plan is included below.
Added
Information regarding our Equity Plans, and the securities authorized under the Equity Plans is included below. Refer to Note 10 – Stock-Based Compensation in Part II, Item 8 of this report for discussion and definitions of the Equity Plans.
Removed
(2) In June 2024, our Board of Directors re-authorized the existing Stock Repurchase Program, and authorized us to repurchase up to $500.0 million in aggregate value of our common stock through December 31, 2027.
Removed
The Stock Repurchase Program permits us to repurchase our shares from time to time in open market transactions, through privately negotiated transactions or by other means in accordance with federal securities laws and subject to certain provisions of our Credit Agreement and the indentures governing our Senior Notes.
Removed
No assurance can be given that any particular number or dollar value of our shares will be repurchased.
Removed
During the year ended December 31, 2024, we repurchased and subsequently retired 1,771,191 shares of our common stock under the Stock Repurchase Program at a weighted-average share price of $47.40 for a total cost of $84.0 million, excluding excise taxes, commissions and fees.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

2 edited+0 added−0 removed0 unchanged
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations 41 Overview of the Company 41 Financial Results of Operations and Additional Comparative Data 45 Comparison of Financial Results and Trends Between 2024 and 2023, and Between 2023 and 2022 49 Overview of Liquidity and Capital Resources 52 Critical Accounting Estimates 56 Accounting Matters 58 Environmental 58 Non-GAAP Financial Measures 59 Item 7A.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations 47 Overview of the Company 47 Financial Results of Operations and Additional Comparative Data 52 Comparison of Financial Results and Trends Between 2025 and 2024 55 Overview of Liquidity and Capital Resources 57 Critical Accounting Estimates 61 Accounting Matters 63 Environmental 63 Non-GAAP Financial Measures 64 Item 7A.
Quantitative and Qualitative Disclosures About Market Risk 60 Item 8. Consolidated Financial Statements and Supplementary Data 61
Quantitative and Qualitative Disclosures About Market Risk 65 Item 8. Consolidated Financial Statements and Supplementary Data 66

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

145 edited+40 added−50 removed76 unchanged
Biggest changeFinancial Results of Operations and Additional Comparative Data The tables below provide information regarding selected production and financial information for the three months ended December 31, 2024, and the preceding three quarters: For the Three Months Ended December 31, September 30, June 30, March 31, 2024 2024 2024 2024 (in millions) Production (MMBOE) 19.1 15.6 14.4 13.2 Oil, gas, and NGL production revenue $ 835.9 $ 642.4 $ 633.5 $ 559.6 Oil, gas, and NGL production expense $ 214.6 $ 148.4 $ 136.6 $ 137.4 Depletion, depreciation, and amortization $ 260.5 $ 202.9 $ 179.7 $ 166.2 Exploration $ 16.3 $ 12.1 $ 17.1 $ 18.6 General and administrative $ 41.9 $ 35.1 $ 31.1 $ 30.2 Net income $ 188.3 $ 240.5 $ 210.3 $ 131.2 ____________________________________________ Note: Amounts may not calculate due to rounding. 45 Selected Performance Metrics For the Three Months Ended December 31, September 30, June 30, March 31, 2024 2024 2024 2024 Average net daily equivalent production (MBOE per day) 208.0 170.0 158.5 145.1 Lease operating expense (per BOE) $ 5.35 $ 4.73 $ 4.82 $ 5.54 Transportation costs (per BOE) $ 4.10 $ 2.13 $ 1.94 $ 2.07 Production taxes as a percent of oil, gas, and NGL production revenue 4.1 % 4.6 % 4.3 % 4.5 % Ad valorem tax expense (per BOE) $ (0.03) $ 0.76 $ 0.82 $ 0.89 Depletion, depreciation, and amortization (per BOE) $ 13.61 $ 12.98 $ 12.46 $ 12.59 General and administrative (per BOE) $ 2.19 $ 2.25 $ 2.16 $ 2.29 ____________________________________________ Note: Amounts may not calculate due to rounding. 46 Overview of Selected Production and Financial Information, Including Trends For the Years Ended December 31, Amount Change Between Percent Change Between 2024 2023 2022 2024/2023 2023/2022 2024/2023 2023/2022 Net production volumes: (1) Oil (MMBbl) 29.4 23.8 24.0 5.6 (0.2) 24 % (1) % Gas (Bcf) 137.0 132.4 125.9 4.6 6.4 3 % 5 % NGLs (MMBbl) 10.2 9.7 8.0 0.6 1.7 6 % 21 % Equivalent (MMBOE) 62.4 55.5 53.0 6.9 2.5 12 % 5 % Average net daily production: (1) Oil (MBbl per day) 80.2 65.1 65.7 15.1 (0.6) 23 % (1) % Gas (MMcf per day) 374.3 362.7 345.0 11.6 17.6 3 % 5 % NGLs (MBbl per day) 27.9 26.4 21.9 1.4 4.5 5 % 21 % Equivalent (MBOE per day) 170.5 152.0 145.1 18.5 6.9 12 % 5 % Oil, gas, and NGL production revenue (in millions): (1) Oil production revenue $ 2,187.5 $ 1,813.8 $ 2,270.1 $ 373.7 $ (456.3) 21 % (20) % Gas production revenue 249.1 327.9 790.9 (78.8) (463.0) (24) % (59) % NGL production revenue 234.7 222.2 285.0 12.5 (62.7) 6 % (22) % Total oil, gas, and NGL production revenue $ 2,671.3 $ 2,363.9 $ 3,345.9 $ 307.4 $ (982.0) 13 % (29) % Oil, gas, and NGL production expense (in millions): (1) Lease operating expense $ 319.0 $ 284.8 $ 266.5 $ 34.2 $ 18.3 12 % 7 % Transportation costs 167.1 136.2 150.0 30.9 (13.8) 23 % (9) % Production taxes 116.0 105.1 162.6 10.8 (57.5) 10 % (35) % Ad valorem tax expense 34.9 37.4 41.7 (2.5) (4.3) (7) % (10) % Total oil, gas, and NGL production expense $ 637.0 $ 563.5 $ 620.9 $ 73.4 $ (57.4) 13 % (9) % Realized price: Oil (per Bbl) $ 74.49 $ 76.28 $ 94.67 $ (1.79) $ (18.39) (2) % (19) % Gas (per Mcf) $ 1.82 $ 2.48 $ 6.28 $ (0.66) $ (3.80) (27) % (61) % NGLs (per Bbl) $ 23.01 $ 23.02 $ 35.66 $ (0.01) $ (12.64) — % (35) % Per BOE $ 42.81 $ 42.60 $ 63.18 $ 0.21 $ (20.58) — % (33) % Per BOE data: (1) Oil, gas, and NGL production expense: Lease operating expense $ 5.11 $ 5.13 $ 5.03 $ (0.02) $ 0.10 — % 2 % Transportation costs 2.68 2.46 2.83 0.22 (0.37) 9 % (13) % Production taxes 1.86 1.89 3.07 (0.03) (1.18) (2) % (38) % Ad valorem tax expense 0.56 0.67 0.79 (0.11) (0.12) (16) % (15) % Total oil, gas, and NGL production expense (1) $ 10.21 $ 10.16 $ 11.72 $ 0.05 $ (1.56) — % (13) % Depletion, depreciation, and amortization $ 12.97 $ 12.44 $ 11.40 $ 0.53 $ 1.04 4 % 9 % General and administrative $ 2.22 $ 2.18 $ 2.16 $ 0.04 $ 0.02 2 % 1 % Net derivative settlement gain (loss) (2) $ 1.10 $ 0.49 $ (13.42) $ 0.61 $ 13.91 124 % 104 % Earnings per share information (in thousands, except per share data): (3) Basic weighted-average common shares outstanding 114,757 118,678 122,351 (3,921) (3,673) (3) % (3) % Diluted weighted-average common shares outstanding 115,533 119,240 124,084 (3,707) (4,844) (3) % (4) % Basic net income per common share $ 6.71 $ 6.89 $ 9.09 $ (0.18) $ (2.20) (3) % (24) % Diluted net income per common share $ 6.67 $ 6.86 $ 8.96 $ (0.19) $ (2.10) (3) % (23) % 47 ____________________________________________ (1) Amounts and percentage changes may not calculate due to rounding.
