Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): December 5, 2023

Crescent Energy Company

(Exact Name of Registrant as Specified in its Charter)


Delaware	001-41132	87-1133610
(State or Other Jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number

600 Travis Street, Suite 7200

Houston, Texas

77002

(Address of Principal Executive Office)

(Zip Code)

(713) 337-4600

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	CRGY	The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.

Results of Operations and Financial Condition.

Notes Offering

On December 5, 2023, in connection with the Notes Offering (as defined below), Crescent Energy Company (NYSE: CRGY) (the “Company” or “our,” “us,” or “we”) provided certain updated disclosures to potential investors, the relevant excerpts of which are set forth below in Item 8.01.

Pro Forma Financial Statements

As reported in a Current Report on Form 8-K filed on July 10, 2023, as amended on a Form 8-K/A filed on September 6, 2023, on July 3, 2023, the Company consummated the previously announced acquisition contemplated by the Purchase and Sale Agreement dated as of May 2, 2023, by and among Javelin EF L.P. (the “Purchaser”), a subsidiary of the Company, Mesquite Comanche Holdings, LLC (“Comanche Holdings”) and SN EF Maverick, LLC (“SN EF Maverick,” and collectively with Comanche Holdings, the “Seller”), pursuant to which the Purchaser agreed to acquire from the Seller certain interests in oil and gas properties, rights and related assets (such transactions contemplated by the Purchase Agreement, collectively, the “July Western Eagle Ford Acquisition”).

This Current Report on Form 8-K provides pro forma statements of operations of the Company, as described in Item 8.01 below and which are incorporated into this Item 2.02 by reference, giving effect to the July Western Eagle Ford Acquisition as if it has been consummated on January 1, 2022. This Current Report on Form 8-K should be read in connection with the Company’s July 10 and September 6 filings referenced above, which together provide a more complete description of the July Western Eagle Ford Acquisition.

In addition, to the extent required, the information contained in Item 8.01 of this Current Report on Form 8-K is incorporated into this Item 2.02 by reference.

The information in this Item 2.02 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

Item 7.01.

Regulation FD Disclosure.

On December 5, 2023, Crescent Energy Finance LLC (“CE Finance”), a subsidiary of the Company, issued a news release announcing that, subject to market conditions, CE Finance intends to offer (the “Notes Offering”) for sale in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), to eligible purchasers $150 million aggregate principal amount of its 9.250% Senior Notes due 2028 (the “Notes”). The Notes are being offered as additional notes under the indenture dated as of February 1, 2023 (the “Base Indenture”), as supplemented by the first supplemental indenture dated as of July 20, 2023 (the “First Supplemental Indenture”) and the second supplemental indenture dated as of September 12, 2023 (the “Second Supplemental Indenture” and, collectively with the First Supplemental Indenture and the Base Indenture, the “Indenture”), pursuant to which the Issuer has previously issued $850 million aggregate principal amount of 9.250% Senior Notes due 2028 (the “Existing Notes”). The Notes will have substantially identical terms, other than the issue date, issue price and first payment date, as the Existing Notes, and the Notes and the Existing Notes will be treated as a single series of securities under the Indenture and will vote together as a single class. A copy of the news release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

In addition, the information contained in Item 8.01 of this Current Report on Form 8-K is incorporated into this Item 7.01 by reference.

The information contained in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act, or the Exchange Act.

Item 8.01

Other Events.

Pro Forma Financial Statements

The following unaudited pro forma condensed combined financial information of the Company, giving effect to the July Western Eagle Ford Acquisition, is attached as Exhibit 99.2 hereto:

•

Unaudited Pro Forma Condensed Combined Statement of Operations for the Nine Months Ended September 30, 2023

•

Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2022

•

Notes to unaudited pro forma condensed combined financial statements

Notes Offering

On December 5, 2023, in connection with the Notes Offering, the Company provided certain updated disclosures to potential investors, the relevant excerpts of which are set forth below.

******

As of October 31, 2023, we had $223.0 million of outstanding borrowings under the Revolving Credit Facility, resulting in $1,065.6 million of remaining availability thereunder.

