Civitas Resources (CIVI) ended the recent trading session at $68.64, demonstrating a +0.5% swing from the preceding day's closing price. The stock fell short of the S&P 500, which registered a gain of 1.03% for the day. On the other hand, the Dow registered a gain of 0.34%, and the technology-centric Nasdaq increased by 1.51%.The oil and gas company's shares have seen an increase of 10.91% over the last month, surpassing the Oils-Energy sector's gain of 4.1% and the S&P 500's gain of 3.21%.The upcoming earn ...

Civitas Resources (CIVI) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Shares of this oil and gas company have returned +10.9% over the past month versus the Zacks S&P 500 composite's +3.2% change. The Zacks Oil and Gas - Exploration and Production - United States industry, to which Civitas belongs, has gained 8.3% over this period. Now the key question is: Where could the sto ...

Financial Data and Key Metrics Changes - Year-end 2023 proved reserves totaled nearly 700 million barrels of oil equivalent, up about 70% from last year, driven largely by the Tap Rock and Hibernia acquisitions [14] - Full year results for 2023 were in line with guidance, with nearly $1 billion returned to shareholders, consisting of two-thirds in dividends and one-third in share buybacks [26] - The company reduced its capital expenditures by $150 million for 2024 while maintaining expected full year production [12][29] Business Line Data and Key Metrics Changes - Fourth quarter production was 279,000 barrels of oil equivalent per day, with DJ basin volumes outperforming expectations, particularly in the Watkins area [44] - Approximately 70% of the 2024 activity will be focused in the Watkins area, with significant capital allocation planned for this high-return area [5][17] - The company anticipates modest production volume increases throughout 2024, with a strong exit rate from December 2023 [44][49] Market Data and Key Metrics Changes - The company expects free cash flow of approximately $1.3 billion in 2024, with dividends estimated at around $600 million, equating to a nearly 10% yield based on current stock price [46] - The remaining 40% of anticipated capital expenditures will be allocated to the DJ, with a focus on the Watkins area [45] Company Strategy and Development Direction - The 2024 plan focuses on maximizing free cash flow through disciplined investments, maintaining industry-leading shareholder returns, and improving the balance sheet [15] - The company is committed to a strong balance sheet with a long-term leverage target of 0.75x, while also pursuing a divestment program to enhance financial flexibility [30][39] - The integration of new Permian assets is expected to drive operational efficiencies and enhance returns, with a focus on continuous improvement [58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver long-term shareholder value, highlighting the transformation into a stronger company with diversified operations [12][31] - The management team noted that the operational improvements seen in the DJ basin are expected to be replicated in the Permian, with a focus on returns and efficiency [58] - There is optimism regarding the regulatory environment in Colorado, with indications that proposed drilling phase-out measures may not gain significant support [55] Other Important Information - The company has completed divestments totaling about one-third of its $300 million target, with plans to complete the remainder by mid-2024 [30] - The company has a remaining $425 million on its share repurchase authorization, indicating a strong commitment to returning capital to shareholders [46][88] Q&A Session Summary Question: What is the 2024 Permian production guide? - The company expects production of around 170,000 BOE per day from approximately 140 wells, with a focus on capital efficiencies and operational improvements [34] Question: How will the company manage operational efficiencies in the Permian? - Management noted early wins in reducing drilling days by 20-30% and emphasized a focus on returns and shortening the time from capital deployment to production [35][36] Question: What is the expected cash tax outlook for 2025 and beyond? - Management indicated that cash taxes are expected to be in the range of $150 million to $175 million per year at $75 oil [6] Question: How does the company plan to balance buybacks and debt reduction? - The company aims to balance shareholder returns with its leverage target, remaining opportunistic in share repurchases while focusing on long-term value creation [87][88]

For the quarter ended December 2023, Civitas Resources (CIVI) reported revenue of $1.13 billion, up 38.4% over the same period last year. EPS came in at $3.20, compared to $2.49 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $1.2 billion, representing a surprise of -6.35%. The company delivered an EPS surprise of +9.59%, with the consensus EPS estimate being $2.92.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall S ...

Civitas Resources (CIVI) came out with quarterly earnings of $3.20 per share, beating the Zacks Consensus Estimate of $2.92 per share. This compares to earnings of $2.49 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 9.59%. A quarter ago, it was expected that this oil and gas company would post earnings of $2.55 per share when it actually produced earnings of $1.56, delivering a surprise of -38.82%.Over the last four quarters ...

DENVER--(BUSINESS WIRE)--Civitas Resources, Inc. (NYSE: CIVI) (“Civitas” or the “Company”), today announced the execution of a definitive agreement to repurchase approximately 876 thousand shares of its common stock at a price of $64.54 per share from NGP Tap Rock Holdings, LLC and certain of its affiliates (“NGP”). The transaction was approved by the Company’s Board of Directors, and the repurchase is expected to close in early March 2024. Following the transaction, NGP will no longer own any shares of Civ ...

Civitas Announces Fourth Quarter and Full-Year 2023 Results DENVER — February 27, 2024 - Civitas Resources, Inc. (NYSE: CIVI) (the "Company" or "Civitas") today reported its fourth quarter and full-year 2023 financial and operating results, as well as provided its 2024 outlook. A webcast and conference call to discuss the results is planned for 8:00 a.m. MT (10:00 a.m. ET), February 28, 2024. Participation details are available in this release, and supplemental materials can be accessed on the Company's web ...