Biggest changeSelected Performance Metrics For the Three Months Ended December 31, September 30, June 30, March 31, 2025 2025 2025 2025 Average net daily equivalent production (MBOE per day) 206.9 213.8 209.1 197.3 Lease operating expense (per BOE) $ 5.55 $ 5.67 $ 5.52 $ 6.13 Transportation costs (per BOE) $ 3.67 $ 3.77 $ 4.13 $ 3.92 Production taxes as a percent of oil, gas, and NGL production revenue 3.8 % 4.1 % 3.9 % 4.4 % Ad valorem tax expense (per BOE) $ 0.23 $ 0.51 $ 0.54 $ 0.55 Depletion, depreciation, and amortization (per BOE) $ 16.73 $ 16.54 $ 15.40 $ 15.20 General and administrative (per BOE) $ 2.10 $ 2.00 $ 2.21 $ 2.22 ____________________________________________ Note: Amounts may not calculate due to rounding. 52 Overview of Selected Production and Financial Information, Including Trends For the Years Ended December 31, Amount Change Between Periods Percent Change Between Periods 2025 2024 Net production volumes: (1) Oil (MMBbl) 40.3 29.4 11.0 37 % Gas (Bcf) 150.5 137.0 13.5 10 % NGLs (MMBbl) 10.1 10.2 (0.1) (1) % Equivalent (MMBOE) 75.5 62.4 13.1 21 % Average net daily production: (1) Oil (MBbl per day) 110.5 80.2 30.2 38 % Gas (MMcf per day) 412.3 374.3 38.1 10 % NGLs (MBbl per day) 27.6 27.9 (0.3) (1) % Equivalent (MBOE per day) 206.8 170.5 36.3 21 % Oil, gas, and NGL production revenue (in millions): (1) Oil production revenue $ 2,561 $ 2,187 $ 374 17 % Gas production revenue 353 249 104 42 % NGL production revenue 224 235 (11) (5) % Total oil, gas, and NGL production revenue $ 3,138 $ 2,671 $ 467 17 % Oil, gas, and NGL production expense (in millions): (1) Lease operating expense $ 431 $ 319 $ 112 35 % Transportation costs 292 167 125 75 % Production taxes 127 116 11 10 % Ad valorem tax expense 35 35 — (1) % Total oil, gas, and NGL production expense $ 885 $ 637 $ 248 39 % Realized price: Oil (per Bbl) $ 63.52 $ 74.49 $ (10.97) (15) % Gas (per Mcf) $ 2.35 $ 1.82 $ 0.53 29 % NGLs (per Bbl) $ 22.22 $ 23.01 $ (0.79) (3) % Per BOE $ 41.58 $ 42.81 $ (1.23) (3) % Per BOE data: (1) Oil, gas, and NGL production expense: Lease operating expense $ 5.71 $ 5.11 $ 0.60 12 % Transportation costs 3.87 2.68 1.19 44 % Production taxes 1.69 1.86 (0.17) (9) % Ad valorem tax expense 0.46 0.56 (0.10) (18) % Total oil, gas, and NGL production expense (1) $ 11.72 $ 10.21 $ 1.51 15 % Depletion, depreciation, and amortization $ 15.99 $ 12.97 $ 3.02 23 % General and administrative $ 2.13 $ 2.22 $ (0.09) (4) % Net derivative settlement gain (2) $ 1.75 $ 1.10 $ 0.65 59 % Earnings per share information (in millions, except per share data): (3) Basic weighted-average common shares outstanding 115 115 — — % Diluted weighted-average common shares outstanding 115 116 (1) (1) % Basic net income per common share $ 5.65 $ 6.71 $ (1.06) (16) % Diluted net income per common share $ 5.64 $ 6.67 $ (1.03) (15) % ____________________________________________ (1) Amounts and percentage changes may not calculate due to rounding.
For additional information about climate change, air quality, and related environmental matters, refer to Risk Factors – Risks Related to Government Regulations – Legislative and regulatory initiatives and litigation related to global warming and climate change could have an adverse effect on our operations and the demand for oil, gas, and NGLs, and could result in significant litigation, capital, and related expenses and Federal and state regulatory initiatives relating to air quality and greenhouse gas emissions could result in increased costs and additional operating restrictions or delays.
For additional information about climate change, air quality, and related environmental matters, refer to Risk Factors – Risks Related to Litigation and Government Regulations – Legislative and regulatory initiatives and litigation related to global warming and climate change could have an adverse effect on our operations and the demand for oil, gas, and NGLs, and could result in significant litigation, capital, and related expenses and Federal and state regulatory initiatives relating to air quality and greenhouse gas emissions could result in increased costs and additional operating restrictions or delays.
The markets for oil, gas, and NGLs have been volatile, especially over the last decade, and remain subject to high levels of uncertainty and volatility related to production output from OPEC+, fluctuations in oil and gas demand from China, global shipping channel constraints and disruptions, War and Geopolitical Instability, tariffs or trade restrictions, and the potential impacts of these issues on global commodity and financial markets.
