Capital return framework enhanced for share
repurchase flexibility and balance sheet support, with buyback
authorization increased to $500 million
Lower well costs driving $50 million
reduction in full-year capital expectations; 2024 sales
volume outlook raised 1.5%
Civitas Resources, Inc. (NYSE: CIVI) (the "Company" or
"Civitas") today reported its second quarter 2024 financial and
operating results. A webcast and conference call is planned for 9
a.m. MT (11 a.m. ET) on Friday, August 2, 2024. Participation
details are available in this release, and supplemental materials
can be accessed on the Company's website,
www.civitasresources.com.
Key Second Quarter 2024 Results
Three Months Ended June 30,
2024
Six Months Ended June 30,
2024
Net Income ($MM)
$216.0
$391.8
Adjusted Net Income ($MM)(1)
$207.0
$478.7
Operating Cash Flow ($MM)
$359.6
$1,172.1
Adjusted EBITDAX ($MM)(1)
$918.1
$1,846.3
Total Sales Volumes (MBoe/d)
342.9
339.2
Oil Volumes (MBbl/d)
155.3
155.7
Capital Expenditures ($MM)
$566.5
$1,216.0
Adjusted Free Cash Flow ($MM)(1)
$235.4
$381.0
(1) Non-GAAP financial measure; see
attached reconciliation schedules at the end of this release.
Additional Highlights
- Permian Basin sales volumes increased nearly 12% from the first
quarter, driven by strong production from recent Delaware and
Midland Basin wells.
- Well costs in the Midland Basin are currently 10% lower than at
the start of the year, enhancing well-level average rates of return
by more than 10% (at $70 per barrel WTI).
- Total cash operating expense per BOE was $8.97, below
expectation and the first quarter of 2024.
- Commenced production on 13 four-mile laterals from the Watkins
area of the DJ Basin (the longest laterals ever drilled and
completed in Colorado) in late June 2024.
- Return of capital to shareholders totaled $274 million,
including dividends paid of $1.50 per share and share repurchases
of $125 million, or 1,766,808 shares at an average price of $70.70
per share.
- The Company amended its credit facility to increase the
borrowing base by $400 million (to $3.4 billion) and its elected
commitment by $350 million (to $2.2 billion) during the May 2024
redetermination.
Shareholder Return Framework Adds Flexibility for
Buybacks
Civitas maintains one of the industry’s premier shareholder
return programs, distributing to shareholders a strong base
dividend and at least 50% of its free cash flow, after the base
dividend, in the form of a variable return.
The Company's Board of Directors recently enhanced Civitas'
shareholder return program to add flexibility in the way it returns
the variable component to shareholders. Beginning with the third
quarter, the variable return of capital will now be provided
through a combination of common stock repurchases and dividends,
with the quarterly allocation between the two determined by
management and the Board. The base dividend remains unchanged at
$0.50 per share quarterly.
As part of the enhanced capital return framework, the Board
authorized a new share repurchase program of up to $500 million of
the Company's outstanding shares of common stock. The new share
repurchase program replaces the prior share repurchase program and
represents an approximately 75% increase as compared to the
authorization remaining under the prior program. Civitas intends to
continue its disciplined and strong share repurchase track record,
as evidenced by the Company's execution of over $510 million in
buybacks at an average price of $63.80 since the beginning of
2023.
The remaining 50% of free cash flow, after the base dividend,
will support the Company's balance sheet initiatives, with a
long-term leverage target unchanged at less than 0.75 times EBITDAX
(earnings before interest, taxes, depreciation and
exploration).
CEO Quote
“Civitas’ team and assets continue to perform very well, as
demonstrated by our strong second quarter results,” said CEO Chris
Doyle. “At this time last year, we transformed our Company through
multiple Permian Basin acquisitions, which significantly expanded
our scale, depth and quality of inventory. Since then, we've driven
production ahead of plan, lowered drilling and completion costs,
and enhanced margins through reduced operating costs, evidencing
that assets are better in Civitas' hands. In the DJ Basin, we
continue to execute very well, and the regulatory environment has
been derisked for multiple years into the future. In support of
these results and the value we are creating, our Board has recently
increased our share buyback authorization and enhanced our capital
return framework by adding flexibility for us to execute
repurchases in times when our equity does not reflect the
underlying value of our high-quality business. I am highly
confident in our execution and our focused business strategy to
capture the long-term value within Civitas.”
