Crescent Energy Company · NYSE:CRGY
Crescent Energy — Q4 2022 Earnings Presentation
30 slides from Crescent Energy's earnings presentation, Mar 8, 2023
Slide 1: Solid Execution, Delivering Value
Solid Execution, Delivering Value March 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) $9.6 Bn Total Proved PV-10(1) Cash Flow Rockies ~45% of ‘23E Production 130 – 138 Mboe/d ‘23E Production • Substantial C
Slide 4: 2022 Recap: Executing Our Consistent Strategy
2022 Recap: Executing Our Consistent Strategy Substantial Large, Low Decline Cash Flow Generation Base Production $1,217 MM Adj. EBITDAX(1) 138 Mboe/d Production $484 MM Levered FCF(1) 58% Liquids Attractive Premier Return of Capital Balance Sheet $0.63/sh Annual Dividend(2) 1.0x Net LTM Leverage(1)
Slide 5: 2022 Recap: Executing Our Consistent Strategy (Cont'd)
2022 Recap: Executing Our Consistent Strategy (Cont’d) Scaling the • Strong year-over-year growth in production, cash flow and reserves Business • $9.6 BN of SEC PV-10(1) value • ~$1 BN of M&A transactions executed in the last 18 months Returns Focused • 2022 capital program below midpoint of guidan
Slide 6: 2023 Outlook: Committed to Long Term Value Creation
2023 Outlook: Committed to Long Term Value Creation Maintenance Program; Capex Down YoY (at the Midpoint) 2023 Guidance 2023 Capital Expenditures ($70 / Bbl WTI and $3.50 / MMbtu Henry Hub) Other (4) Non-Op D&C 5% Capital Full Year 2023 10% Expenditures $575 - $650 MM Total Production (Mboe/d) 130 -
Slide 7: Consistent Strategy Execution Over Last Decade
Consistent Strategy Execution Over Last Decade Current Past Decade (Average)(1) Commodity Prices Commodity Prices $80.16 / $3.52 $58.37 / $3.27 Leverage Leverage Strong Balance 1.0x 1.2x 1 Sheet (Long Term Target ≤1.0x) Decline Rate Decline Rate 22% <25% Low Decline 2 (Target <25% Reinvestment Rate
Slide 8: Capital Allocation Priorities
Capital Allocation Priorities Priority #1A Financial Strength 1.0x Net LTM Leverage(1) Priority #1B Returning Capital to Shareholders 10% of Adjusted EBITDAX(2) Returns-Driven Investing: A B Priority #2 Target >2.0x MOIC(3) and Short Payback Periods Development Capital Accretive Acquisitions A B #3
Slide 9: Balance Sheet: Financial Strength and Flexibility
Balance Sheet: Financial Strength and Flexibility Targeting Investment Grade Capitalization (12/31/22) Balance Sheet Metrics ($ in MM, unless noted) Actual Pro Forma ($MM) 12/31/2022 $400 MM HY • Large, low decline resource base with Cash & Cash Equivalents – – significant asset coverage RBL Borrowi
Slide 10: No Near-Term Debt Maturities
No Near-Term Debt Maturities Maturity Profile ($MM) $2,000 Borrowing Base $1,300 Elected Commitments $700 $400 $168 2023 2024 2025 2026 2027 2028 7.25% Senior Notes RBL Borrowings 9.25% Senior Notes CRESCENT ENERGY Note: As of 12/31/22 and pro forma the $400 MM aggregate principal amount of 9.25% se
Slide 11: Cash Returns to Shareholders: Leading Track Record
Cash Returns to Shareholders: Leading Track Record Dividend Yield Comparison(5) Return of Capital Strategy 14.2% Distributes 10% of Adj. EBITDAX(1) Consecutive 12.2% • Adj. EBITDAX-based(1) strategy 10 years reduces variability vs. FCF- of dividend payments(6) based alternatives • $0.17/sh dividend,
Slide 12: Scaled, Low Decline Assets Drive Sustainable FCF
Scaled, Low Decline Assets Drive Sustainable FCF First Year PDP Decline vs. Peers(1) Cash Flow Stability 41% 38% Through: 35% 35% 34% 33% 29% 29% • Low decline PDP base, 27% Peer Average: 29% 26% 24% which drives low 22% reinvestment rate 16% 9% • Flexible, returns-driven investments 1 2 3 4 5 6 7 8
Slide 13: Efficiencies Offsetting Inflation, Enhancing Margins
Efficiencies Offsetting Inflation, Enhancing Margins EGF: Lateral Length vs. Peers (ft)(1) Eagle Ford 12,000 ’2022-23 Program Average 10,000 • Longer laterals increase 8,000 margins and improve well 6,000 productivity 4,000 2,000 • Improved cycle times and 0 CRGY Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 P
Slide 14: Growth Through Accretive Acquisitions
