CIVI - Earnings call transcript Q3 2024

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Operator

Good day, and thank you for standing by. Welcome to Civitas Resources Third Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions] Thank you. Please be advised that today's conference is being recorded. And I would now like to hand the call over to Brad Whitmarsh, Head of Investor Relations. ahead. go please Brad,

Brad Whitmarsh

review. morning, issued thank release, our provided for and Good us. this our will are CEO, by session. conduct for Foschi; Yesterday, our we your materials a supplemental Chris we third website. I'm some items everyone, After Christa. you Walker. Marianella our COO, CFO, and question-and-answer joining morning XX-Q, These Thanks, quarter Hodge all our our our available and on joined Doyle; remarks, we earnings

time your we limit please X the question efficiently. so always, As follow-up X to can list and through work

We in subject and from sure will make most our certain those cause forward-looking that materially statements filings. make statements today, Please read and recent SEC our to those and actual are projections. differ full risks results disclosures to could these uncertainties regarding

also Reconciliations I'll In also are release. Chris. call yesterday's non-GAAP to refer appropriate the addition, GAAP With certain we the our to and measure financial may to that, SEC filings in over turn metrics.

M. Doyle

morning, everybody, our key to on. Brad. there third focus things I Thanks, X morning, This and are Good call. want quarter to welcome

third results quickly summarize fourth quarter I'll and the expectations quarter. First, for

capital through Second, operational where we you understand returns and have changed. I'll execution priorities from not Permian, on some to I'll enhance and it's share DJ continue comment lastly, important that highlights the efficiencies. sustainable briefly as And solid XXXX, that our

we'll usual our XXXX February. final practice, our provide As with plan in

positioned volatility in long-term see of shareholders The Over couple company point commodity the the Civitas the actions a past deliver as value at significant in strengthened in taken over the years to our few to continued cycle. macro any and we've we've prices to underlying environment. months, us past

capital the opportunities, inventory, size of efficiency the capital shareholders. lowest and opportunities we delivering basins gains, With added add and Permian, significant in of U.S. And and quality inventory the and runway the of have zones returning now for that in to while depth development company. additional proving to continues acquisitions capturing high-return the high-quality, team Permian portfolio new a doubling all to our DJ the our our up diversified sustainable our scale to positions breakeven of Our position, amounts improve in expands that

with results and fourth Let third our start me expectations. quarter quarter

the financial EBITDA For delivered quarter, $XXX we strong differentials strong with and led solid strong adjusted sales third by of results oil control. cost million, volumes,

action the sheet recent Board's and buybacks to Our share further prioritize is very balance timely.

returned on capital we quarter, the $XXX of XX-month shareholders. third trailing calculation, totaled During $XXX our the million. the return to Based quarter variable million

variable third to a shift flow dividend, cash in return elected we of reduce October. buybacks, and prioritize The equity, paying free than XX% repurchases. see share we'll of these continue XXX% our our rather remaining value our to debt. repurchases to to tremendous So completing We went in quarter share variable

On an in facilities quarter downtime and third Oil realizations slightly solid expectation. light quarter natural unexpected volumes little from now been have equivalent activity. completion the drilling Capital pulled third reflect spend issues accelerated in quarter resolved. well fourth these as the facility water in oil volumes hedging at above were and DJ from constraints basis, a were in Permian, strong to takeaway but Revenues investments third-party gas due quarter, the and as gains. the benefited temporary the forward

capital you year all In guide. see can importantly, and including lower with volumes, cash free a costs, operating full fourth We guidance, yesterday's we provide track where most remain flow. materials, deliverables, quarter on detailed CapEx, the quarter fourth

quarter of expected a growth as should DJ we quarter-over-quarter, were averaging oil year-end. earlier had cash activity above from with the reduce Our day. oil X% year, Permian of strong volumes We've the with as in the into final increase for this October Basin per expected declines original higher offsetting guidance year in XXX,XXX start our more production than the divestments barrels oil are our flow to midpoint Free quarter for the factoring production year. the significantly

our me establishing unit. Let track Permian, focused team an done an has now our details from efficiencies assets. business on operating enhancing job outstanding value share a more each the record and In driving few capital of the

focuses the the return. rather we've front, well of productivity pad begun level an development On improvement in performance philosophy, returns result deliver our as than to well expected overall a incremental which on

times, Our trend done. and drilling not costs We're by oilfield lower service improvements well and Permian design to driven lower, completion certainly cycle continue reduced costs.

