SM Energy has announced a significant divestiture, agreeing to sell its South Texas assets to Caturus Energy for $950 million in cash. This strategic move is aimed at accelerating debt reduction and strengthening the company’s overall financial position. The transaction is anticipated to close in the second quarter of 2026.
The sale encompasses roughly 61,000 net acres and approximately 260 producing wells located in SM Energy’s southern Maverick Basin position in Webb County, Texas. Associated support facilities are also included in the deal. These assets are projected to yield between 37,000 to 39,000 barrels of oil equivalent per day (MBoe/d) in 2026. The production mix is estimated at 45% liquids, with 9% being oil. Furthermore, the divested properties are expected to generate around $160 million in asset-level cash flow for the full year 2026, excluding corporate burdens. As of December 31, 2025, the net proved reserves associated with these properties were approximately 168 million barrels of oil equivalent (MMBoe).
SM Energy’s President and CEO, Beth McDonald, highlighted that this asset sale is a crucial step in achieving the company’s priority of divesting over $1.0 billion in assets. The substantial cash infusion from the sale will be instrumental in reducing debt and fortifying the company’s capital structure. This strategic financial maneuver is expected to enhance SM Energy’s balance sheet strength and financial flexibility. The company plans to provide an update on its return-of-capital program when it reports its upcoming earnings.
The agreement between SM Energy and Caturus Energy has an effective date of February 1, 2026, with the transaction expected to be finalized in the second quarter of 2026, subject to customary adjustments. RBC Capital Markets served as the exclusive financial advisor to SM Energy, while Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel for the transaction.