SM Energy Co
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
SM$29.92+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0000893538-26-000121
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0000893538-26-000147
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 167 previous paragraphs and 168 current paragraphs.
68 unchanged; 85 reworded; 14 added; 13 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 23 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
During the nine months ended September 30, 2026, we strengthened our debt maturity profile and reduced higher-coupon debt through the following transactions:
Current report
•We used the net cash proceeds from the South Texas Divestiture to redeem, at par, all $819 million aggregate principal amount outstanding of our 2026 Civitas Senior Notes and our 2026 Senior Notes.
Current report
•We used cash flows from operations to redeem, at par, all $417 million aggregate principal amount outstanding of our 2027 Senior Notes.
Current report
During the nine months ended September 30, 2026, benchmark oil prices were substantially higher than the prior year period, primarily due to global supply disruptions and heightened risk associated with War and Geopolitical Instability. Despite sustained higher near-term prices, we have maintained our disciplined approach to capital allocation and have not materially altered our 2026 development program. We continue to monitor commodity market developments, including potential inflationary pressures on oilfield services, materials, and other key inputs associated with the elevated commodity price environment and the ongoing conflict in the Middle East.
Current report
Commodity prices and broader financial markets continue to be influenced by geopolitical developments, global supply and demand fundamentals, production decisions by the Organization of the Petroleum Exporting Countries (“OPEC”) plus other non-OPEC oil producing countries (collectively referred to as “OPEC+”), and broader economic and monetary conditions. The ongoing conflict in the Middle East, including disruptions to energy infrastructure and shipping routes such as the Strait of Hormuz, has contributed to elevated oil prices and increased uncertainty regarding future commodity market conditions.
Current report
These developments, together with evolving U.S. and international trade policies, including tariffs and other trade restrictions, may also contribute to inflationary pressures, supply chain disruptions, and increased costs for oilfield services, equipment, materials and other key inputs. We continue to monitor these conditions and their potential effects on our operating costs, capital expenditures, and development economics.
Current report
The duration and magnitude of these factors remain uncertain. Changes in commodity prices, regional pricing differentials, operating costs and broader economic conditions could materially affect our business, financial condition, and results of operations. In addition, sustained declines in oil, gas, and NGL prices could result in impairments of certain oil and gas properties.
Current report
During the third quarter of 2026:
Current report
•We substantially completed the integration of the Merger across all key operational and organizational workstreams and have captured targeted synergies from our combined operations, with remaining integration activities expected to continue in the normal course.
Current report
Commodity prices remain subject to uncertainty arising from global supply and demand fundamentals, geopolitical developments and broader economic conditions. While these factors influence benchmark prices, our realized prices are also affected by regional supply and demand, basis differentials, and transportation and infrastructure constraints, including capacity limitations and outages in or affecting our operating areas. We continue to monitor these conditions and their potential impacts on our realized prices and financial results. Refer to Market Trends and Uncertainties above for additional discussion of factors impacting pricing.
Current report
Comparison of Financial Results and Trends Between the Three Months Ended September 30, 2026, and June 30, 2026, and Between the Nine Months Ended September 30, 2026, and 2025
Current report
Average net daily equivalent production decreased two percent, as the three months ended June 30, 2026, included one month of production from our divested South Texas assets. Total realized price increased slightly, resulting in oil, gas, and NGL production revenue remaining relatively flat. Oil, gas, and NGL production expense increased three percent primarily driven by increases in LOE and production tax expense.
Current report
Gain (loss) on divestiture activity
Current report
Income tax expense
Removed paragraphs (13)
Previous report
During the six months ended June 30, 2026, benchmark oil prices reached their highest levels since 2022, reflecting strong global demand and ongoing supply-side constraints resulting from geopolitical developments in the Middle East. Despite the resulting price volatility, we have not made material changes to our 2026 development plan and do not currently anticipate making material changes for the remainder of 2026.
Previous report
As global commodities, the prices of oil, gas, and NGLs, as well as broader financial markets, remain subject to heightened uncertainty and volatility. Market conditions are influenced by factors including real or perceived geopolitical risks; War and Geopolitical Instability; Organization of the Petroleum Exporting Countries (“OPEC”) plus other non-OPEC oil producing countries (collectively referred to as “OPEC+”) production decisions; fluctuations in global supply and demand (including demand from China); U.S. Federal Reserve monetary policy; movements in the strength of the U.S. dollar; shipping channel constraints and disruptions including restrictions in and closures of the Strait of Hormuz; tariffs and trade restrictions; the potential for economic recession in the U.S.; and changes in global oil inventory in storage. 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.
Previous report
Historically, tariffs have led to increased costs for products exchanged in international trade, and have heightened global political tensions. Changes in the U.S. and international trade policies, including the imposition, modification, or repeal of tariffs, continue to contribute to economic and market uncertainty. In recent periods, U.S. tariff policies and related trade actions have shifted frequently, and retaliatory measures or additional policy changes by other countries remain possible, and could contribute to broader economic and market instability.