in our daily Here XX% in fluid Basin results highlighting with across Permian a fourth the fracs early ] more simul throughput. quarter, Midland program [ than in the we've initiated uplift

D results Wolfcamp for mid-$XX D oil Midland inventory the locations development recent more as costs. offsetting new are are wells with Returns from the resource the Wolfcamp modestly A is productivity with Southern higher unlocking the breakevens. XXX D other in approximately higher Wolfcamp well Strong core we've B, in than such identified in and zones competitive and

a the ground lengths In addition, more materially We've our acreage extend Permian working core increase and locations interest than in also adding high-quality beneficial of and year-to-date. by trades inventory number executed gross lateral is in XX to capturing near-term developments. game swaps

even more these All add the to capital, portfolio. adds of we're immediately game opportunities compete ground and for to working

our add foot our game inventory execute No recently this example entirety legacy of X/X returns and position reach across we the additional and in the the high-quality well year. XXX,XXX are to the asset capability Basin, approximately of this a we've XX our to our degradation X drive and of In X-milers the In acreage of count X-mile to well compared cumulative acreage comprises as area, at in prolific complex of ]. another and our production results unrestricted opportunities extended Of The demonstrated position. production deliverability observed DJ XAH deliver continues Blue on laterals, are XX-day milers our laterals. results, through the our commenced to barrels expectations. note, well per These of highlighted strong record drive helping Watkins geometries oil. outstanding Colorado in materials. team's southern our performance ability area to part This the DJ is ground with [ of of ahead

reminder, our to DJ than the in realizations the including is Watkins, measure and position down great a contributor lower to Add the deliver barrel, our Lowry continue stand a in our the of significant to DJ. approval late. the of Watkins API regulatory stronger we're CAP developments typical a quarters, As positive to this couple oil on crude last over ballot and

take we your Before questions, me briefly talk about XXXX. let

not significant strategic driver, priorities ESG. capital will balance seek and of in cash said be our not be pillars: of changed enhance the the return free strategic shareholders flow, and will balance Production past, to generate have we lead the As imperatives. these we've to sheet, the outcome as each by guided our an plan, in

bit entered sustainable through quarter In level XXXX, year more will that capital decreased high acquisitions, and activity our year, a a establishing with level better. we'd Permian efficiencies forward. Recall inherited capital we investments the this levels X every activity ultimately we've support loading like very of and activity XXXX to moving steady-state load from the operation,

flexible respond on cash forward Given flow the as in focused the and levels. again, free price quickly oil commodity current we'll plan we we XXXX remain protecting will strip, for changes, volatility to

On has balance on where investments our an That's XXXX sheet capital of we are team our the our important shareholders. A to shake and stood Regardless focused year in to in returns and closing, out, things on record returns been of demonstrated we for up as had that build new are year we Civitas. and Permian. ago, to a the a we on track looking record DJ, track returns.

is Civitas positioned not is as job as XXXX. done, we enter well Our

We to to deliver and have now Operator, the our Permian again enhance your teams returns interest driving and we're of breakeven for in scaled shareholders the that in through efficiency low the focused Thank Civitas. a questions. are assets capital on portfolio take cycle. ready high-quality, you and for Rockies

Operator

the question of first Instructions] Dingmann Truist Neal [Operator with Your Securities. line from comes

Neal Dingmann

first quarter. is future Nice around My question your activity.

all count, I believe while agreement DJ still in but I'm out DJ? also need maybe a talked you now. Permian everybody just in maybe way on investors shape hand, grow forward? wondering, most Chris, the value forward the is believe to I'm Specifically, investors seem overall of -- how will your with little be I rig advancements production. going to you about you plan given value Permian to X say, curious going create believe continue understanding might X:X, activity just assets best I potential you right your that to limited to for should versus giving continued or about of be this

M. Doyle

Yes. Good question. Thanks, Neal.

into capital broadly and we've As as as we you run flat. we we the a flow. going that going X basic maximizing free year, brought low on and on to think out this as peel in head as company, capital focus we down much keep the we is outlier cash we're acquisitions. can know, and established get really back year. an XXXX. to about as production as model, focusing A the we'll XXXX throughout the can, really flow step how this tweaks, We're costs cash how capital to again was company we We've free bit get front-end couple as loaded with in of tried right, for

I on load As level cash in flow. my maintaining but in said head as really free prepared into we'll focus we 'XX, activity remarks,

positions I point, drive going You the both your in a to had And bit DJ Permian DJ. us a other of these We're question about are considerations. think gives benefit returns X:X quite there the To having flexibility. Permian of to a couple of let and us.

