Civitas Resources, Inc. Reports Third Quarter 2024 Results
Civitas Resources (NYSE: CIVI) reported strong Q3 2024 financial results with net income of $295.8 million and sales volumes of 348.1 MBoe/d. The company returned $227 million to shareholders through dividends ($149 million) and share repurchases ($78 million). Notable operational achievements include reducing well costs in the Midland Basin by 13% to $740 per lateral foot and setting a DJ Basin production record. Q4 oil volumes are expected to increase 3% from Q3, with October production averaging 165 MBbl/d. The company maintains strong liquidity of over $1.4 billion and continues to focus on debt reduction, having paid down $88 million in Q3.
Civitas Resources (NYSE: CIVI) ha riportato forti risultati finanziari nel terzo trimestre del 2024, con un reddito netto di 295,8 milioni di dollari e volumi di vendita di 348,1 MBoe/giorno. L'azienda ha restituito 227 milioni di dollari agli azionisti attraverso dividendi (149 milioni di dollari) e riacquisto di azioni (78 milioni di dollari). Tra i risultati operativi notevoli c'è la riduzione dei costi per pozzo nel Midland Basin del 13%, portandoli a 740 dollari per piede laterale, e un record di produzione nel DJ Basin. I volumi di petrolio del quarto trimestre sono previsti in aumento del 3% rispetto al terzo trimestre, con una produzione media di ottobre di 165 MBbl/giorno. L'azienda mantiene una forte liquidità di oltre 1,4 miliardi di dollari e continua a concentrarsi sulla riduzione del debito, avendo rimborsato 88 milioni di dollari nel terzo trimestre.
Civitas Resources (NYSE: CIVI) reportó sólidos resultados financieros en el tercer trimestre de 2024, con un ingreso neto de 295,8 millones de dólares y volúmenes de venta de 348,1 MBoe/día. La compañía devolvió 227 millones de dólares a los accionistas a través de dividendos (149 millones de dólares) y recompra de acciones (78 millones de dólares). Logros operativos notables incluyen la reducción de costos por pozo en el Midland Basin en un 13%, dejándolos en 740 dólares por pie lateral, y un récord de producción en el DJ Basin. Se espera que los volúmenes de petróleo del cuarto trimestre aumenten un 3% respecto al tercer trimestre, con una producción promedio en octubre de 165 MBbl/día. La empresa mantiene una sólida liquidez de más de 1,4 mil millones de dólares y sigue enfocándose en la reducción de deudas, habiendo pagado 88 millones de dólares en el tercer trimestre.
Civitas Resources (NYSE: CIVI)는 2024년 3분기 강력한 재무 실적을 보고했습니다. 순이익은 2억 9,580만 달러, 판매량은 348.1 MBoe/일입니다. 이 회사는 배당금(1억 4,900만 달러) 및 자사주 매입(7천8백만 달러)을 통해 주주에게 2억 2,700만 달러를 반환했습니다. 미드랜드 분지에서 유정당 비용을 13% 줄여 1피트당 740달러로 낮추고, DJ 분지에서 생산 기록을 세운 것이 주목할 만한 운영 성과입니다. 4분기 석유 생산량은 3분기 대비 3% 증가할 것으로 예상되며, 10월 생산량은 하루 평균 165 MBbl입니다. 이 회사는 14억 달러 이상의 강력한 유동성을 유지하고 있으며, 3분기에 8천8백만 달러의 부채를 상환하며 부채 감소에 지속적으로 집중하고 있습니다.
Civitas Resources (NYSE: CIVI) a annoncé de solides résultats financiers pour le troisième trimestre de 2024, avec un revenu net de 295,8 millions de dollars et des volumes de vente de 348,1 MBoe/jour. La société a restitué 227 millions de dollars aux actionnaires sous forme de dividendes (149 millions de dollars) et de rachat d'actions (78 millions de dollars). Parmi les réalisations opérationnelles notables, on note la réduction des coûts de forages dans le Midland Basin de 13% à 740 dollars par pied latéral et l'établissement d'un record de production dans le DJ Basin. Les volumes de pétrole du quatrième trimestre devraient augmenter de 3% par rapport au troisième trimestre, avec une production moyenne en octobre de 165 MBbl/jour. L'entreprise maintient une forte liquidité de plus de 1,4 milliard de dollars et continue de se concentrer sur la réduction de la dette, ayant remboursé 88 millions de dollars au troisième trimestre.
