Civitas Announces Fourth Quarter and Full-Year 2023 Results
- None.
- None.
Insights
The announcement by Civitas Resources, Inc. regarding their financial performance, production guidance and capital expenditure adjustments is a critical piece of information for investors and analysts. The company's net income of $303 million and Adjusted EBITDAX of $763 million are solid indicators of its profitability and operational efficiency. The reported free cash flow of $215 million is particularly noteworthy, as it reflects the company's ability to generate surplus cash after accounting for capital expenditures, which is a key metric for assessing financial health and sustainability.
The 7% reduction in capital expenditures coupled with the maintenance of production guidance suggests improved capital efficiency, likely resulting from enhanced well productivity and reduced cycle times. This is a positive sign for investors as it indicates that the company is able to sustain its production levels while spending less, potentially leading to increased returns on investment. The focus on free cash flow and cash returns to shareholders, including a fixed-plus-variable dividend of $1.45 per share, aligns with shareholder interests, especially in an industry that is capital intensive and subject to volatile commodity prices.
The strategic divestment of non-core DJ Basin acreage, which is part of Civitas' plan to achieve a $300 million divestment target by mid-year 2024, indicates a focused approach to portfolio optimization. This move allows Civitas to concentrate on its higher-value assets and could be a response to market conditions that favor leaner, more efficient operations. The acquisition of Permian Basin assets worth approximately $7 billion has significantly diversified the company's asset base, which is a strategic move to mitigate risk and ensure growth in a competitive landscape.
From a market perspective, the company's increased scale and diversified portfolio provide it with a competitive edge in the unconventional basin space. The Permian Basin is a world-class resource play and Civitas' investment there suggests confidence in its long-term potential. The company's ability to meet its 2023 business plan deliverables and return approximately $1 billion to shareholders reflects strong operational execution and commitment to shareholder value, which are attributes highly regarded by the market.
The energy sector is impacted by a variety of macroeconomic factors, including commodity prices, regulatory changes and broader economic cycles. Civitas' performance must be contextualized within these broader economic trends. For instance, the company's improved capital efficiency and reduction in capital expenditures are likely influenced by industry-wide pressures to maintain profitability amidst fluctuating oil prices.
The company's emphasis on maintaining a strong balance sheet and maximizing free cash flow is a prudent strategy in an environment where economic uncertainties persist. This focus on financial discipline helps ensure resilience against potential downturns and provides the capacity to capitalize on opportunities as they arise. Additionally, the reduction of the total recordable incident rate and operated spills in the DJ Basin by 4% and 43% respectively, speaks to the company's commitment to operational safety and efficiency, which can have broader implications for its social license to operate and long-term sustainability.
2024 Outlook Focused on Free Cash Flow and Cash Returns to Shareholders;
Production Guidance Maintained with
Fourth Quarter 2023 Highlights
-
Net income of
$303 million $763 million -
Net cash provided by operating activities of
$843 million $215 million -
Fixed-plus-variable dividend, to be paid in March 2024, of
$1.45 -
Average sales of 279 thousand barrels of crude oil equivalent per day (“MBoe/d”), of which
47% was crude oil. DJ Basin production averaged 173 MBoe/d and Permian Basin production averaged 106 MBoe/d -
Divested
$85 million $300 million -
Cash on hand at the end of the year of
$1.1 billion $1 billion
Full Year 2023 Highlights
-
Added significant scale and diversified the Company's asset base by acquiring approximately
$7 billion - Combined, the transactions added approximately 160 MBoe/d of production, 112,000 net acres and 1,200 high-value development locations through the acquisitions of Tap Rock Resources, LLC ("Tap Rock"), Hibernia Energy III, LLC ("Hibernia") and Vencer
- Met all key deliverables under the Company's 2023 business plan, delivering full-year production and capital investments within guidance
-
Returned approximately
$1 billion 16% of the Company's current market capitalization -
Reduced Civitas' total recordable incident rate in the DJ Basin by
4% as compared to 2022, while decreasing the occurrence of operated spills by43%
(1) Non-GAAP financial measure; see attached reconciliation schedules at the end of this release.
“Civitas is a remarkably different company today. As our DJ Basin asset continues to outperform, we were successful in strategically expanding our portfolio over the last year by capturing accretive acquisitions that provide us with important scale and diversification in another world-class unconventional basin, the Permian. With a lengthened runway of high-return development opportunities, we are better positioned today to create sustainable, long-term value for our shareholders. Our 2024 outlook builds on the momentum we created over the last year as our premier asset base provides us with more flexibility in our capital allocation and higher certainty in our outcomes. Our focus in 2024 is clear: maximize free cash flow, return cash to owners, and maintain our strong balance sheet,” said CEO Chris Doyle.
