Civitas Resources, Inc. Reports Fourth Quarter and Full Year 2024 Results
DENVER--(BUSINESS WIRE)--February 24, 2025--
Civitas Resources, Inc. (NYSE: CIVI) (the "Company" or "Civitas") today reported its fourth quarter and full year 2024 financial and operating results. A webcast and conference call to review these results and the Company's 2025 outlook is planned for 6:30 a.m. MT (8:30 a.m. ET), on Tuesday, February 25, 2025. Participation details are available in this release, and supplemental materials can be accessed on the Company's website, www.civitasresources.com.
Key Fourth Quarter and Full Year 2024 Results
Three Months Ended Twelve Months Ended
December 31, 2024 December 31, 2024
------------------ -------------------
Net Income ($MM) $151 $839
Adjusted Net Income ($MM)(1) $171 $842
Operating Cash Flow ($MM) $858 $2,865
Adjusted EBITDAX ($MM)(1) $895 $3,652
Sales Volumes (MBoe/d) 352 345
Oil Volumes (MBbl/d) 164 159
Capital Expenditures ($MM) $278 $1,933
Adjusted Free Cash Flow ($MM)(1) $519 $1,266
--------------------------------- ------------------ -------------------
(1) Non-GAAP financial measure; see attached reconciliation schedules at the
end of this release for reconciliations to the most directly comparable GAAP
financial measures.
Management Quote
"The Civitas team performed well in 2024, establishing a successful operational track record in our first full year of operating in the Permian Basin and building on our strong momentum in the DJ Basin. Our high-quality assets and strong execution delivered in-line to better-than-expected sales volumes, capital expenditures, and operating costs. Along with enhancing our portfolio returns through sustainable capital efficiency gains and improved cycle times, we also expanded our asset base with attractive inventory adds in our core areas. All of these actions strengthened our business and our long-term free cash flow outlook," said President and CEO Chris Doyle.
Fourth Quarter 2024 Financial and Operating Results
Total sales and oil volumes increased 1% and 3% sequentially to 352 MBoe/d and 164 MBbl/d, respectively. Sales volumes in the fourth quarter were split 50% Permian Basin and 50% DJ Basin, as the DJ Basin grew significantly following a high number of third quarter turn-in-lines. Supported by strong sales volumes and commodity price realizations, higher than expected revenues offset higher cash operating costs, primarily occurring in the Permian Basin, as a result of winterization efforts and increased workover and maintenance activities.
Capital expenditures of $278 million were consistent with plan and reflected continued efficiency gains, as the Company drilled, completed, and turned to sales 21, 34, and 4 net operated wells, respectively, in the Permian Basin, and 9, 3, and 28 net operated wells, respectively, in the DJ Basin. The Company's average lateral length completed in the quarter was approximately 2.2 miles and 3.0 miles for the Permian Basin and DJ Basin, respectively.
Long-term debt was reduced by $350 million in the fourth quarter, while the Company also returned $205 million to its shareholders, including $48 million in dividends and $157 million in share repurchases. The Company repurchased nearly 3.5% of its outstanding shares in the fourth quarter.
2024 Financial Highlights
--
Generated adjusted free cash flow(1) of nearly $1.3 billion,
representing a yield of 29% (based on year-end 2024 market
capitalization)
--
Delivered capital expenditures in the lower half of the Company's
original guidance, with total sales volumes approximately 5% above
original guidance and oil volumes at the midpoint, adjusted for non-core
DJ Basin divestments
--
Cash operating costs, including lease operating, midstream,
gathering, transportation, and processing, and cash G&A were below
the midpoint of original guidance
--
Returned more than $920 million to shareholders throughout the year,
including $494 million in dividends and $427 million of share
repurchases
--
Repurchased 7.3 million outstanding shares (approximately 7% of
shares outstanding)
--
Increased the Company's revolving credit facility borrowing base by
$400 million (to $3.4 billion) and its elected commitment by $350 million
(to $2.2 billion)
--
Received an upgrade on the Company's long-term issuer rating from Fitch
Ratings to BB+, along with an upgrade from S&P Global to a positive
outlook
(1) Non-GAAP financial measure; see attached reconciliation schedules at the
end of this release for reconciliations to the most directly comparable GAAP
financial measures.