X to don't having the free we like for for about 'XX shareholders. pick others the or until of and rigs ahead and basins. go that is think as sustainable a activity. it's our again, macro into flow. -- can flexibility best And DJ on we but a up sustainable macro, us all with think better compromise think let's idea cash the now the think we that ensure ending you what I DJ, can level permits back that think, beyond. in way we or year value in the next really for that looks appropriate level the the loaded production and success in between long-term the overall when you of I We We'll add that to in to over for really right Permian, growing Civitas on not focus -- on, next have And is X that's deliver get ultimately, X years. year, We're the in focused have X

Neal Dingmann

agree just or return. completely shareholder Chris, with And second, the I then Nella Yes, on my that. for you

you sort Xx is if drivers your stock even leverage even where make that's component? dividend from available, it sense or is gets variable asset XX% you to you a discounted an cause as or price view X what change to today secondly, thing would And you such that all below current are component, Specifically, see what on return of then even sort to accretive adequate your highly believe all would you there change do yield? as cause notably further of

Marianella Foschi

for us for thanks inception, question. say the that since a Neal, long mean, I followed Yes, look, our you've I mean, I'd time.

on our Our has always balance current pillars. framework focused striking strategic among that right been

I that countercyclically think do we're to -- at such higher formulation the LTM prices. paying buying look us we're right our at then now, at you than and debt disproportionately that if very -- that quicker paying well, more low framework prices allows

sheet accelerating of taking We system. goals team our great out of the balance in is terms the with cost doing the work continue

lot divestitures earlier of asset You year, this some a other initiatives. saw among complete us

free And quarters, assets the a structure I I've balance in that look prior yield we'll tremendous sheet in we prioritize -- a mean, obviously cash to like further. high-quality times, on I of low-cost have mean, flow. amount certain said

that highly at think our get answers this and both of Also I we aligned team, way compensated. note in those pillars. are point, getting in a like see strategic terms right, management so And of in terms the advanced we we what how that of for

and do always we'll right So the best in shareholders. what's interest of

twice pace certainly in terms about on this making we're want want total say our as look, we certainly that to peers' peer dividend it, point. the be dividend we we're sure your I'll on yield, yield, -- again, second of base then our we mean, the the same question, our balance advancing see I but at at to. at And And sheet the time, is leading, alone goals

Operator

JPMorgan. Your with next of the from question Parham comes Zach line

Zachary Parham

the give buybacks? I given us XXX% XX-month stock little a it pace higher cash buyback so, bit program. would it on trading shareholder return buybacks at continue more just the And if the you this you assume for variable to Can XQ, the expect just on where First, point? to flow? is, free trailing fair wanted just thoughts ask utilize in of Is increase to variable dividends you to return some with versus

Marianella Foschi

are point. Look, on at be going this a the at second asset acquisitions, Yes. we're this your we'll variable to formulation your any we'll disproportionately just directly, stock variable think We from flow are, higher, be to our stock. that up address And just capital LTM prices the allocated very disciplined then we the yes, cash on point. at it. this always with year, return buybacks we with as dividend price to pretty from free which about of would But how we nature expect question, of yes, be and do far question

Zachary Parham

follow just And to wanted then up. I

to little about more flat expect hold expect would bit You program? level-loaded CAP mentioned little in Would program, a a with bit still how more program. And level-loaded you a volumes a level-loaded you year-over-year [indiscernible] year-over-year? talk you that? more more Can

M. Doyle

Yes.

the and [ The through the guide we as half the year. not fall were We sustainable in XXXX, had with had mid-quarter. Again, mean ultimately to to TILs of to of is TIL pull of head really just quarter think I level and of the That the capital. capital ] middle end the shape each have sort up sustained, level level-loaded off into We We year concentrated climbing that XXX would weighted. going to activity start production efficiency. we of drive at basins year. that going first the very more into a that capital. let knew I XXXX, in a of before additional a first of does like we more was of

out this and a as all rigs the year going drilling, at think, What maintenance we throughout done ] more year, team of being wasn't back and capital. level sustainable efficiency, has I efficient completions. capital [ peeling into think right, step our much XXX with the

see to 'XX look I is a in likely a the were and development You're efficient come we level we it's have as think -- starting tweaks certainly closer which ago, would real thought months to we're year as fruition it is ago. and maintenance positive. a the But than the that program, we to much more XX on at than XXX