[Glossary of Crude Oil and Natural Gas Terms](index=6&type=section&id=Glossary%20of%20Crude%20Oil%20and%20Natural%20Gas%20Terms) This section provides definitions for key technical terms essential for understanding the company's crude oil and natural gas activities - The glossary defines terms such as 'Analogous reservoir,' 'Completion,' 'Boe' (barrel of oil equivalent), 'Developed acres,' 'Development costs,' 'Dry hole,' 'Economically producible,' 'Estimated ultimate recovery (EUR),' 'Horizontal drilling,' 'Net acres,' 'Proved reserves,' 'Proved developed reserves,' 'Proved undeveloped reserves,' 'Reasonable certainty,' 'Sales volumes,' and 'Undeveloped acreage,' among others[1](index=1&type=chunk)[2](index=2&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk)[370](index=370&type=chunk)[371](index=371&type=chunk)[372](index=372&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk) [PART I](index=11&type=section&id=PART%20I) [Item 1. Business](index=11&type=section&id=Item%201.%20Business) Civitas Resources is an E&P company in the DJ and Permian Basins focused on free cash flow and shareholder returns - Civitas is an independent exploration and production company primarily operating in the Denver-Julesburg (DJ) Basin in Colorado and the Permian Basin in Texas and New Mexico[170](index=170&type=chunk) - The company's core business strategies include generating significant **Free Cash Flow**, maintaining a **premier balance sheet**, consistently **returning cash to stockholders** through dividends and buybacks, and demonstrating **ESG leadership** by reducing GHG emissions and aiming for carbon neutrality[173](index=173&type=chunk)[174](index=174&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) - In 2023, Civitas completed the **Hibernia and Tap Rock Acquisitions**, expanding its operations into the Permian Basin, adding approximately **68,500 net acres** and **106,000 Boe per day**[203](index=203&type=chunk) | Metric | 2023 (MBoe) | | :----- | :---------- | | Total Proved Reserves | 697,799 | | Total Net Sales Volumes | 77,430 | | Average Daily Equivalents (MBoe/d) | 273.2 | *Note: Total proved reserves increased 68% from December 31, 2022, and average daily equivalent sales volumes increased 61% for the combined operations, primarily due to acquisitions* - The company achieved a **Total Recordable Incident Rate (TRIR) of 0.23** in 2023, below its target of 0.25, demonstrating strong safety performance[264](index=264&type=chunk) - Civitas is subject to extensive federal, state, and local regulations, including those related to environmental protection, air emissions, hydraulic fracturing, and pipeline safety[256](index=256&type=chunk)[257](index=257&type=chunk)[268](index=268&type=chunk)[276](index=276&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[300](index=300&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk)[318](index=318&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk)[346](index=346&type=chunk)[347](index=347&type=chunk)[354](index=354&type=chunk)[355](index=355&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from commodity price volatility, operations, regulations, and financial markets - Declines or volatility in crude oil, natural gas, and NGL prices are a primary risk, directly impacting revenue, profitability, cash flows, and the economic viability of reserves[17](index=17&type=chunk)[21](index=21&type=chunk)[23](index=23&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk)[363](index=363&type=chunk)[373](index=373&type=chunk)[374](index=374&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk) - Operational risks include the high-risk nature of drilling and production, challenges with horizontal drilling, potential for substantial losses and liability claims, and the need for significant capital expenditures to develop and replace reserves[30](index=30&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[106](index=106&type=chunk)[108](index=108&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[365](index=365&type=chunk)[376](index=376&type=chunk)[474](index=474&type=chunk)[475](index=475&type=chunk)[476](index=476&type=chunk)[477](index=477&type=chunk)[482](index=482&type=chunk)[483](index=483&type=chunk)[487](index=487&type=chunk)[493](index=493&type=chunk)[504](index=504&type=chunk)[505](index=505&type=chunk) - Acquisition-related risks include the inability to make attractive acquisitions, failure to realize anticipated benefits from mergers, and encountering new obstacles when expanding into different geographic regions like the Permian Basin[15](index=15&type=chunk)[55](index=55&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[117](index=117&type=chunk)[364](index=364&type=chunk)[378](index=378&type=chunk)[381](index=381&type=chunk)[484](index=484&type=chunk)[485](index=485&type=chunk)[494](index=494&type=chunk)[495](index=495&type=chunk) - Regulatory and environmental risks are significant, including evolving climate change laws, increased operating costs from GHG emission restrictions, potential for litigation, and heightened activism against oil and gas development, particularly in Colorado[18](index=18&type=chunk)[24](index=24&type=chunk)[31](index=31&type=chunk)[45](index=45&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[74](index=74&type=chunk)[85](index=85&type=chunk)[352](index=352&type=chunk)[362](index=362&type=chunk)[380](index=380&type=chunk)[418](index=418&type=chunk)[420](index=420&type=chunk)[436](index=436&type=chunk)[437](index=437&type=chunk)[450](index=450&type=chunk)[497](index=497&type=chunk)[498](index=498&type=chunk)[510](index=510&type=chunk)[511](index=511&type=chunk)[512](index=512&type=chunk)[517](index=517&type=chunk)[518](index=518&type=chunk)[519](index=519&type=chunk)[520](index=520&type=chunk)[521](index=521&type=chunk)[522](index=522&type=chunk)[523](index=523&type=chunk)[524](index=524&type=chunk)[525](index=525&type=chunk)[526](index=526&type=chunk)[532](index=532&type=chunk)[534](index=534&type=chunk)[537](index=537&type=chunk)[538](index=538&type=chunk)[539](index=539&type=chunk)[540](index=540&type=chunk)[541](index=541&type=chunk)[542](index=542&type=chunk) - Financial risks include derivative activities potentially leading to losses, debt covenants limiting financial flexibility, and exposure to credit risks of hedging counterparties and customers[51](index=51&type=chunk)[52](index=52&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk)[369](index=369&type=chunk)[375](index=375&type=chunk)[395](index=395&type=chunk)[396](index=396&type=chunk)[397](index=397&type=chunk)[502](index=502&type=chunk)[527](index=527&type=chunk)[528](index=528&type=chunk)[529](index=529&type=chunk)[543](index=543&type=chunk)[544](index=544&type=chunk) - Risks related to common stock include market price volatility, restrictions on dividend payments, and the influence of significant stockholders[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[379](index=379&type=chunk)[553](index=553&type=chunk)[554](index=554&type=chunk)[555](index=555&type=chunk)[556](index=556&type=chunk)[557](index=557&type=chunk)[558](index=558&type=chunk)[570](index=570&type=chunk)[571](index=571&type=chunk)[572](index=572&type=chunk)[573](index=573&type=chunk)[582](index=582&type=chunk)[583](index=583&type=chunk)[584](index=584&type=chunk)[585](index=585&type=chunk) [Item 1B. Unresolved Staff Comments](index=59&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[575](index=575&type=chunk) [Item 1C. Cybersecurity](index=59&type=section&id=Item%201C.