SM Energy Company announced the reaffirmation of its $3.0bn borrowing base following the semi-annual redetermination of its reserves-based revolving credit facility. The committed borrowing availability remains unchanged at $2.0bn. The decision, taken unanimously by the lender group, reflects the stability of the company’s assets and its perceived financial strength.
Credit agreement revision
The Denver-based company also secured an amendment to its existing credit agreement, replacing the former springing maturity clause with a more flexible structure based on short-term debt levels and available liquidity. This adjustment is aimed at increasing the company’s financial flexibility amid energy market volatility.
Under the revised terms, repayment obligations are now linked to the company’s drawing capacity on the credit line and short-term maturities rather than fixed thresholds. This allows SM Energy to better align its debt structure with market conditions and operational needs.
Maintaining financial discipline
The approval of the revised credit terms aligns with the company’s broader strategy to optimise its capital structure without compromising fiscal discipline. The company has not announced any changes to its development strategy or short-term production targets.
SM Energy’s Executive Vice President and Chief Financial Officer Wade Pursell stated that the reaffirmed borrowing base and amended debt terms demonstrate the ongoing trust of banking partners in the company. He noted that this confidence stems from management’s disciplined strategy and the company’s financial performance over recent quarters.
