Crescent Energy Company · NYSE:CRGY
Crescent Energy — Q2 2024 Earnings Presentation
31 slides from Crescent Energy's earnings presentation, Aug 6, 2024
Slide 1: Q2'24 Earnings Presentation
Q2’24 Earnings Presentation August 2024
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
Slide 3: Delivering On Strategic Priorities
Delivering On Strategic Priorities ✓ Strong Financial Performance • Continued outperformance vs expectations • Increasing standalone CRGY FY’24 guidance ✓ Operational Execution • Best-in-class D&C execution • Strong well performance driving production beat ✓ • Closed ~$2.1 BN SilverBow acquisition a
Slide 4: Standalone CRGY Performance: Strong Q2 Results
Standalone CRGY Performance: Strong Q2 Results Substantial Large, Low Decline Cash Flow Generation Base Production $320 MM Adj. EBITDAX(1) 165 Mboe/d $147 MM Levered FCF(1) 44% Oil / 62% Liquids Attractive Balance Sheet Return of Capital Strength $0.12/sh Fixed Quarterly Dividend(2) 1.3x Net LTM Lev
Slide 5: Increasing 2024 Outlook for Standalone CRGY
Increasing 2024 Outlook for Standalone CRGY Production Outperformance and Strong Capital Execution 2024 Production Guidance(1) ✓ (Mboe/d) Continued Production 162 162.5 160 Outperformance 160.0 157 • Sustained productivity 149 155 Increased 2% gains in the Western since original 2024 Guidance Eagle
Slide 6: Best in Class Eagle Ford D&C Performance
Best in Class Eagle Ford D&C Performance Simultaneous Operations Increasing Efficiencies and Improving Costs Drilled Measured Depth per Day(1) ✓ Drilling ~25% More (Eagle Ford 2022+ Wells: ft) 2,000 Footage per Day than Peer Avg: ~1,635 Peers 1,500 • Improving cycle 1,000 times and cost with 500 con
Slide 7: Continued Gains in Eagle Ford Capital Efficiency
Continued Gains in Eagle Ford Capital Efficiency Incremental Cost Reductions Alongside Strong Well Productivity Eagle Ford Development Costs ✓ (Drilling, Completions & Facilities - $/ft) Meaningful Capital $1,000 Efficiency Gains $950 • Delivering more $825 production for less capital ✓ Continued Ou
Slide 8: Successful Track Record of Accretive Acquisitions
Successful Track Record of Accretive Acquisitions Significant Growth through Returns-Driven M&A ✓ Scaling the Business and Enhancing the Portfolio • Tripled in scale since Crescent Acquisitions Consistent Acquisition Strategy(1) 6 becoming public in 2021 ✓ Consistent Approach to Acquisition Underwri
Slide 9: Closed Transformative Acquisition of SilverBow Resources
Closed Transformative Acquisition of SilverBow Resources Combination Creates Leading Growth Through Acquisition Company with Premier Eagle Ford Position ✓ Leading Eagle Ford Position Achieves Consistent Guadalupe Underwriting Criteria Bexar Gonzales Kinney Uvalde Medina • Accretive across all key Wi
Slide 10: Significant Synergy Capture and Value Creation Opportunities
Significant Synergy Capture and Value Creation Opportunities Acquisition Closed Ahead of Schedule with Successful Integration To-Date • ~$35 MM in annual synergies captured at closing through an improved cost of capital resulting in reduced interest expense SilverBow Synergy Value Potential Expect $
Slide 11: SilverBow Q2 Performance In-Line or Exceeding Expectations
SilverBow Q2 Performance In-Line or Exceeding Expectations Strong Q2 Performance with Higher than Expected Free Cash Flow Q2 Analyst Q2 SilverBow Consensus Actuals Production 93 93 In-Line (MBoe/d) Capital Expenditures $155 $116 Beat ($MM) Levered Free Cash Flow(1) $2 $29 Beat ($MM) Source: Wall Str
Slide 12: Synergies Generating Incremental Value in the Western Eagle Ford
Synergies Generating Incremental Value in the Western Eagle Ford ~$60 MM Captured Within Twelve Months Post-Closing Relative to ~$850 MM Original Purchase Price Western Eagle Ford Synergy Capture (Savings Realized To-Date - $MM) ~$60 ~$18 ~$15 ~$25 ~$25 MM ~$15 MM ~$18 MM ~$60 MM DC&F Cost Reduction
Slide 13: "BB" Balance Sheet Reflects Financial Strength
“BB” Balance Sheet Reflects Financial Strength Targeting Investment Grade Balance Sheet Metrics Through Cycles Commitment to Balance Sheet Strength ✓ Maintain Ample Liquidity: (7/31/24 Statistics – Pro Forma for SilverBow Closing) Current liquidity is ~2.5x our Current Leverage Total >$500 MM target
Slide 14: Decade-Plus History of Returning Cash to Shareholders
Decade-Plus History of Returning Cash to Shareholders Providing Shareholders with Consistent and Peer-Leading Fixed Dividend Return of Capital Framework: Fixed Dividend Yield Comparison(2) Consecutive 12 years 4.0% 4.0% Priority Fixed Dividend: #1 • $0.12 / share per quarter of dividend payments(3)
Slide 15: Pro Forma Business Generates Significant Free Cash Flow