%20Cybersecurity) The company maintains a robust cybersecurity program with Audit Committee oversight and has had no material breaches - Cybersecurity risk is overseen by the Audit Committee, with quarterly reports from management[586](index=586&type=chunk) - The Vice President of Information Technology leads cybersecurity initiatives, reporting to the Chief Administrative Officer and Corporate Secretary, and ensures alignment with industry best practices and compliance requirements[587](index=587&type=chunk)[589](index=589&type=chunk) - The company employs a robust system of data protection, cybersecurity resources, technology, and processes, structured according to the NIST Cybersecurity Framework, including annual training, internal/external audits, and a comprehensive incident response plan[590](index=590&type=chunk)[591](index=591&type=chunk) - Civitas has not experienced any material information security breaches or incurred material losses from penalties/settlements related to breaches in the last three years[592](index=592&type=chunk) [Item 2. Properties](index=60&type=section&id=Item%202.%20Properties) Information regarding the company's properties is incorporated by reference from Item 1 - Information required by Item 2 is contained in "Item 1. Business" and is incorporated by reference[593](index=593&type=chunk) [Item 3. Legal Proceedings](index=60&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to have a material adverse effect - Civitas is a party to various routine legal proceedings, disputes, and claims arising in the ordinary course of business, including those related to federal and state laws, personal injury, title, royalty, contract, contamination, and environmental claims[594](index=594&type=chunk) - Management believes that none of these matters, if ultimately decided adversely, will have a material adverse effect on the company's financial condition, results of operations, or cash flows[594](index=594&type=chunk) - The company has received Notices of Alleged Violations (NOAV) from the ECMC and Colorado Air Pollution Control Division, with anticipated penalties of approximately **$0.6 million**[577](index=577&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[579](index=579&type=chunk)[605](index=605&type=chunk) [PART II](index=62&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=62&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on the NYSE, with a dividend policy tied to Free Cash Flow and an active repurchase program - Civitas's common stock is listed on the NYSE under the symbol 'CIVI'[607](index=607&type=chunk) - The dividend policy includes quarterly base and variable cash dividends, with variable dividends equal to **50% of Free Cash Flow** after the base dividend, subject to leverage targets[581](index=581&type=chunk)[608](index=608&type=chunk) Common Stock Repurchases (Q4 2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :------------------------------- | :------------------------------- | :--------------------------- | | October 1, 2023 - October 31, 2023 | 912 | $79.11 | | November 1, 2023 - November 30, 2023 | 366 | $69.03 | | December 1, 2023 - December 31, 2023 | 87 | $69.29 | | Total | 1,365 | $75.78 | - In 2023, Civitas repurchased approximately **5.2 million shares** at an average price of $61.21 per share[175](index=175&type=chunk)[599](index=599&type=chunk)[603](index=603&type=chunk)[1164](index=1164&type=chunk) [Item 6. [Reserved]](index=63&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - Item 6 is reserved[609](index=609&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=64&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes 2023 financial performance, highlighting increased volumes from acquisitions and lower net income due to commodity prices - In 2023, Civitas's total sales volumes increased by **25%** compared to 2022, with average daily sales volumes rising to **273 MBoe/d** from 170 MBoe/d, primarily driven by the Hibernia and Tap Rock acquisitions[614](index=614&type=chunk) 2023 Financial and Operating Results | Metric | 2023 | 2022 | Change (%) | | :-------------------------------- | :--------- | :--------- | :--------- | | Net Income | $784.3 million | $1,248.1 million | -37.1% | | Diluted EPS | $9.02 | $14.58 | -38.1% | | Cash Flows from Operating Activities | $2.2 billion | $2.5 billion | -12.0% | | Free Cash Flow | $795.9 million | $1.2 billion | -34.4% | | Cash Dividends Declared | $668.7 million | $541.3 million | +23.5% | | Proved Reserves (MMBoe) | 697.8 | 416.0 | +67.7% | - Total product revenues decreased by **8% to $3.5 billion** in 2023, primarily due to a **26% decrease** in total commodity pricing, partially offset by the 25% increase in sales volumes from acquisitions[636](index=636&type=chunk) Average Sales Prices (Before Derivatives) | Commodity | 2023 (per unit) | 2022 (per unit) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | | Crude Oil (per Bbl) | $75.57 | $91.70 | -18% | | Natural Gas (per Mcf) | $2.28 | $6.15 | -63% | | NGL (per Bbl) | $21.35 | $35.76 | -40% | | Total (per Boe) | $44.86 | $61.03 | -26% | - Operating expenses increased by **29% to $2.34 billion** in 2023, with lease operating expense per Boe increasing by 42% due to higher costs in the Permian Basin and inflationary pressures in the DJ Basin[648](index=648&type=chunk)[700](index=700&type=chunk) - The 2024 capital program is projected to be between **$1.8 billion and $2.1 billion**, with approximately 60% allocated to the Permian Basin and 40% to the DJ Basin[621](index=621&type=chunk)[645](index=645&type=chunk) Adjusted EBITDAX Reconciliation | Metric | 2023 (in thousands) | 2022 (in thousands) | | :--------------------------------------- | :------------------ | :------------------ | | Net Income | $784,288 | $1,248,080 | | Exploration | $2,178 | $6,981 | | Depreciation, depletion, and amortization | $1,171,192 | $816,446 | | Abandonment and impairment of unproved properties | $0 | $17,975 | | Transaction costs | $84,328 | $24,683 | | Stock-based compensation | $34,931 | $31,367 | | Derivative (gain) loss | $(9,307) | $335,160 | | Derivative cash settlement loss | $(68,246) | $(576,802) | | Interest expense | $182,740 | $32,199 | | Income tax expense | $215,166 | $405,698 | | **Adjusted EBITDAX** | **$2,369,190** | **$2,347,585** | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from commodity prices, interest rates, and counterparty credit - Civitas's financial condition is highly dependent on crude oil and natural gas market prices, which are subject to wide fluctuations[404](index=404&type=chunk)[711](index=711&type=chunk) - A **10% decline** in SEC crude oil and natural