[10-Q] Crescent Energy Co Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Crescent Energy Company (CRGY) reported Q3 2025 results. Revenue was $866.6 million, up from $744.9 million a year ago, while the quarter showed a net loss of $9.5 million as higher depreciation and an $73.5 million impairment offset operating gains. Interest expense was $72.6 million in the quarter.
For the first nine months, Crescent generated $2.71 billion in revenue and $1.31 billion in net cash from operating activities, with $1.52 billion used in investing, reflecting development spending and acquisitions. Long‑term debt was $3.22 billion and cash and cash equivalents were $3.5 million at quarter‑end.
Strategically, Crescent closed the Ridgemar acquisition for $807.2 million in cash plus 5.5 million Class A shares, with up to $170.0 million in contingent consideration. It also agreed to an all‑equity Vital Energy merger, offering 1.9062 Crescent Class A shares per Vital share. A Corporate Simplification eliminated Class B stock; Class A shares outstanding were 254,631,591 as of October 31, 2025.
Positive
- None.
Negative
- None.
Insights
Busy deal cadence with strong cash generation; neutral net impact.
Crescent posted Q3 revenue of
Closed the Ridgemar deal for
The Corporate Simplification removed Class B shares, consolidating economics in Class A. Actual impact will hinge on commodity prices, integration delivery, and funding costs disclosed in future periods.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2025
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number 001-41132
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(713 ) 332-7001
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| 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 7(a)(2)(B) of the Securities Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
As of October 31, 2025, there were approximately 254,631,591 shares outstanding of the registrant's Class A common stock.
Table of Contents
Glossary | 2 | ||||
Cautionary Statement Regarding Forward-Looking Statements | 3 | ||||
Part I - Financial Information | |||||
Item 1. Financial Statements | 5 | ||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 34 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 57 | ||||
Item 4. Controls and Procedures | 58 | ||||
Part II - Other Information | |||||
Item 1. Legal Proceedings | 59 | ||||
Item 1A. Risk Factors | 59 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 62 | ||||
Item 3. Defaults Upon Senior Securities | 62 | ||||
Item 4. Mine Safety Disclosures | 62 | ||||
Item 5. Other Information | 62 | ||||
Item 6. Exhibits | 62 | ||||
Signatures | 66 | ||||
1
GLOSSARY
The following are abbreviations and definitions of certain terms used in this document, which are commonly used in the oil and natural gas industry:
Barrel or Bbl — One stock tank barrel, or 42 United States gallons liquid volume.
Boe — One barrel of oil equivalent determined using the ratio of six Mcf of natural gas to one barrel of crude oil or condensate.
Boe/d — Barrels of oil equivalent per day.
Brent — the reference price paid in U.S. dollars for a barrel of light sweet crude oil produced from the Brent field in the UK sector of the North Sea.
Btu — British thermal unit, which is the heat required to raise the temperature of a one-pound mass of water one degree Fahrenheit.
Henry Hub — Henry Hub is the major exchange for pricing natural gas futures on the New York Mercantile Exchange. It is frequently referred to as the Henry Hub index.
MBbls — One thousand Bbls or other liquid hydrocarbons.
MBbl/d — One thousand Bbls or other liquid hydrocarbons per day.
MBoe — One thousand Boe.
MBoe/d — One thousand Boe per day.
Mcf — One thousand cubic feet of natural gas.
Mcf/d — One thousand Mcf per day.
MMBoe — One million Boe.
MMBtu — One million Btus.
MMcf — One million Mcf.
MMcf/d — One million Mcf per day.
NYMEX — The New York Mercantile Exchange.
Proved reserves — Proved reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs and under existing economic conditions, operating methods and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.
Working interest — The operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and a share of production.
WTI — A light crude oil produced in the United States with an American Petroleum Institute gravity of approximately 38-40 and sulfur content of approximately 0.3%.