Civitas Resources (NYSE: CIVI) hat im dritten Quartal 2024 starke Finanz Ergebnisse bekannt gegeben mit einem Nettogewinn von 295,8 Millionen Dollar und Verkaufsvolumen von 348,1 MBoe/Tag. Das Unternehmen hat 227 Millionen Dollar an Aktionäre durch Dividenden (149 Millionen Dollar) und Aktienrückkäufe (78 Millionen Dollar) zurückgegeben. Zu den bemerkenswerten betrieblichen Erfolgen gehört die Reduzierung der Bohrkosten im Midland Basin um 13 % auf 740 Dollar pro lateralen Fuß und ein Produktionsrekord im DJ Basin. Die Ölvoraussagen für Q4 werden um 3 % über Q3 erwartet, wobei die Produktion im Oktober im Durchschnitt bei 165 MBbl/Tag liegt. Das Unternehmen verfügt über eine starke Liquidität von über 1,4 Milliarden Dollar und setzt weiterhin auf die Schuldenreduzierung, nachdem im Q3 88 Millionen Dollar zurückgezahlt wurden.
- Net income of $295.8 million in Q3 2024
- Operating cash flow of $835.0 million
- Adjusted free cash flow of $366.3 million
- 13% reduction in Midland Basin well costs
- Sales volumes increased to 348.1 MBoe/d
- Strong liquidity position of $1.4 billion
- Debt reduction of $88 million in Q3
- Natural gas differentials remained weak for Permian Waha basis
- Oil volumes impacted by 2 MBbl/d due to facility downtime and water constraints
- Capital expenditures exceeded expectations at $438 million
Insights
Strong Q3 results showcase Civitas's robust operational execution.
Operational efficiency gains are impressive, with Midland Basin well costs reduced by
Operational highlights reveal significant technical achievements across both basins. The Blue 4AH well's state record production of 165,000 barrels in 90 days validates the four-mile lateral strategy in the DJ Basin. The successful development of 16 Wolfcamp D wells expands the economic potential of Civitas's acreage.
Strategic "ground game" acquisitions adding 75+ gross locations in the Delaware and Midland Basins demonstrate strong inventory management. The approval of the Lowry Ranch Comprehensive Area Plan opens up additional development opportunities in the Watkins area, important for future growth potential.
Return of capital to shareholders and debt reduction benefiting from 2H24 production and free cash flow increase
Key Third Quarter 2024 Results
|
|
Three Months Ended September 30, 2024 |
|
Nine Months Ended September 30, 2024 |
Net Income ($MM) |
|
|
|
|
Adjusted Net Income ($MM)(1) |
|
|
|
|
Operating Cash Flow ($MM) |
|
|
|
|
Adjusted EBITDAX ($MM)(1) |
|
|
|
|
Sales Volumes (MBoe/d) |
|
348.1 |
|
342.2 |
Oil Volumes (MBbl/d) |
|
159.0 |
|
156.8 |
Capital Expenditures ($MM) |
|
|
|
|
Adjusted Free Cash Flow ($MM)(1) |
|
|
|
|
(1) Non-GAAP financial measure; see attached schedules at the end of this release for reconciliations to the most directly comparable GAAP financial measures. |
Additional Highlights
-
Return of capital totaled
, including$227 million in dividends (second quarter dividend paid in September) and$149 million in share repurchases. Rather than declaring a third quarter variable dividend, the Company has allocated$78 million 100% of its third quarter variable return of capital to share repurchases. -
Reduced total debt (inclusive of deferred Vencer acquisition payment) with cash payments of
. Financial liquidity at the end of the third quarter totaled more than$88 million , comprised of cash on hand and available borrowing capacity under the Company's credit facility.$1.4 billion -
Fourth quarter oil volumes are anticipated to increase
3% from the third quarter, with October 2024 oil production averaging 165 MBbl/d. -
Average two-mile Midland Basin Wolfcamp A/B well costs (drilling, completion and equipment) have been reduced to
per lateral foot, a$740 13% decrease from the beginning of the year. - Commenced production on 16 Wolfcamp D wells in the Midland Basin year-to-date, with higher than anticipated productivity. These results expand the economic competitiveness of the Wolfcamp D across Civitas' acreage position.
-
Year-to-date, the Company has added more than 75 gross locations in the
Delaware and Midland Basins through multiple "ground game" transactions. In addition, via several land trades and acreage swaps, Civitas has significantly extended lateral footage on near-term core developments in the Permian Basin. - Four-mile laterals in the DJ Basin are performing above expectation, with the Blue 4AH well producing a state-record 165 thousand barrels of oil in its initial 90 days.
