Crescent Energy Closes $1.3B Asset Acquisition

TL;DR

CRGY just bought a massive asset portfolio for $1.3B, expect bigger production.

AI Summary

On December 3, 2024, Crescent Energy Company (CRGY) announced the closing of its previously disclosed acquisition of a significant portfolio of oil and gas assets from Diversified Energy Company PLC for approximately $1.3 billion. This transaction is expected to enhance CRGY's operational scale and cash flow generation.

Why It Matters

This acquisition significantly expands Crescent Energy's asset base, potentially leading to increased production, revenue, and market share in the oil and gas sector.

Risk Assessment

Risk Level: medium — The acquisition involves a substantial financial commitment and integration risks, which could impact the company's financial performance and operational efficiency.

Key Numbers

• $1.3B — Acquisition Price (Amount paid by Crescent Energy for new assets)
• 2024-12-03 — Closing Date (Date the acquisition was finalized)

Key Players & Entities

• Crescent Energy Company (company) — Registrant
• Diversified Energy Company PLC (company) — Seller of acquired assets
• $1.3 billion (dollar_amount) — Acquisition price
• December 3, 2024 (date) — Closing date of acquisition
• CRGY (company) — Ticker symbol for Crescent Energy Company

FAQ

Key Financial Figures

• $0.0001 — stered Class A Common Stock, par value $0.0001 per share CRGY The New York Stock Excha
• $805 million — gregate consideration consisting of (i) $805 million in cash (subject to upward adjustment i
• $170.0 million — on, the "Consideration") and (ii) up to $170.0 million in earn-out consideration paid quarterl
• $90.5 million — rchase Agreement, the Company deposited $90.5 million (the "Deposit") into escrow, which will
• $20 million — p to an additional amount not to exceed $20 million for actual, direct damages. In accorda
• $5.0 million — ring (as defined below) will not exceed $5.0 million. The foregoing description of the Mana
• $5.3 billion — ition and SilverBow Merger), reflecting $5.3 billion in standardized measure and $5.6 billio
• $5.6 billion — 5.3 billion in standardized measure and $5.6 billion and $4.4 billion, respectively (or $9.4
• $4.4 b — andardized measure and $5.6 billion and $4.4 billion, respectively (or $9.4 billion an
• $9.4 billion — lion and $4.4 billion, respectively (or $9.4 billion and $7.3 billion, respectively, after g
• $7.3 b — lion, respectively (or $9.4 billion and $7.3 billion, respectively, after giving effec
• $322.0 million — year ended December 31, 2023, generated $322.0 million of net income, $935.8 million of net ca
• $935.8 million — generated $322.0 million of net income, $935.8 million of net cash provided by operating activ
• $1,022.7 million — cash provided by operating activities, $1,022.7 million of Adjusted EBITDAX and $310.2 million
• $310.2 million — 1,022.7 million of Adjusted EBITDAX and $310.2 million of Levered Free Cash Flow (or $844.4 mi

Filing Documents

• crgy-20241203.htm (8-K) — 308KB
• exhibit21-8xk.htm (EX-2.1) — 1422KB
• exhibit101-8xk.htm (EX-10.1) — 20KB
• exhibit231-8xk.htm (EX-23.1) — 5KB
• exhibit991-8xk.htm (EX-99.1) — 10KB
• exhibit992-8xk.htm (EX-99.2) — 17KB
• exhibit993-8xk.htm (EX-99.3) — 626KB
• exhibit994-8xk.htm (EX-99.4) — 65KB
• exhibit9942a.jpg (GRAPHIC) — 36KB
• 0001628280-24-049767.txt ( ) — 2958KB
• crgy-20241203.xsd (EX-101.SCH) — 2KB
• crgy-20241203_lab.xml (EX-101.LAB) — 22KB
• crgy-20241203_pre.xml (EX-101.PRE) — 13KB
• crgy-20241203_htm.xml (XML) — 3KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. Purchase Agreement On December 3, 2024, Crescent Energy Finance LLC (the "Purchaser") and Crescent Energy Company (NYSE: CRGY) (the "Company" or "our," "us" or "we" ), entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with Ridgemar Energy Operating, LLC (the "Seller") and Ridgemar (Eagle Ford) LLC (the "Subject Company" or "Ridgemar"), pursuant to which the Purchaser has agreed to acquire from the Seller all of the issued and outstanding securities of the Subject Company. Under the terms and conditions of the Purchase Agreement, which has an economic effective date of October 1, 2024, upon closing, the Seller will receive aggregate consideration consisting of (i) $805 million in cash (subject to upward adjustment in the event of any decrease to the Stock Consideration (as defined herein), the "Cash Consideration"), and up to 7,272,728 shares of Class A Common Stock, par value $0.0001 per share ("Class A Common Stock") of the Company (the "Stock Consideration" and together with the Cash Consideration, the "Consideration") and (ii) up to $170.0 million in earn-out consideration paid quarterly in fiscal years 2026 and 2027 based on quarterly NYMEX WTI price of crude oil in fiscal years 2026 and 2027 , subject to customary purchase price adjustments set forth in the Purchase Agreement. Upon execution of the Purchase Agreement, the Company deposited $90.5 million (the "Deposit") into escrow, which will be credited toward the Consideration payable at the closing of the Transaction. The board of directors of the Company and a committee of independent directors have each unanimously approved the Purchase Agreement and the transactions contemplated thereby (the "Transaction"). The Seller, the Company and the Purchaser have made customary representations and warranties in the Purchase Agreement. The Purchase Agreement also contains customary covenants and agreements, including, among oth

