SM Energy Company

Equities

SM

US78454L1008

Oil & Gas Exploration and Production

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Apr. 12	KeyBanc Adjusts SM Energy Company Price Target to $62 From $51, Maintains Overweight Rating	MT
Apr. 09	JPMorgan Raises Price Target on SM Energy to $54 From $49, Maintains Overweight Rating	MT

SM Energy : CDP Climate Change Questionnaire 2020

February 08, 2021 at 05:47 pm EST

CDP CLIMATE CHANGE QUESTIONNAIRE 2020

SM Energy is pleased to participate in the 2020 CDP Climate Change Questionnaire.

Following investor engagement and discussions relating to environmental, social and governance ("ESG") matters, it was determined that increased disclosure regarding ESG risk management and metrics would provide better insight to SM Energy's sustainability business practices. Please note:

The CDP Questionnaire incorporates all Task Force on Climate related Financial Disclosures (TCFD) requirements; and
- SM Energy's responses exclusively comprise 2019 results.

FORWARD-LOOKING STATEMENTS

SM Energy's responses to the 2020 CDP Climate Change Questionnaire (the "CDP Questionnaire"), which are exclusively comprised of 2019 data and information, contain "forward-looking

statements" within the meaning of securities laws. Responses are given as of August 26, 2020, the date the CDP Questionnaire was completed, and include discussion of potential future risks and opportunities, the Company's planned processes for evaluating potential future risk, and certain plans, objectives, expectations and forecasts. These statements, when made, involved known and unknown risks, which may have caused, or may in the future cause, SM Energy's actual results, plans, objectives, expectations and forecasts to differ materially from results, plans, objectives, expectations and forecasts expressed or implied by the forward-looking statements. All statements, other than statements of historical fact, included in the CDP Questionnaire that address plans, objectives, expectations and forecasts that SM Energy expects, believes or anticipates will or may occur or be taken in the future are forward-looking statements. Such statements are subject to assumptions, risks and uncertainties that are beyond SM Energy's control. Future results, plans, objectives, expectations and forecasts may be impacted by the risks discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, as supplemented by any subsequent Form 10-Q or other filings with the SEC. The forward- looking statements contained in the 2020 CDP Questionnaire speak only as of the date of the questionnaire. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Welcome to your CDP Climate Change

Questionnaire 2020

C0. Introduction

C0.1

(C0.1) Give a general description and introduction to your organization.

SM Energy Company ("SM Energy" or the "Company") is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids. Founded in 1908, SM Energy, a Delaware corporation, has been publicly traded on the New York Stock Exchange (NYSE) since 2002, under the ticker symbol SM. SM Energy operations are located onshore in the United States in two main operating areas: the Midland Basin in West Texas, and the Maverick Basin in South Texas. Proved reserves are balanced equally among the two operating areas, with 462 million barrels of oil equivalent (Boe) at the end of 2019. In 2019, the Company reported full year sales volumes of 132 thousand barrels of oil equivalent per day, consisting of 45% crude oil, 38% natural gas, and 17% natural gas liquids. SM Energy has a longstanding, principled approach to doing business ethically and responsibly. Our company culture drives our behavior and we build open, honest and transparent relationships with our stakeholders. Our goal is to make people's lives better by responsibly producing energy supplies, contributing to domestic energy security and prosperity, and having a positive impact in the communities where we live and work. For more information about SM Energy, please visit www.sm-energy.com.

SM Energy's responses to the CDP Climate Change Questionnaire contain "forward-looking statements" within the meaning of securities laws. Responses include discussion of potential future risks and opportunities, the Company's planned processes for evaluating potential future risk, and certain plans, objectives, expectations and forecasts. These statements involve known and unknown risks, which may cause SM Energy's actual results, plans, objectives, expectations and forecasts to differ materially from results, plans, objectives, expectations and forecasts expressed or implied by the forward-looking statements. All statements, other than statements of historical fact, included in the CDP Climate Change Questionnaire that address plans, objectives, expectations and forecasts that SM Energy expects, believes or anticipates will or may occur or be taken in the future are forward-looking statements. Such statements are subject to assumptions, risks and uncertainties that are beyond our control. Future results, plans, objectives, expectations and forecasts may be impacted by the risks discussed in the Risk Factors section of SM Energy's most recent Annual Report on Form 10-K, Form 10-Q or other filings with the SEC. The forward-looking statements contained herein speak as of the date of this questionnaire. Although SM Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so, except as required by securities laws.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

C0.2

(C0.2) State the start and end date of the year for which you are reporting data.

	Start date	End date	Indicate if you are providing emissions data for

			past reporting years

Reporting	January 1,	December 31,	No
year	2019	2019

C0.3

(C0.3) Select the countries/areas for which you will be supplying data.

United States of America

C0.4

(C0.4) Select the currency used for all financial information disclosed throughout your response.

USD

C0.5

(C0.5) Select the option that describes the reporting boundary for which climate- related impacts on your business are being reported. Note that this option should align with your chosen approach for consolidating your GHG inventory.

Operational control

C-OG0.7

(C-OG0.7) Which part of the oil and gas value chain and other areas does your organization operate in?

Row 1

Oil and gas value chain

Upstream

Other divisions

C1. Governance

C1.1

(C1.1) Is there board-level oversight of climate-related issues within your organization?

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Yes

C1.1a

(C1.1a) Identify the position(s) (do not include any names) of the individual(s) on the board with responsibility for climate-related issues.

Position of	Please explain

individual(s)

Board-level	As a result of stakeholder engagement and input from a third party environmental,
committee	social and governance (ESG) advisory firm engaged in spring 2020, the Company
	amended the charter and enhanced the duties of the existing Nominating and
	Corporate Governance Committee of the Board of Directors to include oversight of
	ESG matters. The charter for this committee, which is now renamed the
	Environmental, Social, and Governance Committee, was approved by the Board of
	Directors in July 2020. Prior to establishment of the Environmental, Social and
	Governance Committee, ESG matters were under the oversight of the entire Board
	of Directors with updates and discussion presented at quarterly Board meetings.
	During 2019, decisions under the purview of the entire Board included
	environmental, health, and safety performance goals for TRIR, spill volumes,
	greenhouse gas emissions, and certain safety training objectives. These metrics
	were tied to short-term incentive compensation and, as a result of the Company's
	outstanding EHS performance during 2019, the Compensation Committee adjusted
	the quantitative multiplier upward by 0.02.
	The charter to our Environmental, Social, and Governance Committee of the Board
	of Directors can be accessed at: sm-energy.com/about-us/governance.

C1.1b

(C1.1b) Provide further details on the board's oversight of climate-related issues.

Frequency with	Governance	Please explain
which climate-	mechanisms into
related issues are	which climate-related
a scheduled	issues are integrated
agenda item

Scheduled - some	Reviewing and guiding	The Board of Directors is actively engaged in the
meetings	strategy	oversight of environmental matters impacting the
	Reviewing and guiding	Company. The Board regularly reviews the
	major plans of action	Company's status in regards to federal, state, and
	Reviewing and guiding	local regulations for air, water, wildlife, spill reporting,
	safety, and general operations. In addition to
	risk management
	regulatory requirements, the Board regularly reviews
	policies
	updated data pertaining to climate-related issues.

		3

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Reviewing and guiding annual budgets

Reviewing and guiding business plans Setting performance objectives Monitoring implementation and performance of objectives Overseeing major capital expenditures, acquisitions and divestitures

Monitoring and overseeing progress against goals and targets for addressing climate-related issues

In early 2019, the Company began presenting the following data dashboards: (1) Air Emission dashboard and (2) Water Stewardship dashboard. These dashboards provide up-to-date metrics. The air emissions dashboard covers GHG emissions intensity, methane emissions rate, and leak detection and repair. The water stewardship dashboard includes metrics on fresh water used, disposal rates, and spilled water. The current data provided by these dashboards is reviewed and discussed at each quarterly Board meeting. These dashboards are provided in conjunction with dashboards for safety metrics. In addition, the Board reviews environmental topics during regularly scheduled quarterly meetings. The most recent examples are in-depth reviews of flaring, water, and seismicity. These in-depth review sessions consider potential risks, sources, potential impacts to the community, mitigation strategies, and opportunities for improvements.

C1.2

(C1.2) Provide the highest management-level position(s) or committee(s) with responsibility for climate-related issues.

Name of the position(s)	Responsibility	Frequency of reporting to the

and/or committee(s)		board on climate-related
		issues

Chief Executive Officer	Both assessing and managing	Quarterly
(CEO)	climate-related risks and
	opportunities

Chief Financial Officer	Assessing climate-related risks and	Quarterly
(CFO)	opportunities

Chief Operating Officer	Both assessing and managing	Quarterly
(COO)	climate-related risks and
	opportunities

Other, please specify	Assessing climate-related risks and	Quarterly
General Counsel	opportunities

C1.2a

(C1.2a) Describe where in the organizational structure this/these position(s) and/or committees lie, what their associated responsibilities are, and how climate-related issues are monitored (do not include the names of individuals).

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

The executive team, including CEO, COO, CFO, and General Counsel share oversight of climate -related decisions and strategy. To support the executive team in ESG matters, the Company has established an ESG working committee representing leadership oversight from key disciplines including the General Counsel and corporate officers who lead HR, EHS, operations and IR. The committee works to identify, assess, monitor and report on ESG matters. Updates are provided to the executive team at each monthly senior management meeting. Specific to monitoring climate-related items, the senior management team (including the executive team) reviews, as first priority at each meeting, dashboards for safety and environmental metrics. As described above, in early 2019, the Company developed environmental data dashboards: (1) Air Emissions dashboard, and (2) Water Stewardship dashboard. These dashboards provide up-to-date metrics. The air emissions dashboard covers GHG emissions intensity, methane emissions rate, and leak detection and repair. The water stewardship dashboard includes metrics on fresh water used, disposal rates and spilled water. The current data provided by these dashboards is reviewed and discussed at each regular senior management meeting, typically held once per month. These dashboards are provided in conjunction with dashboards for safety metrics. The dashboards are available to operating personnel on a daily basis and used for monitoring and mitigation.

C1.3

(C1.3) Do you provide incentives for the management of climate-related issues, including the attainment of targets?

	Provide incentives for the management of climate-related issues	Comment

Row 1Yes

C1.3a

(C1.3a) Provide further details on the incentives provided for the management of climate-related issues (do not include the names of individuals).

