Civitas Resources Inc (CIVI) 2022 Q2 法說會逐字稿

Good morning. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to Civitas Resources Second Quarter 2022 Earnings Conference Call. (Operator Instructions) I would now like to turn the call over to John Wren. Please go ahead.

早上好。我叫 Julianne，今天我將擔任您的會議接線員。在這個時候，我想歡迎大家參加 Civitas Resources 2022 年第二季度收益電話會議。 （操作員說明）我現在想把電話轉給 John Wren。請繼續。

Thank you, operator. Good morning, and welcome to Civitas' Second Quarter 2022 Earnings Conference Call. I'm joined today by Chris Doyle, President and CEO; Marianella Foschi, CFO; Matt Owens, COO; and Brian Cain, our Chief Sustainability Officer.

謝謝你，接線員。早上好，歡迎參加 Civitas 2022 年第二季度收益電話會議。今天，總裁兼首席執行官 Chris Doyle 也加入了我的行列；首席財務官瑪麗安內拉·福斯基；馬特·歐文斯，首席運營官；和我們的首席可持續發展官 Brian Cain。

Yesterday, we issued our earnings press release, filed our 10-Q and posted a new investor presentation, which is available on the Investor Relations section of our website. Please be aware that on today's call, we may make forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from projections. Please read our full disclosures regarding forward-looking statements in our 10-K and other SEC filings.

昨天，我們發布了我們的收益新聞稿，提交了我們的 10-Q 並發布了一份新的投資者演示文稿，該演示文稿可在我們網站的“投資者關係”部分找到。請注意，在今天的電話會議上，我們可能會做出前瞻性陳述。這些前瞻性陳述受風險和不確定性的影響，可能導致實際結果與預測存在重大差異。請閱讀我們在 10-K 和其他 SEC 文件中關於前瞻性陳述的完整披露。

On today's call, we may also refer to certain non-GAAP financial metrics. Reconciliations to certain non-GAAP metrics can be found in our earnings release and SEC filings as well.

在今天的電話會議中，我們也可能會參考某些非公認會計準則財務指標。在我們的收益發布和 SEC 文件中也可以找到與某些非 GAAP 指標的對賬。

I'll now turn the call over to Chris Doyle.

我現在將把電話轉給 Chris Doyle。

Thanks, John, and good morning, everyone. I'm excited to talk about our results in the second quarter, but I want to start by highlighting what I see as the fundamental pillars of how we run our business. First, operate assets to maximize free cash flow; second, maintain a fortress balance sheet; third, commit to returning meaningful capital to shareholders; and fourth, lead the way in terms of environmental, social and governance.

謝謝，約翰，大家早上好。我很高興談論我們在第二季度的業績，但我想首先強調我認為我們經營業務的基本支柱。一是經營資產，使自由現金流最大化；第二，維護堡壘資產負債表；第三，承諾向股東返還有意義的資本；第四，在環境、社會和治理方面處於領先地位。

We believe this is the winning formula to create a durable or sustainable and certainly more investable business through any cycle. We have been and will continue to be strong believers in the value of consolidation, but only as those opportunities enhance, extend or optimize our business around those 4 pillars. Scale for scale's sake is not what we're about. We want to be better, not just bigger.

我們相信這是在任何週期中創造持久或可持續且當然更可投資的業務的製勝法寶。我們一直並將繼續堅信整合的價值，但只有當這些機會圍繞這 4 個支柱增強、擴展或優化我們的業務時。為規模而規模不是我們的目標。我們想要變得更好，而不僅僅是更大。

Staying disciplined and to what matters most and falling back on those pillars as guiding principles is what will position Civitas for long-term success. That discipline means we don't have a significant transaction to highlight for you today. but it also means we have a very clear picture of how the underlying assets are performing. So let's talk about the quarter.

保持紀律和最重要的事情，並依靠這些支柱作為指導原則，這將使 Civitas 獲得長期成功。該紀律意味著我們今天沒有要向您強調的重大交易。但這也意味著我們對標的資產的表現有一個非常清晰的了解。所以讓我們談談這個季度。

Operationally, we delivered 175,000 BOE per day, that includes 80,000 barrels of oil per day and total CapEx of roughly $240 million. The team is executing well. The assets' performing ahead of expectations. We beat our internal oil targets. We beat our internal total production targets and came in under CapEx, and that's in the face of continuing inflationary pressure.

在運營方面，我們每天交付 175,000 BOE，其中包括每天 80,000 桶石油和大約 2.4 億美元的總資本支出。團隊執行良好。資產表現超預期。我們超過了內部石油目標。我們超過了我們的內部總產量目標，並低於資本支出，這是面對持續的通脹壓力。

I'd also like to note some of the success our oil marketing group achieved during the quarter. They were very active, optimizing netbacks on our oil production, which, thanks to 18 months of consolidation, is not only of significantly more scale, we produced 110,000 barrels of oil per day gross, but is also geographically diverse. And that allowed the team to go out and find some very interesting in-basin sales opportunities, some at a premium to WTI.

我還想指出我們的石油營銷團隊在本季度取得的一些成功。他們非常積極，優化了我們石油生產的淨收益，由於 18 個月的整合，不僅規模顯著擴大，我們每天生產 110,000 桶石油，而且地理上也很多樣化。這使團隊能夠走出去尋找一些非常有趣的盆地內銷售機會，其中一些機會比 WTI 溢價。

Whether we continue to capture those opportunities is yet to be determined. The focus from this team is expanding margins. From drilling and completions, to production and marketing, the economies of scale that come from the active and accretive DJ consolidation is very apparent, and they establish Civitas as a cost leader within our peer group.