02. Results of Operations and Financial Condition

Item 2.02. Results of Operations and Financial Condition. On December 3, 2024, in connection with the Offering (as defined below), the Company filed a prospectus supplement to the Registration Statement (as defined below). The information contained in Item 8.01 of this Current Report, to the extent required, is incorporated into this Item 2.02 by reference. This Current Report provides a pro forma statement of operations of the Company for the nine months ended September 30, 2024, as described in Item 8.01 below and which is incorporated into this Item 2.02 by reference, giving effect to the acquisition contemplated by the Agreement and Plan of Merger dated as of May 15, 2024, by and among the Company, SilverBow Resources, Inc. ("SilverBow"), Artemis Acquisition Holdings Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company, Artemis Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company, and Artemis Merger Sub II LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Artemis Holdings, pursuant to which, following a series of transactions (collectively, the "Merger"), SilverBow became an indirect wholly owned subsidiary of the Company. The Merger was consummated on July 30, 2024. The pro forma statement of operations gives effect to the Merger as if it had been consummated on January 1, 2023, are being updated for purposes of the Offering and do not give effect to the Transaction. The information contained in this Item 2.02 shall not be deemed to be "filed" for purposes of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act.

02. Unregistered Sales of Equity Securities

Item 3.02. Unregistered Sales of Equity Securities. The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in response to this Item 3.02. The issuance of the Stock Consideration to the Seller will be completed in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(a)(2) thereof as a transaction by an issuer not involving any public offering. The Company will rely on this exemption from registration based in part on representations made by the Seller. 3

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On December 3, 2024, the Company issued a news release announcing that, subject to market conditions, it intends to conduct an underwritten public offering (the "Offering") of 18,000,000 shares of its Class A Common Stock, pursuant to a shelf registration statement (the "Registration Statement") on Form S-3 (File No. 333-277702) previously filed with the U.S. Securities and Exchange Commission that became effective upon filing on March 6, 2024. In addition, the Company intends to grant the underwriters a 30-day option to purchase up to an additional 2,700,000 shares of Class A Common Stock, on the same terms and conditions. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. Also on December 3, 2024, the Company issued a news release announcing the Transaction. A copy of the press release is attached hereto as Exhibit 99.2 and incorporated herein by reference. In addition, the information contained in Item 8.01 of this Current Report on Form 8-K is incorporated into this Item 7.01 by reference. The information contained in this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act or the Exchange Act.

01. Other Events

Item 8.01. Other Events. Pro Forma Financials This Current Report provides a pro forma statements of operations, giving effect to the Merger, attached as Exhibit 99.3 hereto: Unaudited Pro Forma Condensed Combined Statements of Operations for the nine months ended September 30, 2024 and for the year ended December 31, 2023; and Notes to the Unaudited Pro Forma Condensed Combined Financial Statements. The pro forma statements of operations giving effect to the Merger as if it had been consummated on January 1, 2023 are being updated for purposes of the Offering and do not give effect to the Transaction. Ridgemar Reserve Report This Item 8.01 also incorporates by reference the information contained in Item 2.02 of this Current Report and the reserve report prepared by DeGolyer and MacNaughton, independent reserve engineers for Ridgemar, filed as Exhibit 99.4 herewith. The Offering Also on December 3, 2024 in connection with the Offering, the Company filed a prospectus supplement to the Registration Statement which provided certain updated disclosures to potential investors, the relevant excerpts of which are set forth below. ****** Our free cash flow-focused portfolio includes a balanced set of oil and natural gas assets in proven onshore U.S. basins with substantial existing production, a low decline rate and an acreage position that is 96% held by production as of December 31, 2023. Based on forecasts used in our reserve report, the Ridgemar reserve report and the SilverBow reserve report, our proved developed producing ("PDP") reserves as of December 31, 2023 have estimated average five-year and ten-year annual decline rates of approximately 16% and approximately 13%, respectively, and an estimated 2024 PDP decline rate of approximately 25%. As a result of this overall low decline profile, we require relatively minimal capital expenditures to maintain our production and cash flows while supporting our return of capital policy. We have a robust inventory