Earnings release
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SMENERGY News Release EXHIBIT 99.1 SM Energy Reports Second Quarter 2026 Results Raises second - half production outlook and maintains full - year capital guidance Delivers record operating cash flow , reduces debt , and returns capital to stockholders - DENVER , August 5 , 2026 SM Energy Company ( the “ Company ” or “ SM ” ) ( NYSE : SM ) today reported financial and operating results for the second quarter 2026. Investor materials , including accompanying slides , can be accessed at https://sm-energy.com/investors . A conference call is scheduled for 8 a.m. MT / 10 a.m. ET on August 6 , 2026. Participation details are included in this release . SM continues to advance the integration of its Civitas merger ( the " Merger ” ) and deliver strong progress against three strategic priorities : Integrate , Execute and Bolster . Second quarter 2026 performance on each of these priorities is summarized below . Integrate - • • Execute Progressed Merger - related synergies , with 95 % of the target , or $ 355 million , actioned to date ; full run - rate synergies expected to be actioned by year - end 2026 . Lowered full - year 2026 recurring G & A guidance by $ 50 million at the midpoint , reflecting accelerated integration and full capture of Merger - related G & A synergies . - • . • Net income was $ 4.46 per diluted share ; adjusted net income¹ was $ 2.19 per diluted share . Generated operating cash flow of $ 1.1 billion , or $ 1.2 billion before net change in working capital , including certain long - term items . 1 Capital expenditures totaled $ 754 million , or $ 717 million before changes in accruals.1 Delivered adjusted free cash flow¹ of $ 467 million , after $ 42 million of one - time integration , transaction , and capital costs . • Adjusted EBITDAX1 was $ 1.4 billion . • • • Average net daily production totaled approximately 440 MBoe / d , including approximately 230 MBbl / d of oil . Increased second - half 2026 production guidance to 435-440 MBoe / d , including approximately 238 MBbl / d of oil . Maintained full - year 2026 capital guidance of $ 2.65- $ 2.85 billion . Bolster - • • Returned $ 137 million of capital to stockholders , or approximately 30 % of adjusted free cash flow , 1 through $ 84 million in share repurchases ( 2.6 million shares ) and SM's $ 0.22 per share quarterly dividend . Closed the $ 950 million sale of certain South Texas assets ( the “ South Texas Divestiture " ) on April 30 , 2026 , substantially achieving SM's $ 1.0 billion - plus asset - sales target ; net proceeds of approximately $ 900 million were used to redeem all $ 819 million aggregate principal amount of the 6.75 % and 5.0 % Senior Notes due 2026 ( collectively , " 2026 Senior Notes " ) , contributing to a $ 1.1 billion sequential reduction in net debt.1 Subsequent to quarter - end , issued a notice of full redemption of all remaining $ 417 million aggregate principal amount of the 6.625 % Senior Notes due 2027 ( " 2027 Senior Notes " ) at par using cash on hand , retiring all Senior Notes due through mid - 2028 . ¹Adjusted net income per diluted share ; operating cash flow before net change in working capital , including certain long - term items ; capital expenditures , before changes in accruals ; adjusted free cash flow ; adjusted EBITDAX ; and net debt are non - GAAP measures . Indicates a non - GAAP measure or metric . Refer to " Definitions of Non - GAAP Measures and Metrics As Calculated By the Company " and the accompanying reconciliations later in this release . 1
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“Our team delivered strong results in the second quarter, generating significant free cash flow on the strength of our scaled portfolio,” stated President and CEO Beth McDonald. “In our first full quarter as a combined company, we moved with urgency, actioning 95% of our targeted run-rate synergies, while further strengthening our balance sheet and returning $137 million to stockholders through dividends and share repurchases. With strong performance year-to-date, we today raised second-half 2026 production expectations, reaffirmed full-year capital expectations and reduced our full-year G&A guidance. Our team is focused on disciplined execution – turning scale and asset quality into growing, durable returns for stockholders.” Second Quarter 2026 Review • Production of approximately 440 MBoe/d, including approximately 230 MBbl/d of oil, with an average realized price of $53.86 per Boe, before hedges. Second-quarter volumes include approximately 12 MBoe/d from the recently divested South Texas assets, or one month of production prior to the April 30, 2026 sale. • Recognized an estimated $262 million gain on the South Texas Divestiture. • Year-to-date transaction and integration costs are $172 million compared to full-year guidance of $180 million; the substantial majority of one-time costs have now been incurred. • Other operating income included an approximate $70 million severance tax refund. Guidance • SM raised its second-half production outlook to 435–440 MBoe/d, including approximately 238 MBbl/d of oil, from 430 MBoe/d, and narrowed its full-year production guidance to 418–423 MBoe/d (223–225 MBbl/d of oil). • SM reaffirmed its full-year capital guidance. • See the table below for detailed third quarter and full-year guidance. 2
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The following table summarizes SM’s third quarter and full-year 2026 operational and financial guidance. Production 3Q 2026 Full Year 2026 Total Production (MMBoe) 39.5 – 40.5 152.5 – 154.5 Total Production (MBoe/d) 430 – 440 418 – 423 Oil Production (MBbl/d) 230 – 240 223 – 225 Capital Program ($MM) Capital Expenditures $740 – $790 $2,650 – $2,850 DC&E $2,300 – $2,500 Facility, Land, and Other ~$280 One-Time Capital Costs ~$70 Net Wells Drilled ~55 ~245 Net Wells Turned-In-Line ~85 ~295 Avg. Well Cost ($/lateral ft) ~$710 Operating Expenses ($/Boe) Lease Operating Expense $6.50 – $6.80 Transportation $3.60 – $3.75 Production Taxes (% of oil, gas and NGL revenue) ~6% Ad Valorem Taxes ~$0.50 DD&A $14.00 – $15.00 General & Administrative ($MM) Recurring G&A $230 – $250 One-Time Integration & Transaction — Cash ~$160 One-Time Integration & Transaction — Non-Cash ~$20 Other ($MM) Exploration Expense ~$100 Cash Taxes: $75–$80/Bbl (WTI) $20 – $30 $80–$85/Bbl (WTI) $30 – $50 Notes: FY26 production guidance includes 11 months of Civitas contribution following the January 30, 2026, Merger close, the conversion of certain acquired volumes to two-stream reporting, and four months of production from certain South Texas assets divested on April 30, 2026. Indicates a non-GAAP measure or metric. Refer to “Definitions of Non-GAAP Measures and Metrics As Calculated By the Company” and the accompanying reconciliations later in this release. FY26 capital expenditures before changes in accruals include ~$50 million of expected synergies. Includes one-time, non-recurring capital costs related to Merger integration and the South Texas Divestiture. Company-wide average 2026 expected well cost and includes well connection/equipment costs. FY26 recurring G&A guidance includes ~$35 million of stock-based compensation. The majority of one-time integration and transaction costs (both cash and non-cash) were incurred in 1H26. 1 1 1 2 3 4 5 6 6 1 2 3 4 5 6 3
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Webcast Details SM plans to host a conference call and webcast at 8 a.m. MT (10 a.m. ET) tomorrow, August 6, 2026. The call and accompanying presentation may be accessed at https://www.sm-energy.com/investors. Participants can also dial into the conference call at (877) 407-6050 or +1 (201) 689-8022 for international participants. About SM Energy Company SM is a premier, scaled operator of top-tier oil and gas assets across four leading U.S. shale basins: the Permian Basin, DJ Basin, South Texas, and Uinta Basin. SM routinely posts important information about the Company on its website. SM is focused on operational excellence, disciplined capital allocation, and delivering growing returns to stockholders. For more information, visit www.sm-energy.com. Forward Looking Statements This release contains forward-looking statements within the meaning of securities laws. The words “anticipate,” “deliver,” “demonstrate,” “establish,” “estimate,” “expects,” “goal,” “generate,” “guidance,” “maintain,” “objectives,” “optimize,” “plan,” “priority,” “target,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this release include, among