DENVER - Civitas Resources, Inc. (NYSE: CIVI), an independent oil and gas producer, has announced the repurchase of approximately 1.04 million shares of its common stock from Vitol at $72.00 per share, amounting to a $75 million transaction. This buyback is part of a larger strategy that has seen Civitas repurchase $142 million worth of its shares year-to-date.
The company's acquisition of oil and gas assets in the Permian Basin from Vencer Energy, a Vitol investment, was completed on January 2, 2024. The deal involved 7.2 million shares of Civitas stock and $1.55 billion in cash, with $1 billion paid at closing and the remaining $550 million due on January 3, 2025. As a result of the share repurchase and other market sales, Vitol's equity position in Civitas has been reduced to less than 2%.
Civitas has also accelerated a portion of its payment obligations to Vitol, agreeing to pay $75 million of the deferred $550 million prior to the due date. The company plans to make a payment of $37.5 million in May 2024 and another $37.5 million in July 2024, with the remaining $475 million payable by January 3, 2025.
Following the completion of this latest share repurchase, Civitas retains an authorization to buy back approximately $338 million more of its shares through the end of 2024. This move underscores the company's commitment to capital discipline and returning value to shareholders.
Civitas Resources, known for its operations in the Denver-Julesburg and Permian Basins, prides itself on being Colorado's first carbon-neutral oil and gas producer. The company emphasizes its adherence to leading ESG practices and a business model focused on sustainable cash returns.
InvestingPro Insights
Amidst Civitas Resources, Inc.'s strategic share repurchases and asset acquisitions, key financial metrics from InvestingPro paint a broader picture of the company's performance and position in the market. As of the last twelve months ending Q4 2023, Civitas boasts a robust gross profit margin of 73.74%, underlining its efficiency in generating earnings relative to its revenue. Additionally, the company's operating income margin stood at an impressive 35.44%, highlighting its operational effectiveness.
The company's commitment to shareholder returns is further evidenced by its dividend track record. Civitas has consistently increased its dividends, marking a three-year streak of growth. The dividend yield as of the last reported date is substantial at 9.75%, making it an attractive option for income-seeking investors. These InvestingPro Tips echo the company's focus on sustainable cash returns and capital discipline, as noted in their recent share repurchase announcement.
Investors looking to delve deeper into Civitas Resources can find more InvestingPro Tips, such as the company's low price volatility and the analysts' positive outlook on profitability for the year. With 7 additional tips available at InvestingPro, including insights on earnings revisions and historical returns, interested parties can gain a more nuanced understanding of CIVI's potential. To access these insights and more, visit https://www.investing.com/pro/CIVI and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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