The markets for oil, gas, and NGLs have been volatile, especially over the last decade, and 60 remain subject to high levels of uncertainty and volatility related to production output from OPEC+, fluctuations in oil and gas demand from China, global shipping channel constraints and disruptions, War and Geopolitical Instability, tariffs or trade restrictions, and the potential impacts of these issues on global commodity and financial markets.
Refer to Risk Factors in Part I, Item 1A of this report for additional discussion. If the estimates of proved reserves decline, the rate at which we record DD&A expense will increase, which would reduce future net income. Changes in DD&A rate calculations caused by changes in reserve quantities are made prospectively.
Refer to Risk Factors in Part I, Item 1A of this report for additional discussion. 61 If the estimates of proved reserves decline, the rate at which we record DD&A expense will increase, which would reduce future net income. Changes in DD&A rate calculations caused by changes in reserve quantities are made prospectively.
During 2024, we redeemed all of the $349.1 million of aggregate principal amount outstanding of our 2025 Senior Notes. Additionally, we used a portion of the net proceeds from the 2029 Senior Notes and 2032 Senior Notes, cash on hand, and borrowings under our revolving credit facility to fund our proportionate share of the Uinta Basin Acquisition.
During 2024, we redeemed all of the $349 million of aggregate principal amount outstanding of our 2025 Senior Notes. Additionally, we used a portion of the net proceeds from the 2029 Senior Notes and 2032 Senior Notes, cash on hand, and borrowings under our revolving credit facility to fund our proportionate share of the Uinta Basin Acquisition.
See below for discussion on how the net proceeds received were used, and to Note 5 – Long-Term Debt in Part II, Item 8 of this report for additional discussion. Our credit ratings affect the availability of, and cost for us to borrow, additional funds.
See below for discussion on how the net proceeds received were used, and refer to Note 5 – Long-Term Debt in Part II, Item 8 of this report for additional discussion. Our credit ratings affect the availability of, and cost for us to borrow, additional funds.
Any such legislation or regulatory programs could also increase the cost of consuming, and thereby reduce demand for, the oil and gas we produce. Consequently, legislation and regulatory programs to reduce emissions of GHGs could have an adverse effect on our business, financial condition, and results of operations.
Any such legislation or regulatory programs could also increase the cost of consuming, and 63 thereby reduce demand for, the oil and gas we produce. Consequently, legislation and regulatory programs to reduce emissions of GHGs could have an adverse effect on our business, financial condition, and results of operations.
For additional information about hydraulic fracturing and related environmental matters, refer to Risk Factors – Risks Related to Government Regulations – Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays. Climate Change and Air Quality.
For additional information about hydraulic fracturing and related environmental matters, refer to Risk Factors – Risks Related to Litigation and Government Regulations – Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays. Climate Change and Air Quality.
We expect increases in benchmark commodity prices to result in net derivative losses, and decreases in benchmark commodity 50 prices to result in net derivative gains, as measured against our derivative contract prices. Refer to Note 7 – Derivative Financial Instruments in Part II, Item 8 of this report for additional discussion.
We expect increases in benchmark commodity prices to result in net derivative losses, and decreases in benchmark commodity prices to result in net derivative gains, as measured against our derivative contract prices. Refer to Note 7 – Derivative Financial Instruments in Part II, Item 8 of this report for additional discussion.
In addition, the impact of oil, gas, and NGL prices on investment opportunities, the availability of capital, 53 tax law and other regulatory changes, and the timing and results of our exploration and development activities may lead to changes in funding requirements for future development.
In addition, the impact of oil, gas, and NGL prices on investment opportunities, the availability of capital, tax law and other regulatory changes, and the timing and results of our exploration and development activities may lead to changes in funding requirements for future development.
(2) The change solely reflects the impact of replacing SEC pricing with the five-year average NYMEX strip pricing as of December 31, 2024, and does not include additional impacts to our estimated net proved reserves that may result from our internal intent to drill hurdles or changes in future service or equipment costs.
(2) The change solely reflects the impact of replacing SEC pricing with the five-year average NYMEX strip pricing as of December 31, 2025, and does not include additional impacts to our estimated net proved reserves that may result from our internal intent to drill hurdles or changes in future service or equipment costs.
The borrowing base is subject to regular, semi-annual redetermination, and considers the value of both our proved oil and gas properties reflected in our most recent reserve report and commodity derivative contracts, each as determined by our lender group. The next borrowing base redetermination date is scheduled to occur on April 1, 2025.
The borrowing base is subject to regular, semi-annual redetermination, and considers the value of both our proved oil and gas properties reflected in our most recent reserve report and commodity derivative contracts, each as determined by our lender group. The next borrowing base redetermination date is scheduled to occur on April 1, 2026.
In accordance with SEC requirements, we based these measures on the unweighted arithmetic average of the first-day-of-the-month price of each month within the trailing 12-month period ended December 31, 2024. Actual future prices and costs may be materially higher or lower than the prices and costs utilized in the estimates.
In accordance with SEC requirements, we based these measures on the unweighted arithmetic average of the first-day-of-the-month price of each month within the trailing 12-month period ended December 31, 2025. Actual future prices and costs may be materially higher or lower than the prices and costs utilized in the estimates.
Refer to Supplemental Oil and Gas Information (unaudited) in Part II, Item 8 of this report for additional discussion. Operational Activities. During 2024, successful operational execution drove strong well performance and capital efficiency across our asset portfolio.
Refer to Supplemental Oil and Gas Information (unaudited) in Part II, Item 8 of this report for additional discussion. Operational Activities. During 2025, successful operational execution drove strong well performance and capital efficiency across our asset portfolio.
Overview of the Company General Overview Our purpose is to make people’s lives better by responsibly producing energy supplies, contributing to domestic energy security and prosperity, and having a positive impact in the communities where we live and work.
General Overview Our purpose is to make people’s lives better by responsibly producing energy supplies, contributing to domestic energy security and prosperity, and having a positive impact in the communities where we live and work.
It should not be assumed that the standardized measure of discounted future net cash flows (GAAP) or PV-10 (non-GAAP) as of December 31, 2024, is the current market value of our estimated proved reserves.
It should not be assumed that the standardized measure of discounted future net cash flows (GAAP) or PV-10 (non-GAAP) as of December 31, 2025, is the current market value of our estimated proved reserves.
Sources of Cash We expect to fund our 2025 capital expenditures and return of capital program with cash flows from operations, with any remaining cash needs being funded by borrowings under our revolving credit facility.
