Crescent Energy Closes Accretive Central Eagle Ford Bolt-On

Rhea-AI Summary

Crescent Energy (NYSE: CRGY) has completed its acquisition of Central Eagle Ford assets from Ridgemar Energy for $905 million, comprising $830 million in cash and 5,454,546 shares of Class A common stock, plus future oil price contingent consideration. The transaction strengthens Crescent's core Eagle Ford position with high-quality assets that enhance oil-weighted production and extend low-risk inventory.

CEO David Rockecharlie emphasized the acquisition's accretive nature and alignment with the company's disciplined approach to creating shareholder value through combining investing and operational expertise. The company maintains focus on profitable growth and advancing investment-grade ambitions while delivering sustained cash flow and returns.

Positive

• Acquisition valued at $905 million strengthens Eagle Ford position
• Enhanced oil-weighted production profile
• Extended low-risk inventory for future development
• Accretive transaction supporting cash flow generation

Negative

• Significant cash outlay of $830 million
• Share dilution through issuance of 5,454,546 new Class A shares

Insights

Financial Analyst

This strategic acquisition marks a pivotal expansion for Crescent Energy, demonstrating shrewd capital deployment in a core operating region. The $905M transaction structure is particularly noteworthy, with the equity component representing approximately 8.3% of the deal value, helping preserve cash while offering sellers upside participation.

The deal's structure reveals sophisticated financial engineering:

• The stock consideration (5.45M shares) minimizes immediate cash outlay while maintaining financial flexibility
• The inclusion of oil price contingent consideration helps de-risk the upfront payment while allowing sellers to participate in potential upside
• The focus on Eagle Ford assets suggests operational synergies and reduced integration risk

From a strategic perspective, this bolt-on acquisition strengthens Crescent's position in the Eagle Ford basin, potentially enabling cost synergies and operational efficiencies. The emphasis on low-decline, cash-flow oriented assets aligns with their investment-grade aspirations and suggests potential for improved credit metrics over time.

The transaction's impact on Crescent's production mix, favoring oil-weighted assets, is particularly timely given the current commodity price environment. This could lead to enhanced margins and cash flow generation capacity, supporting their commitment to shareholder returns while maintaining disciplined growth.

Energy Sector Analyst

This acquisition significantly enhances Crescent's Eagle Ford portfolio, representing a strategic consolidation in one of North America's premier oil-producing regions. The transaction's emphasis on low-decline assets is particularly significant as it:

• Reduces capital intensity requirements for maintaining production
• Provides more predictable cash flow streams
• Extends the company's high-return development inventory

The operational synergies potential is substantial, given the bolt-on nature of these assets to Crescent's existing Eagle Ford position. This consolidation could lead to improved operational efficiency through:

• Shared infrastructure utilization
• Optimized drilling and completion programs
• Enhanced bargaining power with service providers

The focus on oil-weighted production is strategically sound, potentially providing improved margins and cash flow generation capacity. This aligns with industry trends toward prioritizing high-quality, oil-rich assets in established basins with proven production histories and existing infrastructure.

HOUSTON--(BUSINESS WIRE)-- Crescent Energy Company (NYSE: CRGY) (“Crescent” or the “Company”), today announced the closing of its acquisition of Central Eagle Ford assets from Ridgemar Energy for upfront consideration of $905 million, consisting of $830 million in cash and 5,454,546 shares of Class A common stock, plus future oil price contingent consideration, subject to customary purchase price adjustments. Crescent plans to provide 2025 guidance reflecting the acquisition along with its fourth quarter and full year 2024 financial and operating results.

"We are pleased to complete this accretive acquisition, which further scales our core Eagle Ford position as we also welcome many talented new members to the Crescent Energy team," said Crescent CEO David Rockecharlie. "This acquisition demonstrates our disciplined approach to creating shareholder value by combining our investing and operational expertise to acquire and efficiently integrate high-quality assets while maintaining a strong financial profile. These assets enhance our oil-weighted production and extend our low-risk inventory, reinforcing our ability to deliver sustained cash flow and returns. We remain focused on executing our strategy of profitable growth and advancing our investment-grade ambitions."

About Crescent Energy Company

Crescent is a differentiated U.S. energy company committed to delivering value for shareholders through a disciplined growth through acquisition strategy and consistent return of capital. Crescent’s portfolio of low-decline, cash-flow oriented assets comprises both mid-cycle unconventional and conventional assets with a long reserve life and deep inventory of high-return development locations in the Eagle Ford and Uinta basins. Crescent’s leadership is an experienced team of investment, financial and industry professionals that combines proven investment and operating expertise. For more than a decade, Crescent and its predecessors have executed on a consistent strategy focused on cash flow, risk management and returns. For additional information, please visit www.crescentenergyco.com.

Cautionary Statement Regarding Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on current expectations. The words and phrases “should”, “could”, “may”, “will”, “believe”, “plan”, “intend”, “expect”, “potential”, “possible”, “anticipate”, “estimate”, “forecast”, “view”, “efforts”, “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, weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, uncertainties inherent in estimating natural gas and oil reserves and in projecting future rates of production; the anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the combined company’s operations; the ability of Crescent to integrate the business successfully and to achieve anticipated synergies and value creation; the risk that cost savings, synergies and growth may take longer to realize than expected; potential litigation relating to the transaction; the risk that disruptions from the transaction will harm Crescent’s business, including current plans and operations and that management’s time and attention will be diverted on transaction-related issues; potential adverse reactions or changes to business relationships, including with employees, suppliers, customers, competitors or credit rating agencies, resulting from the completion of the transaction; our hedging strategy and results; federal and state regulations and laws; upcoming elections and associated political volatility; the severity and duration of public health crises; actions by the Organization of the Petroleum Exporting Countries (“OPEC”) and non-OPEC oil-producing countries; the impact of the armed conflict in Ukraine; continued hostilities in the Middle East, including the Israel-Hamas conflict and rising tensions with Iran; the impact of disruptions in the capital markets; the timing and success of business development efforts, including acquisition and disposition opportunities; our reliance on our external manager, sustained cost inflation, elevated interest rates and central bank policy changes associated therewith and other uncertainties. Consequently, actual future results could differ materially from expectations. The Company assumes no duty to update or revise its respective forward-looking statements based on new information, future events or otherwise.

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Crescent Energy Investor Relations Contacts

IR@crescentenergyco.com

Crescent Energy Media Contacts

Media@crescentenergyco.com

Source: Crescent Energy

FAQ

What is the total value of CRGY's Central Eagle Ford acquisition?

The total upfront consideration is $905 million, consisting of $830 million in cash and 5,454,546 shares of Class A common stock, plus future oil price contingent consideration.

How many new shares did CRGY issue for the Eagle Ford acquisition?

Crescent Energy issued 5,454,546 shares of Class A common stock as part of the acquisition payment.

What are the expected benefits of CRGY's Eagle Ford acquisition?

The acquisition enhances oil-weighted production, extends low-risk inventory, and is expected to deliver sustained cash flow and returns while supporting the company's investment-grade ambitions.

When will CRGY provide guidance reflecting the Eagle Ford acquisition?

Crescent plans to provide 2025 guidance reflecting the acquisition along with its fourth quarter and full year 2024 financial and operating results.