Operator

with Your RBC next Capital question comes Scott of Markets. from the Hanold line

Scott Hanold

the question, first and D&C activity Yes. you've your at mean I guess Midland you're looking your I Basin. the my target. nearing ways for just optimize specifically in

Midland X questions. you've about how that below Delaware much potentially it? So far? the One, further the can in seen like how you push to what talk the And in can progress compares so you

M. Doyle

future been laterals in and highlighting $XXX team Midland think more X/X this optimize, ] Delaware. would surprising. Delaware Midland. said years and between has significant consistent We we've a [ progress in -- the and past the you side, ]. $XXX at capital setting X/X Midland, We're that we Part getting about coming of really Delaware laterals. the year that this But thank extended and and been position, question, operators, really that. I on on XX-XX previous at extending been to in [ split the year plate most the we've direction getting year, our have therefore, the at plate that for to allocate of with We've the XXXX into capital I allocation is swings were of had a said in made past focused the the foot Scott. say the with us most up the Not Sure. Midland swings have

efficiency, vast service drilling, the on faster, better is -- that majority wells that of wells just bit completing end getting on a well. much is but the of majority as the side, little back capital Some

very so target point set close And -- that we're out to we year. there your to the this earlier

throughput we've excited boom well me XXXX, towards frac the gets as program. this what that implementing that We we seen think cost. as quarter, at a there -- simul your type it right and see significant look see automatically as target I savings, throughout $XXX,XXX is We Permian that increases. started

costs continue costs to from what of the improvement. drive will will will the see just from has team done. It It out system. will continuous have be to love not service we alone. -- be So we And

look see applied think that cost we that it's to a as really how Wolfcamp it we interesting structure at We've zone I interested the highlighted to were do. D.

All is of X%, basis. a D Wolfcamp a XX% on sudden, higher per foot

of compete we've in at to subsurface the that D it's interesting results, sudden, capital. seen So Wolfcamp something for all to a bit to a what with -- went a expensive. of more that's from look going But potential little something terms

that very those structure track teams record it's emerging a in to establish cost some and operating pull so that have And zones. and are can able strong of

what drive the see up So really and system. we how continue to to excited the excited costs team's out been of to

Scott Hanold

back I my appreciate content. And the is outlook. on follow-up question the XXXX

where considering mid-XX call at X shown of -- say have there's outcome. capital environment say some look, I'll fall XX oil maybe even to production, production out and know let's you little way, But or disciplined sort let ends bit being production. -- it leading what don't if the guess probably oil you comfortable a up a with macro? point year-over-year? there as it and But volatility Is you're strategies feel all said, this the You in of know, I letting state of being it, the just price low or of more where there. would I going decision a, a lot I

M. Doyle

Marianella's going free to to ultimately comment And with I think flow. is what -- I something really it on in -- shareholders we're is cash management in aligned ourselves focus team appreciate I really about comments, think prides your that's gets Scott. our -- and Yes, is being

XXs back oil the you that in service XXs, That's and you a you the on because did flow, the commodity that mid-XXs, low if price, a cash $XXX oil disconnect XX%. had bit. do. as by low were of markets -- floating let XXXX, look in might there but not big let's so We get focus the XX%, in recall, between moderate was necessarily at, commodity what we'll down underpinned hey, production we a take free And

a So we scenario. moderated in production that little just

to going very we're So be flexible.

demand whether I don't let's this start I you're way, there's if the of it lean volatility, say, point, to other a goes way. Now or think goes it -- Because to and say platform. supply lot would the geopolitical going side. other it's your That in company side, growing this see

You'd start faster to return us shareholders. see and to much delever capital our

Operator

Your line of the Cowen. next TD question comes Daoud Gabe from with

Unknown Analyst

Frank for ] [ is This Digivon Dave. on

production declines X given 'XX of and kind 'XX about the should Just in profile the to next activity we half 'XX, how year keep required think flat? volumes of kind

M. Doyle

Yes.

on if loaded that an us declines, high it, So basis. as we've flow program. you look to more level a company, annual oil XXs again, shaped a focused on free The getting our capital, at call cash sustainable way and

low pick And We'll up well. that looking TILs, the back up as decline first you'll in quarter. a quarter the into quarter. us at then You're activity TILs. And see pick fourth mid-quarter will with

of half what going a back fourth is our drop to of the us so in the before quarter. the a to coming out And down first are activity more that than for level going quarter little we and load bit you second bit into little But quarter. see 'XX see be