******

Summary reserve data based on NYMEX pricing

The following table provides our historical reserves, PV-0 and PV-10 as of December 31, 2022 for Crescent Energy Company and the reserves acquired in the transaction with an unaffiliated third party, pursuant to which the Company acquired certain interests in oil and gas properties, rights and related assets primarily located in Dimmit and Webb Counties, Texas (the “August Western Eagle Ford Acquisition”) and the July Western Eagle Ford Acquisition using NYMEX pricing. The August Western Eagle Ford Acquisition and the July Western Eagle Ford Acquisition are together referred to as the “Western Eagle Ford Acquisitions”). We have included this reserve sensitivity in order to provide an additional method of presentation of the fair value of our assets and the cash flows that we expect to generate from those assets based on the market’s forward-looking pricing expectations as of November 30, 2023. The reserve estimates prepared with respect to the reserves associated with each of the Western Eagle Ford Acquisitions are based on reserve reports prepared by Ryder Scott and reflect data associated with operations by the prior operator. The historical 12-month pricing average in our 2022 disclosures under the heading “—Summary reserve data based on SEC pricing” does not reflect the oil and natural gas futures. We believe that the use of forward prices provides investors with additional useful information about our reserves, as the forward prices are based on the market’s forward-looking expectations of oil and natural gas prices as of a certain date, although we caution investors that this information should be viewed as a helpful alternative, not a substitute, for the data presented based on SEC pricing. In addition, we believe strip pricing provides relevant and useful information because it is widely used by investors in our industry as a basis for comparing the relative size and value of our proved reserves to our peers and in particular addresses the impact of differentials compared with our peers. Our estimated historical reserves, PV-0 and PV-10 based on NYMEX pricing, were otherwise prepared on the same basis as our estimations based on SEC pricing reserves for the comparable period. Reserve estimates using NYMEX pricing are calculated using the internal systems of our management and have not been prepared or audited by an independent, third-party reserve engineer, but otherwise contain the same parameters, except for price and minor system differences.


	Crescent Energy Company		Western Eagle Ford Acquisitions
	As of December 31, 2022(1)
Net Proved Reserves:
Oil (MBbls)		216,815		44,712
Natural gas (MMcf)		1,406,649		283,802
NGLs (MBbls)		68,642		45,707
Total Proved Reserves (MBoe)		519,898		137,719
PV-0 (millions) (2)	$	8,236	$	1,932
PV-10 (millions) (2)	$	4,874	$	1,106
Net Proved Developed Reserves:
Oil (MBbls)		135,826		33,216
Natural gas (MMcf)		1,302,044		229,492
NGLs (MBbls)		57,149		36,960
Total Proved Developed Reserves (MBoe)		409,982		108,425
PV-0 (millions) (2)	$	5,706	$	1,607
PV-10 (millions) (2)	$	3,647	$	1,014
Net Proved Undeveloped Reserves:
Oil (MBbls)		80,989		11,496
Natural gas (MMcf)		104,605		54,310
NGLs (MBbls)		11,493		8,747
Total Proved Undeveloped Reserves (MBoe)		109,916		29,294
PV-0 (millions) (2)	$	2,530	$	326
PV-10 (millions) (2)	$	1,227	$	91

(1)

Our NYMEX reserves, PV-0 and PV-10 were determined using NYMEX pricing, without giving effect to derivative transactions and were calculated based on settlement prices to better reflect the market expectations as of that date, as adjusted for our estimates of quality, transportation fees, and market differentials. The NYMEX reserves calculations are based on NYMEX pricing at closing on November 30, 2023 for oil and natural gas. The average adjusted product prices over the remaining lives of the properties are $64.88 per barrel of oil, $3.26 per Mcf of natural gas and $27.44 per barrel of NGLs as of December 31, 2022 for Crescent Energy Company. The average adjusted product prices over the remaining lives of the properties are $65.38 per barrel of oil, $3.82 per Mcf of natural gas and $30.35 per barrel of NGLs as of December 31, 2022 for the Western Eagle Ford Acquisitions. We believe that the use of forward prices provides investors with additional useful information about our reserves, as the forward prices are based on the market’s forward-looking expectations of oil and natural gas prices as of a certain date, although we caution investors that this information should be viewed as a helpful alternative, not as a substitute, for the data presented based on SEC pricing. See “Risk factors.”