Previous report
The timing and magnitude of future effects of the factors discussed above are inherently unpredictable and could have a material adverse effect on our business, financial condition, and results of operations to an extent we are unable to reasonably estimate. Declines in oil, gas, and NGL prices are difficult to predict in a volatile price environment and could lead to impairments of proved and unproved properties.
Previous report
•We continued to advance Merger integration efforts across key operational and organizational workstreams and made further progress on capturing synergies.
Previous report
•We closed our South Texas Divestiture on April 30, 2026, and received net cash proceeds of $896 million.
Previous report
We subsequently announced that we instructed the trustee under the 2027 Senior Notes to issue a notice of full redemption of the $417 million aggregate principal amount outstanding to the holders of such notes.
Previous report
Given the uncertainty surrounding commodity prices, War and Geopolitical Instability, and global financial markets, we expect benchmark prices for oil, gas, and NGLs to remain volatile for the foreseeable future. In addition to supply and demand fundamentals, as global commodities, the prices for oil, gas, and NGLs are affected by real or perceived geopolitical risks in various regions of the world, as well as the relative strength of the United States dollar compared to other currencies. Additionally, our realized prices at local sales points have been and may continue to be affected by infrastructure capacity or outages in the areas of our operations and beyond. We cannot reasonably predict the timing or likelihood of any future volatility or the related impacts. Refer to Market Trends and Uncertainties above for additional discussion of factors impacting pricing.
Previous report
Comparison of Financial Results and Trends Between the Three Months Ended June 30, 2026, and March 31, 2026, and Between the Six Months Ended June 30, 2026, and 2025
Previous report
Average net daily equivalent production increased 18 percent, and total realized price increased 22 percent, resulting in a 46 percent increase in oil, gas, and NGL production revenue. Oil, gas, and NGL production expense increased 30 percent. These increases are primarily due to the inclusion of a full quarter of activity from the assets acquired in the Merger during the second quarter of 2026, compared to two months of activity in the first quarter of 2026. These increases were partially offset by the South Texas Divestiture, which contributed one month of activity during the second quarter of 2026 compared to three months of activity during the first quarter of 2026. Production revenue also benefited from increases in benchmark oil prices.
Previous report
Gain on divestiture activity
Previous report
Income tax (expense) benefit
Previous report
On August 5, 2026, we instructed the trustee under our 2027 Senior Notes to issue a notice of full redemption of the $417 million aggregate principal amount outstanding, plus accrued and unpaid interest, to the holders of such notes. We intend to redeem our 2027 Senior Notes on September 4, 2026, using cash on hand. Following the redemption, we will have no remaining Senior Notes maturities in 2027.
Reworded paragraphs (85)
Previous wording
The following discussion includes forward-looking statements. Refer to the Cautionary Information about Forward-Looking Statements section of this report for important information about these types of statements. Throughout the following discussion, we explain changes between the three months ended June 30, 2026, and the three months ended March 31, 2026 (“sequential quarterly” or “sequentially”), and the year-to-date (“YTD”) change between the six months ended June 30, 2026, and the six months ended June 30, 2025 (“YTD 2026-over-YTD 2025”).
Current wording
The following discussion includes forward-looking statements. Refer to the Cautionary Information about Forward-Looking Statements section of this report for important information about these types of statements. Throughout the following discussion, we explain changes between the three months ended September 30, 2026, and the three months ended June 30, 2026 (“sequential quarterly” or “sequentially”), and the year-to-date (“YTD”) change between the nine months ended September 30, 2026, and the nine months ended September 30, 2025 (“YTD 2026-over-YTD 2025”).
Previous wording
Our purpose. Our purpose is to improve communities by providing affordable, reliable energy. We are a premier operator of top-tier assets, utilizing state-of-the-art digital technology, data analytics, and artificial intelligence in our operations, and continually pursuing innovative ideas to optimize capital efficiency and well performance, while reducing our impact on shared natural resources and operating in an efficient, safe, and responsible manner.
Current wording
Our purpose. Our purpose is to improve communities by providing affordable, reliable energy. We are a premier operator of top-tier assets, using state-of-the-art digital technology, data analytics, and artificial intelligence in our operations, and continually innovating to optimize capital efficiency and well performance, while reducing our impact on shared natural resources and operating efficiently, safely, and responsibly.
Previous wording
Strategic vision and value creation. Our asset portfolio consists of high-quality assets in the Midland Basin and Delaware Basin, both of which are part of the larger Permian Basin of West Texas and New Mexico; the DJ Basin of Northeast Colorado; the Maverick Basin of South Texas; and the Uinta Basin of Northeast Utah. We believe our assets are capable of generating strong returns in the current macroeconomic environment and provide resilience to commodity price risk and volatility. Through disciplined capital spending, active portfolio management, and continued development and optimization, we seek to maximize returns and increase the value of our top-tier asset base while maintaining financial flexibility and a sustainable approach to long-term value creation.