Unknown Analyst

just thinking are how you Great. forward? M&A Okay. moving then about And

M. Doyle

Yes.

we with -- I important moves we that it the where extremely was say did, when would think we did, scale. as we in came I made

duration. still to that is important. We're what and inventory, quality important It's now. and really really focus asset scale on we in that have believe We enhance believers adding scale adding augment had. we We

the and even just value where operating not of quality said team. true I on the there match today, companies the asset out call, think I and the believe we more think all I it's last equity does underlying the

do high. our is Our hurdle with very to equity very, something

the to seen -- attention, while our But really and where moderate generate earlier what shareholders. gets balance focused look currently games what that asset to is us and sheet little is an for little is do this take bit. to to team with where our we're question, trading, take and and And bolt-on we'll that to our more sure. equity at wait on at transactions ground markets it are drilled free replace a something you've a if take look so there's to that related the we'll cash for inventory to allows And that it

disconnected as as to the disconnected for to equity And think it's the long see the going front. markets get really to excited to and an what too underlying in markets, so as be I where lean M&A to is value asset on so us we disconnected tough trading and

Operator

the next Mariani comes line ROTH. question from Your with Leo of

Leo Mariani

the differently Wanted a here. to approach kind bit of maintenance question little

Permian of kind tilling wanted going think to trying And that. kind color you quarter. activity is. mid-first then little a just DJ that rigs, a to obviously, you're So of Just to roughly that bit start X Is Basin more more of maintenance rigs? get wells, around you of kind what mentioned briefly X sense get

some you sense that we get X for thinking right guidance CapEx activity in expect some company? Should got pretty how it. up kind about new of literally, to the January Just XQ. you're a around trying shows So of low

M. Doyle

that that's Yes, in But level low into third quarter of some CapEx, A facility-related Leo. first, resulted activity. the not a of fourth of Thanks, on forward that's a a We little lot on low that know the of bit guide. really quarter. XQ was a sustainable that that Yes. -- D&C was pulling capital side. byproduct the

becoming you we'll much the DJ, Permian, I'd have. rigs of you On in as for rigs around, We're in and rigs also more in Permian, is X tell we're we think the DJ, efficient that bit lighter going got, be the we're heavier to the say in that a again, we're we've we, free level, really inventory year. That efficient. scenarios it. love bit the that get much, the X, us frame much where more moving at to X lean range. in at or the maintenance activity the load in guided and really Permian level are all looking the off becoming on with or to with that flow. be that continue X not Those I rig extending DJ X little little in In to look scenarios And level interesting started reach. far And XXXX. the by how But maintenance go we're cash laterals. would I'd in extended to really the you for you're what's a

Leo Mariani

Okay. a Appreciate wanted follow D. that. on just the And I to up Wolfcamp little bit

So having think other what, a maybe kind as lot quite in important the Midland classified there. economics operators bit and I good have that you less out little A B and weren't D know of the that as the of a as

the bit color to competitive why that better reading information you it kind similar provided. it's more sounds guys in So like as little provide portfolio? think or of here, maybe your I'm right, a returns more just And if could you that the be

M. Doyle

capital so is, wells the changed bit in the a as it in, What's very well. lower a thought. there was team executed -- Yes, I'd interesting. is, we been right, all those you've we the we had we what way view operators could and to we little XX codevelop than about X a and were of As thing. be potential. Bs, would with D out got is Leo, The zone Wolfcamp The our tell same not pretty thought It's have this that you, saying

turning XX% were seeing higher on B. And than then and bit the capital. That anticipating. to having you're were eye-opener so X% compete compared little to was real these we we on the was as a and And them A really better

compete you'd surprised that didn't it. in we for were to make D was up so there, be we additional And order have to for by for it CapEx, and that knew to just very we capital the that think going

we're stretch, probably And on XXXX of the program capital. that going but compete look, in to had It's spend of to the all by for It XX% will D. forward. the we in going not so our any XX%, going about allocated be XX% D

if Permian the of call the entered you oil out the continues this D Love And and X is starting just there. to and province X we capital, the an and in zones, for there other these we also so I to that's think is back things others highlight go to the Permian, operators that are the emerging next compete when is

Operator

Tim Your next line KeyBanc of from comes with Capital Rezvan Markets. the question

Timothy Rezvan

don't for with this Chris have free or some capital and built areas, especially allocate the derisked more Waha? value the natural looking with of real results steady your is as gas you of a Polis's [ I Governor But you're is kind Colorado, know natural that know you're gas there, value X much in where And Hodge. and but the of tenure getting there's ] at flow, challenges you in more if forward year after look maximizing backlog ends, your I on pull XXXX, for focused operating where most permits a well looking cash uncertainty. not from pragmatic point view, why stronger.