2024 Outlook Optimized
The Company maintained its previously-provided 2024 production guidance and decreased its estimated 2024 capital expenditures by
The following table provides guidance for key items in 2024:
2024 Summary Guidance |
Prior 2024
|
|
Updated 2024
|
Total Production (MBoe/d) |
325 − 345 |
|
325 − 345 |
Oil Production (MBbl/d) |
155 − 165 |
|
155 − 165 |
% Liquids |
71 − |
|
71 − |
Cash Operating Costs ($/Boe)(1) |
|
|
|
Capital Expenditures ($ in millions) |
|
|
|
_____________________________ |
|||
(1) Lease operating, Gathering, transportation and processing, Midstream operating, and cash G&A (Non-GAAP financial measure; see attached reconciliation schedules at the end of this release) expenses combined. |
|||
Note: Guidance is forward-looking information that is subject to considerable change and numerous risks and uncertainties, many of which are beyond the Company's control. Additional guidance details are provided in the supplemental materials associated with today's earnings release and the upcoming webcast / conference call. See “Cautionary Statement Regarding Forward-Looking Information” below.
Fourth Quarter 2023 Financial and Operating Results
Crude oil, natural gas, and natural gas liquids ("NGL") sales for the fourth quarter of 2023 were
As compared to the third quarter of 2023, DJ Basin sales volumes were up nearly
In the fourth quarter of 2023, differentials for the Company's crude oil and natural gas sales volumes averaged negative
The following table presents crude oil, natural gas, and NGL sales volumes by operating region as well as consolidated average sales prices for the periods presented:
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||
|
|
12/31/2023 |
|
12/31/2022 |
|
12/31/2023 |
|
12/31/2022 |
||||
Average sales volumes per day |
|
|
|
|
|
|
|
|
||||
Crude oil (Bbls/d) |
|
|
|
|
|
|
|
|
||||
DJ Basin |
|
|
79,855 |
|
|
75,912 |
|
|
79,247 |
|
|
75,752 |
Permian Basin |
|
|
51,813 |
|
|
— |
|
|
21,373 |
|
|
— |
Total |
|
|
131,668 |
|
|
75,912 |
|
|
100,620 |
|
|
75,752 |
Natural gas (Mcf/d) |
|
|
|
|
|
|
|
|
||||
DJ Basin |
|
|
315,112 |
|
|
299,952 |
|
|
302,298 |
|
|
308,161 |
Permian Basin |
|
|
154,304 |
|
|
— |
|
|
64,335 |
|
|
— |
Total |
|
|
469,416 |
|
|
299,952 |
|
|
366,633 |
|
|
308,161 |
Natural gas liquids (Bbls/d) |
|
|
|
|
|
|
|
|
||||
DJ Basin |
|
|
40,410 |
|
|
43,539 |
|
|
38,902 |
|
|
42,923 |
Permian Basin |
|
|
28,474 |
|
|
— |
|
|
11,508 |
|
|
— |
Total |
|
|
68,884 |
|
|
43,539 |
|
|
50,410 |
|
|
42,923 |
Average sales volumes per day (Boe/d) |
|
|
|
|
|
|
|
|
||||
DJ Basin |
|
|
172,784 |
|
|
169,443 |
|
|
168,532 |
|
|
170,035 |
Permian Basin |
|
|
106,004 |
|
|
— |
|
|
43,604 |
|
|
— |
Total |
|
|
278,788 |
|
|
169,443 |
|
|
212,136 |
|
|
170,035 |
|
|
|
|
|
|
|
|
|
||||
Average sales prices (before derivatives): |
|
|
|
|
|
|
||||||
Crude oil (per Bbl) |
|
$ |
77.04 |
|
$ |
79.39 |
|
$ |
75.57 |
|
$ |
91.70 |
Natural gas (per Mcf) |
|
$ |
1.83 |
|
$ |
5.74 |
|
$ |
2.28 |
|
$ |
6.15 |
Natural gas liquids (per Bbl) |
|
$ |
17.94 |
|
$ |
25.04 |
|
$ |
21.35 |
|
$ |
35.76 |
Total (per Boe) |
|
$ |
43.89 |
|
$ |
52.16 |
|
$ |
44.86 |
|
$ |
61.03 |
Capital expenditures for the fourth quarter totaled
Total cash operating expense per Boe, including lease operating expense, GTP, midstream operating expense, as well as cash general and administrative (a non-GAAP measure(2)), for the fourth quarter of 2023 was
During the fourth quarter of 2023, the Company recorded a
As a result of the multiple Permian Basin transactions executed in 2023, the Company recorded
(2) Non-GAAP financial measure; see attached reconciliation schedules at the end of this release.
Dividend to be Paid in March
The Company's Board of Directors approved a quarterly dividend of
2023 Proved Reserves and Costs Incurred
At December 31, 2023, the Company had proved reserves of 698 million Boe, a
The Company's year-end 2023 proved reserves were comprised of 273 million barrels of crude oil, 1,320 billion cubic feet of natural gas, and 205 million barrels of NGL.
