Civitas Resources Reports Second Quarter 2024 Results
Capital return framework enhanced for share repurchase flexibility and balance sheet support, with buyback authorization increased to
Lower well costs driving
Key Second Quarter 2024 Results
|
Three Months Ended
|
|
Six Months Ended
|
Net Income ($MM) |
|
|
|
Adjusted Net Income ($MM)(1) |
|
|
|
Operating Cash Flow ($MM) |
|
|
|
Adjusted EBITDAX ($MM)(1) |
|
|
|
Total Sales Volumes (MBoe/d) |
342.9 |
|
339.2 |
Oil Volumes (MBbl/d) |
155.3 |
|
155.7 |
Capital Expenditures ($MM) |
|
|
|
Adjusted Free Cash Flow ($MM)(1) |
|
|
|
(1) Non-GAAP financial measure; see attached reconciliation schedules at the end of this release. |
Additional Highlights
-
Permian Basin sales volumes increased nearly 12% from the first quarter, driven by strong production from recentDelaware andMidland Basin wells. -
Well costs in the
Midland Basin are currently 10% lower than at the start of the year, enhancing well-level average rates of return by more than 10% (at$70 per barrel WTI). -
Total cash operating expense per BOE was
$8.97 , below expectation and the first quarter of 2024. -
Commenced production on 13 four-mile laterals from the
Watkins area of theDJ Basin (the longest laterals ever drilled and completed inColorado ) in lateJune 2024 . -
Return of capital to shareholders totaled
$274 million , including dividends paid of$1.50 per share and share repurchases of$125 million , or 1,766,808 shares at an average price of$70.70 per share. -
The Company amended its credit facility to increase the borrowing base by
$400 million (to$3.4 billion ) and its elected commitment by$350 million (to$2.2 billion ) during theMay 2024 redetermination.
Shareholder Return Framework Adds Flexibility for Buybacks
Civitas maintains one of the industry’s premier shareholder return programs, distributing to shareholders a strong base dividend and at least 50% of its free cash flow, after the base dividend, in the form of a variable return.
The Company's Board of Directors recently enhanced Civitas' shareholder return program to add flexibility in the way it returns the variable component to shareholders. Beginning with the third quarter, the variable return of capital will now be provided through a combination of common stock repurchases and dividends, with the quarterly allocation between the two determined by management and the Board. The base dividend remains unchanged at
As part of the enhanced capital return framework, the Board authorized a new share repurchase program of up to
The remaining 50% of free cash flow, after the base dividend, will support the Company's balance sheet initiatives, with a long-term leverage target unchanged at less than 0.75 times EBITDAX (earnings before interest, taxes, depreciation and exploration).
CEO Quote
“Civitas’ team and assets continue to perform very well, as demonstrated by our strong second quarter results,” said CEO
Second Quarter 2024 Financial and Operating Results
Crude oil, natural gas, and natural gas liquids ("NGL") sales for the second quarter of 2024 were
Sales volumes exceeded expectations at 343 MBoe/d, benefiting from continued strong well performance and accelerated turn-in-line timing. Crude oil volumes were consistent with expectations and relatively flat from the first quarter of the year, with higher natural gas and NGL volumes in the
Second quarter
In the second quarter of 2024, differentials for the Company's crude oil and natural gas averaged a reduction of
The following table presents crude oil, natural gas, and NGL sales volumes by operating region as well as consolidated average sales prices for the periods presented:
|
|
Three Months Ended |
||||
|
|
|
|
|
||
Average sales volumes per day |
|
|
|
|
||
Crude oil (Bbls/d) |
|
|
|
|
||
|
|
|
67,846 |
|
|
73,132 |
|
|
|
87,495 |
|
|
83,022 |
Total |
|
|
155,341 |
|
|
156,154 |
Natural gas (Mcf/d) |
|
|
|
|
||
|
|
|
315,308 |
|
|
343,736 |
|
|
|
282,659 |
|
|
253,121 |
Total |
|
|
597,967 |
|
|
596,857 |
Natural gas liquids (Bbls/d) |
|
|
|
|
||
|
|
|
36,648 |
|
|
38,473 |
|
|
|
51,220 |
|
|
41,396 |
Total |
|
|
87,868 |
|
|
79,869 |
Average sales volumes per day (Boe/d) |
|
|
|
|
||
|
|
|
157,044 |
|
|
168,889 |
|
|
|
185,824 |
|
|
166,604 |
Total |
|
|
342,868 |
|
|
335,493 |
|
|
|
|
|
||
Average sales prices (before derivatives): |
|
|
|
|
||
Crude oil (per Bbl) |
|
$ |