other things, the Company’s 2026 plans and strategic objectives; the Company’s intention to redeem in full its 2027 Senior Notes; future return of capital plans; expectations regarding increased scale; integration objectives and synergy targets, including the expected timing and magnitude; plans to achieve the Company’s $1.0 billion- plus divestiture target; assumptions and projections for the third quarter, second half, and full year 2026 regarding guidance for total production and oil production; the Company’s capital plan, including total capital expenditures; drilling, completion and equipment costs; facility, land and other costs; one-time capital costs; Company average cost per lateral foot; certain operating expenses, including lease operating expense, transportation, production and ad valorem taxes; DD&A; general and administrative expense; and certain other costs, including exploration expense and cash taxes. These statements involve known and unknown risks, which may cause the Company’s actual results to differ materially from results expressed or implied by the forward-looking statements. Future results may be impacted by the risks discussed in the Risk Factors section of the Company’s most recent Annual Report on Form 10-K, as such risk factors may be updated from time to time in the Company’s other periodic reports filed with the Securities and Exchange Commission, specifically the 2025 Form 10-K. The forward-looking statements contained herein speak as of the date of this release. Although the Company may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws. Investor Relations Megan Hays, Vice President, Investor Relations, mhays@sm-energy.com Meghan Dack, Director, Investor Relations, mdack@sm-energy.com 4
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Production Data For the Three MonthsEnded PercentChange Between For the Six MonthsEnded PercentChangeBetween June 30, March 31, June 30, 2Q26& 1Q26 June 30, June 30, YTD 2026 &20252026 2026 2025 2026 2025 Realized sales price (before the effect of net derivative settlements): Oil (per Bbl) $ 96.85 $ 73.69 $ 62.04 31 % $ 86.43 $ 66.04 31 % Gas (per Mcf) $ 0.17 $ 1.72 $ 2.15 (90)% $ 0.88 $ 2.73 (68)% NGLs (per Bbl) $ 24.69 $ 21.58 $ 21.91 14 % $ 23.21 $ 23.85 (3)% Equivalent (per Boe) $ 53.86 $ 44.22 $ 41.27 22 % $ 49.48 $ 44.17 12 % Realized sales price (including the effect of net derivative settlements): Oil (per Bbl) $ 80.62 $ 69.56 $ 64.05 16 % $ 75.64 $ 67.25 12 % Gas (per Mcf) $ 1.54 $ 2.27 $ 2.67 (32)% $ 1.87 $ 3.08 (39)% NGLs (per Bbl) $ 24.83 $ 21.75 $ 21.91 14 % $ 23.36 $ 23.37 — % Equivalent (per Boe) $ 48.36 $ 43.32 $ 43.36 12 % $ 46.07 $ 45.47 1 % Net production volumes: Oil (MMBbl) 20.9 17.1 10.5 22 % 38.0 19.9 92 % Gas (Bcf) 86.8 72.4 36.2 20 % 159.2 72.6 119 % NGLs (MMBbl) 4.6 4.2 2.5 10 % 8.9 4.8 84 % Equivalent (MMBoe) 40.0 33.4 19.0 20 % 73.4 36.8 100 % Average net daily production: Oil (MBbl per day) 229.8 190.3 115.7 21 % 210.2 109.7 92 % Gas (MMcf per day) 953.7 804.1 398.3 19 % 879.3 401.2 119 % NGLs (MBbl per day) 51.0 46.9 26.9 9 % 48.9 26.6 84 % Equivalent (MBoe per day) 439.7 371.2 209.1 18 % 405.7 203.2 100 % Per Boe data: Lease operating expense $ 6.71 $ 6.25 $ 5.52 7 % $ 6.50 $ 5.81 12 % Transportation costs $ 3.57 $ 3.65 $ 4.13 (2)% $ 3.61 $ 4.03 (10)% Production taxes $ 3.25 $ 2.43 $ 1.59 34 % $ 2.88 $ 1.82 58 % Ad valorem tax expense $ 0.37 $ 0.47 $ 0.54 (21)% $ 0.41 $ 0.54 (24)% General and administrative $ 1.98 $ 5.20 $ 2.21 (62)% $ 3.44 $ 2.21 56 % Net derivative settlement gain (loss) $ (5.50) $ (0.90) $ 2.09 (511)% $ (3.41) $ 1.29 (364)% Depletion, depreciation, and amortization$ 14.81 $ 12.91 $ 15.40 15 % $ 13.95 $ 15.30 (9)% Indicates a non-GAAP metric calculated as the average realized price after the effects of net commodity derivative settlements. The Company believes thismetric is useful to management and the investment community to understand the effects of net commodity derivative settlements on average realized price. Amounts and percentage changes may not calculate due to rounding. The results for the three months ended March 31, 2026, include only two months of production from the Civitas assets acquired on January 30, 2026. Theresults for the three months ended June 30, 2026, include only one month of production