2
Cautionary Statement Regarding Forward-Looking Statements
The information in this Quarterly Report on Form 10-Q (this "Quarterly Report") contains or incorporates by reference 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 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical facts, included herein concerning, among other things, planned capital expenditures, increases in oil, natural gas and natural gas liquids (“NGL”) production, the number of anticipated wells to be drilled or completed after the date hereof, future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, business strategy and other plans and objectives for future operations, are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “will,” “continue,” “potential,” “should,” “could,” and similar terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, among others:
•commodity price volatility;
•our business strategy;
•our ability to integrate operations or realize any anticipated operational or corporate synergies and other benefits of our acquisitions, including the Ridgemar Acquisition;
•the risk that the Ridgemar Acquisition may not be accretive, and may be dilutive, to Crescent’s earnings per share, which may negatively affect the market price of Crescent common stock;
•the effects of a prolonged government shutdown, including our ability to complete the Vital Energy Merger;
•capital requirements and uncertainty of obtaining additional funding on terms acceptable to us;
•risks and restrictions related to our debt agreements and the level of our indebtedness;
•our reliance on KKR Energy Assets Manager LLC as our external manager;
•our hedging strategy and results;
•realized oil, natural gas and NGL prices;
•political and economic conditions and events in the U.S. and in foreign oil, natural gas and NGL producing countries, including embargoes, political and regulatory changes implemented by the Trump Administration, continued hostilities in the Middle East, including the Israel-Hamas conflict, and the conflict with Iran, and other sustained military campaigns, the armed conflict in Ukraine and associated economic sanctions on Russia, conditions in South America, Central America and China and acts of terrorism or sabotage;
•changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements, including such changes that may be implemented by the Trump Administration;
•general economic conditions, including the impact of inflation, elevated interest rates and associated changes in monetary policy;
•the impact of central bank policy actions and disruptions in the banking industry and in the capital markets;
•the severity and duration of public health crises and any resultant impact on governmental actions, commodity prices, supply and demand considerations, and storage capacity;
•timing and amount of our future production of oil, natural gas and NGLs;
•a decline in oil, natural gas and NGL production, and the impact of general economic conditions on the demand for oil, natural gas and NGLs and the availability of capital;
•unsuccessful drilling and completion (“D&C”) activities and the possibility of resulting write downs;
•our ability to meet our proposed drilling schedule and to successfully drill wells that produce oil, natural gas and NGLs in commercially viable quantities;
•shortages of equipment, supplies, services and qualified personnel and increased costs for such equipment, supplies, services and personnel, including any delays and/or supply chain disruptions due to continued hostilities in the Middle East and international trade rules and regulations;
•adverse variations from estimates of reserves, production, prices and expenditure requirements, and our inability to replace our reserves through exploration and development activities;
•incorrect estimates associated with properties we acquire relating to estimated proved reserves, the presence or recoverability of estimated oil, natural gas and NGL reserves and the actual future production rates and associated costs of such acquired properties;
•hazardous, risky drilling operations, including those associated with the employment of horizontal drilling techniques, and adverse weather and environmental conditions;
•limited control over non-operated properties;
•title defects to our properties and inability to retain our leases;
•our ability to successfully develop our large inventory of undeveloped acreage;
•our ability to retain key members of our senior management and key technical employees;
3
•risks relating to managing our growth, particularly in connection with the integration of significant acquisitions;
•our ability to successfully execute our growth strategies;
•impact of environmental, occupational health and safety, and other governmental regulations, and of current or pending legislation that may negatively impact the future production of oil and natural gas or drive the substitution of renewable forms of energy for oil and natural gas;
•federal and state regulations and laws, including the One Big Beautiful Bill Act (the "OBBBA"), the Inflation Reduction Act of 2022 (the "IRA 2022") and any impact thereon by the OBBBA, taxes, tariffs and international trade, safety and the protection of the environment;
•our ability to predict and manage the effects of actions of OPEC and agreements to set and maintain production levels, including as a result of recent production cuts by OPEC, which may be exacerbated by the continued hostilities in the Middle East, including with Iran;
•information technology failures or cyberattacks;
•changes in tax laws and the impact of those changes on us;
•effects of competition; and
•seasonal weather conditions.
We caution you that these forward-looking statements are subject to all of the risks and uncertainties incident to the development, production, gathering and sale of oil, natural gas and NGLs, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability and cost of drilling and production equipment and services, project construction delays, environmental risks, drilling and other operating risks, lack of availability or capacity of midstream gathering and transportation infrastructure, regulatory changes, including the impact of tariffs and international trade, the uncertainty inherent in estimating reserves and in projecting future rates of production, cash flow and access to capital, including restrictions due to elevated interest rates, the timing of development expenditures and the other risks described under “Risk Factors” in this Quarterly Report, in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 ("Annual Report") and our reports and registration statements filed from time to time with the SEC.
Reserve engineering is a process of estimating underground accumulations of hydrocarbons that cannot be measured in an exact way. The accuracy of any reserve estimates depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development program. Accordingly, reserve estimates may differ significantly from the quantities of oil, natural gas and NGLs that are ultimately recovered.
Should one or more of the risks or uncertainties described in this Quarterly Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.
