SM Energy Company (NYSE:SM) Files An 8-K Completion of Acquisition or Disposition of Assets

On December 1, 2016, SM Energy Company (the Company) completed
its previously announced divestiture (the Divestiture) of certain
oil and gas assets located in Montana and North Dakota (the
Williston Basin Assets) to Oasis Petroleum North America LLC, a
Delaware limited liability company (Oasis), for total cash
consideration of $765.8 million, subject to customary
post-closing purchase price adjustments. The Divestiture closed
to the Purchase and Sale Agreement, dated as of October 17, 2016,
by and between the Company and Oasis. Other than the Divestiture,
there is no material relationship between the Company and Oasis.

The foregoing summary of the Purchase and Sale Agreement does not
purport to be complete and is subject to, and qualified in its
entirety by reference to, the full text of the Purchase and Sale
Agreement, which is filed as Exhibit 2.3 to the Current Report on
Form 8-K filed on October 21, 2016.

The pro forma financial information required by Item 9.01 is
filed as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

In accordance with General Instruction B.2. of Form 8-K, the
following information, including Exhibit 99.2, shall not be
deemed filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the Exchange Act), or otherwise
subject to the liabilities of that section, nor shall such
information and Exhibit be deemed incorporated by reference in
any filing under the Securities Act of 1933, as amended (the
Securities Act), or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.

On December 1, 2016, the Company issued a press release
announcing that it completed its previously announced divestiture
of its Williston Basin Assets. A copy of the press release is
furnished as Exhibit 99.2 to this report and is incorporated by
reference herein.

Item 8.01 Other Events.

Pending Acquisitions

On November 15, 2016, the Company entered into a definitive
agreement (the Howard County Agreement) to acquire producing
properties and undeveloped leasehold interests in Howard County,
Texas. The transaction contemplated by the Howard County
Agreement is expected to close in January 2017, with an effective
date of October 1, 2016, but closing is subject to the
satisfaction of closing conditions customary for a transaction of
this nature. There can be no assurance that the transaction will
close when expected or at all.

As previously disclosed, on October 17, 2016, the Company entered
into a definitive purchase agreement with QStar LLC (QStar) to
acquire QStars interests in certain proved and unproved
properties in the Midland Basin. Additionally, the Company
entered into a Ratification and Joinder Agreement (Joinder
Agreement) with RRP-QStar, LLC (RRP), whereby the Company agreed
to acquire RRPs interests in the same Midland Basin properties on
the same terms and conditions set forth in the agreement with
QStar, except as such terms are modified under the Joinder
Agreement. Under these agreements, the Company agreed to purchase
QStars and RRPs interests in the Midland Basin properties for a
combination of $1.1 billion in cash consideration, and
approximately 13.4 million shares of the Companys common stock.
to the terms of the agreements with QStar and RRP, each of QStar
and RRP have the right prior to closing to acquire additional
leasehold interests in specified areas (the Additional Leases),
and in the event any such additional interests are acquired, the
purchase price to paid by the Company would be increased by an
agreed upon amount per additional acre acquired. The QStar and
RRP transactions are expected to close on December 21, 2016,
subject to be the satisfaction of closing conditions customary
for a transaction of this nature, but there can be no assurance
that either of these transactions will close on the expected
closing date or at all.

As a result of the above transactions, the Company expects to
acquire an aggregate of approximately 4,100 net acres under the
Howard County Agreement and the Additional Leases for total cash
consideration of approximately $120 million.

Pending Divestiture

As previously announced, the Company intends to divest its
outside-operated Eagle Ford shale assets. The interest in the
Companys marketing process for this divestiture has been
significant to date. The Company expects to receive bids on these
assets by December, and to the extent any of such bids are
acceptable to the Company at that time, to close a transaction
covering this divestiture within the first quarter of 2017. There
can be no assurance, however, that any of the bids will be
acceptable to the Company if and when received, or if received on
acceptable terms that a subsequent transaction can be negotiated
on acceptable terms or consummated when expected or at all.

Other Recent Developments

The Company recently completed a three-well pad in Howard County,
Texas on the acreage it acquired from Rock Oil Holdings LLC. As
of December 1, 2016, the 12-day average daily production rate for
the three wells was 3,726 Boe/d, with a peak rate of 4,860 Boe/d.

As a result of closing the Divestiture of the Companys Williston
Basin Assets, the borrowing base under the Fifth Amended and
Restated Credit Agreement has been reduced to $1.165 billion.

Item 9.01 Financial Statements and Exhibits.

(b) Pro forma financial information.

The pro forma financial information for the Divestiture required
by this Item 9.01 is filed as Exhibit 99.1 to this Current Report
on Form 8-K and is incorporated herein by reference. The
unaudited pro forma condensed consolidated balance sheet as of
September 30, 2016, has been prepared as if the Divestiture
occurred on that date. The unaudited pro forma condensed
consolidated statements of operations for the nine months ended
September 30, 2016, and the year ended December 31, 2015, have
been prepared as if the Divestiture occurred on January 1, 2015.

(d) Exhibits.