我們是否繼續抓住這些機會還有待確定。這個團隊的重點是擴大利潤。從鑽井和完井到生產和營銷，來自積極和增值 DJ 整合的規模經濟非常明顯，它們使 Civitas 成為我們同行中的成本領導者。

For a company focused on generating free cash flow ahead of production growth, ahead of activity, cost leadership is an absolute imperative.

對於一家專注於在生產增長、活動之前產生自由現金流的公司來說，成本領先是絕對必要的。

On the financial side, and I would direct you to our release for reconciliation, we generated GAAP net income of $468.8 million, adjusted EBITDAX of $739.2 million and free cash flow of $436.6 million during the second quarter of 2022. The fortress balance sheet just got stronger. We redeemed $100 million in senior notes with cash on hand. And as of the end of the quarter, the company was unlevered on a net debt basis with $400 million of total debt outstanding against roughly $440 million in cash.

在財務方面，我會指導您進行對賬發布，我們在 2022 年第二季度產生了 4.688 億美元的 GAAP 淨收入、7.392 億美元的調整後 EBITDAX 和 4.366 億美元的自由現金流。堡壘資產負債表剛剛得到更強。我們用手頭現金贖回了 1 億美元的優先票據。截至本季度末，該公司在淨債務基礎上解除了槓桿，未償債務總額為 4 億美元，現金約為 4.4 億美元。

We also affirmed as a company our commitment to return meaningful capital to shareholders with the announcement of our $1.7625 per share total quarterly dividend. This is comprised of our base dividend of $0.4625 per share, plus our variable dividend, which was increased to $1.30 per share this quarter. This represents about a 30% quarter-over-quarter increase and one of the highest payout ratios in the industry, and at our current share price, implies roughly a 12% yield.

我們還通過宣布每股 1.7625 美元的總季度股息來確認作為一家公司，我們承諾向股東返還有意義的資本。這包括我們每股 0.4625 美元的基本股息，以及本季度增加到每股 1.30 美元的可變股息。這意味著環比增長約 30%，是業內最高的派息率之一，以我們目前的股價計算，意味著大約 12% 的收益率。

As the business continues to create significant free cash flow, we will evaluate the best use of cash, whether that's reinvesting in our business through the drill bit, launching share buybacks, extending the runway with additional acquisitions or increasing dividends back to our shareholders. The relative merits of each of these options shift, they shift continually, especially in the market as volatile as what we've seen over the past quarter. But this management team, our Board and our largest shareholders are fully aligned and we're committed to getting it right.

隨著業務繼續創造大量自由現金流，我們將評估現金的最佳使用方式，無論是通過鑽頭對我們的業務進行再投資、發起股票回購、通過額外收購擴大跑道，還是增加對股東的股息。這些選項中的每一個的相對優點都會發生變化，它們會不斷變化，尤其是在像我們在過去一個季度中看到的那樣波動的市場中。但是這個管理團隊、我們的董事會和我們最大的股東是完全一致的，我們致力於把它做好。

On the permitting and regulatory front, our 2022 plan is largely permitting at this point. Looking ahead into 2023, roughly 20% of our programs under fully approved OGDP is for permits, another 30% of the permits are submitted with the majority of those deemed complete and simply awaiting hearing dates. And we'll continue to submit the remainder as we approach year-end and into the first quarter. In total, we have 575 wells working through what we call our permit pipeline.

在許可和監管方面，我們的 2022 年計劃在很大程度上是允許的。展望 2023 年，在完全批准的 OGDP 下，我們大約 20% 的計劃是為了獲得許可，另外 30% 的許可是提交的，其中大多數被認為是完整的，只是在等待聽證會日期。當我們接近年底和第一季度時，我們將繼續提交剩餘部分。總共有 575 口井通過我們所謂的許可管道工作。

I'd also like to highlight the Box Elder CAP. As expected, this was deemed complete during the quarter, and we have a hearing set for early November.

我還想強調一下 Box Elder CAP。正如預期的那樣，這在本季度被認為已完成，我們將在 11 月初舉行聽證會。

Quick note on our updated 2022 guidance. We've increased our production guidance to account for outperformance year-to-date and the small acquisition that we closed in early July. That adds about 1,000 BOE per day to 2022. On CapEx, we've increased the midpoint of our '22 guidance slightly, due mainly to cost inflation, but are importantly staying within the high end of the original guidance.

關於我們更新的 2022 年指南的快速說明。我們已經提高了我們的生產指導，以考慮到年初至今的出色表現以及我們在 7 月初完成的小規模收購。到 2022 年，每天增加約 1,000 BOE。在資本支出方面，我們略微提高了 22 年指導的中點，主要是由於成本膨脹，但重要的是保持在原始指導的高端範圍內。

Our operating cost guidance has been updated. Our oil differential guidance was updated, a decrease from $6 to between $4 and $5 per barrel. We also are now guiding $75 million to $125 million of 2022 cash income taxes, and that assumes oil average is $100 per barrel for the remainder of the year.

我們的運營成本指南已更新。我們的油價差價指引已更新，從每桶 6 美元降至 4 至 5 美元。我們現在還指導 7500 萬至 1.25 億美元的 2022 年現金所得稅，假設今年剩餘時間的石油平均價格為每桶 100 美元。

As Colorado's largest pure-play E&P and first carbon-neutral E&P company on a Scope 1, Scope 2 basis, Civitas is well positioned for future success within Colorado and the industry more broadly. We're a young company. We've come together over the past 18 months, and there is certainly more work to be done. But the pride that the team feels after integrating 5 companies is well earned, and that challenge can't be overstated. I am confident in saying we are in the early innings of optimizing this business, and I look forward to sharing our continued progress and execution in the quarters to come.