Pro Forma Business Generates Significant Free Cash Flow Combination of Low-Decline Production with Deep Inventory of High-Return Locations Supports Significant Free Cash Flow Generation >$3.5 BN ~24% 5-Year Cum. Levered FCF(1) % FCF Yield Cumulative LFCF Greater Than CRGY FCF Yield is ~50% Current M
Slide 16: Pro Forma 2H 2024 Outlook
Pro Forma 2H 2024 Outlook Guidance ✓ ($70 / Bbl WTI and $3.00 / MMbtu Henry Hub) Improved Standalone Guidance Updated Standalone CRGY Guidance Pro Forma 2H 2024 Guidance Initial SBOW PF CRGY • Increased FY’24 FY 2024 FY 2024 (Aug. – Dec.) 2H’24(1) production Total Production 155 – 160 160 – 162.5 92
Slide 17: Appendix
©) Crescent Energy Appendix
Slide 18: Increasing Float & Trading Liquidity
Increasing Float & Trading Liquidity Transformed the Equity Positioning of the Business Since Going Public CRGY Ownership Pro Forma ✓ Increased Public Private Investors SBOW Closing Float to ~71% of 17% KKR 22% Shares Outstanding 34% +13% Public Shareholders 55% +23% 11% 15% +76% 15% ✓ Enhanced Clar
Slide 19: Reducing Our Emissions Impact
Reducing Our Emissions Impact Our Sustainability Focus Areas CLIMATE ENVIRONMENT SAFETY COMMUNITY WORKFORCE ✓ Transparent Reporting to Support Long-Term Goals • Awarded OGMP 2.0 Gold Standard pathway rating in 2023 for the second consecutive year ✓ Monitoring and Reducing Emissions • Active leak det
Slide 20: Capital Allocation Priorities
Capital Allocation Priorities Priority #1A Financial Strength Target up to 1.5x leverage in an acquisition scenario Target 1.0x long-term leverage Priority #1B Returning Capital to Shareholders Fixed Dividend: $0.12 per share per quarter(1) A B Returns-Driven Investing: Priority #2 Target >2.0x MOIC
Slide 21: Eagle Ford Asset Overview
Eagle Ford Asset Overview: Premier Position with Attractive Commodity Diversification Asset Detail Operated Central Southern Western Non-Op Net Acres ~160k ~100k ~165k ~33k Live Oak, Atascosa, Webb, La Salle, Dimmit, Webb, Zavala, Frio, Counties McMullen, La McMullen, Live Maverick, La Salle Atascos
Slide 22: Uinta Asset Overview
Uinta Asset Overview: Proven Oil Resource with Multi-Year Development Inventory Asset Detail Uinta Net Acres ~145k Counties Duchesne and Uintah Avg. WI / NRI ~85% / ~70% % Oil ~65% Current 1 Rigs Gross Locations(1) Low-Risk 250 Total 650 MOIC(2) >2.0x DC&F ~$950 $ / ft ’23 Avg. Lateral ~10,000’ High
Slide 23: Current Hedge Position: Liquids
Current Hedge Position: Liquids Pro Forma for SilverBow Acquisition Q3’24 Q4’24 FY 2025(1) FY 2026 NYMEX WTI (Bbls, $/Bbl) Swaps Total Volumes 3,603,100 3,280,730 4,069,000 1,746,050 Total Daily Volumes 39,164 35,660 11,148 4,784 WA Swap Price $71.28 $71.93 $72.61 $69.00 Collars Total Volumes 2,806,
Slide 24: Current Hedge Position: Gas
Current Hedge Position: Gas Pro Forma for SilverBow Acquisition Q3’24 Q4’24 FY 2025 FY 2026 NYMEX Henry Hub (MMBtu, $/MMBtu) Swaps Total Volumes 26,423,800 26,420,370 55,205,000 41,745,000 Total Daily Volumes 287,215 287,178 151,247 114,370 WA Swap Price $3.70 $3.91 $3.98 $3.98 Collars Total Volumes
Slide 25: Per Unit Performance
Per Unit Performance For the three months ended June 30, 2024 June 30, 2023 March 31, 2024 Average daily net sales volumes: Oil (Mbbls/d) 73 64 70 Natural gas (MMcf/d) 372 335 403 NGLs (Mbbls/d) 30 19 28 Total (Mboe/d) 165 139 166 Average realized prices, before effects of derivative settlements: Oi
Slide 26: 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, loss from extinguishment of debt, income tax expense (benefit), depreciation, depletion and amortization, exploration expense, non-cash
Slide 27: Adjusted EBITDAX & Levered Free Cash Flow (Cont'd)
Adjusted EBITDAX & Levered Free Cash Flow (Cont’d) For the three months ended June 30, 2024 June 30, 2023 (in thousands) Net income (loss) $ 70,205 $ 57,474 Adjustments to reconcile to Adjusted EBITDAX: Interest expense 42,359 31,128 Income tax expense (benefit) 11,527 9,178 Depreciation, depletion
Slide 28: Adjusted EBITDAX & Levered Free Cash Flow (SBOW)
Adjusted EBITDAX & Levered Free Cash Flow (SBOW) For the three months ended June 30, 2024 (in thousands) Net income (loss) $ 8,493 Adjustments to reconcile to Adjusted EBITDAX: Interest expense 33,727 Income tax expense (benefit) 2,489 Depreciation, depletion and amortization 93,067 Non-cash (gain)
Slide 29: 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
Slide 30: 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
Slide 31: Stay Connected.
Stay Connected. IR@crescentenergyco.com 600 Travis Street Suite 7200 Houston, Texas 77002 + 1 (713) 332-7001 www.crescentenergyco.com
Crescent Energy Company — Q2 2024 Earnings Presentation on 6ix