Civitas Resources Inc (CIVI) 2022 Q4 法說會逐字稿

Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Civitas Resources Fourth Quarter 2022 Earnings Conference Call. (Operator Instructions)

早上好。我叫克里斯，今天我將擔任你們的會議接線員。此時，我想歡迎大家參加 Civitas Resources 2022 年第四季度收益電話會議。 （操作員說明）

I'll now hand it over to John Wren, Director of Investor Relations. You may begin.

我現在將其交給投資者關係總監 John Wren。你可以開始了。

Thanks, operator, and good morning, everyone. We appreciate you joining our conference call. Today, I'm joined by Civitas' CEO, Chris Doyle; CFO, Marianella Foschi; COO, Matt Owens; and Brian Cain, our Chief Sustainability Officer. By now, I hope you've had a chance to review our earnings release, 10-K and slide deck, all of which are available on our website.

謝謝接線員，大家早上好。感謝您加入我們的電話會議。今天，Civitas 的首席執行官 Chris Doyle 加入了我的行列；首席財務官，Marianella Foschi；首席運營官馬特·歐文斯；和我們的首席可持續發展官 Brian Cain。到目前為止，我希望您有機會查看我們的收益發布、10-K 和幻燈片，所有這些都可以在我們的網站上找到。

On today's call, we may make forward-looking statements, which 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.

在今天的電話會議上，我們可能會做出前瞻性陳述，這些陳述存在風險和不確定性，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。

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. After our brief prepared remarks, Chris and other members of the leadership team will be happy to take your questions. However, please limit your time to 1 question and 1 follow-up.

我們也可能會參考某些非 GAAP 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。在我們準備好的簡短髮言之後，克里斯和領導團隊的其他成員將很樂意回答您的問題。但是，請將您的時間限制在 1 個問題和 1 個跟進。

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

現在我會把電話轉給克里斯。

Thanks, John. Good morning, everyone. We have a lot of good news to share today, both in terms of our strong finish to 2022 as well as our plans for 2023. We'll get to your questions shortly, but first, I want to highlight 3 points, which are critical to understanding where we sit today and the tremendous opportunity that lies before us.

謝謝，約翰。大家，早安。我們今天有很多好消息要分享，既有我們到 2022 年的強勁表現，也有我們 2023 年的計劃。我們很快就會回答你的問題，但首先，我想強調 3 點，這很關鍵了解我們今天所處的位置以及擺在我們面前的巨大機遇。

Let's start with 2022. As we often discuss, our business model is based on the principle that a company in our space should prioritize free cash flow, sustainably return that cash to shareholders, maintain a premier balance sheet and lead on ESG.

讓我們從 2022 年開始。正如我們經常討論的那樣，我們的商業模式基於以下原則：我們所在領域的公司應優先考慮自由現金流，可持續地將現金返還給股東，保持一流的資產負債表並在 ESG 方面處於領先地位。

In 2022, we delivered across each of these strategic pillars. We met our original capital guidance for the year despite significant service cost inflation. We exceeded the top end of our production guidance and generated a record $1.2 billion in free cash flow, which is about 25% of our enterprise value.

2022 年，我們實現了所有這些戰略支柱。儘管服務成本大幅上漲，但我們仍達到了當年的原始資本指導。我們超出了生產指導的上限，產生了創紀錄的 12 億美元自由現金流，約占我們企業價值的 25%。

We demonstrated our commitment to returning cash to shareholders through our base and variable dividends totaling about $530 million last year or $6.29 per share. In addition, we bought back $300 million in stock last month. We maintained our pristine balance sheet and exited the year with nearly $770 million in cash, against $400 million in total debt and an undrawn facility.

我們承諾通過去年總計約 5.3 億美元或每股 6.29 美元的基本股息和可變股息向股東返還現金。此外，我們上個月回購了 3 億美元的股票。我們保持了原始的資產負債表，並以近 7.7 億美元的現金結束了這一年，而總債務為 4 億美元，還有未提取的貸款。

Lastly, we continued our focus on best-in-class ESG performance, initiating an equipment retrofit program to reduce emissions by more than 1/3 by the end of this year and standing up the Civitas Community Foundation, a scholarship fund for high school graduates living in our operating areas and nearby communities.

最後，我們繼續專注於一流的 ESG 績效，啟動了一項設備改造計劃，以在今年年底前將排放量減少 1/3 以上，並成立了 Civitas 社區基金會，這是一個面向高中畢業生的獎學金基金住在我們的經營區域和附近社區。

We talk a lot about our commitment to ESG, but it's not just Civitas. We're among a truly exceptional group of North American oil and gas operators who are meeting global demand while producing among the cleanest energy molecules in the world every single day.

我們經常談論我們對 ESG 的承諾，但不僅僅是 Civitas。我們是一群真正傑出的北美石油和天然氣運營商，他們每天都在滿足全球需求，同時生產世界上最清潔的能源分子。

Turning our attention to 2023. Our approach this year remains consistent. We're committed to capital discipline. We're focused on generating free cash flow, and we'll return that cash to our shareholders. We've seen a meaningful pullback in commodity prices lately, and service costs have yet to adjust.

將注意力轉向 2023 年。我們今年的方法保持一致。我們致力於資本紀律。我們專注於產生自由現金流，我們會將這些現金返還給我們的股東。我們最近看到大宗商品價格大幅回落，服務成本尚未調整。

Utilization remains high as many operators are choosing to sacrifice margins and capital efficiency to keep programs going. Although the DJ Basin has some of the lowest breakevens in North America, I can assure you, Civitas will not make that mistake.

利用率仍然很高，因為許多運營商選擇犧牲利潤和資本效率來維持項目的進行。儘管 DJ Basin 的盈虧平衡點在北美處於最低水平，但我可以向您保證，Civitas 不會犯這樣的錯誤。

We started taking action late in the third quarter of '22 when we dropped a rig and temporarily added a third completion crew to work down our DUC inventory and improve overall program efficiency. Although we have the permits in hand today to [pad] that third rig back, we're instead of electing to maintain 2 rigs and 2 completion crews to maximize capital efficiency and overall program returns.