作為科羅拉多州最大的純勘探與生產公司和第一家在範圍 1、範圍 2 基礎上實現碳中和的勘探與生產公司，Civitas 為未來在科羅拉多州和更廣泛的行業取得成功做好了充分準備。我們是一家年輕的公司。在過去的 18 個月裡，我們走到了一起，當然還有更多工作要做。但團隊在整合 5 家公司後所感受到的自豪感是來之不易的，這種挑戰怎麼強調都不為過。我有信心說我們正處於優化這項業務的早期階段，我期待在未來幾個季度分享我們的持續進展和執行情況。

Thank you again for joining the call this morning, and I'll pass it back over to the operator for Q&A.

再次感謝您今天早上加入電話會議，我會將其轉回給接線員進行問答。

(Operator Instructions) Our first question comes from Neal Dingmann from Truist Securities.

（操作員說明）我們的第一個問題來自 Truist Securities 的 Neal Dingmann。

Fantastic quarter. My first question is really on capital allocation. I'm just wondering, given the -- what appears to be substantial free cash flow going forward, Chris, I'm just wondering, could you discuss how share buybacks will play into the mix along with -- you certainly mentioned the dividends. I understand that as well in the mix, but also potentially even more -- hopefully, more accretive deals like this latest non-op purchase?

很棒的季度。我的第一個問題實際上是關於資本配置。我只是想知道，鑑於 - 未來似乎有大量的自由現金流，克里斯，我只是想知道，你能否討論股票回購將如何參與其中 - 你當然提到了股息。我理解這也是混合的，但也可能更多——希望，像這次最新的非運營採購這樣的增值交易？

Yes, Neal, thank you for the question and the comment. So I would say that we're in a great position. We have a tremendous amount of optionality and flexibility. We're going to look opportunistically for opportunities, as you said, to do accretive deals, like the one that we did. But we will also consider whether that's a buyback, a special dividend or other acquisitions. All of those are in play.

是的，尼爾，謝謝你的問題和評論。所以我想說我們處於一個很好的位置。我們有大量的可選性和靈活性。正如你所說，我們將尋找機會進行增值交易，就像我們所做的那樣。但我們也會考慮這是否是回購、特別股息或其他收購。所有這些都在發揮作用。

And as we've guided, most of the year, there's still a few in-basin opportunities within the DJ that we'll continue to run to ground. We've been running to ground but disciplined in our approach, and we'll be opportunistic. I think that we take most of those over the course of the next quarter or so. And as you said, we're generating significant free cash, and the Board is really focused and the team is focused on what the best use of that cash is going to be.

正如我們所指導的那樣，在一年中的大部分時間裡，DJ 中仍有一些盆地內的機會，我們將繼續努力。我們一直在努力，但我們的方法很自律，我們會投機取巧。我認為我們將在下個季度左右完成大部分工作。正如你所說，我們正在產生大量的自由現金，董事會非常專注，團隊專注於最好地利用這些現金。

Great. And then second, just for Chris, for you, or Matt, maybe on permitting. So basically, I'm just wondering, how long a runway do you all anticipate is prudent in order to continue to have the efficient D&C pace that you all are sort of laying out?

偉大的。然後第二個，只是為了克里斯，為了你，或者馬特，也許是在允許的情況下。所以基本上，我只是想知道，為了繼續保持你們都在佈局的高效 D&C 步伐，你們都預計多長時間的跑道是謹慎的？

Yes, I'll start, and then I'll kick it to Matt. I like to have 12 to 18 months of permits in front of us, always in the queue, and that allows us to optimize our capital allocation. I would say we're early days with both the COGCC and the industry as more broadly. If you think back, Neal, to Appalachia early days, it takes some time for operators to get their feet under them, it takes some time for the regulators to get their feet under them as well. I think we're getting there. But ultimately, I'd like to have 1 year to 18 months of permits in hand. Matt?

是的，我會開始，然後我會把它踢給馬特。我喜歡在我們面前有 12 到 18 個月的許可證，總是在排隊，這使我們能夠優化我們的資本配置。我想說，我們在 COGCC 和更廣泛的行業中都處於早期階段。如果你回想一下，尼爾，早期的阿巴拉契亞，運營商需要一些時間才能站穩腳跟，監管機構也需要一些時間才能站穩腳跟。我想我們快到了。但最終，我希望手頭有 1 年到 18 個月的許可證。馬特?

Yes. I think that's a great number. And that's permits in hand. So that's why when you look at that new Slide 5 that we have, we're showing a lot more than that, almost 600 permits that we have in the queue because we want to have that 18-month runway that is approved. We've got a lot of projects that we're working on internally. Chris mentioned in his prepared remarks that we did get our first CAP deemed complete earlier in the quarter, and we hope to have our second one submitted by the end of this year.

是的。我認為這是一個很大的數字。這是在手的許可證。因此，這就是為什麼當您查看我們擁有的新幻燈片 5 時，我們展示的遠不止於此，我們有近 600 個許可證在排隊等候，因為我們希望獲得批准的 18 個月跑道。我們有很多項目正在內部進行。克里斯在他準備好的評論中提到，我們確實在本季度早些時候完成了我們的第一個 CAP，我們希望在今年年底之前提交我們的第二個 CAP。

Our next question comes from Leo Mariani from MKM Partners.

