Crescent Energy Company Q3 FY2025 earnings call

• Business delivered strong results with significant free cash flow, exceeding expectations on key metrics and enhancing full-year outlook for the second consecutive quarter.
• Announced transformative acquisition of Vital Energy, marking accretive and scaled entry into the Permian Basin and positioning Crescent as a top 10 U.S. independent oil and gas producer.
• Over $700 million of noncore divestitures signed this quarter, with year-to-date divestitures exceeding $800 million, streamlining the portfolio and strengthening the balance sheet via debt reduction.
• In the Eagle Ford, achieved 15% savings per foot on capital and improved well productivity by over 20% compared to prior activity. Post-acquisition, will operate in 3 core regions: Eagle Ford, Permian, and Uinta.

Crescent generated approximately $487 million of adjusted EBITDA, $205 million of capital expenditures, and $204 million of levered free cash flow. They produced 253,000 barrels of oil equivalent per day, including 103,000 barrels of oil per day. Key financials highlight strong free cash flow generation and efficient operating performance.

• Enhanced full-year outlook for the second consecutive quarter.
• Acquisition of Vital Energy is accretive and scales Crescent to a top 10 U.S. independent producer.
• Divestiture proceeds will be used to pay down credit facilities upon closing of the Vital acquisition, helping maintain a strong balance sheet.

• Commodity price volatility.
• Global geopolitical conflict.
• Business strategies and other factors that may cause actual results to differ from projections.

Q: Neal Dingmann from William Blair asked about development plan and M&A parameters.

A: David Rockecharlie stated no fundamental change in development approach, continuing efficient operations; still looking for great value and asset opportunity in Eagle Ford and Permian.

Q: John Freeman from Raymond James inquired about divestitures and leverage.

A: Brandi Kendall mentioned balance sheet is in great spot, using divestiture proceeds to pay down debt, expecting to reduce debt and leverage metric.

Q: Tim Rezvan from KeyBanc Capital Markets asked about 4Q 2025 production and oil SKU.

A: Brandi Kendall said divestitures will impact Q4 production, expecting roughly 39% oil in Q4.

Q: John Abbott from Wolfe Research asked about divestiture program and minerals.

A: David Rockecharlie stated divestiture program was successful, minerals are core business with no plans to sell soon.

Q: Michael Furrow from Pickering Energy Partners asked about adjusted cash OpEx and capital allocation.

A: Brandi Kendall said divestitures improve adjusted operating costs, expecting pro forma adjusted cash OpEx around $11.50 per BOE, with opportunities to further improve.