2024 Operational Highlights
--
Established operational track record in the Permian Basin, delivering
sustainably lower well costs through well design changes, accelerated
drilling and completion cycle times, and scale benefits
--
Midland Basin average two-mile well costs (drilling, completion
and equipment) decreased from $850 per lateral foot to less than
$725 per foot by the end of the year, a more than 15% improvement
--
Implemented simulfrac operations late in 2024, increasing fluid
throughput by more than 40% (barrels pumped per day)
--
Achieved Permian Basin total recordable incident rate of 0.18 in
the first year of operatorship
--
Delineated Wolfcamp D development in the Midland Basin, with higher
than anticipated productivity and lower costs, expanding the economic
competitiveness of the Wolfcamp D across Civitas' acreage position
--
Successfully executed 13 four-mile laterals in the DJ Basin, the
longest laterals ever drilled and completed in Colorado, representing the
highest 180-day cumulative oil producing wells in the state and observing
no per foot degradation in productivity
--
Drilled, completed, and commenced production on the Company's first
"U-turn" wells in the Company's northeast extension area of the DJ Basin,
outperforming expected capital cost, cycle times, and production
--
Reported 2024 proved reserves of 798 million barrels of oil equivalent,
a 14% increase from year-end 2023, primarily driven by the acquisition of
Vencer Energy
2024 Strategic Highlights
--
Closed on the acquisition of certain oil and gas assets in the Midland
Basin from Vencer Energy at the start of the year, materially expanding
the Company's Permian Basin position
--
Extended the Company's future development inventory through multiple
land transactions and optimized development plans, adding approximately
100 gross locations in the Permian Basin and 250 gross locations in the
DJ Basin
--
Divested non-core DJ Basin assets for $215 million, which included 7
MBoe/d of production (40% oil) and long-dated future development
inventory in the Company's northeast extension area
--
Reduced regulatory risk in the DJ Basin through a multi-party
regulatory agreement with the governor, industry colleagues, and
environmental groups that defers future ballot measure and legislative
initiatives through at least the end of 2027 (Senate Bill 24-229 and
24-230)
--
Received approval from Colorado's Energy and Carbon Management
Commission of the Lowry Ranch Comprehensive Area Plan within the Watkins
development area of the DJ Basin
Webcast / Conference Call Information
The Company plans to host a webcast and conference call at 6:30 a.m. MT (8:30 a.m. ET) on February 25, 2025. The dial-in number for the call is 888-510-2535, with passcode 4872770. A live webcast and replay of this event will be available on the Investor Relations section of the Company's website at www.civitasresources.com.
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 Colorado and the Permian Basin in Texas and New Mexico. Civitas' proven business model to maximize shareholder returns is focused on four key strategic pillars: generating significant free cash flow, maintaining a premier balance sheet, returning capital to shareholders, and demonstrating ESG leadership. For more information about Civitas, please visit www.civitasresources.com.
Schedule 1: Consolidated Statements of Operations
(in thousands, except for per share amounts, unaudited)
-------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ --------------------------
2024 2023 2024 2023
--------- --------- --------- ---------
Operating net
revenues:
Crude oil,
natural gas,
and NGL sales $1,291,745 $1,125,730 $5,202,408 $3,473,821
Other operating
income 1,121 1,045 4,400 5,419
--------- --------- --------- ---------
Total
operating
net
revenues 1,292,866 1,126,775 5,206,808 3,479,240
--------- --------- --------- ---------
Operating expenses:
Lease operating
expense 173,005 109,560 577,837 301,288
Midstream
operating
expense 11,313 10,039 48,038 45,080
Gathering,
transportation,
and processing 97,894 80,880 377,678 290,645
Severance and ad
valorem taxes 86,307 88,293 377,388 276,535
Exploration 587 632 14,322 2,178
Depreciation,
depletion, and
amortization 544,568 416,634 2,056,427 1,171,192
Transaction
costs 682 24,251 31,419 84,328
General and
administrative
expense 53,223 54,524 226,965 161,077
Other operating
expense 6,192 2,182 17,330 7,437
--------- --------- --------- ---------
Total
operating
expenses 973,771 786,995 3,727,404 2,339,760
--------- --------- --------- ---------
Other income
(expense):
Derivative gain
(loss), net (11,437) 129,881 37,490 9,307
Interest expense (113,860) (90,071) (456,303) (182,740)
Loss on property
transactions,
net (1,136) -- (2,566) (254)
Other income
(expense) 7,099 (695) 24,670 33,661
--------- --------- --------- ---------
Total other
income
(expense) (119,334) 39,115 (396,709) (140,026)
--------- --------- --------- ---------
Income from
operations before
income taxes 199,761 378,895 1,082,695 999,454