Sources of Cash We expect to fund our 2026 capital expenditures and return of capital program with cash flows from operations, with any remaining cash needs being funded by borrowings under our revolving credit facility.
Although we expect cash flows from these sources to be sufficient for 2025, we may also elect to raise funds through new debt or equity offerings or from other sources of financing.
Although we expect cash flows from these sources to be sufficient for 2026, we may also elect to raise funds through new debt or equity offerings or from other sources of financing.
The CAMT and other possible future legislation could reduce our net cash provided by operating activities resulting in a reduction of available funding. Refer to Comparison of Financial Results and Trends Between 2024 and 2023 and Between 2023 and 2022 above for additional discussion.
The CAMT and other possible future legislation could reduce our net cash provided by operating activities resulting in a reduction of available funding. Refer to Comparison of Financial Results and Trends Between 2025 and 2024 above for additional discussion.
As of December 31, 2024, the borrowing base and aggregate revolving lender commitments under our Credit Agreement were $3.0 billion and $2.0 billion, respectively.
As of December 31, 2025, the borrowing base and aggregate revolving lender commitments under our Credit Agreement were $3.0 billion and $2.0 billion, respectively.
Refer to Overview of Selected Production and Financial Information, Including Trends above for discussion of DD&A expense on a per BOE basis.
Refer to Overview of Selected Production and Financial Information, Including Trends above for discussion of G&A expense, including G&A expense on a per BOE basis.
We were in compliance with all financial and non-financial covenants as of December 31, 2024, and through the filing of this report.
We were in compliance with all financial and non-financial covenants as of December 31, 2025, and through the filing of this report.
States are also required to comply with the NAAQS. The oil and gas sector is often subjected to additional controls when areas within states are not attaining the ozone NAAQS as the VOCs emitted by the oil and gas sector are a precursor to ozone formation. The ozone NAAQS was set at 70 parts per billion (“ppb”) in 2015.
The oil and gas sector is often subjected to additional controls when areas within states are not attaining the ozone NAAQS as the VOCs emitted by the oil and gas sector are a precursor to ozone formation. The ozone NAAQS was set at 70 parts per billion (“ppb”) in 2015.
If commodity prices had been 10 percent lower, our net derivative settlements for the year ended December 31, 2024, would have offset the declines in oil, gas, and NGL production revenue by approximately $50.3 million. We enter into commodity derivative contracts in order to reduce the risk of fluctuations in commodity prices.
If commodity prices had been 10 percent lower, our net derivative settlements for the year ended December 31, 2025, would have offset the declines in oil, gas, and NGL production revenue by approximately $106 million. We enter into commodity derivative contracts in order to reduce the risk of fluctuations in commodity prices.
Refer to Significant Developments in 2024 in Part I, Items 1 and 2 for the definitions of 2029 Senior Notes and 2032 Senior Notes, and to Note 5 – Long-Term Debt and Note 17 – Acquisitions in Part II, Item 8 of this report for additional discussion and definitions.
Refer to Significant Developments in 2025 in Part I, Items 1 and 2 for the definitions of 2029 Senior Notes and 2032 Senior Notes, and to Note 5 – Long-Term Debt and Note 17 – Mergers, Acquisitions, and Divestitures in Part II, Item 8 of this report for additional discussion and definitions.
Oil, gas, and NGL production expense for the year ended December 31, 2024, increased 13 percent compared with 2023, as activity related to our Uinta Basin assets contributed to increases in transportation costs, LOE, and production tax expense.
Oil, gas, and NGL production expense for the year ended December 31, 2025, increased 39 percent compared with 2024, as activity related to our Uinta Basin assets contributed to increases in transportation costs, LOE, and production tax expense.
Analysis of Cash Flow Changes Between 2024 and 2023 and Between 2023 and 2022 The following tables present changes in cash flows between the years ended December 31, 2024, 2023, and 2022, for our operating, investing, and financing activities.
Analysis of Cash Flow Changes Between 2025 and 2024 The following tables present changes in cash flows between the years ended December 31, 2025 and 2024, for our operating, investing, and financing activities.
The Environmental, Social and Governance Committee of our Board of Directors oversees, among other things, the effectiveness of our ESG policies, programs and initiatives, monitors and responds to emerging trends, issues, and associated risks, and, together with management, reports to our Board of Directors regarding such matters.
The Governance and Sustainability Committee of our Board of Directors oversees, among other things, the effectiveness of our sustainability policies, programs and initiatives, monitors and responds to emerging trends, issues, and associated risks, and, together with management, reports to our Board of Directors regarding such matters.
Refer to Significant Developments in 2024 in Part I, Items 1 and 2 for the definitions of 2029 Senior Notes and 2032 Senior Notes, and to Note 5 – Long-Term Debt and Note 17 – Acquisitions in Part II, Item 8 of this report for additional discussion and definitions.
Refer to Significant Developments in 2025 in Part I, Items 1 and 2 for the definitions of 2029 Senior Notes and 2032 Senior Notes, and to Note 5 – Long-Term Debt in Part II, Item 8 of this report for additional discussion and definitions.
As of December 31, 2024, $500.0 million remained available under the Stock Repurchase Program for repurchases of our common stock through December 31, 2027. Effective January 1, 2023, shares of common stock repurchased, net of shares of common stock issued, are subject to a one percent excise tax imposed by the IRA.
As of December 31, 2025, $488 million remained available under the Stock Repurchase Program for repurchases of our common stock through December 31, 2027. Effective January 1, 2023, shares of common stock repurchased, net of shares of common stock issued, are subject to a one percent excise tax imposed by the IRA.
We plan to focus our 2025 capital program on highly economic oil development projects in our Midland Basin, South Texas, and Uinta Basin assets.
We plan to focus our 2026 capital program on highly economic oil development projects in our Midland Basin, South Texas, Uinta Basin, and DJ Basin assets.
The following table reflects the estimated MMBOE change and percentage change to our total reported estimated net proved reserve volumes from the described hypothetical changes: For the year ended December 31, 2024 MMBOE Change Percentage Change 10 percent decrease in SEC pricing (1) (19.3) (3) % Average NYMEX strip pricing as of fiscal year end (2) 11.5 2 % 10 percent decrease in net proved undeveloped reserves (3) (27.4) (4) % ____________________________________________ (1) The change solely reflects the impact of a 10 percent decrease in SEC pricing to the total reported estimated net proved reserve volumes as of December 31, 2024, and does not include additional impacts to our estimated net proved reserves that may result from our internal intent to drill hurdles or changes in future service or equipment costs.