4
Part I – Financial Information
Item 1. Financial Statements
| CRESCENT ENERGY COMPANY | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (Unaudited) | |||||||||||
| (in thousands, except share data) | |||||||||||
| September 30, 2025 | December 31, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Accounts receivable, net | |||||||||||
| Accounts receivable – affiliates | |||||||||||
| Derivative assets – current | |||||||||||
| Prepaid expenses | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment: | |||||||||||
| Oil and natural gas properties at cost, successful efforts method | |||||||||||
| Proved | |||||||||||
| Unproved | |||||||||||
| Oil and natural gas properties at cost, successful efforts method | |||||||||||
| Field and other property and equipment, at cost | |||||||||||
| Total property, plant and equipment | |||||||||||
| Less: accumulated depreciation, depletion, amortization and impairment | ( | ( | |||||||||
| Property, plant and equipment, net | |||||||||||
| Derivative assets – noncurrent | |||||||||||
| Investments in equity affiliates | |||||||||||
| Other assets | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
| The accompanying notes to financial statements are an integral part of these condensed consolidated financial statements | |||||||||||
5
| CRESCENT ENERGY COMPANY | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (Unaudited) | |||||||||||
| (in thousands, except share data) | |||||||||||
| September 30, 2025 | December 31, 2024 | ||||||||||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | $ | |||||||||
| Accounts payable – affiliates | |||||||||||
| Derivative liabilities – current | |||||||||||
| Financing lease obligations – current | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Derivative liabilities – noncurrent | |||||||||||
| Asset retirement obligations | |||||||||||
| Deferred tax liability | |||||||||||
| Financing lease obligations – noncurrent | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 9) | |||||||||||
| Redeemable noncontrolling interests | |||||||||||
| Equity: | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
Preferred stock, $ | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings (accumulated deficit) | ( | ||||||||||
| Noncontrolling interests | |||||||||||
| Total equity | |||||||||||
| TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | $ | $ | |||||||||
The accompanying notes to financial statements are an integral part of these condensed consolidated financial statements
6
CRESCENT ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Oil | $ | $ | $ | $ | |||||||||||||||||||
| Natural gas | |||||||||||||||||||||||
| Natural gas liquids | |||||||||||||||||||||||
| Midstream and other | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Lease operating expense | |||||||||||||||||||||||
| Workover expense | |||||||||||||||||||||||
| Asset operating expense | |||||||||||||||||||||||
| Gathering, transportation and marketing | |||||||||||||||||||||||
| Production and other taxes | |||||||||||||||||||||||
| Depreciation, depletion and amortization | |||||||||||||||||||||||
| Impairment of oil and natural gas properties | |||||||||||||||||||||||
| Exploration expense | |||||||||||||||||||||||
| Midstream and other operating expense | |||||||||||||||||||||||
| General and administrative expense | |||||||||||||||||||||||
| (Gain) loss on sale of assets | ( | ( | |||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Income (loss) from operations | ( | ||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Gain (loss) on derivatives | ( | ||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Loss from extinguishment of debt | ( | ( | ( | ( | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Income (loss) from equity affiliates | |||||||||||||||||||||||
| Total other income (expense) | ( | ( | ( | ||||||||||||||||||||
| Income (loss) before taxes | ( | ( | |||||||||||||||||||||
| Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||
| Less: net (income) loss attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
| Less: net (income) loss attributable to redeemable noncontrolling interests | ( | ( | ( | ||||||||||||||||||||
| Net income (loss) attributable to Crescent Energy | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Net income (loss) per share: | |||||||||||||||||||||||
| Class A common stock – basic | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Class A common stock – diluted | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Class B common stock – basic and diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Class A common stock – basic | |||||||||||||||||||||||
| Class A common stock – diluted | |||||||||||||||||||||||
| Class B common stock – basic and diluted | |||||||||||||||||||||||
The accompanying notes to financial statements are an integral part of these condensed consolidated financial statements
7
| CRESCENT ENERGY COMPANY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crescent Energy Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Series I Preferred Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Noncontrolling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend to Class A common stock | — | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in deferred taxes related to basis differences associated with the 2024 Equity Transactions | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in equity associated with the 2024 Equity Transactions | ( | ( | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend to Class A common stock | — | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in deferred taxes related to basis differences associated with the 2024 Equity Transactions | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of redeemable noncontrolling interest | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in equity associated with the 2024 Equity Transactions | — | ( | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend to Class A common stock | — | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in deferred taxes related to basis differences associated with the SilverBow Merger and repurchases of Class A common stock | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of redeemable noncontrolling interest | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in equity associated with the SilverBow Merger | — | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of Class A common stock | ( | — | — | — | — | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The accompanying notes to financial statements are an integral part of these condensed consolidated financial statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8