Entitled to	Type of	Activity	Comment

incentive	incentive	inventivized

Chief	Monetary	Emissions	Short-term incentive compensation at SM Energy is
Executive	reward	reduction	based partially on environmental, health, and safety
Officer		target	(EHS) performance. In 2019, the EHS targets included
(CEO)			spill volumes, greenhouse gas emissions (GHG) including
			CO2 equivalent and methane (as a percentage of
			methane produced), total recordable incident rate (TRIR),
			and certain safety training objectives. Short-term incentive
			compensation was tied to top-quartile performance or
			other defined targets and has quantitative and qualitative
			components. Top-quartile is based on surveyed and/or
			publicly available data from American Exploration &
			Production Council (AXPC) members. For 2020, incentive
			compensation targets are tied to AXPC top-quartile
			performance in spill volumes and TRIR. Additionally,
			5

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

			goals include targets for CO2 emissions and methane
			emissions. Also for 2020, a portion of bonus
			compensation is dependent on the completion of our
			triennial independent EHS compliance audit, and to put
			systems in place for tracking broader ESG metrics to
			enable increased reporting in the future and to increase
			employee awareness.

Chief	Monetary	Emissions	Short-term incentive compensation at SM Energy is
Financial	reward	reduction	based partially on environmental, health, and safety
Officer		target	(EHS) performance. In 2019, the EHS targets included
(CFO)			spill volumes, greenhouse gas emissions (GHG) including
			CO2 equivalent and methane (as a percentage of
			methane produced), total recordable incident rate (TRIR),
			and certain safety training objectives. Short-term incentive
			compensation was tied to top-quartile performance or
			other defined targets and has quantitative and qualitative
			components. Top-quartile is based on surveyed and/or
			publicly available data from American Exploration &
			Production Council (AXPC) members. For 2020, incentive
			compensation targets are tied to AXPC top-quartile
			performance in spill volumes and TRIR. Additionally,
			goals include targets for CO2 emissions and methane
			emissions. Also for 2020, a portion of bonus
			compensation is dependent on the completion of our
			triennial independent EHS compliance audit, and to put
			systems in place for tracking broader ESG metrics to
			enable increased reporting in the future and to increase
			employee awareness.

Chief	Monetary	Emissions	Short-term incentive compensation at SM Energy is
Operating	reward	reduction	based partially on environmental, health, and safety
Officer		target	(EHS) performance. In 2019, the EHS targets included
(COO)			spill volumes, greenhouse gas emissions (GHG) including
			CO2 equivalent and methane (as a percentage of
			methane produced), total recordable incident rate (TRIR),
			and certain safety training objectives. Short-term incentive
			compensation was tied to top-quartile performance or
			other defined targets and has quantitative and qualitative
			components. Top-quartile is based on surveyed and/or
			publicly available data from American Exploration &
			Production Council (AXPC) members. For 2020, incentive
			compensation targets are tied to AXPC top-quartile
			performance in spill volumes and TRIR. Additionally,
			goals include targets for CO2 emissions and methane
			emissions. Also for 2020, a portion of bonus
			compensation is dependent on the completion of our
			6

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

			triennial independent EHS compliance audit, and to put
			systems in place for tracking broader ESG metrics to
			enable increased reporting in the future and to increase
			employee awareness.

All	Monetary	Emissions	Short-term incentive compensation at SM Energy is
employees	reward	reduction	based partially on environmental, health, and safety
		target	(EHS) performance. In 2019, the EHS targets included
			spill volumes, greenhouse gas emissions (GHG) including
			CO2 equivalent and methane (as a percentage of
			methane produced), total recordable incident rate (TRIR),
			and certain safety training objectives. Short-term incentive
			compensation was tied to top-quartile performance or
			other defined targets and has quantitative and qualitative
			components. Top-quartile is based on surveyed and/or
			publicly available data from American Exploration &
			Production Council (AXPC) members. For 2020, incentive
			compensation targets are tied to AXPC top-quartile
			performance in spill volumes and TRIR. Additionally,
			goals include targets for CO2 emissions and methane
			emissions. Also for 2020, a portion of bonus
			compensation is dependent on the completion of our
			triennial independent EHS compliance audit, and to put
			systems in place for tracking broader ESG metrics to
			enable increased reporting in the future and to increase
			employee awareness.

C2. Risks and opportunities

C2.1

(C2.1) Does your organization have a process for identifying, assessing, and responding to climate-related risks and opportunities?

Yes

C2.1a

(C2.1a) How does your organization define short-, medium- and long-term time horizons?

	From	To	Comment
	(years)	(years)

Short-	0	2	Short term - Our detailed corporate business plan focuses on a one
term			to two-year time horizon intended to specifically provide a detailed
			operating plan that supports our long-term strategy and objectives.

			7

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Medium-	2	5	Medium term - Our long-range plan (LRP) is a five-year plan and
term			corresponds with the SEC timeline for developing the Company's
			proved oil and natural gas reserves and also supports achieving our
			long-term objectives.

Long-	5	25	Long-term - The Company considers its long-term sustainability over
term			25 years, which incorporates field life, reserve replacement,
			enterprise value assessments and sets the course for long-term
			sustainability objectives.

C2.1b

(C2.1b) How does your organization define substantive financial or strategic impact on your business?

The policy of the Company's enterprise risk management (ERM) committee sets forth a process whereby risks are identified, assessed and reviewed in consideration of the likelihood of the risk to occur, the potential impact of the risk and the time-frame of the risk. Impact is graded into five categories from minimal (<$10MM EBITDAX, <$50 MM equity value) to major (>$75MM EBITDAX, > $375 MM equity value).

C2.2

(C2.2) Describe your process(es) for identifying, assessing and responding to climate- related risks and opportunities.

Value chain stage(s) covered

Upstream

Risk management process

Integrated into multi-disciplinarycompany-wide risk management process

Frequency of assessment

More than once a year

Time horizon(s) covered

Short-term

Medium-term

Long-term

Description of process

Climate-related risks to the Company are addressed within our ERM. The policy of the Company's enterprise risk management (ERM) committee sets forth a process whereby risks are identified, assessed and reviewed in consideration of the likelihood of the risk to occur, the potential impact of the risk and the time-frame of the risk. Impact is graded into five categories from minimal (<$10MM EBITDAX, <$50 MM equity value) to major (>$75MM EBITDAX, > $375 MM equity value). The ERM committee evaluates, monitors

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

and mitigates (where possible) those risks. Emerging risks and trends are also considered. The Board annually reviews the Company's risk management philosophy and practices. The Board also considers potential risks to the Company's strategic initiatives. More broadly, environmental, health, and safety risks and opportunities are part of daily operations under the oversight of the SVP of Development and Environmental, Health, and Safety and SVP of Operations.

TRANSITIONAL RISK

With respect to the EPA's regulation New Source Performance Standards (NSPS) OOOO, the Company had adopted, prior to the regulation, a proactive approach to using intermittent or low-bleed gas pneumatics on many of our facilities. We have converted certain pneumatic devices to operate on a compressed instrument air system, which replaces the pressurized natural gas with atmospheric air, eliminating methane emissions. These systems have been installed at new facilities in our Midland Basin Region since 2017. In our South Texas Region, we are replacing gas pneumatic devices with solar and wind powered electronic controllers.

PHYSICAL RISK

SM Energy does not foresee physical risk due to climate change impacting our business any more than the current environment in either the short, medium, or long-term time frames. Oil and gas extraction operations have been successful in extreme environments around the world and we are confident in our ability to continue operating during those time frames.

C2.2a

(C2.2a) Which risk types are considered in your organization's climate-related risk assessments?

	Relevance &	Please explain

	inclusion

Current	Relevant,	Current regulations are considered by the Company and discussed
regulation	sometimes	with the Board of Directors. In addition, through our participation in
	included	industry trade groups, the Company is provided additional data and
		assessment of current and proposed regulations. The Company
		meets or exceeds current regulations and establishes programs to
		monitor compliance. For example, in regard to the EPA's regulation
		NSPS OOOO, the Company had adopted, prior to the regulation, a
		proactive approach to using intermittent or low-bleed gas pneumatics
		on many of our facilities. We have converted certain pneumatic
		devices to operate on a compressed instrument air system, which
		replaces the pressurized natural gas with atmospheric air, eliminating
		methane emissions. These systems have been installed at new
		facilities in our Midland Basin Region since 2017. In our South Texas
		Region, we are replacing gas pneumatic devices with solar and wind
		9

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

		powered electronic controllers. Also, in regard to EPA regulations, we
		utilize various techniques across our operations, including audio/
		visual/olfactory inspections (AVO) and optical gas imaging (OGI)
		cameras, to monitor fugitive emissions. Since 2017, we have been
		using a leak detection and repair (LDAR) program at all new facilities
		in accordance with EPA's NSPS OOOOa rules. In addition, we often
		undertake voluntary efforts that exceed regulatory requirements, such
		as our use of an OGI cameras to conduct LDAR as part of our
		maintenance program in both our Midland and South Texas assets.
		The foregoing discussion is subject to and supplemented by the "Risk
		Factor" sections of the Company's Form 10-K and other regulatory
		filings.

Emerging	Relevant,	Current and proposed regulations are considered by the Company
regulation	sometimes	and discussed with the Board of Directors. For example, the potential
	included	for increased regulation of methane emissions through flaring is a key
		topic across oil and gas production basins. SM Energy seeks to
		minimize flaring by establishing appropriate targets, developing and
		installing the appropriate monitoring tools and facilities, and training
		personnel to support these goals. The Company has established
		flaring goals and monitors daily operational data that provides
		operations management with the information needed to identify root
		causes to implement appropriate actions. Actions could include
		notifying and working with our midstream gas purchasers to identify
		and install gas off-loads to other purchasers, de-bottle necking and
		optimizing pipelines and equipment, shutting in production to
		minimize flaring, and rescheduling capital expenditures in order to
		allow infrastructure to catch-up with development, thus eliminating or
		minimizing flaring. We are also members of The Environmental
		Partnership and Texas Methane and Flaring Coalition, both of which
		focus on reducing flaring. The foregoing discussion is subject to and
		supplemented by the "Risk Factor" sections of the Company's Form
		10-K and other regulatory filings.

