Crescent Energy Company · NYSE:CRGY
Crescent Energy — Q1 2023 Earnings Presentation
33 slides from Crescent Energy's earnings presentation, May 11, 2023
Slide 1: Solid Execution, Delivering Value
Solid Execution, Delivering Value May 2023
Slide 2: Disclaimer
Disclaimer The information in this presentation relates to Crescent Energy Company (the “Company”) 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 Section 21E
Slide 3: A Differentiated U.S. Energy Company
A Differentiated U.S. Energy Company Acquire + Exploit Strategy that Combines an Investor Mindset and Deep Operational Expertise CRGY at a Glance $7.1 Bn Proved Developed PV-10(1) Cash Flow Rockies $9.6 Bn Total Proved PV-10(1) • Substantial Cash Flow ~45% of ‘23E Production 130 - 138 Mboe/d ‘23E Pr
Slide 4: Q1'23 Recap: Executing On Our Consistent Strategy
Q1’ 23 Recap: Executing On Our Consistent Strategy Substantial Large, Low Decline Cash Flow Generation Base Production $232 MM Adj. EBITDAX(1) 137 Mboe/d Production $928 MM Annualized Adj. EBITDAX(1)(2) 57% liquids Attractive Premier Return of Capital Balance Sheet $0.12/sh Cash Dividend(3) 1.0x Net
Slide 5: Q1'23 Recap: Executing On Our Consistent Strategy (Cont'd)
Q1’23 Recap: Executing On Our Consistent Strategy (Cont’d) • Produced 137 MBoe/d (57% liquids) Strong Q1 • Generated $232 MM of Adjusted EBITDAX(1) 2023 Performance • Operated one rig in the Eagle Ford and one rig in the Uinta; brought online 18 gross operated wells during the quarter Accretive West
Slide 6: Consistent Strategy Execution Over Last Decade
Consistent Strategy Execution Over Last Decade Current Past Decade (Average)(1) Commodity Prices Commodity Prices $79.31 / $2.32 $59.58 / $3.28 Leverage Leverage Strong Balance 1.0x 1.2x 1 Sheet (Long Term Target ≤1.0x) Decline Rate Decline Rate 22% <25% Low Decline 2 (Target <25% Reinvestment Rate
Slide 7: Opportunistic Acquisition with Significant Upside
Opportunistic Acquisition with Significant Upside Western Eagle Ford Acquisition Highlights Consistent Strategy Since 2011(1) Crescent Attractive purchase price, Acquisitions 6 immediately accretive to financial metrics Disciplined, opportunistic acquisition history 4 Enhances Eagle Ford scale a
Slide 8: Acquired High-Quality Inventory with Strong Recent Performance
Acquired High-Quality Inventory with Strong Recent Performance The Lower Eagle Ford Across the Acquired Assets is Some of the Highest Quality in the Basin, Driven by Exceptional Thickness and Pressure Asset Well Performance Over Time (EUR Boe / ft)(1) Total EUR / ft Oil EUR / ft Crescent non-consent
Slide 9: Expands Crescent's Proven Inventory and Resource Potential
Expands Crescent’s 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 Eagle Ford Uinta 60 - 80 Maintenance Low Risk Resource Program(1) Inventory Potenti
Slide 10: Efficiencies Offsetting Inflation, Enhancing Margins
Efficiencies Offsetting Inflation, Enhancing Margins EGF: Lateral Length vs. Peers (ft)(1) Eagle Ford 12,000 ’2022-23 Program Average 10,000 • Longer laterals increase 8,000 margins and improve well 6,000 productivity 4,000 2,000 • Improved cycle times and 0 CRGY Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 P
Slide 11: Capital Allocation Priorities
Capital Allocation Priorities Priority #1A Financial Strength 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 $0.12 per share A B Returns-Driven Investing: Priority #2 Target >2.0x MOIC(2) and
Slide 12: Balance Sheet: Financial Strength and Flexibility
Balance Sheet: Financial Strength and Flexibility Targeting Investment Grade Capitalization as of 3/31/23 Balance Sheet Metrics ($ in MM, unless noted) ($MM) 3/31/2023 Cash & Cash Equivalents $3 • Large, low decline resource base with significant asset coverage RBL Borrowings $164 7.25% Senior Notes
Slide 13: No Near-Term Debt Maturities
No Near-Term Debt Maturities Maturity Profile ($MM) $1,300 Elected Commitments $700 $400 $164 2023 2024 2025 2026 2027 2028 7.25% Senior Notes RBL Borrowings 9.25% Senior Notes CRESCENT ENERGY Note: As of 3/31/23. Does not include pending Western Eagle Ford bolt-on acquisition. 13
Slide 14: 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) 12.4% at Guidance Pricing Consecutive 10 years • Adj. EBITDAX-based(1) strategy of dividend payments(6) reduces variability vs. FCF- 9.1% based alternatives •
Slide 15: Scaled, Low Decline Assets Drive Sustainable FCF
