COVER PAGE
COVER PAGE - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35371 | |
Entity Registrant Name | Civitas Resources, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 61-1630631 | |
Entity Address, Address Line One | 555 17th Street, | |
Entity Address, Address Line Two | Suite 3700 | |
Entity Address, City or Town | Denver, | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 303 | |
Local Phone Number | 293-9100 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CIVI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 93,773,847 | |
Entity Central Index Key | 0001509589 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 95,324 | $ 768,032 |
Accounts receivable, net: | ||
Oil and natural gas sales | 573,077 | 343,500 |
Joint interest and other | 178,643 | 135,816 |
Derivative assets | 7,058 | 2,490 |
Prepaid income taxes | 21,577 | 29,604 |
Prepaid expenses and other | 73,066 | 48,988 |
Total current assets | 948,745 | 1,328,430 |
Property and equipment (successful efforts method): | ||
Proved properties | 12,135,971 | 6,774,635 |
Less: accumulated depreciation, depletion, and amortization | (1,939,956) | (1,214,484) |
Total proved properties, net | 10,196,015 | 5,560,151 |
Unproved properties | 973,102 | 593,971 |
Wells in progress | 535,499 | 407,351 |
Other property and equipment, net of accumulated depreciation of $9,016 in 2023 and $7,329 in 2022 | 63,006 | 49,632 |
Total property and equipment, net | 11,767,622 | 6,611,105 |
Long-term derivative assets | 1,872 | 794 |
Right-of-use assets | 91,766 | 24,125 |
Other noncurrent assets | 31,563 | 6,945 |
Total assets | 12,841,568 | 7,971,399 |
Current liabilities: | ||
Accounts payable and accrued expenses | 645,214 | 295,297 |
Production taxes payable | 431,346 | 258,932 |
Oil and natural gas revenue distribution payable | 745,214 | 538,343 |
Derivative liability | 126,053 | 46,334 |
Asset retirement obligations | 25,557 | 25,557 |
Lease liability | 41,581 | 13,464 |
Deferred revenue | 4,501 | 0 |
Total current liabilities | 2,019,466 | 1,177,927 |
Long-term liabilities: | ||
Senior notes | 3,049,888 | 393,293 |
Credit facility | 650,000 | 0 |
Ad valorem taxes | 231,472 | 412,650 |
Derivative liability | 10,768 | 17,199 |
Deferred income tax liabilities, net | 458,590 | 319,618 |
Asset retirement obligations | 304,812 | 265,469 |
Lease liability | 50,924 | 11,324 |
Deferred revenue | 45,015 | 0 |
Total liabilities | 6,820,935 | 2,597,480 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Preferred stock, $.01 par value, 25,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock, $.01 par value, 225,000,000 shares authorized, 93,772,363 and 85,120,287 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 5,004 | 4,918 |
Additional paid-in capital | 4,955,206 | 4,211,197 |
Retained earnings | 1,060,423 | 1,157,804 |
Total stockholders’ equity | 6,020,633 | 5,373,919 |
Total liabilities and stockholders’ equity | $ 12,841,568 | $ 7,971,399 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Other property and equipment, accumulated depreciation | $ 9,016 | $ 7,329 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 |
Common stock, shares issued (in shares) | 93,772,363 | 85,120,287 |
Common stock, shares outstanding (in shares) | 93,772,363 | 85,120,287 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating net revenues: | ||||
Oil and natural gas sales | $ 1,035,916,000 | $ 1,007,951,000 | $ 2,352,464,000 | $ 2,977,125,000 |
Operating expenses: | ||||
Lease operating expense | 94,660,000 | 45,063,000 | 191,728,000 | 122,959,000 |
Severance and ad valorem taxes | 83,437,000 | 85,029,000 | 188,242,000 | 234,203,000 |
Exploration | 429,000 | 4,355,000 | 1,546,000 | 6,436,000 |
Depreciation, depletion, and amortization | 320,469,000 | 212,070,000 | 754,558,000 | 601,449,000 |
Abandonment and impairment of unproved properties | 0 | 0 | 0 | 17,975,000 |
Unused commitments | 3,942,000 | 193,000 | 4,696,000 | 2,700,000 |
Bad debt expense (recovery) | (24,000) | (11,000) | 559,000 | (7,000) |
Transaction costs | 28,450,000 | 1,814,000 | 60,077,000 | 23,766,000 |
General and administrative expense, including $8,302, $10,244, $25,577, and $24,469, respectively, of stock-based compensation | 36,154,000 | 37,296,000 | 106,553,000 | 102,682,000 |
Total operating expenses | 656,718,000 | 479,505,000 | 1,552,765,000 | 1,348,962,000 |
Other income (expense): | ||||
Derivative gain (loss) | (150,661,000) | 9,281,000 | (120,574,000) | (358,862,000) |
Interest expense | (76,467,000) | (7,468,000) | (92,669,000) | (24,650,000) |
Gain (loss) on property transactions, net | 0 | (938,000) | (254,000) | 15,859,000 |
Other income | 17,288,000 | 12,769,000 | 34,356,000 | 17,865,000 |
Total other income (expense) | (209,840,000) | 13,644,000 | (179,141,000) | (349,788,000) |
Income from operations before income taxes | 169,358,000 | 542,090,000 | 620,558,000 | 1,278,375,000 |
Income tax expense | (29,686,000) | (136,338,000) | (139,138,000) | (312,163,000) |
Net income, basic | 139,672,000 | 405,752,000 | 481,420,000 | 966,212,000 |
Net income, diluted | $ 139,672,000 | $ 405,752,000 | $ 481,420,000 | $ 966,212,000 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 1.57 | $ 4.77 | $ 5.75 | $ 11.37 |
Diluted (in dollars per share) | $ 1.56 | $ 4.74 | $ 5.70 | $ 11.30 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 88,911 | 85,069 | 83,700 | 84,968 |
Diluted (in shares) | 89,631 | 85,554 | 84,468 | 85,495 |
Midstream operating expense | ||||
Operating expenses: | ||||
Operating expense | $ 11,661,000 | $ 9,214,000 | $ 35,041,000 | $ 22,395,000 |
Gathering, transportation, and processing | ||||
Operating expenses: | ||||
Operating expense | $ 77,540,000 | $ 84,482,000 | $ 209,765,000 | $ 214,404,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
General and administrative expense, stock-based compensation | $ 8,302 | $ 10,244 | $ 25,577 | $ 24,469 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 84,572,846 | |||
Balance at beginning of period at Dec. 31, 2021 | $ 4,654,998 | $ 4,912 | $ 4,199,108 | $ 450,978 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted common stock issued (in shares) | 579,229 | |||
Restricted common stock issued | 6 | $ 6 | ||
Stock used for tax withholdings (in shares) | (215,811) | |||
Stock used for tax withholdings | (12,934) | $ (2) | (12,932) | |
Exercise of stock options (in shares) | 5,294 | |||
Exercise of stock options | 178 | 178 | ||
Stock-based compensation | 8,090 | 8,090 | ||
Dividends declared | (104,444) | (104,444) | ||
Net income | 91,639 | 91,639 | ||
Balance at end of period (in shares) at Mar. 31, 2022 | 84,941,558 | |||
Balance at end of period at Mar. 31, 2022 | 4,637,533 | $ 4,916 | 4,194,444 | 438,173 |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 84,572,846 | |||
Balance at beginning of period at Dec. 31, 2021 | 4,654,998 | $ 4,912 | 4,199,108 | 450,978 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 966,212 | |||
Balance at end of period (in shares) at Sep. 30, 2022 | 85,105,363 | |||
Balance at end of period at Sep. 30, 2022 | 5,253,525 | $ 4,917 | 4,204,742 | 1,043,866 |
Balance at beginning of period (in shares) at Mar. 31, 2022 | 84,941,558 | |||
Balance at beginning of period at Mar. 31, 2022 | 4,637,533 | $ 4,916 | 4,194,444 | 438,173 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted common stock issued (in shares) | 130,309 | |||
Restricted common stock issued | 1 | $ 1 | ||
Stock used for tax withholdings (in shares) | (40,646) | |||
Stock used for tax withholdings | (2,813) | (2,813) | ||
Exercise of stock options (in shares) | 742 | |||
Exercise of stock options | 24 | 24 | ||
Stock-based compensation | 6,135 | 6,135 | ||
Dividends declared | (117,151) | (117,151) | ||
Net income | 468,821 | 468,821 | ||
Balance at end of period (in shares) at Jun. 30, 2022 | 85,031,963 | |||
Balance at end of period at Jun. 30, 2022 | 4,992,550 | $ 4,917 | 4,197,790 | 789,843 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted common stock issued (in shares) | 125,381 | |||
Restricted common stock issued | 1 | $ 1 | ||
Stock used for tax withholdings (in shares) | (52,879) | |||
Stock used for tax withholdings | (3,323) | $ (1) | (3,322) | |
Exercise of stock options (in shares) | 898 | |||
Exercise of stock options | 30 | 30 | ||
Stock-based compensation | 10,244 | 10,244 | ||
Dividends declared | (151,729) | (151,729) | ||
Net income | 405,752 | 405,752 | ||
Balance at end of period (in shares) at Sep. 30, 2022 | 85,105,363 | |||
Balance at end of period at Sep. 30, 2022 | 5,253,525 | $ 4,917 | 4,204,742 | 1,043,866 |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 85,120,287 | |||
Balance at beginning of period at Dec. 31, 2022 | 5,373,919 | $ 4,918 | 4,211,197 | 1,157,804 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted common stock issued (in shares) | 112,052 | |||
Stock used for tax withholdings (in shares) | (30,111) | |||
Stock used for tax withholdings | (2,118) | (2,118) | ||
Exercise of stock options (in shares) | 13,352 | |||
Exercise of stock options | 440 | 440 | ||
Common stock repurchased and retired (in shares) | (4,918,032) | |||
Common stock repurchased and retired | (303,455) | $ (49) | (243,312) | (60,094) |
Stock-based compensation | 7,380 | 7,380 | ||
Dividends declared | (176,878) | (176,878) | ||
Net income | 202,461 | 202,461 | ||
Balance at end of period (in shares) at Mar. 31, 2023 | 80,297,548 | |||
Balance at end of period at Mar. 31, 2023 | 5,101,749 | $ 4,869 | 3,973,587 | 1,123,293 |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 85,120,287 | |||
Balance at beginning of period at Dec. 31, 2022 | 5,373,919 | $ 4,918 | 4,211,197 | 1,157,804 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 481,420 | |||
Balance at end of period (in shares) at Sep. 30, 2023 | 93,772,363 | |||
Balance at end of period at Sep. 30, 2023 | 6,020,633 | $ 5,004 | 4,955,206 | 1,060,423 |
Balance at beginning of period (in shares) at Mar. 31, 2023 | 80,297,548 | |||
Balance at beginning of period at Mar. 31, 2023 | 5,101,749 | $ 4,869 | 3,973,587 | 1,123,293 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted common stock issued (in shares) | 375,615 | |||
Restricted common stock issued | 4 | $ 4 | ||
Stock used for tax withholdings (in shares) | (139,895) | |||
Stock used for tax withholdings | (10,496) | $ (1) | (10,495) | |
Exercise of stock options (in shares) | 111 | |||
Exercise of stock options | 4 | 4 | ||
Common stock repurchased and retired (in shares) | (312,766) | |||
Common stock repurchased and retired | (20,398) | $ (3) | (15,478) | (4,917) |
Stock-based compensation | 9,895 | 9,895 | ||
Dividends declared | (173,358) | (173,358) | ||
Net income | 139,287 | 139,287 | ||
Balance at end of period (in shares) at Jun. 30, 2023 | 80,220,613 | |||
Balance at end of period at Jun. 30, 2023 | 5,046,687 | $ 4,869 | 3,957,513 | 1,084,305 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance pursuant to acquisition (in shares) | 13,538,472 | |||
Issuance pursuant to acquisition | 990,204 | $ 135 | 990,069 | |
Restricted common stock issued (in shares) | 21,596 | |||
Stock used for tax withholdings (in shares) | (8,783) | |||
Stock used for tax withholdings | (693) | (693) | ||
Exercise of stock options (in shares) | 465 | |||
Exercise of stock options | 15 | 15 | ||
Common stock repurchased and retired | 3,456 | 3,456 | ||
Stock-based compensation | 8,302 | 8,302 | ||
Dividends declared | (167,010) | (167,010) | ||
Net income | 139,672 | 139,672 | ||
Balance at end of period (in shares) at Sep. 30, 2023 | 93,772,363 | |||
Balance at end of period at Sep. 30, 2023 | $ 6,020,633 | $ 5,004 | $ 4,955,206 | $ 1,060,423 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends declared (in dollars per share) | $ 1.7400 | $ 2.1200 | $ 2.1500 | $ 1.7625 | $ 1.3625 | $ 1.2125 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Cash flows from operating activities: | |||
Net income | $ 481,420,000 | $ 966,212,000 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion, and amortization | 754,558,000 | 601,449,000 | |
Abandonment and impairment of unproved properties | 0 | 17,975,000 | |
Stock-based compensation | 25,577,000 | 24,469,000 | |
Derivative loss | 120,574,000 | 358,862,000 | |
Derivative cash settlement loss | (44,907,000) | (492,120,000) | |
Amortization of deferred financing costs | 5,706,000 | 3,319,000 | |
(Gain) loss on property transactions, net | 254,000 | (15,859,000) | |
Deferred income tax expense | 138,972,000 | 239,766,000 | |
Other, net | (409,000) | 202,000 | |
Changes in operating assets and liabilities, net | (86,173,000) | 260,588,000 | |
Net cash provided by operating activities | 1,395,572,000 | 1,964,863,000 | |
Cash flows from investing activities: | |||
Acquisitions of oil and natural gas properties, net of cash acquired | (3,711,466,000) | (330,459,000) | |
Proceeds from sale of oil and natural gas properties | 5,764,000 | 0 | |
Exploration and development of oil and natural gas properties | (782,119,000) | (708,958,000) | |
Additions to other property and equipment | (1,714,000) | (97,000) | |
Purchases of carbon offsets | (5,864,000) | (7,196,000) | |
Other | (1,464,000) | 126,000 | |
Net cash used in investing activities | (4,496,863,000) | (1,046,584,000) | |
Cash flows from financing activities: | |||
Proceeds from credit facility | 1,120,000,000 | 100,000,000 | |
Payments to credit facility | (470,000,000) | (100,000,000) | |
Proceeds from issuance of senior notes | 2,666,250,000 | 0 | |
Payment of deferred financing costs | (42,909,000) | (1,174,000) | |
Redemption of senior notes | 0 | (100,000,000) | |
Dividends paid | (511,031,000) | (370,591,000) | |
Common stock repurchased and retired | (320,398,000) | 0 | |
Proceeds from exercise of stock options | 458,000 | 232,000 | |
Payment of employee tax withholdings in exchange for the return of common stock | (13,302,000) | (19,062,000) | |
Principal payments on finance lease obligations | (483,000) | 0 | |
Net cash provided by (used in) financing activities | 2,428,585,000 | (490,595,000) | |
Net change in cash, cash equivalents, and restricted cash | (672,706,000) | 427,684,000 | |
Cash, cash equivalents, and restricted cash: | |||
Beginning of period | [1] | 768,134,000 | 254,556,000 |
End of period | [1] | $ 95,428,000 | $ 682,240,000 |
[1] (1) Includes $0.1 million of restricted cash and consists of funds for road maintenance and repairs that is presented in other noncurrent assets within the accompanying unaudited condensed consolidated balance sheets (“balance sheets”). |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2023 | Sep. 30, 2022 |
Statement of Cash Flows [Abstract] | ||
Restricted cash included in other noncurrent assets | $ 0.1 | $ 0.1 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Operations When we use the terms “Civitas,” the “Company,” “we,” “us,” or “our,” we are referring to Civitas Resources, Inc. and its consolidated subsidiaries unless the context otherwise requires. Civitas is an independent exploration and production company focused on the acquisition, development, and production of oil and associated liquids-rich natural gas primarily in the Denver-Julesburg Basin in Colorado (the “DJ Basin”) and the Permian Basin in Texas and New Mexico. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Regulation S-X. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in audited financial statements have been condensed or omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. All significant intercompany balances and transactions have been eliminated in consolidation. The December 31, 2022 unaudited condensed consolidated balance sheet data has been derived from the audited consolidated financial statements contained in our 2022 Form 10-K , but does not include all disclosures, including notes required by GAAP. As such, this quarterly report should be read in conjunction with the audited consolidated financial statements and related notes included in our 2022 Form 10-K . In connection with the preparation of the unaudited condensed consolidated financial statements, the Company evaluated events subsequent to the balance sheet date of September 30, 2023, through the filing date of this report. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the full year or any other future period. Significant Accounting Policies The significant accounting policies followed by the Company are set forth in Note 1 - Summary of Significant Accounting Policies in the 2022 Form 10-K and are supplemented by the notes to the unaudited condensed consolidated financial statements included in this report. Recently Issued and Adopted Accounting Standards In October 2021, the FASB issued ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that the acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The Company adopted this guidance effective December 15, 2022 and the adoption did not have a material impact on the accompanying unaudited condensed consolidated financial statements. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES All mergers and acquisitions disclosed are accounted for under the acquisition method of accounting for business combinations under ASC Topic 805, Business Combinations . Accordingly, we conduct assessments of the net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisition are expensed as incurred. The fair value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market, and therefore represent Level 3 inputs. The fair values of oil and natural gas properties are measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural gas properties include estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows, and a market-based weighted-average cost of capital. These inputs require significant judgments and estimates by management at the time of the valuation. Hibernia Acquisition On June 19, 2023, the Company entered into a membership interest purchase agreement (the “Hibernia Acquisition Agreement”) with Hibernia Energy III Holdings, LLC and Hibernia Energy III-B Holdings, LLC, pursuant to which the Company agreed to purchase all of the issued and outstanding equity ownership interests of Hibernia Energy III, LLC and Hibernia Energy III-B, LLC. On August 2, 2023, the Company completed the transactions contemplated by the Hibernia Acquisition Agreement (the “Hibernia Acquisition”) for aggregate consideration of approximately $2.2 billion in cash, subject to certain customary purchase price adjustments set forth in the Hibernia Acquisition Agreement. The following table presents the preliminary purchase price allocation of the assets acquired and the liabilities assumed in the Hibernia Acquisition: Preliminary Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 30,671 Accounts receivable - oil and natural gas sales 89,766 Accounts receivable - joint interest and other 4,874 Proved properties 2,123,791 Unproved properties 115,802 Other property and equipment 520 Right-of-use assets 30,393 Total assets acquired $ 2,395,817 Liabilities Assumed Accounts payable and accrued expenses $ 91,977 Production taxes payable 10,320 Oil and natural gas revenue distribution payable 75,267 Asset retirement obligations 8,299 Lease liability 30,393 Total liabilities assumed 216,256 Net assets acquired $ 2,179,561 The purchase price allocation for the Hibernia Acquisition is preliminary, and Civitas is continuing to assess the fair values of certain of the Hibernia assets acquired and liabilities assumed. The Company expects to finalize the purchase price allocation as soon as practicable, which will not extend beyond the one-year measurement period. Tap Rock Acquisition On June 19, 2023, the Company entered into a membership interest purchase agreement (the “Tap Rock Acquisition Agreement”) with Tap Rock Resources Legacy, LLC (“Tap Rock I Legacy”), Tap Rock Resources Intermediate, LLC (“Tap Rock I Intermediate” and, together with Tap Rock I Legacy, the “Tap Rock I Sellers”), Tap Rock Resources II Legacy, LLC (“Tap Rock II Legacy”), Tap Rock Resources II Intermediate, LLC (“Tap Rock II Intermediate” and, together with Tap Rock II Legacy, the “Tap Rock II Sellers”), Tap Rock NM10 Legacy Holdings, LLC (“NM10 Legacy”), and Tap Rock NM10 Holdings Intermediate, LLC (“NM10 