Crescent Energy Announces Accretive Central Eagle Ford Bolt-On
Crescent Energy (NYSE: CRGY) has announced a definitive agreement to acquire Eagle Ford assets from Ridgemar Energy for $905 million plus future oil price contingent payments up to $170 million. The acquisition, expected to close in Q1 2025, adds approximately 20 Mboe/d of oil-weighted production and ~140 high-return well locations.
The transaction is valued at 2.7x EBITDA and includes up to $100 million in equity issued to the seller, with the remainder in cash. The assets are located in Frio, Atascosa, La Salle and McMullen counties, directly offsetting Crescent's existing footprint. This acquisition builds upon Crescent's $4 billion M&A activity in Eagle Ford over the past 18 months.
Crescent Energy (NYSE: CRGY) ha annunciato un accordo definitivo per acquisire le attività dell'Eagle Ford da Ridgemar Energy per 905 milioni di dollari più pagamenti futuri contingentati in base al prezzo del petrolio fino a 170 milioni di dollari. L'acquisizione, prevista per chiudere nel primo trimestre del 2025, aggiunge circa 20 Mboe/d di produzione a forte contenuto di petrolio e circa 140 pozzi ad alto rendimento.
La transazione è valutata 2,7 volte l'EBITDA e include fino a 100 milioni di dollari in azioni emesse al venditore, con il resto in contante. Le attività si trovano nei conti di Frio, Atascosa, La Salle e McMullen, sovrapponendosi direttamente all'area esistente di Crescent. Questa acquisizione si basa sulle attività di M&A di Crescent da 4 miliardi di dollari nell'Eagle Ford negli ultimi 18 mesi.
Crescent Energy (NYSE: CRGY) ha anunciado un acuerdo definitivo para adquirir activos de Eagle Ford de Ridgemar Energy por 905 millones de dólares más pagos contingentados futuros por el precio del petróleo de hasta 170 millones de dólares. Se espera que la adquisición se cierre en el primer trimestre de 2025, añadiendo aproximadamente 20 Mboe/d de producción de petróleo y alrededor de 140 ubicaciones de pozos de alto rendimiento.
La transacción se valora en 2,7 veces EBITDA e incluye hasta 100 millones de dólares en acciones emitidas al vendedor, con el resto en efectivo. Los activos están ubicados en los condados de Frio, Atascosa, La Salle y McMullen, compensando directamente la huella existente de Crescent. Esta adquisición se basa en la actividad de M&A de Crescent por 4 mil millones de dólares en Eagle Ford durante los últimos 18 meses.
Crescent Energy (NYSE: CRGY)는 Ridgemar Energy로부터 Eagle Ford 자산을 9억 5천만 달러에 인수하는 최종 계약을 발표했습니다. 이 계약은 향후 유가에 따라 최대 1억 7천만 달러의 추가 지불이 포함됩니다. 인수는 2025년 1분기에 마감될 것으로 예상되며, 약 20 Mboe/d의 석유 중심 생산량과 약 140개의 높은 수익성을 가진 우물 위치를 추가합니다.
이번 거래의 가치는 EBITDA의 2.7배로 평가되며, 1억 달러까지 판매자에게 발행되는 자본금이 포함되고 나머지는 현금으로 지급됩니다. 자산은 Frio, Atascosa, La Salle, McMullen 카운티에 위치하며, Crescent의 기존 입지와 직접적으로 맞물려 있습니다. 이 인수는 지난 18개월 동안 Eagle Ford에서 40억 달러 규모의 M&A 활동을 기반으로 하고 있습니다.
Crescent Energy (NYSE: CRGY) a annoncé un accord définitif pour acquérir des actifs de l'Eagle Ford de Ridgemar Energy pour 905 millions de dollars, plus des paiements conditionnels futurs basés sur le prix du pétrole pouvant aller jusqu'à 170 millions de dollars. L'acquisition, qui devrait être finalisée au premier trimestre 2025, ajoute environ 20 Mboe/d de production à forte intensité pétrolière et environ 140 emplacements de puits à haut rendement.
