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In a move set to shake up the American oil landscape, SM Energy Co. announced Monday it will merge with Civitas Resources Inc. in a $12.8 billion all-stock deal, forging one of the nation’s largest independent energy producers.

Advised by Gibson Dunn & Crutcher LLP, SM Energy will exchange 1.45 shares of its common stock for each Civitas share, according to a joint statement. When the deal closes, Civitas shareholders will own 52% of the combined entity, while SM Energy shareholders will hold 48% on a fully diluted basis.

Transforming Into a Shale Titan

The merger unites two of the strongest operators in the U.S. shale oil scene. SM Energy, with deep roots in Texas and Utah, focuses on the acquisition, exploration, and development of crude oil, natural gas, and natural gas liquids. Civitas, led by Kirkland & Ellis LLP, brings prime assets in the Permian Basin of Texas and New Mexico and the DJ Basin of Colorado.

Together, the two will control 823,000 net acres across some of the most profitable oil regions in the country. The deal promises to “immediately transform” the combined firm into a top-10 U.S. independent oil producer, according to Monday’s announcement.

“This merger combines two premier operators and establishes a company with transformative scale in the highest-return shale basins,” said Beth McDonald, SM Energy’s president and chief operating officer. She added that the combined strength will “unlock significant free cash flow, strengthen our balance sheet, and accelerate shareholder returns.”

A New Era for Energy Independence

Upon completion, the Denver-headquartered company will continue trading on the New York Stock Exchange under the SM Energy name. Its 11-member board will include six representatives from SM Energy and five from Civitas, ensuring a balance of expertise and leadership continuity.

“Today marks a pivotal moment for Civitas and SM Energy,” said Wouter van Kempen, Civitas’ interim CEO. “By combining our strong technical teams and complementary assets, we gain scale, sharpen our competitive edge, and enhance our ability to responsibly produce energy that contributes to security and prosperity.”

The deal is expected to close in the first quarter of 2026, pending shareholder approval, regulatory clearance, and other customary conditions.

The Legal Powerhouses Behind the Deal

The Kirkland & Ellis team advising Civitas includes transactional partners Doug Bacon, Kim Hicks, Julian Seiguer, Patrick Salvo, Ieuan List, Brittany Scheier, and Christian Mahre; executive compensation partners Stephen Jacobson and Brandon Newman; and tax partner Mark Dundon.

On the SM Energy side, Gibson Dunn’s corporate team was led by partner Jeffrey Chapman, alongside Jonathan Whalen and Robyn Zolman. Supporting partners included oil and gas experts Rahul Vashi and Adam Whitehouse, financing partner Doug Rayburn, tax partner Michael Cannon, antitrust partner Sophia Hansell, and benefits partner Krista Hanvey.

Evercore served as financial adviser to Civitas, with legal counsel from Fried Frank Harris Shriver & Jacobson LLP, led by partners Roy Tannenbaum and Philip Richter.

Energy Megadeal Signals Renewed M&A Momentum

The SM Energy–Civitas merger signals a fresh wave of consolidation in the U.S. oil and gas sector, as companies seek scale, efficiency, and resilience amid fluctuating commodity prices and global uncertainty.

If completed, the transaction will mark one of the largest shale mergers in recent years, positioning the combined company as a formidable force in American energy independence — one built to thrive through every boom and bust cycle.