我們的下一個問題來自 MKM Partners 的 Leo Mariani。

I was hoping you could talk a little bit more about some of these kind of pending M&A deals? I know that you guys have kind of had a few of these privates in your sites for quite a while now. They've kind of been sitting there in the slide deck. I guess, there's still kind of ongoing negotiations here. Are they kind of heavy? Or is it just kind of getting difficult to transact here at the right price? Just trying to get a sense of how you're thinking about M&A right now?

我希望你能多談一些這類未決的併購交易？我知道你們已經有一段時間在你們的網站上有一些這樣的私人了。他們一直坐在幻燈片上。我想，這裡還有一些正在進行的談判。它們有點重嗎？還是以合適的價格在這裡交易變得有點困難？只是想了解一下您現在對併購的看法？

Sure. I would say, we're in continuous dialogue with multiple folks within the basin. Obviously, it's a rapidly consolidating basin, thanks to the efforts of this company and others. It's not a difficult discussion to have, quite honestly, as long as we are disciplined, and we have been, coming back to how do we make this company better, not just bigger.

當然。我想說，我們正在與盆地內的多個人進行持續對話。顯然，這是一個快速整合的盆地，這要歸功於這家公司和其他人的努力。老實說，只要我們遵守紀律，而且我們一直在，回到我們如何讓這家公司變得更好，而不僅僅是更大，這並不是一個困難的討論。

And so what you saw in the second quarter is we were disciplined. We didn't get anything over the finish line other than the small transaction that we highlighted in the comments. But that's the right approach. We are to a point now 18 months in where we are a scaled position, one of the larger operators, one of the most active operators in the basin, and we can be selective, and we'll continue to be selective.

所以你在第二季度看到的是我們紀律嚴明。除了我們在評論中強調的小交易外，我們沒有得到任何越過終點線的東西。但這是正確的做法。我們現在已經到了 18 個月的時間，我們處於一個規模化的位置，是較大的運營商之一，是盆地中最活躍的運營商之一，我們可以有選擇性，我們將繼續保持選擇性。

We're not going to pull down acquisitions that simply make us bigger, unless they do 4 things for us, unless they allow us to create more cash flow, get that back to shareholders, protect our balance sheet and lead the way in ESG, and it's as simple as that.

我們不會取消那些只會讓我們變得更大的收購，除非它們為我們做四件事，除非它們允許我們創造更多現金流，將其返還給股東，保護我們的資產負債表並在 ESG 方面處於領先地位，就這麼簡單。

Okay. And I guess, just is there any kind of high-level sort of time frame? Or do you feel like at some point, we've had these things in our sites, been in ongoing active dialogue where that just becomes exhausted where it's just clear maybe there's not going to be a deal at some point for one of these targets? And at that point, would you pivot to just a higher return of capital? You obviously have no net debt at this point, strong base dividend, the variable was up a lot this quarter, but still a lot of excess free cash flow above that. You did mention buybacks in your prepared comments. Just trying to get a sense, if some of these deals don't come to fruition, should we be expecting maybe a buyback to come into play here?

好的。我想，是否有某種高級別的時間框架？或者您是否覺得在某個時候，我們的站點中有這些東西，一直在進行持續的積極對話，但在很明顯的情況下，這些目標之一可能不會在某個時候達成協議？到那時，你會轉向更高的資本回報率嗎？你顯然此時沒有淨債務，強勁的基礎股息，本季度變量上升了很多，但仍然有很多超額自由現金流高於此。您在準備好的評論中確實提到了回購。只是想了解一下，如果其中一些交易沒有實現，我們是否應該期待回購在這裡發揮作用？

Sure. Yes. Thanks again, Leo. I would say time frame, there was -- we're always going to be in the market within the DJ, certainly looking at opportunities. We'll know, I would say, in the next quarter, certainly by the year-end, we'll be sitting on significant free cash that we will deploy and what we'll determine working with the Board and the management team is the best use of those funds. But I think, from a time perspective, Leo, I'm thinking the next quarter, possibly to the end of the year.

當然。是的。再次感謝，獅子座。我會說時間框架，有 - 我們總是會在 DJ 中進入市場，當然會尋找機會。我們會知道，我會說，在下個季度，當然到年底，我們將坐擁大量自由現金，我們將部署這些現金，我們將確定與董事會和管理團隊合作的是最好地利用這些資金。但我認為，從時間的角度來看，Leo，我正在考慮下一季度，可能到今年年底。

Okay. And then, I just wanted to ask on the production here. Obviously, very strong outperformance in the quarter. I know historically, the company has kind of talked about trying to keep volumes fairly steady. There was some benefit from the Bison deal, but volumes were up a lot more than that. Can you just provide a little bit of color around that? Did you get just a lot more wells on, maybe they came on early in the quarter? Did you see better well performance? What kind of drove the performance there? And do you expect second quarter to kind of be the peak on production? Do we kind of start falling the rest of the year? When you look at the guidance, it kind of implies that.

好的。然後，我只想問這裡的製作。顯然，本季度的表現非常強勁。我知道從歷史上看，該公司曾談到試圖保持銷量相當穩定。與 Bison 的交易有一些好處，但交易量的增長遠不止於此。你能提供一點顏色嗎？你有沒有更多的井，也許他們在本季度早些時候出現了？你看到更好的井性能了嗎？是什麼推動了那裡的表演？您是否預計第二季度會成為生產高峰？我們會在今年剩下的時間裡開始下跌嗎？當您查看指南時，它暗示了這一點。

Yes. Great question. I would say, if you look at first half, we're essentially flat to the second half. The second quarter is higher than -- came in higher than what we expected. A lot of that's due to early but outperformance in the Watkins area, longer plateaus and good execution by the team. We think production moderates, as reflected in our guidance, but comfortable with our update. Matt, anything to add?