La transaction est évaluée à 2,7 fois l'EBITDA et comprend jusqu'à 100 millions de dollars en actions émises au vendeur, le reste étant en espèces. Les actifs sont situés dans les comtés de Frio, Atascosa, La Salle et McMullen, s'alignant directement sur la zone existante de Crescent. Cette acquisition s'inscrit dans le cadre des activités de fusions et acquisitions de Crescent d'un montant de 4 milliards de dollars dans l'Eagle Ford au cours des 18 derniers mois.
Crescent Energy (NYSE: CRGY) hat eine endgültige Vereinbarung zur Übernahme von Eagle Ford Vermögenswerten von Ridgemar Energy für 905 Millionen Dollar plus zukünftige ölpreisabhängige Zahlungen von bis zu 170 Millionen Dollar bekannt gegeben. Die Übernahme, die im ersten Quartal 2025 abgeschlossen werden soll, fügt etwa 20 Mboe/d ölgewichtete Produktion und etwa 140 Standorte für hochrentable Bohrungen hinzu.
Die Transaktion wird mit dem 2,7-fachen EBITDA bewertet und umfasst bis zu 100 Millionen Dollar in Eigenkapital, das an den Verkäufer ausgegeben wird, während der Rest in bar erfolgt. Die Vermögenswerte befinden sich in den Bezirken Frio, Atascosa, La Salle und McMullen und grenzen direkt an die bestehende Präsenz von Crescent. Diese Übernahme knüpft an die M&A-Aktivitäten von Crescent in Höhe von 4 Milliarden Dollar im Eagle Ford in den letzten 18 Monaten an.
- Acquisition valued at attractive 2.7x EBITDA multiple
- Adds 20 Mboe/d of high-margin, oil-weighted production
- Includes ~140 high-return well locations
- Transaction is accretive to Operating Cash Flow and Levered Free Cash Flow
- Maintains leverage at or below 1.5x target
- Significant capital outlay of $905 million plus contingent payments up to $170 million
- Equity dilution through $100 million stock issuance to seller
Insights
This
The transaction structure is notably well-balanced, with up to
The strategic fit of these assets is excellent, adding contiguous acreage in core Eagle Ford counties that enables operational synergies and economies of scale. The oil-weighted production profile enhances cash margins and provides commodity price upside exposure. The 140 identified drilling locations are particularly valuable given they compete for immediate capital allocation, suggesting strong economics and return profiles.
This continues CRGY's successful consolidation strategy in the Eagle Ford, where they've demonstrated ability to integrate assets and capture synergies, as evidenced by their accelerated integration of SilverBow. The focus on acquiring assets with existing production and proven well performance reduces development risk while providing immediate cash flow contribution.
Highlights
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Complementary operations directly offset core position – Adding significant and contiguous scale offset Crescent’s existing footprint in
Frio ,Atascosa ,La Salle andMcMullen counties with potential for meaningful operating efficiencies
- Attractive valuation and accretive to key financial metrics – The transaction, valued at 2.7x EBITDA, is accretive to Operating Cash Flow, Levered Free Cash Flow(1) and net asset value, with strong expected cash-on-cash returns
- Strengthens the Crescent asset portfolio – Approximately 20 Mboe/d of high-margin, oil-weighted production and ~140 well understood, high-return locations that immediately compete for capital and extend Crescent’s low-risk inventory life
- Maintains strong balance sheet and Investment Grade credit metrics – Leverage neutral-to-accretive transaction with balanced consideration mix. Crescent’s net debt to trailing 12-month Adjusted EBITDAX ratio expected to be at or below the Company’s publicly stated maximum leverage target of 1.5x(2)
“This transaction continues to highlight our ability to utilize our investing and operating expertise to identify and acquire high-quality assets, efficiently integrate them into our business and drive additional value through improved operations. With accelerated synergies captured from the integration of SilverBow and our recent bolt-on acquisition, our full team is ready and eager to add the Ridgemar assets to our core operating footprint in the Eagle Ford,” said Crescent CEO David Rockecharlie. “These assets contribute meaningful scale, enhance Crescent’s cash margins, increase our oil-weighting and extend our low-risk inventory life, all at an attractive and highly accretive valuation. I remain confident in our ability to capitalize on our strong momentum and continue our profitable growth trajectory towards our investment grade ambitions.”
