Crescent Energy Announces Complementary Central Eagle Ford Bolt-On
Crescent Energy Company (NYSE: CRGY) has announced a $168 million acquisition of assets from a private Eagle Ford operator. This bolt-on acquisition complements Crescent's existing Central Eagle Ford footprint and follows recent significant acquisition activity in the region. Key highlights include:
- Strong investment returns and accretive to financial metrics
- Complementary operations directly offsetting core position
- Addition of ~30 oil-weighted, core development locations
- Ownership of minerals, surface, and midstream assets
- Maintenance of strong balance sheet and Investment Grade credit metrics
The transaction is expected to close in September 2024, subject to customary conditions. Crescent CEO David Rockecharlie emphasized the opportunity for further growth and compelling investment returns in the Eagle Ford region.
Crescent Energy Company (NYSE: CRGY) ha annunciato un acquisto di asset da 168 milioni di dollari da un operatore privato di Eagle Ford. Questa acquisizione, a complemento, si integra con la già esistente presenza di Crescent nella zona centrale di Eagle Ford e segue recenti attività significative di acquisizione nella regione. I punti salienti includono:
- Ritorni sugli investimenti solidi e impatto positivo sui parametri finanziari
- Operazioni complementari che compensano direttamente la posizione principale
- Aggiunta di circa 30 siti di sviluppo principali con predominanza di petrolio
- Possesso di minerali, superfici e beni midstream
- Mantenimento di un forte bilancio e di parametri di credito di Investimento di alta qualità
Si prevede che la transazione si concluda a settembre 2024, soggetta a condizioni consuete. Il CEO di Crescent, David Rockecharlie, ha sottolineato l'opportunità di ulteriore crescita e di ritorni sugli investimenti interessanti nella regione di Eagle Ford.
Crescent Energy Company (NYSE: CRGY) ha anunciado una adquisición de activos de 168 millones de dólares de un operador privado en Eagle Ford. Esta adquisición complementaria se suma a la presencia existente de Crescent en la zona central de Eagle Ford y sigue a recientes actividades significativas de adquisición en la región. Los aspectos más destacados incluyen:
- Fuertes retornos de inversión y mejora en los métricas financieras
- Operaciones complementarias que compensan directamente la posición central
- Adición de aproximadamente 30 ubicaciones de desarrollo principal con predominancia de petróleo
- Propiedad de minerales, superficie y activos midstream
- Mantenimiento de un balance sólido y métricas crediticias de calidad de inversión
Se espera que la transacción se cierre en septiembre de 2024, sujeta a condiciones habituales. El CEO de Crescent, David Rockecharlie, enfatizó la oportunidad de un mayor crecimiento y atractivos retornos de inversión en la región de Eagle Ford.
Crescent Energy Company (NYSE: CRGY)는 사설 Eagle Ford 운영자로부터 1억 6800만 달러의 자산 인수를 발표했습니다. 이번 인수는 Crescent의 기존 중앙 Eagle Ford 입지를 보완하며, 이 지역에서 최근 발생한 주요 인수 활동에 이어진 것입니다. 주요 내용은 다음과 같습니다:
- 강력한 투자 수익 및 재무 지표에 긍정적인 영향을 미침
- 핵심 위치를 직접 보완하는 상호 보완적 작업
- 약 30개 유전 중심 개발 위치 추가
- 광물, 표면 및 중간 자산 소유
- 강력한 재무 상태 유지 및 투자 등급 신용 지표
이번 거래는 일반적인 조건 충족을 전제로 2024년 9월에 완료될 것으로 예상됩니다. Crescent의 CEO인 David Rockecharlie는 Eagle Ford 지역에서의 추가 성장과 매력적인 투자 수익의 기회를 강조했습니다.
Crescent Energy Company (NYSE: CRGY) a annoncé une acquisition d'actifs de 168 millions de dollars auprès d'un opérateur privé d'Eagle Ford. Cette acquisition complémentaire s'ajoute à la présence existante de Crescent dans la région centrale d'Eagle Ford et fait suite à des activités d'acquisition significatives récentes dans la région. Les points clés incluent :
- Rendements d'investissement solides et impact positif sur les indicateurs financiers
- Opérations complémentaires compensant directement la position centrale
- Ajout d'environ 30 sites de développement principaux axés sur le pétrole
- Propriété de minéraux, de surfaces et d'actifs midstream
- Maintien d'un solide bilan et d'indicateurs de crédit de qualité investissement
La transaction devrait être finalisée en septembre 2024, sous réserve des conditions habituelles. Le directeur général de Crescent, David Rockecharlie, a souligné l'opportunité de croissance supplémentaire et de rendements d'investissement intéressants dans la région d'Eagle Ford.
