Civitas Resources issued two major press releases on Aug. 6: restarting a capital return program and a leadership shakeup which includes the appointment of Board Chair Wouter van Kempen as interim CEO.
The Board of Directors of the company has approved an enhanced capital deployment plan aimed at striking a balance between debt repayment and shareholder return. Civitas will allocate future free cash flow-after its annual $2 per share base dividend-equally to share repurchases and debt repayment.
Along with the relocation, the Board increased authorization for share repurchases by the company to $750 million, or approximately 28% of its existing market capitalization. The company will enter into an accelerated share repurchase (ASR) agreement for $250 million, with final settlement in Q3 2025.
"Addding paid and planned dividends and year-end repurchases, the company's capital return to shareholders for 2025 will be approximately 21% of its current market capitalization," Civitas said.
Board Chairman Howard A. Willard III commented, "We are reinitiating an aggressive capital return program to capitalize on the strong value we perceive in our equity today. Under the ASR program, we are seeking to repurchase a substantial number of the company's outstanding shares at a fast pace."
The resumption comes after a series of strategic actions Civitas has undertaken in 2025, including:
A $150 million cut to its capital spending plan;
Hedling 17 million barrels of oil during Q3 2026 (approximately 60% of oil through 2025 with $67 WTI floor);
Issuance of senior notes due 2033 for $750 million to extend debt maturities and reduce revolver borrowings;
Implementation of a $100 million cost saving program;
Exceeding its goal of non-core asset sales with $435 million of DJ Basin sales.
These actions have left the company on track to decrease net debt to $4.5 billion by the end of 2025, in line with previous goals.
In a second release, Civitas announced that Wouter van Kempen, who has been Chair of the Board since February 2023, has become interim CEO after the resignation of Chris Doyle. The Board has started its succession planning to find a permanent successor.
Board member since 2021, Howard A. Willard III, will act as Acting Chair in an interim capacity.
"The Board believes this is the right time to make the transition to new leadership," Willard said. "Wouter's extensive background as a business executive and Board Chair make him well-suited to serve as Interim CEO.".
Van Kempen added, "Every day, we move through a very competitive market for a limited pool of investor capital. I am committed to continuing to build Civitas into a world-class energy company by building our performance culture, executing with unrelenting discipline, and achieving industry-leading cost efficiency, in order to maximize value to our shareholders."