Civitas Resources(US:CIVI)2025-05-07 20:32Financial Performance - Net income for the quarter was $186 million, or $1.99 per diluted share, with cash flows from operating activities amounting to $719 million[106]. - Product revenues decreased by 8% to $1.2 billion for the three months ended March 31, 2025, down from $1.3 billion in the previous quarter[123]. - Total operating expenses decreased by 10% to $879 million for the three months ended March 31, 2025, compared to $974 million for the three months ended December 31, 2024[124]. - Adjusted EBITDAX for Q1 2025 was $786 million, down from $895 million in Q4 2024[152]. - Adjusted Free Cash Flow for Q1 2025 was $171 million, significantly lower than $520 million in Q4 2024[153]. Sales and Production - Total sales volumes decreased by 14% to 28 MMBoe for the three months ended March 31, 2025, compared to 32 MMBoe for the previous quarter[106]. - Average sales price for crude oil increased by 1% to $70.90 per Bbl, while natural gas prices surged by 118% to $2.48 per Mcf compared to the previous quarter[119]. - During Q1 2025, the company drilled 22, completed 33, and turned to sales 47 net operated wells in the Permian Basin, compared to 36, 43, and 35 wells in Q1 2024[144]. Expenses and Costs - Lease operating expense increased by 1% to $174 million, with a 16% increase on a per Boe basis, primarily driven by fixed operating costs in the DJ Basin[124]. - Gathering, transportation, and processing expense decreased by 12% to $87 million, attributed to a 14% decrease in sales volumes[125]. - Severance and ad valorem taxes increased by 3% to $89 million, with a 20% increase on a per Boe basis due to updated mill levies[128]. - Depreciation, depletion, and amortization expense decreased by 18% to $445 million, primarily due to a 14% decrease in sales volumes[129]. - General and administrative expense increased by 8% to $57 million, with a 23% increase on a per Boe basis due to non-recurring severance charges[130]. Capital Expenditures and Investments - Capital expenditures for drilling and related activities totaled $495 million during the quarter[106]. - Capital expenditures for drilling and completion activities decreased by $97 million, reflecting a 5% reduction in the 2025 capital investment program compared to 2024[144]. - Cash proceeds from increased draws on the Credit Facility were used to pay $475 million for Vencer acquisition consideration and $281 million for oil and gas properties in the Permian Basin[146]. Shareholder Returns and Liquidity - The company repurchased approximately 1.5 million shares of common stock for a total of $71 million and paid cash dividends of $50 million[106]. - Free cash flow was prioritized for debt reduction, leading to a decrease in dividends declared and paid by $0.95 per share compared to Q1 2024, maintaining a base dividend of $0.50 per share quarterly[145]. - Liquidity as of March 31, 2025, was $1.5 billion, consisting of $20 million in cash and $1.4 billion in available borrowing capacity[136]. - The company had $1.1 billion outstanding under its Credit Facility as of March 31, 2025, with compliance to all financial covenants[160]. Market Conditions and Operational Flexibility - The average NYMEX WTI crude oil price for the quarter was $71.42, compared to $70.27 in the previous quarter[113]. - The Permian Basin crude oil differential was a premium to WTI, while the DJ Basin crude oil price included a higher-grade quality differential[115]. - The company recorded a cash settlement gain of $3 million from natural gas derivative contracts during the quarter[117]. - The company maintains operational flexibility to adjust capital spending in response to market conditions and external factors affecting commodity prices[109]. - The marketability of production is influenced by third-party infrastructure availability, which could impact pricing and production continuity[163].