gas prices would decrease proved reserve volumes by **3%** and PV-10 value by approximately **18% ($1.6 billion)**[404](index=404&type=chunk) - The company uses derivative contracts to manage commodity price risk, which can limit benefits from favorable price changes but also exposes them to financial losses[395](index=395&type=chunk)[396](index=396&type=chunk)[405](index=405&type=chunk)[712](index=712&type=chunk) - Borrowings under the Credit Facility bear fluctuating interest rates (ABR or SOFR), exposing the company to interest rate risk[713](index=713&type=chunk) - Civitas faces credit risk from hedging counterparties and customers, with significant concentrations in crude oil and natural gas receivables[407](index=407&type=chunk)[502](index=502&type=chunk)[527](index=527&type=chunk)[543](index=543&type=chunk)[714](index=714&type=chunk) - Marketability of production depends on the availability and capacity of third-party infrastructure, and disruptions could reduce prices or shut-in wells[715](index=715&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=81&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item presents the company's audited consolidated financial statements, supplementary data, and independent auditor's report [Report of Independent Registered Public Accounting Firm](index=81&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on the company's consolidated financial statements - Deloitte & Touche LLP provided an unqualified opinion on the consolidated financial statements for the three years ended December 31, 2023, stating they are presented fairly in all material respects in conformity with GAAP[701](index=701&type=chunk)[702](index=702&type=chunk) [Critical Audit Matters](index=81&type=section&id=Critical%20Audit%20Matters) Critical audit matters include estimating proved oil and gas reserves and valuing properties acquired in business combinations - A critical audit matter is the estimation of proved oil and gas reserve quantities, including management's assumptions for converting proved undeveloped reserves to producing properties within five years[704](index=704&type=chunk)[719](index=719&type=chunk) - Another critical audit matter is the valuation of oil and gas properties acquired in the Hibernia and Tap Rock acquisitions, which involved significant management judgment and complex inputs[722](index=722&type=chunk)[723](index=723&type=chunk) - Audit procedures included testing controls, comparing forecasts to historical data and industry reports, and evaluating the experience and methodologies of management's and independent experts[410](index=410&type=chunk)[411](index=411&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk)[417](index=417&type=chunk)[426](index=426&type=chunk)[438](index=438&type=chunk)[721](index=721&type=chunk)[723](index=723&type=chunk) [Consolidated Balance Sheets](index=84&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $14.1 billion in 2023, driven by acquisitions and a corresponding rise in liabilities Consolidated Balance Sheet Highlights (in thousands) | Metric | December 31, 2023 | December 31, 2022 | | :--------------------------------------- | :------------------ | :------------------ | | Total Current Assets | $2,144,412 | $1,328,430 | | Total Property and Equipment, Net | $11,820,216 | $6,611,105 | | Total Assets | $14,097,319 | $7,971,399 | | Total Current Liabilities | $1,851,887 | $1,177,927 | | Total Liabilities | $7,915,998 | $2,597,480 | | Total Stockholders' Equity | $6,181,321 | $5,373,919 | - Proved properties, net, increased significantly to **$10.4 billion** in 2023 from $5.6 billion in 2022, reflecting substantial investments and acquisitions[429](index=429&type=chunk) - Long-term liabilities saw a major increase, with senior notes rising to **$4.0 billion** and the credit facility balance at **$750.0 million** in 2023, primarily to fund acquisitions[429](index=429&type=chunk) [Consolidated Statements of Operations and Comprehensive Income](index=85&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Net income decreased in 2023 due to lower commodity prices and higher operating costs, despite increased sales volumes Consolidated Statements of Operations Highlights (in thousands) | Metric | 2023 | 2022 | 2021 | | :--------------------------------------- | :--------- | :--------- | :--------- | | Crude oil, natural gas, and NGL sales | $3,479,240 | $3,791,398 | $930,614 | | Total Operating Expenses | $2,339,760 | $1,807,358 | $608,551 | | Derivative gain (loss), net | $9,307 | $(335,160) | $(60,510) | | Interest expense | $(182,740) | $(32,199) | $(9,700) | | Income tax expense | $(215,166) | $(405,698) | $(72,858) | | Net Income | $784,288 | $1,248,080 | $178,921 | | Basic EPS | $9.09 | $14.68 | $4.82 | | Diluted EPS | $9.02 | $14.58 | $4.74 | - Crude oil, natural gas, and NGL sales decreased by **8% in 2023 to $3.48 billion**, primarily due to lower commodity prices, despite increased sales volumes[440](index=440&type=chunk)[636](index=636&type=chunk) - Total operating expenses increased by **29% to $2.34 billion** in 2023, driven by higher lease operating expenses, midstream operating expenses, and transaction costs[440](index=440&type=chunk)[700](index=700&type=chunk) [Consolidated Statements of Stockholders' Equity](index=86&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased to $6.18 billion in 2023, influenced by net income and stock issuance for acquisitions Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | December 31, 2023 | December 31, 2022 | December 31, 2021 | | :--------------------------------------- | :------------------ | :------------------ | :------------------ | | Total Stockholders' Equity | $6,181,321 | $5,373,919 | $4,654,998 | | Common Shares Outstanding | 93,774,901 | 85,120,287 | 84,572,846 | | Additional Paid-In Capital | $4,964,450 | $4,211,197 | $4,199,108 | | Retained Earnings | $1,211,867 | $1,157,804 | $450,978 | | Net Income | $784,288 | $1,248,080 | $178,921 | | Cash Dividends | $(668,669) | $(541,254) | $(61,704) | | Common Stock Repurchased and Retired | $(320,398) | $0 | $0 | - Issuance of common stock for acquisitions contributed **$990.1 million** to additional paid-in capital in 2023[433](index=433&type=chunk) - Cash dividends declared totaled **$668.7 million** in 2023, and the company repurchased and retired **$320.4 million** of common stock[433](index=433&type=chunk) [Consolidated Statements of Cash Flows](index=87&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased in 2023, while significant financing activities funded substantial business and property acquisitions Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 2023 | 2022 | 2021 | | :--------------------------------------- | :--------- | :--------- | :--------- | | Net Cash Provided by Operating Activities | $2,238,760 | $2,477,041 | $274,599 | | Net Cash Used in Investing Activities | $(5,243,155) | $(1,306,095) | $73,547 | | Net Cash Provided by (Used in) Financing Activities | $3,363,076 | $(657,368) | $(118,435) | | Net Change in Cash, Cash Equivalents, and Restricted Cash | $358,681 | $513,578 | $229,711 | | Cash, Cash Equivalents, and Restricted Cash (End of Period) | $1,126,815 | $768,134 | $254,556 | - Net cash provided by operating activities decreased by **$238.3 million to $2.2 billion** in 2023, mainly due to lower commodity prices and higher operating/transaction costs[660](index=660&type=chunk) - Net cash used in investing activities was **$5.2 billion** in 2023, primarily for business acquisitions (**$3.7 billion**) and exploration/development of properties (**$1.4 billion**)[662](index=662&type=chunk) - Net cash provided by financing activities was **$3.4 billion** in 2023, largely from **$3.7 billion** in senior notes issuance and **$750 million** in net credit facility borrowings, used to fund acquisitions[665](index=665&type=chunk) [Note 1 - Summary of Significant Accounting Policies](index=88&type=section&id=Note%201%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines key accounting policies, including the successful efforts method, fair value measurements, and revenue recognition - Civitas operates in one industry segment: acquisition, development, and production of crude oil and associated liquids-rich natural gas in the continental United States[448](index=448&type=chunk) - The company uses the **successful efforts method** of accounting for oil and natural gas properties, capitalizing development well costs and depleting them using the units-of-production method[456](index=456&type=chunk)[705](index=705&type=chunk) - Unproved properties are evaluated quarterly for impairment, considering factors like lease terms, drilling plans, commodity prices, and operational results[467](index=467&type=chunk)[706](index=706&type=chunk) - Revenue from crude oil, natural gas, and NGL sales is recognized when control transfers to the purchaser[783](index=783&type=chunk)[784](index=784&type=chunk)[785](index=785&type=chunk) - Asset retirement obligations are recognized at fair value for future abandonment costs of oil and gas properties, discounted using a credit-adjusted risk-free rate[770](index=770&type=chunk)[774](index=774&type=chunk) - The company periodically enters into commodity derivative contracts to mitigate exposure to adverse market changes, measuring them at fair value and recording changes in earnings[763](index=763&type=chunk)[771](index=771&type=chunk)[772](index=772&type=chunk) [Note 2 - Acquisitions and Divestitures](index=94&type=section&id=Note%202%20-%20Acquisitions%20and%20Divestitures) This note details significant 2023 acquisitions that expanded the company's Permian Basin operations - On August 2, 2023, Civitas acquired Hibernia Energy III Holdings, LLC for approximately **$2.2 billion in cash**, adding proved properties valued at $2.14 billion[802](index=802&type=chunk) - Also on August 2, 2023, Civitas acquired Tap Rock AcquisitionCo, LLC and related entities for approximately **$2.5 billion**, consisting of cash and 13.5 million shares of common stock[804](index=804&type=chunk)[813](index=813&type=chunk)[814](index=814&type=chunk) - The Vencer Acquisition, which closed on January 2, 2024, involved acquiring oil and gas properties for approximately **$2.05 billion** (cash and 7.3 million shares of common stock)[820](index=820&type=chunk) - Transaction costs related to these acquisitions were **$84.3 million** in 2023, expensed as incurred[821](index=821&type=chunk) - The results of operations for Hibernia and Tap Rock contributed approximately **$312.7 million** and **$410.4 million** in revenue, respectively, to Civitas's consolidated statements of operations for the period from August 2, 2023, through December 31, 2023[817](index=817&type=chunk)[826](index=826&type=chunk) [Note 3 - Revenue Recognition](index=98&type=section&id=Note%203%20-%20Revenue%20Recognition) This note details revenue recognition policies and provides a breakdown of operating net revenues by basin - Revenue is recognized at the point in time when control of produced crude oil, natural gas, or NGL volumes transfers to the purchaser[783](index=783&type=chunk) Disaggregated Operating Net Revenues (in thousands) | Product | DJ Basin (2023) | Permian Basin (2023) | Total (2023) | Total (2022) | Total (2021) | | :-------------------------- | :-------------- | :------------------- | :----------- | :----------- | :----------- | | Crude oil | $2,141,936 | $634,756 | $2,776,692 | $2,536,134 | $614,811 | | Natural gas | $284,670 | $25,050 | $309,720 | $695,079 | $144,708 | | NGL | $326,675 | $66,153 | $392,828 | $560,185 | $171,095 | | **Total Sales** | **$2,753,281** | **$725,959** | **$3,479,240** | **$3,791,398** | **$930,614** | [Note 4 - Accounts Payable and Accrued Expenses](index=98&type=section&id=Note%204%20-%20Accounts%20Payable%20and%20Accrued%20Expenses) This note provides a detailed breakdown of accounts payable and accrued expenses, showing significant increases in 2023 Accounts Payable and Accrued Expenses (in thousands) | Category | December 31, 2023 | December 31, 2022 | | :--------------------------------------- | :------------------ | :------------------ | | Accounts payable trade | $55,750 | $31,783 | | Accrued drilling and completion costs | $149,520 | $137,171 | | Accrued lease operating expense | $80,423 | $18,109 | | Accrued gathering, transportation, and processing | $69,060 | $59,398 | | Accrued general and administrative expense | $30,095 | $20,054 | | Accrued transaction costs | $8,796 | $0 | | Accrued commodity derivative settlements | $1,580 | $12,514 | | Accrued interest expense | $141,401 | $5,509 | | Other accrued expenses | $29,083 | $10,759 | | **Total** | **$565,708** | **$295,297** | - Total accounts payable and accrued expenses increased by **91.6%** from $295.3 million in 2022 to $565.7 million in 2023[827](index=827&type=chunk) - Accrued interest expense saw a substantial increase from **$5.5 million** in 2022 to **$141.4 million** in 2023, reflecting higher debt levels from recent acquisitions[827](index=827&type=chunk) [Note 5 - Long-Term Debt](index=99&type=section&id=Note%205%20-%20Long-Term%20Debt) This note details the company's long-term debt structure, including new Senior Notes issued to fund acquisitions Senior Notes Outstanding (in thousands) | Senior Notes | Interest Rate | Principal Amount | Principal Amount, Net (Dec 31, 2023) | | :------------------ | :------------ | :--------------- | :----------------------------------- | | 2026 Senior Notes | 5.000% | $400,000 | $394,929 | | 2028 Senior Notes | 8.375% | $1,350,000 | $1,328,463 | | 2030 Senior Notes | 8.625% | $1,000,000 | $984,400 | | 2031 Senior Notes | 8.750% | $1,350,000 | $1,327,940 | | **Total** | | **$4,100,000** | **$4,035,732** | - In June 2023, Civitas issued **$1.35 billion** each of 2028 Senior Notes and 2031 Senior Notes to fund a portion of the Hibernia and Tap Rock acquisitions[834](index=834&type=chunk) - In October 2023, **$1.0 billion** of 2030 Senior Notes were issued to fund a portion of the Vencer Acquisition[836](index=836&type=chunk) - The Credit Facility's aggregate elected commitments increased from $1.0 billion to **$1.85 billion**, the