Crescent Energy Company (NYSE: CRGY) hat eine Erwerb von Vermögenswerten in Höhe von 168 Millionen Dollar von einem privaten Betreiber in Eagle Ford angekündigt. Diese ergänzende Übernahme ergänzt die bestehende Präsenz von Crescent in der zentralen Eagle Ford-Region und folgt auf kürzliche bedeutende Akquisitionstätigkeiten in der Gegend. Zu den wichtigsten Punkten gehören:
- Starke Renditen und Bereicherung der finanziellen Kennzahlen
- Komplementäre Operationen, die die Kernposition direkt ausgleichen
- Hinzufügung von etwa 30 ölzentrierten Kernentwicklungsstandorten
- Eigentum an Mineralien, Flächen und Midstream-Vermögenswerten
- Aufrechterhaltung einer soliden Bilanz und kreditwürdigen Kennzahlen
Die Transaktion wird voraussichtlich im September 2024 abgeschlossen, vorbehaltlich üblicher Bedingungen. Crescent-CEO David Rockecharlie betonte die Möglichkeit für weiteres Wachstum und ansprechende Renditen in der Eagle Ford-Region.
- Acquisition is accretive to Operating Cash Flow, Levered Free Cash Flow, and net asset value per share
- Unlevered cash-on-cash returns exceed Crescent's 2.0x Multiple on Invested Capital target
- Addition of approximately 30 oil-weighted, core development locations with advantaged NRIs
- Acquisition includes 5,300 net royalty acres, 3,500+ surface acres, and owned takeaway infrastructure
- Leverage ratio expected to remain below the company's 1.5x maximum target
- Significant cash outlay of $168 million for the acquisition
Insights
This $168 million acquisition in the Eagle Ford shale is a strategic move for Crescent Energy. It's accretive to key financial metrics like Operating Cash Flow and Levered Free Cash Flow, suggesting immediate value creation. The deal's unlevered cash-on-cash returns exceeding the 2.0x MOIC target is particularly impressive, indicating strong potential for return on investment.
The acquisition's complementary nature to Crescent's existing assets is crucial. It allows for operational synergies, potentially leading to cost reductions and efficiency gains. The addition of 30 oil-weighted development locations with high net revenue interests (NRIs) from owned minerals is a significant boost to the company's inventory, likely enhancing future production and revenue streams.
Importantly, the deal maintains Crescent's strong balance sheet, with the leverage ratio expected to remain below the 1.5x target. This financial prudence is commendable, as it allows for future growth opportunities while managing risk.
This bolt-on acquisition strengthens Crescent's position in the Eagle Ford, a prime U.S. shale play. The low-decline oil production is particularly valuable in today's market, offering stable cash flows. The addition of 5,300 net royalty acres and 3,500+ surface acres is strategically significant, providing operational flexibility and potential cost savings.
The owned minerals and midstream assets are key differentiators. They not only increase margins but also provide a hedge against potential bottlenecks in takeaway capacity, a common issue in rapidly developing shale plays. This vertical integration can be a significant competitive advantage.
The immediate competitiveness of the new inventory for capital allocation suggests high-quality assets, which is important in the current environment of capital discipline in the oil and gas sector. This acquisition aligns well with the industry trend of consolidation and focus on core areas for operational efficiency.
HIGHLIGHTS
- Strong investment returns and accretive to key financial metrics – The transaction is accretive to Operating Cash Flow, Levered Free Cash Flow(1) and net asset value per share, with unlevered cash-on-cash returns in excess of Crescent’s 2.0x Multiple on Invested Capital (“MOIC”) target
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Complementary operations directly offset core position – Low-decline oil production with attractive inventory directly offset Crescent’s existing footprint in
Frio ,Atascosa ,La Salle andMcMullen counties with potential for meaningful operating efficiencies and extended lateral lengths across Crescent’s existing position - High-return drilling inventory; immediately competes for capital – Acquisition adds roughly 30 oil-weighted, core development locations with advantaged NRIs from owned minerals further increasing returns
- Minerals, surface and midstream ownership enhances flexibility – Approximately 5,300 net royalty acres, greater than 3,500 surface acres and owned takeaway increase margins and create meaningful operating flexibility
- Maintains strong balance sheet and Investment Grade credit metrics – Crescent’s leverage ratio is expected to remain relatively unchanged, with net debt to trailing 12-month Adjusted EBITDAX ratio expected to be below the Company’s publicly stated maximum leverage target of 1.5x(2). In conjunction with the signing of the transaction, Crescent entered into additional hedges in-line with its risk-management strategy
“This transaction builds upon our momentum in the Eagle Ford, where we see substantial opportunity for further growth and compelling investment returns,” said Crescent CEO David Rockecharlie. “We are adding low-decline oil production and high-quality acreage adjacent to our existing position, with meaningful opportunity to further increase returns through improved operating efficiency. We are pleased with this attractive acquisition, and we believe in our ability to continue to accretively scale Crescent.”
(1) | Non-GAAP financial measure. Please see “Non-GAAP Measures” for a description of the applicable metric. |
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(2) | Crescent defines leverage as the ratio of consolidated net debt to consolidated Adjusted EBITDAX (non-GAAP). |
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.
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Source: Crescent Energy
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