(2)

Present value (discounted at PV-0 and PV-10) is not a financial measure calculated in accordance with GAAP because it does not include the effects of income taxes on future net revenues. Neither PV-0 nor PV-10 represent an estimate of the fair market value of our oil and natural gas properties. Our PV-0 measurement does not provide a discount rate to estimated future cash flows. PV-0 therefore does not reflect the risk associated with future cash flow projections like PV-10 does. PV-0 should therefore only be evaluated in connection with an evaluation of our PV-10 of discounted future net cash flows. We believe that the presentation of PV-0 and PV-10 is relevant and useful to our investors about the future net cash flows of our reserves in the absence of a comparable measure such as standardized measure. We and others in our industry use PV-0 and PV-10 as a measure to compare the relative size and value of proved reserves held by companies without regard to the specific tax characteristics of such entities. Investors should be cautioned that neither of PV-0 and PV-10 represent an estimate of the fair market value of our proved reserves. GAAP does not prescribe any corresponding measure for PV-10 of reserves based on pricing other than SEC pricing. As a result, it is not practicable for us to reconcile our PV-10 using NYMEX pricing to standardized measure as determined in accordance with GAAP.

******

This Item 8.01 incorporates by reference the information contained in Item 2.02 of this Current Report on Form 8-K.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.


Exhibit		Description

99.1		Press Release, dated December 5, 2023.

99.2		Unaudited pro forma condensed combined financial statements for the nine months ended September 30, 2023 and the year ended December 31, 2022.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, CRGY has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 5, 2023


CRESCENT ENERGY COMPANY

By:		/s/ Bo Shi
Name:		Bo Shi
Title:		General Counsel

Exhibit 99.1

LOGO

Crescent Energy Announces Offering of $150 Million Private Placement of Additional 9.250% Senior Notes Due 2028

December 05, 2023

HOUSTON, TX – (BUSINESS WIRE) – Crescent Energy Company (NYSE: CRGY) (“we” or “our”) announced today that, subject to market conditions, its indirect subsidiary Crescent Energy Finance LLC (the “Issuer”) intends to offer for sale in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), to eligible purchasers $150 million aggregate principal amount of 9.250% Senior Notes due 2028 (the “Notes”). The Notes are being offered as additional notes under the indenture dated as of February 1, 2023, as previously supplemented (the “Indenture”), pursuant to which the Issuer has previously issued $850 million aggregate principal amount of 9.250% Senior Notes due 2028 (the “Existing Notes”). The Notes will have substantially identical terms, other than the issue date, issue price and first payment date, as the Existing Notes, and the Notes and the Existing Notes will be treated as a single series of securities under the Indenture and will vote together as a single class. The Notes mature on February 15, 2028 and pay interest at the rate of 9.250% per year, payable on February 15 and August 15 of each year, with interest payments on the Notes commencing on February 15, 2024. The Issuer intends to use the net proceeds from this offering to repay a portion of the amounts outstanding under its revolving credit facility.

The Notes and the related guarantees have not been registered under the Securities Act, or any state securities laws, and, unless so registered, the Notes and the guarantees may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Issuer plans to offer and sell the Notes only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S under the Securities Act.

This communication shall not constitute an offer to sell, or the solicitation of an offer to buy, the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Crescent Energy Company

Crescent Energy Company is a U.S. independent energy company with a portfolio of assets in basins across the lower 48 states.

Cautionary Statement Regarding Forward-Looking Information

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on current expectations. The words and phrases “should”, “could”, “may”, “will”, “believe”, “think”, “plan”, “intend”, “expect”, “potential”, “possible”, “anticipate”, “estimate”, “forecast”, “view”, “efforts”, “target”, “goal” and similar expressions identify forward-looking statements and express our expectations about future events. This communication includes statements regarding this private placement and the use of proceeds therefrom that may contain forward-looking statements within the meaning of federal securities laws. We believe that our expectations are based on reasonable assumptions; however, no assurance can be given that such expectations will prove to be correct. A number of factors could cause actual results to differ materially from the expectations, anticipated results or other forward-looking information expressed in this communication, including weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, uncertainties inherent in estimating natural gas and oil reserves and in projecting future rates of production; our hedging strategy and results, federal and state regulations and laws, the impact of pandemics such as COVID-19, actions by the Organization of the Petroleum Exporting Countries (“OPEC”) and non-OPEC oil-producing countries, including recent production cuts by OPEC, the impact of armed conflicts, including in and around

Ukraine and Israel, the impact of disruptions in the banking industry and capital markets, the timing and success of business development efforts, including acquisition and disposition opportunities, our reliance on external manager, cost inflation and central bank policy changes associated therewith and other uncertainties. All statements, other than statements of historical facts, included in this communication that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially from our expectations due to a number of factors, including, but not limited to, those items identified as such in the most recent Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q and the risk factors described thereunder, filed by Crescent Energy Company with the U.S. Securities and Exchange Commission.