The following table reflects the estimated MMBOE change and percentage change to our total reported estimated net proved reserve volumes from the described hypothetical changes: For the year ended December 31, 2025 MMBOE Change Percentage Change 10 percent decrease in SEC pricing (1) (18.4) (3) % Average NYMEX strip pricing as of fiscal year end (2) (9.0) (1) % 10 percent decrease in net proved undeveloped reserves (3) (26.1) (4) % ____________________________________________ (1) The change solely reflects the impact of a 10 percent decrease in SEC pricing to the total reported estimated net proved reserve volumes as of December 31, 2025, and does not include additional impacts to our estimated net proved reserves that may result from our internal intent to drill hurdles or changes in future service or equipment costs.
Additionally, we paid $86.1 million, including commission and fees, to repurchase and subsequently retire 1.8 million shares of our common stock under the Stock Repurchase Program, and paid $85.0 million of dividends to our stockholders.
Additionally, we paid $86 million, including commission and fees, to repurchase and subsequently retire 1,771,191 shares of our common stock under the Stock Repurchase Program, and paid $85 million of dividends to our stockholders.
Total interest expense can vary based on the amount of our outstanding fixed-rate debt securities, fluctuations in the amount of capitalized interest as a result of the timing of the development of our wells in progress, and due to the timing and amount of borrowings under our revolving credit facility.
Total interest expense can vary based on the amount of our outstanding fixed-rate debt securities, fluctuations in the amount of capitalized interest resulting from the timing of the development of our wells in progress, and due to the timing and amount of borrowings under our revolving credit facility.
Refer to Note 17 – Acquisitions in Part II, Item 8 of this report for additional discussion and definitions.
Refer to Note 17 – Mergers, Acquisitions, and Divestitures in Part II, Item 8 of this report for additional discussion.
For the years ended December 31, 2024, and 2023, approximately 37 percent and 40 percent, respectively, of our production on a per BOE basis was gas.
For the years ended December 31, 2025, and 2024, approximately 33 percent and 37 percent, respectively, of our production on a per BOE basis was gas.
This amount differs from the costs incurred amount of $3.5 billion for the year ended December 31, 2024, as costs incurred is an accrual-based amount that also includes asset retirement obligations, geological and geophysical expenses, and exploration overhead amounts.
This amount differs from the costs incurred amount of $1.4 billion for the year ended December 31, 2025, as costs incurred is an accrual-based amount that also includes asset retirement obligations, geological and geophysical expenses, and exploration overhead amounts.
Refer to Note 17 – Acquisitions in Part II, Item 8 of this report for additional discussion of acquisition activity and the definition of the Uinta Basin Acquisition.
Refer to Note 17 – Mergers, Acquisitions, and Divestitures in Part II, Item 8 of this report for additional discussion of the Uinta Basin Acquisition.
Despite any amount of future impairment being difficult to predict, based on our commodity price assumptions as of January 31, 2025, we do not expect any material proved oil and gas property impairments in the first quarter of 2025 resulting from commodity price impacts.
Despite any amount of future impairment being difficult to predict, based on our commodity price assumptions as of 62 February 2, 2026, we do not expect any material proved oil and gas property impairments in the first quarter of 2026 resulting from commodity price impacts.
We are committed to exceptional safety, health, and environmental stewardship; supporting the professional development of a diverse and thriving team of employees; building and maintaining partnerships with our stakeholders by investing in and connecting with the communities where we live and work; and transparency in reporting our progress in these areas.
Refer to Outlook for discussion of our 2026 capital program. 47 We are committed to exceptional safety, health, and environmental stewardship; supporting the professional development of a diverse and thriving team of employees; building and maintaining partnerships with our stakeholders by investing in and connecting with the communities where we live and work; and transparency in reporting our progress in these areas.
For the years ended December 31, 2024, and 2023, we recognized net gains on the settlement of our commodity derivative contracts of $1.10 per BOE and $0.49 per BOE, respectively.
For the years ended December 31, 2025, and 2024, we recognized net gains on the settlement of our commodity derivative contracts of $1.75 per BOE and $1.10 per BOE, respectively.
Operational activities during the year ended December 31, 2024, resulted in the following: • Net cash provided by operating activities of $1.8 billion, compared with $1.6 billion for 2023. • Net income of $770.3 million, or $6.67 per diluted share, compared with net income of $817.9 million, or $6.86 per diluted share for 2023. • Adjusted EBITDAX, a non-GAAP financial measure, of $2.0 billion, compared with $1.7 billion for 2023.
Operational activities during the year ended December 31, 2025, resulted in the following: • Net cash provided by operating activities of $2.0 billion, compared with $1.8 billion for 2024. • Net income of $648 million, or $5.64 per diluted share, compared with net income of $770 million, or $6.67 per diluted share for 2024. • Adjusted EBITDAX, a non-GAAP financial measure, of $2.3 billion, compared with $2.0 billion for 2024.
We anticipate volatility in LOE on a per BOE basis as a result of changes in total production, timing of workover projects, changes in service provider costs, and industry activity, all of which affect total LOE. Transportation costs on a per BOE basis increased nine percent for the year ended December 31, 2024, compared with 2023.
We anticipate volatility in LOE on a per BOE basis resulting from changes in production, timing of workover projects, changes in service provider costs, and industry activity, all of which affect total LOE. Transportation costs on a per BOE basis increased 44 percent for the year ended December 31, 2025, compared with 2024.
Consequently, we expect to continue experiencing these types of changes. We cannot reasonably predict future commodity prices, although we believe that together, the analyses below provide reasonable information regarding the impact of changes in pricing and trends on total estimated net proved reserves.
As previously noted, commodity prices are volatile and estimates of reserves are inherently imprecise. Consequently, we expect to continue experiencing these types of changes. We cannot reasonably predict future commodity prices, although we believe that together, the analyses below provide reasonable information regarding the impact of changes in pricing and trends on total estimated net proved reserves.
Outlook We expect our total 2025 capital program to be approximately $1.3 billion, excluding acquisitions, which we expect to fund with cash flows from operations, with any remaining cash needs being funded by borrowings under our revolving credit facility.
Outlook We expect our total 2026 capital program to be approximately $2.65 billion to $2.85 billion, excluding acquisitions, which we expect to fund with cash flows from operations, with any remaining cash needs being funded by borrowings under our revolving credit facility.
As of December 31, 2024, a 10 percent increase or decrease in the forward curves associated with our oil, gas, and NGL commodity derivative instruments would have changed our net derivative positions for these products by approximately $51.9 million, $23.4 million, and $1.7 million, respectively.