Intermediate” and together with NM10 Legacy, the “NM10 Sellers”, and the NM10 Sellers, together with the Tap Rock I Sellers and Tap Rock II Sellers, the “Tap Rock Sellers”), solely in its capacity as “Sellers’ Representative” (as defined therein), Tap Rock I Legacy, and solely for the limited purposes set forth therein, Tap Rock Resources, LLC, pursuant to which the Company agreed to purchase all of the issued and outstanding equity ownership interests of Tap Rock AcquisitionCo, LLC, Tap Rock Resources II, LLC, and Tap Rock NM10 Holdings, LLC from the Tap Rock I Sellers, the Tap Rock II Sellers and the NM10 Sellers, respectively. On August 2, 2023, the Company completed the transactions contemplated by the Tap Rock Acquisition Agreement (the “Tap Rock Acquisition”). The following tables present the consideration transferred and preliminary purchase price allocation of the assets acquired and the liabilities assumed in the Tap Rock Acquisition: Consideration (in thousands, except per share amount) Cash consideration $ 1,508,143 Shares of common stock issued 13,538,472 Closing price per share (1) $ 73.14 Equity consideration $ 990,204 Total consideration (2) $ 2,498,347 _______________________ (1) Based on the closing stock price of Civitas common stock on August 2, 2023. (2) Subject to certain customary purchase price adjustments set forth in the Tap Rock Acquisition Agreement. Preliminary Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 6,543 Accounts receivable - oil and natural gas sales 106,255 Accounts receivable - joint interest and other 31,300 Prepaid expenses and other 22,013 Proved properties 2,377,649 Unproved properties 298,859 Other property and equipment 12,827 Right-of-use assets 626 Total assets acquired $ 2,856,072 Liabilities Assumed Accounts payable and accrued expenses $ 179,626 Production taxes payable 15,557 Oil and natural gas revenue distribution payable 78,758 Ad valorem taxes 1,374 Asset retirement obligations 31,518 Lease liability 626 Deferred revenue 50,266 Total liabilities assumed 357,725 Net assets acquired $ 2,498,347 The purchase price allocation for the Tap Rock Acquisition is preliminary, and Civitas is continuing to assess the fair values of certain of the Tap Rock assets acquired and liabilities assumed. The Company expects to finalize the purchase price allocation as soon as practicable, which will not extend beyond the one-year measurement period. Revenue and earnings of the acquirees The results of operations for the Hibernia Acquisition and Tap Rock Acquisition since the closing date have been included on our condensed consolidated financial statements for the three and nine months ended September 30, 2023. The amount of revenue of Hibernia and Tap Rock included in our accompanying unaudited condensed consolidated statements of operations (“statements of operations”) was approximately $124.1 million and $182.6 million, respectively, during the three and nine months ended September 30, 2023. We determined that disclosing the amount of Hibernia and Tap Rock related earnings included in the statements of operations is impracticable as the operations from these acquisitions were integrated into the operations of the Company from the dates of each acquisition. Supplemental pro forma financial information The following unaudited pro forma financial information (in thousands, except per share amounts) represents a summary of the condensed consolidated results of operations for the three and nine months ended September 30, 2023 and 2022, assuming the Hibernia Acquisition and Tap Rock Acquisition had been completed as of January 1, 2022. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the Hibernia Acquisition and Tap Rock Acquisition had been effective as of this date, or of future results, and includes certain nonrecurring pro forma adjustments that were directly related to these business combinations. Specifically, pro forma earnings were adjusted to exclude transaction costs incurred associated with these acquisitions for the three and nine months ended September 30, 2023 and include such transaction costs in pro forma earnings for the nine months ended September 30, 2022. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Total revenue $ 1,157,615 $ 1,575,493 $ 3,306,345 $ 4,542,055 Net income 179,307 597,835 686,951 1,413,135 Net income per common share - basic $ 1.91 $ 6.06 $ 7.28 $ 14.35 Net income per common share - diluted 1.90 6.03 7.22 14.27 Bison Acquisition On March 1, 2022, the Company completed the acquisition of privately held DJ Basin operator Bison Oil & Gas II, LLC for consideration of approximately $280.4 million (the “Bison Acquisition”). Net assets acquired under the purchase price allocation were $294.0 million and consequently resulted in a bargain purchase gain of $13.6 million. Because of the immateriality of the Bison Acquisition, the related revenue and earnings, supplemental pro forma financial information, and detailed purchase price allocation are not disclosed. Transaction costs Transaction costs related to the aforementioned acquisitions are accounted for separately from the assets acquired and liabilities assumed and are included in transaction costs in the statements of operations. The Company incurred transaction costs of $28.5 million and $1.8 million during the three months ended September 30, 2023 and 2022, respectively, and $60.1 million and $23.8 million during the nine months ended September 30, 2023 and 2022, respectively. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Oil and natural gas sales revenue presented within the accompanying statements of operations is reflective of the revenue generated from contracts with customers. Revenue attributable to each identified revenue stream is disaggregated below (in thousands): Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 DJ Basin Permian Basin (2) Total DJ Basin Permian Basin Total Operating net revenues: Oil $ 583,081 $ 258,595 $ 841,676 $ 653,548 $ — $ 653,548 Natural gas (1) 68,641 12,694 81,335 216,917 — 216,917 Natural gas liquids (“NGL”) (1) 77,502 35,403 112,905 137,486 — 137,486 Oil and natural gas sales $ 729,224 $ 306,692 $ 1,035,916 $ 1,007,951 $ — $ 1,007,951 __________________________ (1) Includes $0.4 million and $0.4 million of deferred revenue that has been recognized during the three months ended September 30, 2023 for natural gas and NGL, respectively. (2) Represents revenue attributable to the Hibernia Acquisition and Tap Rock Acquisition for the period from August 2, 2023 through September 30, 2023. Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 DJ Basin Permian Basin (2) Total DJ Basin Permian Basin Total Operating net revenues: Oil $ 1,584,498 $ 258,595 $ 1,843,093 $ 1,981,308 $ — $ 1,981,308 Natural gas (1) 217,560 12,694 230,254 535,918 — 535,918 NGL (1) 243,714 35,403 279,117 459,899 — 459,899 Oil and natural gas sales $ 2,045,772 $ 306,692 $ 2,352,464 $ 2,977,125 $ — $ 2,977,125 __________________________ (1) Includes $0.4 million and $0.4 million of deferred revenue that has been recognized during the nine months ended September 30, 2023 for natural gas and NGL, respectively. (2) Represents revenue attributable to the Hibernia Acquisition and Tap Rock Acquisition for the period from August 2, 2023 through September 30, 2023. The Company recognizes revenue from the sale of produced oil, natural gas, and NGL at the point in time when control of produced oil, natural gas, or NGL volumes transfer to the purchaser, which may differ depending on the applicable contractual terms. The Company considers the transfer of control to have occurred when the purchaser has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the oil, natural gas, or NGL production. Transfer of control dictates the presentation of gathering, transportation, and processing expenses within the accompanying statements of operations. Gathering, transportation, and processing expenses incurred by the Company prior to the transfer of control are recorded gross within the gathering, transportation, and processing line item on the accompanying statements of operations. Conversely, gathering, transportation, and processing expenses incurred by the Company subsequent to the transfer of control are recorded net within the oil and natural gas sales line item on the accompanying statements of operations. Please refer to Note 1 - Summary of Significant Accounting Policies in the 2022 Form 10-K for more information regarding the types of contracts under which oil, natural gas, and NGL sales revenue is generated. The Company records revenue in the month production is delivered and control is transferred to the purchaser. However, settlement statements and payment may not be received for 30 to 60 days after the date production is delivered and control is transferred. Until such time settlement statements and payment are received, the Company records a revenue accrual based on, amongst other factors, an estimate of the volumes delivered at estimated prices as determined by the applicable contractual terms. The Company records the differences between its estimates and the actual amounts received for product sales in the month in which payment is received from the purchaser. For the three and nine months ended September 30, 2023 and 2022, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was insignificant. As of September 30, 2023 and December 31, 2022, the Company’s receivables from contracts with customers were $573.1 million and $343.5 million, respectively. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses contain the following (in thousands): September 30, 2023 December 31, 2022 Accounts payable trade $ 85,938 $ 31,783 Accrued drilling and completion costs 249,625 137,171 Accrued lease operating expense 70,722 18,109 Accrued gathering, transportation, and processing 80,441 59,398 Accrued general and administrative expense 19,282 20,054 Accrued transaction costs 6,410 — Accrued commodity derivative settlements 20,599 12,514 Accrued interest expense 75,183 5,509 Accrued settlement 1,727 1,497 Other accrued expenses 35,287 9,262 Total accounts payable and accrued expenses $ 645,214 $ 295,297 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Senior Notes Senior Notes are recorded net of unamortized discount and unamortized deferred financing costs within senior notes on the accompanying balance sheets, with no associated premiums. The tables below present the related carrying values as of September 30, 2023 and December 31, 2022 (in thousands): As of September 30, 2023 Principal Amount Unamortized Discount Unamortized Deferred Financing Costs Principal Amount, Net 2026 Senior Notes $ 400,000 $ — $ 5,489 $ 394,511 2028 Senior Notes 1,350,000 16,409 5,773 1,327,818 2031 Senior Notes 1,350,000 16,600 5,841 1,327,559 Total $ 3,100,000 $ 33,009 $ 17,103 $ 3,049,888 As of December 31, 2022 Principal Amount Unamortized Discount Unamortized Deferred Financing Costs Principal Amount, Net 2026 Senior Notes $ 400,000 $ — $ 6,707 $ 393,293 8.375% Senior Notes due 2028 and 8.750% Senior Notes due 2031. On June 29, 2023, the Company issued $1.35 billion aggregate principal amount of 8.375% Senior Notes due 2028 (the “2028 Senior Notes”), at par, pursuant to an indenture (the “2028 Indenture”) among the Company, Computershare Trust Company, N.A., as trustee, and the guarantors party thereto, and $1.35 billion aggregate principal amount of 8.750% Senior Notes due 2031 (the “2031 Senior Notes”), at par, pursuant to an indenture (the “2031 Indenture”) among the Company, Computershare Trust Company, N.A., as trustee. Upon issuance of the 2028 Senior Notes and 2031 Senior Notes, the Company received net proceeds of $2.67 billion after deducting fees of $33.8 million. The Company used the net proceeds from the 2028 Senior Notes and 2031 Senior Notes, together with cash on hand and borrowings under the Credit Facility (as defined below), to fund a portion of the consideration for the Hibernia Acquisition and Tap Rock Acquisition. Interest on the 2028 Senior Notes and 2031 Senior Notes will accrue at the rate of 8.375% per annum and 8.750% per annum, respectively, and will be payable semi-annually in arrears on January 1 and July 1 of each year, commencing on January 1, 2024. The 2028 Indenture and 2031 Indenture each contain covenants that limit, among other things, the Company’s ability and the ability of its subsidiaries to: incur or guarantee additional indebtedness; create liens securing indebtedness; pay dividends on or redeem or repurchase stock or subordinated debt; make specified types of investments and acquisitions; enter into or permit to exist contractual limits on the ability of the Company’s subsidiaries to pay dividends to the Company; enter into transactions with affiliates; and sell assets or merge with other companies. These covenants are subject to a number of important limitations and exceptions. The Company was in compliance with all covenants under the 2028 Indenture and 2031 Indenture as of September 30, 2023, and through the filing of this report. Each of the 2028 Indenture and 2031 Indenture also contain customary events of default. At any time prior to July 1, 2025, the Company may redeem all or part of the 2028 Senior Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any. On or after July 1, 2025, the Company may redeem all or part of the 2028 Senior Notes at redemption prices (expressed as percentages of the principal amount redeemed) equal to (i) 104.188% for the twelve-month period beginning on July 1, 2025; (ii) 102.094% for the twelve-month period beginning on July 1, 2026; and (iii) 100.000% for the period beginning July 1, 2027 and at any time thereafter, plus accrued and unpaid interest, if any to, but excluding the redemption date. At any time prior to July 1, 2026, the Company may redeem all or part of the 2031 Senior Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any. On or after July 1, 2026, the Company may redeem all or part of the 2031 Senior Notes at redemption prices (expressed as percentages of the principal amount redeemed) equal to (i) 104.375% for the twelve-month period beginning on July 1, 2026; (ii) 102.188% for the twelve-month period beginning on July 1, 2027; and (iii) 100.000% for the period beginning July 1, 2028 and at any time thereafter, plus accrued and unpaid interest, if any. The Company may redeem up to 35% of the aggregate principal amount of the 2028 Senior Notes or 2031 Senior Notes at any time prior to July 1, 2025 or 2026, respectively, with an amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 108.375%, with respect to the 2028 Senior Notes, and 108.750%, with respect to the 2031 Senior Notes, of the principal amount of such series of 2028 Senior Notes and 2031 Senior Notes redeemed, plus accrued and unpaid interest, if any, provided, however, that (i) at least 65.0% of the aggregate principal amount of 2028 Senior Notes and 2031 Senior Notes of such series originally issued on the issue date (but excluding the 2028 Senior Notes and 2031 Senior Notes of such series held by the Company and its subsidiaries) remains outstanding immediately after the occurrence of such redemption (unless all such 2028 Senior Notes and 2031 Senior Notes are redeemed substantially concurrently) and (ii) the redemption occurs within 180 days after the date of the closing of such equity offering. The 2028 Senior Notes and 2031 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by all of the Company’s subsidiaries, including the entities that became subsidiaries of the Company upon the consummation of the Hibernia Acquisition and Tap Rock Acquisition, as well as by certain other future subsidiaries that may be required to guarantee the 2028 Senior Notes and 2031 Senior Notes. 5.000% Senior Notes due 2026. On October 13, 2021, the Company issued $400.0 million aggregate principal amount of 5.000% Senior Notes due 2026 (the “2026 Senior Notes”) pursuant to an indenture (the “2026 Indenture”), among Civitas Resources, Wells Fargo Bank, National Association, as trustee, and the guarantors party thereto. Interest accrues at the rate of 5.000% per annum and is payable semiannually in arrears on April 15 and October 15 of each year. Payments commenced on April 15, 2022. The 2026 Indenture contains covenants that limit, among other things, the Company’s ability to: (i) incur or guarantee additional indebtedness; (ii) create liens securing indebtedness; (iii) pay dividends on or redeem or repurchase stock or subordinated debt; (iv) make specified types of investments and acquisitions; (v) enter into or permit to exist contractual limits on the ability of the Company’s subsidiaries to pay dividends to Civitas Resources; (vi) enter into transactions with affiliates; and (vii) sell assets or merge with other companies. These covenants are subject to a number of important limitations and exceptions. The Company was in compliance with all covenants under the 2026 Indenture as of September 30, 2023, and through the filing of this report. In addition, certain of these covenants will be terminated before the 2026 Senior Notes mature if at any time no default or event of default exists under the 2026 Indenture and the 2026 Senior Notes receive an investment-grade rating from at least two ratings agencies. The 2026 Indenture also contains customary events of default. At any time prior to October 15, 2023, the Company may redeem the 2026 Senior Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any. On or after October 15, 2023, the Company may redeem all or part of the 2026 Senior Notes at redemption prices (expressed as percentages of the principal amount redeemed) equal to (i) 102.500% for the twelve-month period beginning on October 15, 2023; (ii) 101.250% for the twelve-month period beginning on October 15, 2024; and (iii) 100.000% for the twelve-month period beginning October 15, 2025 and at any time thereafter, plus accrued and unpaid interest, if any. The Company may redeem up to 35% of the aggregate principal amount of the 2026 Senior Notes at any time prior to October 15, 2023 with an amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 105.000% of the principal amount of the 2026 Senior Notes redeemed, plus accrued and unpaid interest, if any, provided, however, that (i) at least 65.0% of the aggregate principal amount of the 2026 Senior Notes originally issued on the issue date (but excluding 2026 Senior Notes held by the Company) remains outstanding immediately after the occurrence of such redemption (unless all such 2026 Senior Notes are redeemed substantially concurrently) and (ii) the redemption occurs within 180 days after the date of the closing of such equity offering. The 2026 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by all of Civitas’ existing subsidiaries, including the entities that became subsidiaries of the Company upon the consummation of the Hibernia Acquisition and Tap Rock Acquisition. 