We recently published 10 Stocks on a Hot Streak. Crescent Energy Company (NYSE:CRGY) is one of the best-performing stocks on Tuesday. Crescent Energy extended its winning streak to a 5th straight day on Tuesday, jumping 8.15 percent to close at $9.69 apiece amid higher oil and gas prices, while investors gobbled up shares ahead of a dividend record date. As of writing, prices of natural gas were up by 5.23 percent at $4.57/MMBtu, while Brent and WTI—the benchmark indices for crude oil—jumped by 1.65 perc ...

Production and Sales - Third quarter production averaged 253 MBoe/d, consisting of approximately 41% oil and 58% liquids, with oil production at 103 Mbo/d[4] - For the three months ended September 30, 2025, average daily net sales volumes were 103 MBbls/d for oil, 631 MMcf/d for natural gas, and 45 MBbls/d for NGLs, resulting in a total of 253 MBoe/d, representing a 15.5% increase from 219 MBoe/d in the same period of 2024[26] - Total revenues for the three months ended September 30, 2025, were $866.6 million, up 16.3% from $744.9 million in the same period of 2024, driven by increased oil and natural gas sales[27] - The average realized price for oil was $63.07 per Bbl, a decrease of 8.3% from $69.19 per Bbl in the same period of 2024, while natural gas prices increased to $2.49 per Mcf from $1.55 per Mcf[26] Financial Performance - Crescent reported a net loss of $10 million and an Adjusted Net Income of $88 million for the third quarter[5] - Generated $487 million in Adjusted EBITDAX, $473 million in Operating Cash Flow, and $204 million in Levered Free Cash Flow[5] - Net income attributable to Crescent for the nine months ended September 30, 2025, was $141.6 million, compared to $3.4 million in the same period of 2024, indicating a significant improvement in profitability[27] - The company reported net cash provided by operating activities of $1,309,140 thousand for the nine months ended September 30, 2025, compared to $838,652 thousand for the same period in 2024, an increase of approximately 55.9%[32] - Adjusted Net Income for the three months ended September 30, 2025, was $88,332 thousand, compared to $81,972 thousand in 2024, showing an increase of approximately 7.5%[42] Cost Management and Efficiency - Achieved 15% savings in drilling, completion, and facilities costs per foot compared to 2024, enhancing capital efficiencies in the Eagle Ford[6] - Operating expenses per Boe for the three months ended September 30, 2025, were $16.65, slightly higher than $16.23 in the same period of 2024, reflecting ongoing cost management efforts[26] - General and administrative expenses decreased significantly to $74.3 million for the three months ended September 30, 2025, from $159.7 million in the same period of 2024, reflecting improved cost control measures[27] - The company incurred transaction and nonrecurring expenses of $19,938 thousand for the three months ended September 30, 2025, compared to $56,311 thousand in 2024, reflecting a decrease of approximately 64.5%[42] Debt and Equity - Strengthened the balance sheet with approximately $150 million in debt repayment and expanded the borrowing base by 50% to $3.9 billion[6] - Long-term debt increased to $3,221,409 thousand as of September 30, 2025, up from $3,049,255 thousand on December 31, 2024, marking an increase of about 5.6%[30] - Total current liabilities rose to $864,198 thousand as of September 30, 2025, compared to $827,363 thousand at the end of 2024, reflecting an increase of approximately 4.4%[30] - Total equity increased to $4,478,881 thousand as of September 30, 2025, compared to $3,139,631 thousand at the end of 2024, representing a growth of approximately 42.7%[30] Future Outlook and Guidance - Enhanced 2025 guidance for the second consecutive quarter, resulting in a 4% improvement in capital outlook while maintaining production levels[9][10] - Future guidance indicates a focus on increasing production volumes and optimizing operational efficiencies to drive revenue growth in the upcoming quarters[25] Acquisitions and Divestitures - Announced the acquisition of Vital Energy for approximately $3.1 billion in an all-stock transaction, expected to close in late Q4 2025[7] - Executed agreements for non-core divestitures totaling over $800 million year-to-date, including more than $700 million in September and October 2025[8] Market Conditions and Derivatives - The company achieved a gain on derivatives of $55.7 million for the three months ended September 30, 2025, compared to a gain of $96.9 million in the same period of 2024, indicating volatility in market conditions[27] - The unrealized loss on derivatives for the three months ended September 30, 2025, was $(33,859) thousand, compared to $(91,672) thousand in 2024, indicating an improvement in derivative performance[42] Dividends - Approved a cash dividend of $0.12 per share for the third quarter, payable on December 1, 2025[11] - Class A common stock dividends for Q3 2025 were $30,554,000, up from $19,562,000 in Q3 2024, representing a 56.9% increase[52] - Adjusted dividends paid for the nine months ended September 30, 2025, totaled $92,125,000, compared to $69,692,000 for the same period in 2024, reflecting a 32.2% increase[52]

