Civitas Resources Reports Strong Third Quarter 2025 Financial and Operating Results

Civitas Resources, Inc. (NYSE:CIVI) (the "Company" or "Civitas") today reported its third quarter 2025 financial and operating results. Civitas' third quarter 2025 earnings webcast and conference call scheduled for Friday, November 7, 2025, has been cancelled as a result of the merger announcement with SM Energy Company (NYSE:SM) ("SM Energy").

Key Highlights

• Third quarter results exceeded expectations, with higher production and lower cash operating expenses contributing to net income of $177 million, operating cash flow of $860 million, Adjusted EBITDAX⁽¹⁾ of $855 million and Adjusted Free Cash Flow⁽¹⁾ of $254 million.

• Oil and total production were up six percent from the second quarter to more than 158 thousand barrels of oil per day ("MBbl/d") and 336 thousand barrels of oil equivalent per day ("MBoe/d"), and cash operating expenses⁽²⁾ were lower by five percent to $9.67 per barrel of oil equivalent ("BOE").

• Closed on the divestment of two previously-announced non-core DJ Basin assets on August 29 and October 1, as planned.

• Reduced net debt⁽¹⁾ by $237 million, while also repurchasing $250 million of Civitas' stock (approximately 8% of outstanding shares) in the third quarter; year-to-date repurchases total nearly 10% of outstanding shares.

Key Third Quarter 2025 Results

Third Quarter 2025 Operational Update

• Permian Basin production increased six percent from the second quarter to 181 MBoe/d, with oil volumes growing to 86 MBbl/d, up four percent. Midland Basin production represented two-thirds of total Permian Basin volumes, with the Delaware Basin accounting for the remaining one-third.
  • Activity for the quarter included 29, 30, and 27 net operated wells drilled, completed, and turned to sales, respectively. The Company's average lateral length completed was 2.2 miles.
  • Approximately 45% of the wells drilled, 40% of the wells completed, and 70% of the wells turned to sales were in the Delaware Basin.
  • Production from the Double Stamp pad (nine wells, two-mile laterals in Lea County, NM) and the Brother Nature pad (four wells, two-mile laterals in Reeves County, TX) in the Delaware Basin delivered an average peak 30-day rate of 1,200 Boe/d (80% oil) per well, higher than average offset results by up to 20%.
  • After more than 120 days online, a two-mile Wolfcamp B well in western Upton County, TX, in the Midland Basin, has confirmed strong productivity, extended the economic boundary of the play, and de-risked future development. Peak 30-day production from the well was 1,495 Boe/d (74% oil).
• DJ Basin production increased six percent from the second quarter to 155 MBoe/d, with oil volumes growing to 72 MBbl/d, up nine percent. With the first of two non-core asset sales closing on August 29, third quarter average production was reduced by 2 MBoe/d (50% oil).
  • Activity for the quarter included 31, 28, and 40 net operated wells drilled, completed, and turned to sales, respectively. The Company's average lateral length completed was nearly two miles.
  • Civitas drilled a two-mile lateral well to total depth in 1.3 days (a Company record), excluding surface drilling.
  • The Invicta development in Watkins surpassed more than one million barrels of oil equivalent (approximately 80% oil) after 105 days of production. The pad includes eight wells, each drilled over four miles and completed over three miles.

Third Quarter 2025 Financial Update

• Crude oil, natural gas, and NGL revenues totaled $1.2 billion, benefiting from strong volumes and realizations.
  • Realized oil prices, excluding hedging impacts, represented a $0.31 per barrel premium to the average West Texas Intermediate ("WTI") oil price. The strong differential resulted from crude quality and forward pricing impacts in both basins, along with improved long-haul transportation in the DJ Basin.
  • Natural gas realizations were impacted by continued weak Waha pricing, and natural gas liquids realizations averaged 28% of WTI for the period, consistent with expected summer demand trends.
• Realized hedging gains totaled $65 million, with 60% coming from crude oil.
• LOE per BOE was seven percent lower than the second quarter, largely driven by production increases and lower fuel and power usage.
• Cash G&A⁽³⁾ of $41 million includes $3 million of non-recurring severance charges. Excluding these amounts, cash G&A was lower than the second quarter by seven percent.
• Capital expenditures of $491 million reflect continued drilling and completion efficiencies and accelerated activity in both basins.
• Financial liquidity at the end of the third quarter 2025 totaled $2.2 billion, representing cash on hand and borrowings available under the Company's revolving credit facility. During the third quarter, the Company reduced its revolving credit facility balance by $250 million.
• The Company completed a $250 million accelerated share repurchase program in the third quarter, repurchasing 7.4 million shares of Civitas' stock.
• During the third quarter, the Company added more than two million barrels of oil hedges covering the next 12 months.

Dividend Declared

The Company's Board of Directors approved a quarterly dividend of $0.50 per share, payable on December 29, 2025, to shareholders of record as of December 15, 2025.

Guidance

Due to the pending merger with SM Energy, Civitas has discontinued providing quarterly and annual guidance. Accordingly, investors should not rely on any previously disclosed financial and operating guidance and are cautioned not to rely on historical forward-looking statements as those forward-looking statements were the estimates of management only as of the date provided and were subject to the specific risks and uncertainties that accompanied such forward-looking statements.