A breakout of the Company's costs incurred are provided in the table below:
(in thousands) |
Year Ended December 31, 2023 |
|
Acquisition(1) |
$ |
5,039,610 |
Development(2)(3) |
|
1,386,371 |
Exploration |
|
2,178 |
Total |
$ |
6,428,159 |
_____________________________ |
|
(1) |
Acquisition costs for unproved and proved properties were |
(2) |
Development costs include workover costs of |
(3) |
Includes amounts relating to asset retirement obligations of |
Proved Reserve Roll-Forward
(in MBoe) |
Net Proved Reserves |
|
Balance as of December 31, 2022 |
416,019 |
|
Production |
(77,430 |
) |
Acquisition of reserves |
372,377 |
|
Extensions, discoveries, and other additions |
21,513 |
|
Divestiture of reserves |
(1,940 |
) |
Removed from capital program |
(4,758 |
) |
Revisions to previous estimates |
(27,982 |
) |
Balance as of December 31, 2023 |
697,799 |
|
Webcast / Conference Call Information
The Company plans to host a webcast and conference call to discuss these results at 8:00 a.m. MT (10:00 a.m. ET) on February 28, 2024. The webcast will be available on the Investor Relations section of the Company's website at www.civitasresources.com. The dial-in number for the call is 888-510-2535, with passcode 4872770.
About Civitas Resources, Inc.
Civitas Resources, Inc. is an independent, domestic oil and gas producer focused on development of its premier assets in the
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this press release concerning future opportunities for Civitas, future financial performance and condition, guidance, and any other statements regarding Civitas’ future expectations, beliefs, plans, objectives, financial conditions, returns to shareholders, assumptions, or future events or performance that are not historical facts are “forward-looking” statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,” “may,” “might,” “anticipate,” “likely,” “plan,” “positioned,” “strategy,” and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking statements include statements regarding the Company’s plans and expectations with respect to the future production and capital expenditures, and the effects of such on the Company’s results of operations, financial position, growth opportunities, reserve estimates and competitive position. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, Civitas’ future financial condition, results of operations, strategy and plans; the ability of Civitas to realize anticipated synergies related to Civitas' recent acquisitions in the timeframe expected or at all; changes in capital markets and the ability of Civitas to finance operations in the manner expected; the effects of commodity prices; the risks of oil and gas activities; and the fact that operating costs and business disruption may be greater than expected. Additionally, risks and uncertainties that could cause actual results to differ materially from those anticipated also include: declines or volatility in the prices we receive for our oil, natural gas, and natural gas liquids; general economic conditions, whether internationally, nationally, or in the regional and local market areas in which we do business, including any future economic downturn, the impact of continued or further inflation, disruption in the financial markets, and the availability of credit on acceptable terms; the Company’s ability to identify and select possible additional acquisition and disposition opportunities; the effects of disruption of our operations or excess supply of oil and natural gas due to world health events, and the actions by certain oil and natural gas producing countries, including
Additional information concerning other factors that could cause results to differ materially from those described above can be found under Item 1A. “Risk Factors” and “Management’s Discussion and Analysis” sections in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, subsequently filed Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings made with the Securities and Exchange Commission.
All forward-looking statements speak only as of the date they are made and are based on information available at the time they were made. The Company assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Schedule 1: Consolidated Statements of Operations |
|||||||||||||||
(in thousands, expect for per share amounts, unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Operating net revenues: |
