SM Energy Co. reported a net income of $648 million for the year ended December 31, 2025, compared to $770 million in the previous year. Oil, gas, and NGL production revenue increased by 17% to $3.1 billion, up from $2.7 billion in 2024. The increase in revenue was primarily driven by a 21% increase in average net daily equivalent production, which reached 206.8 MBOE, reflecting a full year of production from the Uinta Basin assets and continued strong well performance. However, this was partially offset by a 3% decrease in the total realized price per BOE due to lower oil and NGL benchmark commodity prices.
The company's average net daily equivalent production in 2025 was 206.8 MBOE, consisting of 40.3 MMbbl of oil, 150.5 Bcf of gas, and 10.1 MMbbl of NGLs. This represents a 21% increase compared to 2024. Oil production accounted for 53% of total production in 2025, up from 47% in 2024, due to the Uinta Basin assets' high oil production rate. Realized prices before the effect of net derivative settlements decreased by 15% for oil and 3% for NGLs, while gas prices increased by 29% compared to the previous year.
Strategic developments for SM Energy in 2025 included the merger agreement with Civitas Resources, which was completed on January 30, 2026. This merger expanded SM Energy's asset portfolio to include operations in the DJ Basin in Colorado and the Delaware Basin in New Mexico and Texas. The company also finalized post-closing adjustments related to the Uinta Basin Acquisition during the first quarter of 2025 and focused on integrating these assets and optimizing operations throughout the year. Total estimated net proved reserves decreased slightly to 673.0 MMBOE as of December 31, 2025, from 678.3 MMBOE as of December 31, 2024.
Key operational developments included drilling 179 gross wells and completing 174 gross wells in 2025. Costs incurred decreased by 59% from 2024 to $1.4 billion in 2025, as 2024 included the acquisition of proved and unproved properties related to the Uinta Basin Acquisition. The company's proved reserve life index decreased to 8.9 years as of December 31, 2025, compared with 10.9 years as of December 31, 2024. The company recorded net derivative gains of $178 million for the year ended December 31, 2025, compared to $50 million for 2024.
Looking ahead, SM Energy's strategy for 2026 includes successfully integrating Civitas, completing the divestiture of certain South Texas assets, generating cash flows to reduce debt and return capital to stockholders, and executing operations with financial discipline. The company expects its total 2026 capital program to be approximately $2.65 billion to $2.85 billion, excluding acquisitions, which it expects to fund with cash flows from operations and borrowings under its revolving credit facility. The focus will be on highly economic oil development projects across its asset base.
About SM Energy Co
SM Energy is an independent energy company engaged in the acquisition, exploration, development, and production of oil, gas, and NGLs primarily in Texas and Utah. It operates high-quality assets in the Midland, South Texas, and Uinta Basins, focusing on sustainable growth, operational efficiency, and stakeholder value. The company emphasizes safety, ESG initiatives, and strategic acquisitions to optimize reserves and generate cash flows.
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