-
Received approval by Colorado’s Energy and Carbon Management Commission of the Lowry Ranch Comprehensive Area Plan within the
Watkins development area of the DJ Basin.
Management Quote
“We’ve accomplished great things in 2024, including rapidly integrating new assets, delivering sustainable capital efficiency gains, proving up new zones for future development, and capturing additional inventory that expands our runway of high-return opportunities,” said President and CEO Chris Doyle. “Our Board's recent action to further prioritize the balance sheet and share repurchases was well-timed, and we have been aggressively repurchasing our stock, while also reducing debt. As we look to 2025, we are focused on generating significant free cash flow, reducing leverage, and returning capital to shareholders. Our high-quality assets, with positions of scale in the lowest-cost oil basins in the
Third Quarter 2024 Financial and Operating Results
Crude oil, natural gas, and natural gas liquids ("NGL") sales for the third quarter of 2024 were
Sales volumes increased quarter over quarter to 348 MBoe/d, with increases in both the Permian and DJ Basins. Oil volumes were approximately
In the third quarter of 2024, differentials for the Company's crude oil and natural gas averaged a premium of
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 |
||||
|
|
September 30, 2024 |
|
June 30, 2024 |
||
Average sales volumes per day |
|
|
|
|
||
Crude oil (Bbls/d) |
|
|
|
|
||
DJ Basin |
|
|
70,674 |
|
|
67,846 |
Permian Basin |
|
|
88,326 |
|
|
87,495 |
Total |
|
|
159,000 |
|
|
155,341 |
Natural gas (Mcf/d) |
|
|
|
|
||
DJ Basin |
|
|
311,370 |
|
|
315,308 |
Permian Basin |
|
|
291,630 |
|
|
282,659 |
Total |
|
|
603,000 |
|
|
597,967 |
Natural gas liquids (Bbls/d) |
|
|
|
|
||
DJ Basin |
|
|
36,804 |
|
|
36,648 |
Permian Basin |
|
|
51,815 |
|
|
51,220 |
Total |
|
|
88,619 |
|
|
87,868 |
Average sales volumes per day (Boe/d) |
|
|
|
|
||
DJ Basin |
|
|
159,370 |
|
|
157,044 |
Permian Basin |
|
|
188,750 |
|
|
185,824 |
Total |
|
|
348,120 |
|
|
342,868 |
|
|
|
|
|
||
Average sales prices (before derivatives): |
|
|
|
|
||
Crude oil (per Bbl) |
|
$ |
75.46 |
|
$ |
80.27 |
Natural gas (per Mcf) |
|
$ |
0.17 |
|
$ |
0.17 |
Natural gas liquids (per Bbl) |
|
$ |
19.38 |
|
$ |
20.94 |
Total (per Boe) |
|
$ |
39.70 |
|
$ |
42.03 |
Realized hedging gains totaled
Total cash operating expense, including lease operating expense, gathering, transportation and processing expenses, midstream operating expense, as well as cash general and administrative (a non-GAAP measure(1)), for the third quarter of 2024 was
Depreciation, depletion and amortization was
Interest expense of
(1) Non-GAAP financial measure; see attached schedules at the end of this release for reconciliations to the most directly comparable GAAP financial measure. |
Third Quarter Efficiency Gains Driving Accelerated Activity
Capital expenditures for the third quarter totaled
The following table presents capital expenditures by operating region:
|
|
Three Months Ended |
|||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|||
Capital expenditures (in thousands) |
|
|
|
|
|||
DJ Basin |
|
$ |
208,530 |
|
$ |
264,402 |
|
Permian Basin |
|
|
228,910 |
|
|
302,587 |
|
Other/Corporate |
|
|
951 |
|
|
(480 |
) |
Total |
|
$ |
438,391 |
|
$ |
566,509 |
|
Return of Capital Focused on Share Buybacks and Debt Reduction
In July 2024, the Company's Board of Directors enhanced Civitas' shareholder return program to add flexibility in the way it returns capital to shareholders and to further advance the Company's balance sheet initiatives. The Company's base dividend of
Based on average quarterly free cash flow over the prior 12 months, the Company's third quarter variable return of capital was determined to be
In addition, Civitas paid
Fourth Quarter Outlook Highlights Oil Volume and Free Cash Flow Increase
Fourth quarter 2024 sales volumes are expected between 347 and 353 MBoe/d, and oil volumes are anticipated in a range of 162 to 166 MBbl/d, reflecting an increase in the DJ Basin and a decline in the Permian Basin. The DJ Basin increase is anticipated to benefit from
Capital expenditures in the fourth quarter are anticipated to be
Civitas has provided specific fourth quarter 2024 guidance in its supplemental earnings materials which can be located on the Company’s website.