|
|
|
|
|
|
|
||||||||
Crude oil, natural gas, and NGL sales |
$ |
1,126,775 |
|
|
$ |
814,273 |
|
|
$ |
3,479,240 |
|
|
$ |
3,791,398 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Lease operating expense |
|
109,560 |
|
|
|
47,027 |
|
|
|
301,288 |
|
|
|
169,986 |
|
Midstream operating expense |
|
10,039 |
|
|
|
9,549 |
|
|
|
45,080 |
|
|
|
31,944 |
|
Gathering, transportation, and processing |
|
80,880 |
|
|
|
73,070 |
|
|
|
290,645 |
|
|
|
287,474 |
|
Severance and ad valorem taxes |
|
88,293 |
|
|
|
71,498 |
|
|
|
276,535 |
|
|
|
305,701 |
|
Exploration |
|
632 |
|
|
|
545 |
|
|
|
2,178 |
|
|
|
6,981 |
|
Depreciation, depletion, and amortization |
|
416,634 |
|
|
|
214,997 |
|
|
|
1,171,192 |
|
|
|
816,446 |
|
Abandonment and impairment of unproved properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,975 |
|
Transaction costs |
|
24,251 |
|
|
|
917 |
|
|
|
84,328 |
|
|
|
24,683 |
|
General and administrative (including |
|
54,524 |
|
|
|
40,795 |
|
|
|
161,077 |
|
|
|
143,477 |
|
Other operating expense |
|
2,182 |
|
|
|
(2 |
) |
|
|
7,437 |
|
|
|
2,691 |
|
Total operating expenses |
|
786,995 |
|
|
|
458,396 |
|
|
|
2,339,760 |
|
|
|
1,807,358 |
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Derivative gain (loss), net |
|
129,881 |
|
|
|
23,702 |
|
|
|
9,307 |
|
|
|
(335,160 |
) |
Interest expense |
|
(90,071 |
) |
|
|
(7,549 |
) |
|
|
(182,740 |
) |
|
|
(32,199 |
) |
Gain (loss) on property transactions, net |
|
— |
|
|
|
21 |
|
|
|
(254 |
) |
|
|
15,880 |
|
Other income (expense) |
|
(695 |
) |
|
|
3,352 |
|
|
|
33,661 |
|
|
|
21,217 |
|
Total other income (expense) |
|
39,115 |
|
|
|
19,526 |
|
|
|
(140,026 |
) |
|
|
(330,262 |
) |
Income from operations before income taxes |
|
378,895 |
|
|
|
375,403 |
|
|
|
999,454 |
|
|
|
1,653,778 |
|
Income tax expense |
|
(76,028 |
) |
|
|
(93,535 |
) |
|
|
(215,166 |
) |
|
|
(405,698 |
) |
Net income |
$ |
302,867 |
|
|
$ |
281,868 |
|
|
$ |
784,288 |
|
|
$ |
1,248,080 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
3.23 |
|
|
$ |
3.31 |
|
|
$ |
9.09 |
|
|
$ |
14.68 |
|
Diluted |
$ |
3.20 |
|
|
$ |
3.29 |
|
|
|
9.02 |
|
|
$ |
14.58 |
|
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
|
93,774 |
|
|
|
85,114 |
|
|
|
86,240 |
|
|
|
85,005 |
|
Diluted |
|
94,519 |
|
|
|
85,750 |
|
|
|
86,988 |
|
|
|
85,604 |
|
Schedule 2: Consolidated Statement of Cash Flows |
|||||||||||||||
(in thousands, unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
302,867 |
|
|
$ |
281,868 |
|
|
$ |
784,288 |
|
|
$ |
1,248,080 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation, depletion, and amortization |
|
416,634 |
|
|
|
214,997 |
|
|
|
1,171,192 |
|
|
|
816,446 |
|
Abandonment and impairment of unproved properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,975 |
|
Stock-based compensation |
|
9,354 |
|
|
|
6,898 |
|
|
|
34,931 |
|
|
|
31,367 |
|
Derivative (gain) loss, net |
|
(129,881 |
) |
|
|
(23,702 |
) |
|
|
(9,307 |
) |
|
|
335,160 |
|
Derivative cash settlement loss |
|
(23,339 |
) |
|
|
(84,682 |
) |
|
|
(68,246 |
) |
|
|
(576,802 |
) |
Amortization of deferred financing costs |
|
3,587 |
|
|
|
1,145 |
|
|
|
9,293 |
|
|
|
4,464 |
|
(Gain) loss on property transactions, net |
|
— |
|
|
|
(21 |
) |
|
|
254 |
|
|
|
(15,880 |
) |
Deferred income tax expense |
|
106,191 |
|
|
|
97,736 |
|
|
|
245,163 |
|
|
|
337,502 |
|
Other, net |
|
(330 |
) |
|
|
2,386 |
|
|
|
(740 |
) |
|
|
2,588 |
|
Changes in operating assets and liabilities, net |
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
|
760 |
|
|
|
(39,968 |
) |
|
|
(39,869 |
) |
|
|
(941 |
) |
Prepaid expenses and other current assets |
|
19,141 |
|
|
|
(31,926 |
) |
|
|
19,987 |
|
|
|
(34,025 |
) |
Accounts payable and accrued liabilities |
|
149,737 |
|
|
|
93,901 |
|
|
|
126,215 |
|
|
|
335,563 |
|
Settlement of asset retirement obligations |
|
(11,533 |
) |
|
|
(6,454 |
) |
|
|
(34,401 |
) |
|
|
(24,456 |
) |
Net cash provided by operating activities |
|
843,188 |
|
|
|
512,178 |
|
|
|
2,238,760 |
|
|
|
2,477,041 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
Acquisitions of businesses, net of cash acquired |
|
(5,121 |
) |
|
|
— |
|
|
|
(3,655,612 |
) |
|
|
(236,160 |
) |
Acquisitions of crude oil and natural gas properties |
|
(93,880 |
) |
|
|
(3,154 |
) |
|
|
(154,855 |
) |
|
|
(97,453 |
) |
Deposits for acquisitions |