我們在 22 年第三季度末開始採取行動，當時我們放棄了一個鑽機並臨時增加了第三個完井人員來減少我們的 DUC 庫存並提高整體項目效率。儘管我們今天已經獲得了 [pad] 第三個鑽井平台的許可，但我們不會選擇維護 2 個鑽井平台和 2 個完工人員，以最大限度地提高資本效率和整體項目回報。

So for 2023, year-over-year capital investments will be down. Cash returns to shareholders are projected higher, and production will be broadly flat So let me explain how we get this done. Our capital investments will be $850 million or about 15% lower than last year, and our reinvestment rate will be below 50%. In the updated slide deck, we show cumulative production for our wells, vintaged by year.

因此，到 2023 年，資本投資同比將下降。股東的現金回報預計更高，產量將基本持平所以讓我解釋一下我們是如何做到這一點的。我們的資本投資將比去年減少 8.5 億美元或約 15%，我們的再投資率將低於 50%。在更新的幻燈片中，我們顯示了我們油井的累計產量，按年份計算。

The company delivered a step change in performance in 2021, and you can see our 2022 program delivered that same performance. We don't expect to see degradation in 2023's program, and we continue to be excited with the results we're delivering in our Watkins-Lowry area. This year's turn-in-lines will be similar to 2022, and production will be relatively flat year-over-year and exit-to-exit.

該公司在 2021 年實現了業績的階躍變化，您可以看到我們的 2022 年計劃實現了同樣的業績。我們預計 2023 年的計劃不會退化，我們對我們在 Watkins-Lowry 地區取得的成果繼續感到興奮。今年的上交線將與 2022 年類似，產量同比和出口到出口將相對持平。

Like others, record cold weather in the Rockies will impact first quarter sales. We've had 6 weeks so far already this year with below 0 wind chills, including this week. This weather has impacted our fuel operations, and we expect volumes will be in the 155,000 to 160,000 BOE per day range in the first quarter versus our full year guide of 160,000 to 170,000 BOE per day.

與其他地區一樣，落基山脈創紀錄的寒冷天氣將影響第一季度的銷售額。今年到目前為止，我們已經有 6 週的風寒次數低於 0，包括本週。這種天氣影響了我們的燃料運營，我們預計第一季度的每日產量將在 155,000 至 160,000 桶油當量範圍內，而我們全年的指導量為每天 160,000 至 170,000 桶桶油當量。

At current strip prices, we expect to generate roughly $1 billion in free cash this year, the majority of which will be returned to shareholders. Due to our unique and resilient return framework with payouts based on the last 12 months of free cash flow, we actually expect total dividends to increase year-over-year to more than $600 million.

按照目前的剝離價格，我們預計今年將產生大約 10 億美元的自由現金，其中大部分將返還給股東。由於我們獨特且有彈性的回報框架以及基於過去 12 個月自由現金流的支出，我們實際上預計總股息將同比增加至超過 6 億美元。

Our commitment to return cash to shareholders is unwavering. And yesterday, we were excited to announce a new $1 billion buyback authorization. This is in addition to the $300 million we repurchased in January. We believe Civitas has the most compelling cash return framework in the industry.

我們堅定不移地向股東返還現金。昨天，我們很高興地宣布新的 10 億美元回購授權。這是我們在 1 月份回購的 3 億美元之外的補充。我們相信 Civitas 擁有業內最引人注目的現金回報框架。

Finally, I continue to be impressed with the talented Civitas team and our collective accomplishments. We strengthened our business on numerous fronts over the past year. We secured more new pad permits than any other operator in the DJ. We received approval on the state's first CAP with preliminary siting. We were disciplined in our approach to M&A, selectively executing on a couple of accretive transactions. And we found innovative ways to drive capital efficiency to help counter industry-wide inflation.

最後，我仍然對才華橫溢的 Civitas 團隊和我們的集體成就印象深刻。過去一年，我們在多個方面加強了業務。我們獲得了比 DJ 中任何其他運營商更多的新墊許可證。我們通過初步選址獲得了該州第一個 CAP 的批准。我們在併購方面非常嚴格，有選擇地執行幾筆增值交易。我們還找到了提高資本效率的創新方法，以幫助應對整個行業的通貨膨脹。

I'd like to give a special shout out to our field team. This team's executed operationally quarter after quarter. They've delivered these results safely despite record cold temperatures, and so I thank them, and our shareholders thank them.

我想特別感謝我們的現場團隊。該團隊每個季度都在執行操作。他們在創紀錄的低溫下安全地交付了這些結果，所以我感謝他們，我們的股東也感謝他們。

Before I close, I would be remiss if I didn't mention the significant contributions to our company's foundation provided by both Ben Dell and Brian Stech. Back in 2021, these 2 former Chairmen recognized a shared vision of driving consolidation within the DJ Basin. I want to thank them for their service that proved to be so critical during our first chapter as Civitas.

在我結束之前，如果我不提及 Ben Dell 和 Brian Stech 對我們公司的基礎做出的重大貢獻，那我就是失職了。早在 2021 年，這兩位前主席就認識到在 DJ 盆地內推動整合的共同願景。我要感謝他們的服務，事實證明，在我們作為 Civitas 的第一章中，他們的服務非常重要。

So I'm excited to start a new chapter in our company's history and welcome Wouter van Kempen and Deborah Byers to our Board. The Civitas team is just getting started, and we look forward to delivering differentiated results for our shareholders in the years ahead.

因此，我很高興開啟我們公司歷史的新篇章，並歡迎 Wouter van Kempen 和 Deborah Byers 加入我們的董事會。 Civitas 團隊才剛剛起步，我們期待在未來幾年為我們的股東帶來與眾不同的成果。

Operator, we're now happy to take questions.

接線員，我們現在很樂意接受提問。

(Operator Instructions) The first question is from Neal Dingmann with Truist Securities.

