Climate Change Data

Civitas Resources, Inc.

Climate Impact & Sustainability Data (2021, 2022, 2023)

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:1,329,900 tCO2e
Scope 2 Emissions:51,500 tCO2e
Total Energy Consumption:96,300 MWh
Water Consumption:4,300,000 m3
Carbon Intensity:15.6 tCO2e/MBOE

ESG Focus Areas

  • Climate Change
  • Safety
  • Community Engagement
  • Governance
  • Human Capital

Environmental Achievements

  • Achieved carbon neutrality on a Scope 1 and 2 basis.
  • Reduced greenhouse gas emissions attributable to fugitive emissions leaks by approximately 85%.
  • Achieved zero routine flaring as of January 2022.
  • Implemented electrification of drilling and completions equipment where feasible.
  • Voluntarily committed to plugging 42 orphaned wells.

Social Achievements

  • Pledged over $11 million to humanitarian and disaster relief, education, agriculture, veterans and first responders, and community infrastructure.
  • Launched the Colorado Preparedness & Response Network, training over 1,000 firefighters.
  • Maintained a Total Recordable Incident Rate (TRIR) below 0.25.
  • Committed to a Board of Directors with greater than 30% racial and gender diversity.

Governance Achievements

  • Established an ESG Committee within the Board of Directors.
  • Majority of Board compensation is in stock.
  • Executive Management compensation aligned with absolute shareholder return targets.
  • Implemented an internal cost of carbon.

Climate Goals & Targets

Long-term Goals:
  • Maintain carbon neutrality.
Medium-term Goals:
  • Transition 85% of fleet vehicles to electric and electric-hybrid by 2030.
Short-term Goals:
  • Reduce pneumatics emissions by 70% by 2025.
  • Transition 50% of fleet vehicles to electric and electric-hybrid by 2025.

Environmental Challenges

  • Increasingly stringent regulations could reduce profitability.
  • Potential for more intense and prevalent fire seasons.
  • More severe droughts could lead to a decline in available water.
  • Maintaining a diverse workforce in specific geographic locations.
Mitigation Strategies
  • Proactively reducing emissions and setting an internal price of carbon.
  • Investing in facility design innovations and emission-reduction technologies.
  • Using recycled produced water and exploring other non-potable water sources.
  • Prioritizing local hiring and implementing diverse hiring protocols.

Supply Chain Management

Supplier Audits: Annual audits of contractors and subcontractors.

Responsible Procurement
  • Contractor Expectations Manual outlining EH&S standards and ESG objectives.

Climate-Related Risks & Opportunities

Physical Risks
  • Wildfires
  • Droughts
Transition Risks
  • Stringent regulations
  • Market shifts
  • Technological changes
Opportunities
  • Acquiring assets from higher-emitting companies.
  • Developing and delivering renewable energy.
  • Providing responsibly sourced gas to utilities.

Reporting Standards

Frameworks Used: SASB, TCFD, AXPC

Certifications: ISO 14001

Sustainable Products & Innovation

  • Responsibly Sourced Gas (RSG)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:1,323,568 tCO2e/year
Scope 1 Emissions:1,250,800 tCO2e/year
Scope 2 Emissions:73,869 tCO2e/year
Total Energy Consumption:143,080 MWh/year
Water Consumption:10,745,400 m3/year
Carbon Intensity:14.5 tCO2e / MBOE

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Achieved carbon neutrality for Scope 1 and 2 GHG emissions.
  • Implemented a company-wide retrofit to compressed air, reducing scope 1 CO2e emissions by approximately 33 percent relative to 2021.
  • Zero routine flaring achieved in January 2022.
  • More than 90 locations equipped with more than 100 24/7 real-time air monitoring and methane detection stations.
  • 31 wells certified by a third-party as producing Responsibly Sourced Gas (RSG).

Social Achievements

  • Launched the Civitas Community Foundation, providing project grants and scholarships.
  • Provided $10 million for Ukrainian war relief.
  • Voluntarily committed to plugging 41 orphaned wells in Colorado.
  • Improved female and racial/ethnic representation on the Board.

Governance Achievements

  • Published Human Rights and Biodiversity policies.
  • Initiated the Employee Engagement Committee with a DEI subcommittee.
  • Updated bylaws to create a majority voting standard and proxy access.