|
(161,250 |
) |
|
|
— |
|
|
|
(161,250 |
) |
|
|
— |
|
Proceeds from sale of crude oil and natural gas properties |
|
84,692 |
|
|
|
2,355 |
|
|
|
90,456 |
|
|
|
2,355 |
|
Exploration and development of crude oil and natural gas properties |
|
(570,269 |
) |
|
|
(258,138 |
) |
|
|
(1,352,388 |
) |
|
|
(967,096 |
) |
Additions to other property and equipment |
|
(178 |
) |
|
|
(482 |
) |
|
|
(1,892 |
) |
|
|
(579 |
) |
Purchases of carbon credits and renewable energy credits |
|
(287 |
) |
|
|
(102 |
) |
|
|
(6,151 |
) |
|
|
(7,298 |
) |
Other, net |
|
1 |
|
|
|
10 |
|
|
|
(1,463 |
) |
|
|
136 |
|
Net cash used in investing activities |
|
(746,292 |
) |
|
|
(259,511 |
) |
|
|
(5,243,155 |
) |
|
|
(1,306,095 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
Proceeds from credit facility |
|
1,000,000 |
|
|
|
— |
|
|
|
2,120,000 |
|
|
|
100,000 |
|
Payments to credit facility |
|
(900,000 |
) |
|
|
— |
|
|
|
(1,370,000 |
) |
|
|
(100,000 |
) |
Proceeds from issuance of senior notes |
|
987,500 |
|
|
|
— |
|
|
|
3,653,750 |
|
|
|
— |
|
Payment of deferred financing costs |
|
(2,879 |
) |
|
|
— |
|
|
|
(45,788 |
) |
|
|
(1,174 |
) |
Redemption of senior notes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(100,000 |
) |
Dividends paid |
|
(149,289 |
) |
|
|
(166,331 |
) |
|
|
(660,320 |
) |
|
|
(536,922 |
) |
Common stock repurchased and retired |
|
— |
|
|
|
— |
|
|
|
(320,398 |
) |
|
|
— |
|
Proceeds from exercise of stock options |
|
1 |
|
|
|
76 |
|
|
|
459 |
|
|
|
308 |
|
Payment of employee tax withholdings in exchange for the return of common stock |
|
(114 |
) |
|
|
(518 |
) |
|
|
(13,416 |
) |
|
|
(19,580 |
) |
Principal payments on finance lease obligations |
|
(728 |
) |
|
|
— |
|
|
|
(1,211 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
934,491 |
|
|
|
(166,773 |
) |
|
|
3,363,076 |
|
|
|
(657,368 |
) |
Net change in cash, cash equivalents, and restricted cash |
|
1,031,387 |
|
|
|
85,894 |
|
|
|
358,681 |
|
|
|
513,578 |
|
Cash, cash equivalents, and restricted cash: |
|
|
|
|
|
|
|
||||||||
Beginning of period (1) |
|
95,428 |
|
|
|
682,240 |
|
|
|
768,134 |
|
|
|
254,556 |
|
End of period (1) |
$ |
1,126,815 |
|
|
$ |
768,134 |
|
|
$ |
1,126,815 |
|
|
$ |
768,134 |
|
(1) Includes |
|||||||||||||||
Schedule 3: Consolidated Balance Sheets |
|||||||
(in thousands) |
|||||||
|
As of December 31, |
||||||
|
2023 |
|
2022 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,124,797 |
|
|
$ |
768,032 |
|
Accounts receivable, net: |
|
|
|
||||
Crude oil and natural gas sales |
|
505,961 |
|
|
|
343,500 |
|
Joint interest and other |
|
247,228 |
|
|
|
135,816 |
|
Derivative assets |
|
35,192 |
|
|
|
2,490 |
|
Prepaid income taxes |
|
9,552 |
|
|
|
29,604 |
|
Deposits for acquisitions |
|
163,164 |
|
|
|
— |
|
Prepaid expenses and other |
|
58,518 |
|
|
|
48,988 |
|
Total current assets |
|
2,144,412 |
|
|
|
1,328,430 |
|
Property and equipment (successful efforts method): |
|
|
|
||||
Proved properties |
|
12,738,568 |
|
|
|
6,774,635 |
|
Less: accumulated depreciation, depletion, and amortization |
|
(2,339,541 |
) |
|
|
(1,214,484 |
) |
Total proved properties, net |
|
10,399,027 |
|
|
|
5,560,151 |
|
Unproved properties |
|
821,939 |
|
|
|
593,971 |
|
Wells in progress |
|
536,858 |
|
|
|
407,351 |
|
Other property and equipment, net of accumulated depreciation of |
|
62,392 |
|
|
|
49,632 |
|
Total property and equipment, net |
|
11,820,216 |
|
|
|
6,611,105 |
|
Derivative assets |
|
8,233 |
|
|
|
794 |
|
Right-of-use assets |
|
94,606 |
|
|
|
24,125 |
|
Other noncurrent assets |
|
29,852 |
|
|
|
6,945 |
|
Total Assets |
$ |
14,097,319 |
|
|
$ |
7,971,399 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
565,708 |
|
|
$ |
295,297 |
|
Production taxes payable |
|
421,045 |
|
|
|
258,932 |
|
Crude oil and natural gas revenue distribution payable |
|
766,123 |
|
|
|
538,343 |
|
Derivative liability |
|
18,096 |
|
|
|
46,334 |
|
Asset retirement obligations |
|
31,116 |
|
|
|
25,557 |
|
Lease liability |
|
45,298 |
|
|
|
13,464 |
|
Deferred revenue |
|
4,501 |
|
|
|
— |
|
Total current liabilities |
|
1,851,887 |
|
|
|
1,177,927 |
|
Long-term liabilities: |
|
|
|
||||
Senior notes, net |
|
4,035,732 |
|
|
|
393,293 |
|
Credit facility |
|
750,000 |
|
|
|
— |
|
Ad valorem taxes |
|
313,753 |
|
|
|
412,650 |
|
Derivative liability |
|
— |
|
|
|
17,199 |
|
Deferred income tax liabilities, net |
|