Current wording
Strategic vision and value creation. Our asset portfolio consists of high-quality assets in the Midland Basin and Delaware Basin, both of which are part of the larger Permian Basin of West Texas and New Mexico; the DJ Basin of Northeast Colorado; the Maverick Basin of South Texas; and the Uinta Basin of Northeast Utah. We believe our assets are capable of generating strong returns in the current macroeconomic environment and provide resilience to commodity price risk and volatility. Through disciplined capital allocation, active portfolio management, and continued development and optimization, we seek to maximize returns and increase the long-term value of our asset portfolio.
Previous wording
Our long-term vision and strategy are focused on sustainably growing value for all of our stakeholders by deploying our technical excellence and exceptional execution to improve and optimize our high-quality asset portfolio, generate cash flows, and maintain a disciplined, strong balance sheet. Our team executes our strategy by prioritizing safety, technological innovation, and stewardship of natural resources, which are foundational to our corporate culture. Our near-term strategic focus is post-Merger integration; maintaining safe operations; delivering consistent operational execution; maximizing free cash flow; and bolstering our balance sheet.
Current wording
Our long-term vision and strategy are focused on sustainably growing value for all of our stakeholders by maintaining and optimizing our high-quality asset portfolio, generating cash flows, and maintaining a strong balance sheet. Our team executes our strategy by prioritizing safety, technological innovation, and stewardship of natural resources, which are foundational to our corporate culture. Our near-term strategic focus is continuing to optimize operations across our multi-basin portfolio; maintaining safe operations; delivering consistent operational execution; maximizing free cash flow; and bolstering our balance sheet.
Previous wording
Responsible operations and governance. 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. The Operations and EHS 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. 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.
Current wording
Responsible operations. We believe responsible operations and strong financial performance are mutually reinforcing. We are committed to operating safely and efficiently, managing environmental and operational risks, investing in our workforce, maintaining constructive relationships with the communities where we operate, and transparently reporting our performance. The Operations and Environmental, Health and Safety Committee of our Board of Directors assists the Board of Directors in overseeing operational performance, environmental stewardship, health and safety, sustainability reporting, and the management of operational and environmental risks. In addition, compensation for our executives and employees under certain aspects of our compensation plans is based in part on Company-wide performance metrics that include financial, operational, environmental, health and safety measures.
Previous wording
On January 30, 2026, we completed the Merger in accordance with the terms of the Merger Agreement. Civitas was an independent exploration and production company focused on the acquisition, development, and production of crude oil and associated liquids-rich natural gas in the DJ Basin in Colorado and the Permian Basin in Texas and New Mexico. We believe that the Merger enhances our premier portfolio across high-return U.S. shale basins, enabling the realization of operational efficiencies and cost synergies and providing opportunities for increased free cash flow to drive long-term differentiated stockholder value.
Current wording
On January 30, 2026, we completed the Merger in accordance with the terms of the Merger Agreement. Civitas was an independent exploration and production company focused on the acquisition, development, and production of crude oil and associated liquids-rich natural gas in the DJ Basin in Colorado and the Permian Basin in Texas and New Mexico. We believe that the Merger enhances our asset portfolio across high-return U.S. shale basins, enabling the realization of operational efficiencies and cost synergies and providing opportunities for increased free cash flow to drive long-term differentiated stockholder value.
Previous wording
On April 30, 2026, we completed the South Texas Divestiture and received net cash proceeds of $896 million. The final purchase price remains subject to customary post-closing adjustments. The South Texas Divestiture substantially achieved our target of selling more than $1.0 billion in assets within one year of the completion of the Merger, which has enabled us to reduce debt and strengthen our capital structure. See Note 2 - Mergers, Acquisitions, and Divestitures in Part I, Item 1 of this report for additional discussion.
Current wording
On April 30, 2026, we completed the South Texas Divestiture. Subsequent to September 30, 2026, we completed the final post-closing settlement, resulting in total net cash proceeds of $894 million after final purchase price adjustments. The South Texas Divestiture substantially achieved our target of selling more than $1.0 billion in assets within one year of the completion of the Merger, which has enabled us to reduce debt and strengthen our capital structure. See Note 2 - Mergers, Acquisitions, and Divestitures in Part I, Item 1 of this report for additional discussion.
Previous wording
During the six months ended June 30, 2026, and into the subsequent period, we made meaningful progress toward strengthening our debt structure and addressing near-term maturities of certain of our Senior Notes. We issued our 2034 Senior Notes and used the majority of the net proceeds to repurchase $894 million in aggregate principal amount of our higher-coupon 2028 Civitas Senior Notes. After the completion of the South Texas Divestiture, we used the net cash proceeds to fully redeem our 2026 Civitas Senior Notes and our 2026 Senior Notes at par, on May 11, 2026, and June 1, 2026, respectively. Subsequent to June 30, 2026, on August 5, 2026, we instructed the trustee under the 2027 Senior Notes to issue a notice of full redemption of the $417 million aggregate principal amount outstanding, plus accrued and unpaid interest, and intend to complete such redemption on September 4, 2026. Our semi-annual borrowing base redetermination was completed in April 2026, reaffirming our borrowing base and aggregate lender commitments at their existing levels. As of June 30, 2026, we had no outstanding borrowings under our revolving credit facility.