7.500% Senior Notes due 2026. In April 2021, the Company issued $100.0 million aggregate principal amount of 7.500% Senior Notes due 2026 pursuant to an indenture by and among Civitas Resources, U.S. Bank National Association, as trustee, and the guarantors party thereto. Interest accrued at the rate of 7.500% per annum and was payable semiannually in arrears on April 30 and October 31 of each year. On May 1, 2022, the Company redeemed all of the issued and outstanding 7.500% Senior Notes at 100.0% of their aggregate principal amount, plus accrued and unpaid interest thereon to the redemption date. Credit Facility The Company is party to a reserve-based revolving facility, as the borrower, with JPMorgan Chase Bank, N.A. (“JPMorgan”), as the administrative agent, and a syndicate of financial institutions, as lenders, that has an aggregate maximum commitment amount of $4.0 billion and is set to mature on August 2, 2028 (together with all amendments thereto, the “Credit Facility” or the “Credit Agreement”). The Credit Facility is guaranteed by all restricted domestic subsidiaries of the Company, including the entities that became subsidiaries of the Company upon the consummation of the Hibernia Acquisition and Tap Rock Acquisition, and is secured by first priority security interests on substantially all assets, including a mortgage on at least 90% of the total value of the proved properties evaluated in the most recently delivered reserve reports prior to the amendment effective date, including any engineering reports relating to the oil and natural gas properties of the restricted domestic subsidiaries of the Company, subject to customary exceptions. The Credit Facility contains customary representations and affirmative covenants. The Credit Facility also contains customary negative covenants, which, among other things, and subject to certain exceptions, include restrictions on (i) liens, (ii) indebtedness, guarantees and other obligations, (iii) restrictions in agreements on liens and distributions, (iv) mergers or consolidations, (v) asset sales, (vi) restricted payments, (vii) investments, (viii) affiliate transactions, (ix) change of business, (x) foreign operations or subsidiaries, (xi) name changes, (xii) use of proceeds, letters of credit, (xiii) gas imbalances, (xiv) hedging transactions, (xv) additional subsidiaries, (xvi) changes in fiscal year or fiscal quarter, (xvii) operating leases, (xviii) prepayments of certain debt and other obligations, (xix) sales or discounts of receivables, (xx) dividend payment thresholds, and (xxi) cash balances. In addition, the Company is subject to certain financial covenants under the Credit Facility, as tested on the last day of each fiscal quarter, including, without limitation, (a) permitted net leverage ratio of 3.00 to 1.00 and (b) a current ratio, inclusive of the unused commitments then available to be borrowed, to not be less than 1.00 to 1.00. The Company was in compliance with all covenants under the Credit Facility as of September 30, 2023 and through the filing of this report. Borrowings under the Credit Facility bear interest at a per annum rate equal to, at the option of the Company, either (i) the Alternate Base Rate (“ABR”, for ABR revolving credit loans) plus the applicable margin, or (ii) the term-specific Secured Overnight Financing Rate (“SOFR”) plus the applicable margin. ABR is established as a rate per annum equal to the greatest of (a) the rate of interest publicly announced by JPMorgan as its prime rate, (b) the applicable rate of interest published by the Federal Reserve Bank of New York plus 0.5%, or (c) the term-specific SOFR plus 1.0%, subject to a 1.5% floor plus the applicable margin of 1.0% to 2.0%, based on the utilization of the Credit Facility. Term-specific SOFR is based on one-, three-, or six-month terms as selected by the Company and is subject to a 0.5% floor plus the applicable margin of 2.0% to 3.0%, based on the utilization of the Credit Facility. Interest on borrowings that bear interest at the SOFR are payable on the last day of the applicable interest period selected by the Company, and interest on borrowings that bear interest at the ABR are payable quarterly in arrears. In connection with the Company’s entry into the Hibernia Acquisition Agreement and the Tap Rock Acquisition Agreement, on June 23, 2023, the Company entered into an amendment to the Credit Agreement. Pursuant to the amendment, the Company was authorized to, among other things, (i) offer and issue the 2028 Senior Notes and the 2031 Senior Notes, (ii) incur indebtedness pursuant to those certain debt commitment letters by and among the Company, Bank of America N.A., BofA Securities, Inc., and JPMorgan Chase Bank, N.A. providing for two separate 364-day bridge loan facilities in an aggregate principal amount of up to $2.7 billion (such facilities, the “Bridge Facilities” and the loans made thereunder, the “Bridge Loans”), the proceeds of which would have, if drawn, been used to partially fund the Hibernia Acquisition and the Tap Rock Acquisition, (iii) incur the debt described in the immediately preceding clauses (i) and (ii) without any corresponding reduction in the borrowing base of the Credit Facility, and (iv) incur pari passu term loan indebtedness subject to a total secured leverage test of 2.00 to 1.00 and certain other customary terms and Finally, in connection with the Company’s closing of the Hibernia Acquisition and Tap Rock Acquisition, on August 2, 2023, the Company entered in an amendment to the Credit Agreement whereby aggregate elected commitments increased from $1.0 billion to $1.85 billion, the borrowing base increased from $1.85 billion to $3.0 billion, and the aggregate maximum credit commitment increased from $2.0 billion to $4.0 billion. In addition, the maturity of the Credit Facility was extended to August 2028. The next scheduled borrowing base redetermination date is set to occur in May 2024. The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Facility as of the dates indicated (in thousands): November 7, 2023 September 30, 2023 December 31, 2022 Revolving credit facility $ — $ 650,000 $ — Letters of credit 2,100 2,100 12,100 Available borrowing capacity 1,847,900 1,197,900 987,900 Total aggregate elected commitments $ 1,850,000 $ 1,850,000 $ 1,000,000 As of September 30, 2023 and December 31, 2022, the unamortized deferred financing costs associated with the amendments to the Credit Facility were $36.1 million and $8.5 million, respectively. Of the unamortized deferred financing costs, (i) $28.6 million and $5.5 million are presented within other noncurrent assets on the accompanying balance sheets as of September 30, 2023 and December 31, 2022, respectively, and (ii) $7.5 million and $3.0 million are presented within prepaid expenses and other on the accompanying balance sheets as of September 30, 2023 and December 31, 2022, respectively. Interest Expense For the three months ended September 30, 2023 and 2022, the Company incurred interest expense of $76.5 million and $7.5 million, respectively. For the nine months ended September 30, 2023 and 2022, the Company incurred interest expense of $92.7 million and $24.7 million, respectively. No interest was capitalized during the three and nine months ended September 30, 2023 and 2022. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is involved in various commercial and regulatory claims, litigation, and other legal proceedings that arise in the ordinary course of its business. The Company assesses these claims in an effort to determine the degree of probability and range of possible loss for potential accrual in its consolidated financial statements. In accordance with authoritative accounting guidance, an accrual is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the most likely anticipated outcome or the minimum amount within a range of possible outcomes. Because legal proceedings are inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about uncertain future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The Company regularly reviews contingencies to determine the adequacy of its accruals and related disclosures. As of the filing date of this report, there were no probable, material pending, or overtly threatened legal actions against the Company of which it was aware. Enforcement. Disclosure of certain environmental matters is required when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that the Company believes could exceed $0.3 million. The Company has received Notices of Alleged Violations (“NOAV”) from the ECMC alleging violations of various Colorado statutes and ECMC regulations governing oil and gas operations. The Company has further received notices from the Colorado Air Pollution Control Division. The Company continues to engage in discussions regarding resolution of the alleged violations. As of September 30, 2023 and December 31, 2022, the Company has accrued approximately $0.8 million and $0.7 million, respectively, associated with the NOAVs and Colorado Air Pollution Control Division notices. Commitments Firm Transportation Agreements. The Company is party to a firm pipeline transportation contract to provide a guaranteed outlet for production on an oil pipeline system. The contract requires the Company to pay minimum volume transportation charges on 12,500 barrels (“Bbl”) per day through April 2025, regardless of the amount of pipeline capacity utilized by the Company. The aggregate financial commitment fee over the remaining term was $28.5 million as of September 30, 2023. The Company has not and does not expect to incur any deficiency payments. Minimum Volume Agreement - Oil. The Company is party to a purchase agreement to deliver fixed and determinable quantities of crude oil. Under the terms of the agreement, the Company is required to make periodic deficiency payments for any shortfalls in delivering the minimum volume commitment of 20,000 Bbls per day over a term ending in December 2023. The aggregate financial commitment fee over the remaining term is $11.7 million as of September 30, 2023. The Company has not and does not expect to incur any deficiency payments. Minimum Volume Agreement - Gas and Other. The Company is party to a gas gathering and processing agreement (the “Gathering Agreement”) with a third-party midstream provider over a term ending in 2029 with an annual minimum volume commitment of 13.0 billion cubic feet of natural gas. The Gathering Agreement also includes a commitment to sell take-in-kind NGL from other processing agreements of 7,500 Bbls a day through 2026 with the ability to roll forward up to a 10% shortfall in a given month to the subsequent month. The aggregate financial commitment fee over the remaining term is $109.7 million as of September 30, 2023, which fluctuates with commodity prices as this is a value-based percentage of proceeds sales contract. During the three months ended September 30, 2023, we recorded $3.6 million in unused commitments in the statements of operations based on volumes delivered relative to the minimum volume commitment. Based on current projections, the Company may incur approximately $31.9 million, inclusive of the amounts recorded as described above, of shortfall payments under the Gathering Agreement during the remaining term of approximately six years; however, the Company is actively engaging alternative strategies to reduce any potential contract deficiencies incurred in future periods. Additionally, the Company is also party to a gas gathering and processing agreement with several third-party producers and a third-party midstream provider to deliver to two different plants over terms that end in August 2025 and July 2026. The Company’s share of these commitments requires an incremental 51.5 and 20.6 million cubic feet of natural gas (“MMcf”) per day, respectively, over a baseline volume of 65 MMcf per day for a period of seven years following the in-service dates of the plants. The Company may be required to pay a shortfall fee for any incremental volume deficiencies under these commitments. These contractual obligations can be reduced by the Company’s proportionate share of the collective volumes delivered to the plants by other incremental third-party volumes available to the midstream provider that are in excess of the total commitments. Because of the third-party producer reduction provision, we believe that the aggregate financial commitment fee over the remaining term is zero as of September 30, 2023. The Company has not and does not expect to incur any deficiency payments. The Company is also party to additional individually immaterial agreements that require the Company to pay a fee associated with the minimum volumes over various terms ending in December 2025, regardless of the amount delivered. The aggregate financial commitment fee over the remaining term for these contracts was $9.0 million as of September 30, 2023. The minimum annual payments under these agreements for the next five years as of September 30, 2023 are presented below (in thousands): Firm Transportation Minimum Volume (1) Remainder of 2023 $ 4,531 $ 21,688 2024 18,026 20,655 2025 5,910 21,349 2026 — 17,598 2027 — 16,900 2028 and thereafter — 32,240 Total $ 28,467 $ 130,430 ___________________________ (1) The above calculation is based on the minimum volume commitment schedule (as defined in the relevant agreement) and applicable differential fees. Other commitments. The Company is party to a drilling commitment agreement with a third-party midstream provider such that the Company is required to drill and complete a total of 106 qualifying wells, whereby a minimum number of wells out of the total must be drilled by a deadline occurring every two years over a period ending December 31, 2026. The drilling commitment agreement provides for, among other things, a number of specifications such as minimum consecutive days of production, well performance, and lateral length. Wells operated by others can satisfy this commitment, subject to limitations. If the Company were to fail to complete the wells by the applicable deadline, it would be in breach of the agreement and the third-party midstream provider could attempt to assert damages against Civitas and its affiliates. As of the date of filing, the Company cannot reasonably estimate how much, if any, damages will be paid. Refer to Note 13 - Leases |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Long Term Incentive Plans In April 2017, the Company adopted the 2017 Long Term Incentive Plan (“2017 LTIP”), which provides for the issuance of restricted stock units, performance stock units, and stock options, and reserved 2,467,430 shares of common stock. In June 2021, the Company adopted the 2021 Long Term Incentive Plan (“2021 LTIP”), which reserved an incremental 700,000 shares of common stock to those previously reserved under the 2017 LTIP. Finally, in conjunction with the Company’s merger with Extraction Oil & Gas, Inc. (“Extraction”) in November 2021, Civitas assumed Extraction’s 2021 Long Term Incentive Plan (the “Extraction Equity Plan”), which reserved 3,305,080 shares of common stock now issuable by Civitas. The 2017 LTIP, 2021 LTIP, and Extraction Equity Plan are collectively referred to herein as the “LTIP”. The Company records compensation expense associated with the issuance of awards under the LTIP on a straight-line basis over the vesting period based on the fair value of the awards as of the date of grant within general and administrative expense. The following table outlines the compensation expense recorded by type of award (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Restricted and deferred stock units $ 4,711 $ 5,809 $ 13,905 $ 14,991 Performance stock units 3,591 4,435 11,672 9,478 Total stock-based compensation $ 8,302 $ 10,244 $ 25,577 $ 24,469 As of September 30, 2023, unrecognized compensation expense related to the awards granted under the LTIP will be amortized through the relevant periods as follows (in thousands): Unrecognized Compensation Expense Final Year of Recognition Restricted and deferred stock units $ 39,645 2026 Performance stock units 23,225 2025 Total unrecognized stock-based compensation $ 62,870 Restricted Stock Units and Deferred Stock Units The Company grants time-based Restricted Stock Units (“RSUs”) to its officers, executives, and employees and time-based Deferred Stock Units (“DSUs”) to its non-employee directors as part of its LTIP. Each RSU and DSU represents a right to receive one share of the Company’s common stock after the RSU or DSU vests and is settled as described below. RSUs generally vest and settle either over a (i) one-year vesting period, with the entire grant vesting and settling on the anniversary date, (ii) two-year vesting period, with one-half of the total grant vesting and settling on each anniversary date, or (iii) three-year vesting period, with one-third of the total grant vesting and settling on each anniversary date. Each RSU is entitled to a dividend equivalent right to receive, upon settlement, a cash payment based on the regular cash dividends that would have been paid on a share of the Company’s common stock during the period between the grant date and the date the RSUs vest and are settled. Accrued but unpaid dividend equivalents are recognized as a liability on the accompanying balance sheets, until the recipients receive the dividend equivalents upon vesting and settlement. DSUs generally vest over a one-year period following the grant date. DSUs are settled in shares of the Company’s common stock upon the non-employee director’s separation of service from the Board of Directors (the “Board”). Each DSU is entitled to a dividend equivalent right to receive a cash payment based on the regular cash dividends that would have been paid on a share of the Company’s common stock. All amounts payable as a result of such dividend equivalent right are paid (1) with respect to vested DSUs, at the same time dividends are paid to the Company’s stockholders and (2) with respect to unvested DSUs, when such underlying DSUs vest. Accrued but unpaid dividend equivalents in respect of unvested DSUs are recognized as a liability on the accompanying balance sheets, until the recipients receive the dividend equivalents upon vesting. The grant-date fair value of RSUs and DSUs is equal to the closing price of the Company’s common stock on the date of the grant. A summary of the status and activity of non-vested RSUs and DSUs for the nine months ended September 30, 2023 is presented below: RSUs and DSUs Weighted-Average Grant-Date Fair Value Non-vested, beginning of year 675,898 $ 50.27 Granted 549,127 72.30 Vested (364,159) 47.30 Forfeited (48,866) 58.78 Non-vested, end of period 812,000 $ 65.99 The aggregate grant-date fair value of the RSUs and DSUs granted under the LTIP during the nine months ended September 30, 2023 was $39.7 million. Performance Stock Units The Company grants market-based performance stock units (“PSUs”) to its officers and certain executives as part of its LTIP. The number of shares of the Company’s common stock issued to settle PSUs ranges from zero to 225% (or, for PSUs granted prior to fiscal year 2023, 200%) of the number of PSUs granted and is determined based on performance achievement against certain market-based criteria over a three-year performance period. PSUs generally vest and settle on December 31 of the year preceding the third anniversary of the date of grant. Each PSU is entitled to a dividend equivalent right to receive, upon settlement, a cash payment based on the regular cash dividends that would have been paid on a share of the Company’s common stock during the period between the grant date and the date the PSUs vest and are settled. Accrued but unpaid dividend equivalents are recognized as a liability on the accompanying balance sheets, until the recipients receive the dividend equivalents upon vesting and settlement. Performance achievement is determined based on either, or a combination of, (1) the Company’s annualized absolute total stockholder return (“TSR”) or (2) for certain PSUs granted prior to fiscal year 2023, the Company’s absolute TSR relative to that of a defined peer group. Absolute TSR is determined based upon the performance of the Company’s common stock over the performance period relative to the price of the Company’s common stock at the grant date. For awards with a relative TSR component, the Company’s absolute TSR is compared with the absolute TSRs of a group of peer companies over the performance period. The absolute TSR for the Company and each of the peer companies is determined by dividing (A) (i) the volume-weighted average share price for the last 30 trading days of the performance period, minus (ii) the volume-weighted average share price for the 30 trading days preceding the beginning of the performance period, plus (iii) dividends paid by (B) the volume-weighted average share price for the 30 trading days preceding the beginning of the performance period. The resultant amount is then annualized based on the length of the performance period. The grant-date fair value of the PSUs was estimated using a Monte Carlo valuation model. The Monte Carlo valuation model is based on random projections of stock price paths and must be repeated numerous times to achieve a probabilistic assessment. Significant assumptions used in this valuation include the Company’s expected volatility as well as the volatilities for each of the Company’s peers and an interpolated risk-free interest rate based on U.S. Treasury yields with maturities consistent with the performance period. A summary of the status and activity of non-vested PSUs for the nine months ended September 30, 2023 is presented below: PSUs (1) Weighted-Average Grant-Date Fair Value Non-vested, beginning of year 345,999 $ 77.42 Granted 247,421 104.44 Vested (89,901) 78.49 Forfeited (73,759) 87.49 Expired (242) 18.26 Non-vested, end of period 429,518 $ 91.07 ___________________________ (1) The number of awards assumes that the associated performance condition is met at the target amount (multiplier of one). The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to 225% (or, for PSUs granted prior to fiscal year 2023, 200%), depending on the level of satisfaction of the performance condition. The aggregate grant-date fair value of the PSUs granted under the LTIP during the nine months ended September 30, 2023 was $25.8 million. Stock Options The LTIP allows for the issuance of stock options to the Company’s employees at the sole discretion of the Board. Options expire ten years from the grant date unless otherwise determined by the Board. Stock options are valued using a Black-Scholes Model where expected volatility is based on an average historical volatility of a peer group selected by management over a period consistent with the expected life assumption on the grant date, the risk-free rate of return is based on the U.S. Treasury constant maturity yield on the grant date with a remaining term equal to the expected term of the awards, and the Company’s expected life of stock option awards is derived from the midpoint of the average vesting time and contractual term of the awards. A summary of the status and activity of stock options for the nine months ended September 30, 2023 is presented below: Stock Options Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding, beginning of year 15,170 $ 34.36 Exercised (13,928) 34.36 Expired (111) 34.36 Outstanding, end of period 1,131 $ 34.36 3.6 $ 49 Options outstanding and exercisable 1,131 $ 34.36 3.6 $ 49 The aggregate intrinsic value of options exercised during the nine months ended September 30, 2023 was $0.5 million. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company follows authoritative accounting guidance for measuring the fair value of assets and liabilities in its financial statements. This guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Further, this guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The fair value hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Quoted prices in active markets for identical assets or liabilities Level 2: Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable Level 3: Significant inputs to the valuation model are unobservable Financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy. Derivatives The Company uses Level 2 inputs to measure the fair value of oil and natural gas commodity price derivatives. The fair value of the Company’s commodity price derivatives is estimated using industry-standard models that contemplate various inputs including, but not limited to, the contractual price of the underlying position, current market prices, forward commodity price curves, volatility factors, time value of money, and the credit risk of both the Company and its counterparties. We validate our fair value estimate by corroborating the original source of inputs, monitoring changes in valuation methods and assumptions, and reviewing counterparty mark-to-market statements and other supporting documentation. Refer to Note 9 - Derivatives for more information regarding the Company’s derivative instruments. The following tables present the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 and their classification within the fair value hierarchy (in thousands): As of September 30, 2023 Level 1 Level 2 Level 3 Derivative assets $ — $ 8,930 $ — Derivative liabilities $ — $ 136,821 $ — As of December 31, 2022 Level 1 Level 2 Level 3 Derivative assets $ — $ 3,284 $ — Derivative liabilities $ — $ 63,533 $ — Long-Term Debt The 2026 Senior Notes, 2028 Senior Notes, and 2031 Senior Notes are recorded at cost, net of any unamortized discount or deferred financing costs. As of September 30, 2023, the fair value of the 2026 Senior Notes, 2028 Senior Notes, and 2031 Senior Notes were $375.4 million, $1.38 billion, and $1.38 billion, respectively. These fair values are based on quoted market prices, and as such, are designated as Level 1 within the fair value hierarchy. The recorded value of the Credit Facility, if any, approximates its fair value as it bears interest at a floating rate that approximates a current market rate. Please refer to Note 5 - Long-Term Debt for additional information. Warrants Warrants issued are indexed to the Company’s common stock and required to be net share settled via a cashless exercise. Accordingly, they are classified as equity instruments. The Company’s share price traded below the exercise price of the warrants and therefore were not exercisable during the three and nine months ended September 30, 2023 and 2022. The fair value of the warrants on the issuance date was determined using Level 3 inputs including, but not limited to, volatility, risk-free rate, and dividend yield under the Cox-Ross-Rubinstein binomial option pricing model. The warrants are recorded within additional paid-in capital on the accompanying balance sheets at a fair value of $77.5 million, with no recurring fair value measurement required. There have been no changes to the initial carrying amount of the warrants since issuance. Acquisitions and Impairments of Proved and Unproved Properties We measure acquired assets or businesses at fair value on a nonrecurring basis and review our proved and unproved oil and natural gas properties for impairment using inputs that are not observable in the market, and are therefore designated as Level 3 within the valuation hierarchy. There were no impairments of proved properties recorded during the three and nine months ended September 30, 2023 and 2022, and no abandonment and impairment of unproved properties expense was incurred during the three months ended September 30, 2023 and 2022. During the nine months ended September 30, 2023 and 2022, the Company incurred abandonment and impairment of unproved properties expense of zero and $18.0 million, respectively. Please refer to Note 1 – Summary of Significant Accounting Policies in the 2022 Form 10-K for information on the Company’s policies for determining fair value of its proved and unproved properties and related impairment expense. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company periodically enters into commodity derivative contracts to mitigate a portion of its exposure to potentially adverse market changes in commodity prices for its expected future oil and natural gas production and the associated impact on cash flows. The Company’s commodity derivative contracts consist of swaps, collars, basis protection swaps, and puts. As of September 30, 2023, all derivative counterparties were members of the Credit Facility lender group and all commodity derivative contracts are entered into for other-than-trading purposes. The Company does not designate its commodity derivative contracts as hedging instruments. A typical swap arrangement guarantees a fixed price on contracted volumes. If the agreed upon published third-party index price (“index price”) is lower than the fixed contract price at the time of settlement, the Company receives the difference between the index price and the fixed contract price. If the index price is higher than the fixed contact price at the time of settlement, the Company pays the difference between the index price and the fixed contract price. A typical collar arrangement establishes a floor and ceiling price on contracted volumes through the use of a short call and a long put (“two-way collar”). When the index price is above the ceiling price at the time of settlement, the Company pays the difference between the index price and the ceiling price. When the index price is below the floor price at the time of settlement, the Company receives the difference between the index price and floor price. When the index price is between the floor price and ceiling price, no payment or receipt occurs. A minority of our collar arrangements combine a two-way collar with a short put that holds an exercise price below the floor price (“three-way collar”). In these arrangements, when the index price is below the floor price at the time of settlement, the Company receives the difference between the index price and the floor price, capped at the difference between the floor price and the exercise price of the short put. Basis protection swaps are arrangements that guarantee a price differential for natural gas from a specified delivery point. For basis protection swaps, the Company receives a payment from the counterparty if the price differential is greater than the stated terms of the contract and pays the counterparty if the price differential is less than the stated terms of the contract. A put arrangement gives the Company the right to sell the underlying commodity at a strike price over the term of the contract. If the index price is higher than the strike price, no payment or receipt occurs. If the index price is lower than the strike price, the Company receives the difference between the index price and the strike price. As of September 30, 2023, the Company had entered into the following commodity price derivative contracts: Contract Period Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) Swaps NYMEX WTI Volumes 29,161 12,727 11,991 10,536 8,997 Weighted-Average Contract Price $ 71.83 $ 70.39 $ 68.75 $ 68.87 $ 69.46 Two-Way Collars NYMEX WTI Volumes 9,392 11,913 10,430 9,324 8,504 Weighted-Average Ceiling Price $ 82.28 $ 81.51 $ 80.83 $ 80.27 $ 79.85 Weighted-Average Floor Price $ 60.00 $ 58.00 $ 58.00 $ 58.00 $ 58.00 Three-Way Collars NYMEX WTI Volumes 1,172 573 — — — Weighted-Average Ceiling Price $ 56.49 $ 56.25 $ — $ — $ — Weighted-Average Floor Price $ 49.04 $ 45.00 $ — $ — $ — Weighted-Average Sold Put Price $ 39.04 $ 35.00 $ — $ — $ — Bought Puts NYMEX WTI Volumes — 7,942 6,953 6,216 5,669 Weighted-Average Contract Price $ — $ 55.00 $ 55.00 $ 55.00 $ 55.00 Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) Swaps NYMEX HH Volumes 45,947 31,790 31,686 31,578 1,701 Weighted-Average Contract Price $ 2.60 $ 2.69 $ 2.68 $ 2.66 $ 4.23 Two-Way Collars NYMEX HH Volumes 1,756 736 1,732 1,668 — Weighted-Average Ceiling Price $ 2.96 $ 3.16 $ 2.89 $ 3.16 $ — Weighted-Average Floor Price $ 2.38 $ 2.50 $ 2.20 $ 2.50 $ — Three-Way Collars NYMEX HH Volumes — 1,166 55 — — Weighted-Average Ceiling Price $ — $ 3.50 $ 3.42 $ — $ — Weighted-Average Floor Price $ — $ 2.50 $ 2.50 $ — $ — Weighted-Average Sold Put Price $ — $ 2.00 $ 2.00 $ — $ — Basis Protection Swaps CIG-NYMEX HH Volumes 47,703 33,691 33,473 33,246 — Weighted-Average Contract Price $ (0.46) $ (0.27) $ (0.27) $ (0.27) $ — As of November 3, 2023, the Company had entered into the following commodity price derivative contracts: Contract Period Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 - Q2 2025 Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) Swaps NYMEX WTI Volumes 29,161 12,727 11,991 10,536 3,032 Weighted-Average Contract Price $ 71.83 $ 70.39 $ 68.75 $ 68.87 $ 69.46 Two-Way Collars NYMEX WTI Volumes 9,392 25,913 22,930 18,324 10,708 Weighted-Average Ceiling Price $ 82.28 $ 88.38 $ 85.91 $ 83.26 $ 80.99 Weighted-Average Floor Price $ 60.00 $ 64.48 $ 64.54 $ 63.89 $ 66.79 Three-Way Collars NYMEX WTI Volumes 1,172 573 — — — Weighted-Average Ceiling Price $ 56.49 $ 56.25 $ — $ — $ — Weighted-Average Floor Price $ 49.04 $ 45.00 $ — $ — $ — Weighted-Average Sold Put Price $ 39.04 $ 35.00 $ — $ — $ — Puts NYMEX WTI Volumes — 7,942 6,953 6,216 1,911 Weighted-Average Strike Price $ — $ 55.00 $ 55.00 $ 55.00 $ 55.00 Natural Gas Derivatives (volumes in MMBtu/day and prices in $/MMBtu) Swaps NYMEX HH Volumes 45,947 31,790 31,686 31,578 573 Weighted-Average Contract Price $ 2.60 $ 2.69 $ 2.68 $ 2.66 $ 4.23 Two-Way Collars NYMEX HH Volumes 1,756 736 1,732 1,668 — Weighted-Average Ceiling Price $ 2.96 $ 3.16 $ 2.89 $ 3.16 $ — Weighted-Average Floor Price $ 2.38 $ 2.50 $ 2.20 $ 2.50 $ — Three-Way Collars NYMEX HH Volumes — 1,166 55 — — Weighted-Average Ceiling Price $ — $ 3.50 $ 3.42 $ — $ — Weighted-Average Floor Price $ — $ 2.50 $ 2.50 $ — $ — Weighted-Average Sold Put Price $ — $ 2.00 $ 2.00 $ — $ — Basis Protection Swaps CIG-NYMEX HH Volumes 47,703 33,691 33,473 33,246 — Weighted-Average Contract Price $ (0.46) $ (0.27) $ (0.27) $ (0.27) $ — Derivative Assets and Liabilities Fair Value The Company’s commodity price derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets and liabilities. The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as well as a reconciliation between the gross assets and liabilities and the potential effects of master netting arrangements on the fair value of the Company’s commodity derivative contracts as of September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 December 31, 2022 Derivative Assets: Commodity contracts - current $ 7,058 $ 2,490 Commodity contracts - noncurrent 1,872 794 Total derivative assets 8,930 3,284 Amounts not offset in the accompanying balance sheets (906) — Total derivative assets, net $ 8,024 $ 3,284 Derivative Liabilities: Commodity contracts - current $ (126,053) $ (46,334) Commodity contracts - long-term (10,768) (17,199) Total derivative liabilities (136,821) (63,533) Amounts not offset in the accompanying balance sheets 906 — Total derivative liabilities, net $ (135,915) $ (63,533) The following table summarizes the components of the derivative gain (loss) presented on the accompanying statements of operations for the periods below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Derivative cash settlement loss: Oil contracts $ (32,397) $ (67,623) $ (38,010) $ (307,563) Natural gas contracts (625) (66,610) (6,897) (149,485) NGL contracts — (9,678) — (35,072) Total derivative cash settlement loss (33,022) (143,911) (44,907) (492,120) Change in fair value gain (loss) (117,639) 153,192 (75,667) 133,258 Total derivative gain (loss) $ (150,661) $ 9,281 $ (120,574) $ (358,862) |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS The Company recognizes an estimated liability for future costs associated with the abandonment of its oil and gas properties, including facilities requiring decommissioning. A liability for the fair value of an asset retirement obligation and corresponding increase to the carrying value of the related long-lived asset are recorded at the time a well is drilled or acquired, or a facility is constructed. The increase in carrying value is included in proved properties in the accompanying balance sheets. The Company depletes the amount added to proved properties and recognizes expense in connection with the accretion of the discounted liability over the remaining estimated economic lives of the respective long-lived assets. Cash paid to settle asset retirement obligations is included in the cash flows from operating activities section of the accompanying unaudited condensed consolidated statements of cash flows. The Company’s estimated asset retirement obligation liability is based on historical experience plugging and abandoning wells, estimated economic lives, estimated plugging and abandonment cost, and regulatory requirements. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised. A roll-forward of the Company’s asset retirement obligation is as follows (in thousands): Amount Balance as of December 31, 2022 $ 291,026 Additional liabilities incurred 42,549 Accretion expense 12,134 Liabilities settled (15,340) Balance as of September 30, 2023 $ 330,369 Current portion 25,557 Long-term portion $ 304,812 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Earnings per basic and diluted share are calculated under the treasury stock method. Basic net income per common share is calculated by dividing net income by the basic weighted-average common shares outstanding for the respective period. Diluted net income per common share is calculated by dividing net income by the diluted weighted-average common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities consist of unvested RSUs, DSUs, and PSUs, as well as outstanding in-the-money stock options and warrants. When the Company recognizes a loss from continuing operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted earnings per share. As discussed in Note 7 - Stock-Based Compensation , PSUs represent the right to receive a number of shares of the Company’s common stock ranging from zero to 225% (or, for PSUs granted prior to fiscal year 2023, 200%) of PSUs granted based on the performance achievement over the applicable performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that date was the end of the performance period applicable to such awards. The Company has also issued stock options and warrants, which both represent the right to purchase the Company’s common stock at a specified exercise price. The number of potentially dilutive shares related to the stock options and warrants is based on the number of shares, if any, that would be exercisable at the end of the respective reporting period, assuming that date was the end of such stock options’ or warrants’ term. Stock options and warrants are only dilutive when the average price of the common stock during the period exceeds the exercise price. The following table sets forth the calculations of basic and diluted net income per common share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income $ 139,672 $ 405,752 $ 481,420 $ 966,212 Basic net income per common share $ 1.57 $ 4.77 $ 5.75 $ 11.37 Diluted net income per common share $ 1.56 $ 4.74 $ 5.70 $ 11.30 Weighted-average shares outstanding - basic 88,911 85,069 83,700 84,968 Add: dilutive effect of stock awards 720 485 768 527 Weighted-average shares outstanding - diluted 89,631 85,554 84,468 85,495 There were 10,103 and 109,519 shares that were anti-dilutive for the three months ended September 30, 2023 and 2022, respectively. There were 7,437 and 68,171 shares that were anti-dilutive for the nine months ended September 30, 2023 and 2022, respectively. The exercise price of the Company’s warrants was in excess of the Company’s stock price during the three and nine months ended September 30, 2023 and 2022 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Deferred tax assets and liabilities are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years related to cumulative temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets. The tax effect of the net change in the cumulative temporary differences during each period in the deferred tax assets and liabilities determines the periodic provision for deferred taxes. The Company assesses the recoverability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will be realized. In making such determination, the Company considers all available (both positive and negative) evidence, including future reversals of temporary differences, tax-planning strategies, projected future taxable income, and results of operations. As a result of merger activity in 2021, the Company had a valuation allowance of $25.4 million as of both September 30, 2023 and December 31, 2022 against certain acquired net operating losses and other tax attributes due to the limitation on realizability caused by the change of ownership provisions of Section 382 of the Internal Revenue Code. The Company will continue to monitor facts and circumstances in the reassessment of the likelihood that the deferred tax assets will be realized. The net deferred tax liability as of September 30, 2023 and December 31, 2022 was $458.6 million and $319.6 million, respectively. Additionally, prepaid income taxes under current assets as of September 30, 2023 and December 31, 2022 were $21.6 million and $29.6 million, respectively. During the three months ended September 30, 2023 and 2022, the Company recorded income tax expense of $29.7 million and $136.3 million, respectively. During the nine months ended September 30, 2023 and 2022, the Company recorded income tax expense of $139.1 million and $312.2 million, respectively. Income tax expense differs from the amount that would be provided by applying the statutory United States federal income tax rate of 21% to income before income taxes due to the effect of state income taxes, excess tax benefits and deficiencies on stock-based compensation awards, and tax limitations on compensation of covered individuals. During the three and nine months ended September 30, 2023, income tax expense was additionally impacted by deferred tax benefits from state apportionment changes as a result of the Hibernia Acquisition and Tap Rock Acquisition. During the three and nine months ended September 30, 2022, income tax expense was additionally impacted by changes in valuation allowances and other permanent differences including bargain purchase gain. The Company had no unrecognized tax benefits as of September 30, 2023 and December 31, 2022. The Company’s management does not believe that there are any new items or changes in facts or judgments that would impact the Company’s tax position taken thus far in 2023. On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law. Among other provisions, the IRA imposes a 15% corporate alternative minimum tax (“Corporate AMT”) for tax years beginning after December 31, 2022. The Company is evaluating the potential impact of the Corporate AMT on our current income tax expense and income taxes payable; however, we currently do not believe this will materially affect our income taxes paid for the 2023 tax year. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company’s right-of-use assets and lease liabilities are recognized on the accompanying balance sheets based on the present value of the expected lease payments over the lease term. The following table summarizes the asset classes of the Company’s leases (in thousands): September 30, 2023 December 31, 2022 Operating Leases Field equipment (1) $ 64,076 $ 15,131 Corporate leases 6,140 8,235 Vehicles 4,446 759 Total right-of-use asset $ 74,662 $ 24,125 Field equipment (1) $ 64,132 $ 15,131 Corporate leases 6,796 8,898 Vehicles 4,446 759 Total lease liability $ 75,374 $ 24,788 Finance Leases Right of use asset - field equipment $ 17,104 $ — Lease liability - field equipment $ 17,131 $ — ____________________________ (1) Includes drilling rigs, compressors, certain natural gas processing equipment, and other field equipment. Future commitments by year for the Company’s leases with a lease term of greater than one year as of September 30, 2023 are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the accompanying balance sheets as follows (in thousands): Operating Leases Finance Leases Remainder of 2023 $ 11,103 $ 992 2024 39,100 4,210 2025 21,887 4,277 2026 5,554 4,020 2027 2,138 3,683 Thereafter 654 2,810 Total lease payments 80,436 19,992 Less: imputed interest (5,062) (2,861) Total lease liability $ 75,374 $ 17,131 |