564,781 |
|
|
|
319,618 |
|
Asset retirement obligations |
|
305,716 |
|
|
|
265,469 |
|
Lease liability |
|
50,240 |
|
|
|
11,324 |
|
Deferred revenue |
|
43,889 |
|
|
|
— |
|
Total liabilities |
|
7,915,998 |
|
|
|
2,597,480 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
5,004 |
|
|
|
4,918 |
|
Additional paid-in capital |
|
4,964,450 |
|
|
|
4,211,197 |
|
Retained earnings |
|
1,211,867 |
|
|
|
1,157,804 |
|
Total stockholders’ equity |
|
6,181,321 |
|
|
|
5,373,919 |
|
Total Liabilities and Stockholders’ Equity |
$ |
14,097,319 |
|
|
$ |
7,971,399 |
|
Schedule 4: Adjusted EBITDAX
(in thousands, unaudited)
Adjusted EBITDAX is a non-GAAP measure that represents earnings before interest, income taxes, depreciation, depletion, and amortization, exploration expense, and other non-cash and non-recurring charges. Adjusted EBITDAX excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. We present Adjusted EBITDAX because we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to internally generate funds for exploration, development, acquisitions, and to service debt. We are also subject to financial covenants under our revolving credit facility based on Adjusted EBITDAX ratios. In addition, Adjusted EBITDAX is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and natural gas exploration and production industry. Adjusted EBITDAX should not be considered in isolation or as a substitute for net income, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because Adjusted EBITDAX excludes some, but not all items that affect net income and may vary among companies, the Adjusted EBITDAX amounts presented may not be comparable to similar metrics of other companies.
The following table presents a reconciliation of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted EBITDAX:
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income |
$ |
302,867 |
|
|
$ |
281,868 |
|
|
$ |
784,288 |
|
|
$ |
1,248,080 |
|
Exploration |
|
632 |
|
|
|
545 |
|
|
|
2,178 |
|
|
|
6,981 |
|
Depreciation, depletion, and amortization |
|
416,634 |
|
|
|
214,997 |
|
|
|
1,171,192 |
|
|
|
816,446 |
|
Abandonment and impairment of unproved properties |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,975 |
|
Unused commitments and other (1) |
|
1,067 |
|
|
|
941 |
|
|
|
5,013 |
|
|
|
3,641 |
|
Transaction costs |
|
24,251 |
|
|
|
917 |
|
|
|
84,328 |
|
|
|
24,683 |
|
Stock-based compensation (2) |
|
9,354 |
|
|
|
6,898 |
|
|
|
34,931 |
|
|
|
31,367 |
|
Non-recurring general and administrative expense (2) |
|
— |
|
|
|
6,221 |
|
|
|
— |
|
|
|
18,037 |
|
Derivative (gain) loss |
|
(129,881 |
) |
|
|
(23,702 |
) |
|
|
(9,307 |
) |
|
|
335,160 |
|
Derivative cash settlement loss |
|
(23,339 |
) |
|
|
(84,682 |
) |
|
|
(68,246 |
) |
|
|
(576,802 |
) |
Interest expense |
|
90,071 |
|
|
|
7,549 |
|
|
|
182,740 |
|
|
|
32,199 |
|
Interest income (3) |
|
(5,175 |
) |
|
|
— |
|
|
|
(33,347 |
) |
|
|
— |
|
(Gain) loss on property transactions, net |
|
— |
|
|
|
(21 |
) |
|
|
254 |
|
|
|
(15,880 |
) |
Income tax expense |
|
76,028 |
|
|
|
93,535 |
|
|
|
215,166 |
|
|
|
405,698 |
|
Adjusted EBITDAX |
$ |
762,509 |
|
|
$ |
505,066 |
|
|
$ |
2,369,190 |
|
|
$ |
2,347,585 |
|
_________________________ |
|
(1) |
Included as a portion of other operating expense in the consolidated statements of operations. |
(2) |
Included as a portion of general and administrative expense in the consolidated statements of operations. |
(3) |
Included as a portion of other income in the consolidated statements of operations. |
Schedule 5: Free Cash Flow
(in thousands, unaudited)
Free Cash Flow is a supplemental non-GAAP financial measure that is calculated as net cash provided by operating activities before changes in operating assets and liabilities and less exploration and development of crude oil and natural gas properties, changes in working capital related to capital expenditures, and purchases of carbon credits. We believe that Free Cash Flow provides additional information that may be useful to investors in evaluating our ability to generate cash from our existing crude oil and natural gas assets to fund future exploration and development activities and to return cash to stockholders. Free Cash Flow is a supplemental measure of liquidity and should not be viewed as a substitute for cash flows from operations because it excludes certain required cash expenditures.