Many of such risks, uncertainties and assumptions are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. We do not give any assurance (1) that we will achieve our expectations or (2) concerning any result or the timing thereof.

All subsequent written and oral forward-looking statements concerning this offering, the use of proceeds therefrom, Crescent Energy Company and the Issuer or other matters and attributable thereto or to any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. We assume no duty to update or revise these forward-looking statements based on new information, future events or otherwise.

Contacts

Emily Newport

IR@crescentenergyco.com

Source: Crescent Energy

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On July 3, 2023, Javelin EF L.P. (the “Purchaser”), a subsidiary of Crescent Energy Company (“Crescent” or the “Company”), consummated the acquisition contemplated by the Purchase and Sale Agreement (the “Western Eagle Ford Acquisition Agreement”), dated as of May 2, 2023, with Mesquite Comanche Holdings, LLC (“Comanche Holdings”) and SN EF Maverick, LLC (“SN EF Maverick,” and together with Comanche Holdings, the “Seller”), pursuant to which the Purchaser acquired from the Seller certain interests in oil and gas properties, rights and related assets in the Western Eagle Ford basin (the “July Western Eagle Ford Assets”) for aggregate cash consideration of $592.7 million, including capitalized transaction costs and certain final settlement statement adjustments (the “July Western Eagle Ford Acquisition”). The cash purchase price was funded by borrowings under the Revolving Credit Facility (the “Acquisition Borrowings”), which represented the purchase price, after purchase price adjustments less a $60.0 million deposit funded by borrowings under the Revolving Credit Facility made at signing on May 2, 2023 (the “Acquisition Deposit”).

The unaudited pro forma condensed combined statements of operations (the “pro forma statements of operations”) have been prepared from the historical consolidated financial statements of Crescent for the nine months ended September 30, 2023 and for the year ended December 31, 2022 and the statements of revenues and direct operating expenses of the July Western Eagle Ford Assets for the period from January 1, 2023 through July 2, 2023 and for the year ended December 31, 2022, adjusted to give effect to the July Western Eagle Ford Acquisition as if it had been consummated on January 1, 2022.

The following unaudited pro forma condensed combined financial statements (the “pro forma financial statements”) are based on, and should be read in conjunction with:

•

the historical unaudited consolidated financial statements of Crescent for the three and nine months ended September 30, 2023 included in the Company’s Quarterly Report on Form 10-Q and the historical audited combined and consolidated financial statements of Crescent for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K and

•

the statements of revenues and direct operating expenses of the July Western Eagle Ford Assets for the six months ended June 30, 2023 and for the year ended December 31, 2022 included as Exhibit 99.1 in the Company’s Current Report on Form 8-K/A dated September 6, 2023.

The pro forma financial statements were derived by making certain transaction accounting adjustments to the historical financial statements noted above. The adjustments are based on currently available information and certain estimates and assumptions. Therefore, the actual impact of the July Western Eagle Ford Acquisition may differ from the adjustments made to the pro forma financial statements. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects for the periods presented as if the July Western Eagle Ford Acquisition had been consummated earlier, and that all adjustments necessary to present fairly the pro forma financial statements have been made. The pro forma adjustments have been made solely for the purpose of providing the unaudited pro forma financial statements presented below.

The pro forma financial statements and related notes are presented for illustrative purposes only and should not be relied upon as an indication of the financial condition or the operating results that the Company would have achieved if the Western Eagle Ford Acquisition Agreement had been entered into and the July Western Eagle Ford Acquisition had taken place on the assumed dates. The pro forma financial statements do not reflect future events that may occur after the consummation of the July Western Eagle Ford Acquisition, including, but not limited to, the anticipated realization of ongoing savings from potential operating efficiencies, asset dispositions, cost savings, or economies of scale that the Company may achieve with respect to the combined operations. As a result, future results may vary significantly from the results reflected in the pro forma financial statements and should not be relied on as an indication of the financial position or future results of the Company.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2023

(in thousands, except per share data)


	Crescent (Historical)			July Western Eagle Ford Assets (Historical)		Transaction Adjustments			Crescent Pro Forma Combined
Revenues:
Oil	$	1,270,244		$	109,588	$	—		$	1,379,832
Natural gas		286,172			17,225		—			303,397
Natural gas liquids		131,098			23,144		—			154,242
Midstream and other		37,360			—		(6,717	)(a)		30,643