borrowing base increased to **$3.0 billion**, and the aggregate maximum credit commitment increased to **$4.0 billion** in August 2023[848](index=848&type=chunk)[849](index=849&type=chunk) - As of December 31, 2023, Civitas had a **$750.0 million** balance on its Credit Facility and **$1.1 billion** of available borrowing capacity[654](index=654&type=chunk)[767](index=767&type=chunk) - The company was in compliance with all financial and non-financial covenants under the Credit Facility and Senior Notes as of December 31, 2023[655](index=655&type=chunk)[839](index=839&type=chunk)[850](index=850&type=chunk) [Note 6 - Commitments and Contingencies](index=102&type=section&id=Note%206%20-%20Commitments%20and%20Contingencies) This note details contractual commitments for transportation and drilling, including anticipated shortfall payments - Civitas is party to a crude oil transportation services agreement requiring delivery of **20,000 Bbls/day** through December 2028, with an aggregate financial commitment of **$74.9 million**[736](index=736&type=chunk) - A gas gathering and processing agreement has an annual minimum volume commitment of **13.0 billion cubic feet** of natural gas through December 2029, with an aggregate financial commitment of **$79.0 million**[742](index=742&type=chunk) - The company recorded **$5.6 million** in other operating expense in 2023 due to volume deficiencies under the gas gathering agreement and anticipates approximately **$20.6 million** in future shortfall payments[742](index=742&type=chunk) - A drilling commitment agreement requires drilling and completing **106 qualifying wells** by December 31, 2026[744](index=744&type=chunk) Minimum Volume Commitments (in thousands) | Year | Firm Transportation | Minimum Volume | | :--- | :------------------ | :------------- | | 2024 | $18,932 | $29,583 | | 2025 | $6,501 | $30,952 | | 2026 | $0 | $28,774 | | 2027 | $0 | $28,720 | | 2028 and thereafter | $0 | $41,626 | | **Total** | **$25,433** | **$159,655** | [Note 7 - Stock-Based Compensation](index=105&type=section&id=Note%207%20-%20Stock-Based%20Compensation) This note describes the company's Long Term Incentive Plans, with total stock-based compensation expense of $34.9 million in 2023 - Civitas's LTIP includes RSUs, DSUs, PSUs, and stock options, with shares reserved under various equity plans[753](index=753&type=chunk) Stock-Based Compensation Expense (in thousands) | Award Type | 2023 | 2022 | 2021 | | :-------------------------- | :--------- | :--------- | :--------- | | Restricted and deferred stock units | $19,502 | $19,401 | $11,895 | | Performance stock units | $15,429 | $11,966 | $3,663 | | **Total** | **$34,931** | **$31,367** | **$15,558** | - PSUs granted in 2021 are expected to be released in Q1 2024 with a performance achievement of **142%**[860](index=860&type=chunk) PSU Valuation Assumptions (2023) | Metric | 2023 | | :---------------------- | :--------- | | Expected term (in years) | 3.0 | | Risk-free interest rate | 3.6% to 5.0% | | Expected daily volatility | 3.1% to 3.7% | [Note 8 - Fair Value Measurements](index=108&type=section&id=Note%208%20-%20Fair%20Value%20Measurements) This note outlines the fair value hierarchy used for financial and non-financial assets and liabilities - The fair value hierarchy consists of Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (significant unobservable inputs)[871](index=871&type=chunk)[912](index=912&type=chunk) - Crude oil and natural gas commodity price derivatives are measured using **Level 2 inputs**, based on industry-standard models and market-based inputs[873](index=873&type=chunk) Derivative Assets and Liabilities Fair Value (in thousands) | Category | December 31, 2023 (Level 2) | December 31, 2022 (Level 2) | | :----------------------- | :-------------------------- | :-------------------------- | | Derivative assets | $43,425 | $3,284 | | Derivative liabilities | $18,096 | $63,533 | - The fair value of Senior Notes is based on quoted market prices (**Level 1**), while acquired oil and gas properties and impairments are measured using **Level 3 inputs**[875](index=875&type=chunk)[879](index=879&type=chunk) [Note 9 - Derivatives](index=109&type=section&id=Note%209%20-%20Derivatives) This note details the company's commodity derivative contracts used to mitigate price volatility - Civitas uses commodity derivative contracts (swaps, collars, basis protection swaps, and puts) to mitigate exposure to adverse market changes in crude oil and natural gas prices[880](index=880&type=chunk) Crude Oil Derivatives as of December 31, 2023 (Bbl/day, $/Bbl) | Type | Q1 2024 Volumes | Q1 2024 Wtd-Avg Price | | :-------------------- | :---------------- | :-------------------- | | Swaps | 19,727 | $72.75 | | Two-Way Collars (Ceiling) | 27,913 | $88.38 | | Two-Way Collars (Floor) | 27,913 | $64.88 | | Three-Way Collars (Ceiling) | 573 | $56.25 | | Three-Way Collars (Floor) | 573 | $45.00 | | Three-Way Collars (Sold Put) | 573 | $35.00 | | Bought Puts | 7,942 | $55.00 | Natural Gas Derivatives as of December 31, 2023 (MMBtu/day, $/MMBtu) | Type | Q1 2024 Volumes | Q1 2024 Wtd-Avg Price | | :-------------------- | :---------------- | :-------------------- | | Swaps | 31,790 | $2.69 | | Two-Way Collars (Ceiling) | 736 | $3.16 | | Two-Way Collars (Floor) | 736 | $2.50 | | Three-Way Collars (Ceiling) | 1,166 | $3.50 | | Three-Way Collars (Floor) | 1,166 | $2.50 | | Three-Way Collars (Sold Put) | 1,166 | $2.00 | | Basis Protection Swaps | 33,691 | $(0.27) | Total Derivative Gain (Loss) (in thousands) | Metric | 2023 | 2022 | 2021 | | :--------------------------------------- | :--------- | :--------- | :--------- | | Derivative cash settlement gain (loss) | $(68,246) | $(576,802) | $(275,914) | | Change in fair value gain | $77,553 | $241,642 | $215,404 | | **Total derivative gain (loss)** | **$9,307** | **$(335,160)** | **$(60,510)** | [Note 10 - Asset Retirement Obligations](index=111&type=section&id=Note%2010%20-%20Asset%20Retirement%20Obligations) This note details the company's asset retirement obligations, which increased to $336.8 million in 2023 due to acquisitions - Civitas recognizes an estimated liability for future costs associated with the abandonment of oil and gas properties, discounted using a credit-adjusted risk-free rate[890](index=890&type=chunk)[893](index=893&type=chunk) Asset Retirement Obligation Roll-Forward (in thousands) | Metric | 2023 | 2022 | | :--------------------------------------- | :--------- | :--------- | | Balance, beginning of year | $291,026 | $225,315 | | Additional liabilities incurred with development activities and other | $7,516 | $1,919 | | Additional liabilities incurred with acquisitions | $40,373 | $1,112 | | Liabilities settled | $(19,136) | $(15,902) | | Accretion expense | $17,053 | $15,926 | | Revisions to estimate | $0 | $62,656 | | **Balance, end of year** | **$336,832** | **$291,026** | | Current portion | $31,116 | $25,557 | | Long-term portion | $305,716 | $265,469 | - Additional liabilities incurred with acquisitions significantly contributed to the increase in