Webcast / Conference Call Information
The Company plans to host a webcast and conference call at 7 a.m. MT (9 a.m. ET) on Friday, November 8, 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 exploration and production company focused on the acquisition, development and production of crude oil and liquids-rich natural gas from its premier assets in the DJ Basin in
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 included in this press release include statements regarding the Company’s plans and expectations with respect to the future production, capital expenditures, dividend payments, and share repurchases, 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 (the “Exchange Act”), 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; the ability of our customers to meet their obligations to us; our access to capital on acceptable terms; our ability to generate sufficient cash flow from operations, borrowings, or other sources to enable us to fully develop our undeveloped acreage positions; our ability to continue to pay dividends at their current level or at all; the presence or recoverability of estimated oil and natural gas reserves and the actual future sales volume rates and associated costs; uncertainties associated with estimates of proved crude oil and natural gas reserves; the possibility that the industry may be subject to future local, state, and federal regulatory or legislative actions (including additional taxes and changes in environmental, health and safety regulation and regulations addressing climate change); environmental, health and safety risks; seasonal weather conditions, as well as severe weather and other natural events caused by climate change; lease stipulations; drilling and operating risks, including the risks associated with the employment of horizontal drilling and completion techniques; our ability to acquire adequate supplies of water for drilling and completion operations; the availability of oilfield equipment, services, and personnel; exploration and development risks; operational interruption of centralized oil and natural gas processing facilities; competition in the oil and natural gas industry; management’s ability to execute our plans to meet our goals; unforeseen difficulties encountered in operating in new geographic areas; our ability to attract and retain key members of our senior management and key technical employees; our ability to maintain effective internal controls; access to adequate gathering systems and pipeline take-away capacity; our ability to secure adequate processing capacity for natural gas we produce, to secure adequate transportation for oil, natural gas, and natural gas liquids we produce, and to sell the oil, natural gas, and natural gas liquids at market prices; costs and other risks associated with perfecting title for mineral rights in some of our properties; potential impacts following the result of the presidential election in
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.
Disclaimer
Civitas’ share repurchase program permits the Company to make repurchases on a discretionary basis as determined by management and the Board, subject to market conditions, applicable legal requirements, available liquidity, compliance with the Company's debt agreements, and other appropriate factors. Repurchases under the share repurchase program are to be made through open market or privately negotiated transactions and may be made pursuant to plans entered into in accordance with Rule 10b5-1 and/or Rule 10b-18 of the Exchange Act. The share repurchase program does not have a termination date, does not obligate Civitas to acquire any particular amount of common stock, and may be modified, extended, suspended, or discontinued at any time without prior notice. No assurance can be given that any particular amount of common stock will be repurchased.