Income tax
expense (48,651) (76,028) (243,972) (215,166)
--------- --------- --------- ---------
Net income $ 151,110 $ 302,867 $ 838,723 $ 784,288
========= ========= ========= =========
Earnings per common
share
Basic $ 1.57 $ 3.23 $ 8.48 $ 9.09
Diluted $ 1.57 $ 3.20 $ 8.46 $ 9.02
Weighted-average
common shares
outstanding:
Basic 96,254 93,774 98,865 86,240
Diluted 96,394 94,519 99,176 86,988
Schedule 2:
Consolidated Statement
of Cash Flows (in
thousands, unaudited)
-----------------------
Three Months Ended Twelve Months Ended December
December 31, 31,
----------------------- ----------------------------
2024 2023 2024 2023
-------- --------- ---------- ----------
Cash flows from
operating activities:
Net income $ 151,109 $ 302,867 $ 838,723 $ 784,288
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation,
depletion, and
amortization 544,568 416,634 2,056,427 1,171,192
Stock-based
compensation 12,150 9,354 48,272 34,931
Derivative (gain)
loss, net 11,437 (129,881) (37,490) (9,307)
Derivative cash
settlement gain
(loss), net 12,147 (23,339) 6,435 (68,246)
Amortization of
deferred
financing costs
and deferred
acquisition
consideration 13,775 3,587 52,702 9,293
Loss on property
transactions,
net 1,136 -- 2,566 254
Deferred income
tax expense 48,378 106,191 235,773 245,163
Other, net 4,084 (330) 1,084 (740)
Changes in
operating assets
and liabilities,
net
Accounts
receivable,
net (58,057) 760 (23,036) (39,869)
Prepaid
expenses and
other (12,856) 19,141 (17,644) 19,987
Accounts
payable,
accrued
expenses, and
other
liabilities 130,199 138,204 (298,584) 91,814
-------- --------- ---------- ----------
Net cash
provided
by
operating
activities 858,070 843,188 2,865,228 2,238,760
-------- --------- ---------- ----------
Cash flows from
investing activities:
Acquisitions of
businesses, net of
cash acquired -- (5,121) (905,096) (3,655,612)
Acquisitions of
crude oil and
natural gas
properties (23,096) (93,880) (47,440) (154,855)
Deposits for
acquisitions -- (161,250) -- (161,250)
Capital expenditures
for drilling and
completion
activities and
other fixed assets (292,319) (570,269) (1,924,426) (1,352,388)
Proceeds from
property
transactions 45,544 84,692 208,824 90,456
Purchases of carbon
credits and
renewable energy
credits (1,826) (287) (5,744) (6,151)
Other, net -- (177) 2,000 (3,355)
-------- --------- ---------- ----------
Net cash
used in
investing
activities (271,697) (746,292) (2,671,882) (5,243,155)
-------- --------- ---------- ----------
Cash flows from
financing activities:
Proceeds from credit
facility 250,000 1,000,000 1,900,000 2,120,000
Payments to credit
facility (600,000) (900,000) (2,200,000) (1,370,000)
Proceeds from
issuance of senior
notes -- 987,500 -- 3,653,750
Payment of deferred
financing costs and
other (1,215) (2,879) (7,724) (45,788)
Dividends paid (47,629) (149,289) (493,842) (660,320)
Common stock
repurchased and
retired (157,444) -- (427,305) (320,398)
Payment of employee
tax withholdings in
exchange for the
return of common
stock (396) (114) (12,037) (13,416)
Other, net (938) (727) (3,427) (752)
-------- --------- ---------- ----------
Net cash
provided
by (used
in)
financing
activities (557,622) 934,491 (1,244,335) 3,363,076
-------- --------- ---------- ----------
Net change in cash,
cash equivalents, and
restricted cash 28,751 1,031,387 (1,050,989) 358,681
Cash, cash equivalents,
and restricted cash:
Beginning of period
(1) 47,075 95,428 1,126,815 768,134
-------- --------- ---------- ----------
End of period (1) $ 75,826 $1,126,815 $ 75,826 $ 1,126,815
======== ========= ========== ==========
(1) The balance includes $0.1 million of restricted cash consisting of funds
for road maintenance and repairs that is presented in other noncurrent assets
within our balance sheets for all periods presented prior to September 30,
2024. These funds were released to the Company during the third quarter of
2024. In addition, the December 31, 2023 balance includes $1.9 million of
interest earned on cash held in escrow that is presented in deposits for
acquisitions within our balance sheets for the period ended December 31,
2023.
Schedule 3: Consolidated Balance Sheets
(in thousands)
----------------------------------------------------------------------
December 31,
----------------------------
2024 2023
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 75,826 $ 1,124,797
Accounts receivable, net:
Crude oil and natural gas sales 646,290 505,961
Joint interest and other 125,047 247,228
Derivative assets 66,517 35,192
Deposits for acquisitions -- 163,164
Prepaid expenses and other 74,638 68,070
---------- ----------
Total current assets 988,318 2,144,412
Property and equipment (successful
efforts method):
Proved properties 16,897,070 12,738,568
Less: accumulated depreciation,
depletion, and amortization (4,287,752) (2,339,541)
---------- ----------
Total proved properties, net 12,609,318 10,399,027
Unproved properties 630,727 821,939
Wells in progress 505,556 536,858
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