Financial Performance - Total revenues for the three months ended March 31, 2025, reached $950.2 million, a 45% increase from $657.5 million in the same period of 2024 [177]. - Oil revenue increased by $145.8 million (31%) due to a 43% rise in sales volumes, primarily driven by the SilverBow Merger and Ridgemar Acquisition [177]. - Natural gas revenue surged by $107.5 million (134%), attributed to a 63% increase in sales volumes and a 46% rise in realized prices [178]. - NGL revenue rose by $40.6 million (61%), driven by a 68% increase in sales volumes [179]. - Total sales volume increased by 8,129 MBoe, reaching 23,217 MBoe for the three months ended March 31, 2025, compared to 15,088 MBoe in 2024 [171]. - Adjusted EBITDAX increased by $216.1 million, or 69%, to $529.5 million, driven by additional production from acquisitions [192][194]. - Levered Free Cash Flow increased by $175.5 million, or 265%, to $241.6 million, primarily due to increased Adjusted EBITDAX [194]. - Net cash provided by operating activities increased by $153.3 million, or 83%, to $337.1 million [193]. Expenses and Costs - Operating expenses rose by $99.3 million (33%) to $403.5 million, influenced by increased production from acquisitions [181]. - Depreciation, depletion, and amortization expenses increased by $106.0 million (60%) due to higher production levels [182]. - Lease and asset operating expense increased by $30.0 million, or 18%, to $8.27 per Boe, driven by higher production from the SilverBow Merger and Ridgemar Acquisition [184]. - Gathering, transportation, and marketing expense rose by $35.7 million, or 51%, to $4.53 per Boe, primarily due to the SilverBow Merger and Ridgemar Acquisition [184]. - Production and other taxes increased by $27.9 million, or 86%, to $2.60 per Boe, driven by higher oil and gas revenues [184]. - General and administrative expense increased by $14.1 million, or 33%, totaling $56.77 million, with recurring G&A rising by 115% [185][186]. - Interest expense rose by $30.5 million, or 71%, to $73.2 million, primarily due to higher average debt balances from acquisitions [187]. Acquisitions and Mergers - The company acquired Ridgemar (Eagle Ford) LLC for $812.5 million in cash and issued 5.5 million shares of Class A Common Stock, with potential contingent earn-out consideration of up to $170.0 million [154]. - 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 [155]. - The company acquired additional interests in oil and gas properties in Webb County, Texas for approximately $21.2 million in January 2025 [156]. - Cash used for the acquisition of oil and natural gas properties in Q1 2025 was $864.7 million, significantly higher than $19.5 million in Q1 2024, primarily due to the Ridgemar Acquisition [223]. Impairments and Adjustments - For the three months ended March 31, 2025, the company recorded an impairment expense of $45.6 million related to oil and natural gas properties [147]. - Impairment expense of $45.6 million was recorded for the three months ended March 31, 2025, related to assets held for sale [183]. - The company recorded a decrease of $34.1 million in redeemable noncontrolling interests as a result of the March 2025 Class A Redemption [152]. Capital Expenditures and Funding - The company expects to fund its 2025 capital program through cash flow from operations, with flexibility to defer expenditures based on market conditions [164]. - Total expenditures on acquisition and development of oil and natural gas properties for the three months ended March 31, 2025, amounted to $1.15 billion, compared to $156.3 million in the same period of 2024 [223]. - The company’s capital program for 2025 is expected to be funded through cash flow from operations, with capital expenditures being regularly reviewed and adjusted based on various factors [222]. Debt and Financing - Long-term debt increased to $3,596,870 thousand as of March 31, 2025, compared to $3,049,255 thousand as of December 31, 2024 [199]. - The company issued $750 million of 7.375% senior notes due 2033 in June 2024 and an additional $250 million in September 2024, raising approximately $981.8 million in total proceeds [203]. - The company issued $700 million of 7.625% senior notes due 2032 in March 2024 and an additional $400 million in December 2024, raising approximately $1,080.7 million in total proceeds [206]. - As of March 31, 2025, the elected commitment amount under the Revolving Credit Facility was approximately $2.0 billion, with $546.5 million of outstanding borrowings [215]. - The borrowing base under the Revolving Credit Facility was $2.6 billion as of March 31, 2025, with a weighted average interest rate of 6.34% on outstanding loans [216][217]. - The company expects to maintain compliance with covenants under its debt agreements based on planned capital spending and forecasted cash flows [199]. Cash Flow and Dividends - Cash and cash equivalents decreased to $6,255 thousand as of March 31, 2025, from $132,818 thousand as of December 31, 2024 [199]. - Net cash used in investing activities surged by $899.5 million, or 571%, to $(1,056,923) thousand for the three months ended March 31, 2025, primarily due to $845.1 million for acquisitions related to the Ridgemar Acquisition [201]. - Net cash provided by financing activities was $502,653 thousand for the three months ended March 31, 2025, compared to $(23,867) thousand for the same period in 2024 [202]. - The company paid a quarterly cash dividend of $0.12 per share on March 26, 2025, with an annualized dividend of $0.48 per share [225][226]. - Management will evaluate future increases in cash dividends on a quarterly basis, considering current economic conditions and financial performance [227]. Market Conditions and Economic Factors - The company experienced significant inflationary pressures, impacting operating costs and capital expenditures, with the U.S. inflation rate remaining elevated through 2024 and early 2025 [149]. - The effective tax rate increased to 30.7% in Q1 2025 from 11.5% in Q1 2024, primarily due to increased ownership of OpCo and higher state tax rates [190]. - The company plans to continue entering into derivative contracts to hedge against commodity price fluctuations [174]. - The company plans to continue economic hedging arrangements to mitigate commodity price volatility and protect margins [197]. - As of March 31, 2025, the company's derivative portfolio had an aggregate notional value of approximately $3.1 billion, with a net liability of $79.1 million for commodity derivative contracts [239]. - A hypothetical 10% increase in commodity prices would change the net commodity derivative position by approximately $214.7 million, while a 10% decrease would change it by approximately $171.5 million [240].
Crescent Energy Co(CRGY) - 2025 Q1 - Quarterly Report