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

Outstanding quarter, Chris. I'm glad the investors are recognizing that this morning. My first question is, I guess, looking at free cash flow or, I guess, I'd call it cash investment, specifically, you all recently announced a material stock buyback. And I'm just wondering, was this just you all simply looking at how you -- I guess, you assume the PV of your company value versus what you're seeing current deals? Or what were the other drivers or decisions part of that process?

出色的季度，克里斯。我很高興投資者今天早上認識到這一點。我想我的第一個問題是關注自由現金流，或者，我想，我稱之為現金投資，具體來說，你們最近都宣布了重大的股票回購。而且我只是想知道，這只是你們所有人只是在看你如何 - 我猜，你假設你的公司價值的 PV 與你所看到的當前交易？或者該過程的其他驅動因素或決策是什麼？

Thanks for the question, Neal. Yes, I think you hit on it. As you know, we've been very active looking at in-basin M&A. What we did last month, pulling down $300 million of our stock, really is an indication that the most attractive things we saw in front of us was buying back our own equity.

謝謝你的問題，尼爾。是的，我想你成功了。如您所知，我們一直非常積極地關注流域內併購。我們上個月所做的，將我們的股票減持 3 億美元，確實表明我們看到的最有吸引力的事情是回購我們自己的股票。

As we roll our business model, which is very, very simple, forward through '23 and into 2024, the $1 billion authorization is really a product of looking at the excess cash flow that this company and this business is going to generate. So looking at '22 dividends of a little over $500 million going to $600 million this year and $1 billion of free cash this year, roll that forward into 2024, in addition to the cash balance that we currently have, and we think, hey, this could be a really good opportunity and a really compelling investment to buy back additional shares.

隨著我們推出非常非常簡單的商業模式，從 23 年到 2024 年，10 億美元的授權實際上是考慮這家公司和這項業務將產生的超額現金流的產物。因此，看看今年 22 年略高於 5 億美元的股息將增加到 6 億美元，以及今年 10 億美元的自由現金，除了我們目前擁有的現金餘額外，將其延期到 2024 年，我們認為，嘿，這可能是一個非常好的機會，也是一項非常有吸引力的回購額外股票的投資。

Yes, I'm glad to hear that. And then second question is on your operating plan that you just touched upon, specifically. I appreciate and agree with your plan to selectivity, especially if these OFS costs remain relatively high while oil and gas declines. So I'm just wondering what would it take for you to ramp this plan back up? Or maybe asked another way, maybe just talk a little bit more than you already have about how you're thinking about just returning shareholder return versus growth.

是的，我很高興聽到這個消息。然後第二個問題是關於您剛剛提到的運營計劃。我感謝並同意你的選擇性計劃，尤其是如果這些 OFS 成本仍然相對較高而石油和天然氣下降。所以我只是想知道你需要什麼才能重新啟動這個計劃？或者換一種方式問，也許只是比你已經擁有的更多地談論你是如何考慮回報股東回報與增長的。

Sure. And let me start just by reiterating, we're not focused on growth, right? We're focused on keeping production as wide as we can and minimizing capital to do so to maximize free cash. What we saw -- if you think back in 2022 prior to 20-plus percent of inflation in '22, we actually were more aggressive. We drilled, we picked up, went to 4 rigs for a short period, built up a DUC inventory, and we've worked that down through the year.

當然。讓我首先重申，我們並不專注於增長，對吧？我們專注於盡可能擴大生產規模，並最大限度地減少資本，以最大限度地增加自由現金。我們所看到的——如果你在 2022 年 2022 年的通貨膨脹率超過 20% 之前回想一下，我們實際上更加激進。我們進行了鑽探、拾取、短期使用 4 個鑽井平台、建立了 DUC 庫存，並且我們已經完成了這一年。

When we look at where we are today, it's actually the opposite. Commodity prices, oil is down, call it, 20-ish percent. Gas is less than half of what it was just a short while ago, and yet we're still seeing pressure given where utilization sits. So I think, with this environment, with the disconnect between service costs and commodity prices, I think the right thing to do is to sit back a little bit.

當我們審視今天的處境時，事實恰恰相反。大宗商品價格、石油價格下跌了 20% 以上。天然氣價格不到不久前的一半，但考慮到利用率，我們仍然看到壓力。所以我認為，在這種環境下，在服務成本和商品價格脫節的情況下，我認為正確的做法是稍微坐下來。

Now what would it take to lean back in? Those two things need to align better. And so that's either commodity prices up or service costs start to soften a bit. And I think as you see operators pull back on activity, especially in some of the gassier names, we'll see that. How long will that take? We'll see but we'll be very disciplined in our approach to how we allocate capital. And that's not just M&A, it's not just buybacks, it's organic investments as well.

現在需要什麼才能靠回去？這兩件事需要更好地協調。因此，這要么是商品價格上漲，要么是服務成本開始有所下降。而且我認為，當您看到運營商撤回活動時，尤其是在一些氣勢較大的名稱中，我們會看到這一點。多久才能做到？我們會看到，但我們在分配資本的方法上會非常自律。這不僅僅是併購，不僅僅是回購，它也是有機投資。

The next question is from Tim Rezvan with KeyBanc.

下一個問題來自 KeyBanc 的 Tim Rezvan。

I'd like to dig into the Slide 8 of your deck a bit. You're highlighting lack of degradation. And I was just curious, kind of, were these consistent results a result of specific areas you're drilling? Was it changes in the D&C design? And how repeatable do you think these results are over the next few years?

我想深入了解一下您的幻燈片 8。你強調沒有退化。我只是很好奇，這些一致的結果是否是您正在鑽探的特定區域的結果？ D&C 設計有變化嗎？您認為這些結果在未來幾年的可重複性如何？

Thanks for the question, Tim. So we've pulled in the full year programs for everything 2020 and before, looked at just what was drilled in '21, looked at just what was drilled in '22. I would say the character of the -- of each year's program is starting to shift a bit into Watkins and the Lowry area. And what we've seen is consistent results.