80.27 |
|
$ |
75.69 |
Natural gas (per Mcf) |
|
$ |
0.17 |
|
$ |
1.60 |
Natural gas liquids (per Bbl) |
|
$ |
20.94 |
|
$ |
22.73 |
Total (per Boe) |
|
$ |
42.03 |
|
$ |
43.49 |
Realized hedging losses totaled
Total cash operating expense per BOE, including lease operating expense, gathering, transportation and processing expenses, midstream operating expense, as well as cash general and administrative (a non-GAAP measure(1)), for the second quarter of 2024 was
Depreciation, depletion and amortization was
Interest expense of
As of the end of the second quarter, Civitas' financial liquidity was
(1) Non-GAAP financial measure; see attached reconciliation schedules at the end of this release. |
Second Quarter Capital Expenditures Benefit from Well Cost Savings
Capital expenditures for the second quarter totaled
During the second quarter, the Company drilled, completed, and turned to sales 34, 32, and 49 gross wells (32, 30, and 41 net), respectively, in the
The following table presents capital expenditures by operating region:
|
|
Three Months Ended |
|||||
|
|
|
|
|
|||
Capital expenditures (in thousands) |
|
|
|
|
|||
|
|
$ |
264,402 |
|
|
$ |
262,595 |
|
|
|
302,587 |
|
|
|
386,234 |
Other/Corporate |
|
|
(480 |
) |
|
|
703 |
Total |
|
$ |
566,509 |
|
|
$ |
649,532 |
2024 Outlook Enhanced Through Lower Capex and Higher Volumes
Civitas continues to find innovative ways to safely reduce well costs and enhance production. Recent accomplishments have led to a
Full-year 2024 expected sales volumes were increased to the upper half of the Company's original range, now expected between 335 and 345 MBoe/d. The increase in total sales volumes represents a 3% increase at the midpoint from original guidance, after adjusting for asset sales. Civitas reiterated its expectation for full-year oil volumes. Third quarter total volumes and oil are anticipated to be higher than the second quarter, with increases expected in both the
Updated full-year guidance, including a reduced cash operating expense outlook, can be found in the Company's supplemental earnings presentation on the Company's website.
Webcast / Conference Call Information
The Company plans to host a webcast and conference call at
About
Cautionary Statement Regarding Forward-Looking Information
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 included in this press release include statements regarding the Company’s plans and expectations with respect to the future production, capital expenditures, dividend payments, and share repurchases, and the effects of such 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,(the “Exchange Act”), 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 Civitas' recent 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 inflation, disruption in the financial markets, and the availability of credit on acceptable terms; the Company’s ability to identify and select possible additional acquisition and disposition opportunities; 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
Additional information concerning other factors that could cause results to differ materially from those described above can be found under Item 1A. “Risk Factors” and “Management’s Discussion and Analysis” sections in the Company’s Annual Report on Form 10-K for the year ended
All forward-looking statements speak only as of the date they are made and are based on information available at the time they were made. The Company assumes no 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.
Disclaimer
Civitas’ share repurchase program permits the Company to make repurchases on a discretionary basis as determined by management and the Board, subject to market conditions, applicable legal requirements, available liquidity, compliance with the Company's debt agreements, and other appropriate factors. Repurchases under the share repurchase program are to be made through open market or privately negotiated transactions and may be made pursuant to plans entered into in accordance with Rule 10b5-1 and/or Rule 10b-18 of the Exchange Act. The share repurchase program does not have a termination date, does not obligate Civitas to acquire any particular amount of common stock, and may be modified, extended, suspended, or discontinued at any time without prior notice. No assurance can be given that any particular amount of common stock will be repurchased.
