Civitas Resources (CIVI) reported mixed fourth-quarter 2024 results, with revenue and adjusted earnings missing consensus estimates. The company's Q4 revenue was $1.29 billion, slightly below the $1.30 billion expected, while adjusted EPS of $1.78 missed the $1.99 consensus. However, total sales volumes and oil production increased sequentially during the quarter.

For the full year 2024, Civitas highlighted record adjusted free cash flow generation of $1.27 billion, representing a 29% yield based on year-end market capitalization. The company exceeded its original production guidance while keeping capital expenditures below the midpoint of guidance. Civitas also returned over $920 million to shareholders through dividends and share buybacks.

Looking ahead to 2025, Civitas plans to reduce capital investments by nearly 5% year-over-year to a range of $1.8-$1.9 billion. The company expects oil production to average between 150,000-155,000 barrels per day and projects generating approximately $1.1 billion in free cash flow, assuming $70 per barrel WTI crude oil prices. This represents a peer-leading free cash flow yield of 22%.

Civitas aims to maintain its base quarterly dividend of $0.50 per share, while prioritizing debt reduction with the majority of free cash flow after dividends. The company targets reducing year-end 2025 net debt below $4.5 billion and has set a divestment target of at least $300 million to further support debt reduction efforts.

Additionally, Civitas announced the acquisition of certain Permian Basin assets for $300 million, expanding its position in the Midland Basin with approximately 130 future development locations. The company also executed various land optimization initiatives, adding around two years' worth of inventory across the Permian and DJ Basins.