Second Quarter 2024 Financial and Operating Results
Crude oil, natural gas, and natural gas liquids ("NGL") sales
for the second quarter of 2024 were $1.3 billion, consistent with
the first quarter of 2024. Crude oil accounted for 87% of total
revenue.
Sales volumes exceeded expectations at 343 MBoe/d, benefiting
from continued strong well performance and accelerated turn-in-line
timing. Crude oil volumes were consistent with expectations and
relatively flat from the first quarter of the year, with higher
natural gas and NGL volumes in the Permian Basin driving
outperformance. Permian Basin sales volumes were up nearly 12% as
compared to the first quarter of the year, with the increase
primarily related to the impact and timing of new wells commencing
production. Approximately 58% of second quarter sales volumes in
the Permian Basin were from the Midland Basin, with 42% from the
Delaware Basin.
Second quarter DJ Basin volumes were lower than the first
quarter of the year in part due to the two previously-announced
non-core asset divestments which closed in March and May 2024.
Assets sold reduced second quarter average sales volumes by
approximately 5 MBoe/d (~35% oil). In addition, DJ Basin sales
volumes reflect the timing of new wells commencing production which
were weighted to the latter part of the second quarter, as well as
temporary third-party facility downtime.
In the second quarter of 2024, differentials for the Company's
crude oil and natural gas averaged a reduction of $0.16 per barrel
and $1.72 per thousand cubic feet from the respective index prices.
Higher than anticipated crude oil realizations were primarily
related to improvement in the values obtained for the Company's
crude quality, especially Niobrara production in the DJ Basin.
Natural gas differentials were significantly impacted by weak Waha
pricing in the Permian Basin. NGL realizations per barrel averaged
26% of WTI crude oil in the second quarter of 2024.
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
June 30, 2024
March 31, 2024
Average sales volumes per day
Crude oil (Bbls/d)
DJ Basin
67,846
73,132
Permian Basin
87,495
83,022
Total
155,341
156,154
Natural gas (Mcf/d)
DJ Basin
315,308
343,736
Permian Basin
282,659
253,121
Total
597,967
596,857
Natural gas liquids (Bbls/d)
DJ Basin
36,648
38,473
Permian Basin
51,220
41,396
Total
87,868
79,869
Average sales volumes per day (Boe/d)
DJ Basin
157,044
168,889
Permian Basin
185,824
166,604
Total
342,868
335,493
Average sales prices (before
derivatives):
Crude oil (per Bbl)
$
80.27
$
75.69
Natural gas (per Mcf)
$
0.17
$
1.60
Natural gas liquids (per Bbl)
$
20.94
$
22.73
Total (per Boe)
$
42.03
$
43.49
Realized hedging losses totaled $13 million for the second
quarter of 2024. A complete listing of derivative positions can be
found in the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 2024.
Total cash operating expense per BOE, 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 second quarter of
2024 was $8.97. Second quarter cash operating expense benefited
from continued focus on chemicals and labor optimization in the
Permian Basin and the divestment of higher-cost, non-core DJ Basin
assets.
Depreciation, depletion and amortization was $16.70 per BOE for
the second quarter, higher than the first quarter of 2024 primarily
as a result of timing differences between capital investments and
reserve additions.
Interest expense of $115 million, which includes amortization on
the remaining Vencer deferred payment, was in line with
expectation.
As of the end of the second quarter, Civitas' financial
liquidity was $1.4 billion, consisting of cash on hand and
available borrowing capacity on the Company's credit facility. The
Company's borrowings on its revolving credit facility totaled $850
million at the end of the second quarter, increasing from the first
quarter primarily as a result of working capital changes during the
period, including gross Colorado ad valorem taxes paid for 2022 of
nearly $400 million.
(1) Non-GAAP financial measure; see
attached reconciliation schedules at the end of this release.
Second Quarter Capital Expenditures Benefit from Well Cost
Savings
Capital expenditures for the second quarter totaled $567
million, below anticipation as a result of sustainably lower costs.
Through ongoing drilling and completion efficiencies, as well as
design optimization and scale savings, the Company has delivered
10% well cost reductions in the Midland Basin and three percent in
each of the Delaware and DJ Basins.
During the second quarter, the Company drilled, completed, and
turned to sales 34, 32, and 49 gross wells (32, 30, and 41 net),
respectively, in the Permian Basin, and 23, 39, and 34 gross wells
(22, 33, and 31 net), respectively, in the DJ Basin. The Company's
average lateral length completed during the quarter totaled 2.3
miles in the Permian Basin and 2.2 miles in the DJ Basin.
