SM Energy Co

SECTION 3—2024 Business Highlights and Continuation of Our Capital Return Program

In 2024, we returned substantial capital to our stockholders, delivered excellent financial and operating results, substantially increased acreage and inventory through the Uinta Basin Acquisition, and increased our estimate net proved reserves to achieve a Company record.

All metrics given for the full year 2024 unless otherwise noted.

(1) As of December 31, 2024; year-over-year increase compared to December 31, 2023

(2) From $190 million on October 1, 2024 to $68.5 million at year-end 2024

Beginning in September 2022, our Board approved a stock repurchase program that authorized the repurchase of up to $500 million in aggregate value of our common stock through year-end 2024 (the “Stock Repurchase Program”). In total, the Company has repurchased approximately 10.1 million shares from the announcement of the Stock Repurchase Program through year-end 2024.

During the first half of 2024, we repurchased 1.8 million shares of our common stock for a total cost of $84 million, and during the full year, we paid annual dividends of $0.74 per share, an increase from annual dividends of $0.60 per share paid in 2023. Inclusive of the Stock Repurchase Program and our payment of fixed dividends (collectively, our “Capital Return Program”), we returned a total of $169 million of capital to stockholders in 2024.

In June 2024, our Board approved an 11 percent increase to our fixed dividend, to $0.80 per share annually, to be paid in increments of $0.20 per share per quarter, beginning in the fourth quarter of 2024; and further, reauthorized and extended our existing Stock Repurchase Program to $500 million through 2027. We believe that our Capital Return Program, which we intend to fund with cash flows from operations, will be sustainable and will create long-term value for our stockholders, while our callable senior notes provide the opportunity to reduce absolute debt over time with cash on hand.

The graph below illustrates the Company’s stock price performance as compared to the average of our 2024 peer companies’ stock price performance (excluding those peers that did not exist for the duration of the period shown), the price of crude oil, and the S&P 500 during the period from January 2020 through December 31, 2024.