Scaled, Low Decline Assets Drive Sustainable FCF First Year PDP Decline vs. Peers(1) Cash Flow Stability 44% Through: 40% Mesquite transaction improves Crescent’s decline rate to ~21% 34% 34% 34% 32% 32% 31% • Low decline PDP base, 25% Peer Average: 28% which drives low 22% 22% 21% 20% reinvestment
Slide 16: 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
Slide 17: Appendix
©) Crescent Energy Appendix
Slide 18: Acquisition Enhances Eagle Ford Scale and Operational Control
Acquisition Enhances Eagle Ford Scale and Operational Control Crescent is a Long-Standing Operator in the Eagle Ford with a Proven Ability to Scale and Capture Operational Upside Eagle Ford Key Metrics Gains Operatorship and Adds Incremental Working Interest in Asset Pro Increase / Acquisition Forma
Slide 19: Pro Forma Eagle Ford Asset Overview
Pro Forma Eagle Ford Asset Overview Asset Detail Operated Central Western Non-Op (Palo Verde) (Mesquite) 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 gross / 120 gross /
Slide 20: Uinta Asset Overview
Uinta Asset Overview 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 Avg. Lateral ~10,000’ CH4_Finley XCL High-value crude
Slide 21: Benefits From Our Low-Risk, Sustainable Asset Base
Benefits From Our Low-Risk, Sustainable Asset Base Low Decline Asset Base Diversification(1) Commodity Region Other Decline rate: ~10% 10% Stable production and cash flow Gas Oil 42% 45% Texas 45% Rockies Late Cycle 45% Low-Decline NGL 45% 13% Mid-Cycle Unconventional 55% Oil Basis Gas Basis WY/Othe
Slide 22: YE22 Proved Reserves (Excludes Western Eagle Ford Bolt-On)
YE22 Proved Reserves (Excludes Western Eagle Ford Bolt-On) 56% Liquids and 80% Proved Developed YE22 Proved Reserves Summary PV-10 ($MM) PV-10 ($MM) Reserve Category Oil (MMBbl) Gas (Bcf) NGL (MMBbl) Total (MMBoe) SEC(1)(2) NYMEX(1)(3) Proved Developed 160 1,399 67 460 $7,132 $3,715 Proved Undevelop
Slide 23: Minerals Portfolio Provides Upside
Minerals Portfolio Provides Upside • High margin and free cash DJ Basin (~13K NRAs) Minerals Overview Marcellus flow generation with no (~27K NRAs) ongoing capital requirement • ~72,000 NRAs in high quality basins(1) • Exposure to best-in-class Utica (~6K NRAs) operators by basin Eagle Ford (~11K NR
Slide 24: Strong Equity Support from Large Existing Shareholders
Strong Equity Support from Large Existing Shareholders KKR and John Goff are stated long-term holders of the stock – 22% Combined Ownership CRGY Ownership CRGY Ownership (as of 7/31/22) (as of 3/31/23) KKR & Co. KKR & Co. 16% 16% John Goff John Goff 6% 6% 169.5 MM 166.9 MM Total Shares Private Total
Slide 25: 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
Slide 26: Hedge Position: Liquids
Hedge Position: Liquids Q2'23 Q3'23 Q4'23 Q2-Q4 2023 FY 2024 FY 2025(1) NYMEX WTI (Bbls, $/Bbl) Swaps Total Volumes 2,486,465 3,154,242 3,062,463 8,703,170 10,201,460 -- Total Daily Volumes 27,324 34,285 33,288 31,648 27,873 -- WA Swap Price $60.16 $63.16 $63.16 $62.30 $65.72 -- Collars Total Volume
Slide 27: Hedge Position: Gas
Hedge Position: Gas Q2'23 Q3'23 Q4'23 Q2-Q4 2023 FY 2024 NYMEX Henry Hub (MMBtu, $/MMBtu) Swaps Total Volumes 15,913,870 14,690,735 13,904,668 44,509,273 9,604,100 Total Daily Volumes 174,878 159,682 151,138 161,852 26,241 WA Swap Price $2.55 $2.90 $2.92 $2.78 $4.14 Collars Total Volumes -- -- -- --
Slide 28: Per Unit Performance
Per Unit Performance For the three months ended March 31, 2023 March 31, 2022 December 31, 2022 Average daily net sales volumes: Oil (MBbls/d) 59 44 63 Natural gas (MMcf/d) 351 333 352 NGLs (MBbls/d) 19 20 18 Total (MBoe/d) 137 120 139 Average realized prices, before effects of derivative settlement
Slide 29: 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
Slide 30: Adjusted EBITDAX & Levered Free Cash Flow (Cont'd)
Adjusted EBITDAX & Levered Free Cash Flow (Cont’d) For the three months ended March 31, 2023 March 31, 2022 (in thousands) Net income (loss) $ 255,611 $ (406,007) Adjustments to reconcile to Adjusted EBITDAX: Interest expense 29,320 16,524 Income tax expense (benefit) 16,360 (21,725) Depreciation, d
Slide 31: 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 32: 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(1). Management bel
Slide 33: 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 — Q1 2023 Earnings Presentation on 6ix