Company Closes Previously Announced Permian
Basin Transactions
Declares Fixed-plus-Variable Dividend to be
Paid in September
Civitas Resources, Inc. (NYSE: CIVI) (the "Company" or
"Civitas") today announced its second quarter 2023 financial and
operating results. In addition, the Company also announced the
closing of its transformative acquisitions in the Permian Basin for
aggregate consideration of approximately $4.7 billion. The deals
diversify the Company’s asset portfolio through scalable operations
and a deep inventory of quality drilling locations in the top three
oil basins in the U.S.
A conference call to discuss the second quarter results is
planned for 8:00 a.m. MT (10:00 a.m. ET), August 3, 2023. Dial-in
details can be found in this release. In addition, supplemental
slides have been posted to the Company’s website,
www.civitasresources.com.
Second Quarter 2023 Highlights
- Average daily sales volumes of 173.5 thousand barrels of oil
equivalent per day ("MBoe/d") and 84.4 thousand barrels of oil per
day
- Total capital expenditures of $226.8 million
- GAAP net income of $139.3 million and Adjusted EBITDAX(1) of
$454.3 million
- Net cash provided by operating activities of $337.2 million and
free cash flow(1) of $189.2 million
- Approximately 312,800 shares of outstanding common stock
repurchased under the Company's stock repurchase program for a
total of $20.2 million (average repurchase price of $64.55 per
share)
- Fixed-plus-variable dividend, to be paid in September, of $1.74
per share
- Total liquidity was $3.7 billion as of June 30, 2023, which
consisted of $2.7 billion of cash plus funds available under the
Company's credit facility(2)
(1)
Non-GAAP financial measure; see attached
reconciliation schedules at the end of this release.
(2)
Liquidity as of June 30, 2023 does not
take into account the acquisitions.
“This is a great day for Civitas, an organization with scale,
portfolio diversity, and durability,” said Civitas CEO Chris Doyle.
“We continue to perform exceptionally well and have strengthened
our company with the addition of top-tier assets in the heart of
the Permian Basin. Our diversified portfolio of oil assets will
provide us with capital allocation flexibility and a greater
ability to direct investments to our highest return opportunities.
Our focus today is on effectively integrating our Permian assets
into Civitas and delivering on our plan to profitably grow our
business, while reducing debt and returning significant cash to
shareholders.”
Shareholder Return Update
During the second quarter of 2023, the Company repurchased
approximately 312,800 shares of outstanding common stock under its
stock repurchase program for a total of $20.2 million, representing
an average repurchase price of $64.55 during the quarter.
Approximately $480 million remains under the Company's $500 million
share buyback authorization, which expires at year-end 2024.
The Company's board of directors approved a dividend of $1.74
per share, payable on September 29, 2023 to shareholders of record
as of September 15, 2023. The total reflects the combination of a
quarterly base dividend of $0.50 per share and a quarterly variable
dividend of $1.24 per share. Additional details regarding the
calculation of the variable dividend can be found in the Company's
new investor presentation located on its website.
Second Quarter 2023 Financial and Operating Results
During the second quarter of 2023, the Company reported average
daily sales of 173.5 MBoe/d, of which 49% was crude oil, 28% was
natural gas, and 23% was natural gas liquids. The table below
provides sales volumes, product mix, and average sales prices for
the second quarter of 2023 and 2022.
Three Months Ended June
30,
2023
2022
% Change
Avg. Daily Sales Volumes:
Crude oil (Bbls/d)
84,369
80,312
5
%
Natural gas (Mcf/d)
289,547
317,621
(9
)%
Natural gas liquids (Bbls/d)
40,864
41,974
(3
)%
Crude oil equivalent (Boe/d)
173,491
175,223
(1
)%
Product Mix
Crude oil
49
%
46
%
Natural gas
28
%
30
%
Natural gas liquids
23
%
24
%
Average Sales Prices (before
derivatives):
Crude oil (per Bbl)
$
70.43
$
106.48
(34
)%
Natural gas (per Mcf)
$
1.67
$
7.10
(76
)%
Natural gas liquids (per Bbl)
$
19.93
$
43.79
(54
)%
Crude oil equivalent (per Boe)
$
41.73
$
72.17
(42
)%
Capital expenditures during the quarter were $226.8 million,
which included $11.5 million of land and midstream investments. The
Company drilled 31 gross (25.5 net) operated wells, completed 31
gross (26.0 net) operated wells, and turned to sales 32 gross (28.1
net) operated wells during the second quarter.