(1) |
Non-GAAP financial measure. Please see “Non-GAAP Measures” for a description of the applicable metric. |
(2) |
Crescent defines leverage as the ratio of consolidated net debt to consolidated Adjusted EBITDAX (non-GAAP). |
Transaction Consideration
The base upfront consideration of
Advisors
Jefferies LLC served as financial advisor to Crescent in connection with the acquisition and Kirkland & Ellis LLP served as legal counsel. RBC Capital Markets, LLC served as financial advisor to Ridgemar Energy and Vinson & Elkins LLP served as legal counsel.
About Crescent Energy
Crescent is a differentiated
Cautionary Statement Regarding Forward-Looking Information
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on current expectations, including with respect to the proposed transaction. The words and phrases “should”, “could”, “may”, “will”, “believe”, “think”, “plan”, “intend”, “expect”, “potential”, “possible”, “anticipate”, “estimate”, “forecast”, “view”, “efforts”, “target”, “goal” and similar expressions identify forward-looking statements and express the Company’s expectations about future events. All statements, other than statements of historical facts, included in this communication that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the Company’s control. Such risks and uncertainties include, but are not limited to, the ability of the parties to consummate the transaction in a timely manner or at all; satisfaction of the conditions precedent to consummation of the transaction; the integration of the assets acquired in the transaction into the Company’s existing strategies and plans; the possibility of litigation (including related to the transaction itself), weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, actions by the Organization of the Petroleum Exporting Countries (“OPEC”) and non-OPEC oil producing countries, the timing and success of business development efforts, and other uncertainties. Consequently, actual future results could differ materially from expectations. The Company assumes no duty to update or revise its forward-looking statements based on new information, future events or otherwise.
Non-GAAP Measures
Crescent defines Levered Free Cash Flow as Adjusted EBITDAX less interest expense, excluding non-cash amortization of deferred financing costs, discounts, and premiums, loss from extinguishment of debt, excluding non-cash write-off of deferred financing costs, discounts, and premiums, realized loss on interest rate derivatives, current income tax benefit (expense), tax-related redeemable noncontrolling interest distributions made by OpCo and development of oil and natural gas properties. Levered Free Cash Flow does not take into account amounts incurred on acquisitions.
Crescent defines Adjusted EBITDAX as net income (loss) before interest expense, loss from extinguishment of debt, realized (gain) loss on interest rate derivatives, income tax expense (benefit), depreciation, depletion and amortization, exploration expense, non-cash gain (loss) on derivatives, impairment expense, non-cash equity-based compensation expense, (gain) loss on sale of assets, other (income) expense, transaction and nonrecurring expenses and early settlement of derivative contracts. Additionally, we further subtract certain redeemable noncontrolling interest distributions made by Crescent Energy OpCo LLC, our wholly owned subsidiary, related to Manager Compensation to KKR Energy Assets Manager LLC, our external manager, and settlement of acquired derivative contracts.
We refer herein to the “EBITDA” of the target business used for purposes of calculating certain illustrative valuation multiples. Unless otherwise noted, such metrics represent unaudited lease operating statement data for the six months ended June 30, 2024, presented on an annualized basis. As used for purposes of such disclosures, the term “EBITDA” refers to a measure of revenues less certain operating expenses (i.e., revenues less production and other taxes, lease operating expense, workover expense and gathering, transportation and marketing costs). Such definitions are used for purposes of the illustrative metrics referred to above but do not reconcile to GAAP financial statements and differ in certain respects from similarly named measures used by other companies or that we have historically used in our earnings releases and other public disclosures. See our other public disclosures, including the information we file and furnish with the SEC, for additional information regarding our historical measures of Adjusted EBITDA.
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For additional information, please reach out to IR@crescentenergyco.com.
Source: Crescent Energy
FAQ
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