Current wording
•We issued our 2034 Senior Notes and used the majority of the net proceeds to repurchase $894 million in aggregate principal amount of certain of our higher-coupon 2028 Civitas Senior Notes.
Previous wording
Our oil-weighted, liquids-rich asset base spans four operating areas within the United States. Across all areas, gas composition is amenable to processing for NGL extraction, and each area provides future development and exploration opportunities within multiple proven formations.
Current wording
Our oil-weighted, liquids-rich asset base spans four operating areas within the United States. Each area described below provides future development and exploration opportunities within multiple proven formations, and gas composition across all areas is amenable to processing for NGL extraction.
Previous wording
Our Permian Basin assets comprise approximately 233,000 net acres located in the Midland Basin and Delaware Basin of West Texas and New Mexico (collectively referred to as the “Permian Basin”) with future development and exploration opportunities in the Spraberry, Wolfcamp, and Woodford formations in the Midland Basin; and the Avalon, Bone Spring, and Wolfcamp formations in the Delaware Basin.
Current wording
Our Permian Basin assets comprise approximately 230,000 net acres located in the Midland Basin and Delaware Basin of West Texas and New Mexico (collectively referred to as the “Permian Basin”) with future development and exploration opportunities in the Spraberry, Wolfcamp, and Woodford-Barnett formations in the Midland Basin; and the Avalon, Bone Spring, and Wolfcamp formations in the Delaware Basin.
Previous wording
Our DJ Basin assets comprise approximately 301,000 net acres located primarily in northeastern Colorado (“DJ Basin”) with future development and exploration opportunities in the Niobrara and Codell formations.
Current wording
Our DJ Basin assets comprise approximately 300,000 net acres located primarily in northeastern Colorado (“DJ Basin”) with future development and exploration opportunities in the Niobrara and Codell formations.
Previous wording
Following the completion of the South Texas Divestiture, our South Texas assets comprise approximately 95,000 net acres located in Dimmit and Webb counties, Texas (“South Texas”) with future development and exploration opportunities across our overlapping acreage position covering a portion of the western Eagle Ford shale and Austin Chalk formations.
Current wording
Our South Texas assets comprise approximately 95,000 net acres located in Dimmit and Webb counties, Texas (“South Texas”) with future development and exploration opportunities across our overlapping acreage position covering a portion of the western Eagle Ford shale and Austin Chalk formations.
Previous wording
Benchmark gas prices have been volatile throughout 2026, and our realized gas prices have been negatively impacted by basis differentials in both the Permian Basin and the DJ Basin. In the Permian Basin, gas gathering and takeaway capacity constraints contributed to significant basis differentials at the Waha hub throughout the first and second quarters of 2026, with differentials widening in April and May before narrowing in June. In June, additional pipeline capacity entered service and we expect additional pipeline capacity during the second half of 2026 to provide adequate takeaway capacity out of the Permian Basin. In the DJ Basin, unfavorable differentials at CIG Rockies persisted through the second quarter of 2026 as elevated storage inventories and continued spring shoulder season demand weakness kept regional prices below benchmark levels, with only modest improvement late in the second quarter as summer cooling demand increased.
Current wording
Benchmark gas prices have fluctuated throughout 2026. Regional basis differentials in the Permian Basin and the DJ Basin have adversely impacted our realized gas prices, particularly during the first half of 2026. These differentials moderated during the third quarter, although regional pricing constraints continue to influence our realized prices. In the Permian Basin, gas gathering and takeaway capacity constraints contributed to widening basis differentials at the Waha hub during the first half of 2026, with differentials improving late in the second quarter and stabilizing in the third quarter of 2026 as new pipeline capacity entered service. We expect additional pipeline capacity to come online during the remainder of 2026 to further support takeaway out of the Permian Basin. In the DJ Basin, differentials at CIG Rockies widened during the first half of 2026, reflecting elevated regional storage following a mild winter, as well as lower demand during the spring shoulder season. Differentials narrowed through the late second and third quarters as regional demand strengthened.
Previous wording
Second Quarter 2026 Overview and Outlook for the Remainder of 2026
Current wording
Third Quarter 2026 Overview and Outlook for the Remainder of 2026
Previous wording
•We redeemed the entire $400 million and $419 million aggregate principal amounts outstanding of our 2026 Civitas Senior Notes and 2026 Senior Notes, respectively, at par.
Current wording
•We redeemed the entire $417 million aggregate principal amount outstanding of our 2027 Senior Notes, at par.
Previous wording
•We resumed activity under our Stock Repurchase Program by repurchasing and subsequently retiring 2.6 million shares of our common stock at a cost of $84 million, excluding excise taxes, commissions, and fees.