Schedule 1: Condensed Consolidated Statements of Operations |
|||||||||||||||
(in thousands, except for per share amounts, unaudited) |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Operating net revenues: |
|
|
|
|
|
|
|
||||||||
Crude oil, natural gas, and NGL sales |
$ |
1,271,375 |
|
|
$ |
1,034,410 |
|
|
$ |
3,910,663 |
|
|
$ |
2,348,090 |
|
Other operating income |
|
670 |
|
|
|
1,506 |
|
|
|
3,279 |
|
|
|
4,374 |
|
Total operating net revenues |
|
1,272,045 |
|
|
|
1,035,916 |
|
|
|
3,913,942 |
|
|
|
2,352,464 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Lease operating expense |
|
146,761 |
|
|
|
94,660 |
|
|
|
404,832 |
|
|
|
191,728 |
|
Midstream operating expense |
|
11,225 |
|
|
|
11,661 |
|
|
|
36,725 |
|
|
|
35,041 |
|
Gathering, transportation, and processing |
|
96,414 |
|
|
|
77,540 |
|
|
|
279,784 |
|
|
|
209,765 |
|
Severance and ad valorem taxes |
|
87,262 |
|
|
|
83,437 |
|
|
|
291,081 |
|
|
|
188,242 |
|
Exploration |
|
861 |
|
|
|
429 |
|
|
|
13,735 |
|
|
|
1,546 |
|
Depreciation, depletion, and amortization |
|
523,929 |
|
|
|
320,469 |
|
|
|
1,511,859 |
|
|
|
754,558 |
|
Transaction costs |
|
140 |
|
|
|
28,450 |
|
|
|
30,737 |
|
|
|
60,077 |
|
General and administrative expense |
|
56,729 |
|
|
|
36,154 |
|
|
|
173,742 |
|
|
|
106,553 |
|
Other operating expense |
|
2,114 |
|
|
|
3,918 |
|
|
|
11,138 |
|
|
|
5,255 |
|
Total operating expenses |
|
925,435 |
|
|
|
656,718 |
|
|
|
2,753,633 |
|
|
|
1,552,765 |
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Derivative gain (loss), net |
|
151,029 |
|
|
|
(150,661 |
) |
|
|
48,927 |
|
|
|
(120,574 |
) |
Interest expense |
|
(117,760 |
) |
|
|
(76,467 |
) |
|
|
(342,443 |
) |
|
|
(92,669 |
) |
Loss on property transactions, net |
|
— |
|
|
|
— |
|
|
|
(1,430 |
) |
|
|
(254 |
) |
Other income |
|
9,233 |
|
|
|
17,288 |
|
|
|
17,571 |
|
|
|
34,356 |
|
Total other income (expense) |
|
42,502 |
|
|
|
(209,840 |
) |
|
|
(277,375 |
) |
|
|
(179,141 |
) |
Income from operations before income taxes |
|
389,112 |
|
|
|
169,358 |
|
|
|
882,934 |
|
|
|
620,558 |
|
Income tax expense |
|
(93,309 |
) |
|
|
(29,686 |
) |
|
|
(195,321 |
) |
|
|
(139,138 |
) |
Net income |
$ |
295,803 |
|
|
$ |
139,672 |
|
|
$ |
687,613 |
|
|
$ |
481,420 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
3.02 |
|
|
$ |
1.57 |
|
|
$ |
6.91 |
|
|
$ |
5.75 |
|
Diluted |
$ |
3.01 |
|
|
$ |
1.56 |
|
|
$ |
6.88 |
|
|
$ |
5.70 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
97,905 |
|
|
|
88,911 |
|
|
|
99,540 |
|
|
|
83,700 |
|
Diluted |
|
98,224 |
|
|
|
89,631 |
|
|
|
99,951 |
|
|
|
84,468 |
|
Schedule 2: Condensed Consolidated Statements of Cash Flows |
|||||||||||||||
(in thousands, unaudited) |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
295,803 |
|
|
$ |
139,672 |
|
|
$ |
687,613 |
|
|
$ |
481,420 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation, depletion, and amortization |
|
523,929 |
|
|
|
320,469 |
|
|
|
1,511,859 |
|
|
|
754,558 |
|
Stock-based compensation |
|
12,661 |
|
|
|
8,302 |
|
|
|
36,122 |
|
|
|
25,577 |
|
Derivative (gain) loss, net |
|
(151,029 |
) |
|
|
150,661 |
|
|
|
(48,927 |
) |
|
|
120,574 |
|
Derivative cash settlement gain (loss), net |
|
18,195 |
|
|
|
(33,022 |
) |
|
|
(5,712 |
) |
|
|
(44,907 |
) |
Amortization of deferred financing costs and deferred acquisition consideration |
|
13,538 |
|
|
|
3,401 |
|
|
|
38,927 |
|
|
|
5,706 |
|
Loss on property transactions, net |
|
— |
|
|
|
— |
|
|
|
1,430 |
|
|
|
254 |
|
Deferred income tax expense |
|
94,706 |
|
|
|
48,997 |
|
|
|
187,395 |
|
|
|
138,972 |
|
Other, net |
|
(1,035 |
) |
|
|
(701 |
) |
|
|
(3,000 |
) |
|
|
(409 |
) |
Changes in operating assets and liabilities, net |
|
28,270 |
|
|
|
(118,237 |
) |
|
|
(398,549 |
) |
|
|
(86,173 |
) |
Net cash provided by operating activities |