from the South Texas assets divested on April 30, 2026. The resultsfor the six months ended June 30, 2026, include five months of production from the acquired Civitas assets and four months of production from the divestedSouth Texas assets. Includes recurring non-cash stock-based compensation expense of $0.12, $0.26, and $0.24 per Boe for the three months ended June 30, 2026, March 31,2026, and June 30, 2025, respectively, and $0.18 and $0.28 per Boe for the six months ended June 30, 2026, and 2025, respectively. Includes one-time costs (consisting of both cash and non-cash items) of $0.92 per Boe and $3.52 per Boe for the three months ended June 30, 2026, andMarch 31, 2026, respectively, and $2.10 per Boe for the six months ended June 30, 2026, respectively. 1 2,3 2,3 4,5 1 2 3 4 5 5
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Condensed Consolidated Balance Sheets (in millions, except share data) June 30, December 31, ASSETS 2026 2025 Current assets: Cash and cash equivalents $ 620 $ 368 Accounts receivable 989 331 Derivative assets 145 83 Prepaid expenses and other 146 29 Total current assets 1,900 811 Property and equipment (successful efforts method): Proved oil and gas properties 23,214 16,012 Accumulated depletion, depreciation, and amortization (8,466) (8,793) Unproved oil and gas properties, net of valuation allowance of $12 and $12, respectively 860 460 Wells in progress 809 458 Other property and equipment, net of accumulated depreciation of $67 and $63, respectively 131 65 Total property and equipment, net 16,548 8,202 Noncurrent assets: Derivative assets 56 6 Other noncurrent assets 354 234 Total noncurrent assets 410 240 Total assets $ 18,858 $ 9,253 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 2,367 $ 690 Senior Notes, net 416 419 Derivative liabilities 184 2 Other current liabilities 122 58 Total current liabilities 3,089 1,169 Noncurrent liabilities: Revolving credit facility — — Senior Notes, net 6,620 2,296 Asset retirement obligations 430 150 Deferred tax liabilities, net 630 724 Derivative liabilities 1 2 Other noncurrent liabilities 275 102 Total noncurrent liabilities 7,956 3,274 Stockholders’ equity: Common stock, $0.01 par value - authorized: 400,000,000 and 200,000,000 shares, respectively;issued and outstanding: 237,494,374 and 114,630,905 shares, respectively 2 1 Additional paid-in capital 3,888 1,517 Retained earnings 3,921 3,291 Accumulated other comprehensive income 2 1 Total stockholders’ equity 7,813 4,810 Total liabilities and stockholders’ equity $ 18,858 $ 9,253 6
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Condensed Consolidated Statements of Operations (in millions, except per share data) For the Three Months EndedJune 30, For the Six Months EndedJune 30, 2026 2025 2026 2025 Operating revenues and other income: Oil, gas, and NGL production revenue $ 2,156 $ 785 $ 3,633 $ 1,625 Gain on divestiture activity 262 — 262 — Other operating income 82 8 84 13 Total operating revenues and other income 2,500 793 3,979 1,637 Operating expenses: Oil, gas, and NGL production expense 556 224 984 449 Depletion, depreciation, and amortization 592 293 1,024 563 Exploration 21 15 47 27 General and administrative 79 42 253 81 Net derivative (gain) loss (272) (78) 425 (61) Other operating expense 28 2 48 7 Total operating expenses 1,004 498 2,781 1,066 Income from operations 1,496 295 1,198 571 Interest expense (111) (43) (224) (87) Other non-operating income, net 4 — 5 — Income before income taxes 1,389 253 979 485 Income tax expense (318) (51) (243) (101) Net income $ 1,071 $ 202 $ 736 $ 384 Basic weighted-average common shares outstanding 239 115 219 115 Diluted weighted-average common shares outstanding 240 115 220 115 Basic net income per common share $ 4.48 $ 1.76 $ 3.35 $ 3.35 Diluted net income per common share $ 4.46 $ 1.76 $ 3.34 $ 3.34 Recurring non-cash stock-based compensation included in: Exploration expense $ 3 $ 1 $ 5 $ 3 General and administrative expense 4 5 12 10 Total non-cash stock-based compensation $ 7 $ 6 $ 17 $ 13 Transaction and integration costs included in: General and administrative (includes $5 million and $20 million,respectively, of non-cash stock-based compensation associatedwith the Merger) $ 37 $ — $ 155 $ — Other operating expenses — — 17 — Total transaction and integration costs $ 37 $ — $ 172 $ — The net derivative (gain) loss line item consists of the following: Net derivative settlement (gain) loss $ 220 $ (40) $ 250 $ (47) Net (gain) loss on fair value changes (492) (39) 175 (14) Total net derivative (gain) loss $ (272) $ (78) $ 425 $ (61) Note: Prior year amounts may not calculate due to rounding. 1 1,2 3 2 1 2 3 7
