Crescent Energy Company · NYSE:CRGY

Crescent Energy — Q2 2023 Earnings Presentation

34 slides from Crescent Energy's earnings presentation, Aug 10, 2023

  1. Slide 1: Q2'23 Results Conference Call

    Q2’23 Results Conference Call August 2023

  2. Slide 2: Disclaimer

    Disclaimer The information in this presentation relates to Crescent Energy Company (the “Company” or “CRGY”) and contains information that includes or is based upon “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Se

  3. Slide 3: A Differentiated U.S. Energy Company

    A Differentiated U.S. Energy Company Acquisition Strategy that Combines an Investor Mindset and Deep Operational Expertise CRGY at a Glance $8.3 Bn Proved Developed PV-10(1) Cash Flow Rockies $11.1 Bn Total Proved PV-10(1) • Substantial Cash Flow ~40% of ‘23E Production 143 - 148 Mboe/d ‘23E Product

  4. Slide 4: Executing On Our Consistent Strategy

    Executing On Our Consistent Strategy  Beat Q2’23 Estimates • Outperformed on all key financial metrics  Raised FY’23 Guidance • Increased FY’23 production & cash flow  Strong Operational Execution • Operational efficiencies improving D&C costs  Growth Through Accretive M&A • Seamlessly integrati

  5. Slide 5: Executing On Our Consistent Strategy (Cont'd)

    Executing On Our Consistent Strategy (Cont’d) Substantial Large, Low Decline Cash Flow Generation Base Production $225 MM Adj. EBITDAX(1) 139 Mboe/d Production $46 MM Levered FCF(1) 46% oil / 60% liquids Attractive Premier Return of Capital Balance Sheet $0.12/sh Quarterly Cash Dividend(2) 1.1x Net

  6. Slide 6: Raising Guidance to Reflect Strong Operations

    Raising Guidance to Reflect Strong Operations Strong Operational Results Drive Higher Full Year Production Guidance and Improved Capital Efficiency Updated 2023 Outlook Initial(1) Updated Full Year FY 2023 FY 2023 Change Total Production 140 - 148 143 - 148 (Mboe/d) Capital Expenditures $625 - $700

  7. Slide 7: Operational Execution Resulting in Significant Cost Savings

    Operational Execution Resulting in Significant Cost Savings Continued Execution on Efficiencies Offsetting D&C Efficiencies Inflation and Enhancing Margins • Improved cycle times; ~20% reduction in drilling days • Optimized completion design driving cost savings and strong well performance • Shorter

  8. Slide 8: Closed on Accretive Western Eagle Ford Acquisition

    Closed on Accretive Western Eagle Ford Acquisition Eagle Ford Footprint  Closed acquisition on July 3 Seamlessly integrating  acquisition into existing capital program CRGY Central (Op) CRGY Western (Op) CRGY (Non-Op) Eagle Ford Key Metrics Optimizing  Statistic development plan Net Acres (000s)

  9. Slide 9: Significant Capital Markets Progress

    Significant Capital Markets Progress Priority #1 Increase Float & Liquidity Increased public float from ~25% to ~45% in the last 18 months Priority #2 Increase Research Coverage Added 7 publishing analysts with path to more Successfully accessed the Priority Increase Market #3 Awareness capital mark

  10. Slide 10: Class B Share Conversion Increases Public Float to 45%

    Class B Share Conversion Increases Public Float to 45% Crescent Energy % Ownership Increased public float to  Public Shareholders KKR Private Investors ~45% of shares outstanding, a ~57% 100% increase(1) 39% 75%  60% 55% Continued path to simplifying corporate 16% structure 50% +57% 16% +17% 16% 

  11. Slide 11: Balance Sheet: Financial Strength and Flexibility

    Balance Sheet: Financial Strength and Flexibility Recently Achieved Two BB- Unsecured Notes Ratings; Added to BB HY Index Targeting Investment Grade Capitalization as of 6/30/23 Balance Sheet Metrics ($ in MM, unless noted) ($MM) 6/30/23 PF HY + Acq • Significant asset coverage from large, Cash & Ca

  12. Slide 12: Cash Returns to Shareholders: Leading Track Record

    Cash Returns to Shareholders: Leading Track Record Dividend Yield Comparison(5) Return of Capital Strategy Distributes 10% of Adj. EBITDAX(1) at Guidance Pricing Consecutive • Adj. EBITDAX-based(1) strategy 10 years 9.2% of dividend payments(6) reduces variability vs. FCF- based alternatives • $0.12

