Crescent Energy Co(US:CRGY)2025-11-03 21:24Financial 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].