|
835,038 |
|
|
|
519,542 |
|
|
|
2,007,158 |
|
|
|
1,395,572 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
Acquisitions of businesses, net of cash acquired |
|
(37,500 |
) |
|
|
(3,650,491 |
) |
|
|
(905,096 |
) |
|
|
(3,650,491 |
) |
Acquisitions of crude oil and natural gas properties |
|
(10,360 |
) |
|
|
(9,728 |
) |
|
|
(24,344 |
) |
|
|
(60,975 |
) |
Deposits for acquisitions |
|
— |
|
|
|
352,500 |
|
|
|
— |
|
|
|
— |
|
Capital expenditures for drilling and completion activities and other fixed assets |
|
(541,410 |
) |
|
|
(263,170 |
) |
|
|
(1,632,107 |
) |
|
|
(782,119 |
) |
Proceeds from property transactions |
|
(8,399 |
) |
|
|
— |
|
|
|
163,280 |
|
|
|
5,764 |
|
Purchases of carbon credits and renewable energy credits |
|
(2,032 |
) |
|
|
(213 |
) |
|
|
(3,918 |
) |
|
|
(5,864 |
) |
Other, net |
|
2,000 |
|
|
|
(2,557 |
) |
|
|
2,000 |
|
|
|
(3,178 |
) |
Net cash used in investing activities |
|
(597,701 |
) |
|
|
(3,573,659 |
) |
|
|
(2,400,185 |
) |
|
|
(4,496,863 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
Proceeds from credit facility |
|
350,000 |
|
|
|
1,120,000 |
|
|
|
1,650,000 |
|
|
|
1,120,000 |
|
Payments to credit facility |
|
(400,000 |
) |
|
|
(470,000 |
) |
|
|
(1,600,000 |
) |
|
|
(470,000 |
) |
Proceeds from issuance of senior notes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,666,250 |
|
Payment of deferred financing costs and other |
|
(1,352 |
) |
|
|
(38,694 |
) |
|
|
(6,509 |
) |
|
|
(42,909 |
) |
Dividends paid |
|
(148,856 |
) |
|
|
(163,507 |
) |
|
|
(446,213 |
) |
|
|
(511,031 |
) |
Common stock repurchased and retired |
|
(77,989 |
) |
|
|
(93 |
) |
|
|
(269,861 |
) |
|
|
(320,398 |
) |
Proceeds from exercise of stock options |
|
4 |
|
|
|
14 |
|
|
|
10 |
|
|
|
458 |
|
Payment of employee tax withholdings in exchange for the return of common stock |
|
(3,135 |
) |
|
|
(692 |
) |
|
|
(11,641 |
) |
|
|
(13,302 |
) |
Principal payments on finance lease obligations |
|
(922 |
) |
|
|
(483 |
) |
|
|
(2,499 |
) |
|
|
(483 |
) |
Net cash provided by (used in) financing activities |
|
(282,250 |
) |
|
|
446,545 |
|
|
|
(686,713 |
) |
|
|
2,428,585 |
|
Net change in cash, cash equivalents, and restricted cash |
|
(44,913 |
) |
|
|
(2,607,572 |
) |
|
|
(1,079,740 |
) |
|
|
(672,706 |
) |
Cash, cash equivalents, and restricted cash: |
|
|
|
|
|
|
|
||||||||
Beginning of period(1) |
|
91,988 |
|
|
|
2,703,000 |
|
|
|
1,126,815 |
|
|
|
768,134 |
|
End of period(2) |
$ |
47,075 |
|
|
$ |
95,428 |
|
|
$ |
47,075 |
|
|
$ |
95,428 |
|
|
|
|
|
|
|
|
|
||||||||
(1) The beginning of period balance includes |
|||||||||||||||
(2) With the exception of the end of the period balance for the three months ended September 30, 2024, the balance end of period presented includes |
Schedule 3: Condensed Consolidated Balance Sheets |
|||||||
(in thousands, unaudited) |
|||||||
|
September 30, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
47,075 |
|
|
$ |
1,124,797 |
|
Accounts receivable, net: |
|
|
|
||||
Crude oil and natural gas sales |
|
549,074 |
|
|
|
505,961 |
|
Joint interest and other |
|
201,202 |
|
|
|
247,228 |
|
Derivative assets |
|
94,312 |
|
|
|
35,192 |
|
Deposits for acquisitions |
|
— |
|
|
|
163,164 |
|
Prepaid expenses and other |
|
67,955 |
|
|
|
68,070 |
|
Total current assets |
|
959,618 |
|
|
|
2,144,412 |
|
Property and equipment (successful efforts method): |
|
|
|
||||
Proved properties |
|
16,310,966 |
|
|
|
12,738,568 |
|
Less: accumulated depreciation, depletion, and amortization |
|
(3,751,613 |
) |
|
|
(2,339,541 |
) |
Total proved properties, net |
|
12,559,353 |
|
|
|
10,399,027 |
|
Unproved properties |
|
782,027 |
|
|
|
821,939 |
|
Wells in progress |
|
514,590 |
|
|
|
536,858 |
|
Other property and equipment, net of accumulated depreciation of |
|
55,297 |
|
|
|
62,392 |
|