謝謝你的問題，蒂姆。因此，我們已經為 2020 年及之前的所有項目制定了全年計劃，研究了 21 年的鑽探情況，以及 22 年的鑽探情況。我想說的是，每年計劃的特點開始有點轉移到沃特金斯和洛瑞地區。我們看到的是一致的結果。

And not just what we show here, but there was a recently published report about 1.5 weeks ago showing consistency in the Watkins area from a step change in 2020 to '21 and then again in '22, lay over on '21. When we look at our 2023 plan, it's a lay down on 2022. So we're seeing a very consistent, very repeatable results.

不僅是我們在這裡展示的內容，而且大約 1.5 週前最近發布的一份報告顯示，沃特金斯地區的一致性從 2020 年到 21 年的階躍變化，然後在 22 年再次發生，擱置在 21 年。當我們審視我們的 2023 年計劃時，它是對 2022 年的規劃。因此我們看到了非常一致、非常可重複的結果。

And I would say that a lot of that is being driven by up spacing and optimizing returns, focused on the right things, not necessarily how many [sticks] we can drill a year, but how do we maximize those returns for the company and maximize free cash flow.

我想說的是，其中很大一部分是由上行間距和優化回報驅動的，專注於正確的事情，不一定是我們一年可以鑽多少 [sticks]，而是我們如何為公司最大化這些回報並最大化自由現金流。

Okay, okay. That's helpful. And then if I could pivot back to the purchase discussion. I know there's some folks who have argued that having an open-ended repurchase that's not being actively utilized is not helpful. So do you believe that -- is it your intent, in a steady-state world, to kind of fully utilize this $1 billion over the next 2 years? And do you have a preference over open-market repurchases versus sort of negotiated repurchases like you did with CPPIB?

好吧好吧。這很有幫助。然後我是否可以回到購買討論。我知道有些人認為沒有積極利用的開放式回購是沒有幫助的。那麼，您是否相信——在一個穩定的世界中，您是否打算在未來 2 年內充分利用這 10 億美元？你是否更喜歡公開市場回購而不是像你對 CPPIB 那樣的協商回購？

Sure. And I'll kick this off and then maybe kick it to Nella to add some color. Yes, our intent with the authorization is to purchase $1 billion by the end of next year. Now how we do that, I think, everything is on the table. And I would tell you one thing that this team has shown time and time again, and the company has shown time and time again, is we're going to be disciplined. And we're going to attack whatever it is, if it's a buyback, to maximize returns for our company.

當然。我會開始這個，然後可能會把它踢給 Nella 來添加一些顏色。是的，我們的授權意圖是在明年年底前購買 10 億美元。我認為，現在我們如何做到這一點，一切都擺在桌面上。我會告訴你一件事，這個團隊已經一次又一次地展示了，公司也一次又一次地展示了，我們會受到紀律處分。我們將攻擊任何它，如果它是回購，以最大化我們公司的回報。

What we saw in January, again, was an opportunity to pull down a pretty significant chunk from one of our larger shareholders not impact the overall flow to the equity and do so at a really compelling price. And so what that looks like over the next couple of years is yet to be determined, but everything is on the table.

我們在 1 月份再次看到，這是一個機會，可以從我們的一個大股東手中撤下相當大的一部分，而不影響整體股權流動，並以非常有吸引力的價格這樣做。因此，未來幾年的情況尚待確定，但一切都擺在桌面上。

Tim, and I would add, I mean, to Chris' point, any and all options are open. I mean the way we think about it is just really the incremental dollar, like where the return on that incremental dollar is. I mean open-market repurchases are just more spread out. You can't do them as chunky. If you look at something negotiated, as we announced in January, that one is more chunky.

蒂姆，我想補充一點，我的意思是，對於克里斯的觀點，任何和所有選項都是開放的。我的意思是我們考慮它的方式實際上只是增量美元，就像增量美元的回報在哪裡一樣。我的意思是公開市場回購更加分散。你不能把它們做得那麼矮胖。如果你看一下談判的內容，正如我們在 1 月份宣布的那樣，那會更加厚實。

You saw us over the last year evaluate. We did a couple of relatively small deals, one in January, one in July. At those points, we determined that those asset acquisitions were better than our stock. In January, we determined that our stock was very compelling. So it's just a continuous evaluation of the relative merits of our stock and additional asset acquisitions.

你看到了我們去年的評估。我們做了幾筆相對較小的交易，一筆在一月份，一筆在七月。在那些時候，我們確定這些資產收購優於我們的股票。一月份，我們確定我們的股票非常有吸引力。因此，這只是對我們股票和額外資產收購的相對優點的持續評估。

But we always, over time, we do those valuations. We look at the value proposition in our stock, and it's just -- it's a continuous evaluation. So it's hard to say pace or anything format, right? I mean, it just depends on -- it's going to be the situation on what the best return is at the time.

但隨著時間的推移，我們總是會進行這些估值。我們看看我們股票的價值主張，它只是——這是一個持續的評估。所以很難說速度或任何格式，對嗎？我的意思是，這僅取決於 - 這將取決於當時最佳回報的情況。

And we'll be very opportunistic.

我們會非常投機取巧。

I look forward to seeing what happens.

我期待看到會發生什麼。

Great. Thanks.

偉大的。謝謝。

The next question is from Phillips Johnston with Capital One.

下一個問題來自 Capital One 的 Phillips Johnston。

Just to ask about the setup for '24. Obviously, it's early to be talking about next year. And obviously, there's no guidance out there or anything like that, but it is pretty notable that you guys are going to be bringing about 40 more wells online this year than the number of wells that you're drilling with the 2-rig program.

只是問一下 24 年的設置。顯然，現在談論明年還為時過早。很明顯，那裡沒有任何指導或類似的東西，但值得注意的是，今年你們將在網上開采的井比你們使用 2 鑽井計劃鑽井的數量多 40 口。

I agree with the rationale, but services costs do remain high. I'm wondering if we're at risk of robbing (inaudible) and essentially pulling some free cash flow from '24 forward by year since you would presumably need to ramp up drilling activity to sort of keep the same tail pace?