Schedule 1: Condensed Consolidated Statements of Operations (in thousands, except for per share amounts, unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Operating net revenues: |
|
|
|
|
|
|
|
||||||||
Crude oil, natural gas, and NGL sales |
$ |
1,311,532 |
|
|
$ |
658,840 |
|
|
$ |
2,639,288 |
|
|
$ |
1,313,681 |
|
Other operating income |
|
1,162 |
|
|
|
1,686 |
|
|
|
2,609 |
|
|
|
2,867 |
|
Total operating net revenues |
|
1,312,694 |
|
|
|
660,526 |
|
|
|
2,641,897 |
|
|
|
1,316,548 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Lease operating expense |
|
126,606 |
|
|
|
51,230 |
|
|
|
258,071 |
|
|
|
97,068 |
|
Midstream operating expense |
|
11,939 |
|
|
|
13,319 |
|
|
|
25,500 |
|
|
|
23,380 |
|
Gathering, transportation, and processing |
|
94,469 |
|
|
|
64,873 |
|
|
|
183,370 |
|
|
|
132,225 |
|
Severance and ad valorem taxes |
|
101,913 |
|
|
|
52,443 |
|
|
|
203,819 |
|
|
|
104,805 |
|
Exploration |
|
1,340 |
|
|
|
546 |
|
|
|
12,874 |
|
|
|
1,117 |
|
Depreciation, depletion, and amortization |
|
521,090 |
|
|
|
232,786 |
|
|
|
987,930 |
|
|
|
434,089 |
|
Transaction costs |
|
7,877 |
|
|
|
31,145 |
|
|
|
30,597 |
|
|
|
31,627 |
|
General and administrative expense (including |
|
59,135 |
|
|
|
33,541 |
|
|
|
117,013 |
|
|
|
70,399 |
|
Other operating expense |
|
1,458 |
|
|
|
1,199 |
|
|
|
9,024 |
|
|
|
1,337 |
|
Total operating expenses |
|
925,827 |
|
|
|
481,082 |
|
|
|
1,828,198 |
|
|
|
896,047 |
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Derivative gain (loss), net |
|
7,578 |
|
|
|
4,927 |
|
|
|
(102,102 |
) |
|
|
30,087 |
|
Interest expense |
|
(114,897 |
) |
|
|
(8,753 |
) |
|
|
(224,683 |
) |
|
|
(16,202 |
) |
Loss on property transactions, net |
|
— |
|
|
|
(13 |
) |
|
|
(1,430 |
) |
|
|
(254 |
) |
Other income |
|
3,434 |
|
|
|
8,045 |
|
|
|
8,338 |
|
|
|
17,068 |
|
Total other income (expense) |
|
(103,885 |
) |
|
|
4,206 |
|
|
|
(319,877 |
) |
|
|
30,699 |
|
Income from operations before income taxes |
|
282,982 |
|
|
|
183,650 |
|
|
|
493,822 |
|
|
|
451,200 |
|
Income tax expense |
|
(66,993 |
) |
|
|
(44,363 |
) |
|
|
(102,012 |
) |
|
|
(109,452 |
) |
Net income |
$ |
215,989 |
|
|
$ |
139,287 |
|
|
$ |
391,810 |
|
|
$ |
341,748 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
2.17 |
|
|
$ |
1.73 |
|
|
$ |
3.92 |
|
|
$ |
4.22 |
|
Diluted |
$ |
2.15 |
|
|
$ |
1.72 |
|
|
$ |
3.88 |
|
|
$ |
4.18 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
99,426 |
|
|
|
80,393 |
|
|
|
100,062 |
|
|
|
81,052 |
|
Diluted |
|
100,245 |
|
|
|
81,144 |
|
|
|
100,865 |
|
|
|
81,824 |
|
Schedule 2: Condensed Consolidated Statements of Cash Flows (in thousands, unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
215,989 |
|
|
$ |
139,287 |
|
|
$ |
391,810 |
|
|
$ |
341,748 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation, depletion, and amortization |
|
521,090 |
|
|
|
232,786 |
|
|
|
987,930 |
|
|
|
434,089 |
|
Stock-based compensation |
|
12,262 |
|
|
|
9,895 |
|
|
|
23,461 |
|
|
|
17,275 |
|
Derivative (gain) loss, net |
|
(7,578 |
) |
|
|
(4,927 |
) |
|
|
102,102 |
|
|
|
(30,087 |
) |
Derivative cash settlement loss, net |