| CRESCENT ENERGY COMPANY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crescent Energy Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Series I Preferred Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Noncontrolling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend to Class A common stock | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in deferred taxes related to basis in OpCo | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in equity associated with the 2025 Class A Redemption | — | ( | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in equity associated with the Ridgemar Acquisition | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of Class A common stock | ( | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend to Class A common stock | — | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in deferred taxes related to basis in OpCo | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in equity associated with the Corporate Simplification | ( | ( | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash distributions on behalf of former redeemable noncontrolling interest holders related to income taxes | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of Class A common stock | ( | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend to Class A common stock | — | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash distributions on behalf of former redeemable noncontrolling interest holders related to income taxes | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
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CRESCENT ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||||
| Net income (loss) | $ | $ | |||||||||||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||||||||||||||||||||||
| Depreciation, depletion and amortization | |||||||||||||||||||||||
| Impairment expense | |||||||||||||||||||||||
| Deferred tax expense (benefit) | ( | ||||||||||||||||||||||
| (Gain) loss on derivatives | ( | ||||||||||||||||||||||
| Net cash (paid) received on settlement of derivatives | ( | ||||||||||||||||||||||
| Non-cash equity-based compensation expense | |||||||||||||||||||||||
| Amortization of debt issuance costs, premium and discount | |||||||||||||||||||||||
| Loss from debt extinguishment | |||||||||||||||||||||||
| (Gain) loss on sale of oil and natural gas properties | ( | ( | |||||||||||||||||||||
| Settlement of acquired derivative contracts | |||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| Accounts receivable | |||||||||||||||||||||||
| Accounts receivable – affiliates | |||||||||||||||||||||||
| Prepaid and other current assets | ( | ( | |||||||||||||||||||||
| Accounts payable and accrued liabilities | ( | ||||||||||||||||||||||
| Accounts payable – affiliates | ( | ||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||
| Development of oil and natural gas properties | ( | ( | |||||||||||||||||||||
| Acquisitions of oil and natural gas properties, net of cash acquired | ( | ( | |||||||||||||||||||||
| Proceeds from the sale of oil and natural gas properties | |||||||||||||||||||||||
| Purchases of restricted investment securities – HTM | ( | ( | |||||||||||||||||||||
| Maturities of restricted investment securities – HTM | |||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Net cash used in investing activities | ( | ( | |||||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||
| Proceeds from the issuance of Senior Notes, after premium, discount and underwriting fees | |||||||||||||||||||||||
| Repurchase of Senior Notes, including extinguishment costs | ( | ( | |||||||||||||||||||||
| Revolving Credit Facility borrowings | |||||||||||||||||||||||
| Revolving Credit Facility repayments | ( | ( | |||||||||||||||||||||
| Payment of debt issuance costs | ( | ( | |||||||||||||||||||||
| Repayments of debt acquired in SilverBow Merger, including extinguishment costs | ( | ||||||||||||||||||||||
| Dividend to Class A common stock | ( | ( | |||||||||||||||||||||
| Cash distributions to redeemable noncontrolling interests initiated by Class A common stock dividend | ( | ( | |||||||||||||||||||||
| Cash distributions to redeemable noncontrolling interests initiated by Manager Compensation | ( | ( | |||||||||||||||||||||
| Cash distributions to redeemable noncontrolling interests initiated by income taxes | ( | ( | |||||||||||||||||||||
| Repurchase of redeemable noncontrolling interests related to 2024 Equity Transactions | ( | ||||||||||||||||||||||
| Repurchase of redeemable noncontrolling interests | ( | ||||||||||||||||||||||
| Noncontrolling interest distributions | ( | ( | |||||||||||||||||||||
| Noncontrolling interest contributions | |||||||||||||||||||||||
| Cash paid for treasury stock acquired for equity-based compensation tax withholding | ( | ( | |||||||||||||||||||||
| Repurchases of Class A common stock | ( | ( | |||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||||||||||||||
| Net change in cash, cash equivalents and restricted cash | ( | ||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
10
CRESCENT ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Except as noted within the context of each footnote disclosure, the dollar amounts presented in the tabular data within these footnote disclosures are stated in thousands of dollars.)
Unless otherwise stated or the context otherwise indicates, all references to “we,” “us,” “our,” "Crescent" and the “Company” or similar expressions refer to Crescent Energy Company and its subsidiaries.
NOTE 1 – Organization and Basis of Presentation
Organization
Crescent is a differentiated U.S. energy company committed to delivering value for shareholders through a disciplined growth through acquisition strategy and consistent return of capital. Our long-life, balanced portfolio combines stable cash flows from low-decline production with deep, high-quality development inventory. Our activities are focused in Texas and the Rocky Mountain region.
Corporate Structure
Our Class A common stock, par value $0.0001 per share ("Class A Common Stock"), is listed on the New York Stock Exchange under the symbol “CRGY”. Crescent is a holding company that conducts all of its business operations through its subsidiaries including, Crescent Energy OpCo LLC ("OpCo") and its subsidiaries. Additionally, an affiliate of KKR & Co. Inc. (together with its subsidiaries, the "KKR Group") is the sole holder of Crescent's non-economic Series I preferred stock, par value $0.0001 per share, which entitles the holder thereof to appoint the Board of Directors of Crescent and to certain other approval rights.