我同意這個理由，但服務成本確實仍然很高。我想知道我們是否有搶劫（聽不清）的風險，並且基本上每年從 24 年向前拉動一些自由現金流，因為您可能需要增加鑽井活動以保持相同的尾速？

Yes. Thanks for the question, Phillips. Let me -- I'll step back for a second and just make the point that no company should be building up DUCs. No company should have hundreds of DUCs. In my opinion, that's inefficient use of capital. What we saw last year was we entered the year with about 40 DUCs. We exited with about 60. And so we're working that down in '23 because it's the best use of capital.

是的。謝謝你的問題，菲利普斯。讓我 - 我會退後一步，只是指出任何公司都不應該建立 DUC。任何公司都不應該擁有數百個 DUC。在我看來，這是對資本的低效利用。我們去年看到的是我們進入這一年時有大約 40 個 DUC。我們退出時大約有 60 個。所以我們在 23 年將其減少，因為這是對資本的最佳利用。

As I look from '23 into '24, while there's no guidance there, the guidance is the business model. The business model is we're going to keep production broadly flat. And so that's 160,000, 170,000, that's fine. Now how we get there, to your point, depends very highly on service costs. Now in my opinion, why would service costs remain high? I think because commodity prices will deem the utilization to remain high. And so in that case, we would lean into that.

當我從 23 年展望到 24 年時，雖然那裡沒有指導，但指導就是商業模式。商業模式是我們要保持產量基本持平。所以那是 160,000、170,000，沒關係。現在我們如何到達那裡，對你來說，在很大程度上取決於服務成本。現在在我看來，為什麼服務成本會居高不下？我認為因為大宗商品價格會認為利用率保持高位。因此，在那種情況下，我們會傾向於這樣做。

So I think the simplicity of our business model, focusing on all the right things, trying to be as efficient every year as possible, is not going to waiver this year or next year or over the foreseeable future. So Matt, I don't know if there's anything you would add in terms of how we think about capital allocation or not.

所以我認為我們的商業模式的簡單性，專注於所有正確的事情，每年都盡可能提高效率，不會在今年或明年或可預見的未來放棄。所以馬特，我不知道你是否會就我們如何看待資本配置添加任何內容。

No, nothing for me, but I would echo that we're not drawing down a significant number of DUCs. Like Chris said, we did enter the year with about 40 and -- or the previous year. And then going into '23, we have about 60. So it wasn't like we built up a massive number, and that's what we're focusing on going forward. But we should always be kind of normalized right around that 40-ish number, depending on just the ebb and flow of the rig schedule.

不，對我來說沒什麼，但我會附和我們並沒有減少大量的 DUC。就像克里斯所說的那樣，我們確實以大約 40 和 - 或前一年進入了這一年。然後進入 23 年，我們大約有 60 個。所以我們並沒有建立一個龐大的數字，這就是我們未來的重點。但我們應該始終在 40 左右的數字附近進行標準化，這取決於鑽機時間表的潮起潮落。

Okay, sounds good. That's good color. Maybe just to follow up on Neal's question on the M&A front. You guys haven't been shy about your efforts to acquire some of the larger privates in the basin. So can you maybe just give us an update there? And should we assume that the more aggressive return of capital plans means that M&A is less of a priority going forward? .

好的聽起來不錯。這個顏色好也許只是為了跟進 Neal 在併購方面的問題。你們並沒有羞於收購盆地中一些較大的私有企業。那麼你能不能給我們更新一下？我們是否應該假設更積極的資本計劃回報意味著併購不再是未來的優先事項？ .

Yes. I wouldn't say that, Phillips. I appreciate the question. I think it's an indication that, all along, anything that we do in terms of M&A has to compete against our underlying business. We've been very, very active, as we said, on the M&A side. And the most compelling that we've seen currently is our own equity. And that's a tribute to the strength of the business model and the opportunities -- versus the opportunities that are out there.

是的。我不會這麼說，菲利普斯。我很欣賞這個問題。我認為這表明，一直以來，我們在併購方面所做的任何事情都必須與我們的基礎業務競爭。正如我們所說，在併購方面，我們一直非常非常活躍。我們目前看到的最引人注目的是我們自己的股權。這是對商業模式和機會的力量的讚揚——與現有的機會相比。

I would say we will remain active and look for ways, big or small, to continue to optimize our underlying business model, which is how do you generate the most cash that you can, get it back to shareholders without putting your balance sheet at risk and lead on ESG. So we'll remain active. It's really just a commitment to investors to say, look, this is -- we're not committed one way or the other. Everything has to compete on a level playing field.

我想說的是，我們將保持活躍並尋找各種方式，無論大小，繼續優化我們的基本業務模式，即如何產生盡可能多的現金，在不使資產負債表面臨風險的情況下將其返還給股東並引領 ESG。所以我們會保持活躍。這實際上只是對投資者的承諾，看，這是——我們沒有以任何方式承諾。一切都必須在公平的競爭環境中競爭。

The next question is from Noel Parks with Tuohy Brothers.

下一個問題來自 Noel Parks 和 Tuohy Brothers。

Just a couple for me. In the release, you talked about setting a record for the -- your (inaudible) 2.5-mile lateral. I was just curious if you could talk about that. I assume that record will still not be the -- will not be the average or typical in the near term. But I was just sort of curious of the elements of that improvement. And I think it was described as being your highest-performing rig. And I was just wondering how much of that was maybe sort of crew dependent as well as just process consistency?

