Crescent Energy Company Announces Pricing of Upsized Public Offering of Class A Common Stock

Rhea-AI Summary

Crescent Energy Company (NYSE: CRGY) has announced the pricing of an upsized public offering of 21,500,000 shares of Class A common stock at $14.00 per share. The offering represents a 3,500,000 share increase from the originally proposed 18,000,000 shares. The company plans to use the proceeds to partially fund the Ridgemar Acquisition, expected to close in Q1 2025. The underwriters have a 30-day option to purchase up to an additional 3,225,000 shares. The offering is expected to close on December 5, 2024, with Wells Fargo Securities, KKR Capital Markets, Raymond James, and Evercore Group serving as joint book-running managers.

Positive

• Successful upsizing of the offering from 18M to 21.5M shares indicates strong market interest
• Strategic acquisition funding through equity rather than debt maintains financial flexibility
• Multiple tier-1 financial institutions participating as underwriters suggests institutional backing

Negative

• Significant shareholder dilution due to 21.5M new shares being issued
• Additional potential dilution from 3.225M shares in underwriters' option
• Stock offering price of $14.00 may represent a discount to market price

Insights

Financial Analyst

The upsized public offering of 21.5 million shares at $14.00 per share will generate gross proceeds of approximately $301 million. This represents a significant capital raise, with an additional $45.15 million possible if the underwriters exercise their 30-day option for 3.225 million additional shares.

The proceeds will partially fund the Ridgemar Acquisition in Eagle Ford, strengthening Crescent's position in Texas. The pricing at $14.00 represents a modest discount to recent trading levels, which is typical for secondary offerings. The upsize from 18 million to 21.5 million shares indicates strong investor demand and confidence in the company's growth strategy.

The diverse syndicate of underwriters, including major firms like Wells Fargo and KKR, suggests broad institutional interest. The flexibility to use proceeds for debt reduction if the acquisition fails provides a prudent backup plan for capital allocation.

Market Research Analyst

This offering represents approximately 9.1% dilution to existing shareholders (potentially reaching 10.5% if the overallotment option is exercised). However, the strategic benefits of the Eagle Ford acquisition could offset this dilution through operational synergies and increased production.

The timing aligns with Crescent's expansion in key U.S. energy regions, particularly Texas and the Rockies. The strong underwriter lineup and upsized offering suggest institutional investors view the company's growth strategy favorably. The $14.00 pricing indicates a balanced approach between minimizing dilution and ensuring sufficient demand for the offering.

HOUSTON--(BUSINESS WIRE)-- Crescent Energy Company (“Crescent” or the “Company”) (NYSE: CRGY) today announced the pricing of an underwritten, upsized public offering of 21,500,000 shares of its Class A common stock, par value $0.0001 per share (“Class A common stock”), at a price to the public of $14.00 per share, pursuant to an effective shelf registration statement on Form S-3 (the “Registration Statement”) filed previously with the U.S. Securities and Exchange Commission (the “SEC”). The 21,500,000 share offering represents a 3,500,000 share upsize to the originally proposed 18,000,000 share offering.

The Company intends to use the net proceeds it receives from the offering to fund a portion of the cash consideration for its recently announced acquisition of Ridgemar (Eagle Ford) LLC (the “Ridgemar Acquisition”), which is expected to close in the first quarter of 2025, subject to customary closing conditions and regulatory approvals. The Ridgemar Acquisition is not contingent upon the completion of this offering and this offering is not contingent upon the completion of the Ridgemar Acquisition. If the Ridgemar Acquisition is not completed, the proceeds of this offering will be used to reduce the borrowings outstanding under our revolving credit facility or for general corporate purposes.

The Company has granted the underwriters a 30-day option to purchase up to an additional 3,225,000 shares of Class A common stock at the public offering price, less the underwriting discounts and commissions.

Wells Fargo Securities, LLC, KKR Capital Markets LLC, Raymond James & Associates, Inc. and Evercore Group L.L.C. are serving as joint book-running managers for the offering. Mizuho Securities USA LLC and Truist Securities, Inc., are also serving as joint book-running managers. KeyBanc Capital Markets, PEP Advisory LLC, Stephens Inc. and TPH&CO., the energy business of Perella Weinberg Partners are serving as co-managers for the offering. The offering is expected to close on December 5, 2024, subject to customary closing conditions.

The offering is being made only by means of a prospectus and a final prospectus supplement that meet the requirements under the Securities Act of 1933, as amended. Copies of the final prospectus supplement and accompanying base prospectus relating to the offering and final prospectus supplement, when available, may be obtained from: Wells Fargo Securities, LLC, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, at 800-645-3751 (option #5) or email a request to WFScustomerservice@wellsfargo.com, KKR Capital Markets LLC, 30 Hudson Yards, New York, New York 10001 or by telephone at (212) 750-8300, Raymond James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, FL 33716, by telephone at (800) 248-8863 or by email at prospectus@raymondjames.com, or Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, New York 10055, by telephone at 888-474-0200 or by email at ecm.prospectus@evercore.com, or by accessing the SEC’s website at www.sec.gov.

The Registration Statement was previously filed on March 6, 2024 and became effective upon filing. The Registration Statement may be obtained free of charge at the SEC’s website at www.sec.gov under “Crescent Energy Company.” This press release shall not constitute an offer to sell or the solicitation of an offer to buy the shares of Class A common stock or any other securities, nor shall there be any sale of such shares of Class A common stock or any other securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Crescent Energy Company

Crescent Energy Company is a U.S. energy company with a portfolio of assets concentrated in Texas and the Rockies.

Cautionary Note Regarding Forward-Looking Statements

This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. These forward-looking statements include any statements regarding the proposed offering of Class A common stock and the Ridgemar Acquisition. These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “will,” “continue,” “potential,” “should,” “could,” and similar terms and phrases. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth in the Company’s filings with the SEC, including the Registration Statement and the prospectus supplement relating to this offering, its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and its subsequent Quarterly Reports on Form 10-Q, under the caption “Risk Factors,” as may be updated from time to time in the Company’s periodic filings with the SEC. Any forward-looking statement in this press release speaks only as of the date of this release. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241203585973/en/

IR@crescentenergyco.com

Source: Crescent Energy

FAQ

How many shares is Crescent Energy (CRGY) offering in its public offering?

Crescent Energy is offering 21,500,000 shares of Class A common stock, with an additional 30-day option for underwriters to purchase up to 3,225,000 shares.

What is the price per share for CRGY's public offering?

The public offering price is $14.00 per share.

When is CRGY's public offering expected to close?

The offering is expected to close on December 5, 2024, subject to customary closing conditions.

What will CRGY use the proceeds from the stock offering for?

The proceeds will be used to fund part of the cash consideration for the Ridgemar Acquisition, expected to close in Q1 2025. If the acquisition doesn't complete, proceeds will reduce revolving credit facility borrowings or be used for general corporate purposes.