是的。好問題。我想說，如果你看上半場，我們基本上與下半場持平。第二季度高於 - 高於我們的預期。這在很大程度上是由於沃特金斯地區早期但表現出色、更長的高原期和團隊的良好執行力。正如我們的指導所反映的，我們認為生產放緩，但對我們的更新感到滿意。馬特，有什麼要補充的嗎？

Yes. The only thing I'd add is, remember, we had a bunch of capital that we spent in the fourth quarter last year, accelerating a bunch of DUCs. A lot of those wells were in our oilier areas like Watkins, like Chris mentioned, and out in the legacy Bonanza Creek position. Those wells are the type that go on those oil plateaus on production for a couple of quarters, and we just frankly saw outperformance due to our completion design and -- on those plateaus, and it really manifested in the second quarter oil numbers.

是的。我唯一要補充的是，請記住，我們在去年第四季度花費了大量資金，加速了一系列 DUC。很多這樣的井都在我們的油區，比如沃特金斯，就像克里斯提到的那樣，並且在傳統的 Bonanza Creek 位置。這些油井是在幾個季度內處於石油生產平台的類型，坦率地說，由於我們的完井設計，我們看到了出色的表現——在這些平台上，這確實體現在第二季度的石油數據中。

Our next question comes from Nicholas Pope from Seaport Research.

我們的下一個問題來自 Seaport Research 的 Nicholas Pope。

I was hoping you guys could talk a little bit about the kind of shift mentioned in crude marketing. Kind of, I guess, longer-term plans there, a big jump in transport cost, but obviously, you saw it in the realizations. I guess what is the bigger picture? What's the long-term plan with how you guys are planning to kind of move all this oil and how those costs kind of play into those realized pricing?

我希望你們能談談粗略營銷中提到的那種轉變。我想，那裡的長期計劃，運輸成本的大幅上漲，但顯然，你在實現中看到了它。我想更大的圖景是什麼？你們計劃如何轉移所有這些石油以及這些成本如何影響這些已實現的定價的長期計劃是什麼？

Yes. Great question. So our better realized prices mostly come from having opportunities to sell our crude in basin. We are the largest producer of low gravity crude in the DJ now after this consolidation effort we've gone through. So pretty much, we control the supply of sub 42 oil. We're able to sell that at a premium in basin when the markets are there. Because of the restructuring of several of the previous companies that have created Civitas, we were able to remove legacy contracts and have the ability to sell that crude in basin.

是的。好問題。因此，我們更好的實現價格主要來自有機會在盆地出售我們的原油。在我們經歷了這次整合努力之後，我們現在是 DJ 中最大的低比重原油生產商。差不多，我們控制了 sub 42 油的供應。當市場在那裡時，我們能夠在盆地以溢價出售它。由於之前創建了 Civitas 的幾家公司進行了重組，我們能夠取消遺留合同並有能力在盆地出售原油。

So as we continue developing, especially in our southern area, we will have more volumes that we're able to sell in basin, potentially at these better prices like we saw in the last 2 quarters. We also have a large volume commitment with NGL that rolls off in 2023 that was associated with the legacy Bonanza Creek position, which would free up another 25,000 barrels a day of low gravity crude that we would then be able to access these in-basin markets with. So as long as those in-basin markets stay strong, we should be able to continue taking advantage of these prices.

因此，隨著我們繼續發展，特別是在我們的南部地區，我們將能夠在盆地銷售更多的數量，可能會以我們在過去兩個季度看到的更好的價格出售。我們還與 NGL 簽訂了大量承諾，該承諾將於 2023 年推出，這與傳統的 Bonanza Creek 位置相關，這將每天釋放另外 25,000 桶低比重原油，然後我們將能夠進入這些盆地市場和。因此，只要這些盆地市場保持強勁，我們就應該能夠繼續利用這些價格。

Our next question comes from Noel Parks from Tuohy Brothers.

我們的下一個問題來自 Tuohy Brothers 的 Noel Parks。

I just had a couple of questions. I was wondering, with all the free cash flow you've generated, have you been doing any work in terms of looking at additional benches, secondary targets on your plays now that most of the consolidation of the different companies is under your belt?

我只是有幾個問題。我想知道，由於您已經產生了所有自由現金流，您是否一直在尋找額外的替補席，您的比賽中的次要目標，因為大多數不同公司的整合都在您的掌控之下？

Yes, great question, Noel. I would say that's exactly where you start, right? I mean you start with the performance of your existing asset, how do you optimize base declines, how do you optimize completions. But then you go up and down wellbores and look for other opportunities. I would say we're early days of thinking about that. But exploration within the DJ, I think, is an area that could -- we could allocate some capital to if we see a real opportunity, and it would be an easy tuck-in to our ops. Matt?

是的，很好的問題，諾埃爾。我會說這正是你開始的地方，對吧？我的意思是你從現有資產的性能開始，如何優化基數下降，如何優化完井。但隨後你會上下井眼並尋找其他機會。我會說我們還處於考慮這個問題的早期階段。但我認為，在 DJ 內部進行探索是一個可以——如果我們看到真正的機會，我們可以分配一些資金，這對我們的運營來說很容易。馬特?