對我來說只是一對。在新聞稿中，您談到要為您的（聽不清的）2.5 英里橫向距離創造記錄。我只是想知道你是否可以談談這個。我認為該記錄仍不會是 - 不會是近期的平均水平或典型水平。但我只是對這種改進的要素感到好奇。我認為它被描述為您性能最高的鑽機。我只是想知道其中有多少可能取決於船員以及流程的一致性？

Yes. Thank you for the question. I'll kick this off and then kick it over to Matt. It's Matt's team that is delivering that type of continuous improvement. I think what I would highlight for us is not just the record. The thing that jumps off the slide for me is a 30-plus percent improvement over '17, a 16% improvement over 2019, a team that is geared to continuously improve and drive cost, time, cycle times out of the system is that's how you win in a commodity business.

是的。感謝你的提問。我先開始，然後交給馬特。 Matt 的團隊正在提供這種類型的持續改進。我想我要為我們強調的不僅僅是記錄。對我來說，從幻燈片上跳下來的是比 17 年提高了 30% 以上，比 2019 年提高了 16%，一個致力於不斷改進和降低系統成本、時間和周期時間的團隊就是這樣您在商品業務中獲勝。

I would say the other thing is that this highlights the underlying capital efficiency of a DJ asset. Industry, and it's not just us, has gotten this down to a fine art, and we continue to look for ways and find ways to get cost and time out of the system.

我想說的另一件事是，這突出了 DJ 資產的潛在資本效率。行業，不僅僅是我們，已經把它變成了一門藝術，我們繼續尋找方法，找到從系統中減少成本和時間的方法。

Your last point is a good one. There are -- it's beyond just the rig, it's the crew in the field, it's the team helping those crews. And what we've seen is while we highlight the highest-performing rig, we're very happy with the performance of all our rigs. And the last thing I would point out, too, is to have that type of performance for an entire year with no lost time incidences is what we can be most proud of. So Matt, anything to add from you?

你的最後一點很好。有——不僅僅是鑽井平台，還有現場的工作人員，是幫助這些工作人員的團隊。我們所看到的是，雖然我們突出了性能最高的鑽機，但我們對所有鑽機的性能都非常滿意。我還要指出的最後一件事是，在一整年中都保持這種表現，沒有浪費時間，這是我們最引以為豪的事情。那麼馬特，你有什麼要補充的嗎？

Yes. I would just add, this was the only rig that we ran for the full year last year. Our second rig that we were running all of last year, the second 2 quarters, anyways, we picked up halfway through the year. And it's not far behind what this rig was in terms of pace. .

是的。我只想補充一點，這是我們去年全年運行的唯一鑽機。我們去年全年都在運行的第二個鑽井平台，第二個兩個季度，無論如何，我們在今年中途開始了。就速度而言，它與該鑽機相差不遠。 .

Now our average 2.5-mile well is at 2.2 days spud to TD, but the averages have been coming down. And you can see that in that bullet point Chris referenced earlier and the improvement over the prior year. So our goal is to continue bringing down that average closer and closer to what our records are.

現在，我們平均 2.5 英里的井開鑽到 TD 需要 2.2 天，但平均值一直在下降。您可以在 Chris 之前提到的那個要點中看到這一點以及比前一年有所改進。因此，我們的目標是繼續降低該平均值，使其越來越接近我們的記錄。

But again, if you were to rewind 2 years and asked if we thought we'd be drilling a 2.5-mile well, almost 21,000 feet, spud to TD in 2.2 days, I would have thought that would have been a little bit out of reach. But we keep finding new ways to innovate and get things done a little bit quicker and a little bit quicker each year.

但同樣，如果你倒回 2 年，問我們是否認為我們會在 2.2 天內鑽一口 2.5 英里長的井，將近 21,000 英尺，開鑽到 TD，我會認為這有點超出預期抵達。但我們一直在尋找新的創新方法，並且每年都在更快、更快地完成工作。

Great. And I just wanted to ask about reserves. And I wonder if you could talk a bit about maybe whether you saw a positive-type curve revisions. I'm assuming that with the 5-year rule, not all of those would necessarily be immediately visible in the proved numbers. And if you have any sense of what kind of improvement you might be able to see going forward? .

偉大的。我只是想問一下儲備金。我想知道你是否可以談談你是否看到了積極的曲線修正。我假設根據 5 年規則，並非所有這些都必然會立即在已證明的數字中可見。如果您對未來可以看到什麼樣的改進有任何感覺？ .

Yes. Good question. This is Matt again. I'm assuming you're referring to the roughly 25 million barrels equivalent of revisions that is showing up in the 10-K. But if you're looking at that, about half of that is due to price and the other half, roughly, is due to well performance. So we have seen positive well performance compared to what type curves were generated off of a few years ago. And a lot of that has to do with what Chris alluded to earlier and our repeatable well results year-over-year due to different completion designs that we think are attributing to our outperformance, but also up spacing. So we've generally up spaced across the board, and we're seeing positive results and consistent results from that over the last 1.5 years. .

是的。好問題。這又是馬特。我假設您指的是 10-K 中顯示的大約 2500 萬桶的修正量。但如果你仔細觀察，就會發現其中大約一半是由於價格，而另一半大致是由於良好的性能。因此，與幾年前生成的類型曲線相比，我們已經看到了良好的性能。這在很大程度上與克里斯之前提到的以及我們的可重複油井結果逐年有關，因為我們認為不同的完井設計歸因於我們的優異表現，但也歸因於間距。因此，我們通常會全面擴大空間，並且在過去 1.5 年中我們看到了積極的結果和一致的結果。 .

The next question is from Nicholas Pope with Seaport Research.

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

I was hoping you could expand a little bit on these big wells that you're drilling because I see that the guidance for '23, you're talking about the average lateral lengths are going to be 2.5 miles. Is -- I guess, how has that progressed over the last year in terms of -- maybe the last 2 years, as you kind of look at the size of the wells you're drilling and kind of how sustainable that is to kind of keep with those bigger, longer wells?