About Civitas Resources, Inc.

Civitas Resources, Inc. is an independent exploration and production company focused on the acquisition, development and production of crude oil and liquids-rich natural gas from its premier assets in the Permian Basin in Texas and New Mexico and the DJ Basin in Colorado. Civitas' proven business model to maximize shareholder returns is focused on four key strategic pillars: generating significant free cash flow, maintaining a premier balance sheet, returning capital to shareholders, and demonstrating ESG leadership. For more information about Civitas, please visit www.civitasresources.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this press release that address events or developments SM Energy and Civitas expect, believe, or anticipate will or may occur in the future are forward-looking statements. The words "intend," "expect," and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding the transactions contemplated by the Agreement and Plan of Merger, dated November 2, 2025 (the "Merger Agreement"), among SM Energy, Civitas and Cars Merger Sub, Inc. (the "Transaction"). There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this press release. These include the expected timing and likelihood of completion of the Transaction, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the Transaction that could reduce anticipated benefits or cause the parties to abandon the Transaction, the ability to successfully integrate the businesses, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, the possibility that stockholders of SM Energy or Civitas may not approve the Transaction, the risk that the parties may not be able to satisfy the conditions to the Transaction in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the Transaction, the risk that any announcements relating to the Transaction could have adverse effects on the market price of SM Energy's common stock or Civitas' common stock, the risk that the Transaction and its announcement could have an adverse effect on the ability of SM Energy and Civitas to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers and on their operating results and businesses generally, the risk the pending Transaction could distract management of both entities and they will incur substantial costs, the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected, the risk that the combined company may be unable to achieve synergies or it may take longer than expected to achieve those synergies and other important factors that could cause actual results to differ materially from those projected. All such factors are difficult to predict and are beyond SM Energy's or Civitas' control, including those detailed in SM Energy's annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that are available on its website at sm-energy.com/investors and on the SEC's website at http://www.sec.gov, and those detailed in Civitas' annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that are available on Civitas' website at ir.civitasresources.com/investor-relations and on the SEC's website at http://www.sec.gov. All forward-looking statements are based on assumptions that SM Energy and Civitas believe to be reasonable but that may not prove to be accurate. Such forward-looking statements are based on assumptions and analyses made by SM Energy and Civitas in light of their perceptions of current conditions, expected future developments, and other factors that SM Energy and Civitas believe are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance and actual events may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this communication speak as of the date of this communication.

No Offer or Solicitation

This communication is for informational purposes only and is not intended to, and shall not, constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Additional Information and Where to Find It

In connection with the proposed transaction, SM Energy intends to file with the SEC a registration statement on Form S-4 (the "Registration Statement") that will include a joint proxy statement of SM Energy and Civitas and a prospectus of SM Energy (the "Joint Proxy Statement/Prospectus"). Each of SM Energy and Civitas may also file other relevant documents with the SEC regarding the proposed transaction. This communication is not a substitute for the Joint Proxy Statement/Prospectus or Registration Statement or any other document that SM Energy or Civitas, as applicable, may file with the SEC in connection with the proposed transaction. After the Registration Statement has been declared effective by the SEC, a definitive Joint Proxy Statement/Prospectus will be mailed to the stockholders of each of SM Energy and Civitas. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF SM ENERGY AND CIVITAS ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT SM ENERGY, CIVITAS, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus, as well as other filings containing important information about SM Energy, Civitas and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at https://www.sec.gov. Copies of the documents filed with the SEC by SM Energy will be available free of charge on SM Energy's website at https://www.sm-energy.com/investors. Copies of the documents filed with the SEC by Civitas will be available free of charge on Civitas' website at https://ir.civitasresources.com/investor-relations/Overview/default.aspx. The information included on, or accessible through, SM Energy's or Civitas' website is not incorporated by reference into this communication.

Participants in the Solicitation

SM Energy, Civitas and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of SM Energy, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in SM Energy's proxy statement for its 2025 Annual Meeting of Stockholders, which was filed with the SEC on April 7, 2025 (and which is available at https://www.sec.gov/Archives/edgar/data/893538/000089353825000032/sm-20250404.htm) and a Form 8-K filed by SM Energy on September 8, 2025 (and which is available at https://www.sec.gov/Archives/edgar/data/893538/000089353825000116/sm-20250904.htm). Information about the directors and executive officers of Civitas, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in a Form 8-K filed by Civitas on August 6, 2025 (and which is available at https://www.sec.gov/Archives/edgar/data/1509589/000110465925074774/tm2522747d1_8k.htm), a Form 8-K filed by Civitas on May 7, 2025 (and which is available at https://www.sec.gov/Archives/edgar/data/1509589/000110465925045550/tm2514090d1_8k.htm), and Civitas' proxy statement for its 2025 Annual Meeting of Stockholders, which was filed with the SEC on April 21, 2025 (and which is available at https://www.sec.gov/Archives/edgar/data/1509589/000155837025005077/civi-20241231xdef14a.htm). Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Joint Proxy Statement/Prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors should read the Joint Proxy Statement/Prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from SM Energy and Civitas using the sources indicated above.

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For further information, please contact:

Investor Relations:

Brad Whitmarsh, 832.736.8909, [email protected]

Media:

Rich Coolidge, [email protected]