Total revenues		1,724,874			149,957		(6,717	)		1,868,114
Expenses:
Lease operating expense		364,796			28,654		—			393,450
Workover expense		47,402			—		—			47,402
Asset operating expense		65,206			—		—			65,206
Gathering, transportation and marketing		160,650			52,540		(6,717	)(a)		206,473
Production and other taxes		116,223			8,390		—			124,613
Depreciation, depletion and amortization		492,879			—		22,778	(b)		515,657
Exploration expense		1,541			—		—			1,541
Midstream and other operating expense		13,803			—		—			13,803
General and administrative expense		106,235			—		—			106,235
Gain on sale of assets		—			—		—			—

Total expenses		1,368,735			89,584		16,061			1,474,380

Income (loss) from operations		356,139			60,373		(22,778	)		393,734
Other income (expense):
Gain (loss) on derivatives		(68,211	)		—		—			(68,211	)
Interest expense		(102,648	)		—		(21,093	)(c)		(123,741	)
Other income (expense)		1,206			—		—			1,206
Income from equity affiliates		396			—		—			396

Total other income (expense)		(169,257	)		—		(21,093	)		(190,350	)

Income before taxes		186,882			60,373		(43,871	)		203,384
Income tax expense		(4,899	)		—		(1,077	)(d)		(5,976	)

Net income		181,983			60,373		(44,948	)		197,408
Less: net income attributable to noncontrolling interests		(453	)		—		—			(453	)
Less: net income attributable to redeemable noncontrolling interests		(169,455	)		—		(10,737	)(e)		(180,192	)

Net income attributable to Crescent Energy	$	12,075		$	60,373	$	(55,685	)	$	16,763

Net income per share:
Class A common stock – basic	$	0.21							$	0.29	(f)
Class A common stock – diluted	$	0.21							$	0.29	(f)
Class B common stock – basic and diluted	$	—							$	—
Weighted average common shares outstanding:
Class A common stock – basic		58,663								58,663
Class A common stock – diluted		59,142								59,142
Class B common stock – basic and diluted		109,244								109,244

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2022

(in thousands, except per share data)


	Crescent (Historical)			July Western Eagle Ford Assets (Historical)		Transaction Adjustments			Crescent Pro Forma Combined
Revenues:
Oil	$	1,969,070		$	273,827	$	—		$	2,242,897
Natural gas		766,962			98,765		—			865,727
Natural gas liquids		268,192			80,964		—			349,156
Midstream and other		52,841			—		(14,426	)(a)		38,415

Total revenues		3,057,065			453,556		(14,426	)		3,496,195
Expenses:
Lease operating expense		438,753			46,411		—			485,164
Workover expense		66,864			—		—			66,864
Asset operating expense		78,709			—		—			78,709
Gathering, transportation and marketing		177,078			117,566		(14,426	)(a)		280,218
Production and other taxes		238,381			24,547		—			262,928
Depreciation, depletion and amortization		532,926			—		46,557	(b)		579,483
Impairment expense		142,902			—		—			142,902
Exploration expense		3,425			—		—			3,425
Midstream and other operating expense		13,513			—		—			13,513
General and administrative expense		84,990			—		—			84,990
Gain on sale of assets		(4,641	)		—		—			(4,641	)

Total expenses		1,772,900			188,524		32,131			1,993,555

Income (loss) from operations		1,284,165			265,032		(46,557	)		1,502,640
Other income (expense):
Gain (loss) on derivatives		(676,902	)		—		—			(676,902	)
Interest expense		(95,937	)		—		(27,350	)(c)		(123,287	)
Other income (expense)		949			—		—			949
Income from equity affiliates		4,616			—		—			4,616

Total other income (expense)		(767,274	)		—		(27,350	)		(794,624	)

Income before taxes		516,891			265,032		(73,907	)		708,016
Income tax expense		(36,291	)		—		(12,263	)(d)		(48,554	)

Net income		480,600			265,032		(86,170	)		659,462
Less: net income attributable to noncontrolling interests		(2,669	)		—		—			(2,669	)
Less: net income attributable to redeemable noncontrolling interests		(381,257	)		—		(141,436	)(e)		(522,693	)

Net income attributable to Crescent Energy	$	96,674		$	265,032	$	(227,606	)	$	134,100

Net income per share:
Class A – basic	$	2.20							$	3.06	(f)
Class A – diluted	$	2.20							$	3.06	(f)
Class B – basic and diluted	$	—							$	—
Weighted average common shares outstanding:
Class A – basic		43,865								43,865
Class A – diluted		44,112								44,112
Class B – basic and diluted		124,857								124,857

Notes to unaudited pro forma condensed combined financial statements

NOTE 1 – Basis of pro forma presentation

The pro forma financial statements have been derived from the historical financial statements of Crescent and the statements of revenues and direct operating expenses for the July Western Eagle Ford Assets. The pro forma statements of operations for the nine months ended September 30, 2023 and for the year ended December 31, 2022 give effect to the July Western Eagle Ford Acquisition as if it occurred on January 1, 2022.