Net crude oil, natural gas, and natural gas liquids revenue in
the second quarter of 2023 was $660.5 million, compared to $656.0
million in the first quarter of 2023 as average daily sales volumes
increased 9% and realized prices decreased 9%. Crude oil accounted
for approximately 82% of total revenue for the quarter.
Differentials for the Company's crude oil production, relative to
WTI, averaged approximately negative $3.11 per barrel in the
quarter.
Lease operating expense for the second quarter of 2023, on a
unit basis, increased to $3.24 per Boe from $3.19 per Boe in the
first quarter of 2023.
The Company's general and administrative expenses ("G&A")
for the second quarter were $33.5 million, which included $9.9
million in non-cash stock-based compensation as well as $1.7
million of severance costs. On a per unit basis, the Company's
general and administrative expenses decreased 18% sequentially from
$2.57 per Boe in the first quarter of 2023 to $2.12 per Boe in the
second quarter of 2023.
Permian Assets Operational Update
During the second quarter, production for the Permian assets
acquired from Hibernia and Tap Rock was approximately 107 thousand
barrels of oil equivalent per day, which included 53 thousand
barrels of oil per day. This information was provided to the
Company by Hibernia and Tap Rock and has not been independently
verified by the Company. The Permian transactions closed August 2,
2023.
Guidance
Updated guidance is provided below. Civitas no longer expects to
have any cash income tax exposure in 2023.
Legacy Civitas
Permian
Aug-Dec 2023
Pro Forma 2023
(5 months Permian)
2024
Total Production (Mboe/d)
160 − 170
100 − 110
200 − 220
270 − 290
Oil Production (Mbo/d)
72 − 77
53 − 58
95 − 105
130 − 140
% Liquids
68 − 70%
74 − 76%
70 − 73%
71 − 74%
Oil Differential ($/Bbl)
($5.00) − ($4.00)
($2.00) − $0.00
($4.50) − ($2.50)
Production Taxes (% of Revenue)
8 - 9%
7 - 8%
~8%
Cash Operating Costs ($/Boe)(1)
$9.50 − $10.50
$10.00 − $12.00
$9.75 − $11.00
Capital Expenditures ($ in millions)
$800 − $910
$375 − $475
$1,175 − $1,385
$1,600 − $1,800
Permian transactions closed August 2,
2023.
(1) Lease operating, Gathering,
transportation and processing, Midstream operating, and cash
G&A expenses combined.
Note: Guidance is forward-looking information that is subject to
considerable change and numerous risks and uncertainties, many of
which are beyond the Company’s control. See “Forward-Looking
Statements” below.
Conference Call Information
The Company plans to host a conference call to discuss second
quarter results at 8:00 a.m. MT (10:00 a.m. ET) on August 3, 2023.
A live webcast and replay will be available on the Investor
Relations section of the Company’s website at
www.civitasresources.com. Dial-in information for the conference
call is included below.
Type
Phone Number
Passcode
Live participant
888-510-2535
4872770
Replay
800-770-2030
4872770
About Civitas Resources, Inc.
Civitas Resources, Inc. is an independent, domestic oil and gas
producer focused on development of its premier assets in the
Denver-Julesburg (DJ) and Permian basins. The Company has a proven
business model combining capital discipline, a strong balance
sheet, sustainable cash flow generation and peer-leading cash
returns to shareholders. Civitas employs leading ESG practices and
is Colorado’s first carbon neutral oil and gas producer. For more
information about Civitas, please visit
www.civitasresources.com.
