Crescent Energy Co(CRGY) - 2025 Q2 - Quarterly Results

Financial & Operational Highlights Crescent Energy reported a strong second quarter of 2025, achieving record production of 263 MBoe/d and generating significant cash flow, successfully reducing costs, executing accretive transactions, repaying debt, and returning capital to shareholders, leading to an enhanced full-year outlook Q2 2025 Financial and Operational Metrics | Metric | Q2 2025 Value | | :--- | :--- | | Average Production | 263 MBoe/d | | Oil Production | 108 Mbo/d | | Net Income | $162 million | | Adjusted Net Income | $110 million | | Adjusted EBITDAX | $514 million | | Operating Cash Flow | $499 million | | Levered Free Cash Flow | $171 million | | Capital Expenditures | $265 million | - Key operational and strategic achievements in Q2 2025 include: - Improved drilling, completion, and facilities (DC&F) costs by approximately 15% in South Texas and the Uinta compared to 2024 - Repaid approximately $200 million of debt using excess free cash flow - Repurchased approximately $28 million of shares at an average price of $7.88 - Simplified corporate structure by eliminating the Up-C structure[6] Strategic Activities During the quarter, Crescent continued its portfolio optimization strategy by closing a $72 million minerals acquisition and divesting approximately $110 million in non-core assets year-to-date, while maintaining its shareholder return program through a quarterly dividend and opportunistic share repurchases Acquisitions and Divestitures Crescent closed a $72 million accretive minerals acquisition to scale its existing portfolio, with year-to-date divestitures of non-core assets reaching $110 million, including the sale of non-operated assets in the Permian and Eagle Ford basins, as part of a larger $250 million divestiture pipeline - On July 31, 2025, Crescent closed an accretive acquisition of complementary minerals assets for approximately $72 million[7] - Year-to-date, the company has divested approximately $110 million of non-core assets, including: - $83 million from non-operated Permian Basin assets (closed April 22, 2025) - $22 million from non-operated Eagle Ford Basin assets (closed July 30, 2025)[8] Shareholder Return The company declared a Q2 2025 cash dividend of $0.12 per share, and additionally repurchased $28 million of its Class A common stock at a weighted average price of $7.88 per share, leaving approximately $86 million available under its $150 million share repurchase program - The Board of Directors approved a Q2 2025 cash dividend of $0.12 per share, payable on September 2, 2025[11] - During Q2, the company repurchased approximately $28 million of shares, with $86 million remaining under the authorized $150 million Share Repurchase Program[12] Enhanced 2025 Outlook Crescent has enhanced its full-year 2025 guidance, reducing its capital expenditure forecast by approximately 3% while maintaining production targets, and significantly improving the cash tax outlook to 0% of Adjusted EBITDAX, largely due to the new 'One Big Beautiful Bill Act' 2025 Full-Year Outlook Comparison | Metric | Prior 2025 Outlook | Current 2025 Outlook | Change vs. Midpoint | | :--- | :--- | :--- | :--- | | Total Production (MBoe/d) | 251 - 261 | 251 - 261 | 0% | | Capital Expenditures ($MM) | $925 - $1,025 | $910 - $990 | ($25 MM) / (~3%) | | Cash Taxes (% of Adj. EBITDAX) | 2.0% - 5.0% | 0% | (100%) | - The improved outlook reflects ongoing operational efficiencies, modest activity acceleration, and a more favorable tax outlook due to the 'One Big Beautiful Bill Act' (OBBBA) signed into law on July 4, 2025[9] Financial Statements The company's financial statements reflect significant year-over-year growth in production and revenue, driven by acquisitions and operational performance, with net income for Q2 2025 at $162.5 million, total assets at $9.86 billion, and strong operating cash flow of $836.1 million for the first six months of 2025 Operational Summary In Q2 2025, total average daily production increased to 263 MBoe/d from 165 MBoe/d in Q2 2024, a 59% increase, and while realized prices for oil and NGLs before