Technology	Relevant,	There are risks and opportunities associated with the various
	sometimes	emission and spill related technologies available to the oil and gas
	included	industry and the Company seeks to implement appropriate
		technologies in its business. In general, innovation, data, and
		technologies are applied in our efforts to mitigate environmental
		impacts on an ongoing basis. Examples of such innovation, applied
		data and new technologies are listed in detail in the Company's
		Corporate Responsibility Report and include with respect to air
		emissions: development of our dashboard that tracks/monitors
		emissions; implementation of vapor recovery technology; controller
		equipment upgrades; and application of LDAR. For land protection it
		includes: collection of LIDAR and aerial imagery data; implementation
		of spill prevention and expanded recycling. With respect to water
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SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

		protection: implementation of water management systems, including
		construction of facilities for the recycling and disposal of produced
		water. The foregoing discussion is subject to and supplemented by
		the "Risk Factor" sections of the Company's Form 10-K and other
		regulatory filings.

Legal	Relevant,	Climate-related legal risks could include, but not be limited to, the
	sometimes	potential for increased litigation involving climate-related laws or
	included	regulations and the Company's disclosures concerning climate-
		related matters. Federal, state, and local authorities regulate the oil
		and gas industry. Legislation and regulations affecting the industry
		are often amended or supplemented. SM Energy is in substantial
		compliance with applicable Texas and federal GHG and methane
		regulatory requirements. The foregoing discussion is subject to and
		supplemented by the "Risk Factor" sections of the Company's Form
		10-K and other regulatory filings.

Market	Not relevant,	We believe that climate-related risks are likely to result in changes in
	explanation	demand for, or pricing of, oil, gas and NGLs. The Company sells oil,
	provided	gas and NGLs at the well head and does not own gathering assets,
		mitigating risk exposure. The foregoing discussion is subject to and
		supplemented by the "Risk Factor" sections of the Company's Form
		10-K and other regulatory filings.

Reputation	Relevant,	Certain segments of the public, the business community, and the
	sometimes	investment community, have developed negative sentiment towards
	included	our industry. Recent equity returns in the sector versus other industry
		sectors have led to lower oil and gas representation in certain key
		equity market indices. In addition, some investors, including
		investment management firms, sovereign wealth and pension funds,
		university endowments and other investment advisors, have adopted
		policies to discontinue or reduce their investments in the oil and gas
		sector based on social and environmental considerations.
		Furthermore, other influential stakeholders have pressured
		commercial and investment banks and other service providers to
		cease doing business with the oil and gas industry, including to
		reduce or cease financing of oil and gas companies and related
		infrastructure projects. The foregoing discussion is subject to and
		supplemented by the "Risk Factor" sections of the Company's Form
		10-K and other regulatory filings.

Acute	Not relevant,	SM Energy does not foresee acute physical risk due to climate
physical	explanation	change impacting our business any more than the current
	provided	environment in either the short, medium, or long-term time frames.
		The foregoing discussion is subject to and supplemented by the "Risk
		Factor" sections of the Company's Form 10-K and other regulatory
		filings.

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SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Chronic	Not relevant,	SM Energy does not foresee chronic physical risk due to climate
physical	explanation	change impacting our business any more than the current
	provided	environment in either the short, medium, or long-term time frames.
		The foregoing discussion is subject to and supplemented by the "Risk
		Factor" sections of the Company's Form 10-K and other regulatory
		filings.

C2.3

(C2.3) Have you identified any inherent climate-related risks with the potential to have a substantive financial or strategic impact on your business?

Yes

C2.3a

(C2.3a) Provide details of risks identified with the potential to have a substantive financial or strategic impact on your business.

Identifier

Risk 1

Where in the value chain does the risk driver occur?

Direct operations

Risk type & Primary climate-related risk driver

Current regulation

Mandates on and regulation of existing products and services

Primary potential financial impact

Increased indirect (operating) costs

Company-specific description

Fugitive methane emissions during natural gas production has become a concern for the oil and gas industry as production of natural gas has increased with the emergence of shale gas. According to the 2019 IEA Global Methane Tracker, fugitive emissions were believed to account for approximately 20% of upstream methane emissions during the year. As a result of increased fugitive methane emissions, there is a risk to SM Energy that increased regulations will be implemented to control these emissions, which could reduce our revenues or increase our costs. In 2016, the U.S. Environmental Protection Agency (EPA) and the Bureau of Land Management finalized regulations related to fugitive methane emissions. In 2019, the EPA began revising some of those regulations, and these considerations are still under review.

In response to the risk in 2019, SM Energy focused on leak detection and repair (LDAR) at our production facilities in both operating areas, the Midland Basin and South Texas. This focus was voluntary, but if programs like this are not implemented, increased

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

fugitive methane emissions could result in additional government regulations around flaring and/or methane emissions. Additionally, increased regulations in this area could result in the need to shut-in certain wells, which could materially reduce revenue or increase operating costs if we are unable to meet volume commitments.

Time horizon

Medium-term

Likelihood

Unlikely

Magnitude of impact

Medium

Are you able to provide a potential financial impact figure?

Yes, an estimated range

Potential financial impact figure (currency)

Potential financial impact figure - minimum (currency)

1,000,000

Potential financial impact figure - maximum (currency)

3,000,000

Explanation of financial impact figure

Increasingly stringent methane emission regulations could include LDAR inspections on 100% of SM's wells and facilities, multiple times per year. Quarterly inspections of 100% of SM's wells and facilities could cost upwards of $3,000,000 per year.

Cost of response to risk

650,000

Description of response and explanation of cost calculation

In response to the potential risk of increased regulation of fugitive emissions, the COO and operations team set a goal to implement LDAR at 50% of facilities in 2019. This exceeded government regulations and includes the Company's commitment to The American Petroleum Institute (API) Environmental Partnership, which sets targets beyond regulatory requirements. During 2019, SM exceeded this goal by implementing LDAR at 100% of Midland Basin and 50% of South Texas facilities.

The approximate cost to implement LDAR at these facilities was $650,000, which includes costs associated with a third-party contractor to conduct surveys at locations, as well as a maintenance crew to simultaneously address issues as they were found. This successful project resulted in approximately 18,850 Mcf of recovered gas during the year at a cost of $34.50 per Mcf.

Comment

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

In addition to the inspections discussed, we have changed our facility designs and construction techniques. We use welded vs screwed connections, high efficiency flares and combustors, new generation thief hatches, as well as compressed air (vs natural gas) to operate our control and safety systems. The foregoing discussion is subject to and supplemented by the "Risk Factor" sections of the Company's Form 10-K and other regulatory filings.

Identifier

Risk 2

Where in the value chain does the risk driver occur?

Upstream

Risk type & Primary climate-related risk driver

Emerging regulation

Mandates on and regulation of existing products and services

Primary potential financial impact

Increased indirect (operating) costs

Company-specific description

CO2e emissions have become a top concern for the oil and gas industry as production has increased significantly with the development of shale reservoirs.

The Midland Basin, which is our primary area of operations, has become one of the most prevalent oil and gas basins in the United States, with extremely high activity levels. Because of the high activity levels, there is a risk that the capacity at gas processing systems can become constrained at times. When a capacity constraint occurs, wells could be shut-in and/or there could be an increase in flaring. An increase in flaring would lead to higher CO2e emissions and the potential for increased regulation, which is a risk to SM because it could result in increased costs. In addition, the potential need to shut-in wells could have the effect of materially reducing revenues or increasing costs.

In response to this risk in 2019, SM Energy's operations team led a project to add interconnections between gas processing systems to offload production. As part of this effort, multiple midstream companies were utilized to provide sales redundancy, and offloads were added as bottlenecks were identified. Collaboration with the midstream companies included the sharing of oil, gas, and water forecasts to allow a reasonable amount of time to size and design facility upgrades. Additionally, the assessment of gas and oil midstream capacity and reliability was well scoped.

The expected impact of this project is to reduce our flaring related to downstream capacity constraints. This project was voluntary, but if programs like this are not implemented, increased CO2e emissions could result in additional government regulations around flaring.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Time horizon

Medium-term

Likelihood

More likely than not

Magnitude of impact

Medium

Are you able to provide a potential financial impact figure?

Yes, an estimated range

Potential financial impact figure (currency)

Potential financial impact figure - minimum (currency)

Potential financial impact figure - maximum (currency)

72,000,000

Explanation of financial impact figure

Stricter flaring regulations in the Midland Basin could lead to deferred production and lost revenues. For example, a possible cap on flaring could be set at 5% of total gas production. SM flared 9.4% of its Midland gas production in 2019, primarily as a result of downtime events by third-party gas gatherers. If flaring was capped at 5% of natural gas production, the oil associated with the 4.4% excess gas would have to be shut in. Using 2019 gas production of 34,365,000 Mcf, the curtailed volume would have been 1,512,000 Mcf. Using an average GOR of 1.67 Mcf/Bbl would correspond to a loss in oil production of 900,000 Bbls, or lost cash flow of $36,000,000 at a margin of $40/Bbl. If the hypothetical cap on flaring was set at 2.5%, the deferred cash flow would $72,000,000.

Cost of response to risk

7,600,000

Description of response and explanation of cost calculation

In response to the risk of higher CO2e emissions, the Board set a flaring goal of 12% for 2019. The flaring goal was set at 12% based on expected basin-wide transportation constraints during the year.

During 2019, we exceeded this goal by reducing flaring related to gas processing system capacity restraints to 9.4% of total gas production. In addition, we worked with several gas gatherers to inter-connect systems and provide extra redundancy. This allowed an extra 150,000 Mcf of gas to be sold instead of shut-in or flared.

189,000 Boe of production was shut in during 2019 at an approximate value of $40/Boe or $7,600,000. The approximate cost to complete the interconnection project was $60,000. This successful project resulted in the reduction of flaring related to gas

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

processing system constraints of 150,000 Mcf, at a cost of $0.40/Mcf.

Comment

The foregoing discussion is subject to and supplemented by the "Risk Factor" sections of the Company's Form 10-K and other regulatory filings.

Identifier

Risk 3

Where in the value chain does the risk driver occur?

Direct operations

Risk type & Primary climate-related risk driver

Emerging regulation

Mandates on and regulation of existing products and services

Primary potential financial impact

Increased indirect (operating) costs

Company-specific description

Oil and natural gas production requires wastewater disposal. Because a large amount of water is used during oil and gas production operations, the disposal of that water has become a concern for oil and gas companies. Overall risks with produced water disposal include the risk of spilling the produced water, potential seismic events associated with disposing of the water into certain formations, and the large number of trucks used to transport the produced water. These risks could result in the regulation of produced water disposal, which would increase our costs.