ARO, totaling **$40.4 million** in 2023[891](index=891&type=chunk) [Note 11 - Earnings Per Share](index=112&type=section&id=Note%2011%20-%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share, with diluted EPS at $9.02 for 2023 - Basic and diluted EPS are calculated using the treasury stock method, with diluted EPS including the effect of potentially dilutive securities[896](index=896&type=chunk) Earnings Per Common Share (in thousands, except per share amounts) | Metric | 2023 | 2022 | 2021 | | :--------------------------------------- | :--------- | :--------- | :--------- | | Net Income | $784,288 | $1,248,080 | $178,921 | | Basic earnings per common share | $9.09 | $14.68 | $4.82 | | Diluted earnings per common share | $9.02 | $14.58 | $4.74 | | Weighted-average shares outstanding - basic | 86,240 | 85,005 | 37,155 | | Add: dilutive effect of stock awards | 748 | 599 | 591 | | Weighted-average shares outstanding - diluted | 86,988 | 85,604 | 37,746 | - Warrants were excluded from EPS calculations for all periods presented as their exercise price exceeded the stock price, making them anti-dilutive[899](index=899&type=chunk) [Note 12 - Income Taxes](index=113&type=section&id=Note%2012%20-%20Income%20Taxes) This note details income tax provisions, with a total expense of $215.2 million and an effective tax rate of 21.5% for 2023 - Income taxes are accounted for under the asset and liability method, recognizing deferred tax assets and liabilities for temporary differences[789](index=789&type=chunk) Provision for Income Taxes (in thousands) | Category | 2023 | 2022 | 2021 | | :--------------------------------------- | :--------- | :--------- | :--------- | | Total current tax expense (benefit) | $(29,997) | $68,196 | $0 | | Total deferred tax expense | $245,163 | $337,502 | $72,858 | | **Total income tax expense** | **$215,166** | **$405,698** | **$72,858** | - The effective tax rate for 2023 was **21.5%**, differing from the 21% federal statutory rate due to state income taxes and other permanent differences[670](index=670&type=chunk)[905](index=905&type=chunk) - Civitas had **$2.1 billion** in federal net operating loss carryforwards as of December 31, 2023, with some subject to Section 382 limitations[902](index=902&type=chunk)[904](index=904&type=chunk) [Note 13 - Leases](index=115&type=section&id=Note%2013%20-%20Leases) This note details the company's lease accounting, with total lease cost in 2023 amounting to $113.9 million - Operating and finance leases with terms greater than 12 months are recognized on the balance sheets, with right-of-use assets and lease liabilities measured at the present value of lease payments[471](index=471&type=chunk) Total Lease Cost (in thousands) | Category | 2023 | 2022 | 2021 | | :----------------------- | :--------- | :--------- | :--------- | | Operating lease cost | $32,769 | $21,050 | $15,449 | | Finance lease cost (Amortization of ROU assets) | $1,275 | $0 | $3 | | Finance lease cost (Interest on lease liabilities) | $442 | $0 | $1 | | Short-term lease cost | $79,405 | $55,059 | $3,662 | | **Total lease cost** | **$113,891** | **$76,109** | **$19,115** | Right-of-Use Assets and Lease Liabilities (in thousands) | Category | December 31, 2023 | December 31, 2022 | | :--------------------------------------- | :------------------ | :------------------ | | Operating Leases (Right-of-Use Asset) | $78,266 | $24,125 | | Operating Leases (Lease Liability) | $79,134 | $24,788 | | Finance Leases (Right-of-Use Asset) | $16,340 | $0 | | Finance Leases (Lease Liability) | $16,404 | $0 | [Note 14 - Supplemental Disclosures of Cash Flow Information](index=116&type=section&id=Note%2014%20-%20Supplemental%20Disclosures%20of%20Cash%20Flow%20Information) This note provides supplemental cash flow data, highlighting significant non-cash activities related to 2023 acquisitions Supplemental Cash Flow Information (in thousands) | Metric | 2023 | 2022 | 2021 | | :--------------------------------------- | :--------- | :--------- | :--------- | | Cash (paid) refunded for income taxes | $50,049 | $(97,800) | $(14,000) | | Cash paid for interest | $(37,112) | $(28,528) | $(1,829) | | Investing activities for property additions related to acquisitions of businesses | $1,049,129 | $0 | $4,911,186 | | Issuance of common stock for acquisition of businesses | $990,204 | $0 | $3,481,312 | | Right-of-use assets obtained in exchange for new operating lease obligations | $85,521 | $4,874 | $25,469 | | Right-of-use assets obtained in exchange for new finance lease obligations | $17,614 | $0 | $0 | - In 2023, significant non-cash investing activities included **$1.05 billion** for property additions related to business acquisitions and **$990.2 million** for common stock issued for acquisitions[943](index=943&type=chunk) [Note 15 - Stockholders' Equity](index=116&type=section&id=Note%2015%20-%20Stockholders'%20Equity) This note details share repurchase activities and the dividend policy, with $668.7 million in dividends declared in 2023 - In January 2023, Civitas repurchased approximately **4.9 million shares** of common stock for **$300.0 million** in a privately-negotiated transaction[863](index=863&type=chunk) - Under its stock repurchase program, the company repurchased approximately **312,800 shares for $20.3 million** in 2023, with the program's authorization reduced to $500.0 million[864](index=864&type=chunk) - In February 2024, Civitas entered into another privately-negotiated agreement to purchase approximately **876,200 shares for $56.5 million**[945](index=945&type=chunk) Dividends Declared (in thousands, except per share amounts) | Dividend Type | 2023 (per share) | 2022 (per share) | 2021 (per share) | | :-------------------- | :--------------- | :--------------- | :--------------- | | Base dividend | $2.00 | $1.89 | $1.16 | | Variable dividend | $5.60 | $4.40 | $0 | | **Total dividend** | **$7.60** | **$6.29** | **$1.16** | | Total dividend (in thousands) | $668,669 | $541,254 | $61,704 | [Note 16 - Disclosures About Crude Oil and Natural Gas Producing Activities (Unaudited)](index=117&type=section&id=Note%2016%20-%20Disclosures%20About%20Crude%20Oil%20and%20Natural%20Gas%20Producing%20Activities%20(Unaudited)) This note provides unaudited disclosures on reserves, which increased significantly in 2023 due to acquisitions - Proved reserve estimates are inherently imprecise and subject to revision based on production history, development, and price changes[856](index=856&type=chunk) Proved Reserves Roll-Forward (MBoe) | Metric | December 31, 2023 | December 31, 2022 | December 31, 2021 | | :--------------------------------------- | :------------------ | :------------------ | :------------------ | | Beginning of year | 416,019 | 397,690 | 118,192 | | Extensions, discoveries, and other additions | 21,513 | 27,904 | 36 | | Production | (77,430) | (62,063) | (8,595) | | Acquisition of reserves | 372,377 | 27,269 | 332,093 | | Revisions to previous estimates | (27,982) | 25,447 | (19,983) | | **End of year** | **697,799** | **416,019** | **397,690** | | Proved developed reserves (End