The following table presents capital expenditures by operating
region:
Three Months Ended
June 30, 2024
March 31, 2024
Capital expenditures (in
thousands)
DJ Basin
$
264,402
$
262,595
Permian Basin
302,587
386,234
Other/Corporate
(480
)
703
Total
$
566,509
$
649,532
2024 Outlook Enhanced Through Lower Capex and Higher
Volumes
Civitas continues to find innovative ways to safely reduce well
costs and enhance production. Recent accomplishments have led to a
$50 million reduction in 2024 capital investment plans, with the
Company's new full-year 2024 capital guidance being $1.85 - $1.95
billion.
Full-year 2024 expected sales volumes were increased to the
upper half of the Company's original range, now expected between
335 and 345 MBoe/d. The increase in total sales volumes represents
a 3% increase at the midpoint from original guidance, after
adjusting for asset sales. Civitas reiterated its expectation for
full-year oil volumes. Third quarter total volumes and oil are
anticipated to be higher than the second quarter, with increases
expected in both the Permian Basin and DJ Basin.
Updated full-year guidance, including a reduced cash operating
expense outlook, can be found in the Company's supplemental
earnings presentation on the Company's website.
Webcast / Conference Call Information
The Company plans to host a webcast and conference call at 9
a.m. MT (11 a.m. ET) on Friday, August 2, 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 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.
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, including Russia; 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 oil and 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 upcoming presidential election
in the United States, including volatility in the political, legal,
and regulatory environments; political conditions in or affecting
other producing countries, including conflicts or hostilities in or
relating to the Middle East (including the current events related
to the Israel-Palestine conflict), South America, Russia (including
the current events involving Russia and Ukraine), and the Red Sea,
and other sustained military campaigns or acts of terrorism or
sabotage and the effects therefrom; the effects of any pandemic or
other global health epidemic; other economic, competitive,
governmental, legislative, regulatory, geopolitical, and
technological factors that may negatively impact our businesses,
operations, or pricing; and disruptions to our business due to
acquisitions and other significant transactions. Expectations
regarding business outlook, including changes in revenue, pricing,
capital expenditures, cash flow generation, strategies for our
operations, oil and natural gas market conditions, legal, economic,
and regulatory conditions, and environmental matters are only
forecasts regarding these matters.
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 June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Operating net revenues:
Crude oil, natural gas, and NGL sales
$
1,311,532
$
658,840
$
2,639,288
$
1,313,681
Other operating income
1,162
1,686
2,609
2,867
Total operating net revenues
1,312,694
660,526
2,641,897
1,316,548
Operating expenses:
Lease operating expense
126,606
51,230
258,071
97,068
Midstream operating expense
11,939
13,319
25,500
23,380
Gathering, transportation, and
processing
94,469
64,873
183,370
132,225
Severance and ad valorem taxes
101,913
52,443
203,819
104,805
Exploration
1,340
546
12,874
1,117
Depreciation, depletion, and
amortization
521,090
232,786
987,930
434,089
Transaction costs
7,877
31,145
30,597
31,627
General and administrative expense
(including $12,262, $9,895, $23,461, and $17,275, respectively, of
stock-based compensation)
59,135
33,541
117,013
70,399