In response to this risk, in 2018, SM Energy initiated a project to drill its own disposal wells and install pipeline across the middle of its acreage position in Howard County, Texas to transport produced water. The expected impact of this project included a reduction in produced water spills, reduction in the likelihood of seismic events, and a substantial decrease in the number of trucks used to transport produced water.

Time horizon

Medium-term

Likelihood

About as likely as not

Magnitude of impact

Medium

Are you able to provide a potential financial impact figure?

Yes, an estimated range

Potential financial impact figure (currency)

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Potential financial impact figure - minimum (currency)

60,000,000

Potential financial impact figure - maximum (currency)

120,000,000

Explanation of financial impact figure

Potential regulations around water disposal could limit trucking of produced water to reduce emissions, and limit deep disposal of water due to seismicity concerns. If SM Energy's produced water had to be disposed of all by pipeline in deep disposal wells limited to 25,000 barrels of water per day, it would require 8-12 disposal wells plus the connecting pipelines at a cost of approximately $8-10MM each.

Cost of response to risk

59,000,000

Description of response and explanation of cost calculation

In response to the risk, SM Energy has installed more than 80 miles of pipeline in the Midland Basin and drilled 4 deep disposal wells to transport and inject produced water from our wells to minimize our environmental impact while improving operating costs. Approximately 95% of SM's produced water from the Howard County assets is transported to SM operated and third-party disposal wells via pipeline, which reduces spill risk, emissions, truck traffic, and operating costs. We carefully plan the location of our disposal wells with the intent to ensure that our operations minimize any potential environmental impacts. Our existing well sites were selected by integrated teams of geoscientists and engineers using subsurface imaging and characterization, including multi-attribute analysis from our 3D seismic data and earth modeling for well planning. These efforts are undertaken with the goal of minimizing any impact on fault lines and other potential seismic risks. This project had a positive impact on spill volumes in 2019, which were reduced 39% compared with 2018. Through 2019, this project has saved approximately 10,000 MT CO2e by transporting water by pipeline rather than truck.

SM Energy spent approximately $51.8 million in 2018 and $7.2 million in 2019 to drill its own disposal wells and install pipelines and seismic monitoring stations across its acreage position in Howard County, Texas.

Comment

When using third-party disposal wells, we periodically audit the operators to ensure they are approved and permitted by applicable governmental agencies and meet our expectations. In addition, we utilize our auditing program with the intent to confirm that each operator and its wells are in compliance with applicable regulations. To monitor potential seismic activity, SM Energy has deployed a fit-for-purpose,real-time seismic monitoring array in the vicinity of our Midland Basin disposal system. We serve on the TexNet Center for Integrated Seismic Research (CISR) Advisory Committee to remain informed about seismicity through science and data-based knowledge and to

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

collaborate with other operators and researchers at the Bureau of Economic Geology in the State of Texas. The foregoing discussion is subject to and supplemented by the "Risk Factor" sections of the Company's Form 10-K and other regulatory filings.

C2.4

(C2.4) Have you identified any climate-related opportunities with the potential to have a substantive financial or strategic impact on your business?

Yes

C2.4a

(C2.4a) Provide details of opportunities identified with the potential to have a substantive financial or strategic impact on your business.

Identifier

Opp1

Where in the value chain does the opportunity occur?

Upstream

Opportunity type

Energy source

Primary climate-related opportunity driver

Use of lower-emission sources of energy

Primary potential financial impact

Increased revenues resulting from increased demand for products and services

Company-specific description

Coal-fired power generation is a primary source of GHG emissions. As more countries seek to reduce their impact on climate change, it is expected that global consumption of coal will be further reduced and replaced by cleaner natural gas/liquefied natural gas (LNG). This has the potential to have a substantive strategic and financial impact on our business.

Increased demand for cleaner natural gas and LNG would result in increased pricing for the commodity. In 2019, natural gas accounted for approximately 38% of SM Energy's production. The Company's sales revenue and profitability is very sensitive to the price of natural gas.

Time horizon

Long-term

Likelihood

More likely than not

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Magnitude of impact

Medium

Are you able to provide a potential financial impact figure?

No, we do not have this figure

Potential financial impact figure (currency)

Potential financial impact figure - minimum (currency)

Potential financial impact figure - maximum (currency)

Explanation of financial impact figure

Cost to realize opportunity

Strategy to realize opportunity and explanation of cost calculation

Our business strategy is to have commodity diversification, and our Company holds substantial natural gas reserves at approximately 1.2 Tcf at year-end 2019. In the fall of 2019, S&P Global presented to the Company's executive team and Board of Directors, providing scenarios of coal replacement by natural gas that support this potential.

Comment

Identifier

Opp2

Where in the value chain does the opportunity occur?

Direct operations

Opportunity type

Energy source

Primary climate-related opportunity driver

Use of new technologies

Primary potential financial impact

Reduced indirect (operating) costs

Company-specific description

CO2e emissions have become a top concern for the oil and gas industry as production of natural gas has increased significantly with the emergence of shale gas.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

SM Energy has identified an opportunity to reduce CO2e emissions by converting pneumatic controllers, which are a source of CO2e emissions at oil and gas facilities. This opportunity involves using intermittent or low-bleed gas pneumatics on many of our facilities to reduce CO2e emissions at our facilities.

Time horizon

Medium-term

Likelihood

Very likely

Magnitude of impact

Medium

Are you able to provide a potential financial impact figure?

No, we do not have this figure

Potential financial impact figure (currency)

Potential financial impact figure - minimum (currency)

Potential financial impact figure - maximum (currency)

Explanation of financial impact figure

Cost to realize opportunity

520,000

Strategy to realize opportunity and explanation of cost calculation

To realize this opportunity, we have begun converting certain pneumatic devices to operate on a compressed instrument air system, which replaces the pressurized natural gas with atmospheric air, eliminating methane emissions. These systems have been installed at new facilities in our Midland Basin Region since 2017. In our South Texas Region, we are replacing gas pneumatic devices with solar and wind powered electronic controllers.

During 2019, we installed and replaced nearly 1,000 non-gas pneumatic controllers at a cost of approximately $520,000, which resulted in approximately 4,500 MT CO2e saved. To execute this strategy going forward, we estimate spending in our Midland region at approximately $30,000 per production battery and $8,000 per wellhead on installing instrument air, as well as annual operation and maintenance costs of approximately $118,000.

Comment

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Identifier

Opp3

Where in the value chain does the opportunity occur?

Direct operations

Opportunity type

Resource efficiency

Primary climate-related opportunity driver

Use of more efficient production and distribution processes

Primary potential financial impact

Reduced indirect (operating) costs

Company-specific description

Oil and natural gas production requires the usage of water during completion activities. Because of this, there is risk that produced water spills will occur. Produced water spills are tracked and reported to the state when required. These spills require specific cleanup protocols, including the disposal of spilled fluids and potential soil remediation. As a result, produced water spills can increase indirect costs significantly.

SM Energy completes a large number of wells each year, which require the usage of water. Because of the potential negative impacts of handling this water, employee short term incentive compensation targets include a performance goal for spill volumes.

SM Energy has implemented a voluntary Spill Reduction Planning effort across the company. This effort, which began in 2013, goes beyond current EPA requirements for Spill Prevention, Control and Countermeasure (SPCC) Plans. A Spill Reduction Team, composed of operations personnel, engineers and environmental specialists, are responsible for analyzing common spill sources and causes, and developing mitigation strategies to reduce leaks and spills. We benchmark our spill performance against AXPC peer companies using the spill metric of Total Produced Fluid Spill Rate, which is the ratio of the total barrels of produced fluids that are spilled to the total barrels of produced fluids. In our operations, on average we spill less than 5 barrels of produced fluid per 100,000 barrels of fluids produced. Much of this spilled fluid is captured within secondary containment built to protect the land and environment.

Time horizon

Long-term

Likelihood

Virtually certain

Magnitude of impact

Medium

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Are you able to provide a potential financial impact figure?

No, we do not have this figure

Potential financial impact figure (currency)

Potential financial impact figure - minimum (currency)

Potential financial impact figure - maximum (currency)

Explanation of financial impact figure

Cost to realize opportunity

8,700,000

Strategy to realize opportunity and explanation of cost calculation

The best way to minimize any impact from spills is to prevent them from occurring in the first place. Accordingly, we seek to design and maintain our facilities to prevent spills, but in the event of a spill, we have safeguards intended to contain all fluids on location. When a spill does occur, we work to properly clean-up the affected area, dispose of any recovered fluids, and as necessary, remediate any contaminated soil or water. For each spill, we determine the source and the cause to analyze spill trends, and work to implement new procedures and practices to mitigate future occurrences.

In 2019, the SPCC at SM Energy took on multiple activities to reduce produced water spills totaling nearly $9 million, which included:

Tank, vessel and pipeline inspections, and replacement as necessary;
Extra manpower to help prevent spills, which include flowback crews and night lease operators;
Projects to increase automation and associated maintenance to help reduce spills and leaks.

As a result of these activities to reduce produced water spills, SM ranked top-quartile among its peers for spill volumes in 2019.

Comment

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

C3. Business Strategy

C3.1

(C3.1) Have climate-related risks and opportunities influenced your organization's strategy and/or financial planning?

Yes

C3.1a

(C3.1a) Does your organization use climate-related scenario analysis to inform its strategy?

No, but we anticipate using qualitative and/or quantitative analysis in the next two years

C3.1c

(C3.1c) Why does your organization not use climate-related scenario analysis to inform its strategy?

SM Energy realizes the global shift towards using a climate-related scenario analysis into its organizational strategy. The Company amended the charter and enhanced the duties of the existing Nominating and Corporate Governance Committee of the Board of Directors to include oversight of ESG matters. The charter for this committee, which is now renamed the Environmental, Social, and Governance Committee, was approved by the Board of Directors in July 2020. The ESG Committee is expected to consider whether a climate-related scenario analysis would be a beneficial undertaking at this time.

C3.1d

(C3.1d) Describe where and how climate-related risks and opportunities have influenced your strategy.

	Have climate-related	Description of influence
	risks and
	opportunities
	influenced your
	strategy in this area?