Current wording
•We repurchased and subsequently retired 2.3 million shares of our common stock at a cost of $81 million, excluding excise taxes, commissions, and fees.
Previous wording
Financial and Operational Results. Oil, gas, and NGL production revenue increased 46 percent sequentially to $2.2 billion for the three months ended June 30, 2026, compared with $1.5 billion for the three months ended March 31, 2026. This increase was primarily driven by an 18 percent sequential quarterly increase in average daily equivalent production to 439.7 MBOE per day, reflecting a full quarter of production from the assets acquired in the Merger, and a 22 percent sequential quarterly increase in total realized price per BOE, before the effect of net derivative settlements (“realized price” or “realized prices”), resulting from increases in benchmark oil prices. Oil, gas, and NGL production expense increased 30 percent sequentially to $556 million for the three months ended June 30, 2026, compared with $428 million for the three months ended March 31, 2026.
Current wording
Financial and Operational Results. Oil, gas, and NGL production revenue remained relatively flat sequentially at $2.2 billion. Average net daily equivalent production decreased two percent sequentially to 433.1 MBOE per day for the three months ended September 30, 2026, compared with 439.7 MBOE per day for the three months ended June 30, 2026. This decrease reflects the impact of the divestiture of a portion of our South Texas assets which contributed one month of production in the prior quarter, partially offset by a net increase in average net daily equivalent production from our retained assets, including our retained South Texas assets. Total realized price per BOE, before the effect of net derivative settlements (“realized price” or “realized prices”) increased slightly sequentially, as higher realized natural gas prices, resulting from narrower price differentials at Waha, and higher realized NGL prices were largely offset by lower benchmark oil prices. Oil, gas, and NGL production expense increased three percent sequentially to $574 million for the three months ended September 30, 2026, compared with $556 million for the three months ended June 30, 2026.
Previous wording
We recorded a net derivative gain of $272 million and a net derivative loss of $697 million for the three months ended June 30, 2026, and March 31, 2026, respectively. Included within these amounts are net derivative settlement losses of $220 million and $30 million for the three months ended June 30, 2026, and March 31, 2026, respectively.
Current wording
We recorded a net derivative loss of $684 million and a net derivative gain of $272 million for the three months ended September 30, 2026, and June 30, 2026, respectively. Included within these amounts are net derivative settlement losses of $207 million and $220 million for the three months ended September 30, 2026, and June 30, 2026, respectively.
Previous wording
•Net income of $1.1 billion, or $4.46 per diluted share, compared with a net loss of $335 million, or $1.68 per diluted share, for the three months ended March 31, 2026.
Current wording
•Net income of $93 million, or $0.39 per diluted share, compared with net income of $1.1 billion, or $4.46 per diluted share, for the three months ended June 30, 2026, which included an estimated gain of $262 million related to the South Texas Divestiture.
Previous wording
•Net cash provided by operating activities of $1.1 billion, compared with $640 million for the three months ended March 31, 2026.
Current wording
•Net cash provided by operating activities of $1.1 billion remained unchanged compared with the three months ended June 30, 2026.
Previous wording
•Adjusted EBITDAX, a non-GAAP financial measure, of $1.4 billion, compared with $970 million for the three months ended March 31, 2026. Refer to the caption Non-GAAP Financial Measures below for additional discussion and our definition of adjusted EBITDAX and reconciliations to net income and net cash provided by operating activities.
Current wording
•Adjusted EBITDAX, a non-GAAP financial measure, of $1.3 billion, compared with $1.4 billion for the three months ended June 30, 2026. Refer to the caption Non-GAAP Financial Measures below for additional discussion and our definition of adjusted EBITDAX and reconciliations to net income and net cash provided by operating activities.
Previous wording
Refer to Overview of Selected Production and Financial Information, Including Trendsand Comparison of Financial Results and Trends Between the Three Months Ended June 30, 2026, and March 31, 2026, and Between the Six Months Ended June 30, 2026, and 2025 below for additional discussion.
Current wording
Refer to Overview of Selected Production and Financial Information, Including Trendsand Comparison of Financial Results and Trends Between the Three Months Ended September 30, 2026, and June 30, 2026, and Between the Nine Months Ended September 30, 2026, and 2025 below for additional discussion.
Previous wording
Operational Activities. Our capital program for 2026 is expected to be approximately $2.65 billion to $2.85 billion, excluding acquisitions. Our capital program remains focused on applying our strength in geosciences and development optimization to highly economic oil and liquids rich development projects in our areas of operations that support our priority of strategic inventory replacement and growth. Refer to Overview of Liquidity and Capital Resources below for discussion of how we expect to fund the remainder of our 2026 capital program.
Current wording
Operational Activities. Our capital program for 2026 is expected to be approximately $2.75 billion, excluding acquisitions. We remain focused on applying our strength in geosciences and development optimization to highly economic oil and liquids-rich development projects in our areas of operations that support our priority of strategic inventory replacement and growth. Refer to Overview of Liquidity and Capital Resources below for discussion of how we expect to fund the remainder of our 2026 capital program.
