Crescent Energy Company Q1 FY2026 earnings call

• Strong execution drove outperformance: Exceeded production expectations, increased free cash flow via opportunistic refinancing. • Permian acquisition integration ahead of plan: Already exceeded initial synergy target, seeing early improvements in well costs and production. • Differentiated combination of investing and operating expertise continues to deliver significant free cash flow. • In Eagleford, steady efficiency gains with simulfrac, strengthened 2026 development program. • In Permian, right-sized capital intensity, focused on optimization, captured $120 million in synergies, improved operational planning, accelerated cycle times, reduced well costs. • In Uinta, well costs down 20% year on year, activity focused on core development, investing in broader resource opportunity delineation. • Minerals and royalties business shows strong performance with portfolio expected to generate ~$200 million of EBITDA this year.

Production: Record 341,000 barrels of oil equivalent per day for the quarter, including 140,000 barrels of oil per day. Levered free cash flow: $192 million. Permian: Integration ahead of plan, exceeded initial $120 million synergy target, saw early improvements in well costs and production. Eagleford: Steady efficiency gains with simulfrac completions, strengthened 2026 development program. Uinta: Well costs down ~20% year on year, activity focused on core Ute-Land Butte development, investing more in broader resource opportunity delineation. Minerals and royalties: Portfolio expected to generate ~$200 million of EBITDA this year, meaningful increase vs original guidance, provides cost-free organic growth.

• Expect to generate approximately $1 billion of leverage free cash flow in 2026. • Declared a $0.12 per share dividend for the quarter. • Ended the quarter with approximately $2 billion of liquidity, no near-term debt maturities, clear pathway to lower absolute leverage over time. • At current prices, expect portfolio to generate ~$200 million of EBITDA this year, meaningfully increase vs original guidance. • No formal change to production or capital guidance for the full year, but given performance to date and commodity prices, expect to be between mid and high point on both production and capital.

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

Q: On operational efficiency, how much upside seen on vital assets?

A: Joey responded about hitting ground running, rebidding services, displacing diesel, larger pads, simulfrac, reducing cycle time, right-sizing artificial lift, reducing facility sizes.

Q: On Diamondback Boost activity, what would it take to do something similar?

A: David said deployment of capital is investing, pleased with M&A, don't see increasing rig activity in higher price environment, see producing barrels at high margin and returning cash.

Q: In Permian, how factor Waha spot price?

A: Brandy said well hedged from Waha standpoint over next 24 months in mid-2s.

Q: On delineation of broader resource opportunity in Uinta?

A: Clayton said early in year focused on Ute and Butte, back half of year to see delineation opportunities, JV on northeastern side of acreage, excited about upper cube activity.

Q: On drivers of first quarter outperformance between faster cycle times and base outperformance?

A: Brandy said roughly 50-50.

Q: On leverage on Crescent Royalties?

A: Brandy said would expect to be one and a half times or below on minerals business as exit year.

Q: On improved cycle times and impact on decline rate?

A: David said better performance is better performance, won't fundamentally change decline rate, Joey talked about further outlook.

Q: On synergy composition remaining to be achieved?

A: Brandy said captured largely overhead, cost of capital, operational synergies, left for cost of capital improvement, marketing efforts optimization; Joey talked about capital opportunities, artificial lift, reducing facility size, eliminating work overs, attacking LOE.

Q: On initial assessment around vital inventory in Permian?

A: Clay said excited about overall inventory opportunity, more encouraged on all fronts including inventory side.

Q: On stronger commodity environment change approach to A&D market with Crescent Royalties and E&P?

A: David said excited about business accomplishments, disciplined evaluators of assets, will be disciplined acquirers.

Q: On early thoughts on 2027?

A: David said continue to do more of the same, steady focus on production levels, drive performance on production, DNC, cost side.

Q: On working capital draw and cash taxes?

A: Brandy said working capital expected to unwind next quarter, largely related to end of fourth quarter A&D transactions; on cash tax, significant tax assets to offset taxable income, expect to become cash taxpayer in $80-plus WTI environment.

Q: On oil marketing exposure split and second quarter vs first quarter?

A: Brandy said 99% of WTI, 70-75% of crude prices off of MEH; on Q2 oil realizations, probably in zip code where Q1 printed.

Q: On capex flexibility and reallocating to more oily assets?

A: David said yes, pride in portfolio flexibility, today about 90 plus percent allocated to liquids-oriented drilling, continue to monitor opportunities for best returns