Civitas Resources, Inc. (NYSE:CIVI) Q4 2022 Earnings Conference Call February 23, 2023 10:00 AM ET

Company Participants

John Wren - Director, Investor Relations

Chris Doyle - Chief Executive Officer

Marianella Foschi - Chief Financial Officer

Matt Owens - Chief Operating Officer

Brian Cain - Chief Sustainability Officer

Conference Call Participants

Neal Dingmann - Truist Securities

Tim Rezvan - KeyBanc

Phillips Johnston - Capital One

Noel Parks - Tuohy Brothers

Nicholas Pope - Seaport Research

Bill Dezellem - Tieton Capital

Operator

Good morning. My name is Chris and I will 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] I’ll now hand it over to John Wren, Director of Investor Relations. You may begin.

John Wren

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

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. 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 one question and one follow-up.

And now I will turn the call over to Chris.

Chris Doyle

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 three points, which are critical to understanding where we sit today and the tremendous opportunity that lies before us.

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. 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.