He is scheduled to become an unrestricted free agent July 5, but his next contract will keep him out of the free agent pool this summer.
TSN's Ryan Rishaug first reported, via his Twitter account, that Smid sounded optimistic a deal would be reached in the next few days.
Smid told Rishaug he wants to remain an Oiler.
In 34 games with the Oilers so far this season, Smid has registered one goal, two assists and 41 penalty minutes.
Meanwhile, the Oilers have been entertaining calls for right wing Ales Hemsky and center Shawn Horcoff, but nothing appears to be imminent.
Center Sam Gagner has also attracted interest, but the Oilers do not plan on moving him without a top-tier defenseman coming their way.