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Condensed Consolidated Statements of Stockholders' Equity (in millions, except share data and dividends per share) AdditionalPaid-inCapital RetainedEarnings AccumulatedOtherComprehensiveIncome TotalStockholders’Equity Common Stock Shares Amount Balances, December 31, 2025 114,630,905 $ 1 $ 1,517 $ 3,291 $ 1 $ 4,810 Net loss — — — (335) — (335) Net cash dividends declared, $0.22 pershare — — — (53) — (53) Issuance of common stock upon vestingof RSUs, and settlement of PSUs, net ofshares used for tax withholdings 235,422 — (17) — — (17) Stock-based compensation expense 1,114,479 — 25 — — 25 Replacement equity awards issued inconnection with the Merger — — 29 — — 29 Issuance of common stock in connectionwith the Merger 123,715,771 1 2,408 — — 2,409 Balances, March 31, 2026 239,696,577 $ 2 $ 3,962 $ 2,903 $ 1 $ 6,868 Net income — — — 1,071 — 1,071 Other comprehensive income — — — — 1 1 Net cash dividends declared, $0.22 pershare — — — (53) — (53) Issuance of common stock underEmployee Stock Purchase Plan 147,743 — 2 — — 2 Issuance of common stock upon vestingof RSUs, net of shares used for taxwithholdings 216,257 — (3) — — (3) Stock-based compensation expense 77,303 — 11 — — 11 Purchase of shares under StockRepurchase Program (2,643,506) — (84) — — (84) Balances, June 30, 2026 237,494,374 $ 2 $ 3,888 $ 3,921 $ 2 $ 7,813 8
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Condensed Consolidated Statements of Stockholders' Equity (Continued) (in millions, except share data and dividends per share) AdditionalPaid-inCapital AccumulatedOtherComprehensiveLoss TotalStockholders’Equity Common Stock RetainedEarningsShares Amount Balances, December 31, 2024 114,461,934 $ 1 $ 1,502 $ 2,735 $ (1) $ 4,237 Net income — — — 182 — 182 Net cash dividends declared, $0.20 pershare — — — (23) — (23) Issuance of common stock upon vestingof RSUs, net of shares used for taxwithholdings 284 — — — — — Stock-based compensation expense — — 7 — — 7 Balances, March 31, 2025 114,462,218 $ 1 $ 1,509 $ 2,895 $ (1) $ 4,404 Net income — — — 202 — 202 Net cash dividends declared, $0.20 pershare — — — (23) — (23) Issuance of common stock underEmployee Stock Purchase Plan 90,314 — 2 — — 2 Stock-based compensation expense 82,193 — 6 — — 6 Balances, June 30, 2025 114,634,725 $ 1 $ 1,517 $ 3,074 $ (1) $ 4,590 Note: Prior year amounts may not calculate due to rounding. 9
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Condensed Consolidated Statements of Cash Flows (in millions) For the Three Months EndedJune 30, For the Six Months EndedJune 30, 2026 2025 2026 2025 Cash flows from operating activities: Net income $ 1,071 $ 202 $ 736 $ 384 Adjustments to reconcile net income to net cash provided by operating activities: Gain on divestiture activity (262) — (262) — Depletion, depreciation, and amortization 592 293 1,024 563 Stock-based compensation expense 11 6 36 13 Net derivative (gain) loss (272) (78) 425 (61) Net derivative settlement gain (loss) (220) 40 (250) 47 Amortization of deferred financing costs and debt premiums, net(5) 3 (10) 5 Deferred income tax expense 316 43 231 69 Other, net (10) (6) (38) (4) Net change in working capital (118) 69 (149) 38 Net cash provided by operating activities 1,103 571 1,743 1,054 Cash flows from investing activities: Net proceeds from the sale of oil and gas properties 897 — 897 — Capital expenditures (754) (410) (1,309) (824) Acquisition of business, net of cash acquired — — (49) — Other — — (24) (15) Net cash provided by (used in) investing activities 143 (410) (485) (839) Cash flows from financing activities: Proceeds from revolving credit facility 326 528 341 1,385 Repayment of revolving credit facility (326) (566) (341) (1,453) Net proceeds from Senior Notes (1) — 984 — Cash paid to repurchase Senior Notes (935) — (1,743) — Repurchase of common stock (87) (1) (87) (1) Dividends paid (53) (23) (135) (46) Other, net 1 2 (25) 2 Net cash used in financing activities (1,075) (59) (1,006) (113) Net change in cash, cash equivalents, and restricted cash 171 102 252 102 Cash, cash equivalents, and restricted cash at beginning of period449 — 368 — Cash, cash equivalents, and restricted cash at end of period$ 620 $ 102 $ 620 $ 102 10