Other operating expense
1,458
1,199
9,024
1,337
Total operating expenses
925,827
481,082
1,828,198
896,047
Other income (expense):
Derivative gain (loss), net
7,578
4,927
(102,102
)
30,087
Interest expense
(114,897
)
(8,753
)
(224,683
)
(16,202
)
Loss on property transactions, net
—
(13
)
(1,430
)
(254
)
Other income
3,434
8,045
8,338
17,068
Total other income (expense)
(103,885
)
4,206
(319,877
)
30,699
Income from operations before income
taxes
282,982
183,650
493,822
451,200
Income tax expense
(66,993
)
(44,363
)
(102,012
)
(109,452
)
Net income
$
215,989
$
139,287
$
391,810
$
341,748
Earnings per common share:
Basic
$
2.17
$
1.73
$
3.92
$
4.22
Diluted
$
2.15
$
1.72
$
3.88
$
4.18
Weighted-average common shares
outstanding:
Basic
99,426
80,393
100,062
81,052
Diluted
100,245
81,144
100,865
81,824
Schedule 2:
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Cash flows from operating activities:
Net income
$
215,989
$
139,287
$
391,810
$
341,748
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and
amortization
521,090
232,786
987,930
434,089
Stock-based compensation
12,262
9,895
23,461
17,275
Derivative (gain) loss, net
(7,578
)
(4,927
)
102,102
(30,087
)
Derivative cash settlement loss, net
(12,752
)
(1,335
)
(23,907
)
(11,885
)
Amortization of deferred financing costs
and deferred acquisition consideration
13,044
1,155
25,389
2,305
Loss on property transactions, net
—
13
1,430
254
Deferred income tax expense
62,695
44,022
92,689
89,975
Other, net
(930
)
300
(1,965
)
292
Changes in operating assets and
liabilities, net
(444,252
)
(84,015
)
(426,819
)
32,064
Net cash provided by operating
activities
359,568
337,181
1,172,120
876,030
Cash flows from investing activities:
Acquisitions of businesses, net of cash
acquired
(33,694
)
—
(867,596
)
—
Acquisitions of crude oil and natural gas
properties
(13,984
)
(20,423
)
(13,984
)
(51,247
)
Deposits for acquisitions
—
(352,500
)
—
(352,500
)
Capital expenditures for drilling and
completion activities and other fixed assets
(519,120
)
(268,560
)
(1,090,697
)
(518,949
)
Proceeds from property transactions
78,817
64
171,679
5,764
Purchases of carbon credits and renewable
energy credits
(1,886
)
(5,651
)
(1,886
)
(5,651
)
Other, net
—
(527
)
—
(621
)
Net cash used in investing activities
(489,867
)
(647,597
)
(1,802,484
)
(923,204
)
Cash flows from financing activities:
Proceeds from credit facility
1,000,000
—
1,300,000
—
Payments to credit facility
(550,000
)
—
(1,200,000
)
—
Proceeds from issuance of senior notes
—
2,666,250
—
2,666,250
Payment of deferred financing costs and
other
(3,789
)
(4,215
)
(5,157
)
(4,215
)
Dividends paid
(148,918
)
(174,148
)
(297,357
)
(347,524
)
Common stock repurchased and retired
(124,936
)
(20,198
)
(191,872
)
(320,305
)
Proceeds from exercise of stock
options
6
4
6
444
Payment of employee tax withholdings in
exchange for the return of common stock
(1,436
)
(10,492
)
(8,506
)
(12,610
)
Principal payments on finance lease
obligations
(814
)
—
(1,577
)
—
Net cash provided by (used in) financing
activities
170,113
2,457,201
(404,463
)
1,982,040
Net change in cash, cash equivalents, and
restricted cash
39,814
2,146,785
(1,034,827
)
1,934,866
Cash, cash equivalents, and restricted
cash:
Beginning of period(1)
52,174
556,215
1,126,815
768,134
End of period(1)
$
91,988
$
2,703,000
$
91,988
$
2,703,000
(1) Includes $2.0 million of restricted
cash and consists of $1.9 million of interest earned on cash held
in escrow that is presented in deposits for acquisitions within the
accompanying unaudited condensed consolidated balance sheets
(“balance sheets”) for the period ended December 31, 2023 and $0.1
million of funds for road maintenance and repairs that is presented
in other noncurrent assets within the accompanying balance sheets
for all periods presented.
