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Civitas Resources First Quarter 2022 Results

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   |    Monday,May 09,2022

Civitas Resources, Inc. announced its first quarter 2022 financial results, and has posted an updated investor presentation to its website.

1Q Operational and Financial Highlights:

  • Average daily sales volumes of 159.0 thousand barrels of oil equivalent per day ("MBoe/d"), with oil representing 43% of total volumes (includes one month of volumes from the Bison acquisition, which closed March 1, 2022)
  • Total capital expenditures of $234.5 million
  • GAAP net income of $91.6 million for the first quarter 2022
  • Adjusted EBITDAX(1) of $471.8 million for the first quarter 2022
  • Lease operating expenses ("LOE") of $2.52 per Boe for the first quarter; up 14% from the fourth quarter of 2021, and down 17% from the first quarter of 2021
  • Recurring cash G&A(1) expense, which excludes non-cash and non-recurring expenses, was $24.7 million for the quarter, or $1.73 per Boe, down sequentially from $2.00 per Boe in the fourth quarter of 2021
  • Exited first quarter 2022 with approximately $0.9 billion of liquidity, including an undrawn credit facility and approximately $154.3 million of cash, after giving effect to an aggregate of $12.4 million of undrawn letters of credit

Dividends

The Company's board of directors has elected to pay a dividend of $1.3625/share in the second quarter, which reflects the combination of a variable dividend of $0.9000/share and a base fixed dividend of $0.4625/share. This dividend will be paid on June 29, 2022 to shareholders of record as of June 15, 2022. Additional detail regarding the calculation of the variable dividend can be found in the Company's new investor presentation.

Ben Dell, Chairman of Civitas, commented, "Our first quarter results continue to demonstrate our execution of the new E&P business model. We have successfully integrated Bison, kept a tight control on our costs and delivered significant free cash flow, which we are returning to shareholders. As we welcome our new President and Chief Executive Officer, Chris Doyle, we look forward to continuing the momentum and developing Civitas into a peer group leader on all aspects of the operating model."

First Quarter 2022 Results

During the first quarter of 2022, the Company reported average daily sales of 159.0 MBoe/d. Product mix for the first quarter was 43% crude oil, 31% natural gas, and 26% natural gas liquids. The table below provides sales volumes, product mix, and average sales prices for the first quarter 2022 and 2021.

Capital expenditures were $234.5 million for the first quarter of 2022. The Company drilled 52 gross (43 net) operated wells, completed 41 gross (37 net) operated wells, and turned to sales 49 gross (44 net) operated wells during the first quarter.

Net crude oil, natural gas, and natural gas liquids revenue for the first quarter of 2022 increased to $817.8 million compared to $510.5 million for the fourth quarter of 2021. The increase was a result of higher crude oil, natural gas, and natural gas liquids realized prices and a significant increase in sales volumes, primarily related the acquisitions that closed on November 1, 2021. Crude oil accounted for approximately 67% of total revenue for the quarter. Differentials for the Company's crude oil production, relative to WTI, averaged approximately negative $5.00 per barrel in the quarter.

LOE for the first quarter of 2022 on a unit basis increased to $2.52 per Boe from $2.22 per Boe in the fourth quarter of 2021.

Rocky Mountain Infrastructure ("RMI") net effective cost for the first quarter 2022 was $0.31 per Boe, which consists of $0.40 per Boe of midstream operating expense offset by $0.09 per Boe of RMI operating revenue from working interest partners. RMI operating revenue from working interest partners is based on production volumes and the fees are not tied to crude oil or natural gas prices.

The Company's general and administrative ("G&A") expenses were $35.7 million for the first quarter of 2022, which included $8.1 million in non-cash stock-based compensation and $2.9 million of other non-recurring G&A. Recurring cash G&A, which excludes non-recurring and non-cash items, was $24.7 million for the first quarter of 2022. On a per unit basis, the Company's recurring cash G&A decreased 14% sequentially from $2.00 per Boe in the fourth quarter of 2021 to $1.73 per Boe in the first quarter of 2022.

RMI net effective cost and recurring cash G&A are non-GAAP financial measures. Please see Schedule 7 and Schedule 8 at the end of this release for a reconciliation to the most comparable GAAP measure.

2022 Guidance

2022 Company guidance reflects the closing of the Bison acquisition on March 1, 2022. The Company expects an average crude oil price differential of roughly negative $6.00/Bbl relative to WTI during the year. Civitas does not expect to be a cash income taxpayer this year at the commodity prices assumed below.


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