Crescent Energy Co(US:CRGY)2025-08-04 20:27Part I - Financial Information Financial Statements Crescent Energy's Q2 2025 financial statements reflect increased assets and liabilities due to acquisitions, with net income and operating cash flow significantly improving year-over-year Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $753,271 | $788,088 | | Property, Plant and Equipment, net | $8,980,400 | $8,145,054 | | TOTAL ASSETS | $9,856,686 | $9,160,649 | | Total Current Liabilities | $851,595 | $827,363 | | Long-term Debt | $3,373,595 | $3,049,255 | | Total Liabilities | $5,357,962 | $4,792,689 | | Total Equity | $4,498,724 | $3,139,631 | | TOTAL LIABILITIES AND EQUITY | $9,856,686 | $9,160,649 | Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues | $1,848,156 | $1,310,756 | | Total Expenses | $1,596,293 | $1,057,352 | | Income from Operations | $251,863 | $253,404 | | Net Income | $168,412 | $37,841 | | Net Income Attributable to Crescent | $151,074 | $13,379 | | Diluted EPS (Class A) | $0.67 | $0.13 | Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $836,080 | $470,696 | | Net Cash used in Investing Activities | $(1,269,111) | $(286,562) | | Net Cash from Financing Activities | $213,380 | $594,461 | - In April 2025, the company simplified its corporate structure by eliminating the Up-C structure; all remaining Class B common stock and corresponding OpCo units were exchanged for Class A common stock, resulting in all common stockholders holding Class A shares37 - The company completed the Ridgemar Acquisition on January 31, 2025, for $807.2 million in cash and 5.5 million shares of Class A Common Stock, plus up to $170.0 million in contingent consideration64 - The company consummated the SilverBow Merger on July 30, 2024, issuing 51.6 million shares of Class A Common Stock and paying $382.4 million in cash to former SilverBow shareholders6567 - In March 2025, the company sold non-core assets for $83.0 million, recording an impairment of $48.6 million on these assets during the six months ended June 30, 202577 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management attributes significant H1 2025 revenue and production growth to recent acquisitions, effectively managing commodity price fluctuations and optimizing debt Results of Operations Q2 2025 revenues rose 37% to $898.0 million due to a 60% increase in sales volumes, offsetting lower oil prices, with net income reaching $162.5 million and Adjusted EBITDAX increasing 61% Q2 2025 vs Q2 2024 Revenue and Volume Comparison | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues (in thousands) | $897,983 | $653,283 | 37% | | Oil Revenue (in thousands) | $602,488 | $499,622 | 21% | | Natural Gas Revenue (in thousands) | $159,001 | $51,274 | 210% | | Total Sales Volume (MBoe) | 23,908 | 14,971 | 60% | | Average Daily Volume (MBoe/d) | 263 | 165 | 59% | Six Months 2025 vs 2024 Revenue and Volume Comparison | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues (in thousands) | $1,848,156 | $1,310,756 | 41% | | Oil Revenue (in thousands) | $1,222,147 | $973,516 | 26% | | Natural Gas Revenue (in thousands) | $346,441 | $131,218 | 164% | | Total Sales Volume (MBoe) | 47,125 | 30,059 | 57% | | Average Daily Volume (MBoe/d) | 260 | 165 | 58% | - General and administrative (G&A) expense for Q2 2025 increased by 164% to $124.6 million, primarily driven by a $71.3 million increase in equity-based compensation expense, which included a $69.3 million expense from a change in estimate189190191 Non-GAAP Financial Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (loss) | $162,498 | $70,205 | $168,412 | $37,841 | | Adjusted EBITDAX | $513,854 | $319,774 | $1,043,310 | $633,097 | | Levered Free Cash Flow | $170,875 | $146,933 | $412,452 | $213,057 | Liquidity and Capital Resources The company's liquidity is driven by operating cash flow and its Revolving Credit Facility, with $1.7 billion available, while strategic debt management included a tender offer for 2028 notes and issuance of new 2034 notes - As of June 30, 2025, the company had $3.05 million in cash and cash equivalents and $3.37 billion in long-term debt222 - Net cash from operating activities increased by 77.6% to $836.1 million for the six months ended June 30, 2025, compared to the same period in 2024223 - In June 2025, the company commenced a tender offer for its 9.250% Senior Notes due 2028, ultimately purchasing $500 million aggregate principal amount; in July 2025, it issued $600 million of 8.375% Senior Notes due 2034 to finance the tender and repay revolver borrowings226228 Revolving Credit Facility Status (as of June 30, 2025) | Metric | Amount (in millions) | | :--- | :--- | | Borrowing Base | $2,600 | | Elected Commitment | $2,000 | | Outstanding Borrowings | $323.5 | | Letters of Credit | $19.9 | | Availability | ~$1,700 | Quantitative and Qualitative Disclosures About Market Risk The company faces commodity price volatility, mitigated by derivatives, and interest rate risk on variable debt, with a 1% rate change impacting six-month expense by $1.6 million - The company's main market risk exposure is the pricing of its oil, natural gas, and NGL production258 - As of June 30, 2025, the fair value of the company's commodity derivative contracts was a net asset of $72.1 million; a hypothetical 10% increase in commodity prices would result in a derivative loss of $202.6 million, while a 10% decrease would result in a gain of $170.2 million260261 - At June 30, 2025, the company had $323.5 million of variable rate debt; a 1% change in the average interest rate would impact interest expense by approximately $1.6 million for a six-month period267 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during Q2 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025270 - No material changes were made to the internal control over financial reporting during the three months ended June 30, 2025271 Part II - Other Information Legal Proceedings The company is not currently involved in any legal proceedings expected to have a material adverse effect on its financial position or operations - The company is unaware of any legal proceedings that are expected to have a material adverse effect on its financial condition or results of operations273 Risk Factors A new risk factor highlights potential U.S. government tariffs and trade measures, which could increase costs and reduce demand for oil and natural gas, adversely affecting financial results - A new risk factor was noted regarding the April 2025 announcement of a baseline 10% tariff on products from all countries by the U.S. government275 - The imposition of tariffs could increase the company's material input costs and supply chain costs, or reduce demand for oil and natural gas, which would adversely affect financial results275276 Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, the company repurchased approximately 3.6 million Class A Common Stock shares for $28.2 million under its $150 million program, with $86.0 million remaining Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 2,941,982 | $7.87 | | May 2025 | 631,311 | $7.95 | | June 2025 | 0 | $0.00 | - As of June 30, 2025, approximately $86.0 million remained under the company's $150.0 million share repurchase authorization279 Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025282