Schedule 3:
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
June 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
91,884
$
1,124,797
Accounts receivable, net:
Crude oil and natural gas sales
559,736
505,961
Joint interest and other
227,233
247,228
Derivative assets
14,118
35,192
Deposits for acquisitions
—
163,164
Prepaid expenses and other
60,809
68,070
Total current assets
953,780
2,144,412
Property and equipment (successful efforts
method):
Proved properties
15,671,856
12,738,568
Less: accumulated depreciation, depletion,
and amortization
(3,249,814
)
(2,339,541
)
Total proved properties, net
12,422,042
10,399,027
Unproved properties
817,351
821,939
Wells in progress
661,599
536,858
Other property and equipment, net of
accumulated depreciation of $10,938 in 2024 and $9,808 in 2023
56,630
62,392
Total property and equipment, net
13,957,622
11,820,216
Derivative assets
500
8,233
Other noncurrent assets
129,388
124,458
Total assets
$
15,041,290
$
14,097,319
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
665,635
$
565,708
Production taxes payable
259,304
421,045
Crude oil and natural gas revenue
distribution payable
705,343
766,123
Derivative liability
70,835
18,096
Deferred acquisition consideration
497,277
—
Other liabilities
91,345
80,915
Total current liabilities
2,289,739
1,851,887
Long-term liabilities:
Long-term debt
4,889,554
4,785,732
Ad valorem taxes
189,917
307,924
Derivative liability
936
—
Deferred income tax liabilities, net
657,470
564,781
Asset retirement obligations
317,886
305,716
Other long-term liabilities
109,771
99,958
Total liabilities
8,455,273
7,915,998
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value,
25,000,000 shares authorized, none outstanding
—
—
Common stock, $.01 par value, 225,000,000
shares authorized, 98,347,937 and 93,774,901 issued and outstanding
as of June 30, 2024 and December 31, 2023, respectively
5,050
5,004
Additional paid-in capital
5,318,431
4,964,450
Retained earnings
1,262,536
1,211,867
Total stockholders’ equity
6,586,017
6,181,321
Total liabilities and stockholders’
equity
$
15,041,290
$
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
Six Months Ended
June 30, 2024
March 31, 2024
June 30, 2024
June 30, 2023
Net income
$
215,989
$
175,821
$
391,810
$
341,748
Adjustments to net income:
Unused commitments(1)
608
(1,226
)
(618
)
754
Transaction costs
7,877
22,720
30,597
31,627
Loss on property transactions, net
—
1,430
1,430
254
Derivative (gain) loss, net
(7,578
)
109,680
102,102
(30,087
)
Derivative cash settlement loss
(12,752
)
(11,155
)
(23,907
)
(11,885
)
Total adjustments to net income before
taxes
(11,845
)
121,449
109,604
(9,337
)
Tax effect of adjustments
2,807
(20,161
)
(22,688
)
2,269
Total adjustments to net income after
taxes
(9,038
)
101,288
86,916
(7,068
)
Adjusted Net Income
$
206,951
$
277,109
$
478,726
$
334,680
Adjusted Net Income per diluted share
$
2.06
$
2.74
$
4.75
$
4.09
Diluted weighted-average common shares
outstanding
100,245
101,293
100,865
81,824
(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 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
Six Months Ended
June 30, 2024
March 31, 2024
June 30, 2024
June 30, 2023
Net Income
$
215,989
$
175,821
$
391,810
$
341,748
Total adjustments to net income before
taxes (from schedule 4)
(11,845
)
121,449
109,604
(9,337
)
Exploration
1,340
11,534
12,874
1,117
Depreciation, depletion, and
amortization
521,090
466,840
987,930
434,089
Stock-based compensation(2)
12,262
11,199
23,461
17,275
Interest expense
114,897
109,786
224,683
16,202
Interest income(1)
(2,650
)
(3,425
)
(6,074
)
(12,807
)
Income tax expense
66,993
35,019
102,012
109,452
Adjusted EBITDAX
$
918,076
$
928,223
$
1,846,300
$
897,739
(1) Included as a portion of other income
in the condensed consolidated statements of operations.
(2) Included as a portion of general and
administrative expense 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
Six Months Ended
June 30, 2024
March 31, 2024
June 30, 2024
June 30, 2023
Net cash provided by operating
activities
$
359,568
$
812,552
$
1,172,120
$
876,030
Add back: Changes in operating assets and
liabilities, net
444,252
(17,433
)
426,819
(32,064
)
Cash flow from operations before changes
in operating assets and liabilities
803,820
795,119
1,598,939
843,966
Less: Cash paid for capital expenditures
for drilling and completion activities and other fixed assets
(519,120
)
(571,577
)
(1,090,697
)
(518,949
)
Less: Changes in working capital related
to capital expenditures
(47,389
)
(77,955
)
(125,344
)
56,345
Capital expenditures
(566,509
)
(649,532
)
(1,216,041
)
(462,604
)
Less: Purchases of carbon credits and
renewable energy credits
(1,886
)
—
(1,886
)
(5,651
)
Adjusted Free Cash Flow
$
235,425
$
145,587
$
381,012
$
375,711
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
Six Months Ended
June 30, 2024
March 31, 2024
June 30, 2024
June 30, 2023
General and administrative expense (as
reported)
$
59,135
$
57,878
$
117,013
$
70,399
Less: Stock-based compensation
(12,262
)
(11,199
)
(23,461
)
(17,275
)
Cash general and administrative
expense
$
46,873
$
46,679
$
93,552
$
53,124
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801372903/en/
Investor Relations: Brad Whitmarsh, 832.736.8909,
bwhitmarsh@civiresources.com Mae Herrington, 832.913.5444,
mherrington@civiresources.com
Media: Rich Coolidge, info@civiresources.com
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