SM Energy reportedly seeking buyers for Eagle Ford gas assets

SM Energy has reportedly launched a sales process for some of its natural gas-producing assets in the Eagle Ford shale in South Texas. This was reported by Reuters, which cited three sources familiar with the matter.

The attempt to sell the assets comes as SM seeks to reduce its debt following merger with Civitas Resources, which closed in late January. The merger created a company with an enterprise value of around $12.8bn, inclusive of each company’s net debt. It is also worth noting that it took on around $5bn of net debt from Civitas.

The combined company was described as being a top 10 US independent oil-focused producer, with a larger, complementary footprint across the highest‑return US shale basins, including a “premier” Permian Basin position.

However, SM and Civitas said in a presentation accompanying their merger announcement in November that the combined company would seek to sell off at least $1.0bn worth of assets within one year of the transaction closing. The Reuters report suggests that they have wasted no time in kicking off sales of non-core assets.

SM had not previously commented on which assets it would seek to sell. However, it looks set to retain its focus on the Permian. The merged company also has a presence in the Denver-Julesburg (DJ) and Uinta basins.

One of Reuters’ sources said the Eagle Ford assets SM was marketing were likely to fetch more than $500mn. According to the sources, the assets produce around 250mn cubic feet (7.1mn cubic metres) of gas equivalent per day. The sources added that SM had hired investment bank RBC Capital Markets to manage the asset sale.

As is typical in such cases, neither SM nor RBC has commented publicly on the matter. However, SM is due to report its earnings for the fourth quarter of 2025 on February 25 and it is possible that the company will provide more clarity on its plans, though this would be unlikely to include any details of discussions around a potential sale.