The following table presents a reconciliation of the GAAP financial measure of net cash provided by operating activities to the non-GAAP financial measure of Free Cash Flow:
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net cash provided by operating activities |
|
$ |
843,188 |
|
|
$ |
512,178 |
|
|
$ |
2,238,760 |
|
|
$ |
2,477,041 |
|
Add back: changes in operating assets and liabilities, net |
|
|
(158,105 |
) |
|
|
(15,553 |
) |
|
|
(71,932 |
) |
|
|
(276,141 |
) |
Cash flow from operations before changes in operating assets and liabilities |
|
|
685,083 |
|
|
|
496,625 |
|
|
|
2,166,828 |
|
|
|
2,200,900 |
|
Less: Exploration and development of crude oil and natural gas properties |
|
|
(570,269 |
) |
|
|
(258,138 |
) |
|
|
(1,352,388 |
) |
|
|
(967,096 |
) |
Less: Changes in working capital related to capital expenditures |
|
|
100,105 |
|
|
|
(7,712 |
) |
|
|
(12,349 |
) |
|
|
(7,679 |
) |
Capital expenditures incurred on the exploration and development of crude oil and natural gas properties |
|
|
(470,164 |
) |
|
|
(265,850 |
) |
|
|
(1,364,737 |
) |
|
|
(974,775 |
) |
Less: Purchases of carbon credits and renewable energy credits |
|
|
(287 |
) |
|
|
(102 |
) |
|
|
(6,151 |
) |
|
|
(7,298 |
) |
Free cash flow |
|
$ |
214,632 |
|
|
$ |
230,673 |
|
|
$ |
795,940 |
|
|
$ |
1,218,827 |
|
Schedule 6: Cash General and Administrative
(in thousands, unaudited)
Cash general and administrative is a non-GAAP measure that excludes stock-based compensation, that we believe affects the comparability of operating results as it is non-cash. Cash general and administrative is a non-GAAP measure that we include in our total cash operating expense per BOE. We believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our operations.
The following table presents a reconciliation of the GAAP financial measure of general and administrative expense to the non-GAAP financial measure of cash general and administrative:
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
General and administrative expense (as reported) |
|
$ |
54,524 |
|
|
$ |
40,795 |
|
|
$ |
161,077 |
|
|
$ |
143,477 |
|
Less: Stock-based compensation |
|
|
(9,354 |
) |
|
|
(6,898 |
) |
|
|
(34,931 |
) |
|
|
(31,367 |
) |
Cash general and administrative |
|
$ |
45,170 |
|
|
$ |
33,897 |
|
|
$ |
126,146 |
|
|
$ |
112,110 |
|
Schedule 7: Per Unit Cash Margins
(unaudited)
Per Unit Cash Margin before derivatives and Per Unit Cash Margin after derivatives are supplemental non-GAAP financial measure that is calculated as total sales, less total cash costs total, divided by total volumes, and total sales, less total cash costs, plus derivative cash settlements, divided by total volumes. Per Unit Cash Margin excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally non-cash and/or non-recurring in nature. Per Unit Cash Margin is a non-GAAP measure that we present as we believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our ability to generate funds for exploration, development, acquisitions, return of capital, and to service debt. Per Unit Cash Margin should not be considered in isolation or as a substitute for net income, net cash provided by operating activities, or other profitability or liquidity measures prepared under GAAP. Because Per Unit Cash Margin excludes some, but not all items that affect per unit total operating income and may vary among other companies, the Per Unit Cash Margin amounts presented may not be comparable to similar metrics of other companies.
