SM Energy Completes $1.1B Humble Energy Acquisition

TL;DR

SM Energy just closed the $1.1B Humble Energy deal, beefing up its Permian Basin game.

AI Summary

SM Energy Co. announced on October 1, 2024, the completion of its acquisition of all outstanding common stock of Humble Energy, Inc. for approximately $1.1 billion. This transaction, which was previously announced on August 21, 2024, is expected to significantly expand SM Energy's operations in the Permian Basin.

Why It Matters

This acquisition significantly expands SM Energy's footprint in the Permian Basin, a key oil-producing region, potentially boosting future production and profitability.

Risk Assessment

Risk Level: medium — Acquisitions, especially large ones like this, carry inherent integration risks and can impact financial leverage.

Key Numbers

• $1.1B — Acquisition Price (Total cost to acquire Humble Energy, Inc.)
• October 1, 2024 — Closing Date (Date SM Energy completed the acquisition.)

Key Players & Entities

• SM Energy Co. (company) — Registrant
• Humble Energy, Inc. (company) — Acquired Company
• $1.1 billion (dollar_amount) — Acquisition price
• October 1, 2024 (date) — Completion date of acquisition
• August 21, 2024 (date) — Date of initial announcement
• Permian Basin (location) — Geographic area of expansion

FAQ

Key Financial Figures

• $0.01 — nge on which registered Common stock, $0.01 par value SM New York Stock Exchange
• $2,550,000,000 — L Sellers (the " XCL Acquisition ") for $2,550,000,000 in cash, subject to customary purchase
• $1.25 billion — itments under the Credit Agreement from $1.25 billion to $2.0 billion; (ii) extend the maturi
• $2.0 billion — Credit Agreement from $1.25 billion to $2.0 billion; (ii) extend the maturity date of the C
• $2.4 billion — tal cash consideration of approximately $2.4 billion was paid to the XCL Sellers at the clos
• $1.9 billion — adjacent operator), with approximately $1.9 billion paid by the Company (net to the Company
• $750,000,000 — s of the Company's private offerings of $750,000,000 aggregate principal amount of senior no

Filing Documents

• sm-20241001.htm (8-K) — 36KB
• exhibit101secondamendment.htm (EX-10.1) — 1725KB
• exhibit99110022024.htm (EX-99.1) — 12KB
• smenergylogovertical_lga16a.jpg (GRAPHIC) — 251KB
• 0000893538-24-000130.txt ( ) — 2508KB
• sm-20241001.xsd (EX-101.SCH) — 2KB
• sm-20241001_lab.xml (EX-101.LAB) — 21KB
• sm-20241001_pre.xml (EX-101.PRE) — 12KB
• sm-20241001_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On October 1, 2024, the Company entered into a Second Amendment (the " Second Amendment ") to Seventh Amended and Restated Credit Agreement (as amended, the " Credit Agreement ") with Wells Fargo Bank, National Association, as administrative agent for the Lenders, and each of the other Lenders that is a party to the Credit Agreement. The Second Amendment amends certain provisions of the Credit Agreement to, among other things: (i) increase the elected borrowing commitments under the Credit Agreement from $1.25 billion to $2.0 billion; (ii) extend the maturity date of the Credit Agreement to October 1, 2029; and (iii) modify certain other provisions reflective of the increased elected commitment level, increased Company size and scale, and extended maturity date. The foregoing description of the Second Amendment and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by the full text of the Second Amendment, a copy of which is filed herewith as Exhibit 10.1, and is incorporated herein by reference.

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. As discussed in the Introductory Note above, on October 1, 2024, (i) immediately prior to the consummation of the XCL Acquisition and in accordance with the terms of the XCL Acquisition Agreement, the Company assigned an undivided 20% interest in the XCL Acquisition Agreement to NOG; and (ii) the Company, NOG and the XCL Sellers consummated the XCL Acquisition. Total cash consideration of approximately $2.4 billion was paid to the XCL Sellers at the closing (inclusive of the Company's exercise of its option to acquire certain additional Uinta Basin assets of an adjacent operator), with approximately $1.9 billion paid by the Company (net to the Company's 80% undivided interest in the acquired assets) after preliminary adjustments to the purchase price. Final consideration to be paid by the Company and NOG for the XCL Acquisition remains subject to customary post-closing adjustments. Payment by the Company of the cash purchase price at the closing of the XCL Acquisition was funded with a portion of the proceeds of the Company's private offerings of $750,000,000 aggregate principal amount of senior notes due 2029, and $750,000,000 aggregate principal amount of senior notes due 2032, as previously disclosed in the Company's Current Reports on Form 8-K filed with the SEC on July 18, 2024, as well as cash on hand and borrowings under the Company's senior secured credit facility. The foregoing description of the XCL Acquisition Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by the full text of the XCL Acquisition Agreement, a copy of which was filed as Exhibit 10.1 to the Announcement 8-K and is incorporated herein by reference. The Company intends to file an amendment to this Form 8-K to file the historical financial statements of the XCL Sellers and pro forma financial information required by Item 9.01 with respect to the XCL Acquisition

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On October 2, 2024, the Company issued a press release (the " Press Release ") announcing the closing of the XCL Acquisition. A copy of the Press Release is attached hereto as Exhibit 99.1 and incorporated into this Item 7.01 by reference. The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein and being incorporated therein by reference.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Description 10.1* Second Amendment to Seventh Amended and Restated Credit Agreement, dated as of October 1, 2024, by and Among SM Energy Company, a Delaware corporation, each of the Lenders that is a party thereto; and Wells Fargo Bank, National Association, as administrative agent for the Lenders, the Issuing Banks and the Swingline Lender 99.1 Press release of SM Energy Company dated October 2, 2024, entitled "SM Energy Announces Closing of Uinta Acquisitions - Significantly Expanding Its Top-Tier Portfolio" 104 Cover Page Interactive Data File (formatted as Inline XBRL and included as Exhibit 101) _____________________________________ * Certain of the schedules and exhibits to the agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the SEC upon request.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SM ENERGY COMPANY Date: October 2, 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