SM Energy to Acquire HighPoint Resources for $750M

TL;DR

SM Energy buys HighPoint for $750M, boosting Midland Basin presence.

AI Summary

SM Energy Co. announced on July 18, 2024, that it has entered into a definitive agreement to acquire all of the outstanding equity interests of HighPoint Resources Corp. for a purchase price of approximately $750 million, subject to customary adjustments. This acquisition is expected to close in the fourth quarter of 2024.

Why It Matters

This acquisition significantly expands SM Energy's footprint in the Midland Basin, potentially leading to increased production and operational efficiencies.

Risk Assessment

Risk Level: medium — Acquisitions carry inherent risks related to integration, valuation, and potential unforeseen liabilities.

Key Numbers

• $750 million — Purchase Price (Total consideration for the acquisition of HighPoint Resources Corp.)

Key Players & Entities

• SM Energy Co. (company) — Acquiring company
• HighPoint Resources Corp. (company) — Acquired company
• $750 million (dollar_amount) — Purchase price
• July 18, 2024 (date) — Announcement date
• fourth quarter of 2024 (date) — Expected closing date

FAQ

Key Financial Figures

• $0.01 — nge on which registered Common stock, $0.01 par value SM New York Stock Exchange
• $650,000,000.00 — for sale (the " Offering ") an expected $650,000,000.00 aggregate principal amount of senior no
• $650 Million — SM Energy Announces Private Offering of $650 Million of Senior Notes due 2029 and $650 Milli

Filing Documents

• sm-20240718.htm (8-K) — 38KB
• exhibit231consentofplantem.htm (EX-23.1) — 3KB
• exhibit232accountantsackno.htm (EX-23.2) — 3KB
• exhibit233consentofdegolye.htm (EX-23.3) — 9KB
• exhibit99107182024pressrel.htm (EX-99.1) — 11KB
• exhibit992excerptfromthepr.htm (EX-99.2) — 38KB
• exhibit993xclresources2023.htm (EX-99.3) — 452KB
• exhibit994xclresourcesmarc.htm (EX-99.4) — 464KB
• exhibit995xclacquisitionpr.htm (EX-99.5) — 865KB
• exhibit996reservesreport-x.htm (EX-99.6) — 69KB
• auditpicture1.jpg (GRAPHIC) — 25KB
• auditpictureb.jpg (GRAPHIC) — 25KB
• degolyerlogo.jpg (GRAPHIC) — 22KB
• image_41a.jpg (GRAPHIC) — 170KB
• image_42.jpg (GRAPHIC) — 170KB
• image_43.jpg (GRAPHIC) — 170KB
• image_4b.jpg (GRAPHIC) — 272KB
• image_4d.jpg (GRAPHIC) — 170KB
• smenergylogovertical_lga16.jpg (GRAPHIC) — 251KB
• xclresourceslogo1.jpg (GRAPHIC) — 43KB
• xclresourceslogoa.jpg (GRAPHIC) — 43KB
• 0000893538-24-000079.txt ( ) — 4124KB
• sm-20240718.xsd (EX-101.SCH) — 2KB
• sm-20240718_lab.xml (EX-101.LAB) — 21KB
• sm-20240718_pre.xml (EX-101.PRE) — 12KB
• sm-20240718_htm.xml (XML) — 3KB

01 Other Events

Item 8.01 Other Events. On July 18, 2024, SM Energy Company (the " Company ") issued a press release announcing that, subject to market and other conditions, the Company intends to offer for sale (the " Offering ") an expected $650,000,000.00 aggregate principal amount of senior notes due 2029 (the " 2029 Notes "), and $650,000,000.00 aggregate principal amount of senior notes due 2032 (the " 2032 Notes ," and together with the 2029 Notes, the " Notes "). The Notes to be offered will not be registered under the Securities Act of 1933, as amended (the " Securities Act "), or under any state or other securities laws, and the Notes will be issued pursuant to an exemption therefrom, and may not be offered or sold within the United States, or to or for the account or benefit of any U.S. person, absent registration or an applicable exemption from registration requirements. The Notes are being offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A under the Securities Act and non-U.S. persons outside the United States in accordance with Regulation S under the Securities Act. The 2029 Notes will be subject to a "special mandatory redemption" in the event that the transactions contemplated by the Purchase and Sale Agreement (the " XCL Acquisition Agreement " and such transactions, the " XCL Acquisition ") among the Company and certain entities affiliated with XCL Resources, LLC (collectively, the " XCL Sellers "), dated June 27, 2024, is not consummated on or prior to July 1, 2025, or if the Company notifies the trustee of the 2029 Notes that it will not pursue the consummation of the XCL Acquisition. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated by reference herein. In accordance with General Instruction B.2. of Form 8-K, this press release is deemed "furnished" and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 17A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this report include, among other things, the consummation of the XCL Acquisition, the contingencies related to the special mandatory redemption, and other aspects of the Offering. These statements involve known and unknown risks, including market conditions, customary offering closing conditions and other factors described in the excerpts from the Preliminary Offering Memorandum, 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 for the year ended December 31, 2023, as such risk factors may be updated from time to time in the Company's other periodic and current reports filed with the Securities and Exchange Commission. These risks also include risks associated with the XCL Acquisition, including the risk that we may fail to consummate the XCL Acquisition on the terms or timing currently contemplated, or at all, the risk that Northern Oil and Gas, Inc. may fail to consummate its purchase of an undivided 20% of the XCL Acquisition Agreement, the risk that we may fail to realize the expected benefits of the XCL Acquisition, including as it relates to the number of net acres to be acquired, the number of expected drilling locations, reserves estimates and producing formations, and risks related to the integration of the XCL Acquisition or business disruptions that could result from the XCL Acquisition. The forward-looking statements contained herein speak as of the date of this report. Although the Company may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitme

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Description 23.1 Consent of Plante & Moran, PLLC 23.2 Auditor's Acknowledgement of Plante & Moran, PLLC 23. 3 Consent of DeGolyer and MacNaughton Corp. 99.1 * Press release of the Company dated July 18, 2024, entitled "SM Energy Announces Private Offering of $650 Million of Senior Notes due 2029 and $650 Million of Senior Notes due 2032" 99.2 Excerpts from the Preliminary Offering Memorandum of the Company 99.3 Audited historical financial statements for the fiscal years ended December 31, 2023 and 2022, for the XCL Sellers 99.4 Reviewed interim historical financial statements (unaudited) as of March 31, 2024 and for the periods ended March 31, 2024 and 2023 for the XCL Sellers 99.5 Unaudited pro forma condensed combined financial information for the periods presented, for the Company and the XCL Sellers 99.6 Reserve Report as of December 31, 2023 for the XCL Sellers 104 Cover Page Interactive Data File (formatted as Inline XBRL and included as Exhibit 101) * Furnished, not filed.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SM ENERGY COMPANY Date: July 18, 2024 By: /s/ JAMES B. LEBECK James B. Lebeck Executive Vice President and General Counsel

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View this 8-K filing on SEC EDGAR