Group 1 - The article discusses the analysis of oil and gas companies, specifically focusing on Crescent Energy and similar firms, highlighting the search for undervalued companies in the sector [1] - The author emphasizes the cyclical nature of the oil and gas industry, which requires patience and experience for successful investment [2] - The investing group, Oil & Gas Value Research, aims to identify under-followed oil companies and out-of-favor midstream companies that present attractive investment opportunities [2] Group 2 - The article mentions that the investing group includes an active chat room for discussions among oil and gas investors, facilitating the sharing of recent information and ideas [2] - The author has a beneficial long position in Crescent Energy shares, indicating a personal investment interest in the company [3] - The article does not provide specific investment recommendations but encourages investors to review company documents and press releases for their own investment qualifications [4]

Financial Data and Key Metrics Changes - Crescent Energy generated approximately $487 million of adjusted EBITDA and $204 million of levered free cash flow for Q3 2025, demonstrating strong financial performance [13][4] - The company reported $205 million in capital expenditures, maintaining a lower capital-intensive operating model [13] - The company announced a dividend of $0.12 per share for the quarter, equating to a 6% annualized yield, and repaid over $150 million of debt during the quarter [13][14] Business Line Data and Key Metrics Changes - Crescent produced 253,000 barrels of oil equivalent per day, including 103,000 barrels of oil per day, indicating strong operational performance [5] - In the Eagle Ford region, the company achieved 15% savings per foot on capital expenditures compared to the previous year, with well productivity outperforming prior activity by over 20% [6] Market Data and Key Metrics Changes - The company expects to maintain a production guidance of approximately 39% oil in Q4 2025, despite the impact of divestitures [36] - The divestitures are projected to have a 16,000 BOE per day impact on Q4 production, reflecting the company's strategic asset management [35] Company Strategy and Development Direction - Crescent announced a transformative acquisition of Vital Energy, establishing itself as a top 10 U.S. independent oil and gas producer and enhancing its growth trajectory [4][8] - The company plans to streamline its portfolio through over $800 million in non-core divestitures, focusing on maintaining a strong balance sheet and reducing debt [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate significant long-term value for investors, emphasizing a focus on free cash flow generation and operational excellence [17] - The management team highlighted the successful integration of acquired assets and the potential for significant value creation through improved operations [9][10] Other Important Information - Crescent has successfully increased its borrowing base by 50% to $3.9 billion, reflecting strong support from its bank group [14] - The company plans to use 100% of the proceeds from divestitures to pay down existing credit facilities, further strengthening its balance sheet [14] Q&A Session Summary Question: Development plan and operational efficiencies - Management confirmed no fundamental changes in their operational strategy, focusing on efficient operations and capital allocation [20] Question: M&A parameters and future acquisitions - Management stated that they will continue to look for great value and asset opportunities in the Eagle Ford and Permian regions, maintaining their underwriting standards [21] Question: Leverage and future steps - Management indicated a strong balance sheet and plans to use divestiture proceeds to reduce debt, aiming for a long-term leverage target of one time [26] Question: Impact of divestitures on maintenance CapEx - Management noted that divestitures would improve margins and reserve life, while maintaining a lower reinvestment rate [28] Question: Production guidance for Q4 2025 - Management reaffirmed production guidance, indicating a 16,000 BOE per day impact from divestitures [35] Question: Future capital allocation between gas and oil - Management emphasized a flexible approach to capital allocation, focusing on returns and the ability to switch between oil and gas based on market conditions [38] Question: Status of divestiture program - Management confirmed the success of the divestiture program and indicated that while there are smaller assets remaining, they can decide to sell them at the right time [42] Question: Well performance in Eagle Ford - Management attributed improved well performance to their acquisition strategy and operational practices, expecting continued outperformance [43] Question: Minerals business outlook - Management confirmed that the minerals business is a core part of their strategy with no plans for divestiture [46] Question: Cash tax situation post-divestitures - Management expects the divestitures to be broadly tax-neutral, with a minor tax gain anticipated from the sales [47]