The statements of revenues and direct operating expenses for the July Western Eagle Ford Assets, which are being presented in accordance with Article 3-05 of Regulation S-X, represent abbreviated financial statements that include less information about the historical business associated with the July Western Eagle Ford Assets or about our current and future results as the owner of the July Western Eagle Ford Assets than full financial statements. For example, the statements of revenues and direct operating expenses do not include information about capital structure, interest expense, entity-level taxes, or depreciation, depletion and amortization and certain overhead recoveries allowed for under our joint operating agreements.

The pro forma financial statements reflect pro forma adjustments that are based on available information and certain assumptions that management believes are reasonable. However, actual results may differ from those reflected in these statements. In management’s opinion, all adjustments known to date that are necessary to fairly present the pro forma information have been made. The pro forma financial statements do not purport to represent what the combined entity’s results of operations would have been if the July Western Eagle Ford Acquisition had actually occurred on January 1, 2022, nor are they indicative of Crescent’s future results of operations.

These pro forma financial statements should be read in conjunction with Crescent’s historical financial statements for the three and nine months ended September 30, 2023 and for the year ended December 31, 2022 included in the Company’s Quarterly Report on Form 10-Q and Annual Report on Form 10-K, respectively.

NOTE 2 – Pro forma acquisition accounting

In July 2023, we consummated the acquisition contemplated by the Western Eagle Ford Acquisition Agreement, pursuant to which we acquired the July Western Eagle Ford Assets for aggregate consideration of $592.7 million, including capitalized transaction costs and certain final settlement statement adjustments. The Acquisition Borrowings were funded using Crescent’s Revolving Credit Facility. The July Western Eagle Ford Acquisition was accounted for as an asset acquisition. The pro forma purchase price allocation is as follows:


(in thousands)	July Western Eagle Ford Acquisition
Cash consideration paid	$	587,346
Transaction costs incurred		5,389

Purchase consideration	$	592,735

Assets acquired and liabilities assumed:
Oil and natural gas properties – proved	$	589,869
Oil and natural gas properties – unproved		22,117
Other current assets		2,682
Accrued liabilities		(4,630	)
Minimum volume commitments		(6,762	)
Asset retirement obligations		(10,541	)

Net assets acquired	$	592,735

NOTE 3 – Adjustments to the pro forma financial statements

The pro forma financial statements have been prepared to illustrate the effect of the July Western Eagle Ford Acquisition and have been prepared for informational purposes only.

The preceding pro forma financial statements have been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaced the previous pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and allows for supplemental disclosure of the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management Adjustments”). Management has elected not to disclose Management Adjustments.

Pro forma statements of operations adjustments

The adjustments included in the pro forma statements of operations for the nine months ended September 30, 2023 and for the year ended December 31, 2022 are as follows:

(a)	Reflects the elimination of intercompany transactions for gathering, transportation and marketing between Crescent and the July Western Eagle Ford Assets.

(b)	Reflects the pro forma depletion expense calculated in accordance with the successful efforts method of accounting for oil and gas properties totaling $22.8 million and $46.6 million for the nine months ended September 30, 2023 and for the year ended December 31, 2022, respectively.

(c)	Reflects the pro forma interest expense related to borrowings to fund the transaction purchase consideration of $21.1 million and $27.4 million for the nine months ended September 30, 2023 and for the year ended December 31, 2022, respectively.

(d)

Reflects the income tax effect of the pro forma adjustments presented. The tax rate applied to the pro forma adjustments was the estimated combined federal and state statutory rate, after the effect of noncontrolling interests, of 6.5% and 6.4% for the nine months ended September 30, 2023 and for the year ended December 31, 2022, respectively. The effective rate of the Company could be significantly different (either higher or lower) depending on a variety of factors.

(e)	Reflects the impact of the allocation of net income attributable to redeemable noncontrolling interests for the portion of Crescent Energy OpCo LLC not owned by Crescent.

(f)	Reflects the impact of the allocation of net income attributable to Crescent on the computation of basic and diluted net income (loss) per share.

