Mar. 15 at 6:15 AM
$SM Bull case for SM Energy (
$SM) in simple terms:
Production after the Civitas merger is roughly 420k–450k BOE/day, which puts it close to some of the largest Permian operators.
Yet the market caps look like this:
• Diamondback Energy: ~470k BOE/day | ~
$45–50B market cap
• Permian Resources: ~330–350k BOE/day | ~
$13–15B market cap
• SM Energy: 420k–450k BOE/day | **
$5–6B market cap**
That means SM trades at ~
$25K–35k EV per flowing barrel, while peers are often
$60K–100k+.
At higher oil prices the leverage is huge:
• ~
$2.0B free cash flow at
$90 WTI
• ~
$2.5B free cash flow at
$100 WTI
If oil stays near
$100 and the market gives SM even a 4× EV/EBITDA multiple, that implies roughly:
$70–
$100 per share potential.
Current price in the mid-
$20S means the valuation gap vs peers is massive.