Financial Performance - Crescent Energy's Q3'25 performance exceeded expectations, generating $487 million in Adjusted EBITDAX[14] - The company reported $204 million in Levered Free Cash Flow in Q3'25[14] - Crescent Energy paid a fixed quarterly dividend of $0.12 per share, resulting in a 6% fixed dividend yield[14] - The company paid down over $150 million in debt during Q3[13] Strategic Acquisitions and Divestitures - Crescent Energy announced the acquisition of Vital Energy for approximately $3.1 billion[13] - The company signed over $700 million in accretive divestitures during Q3'25[13] - Year-to-date, Crescent Energy has signed over $800 million in non-core divestitures[19] Operational Highlights - Q3'25 average production was 253 Mboe/d, with 41% oil and 58% liquids[14] - Eagle Ford well performance has increased by approximately 20% year-over-year[37] - Crescent Energy achieved approximately 15% DC&F savings year-to-date in both the Eagle Ford and Uinta basins[35, 42] Balance Sheet and Capital Management - Crescent Energy's net LTM leverage ratio is 14x[14] - The company has approximately $20 billion in liquidity[14] - The borrowing base was increased to $39 billion pro forma for the Vital Energy acquisition[13]

Financial Performance - Total revenues increased by $121.7 million, or 16%, to $866.6 million for the three months ended September 30, 2025, compared to $744.9 million in the same period of 2024[192]. - Total revenues for the nine months ended September 30, 2025, increased by $659.1 million, or 32%, to $2.71 billion, compared to $2.06 billion for the same period in 2024[213]. - The company reported net income (loss) of $(10.3) million for the three months ended September 30, 2025, compared to $(5.6) million for the same period in 2024, reflecting an increase in loss of 84%[207]. - Net income increased by $125.9 million, or 390%, to $158.1 million for the nine months ended September 30, 2025, compared to $32.3 million in 2024[228]. - The company’s net cash provided by operating activities increased by $470.5 million, or 56%, to $1.31 billion for the nine months ended September 30, 2025, compared to $838.7 million in 2024[229]. Revenue Breakdown - Natural gas revenue surged by $65.7 million, or 83%, driven by a 61% increase in realized prices per Mcf and a 14% increase in sales volume[193]. - Oil revenue rose by $47.9 million, or 9%, attributed to a 20% increase in sales volume, offset by a 9% decrease in realized prices per Bbl[192]. - Oil revenue increased by $296.5 million, or 19%, to $1.82 billion for the nine months ended September 30, 2025, driven by a 37% increase in sales volume[213]. - Natural gas revenue surged by $280.9 million, or 134%, to $490.9 million for the nine months ended September 30, 2025, primarily due to a 45% increase in sales volume[214]. - NGL revenue rose by $77.2 million, or 35%, to $298.3 million for the nine months ended September 30, 2025, driven by a 39% increase in sales volume[215]. Expenses and Costs - Operating expenses increased by $60.3 million, or 18%, totaling $386.9 million, primarily due to higher production from acquisitions[196]. - Operating expenses increased by $256.1 million, or 28%, to $1.18 billion for the nine months ended September 30, 2025, compared to $924.4 million for the same period in 2024[218]. - General and administrative expenses decreased by $85.4 million, or 53%, to $74.3 million, driven by lower equity-based compensation and transaction-related expenses[200]. - Interest expense increased by 17% to $72.6 million, primarily due to higher average debt balances from acquisitions[202]. - Interest expense rose to $221.0 million for the nine months ended September 30, 2025, compared to $146.9 million in 2024, driven by higher average debt balances from the SilverBow Merger and Ridgemar Acquisition[223]. Acquisitions