Previous wording
During the three and six months ended June 30, 2026, costs incurred in oil and gas property acquisition, exploration, and development activities, whether capitalized or expensed, totaled $734 million and $1.5 billion, respectively. Total costs incurred includes activity in our core areas of operations, corporate charges incurred in exploration activities, and costs related to exploration efforts outside of our core areas of operation.
Current wording
During the three and nine months ended September 30, 2026, costs incurred in oil and gas property acquisition, exploration, and development activities, whether capitalized or expensed, totaled $782 million and $2.2 billion, respectively. Total costs incurred includes activity in our core areas of operations, corporate charges incurred in exploration activities, and costs related to exploration efforts outside of our core areas of operation.
Previous wording
In our Permian Basin program, we operated an average of seven drilling rigs and one completion crew during the second quarter of 2026, and our operations focused on development optimization and delineation of our assets in the Midland Basin and Delaware Basin. Average net daily equivalent production increased sequentially by 28 percent to 233.5 MBOE per day, reflecting a full quarter of production from the assets acquired in the Merger, compared to two months of production included in the first quarter of 2026 following the Closing Date of the Merger. Costs incurred during the three months ended June 30, 2026, totaled $300 million, or 41 percent of our total costs incurred for the period. We anticipate operating an average of six drilling rigs and two completion crews for the remainder of 2026, focused on development of the Spraberry, Woodford, Bone Spring, Wolfcamp, and Avalon formations.
Current wording
In our Permian Basin program, we operated an average of six drilling rigs and two completion crews during the third quarter of 2026. Average net daily equivalent production decreased sequentially by five percent to 222.7 MBOE per day. Costs incurred during the three months ended September 30, 2026, totaled $394 million, or 50 percent of our total costs incurred for the period. We anticipate operating an average of six drilling rigs and an average of one completion crew for the remainder of 2026.
Previous wording
In our DJ Basin program, we operated two drilling rigs during the second quarter of 2026 and one completion crew for a portion of the quarter, and our operations focused primarily on delineation and development. Average net daily equivalent production increased sequentially by 46 percent to 118.8 MBOE per day reflecting a full quarter of production from the assets acquired in the Merger, compared to two months of production included in the first quarter of 2026 following the Closing Date of the Merger. Costs incurred during the three months ended June 30, 2026, totaled $178 million, or 24 percent of our total costs incurred for the period. We anticipate operating an average of one drilling rig and one completion crew for the remainder of 2026, focused on further development and delineation of the Niobrara and Codell formations.
Current wording
In our DJ Basin program, we operated one drilling rig and one completion crew during the third quarter of 2026. Average net daily equivalent production remained flat sequentially at 119.4 MBOE per day. Costs incurred during the three months ended September 30, 2026, totaled $145 million, or 19 percent of our total costs incurred for the period. We anticipate operating an average of one drilling rig for the remainder of 2026 and one completion crew for a portion of the fourth quarter of 2026.
Previous wording
In our South Texas program, we operated one drilling rig and averaged one completion crew during the second quarter of 2026, and our operations focused primarily on the development and further delineation of the Austin Chalk formation. The three months ended June 30, 2026, reflect only one month of activity related to the divested assets prior to April 30, 2026. Average net daily equivalent production decreased sequentially by 30 percent to 47.4 MBOE per day, primarily due to the South Texas Divestiture. Costs incurred during the three months ended June 30, 2026, totaled $133 million, or 18 percent of our total costs incurred for the period. We anticipate operating one drilling rig during the remainder of 2026 and averaging one completion crew through the end of the third quarter of 2026, focused primarily on developing the Austin Chalk formation.
Current wording
In our South Texas program, we operated one drilling rig and averaged one completion crew during the third quarter of 2026. Average net daily equivalent production remained flat sequentially at 46.3 MBOE per day, despite the second quarter benefiting from one month of production from the divested South Texas assets. Costs incurred during the three months ended September 30, 2026, totaled $95 million, or 12 percent of our total costs incurred for the period. We anticipate operating one drilling rig and no completion crews for the remainder of 2026.
Previous wording
In our Uinta Basin program, we operated two drilling rigs and one completion crew during the second quarter of 2026, and our operations focused on delineation and development. Average net daily equivalent production increased sequentially by two percent to 40.1 MBOE per day. Costs incurred during the three months ended June 30, 2026, totaled $123 million, or 17 percent of our total costs incurred for the period. We anticipate operating between two and three drilling rigs and one completion crew during the remainder of 2026, focused primarily on delineating and developing the Lower Green River and Wasatch formations.
Current wording
In our Uinta Basin program, we operated an average of two drilling rigs and one completion crew during the third quarter of 2026. Average net daily equivalent production increased sequentially by 12 percent to 44.7 MBOE per day. Costs incurred during the three months ended September 30, 2026, totaled $129 million, or 16 percent of our total costs incurred for the period. We anticipate operating an average of three drilling rigs and one completion crew during the remainder of 2026.