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Condensed Consolidated Statements of Cash Flows (continued) (in millions) For the Three Months EndedJune 30, For the Six Months EndedJune 30, 2026 2025 2026 2025 Supplemental schedule of additional cash flow information: Operating activities: Cash paid for interest, net of capitalizedinterest $ (90) $ (3) $ (185)$ (85) Operating activities: Net cash paid for income taxes$ (33) $ (5) $ (32) $ (5) Investing activities: Changes in capital expenditure accruals$ (37) $ (22) $ 80 $ 5 Note: Prior year amounts may not calculate due to rounding. 11
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DEFINITIONS OF NON-GAAP MEASURES AND METRICS AS CALCULATED BY THE COMPANY To supplement the presentation of its financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides certain non-GAAP measures and metrics, which are used by management and the investment community to assess the Company’s financial condition, results of operations, and cash flows, as well as compare performance from period to period and across the Company’s peer group. The Company believes these measures and metrics are widely used by the investment community, including investors, research analysts and others, to evaluate and compare recurring financial results among upstream oil and gas companies in making investment decisions or recommendations. These measures and metrics, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures and metrics provided by others. A non-GAAP measure should not be considered in isolation or as a substitute for the most directly comparable GAAP measure or any other measure of a company’s financial or operating performance presented in accordance with GAAP. Reconciliations of the Company’s non-GAAP measures to the most directly comparable GAAP measures are presented below. These measures may not be comparable to similarly titled measures of other companies. Adjusted EBITDAX: Adjusted EBITDAX represents net income (loss) before interest expense, interest income, income taxes, depletion, depreciation, and amortization expense, exploration expense, property abandonment and impairment expense, non- cash stock-based compensation expense, derivative gains and losses net of settlements, gains and losses on divestitures, gains and losses on extinguishment of debt, non-recurring or one-time costs including transaction and integration costs associated with the Merger, and certain other items. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDAX is a non-GAAP measure that the Company believes provides useful additional information to investors and analysts, as a performance measure, for analysis of the Company’s ability to internally generate funds for exploration, development, acquisitions, and to service debt. The Company is also subject to financial covenants under the Company’s Credit Agreement, a material source of liquidity for the Company, based on Adjusted EBITDAX ratios. Please reference the Company’s second quarter 2026 Form 10-Q and the most recent Annual Report on Form 10-K for discussion of the Credit Agreement and its covenants. Adjusted free cash flow: Adjusted free cash flow is calculated as net cash provided by operating activities before net change in working capital, including change in certain long-term items, less capital expenditures before changes in accruals. The Company uses this measure to represent the cash generated from operations, in excess of capital expenditures, that is available to fund discretionary uses such as debt reduction, stockholder returns, or expanding the business. Adjusted net income and Adjusted net income per diluted common share: Adjusted net income and Adjusted net income per diluted common share exclude certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. These items include non-cash and other adjustments, such as derivative gains and losses net of settlements, impairments, gains and losses on divestitures, gains and