of year) | 541,239 | 344,904 | 317,839 | | Proved undeveloped reserves (End of year) | 156,560 | 71,115 | 79,851 | - In 2023, proved reserves increased by **67.7% to 697,799 MBoe**, primarily due to **372,377 MBoe** from acquisitions (Hibernia and Tap Rock)[189](index=189&type=chunk)[208](index=208&type=chunk)[857](index=857&type=chunk) - Negative revisions of **28.0 MMBoe** in 2023 were driven by lower SEC prices (WTI crude oil $78.22/Bbl, HH natural gas $2.64/MMBtu), non-producing wells, and updates to production costs and well performance[200](index=200&type=chunk)[916](index=916&type=chunk) Standardized Measure of Discounted Future Net Cash Flows (in thousands) | Metric | 2023 | 2022 | 2021 | | :--------------------------------------- | :--------- | :--------- | :--------- | | Future cash flows | $27,947,743 | $23,225,188 | $14,401,814 | | Future production costs | $(11,038,268) | $(6,490,522) | $(5,054,695) | | Future development costs | $(2,366,582) | $(1,337,494) | $(1,107,576) | | Future income tax expense | $(1,605,756) | $(2,870,178) | $(1,465,949) | | Future net cash flows | $12,937,137 | $12,526,994 | $6,773,594 | | 10% annual discount | $(4,667,858) | $(4,599,504) | $(2,361,490) | | **Standardized measure** | **$8,269,279** | **$7,927,490** | **$4,412,104** | [Item 9. Disagreements with Accountants on Accounting and Financial Disclosure](index=121&type=section&id=Item%209.%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no disagreements with accountants on accounting and financial disclosure matters - There were no changes in or disagreements with accountants on accounting and financial disclosure[925](index=925&type=chunk) [Item 9A. Controls and Procedures](index=121&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2023[927](index=927&type=chunk) - Management assessed and determined that internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[931](index=931&type=chunk) - The assessment of internal control over financial reporting excluded the internal controls of the Hibernia and Tap Rock acquisitions, which represented approximately **9% and 12% of total revenues**, respectively, for 2023[931](index=931&type=chunk)[938](index=938&type=chunk) - Deloitte & Touche LLP issued an unqualified opinion on the effectiveness of internal control over financial reporting as of December 31, 2023[932](index=932&type=chunk)[936](index=936&type=chunk) - There were no changes in internal control over financial reporting during Q4 2023 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[933](index=933&type=chunk) [Item 9B. Other Information](index=123&type=section&id=Item%209B.%20Other%20Information) This item states that there is no other information to report - No other information is reported under this item[950](index=950&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=123&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item states that disclosures regarding foreign jurisdictions that prevent inspections are not applicable - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[951](index=951&type=chunk) [PART III](index=124&type=section&id=PART%20III) [Item 10. Directors, Executive Officers, and Corporate Governance](index=124&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information for this item will be incorporated by reference from a future proxy statement filing - Information for this item will be incorporated by reference from a future SEC filing within 120 days after December 31, 2023[954](index=954&type=chunk) - The Board has adopted a Code of Business Conduct and Ethics applicable to all officers, directors, and employees, available on the company's website[955](index=955&type=chunk) [Item 11. Executive Compensation](index=124&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation will be incorporated by reference from a future proxy statement filing - Information for this item will be incorporated by reference from a future SEC filing within 120 days after December 31, 2023[956](index=956&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=124&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership will be incorporated by reference from a future proxy statement filing - Information for this item will be incorporated by reference from a future SEC filing within 120 days after December 31, 2023[957](index=957&type=chunk) [Item 13. Certain Relationships and Related Transaction and Director Independence](index=124&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transaction%20and%20Director%20Independence) Information regarding related transactions and director independence will be incorporated by reference from a future proxy statement filing - Information for this item will be incorporated by reference from a future SEC filing within 120 days after December 31, 2023[958](index=958&type=chunk) [Item 14. Principal Accounting Fees and Services (PCAOB ID No. 34)](index=124&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services%20(PCAOB%20ID%20No.%2034)) Information regarding principal accounting fees and services will be incorporated by reference from a future proxy statement filing - Information for this item will be incorporated by reference from a future SEC filing within 120 days after December 31, 2023[959](index=959&type=chunk) [PART IV](index=125&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules.](index=125&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules.) This section lists all financial statements, schedules, and exhibits filed as part of the Annual Report - The report includes financial statements as per Item 8 and lists numerous exhibits, including merger agreements, purchase agreements, indentures for senior notes, long-term incentive plans, and certifications[962](index=962&type=chunk)[963](index=963&type=chunk)[964](index=964&type=chunk)[965](index=965&type=chunk)[967](index=967&type=chunk) [Item 16. Form 10-K Summary](index=129&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K summary is provided - No Form 10-K Summary is provided[967](index=967&type=chunk) [Signatures](index=130&type=section&id=Signatures) This section contains the required signatures for the Annual Report on Form 10-K - The report is signed by Chris Doyle (President, CEO, and Director), Marianella Foschi (CFO and Treasurer), Kayla D. Baird (SVP and Chief Accounting Officer), and other directors, affirming compliance with Securities Exchange Act of 1934 requirements[969](index=969&type=chunk)[971](index=971&type=chunk)

The market expects Civitas Resources (CIVI) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be ...

Buy These 5 Ultra-Yield Dividend Energy Stocks Now GoodLifeStudio / E+ via Getty Images Since topping out at $120 in the summer of 2022, the major oil benchmarks had traded down every month until bottoming at the beginning of December. The decline from the top in June of 2022 was a staggering 40%, and while the oil majors can still make money at that level, with a declining price, many opted to slow or halt production. By March of 2023, West Texas Intermediate had dropped to $67.61, a bottom that remained ...