LEASES | LEASES The Company’s right-of-use assets and lease liabilities are recognized on the accompanying balance sheets based on the present value of the expected lease payments over the lease term. The following table summarizes the asset classes of the Company’s leases (in thousands): September 30, 2023 December 31, 2022 Operating Leases Field equipment (1) $ 64,076 $ 15,131 Corporate leases 6,140 8,235 Vehicles 4,446 759 Total right-of-use asset $ 74,662 $ 24,125 Field equipment (1) $ 64,132 $ 15,131 Corporate leases 6,796 8,898 Vehicles 4,446 759 Total lease liability $ 75,374 $ 24,788 Finance Leases Right of use asset - field equipment $ 17,104 $ — Lease liability - field equipment $ 17,131 $ — ____________________________ (1) Includes drilling rigs, compressors, certain natural gas processing equipment, and other field equipment. Future commitments by year for the Company’s leases with a lease term of greater than one year as of September 30, 2023 are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the accompanying balance sheets as follows (in thousands): Operating Leases Finance Leases Remainder of 2023 $ 11,103 $ 992 2024 39,100 4,210 2025 21,887 4,277 2026 5,554 4,020 2027 2,138 3,683 Thereafter 654 2,810 Total lease payments 80,436 19,992 Less: imputed interest (5,062) (2,861) Total lease liability $ 75,374 $ 17,131 |
SUPPLEMENTAL DISCLOSURES OF CAS
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Supplemental cash flow disclosures are presented below (in thousands): Nine Months Ended September 30, 2023 2022 Supplemental cash flow information: Cash (paid) refunded for income taxes $ 7,861 $ (59,800) Cash paid for interest (17,110) (17,124) Supplemental non-cash investing activities: Non-cash investing activities 1,065,901 — Non-cash financing activities 990,204 — Changes in working capital related to capital expenditures (112,454) 33 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Share Repurchases On January 24, 2023, we entered into a privately-negotiated share purchase agreement with CPPIB Crestone Peak Resources Canada Inc. for the purchase of approximately 4.9 million shares of the Company’s common stock at a price of $61.00 per share for a total purchase price of approximately $300.0 million. The purchase closed on January 27, 2023 and was funded from the Company’s cash on hand. The shares repurchased were immediately retired. In February 2023, we announced that the Board provided authorization for a stock repurchase program (the “stock repurchase program”) pursuant to which we may, from time to time and through December 31, 2024, acquire shares of our common stock in the open market, in privately negotiated transactions, or through block trades, derivative transactions, or purchases made in accordance with the Rule 10b5-1 of the Exchange Act in an amount not to exceed $1.0 billion, exclusive of any fees, commissions, or other expenses related to such repurchases. In June 2023, commensurate with the announcement of the Hibernia Acquisition and Tap Rock Acquisition, the Board reduced the amount of stock authorized for repurchase by the Company under the stock repurchase program from $1.0 billion to $500.0 million. The stock repurchase program does not require any specific number of shares to be acquired and can be modified or discontinued by the Board at any time. As of September 30, 2023, the Company has repurchased approximately 312,800 shares under the program at a weighted average price of $64.55 per share for a total cost of $20.3 million. We record share repurchases at cost, which includes incremental direct transaction costs, as a reduction to stockholder’s equity. As part of the incremental direct transactions costs and subject to netting against the fair value of stock issuances, we record a 1% excise tax with the corresponding liability recorded within accounts payable and accrued expenses on the accompanying balance sheets. Any excess of cost over the par value is charged to additional paid-in-capital on a pro-rata basis, with any remaining cost charged to retained earnings. Dividends As approved by the Board, cash dividends are paid quarterly and consist of a base and variable component. Variable cash dividends are equal to 50% of free cash flow after the base cash dividend for the preceding twelve-month period and pro forma for all acquisition and divestiture activity, assuming pro forma compliance with certain leverage targets. The following table summarizes the dividends declared for the nine months ended September 30, 2023 and 2022: Base Variable Total Total (per share) (per share) (per share) (in thousands) 2023: First quarter $ 0.50 $ 1.65 $ 2.15 $ 176,878 Second quarter $ 0.50 $ 1.62 $ 2.12 $ 173,358 Third Quarter $ 0.50 $ 1.24 $ 1.74 $ 167,010 2022: First quarter $ 0.46 $ 0.75 $ 1.21 $ 104,444 Second quarter $ 0.46 $ 0.90 $ 1.36 $ 117,151 Third Quarter $ 0.46 $ 1.30 $ 1.76 $ 151,729 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Vencer Acquisition On October 3, 2023, the Company entered into a purchase and sale agreement (the “PSA”) with Vencer Energy, LLC (“Vencer”), pursuant to which the Company agreed to acquire from Vencer certain oil and gas properties, interests and related assets located in Glasscock, Martin, Midland, Reagan and Upton Counties, Texas (the “Assets”). As consideration for the pending transactions contemplated by the PSA (the “Vencer Acquisition”, Vencer will receive an aggregate of $2.15 billion with the initial consideration payable at the closing of the transactions (the “Closing”) comprised of (i) $1.0 billion in cash, subject to certain customary purchase price adjustments set forth in the PSA (as adjusted, the “Cash Consideration”), and (ii) 7,289,515 shares of common stock, par value $0.01 per share, of the Company (the “Shares”) valued at approximately $600.0 million, subject to certain customary anti-dilution and purchase price adjustments (as adjusted, the “Stock Consideration”). As further consideration for the Assets, the Company will pay to Vencer up to $550.0 million in cash on January 3, 2025 (the “Deferred Payment” and, together with the Cash Consideration and the Stock Consideration, as each may be adjusted, the “Purchase Price”). The Company has the option to increase the Cash Consideration payable at Closing and retire all or a portion of the Deferred Payment, in which event, the remaining Deferred Payment (if any) due on January 3, 2025, will be reduced as and to the extent provided in the PSA. The obligations of the parties to complete the Vencer Acquisition are subject to the satisfaction or waiver of customary closing conditions set forth in the PSA. In connection with and upon execution of the PSA, the Company deposited with an escrow agent a cash deposit equal to 7.5% of the unadjusted Purchase Price, which deposit will be credited against the Purchase Price payable at closing, or returned to the Company if the closing does not occur for any reason other than as a result of a breach of the Company that results in certain closing conditions not to be satisfied (as further described in the PSA). Fifth Amendment to the Credit Facility In connection with the Company’s entry into the PSA, on October 6, 2023, the Company entered into an amendment to the Credit Agreement (the “Fifth Amendment”). The Fifth Amendment amends the Credit Agreement to, among other things, permit the Company to incur, on or before January 31, 2024, an aggregate of up to $1.5 billion of indebtedness comprised of new senior unsecured notes, unsecured bridge facilities or a combination thereof, provided the proceeds therefrom are used to fund the Vencer Acquisition. 8.625% Senior Notes due 2030 On October 17, 2023, the Company issued $1.0 billion aggregate principal amount of 8.625% Senior Notes due 2030 (the “2030 Senior Notes”), at par, pursuant to an indenture (the “2030 Indenture”) among the Company, Computershare Trust Company, N.A., as trustee, and the guarantors party thereto. Upon issuance of the 2030 Senior Notes, the Company received net proceeds of $987.5 million after deducting fees of $12.5 million. The Company expects to use the net proceeds, together with cash on hand, to fund a portion of the cash purchase price for the Vencer Acquisition. Pending the potential use of the net proceeds to fund a portion of the consideration for the Vencer Acquisition, the Company has temporarily applied the net proceeds to repay outstanding borrowings under the Credit Facility. The 2030 Senior Notes are subject to a special mandatory redemption such that if (i) the consummation of the Vencer Acquisition does not occur on or before January 31, 2024 or (ii) prior thereto, the Company notifies Computershare Trust Company, N.A. that it will not pursue the consummation of the Vencer Acquisition, it will be required to redeem all 2030 Senior Notes then outstanding (such redemption, the “Special Mandatory Redemption”) at a redemption price equal to 100% of the principal amount of the 2030 Senior Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the date of the Special Mandatory Redemption. The 2030 Senior Notes will mature on November 1, 2030. Interest on the 2030 Senior Notes will accrue at the rate of 8.625% per annum and will be payable semi-annually in arrears on May 1 and November 1 of each year, commencing on May 1, 2024. At any time prior to November 1, 2026, the Company may redeem all or part of the 2030 Senior Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any. On or after November 1, 2026, the Company may redeem all or part of the 2030 Senior Notes at redemption prices (expressed as percentages of the principal amount redeemed) equal to (i) 104.313% for the twelve-month period beginning on November 1, 2026; (ii) 102.156% for the twelve-month period beginning on November 1, 2027; and (iii) 100.000% for the period beginning November 1, 2028 and at any time thereafter, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of the noteholders on the relevant record date to receive interest on the relevant interest payment date). The Company may redeem up to 35% of the aggregate principal amount of the 2030 Senior Notes at any time prior to November 1, 2026 with an amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 108.625% of the principal amount of the 2030 Senior Notes redeemed, plus accrued and unpaid interest, if any, provided, however, that (i) at least 65.0% of the aggregate principal amount of 2030 Senior Notes originally issued on the issue date (but excluding 2030 Senior Notes held by the Company and its subsidiaries) remains outstanding immediately after the occurrence of such redemption (unless all such 2030 Senior Notes are redeemed substantially concurrently) and (ii) the redemption occurs within 180 days after the date of the closing of such equity offering. The 2030 Indenture contains covenants that limit, among other things, the Company’s ability and the ability of its subsidiaries to: incur or guarantee additional indebtedness; create liens securing indebtedness; pay dividends on or redeem or repurchase stock or subordinated debt; make specified types of investments and acquisitions; enter into or permit to exist contractual limits on the ability of the Company’s subsidiaries to pay dividends to the Company; enter into transactions with affiliates; and sell assets or merge with other companies. These covenants are subject to a number of important limitations and exceptions. The Company was in compliance with all covenants under the 2030 Indenture through the filing of this report. The 2030 Indenture also contain customary events of default. The 2030 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by all of the Company’s existing subsidiaries and are expected to be guaranteed by certain other future subsidiaries that may be required to guarantee the 2030 Senior Notes. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Regulation S-X. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in audited financial statements have been condensed or omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. All significant intercompany balances and transactions have been eliminated in consolidation. The December 31, 2022 unaudited condensed consolidated balance sheet data has been derived from the audited consolidated financial statements contained in our 2022 Form 10-K , but does not include all disclosures, including notes required by GAAP. As such, this quarterly report should be read in conjunction with the audited consolidated financial statements and related notes included in our 2022 Form 10-K . In connection with the preparation of the unaudited condensed consolidated financial statements, the Company evaluated events subsequent to the balance sheet date of September 30, 2023, through the filing date of this report. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the full year or any other future period. Significant Accounting Policies The significant accounting policies followed by the Company are set forth in Note 1 - Summary of Significant Accounting Policies in the 2022 Form 10-K and are supplemented by the notes to the unaudited condensed consolidated financial statements included in this report. |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards In October 2021, the FASB issued ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that the acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The Company adopted this guidance effective December 15, 2022 and the adoption did not have a material impact on the accompanying unaudited condensed consolidated financial statements. |
Acquisitions and Divestitures | ACQUISITIONS AND DIVESTITURES All mergers and acquisitions disclosed are accounted for under the acquisition method of accounting for business combinations under ASC Topic 805, Business Combinations |
Revenue Recognition | The Company recognizes revenue from the sale of produced oil, natural gas, and NGL at the point in time when control of produced oil, natural gas, or NGL volumes transfer to the purchaser, which may differ depending on the applicable contractual terms. The Company considers the transfer of control to have occurred when the purchaser has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the oil, natural gas, or NGL production. Transfer of control dictates the presentation of gathering, transportation, and processing expenses within the accompanying statements of operations. Gathering, transportation, and processing expenses incurred by the Company prior to the transfer of control are recorded gross within the gathering, transportation, and processing line item on the accompanying statements of operations. Conversely, gathering, transportation, and processing expenses incurred by the Company subsequent to the transfer of control are recorded net within the oil and natural gas sales line item on the accompanying statements of operations. Please refer to Note 1 - Summary of Significant Accounting Policies in the 2022 Form 10-K for more information regarding the types of contracts under which oil, natural gas, and NGL sales revenue is generated. |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Transferred and Preliminary Purchase Price Allocation | The following table presents the preliminary purchase price allocation of the assets acquired and the liabilities assumed in the Hibernia Acquisition: Preliminary Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 30,671 Accounts receivable - oil and natural gas sales 89,766 Accounts receivable - joint interest and other 4,874 Proved properties 2,123,791 Unproved properties 115,802 Other property and equipment 520 Right-of-use assets 30,393 Total assets acquired $ 2,395,817 Liabilities Assumed Accounts payable and accrued expenses $ 91,977 Production taxes payable 10,320 Oil and natural gas revenue distribution payable 75,267 Asset retirement obligations 8,299 Lease liability 30,393 Total liabilities assumed 216,256 Net assets acquired $ 2,179,561 Consideration (in thousands, except per share amount) Cash consideration $ 1,508,143 Shares of common stock issued 13,538,472 Closing price per share (1) $ 73.14 Equity consideration $ 990,204 Total consideration (2) $ 2,498,347 _______________________ (1) Based on the closing stock price of Civitas common stock on August 2, 2023. (2) Subject to certain customary purchase price adjustments set forth in the Tap Rock Acquisition Agreement. Preliminary Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 6,543 Accounts receivable - oil and natural gas sales 106,255 Accounts receivable - joint interest and other 31,300 Prepaid expenses and other 22,013 Proved properties 2,377,649 Unproved properties 298,859 Other property and equipment 12,827 Right-of-use assets 626 Total assets acquired $ 2,856,072 Liabilities Assumed Accounts payable and accrued expenses $ 179,626 Production taxes payable 15,557 Oil and natural gas revenue distribution payable 78,758 Ad valorem taxes 1,374 Asset retirement obligations 31,518 Lease liability 626 Deferred revenue 50,266 Total liabilities assumed 357,725 Net assets acquired $ 2,498,347 |