M. Doyle

to wanted to this to in active on of year compromise use we more on the and us the ultimately activity point, of less there position close have get question, in more can -- the to we're returns bit opportunity. last the benefit for and allocate give opportunity capital the Tim. is DJ. underpinning clear bit on DJ, a value in gives having think we're we our the little the internally earlier year, on Thank if and flexibility The the in that's allocating that debate of point, efficient lean Yes. since And or the and XXXX. having focused we if what exercise a than be to little a strong And to greater focused in DJ position I is there. We the or really year of exactly us less, good your been the program with team's capital DJ you your Watkins order this our Permian to yes, very markers going that -- most to so that the more to

a and program, we'd those we so allocate nearly a or it's that would X DJ can bit the of And in program something considerations efficient more hey, if be, little as to lean extra have efficient on.

So is the I'll in and tell you final plan that ongoing here February. have now, work we'll right

Marianella Foschi

to add X yes, total stronger gas in is cases even versus X%, our we're or then, getting also only the point Permian. gas some certainly Rockies, your Rockies But negative nat realizations X% the gas the I'll in is of in in only it's revenue on anyway.

driving So economics. kind oil is that's of always

Timothy Rezvan

a And sense, good That for you. it's Marianella. follow-up segue, was and Okay. intended makes my

You've basis have Is a looks Are can been bleak outlook million like about margin more sort to you swapped West on Just good of protecting that do the looking or amount? you It active kind do looks trying the get what through through curious of still what protection? pretty a that Texas. to in and time. day XXXX you're $XXX there? you

Marianella Foschi

to for our Yes, transport realizations away. and always Look, trying take a our sure. improve not to fan we're paying certainly of for big gas

looking the second of this Permian QX or about so netbacks. $X.XX, that's the gas million, -- off, we -- were balance point, $X.XX. into year hedged company-wide our half they the you And insanely this A will, year. or mean, take 'XX to of decided We half that of if in we alone I hedging successful, 'XX, spring. as companywide, been we at out this early right? this gas improved think risk were realizations essentially I and year opportunistic $XX

to well. obviously, into realizations that's translate QX into increased as going So

in coming the not Waha beat 'XX-'XX, ended quarter I'm amount. sure in are capacities we'll looked there's we that and see the quite to here. 'XX Bcf the X those range mean, not it, year where like bit in at online, lot 'XX, a capacity. just In a are I late a call there's much just We'll that of additional and be of the it 'XX. day going seems

far uplift I been were disappointed seen $X.XX or think others at about it so a so. maybe much, have us Matterhorn, little probably and from been hasn't we've really, or the

those at those point, to positions just so your And looking 'XX. on add to we we Tim, decided 'XX for aggressively, all and pieces,

I gas perhaps for plan, earlier, I would our more. the out to I we're dynamics mean not to say the extent inclined the basin. are a But extent like bit term we of can big we little in that, gets again, driver. certainly would do not a point, that -- that to add we think close supply activity adjust us. lot I demand or to an the keeping example, they're option for if at because particularly a a like business that's said that flexible and to pulse additional this DJ, areas because the it longer is on earlier

to we this we So good ] that particular consider I much at in market some extent that see certainly in tailwinds not to good point, get from [ adding, XX, the or a continue client would good think the but a window increase that. at opportunity we

Operator

from Your next question the comes Huang line with Oliver TPH. of

Hsu-Lei Huang

first But your in from kind round Just wanted horizon X months on in development to perspective? to at next this could levers Certainly of what intensity here tweaking space, think you highlighted see have the to you of further the XX% potentially slides productivity completions. your just of trying the Midland. from to the XX good all look a on on near term through optimization higher focus in on that all over considerations the uplift further the main

