基洼岛评论-探索估值与页岩成熟度

USA | Oil & Gas Exploration & ProductionCivitas Resources Kiawah Commentary - Navigating Valuation &Shale Maturity CEO Chris Doyle and IR Brad Whitmarsh attended. CIVI's focus is on coreoperations, lowering costs and continuing to replace inventory accretively.Mgmt is optimistic about operational progress in the Delaware, while Midlandappraisal zones add duration. Looking ahead, we lean on reducing the dividend,adding oil hedges into volatility, optimizing FC generation (lowering op andcapital costs), and stepping up repurchases as the market overly discountsresource. What Happened in Kiawah?We sat down with CEO Chris Doyle and IR Brad Whitmarsh followingthe CEO's panel discussion about the outlook for shale costs and duration. On the topic, mgmtbelieves they have lowered Permian breakevens below the DJ, which they still believe is in the high$40s. Despite near-term weakness in DJ production, the company finds the regulatory landscapeas fair as it has been post-COVID. We find it notable that they do not believe permitting restrictsinventory depth today, while the outlook once Governor Polis moves out of office is still constructive.Mgmt also believes that insights on the Eastern Wattenberg acreage helped inform the largePermian pads, introducing deeper zones such as the Midland Holly development (7/15/8 WC A/B/D). With only WC A/B underwritten at purchase, the integration of WC D development will beincremental for inventory life, as early Holly WC D results are 5% above CIVI type curves. Cost Efforts Adding FCF.CIVI launched a cost optimization initiative, with projected savings of~$40mn in '25 and ~$100mn in '26. Mgmt detailed changes to casing size and the integrationof locally sourced sand to improve capital efficiency. We also heard about renegotiation withmidstream providers to improve processing rates and the Whitecliffs crude renegotiation in the DJ,which will save $10mn/year. CIVI plans to accelerate production in 2H25 to meet FY25 guidance,and we gather that mgmt will stick to the current plan as capital has already been deployed in 1H25to deliver growth, despite the volatile macro environment. Given the drop-off in capex in 2H25, weexpect that at $60 WTI, and without divestitures, CIVI will generate FCF in line with the guided $4.5bnnet debt target. Lloyd Byrne * | Equity Analyst(212) 323-7528 | lloyd.byrne@jefferies.com John Edelman * | Equity Analyst(212) 336-7412 | jedelman@jefferies.com Emma Schwartz * | Equity Analyst1 (212) 336-7254 | emma.schwartz@jefferies.com Tara Bleustein * | Equity Associate+1 (212) 323-7595 | tbleustein@jefferies.com Civitas Resources, Inc. (CIVI)Equity ResearchJune 15, 2025 Company Description Civitas Resources Civitas is a DJ basin pure-play E&P that formed in 2021 through the 2021 merger of Bonzana Creek Energy, Extraction Oil & Gas, Crestone PeakResources, and HighPoint Resources. The company produced 56kboe/d in 2021 and generated an adjusted net income of $111m. Company Valuation/Risks Civitas Resources We value Civitas on a 2.9x EV/EBITDA multiple on 2027 EBITDA which we discount back to YE25. We corroborate our multiples based valuation witha NAV. We identify five key valuation risks. (1) Civitas operates in Colorado which has a strict regulatory regime, which could affect the permitting ofwells. (2) Civitas is exposed to inflation and this could affect the company's cost structure. (3) Like all E&Ps, Civitas is exposed to broader oil & gasmarket forces that can have a significant impact on financials. (4) A material decrease in commodity prices could increase leverage. (5) There is a riskthat Civitas could purchase an unattractive asset or face challenges integrating acquired assets. Analyst Certification: I, Lloyd Byrne, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressedin this research report. I, John Edelman, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressedin this research report. I, Emma Schwartz, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressedin this research report. I, Tara Bleustein, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of