Schedule of Pro Forma Financial Information | The following unaudited pro forma financial information (in thousands, except per share amounts) represents a summary of the condensed consolidated results of operations for the three and nine months ended September 30, 2023 and 2022, assuming the Hibernia Acquisition and Tap Rock Acquisition had been completed as of January 1, 2022. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the Hibernia Acquisition and Tap Rock Acquisition had been effective as of this date, or of future results, and includes certain nonrecurring pro forma adjustments that were directly related to these business combinations. Specifically, pro forma earnings were adjusted to exclude transaction costs incurred associated with these acquisitions for the three and nine months ended September 30, 2023 and include such transaction costs in pro forma earnings for the nine months ended September 30, 2022. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Total revenue $ 1,157,615 $ 1,575,493 $ 3,306,345 $ 4,542,055 Net income 179,307 597,835 686,951 1,413,135 Net income per common share - basic $ 1.91 $ 6.06 $ 7.28 $ 14.35 Net income per common share - diluted 1.90 6.03 7.22 14.27 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Revenue Stream | Revenue attributable to each identified revenue stream is disaggregated below (in thousands): Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 DJ Basin Permian Basin (2) Total DJ Basin Permian Basin Total Operating net revenues: Oil $ 583,081 $ 258,595 $ 841,676 $ 653,548 $ — $ 653,548 Natural gas (1) 68,641 12,694 81,335 216,917 — 216,917 Natural gas liquids (“NGL”) (1) 77,502 35,403 112,905 137,486 — 137,486 Oil and natural gas sales $ 729,224 $ 306,692 $ 1,035,916 $ 1,007,951 $ — $ 1,007,951 __________________________ (1) Includes $0.4 million and $0.4 million of deferred revenue that has been recognized during the three months ended September 30, 2023 for natural gas and NGL, respectively. (2) Represents revenue attributable to the Hibernia Acquisition and Tap Rock Acquisition for the period from August 2, 2023 through September 30, 2023. Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 DJ Basin Permian Basin (2) Total DJ Basin Permian Basin Total Operating net revenues: Oil $ 1,584,498 $ 258,595 $ 1,843,093 $ 1,981,308 $ — $ 1,981,308 Natural gas (1) 217,560 12,694 230,254 535,918 — 535,918 NGL (1) 243,714 35,403 279,117 459,899 — 459,899 Oil and natural gas sales $ 2,045,772 $ 306,692 $ 2,352,464 $ 2,977,125 $ — $ 2,977,125 __________________________ (1) Includes $0.4 million and $0.4 million of deferred revenue that has been recognized during the nine months ended September 30, 2023 for natural gas and NGL, respectively. (2) Represents revenue attributable to the Hibernia Acquisition and Tap Rock Acquisition for the period from August 2, 2023 through September 30, 2023. |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses contain the following (in thousands): September 30, 2023 December 31, 2022 Accounts payable trade $ 85,938 $ 31,783 Accrued drilling and completion costs 249,625 137,171 Accrued lease operating expense 70,722 18,109 Accrued gathering, transportation, and processing 80,441 59,398 Accrued general and administrative expense 19,282 20,054 Accrued transaction costs 6,410 — Accrued commodity derivative settlements 20,599 12,514 Accrued interest expense 75,183 5,509 Accrued settlement 1,727 1,497 Other accrued expenses 35,287 9,262 Total accounts payable and accrued expenses $ 645,214 $ 295,297 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The tables below present the related carrying values as of September 30, 2023 and December 31, 2022 (in thousands): As of September 30, 2023 Principal Amount Unamortized Discount Unamortized Deferred Financing Costs Principal Amount, Net 2026 Senior Notes $ 400,000 $ — $ 5,489 $ 394,511 2028 Senior Notes 1,350,000 16,409 5,773 1,327,818 2031 Senior Notes 1,350,000 16,600 5,841 1,327,559 Total $ 3,100,000 $ 33,009 $ 17,103 $ 3,049,888 As of December 31, 2022 Principal Amount Unamortized Discount Unamortized Deferred Financing Costs Principal Amount, Net 2026 Senior Notes $ 400,000 $ — $ 6,707 $ 393,293 The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Facility as of the dates indicated (in thousands): November 7, 2023 September 30, 2023 December 31, 2022 Revolving credit facility $ — $ 650,000 $ — Letters of credit 2,100 2,100 12,100 Available borrowing capacity 1,847,900 1,197,900 987,900 Total aggregate elected commitments $ 1,850,000 $ 1,850,000 $ 1,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Annual Minimum Commitment Payments | The minimum annual payments under these agreements for the next five years as of September 30, 2023 are presented below (in thousands): Firm Transportation Minimum Volume (1) Remainder of 2023 $ 4,531 $ 21,688 2024 18,026 20,655 2025 5,910 21,349 2026 — 17,598 2027 — 16,900 2028 and thereafter — 32,240 Total $ 28,467 $ 130,430 ___________________________ (1) The above calculation is based on the minimum volume commitment schedule (as defined in the relevant agreement) and applicable differential fees. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Share-Based Compensation Expense | The following table outlines the compensation expense recorded by type of award (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Restricted and deferred stock units $ 4,711 $ 5,809 $ 13,905 $ 14,991 Performance stock units 3,591 4,435 11,672 9,478 Total stock-based compensation $ 8,302 $ 10,244 $ 25,577 $ 24,469 |
Summary of Unrecognized Compensation Expense | As of September 30, 2023, unrecognized compensation expense related to the awards granted under the LTIP will be amortized through the relevant periods as follows (in thousands): Unrecognized Compensation Expense Final Year of Recognition Restricted and deferred stock units $ 39,645 2026 Performance stock units 23,225 2025 Total unrecognized stock-based compensation $ 62,870 |
Summary of the Status and Activity of Non-Vested RSUs, DSUs, and Options | A summary of the status and activity of non-vested RSUs and DSUs for the nine months ended September 30, 2023 is presented below: RSUs and DSUs Weighted-Average Grant-Date Fair Value Non-vested, beginning of year 675,898 $ 50.27 Granted 549,127 72.30 Vested (364,159) 47.30 Forfeited (48,866) 58.78 Non-vested, end of period 812,000 $ 65.99 A summary of the status and activity of stock options for the nine months ended September 30, 2023 is presented below: Stock Options Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding, beginning of year 15,170 $ 34.36 Exercised (13,928) 34.36 Expired (111) 34.36 Outstanding, end of period 1,131 $ 34.36 3.6 $ 49 Options outstanding and exercisable 1,131 $ 34.36 3.6 $ 49 |
Summary of the Status and Activity of PSUs | A summary of the status and activity of non-vested PSUs for the nine months ended September 30, 2023 is presented below: PSUs (1) Weighted-Average Grant-Date Fair Value Non-vested, beginning of year 345,999 $ 77.42 Granted 247,421 104.44 Vested (89,901) 78.49 Forfeited (73,759) 87.49 Expired (242) 18.26 Non-vested, end of period 429,518 $ 91.07 ___________________________ (1) The number of awards assumes that the associated performance condition is met at the target amount (multiplier of one). The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to 225% (or, for PSUs granted prior to fiscal year 2023, 200%), depending on the level of satisfaction of the performance condition. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities at Fair Value on Recurring Basis | The following tables present the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 and their classification within the fair value hierarchy (in thousands): As of September 30, 2023 Level 1 Level 2 Level 3 Derivative assets $ — $ 8,930 $ — Derivative liabilities $ — $ 136,821 $ — As of December 31, 2022 Level 1 Level 2 Level 3 Derivative assets $ — $ 3,284 $ — Derivative liabilities $ — $ 63,533 $ — |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Commodity Derivatives | As of September 30, 2023, the Company had entered into the following commodity price derivative contracts: Contract Period Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) Swaps NYMEX WTI Volumes 29,161 12,727 11,991 10,536 8,997 Weighted-Average Contract Price $ 71.83 $ 70.39 $ 68.75 $ 68.87 $ 69.46 Two-Way Collars NYMEX WTI Volumes 9,392 11,913 10,430 9,324 8,504 Weighted-Average Ceiling Price $ 82.28 $ 81.51 $ 80.83 $ 80.27 $ 79.85 Weighted-Average Floor Price $ 60.00 $ 58.00 $ 58.00 $ 58.00 $ 58.00 Three-Way Collars NYMEX WTI Volumes 1,172 573 — — — Weighted-Average Ceiling Price $ 56.49 $ 56.25 $ — $ — $ — Weighted-Average Floor Price $ 49.04 $ 45.00 $ — $ — $ — Weighted-Average Sold Put Price $ 39.04 $ 35.00 $ — $ — $ — Bought Puts NYMEX WTI Volumes — 7,942 6,953 6,216 5,669 Weighted-Average Contract Price $ — $ 55.00 $ 55.00 $ 55.00 $ 55.00 Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) Swaps NYMEX HH Volumes 45,947 31,790 31,686 31,578 1,701 Weighted-Average Contract Price $ 2.60 $ 2.69 $ 2.68 $ 2.66 $ 4.23 Two-Way Collars NYMEX HH Volumes 1,756 736 1,732 1,668 — Weighted-Average Ceiling Price $ 2.96 $ 3.16 $ 2.89 $ 3.16 $ — Weighted-Average Floor Price $ 2.38 $ 2.50 $ 2.20 $ 2.50 $ — Three-Way Collars NYMEX HH Volumes — 1,166 55 — — Weighted-Average Ceiling Price $ — $ 3.50 $ 3.42 $ — $ — Weighted-Average Floor Price $ — $ 2.50 $ 2.50 $ — $ — Weighted-Average Sold Put Price $ — $ 2.00 $ 2.00 $ — $ — Basis Protection Swaps CIG-NYMEX HH Volumes 47,703 33,691 33,473 33,246 — Weighted-Average Contract Price $ (0.46) $ (0.27) $ (0.27) $ (0.27) $ — As of November 3, 2023, the Company had entered into the following commodity price derivative contracts: Contract Period Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 - Q2 2025 Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) Swaps NYMEX WTI Volumes 29,161 12,727 11,991 10,536 3,032 Weighted-Average Contract Price $ 71.83 $ 70.39 $ 68.75 $ 68.87 $ 69.46 Two-Way Collars NYMEX WTI Volumes 9,392 25,913 22,930 18,324 10,708 Weighted-Average Ceiling Price $ 82.28 $ 88.38 $ 85.91 $ 83.26 $ 80.99 Weighted-Average Floor Price $ 60.00 $ 64.48 $ 64.54 $ 63.89 $ 66.79 Three-Way Collars NYMEX WTI Volumes 1,172 573 — — — Weighted-Average Ceiling Price $ 56.49 $ 56.25 $ — $ — $ — Weighted-Average Floor Price $ 49.04 $ 45.00 $ — $ — $ — Weighted-Average Sold Put Price $ 39.04 $ 35.00 $ — $ — $ — Puts NYMEX WTI Volumes — 7,942 6,953 6,216 1,911 Weighted-Average Strike Price $ — $ 55.00 $ 55.00 $ 55.00 $ 55.00 Natural Gas Derivatives (volumes in MMBtu/day and prices in $/MMBtu) Swaps NYMEX HH Volumes 45,947 31,790 31,686 31,578 573 Weighted-Average Contract Price $ 2.60 $ 2.69 $ 2.68 $ 2.66 $ 4.23 Two-Way Collars NYMEX HH Volumes 1,756 736 1,732 1,668 — Weighted-Average Ceiling Price $ 2.96 $ 3.16 $ 2.89 $ 3.16 $ — Weighted-Average Floor Price $ 2.38 $ 2.50 $ 2.20 $ 2.50 $ — Three-Way Collars NYMEX HH Volumes — 1,166 55 — — Weighted-Average Ceiling Price $ — $ 3.50 $ 3.42 $ — $ — Weighted-Average Floor Price $ — $ 2.50 $ 2.50 $ — $ — Weighted-Average Sold Put Price $ — $ 2.00 $ 2.00 $ — $ — Basis Protection Swaps CIG-NYMEX HH Volumes 47,703 33,691 33,473 33,246 — Weighted-Average Contract Price $ (0.46) $ (0.27) $ (0.27) $ (0.27) $ — |
Summary of all the Company's Derivative Positions | The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as well as a reconciliation between the gross assets and liabilities and the potential effects of master netting arrangements on the fair value of the Company’s commodity derivative contracts as of September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 December 31, 2022 Derivative Assets: Commodity contracts - current $ 7,058 $ 2,490 Commodity contracts - noncurrent 1,872 794 Total derivative assets 8,930 3,284 Amounts not offset in the accompanying balance sheets (906) — Total derivative assets, net $ 8,024 $ 3,284 Derivative Liabilities: Commodity contracts - current $ (126,053) $ (46,334) Commodity contracts - long-term (10,768) (17,199) Total derivative liabilities (136,821) (63,533) Amounts not offset in the accompanying balance sheets 906 — Total derivative liabilities, net $ (135,915) $ (63,533) |
Summary of the Components of the Derivative Gain (Loss) | The following table summarizes the components of the derivative gain (loss) presented on the accompanying statements of operations for the periods below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Derivative cash settlement loss: Oil contracts $ (32,397) $ (67,623) $ (38,010) $ (307,563) Natural gas contracts (625) (66,610) (6,897) (149,485) NGL contracts — (9,678) — (35,072) Total derivative cash settlement loss (33,022) (143,911) (44,907) (492,120) Change in fair value gain (loss) (117,639) 153,192 (75,667) 133,258 Total derivative gain (loss) $ (150,661) $ 9,281 $ (120,574) $ (358,862) |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligation Changes | A roll-forward of the Company’s asset retirement obligation is as follows (in thousands): Amount Balance as of December 31, 2022 $ 291,026 Additional liabilities incurred 42,549 Accretion expense 12,134 Liabilities settled (15,340) Balance as of September 30, 2023 $ 330,369 Current portion 25,557 Long-term portion $ 304,812 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth the calculations of basic and diluted net income per common share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income $ 139,672 $ 405,752 $ 481,420 $ 966,212 Basic net income per common share $ 1.57 $ 4.77 $ 5.75 $ 11.37 Diluted net income per common share $ 1.56 $ 4.74 $ 5.70 $ 11.30 Weighted-average shares outstanding - basic 88,911 85,069 83,700 84,968 Add: dilutive effect of stock awards 720 485 768 527 Weighted-average shares outstanding - diluted 89,631 85,554 84,468 85,495 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Balance Sheet Activity, Asset Classes | The following table summarizes the asset classes of the Company’s leases (in thousands): September 30, 2023 December 31, 2022 Operating Leases Field equipment (1) $ 64,076 $ 15,131 Corporate leases 6,140 8,235 Vehicles 4,446 759 Total right-of-use asset $ 74,662 $ 24,125 Field equipment (1) $ 64,132 $ 15,131 Corporate leases 6,796 8,898 Vehicles 4,446 759 Total lease liability $ 75,374 $ 24,788 Finance Leases Right of use asset - field equipment $ 17,104 $ — Lease liability - field equipment $ 17,131 $ — ____________________________ (1) Includes drilling rigs, compressors, certain natural gas processing equipment, and other field equipment. |
Schedule of Future Minimum Commitments for Operating Leases | Future commitments by year for the Company’s leases with a lease term of greater than one year as of September 30, 2023 are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the accompanying balance sheets as follows (in thousands): Operating Leases Finance Leases Remainder of 2023 $ 11,103 $ 992 2024 39,100 4,210 2025 21,887 4,277 2026 5,554 4,020 2027 2,138 3,683 Thereafter 654 2,810 Total lease payments 80,436 19,992 Less: imputed interest (5,062) (2,861) Total lease liability $ 75,374 $ 17,131 |
Schedule of Future Minimum Commitments for Finance Leases | Future commitments by year for the Company’s leases with a lease term of greater than one year as of September 30, 2023 are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the accompanying balance sheets as follows (in thousands): Operating Leases Finance Leases Remainder of 2023 $ 11,103 $ 992 2024 39,100 4,210 2025 21,887 4,277 2026 5,554 4,020 2027 2,138 3,683 Thereafter 654 2,810 Total lease payments 80,436 19,992 Less: imputed interest (5,062) (2,861) Total lease liability $ 75,374 $ 17,131 |
SUPPLEMENTAL DISCLOSURES OF C_2
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow disclosures are presented below (in thousands): Nine Months Ended September 30, 2023 2022 Supplemental cash flow information: Cash (paid) refunded for income taxes $ 7,861 $ (59,800) Cash paid for interest (17,110) (17,124) Supplemental non-cash investing activities: Non-cash investing activities 1,065,901 — Non-cash financing activities 990,204 — Changes in working capital related to capital expenditures (112,454) 33 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Dividends Paid | The following table summarizes the dividends declared for the nine months ended September 30, 2023 and 2022: Base Variable Total Total (per share) (per share) (per share) (in thousands) 2023: First quarter $ 0.50 $ 1.65 $ 2.15 $ 176,878 Second quarter $ 0.50 $ 1.62 $ 2.12 $ 173,358 Third Quarter $ 0.50 $ 1.24 $ 1.74 $ 167,010 2022: First quarter $ 0.46 $ 0.75 $ 1.21 $ 104,444 Second quarter $ 0.46 $ 0.90 $ 1.36 $ 117,151 Third Quarter $ 0.46 $ 1.30 $ 1.76 $ 151,729 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Aug. 02, 2023 | Mar. 01, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||||
Transaction costs | $ 28,450 | $ 1,814 | $ 60,077 | $ 23,766 | ||
Hibernia Acquisition and Tap Rock Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Revenue, included in statements of operations | $ 124,100 | $ 182,600 | ||||
Hibernia Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 2,200,000 | |||||
Net assets acquired | 2,179,561 | |||||
Tap Rock Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | 1,508,143 | |||||
Total consideration | 2,498,347 | |||||
Net assets acquired | $ 2,498,347 | |||||
Bison Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Total consideration | $ 280,400 | |||||
Net assets acquired | 294,000 | |||||
Bargain purchase gain | $ 13,600 |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES - Purchase Price Allocation (Details) $ in Thousands | Aug. 02, 2023 USD ($) |
Hibernia Acquisition | |
Assets Acquired | |
Cash and cash equivalents | $ 30,671 |
Accounts receivable - oil and natural gas sales | 89,766 |
Accounts receivable - joint interest and other | 4,874 |
Proved properties | 2,123,791 |
Unproved properties | 115,802 |
Other property and equipment | 520 |
Right-of-use assets | 30,393 |
Total assets acquired | 2,395,817 |
Liabilities Assumed | |
Accounts payable and accrued expenses | 91,977 |
Production taxes payable | 10,320 |
Oil and natural gas revenue distribution payable | 75,267 |
Asset retirement obligations | 8,299 |
Lease liability | 30,393 |
Total liabilities assumed | 216,256 |
Net assets acquired | 2,179,561 |
Tap Rock Acquisition | |
Assets Acquired | |
Cash and cash equivalents | 6,543 |
Accounts receivable - oil and natural gas sales | 106,255 |
Accounts receivable - joint interest and other | 31,300 |
Prepaid expenses and other | 22,013 |
Proved properties | 2,377,649 |
Unproved properties | 298,859 |
Other property and equipment | 12,827 |
Right-of-use assets | 626 |
Total assets acquired | 2,856,072 |
Liabilities Assumed | |
Accounts payable and accrued expenses | 179,626 |
Production taxes payable | 15,557 |
Oil and natural gas revenue distribution payable | 78,758 |
Ad valorem taxes | 1,374 |
Asset retirement obligations | 31,518 |
Lease liability | 626 |
Deferred revenue | 50,266 |
Total liabilities assumed | 357,725 |
Net assets acquired | $ 2,498,347 |
ACQUISITIONS AND DIVESTITURES_3
ACQUISITIONS AND DIVESTITURES - Consideration Transferred (Details) - Tap Rock Acquisition $ / shares in Units, $ in Thousands | Aug. 02, 2023 USD ($) $ / shares shares |
Business Acquisition [Line Items] | |
Cash consideration | $ 1,508,143 |
Closing price per share (in dollars per share) | $ / shares | $ 73.14 |
Equity consideration | $ 990,204 |
Total consideration | $ 2,498,347 |
Common Stock | |
Business Acquisition [Line Items] | |
Shares of common stock issued (in shares) | shares | 13,538,472 |
ACQUISITIONS AND DIVESTITURES_4
ACQUISITIONS AND DIVESTITURES - Pro Forma Information (Details) - Hibernia Acquisition and Tap Rock Acquisition - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Total revenue | $ 1,157,615 | $ 1,575,493 | $ 3,306,345 | $ 4,542,055 |
Net income | $ 179,307 | $ 597,835 | $ 686,951 | $ 1,413,135 |
Net income per common share - basic (in dollars per share) | $ 1.91 | $ 6.06 | $ 7.28 | $ 14.35 |
Net income per common share - diluted (in dollars per share) | $ 1.90 | $ 6.03 | $ 7.22 | $ 14.27 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Revenue by Revenue Stream (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | $ 1,035,916 | $ 1,007,951 | $ 2,352,464 | $ 2,977,125 |
DJ Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 729,224 | 1,007,951 | 2,045,772 | 2,977,125 |