As of December 31, 2025, and 2024, a 10 percent increase or decrease in the forward curves associated with our oil, gas, and NGL commodity derivative instruments would have changed our net derivative positions for these products by approximately $57 million, $36 million, and $1 million, respectively, for 2025, and $52 million, $23 million, and $2 million, respectively, for 2024.
Net derivative (gain) loss For the Years Ended December 31, 2024 2023 2022 (in millions) Net derivative (gain) loss $ (50.0) $ (68.2) $ 374.0 Net derivative (gain) loss is a result of changes in fair values associated with fluctuations in the forward price curves for the commodities underlying our outstanding derivative contracts and the monthly cash settlements of our derivative positions during the period.
Net derivative gain For the Years Ended December 31, 2025 2024 (in millions) Net derivative gain $ (178) $ (50) Net derivative gain is a result of changes in fair values associated with fluctuations in the forward price curves for the commodities underlying our outstanding derivative contracts and the monthly cash settlements of our derivative positions during the period.
Expenditures for the development, exploration, and acquisition of oil and gas properties are the primary use of our capital resources. During 2024, we spent $3.4 billion on capital expenditures and on acquisitions of proved and unproved oil and gas properties.
Expenditures for the development, exploration, and acquisition of oil and gas properties are the primary use of our capital resources. During 2025, we spent $1.5 billion on capital expenditures and on acquisitions of proved and unproved oil and gas properties.
For the Years Ended December 31, 2024 2023 2022 MMBOE Change Revisions resulting from performance (1) (8.0) 37.2 (11.1) Removal of net proved undeveloped reserves no longer in our five-year development plan (30.5) (30.8) (19.9) Revisions resulting from price changes (13.4) (28.4) 9.5 Total (51.9) (22.0) (21.5) ____________________________________________ Note: Amounts may not calculate due to rounding.
For the Years Ended December 31, 2025 2024 MMBOE Change Revisions resulting from performance (19.2) (8.0) Removal of net proved undeveloped reserves no longer in our five-year development plan (40.7) (30.5) Revisions resulting from price changes 3.7 (13.4) Total (56.2) (51.9) ____________________________________________ Note: Amounts may not calculate due to rounding.
Refer to Note 5 – Long-Term Debt in Part II, Item 8 of this report for additional discussion, as well as the presentation of the outstanding balance, total amount 52 of letters of credit, and available borrowing capacity under the Credit Agreement as of January 31, 2025, December 31, 2024, and December 31, 2023.
Refer to Note 5 – Long-Term Debt in Part II, Item 8 of this report for definitions of the Third 57 Amendment and Fourth Amendment and additional discussion, as well as the presentation of the outstanding balance, total amount of letters of credit, and available borrowing capacity under the Credit Agreement as of February 2, 2026, December 31, 2025, and December 31, 2024.
The rates disclosed in the table above for the year ended December 31, 2024, do not reflect the $9.0 million fee paid to secure the Bridge Facility in connection with the Uinta Basin Acquisition.
The rates disclosed in the table above for the year ended December 31, 2024, do not reflect the $9 million fee paid to secure firm commitments for senior unsecured bridge term loans in connection with the Uinta Basin Acquisition.
Our proved reserve life index remained flat at 10.9 years as of December 31, 2024, and 2023. Refer to Reserves in Part I, Items 1 and 2 of this report for additional discussion.
Our proved reserve life index decreased to 8.9 years as of December 31, 2025, compared with 10.9 years as of December 31, 2024. Refer to Reserves in Part I, Items 1 and 2 of this report for additional discussion.
Our DD&A rate fluctuates as a result of changes in our production mix, changes in our total estimated proved reserve volumes, changes in capital allocation, impairments, acquisition and divestiture activity, and carrying cost funding and sharing arrangements with third parties.
Our DD&A expense on a per BOE and absolute basis may fluctuate as a result of changes in our production mix, changes in our total estimated proved reserve volumes, changes in capital allocation, impairments, acquisition and divestiture activity, and carrying cost funding and sharing arrangements with third parties.
We present certain information on a per BOE basis in order to evaluate our performance relative to our peers and to identify and measure trends we believe may require additional analysis and discussion.
Refer to Comparison of Financial Results and Trends Between 2025 and 2024 below for additional discussion. We present certain information on a per BOE basis in order to evaluate our performance relative to our peers and to identify and measure trends we believe may require additional analysis and discussion.
Further demonstrating our commitment to sustainable operations and environmental stewardship, compensation for our executives and eligible employees under our long-term incentive plan, and compensation for all employees under our short-term incentive plan is calculated based on, in part, certain Company-wide, performance-based metrics that include key financial, operational, environmental, health, and safety measures.
Further demonstrating our commitment to sustainable operations and environmental stewardship, compensation for our executives and employees under certain aspects of our compensation plans is calculated based on Company-wide performance metrics that include key financial, operational, environmental, health, and safety measures.
(1) As of December 31, 2023, and 2024, the drilled but not completed well count included nine gross (nine net) wells that were not included in our five-year development plan, eight of which were in the Eagle Ford shale. (2) We acquired these drilled but not completed wells as part of the Uinta Basin Acquisition on October 1, 2024.
(1) As of December 31, 2024, the drilled but not completed well count included nine gross (nine net) wells that were not included in our five-year development plan, eight of which were in the Eagle Ford shale.
Impairment of Proved Properties. Proved oil and gas properties are evaluated for impairment on a depletion pool-by-pool basis and reduced to fair value when events or changes in circumstances indicate that their carrying amount may not be recoverable.
Proved oil and gas properties are evaluated for impairment on a depletion pool-by-pool basis and reduced to fair value when there is an indication that their carrying amount may not be recoverable.
Future cash inflows and future production and development costs are determined by applying prices and costs, including transportation, quality differentials, and basis differentials, applicable to each period to the estimated quantities of proved reserves remaining to be produced as of the end of that period. Expected cash flows are discounted to present value using an appropriate discount rate.
Future cash inflows and future production and development costs are determined by applying prices and costs, including transportation, quality differentials, and basis differentials, applicable to each period to our net share of estimated quantities of proved reserves remaining to be produced as of the end of that period.
Our realized price on a per BOE basis remained flat for the year ended December 31, 2024, compared with 2023, primarily because a 24 percent increase in oil production was offset by decreases in oil and gas benchmark commodity prices.
Our realized price on a per BOE basis decreased three percent for the year ended December 31, 2025, compared with 2024, primarily because of decreases in oil benchmark commodity prices partially offset by the increase in gas benchmark commodity prices.
These factors have driven commodity price volatility, contributed to instances of supply chain disruptions and fluctuations in interest rates, and could have further industry-specific impacts that may require us to adjust our business plan. Future impacts of these and other events on commodity and financial markets are inherently unpredictable.
