Civitas Resources, Inc. (NYSE: CIVI) (the "Company" or "Civitas") today announced its third quarter 2023 financial and operating results. A conference call is planned for 8 a.m. MT (10 a.m. ET), November 8, 2023. Participation details can be found in this release. In addition, supplemental slides have been posted to the Company’s website, www.civitasresources.com.
Third Quarter 2023 Highlights
- Average daily sales volumes of 235.3 thousand barrels of oil equivalent per day ("MBoe/d") and 113.8 thousand barrels of oil per day, which benefited from the addition of two months of Permian Basin volumes
- Total capital expenditures of $432.0 million
- GAAP net income of $139.7 million and Adjusted EBITDAX(1) of $708.9 million
- Net cash provided by operating activities of $519.5 million and free cash flow(1) of $205.6 million
- Fixed-plus-variable dividend, to be paid in December, of $1.59 per share
- Total liquidity was $1.3 billion as of September 30, 2023, which consisted of $95.3 million of cash plus funds available under the Company's credit facility
- On track to close Vencer Energy acquisition in January 2024
(1) Non-GAAP financial measure; see attached reconciliation schedules at the end of this release.
Civitas CEO Chris Doyle said, "The year 2023 has been a significant one for Civitas as we reposition our company by capturing high-quality assets and balancing our business across premium Permian and DJ positions. Our third quarter results were solid as we continued to integrate our new Permian position and deliver on our promises to our shareholders. We are demonstrating that an E&P company with high quality assets can return significant cash to shareholders while also building scale through disciplined, accretive acquisitions."
Third Quarter 2023 Financial and Operating Results
During the third quarter of 2023, the Company reported total average daily sales of 235.3 MBoe/d, of which 48% was crude oil, 29% was natural gas, and 23% was natural gas liquids. Production during the period benefited from the two large acquisitions in the Permian Basin that Civitas closed on August 2, 2023.
DJ Basin average daily sales were 168.3 MBoe/d during the quarter, of which 48% was crude oil, 30% was natural gas, and 22% was natural gas liquids. Permian Basin average daily sales were 67.0 MBoe/d during the quarter, of which 49% was crude oil, 25% was natural gas, and 26% was natural gas liquids.
Total capital expenditures during the quarter were $432.0 million, which included $4.7 million of land and midstream investments. In total, the Company drilled 57 gross (48.2 net) operated wells, completed 71 gross (59.1 net) operated wells, and turned to sales 60 gross (49.8 net) operated wells during the third quarter.
DJ Basin capital expenditures during the quarter were $238.0 million. In the DJ Basin, the Company drilled 23 gross (18.7 net) operated wells, completed 43 gross (35.8 net) operated wells, and turned to sales 29 gross (24.8 net) operated wells during the third quarter.
Permian Basin capital expenditures during the quarter were $194.0 million. In the Permian Basin, the Company drilled 34 gross (29.5 net) operated wells, completed 28 gross (23.3 net) operated wells, and turned to sales 31 gross (25.0 net) operated wells during the third quarter.
Net crude oil, natural gas, and natural gas liquids revenue in the third quarter of 2023 was $1.0 billion, compared to $660.5 million in the second quarter of 2023 as average daily sales volumes increased 36% and realized prices increased 15%. Crude oil accounted for approximately 81% of total revenue for the quarter. Differentials for the Company's crude oil production, relative to WTI, averaged approximately negative $1.92 per barrel in the quarter.
Lease operating expense for the third quarter of 2023, on a unit basis, increased to $4.37 per Boe from $3.24 per Boe in the second quarter of 2023, reflecting the addition of two months of Permian operations.
The Company's general and administrative ("G&A") expenses for the third quarter were $36.2 million, which included $8.3 million in non-cash stock-based compensation as well as $0.5 million of severance costs. On a per unit basis, the Company's G&A expenses decreased 21% sequentially from $2.12 per Boe in the second quarter of 2023 to $1.67 per Boe in the third quarter of 2023.
Combined Base and Variable Dividend to be Paid in December
The Company's board of directors approved a dividend of $1.59 per share, payable on December 29, 2023 to shareholders of record as of December 15, 2023. The total reflects the combination of a quarterly base dividend of $0.50 per share and a quarterly variable dividend of $1.09 per share. Additional details regarding the calculation of the variable dividend can be found in the Company's investor presentation located on its website.
Key Leadership Personnel Added
Civitas is expanding its leadership team with two key additions:
Sam Blatt will lead Civitas' Permian operations as Senior Vice President - Permian. He most recently served as CEO of Blue Ox Resources, a Permian-focused private E&P company. A proven leader with deep experience driving safe and efficient operations, Blatt’s career has spanned nearly two decades in positions of increasing responsibility with Primexx Energy Partners, J Cleo Thompson Petroleum, and Devon Energy. Blatt graduated with a BS in Petroleum and Natural Gas Engineering from West Virginia University.
Ji Rim will serve as Civitas’ Senior Vice President - Environmental, Health, Safety, & Regulatory (EHSR) and Chief Sustainability Officer. Rim joins the Company from Marathon Oil Corporation, where she served as Technical Director, leading a team supporting offshore, onshore gas plant and LNG operations in West Africa. Prior to Marathon, Rim spent 13 years at Noble Energy, most recently serving as Vice President of EHSR, Global for Noble Energy & Noble Midstream Partners LP. Rim also served over six years at BP as a production and reservoir engineer. Rim received her BS in Chemical Engineering from Texas A&M University.
