Crescent Stockholders Overwhelmingly Approve Merger with SilverBow Resources

Rhea-AI Summary

Crescent Energy Company (NYSE: CRGY) has received overwhelming stockholder approval for its proposed merger with SilverBow Resources Inc. (NYSE: SBOW). At a special meeting, approximately 99.94% of the Crescent common stock voted were in favor of the Merger, representing about 87.94% of the outstanding Crescent common stock. The merger is expected to close on July 30, 2024.

CEO David Rockecharlie highlighted that this decisive vote demonstrates strong support for the complementary transaction, which will create one of the largest operators in the Eagle Ford. The combined entity will feature high-quality, long-life assets, an attractive returns-driven financial framework, and a strong balance sheet. It will be led by a management team and Board with significant operating and investing expertise.

Positive

• Overwhelming stockholder approval with 99.94% of votes in favor
• Creation of one of the largest operators in the Eagle Ford
• Combination of high-quality and long-life assets
• Strong balance sheet and attractive financial framework

Negative

• None.

Insights

Financial Analyst

The overwhelming approval of Crescent Energy's merger with SilverBow Resources marks a significant milestone in the consolidation of the Eagle Ford shale play. This merger, set to create one of the largest operators in the region, carries substantial implications for both companies and the broader energy sector.

From a financial perspective, the merger presents several key advantages:

• Enhanced scale and operational efficiency: The combined entity will likely benefit from economies of scale, potentially reducing per-unit production costs and improving overall profitability.
• Diversified asset base: The merger combines the high-quality, long-life assets of both companies, which could lead to a more stable production profile and reduced operational risk.
• Improved financial framework: The emphasis on a "returns-driven financial framework" suggests a focus on capital discipline and shareholder value creation, which could attract more investor interest.
• Strengthened balance sheet: A stronger balance sheet could provide greater financial flexibility, potentially allowing for more aggressive development plans or improved ability to weather market volatility.

However, investors should also consider potential challenges:

• Integration risks: Mergers often face operational and cultural integration hurdles that could impact short-term performance.
• Market conditions: The success of the merged entity will still be subject to broader energy market dynamics, including oil and gas prices.
• Regulatory scrutiny: Large mergers in the energy sector may face increased regulatory oversight.

Overall, the strong stockholder support (99.94% of voted shares) indicates confidence in the strategic rationale behind the merger. As the deal approaches its expected closing date of July 30, 2024, investors should closely monitor integration progress and any synergies realized to gauge the merger's success.

Market Research Analyst

The merger between Crescent Energy and SilverBow Resources is poised to reshape the competitive landscape of the Eagle Ford shale play. This consolidation trend reflects broader industry dynamics and warrants closer examination.

Key market implications include:

• Industry consolidation: This merger aligns with the ongoing trend of consolidation in the U.S. shale industry, as companies seek to achieve scale and improve efficiency in a challenging market environment.
• Competitive positioning: The creation of "one of the largest operators in the Eagle Ford" could potentially shift the balance of power in the region, affecting smaller players and possibly triggering further consolidation.
• Investor sentiment: The overwhelming approval (87.94% of outstanding shares voting in favor) suggests strong investor confidence in the strategic rationale behind the merger. This positive sentiment could potentially extend to other M&A activities in the sector.
• Management expertise: The emphasis on the combined entity's "management team and Board with significant operating and investing expertise" indicates a focus on leveraging industry knowledge to drive value creation.

From a market research perspective, several factors warrant ongoing monitoring:

• Post-merger performance metrics: Key indicators such as production levels, operational efficiency and financial performance will be important in assessing the success of the merger.
• Industry reaction: Competitors' responses to this consolidation could provide insights into future market dynamics in the Eagle Ford region.
• Investor behavior: The market's reaction to this merger could influence investor appetite for similar deals in the energy sector.

As the energy landscape continues to evolve, this merger between Crescent and SilverBow represents a significant development that could potentially catalyze further changes in the industry structure and competitive dynamics of the U.S. shale sector.

HOUSTON--(BUSINESS WIRE)-- Crescent Energy Company (NYSE: CRGY) (“Crescent” or the “Company”), today announced it received overwhelming stockholder approval for the issuance of Crescent Class A common stock in connection with its proposed merger (the “Merger”) with SilverBow Resources Inc. (NYSE: SBOW) (“SilverBow”) at a special meeting of stockholders today. The Merger is expected to close on July 30, 2024.

“This decisive vote underscores strong support for the complementary transaction, which creates one of the largest operators in the Eagle Ford with high-quality and long-life assets, an attractive, returns-driven financial framework and strong balance sheet, led by a management team and Board with significant operating and investing expertise,” commented David Rockecharlie, Chief Executive Officer and member of the Board of Directors of Crescent.

Based on the preliminary vote count from today’s special meeting, approximately 99.94% of the Crescent common stock voted were in favor of the Merger, resulting in approximately 87.94% of the outstanding Crescent common stock voting in favor of the Merger. Crescent will file the final vote results for its special meeting on a Form 8-K with the U.S. Securities and Exchange Commission.

