Civitas Resources Inc., Denver, has decreased its 2024 estimated capital expenditures by 7% while maintaining its previously provided 2024 production guidance of 325,000−345,000 boe/d (71-74% liquids).
The $150-million decrease to $1.8−2.1 billion from $1.95−2.25 billion is primarily driven by optimized activity levels, enhanced well productivity, and reduced cycle times, the company said as part of its fourth-quarter 2024 earnings report Feb. 27.
The company expected to allocate about 60% of total investments to the Permian basin, with the remainder to the Denver-Julesburg (DJ) basin.
Civitas intends to drill and complete 130-150 gross wells in the Permian basin and 90-110 gross wells in the DJ basin. Most of the DJ basin activity will be focused in the Watkins area, which the company said is benefiting from higher well productivity.
Capital expenditures and activity levels will be more weighted to the first half of the year, and production volumes are expected to increase modestly through the year.
Fourth-quarter 2023
In fourth-quarter 2023, Civitas had net income of $303 million. Net cash provided by operating activities was $843 million.
DJ basin production averaged 173,000 boe/d in the quarter, during which Civitas drilled, completed, and turned to sales 22 gross (18.3 net), 21 gross (20.0 net), and 38 gross (30.4 net) operated wells, respectively.
Permian basin production averaged 106,000 boe/d. In the basin, the operator drilled, completed, and turned to sales 27 gross (19.9 net), 25 gross (21.8 net), and 48 gross (41.7 net) operated wells, respectively, during the fourth quarter of 2023.
During the quarter, the company divested $85 million of non-core DJ basin acreage, primarily non-operated with minimal production. The operator aims to reach its $300 million divestment target by mid-year 2024.
Capital expenditures for the fourth quarter were $470 million, bringing full-year 2023 capital expenditures to $1.365 billion. DJ Basin capital expenditures represented 40% of fourth quarter capital expenditures, with the Permian basin accounting for the remaining 60%.