Forward-Looking Statements and Cautionary Statements
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 include statements regarding the
Company’s plans and expectations with respect to the transactions
contemplated by (i) the membership interest purchase agreement,
dated as of June 19, 2023, by and between Civitas, Hibernia Energy
III Holdings, LLC, and Hibernia Energy III-B Holdings, LLC (such
transactions, the “Hibernia Acquisition”) and (ii) the membership
interest purchase agreement, dated as of June 19, 2023, by and
between Civitas, Tap Rock Resources Legacy, LLC, Tap Rock Resources
Intermediate, LLC, Tap Rock Resources II Legacy, LLC, Tap Rock
Resources II Intermediate, LLC, Tap Rock NM10 Legacy Holdings, LLC
and Tap Rock NM10 Holdings Intermediate, LLC, solely in its
capacity as representative of the sellers thereunder, Tap Rock I
Legacy, and solely for the limited purposes set forth therein, Tap
Rock Resources, LLC (such transactions, the “Tap Rock Acquisition”
and together with the Hibernia Acquisition, the “Acquisitions”) and
the anticipated impact of the Acquisitions 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, 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 the 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 increased inflation,
disruption in the financial markets, and the availability of credit
on acceptable terms; 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 continuing effects of the COVID-19 pandemic,
including any recurrence or the worsening thereof; 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; 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; political
conditions in or affecting other producing countries, including
conflicts in or relating to the Middle East, South America, and
Russia (including the current events involving Russia and Ukraine),
and other sustained military campaigns or acts of terrorism or
sabotage; and other economic, competitive, governmental,
legislative, regulatory, geopolitical, and technological factors
that may negatively impact our businesses, operations, or pricing.
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 risk factors is also
contained in Civitas’ most recently filed Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and other Securities and Exchange Commission filings. All
forward-looking statements speak only as of the date they are made
and are based on information available at that time. Civitas does
not assume any 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.
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,
2023
2022
2023
2022
Operating net revenues:
Oil and natural gas sales
$
660,526
$
1,151,364
$
1,316,548
$
1,969,174
Operating expenses:
Lease operating expense
51,230
41,877
97,068
77,896
Midstream operating expense
13,319
7,469
23,380
13,181
Gathering, transportation, and
processing
64,873
79,519
132,225
129,922
Severance and ad valorem taxes
52,443
85,870
104,805
149,174
Exploration
546
1,553
1,117
2,081
Depreciation, depletion, and
amortization
232,786
204,519
434,089
389,379
Abandonment and impairment of unproved
properties
—
—
—
17,975
Unused commitments
363
1,731
754
2,507
Bad debt expense
836
4
583
4
Merger transaction costs
31,145
1,418
31,627
21,952
General and administrative expense,
including $9,895, $6,135, $17,275, and $14,225, respectively, of
stock-based compensation
33,541
29,666
70,399
65,386
Total operating expenses
481,082
453,626
896,047
869,457
Other income (expense):
Derivative gain (loss)
4,927
(72,650
)
30,087
(368,143
)
Interest expense
(8,753
)
(8,116
)
(16,202
)
(17,182
)
Gain (loss) on property transactions,
net
(13
)
—
(254
)
16,797
Other income
8,045
4,313
17,068
5,096
Total other income (expense)
4,206
(76,453
)
30,699
(363,432
)
Income from operations before income
taxes
183,650
621,285
451,200
736,285
Income tax expense
(44,363
)
(152,464
)
(109,452
)
(175,825
)
Net income
$
139,287
$
468,821
$
341,748
$
560,460
Net income per common share:
Basic
$
1.73
$
5.52
$
4.22
$
6.60
Diluted
$
1.72
$
5.48
$
4.18
$
6.56
Weighted-average common shares
outstanding:
Basic
80,393
84,993
81,052
84,917
Diluted
81,144
85,554
81,824
85,453
Schedule 2:
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Cash flows from operating activities:
Net income
$
139,287
$
468,821
$
341,748
$
560,460
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and
amortization
232,786