|
(12,752 |
) |
|
|
(1,335 |
) |
|
|
(23,907 |
) |
|
|
(11,885 |
) |
Amortization of deferred financing costs and deferred acquisition consideration |
|
13,044 |
|
|
|
1,155 |
|
|
|
25,389 |
|
|
|
2,305 |
|
Loss on property transactions, net |
|
— |
|
|
|
13 |
|
|
|
1,430 |
|
|
|
254 |
|
Deferred income tax expense |
|
62,695 |
|
|
|
44,022 |
|
|
|
92,689 |
|
|
|
89,975 |
|
Other, net |
|
(930 |
) |
|
|
300 |
|
|
|
(1,965 |
) |
|
|
292 |
|
Changes in operating assets and liabilities, net |
|
(444,252 |
) |
|
|
(84,015 |
) |
|
|
(426,819 |
) |
|
|
32,064 |
|
Net cash provided by operating activities |
|
359,568 |
|
|
|
337,181 |
|
|
|
1,172,120 |
|
|
|
876,030 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
Acquisitions of businesses, net of cash acquired |
|
(33,694 |
) |
|
|
— |
|
|
|
(867,596 |
) |
|
|
— |
|
Acquisitions of crude oil and natural gas properties |
|
(13,984 |
) |
|
|
(20,423 |
) |
|
|
(13,984 |
) |
|
|
(51,247 |
) |
Deposits for acquisitions |
|
— |
|
|
|
(352,500 |
) |
|
|
— |
|
|
|
(352,500 |
) |
Capital expenditures for drilling and completion activities and other fixed assets |
|
(519,120 |
) |
|
|
(268,560 |
) |
|
|
(1,090,697 |
) |
|
|
(518,949 |
) |
Proceeds from property transactions |
|
78,817 |
|
|
|
64 |
|
|
|
171,679 |
|
|
|
5,764 |
|
Purchases of carbon credits and renewable energy credits |
|
(1,886 |
) |
|
|
(5,651 |
) |
|
|
(1,886 |
) |
|
|
(5,651 |
) |
Other, net |
|
— |
|
|
|
(527 |
) |
|
|
— |
|
|
|
(621 |
) |
Net cash used in investing activities |
|
(489,867 |
) |
|
|
(647,597 |
) |
|
|
(1,802,484 |
) |
|
|
(923,204 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
Proceeds from credit facility |
|
1,000,000 |
|
|
|
— |
|
|
|
1,300,000 |
|
|
|
— |
|
Payments to credit facility |
|
(550,000 |
) |
|
|
— |
|
|
|
(1,200,000 |
) |
|
|
— |
|
Proceeds from issuance of senior notes |
|
— |
|
|
|
2,666,250 |
|
|
|
— |
|
|
|
2,666,250 |
|
Payment of deferred financing costs and other |
|
(3,789 |
) |
|
|
(4,215 |
) |
|
|
(5,157 |
) |
|
|
(4,215 |
) |
Dividends paid |
|
(148,918 |
) |
|
|
(174,148 |
) |
|
|
(297,357 |
) |
|
|
(347,524 |
) |
Common stock repurchased and retired |
|
(124,936 |
) |
|
|
(20,198 |
) |
|
|
(191,872 |
) |
|
|
(320,305 |
) |
Proceeds from exercise of stock options |
|
6 |
|
|
|
4 |
|
|
|
6 |
|
|
|
444 |
|
Payment of employee tax withholdings in exchange for the return of common stock |
|
(1,436 |
) |
|
|
(10,492 |
) |
|
|
(8,506 |
) |
|
|
(12,610 |
) |
Principal payments on finance lease obligations |
|
(814 |
) |
|
|
— |
|
|
|
(1,577 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
170,113 |
|
|
|
2,457,201 |
|
|
|
(404,463 |
) |
|
|
1,982,040 |
|
Net change in cash, cash equivalents, and restricted cash |
|
39,814 |
|
|
|
2,146,785 |
|
|
|
(1,034,827 |
) |
|
|
1,934,866 |
|
Cash, cash equivalents, and restricted cash: |
|
|
|
|
|
|
|
||||||||
Beginning of period(1) |
|
52,174 |
|
|
|
556,215 |
|
|
|
1,126,815 |
|
|
|
768,134 |
|
End of period(1) |
$ |
91,988 |
|
|
$ |
2,703,000 |
|
|
$ |
91,988 |
|
|
$ |
2,703,000 |
|
(1) Includes |
Schedule 3: Condensed Consolidated Balance Sheets (in thousands, unaudited) |