Permian Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 306,692 | 0 | 306,692 | 0 |
Oil | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 841,676 | 653,548 | 1,843,093 | 1,981,308 |
Oil | DJ Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 583,081 | 653,548 | 1,584,498 | 1,981,308 |
Oil | Permian Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 258,595 | 0 | 258,595 | 0 |
Natural gas | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 81,335 | 216,917 | 230,254 | 535,918 |
Deferred revenue recognized | 400 | 400 | ||
Natural gas | DJ Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 68,641 | 216,917 | 217,560 | 535,918 |
Natural gas | Permian Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 12,694 | 0 | 12,694 | 0 |
Natural gas liquids (“NGL”) | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 112,905 | 137,486 | 279,117 | 459,899 |
Deferred revenue recognized | 400 | 400 | ||
Natural gas liquids (“NGL”) | DJ Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | 77,502 | 137,486 | 243,714 | 459,899 |
Natural gas liquids (“NGL”) | Permian Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and natural gas sales | $ 35,403 | $ 0 | $ 35,403 | $ 0 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Receivable from contracts with customers | $ 573,077 | $ 343,500 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable trade | $ 85,938 | $ 31,783 |
Accrued drilling and completion costs | 249,625 | 137,171 |
Accrued lease operating expense | 70,722 | 18,109 |
Accrued gathering, transportation, and processing | 80,441 | 59,398 |
Accrued general and administrative expense | 19,282 | 20,054 |
Accrued transaction costs | 6,410 | 0 |
Accrued commodity derivative settlements | 20,599 | 12,514 |
Accrued interest expense | 75,183 | 5,509 |
Accrued settlement | 1,727 | 1,497 |
Other accrued expenses | 35,287 | 9,262 |
Total accounts payable and accrued expenses | $ 645,214 | $ 295,297 |
LONG-TERM DEBT - Schedule of Ca
LONG-TERM DEBT - Schedule of Carrying Values (Details) - Senior Notes - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
LONG-TERM DEBT | ||
Principal Amount | $ 3,100,000 | |
Unamortized Discount | 33,009 | |
Unamortized Deferred Financing Costs | 17,103 | |
Principal Amount, Net | 3,049,888 | |
2026 Senior Notes | ||
LONG-TERM DEBT | ||
Principal Amount | 400,000 | $ 400,000 |
Unamortized Discount | 0 | 0 |
Unamortized Deferred Financing Costs | 5,489 | 6,707 |
Principal Amount, Net | 394,511 | $ 393,293 |
2028 Senior Notes | ||
LONG-TERM DEBT | ||
Principal Amount | 1,350,000 | |
Unamortized Discount | 16,409 | |
Unamortized Deferred Financing Costs | 5,773 | |
Principal Amount, Net | 1,327,818 | |
2031 Senior Notes | ||
LONG-TERM DEBT | ||
Principal Amount | 1,350,000 | |
Unamortized Discount | 16,600 | |
Unamortized Deferred Financing Costs | 5,841 | |
Principal Amount, Net | $ 1,327,559 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||||||||||||
Jun. 29, 2023 USD ($) | May 01, 2022 | Apr. 20, 2022 USD ($) | Nov. 01, 2021 | Oct. 13, 2021 USD ($) agency | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Aug. 02, 2023 USD ($) | Aug. 01, 2023 USD ($) | Jun. 23, 2023 USD ($) bridge_loan_facility | Dec. 31, 2022 USD ($) | Oct. 27, 2022 USD ($) | Apr. 30, 2021 USD ($) | |
LONG-TERM DEBT | |||||||||||||||
Proceeds from issuance of senior notes | $ 2,666,250,000 | $ 0 | |||||||||||||
Transaction costs | $ 28,450,000 | $ 1,814,000 | 60,077,000 | 23,766,000 | |||||||||||
Interest expense | 76,500,000 | 7,500,000 | 92,700,000 | 24,700,000 | |||||||||||
Capitalized interest | 0 | $ 0 | 0 | $ 0 | |||||||||||
Revolving credit facility | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Minimum current ratio covenant | 1 | ||||||||||||||
Amended Credit Agreement | Revolving credit facility | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Maximum borrowing capacity | $ 4,000,000,000 | $ 2,000,000,000 | |||||||||||||
Covenant, minimum percentage of mortgage on total value of certain proved oil and gas properties | 90% | ||||||||||||||
Maximum net leverage ratio | 3 | ||||||||||||||
Borrowing base amount | 3,000,000,000 | $ 1,850,000,000 | |||||||||||||
Elected commitments | $ 1,000,000,000 | $ 1,850,000,000 | |||||||||||||
Amended Credit Agreement | Revolving credit facility | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Basis spread on variable rate | 0.50% | ||||||||||||||
Amended Credit Agreement | Revolving credit facility | SOFR | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Basis spread on variable rate | 1% | ||||||||||||||
Basis spread on variable rate, floor | 0.50% | ||||||||||||||
Amended Credit Agreement | Revolving credit facility | SOFR | Minimum | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Basis spread on variable rate | 2% | ||||||||||||||
Amended Credit Agreement | Revolving credit facility | SOFR | Maximum | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Basis spread on variable rate | 3% | ||||||||||||||
Amended Credit Agreement | Revolving credit facility | SOFR, Plus Basis Spread One | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Basis spread on variable rate, floor | 1.50% | ||||||||||||||
Amended Credit Agreement | Revolving credit facility | SOFR, Plus Basis Spread One | Minimum | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Basis spread on variable rate | 1% | ||||||||||||||
Amended Credit Agreement | Revolving credit facility | SOFR, Plus Basis Spread One | Maximum | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Basis spread on variable rate | 2% | ||||||||||||||
Amended Credit Agreement | HighPoint Merger | Revolving credit facility | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Deferred financing costs, gross | 36,100,000 | 36,100,000 | $ 8,500,000 | ||||||||||||
Deferred financing costs, net | 28,600,000 | 28,600,000 | 5,500,000 | ||||||||||||
Debt issuance costs | 7,500,000 | 7,500,000 | 3,000,000 | ||||||||||||
Bridge Loans Credit Facilities | Hibernia Acquisition | Bridge Loan | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Aggregate principal amount | $ 2,700,000,000 | ||||||||||||||
Number of separate 364-day bridge loan facilities | bridge_loan_facility | 2 | ||||||||||||||
Total secured leverage test | 2 | ||||||||||||||
Transaction costs | 500,000 | 21,000,000 | |||||||||||||
Senior Notes | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Debt issuance costs | 17,103,000 | 17,103,000 | |||||||||||||
Senior Notes | Senior Notes due 2028, 8.375% and Senior Notes due 2031, 8.750% | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Proceeds from issuance of senior notes | $ 2,670,000,000 | ||||||||||||||
Debt issuance costs | $ 33,800,000 | ||||||||||||||
Senior Notes | Senior Notes due 2028, 8.375% and Senior Notes due 2031, 8.750% | Debt Instrument, Redemption, Period Eight | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Percentage of principal amount redeemed | 65% | ||||||||||||||
Redemption period, after date of closing of equity offering | 180 days | ||||||||||||||
Senior Notes | Senior Notes due 2028, 8.375% | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Interest rate (as a percent) | 8.375% | ||||||||||||||
Aggregate principal amount | $ 1,350,000,000 | ||||||||||||||
Debt issuance costs | 5,773,000 | 5,773,000 | |||||||||||||
Senior Notes | Senior Notes due 2028, 8.375% | Debt Instrument, Redemption, Period Four | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 104.188% | ||||||||||||||
Senior Notes | Senior Notes due 2028, 8.375% | Debt Instrument, Redemption, Period Five | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 102.094% | ||||||||||||||
Senior Notes | Senior Notes due 2028, 8.375% | Debt Instrument, Redemption, Period Six | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 100% | ||||||||||||||
Senior Notes | Senior Notes due 2028, 8.375% | Debt Instrument, Redemption, Period Seven | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 108.375% | ||||||||||||||
Percentage of principal amount redeemed | 35% | ||||||||||||||
Senior Notes | Senior Notes due 2031, 8.750% | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Interest rate (as a percent) | 8.75% | ||||||||||||||
Aggregate principal amount | $ 1,350,000,000 | ||||||||||||||
Debt issuance costs | 5,841,000 | 5,841,000 | |||||||||||||
Senior Notes | Senior Notes due 2031, 8.750% | Debt Instrument, Redemption, Period Four | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 104.375% | ||||||||||||||
Senior Notes | Senior Notes due 2031, 8.750% | Debt Instrument, Redemption, Period Five | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 102.188% | ||||||||||||||
Senior Notes | Senior Notes due 2031, 8.750% | Debt Instrument, Redemption, Period Six | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 100% | ||||||||||||||
Senior Notes | Senior Notes due 2031, 8.750% | Debt Instrument, Redemption, Period Seven | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 108.75% | ||||||||||||||
Percentage of principal amount redeemed | 35% | ||||||||||||||
Senior Notes | Senior Notes due 2026, 5.0% | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Interest rate (as a percent) | 5% | ||||||||||||||
Aggregate principal amount | $ 400,000,000 | ||||||||||||||
Covenant, investment-grade rating, number of ratings agencies (at least) | agency | 2 | ||||||||||||||
Debt issuance costs | $ 5,489,000 | $ 5,489,000 | $ 6,707,000 | ||||||||||||
Senior Notes | Senior Notes due 2026, 5.0% | Debt Instrument, Redemption, Period One | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Percentage of principal amount redeemed | 35% | ||||||||||||||
Redemption period, after date of closing of equity offering | 180 days | ||||||||||||||
Senior Notes | Senior Notes due 2026, 5.0% | Debt Instrument, Redemption, Period Two | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 102.50% | ||||||||||||||
Percentage of principal amount not redeemed | 65% | ||||||||||||||
Senior Notes | Senior Notes due 2026, 5.0% | Debt Instrument, Redemption, Period Three | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 101.25% | ||||||||||||||
Senior Notes | Senior Notes due 2026, 5.0% | Debt Instrument, Redemption, Period Four | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 100% | ||||||||||||||
Senior Notes | Senior Notes due 2026, 5.0% | Debt Instrument, Redemption, Period Five | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 105% | ||||||||||||||
Senior Notes | Senior Notes due 2026, 7.50% | HighPoint Merger | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Interest rate (as a percent) | 7.50% | ||||||||||||||
Aggregate principal amount | $ 100,000,000 | ||||||||||||||
Senior Notes | Senior Notes due 2026, 7.50% | HighPoint Merger | Debt Instrument, Redemption, Period Two | |||||||||||||||
LONG-TERM DEBT | |||||||||||||||
Redemption price, percentage | 100% |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt Outstanding and Borrowing Capacity (Details) - Line of Credit - USD ($) $ in Thousands | Nov. 07, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Revolving credit facility and Letters of credit | |||
LONG-TERM DEBT | |||
Available borrowing capacity | $ 1,197,900 | $ 987,900 | |
Total aggregate elected commitments | 1,850,000 | 1,000,000 | |
Revolving credit facility and Letters of credit | Subsequent Event | |||
LONG-TERM DEBT | |||
Available borrowing capacity | $ 1,847,900 | ||
Total aggregate elected commitments | 1,850,000 | ||
Revolving credit facility | |||
LONG-TERM DEBT | |||
Credit facility outstanding | 650,000 | 0 | |
Revolving credit facility | Subsequent Event | |||
LONG-TERM DEBT | |||
Credit facility outstanding | 0 | ||
Letters of credit | |||
LONG-TERM DEBT | |||
Credit facility outstanding | $ 2,100 | $ 12,100 | |
Letters of credit | Subsequent Event | |||
LONG-TERM DEBT | |||
Credit facility outstanding | $ 2,100 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) plant bbl horizontal_well | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) plant bbl horizontal_well Bcf bbl MMcf | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Loss Contingencies [Line Items] | |||||
Unused commitments | $ 3,942 | $ 193 | $ 4,696 | $ 2,700 | |
Pipeline Transportation Commitment | |||||
Loss Contingencies [Line Items] | |||||
Minimum volume transportation charges, barrels per day requirement thereafter through April 2025 (in barrels per day) | bbl | 12,500 | 12,500 | |||
Financial commitment | $ 28,500 | $ 28,500 | |||
Natural Gas and Fresh Water | Natural Gas and Fresh Water Commitment | |||||
Loss Contingencies [Line Items] | |||||
Financial commitment | 0 | 0 | |||
NGL Crude Logistics | Crude Oil | Crude Oil Commitment | |||||
Loss Contingencies [Line Items] | |||||
Financial commitment | $ 11,700 | $ 11,700 | |||
Maximum volume requirement | bbl | 20,000 | ||||
Third-Party Midstream Provider | |||||
Loss Contingencies [Line Items] | |||||
Number of qualifying wells required to be drilled | horizontal_well | 106 | 106 | |||
Minimum number of qualifying wells required to be drilled, period ending December 31, 2026 | 2 years | ||||
Third-Party Midstream Provider | Natural gas contracts | Natural Gas Commitment and Take-In-Kind Natural Gas Liquids Commitment | |||||
Loss Contingencies [Line Items] | |||||
Financial commitment | $ 109,700 | $ 109,700 | |||
Unused commitments | 3,600 | ||||
Expected shortfall payments | $ 31,900 | $ 31,900 | |||
Remaining term | 6 years | ||||
Third-Party Midstream Provider | Natural gas contracts | Natural Gas Commitment | |||||
Loss Contingencies [Line Items] | |||||
Annual minimum volume requirement | Bcf | 13 | ||||
Third-Party Midstream Provider | Natural gas contracts | Take-In-Kind Natural Gas Liquids Commitment | |||||
Loss Contingencies [Line Items] | |||||
Daily sales commitment requirement, through year seven | bbl | 7,500 | ||||
Monthly roll forward shortfall requirement, percent (up to) | 10% | ||||
Third-Party Producers and a Third-Party Midstream Provider | Natural gas contracts | Natural Gas Commitment | |||||
Loss Contingencies [Line Items] | |||||
Number of different plants | plant | 2 | 2 | |||
Daily baseline volume requirement | MMcf | 65 | ||||
Daily baseline volume requirement, term | 7 years | ||||
Third-Party Producers and a Third-Party Midstream Provider | Natural gas contracts | Natural Gas Commitment | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Daily incremental volume requirement | MMcf | 51.5 | ||||
Third-Party Producers and a Third-Party Midstream Provider | Natural gas contracts | Natural Gas Commitment | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Daily incremental volume requirement | MMcf | 20.6 | ||||
Water Suppliers | Natural Gas and Fresh Water | Natural Gas and Fresh Water Commitment | |||||
Loss Contingencies [Line Items] | |||||
Financial commitment | $ 9,000 | $ 9,000 | |||
Sterling Energy Investments LLC Versus HighPoint Operating Corporation Litigation | Pending Litigation | |||||
Loss Contingencies [Line Items] | |||||
Accrued litigation liability | $ 800 | $ 800 | $ 700 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Purchase Obligations (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Firm Transportation | |
Long-term Purchase Commitment [Line Items] | |
Remainder of 2023 | $ 4,531 |
2024 | 18,026 |
2025 | 5,910 |
2026 | 0 |
2027 | 0 |
2028 and thereafter | 0 |
Total | 28,467 |
Minimum Volume | |
Long-term Purchase Commitment [Line Items] | |
Remainder of 2023 | 21,688 |
2024 | 20,655 |
2025 | 21,349 |
2026 | 17,598 |
2027 | 16,900 |
2028 and thereafter | 32,240 |
Total | $ 130,430 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2023 | Nov. 30, 2021 | Sep. 30, 2021 | Apr. 30, 2017 | |
LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate intrinsic value, options exercised | $ 0.5 | |||
LTIP | Restricted Stock Units (RSUs) and Deferred Stock Units (DSUs) | Non-executive Board Members | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of units granted | $ 39.7 | |||
LTIP | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares released upon vesting (in shares) | 1 | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 2 years | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Two, Anniversary One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percent of shares | 50% | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Two, Anniversary Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percent of shares | 50% | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Three, Anniversary One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percent of shares | 33% | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Three, Anniversary Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percent of shares | 33% | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Three, Anniversary Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percent of shares | 33% | |||
LTIP | Deferred Stock Units (DSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares released upon vesting (in shares) | 1 | |||
LTIP | Deferred Stock Units (DSUs) | Vesting Period One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
LTIP | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
LTIP | Performance Stock Units (PSUs) | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Fair value of units granted | $ 25.8 | |||
Number of trading days | 30 days | |||
LTIP | Performance Stock Units (PSUs) | Officers | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 0 | |||
LTIP | Performance Stock Units (PSUs) | Officers | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 2.25 | |||
LTIP | Performance Stock Units (PSUs), Granted Prior to Fiscal Year 2023 | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 2 | |||
2017 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance (in shares) | 2,467,430 | |||
2021 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance (in shares) | 700,000 | |||
Extraction Equity Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance (in shares) | 3,305,080 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Expenses (Details) - LTIP - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 8,302 | $ 10,244 | $ 25,577 | $ 24,469 |
Restricted and deferred stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 4,711 | 5,809 | 13,905 | 14,991 |
Performance stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 3,591 | $ 4,435 | $ 11,672 | $ 9,478 |
STOCK-BASED COMPENSATION - Unre
STOCK-BASED COMPENSATION - Unrecognized Compensation Expense (Details) - LTIP $ in Thousands | Sep. 30, 2023 USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | $ 62,870 |
Restricted and deferred stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | 39,645 |
Performance stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | $ 23,225 |
STOCK-BASED COMPENSATION - Acti
STOCK-BASED COMPENSATION - Activity of Non-Option Awards (Details) - LTIP | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
RSUs and DSUs | |
Stock Units | |
Non-vested, beginning of year (in shares) | shares | 675,898 |
Granted (in shares) | shares | 549,127 |
Vested (in shares) | shares | (364,159) |
Forfeited (in shares) | shares | (48,866) |
Non-vested, end of period (in shares) | shares | 812,000 |
Weighted-Average Grant-Date Fair Value | |
Non-vested, beginning of year (in dollars per share) | $ / shares | $ 50.27 |
Granted (in dollars per share) | $ / shares | 72.30 |
Vested (in dollars per share) | $ / shares | 47.30 |
Forfeited (in dollars per share) | $ / shares | 58.78 |
Non-vested, end of period (in dollars per share) | $ / shares | $ 65.99 |
PSUs | Officers | |
Stock Units | |
Non-vested, beginning of year (in shares) | shares | 345,999 |
Granted (in shares) | shares | 247,421 |
Vested (in shares) | shares | (89,901) |
Forfeited (in shares) | shares | (73,759) |
Expired (in shares) | shares | (242) |
Non-vested, end of period (in shares) | shares | 429,518 |
Weighted-Average Grant-Date Fair Value | |
Non-vested, beginning of year (in dollars per share) | $ / shares | $ 77.42 |
Granted (in dollars per share) | $ / shares | 104.44 |
Vested (in dollars per share) | $ / shares | 78.49 |
Forfeited (in dollars per share) | $ / shares | 87.49 |
Expired (in dollars per share) | $ / shares | 18.26 |