204,519
434,089
389,379
Deferred income tax expense
44,022
102,079
89,975
125,440
Abandonment and impairment of unproved
properties
—
—
—
17,975
Stock-based compensation
9,895
6,135
17,275
14,225
Amortization of deferred financing
costs
1,155
1,102
2,305
2,180
Derivative (gain) loss
(4,927
)
72,650
(30,087
)
368,143
Derivative cash settlement loss
(1,335
)
(181,631
)
(11,885
)
(348,209
)
(Gain) loss on property transactions,
net
13
—
254
(16,797
)
Other
300
87
292
155
Changes in current assets and
liabilities:
Accounts receivable, net
36,240
(44,682
)
176,984
(32,776
)
Prepaid expenses and other assets
8,810
(4,181
)
26,338
(6,579
)
Accounts payable and accrued
liabilities
(122,327
)
103,864
(157,973
)
192,839
Settlement of asset retirement
obligations
(6,738
)
(6,536
)
(13,285
)
(11,667
)
Net cash provided by operating
activities
337,181
722,227
876,030
1,254,768
Cash flows from investing activities:
Acquisitions of oil and natural gas
properties
(20,423
)
(3,515
)
(51,247
)
(303,602
)
Cash acquired
—
—
—
44,310
Proceeds from sale of oil and natural gas
properties
64
—
5,764
—
Exploration and development of oil and
natural gas properties
(268,560
)
(206,519
)
(518,949
)
(467,186
)
Proceeds from (additions to) other
property and equipment
(527
)
134
(1,157
)
66
Purchases of carbon offsets
(5,651
)
(7,196
)
(5,651
)
(7,196
)
Deposits for acquisitions
(352,500
)
—
(352,500
)
—
Other
—
(95
)
536
117
Net cash used in investing activities
(647,597
)
(217,191
)
(923,204
)
(733,491
)
Cash flows from financing activities:
Proceeds from credit facility
—
100,000
—
100,000
Payments to credit facility
—
(100,000
)
—
(100,000
)
Proceeds from issuance of senior notes
2,666,250
—
2,666,250
—
Redemption of senior notes
—
(100,000
)
—
(100,000
)
Dividends paid
(174,148
)
(116,172
)
(347,524
)
(219,768
)
Common stock repurchased and retired
(20,198
)
—
(320,305
)
—
Proceeds from exercise of stock
options
4
24
444
202
Payment of employee tax withholdings in
exchange for the return of common stock
(10,492
)
(2,812
)
(12,610
)
(15,740
)
Payment of deferred financing costs
(4,215
)
(1,174
)
(4,215
)
(1,174
)
Net cash provided by (used in) financing
activities
2,457,201
(220,134
)
1,982,040
(336,480
)
Net change in cash, cash equivalents, and
restricted cash
2,146,785
284,902
1,934,866
184,797
Cash, cash equivalents, and restricted
cash:
Beginning of period(1)
556,215
154,451
768,134
254,556
End of period(1)
$
2,703,000
$
439,353
$
2,703,000
$
439,353
(1) Includes $0.1 million of restricted
cash and consists of funds for road maintenance and repairs that is
presented in other noncurrent assets within the accompanying
unaudited condensed consolidated balance sheets.
Schedule 3:
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
June 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
2,702,897
$
768,032
Accounts receivable, net:
Oil and natural gas sales
201,248
343,500
Joint interest and other
100,664
135,816
Derivative assets
4,335
2,490
Prepaid income taxes
2,266
29,604
Deposits for acquisitions
352,500
—
Prepaid expenses and other
49,297
48,988
Total current assets
3,413,207
1,328,430
Property and equipment (successful efforts
method):
Proved properties
7,390,897
6,774,635
Less: accumulated depreciation, depletion,
and amortization
(1,628,303
)
(1,214,484
)
Total proved properties, net
5,762,594
5,560,151
Unproved properties
578,508
593,971
Wells in progress
316,119
407,351
Other property and equipment, net of
accumulated depreciation of $8,498 in 2023 and $7,329 in 2022
49,619
49,632
Total property and equipment, net
6,706,840
6,611,105
Long-term derivative assets
1,800
794
Right-of-use assets
41,572
24,125
Other noncurrent assets
7,567
6,945
Total assets
$
10,170,986
$
7,971,399
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
240,555
$
295,297
Production taxes payable
389,392
258,932
Oil and natural gas revenue distribution
payable
522,308
538,343
Derivative liability
21,438
46,334
Asset retirement obligations
25,557
25,557
Lease liability
21,841
13,464
Total current liabilities
1,221,091
1,177,927
Long-term liabilities:
Senior notes
3,048,511
393,293
Ad valorem taxes
153,371
412,650
Derivative liability
2,973
17,199
Deferred income tax liabilities
409,593
319,618
Asset retirement obligations
268,366
265,469
Lease liability
20,394
11,324
Total liabilities
5,124,299
2,597,480
