SM Energy Company SM is an independent oil and gas company engaged in the exploration and production of natural gas and crude oil in North America. The company strengthened its asset portfolio through the January 2026 merger with Civitas, which expanded its presence in the Permian and DJ basins. The merger integrated new Midland and Delaware acreage, bringing SM's footprint to roughly 696,000 net acres spanning the Permian, DJ, South Texas and Uinta basins.
The portfolio diversification drives operational efficiency and fuels long-term production growth. The expanded asset base immediately boosted production, resulting in first-quarter 2026 output of 371.2 thousand barrels of oil equivalent per day (MBoe/d), including 190.3 thousand barrels per day (MBbl/d) of oil, both of which exceeded guidance. Notably, the integration of Civitas assets drove a 117% sequential increase in Permian yields.
SM Energy is leveraging its expanded asset base to drive stronger well performance and capital efficiency. The Civitas merger enabled the company to raise its 2026 production guidance without additional capital spending. The company expects its expanded asset portfolio to achieve production between 410 Mboe/d and 430 MBoe/d, including oil production in the range of 222-228 MBbl/d by 2026.
XOM & CVX Position for Higher Production
Exxon Mobil Corporation XOM maintains a strong presence in the prolific Permian Basin. Following its strategic acquisition of Pioneer Natural Resources, XOM’s Permian footprint spans 1.4 million net acres. Leveraging this expanded asset portfolio, ExxonMobil is expected to increase Permian production to approximately 2.5 million barrels of oil equivalent per day (MMBoe/d) by 2030.
Chevron Corporation CVX is an integrated energy giant with global operations across exploration, production and refining. The Hess acquisition added world-class Guyana assets and 463,000 net acres in the Bakken region within the Williston Basin, enhancing Chevron’s long-term production potential. Driven by the successful integration of Hess and growing output from the Gulf of Mexico and the Permian Basin, CVX’s first-quarter 2026 net oil-equivalent production increased 15% to 3.86 MMBoe/d. Chevron projects 7% to 10% production growth for 2026 compared with 2025 levels.
SM’s Price Performance, Valuation & Estimates
SM Energy's shares have gained 33% over the past year compared with 15.3% growth in the industry.
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From a valuation standpoint, SM trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 5.74X. This is below the broader industry average of 11.47X.
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The Zacks Consensus Estimate for SM's 2026 earnings has been unchanged over the past seven days.
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SM Energy currently carries Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).