losses on extinguishment of debt, non-recurring or one-time costs including transaction and integration costs associated with the Merger, and accruals for non-recurring matters. The Company uses these measures to evaluate the comparability of the Company's ongoing operational results and trends and believes these measures provide useful information to investors for analysis of the Company's fundamental business on a recurring basis. Net debt: Net debt is calculated as the total principal amount of outstanding senior notes plus amounts drawn on the revolving credit facility less cash and cash equivalents (also referred to as total funded debt). The Company uses net debt as a measure of financial position and believes this measure provides useful additional information to investors to evaluate the Company's capital structure and financial leverage. Capital expenditures: The Company’s operating plan guidance uses the term “capital expenditures,” which is defined to be before changes in accruals (excludes working capital), and is a non-GAAP measure. In reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, the Company is unable to provide a reconciliation of forward-looking non-GAAP capital expenditures because components of the calculations are inherently unpredictable, such as changes to, and the timing of, capital accruals, unknown future events, and estimating certain future GAAP measures. The inability to project certain components of the calculation could significantly affect the accuracy of a reconciliation. 12
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Adjusted EBITDAX Reconciliation Reconciliation of net income (GAAP) and net cashprovided by operating activities (GAAP) to AdjustedEBITDAX (non-GAAP): For the Three Months EndedJune 30, For the Six Months EndedJune 30, (in millions) 2026 2025 2026 2025 Net income (GAAP) $ 1,071 $ 202 $ 736 $ 384 Interest expense 111 43 224 87 Income tax expense 318 51 243 101 Depletion, depreciation, and amortization 592 293 1,024 563 Exploration 18 14 42 24 Stock-based compensation expense 7 6 17 13 Net derivative (gain) loss (272) (78) 425 (61) Net derivative settlement gain (loss) (220) 40 (250) 47 Gain on divestiture activity (262) — (262) — Transaction and integration costs 37 — 172 — Other, net 6 — 5 1 Adjusted EBITDAX (non-GAAP) $ 1,406 $ 570 $ 2,376 $ 1,158 Interest expense (111) (43) (224) (87) Income tax expense (318) (51) (243) (101) Exploration (18) (14) (42) (24) Amortization of deferred financing costs and debtpremiums, net (5) 3 (10) 5 Transaction and integration costs (32) — (152) — Deferred income tax expense 316 43 231 69 Other, net (17) (6) (44) (5) Net change in working capital (118) 69 (149) 38 Net cash provided by operating activities (GAAP)$ 1,103 $ 571 $ 1,743 $ 1,054 Note: Prior year amounts may not calculate due to rounding. See "Definitions of Non-GAAP Measures and Metrics as Calculated by the Company" above. Stock-based compensation expense is a component of the exploration expense and general and administrative expense line items on theunaudited condensed consolidated statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary fromthe amounts shown on the unaudited condensed consolidated statements of operations for the component of stock-based compensationexpense recorded to exploration expense. Transaction and integration costs include expenses associated with the Merger and post-Merger integration activities. For the three and sixmonths ended June 30, 2026, these costs consisted of $37 million and $155 million, respectively, of one-time integration costs, (including$5 million and $20 million, respectively, of stock-based compensation), which were included in general and administrative expense in theaccompanying statements of operations, and less than $1 million and $17 million, respectively, of one-time transaction costs included in otheroperating expense in the accompanying statements of operations. 1 2 3 2 3 1 2 3 13