These factors have resulted in commodity price volatility, contributed to instances of supply chain disruptions, inflation, and interest rate fluctuations, and could have further industry-specific impacts that may require us to adjust our business plan. The timing and magnitude of future effects are inherently unpredictable.
Ad valorem tax expense on a per BOE basis decreased 16 percent for the year ended December 31, 2024, compared with 2023, as a result of changes to the assessed values of our producing properties due to decreased commodity price assumptions used in the current year valuation, and increased net equivalent production.
Ad valorem tax expense on a per BOE basis decreased 18 percent for the year ended December 31, 2025, compared with 2024, primarily due to increased net equivalent production and changes to the assessed values of our producing properties.
During the years ended December 31, 2024, and 2023, we repurchased and subsequently retired 1.8 million shares and 6.9 million shares, respectively, of our common stock at a cost, excluding excise taxes, commissions, and fees, of $84.0 million and $228.0 million, respectively.
During the years ended December 31, 2025, and 2024, we repurchased and subsequently retired 444,705 shares and 1,771,191 shares, respectively, of our common stock at a cost, excluding excise taxes, commissions, and fees, of $12 million and $84 million, respectively.
Comparison of Financial Results and Trends Between 2024 and 2023 and Between 2023 and 2022 Refer to Comparison of Financial Results and Trends Between 2023 and 2022 and Between 2022 and 2021 in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2023 Annual Report on Form 10-K, filed with the SEC on February 22, 2024, for a detailed discussion of certain comparisons of our financial results and trends for the year ended December 31, 2023, compared with the year ended December 31, 2022.
For discussion related to changes in financial condition and results of operations for the year ended December 31, 2024, compared with the year ended December 31, 2023, refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025.
We paid a minimal amount of excise tax related to common stock repurchases during 2024. Refer to Note 3 – Equity in Part II, Item 8 of this report for discussion of the Stock Repurchase Program.
We paid a minimal amount of excise tax related to common stock repurchases during 2025. Refer to Note 3 – Equity in Part II, Item 8 of this report for discussion of the Stock Repurchase Program. During the years ended December 31, 2025, and 2024, we paid $92 million and $85 million, respectively, in dividends to our stockholders.
In general, we expect total transportation costs to fluctuate relative to changes in gas and NGL production from our South Texas assets and oil production from our Uinta Basin assets, where we incur a majority of our transportation costs.
In general, we expect total transportation costs to fluctuate relative to changes in oil production from our Uinta Basin assets and gas and NGL production from our South Texas assets, where we incur a majority of our transportation costs. For 2026, we expect transportation costs on a per BOE basis to remain relatively flat compared with 2025.
Depletion, depreciation, and amortization (“DD&A”) expense on a per BOE basis increased four percent for the year ended December 31, 2024, compared with 2023, due to a shift in production mix to our Uinta Basin assets. Our Midland Basin and Uinta Basin assets have higher DD&A rates than our South Texas assets.
Depletion, depreciation, and amortization (“DD&A”) expense on a per BOE basis increased 23 percent for the year ended December 31, 2025, compared with 2024, due to increased production from our Uinta Basin assets, which caused a shift in the production mix towards our higher rate Midland Basin and Uinta Basin assets.
These amounts include net derivative settlement gains of $68.7 million and $26.9 million for the years ended December 31, 2024, and 2023, respectively.
These amounts include net derivative settlement gains of $132 million and $69 million for the years ended December 31, 2025, and 2024, respectively.
For 2025, we expect G&A expense on an absolute basis to increase, compared with 2024, primarily as a result of an increase in employee headcount as a result of the Uinta Basin Acquisition and expected increases in compensation expense.
For 2026, we expect G&A expense on an absolute basis and on a per BOE basis to increase compared with 2025, primarily due to an increase in employee headcount as a result of the Civitas Merger, and expected increases in compensation expense and integration costs.
Average net daily equivalent production volumes for the year ended December 31, 2024, increased 12 percent compared with 2023, comprised of a seven percent increase from our Midland Basin assets, a six percent increase from our South Texas assets, and 9.1 MBOE of production from our Uinta Basin assets.
Average net daily equivalent production volumes for the year ended December 31, 2025, increased 21 percent compared with 2024, comprised of a three percent increase from our Midland Basin assets, and 43.7 MBOE of production from our Uinta Basin assets.
The table below presents the disaggregation of our net production volumes by product type for each of our assets for the year ended December 31, 2024: Midland Basin South Texas Uinta Basin Total Net production volumes: Oil (MMBbl) 19.1 7.4 2.9 29.4 Gas (Bcf) 62.0 72.3 2.7 137.0 NGLs (MMBbl) — 10.2 — 10.2 Equivalent (MMBOE) 29.4 29.6 3.3 62.4 Average net daily equivalent (MBOE per day) 80.5 81.0 9.1 170.5 Relative percentage 47 % 48 % 5 % 100 % ____________________________________________ Note: Amounts may not calculate due to rounding.
The table below presents the disaggregation of our net production volumes by product type for each of our assets for the year ended December 31, 2025: Midland Basin South Texas Uinta Basin Total Net production volumes: Oil (MMBbl) 19.2 7.3 13.9 40.3 Gas (Bcf) 66.3 71.7 12.5 150.5 NGLs (MMBbl) — 10.1 — 10.1 Equivalent (MMBOE) 30.2 29.3 15.9 75.5 Average net daily equivalent (MBOE per day) 82.8 80.3 43.7 206.8 Relative percentage 40 % 39 % 21 % 100 % ____________________________________________ Note: Amounts may not calculate due to rounding.
As a result of decreases in benchmark oil and gas prices, realized prices for oil and gas decreased two percent and 27 percent, respectively, while the realized price for NGLs remained flat. The 13 percent increase in oil, gas, and NGL production revenue is primarily a result of the increase in average net daily equivalent production volumes.
As a result of decreases in benchmark oil and NGL prices, realized prices for oil and NGLs decreased 15 percent and three percent, respectively, while the realized price for gas increased 29 percent. Oil, gas, and NGL production revenue increased 17 percent, primarily resulting from a 21 percent increase in average net daily equivalent production volumes.
Costs incurred in oil and gas property acquisition, exploration, and development activities, whether capitalized or expensed, are summarized as follows: For the Year Ended December 31, 2024 (in thousands) Development costs $ 1,196,542 Exploration costs 170,297 Acquisitions Proved properties 1,622,192 Unproved properties 514,647 Total, including asset retirement obligations (1) $ 3,503,678 ____________________________________________ (1) Refer to the caption Costs Incurred in Supplemental Oil and Gas Information (unaudited) in Part II, Item 8 of this report. 43 Production Results.