Products and	Yes	Macro-economic scenario analysis is reviewed specifically for
services		the impact on demand and pricing of our products. Each
		quarter, our Board of Directors invites third party experts to
		identify key disruptors/technologies that could affect wide-
		scale change. Examples that affect supply and demand for
		our products and services include increased adoption of
		electric vehicles which may require increased natural gas for
		power generation. Also, as discussed above, we consider the
		global effect on natural gas demand and pricing as a
		23

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

		replacement fuel to coal-fired power generation. In the fall of
		2019, S&P Global presented to the Company's executive
		team and Board of Directors, providing scenarios of coal
		replacement by natural gas that support this potential. Due to
		the Company's sizable natural gas reserves at economic
		pricing, long-term strategy and planning considers the
		potential shift in global demand for natural gas. Coal-fired
		power generation is a primary source of GHG emissions. As
		more countries seek to reduce their impact on climate
		change, it is expected that global consumption of coal will be
		further reduced and replaced by cleaner natural gas/LNG.
		This has the potential to have a substantive strategic and
		financial impact on our business. Our business strategy is to
		have commodity diversification, and our Company holds
		substantial natural gas reserves at economic prices. In
		addition, our Board of Directors is presented with an in-depth
		environmental discussion topic each quarter, all of which is
		incorporated into our strategic thinking and operational
		planning.

Supply chain	Yes	Our strategy to reduce emissions caused by downstream
and/or value		capacity constraints involves our supply/value chain. During
chain		2019, as part of our effort to increase interconnections
		between gas processing systems, we worked with multiple
		mid-stream companies to provide sales redundancy.
		Collaboration with the midstream companies included the
		sharing of oil, gas, and water forecasts to allow a reasonable
		amount of time to size and design facility upgrades.
		Additionally, the assessment of gas and oil midstream
		capacity and reliability was well scoped.

Investment in	No
R&D

Operations	Yes	There are a number of climate related risks and opportunities
		considered in our long-term planning and operational
		strategies. Specific examples include:
		(1) We anticipated increased regulatory requirements for
		CO2 and methane emissions. As a result, three years ago we
		introduced specific targets in our bonus compensation to
		incentivize our employees to reduce our CO2e emissions and
		our methane emissions intensity. This has encouraged our
		employees to reduce flaring, to use better control
		technologies, and to employ more efficient combustion in our
		development activities. We proactively went well beyond
		regulations and implemented a comprehensive Leak
		Detection & Repair (LDAR) program to identify and repair

		24

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

leaks across substantially all of our facilities rather than simply those mandated by regulation. We joined The API Environmental Partnership to remain at the forefront of the industry in terms of reducing emissions. Overall, we focus on improving development economics which leads to a continual search for more efficient ways to develop and produce oil and gas. This can be as simple as providing remote monitoring to limit the number of truck trips to visit specific locations, or to enable remote intervention through internet based controls;

We have anticipated the potential for government bans on certain energy development activities on Federal land. As a result, we strategically re-cast our portfolio by divesting of properties in areas where development could be at risk from potential federal government action. Specifically, after identifying a scenario where the federal government could potentially ban certain types of development activity such as fracture stimulation, we divested of a large federal acreage holding. As another example on the local level, after identifying a scenario where local residents could seek to restrict or ban development activity, we focused our activity away from large population centers, generally through divestiture (Wyoming) or acreage trades (in the Midland Basin).

C3.1e

(C3.1e) Describe where and how climate-related risks and opportunities have influenced your financial planning.

	Financial planning	Description of influence
	elements that have been
	influenced

Row	None of the above	As described above, risks and opportunities are considered in
1		our strategic planning, which is incorporated into our long-term
		financial planning scenarios.

C3.1f

(C3.1f) Provide any additional information on how climate-related risks and opportunities have influenced your strategy and financial planning (optional).

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

C4. Targets and performance

C4.1

(C4.1) Did you have an emissions target that was active in the reporting year?

Intensity target

C4.1b

(C4.1b) Provide details of your emissions intensity target(s) and progress made against those target(s).

Target reference number

Int 1

Year target was set

2019

Target coverage

Company-wide

Scope(s) (or Scope 3 category)

Scope 1

Intensity metric

Other, please specify

Metric tons CO2e per thousand barrels of oil equivalent (MBoe)

Base year

2019

Intensity figure in base year (metric tons CO2e per unit of activity)

12.4

of total base year emissions in selected Scope(s) (or Scope 3 category) covered by this intensity figure
100

Target year

2019

Targeted reduction from base year (%)

Intensity figure in target year (metric tons CO2e per unit of activity) [auto- calculated]

12.4

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

change anticipated in absolute Scope 1+2 emissions
change anticipated in absolute Scope 3 emissions

Intensity figure in reporting year (metric tons CO2e per unit of activity)

12.4

% of target achieved [auto-calculated] Target status in reporting year

Achieved

Is this a science-based target?

No, and we do not anticipate setting one in the next 2 years

Please explain (including target coverage)

For 2019, we achieved 100% of our GHG intensity target, which is not reflected in the auto-calculation above. The 2019 GHG intensity target was 14.5 mT; actual 2019 GHG intensity was 12.4 mT. 2020 GHG intensity target is based on top-quartile of publicly reported data by industry peers for the three-year trailing average. Coverage is company-wide for U.S. onshore operations including all Basins reporting GHG to EPA per GHG Mandatory Reporting Rule (40 CFR 98 Subpart W).

C4.2

(C4.2) Did you have any other climate-related targets that were active in the reporting year?

Target(s) to reduce methane emissions

C4.2b

(C4.2b) Provide details of any other climate-related targets, including methane reduction targets.

Target reference number

Oth 1

Year target was set

2019

Target coverage

Company-wide

Target type: absolute or intensity

Intensity

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Target type: category & Metric (target numerator if reporting an intensity target)

Methane reduction target

Other, please specify

Thousand Standard Cubic Feet

Target denominator (intensity targets only)

unit of production

Base year

2019

Figure or percentage in base year

0.11

Target year

2019

Figure or percentage in target year

0.11

Figure or percentage in reporting year

0.11

% of target achieved [auto-calculated] Target status in reporting year

Achieved

Is this target part of an emissions target?

Yes

Is this target part of an overarching initiative?

Other, please specify

Overall ESG

Please explain (including target coverage)

For 2019, we achieved 100% of our methane intensity target, which is not reflected in the auto-calculation above. The 2019 methane intensity target was 0.22%, which was based on top-quartile of publicly reported data by industry peers for three-year trailing average; actual 2019 methane intensity was 0.11%. 2020 methane intensity target is based on top-quartile of publicly reported data by industry peers for the three-year trailing average.This climate-related target is part of a company-wide effort to track and communicate more ESG metrics.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

C4.3

(C4.3) Did you have emissions reduction initiatives that were active within the reporting year? Note that this can include those in the planning and/or implementation phases.

Yes

C4.3a

(C4.3a) Identify the total number of initiatives at each stage of development, and for those in the implementation stages, the estimated CO2e savings.

	Number of	Total estimated annual CO2e savings in metric

	initiatives	tonnes CO2e (only for rows marked *)

Under investigation

To be implemented*

Implementation
commenced*

Implemented*	1	10,004

Not to be implemented

C4.3b

(C4.3b) Provide details on the initiatives implemented in the reporting year in the table below.

Initiative category & Initiative type

Fugitive emissions reductions

Oil/natural gas methane leak capture/prevention

Estimated annual CO2e savings (metric tonnes CO2e)

10,004

Scope(s)

Scope 1

Voluntary/Mandatory

Mandatory

Annual monetary savings (unit currency - as specified in C0.4)

Investment required (unit currency - as specified in C0.4)

650,000

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Payback period

No payback

Estimated lifetime of the initiative

Ongoing

Comment

In response to potential increased regulation of fugitive emissions, the COO and operations team set a goal to implement LDAR at 50% of facilities in 2019. This exceeded government regulations and includes the Company's commitment to The API Environmental Partnership, which sets targets far beyond regulatory requirements.

During 2019, SM exceeded this goal by implementing LDAR at 100% of Midland Basin and 50% of South Texas facilities. The approximate cost to implement LDAR at these facilities was $650,000. This successful project resulted in approximately 18,850 Mcf of recovered gas during the year at a cost of $34.50 per Mcf.

C4.3c

(C4.3c) What methods do you use to drive investment in emissions reduction activities?

Method	Comment

Compliance with regulatory requirements/standards

C4.5

(C4.5) Do you classify any of your existing goods and/or services as low-carbon products or do they enable a third party to avoid GHG emissions?

C-OG4.6

(C-OG4.6) Describe your organization's efforts to reduce methane emissions from your activities.

Fugitive methane emissions during natural gas production has become a concern for the oil and gas industry as production of natural gas has increased with the emergence of shale gas. According to the 2019 IEA Global Methane Tracker, fugitive emissions were believed to account for approximately 20% of upstream methane emissions during the year. As a result of increased fugitive methane emissions, there is the possibility that increased regulations will be implemented to control these emissions, which could increase our costs. In 2016, the U.S. Environmental Protection Agency (EPA) and the Bureau of Land Management finalized regulations related to fugitive methane emissions. In 2019, the EPA began revising some of those regulations, and these considerations are still under review.

During 2019, SM Energy focused on leak detection and repair (LDAR) at our production facilities in both operating areas, the Midland Basin and South Texas. This focus was voluntary,

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

but if programs like this are not implemented, increased fugitive methane emissions could result in additional government regulations around flaring and/or methane emissions. Additionally, potential increased regulations could result in certain wells being shut-in, which could increase operating costs if we are unable to meet volume commitments, and shut-ins could materially reduce operating revenues.

In response to potential increased regulation of fugitive emissions, the COO and operations team set a goal to implement LDAR at 50% of facilities in 2019. This exceeded government regulations and includes the Company's commitment to the API Environmental Partnership, which sets targets far beyond regulatory requirements.

During 2019, SM exceeded this goal by implementing LDAR at 100% of Midland Basin and

50% of South Texas facilities. The approximate cost to implement LDAR at these facilities was $650,000. This successful project resulted in approximately 18,850 Mcf of recovered gas during the year at a cost of $34.50 per Mcf.

SM Energy has implemented environmental goals around methane emissions that impact compensation for every employee.

SM also participates in two programs that are part of The API Environmental Partnership. Under the Leak Program for Natural Gas and Oil Production Sources program, SM conducted surveys at 1,399 sites in 2019. Additionally, SM Energy replaced high-bleed controllers prior to The API Environmental Partnership program in 2018 to replace, remove or retrofit high-bleed pneumatic controllers. During 2019, we installed and replaced nearly 1,000 gas pneumatic controllers, which resulted in approximately 4,500 MT CO2e saved.

C-OG4.7

(C-OG4.7) Does your organization conduct leak detection and repair (LDAR) or use other methods to find and fix fugitive methane emissions from oil and gas production activities?

Yes

C-OG4.7a

(C-OG4.7a) Describe the protocol through which methane leak detection and repair or other leak detection methods, are conducted for oil and gas production activities, including predominant frequency of inspections, estimates of assets covered, and methodologies employed.

Predominant frequency of inspections: semi-annual; estimates of assets covered: 50% (for CY

2020) ; methodologies employed: hand-held OGI camera following EPA 40 CFR 60 NSPS OOOOa.

In response to potential increased regulation of fugitive emissions, the COO and operations team set a goal to implement LDAR at 50% of facilities in 2019. This exceeded government

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

regulations and includes the Company's commitment to The API Environmental Partnership, which sets targets far beyond regulatory requirements.

During 2019, SM exceeded this goal by implementing LDAR at 100% of Midland Basin and

Additional methane emissions reductions can be achieved by installing zero-emission controllers (electronic or air pneumatic controllers).

SM Energy has adopted a proactive approach to using intermittent or low-bleed gas pneumatics on many of our facilities, even before the EPA's NSPS OOOO regulation in 2011, which prohibited high-bleed gas pneumatics at new or modified facilities. We have converted certain pneumatic devices to operate on a compressed instrument air system, which replaces the pressurized natural gas with atmospheric air, eliminating methane emissions. These systems have been installed at new facilities in our Midland Basin Region since 2017. In our South Texas Region, we are replacing gas pneumatic devices with solar and wind powered electronic controllers.

During 2019, we installed and replaced nearly 1,000 non-gas pneumatic controllers, which resulted in approximately 4,500 MT CO2e saved. To execute this strategy going forward, we estimate spending in our Midland region at approximately $30,000 per production battery and $8,000 per wellhead on installing instrument air, as well as annual operation and maintenance costs of approximately $118,000.

C-OG4.8

(C-OG4.8) If flaring is relevant to your oil and gas production activities, describe your organization's efforts to reduce flaring, including any flaring reduction targets.

SM Energy desires to eliminate or minimize flaring by setting targets, developing the appropriate monitoring tools, and identifying projects that support that objective. Each year a flaring goal is set and is monitored using daily operational data that provides operations management with the information needed to identify root causes for flaring and to take action. Actions could include notifying and working with our midstream gas purchasers to identify and install gas off-loads to other purchasers, de-bottle necking and optimizing pipelines and equipment, shutting in production to minimize flaring, and rescheduling capital expenditures in order to allow infrastructure to catch-up with development, thus eliminating or minimizing flaring. We are also members of The Environmental Partnership and Texas Methane and Flaring Coalition, both of which are focusing on reducing flaring. We had a Midland Basin flaring target for 2019, and have again for 2020.

In response to potential increased regulation of CO2e emissions, the Board set a flaring goal of 12% for 2019.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

During 2019, SM exceeded this goal by reducing flaring related to gas processing system capacity restraints to 9.5% of total gas production. The approximate cost to complete this project was $60,000. This successful project resulted in the reduction in flaring related to gas processing system restraints of approximately 150,000 Mcf, at a cost of $0.40/Mcf.

C5. Emissions methodology

C5.1

(C5.1) Provide your base year and base year emissions (Scopes 1 and 2).

Scope 1

Base year start

January 1, 2019

Base year end

December 31, 2019

Base year emissions (metric tons CO2e)

775,678

Comment

As reported per EPA GHG Mandatory Reporting Rule 40 CFR 98 Subpart W.

Scope 2 (location-based)

Base year start

January 1, 2019

Base year end

December 31, 2019

Base year emissions (metric tons CO2e)

86,338

Comment

Scope 2 (market-based)

Base year start

Base year end

Base year emissions (metric tons CO2e)

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Comment

C5.2

(C5.2) Select the name of the standard, protocol, or methodology you have used to collect activity data and calculate emissions.

US EPA Mandatory Greenhouse Gas Reporting Rule

C6. Emissions data

C6.1

(C6.1) What were your organization's gross global Scope 1 emissions in metric tons CO2e?

Reporting year

Gross global Scope 1 emissions (metric tons CO2e)

775,678

Comment

As reported per EPA GHG Mandatory Reporting Rule 40 CFR 98 Subpart W.

C6.2

(C6.2) Describe your organization's approach to reporting Scope 2 emissions.

Row 1

Scope 2, location-based

We are reporting a Scope 2, location-based figure

Scope 2, market-based

Comment

C6.3

(C6.3) What were your organization's gross global Scope 2 emissions in metric tons CO2e?

Reporting year

Scope 2, location-based

86,338

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Comment

C6.4

(C6.4) Are there any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in your disclosure?

C6.5

(C6.5) Account for your organization's gross global Scope 3 emissions, disclosing and explaining any exclusions.

Purchased goods and services

Evaluation status

Not relevant, explanation provided

Please explain

We are unable to gather such information from our hundreds of counterparts, vendors, and service providers. Most do not maintain such information in a uniform way. However, we rely on our business partners to comply with all applicable state and federal laws, including applicable emissions reporting.

Capital goods

Evaluation status

Not relevant, explanation provided

Please explain

Fuel-and-energy-related activities (not included in Scope 1 or 2)

Evaluation status

Not relevant, explanation provided

Please explain

We are unable to gather such information from our vendors and service providers. Most do not maintain such information in a uniform way. However, we rely on our business partners to comply with all applicable state and federal laws, including applicable emissions reporting.

Upstream transportation and distribution

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Evaluation status

Not relevant, explanation provided

Please explain

Waste generated in operations

Evaluation status

Not relevant, explanation provided

Please explain

We are not in a position to gather such information from our counterparts and service providers. Most do not maintain such information in a uniform way. However, we rely on our business partners to comply with all applicable state and federal laws, including emissions reporting, to ensure their ability to continue receiving our product.

Business travel

Evaluation status

Not relevant, explanation provided

Please explain

We are not in a position to gather such information. Although we generally know the number of commercial airline segments flown on any given year, we are not in a position to report GHG emissions on said flight segments due to the number of variables and uncertainties.

Employee commuting

Evaluation status

Not relevant, explanation provided

Please explain

We are not in a position to gather such information. We do not track the commuting specifics of our employees.

Upstream leased assets

Evaluation status

Not relevant, explanation provided

Please explain

This would be reported in our Score 1 or Scope 2 emissions.

Downstream transportation and distribution

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Evaluation status

Not relevant, explanation provided

Please explain

We do not control downstream transportation and distribution.

Processing of sold products

Evaluation status

Not relevant, explanation provided

Please explain

We have no control or knowledge of the ultimate end use of the commodities we produce. Purchasers of our oil and natural gas resell the commodities for different uses and it would be impossible to track the ultimate use and emissions resulting from the final products.

Use of sold products

Evaluation status

Not relevant, explanation provided

Please explain

End of life treatment of sold products

Evaluation status

Not relevant, explanation provided

Please explain

Downstream leased assets

Evaluation status

Not relevant, explanation provided

Please explain

We do not have any downstream leased assets.

Franchises

Evaluation status

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Not relevant, explanation provided

Please explain

We do not have any franchises.

Investments

Evaluation status

Not relevant, explanation provided

Please explain

We do not have any investments.

Other (upstream)

Evaluation status

Please explain

Other (downstream)

Evaluation status

Please explain

C6.7

(C6.7) Are carbon dioxide emissions from biogenic carbon relevant to your organization?

C6.10

(C6.10) Describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tons CO2e per unit currency total revenue and provide any additional intensity metrics that are appropriate to your business operations.

Intensity figure

12.4

Metric numerator (Gross global combined Scope 1 and 2 emissions, metric tons CO2e)

775,678

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Metric denominator

Other, please specify

Thousand Barrels of Oil Equivalent (MBoe)

Metric denominator: Unit total

62,400

Scope 2 figure used

change from previous year Direction of change

Reason for change

No change. This is our first year of reporting, so we cannot compare to last year. Scope 2 emissions are not included in intensity figure/metric.

C-OG6.12

(C-OG6.12) Provide the intensity figures for Scope 1 emissions (metric tons CO2e) per unit of hydrocarbon category.

Unit of hydrocarbon category (denominator)

Other, please specify

Thousand Barrels of Oil Equivalent (MBoe)

Metric tons CO2e from hydrocarbon category per unit specified

12.4

change from previous year Direction of change

Reason for change

N/A

Comment

This is our first year of reporting, so we cannot compare to last year.

C-OG6.13

(C-OG6.13) Report your methane emissions as percentages of natural gas and hydrocarbon production or throughput.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Oil and gas business division

Upstream

Estimated total methane emitted expressed as % of natural gas production or throughput at given division

0.11

Estimated total methane emitted expressed as % of total hydrocarbon production or throughput at given division

0.04

Comment

C7. Emissions breakdowns

C7.1

(C7.1) Does your organization break down its Scope 1 emissions by greenhouse gas type?

Yes

C7.1a

(C7.1a) Break down your total gross global Scope 1 emissions by greenhouse gas type and provide the source of each used greenhouse warming potential (GWP).

Greenhouse	Scope 1 emissions (metric tons of	GWP Reference
gas	CO2e)

CO2	695,512	IPCC Fourth Assessment Report (AR4 -
		100 year)


CH4	79,419	IPCC Fourth Assessment Report (AR4 -
		100 year)

N2O	747	IPCC Fourth Assessment Report (AR4 -
		100 year)

C-OG7.1b

(C-OG7.1b) Break down your total gross global Scope 1 emissions from oil and gas value chain production activities by greenhouse gas type.

Emissions category

Combustion (excluding flaring)

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Value chain

Upstream

Product

Unable to disaggregate

Gross Scope 1 CO2 emissions (metric tons CO2)

695,512

Gross Scope 1 methane emissions (metric tons CH4)

3,177

Total gross Scope 1 emissions (metric tons CO2e)

775,678

Comment

Other includes pneumatic devices and pumps, storage tanks, reciprocating compressors, liquids unloading, completions with and without hydraulic fracturing.

C7.2

(C7.2) Break down your total gross global Scope 1 emissions by country/region.