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Reconciliation of Net Income to Adjusted Net Income (in millions, except per share data) For the Three Months EndedJune 30, For the Six Months EndedJune 30, 2026 2025 2026 2025 Net income (GAAP) $ 1,071 $ 202 $ 736 $ 384 Net derivative (gain) loss (272) (78) 425 (61) Net derivative settlement gain (loss) (220) 40 (250) 47 Gain on divestiture activity (262) — (262) — Transaction and integration costs 37 — 172 — Other, net 10 — 13 1 Tax effect of adjustments 162 8 (22) 3 Deferred tax remeasurement – corporate reorganization — — 23 — Adjusted net income (non-GAAP) $ 526 $ 172 $ 835 $ 374 Diluted net income per common share (GAAP)$ 4.46 $ 1.76 $ 3.34 $ 3.34 Net derivative (gain) loss (1.13) (0.68) 1.93 (0.53) Net derivative settlement gain (loss) (0.92) 0.35 (1.14) 0.41 Gain on divestiture activity (1.09) — (1.19) — Transaction and integration costs 0.15 — 0.78 — Other, net 0.04 — 0.07 0.01 Tax effect of adjustments 0.68 0.07 (0.10) 0.03 Deferred tax remeasurement – corporate reorganization — — 0.10 — Adjusted net income per diluted common share (non-GAAP)$ 2.19 $ 1.50 $ 3.79 $ 3.26 Basic weighted-average common shares outstanding 239 115 219 115 Diluted weighted-average common shares outstanding 240 115 220 115 Note: Prior year amounts may not calculate due to rounding. See "Definitions of Non-GAAP Measures and Metrics as Calculated by the Company" above. Transaction and integration costs include expenses associated with the Merger and post-merger integration activities. For the three and six months endedJune 30, 2026, these costs consisted of $37 million and $155 million, respectively, of one-time integration costs, (including $5 million and $20 million,respectively, of stock-based compensation), which were included in general and administrative expense in the accompanying statements of operations, andless than $1 million and $17 million, respectively, of one-time transaction costs included in other operating expense in the accompanying statements ofoperations. The tax effect of adjustments was calculated using a tax rate of 22.9% for the three and six months ended June 30, 2026, and 22.1% for the three and sixmonths ended June 30, 2025. These rates approximate the Company's statutory tax rates for the respective periods, as adjusted for ordinary permanentdifferences. Reflects a non-recurring remeasurement of net deferred tax balances resulting from a change in state income tax apportionment due to a corporatereorganization and the Merger. 1 2 3 4 2 3 4 1 2 3 4 14
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SM ENERGY COMPANY FINANCIAL HIGHLIGHTS (UNAUDITED) June 30, 2026 Reconciliation of Net Cash Provided by Operating Activitiesand Capital Expenditures to Adjusted Free Cash Flow (in millions) For the Three Months EndedJune 30, For the Six Months EndedJune 30, 2026 2025 2026 2025 Net cash provided by operating activities (GAAP)$ 1,103 $ 571 $ 1,743 $ 1,054 Net change in working capital, including change in certain long-term items 81 (69) 133 (38) Cash flow from operations before net change in working capital,including change in certain long-term items (non-GAAP) 1,184 502 1,876 1,016 Capital expenditures (GAAP) 754 410 1,309 824 Changes in capital expenditure accruals (37) (22) 80 5 Capital expenditures before changes in accruals (non-GAAP)717 388 1,389 829 Adjusted free cash flow (non-GAAP) $ 467 $ 114 $ 487 $ 188 See "Definitions of Non-GAAP Measures and Metrics as Calculated by the Company" above. Note: For the three months ended June 30, 2026, adjusted free cash flow includes approximately $42 million of one-time, non-recurring cash costsassociated with the Merger integration and the South Texas assets divested, consisting of approximately $32 million reported in net cash provided byoperating activities and approximately $10 million in capital expenditures. For the six months ended June 30, 2026, adjusted free cash flow includesapproximately $222 million of one-time, non-recurring cash costs, consisting of approximately $152 million reported in net cash provided by operatingactivities and approximately $70 million in capital expenditures. Reconciliation of Total Principal Amount of Debt to Net Debt (in millions) June 30, 2026 Principal amount of Senior Notes $ 6,873 Revolving credit facility — Total principal amount of debt (GAAP) 6,873 Less: Cash and cash equivalents 620 Net Debt (non-GAAP) $ 6,253 See "Definitions of Non-GAAP Measures and Metrics as Calculated by the Company" above. Amounts as of June 30, 2026, are from Note 6 - Long-Term Debt in Part I, Item 1 of the Company's Form 10-Q. 1 1 1 2 2 1 2 15