derivatives were lower year-over-year, operating expenses per Boe decreased from $19.61 to $16.31, demonstrating improved cost efficiency Operational Summary: Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Production (MBoe/d) | 263 | 165 | +59.4% | | Oil Production (MBbls/d) | 108 | 73 | +47.9% | | Realized Price ($/Boe, pre-hedges) | $35.96 | $41.27 | -12.9% | | Operating Expense ($/Boe) | $16.31 | $19.61 | -16.8% | Income Statement For Q2 2025, Crescent reported total revenues of $898.0 million, up from $653.3 million in Q2 2024, driven by higher production volumes, with net income attributable to Crescent Energy at $153.2 million ($0.61 per basic share), a significant increase from $37.5 million ($0.34 per basic share) in the prior-year quarter, aided by a large gain on derivatives Condensed Consolidated Income Statement (Thousands) | (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $897,983 | $653,283 | | Income from Operations | $79,635 | $119,384 | | Net Income | $162,498 | $70,205 | | Net Income Attributable to Crescent | $153,221 | $37,547 | | EPS (Class A, basic) | $0.61 | $0.34 | Balance Sheet As of June 30, 2025, Crescent's total assets stood at $9.86 billion, up from $9.16 billion at year-end 2024, with total liabilities increasing to $5.36 billion from $4.79 billion, primarily due to a rise in long-term debt to $3.37 billion, while total equity grew to $4.50 billion, strengthened by the elimination of redeemable noncontrolling interests following the corporate simplification Condensed Consolidated Balance Sheet (Thousands) | (in thousands) | June 30, 2025 | Dec 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 | Cash Flow Statement For the six months ended June 30, 2025, net cash from operating activities was $836.1 million, a significant increase from $470.7 million in the same period of 2024, with net cash used in investing activities at $1.27 billion, primarily for property acquisitions and development, and financing activities providing $213.4 million in net cash Condensed Consolidated Cash Flow Statement (Thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $836,080 | $470,696 | | Net cash used in investing activities | ($1,269,111) | ($286,562) | | Net cash provided by (used in) financing activities | $213,380 | $594,461 | Non-GAAP Financial Measures The company provides reconciliations for key non-GAAP metrics used by management and investors to evaluate performance, with Q2 2025 Adjusted EBITDAX at $513.9 million, Levered Free Cash Flow at $170.9 million, Adjusted Net Income at $110.3 million, and a Net LTM Leverage ratio of 1.5x as of June 30, 2025 Adjusted EBITDAX and Levered Free Cash Flow Adjusted EBITDAX for Q2 2025 was $513.9 million, up from $319.8 million in Q2 2024, and after accounting for interest, taxes, and capital expenditures, the company generated $170.9 million in Levered Free Cash Flow for the quarter, compared to $146.9 million in the prior-year period Adjusted EBITDAX and Levered Free Cash Flow Reconciliation (Thousands) | (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $162,498 | $70,205 | | Adjusted EBITDAX (non-GAAP) | $513,854 | $319,774 | | Levered Free Cash Flow (non-GAAP) | $170,875 | $146,933 | Adjusted Net Income Adjusted Net Income, which excludes items like unrealized derivative gains/losses and non-cash compensation, was $110.3 million ($0.43 per share) for Q2 2025, representing a significant increase from the $56.2 million ($0.31 per share) reported in Q2 2024 Adjusted Net Income Reconciliation (Thousands) | (in thousands, except EPS) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $162,498 | $70,205 | | Adjusted Net Income (non-GAAP) | $110,255 | $56,155 | | Adjusted EPS | $0.43 | $0.31 | Net LTM Leverage As of June 30, 2025, Crescent's Net LTM Leverage ratio, calculated as net debt divided by LTM Adjusted EBITDAX under its credit agreement, was 1.5x, based on net debt of $3.37 billion and LTM Adjusted EBITDAX of $2.28 billion Net LTM Leverage Calculation (Millions) | (in millions) | June 30, 2025 | | :--- | :--- | | Net Debt | $3,371 | | LTM Adjusted EBITDAX for Leverage Ratio | $2,284 | | Net LTM Leverage | 1.5x |