About Crescent Energy

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.

No Offer or Solicitation

This communication relates to the proposed business combination transaction (the “Transaction”) between Crescent and SilverBow. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to the Transaction or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Important Additional Information About the Transaction

In connection with the Transaction, Crescent filed with the SEC the Registration Statement to register the shares of Crescent Class A common stock to be issued in connection with the Transaction. The Registration Statement includes the definitive joint proxy statement of Crescent and SilverBow and a prospectus of Crescent (the “Proxy Statement/Prospectus”). The Proxy Statement/Prospectus was mailed to the stockholders of each of Crescent and SilverBow on June 28, 2024. Crescent and SilverBow may also file other documents with the SEC regarding the Transaction. This document is not a substitute for the Registration Statement and the Proxy Statement/Prospectus that have been filed with the SEC or any other documents that Crescent or SilverBow may file with the SEC or mail to stockholders of Crescent or SilverBow in connection with the Transaction.

INVESTORS AND SECURITY HOLDERS OF CRESCENT AND SILVERBOW ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS.

Investors and security holders will be able to obtain free copies of the Registration Statement and the Proxy Statement/Prospectus and all other documents filed or that will be filed with the SEC by Crescent or SilverBow through the website maintained by the SEC at http://www.sec.gov. Copies of documents filed with the SEC by Crescent will be made available free of charge on Crescent’s website at https://ir.crescentenergyco.com, or by directing a request to Investor Relations, Crescent Energy Company, 600 Travis Street, Suite 7200, Houston, TX 77002, Tel. No. (713) 332-7001. Copies of documents filed with the SEC by SilverBow will be made available free of charge on SilverBow’s website at https://sbow.com under the “Investor Relations” tab or by directing a request to Investor Relations, SilverBow Resources, Inc., 920 Memorial City Way, Suite 850, Houston, TX 77024, Tel. No. (281) 874-2700. The information included on, or accessible through, Crescent’s or SilverBow’s website is not incorporated by reference into this document.

Forward-Looking Statements and Cautionary Statements

The foregoing 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. All statements, other than statements of historical fact, included in this communication that address activities, events or developments that Crescent or SilverBow expects, believes or anticipates will or may occur in the future are forward-looking statements. Words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “create,” “intend,” “could,” “may,” “foresee,” “plan,” “will,” “guidance,” “look,” “outlook,” “goal,” “future,” “assume,” “forecast,” “build,” “focus,” “work,” “continue” or the negative of such terms or other variations thereof and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements include, but are not limited to, statements regarding the Transaction and the anticipated timing thereof. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. These include the expected timing and likelihood of completion of the Transaction, the ability to successfully integrate the businesses, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, the risk that the parties may not be able to satisfy the conditions to the Transaction in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the Transaction, the risk that any announcements relating to the Transaction could have adverse effects on the market price of Crescent’s common stock or SilverBow common stock, the risk that the Transaction and its announcement could have an adverse effect on the ability of Crescent and SilverBow to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers and on their operating results and businesses generally, the risk the pending Transaction could distract management of both entities and they will incur substantial costs, the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected, the risk that the combined company may be unable to achieve synergies or it may take longer than expected to achieve those synergies and other important factors that could cause actual results to differ materially from those projected. All such factors are difficult to predict and are beyond Crescent’s or SilverBow’s control, including those detailed in Crescent’s annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that are available on its website at https://ir.crescentenergyco.com and on the SEC’s website at http://www.sec.gov, and those detailed in SilverBow’s annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that are available on SilverBow’s website at https://sbow.com and on the SEC’s website at http://www.sec.gov. All forward-looking statements are based on assumptions that Crescent or SilverBow believe to be reasonable but that may not prove to be accurate. Any forward-looking statement speaks only as of the date on which such statement is made, and Crescent and SilverBow undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240729106517/en/

Crescent Energy Investor Relations Contacts

IR@crescentenergyco.com

Crescent Energy Media Contacts

Media@crescentenergyco.com

Source: Crescent Energy

FAQ

When is the merger between Crescent Energy (CRGY) and SilverBow Resources expected to close?

The merger between Crescent Energy (CRGY) and SilverBow Resources is expected to close on July 30, 2024.

What percentage of Crescent Energy (CRGY) stockholders voted in favor of the merger?

Approximately 99.94% of the Crescent Energy (CRGY) common stock voted were in favor of the merger, representing about 87.94% of the outstanding Crescent common stock.

What are the main benefits of the Crescent Energy (CRGY) and SilverBow Resources merger?

The merger will create one of the largest operators in the Eagle Ford, combining high-quality and long-life assets, an attractive returns-driven financial framework, and a strong balance sheet. It will be led by a management team with significant operating and investing expertise.

How did Crescent Energy (CRGY) CEO David Rockecharlie describe the stockholder vote?

CEO David Rockecharlie described the vote as decisive, underscoring strong support for the complementary transaction between Crescent Energy (CRGY) and SilverBow Resources.