Growth Through Accretive Acquisitions Opportunistic & Value- Consistent Strategy Since 2011(1) Oriented Acquisition Crescent Acquisitions Strategy 6 • Target cash-generative Average of ~4 assets in proven U.S. transactions per 4 year since 2012 onshore basins 3 • Focused on short payback period and
Slide 15: Reducing Our Emissions Impact
Reducing Our Emissions Impact Reduce absolute Scope 1 Maintain methane Joined the leading GHG Emissions emissions at current emissions intensity standard for reporting methane emissions Reduction operations by Targets 50% by 2027(1) <0.20% Replacing pneumatic devices and electrifying operations wh
Slide 16: Appendix
©) Crescent Energy Appendix
Slide 17: YE22 Proved Reserves Up 8% YoY
YE22 Proved Reserves Up 8% YoY 56% Liquids and 80% Proved Developed YE22 Proved Reserves Summary PV-10 ($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 $4,062 Proved Undeveloped 83 108 12 113 2,470 1,252
Slide 18: 2023 Eagle Ford Development Plan
2023 Eagle Ford Development Plan Asset Detail • 1 operated rig focused on Lower Eagle Ford Operated Eagle Non-Op Eagle Ford Ford Net Acres ~82,000 ~40,000 Atascosa and Dimmit, Webb Counties Frio and La Salle % HBP ~80% ~80% Operated 1 – Rigs 200 gross / 375 gross / Inventory(1) 190 net 90 net MOIC(2
Slide 19: 2023 Uinta Development Plan
2023 Uinta Development Plan Asset Detail • 1 operated rig focused on Uteland Butte and Wasatch Operated Uinta Net Acres ~145,000 Counties Duchesne and Uintah % HBP ~85% Operated Rigs 1 Inventory(1) 135 gross / 110 net MOIC(2) >2.0x % Oil ~65% Avg. WI / NRI ~85% / ~70% CRGY (Op) ’23 Avg. Lateral ~10,
Slide 20: 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 21: Our "Up-C" Organizational Structure
Our “Up-C” Organizational Structure The Diagram Below Depicts Our Organizational Structure Immediately Following the Closing of the Merger with Contango Oil & Gas Company • Up-C Investors and Crescent Energy Up-C Public Company (“PubCo”) hold units (“OpCo Investors Stockholders Units”) in an operati
Slide 22: 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 2/27/23) KKR & Co. KKR & Co. 16% 16% John Goff John Goff 6% 6% 169.5 MM 166.9 MM Total Shares Private Total
Slide 23: Hedge Position: Liquids
Hedge Position: Liquids Q1'23 Q2'23 Q3'23 Q4'23 FY 2023 FY 2024 NYMEX WTI (Bbls, $/Bbl) Swaps Total Volumes 2,847,146 2,486,465 2,234,242 2,142,463 9,710,316 5,721,460 Total Daily Volumes 31,635 27,324 24,285 23,288 26,604 15,632 WA Swap Price $59.53 $60.16 $60.29 $60.16 $60.00 $63.82 Collars Total
Slide 24: Hedge Position: Gas
Hedge Position: Gas Q1'23 Q2'23 Q3'23 Q4'23 FY 2023 FY 2024 NYMEX Henry Hub (MMBtu, $/MMBtu) Swaps Total Volumes 17,738,556 15,913,870 14,690,735 13,904,668 62,247,829 9,604,100 Total Daily Volumes 197,095 174,878 159,682 151,138 170,542 26,241 WA Swap Price $2.59 $2.55 $2.90 $2.92 $2.73 $4.14 Colla
Slide 25: Per Unit Performance
Per Unit Performance Year ended For the three months ended December 31, 2022 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Average daily net sales volumes: Oil (MBbls/d) 60 63 69 64 44 Natural gas (MMcf/d) 352 352 367 356 333 NGLs (MBbls/d) 19 18 20 20 20 Total (MBoe/d) 138 139 1
Slide 26: Adjusted EBITDAX & Levered Free Cash Flow
Adjusted EBITDAX & Levered Free Cash Flow Adjusted EBITDAX & Levered Free Cash Flow We define Adjusted EBITDAX as net income (loss) before interest expense, realized (gain) loss on interest rate derivatives, inco me tax expense, 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) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 (in thousands) Net income (loss) $49,360 $168,945 $480,600 ($432,227) Adjustments to reconcile to Adjusted EBITDAX: Interest expense 27,419 12,930 95,937 50,740 Realized (ga
Slide 28: 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. For purposes of the Cr
Slide 29: 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 30: Stay Connected.
Stay Connected. Emily Newport IR@crescentenergyco.com 600 Travis Street Suite 7200 Houston, Texas 77002 + 1 (713) 332-7001 www.crescentenergyco.com
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