Note that the above adjustments do not include amounts for certain overhead recoveries associated with the joint operating agreements that we expect to collect as operator of the July Western Eagle Ford Acquisition assets.

NOTE 4 – Supplemental pro forma oil and natural gas reserves information

Oil and natural gas reserves

The following tables present the estimated pro forma combined net proved developed and undeveloped oil, natural gas, and NGLs reserves information as of December 31, 2022 for our consolidated operations, along with a summary of changes in quantities of net remaining proved reserves for the year ended December 31, 2022 for our consolidated operations. Immaterial amounts for proved developed oil, natural gas, and NGL reserves of our equity affiliates totaling 3,665 MBoe as of December 31, 2021 have been omitted from presentation below. Our equity affiliates had no proved oil, natural gas, and NGL reserves as of December 31, 2022. The estimates below are in certain instances presented on a “barrels of oil equivalent or “Boe” basis. To determine Boe in the following tables, natural gas is converted to a crude oil equivalent at the ratio of six Mcf of natural gas to one barrel of crude oil equivalent.

The pro forma oil and natural gas reserves information is not necessarily indicative of the results that might have occurred had the July Western Eagle Ford Acquisition been completed on January 1, 2022 and is not intended to be a projection of future results. Future results may vary significantly from the results reflected because of various factors, including those discussed in “Risk Factors” included in the Company’s Annual Report on Form 10-K.


	Oil and Condensate (MBbls)
	Crescent (Historical)			July Western Eagle Ford Assets (Historical)			Crescent Pro Forma Combined
Proved Developed and Undeveloped Reserves as of:
December 31, 2021		210,160			32,162			242,322
Revisions of previous estimates		(18,859	)		2,297			(16,562	)
Extensions, discoveries, and other additions		37,208			889			38,097
Sales of reserves in place		(6,006	)		—			(6,006	)
Purchases of reserves in place		42,444			—			42,444
Production		(21,865	)		(2,877	)		(24,742	)

December 31, 2022		243,082			32,471			275,553

Proved Developed Reserves as of:
December 31, 2021		158,091			23,152			181,243
December 31, 2022		160,113			23,237			183,350
Proved Undeveloped Reserves as of:
December 31, 2021		52,069			9,010			61,079
December 31, 2022		82,969			9,234			92,203


	Natural Gas (MMcf)
	Crescent (Historical)			July Western Eagle Ford Assets (Historical)			Crescent Pro Forma Combined
Proved Developed and Undeveloped Reserves as of:
December 31, 2021		1,469,953			174,155			1,644,108
Revisions of previous estimates		(14,815	)		19,544			4,729
Extensions, discoveries, and other additions		60,312			2,134			62,446
Sales of reserves in place		(19,365	)		—			(19,365	)
Purchases of reserves in place		138,920			—			138,920
Production		(128,470	)		(15,208	)		(143,678	)

December 31, 2022		1,506,535			180,625			1,687,160

Proved Developed Reserves as of:
December 31, 2021		1,404,570			137,758			1,542,328
December 31, 2022		1,398,770			146,228			1,544,998
Proved Undeveloped Reserves as of:
December 31, 2021		65,383			36,397			101,780
December 31, 2022		107,765			34,397			142,162

	NGLs (MBbls)
	Crescent (Historical)			July Western Eagle Ford Assets (Historical)			Crescent Pro Forma Combined
Proved Developed and Undeveloped Reserves as of:
December 31, 2021		76,493			29,361			105,854
Revisions of previous estimates		4,167			848			5,015
Extensions, discoveries, and other additions		7,751			333			8,084
Sales of reserves in place		(2,680	)		—			(2,680	)
Production		(7,110	)		(2,365	)		(9,475	)

December 31, 2022		78,621			28,177			106,798

Proved Developed Reserves as of:
December 31, 2021		66,402			23,213			89,615
December 31, 2022		66,803			22,811			89,614
Proved Undeveloped Reserves as of:
December 31, 2021		10,091			6,148			16,239
December 31, 2022		11,818			5,366			17,184

	Total (MBoe)
	Crescent (Historical)			July Western Eagle Ford Assets (Historical)			Crescent Pro Forma Combined
Proved Developed and Undeveloped Reserves as of:
December 31, 2021		531,645			90,549			622,194
Revisions of previous estimates		(17,158	)		6,401			(10,757	)
Extensions, discoveries, and other additions		55,011			1,578			56,589
Sales of reserves in place		(11,915	)		—			(11,915	)
Purchases of reserves in place		65,597			—			65,597
Production		(50,387	)		(7,776	)		(58,163	)