Non-vested, end of period (in dollars per share) | $ / shares | $ 91.07 |
Target amount multiplier | 1 |
PSUs | Minimum | Officers | |
Weighted-Average Grant-Date Fair Value | |
Ratio at which award holders get common stock of the company | 0 |
PSUs | Maximum | Officers | |
Weighted-Average Grant-Date Fair Value | |
Ratio at which award holders get common stock of the company | 2.25 |
PSUs, Granted Prior to Fiscal Year 2023 | Officers | |
Weighted-Average Grant-Date Fair Value | |
Ratio at which award holders get common stock of the company | 2 |
STOCK-BASED COMPENSATION - Ac_2
STOCK-BASED COMPENSATION - Activity of Stock Options (Details) - LTIP - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2023 | |
Stock Options | |
Outstanding, beginning of year (shares) | 15,170 |
Exercised (shares) | (13,928) |
Expired (shares) | (111) |
Outstanding, end of period (shares) | 1,131 |
Options outstanding and exercisable (shares) | 1,131 |
Weighted- Average Exercise Price | |
Outstanding, beginning of year (in dollars per share) | $ 34.36 |
Exercised (in dollars per share) | 34.36 |
Expired (in dollars per share) | 34.36 |
Outstanding, end of period (in dollars per share) | 34.36 |
Options outstanding and exercisable (in dollars per share) | $ 34.36 |
Additional Information | |
Outstanding, Weighted-Average Remaining Contractual Term (in years) | 3 years 7 months 6 days |
Options outstanding and exercisable, Weighted-Average Remaining Contractual Term (in years) | 3 years 7 months 6 days |
Outstanding, Aggregate Intrinsic Value (in thousands) | $ 49 |
Options outstanding and exercisable, Aggregate Intrinsic Value (in thousands) | $ 49 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Non-financial Assets and Liabilities (Details) - Estimate of Fair Value Measurement - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Level 1 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | $ 0 | $ 0 |
Derivative liabilities | 0 | 0 |
Level 2 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | 8,930 | 3,284 |
Derivative liabilities | 136,821 | 63,533 |
Level 3 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Nov. 01, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Financial assets and liabilities accounted for at fair value | |||||
Proved oil and gas property impairments | $ 0 | $ 0 | $ 0 | $ 0 | |
Abandonment and impairment of unproved properties | 0 | $ 0 | 0 | $ 17,975,000 | |
Extraction Merger | Tranche A and Tranche B Warrants | |||||
Financial assets and liabilities accounted for at fair value | |||||
Fair value allocated to consideration transferred | $ 77,500,000 | ||||
2026 Senior Notes | Senior Notes | Level 1 | |||||
Financial assets and liabilities accounted for at fair value | |||||
Long-term debt, fair value | 375,400,000 | 375,400,000 | |||
2028 Senior Notes | Senior Notes | Level 1 | |||||
Financial assets and liabilities accounted for at fair value | |||||
Long-term debt, fair value | 1,380,000,000 | 1,380,000,000 | |||
2031 Senior Notes | Senior Notes | Level 1 | |||||
Financial assets and liabilities accounted for at fair value | |||||
Long-term debt, fair value | $ 1,380,000,000 | $ 1,380,000,000 |
DERIVATIVES - Commodity Derivat
DERIVATIVES - Commodity Derivatives (Details) - Scenario, Forecast | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2024 MMBTU $ / bbl $ / MMBTU bbl | Sep. 30, 2024 MMBTU $ / MMBTU $ / gal $ / bbl bbl | Jun. 30, 2024 MMBTU $ / MMBTU $ / bbl $ / gal bbl | Mar. 31, 2024 MMBTU $ / bbl $ / MMBTU $ / gal bbl | Dec. 31, 2023 MMBTU $ / bbl $ / MMBTU bbl | Jun. 30, 2025 MMBTU $ / bbl $ / gal $ / MMBTU bbl | |
Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) | Swaps | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes (in unit per day) | bbl | 8,997 | 10,536 | 11,991 | 12,727 | 29,161 | |
Weighted-Average Contract Price (in dollars per unit) | $ / bbl | 69.46 | 68.87 | 68.75 | 70.39 | 71.83 | |
Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) | Swaps | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes (in unit per day) | bbl | 10,536 | 11,991 | 12,727 | 29,161 | 3,032 | |
Weighted-Average Contract Price (in dollars per unit) | $ / bbl | 68.87 | 68.75 | 70.39 | 71.83 | 69.46 | |
Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) | Two-Way Collars | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes (in unit per day) | bbl | 8,504 | 9,324 | 10,430 | 11,913 | 9,392 | |
Weighted-Average Ceiling Price (in dollars per unit) | $ / bbl | 79.85 | 80.27 | 80.83 | 81.51 | 82.28 | |
Weighted-Average Floor Price (in dollars per unit) | $ / bbl | 58 | 58 | 58 | 58 | 60 | |
Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) | Two-Way Collars | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes (in unit per day) | bbl | 18,324 | 22,930 | 25,913 | 9,392 | 10,708 | |
Weighted-Average Ceiling Price (in dollars per unit) | $ / bbl | 83.26 | 85.91 | 88.38 | 82.28 | 80.99 | |
Weighted-Average Floor Price (in dollars per unit) | $ / bbl | 63.89 | 64.54 | 64.48 | 60 | 66.79 | |
Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) | Three-Way Collars | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes (in unit per day) | bbl | 573 | 1,172 | ||||
Weighted-Average Ceiling Price (in dollars per unit) | $ / bbl | 56.25 | 56.49 | ||||
Weighted-Average Floor Price (in dollars per unit) | $ / bbl | 45 | 49.04 | ||||
Weighted-Average Sold Put Price (in dollars per unit) | $ / bbl | 35 | 39.04 | ||||
Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) | Three-Way Collars | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes (in unit per day) | bbl | 573 | 1,172 | ||||
Weighted-Average Ceiling Price (in dollars per unit) | $ / bbl | 56.25 | 56.49 | ||||
Weighted-Average Floor Price (in dollars per unit) | $ / bbl | 45 | 49.04 | ||||
Weighted-Average Sold Put Price (in dollars per unit) | $ / bbl | 35 | 39.04 | ||||
Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) | Bought Puts | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes (in unit per day) | bbl | 5,669 | 6,216 | 6,953 | 7,942 | ||
Weighted-Average Contract Price (in dollars per unit) | $ / bbl | 55 | 55 | 55 | 55 | ||
Oil Derivatives (volumes in Bbl/day and prices in $/Bbl) | Puts | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes (in unit per day) | bbl | 6,216 | 6,953 | 7,942 | 1,911 | ||
Weighted-Average Strike Price (in dollars per unit) | $ / gal | 55 | 55 | 55 | 55 | ||
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) | Swaps | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Contract Price (in dollars per unit) | 4.23 | 2.66 | 2.68 | 2.69 | 2.60 | |
NYMEX HH Volumes and CIG NYMEX HH Volumes (in unit per day) | MMBTU | 1,701 | 31,578 | 31,686 | 31,790 | 45,947 | |
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) | Swaps | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Contract Price (in dollars per unit) | 2.66 | 2.68 | 2.69 | 2.60 | 4.23 | |
NYMEX HH Volumes and CIG NYMEX HH Volumes (in unit per day) | MMBTU | 31,578 | 31,686 | 31,790 | 45,947 | 573 | |
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) | Two-Way Collars | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Ceiling Price (in dollars per unit) | 3.16 | 2.89 | 3.16 | 2.96 | ||
Weighted-Average Floor Price (in dollars per unit) | 2.50 | 2.20 | 2.50 | 2.38 | ||
NYMEX HH Volumes and CIG NYMEX HH Volumes (in unit per day) | MMBTU | 1,668 | 1,732 | 736 | 1,756 | ||
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) | Two-Way Collars | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Ceiling Price (in dollars per unit) | 3.16 | 2.89 | 3.16 | 2.96 | ||
Weighted-Average Floor Price (in dollars per unit) | 2.50 | 2.20 | 2.50 | 2.38 | ||
NYMEX HH Volumes and CIG NYMEX HH Volumes (in unit per day) | MMBTU | 1,668 | 1,732 | 736 | 1,756 | ||
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) | Three-Way Collars | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Ceiling Price (in dollars per unit) | 3.42 | 3.50 | ||||
Weighted-Average Floor Price (in dollars per unit) | 2.50 | 2.50 | ||||
Weighted-Average Sold Put Price (in dollars per unit) | 2 | 2 | ||||
NYMEX HH Volumes and CIG NYMEX HH Volumes (in unit per day) | MMBTU | 55 | 1,166 | ||||
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) | Three-Way Collars | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Ceiling Price (in dollars per unit) | 3.42 | 3.50 | ||||
Weighted-Average Floor Price (in dollars per unit) | 2.50 | 2.50 | ||||
Weighted-Average Sold Put Price (in dollars per unit) | 2 | 2 | ||||
NYMEX HH Volumes and CIG NYMEX HH Volumes (in unit per day) | MMBTU | 55 | 1,166 | ||||
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) | Basis Protection Swaps | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Contract Price (in dollars per unit) | (0.27) | (0.27) | (0.27) | (0.46) | ||
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/million British thermal units (“MMBtu”)) | Basis Protection Swaps | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Contract Price (in dollars per unit) | (0.27) | (0.27) | (0.27) | (0.46) | ||
Natural Gas (CIG) | Basis Protection Swaps | ||||||
Derivative [Line Items] | ||||||
NYMEX HH Volumes and CIG NYMEX HH Volumes (in unit per day) | MMBTU | 33,246 | 33,473 | 33,691 | 47,703 | ||
Natural Gas (CIG) | Basis Protection Swaps | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
NYMEX HH Volumes and CIG NYMEX HH Volumes (in unit per day) | MMBTU | 33,246 | 33,473 | 33,691 | 47,703 |
DERIVATIVES - Derivative Positi
DERIVATIVES - Derivative Positions (Details) - Commodity - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Derivative Assets: | ||
Total derivative assets | $ 8,930 | $ 3,284 |
Amounts not offset in the accompanying balance sheets | (906) | 0 |
Total derivative assets, net | 8,024 | 3,284 |
Derivative Liabilities: | ||
Total derivative liabilities | (136,821) | (63,533) |
Amounts not offset in the accompanying balance sheets | 906 | 0 |
Total derivative liabilities, net | (135,915) | (63,533) |
Commodity contracts - current | ||
Derivative Assets: | ||
Total derivative assets | 7,058 | 2,490 |
Commodity contracts - noncurrent | ||
Derivative Assets: | ||
Total derivative assets | 1,872 | 794 |
Commodity contracts - current | ||
Derivative Liabilities: | ||
Total derivative liabilities | (126,053) | (46,334) |
Commodity contracts - long-term | ||
Derivative Liabilities: | ||
Total derivative liabilities | $ (10,768) | $ (17,199) |
DERIVATIVES - Derivative Loss (
DERIVATIVES - Derivative Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Components of the derivative gain (loss) | ||||
Total derivative gain (loss) | $ (150,661) | $ 9,281 | $ (120,574) | $ (358,862) |
Commodity derivative | ||||
Components of the derivative gain (loss) | ||||
Total derivative cash settlement loss | (33,022) | (143,911) | (44,907) | (492,120) |
Change in fair value gain (loss) | (117,639) | 153,192 | (75,667) | 133,258 |
Total derivative gain (loss) | (150,661) | 9,281 | (120,574) | (358,862) |
Commodity derivative | Oil contracts | ||||
Components of the derivative gain (loss) | ||||
Total derivative cash settlement loss | (32,397) | (67,623) | (38,010) | (307,563) |
Commodity derivative | Natural gas contracts | ||||
Components of the derivative gain (loss) | ||||
Total derivative cash settlement loss | (625) | (66,610) | (6,897) | (149,485) |
Commodity derivative | NGL contracts | ||||
Components of the derivative gain (loss) | ||||
Total derivative cash settlement loss | $ 0 | $ (9,678) | $ 0 | $ (35,072) |
ASSET RETIREMENT OBLIGATIONS -
ASSET RETIREMENT OBLIGATIONS - Schedule of Roll-Forward Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Change in asset retirement obligations | ||
Balance as of December 31, 2022 | $ 291,026 | |
Additional liabilities incurred | 42,549 | |
Accretion expense | 12,134 | |
Liabilities settled | (15,340) | |
Balance as of September 30, 2023 | 330,369 | |
Current portion | 25,557 | $ 25,557 |
Long-term portion | $ 304,812 | $ 265,469 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 shares | Sep. 30, 2022 shares | Sep. 30, 2023 shares | Sep. 30, 2022 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive securities excluded from EPS calculation (in shares) | 10,103 | 109,519 | 7,437 | 68,171 |
LTIP | Performance Stock Units (PSUs), Granted Prior to Fiscal Year 2023 | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 2 | |||
LTIP | Minimum | Performance Stock Units (PSUs) | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 0 | |||
LTIP | Maximum | Performance Stock Units (PSUs) | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 2.25 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Net income, basic | $ 139,672 | $ 139,287 | $ 202,461 | $ 405,752 | $ 468,821 | $ 91,639 | $ 481,420 | $ 966,212 |
Net income, diluted | $ 139,672 | $ 405,752 | $ 481,420 | $ 966,212 | ||||
Basic net income per common share (in dollars per share) | $ 1.57 | $ 4.77 | $ 5.75 | $ 11.37 | ||||
Diluted net income per common share (in dollars per share) | $ 1.56 | $ 4.74 | $ 5.70 | $ 11.30 | ||||
Weighted-average shares outstanding - basic (in shares) | 88,911 | 85,069 | 83,700 | 84,968 | ||||
Add: dilutive effect of contingent stock awards (in shares) | 720 | 485 | 768 | 527 | ||||
Weighted-average shares outstanding - diluted (in shares) | 89,631 | 85,554 | 84,468 | 85,495 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Deferred tax assets, valuation allowance | $ 25,400,000 | $ 25,400,000 | $ 25,400,000 | ||
Net deferred tax liability | 458,590,000 | 458,590,000 | 319,618,000 | ||
Prepaid income taxes | 21,577,000 | 21,577,000 | 29,604,000 | ||
Income tax expense | 29,686,000 | $ 136,338,000 | 139,138,000 | $ 312,163,000 | |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
LEASES - Assets and Liabilities
LEASES - Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Total right-of-use asset | $ 74,662 | $ 24,125 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Right-of-use assets | Right-of-use assets |
Total lease liability | $ 75,374 | $ 24,788 |
Finance Leases | ||
Lease liability - field equipment | 17,131 | |
Field equipment | ||
Operating Leases | ||
Total right-of-use asset | 64,076 | 15,131 |
Total lease liability | 64,132 | 15,131 |
Finance Leases | ||
Right of use asset - field equipment | 17,104 | 0 |
Lease liability - field equipment | 17,131 | 0 |
Corporate leases | ||
Operating Leases | ||
Total right-of-use asset | 6,140 | 8,235 |
Total lease liability | 6,796 | 8,898 |
Vehicles | ||
Operating Leases | ||
Total right-of-use asset | 4,446 | 759 |
Total lease liability | $ 4,446 | $ 759 |
LEASES - Lease Maturities (Deta
LEASES - Lease Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Remainder of 2023 | $ 11,103 | |
2024 | 39,100 | |
2025 | 21,887 | |
2026 | 5,554 | |
2027 | 2,138 | |
Thereafter | 654 | |
Total lease payments | 80,436 | |
Less: imputed interest | (5,062) | |
Total lease liability | 75,374 | $ 24,788 |
Finance Leases | ||
Remainder of 2023 | 992 | |
2024 | 4,210 | |
2025 | 4,277 | |
2026 | 4,020 | |
2027 | 3,683 | |
Thereafter | 2,810 | |
Total lease payments | 19,992 | |
Less: imputed interest | (2,861) | |
Total lease liability | $ 17,131 |
SUPPLEMENTAL DISCLOSURES OF C_3
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Supplemental cash flow information: | ||
Cash (paid) refunded for income taxes | $ 7,861 | $ (59,800) |
Cash paid for interest | (17,110) | (17,124) |
Supplemental non-cash investing activities: | ||
Non-cash investing activities | 1,065,901 | 0 |
Non-cash financing activities | 990,204 | 0 |
Changes in working capital related to capital expenditures | $ (112,454) | $ 33 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Jan. 27, 2023 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Feb. 28, 2023 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchased, purchase price | $ 320,398,000 | $ 0 | ||||
Quarterly Variable Cash Dividend | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Common stock, cash dividends, criteria, free cash flow after base cash dividend preceding twelve-month period, percent | 50% | |||||
2023 Stock Repurchase Program, Through December 2024 | Common Stock | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchased (in shares) | 312,800 | |||||
Stock repurchased, per share (in dollars per share) | $ 64.55 | |||||
Stock repurchased, purchase price | $ 20,300,000 | |||||
Stock repurchase program, authorized amount (not to exceed) | $ 500,000,000 | $ 1,000,000,000 | ||||
CPPIB Crestone Peak Resources Canada Inc. | 2023 Share Repurchase Plan | Common Stock | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchased (in shares) | 4,900,000 | |||||
Stock repurchased, per share (in dollars per share) | $ 61 | |||||
Stock repurchased, purchase price | $ 300,000,000 |
STOCKHOLDERS' EQUITY - Summary
STOCKHOLDERS' EQUITY - Summary of Dividends Paid (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Dividends Paid [Line Items] | ||||||
Total (in dollars per share) | $ 1.74 | $ 2.12 | $ 2.15 | $ 1.76 | $ 1.36 | $ 1.21 |
Total | $ 167,010 | $ 173,358 | $ 176,878 | $ 151,729 | $ 117,151 | $ 104,444 |
Base | ||||||
Dividends Paid [Line Items] | ||||||
Total (in dollars per share) | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.46 | $ 0.46 | $ 0.46 |
Variable | ||||||
Dividends Paid [Line Items] | ||||||
Total (in dollars per share) | $ 1.24 | $ 1.62 | $ 1.65 | $ 1.30 | $ 0.90 | $ 0.75 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - USD ($) | 9 Months Ended | |||||
Oct. 17, 2023 | Oct. 03, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Oct. 06, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Proceeds from issuance of senior notes | $ 2,666,250,000 | $ 0 | ||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | |||||
Subsequent Event | Senior Notes | Senior Notes Due 2030, 8.625% | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate (as a percent) | 8.625% | |||||
Aggregate principal amount | $ 1,000,000,000 | |||||
Proceeds from issuance of senior notes | 987,500,000 | |||||
Debt issuance costs | $ 12,500,000 | |||||
Subsequent Event | Senior Notes | Senior Notes Due 2030, 8.625% | Debt Instrument, Redemption, Period One | ||||||
Subsequent Event [Line Items] | ||||||
Redemption price, percentage | 100% | |||||
Subsequent Event | Senior Notes | Senior Notes Due 2030, 8.625% | Debt Instrument, Redemption, Period Two | ||||||
Subsequent Event [Line Items] | ||||||
Redemption price, percentage | 104.313% | |||||
Subsequent Event | Senior Notes | Senior Notes Due 2030, 8.625% | Debt Instrument, Redemption, Period Three | ||||||
Subsequent Event [Line Items] | ||||||
Redemption price, percentage | 102.156% | |||||
Subsequent Event | Senior Notes | Senior Notes Due 2030, 8.625% | Debt Instrument, Redemption, Period Four | ||||||
Subsequent Event [Line Items] | ||||||
Redemption price, percentage | 100% | |||||
Subsequent Event | Senior Notes | Senior Notes Due 2030, 8.625% | Debt Instrument, Redemption, Period Five | ||||||
Subsequent Event [Line Items] | ||||||
Redemption price, percentage | 108.625% | |||||
Percentage of principal amount redeemed | 35% | |||||
Subsequent Event | Senior Notes | Senior Notes Due 2030, 8.625% | Debt Instrument, Redemption, Period Six | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of principal amount redeemed | 65% | |||||
Subsequent Event | Senior Notes | Senior Notes Due 2030, 8.625% | Debt Instrument, Redemption, Period Seven | ||||||
Subsequent Event [Line Items] | ||||||
Redemption period, after date of closing of equity offering | 180 days | |||||
Subsequent Event | Vencer Energy Acquisition | ||||||
Subsequent Event [Line Items] | ||||||
Proposed acquisition, expected purchase price | $ 2,150,000,000 | |||||
Proposed acquisition, cash payment | $ 1,000,000,000 | |||||
Proposed acquisition, number of shares to be issued (in shares) | 7,289,515 | |||||
Proposed acquisition, number of shares to be issued, value | $ 600,000,000 | |||||
Proposed acquisition, additional cash payment (up to) | $ 550,000,000 | |||||
Proposed acquisition, cash deposit, percent of purchase price | 7.50% | |||||
Subsequent Event | Vencer Energy Acquisition | Unsecured Senior Notes and Unsecured Bridge Facilities | ||||||
Subsequent Event [Line Items] | ||||||
Authorized indebtedness (up to) | $ 1,500,000,000 |