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
91,884 |
|
|
$ |
1,124,797 |
|
Accounts receivable, net: |
|
|
|
||||
Crude oil and natural gas sales |
|
559,736 |
|
|
|
505,961 |
|
Joint interest and other |
|
227,233 |
|
|
|
247,228 |
|
Derivative assets |
|
14,118 |
|
|
|
35,192 |
|
Deposits for acquisitions |
|
— |
|
|
|
163,164 |
|
Prepaid expenses and other |
|
60,809 |
|
|
|
68,070 |
|
Total current assets |
|
953,780 |
|
|
|
2,144,412 |
|
Property and equipment (successful efforts method): |
|
|
|
||||
Proved properties |
|
15,671,856 |
|
|
|
12,738,568 |
|
Less: accumulated depreciation, depletion, and amortization |
|
(3,249,814 |
) |
|
|
(2,339,541 |
) |
Total proved properties, net |
|
12,422,042 |
|
|
|
10,399,027 |
|
Unproved properties |
|
817,351 |
|
|
|
821,939 |
|
Wells in progress |
|
661,599 |
|
|
|
536,858 |
|
Other property and equipment, net of accumulated depreciation of |
|
56,630 |
|
|
|
62,392 |
|
Total property and equipment, net |
|
13,957,622 |
|
|
|
11,820,216 |
|
Derivative assets |
|
500 |
|
|
|
8,233 |
|
Other noncurrent assets |
|
129,388 |
|
|
|
124,458 |
|
Total assets |
$ |
15,041,290 |
|
|
$ |
14,097,319 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
665,635 |
|
|
$ |
565,708 |
|
Production taxes payable |
|
259,304 |
|
|
|
421,045 |
|
Crude oil and natural gas revenue distribution payable |
|
705,343 |
|
|
|
766,123 |
|
Derivative liability |
|
70,835 |
|
|
|
18,096 |
|
Deferred acquisition consideration |
|
497,277 |
|
|
|
— |
|
Other liabilities |
|
91,345 |
|
|
|
80,915 |
|
Total current liabilities |
|
2,289,739 |
|
|
|
1,851,887 |
|
Long-term liabilities: |
|
|
|
||||
Long-term debt |
|
4,889,554 |
|
|
|
4,785,732 |
|
Ad valorem taxes |
|
189,917 |
|
|
|
307,924 |
|
Derivative liability |
|
936 |
|
|
|
— |
|
Deferred income tax liabilities, net |
|
657,470 |
|
|
|
564,781 |
|
Asset retirement obligations |
|
317,886 |
|
|
|
305,716 |
|
Other long-term liabilities |
|
109,771 |
|
|
|
99,958 |
|
Total liabilities |
|
8,455,273 |
|
|
|
7,915,998 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
5,050 |
|
|
|
5,004 |
|
Additional paid-in capital |
|
5,318,431 |
|
|
|
4,964,450 |
|
Retained earnings |
|
1,262,536 |
|
|
|
1,211,867 |
|
Total stockholders’ equity |
|
6,586,017 |
|
|
|
6,181,321 |
|
Total liabilities and stockholders’ equity |
$ |
15,041,290 |
|
|
$ |
14,097,319 |
|
Schedule 4: Adjusted Net Income
(in thousands, except per share amounts, unaudited)
Adjusted Net Income is a supplemental non-GAAP financial measure that is used by management to present a more comparable, recurring profitability between periods. We believe that Adjusted Net Income provides external users of our consolidated financial statements with additional information to assist in their analysis of the Company. The Company defines Adjusted Net Income as net income after adjusting for (1) the impact of certain non-cash items and one-time transactions and correspondingly (2) the related tax effect in each period. Adjusted Net Income is not a measure of net income as determined by GAAP and 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.