Corporate Simplification
In April 2025, we announced that our corporate structure had been simplified through the elimination of the Company’s Up-C structure through the exercise by the holders of all remaining shares of Class B Common Stock of their redemption rights with respect to all of their OpCo Units (the “Corporate Simplification”). Prior to the Corporate Simplification, the Up-C structure provided for holders of Crescent’s then-outstanding Class B Common Stock, par value $0.0001 per share (“Class B Common Stock”), which had voting (but no economic) rights with respect to Crescent, to hold a corresponding amount of economic, non-voting units of OpCo (“OpCo Units”), which were generally redeemable or exchangeable for Class A Common Stock on the terms and conditions set forth in OpCo’s Amended and Restated Limited Liability Company Agreement (“OpCo LLC Agreement”). Pursuant to the aforementioned exercise of such right in the Corporate Simplification, all OpCo Units (other than those held by Crescent) were exchanged for an equivalent number of shares of Class A Common Stock and all outstanding shares of Class B Common Stock were cancelled. As a result of the Corporate Simplification, all of the Company’s common stockholders now hold Class A Common Stock. See NOTE 11 – Related Party Transactions for more information.
2025 Equity Transactions
In March 2025, Independence Energy Aggregator L.P., the entity through which certain private investors in affiliated KKR entities held their interests in us, exercised its redemption right with respect to 2.9 million OpCo Units, and such OpCo Units were exchanged for an equivalent number of shares of Class A Common Stock and a corresponding number of shares of Class B Common Stock were cancelled (the "2025 Class A Redemption"). The shares of Class A Common Stock were sold by Independence Energy Aggregator L.P. at a price per share of $9.91 , pursuant to Rule 144, through a broker-dealer. We did not receive any proceeds or incur any material expenses related to the March 2025 Class A Redemption.
As a result of the 2025 Class A Redemption and the Corporate Simplification, the total number of shares of our Class A Common Stock increased by 65.9 million shares with a corresponding decrease in the number of shares of our Class B Common Stock, and redeemable noncontrolling interests decreased by $1,210.8 million, while APIC increased by $1,210.8 million.
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2024 Equity Transactions
On April 1, 2024, Independence Energy Aggregator L.P. exercised its redemption right with respect to 6.0 million OpCo Units and such OpCo Units were exchanged for an equivalent number of shares of Class A Common Stock and corresponding number of shares of Class B Common Stock were cancelled (the "April 2024 Class A Redemption"). The shares of Class A Common Stock were sold by Independence Energy Aggregator L.P. at a price per share of $10.74 , pursuant to Rule 144, through a broker-dealer. We did not receive any proceeds or incur any material expenses related to the April 2024 Class A Redemption.
In March 2024, 16.1 million OpCo Units were acquired from Independence Energy Aggregator L.P. and we cancelled a corresponding number of shares of Class B Common Stock (the "March 2024 Redemption"). Of the total OpCo Units acquired, 13.8 million were exchanged for shares of Class A Common Stock, which were subsequently sold in an underwritten public offering at a price to the public of $10.50 per share, or a net price of $9.87 per share after deducting the underwriters' discounts and commissions, from which we did not receive any proceeds, nor incur any material expenses with respect to such acquisition. In connection with the underwritten public offering, we repurchased 2.3 million OpCo Units from Independence Energy Aggregator L.P. for $22.7 million in cash and we cancelled a corresponding number of shares of Class B Common Stock (the "March 2024 Repurchase," together with the March 2024 Redemption, the "March 2024 Equity Transactions").
As a result of the April 2024 Class A Redemption and the March 2024 Equity Transactions (the "2024 Equity Transactions"), the total number of shares of our Class A Common Stock increased by 19.8 million shares and the total number of shares of our Class B Common Stock decreased by 22.1 million shares, and Redeemable noncontrolling interests decreased by $470.7 million while APIC increased by $448.0
Treasury Stock
Our Board of Directors authorized a stock repurchase program on March 4, 2024 with an approved limit of $150.0 million and a two-year term. Such repurchases may be made from time to time in the open market, in privately negotiated transactions, through purchases made in accordance with the Rule 10b5-1 of the Exchange Act or by such other means as will comply with applicable state and federal securities laws. The timing of any repurchases under the stock repurchase program will depend on market conditions, contractual limitations and other considerations. The program may be extended, modified, suspended or discontinued at any time, and does not obligate us to repurchase any dollar amount or number of securities. The 1 % U.S. federal excise tax on certain repurchases of stock by publicly traded U.S. corporations enacted as part of the IRA 2022 applies to repurchases of our Class A Common Stock pursuant to our stock repurchase program.