Yes. The only other thing I'd add is we're not really focused on new formations at this point in time, but there are alternate benches, like you mentioned, in some of our areas that haven't been adequately tested. As we test those, I don't think it will add a new formation in total for us to develop, but it will allow us to kind of develop a little bit tighter chevron pattern if we are able to squeeze a few extra wells in because we see productivity in those new benches. So that's kind of what we're looking at right now.

是的。我要補充的唯一另一件事是，我們目前並沒有真正專注於新陣型，但是就像您提到的那樣，在我們的某些區域還沒有經過充分測試，還有替代替補席。當我們測試這些時，我認為它不會為我們開發總共添加一個新地層，但如果我們能夠擠出一些額外的井，它將使我們能夠開發出更緊密的人字形圖案，因為我們在這些新工作台上看到了生產力。所以這就是我們現在正在研究的。

Great. And just thinking about the continued -- well, just the long process of integrating the 5 companies. And I just wonder if there is anything that happened recently or on the horizon as far as different types of service contracts rolling off, you're reconciling agreements that some of the component companies had to what the now combined company is having. I'm thinking either on the sort of the cost side or in terms of operationally or even affecting G&A?

偉大的。想想繼續——好吧，只是整合這 5 家公司的漫長過程。我只是想知道最近或即將發生的任何事情，就不同類型的服務合同的推出而言，你正在協調一些組件公司所擁有的協議與現在合併後的公司所擁有的協議。我是在考慮成本方面，還是在運營方面，甚至影響 G&A？

Yes. I think when you look at G&A quarter-over-quarter, a significant decrease as we continue to peel off costs and rationalize systems and put integrated process and systems in place. Again, I would say we're very early in that process. The team has done a very good job. We are shifting some things around. We're bringing in some new folks, and we'll continue to drive further integration of the business. But don't lose sight of 5 companies coming together and the complexity with which the team has really executed extremely well is really impressive from my viewpoint 3 months in. Nella, I don't know if you have anything to add on the G&A and integration?

是的。我認為，當您查看 G&A 季度環比時，隨著我們繼續剝離成本和合理化系統並實施集成流程和系統，顯著下降。再說一次，我想說我們在這個過程中還很早。團隊做得非常好。我們正在改變一些事情。我們正在引進一些新人，我們將繼續推動業務的進一步整合。但是不要忽視 5 家公司的合併，在 3 個月後，從我的角度來看，團隊真正執行得非常出色的複雜性確實令人印象深刻。內拉，我不知道你是否有什麼要補充的 G&A 和一體化？

Yes. I would say, in general, no. And this may -- we've been very impressed at the speed at which we've been able to extract midstream synergies. It's an area that we didn't really underwrite or significantly quantified in the various acquisition due diligence. On the G&A side, like Chris mentioned, we were down 18% quarter-over-quarter. We're currently about $20 million for the second quarter and down a lot more than that on a per unit basis.

是的。我會說，一般來說，沒有。這可能 - 我們對我們能夠提取中游協同效應的速度印象深刻。這是我們在各種收購盡職調查中沒有真正承保或顯著量化的領域。在 G&A 方面，就像 Chris 提到的那樣，我們環比下降了 18%。我們目前第二季度的收入約為 2,000 萬美元，並且比單價低得多。

We're not done yet. I think that just the roll-off of the companies and the excess services, we continue to shave off G&A as quickly as we can. And given where we are in the year, we believe the guidance that we gave was a little bit more appropriate, but we're definitely making meaningful strides on both those items.

我們還沒有完成。我認為，僅僅是公司的裁員和多餘的服務，我們將繼續盡快削減 G&A。鑑於我們在這一年中所處的位置，我們相信我們提供的指導更合適一些，但我們肯定在這兩個項目上都取得了有意義的進展。

Our next question comes from Michael Scialla from Stifel.

我們的下一個問題來自 Stifel 的 Michael Scialla。

I apologize for joining the call late. If any of these questions have been asked previously, I apologize for that. But I was wondering on Slide 14, looking at your activity level for the year. It looks like in terms of wells drilled, completed and brought online, a little bit lower than what you were guiding to previously. I'm just wondering, is that -- any impact from the higher working interest that you have in some of these wells? Or just how does that reconcile with -- because you kept the -- no change on the production forecast.

對於遲到的電話，我深表歉意。如果之前有人問過這些問題中的任何一個，我對此表示歉意。但我想知道幻燈片 14，看看你今年的活動水平。就鑽井、完井和上線而言，它看起來比你之前指導的要低一點。我只是想知道，您對其中一些井的更高工作興趣是否會產生影響？或者這與 - 因為你保持 - 生產預測沒有變化。

Yes. Thanks, Michael. I would say a couple of things. One, the asset's outperforming on a production basis and allowing us to generate significant free cash flow, which is our #1 focus, more so than activity. We did update those numbers. We're on the lower end of the previous guidance. Some of that's related to the working interest that we picked up, that obviously pulled in about $10 million of capital into our program and is allowing us to beat our production guidance with lower activity. And we floated between 2 and 4 rigs this year. We're at 3 right now. And we say we would average around 3 for the year. We're still there. But really happy with how the asset is performing. And if we can deliver or outdeliver on our promises with less activity, that's a win for the team and win for our shareholders. Matt, anything, any other color you'd add there?