Total property and equipment, net |
|
13,911,267 |
|
|
|
11,820,216 |
|
Derivative assets |
|
4,492 |
|
|
|
8,233 |
|
Other noncurrent assets |
|
132,416 |
|
|
|
124,458 |
|
Total assets |
$ |
15,007,793 |
|
|
$ |
14,097,319 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
586,329 |
|
|
$ |
565,708 |
|
Production taxes payable |
|
320,523 |
|
|
|
421,045 |
|
Crude oil and natural gas revenue distribution payable |
|
635,512 |
|
|
|
766,123 |
|
Derivative liability |
|
14,168 |
|
|
|
18,096 |
|
Deferred acquisition consideration |
|
469,183 |
|
|
|
— |
|
Other liabilities |
|
88,394 |
|
|
|
80,915 |
|
Total current liabilities |
|
2,114,109 |
|
|
|
1,851,887 |
|
Long-term liabilities: |
|
|
|
||||
Debt, net |
|
4,841,523 |
|
|
|
4,785,732 |
|
Ad valorem taxes |
|
203,471 |
|
|
|
307,924 |
|
Derivative liability |
|
10,890 |
|
|
|
— |
|
Deferred income tax liabilities, net |
|
752,175 |
|
|
|
564,781 |
|
Asset retirement obligations |
|
310,417 |
|
|
|
305,716 |
|
Other long-term liabilities |
|
106,731 |
|
|
|
99,958 |
|
Total liabilities |
|
8,339,316 |
|
|
|
7,915,998 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
5,037 |
|
|
|
5,004 |
|
Additional paid-in capital |
|
5,255,278 |
|
|
|
4,964,450 |
|
Retained earnings |
|
1,408,162 |
|
|
|
1,211,867 |
|
Total stockholders’ equity |
|
6,668,477 |
|
|
|
6,181,321 |
|
Total liabilities and stockholders’ equity |
$ |
15,007,793 |
|
|
$ |
14,097,319 |
|
Schedule 4: Adjusted Net Income
(in thousands, except per share amounts, unaudited)
Adjusted Net Income is a supplemental non-GAAP financial measure that is used by management to present a more comparable, recurring profitability between periods. We believe that Adjusted Net Income provides external users of our consolidated financial statements with additional information to assist in their analysis of the Company. The Company defines Adjusted Net Income as net income after adjusting for (1) the impact of certain non-cash items and one-time transactions and correspondingly (2) the related tax effect in each period. Adjusted Net Income is not a measure of net income as determined by GAAP and 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.
The following table presents a reconciliation of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted Net Income.
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
Net income |
$ |
295,803 |
|
|
$ |
215,989 |
|
|
$ |
687,613 |
|
|
$ |
481,420 |
|
Adjustments to net income: |
|
|
|
|
|
|
|
||||||||
Unused commitments(1) |
|
1,117 |
|
|
|
608 |
|
|
|
498 |
|
|
|
3,946 |
|
Transaction costs |
|
140 |
|
|
|
7,877 |
|
|
|
30,737 |
|
|
|
60,077 |
|
Loss on property transactions, net |
|
— |
|
|
|
— |
|
|
|
1,430 |
|
|
|
254 |
|
Derivative (gain) loss, net |
|
(151,029 |
) |
|
|
(7,578 |
) |
|
|
(48,927 |
) |
|
|
120,574 |
|
Derivative cash settlement gain (loss) |
|
18,195 |
|
|
|
(12,752 |
) |
|
|
(5,712 |
) |
|
|
(44,907 |
) |
Total adjustments to net income before taxes |
|
(131,577 |
) |
|
|
(11,845 |
) |
|
|
(21,974 |
) |
|
|
139,944 |
|
Tax effect of adjustments |
|
31,578 |
|
|
|
2,807 |
|
|
|
4,856 |
|
|
|
(31,347 |
) |
Total adjustments to net income after taxes |
|
(99,999 |
) |
|
|
(9,038 |
) |
|
|
(17,118 |
) |
|
|
108,597 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income |
$ |
195,804 |
|
|
$ |
206,951 |
|
|
$ |
670,495 |
|
|
$ |
590,017 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income per diluted share |
$ |
1.99 |
|
|
$ |
2.06 |
|
|
$ |
6.71 |
|
|
$ |
6.99 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted-average common shares outstanding |
|
98,224 |
|
|
|
100,245 |
|
|
|
99,951 |
|
|
|
84,468 |
|
|
|
|
|
|
|
|
|
||||||||
(1) Included as a portion of other operating expense in the accompanying statements of operations. |
Schedule 5: Adjusted EBITDAX
(in thousands, unaudited)