Previous wording
The table below provides a quarterly summary of changes in our drilled but not completed well count and current year drilling and completion activity in our operated programs for the three and six months ended June 30, 2026:
Current wording
The table below provides a quarterly summary of changes in our drilled but not completed well count and current year drilling and completion activity in our operated programs by quarter:
Previous wording
(4) Includes adjustments related to normal business activities, including working interest changes for existing drilled but not completed wells and wells completed during the second quarter of 2026. Working interest changes can result from divestitures, joint development agreements, farm-outs, and other activities.
Current wording
(4) Includes adjustments related to normal business activities, including working interest changes for certain existing drilled but not completed wells and for certain wells completed during the second quarter of 2026. Working interest changes can result from divestitures, joint development agreements, farm-outs, and other activities.
Previous wording
Refer to Overview of Selected Production and Financial Information, Including Trendsand Comparison of Financial Results and Trends Between the Three Months Ended June 30, 2026, and March 31, 2026, and Between the Six Months Ended June 30, 2026, and 2025 below for discussion of production.
Current wording
Refer to Overview of Selected Production and Financial Information, Including Trendsand Comparison of Financial Results and Trends Between the Three Months Ended September 30, 2026, and June 30, 2026, and Between the Nine Months Ended September 30, 2026, and 2025 below for discussion of production.
Previous wording
The following table summarizes commodity price data, as well as the effect of net derivative settlements, for the periods presented:
Current wording
The following table summarizes commodity price data, and the effect of net derivative settlements, for the periods presented:
Previous wording
We use financial derivative instruments as part of our financial risk management program. We have a financial risk management policy governing our use of derivatives, and decisions regarding entering into commodity derivative contracts are overseen by a financial risk management committee consisting of certain senior executive officers and finance personnel. We make decisions about the amount of our expected production that we cover by derivatives based on the amount of debt on our balance sheet, the level of capital commitments and long-term obligations we have in place, and the terms and futures prices that are made available by our approved counterparties. With our current commodity derivative contracts, we believe we have partially reduced our exposure to volatility in commodity prices and basis differentials in the near term. Our use of costless collars for a portion of our derivatives allows us to participate in some of the upward movements in oil and gas prices while also setting a price floor below which we are insulated from further price decreases. Refer to Note 8 - Derivative Financial Instruments in Part I, Item 1 of this report and to Commodity Price Riskin Overview of Liquidity and Capital Resources below for additional information regarding our oil, gas, and NGL derivatives.
Current wording
We use financial derivative instruments as part of our financial risk management program. We have a financial risk management policy governing our use of derivatives, and decisions regarding entering into commodity derivative contracts are overseen by a financial risk management committee consisting of certain senior executive officers and finance personnel. The volume of our expected production that we cover with commodity derivative contracts is determined by our balance sheet objectives, capital allocation priorities, anticipated development activity and associated capital requirements, and prevailing commodity market conditions, including available future prices and derivative structures. Our current commodity derivative contracts partially reduce our exposure to volatility in commodity prices and basis differentials in the near term. Our use of costless collars for a portion of our commodity derivative contracts allows us to participate in some of the upward movements in oil and gas prices while also setting a price floor below which we are insulated from further price decreases. Refer to Note 8 - Derivative Financial Instruments in Part I, Item 1 of this report and to Commodity Price Riskin Overview of Liquidity and Capital Resources below for additional information regarding our oil, gas, and NGL derivatives.
Previous wording
Note: Results for the three and six months ended June 30, 2026, reflect activity from the assets acquired in the Merger only after the Closing Date of January 30, 2026, and reflect activity from the assets sold in the South Texas Divestiture only for the period from January 1, 2026, through April 30, 2026.
Current wording
Note: Results for the nine months ended September 30, 2026, reflect activity from the assets acquired in the Merger only after the Closing Date of January 30, 2026, and reflect activity from the assets sold in the South Texas Divestiture only for the period from January 1, 2026, through April 30, 2026.
Previous wording
(2) G&A expense per BOE for the three and six months ended June 30, 2026, includes one-time Merger-related integration costs, the majority of which were incurred during the first quarter of 2026. See below and refer to Comparison of Financial Results and Trends Between the Three Months Ended June 30, 2026, and March 31, 2026, and Between the Six Months Ended June 30, 2026, and 2025 for additional discussion.
Current wording
(2) G&A expense per BOE for the three and nine months ended September 30, 2026, includes one-time Merger-related integration costs, the majority of which were incurred during the six months ended June 30, 2026. See below and refer to Comparison of Financial Results and Trends Between the Three Months Ended September 30, 2026, and June 30, 2026, and Between the Nine Months Ended September 30, 2026, and 2025 for additional discussion.