  13. Slide 13: Reducing Our Emissions Impact

    Reducing Our Emissions Impact Reduce absolute Scope 1 Maintain methane Joined the leading GHG Emissions emissions at current emissions intensity standard for reporting methane emissions Reduction operations by Targets 50% by 2027(1) <0.20%  Replacing pneumatic devices and electrifying operations wh

  14. Slide 14: Appendix

    ©) Crescent Energy Appendix

  15. Slide 15: Strong Well Performance and Capital Efficiencies Lead to Enhanced Full Year Guidance

    Strong Well Performance and Capital Efficiencies Lead to Enhanced Full Year Guidance Updated 2023 Guidance Initial Western Eagle Ford Updated 2023 Guidance Acquisition (2H’23) 2023 Guidance Budget Pricing (Oil / Natural Gas) $70 / $3.50 $70 / $2.75 Total Production (Mboe/d) 130 - 138 19 – 21 143 - 1

  16. Slide 16: Consistent Strategy Execution Over Last Decade

    Consistent Strategy Execution Over Last Decade Current Past Decade (Average)(1) Commodity Prices Commodity Prices $81.37 / $2.56 $64.67 / $3.37 Leverage(2) Leverage Strong Balance 1.1x 1.2x 1 Sheet (Long Term Target ≤1.0x) Decline Rate Decline Rate 21% <25% Low Decline 2 (Target <25% Reinvestment Ra

  17. Slide 17: Capital Allocation Priorities

    Capital Allocation Priorities Priority #1A Financial Strength Target max 1.5x leverage in an acquisition scenario Target 1.0x long-term leverage(1) Priority #1B Returning Capital to Shareholders Base Dividend: 10% of EBITDA $0.12 per share A B Returns-Driven Investing: Priority #2 Target >2.0x MOIC(

  18. Slide 18: Track Record of Growth Through Accretive Acquisitions

    Track Record of Growth Through Accretive Acquisitions Consistent Strategy Since 2011(1) Crescent Opportunistic & Value- Acquisitions 6 Oriented Acquisition Strategy Disciplined, opportunistic acquisition history • Target cash-generative 4 assets in proven U.S. onshore basins 3 • Focused on short Wes

  19. Slide 19: Scaled, Low Decline Assets Drive Sustainable FCF

    Scaled, Low Decline Assets Drive Sustainable FCF First Year PDP Decline vs. Peers(1) Cash Flow Stability 40% Through: 35% 35% 34% 34% 31% 30% 30% • Low decline PDP base, Peer Average: 29% 24% which drives low 21% 21% reinvestment rate 8% • Flexible, returns-driven investments 1 2 3 4 5 6 7 8 9 10 11

  20. Slide 20: Significant Proven Inventory and Resource Potential

    Significant Proven Inventory and Resource Potential High Quality, Deep Inventory (Gross Operated Locations) ~15 Year Unrisked Inventory 8 - 10 Year >1,200 Low Risk Inventory (at Maintenance Activity) 625 Other Other EagleFord Eagle Ford Uinta Uinta 60 - 80 Maintenance Low Risk Resource Program(1) In

  21. Slide 21: Eagle Ford Asset Overview: Large Acreage Position Across Oil / Condensate Window

    Eagle Ford Asset Overview: Large Acreage Position Across Oil / Condensate Window Asset Detail Operated Central Western Non-Op Net Acres ~82,000 ~105,000 ~33,000 Atascosa and Dimmit, Webb Zavala, Frio, Counties Frio and La Salle Atascosa, Webb % HBP ~80% ~80% ~85% Current 1 1 0-1 Rigs 200 gross / 250

  22. Slide 22: Uinta Asset Overview: Proven Oil Resource with Multi-Year Development Inventory

    Uinta Asset Overview: Proven Oil Resource with Multi-Year Development Inventory Asset Detail Operated Uinta Net Acres ~145,000 Counties Duchesne and Uintah % HBP ~85% Current 1 Operated Rigs Inventory(1) 135 gross / 110 net MOIC(2) >2.0x % Oil ~65% Avg. WI / NRI ~85% / ~70% CRGY (Op) Altamont Energy

  23. Slide 23: Conventional Asset Base Provides Cash Flow Stability with CO2 / CCUS-Related Upside

    Conventional Asset Base Provides Cash Flow Stability with CO2 / CCUS-Related Upside Crescent Rockies Footprint • Low decline EOR production base provides stable cash flow stream that Crescent CO2 Pipelines CO2 Pipelines Owned by Others supports broader Crescent business Crescent EOR Field Crescent N

