SM Energy’s Civitas deal promises step-change in production and revenues

US shale producer SM Energy Co. (NYSE: SM) is set to complete its all-stock acquisition of Civitas Resources (NYSE: CIVI) after shareholders of both companies overwhelmingly approved the transaction at meetings on Tuesday, January 27. The merger is expected to close on January 30, subject to customary conditions, creating a larger independent producer that will continue to trade under the SM Energy name.

The deal materially reshapes SM Energy’s asset base. The Denver- and Houston-focused group produces crude oil, natural gas and natural gas liquids primarily from Texas and Utah, while Civitas brings scale in the Permian Basin and the DJ Basin, two of the most prolific oil and liquids-rich gas regions in the US.

Visible Alpha consensus forecasts underline the scale of the transformation. SM Energy’s total oil-equivalent production is expected to surge 133% year-on-year to 484 thousand barrels of oil equivalent a day in fiscal 2026, from 207 thousand barrels a day in 2025. Output from the Permian Basin alone is projected to jump 186% to 234 thousand barrels a day in 2026, making it the company’s largest asset and accounting for roughly 48% of total production.

The addition of Civitas’ DJ Basin operations is also meaningful. That portfolio is expected to contribute about 112 thousand barrels of oil equivalent a day in 2026, or around 23% of the combined group’s total output, further diversifying SM Energy’s production mix.

The production uplift is set to flow through to the top line. Consensus estimates point to total operating revenue more than doubling in 2026, rising 103% year-on-year to about $6.5 billion.

This article was published by Visible Alpha, part of S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.