Previous wording
(3) Net derivative settlements for the three months ended June 30, 2026, and for the six months ended June 30, 2026, and 2025, are included within the net derivative (gain) loss line item in the accompanying statements of operations.
Current wording
(3) Net derivative settlements for the three months ended September 30, 2026, and for the nine months ended September 30, 2026, and 2025, are included within the net derivative (gain) loss line item in the accompanying statements of operations.
Previous wording
The Merger, which closed on January 30, 2026, and the South Texas Divestiture, which closed on April 30, 2026, have materially affected our operating and financial results and will continue to affect comparability with prior periods. The addition of the Civitas assets and operations has increased production volumes and revenues and has impacted oil, gas, and NGL production expense, G&A expense, and other expense categories. The South Texas Divestiture also impacts comparability of our operating and financial results, as the three months ended June 30, 2026, reflect only one month of activity related to the divested assets prior to April 30, 2026. The magnitude and timing of ongoing impacts will depend, in part, on operating performance, commodity prices, Merger integration activities, and other factors and may not be directly comparable to our historical results.
Current wording
The Merger, which closed on January 30, 2026, and the South Texas Divestiture, which closed on April 30, 2026, have materially affected our operating and financial results and will continue to affect comparability with prior periods. The addition of the Civitas assets and operations has increased production volumes and revenues and has impacted oil, gas, and NGL production expense, G&A expense, and other expense categories with the nine months ended September 30, 2026, reflecting eight months of activity from the acquired assets. With respect to the South Texas Divestiture, the three months ended June 30, 2026, include one month of activity from the divested assets prior to the April 30, 2026 closing date, while the three months ended September 30, 2026, reflect only our retained South Texas assets. The nine months ended September 30, 2026, include four months of activity from the divested assets. The magnitude and timing of ongoing impacts will depend, in part, on operating performance, commodity prices, and other factors and may not be directly comparable to our historical results.
Previous wording
Average net daily equivalent production for the three months ended June 30, 2026, increased 18 percent sequentially. The increase was primarily due to the inclusion of a full quarter of production from the assets acquired in the Merger, compared to two months of activity in the first quarter of 2026, partially offset by a decrease in production due to the South Texas Divestiture. Average net daily production increased 100 percent YTD 2026-over-YTD 2025 primarily driven by production from assets acquired in the Merger.
Current wording
Average net daily equivalent production for the three months ended September 30, 2026, decreased two percent sequentially to 433.1 MBOE per day, compared with 439.7 MBOE per day for the three months ended June 30, 2026. This decrease reflects the impact of the divestiture of a portion of our South Texas assets which contributed one month of production in the prior quarter, partially offset by a net increase in average net daily equivalent production from our retained assets, including our retained South Texas assets. Average net daily production increased 101 percent YTD 2026-over-YTD 2025 primarily driven by production from assets acquired in the Merger.
Previous wording
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.
Current wording
We present certain information on a per BOE basis to evaluate our performance relative to our peers and to identify and measure trends we believe may require additional analysis and discussion.
Previous wording
Our realized price on a per BOE basis increased 22 percent sequentially primarily due to increases in benchmark oil prices, partially offset by decreases in realized gas prices driven by a decline in benchmark gas prices and widening price differentials at Waha. Our realized price on a per BOE basis increased 12 percent YTD 2026-over-YTD 2025 primarily due to increases in benchmark oil prices, partially offset by decreases in realized gas prices driven by unfavorable price differentials at Waha and CIG Rockies during the first half of 2026. We recognized net losses on the settlement of our commodity derivative contracts of $5.50 per BOE and $0.90 per BOE during the three months ended June 30, 2026, and March 31, 2026, respectively. During the six months ended June 30, 2026 and 2025, we recognized a net loss of $3.41 per BOE and a net gain of $1.29 per BOE, respectively.
Current wording
Our realized price on a per BOE basis increased slightly sequentially as higher realized natural gas prices, primarily resulting from narrower price differentials at Waha and higher realized NGL prices, were largely offset by lower benchmark oil prices. Our realized price on a per BOE basis increased 19 percent YTD 2026-over-YTD 2025 primarily due to increases in benchmark oil prices, partially offset by decreases in realized gas prices driven by unfavorable price differentials at Waha. We recognized net losses on the settlement of our commodity derivative contracts of $5.20 per BOE and $5.50 per BOE during the three months ended September 30, 2026, and June 30, 2026, respectively. During the nine months ended September 30, 2026, and 2025, we recognized a net loss of $4.04 per BOE and a net gain of $1.53 per BOE, respectively.
Showing the first 40 of 85 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
As of September 30, 2026, we had no outstanding borrowings under our revolving credit facility. After these transactions, we have no Senior Notes maturities until mid-2028. Subsequent to September 30, 2026, we completed our semi-annual borrowing base redetermination, reaffirming our borrowing base and our aggregate lender commitments at their existing levels. See Note 6 - Long-Term Debtin Part I, Item 1 of this report for additional discussion.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
During the second quarter of 2026: