The company will sell its entire leasehold position in the play of about 42,000 net acres as well as associated pipeline assets.
There are currently three producing wells on the acreage with average first quarter production of 2mmcfe/d.
The transaction is expected to be closed in the fourth quarter of 2011, and is subject to closing conditions, purchase price adjustments and transaction fees.
SM Energy president and CEO Tony Best said that the company continuously look to high-grade its portfolio through the divestiture of non-core assets.
"Year to date, we have closed or entered into transactions in excess of $1bn that will be used to fund the development of higher value assets in our portfolio while preserving the strength of our balance sheet," Best said.