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, 80,220,613 and 85,120,287 issued and outstanding
as of June 30, 2023 and December 31, 2022, respectively
4,869
4,918
Additional paid-in capital
3,957,513
4,211,197
Retained earnings
1,084,305
1,157,804
Total stockholders’ equity
5,046,687
5,373,919
Total liabilities and stockholders’
equity
$
10,170,986
$
7,971,399
Schedule 4: Adjusted EBITDAX (in
thousands, unaudited)
Adjusted EBITDAX 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. Adjusted
EBITDAX is a non-GAAP measure that we present 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
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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net income
$
139,287
$
468,821
$
341,748
$
560,460
Exploration
546
1,553
1,117
2,081
Depreciation, depletion, and
amortization
232,786
204,519
434,089
389,379
Abandonment and impairment of unproved
properties
—
—
—
17,975
Stock-based compensation(1)
9,895
6,135
17,275
14,225
Non-recurring general and administrative
expense(1)
—
3,449
—
6,335
Merger transaction costs
31,145
1,418
31,627
21,952
Unused commitments
363
1,731
754
2,507
(Gain) loss on property transactions,
net
13
—
254
(16,797
)
Interest expense
8,753
8,116
16,202
17,182
Interest income(2)
(6,588
)
—
(12,807
)
—
Derivative (gain) loss
(4,927
)
72,650
(30,087
)
368,143
Derivative cash settlements loss
(1,335
)
(181,631
)
(11,885
)
(348,209
)
Income tax expense
44,363
152,464
109,452
175,825
Adjusted EBITDAX
$
454,301
$
739,225
$
897,739
$
1,211,058
(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 5: Free
Cash Flow
(in thousands, unaudited)
Free cash flow is a supplemental non-GAAP
financial measure that is calculated as net cash provided by
operating activities before changes in current assets and
liabilities and less exploration and development of oil and natural
gas properties, changes in working capital related to capital
expenditures, and purchases of carbon offsets. We believe that free
cash flow provides additional information that may be useful to
investors in evaluating our ability to generate cash from our
existing oil and natural gas assets to fund future exploration and
development activities and to return cash to shareholders. 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 free
cash flow:
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net cash provided by operating
activities
$
337,181
$
722,227
$
876,030
$
1,254,768
Add back: changes in current assets and
liabilities
84,015
(48,465
)
(32,064
)
(141,817
)
Cash flow from operations before changes
in operating assets and liabilities
421,196
673,762
843,966
1,112,951
Less: exploration and development of oil
and natural gas properties
(268,560
)
(206,519
)
(518,949
)
(467,186
)
Less: changes in working capital related
to capital expenditures
42,246
(30,681
)
56,345
(2,666
)
Less: purchases of carbon offsets
(5,651
)
(7,196
)
(5,651
)
(7,196
)
Free cash flow
$
189,231
$
429,366
$
375,711
$
635,903
Schedule 6: Per unit
cash margins
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
Percent Change
2023
2022
Percent Change
Crude oil equivalent sales volumes
(MBoe)
15,788
15,945
(1
)%
30,136
30,256
—
%
Realized price (before
derivatives)
$
41.73
$
72.17
(42
)%
$
43.59
$
65.02
(33
)%
Per unit costs ($/Boe)
Lease operating expense
$
3.24
$
2.63
23
%
$
3.22
$
2.57
25
%
Midstream operating expense
$
0.84
$
0.47
79
%
$
0.78
$
0.44
77
%
Gathering, transportation, and
processing
$
4.11
$
4.99
(18
)%
$
4.39
$
4.29
2
%
Severance and ad valorem taxes
$
3.32
$
5.39
(38
)%
$
3.48
$
4.93
(29
)%
General and administrative expense
$
2.12
$
1.86
14
%
$
2.34
$
2.16
8
%
Stock-based compensation
$
(0.63
)
$
(0.38
)
66
%
$
(0.57
)
$
(0.47
)
21
%
Interest expense
$
0.55
$
0.51
8
%
$
0.54
$
0.57
(5
)%
Total cash costs
$
13.55
$
15.47
(12
)%
$
14.18
$
14.49
(2
)%
Cash margin (before derivatives)
$
28.18
$
56.70
(50
)%
$
29.41
$
50.53
(42
)%
Derivative cash settlements
$
(0.08
)
$
(11.39
)
(99
)%
$
(0.39
)
$
(11.51
)
(97
)%
Cash margin (after derivatives)
$
28.10
$
45.31
(38
)%
$
29.02
$
39.02
(26
)%
Non-cash items
Depreciation, depletion, and
amortization
$
14.74
$
12.83
15
%
$
14.40
$
12.87
12
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802804845/en/
Investor Relations: John Wren, ir@civiresources.com
Media: Rich Coolidge, info@civiresources.com
Civitas Resources (NYSE:CIVI)
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