The following table presents a reconciliation of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted Net Income.
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
215,989 |
|
|
$ |
175,821 |
|
|
$ |
391,810 |
|
|
$ |
341,748 |
|
Adjustments to net income: |
|
|
|
|
|
|
|
||||||||
Unused commitments(1) |
|
608 |
|
|
|
(1,226 |
) |
|
|
(618 |
) |
|
|
754 |
|
Transaction costs |
|
7,877 |
|
|
|
22,720 |
|
|
|
30,597 |
|
|
|
31,627 |
|
Loss on property transactions, net |
|
— |
|
|
|
1,430 |
|
|
|
1,430 |
|
|
|
254 |
|
Derivative (gain) loss, net |
|
(7,578 |
) |
|
|
109,680 |
|
|
|
102,102 |
|
|
|
(30,087 |
) |
Derivative cash settlement loss |
|
(12,752 |
) |
|
|
(11,155 |
) |
|
|
(23,907 |
) |
|
|
(11,885 |
) |
Total adjustments to net income before taxes |
|
(11,845 |
) |
|
|
121,449 |
|
|
|
109,604 |
|
|
|
(9,337 |
) |
Tax effect of adjustments |
|
2,807 |
|
|
|
(20,161 |
) |
|
|
(22,688 |
) |
|
|
2,269 |
|
Total adjustments to net income after taxes |
|
(9,038 |
) |
|
|
101,288 |
|
|
|
86,916 |
|
|
|
(7,068 |
) |
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income |
$ |
206,951 |
|
|
$ |
277,109 |
|
|
$ |
478,726 |
|
|
$ |
334,680 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income per diluted share |
$ |
2.06 |
|
|
$ |
2.74 |
|
|
$ |
4.75 |
|
|
$ |
4.09 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted-average common shares outstanding |
|
100,245 |
|
|
|
101,293 |
|
|
|
100,865 |
|
|
|
81,824 |
|
(1) Included as a portion of other operating expense in the accompanying statements of operations. |
Schedule 5: Adjusted EBITDAX
(in thousands, unaudited)
Adjusted EBITDAX is a supplemental non-GAAP measure that 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. We present Adjusted EBITDAX 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 revolving 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 |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net Income |
$ |
215,989 |
|
|
$ |
175,821 |
|
|
$ |
391,810 |
|
|
$ |
341,748 |
|
Total adjustments to net income before taxes (from schedule 4) |
|
(11,845 |
) |
|
|
121,449 |
|
|
|
109,604 |
|
|
|
(9,337 |
) |
Exploration |
|
1,340 |
|
|
|
11,534 |
|
|
|
12,874 |
|
|
|
1,117 |
|
Depreciation, depletion, and amortization |
|
521,090 |
|
|
|
466,840 |
|
|
|
987,930 |
|
|
|
434,089 |
|
Stock-based compensation(2) |
|
12,262 |
|
|
|
11,199 |
|
|
|
23,461 |
|
|
|
17,275 |
|
Interest expense |
|
114,897 |
|
|
|
109,786 |
|
|
|
224,683 |
|
|
|
16,202 |
|
Interest income(1) |
|
(2,650 |
) |
|
|
(3,425 |
) |
|
|
(6,074 |
) |
|
|
(12,807 |
) |
Income tax expense |
|
66,993 |
|
|
|
35,019 |
|
|
|
102,012 |
|
|
|
109,452 |
|
Adjusted EBITDAX |
$ |
918,076 |
|
|
$ |
928,223 |
|
|
$ |
1,846,300 |
|
|
$ |
897,739 |
|
(1) Included as a portion of other income in the condensed consolidated statements of operations. |
(2) Included as a portion of general and administrative expense in the condensed consolidated statements of operations. |
Schedule 6: Adjusted Free Cash Flow
(in thousands, unaudited)
