Civitas Resources, Inc.

Good morning, everyone, and thank you for joining us. Yesterday, we announced our second quarter 2025 results, as well as an enhanced capital return program. We provided some supplemented materials, and we filed our 10-Q. In addition, we announced the appointment of Wouter van Kempen, formerly our board chair, as our interim CEO. Hopefully, you've had a chance to look through all of our materials, which are all on the website. This morning, our prepared remarks will come from Wouter, as well as Mary Nell Afosky, our CFO, and Clay Carroll, our president and COO. As always, please limit your time to one question and one follow-up, and we can get through the list efficiently. We will make certain 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 these statements in our most recent SEC filings. Also, we may refer to certain non-GAAP financial metrics. Reconciliations to the appropriate GAAP measure can be found in yesterday's earnings release and our SEC filings. With that, I'll turn the call over to Wouter.

Thanks, Brad, and good morning, everyone. Thanks for joining us. As we continue to build a world-class energy company, we must stay nimble and adaptable and build a culture of performance, strong execution, and cost leadership. Civitas has accomplished a lot since its formation in 2021, but there's more work to be done. And as such, the board made a difficult decision to part ways with Chris Doyle. We thank Chris for his contributions to our company and all that he has done to bring Civitas to where we are today. I want to be clear that this is not a strategic shift for Civitas. This was a board decision that we needed new leadership to deepen our focus on execution and performance, on discipline, and on cost leadership. and push the company forward. I will act as interim CEO until permanent replacement can be found. And Howard Willard, who has served on our board since 2021, has been appointed chair by the board during this period. We enter 2025 with four clear priorities as we work to build a stronger and more durable Civitas in the face of significant macro volatility. Number one, run the business to maximize free cash flow. and built upon a leading cost structure enhanced by sustainable capital efficiencies. Number two, deploy that free cash flow to protect and strengthen the balance sheet. And we laid out a goal of achieving four and a half billion in net debt towards the end of the year. Number three, return cash to shareholders, which was targeted to primarily come through a strong base dividend with the potential for higher shareholder returns tied to hitting our debt reduction target. And number four, lead in ESG and build a long-term sustainable business as we execute on our goal to further reduce our emissions profile. As we look back on the first half of the year, Civitas has taken decisive action to enhance our operational execution, sustainably lower our cost, and improve our financial position in order to maximize value for shareholders. With a number of our goals already achieved and confidence in meeting our debt reduction targets for the year, we are very pleased that we can now reinstate an aggressive capital returns plan with a buyback authorization that is well over 25% of our market cap today. Let me now hand it over to Marianella to go through this in more detail and cover this year's accomplishments.

Thanks, Sauter. As you mentioned, we've taken decisive actions to strengthen the company and our forward plan, including first, as we came into 2025, we optimized our investment levels, focusing on higher free cash flow and returns. Second, we reduced price risk and protected our cash flow with increased hedges. Taking advantage of multiple commodity price opportunities over the last couple of months, We are now approximately 60% hedged on oil for the remainder of this year, which is about twice our normal levels. Next, we proactively issued $750 million in new senior notes with a focus to enhance our liquidity and extend debt maturities. Today, we have around 2 billion in financial liquidity. And by the end of the year, we anticipate no borrowings outstanding on our credit facility. Fourth, we're on track with our previously announced $100 million cost optimization and efficiency initiative to enhance margins and returns. Well costs are lower in each basin, oil differentials are improved, and we're driving cash operating costs meaningfully lower. Clay will provide more color on this effort here shortly. And lastly, we significantly exceeded our full-year target for non-core asset sales, with executed agreements to divest $435 million in non-core DJ basin assets at a strong valuation. Achieving a four times multiple on 2026 cash flow establishes another strong marker for our DJ assets and allows us to further hybrid our position in the basin. The divestments constitute the northernmost part of our asset base, an area with minimal near-term development plans, and it accelerates significant cash flow with proceeds targeted for debt reduction. Production from the divested assets is estimated to be around 10,000 barrels equivalent per day for next year, half of which is oil, and the transactions are expected to close around the end of the third quarter. Each of these achievements is significant standalone. And combined, we have accelerator plans for the year, putting our $4.5 billion year-end target squarely in sight. With confidence in our plan, we intend to take advantage of the compelling value our equity provides today. Going forward and including full year 2025, we plan to allocate 50% of our free cash flow after the base dividend to share buybacks on an annual basis and the remainder to debt reduction. For the current year, that comes to about $375 million in repurchases, inclusive of the 70 million repurchase year to date. In strong support, our board increased our share repurchase authorization to $750 million, which represents about 28% of our current market cap. We intend to rapidly take advantage with a $250 million accelerated share repurchase program, which is expected to be completed within the third quarter. Before handing it over to Clay, I will quickly summarize our strong second quarter results, which were ahead of plan, demonstrating the strength of our assets and the capabilities of our team. Oil volumes grew 6% quarter over quarter. Cash operating expenses on a unit basis were more than 10% lower, and capital investments were on the low in the plan, driven by lower well costs and meaningful gains in D&C cycle times we have shown today. These outcomes, along with strong oil realizations and hedging gains, led to nearly $750 million in adjusted EBITDA and over $120 million in adjusted free cash flow for the quarter. With an expected significant increase in our volumes, along with capital and operating costs running lower, we expect a meaningful ramp in both EBITDA and free cash flow in the second half of the year. We are pleased with the recent Tax Act and the support it establishes for our industry. This new act will ensure we have minimal cash taxes for the foreseeable future, with over $200 million in savings over the next five years. Finally, we published our annual sustainability report last week, which can be found on our website. I hope you'll take time to read through the report, which includes a review of our performance and provides an update on our sustainability initiative. With that, I will turn it over to Clay.