我希望你能在你正在鑽探的這些大井上擴大一點，因為我看到 23 年的指導，你說的是平均橫向長度將是 2.5 英里。是 - 我想，在過去一年中，這方面取得了怎樣的進展 - 也許是過去 2 年，因為你有點看看你正在鑽井的規模以及它的可持續性如何與那些更大、更長的井保持一致？

Yes. No, thank you for highlighting that. That's a big move year-over-year drilling 2 milers on average versus 2.5 miles now. We're testing longer laterals. We're very excited about what the team has been able to do in terms of cycle times and being able to extend laterals, and it really is just another ingredient to drive additional capital efficiency into the program. That -- looking into 2024, that generally longer lateral mix of wells is, again, how we will most efficiently keep production broadly flat. Matt, I don't know if you want to add anything, any other details?

是的。不，謝謝你強調這一點。與現在平均鑽探 2.5 英里相比，與去年同期相比，這是一個很大的進步。我們正在測試更長的橫向。我們對團隊在周期時間和能夠擴展橫向方面所做的工作感到非常興奮，這確實是為該項目提高資本效率的另一個因素。展望 2024 年，通常較長的橫向井組合將再次成為我們最有效地保持產量基本持平的方式。 Matt，我不知道你是否想補充任何其他細節？

Yes. I would add, our acreage position is different now, too, especially in Watkins, where it's nearly 80,000 acre contiguous block, where we can drill these longer laterals. So down in that area, you'll see us drilling a lot more 3-mile wells. We drilled quite a few 3-mile wells last year, completed them, brought them online, and we have the ability to even do 4-mile wells now going forward.

是的。我要補充的是，我們的種植面積現在也有所不同，尤其是在沃特金斯，那裡有近 80,000 英畝的連續區塊，我們可以在那裡鑽探這些更長的橫向區域。所以在那個地區，你會看到我們鑽了更多 3 英里的井。去年我們鑽了很多 3 英里的井，完成了它們，使它們上線，我們現在甚至有能力打 4 英里的井。

We anticipate efficiencies to get better with these longer laterals. But the one thing you got to remember that's different about the DJ Basin compared to other basins is we can drill the wells so fast. So the vertical section doesn't save us millions of dollars, like it does in other basins. It only saved us about $1 million to not have to drill that vertical section.

我們預計這些較長的支管會提高效率。但你必須記住的一件事是，與其他盆地相比，DJ 盆地的不同之處在於我們可以如此快速地鑽井。所以垂直剖面並沒有像其他盆地那樣為我們節省數百萬美元。不必鑽那個垂直部分，它只為我們節省了大約 100 萬美元。

So it's not quite as efficient as some other basins, where drilling costs are a lot more expensive, but it is -- we still think going to be more efficiencies going forward that we can continue to capitalize on.

所以它不像其他一些盆地那樣高效，那裡的鑽井成本要貴得多，但它是 - 我們仍然認為我們可以繼續利用更高的效率。

Got it. That's great. And to kind of switch gear a little bit here. Kind of curious if you could update thoughts on the permitting process. And I know there's a small piece of '23 that's still kind of outstanding to kind of lock up permitting. Where do you -- can you give a little update on where things are and kind of where the expectation is on kind of updates on kind of finalizing everything with '23?

知道了。那太棒了。並在這裡稍微切換一下。有點好奇您是否可以更新對許可流程的想法。而且我知道 23 年的一小部分仍然非常出色，可以鎖定許可。你在哪裡 - 你能提供一些關於事情在哪裡的更新以及關於用'23完成所有事情的更新的期望嗎？

Sure. I appreciate the question. I'll kick this off and then kick it over to Brian Cain. So as you highlight, we're about 85% of the way through for the 2023 program. I would, just on the backs of the hard work of the team, highlight how much different a place we are this year than we were a year ago. And that's, again, lots of hard work and collaboration with multiple groups.

當然。我很欣賞這個問題。我先開始，然後交給 Brian Cain。因此，正如您強調的那樣，我們已經完成了 2023 年計劃的 85%。在團隊的辛勤工作的支持下，我會強調今年我們與一年前相比有多麼不同。這又是大量的艱苦工作和與多個團隊的合作。

At the tail end of last year, you saw our first -- actually the first CAP get approved with preliminary siting. One of our peer companies in basin followed us. We're seeing the process work and certainly at a much different pace than what we saw this time last year. And so we're focused with that CAP.

在去年年底，您看到了我們的第一個——實際上是第一個 CAP 通過初步選址獲得批准。我們盆地的一家同行公司跟隨我們。我們看到這個過程在起作用，而且速度肯定與我們去年這個時候看到的有很大不同。因此，我們專注於該 CAP。

And you also saw us submit our second CAP. We're talking about '24, 2025 activity. And so the team is getting out in front of the rigs, which is exactly what we want to see, and continue to work very well with the COGCC. So let me kick it to Cain, and he'll give you some additional details.

您還看到我們提交了第二個 CAP。我們正在談論 '24, 2025 活動。因此，團隊正在鑽井平台前，這正是我們希望看到的，並繼續與 COGCC 良好合作。所以讓我把它踢給凱恩，他會給你一些額外的細節。

Thanks, Chris. And as you said, 85% of our 2023 plan is permitted. We have enough permits right now to run 3 rigs if we wanted to, obviously, choosing not to. Those 2 pads essentially left in the 2023 plan are currently pending. Those are November, December pads, and we believe that they are worth the wait because of the value that we assigned to those. So we feel good about our 2023 plan.

謝謝，克里斯。正如您所說，我們 2023 年計劃的 85% 是允許的。如果我們願意，我們現在有足夠的許可證來運行 3 個鑽井平台，顯然，我們選擇不這樣做。基本上留在 2023 年計劃中的那兩個墊子目前正在等待中。這些是 11 月、12 月的墊子，我們相信它們值得等待，因為我們賦予它們的價值。因此，我們對我們的 2023 年計劃感到滿意。

And I would just point out that we ended 2022, as you see, with 9 new pad permits, which is more than any other operator in the basin by nearly 2x. So we're creating a demonstrated track record of success in navigating this regulatory environment with, we think, exceptional results.