M. Doyle

We're are what the How To be of a off return wells? to so upspacing well? it's And on put really a as a program. sixth I just return conservative, whether my X-well really a say, point you drive to ultimately a feel One, fine wells, is what got well? development. couple X it existing in and at, per Yes. to more at of Thanks, And that sixth looking is remarks little -- does We're on what -- return looking well cash-on-cash is bit is us address or Oliver. or focused in, that what those team a for not you've the leads -- as returns. better average said out that that section your let's hey, a so that, on things. our I'd spacing incremental point question,

that different. continue. bespoke DSU. is so little to each And work bit a will very It's Everyone

as of the that's can. are on the improvement Are in we DNA to further just returns. completions. optimizations forward, the best I always as really appropriately. subsurface leaning and is as in wells Are we on in a continuous think zone And company staying focused understand targeting look we focused there we're that on we on

very from you but couple top from line think for the of when is -- quick and quartile If of is looking frac you quickly just that quarter-over-quarter. on to system. a see you'll -- focused say, I a that whether the And that to in sight safely what I right possible, things, ], to opportunities see with operating best to other peel see there. clear into it's waste an [ Simitu out decision got time team not you'll team would we very deliver simul the continue as the out quick cost just yet, wellbores or then here, get

of that a And so will things small more it's going to capital-efficient ton be better, deliver a little continue result. to

Hsu-Lei Huang

follow-up. And and quick kind color. of anything going about does assume? And XXXX Is have there how thinking be of that billion deflation are -- all terms just referencing leg sight on? helpful negotiations of kind maybe of in just you're ballpark maintenance, the aware kind just line much service number $X.XX recontracting for when another to to of of you're you year-over-year the kind down of kind that costs of when a That's QX that

M. Doyle

we our it's The deflation consumables from rig some to from we We're on But service frac billion seen more upgrading on efficient we've the the side, would consumables, started some I more the fleets, say in bit going there. of say little side, rig little side now. whether late driver a big frac where some the than e-fleets, where were now. 'XX 'XX 'XX from also on have side. to operation I seen in there would tubulars, to the cetera. to deflation we is probably now, et Yes. $X.XX Obviously, were We've a

same As service going. right? the trying that volatility the we they're figure we to companies out look market volatility where see is see, forward, is the the And

don't going to we're We a be us X, to as to down know market see We try or to macro us I I year-over-year. take a but a that allows noise quarter be going a be for not take that be you'll close not think to try -- step long surely responsive possible. -- massive as commitments. There's to whatever brings. the to

our out. a we know I how how don't overall sort out. that because volatility that And where ahead, it's and the to are works like the I costs sides think early of so of I think coin to think said, service macro figure year But trying both

Operator

line Your comes Abbott next Research. the of from Wolfe question with John

John Abbott

I are discussion have thought also sort commodity appreciate we this in allocation appreciate maintaining and -- I had but you lower. prices environment. to benefits here. last you Then questions positions There in areas when are of XXXX momentum. commodity We taking lower. here sort your about economic built And a of do a are because you price each prices have our lower about night, color see of the bit and a think operations there of

to much that, -- prices? you like do you lower sort as from commodity think see Midland of necessary or maintain or if see how sort you So efficiencies Del the DJ the about as activities the of we

M. Doyle

question. Yes. Thanks, for Thanks John. the

exactly right. You're

as in in and up maintain in that been we've crews, we'll throughout down I -- really rig the allows to far maintain established scale the the as and operating a about DJ the excited momentum that us DJ that year the back momentum, think I'm the and that or as needed. then we've We've Permian. continued

us there that that's DJ pretty side. the that level a in commodity down but activity type momentum allows to would on think gap I level, be minimal price keep the

looked seen to we to baseload us fourth I when point, is do with level because in that's last of generate thing kind weaken for get had we'd it's flow up free the I cash so your maintain of commodity It's rigs and this breakeven deploy rigs side, frac those other level. expand this in company to not to go how momentum company this shareholders. -- the still is And for sitting if that, or you've and is and bad the marry wanted scale hey, quarter. operating say, returns, John, Permian why of critical times we here. a we're further assets. such And it's as think should diversify go signaling X to scale the keep the crews, would is generate so and up significant market But the how love we a that as On probably to prices can momentum that down low to is piece company keep and load maintenance describe, you level we significant we capital, we the our -- a the

out the will go So all how want flexible to plus. of we the be how months how macro coming that settles see of into responsive, over sort we as