We record treasury stock purchases at cost, which includes incremental direct transaction costs. Amounts are recorded as a reduction to equity on our condensed consolidated balance sheets. For the nine months ended September 30, 2025, we repurchased 4.1 million shares of our Class A Common Stock for $33.5 million, at an average price of $8.21 per share (the "2025 Class A Repurchases"). In connection therewith, we cancelled a corresponding number of OpCo Units. During 2024, we repurchased 0.7 million shares of our Class A Common Stock for $7.8 million, at an average price of $10.70 per share (the "2024 Class A Repurchases" and together with the 2025 Class A Repurchases, the "Class A Repurchases"), and in connection therewith, we cancelled a corresponding number of OpCo Units. When combining the Class A Repurchases with the 2024 Equity Transactions, the remaining amount under the authorized plan is approximately $86.0 million as of September 30, 2025.
Basis of Presentation
Our unaudited condensed consolidated financial statements (the “financial statements”) include the accounts of the Company and its subsidiaries after the elimination of intercompany transactions and balances, are presented in accordance with U.S. general accepted accounting principles (“GAAP”) and reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the respective interim periods. We have no elements of other comprehensive income for the periods presented. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report.
Crescent is a holding company that conducts substantially all of its business through its consolidated subsidiaries, including (i) OpCo, which as of September 30, 2025 was wholly owned by Crescent, and (ii) Crescent Energy Finance LLC, OpCo's wholly owned subsidiary. Crescent and OpCo have no operations, or material cash flows, assets or liabilities other than their investment in Crescent Energy Finance LLC. The assets and liabilities of OpCo represent substantially all of our consolidated assets and liabilities with the exception of certain current and deferred taxes and certain liabilities under the Management
12
Agreement (as defined within NOTE 11 – Related Party Transactions). Certain restrictions and covenants related to the transfer of assets from OpCo are discussed further in NOTE 7 – Debt.
The financial statements include undivided interests in oil and natural gas properties. We account for our share of oil and natural gas properties by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the accompanying condensed consolidated balance sheets, condensed consolidated statements of operations, and condensed consolidated statements of cash flows.
NOTE 2 – Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We use historical experience and various other assumptions and information that are believed to be reasonable under the circumstances in developing our estimates and judgments. Estimates and assumptions about future events and their effects cannot be predicted with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. While we believe that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results may differ from these estimates. Our significant estimates include the fair value of acquired assets and liabilities, oil and natural gas reserves, impairment of proved and unproved oil and natural gas properties, valuation of derivative instruments and income taxes.
Restricted Cash
Restricted cash consists of funds earmarked for a special purpose and therefore not available for immediate and general use. The majority of our restricted cash is composed of cash that is contractually required to be restricted to fund acquisitions or to pay for the future abandonment of certain wells. Restricted cash is included in Other current assets and Other assets on our condensed consolidated balance sheets.
The following table provides a reconciliation of cash and restricted cash presented on our balance sheets to amounts shown in our condensed consolidated statements of cash flows:
| As of September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash – current | |||||||||||
| Restricted cash – noncurrent | |||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
Redeemable Noncontrolling Interests
Pursuant to the OpCo LLC Agreement, holders of OpCo Units, other than the Company, may redeem all or a portion of their OpCo Units for either (a) shares of Class A Common Stock or (b) at the election of the Company, an approximately equivalent amount of cash as determined pursuant to the terms of the OpCo LLC Agreement. In connection with such redemption, a corresponding number of shares of Class B Common Stock will be cancelled. The cash redemption election is not considered to be within the control of the Company because the holders of Class B Common Stock and their affiliates control the Company through direct representation on the Board of Directors. As a result, we present the noncontrolling interests in OpCo as redeemable noncontrolling interests outside of permanent equity. Redeemable noncontrolling interests are recorded at the greater of the carrying value or redemption amount with a corresponding adjustment to Additional paid-in capital. The cash redemption amount for OpCo Units for this purpose is based on the 10-day volume-weighted average closing price of Class A Common Stock at the end of the reporting period. Changes in the redemption value are recognized immediately as they occur, as if the end of the reporting period was also the redemption date for the instrument, with an offsetting entry to Additional paid-in capital. Following the 2025 Class A Redemption and the Corporate Simplification, the Company is the sole holder of all outstanding OpCo Units.
13
For the nine months ended September 30, 2025, the 2025 Class A Redemption and the Corporate Simplification reduced the number of shares of our Class B Common Stock by 65.9 million shares, and we reclassified $1,210.8 million from Redeemable noncontrolling interests to Additional paid-in capital as a result of the transfer of additional OpCo Units to Crescent as a result of such transactions.