and Mergers - Crescent acquired Ridgemar (Eagle Ford) LLC for $807.2 million in cash and 5.5 million shares of Class A Common Stock, with potential contingent earn-out consideration of up to $170.0 million[165]. - The company completed the SilverBow Merger, issuing 51.6 million shares of Class A Common Stock and paying $382.4 million in cash to former SilverBow shareholders[166]. - The company acquired additional interests in oil and gas properties in Webb County, Texas, for approximately $21.2 million in January 2025[167]. - In July 2025, Crescent acquired a portfolio of oil and natural gas mineral interests for total cash consideration of approximately $67.9 million, funded through borrowings from its Revolving Credit Facility[168]. - Cash used for the acquisition of oil and natural gas properties was $942.5 million in 2025, up from $387.8 million in 2024, primarily due to the Ridgemar Acquisition and Minerals Acquisition[259]. Debt and Financing - Crescent Energy recorded impairment expenses of $73.5 million and $122.2 million for the three and nine months ended September 30, 2025, respectively, related to oil and natural gas properties[155]. - The company completed a cash tender offer for approximately $306.1 million of its outstanding 9.250% Senior Notes due 2028 and redeemed an additional $193.9 million of these notes, resulting in a loss on extinguishment of debt of approximately $29.2 million[157]. - Crescent issued $600.0 million of 8.375% senior notes due 2034, with net proceeds of approximately $588.1 million used to finance the tender offer and redeem the 2028 notes[158][159]. - The company incurred a loss on extinguishment of debt of $29.2 million during the nine months ended September 30, 2025, compared to a loss of $59.1 million in 2024[224]. - The company expects to maintain compliance with covenants under its debt agreements based on planned capital spending and forecasted cash flows[236]. Operational Metrics - Average daily net sales volumes for oil increased by 20% to 103 MBbls/d, while natural gas volumes rose by 14% to 631 MMcf/d[192]. - Total sales volume increased by 3,111 MBoe and 20,178 MBoe for the three and nine months ended September 30, 2025, respectively, primarily due to acquisitions[186]. - The effective tax rate for the three months ended September 30, 2025, was 28.2%, up from 22.7% in the prior year, influenced by increased ownership of OpCo[205]. - The effective tax rate for the three months ended September 30, 2025, increased due to higher ownership of OpCo, with a deferred tax liability increase of $136.9 million[173]. - The company plans to fund its 2025 capital program through cash flow from operations, with flexibility to defer expenditures based on market conditions[178]. Shareholder Returns - The Board of Directors approved a quarterly cash dividend of $0.12 per share, amounting to an annualized dividend of $0.48 per share, payable on December 1, 2025[262]. - The company paid cash dividends of $0.36 per share of Class A Common Stock during the nine months ended September 30, 2025[261]. - Management will evaluate future increases in cash dividends on a quarterly basis, considering current economic conditions[263]. Derivative and Risk Management - As of September 30, 2025, the company's derivative portfolio had an aggregate notional value of approximately $3.1 billion, with a net asset fair market value of $88.8 million[275]. - A hypothetical 10% increase in commodity prices would change the net commodity derivative position by approximately $198.6 million, while a 10% decrease would change it by approximately $168.4 million[276]. - The company had $72.0 million of variable rate debt outstanding as of September 30, 2025, with a potential interest expense impact of approximately $0.5 million for a 1% change in interest rates[282].