Country/Region	Scope 1 emissions (metric tons CO2e)

United States of America	775,678

C7.3

(C7.3) Indicate which gross global Scope 1 emissions breakdowns you are able to provide.

By business division

C7.3a

(C7.3a) Break down your total gross global Scope 1 emissions by business division.

Business division	Scope 1 emissions (metric ton CO2e)

Midland Basin	692,437

South Texas	83,241

C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4

(C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4) Break down your organization's total gross global Scope 1 emissions by sector production activity in metric tons CO2e.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

	Gross Scope 1	Comment

	emissions, metric tons
	CO2e

Oil and gas production	775,678	Net GHG emissions not reported per EPA
activities (upstream)		GHG Mandatory Reporting Rule 40 CFR 98
		Subpart W.

Oil and gas production
activities (midstream)

Oil and gas production
activities (downstream)

C7.5

(C7.5) Break down your total gross global Scope 2 emissions by country/region.

Country/Region	Scope 2,	Scope 2,	Purchased and	Purchased and consumed

	location-	market-	consumed	low-carbon electricity,
	based (metric	based	electricity, heat,	heat, steam or cooling
	tons CO2e)	(metric tons	steam or cooling	accounted for in Scope 2
		CO2e)	(MWh)	market-based approach
				(MWh)

United States of	86,338		204,298	158,126
America

C7.6

(C7.6) Indicate which gross global Scope 2 emissions breakdowns you are able to provide.

By business division

C7.6a

(C7.6a) Break down your total gross global Scope 2 emissions by business division.

Business	Scope 2, location-based (metric tons	Scope 2, market-based (metric tons

division	CO2e)	CO2e)

Midland Basin	86,338

C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7

(C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7) Break down your organization's total gross global Scope 2 emissions by sector production activity in metric tons CO2e.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

	Scope 2, location-	Scope 2, market-based (if	Comment

	based, metric tons	applicable), metric tons CO2e
	CO2e

Oil and gas production	86,338
activities (upstream)

Oil and gas production
activities (midstream)

Oil and gas production
activities (downstream)

C7.9

(C7.9) How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to those of the previous reporting year?

This is our first year of reporting, so we cannot compare to last year

C8. Energy

C8.1

(C8.1) What percentage of your total operational spend in the reporting year was on energy?

More than 0% but less than or equal to 5%

C8.2

(C8.2) Select which energy-related activities your organization has undertaken.

	Indicate whether your organization undertook this energy-

	related activity in the reporting year

Consumption of fuel (excluding	Yes
feedstocks)

Consumption of purchased or	Yes
acquired electricity

Consumption of purchased or	No
acquired heat

Consumption of purchased or	No
acquired steam

Consumption of purchased or	No
acquired cooling

Generation of electricity, heat,	No
steam, or cooling

	43

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

C8.2a

(C8.2a) Report your organization's energy consumption totals (excluding feedstocks) in MWh.

	Heating	MWh from	MWh from non-	Total (renewable

	value	renewable	renewable	and non-renewable)
		sources	sources	MWh

Consumption of fuel	HHV (higher	0	1,342,770	1,342,770
(excluding feedstock)	heating
	value)

Consumption of		36,775	167,525	204,300
purchased or acquired
electricity

Total energy		36,775	1,510,295	1,547,070
consumption

C8.2b

(C8.2b) Select the applications of your organization's consumption of fuel.

	Indicate whether your organization undertakes this
	fuel application

Consumption of fuel for the generation of	Yes
electricity

Consumption of fuel for the generation of	No
heat

Consumption of fuel for the generation of	No
steam

Consumption of fuel for the generation of	No
cooling

Consumption of fuel for co-generation or	No
tri-generation

C8.2c

(C8.2c) State how much fuel in MWh your organization has consumed (excluding feedstocks) by fuel type.

Fuels (excluding feedstocks)

Diesel

Heating value

HHV (higher heating value)

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Total fuel MWh consumed by the organization

827,538

MWh fuel consumed for self-generation of electricity

4,713

MWh fuel consumed for self-generation of heat

Emission factor

0.4276

Unit

metric tons CO2e per barrel

Emissions factor source

EPA.

https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references

Comment

Fuels (excluding feedstocks)

Compressed Natural Gas (CNG)

Heating value

HHV (higher heating value)

Total fuel MWh consumed by the organization

53,234

MWh fuel consumed for self-generation of electricity

53,234

MWh fuel consumed for self-generation of heat

Emission factor

0.053

Unit

metric tons CO2e per million Btu

Emissions factor source

EPA.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references

Comment

Fuels (excluding feedstocks)

Propane Gas

Heating value

HHV (higher heating value)

Total fuel MWh consumed by the organization

82,627

MWh fuel consumed for self-generation of electricity

82,627

MWh fuel consumed for self-generation of heat

Emission factor

0.231

Unit

metric tons CO2e per barrel

Emissions factor source

EPA.

https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references

Comment

Fuels (excluding feedstocks)

Natural Gas

Heating value

HHV (higher heating value)

Total fuel MWh consumed by the organization

379,371

MWh fuel consumed for self-generation of electricity

101,126

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

MWh fuel consumed for self-generation of heat

Emission factor

Unit

metric tons CO2e per million Btu

Emissions factor source

EPA.

https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references

Comment

C9. Additional metrics

C9.1

(C9.1) Provide any additional climate-related metrics relevant to your business.

C-OG9.2a

(C-OG9.2a) Disclose your net liquid and gas hydrocarbon production (total of subsidiaries and equity-accounted entities).

	In-year net production	Comment

Crude oil and condensate, million barrels	21.9

Natural gas liquids, million barrels	8.1

Oil sands, million barrels (includes bitumen and synthetic crude)	0

Natural gas, billion cubic feet	109.8

C-OG9.2b

(C-OG9.2b) Explain which listing requirements or other methodologies you use to report reserves data. If your organization cannot provide data due to legal restrictions on reporting reserves figures in certain countries, please explain this.

Our internal controls over the recording of proved reserves are structured to objectively and accurately estimate our reserve quantities and values in compliance with the SEC's regulations. Our process for managing and monitoring our proved reserves is delegated to our corporate reserves group and is coordinated by our Corporate Engineering Manager, subject to the oversight of our management and the Audit Committee of our Board of Directors. Technical,

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

geological, and engineering reviews of our assets are performed throughout the year by our Development Department. Data, obtained from these reviews, in conjunction with economic data and our ownership information, is used in making a determination of estimated proved reserve quantities. Our Development Department's technical staff do not report to our Corporate Engineering Manager; they report to the Sr. Vice President of Development and EHS. This design is intended to promote objective and independent analysis in the proved reserves estimation process.

Ryder Scott is an independent petroleum engineering consulting firm that has been providing petroleum engineering consulting services throughout the world for over 70 years. Ryder Scott performs an independent audit using its own engineering assumptions, but with economic and ownership data we provided. Ryder Scott audits a minimum of 80 percent of our total calculated proved reserve PV-10. In the aggregate, the proved reserve amounts of our audited properties determined by Ryder Scott are required, per our policy, to be within 10 percent of our proved reserve amounts for the total Company, as well as for each respective asset management level.

In addition to a third-party audit, our reserves are reviewed by our management with the Audit Committee of our Board of Directors. Our Management, which includes our Chief Executive Officer, Executive Vice President and Chief Financial Officer, and President and Chief Operating Officer, is responsible for reviewing and verifying that the estimate of proved reserves is reasonable, complete, and accurate. The Audit Committee reviews a summary of the final reserves estimate in conjunction with Ryder Scott's results and also meets with Ryder Scott representatives, apart from our management, from time to time to discuss processes and findings.

C-OG9.2c

(C-OG9.2c) Disclose your estimated total net reserves and resource base (million boe), including the total associated with subsidiaries and equity-accounted entities.

	Estimated total net	Estimated total net	Estimated net	Comment

	proved + probable	proved + probable +	total resource
	reserves (2P) (million	possible reserves (3P)	base (million
	BOE)	(million BOE)	BOE)

Row			462	The Company
1				does not publish
				2P or 3P reserves.

C-OG9.2d

(C-OG9.2d) Provide an indicative percentage split for 2P, 3P reserves, and total resource base by hydrocarbon categories.

Net proved +	Net proved +	Net total	Comment

probable	probable +	resource
	possible	base (%)

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

	reserves (2P)	reserves (3P)
	(%)	(%)

Crude oil/			56	This percentage relates to our
condensate/				reported 1P reserves. The
natural gas				Company does not publish 2P or
liquids				3P resources. From Company's
				2019 Form 10-K table, page 10.

Natural gas			44	This percentage relates to our
				reported 1P reserves. The
				Company does not publish 2P or
				3P resources. From Company's
				2019 Form 10-K table, page 10.

Oil sands			0	The Company does not publish
(includes bitumen				2P or 3P resources. From
and synthetic				Company's 2019 Form 10-K
crude)				table, page 10.

C-OG9.2e

(C-OG9.2e) Provide an indicative percentage split for production, 1P, 2P, 3P reserves, and total resource base by development types.

Development type

Onshore

In-year net production (%)

100

Net proved reserves (1P) (%)

Net proved + probable reserves (2P) (%)

Net proved + probable + possible reserves (3P) (%)

Net total resource base (%)

100

Comment

The Company does not publish 2P or 3P resources.

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

C-CE9.6/C-CG9.6/C-CH9.6/C-CN9.6/C-CO9.6/C-EU9.6/C-MM9.6/C-OG9.6/C-RE9.6/C-ST9.6/C-TO9.6/C-TS9.6

(C-CE9.6/C-CG9.6/C-CH9.6/C-CN9.6/C-CO9.6/C-EU9.6/C-MM9.6/C-OG9.6/C-RE9.6/C-ST9.6/C-TO9.6/C-TS9.6) Does your organization invest in research and development (R&D) of low-carbon products or services related to your sector activities?

	Investment in low-carbon R&D	Comment


Row 1	No

C-OG9.7

(C-OG9.7) Disclose the breakeven price (US$/BOE) required for cash neutrality during the reporting year, i.e. where cash flow from operations covers CAPEX and dividends paid/ share buybacks.

C10. Verification

C10.1

(C10.1) Indicate the verification/assurance status that applies to your reported emissions.

