SM Energy to Offer $1.3 Billion in Senior Notes

By Bobby Samwell • Thursday, July 18 15:22 • Permanent Link

SM Energy Company ("SM Energy") announced its intention to offer $650 million in aggregate principal amount of senior notes due in 2029 and another $650 million in aggregate principal amount of senior notes due in 2032. The net proceeds from this offering, combined with cash on hand and borrowings under its credit agreement, will be used to fund the purchase price for SM Energy's pending acquisition of certain oil and gas properties in the Uinta Basin, redeem all outstanding 5.625% notes due in 2025, and cover related fees and expenses.

The 2029 notes will be subject to a "special mandatory redemption" if the consummation of the acquisition does not occur by July 1, 2025, or if the company decides not to pursue the acquisition. The notes to be offered will not be registered under the Securities Act of 1933 and may not be offered or sold within the United States without registration or an applicable exemption.

This press release does not constitute an offer to sell or a solicitation to buy securities. It also contains forward-looking statements.

This announcement comes after SM Energy recently reported its first-quarter financial results, which showed a 12% increase in revenues compared to the previous year, reaching $487.3 million. Additionally, the company reported a net loss of $27.5 million in the first quarter, compared to a net loss of $67.7 million in the same period last year. Moreover, SM Energy's production for the first quarter stood at 12.3 MMBoe, up from 11.9 MMBoe in the previous quarter.

Furthermore, SM Energy's capital expenditures for the first quarter amounted to $173.5 million, marking a significant increase from the $107.9 million reported in the first quarter of the previous year. The company also reported a cash balance of $123.4 million at the end of the first quarter, up from $48.6 million at the end of the previous quarter.

These figures demonstrate SM Energy's efforts to increase revenues and production while managing its cash flow and capital expenditures. The company's latest announcement regarding the private offering of senior notes aligns with its strategic initiatives to fund acquisitions and manage its outstanding debt. As a result of these announcements, the company's shares have moved 0.5% on the market, and are now trading at a price of $47.05. For the full picture, make sure to review SM Energy's 8-K report.

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