Adjusted Free Cash Flow is a supplemental non-GAAP financial measure that is calculated as net cash provided by operating activities before changes in operating assets and liabilities and less exploration and development of crude oil and natural gas properties, changes in working capital related to capital expenditures, and purchases of carbon credits. We believe that Adjusted Free Cash Flow provides additional information that may be useful to investors and analysts in evaluating our ability to generate cash from our existing crude oil and natural gas assets to fund future exploration and development activities and to return cash to stockholders. Adjusted 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 Adjusted Free Cash Flow:
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities |
|
$ |
359,568 |
|
|
$ |
812,552 |
|
|
$ |
1,172,120 |
|
|
$ |
876,030 |
|
Add back: Changes in operating assets and liabilities, net |
|
|
444,252 |
|
|
|
(17,433 |
) |
|
|
426,819 |
|
|
|
(32,064 |
) |
Cash flow from operations before changes in operating assets and liabilities |
|
|
803,820 |
|
|
|
795,119 |
|
|
|
1,598,939 |
|
|
|
843,966 |
|
Less: Cash paid for capital expenditures for drilling and completion activities and other fixed assets |
|
|
(519,120 |
) |
|
|
(571,577 |
) |
|
|
(1,090,697 |
) |
|
|
(518,949 |
) |
Less: Changes in working capital related to capital expenditures |
|
|
(47,389 |
) |
|
|
(77,955 |
) |
|
|
(125,344 |
) |
|
|
56,345 |
|
Capital expenditures |
|
|
(566,509 |
) |
|
|
(649,532 |
) |
|
|
(1,216,041 |
) |
|
|
(462,604 |
) |
Less: Purchases of carbon credits and renewable energy credits |
|
|
(1,886 |
) |
|
|
— |
|
|
|
(1,886 |
) |
|
|
(5,651 |
) |
Adjusted Free Cash Flow |
|
$ |
235,425 |
|
|
$ |
145,587 |
|
|
$ |
381,012 |
|
|
$ |
375,711 |
|
Schedule 7: Cash General and Administrative
(in thousands, unaudited)
Cash general and administrative is a supplemental non-GAAP measure that is calculated as general and administrative expense less stock-based compensation, that we believe affects the comparability of operating results as it is non-cash. Cash general and administrative is a non-GAAP measure that we include in our total cash operating expense per BOE. We believe it provides useful additional information to investors and analysts, as a performance measure, for analysis of our operations.
The following table presents a reconciliation of the GAAP financial measure of general and administrative expense to the non-GAAP financial measure of cash general and administrative:
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expense (as reported) |
|
$ |
59,135 |
|
|
$ |
57,878 |
|
|
$ |
117,013 |
|
|
$ |
70,399 |
|
Less: Stock-based compensation |
|
|
(12,262 |
) |
|
|
(11,199 |
) |
|
|
(23,461 |
) |
|
|
(17,275 |
) |
Cash general and administrative expense |
|
$ |
46,873 |
|
|
$ |
46,679 |
|
|
$ |
93,552 |
|
|
$ |
53,124 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240801372903/en/
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