December 31, 2022		572,793			90,752			663,545

Proved Developed Reserves as of:
December 31, 2021		458,588			69,325			527,913
December 31, 2022		460,046			70,419			530,465
Proved Undeveloped Reserves as of:
December 31, 2021		73,057			21,224			94,281
December 31, 2022		112,747			20,333			133,080

Standardized measure of discounted future net cash flows

The following tables present the estimated pro forma standardized measure of discounted future net cash flows (the “pro forma standardized measure”) at December 31, 2022. The pro forma standardized measure information set forth below gives effect to the July Western Eagle Ford Acquisition as if it had been completed on January 1, 2022. Transaction Adjustments reflect adjustments related to the tax effects resulting from the July Western Eagle Ford Acquisition. An explanation of the underlying methodology applied, as required by SEC regulations, can be found within the historical financial statements included in the Company’s Annual Report on Form 10-K. The calculations assume the continuation of existing economic, operating and contractual conditions at December 31, 2022.

The pro forma standardized measure is not necessarily indicative of the results that might have occurred had the July Western Eagle Ford Acquisition been completed on January 1, 2022 and is not intended to be a projection of future results. Future results may vary significantly from the results reflected because of various factors, including those discussed in “Risk Factors” included in the Company’s Annual Report on Form 10-K.

The pro forma standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves of our consolidated operations as of December 31, 2022 is as follows:


	(in thousands)
	Crescent (Historical)			July Western Eagle Ford Assets (Historical)			Transaction Adjustments			Crescent Pro Forma Combined
Future cash inflows	$	33,628,495		$	5,278,786		$	—		$	38,907,281
Future production costs		(14,077,136	)		(2,360,128	)		—			(16,437,264	)
Future development costs ⁽¹⁾		(2,380,931	)		(312,143	)		—			(2,693,074	)
Future income taxes		(773,479	)		—			(122,955	)		(896,434	)

Future net cash flows		16,396,949			2,606,515			(122,955	)		18,880,509
Annual discount of 10% for estimated timing		(7,262,283	)		(1,446,203	)		68,221			(8,640,265	)

Standardized measure of discounted future net cash flows as of December 31, 2022	$	9,134,666		$	1,160,312		$	(54,734	)	$	10,240,244

(1)	Future development costs include future abandonment and salvage costs.

Changes in standardized measure

The changes in the pro forma standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves of our consolidated operations for the year ended December 31, 2022 are as follows:


	(in thousands)
	Crescent (Historical)			July Western Eagle Ford Assets (Historical)			Transaction Adjustments			Crescent Pro Forma Combined
Balance at December 31, 2021	$	4,958,300		$	665,847		$	(31,409	)	$	5,592,738
Net change in prices and production costs		4,156,736			614,033			—			4,770,769
Net change in future development costs		(132,213	)		(40,923	)		—			(173,136	)
Sales and transfers of oil and natural gas produced, net of production expenses		(2,083,147	)		(265,032	)		—			(2,348,179	)
Extensions, discoveries, additions and improved recovery, net of related costs		1,105,549			24,501			—			1,130,050
Purchases of reserves in place		1,333,452			—			—			1,333,452
Sales of reserves in place		(118,253	)		—			—			(118,253	)
Revisions of previous quantity estimates		(952,958	)		99,449			—			(853,509	)
Previously estimated development costs incurred		488,934			—			—			488,934
Net change in taxes		(251,714	)		—			(20,184	)		(271,898	)
Accretion of discount		575,440			67,000			(3,141	)		639,299
Changes in timing and other		54,540			(4,563	)		—			49,977

Balance at December 31, 2022	$	9,134,666		$	1,160,312		$	(54,734	)	$	10,240,244

Document and Entity Information	Dec. 05, 2023
Cover [Abstract]
Entity Registrant Name	Crescent Energy Co
Amendment Flag	false
Entity Central Index Key	0001866175
Document Type	8-K
Document Period End Date	Dec. 05, 2023
Entity Incorporation State Country Code	DE
Entity File Number	001-41132
Entity Tax Identification Number	87-1133610
Entity Address, Address Line One	600 Travis Street
Entity Address, Address Line Two	Suite 7200
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77002
City Area Code	(713)
Local Phone Number	337-4600
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Class A Common Stock, par value $0.0001 per share
Trading Symbol	CRGY
Security Exchange Name	NYSE
Entity Emerging Growth Company	false