The 2024 Equity Transactions reduced the number of shares of our Class B Common Stock by 22.1 million shares. In addition, the 2024 Equity Transactions resulted in the transfer of 19.8 million OpCo Units to Crescent and the repurchase, by OpCo, of 2.3 million OpCo Units for $22.7 million in cash. As a result of the transfer of additional OpCo Units to Crescent, we reclassified $448.0
From December 31, 2024 through September 30, 2025, we recorded adjustments to the value of our redeemable noncontrolling interests as shown below:
| Redeemable Noncontrolling Interests | |||||
| (in thousands) | |||||
| Balance as of December 31, 2024 | $ | ||||
| Net (loss) income attributable to redeemable noncontrolling interests | |||||
| Cash distributions from OpCo initiated by Class A common stock dividend, Manager Compensation and income taxes, net | ( | ||||
| Accrued OpCo cash distribution initiated by Manager Compensation | ( | ||||
| Equity-based compensation | |||||
| Change in redeemable noncontrolling interests associated with the Ridgemar Acquisition | ( | ||||
| Change in redeemable noncontrolling interests associated with the March 2025 Class A Redemption | ( | ||||
| Balance as of March 31, 2025 | $ | ||||
| Net (loss) income attributable to redeemable noncontrolling interests | |||||
| Change in redeemable noncontrolling interests associated with the Corporate Simplification | ( | ||||
| Balance as of September 30, 2025 | $ | ||||
Income Taxes
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The OBBBA is a significant piece of tax legislation that includes provisions that permanently restore an EBITDA-based section 163(j) calculation for tax years beginning after December 31, 2024 and restore 100% bonus depreciation under section 168(k) for property acquired and placed in service after January 19, 2025, deferring the recognition of a significant portion of current federal tax for multiple years.
We evaluate and update the estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Consequently, based upon the mix and timing of our actual earnings compared to annual projections, our effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The quarterly income tax provision is generally composed of tax expense on income or benefit on loss at the most recent estimated annual effective tax rate. The tax effect of discrete items is recognized in the period in which they occur at the applicable statutory rate.
14
We continually assess the available positive and negative evidence to determine if sufficient future taxable income will be generated to use the existing deferred tax assets. On the basis of this evaluation a valuation allowance is recorded to recognize only the portion of the deferred tax assets that are more likely than not to be realized. The amount of the deferred tax asset considered realizable; however, could be adjusted in the future.
We have U.S. federal net operating loss ("NOL") carryforwards and recognized built-in-loss ("RBIL") property that are subject to limitation under Section 382. Pursuant to Sections 382 and 383 of the U.S. Internal Revenue Code of 1986, as amended, utilization of our NOL and RBIL carryforwards is subject to an annual limitation. These annual limitations may result in the expiration of NOL and RBIL carryforwards prior to utilization; accordingly we have maintained a valuation allowance related to U.S. federal NOL and RBIL carryforwards that we do not believe are recoverable due to these Section 382 limitations.
As of September 30, 2025 and December 31, 2024, we did not have any uncertain tax positions.
Supplemental Cash Flow Disclosures
The following are our supplemental cash flow disclosures for the nine months ended September 30, 2025 and 2024:
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Supplemental cash flow disclosures: | |||||||||||||||||||||||
| Interest paid, net of amounts capitalized | $ | $ | |||||||||||||||||||||
| Income tax payments (refunds) | |||||||||||||||||||||||
| Non-cash investing and financing activities: | |||||||||||||||||||||||
| Capital expenditures included in accounts payable and accrued liabilities | $ | $ | |||||||||||||||||||||
| Equity consideration for acquisitions | |||||||||||||||||||||||
| Right-of-use assets obtained in exchange for leases | |||||||||||||||||||||||
NOTE 3 – Acquisitions and Divestitures
Acquisitions
Vital Energy Merger
In August 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Vital Energy, Inc., a Delaware corporation ("Vital"), pursuant to which we agreed to acquire Vital in an all-equity transaction through a series of mergers (collectively, the "Vital Energy Merger"). Subject to the terms and conditions of the Merger Agreement, each share of Vital's common stock, par value $0.01 per share ("Vital Common Stock") issued and outstanding immediately prior to the merger close date, will be converted into the right to receive 1.9062 shares of Crescent Class A Common Stock. The Vital Energy Merger will be accounted for using the acquisition method of accounting for business combinations in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations ("ASC 805"), with Crescent being identified as the acquirer for accounting purposes. This Quarterly Report is filed before the completion of the Vital Energy Merger, and information set forth herein only relates to the results of operations for Crescent for the quarter and year-to-date periods ended September 30, 2025 and 2024 and does not include any operational or financial information for Vital for such periods.