我只想指出，如您所見，我們在 2022 年結束時獲得了 9 個新的墊地許可證，這比流域內的任何其他運營商都多了近 2 倍。因此，我們正在創造成功駕馭這種監管環境的成功記錄，我們認為，取得了非凡的成果。

I would also note that by the end of the first quarter, by the end of this quarter, we will have as many OGDP permits, that's new pad permits, pending as we received in the entirety of last year. And so those new pad permits that will be pending would be going toward the 2024 drilling program.

我還要指出，到第一季度末，即本季度末，我們將獲得與去年全年收到的一樣多的 OGDP 許可證，即新的墊板許可證。因此，那些待決的新平台許可將用於 2024 年的鑽探計劃。

Longer term, we'd like to have a bank of about 12 to 18 months of permits in hand to provide that maximum flexibility and value acceleration, where desired in our development plans. And so this year, we are laser-focused on working toward that goal, and we'll be augmenting that through the pads associated with our approved Box Elder CAP.

從長遠來看，我們希望手頭有大約 12 到 18 個月的許可證銀行，以便在我們的開發計劃中提供最大的靈活性和價值加速。所以今年，我們專注於實現這一目標，我們將通過與我們批准的 Box Elder CAP 相關的護墊來增強這一目標。

And then our next CAP, Lowry CAP, which is a very exciting development, about 170 wells nameplate, 1 service owner and no dissenting owners within 2,000 feet. So we remain laser-focused on building that bank this year for coming years.

然後是我們的下一個 CAP，Lowry CAP，這是一個非常令人興奮的開發項目，大約有 170 口井銘牌，1 位服務所有者，並且在 2,000 英尺範圍內沒有反對的所有者。因此，我們今年仍然專注於在未來幾年建設該銀行。

Got it. That's very detailed, very helpful. I appreciate that. And I'd also like to add, I like the slide on the greenhouse gas emissions reduction. That target you guys have for '23, I mean, it's a nice big number. I like to see that.

知道了。說的很詳細，很有幫助。我很感激。我還想補充一點，我喜歡關於溫室氣體減排的幻燈片。你們 23 年的目標，我的意思是，這是一個不錯的大數字。我喜歡這樣。

Yes. No, I appreciate the question. I appreciate the comment. And certainly, that's a massive commitment for the company. And we think it's the right thing to do, and excited to see what the team can do throughout the year.

是的。不，我很欣賞這個問題。我很欣賞這個評論。當然，這對公司來說是一項巨大的承諾。我們認為這是正確的做法，很高興看到團隊全年可以做些什麼。

(Operator Instructions) The next question is from Bill Dezellem with Tieton Capital.

（操作員說明）下一個問題來自 Tieton Capital 的 Bill Dezellem。

Congratulations on a good quarter and year. How are you thinking about moving outside of Colorado over the course of the next couple of years?

祝賀一個好的季度和一年。您如何考慮在接下來的幾年內搬到科羅拉多州以外的地方？

Sure. So I think I would take us back to our 4 pillars, really, of how we're going to run this business. And we have an asset that generates significant free cash. We have returned significant cash to shareholders. We're protecting our balance sheet, and we're leading the way in ESG.

當然。所以我想我會帶我們回到我們將如何經營這項業務的 4 大支柱。我們擁有一項可以產生大量自由現金的資產。我們已向股東返還大量現金。我們正在保護我們的資產負債表，我們在 ESG 方面處於領先地位。

And so I say that because that grounds us to opportunities as we look outside of the DJ, perhaps. It has to be assets that allows us to extend or optimize that business model. And so you're talking about asset quality, you're talking about entry into that asset is important as well.

所以我這麼說是因為當我們在 DJ 之外尋找機會時，也許這讓我們有了機會。它必須是允許我們擴展或優化該業務模型的資產。所以你在談論資產質量，你在談論進入該資產也很重要。

And so again, as we look at options to deploy capital, will we consider adding assets in base, ensure out-of-basin, perhaps? But we have a fundamentally really strong business going here right now. It's going to take quite a bit to have us consider those opportunities. But we've proven ourselves as having a very disciplined approach to M&A, and we'll continue down that path. Nella, I don't know if you want to add anything to that?

因此，當我們考慮部署資本的選項時，我們是否會考慮在基礎中添加資產，確保流域外？但我們現在有一個從根本上非常強大的業務。讓我們考慮這些機會需要相當多的時間。但我們已經證明自己對併購採取非常有紀律的方法，我們將繼續沿著這條道路前進。 Nella，我不知道你是否想補充什麼？

I think that's right. I think with this latest buyback announcement we're -- you saw us over the last 12 months execute on opportunities to compete with that. I think with this latest buyback announcement, we're making a very clear signal that everything that we do has to compete with our stock. And so that's what you saw us do in January. And that's what you'll see us do pursuing to execution of this new newly announced billion-dollar program.

我認為這是對的。我認為，通過最新的回購公告，我們——你看到我們在過去 12 個月中抓住了與之競爭的機會。我認為通過最新的回購公告，我們發出了一個非常明確的信號，即我們所做的一切都必須與我們的股票競爭。這就是您在一月份看到我們所做的。這就是你會看到我們為執行這個新宣布的數十億美元計劃所做的努力。

There are no further questions at this time. I'll turn it over to Chris Doyle for any closing remarks.

目前沒有其他問題。我將把它交給 Chris Doyle 做任何結束語。

Sure. Thank you. I appreciate everyone's continued interest in Civitas. I'm looking out, looking at the temperature, we're below 0 again. So I really appreciate the hard work of all of the Civitas employees, and especially the field operations group that is making this a super compelling investment and super compelling business. Thank you so much for the time this morning, and look forward to speaking soon. Be safe.

當然。謝謝。我感謝大家對 Civitas 的持續關注。我正在往外看，看看溫度，我們又低於 0 度了。因此，我非常感謝所有 Civitas 員工的辛勤工作，尤其是現場運營團隊，他們使這項投資和業務成為一項極具吸引力的投資。非常感謝你今天早上的時間，並期待很快發言。注意安全。

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

女士們，先生們，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。