Core Insights - Crescent Energy Company announced its financial and operational results for the third quarter of 2025, with a conference call scheduled for November 4, 2025 [1][5] - The company is focused on delivering shareholder value through a disciplined growth strategy and consistent capital returns, with operations primarily in Texas and the Rocky Mountain region [2] Financial Highlights - Crescent Energy successfully completed its fall borrowing base redetermination, increasing its borrowing base by 50% under its reserve-based revolving credit facility, reflecting strong support from its bank syndicate [4] - The elected commitment amount for the credit facility was reaffirmed at $2.0 billion [4] Strategic Developments - Crescent Energy announced a definitive agreement to acquire Vital Energy in an all-stock transaction valued at approximately $3.1 billion, including Vital's net debt, which will position Crescent among the top 10 independent energy companies [6]

Core Viewpoint - Crescent Energy (CRGY) is expected to report a year-over-year decline in earnings despite higher revenues, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is anticipated to show earnings of $0.32 per share, reflecting an 18% decrease year-over-year, while revenues are projected to be $886.88 million, a 19.1% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 21.09% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP for Crescent Energy is +6.48%, suggesting a likelihood of beating the consensus EPS estimate, supported by a Zacks Rank of 1 [12]. Historical Performance - Crescent Energy has consistently beaten consensus EPS estimates, achieving a surprise of +86.96% in the last reported quarter and surpassing estimates in all of the last four quarters [13][14]. Market Reaction - The stock may experience upward movement if earnings exceed expectations, while a miss could lead to a decline; however, other factors may also influence stock performance [2][15].

Core Insights - Crescent Energy Company has successfully completed its fall borrowing base redetermination, resulting in an increase in its borrowing base and an extension of the credit facility's tenor, reflecting strong support from its bank syndicate and financial discipline [1][3][6] Credit Facility Highlights - The elected commitment amount has been reaffirmed at $2.0 billion - The borrowing base has increased by 50%, from $2.6 billion to $3.9 billion - The maturity of the credit facility has been extended to five years, resulting in no near-term debt maturities and a weighted average maturity of 6.4 years - The pricing grid has been reduced by 25 basis points, from 200–300 basis points to 175–275 basis points [6] Synergy Capture - Crescent Energy has realized approximately $12 million in total synergy capture, which is roughly 13% of the midpoint of its $90–$100 million synergy range associated with the Vital Energy transaction - The early synergies are primarily driven by lower interest expenses, unused commitment fees, and reduced administrative costs [3][6] Company Overview - Crescent Energy is a differentiated U.S. energy company focused on delivering value for shareholders through a disciplined growth strategy and consistent return of capital - The company has a long-life, balanced portfolio that combines stable cash flows from low-decline production with high-quality development inventory, primarily focused in Texas and the Rocky Mountain region [4]

Group 1 - Crescent Energy (CRGY) closed at $8.25, reflecting a -1.9% change from the previous day, underperforming the S&P 500's gain of 0.53% [1] - Over the last month, Crescent Energy's shares decreased by 4.21%, while the Oils-Energy sector lost 3% and the S&P 500 gained 0.71% [1] Group 2 - Crescent Energy is expected to report earnings on November 3, 2025, with an anticipated earnings per share (EPS) of $0.33, indicating a year-over-year decline of 15.38% [2] - The Zacks Consensus Estimate for revenue is projected at $894.28 million, representing a 20.06% increase from the previous year [2] Group 3 - Full-year Zacks Consensus Estimates for Crescent Energy forecast earnings of $1.61 per share and revenue of $3.62 billion, reflecting year-over-year changes of -9.55% and +23.43%, respectively [3] - Recent changes to analyst estimates for Crescent Energy are important as they indicate the evolving nature of near-term business trends [3] Group 4 - The Zacks Rank system, which evaluates estimate revisions, indicates that these changes are correlated with near-term share price momentum [4] - Crescent Energy currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining unchanged over the past month [5] Group 5 - Crescent Energy has a Forward P/E ratio of 5.22, which is significantly lower than the industry average Forward P/E of 21.22 [6] - The Alternative Energy - Other industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 187, placing it in the bottom 25% of over 250 industries [6]