John Abbott

want to then topic the approach has the sort it's And but just been brought up been different dividend, of Yes. already it -- variable way. about a slightly

just you Or shares to the have going making of the you sort your where given fix and to think to go but it statement buybacks, Does forward? on I do mean, dividend buybacks. sort -- switched now are, to signaling the are sense the plans you a on this your dividend point market, you're where just continue variable there do manage about make just dividend? of at? ever where focus at variable shares here the time, place When stock is just given are. variable focus companies about right is does and a between So in to there a continue as So to buyback back where out

M. Doyle

variable would start critical a for question, shareholders capital it's us. commitment component a our I to it. to Yes, our to the with had returning is that And good John. past, in

from having X seeing months call, look are executing. question. long a given forward, our on now, what the we months now, X we We're very As debate, that from that this I'm team we're from however, away hopeful, and way is just how from asset base debating we're

keeping of position. balance All that sheet leverage in also our and balance a with manageable protecting

and quarter we that up to back tell in Board advantage is protect interesting us really commitment you made what are to an sheet, our you of I that I decision to set equity. committed the getting that any raised undervalued highly would take up shareholders believe The the think live really to last And form. a question. capital balance so we

Operator

of comes from Brothers. the next line Your Tuohy Noel Parks question with

Noel Parks

those or opposed divergence more is the operator I've basin, further where to time by been that all advancements, in as are operator seems on pushing seeing going it more when spacing and how And in basins times holdings. higher about of a technical going inventory thinking existing way. open content we're X is up what's sand inventory like on can potentially everybody

and at And out and going of the maybe Or so yourself acquisitions? does after how might [ divergence when backed make you say, looking more it. kind acquisitions [ the tea you think pickier ] a look you see something -- world's make people there, about terms Does as context, have upside, the potential? bit ] in other upside you adventurous you little it that's interesting how about of does in at unbooked value that

M. Doyle

look makes if think hey, build think year at informed that acquisitions. made to today to and optimize that that weren't I could what previous is for And we we're our No, development, the able the more that it to had completions position if under Yes. we're at, operating is I the to ago based a we looked on question. us in feet us, if underwrite we we momentum, we able operators' Thanks And performance. we're we're transactions this get be. as able

that good a than ago. operating today this what capital team really coupled optimizing B, of much emerging we're team development, A how and subsurface understands more operating we in Now, interestingly, can that just on more but and clarity some delivering you've -- a a team assets you the year technical that team got that with zones. the have have much deliver is not view an the And with with efficiency

And whether of place game up, to great ground track record it's acquisitions, it's a so look that which is at from a as place or we having opportunities, built small be.

could this how what a better be more of able of have be to assets of informed in Civitas. is much hands will or therefore, those valuable team We those view the sticks deliver and,

that It's to everything with that where exciting, would do. you and thought, are. leave But disciplined a is in, we're we I X in to be year we going be

and top the be but in operator. we'll much We be value. need there. long-term will be where we're for ultimately our -- a will will to do us give very assets are aligned shareholders, we to quartile getting better with yet, in hands. That we the advantages shareholder not things, We're all right And thing

Noel Parks

you so wraps what Matterhorn the Great. some heard and pipelines improvement Are far. of Matterhorn, reason you there opinion could -- and significant on little in uplift maintenance look it when hasn't there believe sort from ripple would that up other mentioned see the appearing I just yet. that the And what there's Or you differently? of it some a have still do some manifested that that be in operators like, sort basis effect that of camp? the express to was -- pretty

Marianella Foschi

gas pipe. much home. X.X from Bcf haven't the would mean, I detail just the that there through Bcf about right, No, I -- imagine really and I I month we're this that a imagine imagine X.X -- a say would there's of other look, would recent, seen because would close pipes, but blowing seeing, flows all ago. Matterhorn, elsewhere I that's for Matterhorn's very what about I going down wasn't waiting

some them the certainly, of bringing certainly seen on items yet. haven't correct. up We maintenance you're yes, So are

optimistic. late XXXX. XXXX away earlier, XX% through well Like of we end cautiously we hedged -- we're the So said

we're seeing yet. cautiously not it optimistic. just Frankly, So

Operator

our turn over conference for concludes session. back that question-and-answer Brad And the comments. I now to And closing Whitmarsh will

Brad Whitmarsh

joining next into Thanks, around afternoon Yes. and us Christa, today. and everybody this be We'll for week.

weekend, follow-up be and any out. you have hesitate So have if I questions, safe. you great reach to certainly, please don't hope a

Operator

you you This call. conference concludes and for participation, may your Thank disconnect. now today's

Civitas Resources (CIVI) 8 Nov 242024 Q3 Earnings call transcript