Adjusted EBITDAX is a supplemental non-GAAP financial 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 crude 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 |
|
Nine Months Ended |
||||||||||||
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
Net Income |
$ |
295,803 |
|
|
$ |
215,989 |
|
|
$ |
687,613 |
|
|
$ |
481,420 |
|
Total adjustments to net income before taxes (from schedule 4) |
|
(131,577 |
) |
|
|
(11,845 |
) |
|
|
(21,974 |
) |
|
|
139,944 |
|
Exploration |
|
861 |
|
|
|
1,340 |
|
|
|
13,735 |
|
|
|
1,546 |
|
Depreciation, depletion, and amortization |
|
523,929 |
|
|
|
521,090 |
|
|
|
1,511,859 |
|
|
|
754,558 |
|
Stock-based compensation(1) |
|
12,661 |
|
|
|
12,262 |
|
|
|
36,122 |
|
|
|
25,577 |
|
Interest expense |
|
117,760 |
|
|
|
114,897 |
|
|
|
342,443 |
|
|
|
92,669 |
|
Interest income(2) |
|
(2,650 |
) |
|
|
(2,650 |
) |
|
|
(8,724 |
) |
|
|
(28,172 |
) |
Income tax expense |
|
93,309 |
|
|
|
66,993 |
|
|
|
195,321 |
|
|
|
139,138 |
|
Adjusted EBITDAX |
$ |
910,096 |
|
|
$ |
918,076 |
|
|
$ |
2,756,395 |
|
|
$ |
1,606,680 |
|
|
|
|
|
|
|
|
|
||||||||
(1) Included as a portion of general and administrative expense in the condensed consolidated statements of operations. |
|||||||||||||||
(2) Included as a portion of other income in the condensed consolidated statements of operations. |
Schedule 6: Adjusted Free Cash Flow
(in thousands, unaudited)
Adjusted 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 Adjusted Free Cash Flow provides additional information that may be useful to investors and analysts 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. Adjusted 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 Adjusted Free Cash Flow:
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
Net cash provided by operating activities |
|
$ |
835,038 |
|
|
$ |
359,568 |
|
|
$ |
2,007,158 |
|
|
$ |
1,395,572 |
|
Add back: Changes in operating assets and liabilities, net |
|
|
(28,270 |
) |
|
|
444,252 |
|
|
|
398,549 |
|
|
|
86,173 |
|
Cash flow from operations before changes in operating assets and liabilities |
|
|
806,768 |
|
|
|
803,820 |
|
|
|
2,405,707 |
|
|
|
1,481,745 |
|
Less: Cash paid for capital expenditures for drilling and completion activities and other fixed assets |
|
|
(541,410 |
) |
|
|
(519,120 |
) |
|
|
(1,632,107 |
) |
|
|
(782,119 |
) |
Less: Changes in working capital related to capital expenditures |
|
|
103,021 |
|
|
|
(47,389 |
) |
|
|
(22,323 |
) |
|
|
(112,454 |
) |
Capital expenditures |
|
|
(438,389 |
) |
|
|
(566,509 |
) |
|
|
(1,654,430 |
) |
|
|
(894,573 |
) |
Less: Purchases of carbon credits and renewable energy credits |
|
|
(2,032 |
) |
|
|
(1,886 |
) |
|
|
(3,918 |
) |
|
|
(5,864 |
) |
Adjusted Free Cash Flow |
|
$ |
366,347 |
|
|
$ |
235,425 |
|
|
$ |
747,359 |
|
|
$ |
581,308 |
|
Schedule 7: Cash General and Administrative
(in thousands, unaudited)
Cash general and administrative is a supplemental non-GAAP measure that is calculated as general and administrative expense less 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 |
|
Nine Months Ended |
||||||||||||
|
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2024 |
|
September 30, 2023 |
||||||||
General and administrative expense |
|
$ |
56,729 |
|
|
$ |
59,135 |
|
|
$ |
173,742 |
|
|
$ |
106,553 |
|
Less: Stock-based compensation |
|
|
(12,661 |
) |
|
|
(12,262 |
) |
|
|
(36,122 |
) |
|
|
(25,577 |
) |
Cash general and administrative expense |
|
$ |
44,068 |
|
|
$ |
46,873 |
|
|
$ |
137,620 |
|
|
$ |
80,976 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107805182/en/
For further information, please contact:
Investor Relations:
Brad Whitmarsh, 832.736.8909, bwhitmarsh@civiresources.com
Mae Herrington, 832.913.5444, mherrington@civiresources.com
Media:
Rich
Source: Civitas Resources, Inc.
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