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Jun 30, 2025
Civitas Q2 2025 Earnings Report
Civitas Resources reported strong second quarter 2025 financial and operating results, exceeding expectations with higher oil production and lower capital and operating costs, and reinstated its capital return program.
Key Takeaways
Civitas Resources delivered a robust second quarter in 2025, surpassing expectations with strong operational performance, including increased oil production and reduced capital and operating expenses. The company also announced significant non-core asset divestments totaling $435 million, which will be used for debt reduction, and reinstated a capital return program, including a $250 million accelerated share repurchase.
Second quarter results exceeded expectations, driven by strong operating performance, higher oil production, and lower capital and operating costs.
The company signed agreements to divest non-core DJ Basin assets for $435 million, significantly surpassing its 2025 full-year asset sales target, with proceeds allocated to debt reduction.
Civitas reinstated its capital return strategy, committing 50% of free cash flow (after base dividend) to share buybacks and 50% to debt reduction annually, and increased its share repurchase authorization to $750 million.
Cash operating expenses were reduced by over 10% from the first quarter, totaling $10.19 per BOE, reflecting cost optimization and capital efficiency efforts.
Forward Guidance
Civitas Resources anticipates continued oil volume growth in the third quarter of 2025, with both Permian and DJ Basins showing increases, and expects lower capital expenditures. The company is on track with its cost optimization initiatives and aims to reach its $4.5 billion debt target by year-end.
Positive Outlook
- Anticipated more than five percent oil volume growth in Q3 2025.
- Both Permian and DJ Basins are expected to show meaningful production increases.
- Third quarter capital expenditures are expected to be lower than Q2 2025.
- On track to achieve $40 million in cost savings for 2025 from optimization initiatives.
- Expected to reach $4.5 billion debt target around the end of the year.
Challenges Ahead
- Third quarter 2025 average sales volumes guidance reflects a 2 MBoe/d (1 MBbl/d) reduction due to non-core asset divestments.
- DJ Basin production is anticipated to be reduced in the fourth quarter primarily due to non-core divestitures.
Historical Earnings Impact
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