Costs incurred in oil and gas property acquisition, exploration, and development activities, whether capitalized or expensed, are summarized as follows: For the Year Ended December 31, 2025 (in millions) Development costs $ 1,333 Exploration costs 94 Acquisitions Proved properties (5) Unproved properties 26 Total, including asset retirement obligations (1) $ 1,448 ____________________________________________ (1) Refer to the caption Costs Incurred in Supplemental Oil and Gas Information (unaudited) in Part II, Item 8 of this report.
On September 14, and 15, 2020, the EPA finalized amendments to the 2012 and 2016 NSPS that removed transmission and storage infrastructure from regulation of methane emissions and other VOCs, as well as removed methane control requirements.
In September 2020, the EPA finalized amendments to the 2012 and 2016 NSPS that removed transmission and storage infrastructure from regulation of methane emissions and other VOCs, as well as removed methane control requirements. The portion of the 2020 amendments that removed the transmission and storage infrastructure from the regulations was disapproved by the Congressional Review Act in 2021.
The following table presents our weighted-average interest rates and our weighted-average borrowing rates for the years ended December 31, 2024, 2023, and 2022: For the Years Ended December 31, 2024 2023 2022 Weighted-average interest rate 7.6 % 7.1 % 7.6 % Weighted-average borrowing rate 6.6 % 6.4 % 6.8 % Our weighted-average interest rate and weighted-average borrowing rate each increased for the year ended December 31, 2024, compared with 2023, primarily as a result of the issuance of our 2029 Senior Notes and 2032 Senior Notes during 2024, which have greater outstanding aggregate principal balances and higher interest rates compared with our other outstanding Senior Notes and our 2025 Senior Notes that we redeemed during the third quarter of 2024, and as a result of borrowings under our revolving credit facility during the fourth quarter of 2024.
Our weighted-average borrowing rate increased for the year ended December 31, 2025, compared with 2024, primarily as a result of the issuance of our 2029 Senior Notes and 2032 Senior Notes during 2024, which have greater outstanding aggregate principal balances and higher interest rates compared with our other outstanding Senior Notes and our 5.625% Senior Notes due June 1, 2025 (“2025 Senior Notes”) that we redeemed during the third quarter of 2024.
Financing Activities For the Years Ended December 31, Amount Change Between 2024 2023 2022 2024/2023 2023/2022 (in millions) Net cash provided by (used in) financing activities $ 1,008.5 $ (304.5) $ (693.9) $ 1,313.0 $ 389.4 Net cash provided by financing activities increased during the year ended December 31, 2024, primarily related to net cash proceeds of $1.5 billion from the issuance of our 2029 Senior Notes and 2032 Senior Notes, and net borrowings under our revolving credit facility of $68.5 million, partially offset by $349.1 million of cash paid to redeem our 2025 Senior Notes.
Net cash provided by financing activities during the year ended December 31, 2024, primarily related to net cash proceeds of $1.5 billion from the issuance of our 2029 Senior Notes and 2032 Senior Notes, and net borrowings under our revolving credit facility of $69 million, partially offset by $349 million of cash paid to redeem our 2025 Senior Notes.
We anticipate volatility in ad valorem tax expense on a per BOE and absolute basis as the valuation of our producing properties changes, which is generally driven by fluctuations in commodity prices, and can be impacted by changes in tax laws.
We anticipate volatility in ad valorem tax expense on a per BOE and absolute basis as the valuation of our producing properties changes.
Refer to Outlook in Part I, Items 1 and 2 of this report for additional discussion. 2024 Financial and Operational Highlights During 2024: • We expanded our operations into Utah upon the completion of the Uinta Basin Acquisition during the fourth quarter of 2024.
Refer to Outlook in Part I, Items 1 and 2 of this report for additional discussion. 2025 Financial and Operational Highlights During 2025: • We completed the integration of the Uinta Basin assets into our portfolio.
Operating Activities For the Years Ended December 31, Amount Change Between 2024 2023 2022 2024/2023 2023/2022 (in millions) Net cash provided by operating activities $ 1,782.5 $ 1,574.4 $ 1,686.4 $ 208.1 $ (112.0) Net cash provided by operating activities increased for the year ended December 31, 2024, compared with 2023, primarily as a result of a $184.8 million increase in cash received from oil, gas, and NGL production revenues, net of transportation costs and production taxes, and an increase of $62.4 million in cash received on settled derivative trades.
Operating Activities For the Years Ended December 31, Amount Change Between Periods 2025 2024 (in millions) Net cash provided by operating activities $ 2,011 $ 1,783 $ 228 Net cash provided by operating activities increased for the year ended December 31, 2025, compared with 2024, primarily resulting from a $474 million increase in cash received from oil, gas, and NGL production revenues, net of transportation costs and production taxes, and an increase of $60 million in cash received on settled derivative trades.
Refer to Non-GAAP Financial Measures below for additional discussion, including our definition of adjusted EBITDAX and reconciliations to net income and net cash provided by operating activities. • A 12 percent increase in total estimated net proved reserves as of December 31, 2024, from December 31, 2023, to 678.3 MMBOE, of which, 62 percent were liquids (oil and NGLs) and 60 percent were proved developed reserves.
Refer to Non-GAAP Financial Measures below for additional discussion, including our definition of adjusted EBITDAX and reconciliations to net income and net cash provided by operating activities. • Estimated net proved reserves decreased slightly to 673.0 MMBOE as of December 31, 2025 from 678.3 MMBOE as of December 31, 2024.
Average net daily equivalent production for the year ended December 31, 2024, increased 12 percent compared with 2023, as a result of an increased number of completions, strong well performance, and production from our Uinta Basin assets during the fourth quarter of 2024.
Average net daily equivalent production for the year ended December 31, 2025, increased 21 percent compared with 2024, resulting from a full year of production from our Uinta Basin assets, and continued strong well performance.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this Item is provided under the captions Interest Rate Risk and Commodity Price Risk in Item 7 above, as well as under the section entitled Summary of Oil, Gas, and NGL Derivative Contracts in Place in Note 7 – Derivative Financial Instruments in Part II, Item 8 of this report and is incorporated herein by reference. 60
Biggest changeQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this Item is provided under the captions Interest Rate Risk and Commodity Price Risk in Item 7 above, as well as under the section entitled Summary of Oil, Gas, and NGL Derivative Contracts in Place in Note 7 – Derivative Financial Instruments in Part II, Item 8 of this report and is incorporated herein by reference. 65

Other SM 10-K year-over-year comparisons