Climate Goals & Targets

Long-term Goals:
  • Maintain carbon neutrality across scope 1 and scope 2
Medium-term Goals:
  • Reduce absolute scope 1 GHG emissions 50% by 2027 from a 2021 baseline
  • Achieve a 2.5% fixed annual scope 1 emissions intensity reduction against the 2019 EPA reporting baseline, averaged over 10-years through 2030
Short-term Goals:
  • Reduce scope 1 GHG pneumatics emissions by >80% by 2025 from a 2021 baseline
  • Reduce reportable spills by 20% compared to 2022 for the year 2023

Environmental Challenges

  • Supply chain disruptions
  • Stringent Colorado air emissions regulations
  • Potential future regulations and policies
  • Costly and time-consuming retrofitting of facilities with low-emission technology
  • Unproven reliability of new technologies
Mitigation Strategies
  • Developed alternative sourcing strategies
  • Proactive participation in the development of and preparation to meet new Colorado standards
  • Regular evaluation and proactive planning for compliance with potential future regulations
  • Internal cost of carbon calculation to evaluate capital and operational expenditures
  • Thorough vetting of new technologies on a small scale before larger financial commitments

Supply Chain Management

Supplier Audits: Annual audits of contractors' EH&S performance

Responsible Procurement
  • Contractor Expectations Manual
  • Third-party supply chain management software

Climate-Related Risks & Opportunities

Physical Risks
  • Wildfires
  • Droughts
  • Reduced air quality
Transition Risks
  • Stringent regulations
  • Price on carbon
  • Supply and demand imbalance
  • Emerging technology
Opportunities
  • Acquisition of assets
  • Leadership in sustainability
  • Demand for responsibly sourced energy
  • Water reuse
  • Development of renewables

Reporting Standards

Frameworks Used: SASB, AXPC, TCFD

Sustainable Products & Innovation

  • Responsibly Sourced Gas

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:1,920,131.32 tCO2e/year
Scope 1 Emissions:1,920,131.32 tCO2e/year
Scope 2 Emissions:125,987.42 tCO2e/year
Total Energy Consumption:274,648.01 MWh/year
Water Consumption:17,988.06 m3/year
Carbon Intensity:13.53 tCO2e/MBOE

ESG Focus Areas

  • Air emissions
  • Asset integrity
  • Board composition
  • Business ethics and transparency
  • Company culture
  • Emergency response and preparedness
  • Employee welfare
  • Greenhouse Gas (GHG) emissions
  • Health and safety
  • Management of legal and regulatory environment

Environmental Achievements

  • Reduced Scope 1 GHG emissions intensity by 41% from 2019 baseline (Rockies BU)
  • Retrofitted ~10,000 pneumatic devices on 125 pad sites, eliminating nearly 300,000 mT CO2e GHG emissions
  • Maintained Scope 1 and Scope 2 carbon neutrality in Rockies BU
  • Achieved zero routine flaring in Rockies BU

Social Achievements

  • Achieved a combined Total Recordable Incident Rate (TRIR) below 0.25
  • Voluntarily plugged 19 orphan wells in Colorado
  • Formed four employee resource groups
  • Introduced $1,000 employee giving match and 2 days of Volunteer Time Off

Governance Achievements

  • Enhanced sustainability governance practices
  • Formed an ESG Steering Group
  • Integrated sustainability-related data management systems

Climate Goals & Targets

Long-term Goals:
  • Maintain Scope 1 and Scope 2 carbon neutrality
Medium-term Goals:
  • Reduce absolute Scope 1 GHG emissions by 40% by 2030
  • Reduce pneumatic emissions by 65% by 2030 (Permian BU)
Short-term Goals:
  • Reduce pneumatic emissions by 80% by 2025 (Rockies BU)
  • Achieve zero routine flaring in Permian BU by 2030

Environmental Challenges

  • Supply chain disruptions
  • Integration of acquired assets' ESG datasets
  • Maintaining carbon neutrality with company growth
  • Managing climate-related risks (transition and physical)
Mitigation Strategies
  • Developed alternative sourcing strategies
  • Implemented internal cost of carbon for project evaluation
  • Prioritized projects with low carbon emissions/high emissions reduction value
  • Investing in emissions reduction projects and technologies
  • Utilizing certified carbon credits and RECs to offset residual emissions
  • Proactive engagement with regulators and lawmakers

Supply Chain Management

Supplier Audits: At least annual field audits of contractors; quarterly meetings with on-site contractors; ISNetworld® used for supplier qualification and monitoring

Responsible Procurement
  • Code of Business Conduct and Ethics
  • Contractor Expectations Manual
  • ISNetworld®

Climate-Related Risks & Opportunities

Physical Risks
  • Severe weather events (wildfires, flooding)
  • Water scarcity due to drought
Transition Risks
  • Stringent regulations
  • Carbon pricing
  • Emerging technologies
  • Market shifts in supply and demand
  • Reputational risks
Opportunities
  • Efficiencies from emissions reductions
  • Energy source switching
  • New products and services
  • New markets
  • Resilience

Reporting Standards

Frameworks Used: SASB, TCFD, AXPC ESG Metrics Framework

Sustainable Products & Innovation

  • Responsibly Sourced Gas

Awards & Recognition

  • Gold Standard Pathway for OGMP 2.0 reporting