  24. Slide 24: Minerals Footprint Provides High Margin Cash Flow

    Minerals Footprint Provides High Margin Cash Flow Appalachia DJ Basin Eagle Ford Asset Highlights Key Metrics  High margin asset generating meaningful free cash flow Statistic  Organic growth with no capital costs or operating expenses Net Royalty Acres(1) ~72,000  2022A Net Production(2) (Mboe/d

  25. Slide 25: Benefits From Our Low-Risk, Sustainable Asset Base

    Benefits From Our Low-Risk, Sustainable Asset Base Low Decline Asset Base Balanced Exposure(1) Commodity Region Decline rate: <10% Other 10% Stable production and cash flow Gas Oil 42% 45% Texas Late Cycle Rockies 50% 40% Low-Decline 40% NGL 13% Mid-Cycle Unconventional Oil Basis Gas Basis 60% WY/Ot

  26. Slide 26: Our "Up-C" Organizational Structure

    Our “Up-C” Organizational Structure • Up-C Investors and Crescent Energy Company (“PubCo”) hold units Up-C (“OpCo Units”) in an operating Investors Public Stockholders company (“OpCo”) that is treated as (Legacy Investors) a partnership for U.S. federal income Class B Class A tax purposes (no tax re

  27. Slide 27: Hedge Position: Oil

    Hedge Position: Oil Q3'23 Q4'23 2H 2023 FY 2024 FY 2025(1) NYMEX WTI (Bbls, $/Bbl) Swaps Total Volumes 3,154,242 3,062,463 6,216,705 10,201,460 -- Total Daily Volumes 34,285 33,288 33,786 27,873 -- WA Swap Price $63.16 $63.16 $63.16 $65.72 -- Collars Total Volumes 736,000 720,500 1,456,500 644,000 1

  28. Slide 28: Hedge Position: Gas

    Hedge Position: Gas Q3'23 Q4'23 2H 2023 FY 2024 NYMEX Henry Hub (MMBtu, $/MMBtu) Swaps Total Volumes 14,690,735 13,904,668 28,595,403 9,604,100 Total Daily Volumes 159,682 151,138 155,410 26,241 WA Swap Price $2.90 $2.92 $2.91 $4.14 Collars Total Volumes -- -- -- 18,300,000 Total Daily Volumes -- --

  29. Slide 29: Per Unit Performance

    Per Unit Performance For the three months ended June 30, 2023 June 30, 2022 March 31, 2023 Average daily net sales volumes: Oil (MBbls/d) 64 64 59 Natural gas (MMcf/d) 335 356 351 NGLs (MBbls/d) 19 20 19 Total (MBoe/d) 139 142 137 Average realized prices, before effects of derivative settlements: Oi

  30. Slide 30: Adjusted EBITDAX & Levered Free Cash Flow

    Adjusted EBITDAX & Levered Free Cash Flow Adjusted EBITDAX & Levered Free Cash Flow Crescent defines Adjusted EBITDAX as net income (loss) before interest expense, realized (gain) loss on interest rate derivatives, income tax expense (benefit), depreciation, depletion and amortization, exploration e

  31. Slide 31: Adjusted EBITDAX & Levered Free Cash Flow (Cont'd)

    Adjusted EBITDAX & Levered Free Cash Flow (Cont’d) For the three months ended June 30, 2023 June 30, 2022 (in thousands) Net income (loss) $ 57,474 $ 281,898 Adjustments to reconcile to Adjusted EBITDAX: Interest expense 31,128 24,937 Income tax expense (benefit) 9,178 17,798 Depreciation, depletion

  32. Slide 32: Net LTM Leverage & PV-10 Reconciliation

    Net LTM Leverage & PV-10 Reconciliation Net LTM Leverage Crescent defines Net LTM Leverage as the ratio of consolidated total debt to consolidated Adjusted EBITDAX as calculated under the credit agreement (the "Credit Agreement") governing Crescent’s Revolving Credit Facility. Management believes Ne

  33. Slide 33: Adjusted Recurring Cash G&A

    Adjusted Recurring Cash G&A Adjusted Recurring Cash G&A Crescent defines Adjusted Recurring Cash G&A as general and administrative expense, excluding non- cash equity-based compensation and transaction and nonrecurring expenses, and including Manager Compensation RNCI Distributions. Management belie

  34. Slide 34: Stay Connected.

    Stay Connected. Emily Newport IR@crescentenergyco.com 600 Travis Street Suite 7200 Houston, Texas 77002 + 1 (713) 332-7001 www.crescentenergyco.com

Crescent Energy Company — Q2 2023 Earnings Presentation on 6ix