Crescent Energy Co(US:CRGY)2023-08-08 16:00Acquisition and Investments - The company agreed to acquire operatorship and incremental working interests in its existing Western Eagle Ford assets for approximately $600 million, with 10% paid as a deposit at announcement[99]. - The company recorded a distribution of $6.8 million from its equity method investment, Exaro Energy III, LLC, primarily due to the sale of operations in the Jonah Field[101]. - Cash used in the acquisition of oil and natural gas properties was $14,996 for the six months ended June 30, 2023, significantly lower than $627,390 in 2022[218]. Revenue and Sales Performance - Total revenues for the three months ended June 30, 2023, decreased by $416.1 million, or 46%, to $492.3 million compared to $908.4 million in the same period of 2022[137]. - Oil revenue decreased by $209.3 million, or 35%, while natural gas revenue decreased by $155.1 million, or 75%, and NGL revenue decreased by $50.0 million, or 60%[137]. - Total revenues for the six months ended June 30, 2023, were $1,082,476,000, a decrease of $424,868,000, or 28%, from $1,507,344,000 in the same period of 2022[194]. Commodity Prices and Market Conditions - The company experienced significant commodity price volatility due to geopolitical events, with WTI prices reaching a low of $66.61 in March 2023[123]. - Average realized prices for oil fell to $67.68 per Bbl, down 35% from $104.23 per Bbl in 2022; natural gas prices dropped to $1.71 per Mcf, a 73% decrease from $6.40 per Mcf[137]. - Pricing for oil, natural gas, and NGLs has been volatile, and this volatility is expected to continue in the future[254]. Expenses and Financial Performance - General and administrative expenses increased by $21.5 million, or 109%, for the three months ended June 30, 2023, driven by higher equity-based compensation[140]. - Total expenses for the six months ended June 30, 2023, increased by $123.2 million, or 17%, compared to the same period in 2022[172]. - Adjusted EBITDAX decreased significantly, leading to a Levered Free Cash Flow decrease of $68.1 million, or 60%, in Q2 2023 compared to Q2 2022[168]. Cash Flow and Debt Management - Net cash provided by operating activities for the six months ended June 30, 2023, was $423,556,000, compared to $398,454,000 for the same period in 2022, reflecting an increase of 6%[183]. - As of June 30, 2023, cash and cash equivalents totaled $2,253,000, while long-term debt increased to $1,331,555,000 from $1,247,558,000 at the end of 2022[182]. - The company has $250.0 million of variable rate debt outstanding, with a potential interest expense impact of approximately $1.3 million for a 1% increase or decrease in the average interest rate[259]. Tax and Regulatory Impacts - The Inflation Reduction Act of 2022 may adversely affect the company's operations by increasing operating costs due to a methane emissions charge expected to be collected in 2025[98]. - The company is evaluating the impact of a new corporate alternative minimum tax of 15% on adjusted financial statement income exceeding $1.0 billion over a three-year period[98]. - The effective tax rate for the six months ended June 30, 2023, was 7.5%, compared to a benefit of 3.1% in the same period of 2022[202]. Risk Management and Sustainability - The company joined the Oil & Gas Methane Partnership 2.0 Initiative to enhance reporting of methane emissions as part of its sustainability efforts[130]. - The company regularly enters into commodity derivative contracts to mitigate near-term price volatility and maintain stable cash flows[255]. - The company’s hedging program aims to preserve capital and protect margins through commodity cycles[255].