	Verification/assurance status

Scope 1	No third-party verification or assurance

Scope 2 (location-based or market-based)	No third-party verification or assurance

Scope 3	No emissions data provided

C10.2

(C10.2) Do you verify any climate-related information reported in your CDP disclosure other than the emissions figures reported in C6.1, C6.3, and C6.5?

No, we do not verify any other climate-related information reported in our CDP disclosure

C11. Carbon pricing

C11.1

(C11.1) Are any of your operations or activities regulated by a carbon pricing system (i.e. ETS, Cap & Trade or Carbon Tax)?

No, and we do not anticipate being regulated in the next three years

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

C11.2

(C11.2) Has your organization originated or purchased any project-based carbon credits within the reporting period?

C11.3

(C11.3) Does your organization use an internal price on carbon?

No, and we do not currently anticipate doing so in the next two years

C12. Engagement

C12.1

(C12.1) Do you engage with your value chain on climate-related issues?

No, we do not engage

C12.1e

(C12.1e) Why do you not engage with any elements of your value chain on climate- related issues, and what are your plans to do so in the future?

SM Energy recognizes the valuable role our independent contractors play in our operations and we want to work with others who share our commitment to health and safety and the proper stewardship of shared natural resources. SM Energy has utilized ISNetworld (ISN) to facilitate the collection, maintenance, and verification of contractor information. Contractors are required to submit their safety and training programs, safety performance data, and proof of insurance information to ISN, who independently verifies the information. Contractors are graded on the strength of their EHS management systems and training programs, as well as their performance. Contractors are generally selected based on their performance against defined benchmarks, and the use of each contractor is approved by Company representatives involved in the work to be performed. We maintain a list of qualified contractors and generally only those contractors are permitted to work in our operations.

While we have not implemented a formalized climate engagement program, we engage to the extent that we expect all of our contractors to comply with their respective EHS programs, state and federal regulations, and to respect our safety culture and core values. We conduct periodic audits of a sampling of our contractors at both the corporate and field level. Contractors are selected for these reviews based on the risks attendant to the work to be performed, activity level, past performance, and other factors.

C12.3

(C12.3) Do you engage in activities that could either directly or indirectly influence public policy on climate-related issues through any of the following?

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Trade associations

C12.3b

(C12.3b) Are you on the board of any trade associations or do you provide funding beyond membership?

Yes

C12.3c

(C12.3c) Enter the details of those trade associations that are likely to take a position on climate change legislation.

Trade association

American Exploration and Production Council (AXPC)

Is your position on climate change consistent with theirs?

Consistent

Please explain the trade association's position

American oil and gas producers have an irreplaceable role in meeting the challenge of global climate change. AXPC, representing large independent American oil and gas producers, supports innovative, collaborative solutions that lower greenhouse gas (GHG) emissions while meeting the world's growing need for abundant, low cost, reliable energy. Successful public policy must recognize that oil and gas underpins our standard of living and American oil and gas is critical to our national security and economic prosperity.

The following principles will guide AXPC's climate advocacy efforts, including policy that:

Facilitates meaningful GHG emissions reductions

Requires proportional participation from all sectors of the economy
Utilizes fair, consistent and transparent measurement methodologies across industries
Encourages and appropriately accounts for early and/or voluntary actions
Minimizes inconsistent, redundant and/or contradictory regulations and policies

● Attributes to energy producers only emissions arising during production operations

Balances economic, environmental and energy security needs

Ensures the development of critical energy infrastructure
Makes the costs and associated climate benefits of any policy fully transparent to the
American public
Ensures that the United States shoulders an equitable burden under international agreements
Does not disadvantage American oil and gas producers and workers against foreign competitors

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Promotes innovation

Champions economy-wide public and private investment to develop cost-effective technologies that will materially reduce GHG emissions
Relies upon predictable and economically efficient policy frameworks, such as the use of market-based policies and/or offsets, to deliver outcomes at the lowest cost to society
Allows all energy sources to compete for innovation funding

How have you influenced, or are you attempting to influence their position?

None

C12.3f

(C12.3f) What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy?

SM Energy is committed to developing oil and gas resources in an environmentally responsible and sustainable manner. Our Board of Directors has been consistently engaged in reviewing our climate related efforts to date, and with the designation of a specific Board committee to oversee our ESG efforts, we expect to make even more transparent connections between our strategy, ESG performance goals, and compensation practices. Our leadership team is highly engaged with the trade associations that the Company participates in and monitors the positions of those trade associations to ensure their policies are consistent with SM Energy's overall climate change strategy. In early 2020, responsibilities of Corporate EHS were elevated as part of a re-organization. The Sr. VP Development and EHS is responsible for ensuring all EHS policies and programs are implemented effectively. This role works closely with Sr. VP of Operations to drive a strong EHS culture focused on continuous improvement within our organization and with all of our vendors and contractors. In addition, collaboration with senior leaders to set strategy and drive a forward-looking approach to ESG Matters and integration with EHS objectives was achieved in 2020. Other processes that we have in place include contractor safety training, contractor EHS monitoring, field contractor safety reviews, independent EHS field audits, and benchmarking and analysis of peer EHS and ESG performance.

C12.4

(C12.4) Have you published information about your organization's response to climate change and GHG emissions performance for this reporting year in places other than in your CDP response? If so, please attach the publication(s).

Publication

In mainstream reports

Status

Complete

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Attach the document

Proxy.pdf

Page/Section reference

Proxy

Content elements

Governance

Strategy

Risks & opportunities

Emissions figures

Emission targets

Other metrics

Comment

Publication

In voluntary communications

Status

Complete

Attach the document

8-2020_SM Energy_Combined.pdf

Page/Section reference

Corporate Responsibility Report

Content elements

Governance

Strategy

Risks & opportunities

Emissions figures

Emission targets

Other metrics

Comment

Publication

In mainstream reports

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

Status

Complete

Attach the document

SM-2019.12.31-10K_AS FILED.pdf

Page/Section reference

2019 10-K

Content elements

Governance

Strategy

Risks & opportunities

Emissions figures

Emission targets

Other metrics

Comment

C15. Signoff

C-FI

(C-FI) Use this field to provide any additional information or context that you feel is relevant to your organization's response. Please note that this field is optional and is not scored.

C15.1

(C15.1) Provide details for the person that has signed off (approved) your CDP climate change response.

	Job title	Corresponding job category


Row 1	Chief Executive Officer	Chief Executive Officer (CEO)

Submit your response

In which language are you submitting your response?

English

Please confirm how your response should be handled by CDP

	I am submitting to	Public or Non-Public Submission

SM Energy Co. CDP Climate Change Questionnaire 2020 Monday, January 25, 2021

I am submitting my response	Investors	Non-public

Please confirm below

I have read and accept the applicable Terms

Attachments

Original document
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Disclaimer

SM Energy Company published this content on 05 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 February 2021 22:46:03 UTC.

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Mizuho Adjusts Price Target on SM Energy to $51 From $44, Maintains Buy Rating	Mar. 06	MT
Susquehanna Adjusts Price Target on SM Energy to $42 From $38, Maintains Neutral Rating	Feb. 26	MT
Transcript : SM Energy Company, Q4 2023 Earnings Call, Feb 22, 2024	Feb. 22
Tranche Update on SM Energy Company (NYSE:SM)'s Equity Buyback Plan announced on September 7, 2022.	Feb. 22	CI
SM Energy Expects 'Sustainable' Fixed Annual Dividend of $0.72/Share to Contribute Toward Total Shareholders Return in 2024	Feb. 21	MT
SM Energy Says $214.9 Million Remaining Under Share Buyback Program	Feb. 21	MT
SM Energy Q4 Non-GAAP Earnings Increase, Revenue Declines	Feb. 21	MT
Sm Energy Company Provides Production Guidance for Full Year 2024	Feb. 21	CI
Sm Energy Company Announces Production Results for the Fourth Quarter and Full Year of 2023	Feb. 21	CI
SM Energy Company Reports Earnings Results for the Fourth Quarter Ended December 31, 2023	Feb. 21	CI
SM Energy Company Announces Executive Changes	Feb. 21	CI
Earnings Flash (SM) SM ENERGY COMPANY Reports Q4 EPS $1.56, vs. Street Est of $1.38	Feb. 21	MT
Earnings Flash (SM) SM ENERGY COMPANY Reports Q4 Revenue $608.7M, vs. Street Est of $611.2M	Feb. 21	MT
SM Energy Company Reports Earnings Results for the Full Year Ended December 31, 2023	Feb. 21	CI
Transcript : SM Energy Company, Q4 2023 Pre Recorded Earnings Call, Feb 21, 2024	Feb. 21
SM Energy Company (NYSE:SM) acquired 20,700 acres located in north Martin & Dawson Counties.	Feb. 20	CI
North American Morning Briefing : Stock Futures -2-	Feb. 01	DJ
Seaport Upgrades SM Energy to Buy From Neutral, Sets $50 Price Target, Sees Company 'Well Positioned' for Positive Returns	Jan. 31	MT
KeyBanc Cuts Price Target on SM Energy to $51 From $56 Amid 'More Muted Commodity Price Outlook,' Keeps Overweight Rating	Jan. 11	MT

Chart SM Energy Company

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Company Profile

SM Energy Company s an independent energy company. The Company is engaged in the acquisition, exploration, development, and production of oil, gas, and natural gas liquid (NGL) in the state of Texas. The Companyâs asset portfolio is comprised of assets in the Midland Basin of West Texas and in the Maverick Basin of South Texas. The Companyâs Midland Basin assets are located in the Permian Basin in West Texas is comprised of approximately 110,000 net acres and include its RockStar assets in Howard and Martin Counties, Texas, its Sweetie Peck assets in Upton and Midland Counties, and Klondike assets in Dawson and northern Martin counties (Midland Basin). Its South Texas assets are comprised of approximately 155,000 net acres located in Dimmit and Webb Counties, Texas (South Texas). The Companyâs operations in South Texas are focused on production from the Eagle Ford shale formation and Austin Chalk formation, and further development of the Austin Chalk formation.

Sector

Oil & Gas Exploration and Production

Calendar

2024-04-17 - Ex-dividend day

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Russell 2000

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Ratings for SM Energy Company

Trading Rating

Investor Rating

ESG Refinitiv

B-

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Analysts' Consensus

Sell

Buy

Mean consensus

OUTPERFORM

Number of Analysts

Last Close Price

49.29 USD

Average target price

55.07 USD

Spread / Average Target

+11.73%

Consensus

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