Crescent Energy Co Q4 FY2024 earnings call

• 2024 was a transformational year with impressive financial and operational execution, including accretive acquisitions that more than doubled core Eagle Ford position.
• Consistently exceeded production and capital expectations, generating ~$260 million free cash flow in Q4.
• Completed U-turn wells in Eagle Ford for cost savings, with potential as part of long-term development strategy.
• Silverbell acquisition outperforming expectations, with synergy targets increased by ~15%.
• Ridgemar Energy acquisition offers incremental value creation in early integration phase.
• Uinta development sees solid results with potential from untapped resources, and patient capital allocation to delineate resources.

Eagle Ford: Fourth quarter had strong execution with 15 growth operated wells brought online, contributing to significant free cash flow. Acquisitions like Silverbell have realized annual synergies in excess of $100 million, with plans to increase synergy targets. Ridgemar Energy acquisition is in early integration phase. Uinta: Development program focused on Yule and Butte formations, with early positive results from eastern joint venture wells targeting Castle Peak Black Shale and Douglas Creek formations, averaging ~1,500 barrels of oil per day per well over first 30 days of production.

• 2025 operating plan to run 4-5 rigs, largely focused in Eagle Ford across all phase windows, including dry gas assets.
• Production guidance: 254,000 to 264,000 barrels of oil equivalent per day.
• Capital expenditure guidance: $925 million to $1.025 billion, midpoint $975 million.
• Focus on maximizing free cash flow generation and investment returns, aiming to surpass Wall Street estimates at like-for-like commodity prices.

• Commodity price volatility.
• Global geopolitical conflict.
• Risks associated with business strategies, including integration of acquisitions and optimization of assets.
• Operational risks related to development and delineation of resources in Uinta.

Q: Oliver Huang asked about 2025 capital allocation decision making process.

A: David Rockecharlie stated it's about dynamically allocating capital across the portfolio to maximize returns around the asset base, with more gas drilling due to stronger gas prices.

Q: Neal Dingmann asked about growth for growth's sake and service costs.

A: David Rockecharlie said they are disciplined, focus on accretive acquisitions, and see efficiency in service costs with larger portfolio. Clay Rynd added on divestiture opportunity set.

Q: Tim Rezvan asked about non-core asset sale opportunities.

A: Clay Rynd said there's a $250 million pipeline for divestitures, focusing on finding fair prices for assets better in others' hands.

Q: Michael Scialla asked about Uinta location count and resource potential.

A: Clay Rynd said early days, focused on data aggregation and prudent capital allocation, seeing upside to location count.

Q: John Abbott asked about timing of divestitures based on commodities.

A: David Rockecharlie said they are committed to being a bigger and more efficient company, evaluating assets based on whether they make the portfolio better, with a pipeline of $50-100 million assets sold annually.

Q: Michael Furrow asked about capital flexibility and Uinta zones.

A: Brandi Kendall said they maintain capital allocation flexibility towards high-return opportunities, and Clay Rynd said similar program makeup expected in 2025 with similar results across intervals.

Q: John Freeman asked about free cash flow priority and U-turn wells.

A: Brandi Kendall said priorities are base dividend, balance sheet, and opportunistic buybacks. Brandi Kendall also said no specific U-turns slated in 2025 plan but used as an opportunistic tool.