SM Energy Company

Good morning, and welcome to the SM Energy fourth quarter and full year 2025 financial and operating results and 2026 outlook live session. At this time, all participants will be in the listen only mode. A question and answer session will follow the formal presentation. Please note today's event is being recorded. I would now like to turn the call over to Pat Lytle, SM Energy Senior Vice President, Finance. Please go ahead.

Good morning and welcome to today's call. I'm joined today by our president and CEO, Beth McDonald, and executive vice president and CFO, Wade Purcell. We're looking forward to sharing our latest results and our 2026 plan with you and answering your questions. Our discussion today includes forward-looking statements. Please see slide two of our earnings presentation, page two of the earnings release, page three of our 2026 outlook release, and the risk factor section of our most recent 10-K, which was filed earlier this morning, for risks associated with these statements that could cause actual results to differ. We will also discuss non-GAAP measures and metrics. Definitions and reconciliations to the most directly comparable GAAP measures can be found in both the earnings release, outlook release, and slide deck. Now, I'll turn the call over to Beth. Beth?

Thanks, Pat, and good morning, everyone. It's an exciting day as we provide our first release of the new SM Energy. 2025 was a pivotal year for our company, and it set the stage for 2026 in this transformational moment. We improved on every part of our investment thesis, including returns to stockholders, operational execution, financial strength, and increasing the scale and quality of our portfolio. With the full details in our posted materials, I will quickly hit some highlights from 2025. We delivered record operating cash flow, adjusted EBITDAX production, and oil volumes. Importantly, oil was 53% of the total. Our teams found new ways to rapidly apply best practices and increase operational efficiencies through longer laterals and development of deeper zones. We integrated our oil-weighted Uinta assets. Since late 2024, we've applied our proven technical capabilities to unlock greater value from this high-quality oil basin and its multiple stack pays. We strengthened our financial position by reducing net debt by $437 million, ending the year at roughly one times leverage. As a result, we returned capital to stockholders distributing $104 million through dividends and share repurchases. Lastly, we expanded our scale and inventory across the top U.S. basins through organic reserve growth and our announced merger with Civitas. Now let's turn to 2026. We have three strategic objectives that you will continue to hear throughout the year. Integrate, execute, bolster. First, integrate. We are focused on integrating Civitas and capturing $200 to $300 million in synergies. To date, we have already actioned $185 million of our target, which is close to $1 billion in present value and just under 20% of our market cap. Total synergies could unlock up to $1.5 billion in present value or nearly 30% of our market cap. Next, Execute. Our plan maximizes sustainable free cash flow. By investing in our high return opportunities, we can continue to strengthen the balance sheet while accelerating the return of capital to stockholders. We will execute with a safety first mindset and seek new ways to efficiently develop our assets to maximize free cash flow through disciplined capital allocation. We have reset and optimized our activity levels to accomplish this. Here are the key takeaways from the 2026 outlook. Our plan was developed to maximize free cash flow in a $60 oil and 350 gas environment. Capital investments will total $2.65 to $2.85 billion, with our high margin Permian activities receiving about 45% of the total. Total expected CapEx is about 14% lower than pro forma 2025. With lower capital, we reset activity levels to 11 rigs, down three rigs from a pro forma average of 14. We have prioritized value over volume. First quarter estimates reflect only two months of Civitas. Looking forward, volumes in the second half of the year are expected to range between 420 and 430,000 BOE per day at 55% oil, more indicative of our go-forward run rate. There are a few slides in the presentation that provide more detail and a reconciliation of production for your reference. Ultimately, our plan reflects greater capital efficiency to maximize free cash flow, strengthen the balance sheet, and accelerate return to capital. Lastly, our final objective is to bolster. This relates to our balance sheet and our return to capital framework. I'll now turn the call over to Wade to cover this important catalyst for us. Wade?