是的。謝謝，邁克爾。我想說幾件事。一，資產在生產基礎上表現出色，使我們能夠產生大量的自由現金流，這是我們的第一重點，而不是活動。我們確實更新了這些數字。我們處於先前指導的低端。其中一些與我們獲得的工作興趣有關，這顯然為我們的計劃吸引了大約 1000 萬美元的資金，並使我們能夠以較低的活動超過我們的生產指導。今年我們浮動了 2 到 4 個鑽井平台。我們現在是 3 點。我們說我們今年平均會在 3 左右。我們還在那裡。但對資產的表現非常滿意。如果我們能夠以更少的活動兌現或超過我們的承諾，這對團隊來說是一場胜利，對我們的股東來說也是一場胜利。馬特，任何東西，你會在那裡添加任何其他顏色嗎？

No. Besides the acquisition, the only other thing is we've had some success with our internal leasing program and just setting up organically our working interest in a few pads. So I think that's helped, played into it as well, being able to hit our production numbers with slightly less activity.

沒有。除了收購之外，唯一的另一件事是我們在內部租賃計劃方面取得了一些成功，並且只是有機地建立了我們對幾個墊子的工作興趣。所以我認為這很有幫助，也發揮了作用，能夠以稍微少一點的活動來達到我們的生產數量。

Sounds good. And then I wanted to ask on if the Inflation Reduction Act is -- if that becomes law, what impact that might have on Civitas, in particular, with your methane emissions, if there is a methane emission fee attached to the bill or any other aspects of the bill that would be positive or negative for the company?

聽起來不錯。然後我想問一下《減少通貨膨脹法》是否——如果它成為法律，這可能對 Civitas 產生什麼影響，特別是對你的甲烷排放量，如果法案附有甲烷排放費或任何其他法案的哪些方面對公司有利或不利？

Yes. I would say, and this goes to the fourth pillar that we talked about in our prepared remarks, is we will, as a company, lead the way in environmental, social and governance. That means, for us, becoming the first carbon-neutral company in Colorado. We think that's the right thing to do for our shareholders to ensure the longevity of this business.

是的。我想說，這涉及到我們在準備好的發言中談到的第四個支柱，即作為一家公司，我們將在環境、社會和治理方面處於領先地位。對我們而言，這意味著成為科羅拉多州第一家碳中和公司。我們認為這對我們的股東來說是正確的事情，以確保這項業務的長壽。

But we will be very aggressive in our reductions in overall emissions, including methane, simply because we are allocating capital out the door to be carbon neutral. And so we'll -- we can talk about potential impacts, but I'll tell you, we were going to lead the way in terms of ESG. And Brian, I don't know if you want to add anything?

但是，我們將非常積極地減少包括甲烷在內的總排放量，這僅僅是因為我們將資本分配到門外以實現碳中和。所以我們會——我們可以談論潛在的影響，但我會告訴你，我們將在 ESG 方面處於領先地位。還有布賴恩，我不知道你是否想補充什麼？

Yes. No, we have -- so this is Brian. We have aggressive emissions reduction program in place over the next 3 years. We're going to be spending about $6 million a year to retrofit pneumatic devices, which, at about year 3, should result in a 30% to 40% reduction in emissions. And that, in addition to some of the other sources that we found in looking through the portfolio of 5 companies, we are targeting a 50% reduction by 2027.

是的。不，我們有——所以這是布賴恩。我們在未來 3 年內製定了積極的減排計劃。我們每年將花費大約 600 萬美元來改造氣動設備，大約在第 3 年，這應該會導致排放量減少 30% 到 40%。而且，除了我們在查看 5 家公司的投資組合時發現的其他一些來源外，我們的目標是到 2027 年減少 50%。

And so as Chris said, we have an extremely aggressive program. We are not net zero by 2050 or in 30 years or something like that. We are carbon neutral today, and we are making investments today to significantly reduce emissions in the short term, because to your point, we see that regulations and particularly regulations around air quality, they tend to get tougher and not easier. And so we are taking the proper steps to be ahead of that.

正如克里斯所說，我們有一個非常激進的計劃。到 2050 年或 30 年或類似的時間，我們不會是淨零。我們今天是碳中和的，我們今天正在投資以在短期內顯著減少排放，因為就您而言，我們看到法規，尤其是有關空氣質量的法規，往往變得更加嚴格，而不是更容易。因此，我們正在採取適當的步驟來領先一步。

Our next question comes from Bill Dezellem from Tieton Capital.

我們的下一個問題來自 Tieton Capital 的 Bill Dezellem。

Chris, in your opening remarks, you had mentioned that you're in the early innings of integrating the 5 companies. Would you please give us some examples of really what you're referring to there, given that it appears as though you have integrated the 5 companies?

克里斯，在你的開場白中，你提到你正處於整合 5 家公司的早期階段。鑑於您似乎已經整合了這 5 家公司，請您給我們一些您所指的真正例子嗎？

Sure. And I would say, we're early innings of optimizing the business. The companies are fully integrated, as evidenced by a great quarter -- great string of quarters, quite honestly. But the business, I would -- if we were looking around this table and walking the halls, we know there is more that can be done to optimize our production base, to optimize our performance in all aspects.

當然。我想說，我們處於優化業務的早期階段。這些公司是完全整合的，正如一個偉大的季度所證明的那樣——非常誠實的一系列季度。但是業務，我會 - 如果我們環顧這張桌子並走在大廳裡，我們知道可以做更多的事情來優化我們的生產基地，優化我們在各個方面的表現。

I would highlight a couple of things that are continuing to get attention. I think while not necessarily reflected in future guidance, I guess, could be some potential upside. To me, this is, if you think back 18 months ago and the individual constituents of this company, we are now a $5-plus billion company. What that means is the addition of clear process, clear accountabilities, clear systems integration, I think, can yield a lot of value that we're not in place previously. I would say we're early innings there.

