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Get filing alertsSM Energy pre-announces Q2 2026 results: $220M derivative loss, $0.17/Mcf gas price
Filed July 16, 2026 · Period ending July 16, 2026 · ~1 min read
Key Changes
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Item 2.02 — Results of Operations and Financial Condition verify on EDGAR →
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Natural gas realized only $0.17/Mcf before hedges in Q2 2026, an exceptionally weak spot price; derivative settlements lifted the effective price to $1.54/Mcf.
Item 2.02 — Results of Operations and Financial Condition verify on EDGAR → -
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Oil hedges reduced Q2 2026 realizations by $16.23/Bbl (from $96.85 to $80.62), while NGL prices were essentially flat at $24.69/Bbl before and $24.83/Bbl after derivatives.
Item 2.02 — Results of Operations and Financial Condition verify on EDGAR →
Summary
SM Energy pre-announced Q2 2026 commodity pricing ahead of full earnings, disclosing a $220 million derivative settlement loss driven by hedges that capped oil upside during a strong spot market ($96.85/Bbl realized). The hedging program reduced effective oil prices to $80.62/Bbl but proved critical for natural gas, where spot prices collapsed to $0.17/Mcf—derivative settlements lifted the effective gas price to $1.54/Mcf, partially offsetting the oil hedge drag. The $220 million loss reflects the cost of price protection in a volatile commodity environment where oil strength and gas weakness diverged sharply.
For holders, the pre-announcement highlights SM's hedging strategy as a double-edged sword: it sacrificed $16/Bbl of oil upside but salvaged gas economics in a quarter where unhedged gas would have been nearly worthless. The magnitude of the derivative loss will weigh on reported Q2 earnings, though the underlying realized prices (before hedges) show strong oil fundamentals. Watch for management's commentary on hedging policy and gas market outlook when full Q2 results are released.
Section-by-Section Diff
Event · Item 2.02 — Results of Operations and Financial Condition
SM Energy pre-announced Q2 2026 realized prices and a $220M derivative settlement loss ahead of full earnings.
Added in current filing · verify on EDGAR →
Realized price (before the effect of net derivative settlements): | Oil (per Bbl) $ 96.85 | Gas (per Mcf) $ 0.17 | NGLs (per Bbl) $ 24.69
SM Energy disclosed preliminary realized prices for Q2 2026 before derivative settlements: oil at $96.85/Bbl, natural gas at $0.17/Mcf, and NGLs at $24.69/Bbl. The natural gas price is exceptionally low, reflecting weak market conditions for gas during the quarter.
Added in current filing · verify on EDGAR →
Realized price (including the effect of net derivative settlements): (1) | Oil (per Bbl) $ 80.62 | Gas (per Mcf) $ 1.54 | NGLs (per Bbl) $ 24.83
After derivative settlements, realized prices were oil $80.62/Bbl, gas $1.54/Mcf, and NGLs $24.83/Bbl. The derivative hedges reduced oil realizations by $16.23/Bbl but significantly improved gas realizations by $1.37/Mcf, partially offsetting the weak spot gas market.
Added in current filing · verify on EDGAR →
For the second quarter of 2026, the Company anticipates a net derivative settlement loss of approximately $220 million.
This reflects the cost of hedging programs that locked in prices below the strong spot oil prices realized during the quarter, though the hedges provided significant upside for natural gas.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 17, 2026 · How we verify