Pomerantz Law Firm Initiates Class Action Against Civitas Resources for Securities Violations

Pomerantz Law Firm’s Class Action Against Civitas Resources

On June 27, 2025, the Pomerantz Law Firm announced the filing of a class action lawsuit against Civitas Resources, Inc., identified as Civitas, along with certain of its top officials. The suit has been lodged in the United States District Court for the District of New Jersey, under docket number 25-cv-03791.

This class action pertains to a group of investors who purchased or acquired Civitas securities during a critical time frame, spanning from February 27, 2024, through February 24, 2025. The aim of the lawsuit is to recover damages attributed to the alleged breaches of federal securities laws and to enforce remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, along with Rule 10b-5 that was enacted under this act. Investors interested in joining the lawsuit have until July 1, 2025, to file a motion with the Court requesting that they be appointed as the Lead Plaintiff for the affected class.

Civitas is categorized as an independent exploration and production entity. It focuses on securing, developing, and producing crude oil and natural gas liquids from its resources in the Denver-Julesburg (DJ) Basin located in Colorado and the Permian Basin across Texas and New Mexico. As of December 31, 2024, Civitas owned working interests in up to 530,200 acres.

The company generates its revenue primarily through the sale of extracted crude oil, natural gas, and associated liquids, positioning oil production maintenance as essential for its revenue growth. Throughout the year 2024, Civitas recorded a steady inventory of oil production and advanced the installation of turned-in-lines (TILs)—referring to new oil wells that have been completed and are operational—across both the DJ and Permian Basins. However, critical information was withheld from investors as production levels in the DJ Basin purportedly peaked during the fourth quarter of 2024. Simultaneously, Civitas reduced the pace at which new lines were being turned in.

The legal complaint argues that during the class action period, company officials made materially false or misleading statements about the operation, prospects, and overall business integrity of the organization. Key points alleged in the complaint include:
1. Civitas was likely to see a substantial decline in oil production in 2025 following a peak in the DJ Basin during the fourth quarter of the previous year.
2. To increase oil output, the company would need to acquire new acreage, which would lead to significant debt escalation and pressure to sell corporate assets.
3. The company's financial status suggested the need for disruptive cost-reduction approaches—including significant workforce downsizing.
4. Thus, the company's advertised business and financial outlook, as well as operational capabilities, were exaggerated, leading to deceptive public statements.

On February 24, 2025, Civitas released its financial results for Q4 and the entire year of 2024, reporting revenues of $1.29 billion—a shortfall compared to market predictions—paired with earnings per share of $1.78, missing expectations by $0.21. Moreover, the reported net income fell significantly to $151.1 million, showcasing a stark decline from the previous year.

In conjunction with these results, Civitas outlined its vision for 2025, claiming a target to maximize free cash flow. The anticipated production would average between 150 to 155 thousand barrels per day, reflecting about a 4% decline year-on-year. To support this, plans were set for a $300 million transaction aimed at enhancing the company's holdings in the Permian Basin, while also initiating a divestment target to offset subsequent acquisition costs.

These developments prompted serious concerns from financial analysts, and on the day following the announcements, Civitas's stock witnessed a significant decline, dropping 18.15% to settle at $40.35 per share. Pomerantz Law Firm is recognized as a leading entity in handling cases related to corporate and securities law violations and has a legacy of recovering substantial damages for its clients. Founded by the prominent Abraham L. Pomerantz, the firm remains dedicated to advocating for victims of securities fraud and corporate malpractice.

For investors wishing to obtain a copy of the complaint or more details on how to get involved in this class action lawsuit, further information can be found on Pomerantz’s official website.

Stay informed with regular updates as this case progresses, which could impact many stakeholders within Civitas Resources.