我要強調一些繼續受到關注的事情。我認為，雖然不一定反映在未來的指導中，但我想這可能是一些潛在的上行空間。對我來說，如果你回想 18 個月前和這家公司的個別成員，我們現在是一家價值超過 5 億美元的公司。這意味著增加清晰的流程、清晰的責任、清晰的系統集成，我認為，可以產生很多我們以前沒有的價值。我會說我們是早期的一局。

We are now 170,000 barrel a day company. That is a massive base production, much bigger than any of the constituent parts. And so really focusing in on base production, not just drilling and completing wells, but base production, I think we are early innings and we've reorganized a bit to put more focus in all that. And I think more broadly, we have everything plugged in together. To your point, we're fully integrated.

我們現在是每天生產 170,000 桶原油的公司。這是一個龐大的基礎生產，比任何組成部分都要大得多。因此，真正專注於基礎生產，不僅僅是鑽井和完井，還有基礎生產，我認為我們處於早期階段，我們已經進行了一些重組，以更加專注於所有這些。而且我認為更廣泛地說，我們將所有東西都連接在一起。就您而言，我們已完全集成。

But optimizing process, optimizing systems, getting the right folks in the right spots and everyone aligned to one central mission, we're early days. And we're going to get there. And I think that's what I wake up every morning really excited about is that how the asset is performing, how the team is performing in the wake of 5 companies coming together, knowing that there is much more to come, I get really excited about.

但是優化流程、優化系統、讓合適的人到合適的位置，讓每個人都與一個中心任務保持一致，我們還處於早期階段。我們將到達那裡。我認為這就是我每天早上醒來真正興奮的是資產的表現，團隊在 5 家公司聚集在一起之後的表現，知道還有更多的事情要做，我真的很興奮。

And I recognize this sort of effort is never complete, but when would you expect the bulk of this optimization process for the businesses that you have acquired to be far enough down the path that there's a noticeable difference to the outside world?

而且我認識到這種努力永遠不會完成，但是您何時會期望您所收購的企業的大部分優化過程能夠走得足夠遠，以至於與外界有明顯的不同？

Sure. I would say, there should be a noticeable difference visible to the outside world based on the second quarter results. But I would also say, have this discussion a year from now, we're not going to be done. We may be closer to middle of the innings, but we will, as a company, continuously improve every aspect of our business. We will drive out as much cost as we can to maximize free cash flow and give that back to shareholders and protect our balance sheet. And so I would say, and the company is doing a phenomenal job of this, is we will not accept where we are today. We will continuously drive improvement throughout our company, throughout our business.

當然。我想說，根據第二季度的結果，外界應該可以看到明顯的差異。但我還要說，從現在開始進行一年後的討論，我們不會完成。我們可能更接近中間階段，但作為一家公司，我們將不斷改進我們業務的各個方面。我們將盡可能多地降低成本，以最大限度地提高自由現金流，並將其回饋給股東並保護我們的資產負債表。所以我想說，公司在這方面做得非常出色，我們不會接受我們今天的處境。我們將在整個公司和整個業務中不斷推動改進。

Our next question comes from Michael Scialla from Stifel.

我們的下一個問題來自 Stifel 的 Michael Scialla。

I just had a follow-up on -- just wondered if you could give any guidance, or if you did previously, again, I apologize, but on where current taxes may be for the remainder of the year?

我剛剛進行了跟進-只是想知道您是否可以提供任何指導，或者您之前是否做過，我再次道歉，但是關於今年剩餘時間的當前稅收可能在哪裡？

Sure. I'll start off and then kick it to Nella. In previous quarters, we had guided, at $75 flat, we would not expect to pay cash income taxes. What we've put out there, assuming $100 for the rest of the year, is between $75 million and $125 million. And we think it's a good idea to put that out there, given where commodity prices have been and look to be for the remainder of the year, but let me kick it to Nella.

當然。我會開始，然後把它踢給內拉。在之前的幾個季度中，我們預計在 75 美元的持平下，我們預計不會支付現金所得稅。假設今年剩餘時間為 100 美元，我們已經投入了 7500 萬美元到 1.25 億美元之間。考慮到今年剩餘時間商品價格的走勢和預期，我們認為把它放在那裡是個好主意，但讓我把它踢給 Nella。

Yes. Thanks, Michael, for your question. I would say, consistent with our prior messaging, if you look at where commodity prices have been kind of around the first quarter in that $85 to $90 range, our NOL for 2022 fully offset our taxable income. If you look at oil averaging about $108 for the second quarter and using our assumption of $100 a barrel, the resulting cash impact is essentially all 25% effective rate of that incremental revenue. So that's why we guided to about a midpoint of $100 million based on that incremental oil price.

是的。謝謝你，邁克爾，你的問題。我想說，與我們之前的信息一致，如果你看看第一季度商品價格在 85 美元到 90 美元之間的範圍內，我們 2022 年的 NOL 完全抵消了我們的應稅收入。如果您看一下第二季度平均約 108 美元的石油價格，並使用我們假設的每桶 100 美元，那麼由此產生的現金影響基本上都是該增量收入的 25% 的有效利率。因此，這就是為什麼我們根據該增量油價引導至約 1 億美元的中點。

We have no further questions in queue. I'd like to turn the call back over to Chris Doyle for closing remarks.

我們在隊列中沒有其他問題。我想把電話轉回給 Chris Doyle 做結束語。

Sure. I'd like to thank everybody for being on the call today and your continued interest in Civitas. Have a great day and be safe. Thank you.

當然。我要感謝大家今天參加電話會議以及您對 Civitas 的持續興趣。祝您有美好的一天，並保持安全。謝謝你。

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

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。