Civitas Resources (CIVI) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $216 million ($2.15 per diluted share), with adjusted EBITDAX of $918 million and operating cash flow of $360 million; H1 2024 net income was $391.8 million.

• Total sales volumes reached 343 MBoe/d in Q2 2024, up 2% sequentially and 105% year-over-year, driven by acquisitions and Permian Basin outperformance.

• Integration of Permian and DJ Basin assets enhanced portfolio scale, quality, and capital flexibility, with strong well performance and cost efficiencies.

• Shareholder returns in Q2 2024 totaled $274–$275 million, including $1.50/share in dividends and $125 million in share repurchases; a new $500 million buyback program was authorized.

• Closed the Vencer Acquisition in January 2024, adding 44,000 net acres and 49 MBoe/d production in the Midland Basin.

Financial highlights

• Q2 2024 product revenue was $1.31 billion, flat sequentially; H1 2024 revenue was $2.64 billion, up 101% year-over-year.

• Adjusted EBITDAX for Q2 2024 was $918 million; adjusted free cash flow was $235–$275 million.

• Cash operating expenses per BOE were $8.97, down 2.5% sequentially and below expectations.

• Capital expenditures were $566.5 million in Q2 and $1.2 billion in H1 2024, with well costs in the Midland Basin down 10% year-to-date.

• Financial liquidity at June 30, 2024, was $1.4 billion, with net debt at $5.37–$5.39 billion.

Outlook and guidance

• 2024 capital expenditure guidance reduced by $50 million to $1.85–$1.95 billion, reflecting well cost efficiencies.

• Full-year 2024 sales volume outlook raised to 335–345 MBoe/d, a 3% increase at midpoint from original guidance.

• Third quarter volumes and oil production expected to be higher than Q2, with increases in both Permian and DJ Basins.

• Second half 2024 free cash flow expected to exceed $900 million; 2024 FCF projected at ~$1.3 billion at $75/Bbl and $2.75/Mcf.

• Variable dividends to be set at 50% of Adjusted Free Cash Flow, net of base dividend and share repurchases, starting Q3 2024.