Civitas Resources, Inc. (CIVI) Securities Class Action Lawsuit Update [May 29, 2025]

Introduction

A securities class action lawsuit has been filed against Civitas Resources, Inc. (“Civitas” or the “Company”) for alleged violations of federal securities laws during the period from February 27, 2024 to February 27, 2025 (the “Class Period”). The lawsuit seeks to recover damages for investors who purchased or otherwise acquired Civitas Resources securities during the Class Period.

 Civitas Resources, Inc.  (CIVI) Lawsuit Case Details 

Lin v. Civitas Resources, Inc., et al

Case No.: 2:25-cv-03791

U.S. District Court, District of New Jersey

Filed on May 2, 2025

Civitas Resources, Inc.  (CIVI) Company Profile 

Civitas is an independent exploration and production company focused on the acquisition, development and production of crude oil and liquids-rich natural gas assets in the DJ Basin (Colorado), Permian Basin (Texas and New Mexico).  The Company recognizes revenue from the sale of produced crude oil, natural gas, and natural gas liquids.   

 Class Period: February 27, 2024 to February 27, 2025.

Investors who purchased Civitas securities during this class period might be eligible to join the Civitas class action lawsuit.

Allegations in the Civitas Resources, Inc.  (CIVI) Lawsuit

On February 27, 2024, Civitas issued a press release announcing its Fourth Quarter 2023 and Full Year 2023 financial results.  The Company claimed its DJ Basin (Colorado) assets were outperforming and its Permian Basin (Texas) acquisition had expanded its inventory of high-return development opportunities.  Civitas stated that its 2024 outlook was focused on maximizing free cash flow, maintaining a strong balance sheet, and delivering modest production growth throughout the year.  The Company emphasized its operational capabilities and claimed it was “better positioned today to create sustainable, long-term value for our shareholders.” 

Throughout 2024, Civitas continued to issue statements reinforcing its positive outlook.  In its First Quarter 2024 press release, the Company highlighted strong performance across its portfolio.  Civitas also stated that it had surpassed its goal of selling $300 million in non-core assets.  The Company made similar statements in its Q2-24 and Q3-24 earnings calls, with Civitas emphasizing its operations execution, capital efficiency gains.

The Complaint filed against Civitas and its executives claims these statements were materially false and misleading, in violation of federal securities laws, such as the Securities Exchange Act.  Plaintiffs allege Civitas failed to disclose material, adverse facts relevant to investors that Civitas faced substantial business challenges which grew into question is rosy financial projections.  These known adverse facts included that oil production in the DJ Basin peaked in Q4 2024, that the Company reduced the pace of turning in new oil wells (TILs).  The Complaint further alleges Company was allegedly highly likely to significantly reduce its oil production in 2025 due to natural declines following the DJ Basin production peak and a low TIL count at the end of 2024.  Civitas also omitted that increasing oil production would require acquiring additional acreage and development locations which would incur significant debt and necessitate the sale of corporate assets to offset acquisition costs.  Furthermore, the Company’s condition required disruptive cost-reduction measures, including a 10% workforce reduction.   These adverse facts were allegedly concealed from investors, causing Civitas’ public statements to be materially false and misleading. 

The Truth Emerges

On February 24, 2025, Civitas announced its financial results for Q4 and full-year 2024, revealing several adverse developments. The company reported revenue of $1.29 billion, missing consensus estimates by $3.44 million, and non-GAAP earnings per share (EPS) of $1.78, missing consensus estimates by $0.21 per share. Net income for Q4 2024 was $151.1 million, a significant decline from $302.9 million in the year-ago quarter. Civitas also disclosed interest expenses of $456.3 million for the year.

Market Reaction

On February 25, 2025, Civitas’ stock price dropped by $8.95 per share, or 18.95%, closing at $40.35.

Next Steps 

·       Submissions for lead plaintiff are due July 1, 2025

·       The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.   

·       The Court will then consider motion for class certification.    

·       The Court will later consider a Motion to Dismiss.   

 To learn if you are eligible for recovery under the Civitas shareholder class action, visit the case submission page here.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.