The following table presents a reconciliation of the GAAP financial measure of net cash provided by operating activities to the non-GAAP financial measure of Per Unit Cash Margin (in thousands unless specified otherwise):
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Crude oil, natural gas, and NGL sales (1)(2) |
|
$ |
1,125,731 |
|
|
$ |
813,089 |
|
|
$ |
3,473,821 |
|
|
$ |
3,787,584 |
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative cash settlements (as reported) |
|
$ |
(23,339 |
) |
|
$ |
(84,682 |
) |
|
$ |
(68,246 |
) |
|
$ |
(576,802 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Total operating expense (as reported) |
|
$ |
786,995 |
|
|
$ |
458,396 |
|
|
$ |
2,339,760 |
|
|
$ |
1,807,358 |
|
Less: Exploration |
|
|
(632 |
) |
|
|
(545 |
) |
|
|
(2,178 |
) |
|
|
(6,981 |
) |
Less: Depreciation, depletion, and amortization |
|
|
(416,634 |
) |
|
|
(214,997 |
) |
|
|
(1,171,192 |
) |
|
|
(816,446 |
) |
Less: Abandonment and impairment of unproved properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(17,975 |
) |
Less: Transaction costs |
|
|
(24,251 |
) |
|
|
(917 |
) |
|
|
(84,328 |
) |
|
|
(24,683 |
) |
Less: Stock-based compensation (3) |
|
|
(9,354 |
) |
|
|
(6,898 |
) |
|
|
(34,931 |
) |
|
|
(31,367 |
) |
Less: Other operating expense |
|
|
(2,182 |
) |
|
|
2 |
|
|
|
(7,437 |
) |
|
|
(2,691 |
) |
Add: Interest expense |
|
|
90,071 |
|
|
|
7,549 |
|
|
|
182,740 |
|
|
|
32,199 |
|
Total cash costs (non-GAAP) |
|
$ |
424,013 |
|
|
$ |
242,590 |
|
|
$ |
1,222,434 |
|
|
$ |
939,414 |
|
|
|
|
|
|
|
|
|
|
||||||||
Total sales volumes (MBoe) (as reported) |
|
|
25,649 |
|
|
|
15,589 |
|
|
|
77,430 |
|
|
|
62,063 |
|
|
|
|
|
|
|
|
|
|
||||||||
Realized Price of sales ($/Boe) |
|
$ |
43.89 |
|
|
$ |
52.16 |
|
|
$ |
44.86 |
|
|
$ |
61.03 |
|
Less: Total cash costs ($/Boe) |
|
|
16.53 |
|
|
|
15.56 |
|
|
|
15.79 |
|
|
|
15.14 |
|
Cash margin before derivatives ($/Boe) |
|
|
43.89 |
|
|
|
52.16 |
|
|
|
44.86 |
|
|
|
61.03 |
|
Derivative cash settlements ($/Boe) |
|
|
(0.91 |
) |
|
|
(5.43 |
) |
|
|
(0.88 |
) |
|
|
(9.30 |
) |
Cash margin after derivatives |
|
$ |
42.98 |
|
|
$ |
46.73 |
|
|
$ |
43.98 |
|
|
$ |
51.73 |
|
|
|
|
|
|
|
|
|
|
||||||||
Per unit operating costs ($/Boe) |
|
|
|
|
|
|
|
|
||||||||
Lease operating expense |
|
$ |
4.27 |
|
|
$ |
3.02 |
|
|
$ |
3.89 |
|
|
$ |
2.74 |
|
Midstream operating expense |
|
|
0.39 |
|
|
|
0.61 |
|
|
|
0.58 |
|
|
|
0.51 |
|
Gathering, transportation, and processing |
|
|
3.15 |
|
|
|
4.69 |
|
|
|
3.75 |
|
|
|
4.63 |
|
Cash general and administrative expense (non-GAAP) |
|
|
1.77 |
|
|
|
2.18 |
|
|
|
1.63 |
|
|
|
1.80 |
|
Severance and ad valorem taxes |
|
|
3.44 |
|
|
|
4.59 |
|
|
|
3.57 |
|
|
|
4.93 |
|
Interest expense |
|
|
3.51 |
|
|
|
0.48 |
|
|
|
2.36 |
|
|
|
0.52 |
|
Total cash costs |
|
$ |
16.53 |
|
|
$ |
15.57 |
|
|
$ |
15.78 |
|
|
$ |
15.13 |
|
_____________________________ |
|
(1) |
Product revenue excludes |
(2) |
Product revenue excludes |
(3) |
Included as a portion of general and administrative expense in the accompanying statements of operations. |
Schedule 8: PV-10 of Estimated Proved Reserves
(in thousands, unaudited)
PV-10 is derived from the Standardized Measure, which is the most directly comparable GAAP financial measure. PV-10 is a computation of the Standardized Measure on a pre-tax basis. PV-10 is equal to the Standardized Measure at the applicable date, before deducting future income taxes, discounted at
The following table presents a reconciliation of non-GAAP financial measure of GAAP Standardized Measure to the PV-10 value:
|
|
As of
|
|
Standardized Measure |
|
$ |
8,269,280 |
Present value of future income taxes discounted at |
|
|
1,110,719 |
PV-10 (1) |
|
$ |
9,379,999 |
|
|
|
|
(1) The 12-month average benchmark pricing used to estimate SEC proved reserves and PV-10 value for crude oil and natural gas was |
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227079757/en/
Investor Relations:
Brad Whitmarsh, 832.736.8909, bwhitmarsh@civiresources.com
Media:
Rich Coolidge, info@civiresources.com
Source: Civitas Resources, Inc.
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