Ridgemar Acquisition
On December 3, 2024, we entered into the Membership Interest Purchase Agreement (the “Ridgemar Acquisition Agreement”) pursuant to which we acquired all of the outstanding equity interests in Ridgemar (Eagle Ford) LLC (“Ridgemar”). On January 31, 2025, we acquired all of the outstanding equity interests in Ridgemar (Eagle Ford) LLC ("Ridgemar") for $807.2 million in cash and 5.5 million shares of our Class A Common Stock (the "Ridgemar Acquisition"). In addition, up to $170.0 million in contingent earn-out consideration may be paid in fiscal years 2026 and 2027 if quarterly NYMEX WTI prices of crude oil are
15
above certain thresholds in 2026 and 2027 (collectively, the "Ridgemar Contingent Consideration”). We accounted for the Ridgemar Acquisition as an asset acquisition.
SilverBow Merger
On July 30, 2024, we consummated the transactions contemplated by the Agreement and Plan of Merger, dated May 15, 2024 (the transactions contemplated therein, the "SilverBow Merger"), between Crescent, SilverBow, Artemis Acquisition Holdings Inc. ("Artemis Holdings"), Artemis Merger Sub Inc. ("Merger Sub Inc.") and Artemis Merger Sub II LLC ("Merger Sub LLC"). The SilverBow Merger has been accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, with Crescent being identified as the accounting acquirer.
Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of Crescent, merged with and into SilverBow (the "Initial Merger"), with SilverBow surviving the merger (the "Initial Surviving Corporation"), and immediately following the Initial Merger, the Initial Surviving Corporation merged with and into Merger Sub LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Artemis Holdings, a Delaware corporation and a direct wholly owned subsidiary of Crescent (the "Subsequent Merger" and together with the Initial Merger, the "Mergers"), with Merger Sub LLC continuing as the surviving company of the Subsequent Merger (the "Subsequent Surviving Company") as a direct wholly owned subsidiary of Artemis Holdings. Promptly following the completion of the Mergers, Artemis Holdings contributed the Subsequent Surviving Company to Crescent Energy OpCo LLC, a Delaware limited liability company, of which Crescent is the managing member, which in turn contributed the Subsequent Surviving Company to its wholly owned subsidiary, Crescent Energy Finance, a Delaware limited liability company.
Subject to the terms and conditions of the Merger Agreement, each share of SilverBow's common stock, par value $0.01 per share ("SilverBow Common Stock") issued and outstanding immediately prior to the merger close date, was converted into the right to receive, pursuant to an election made and not revoked, one of the following forms of consideration: (A) 3.125 shares of Crescent Class A Common Stock, (B) a combination of 1.866 shares of Crescent Class A Common Stock and $15.31 in cash or (C) $38.00 in cash, subject to an aggregate cap of $400.0 million on the total cash consideration payable for the SilverBow Common Stock in the SilverBow Merger. The Merger Agreement also provided that each outstanding SilverBow restricted stock unit, performance-based stock unit (assuming maximum performance) and in-the money stock option, whether vested or unvested, held by certain employees and directors of SilverBow (collectively, the "SilverBow Equity Awards") became fully vested and was canceled and converted into a right to receive a cash payment (less the exercise price in the case of stock options) or, in the case of the restricted stock units and performance-based stock units, a partial cash payment and partial settlement in shares of Crescent Class A Common Stock. Each stock option with an exercise price that equaled or exceeded the amount of such cash payment was cancelled for no consideration. We finalized the acquisition accounting for the SilverBow Merger during the three months ended June 30, 2025. See the table below for consideration transferred and final purchase price allocation. Crescent issued 51.6 million shares of Class A Common Stock in the SilverBow Merger and paid $382.4 million in cash to former SilverBow shareholders, including amounts payable in respect of outstanding SilverBow equity awards. See Note 10 - Equity-Based Compensation Awards.
During 2024, we reorganized our business, primarily as a result of the SilverBow Merger, which included one-time termination costs and exit costs for the closure of one of our offices. We expect the total amount of one-time employee termination benefits incurred to be $11.4 million and lease termination and other costs of $5.5 million, all of which was recognized on the condensed consolidated statements of operations during the second half of 2024. The following is a reconciliation of our restructuring liability, which is included within Accounts payable and accrued liabilities on the condensed consolidated balance sheets.
| One-time employee termination benefits | Lease termination and other costs | Total | |||||||||||||||
| (in thousands) | |||||||||||||||||
| December 31, 2024 | $ | $ | $ | ||||||||||||||
| Costs incurred and charged to expense | |||||||||||||||||
| Costs paid | ( | ( | |||||||||||||||
| September 30, 2025 | $ | $ | $ | ||||||||||||||
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Other Acquisitions
Webb Gas Acquisition
In January 2025, we acquired additional interests in Crescent operated oil and gas properties located in Webb County, Texas from unaffiliated third parties for aggregate consideration of approximately $21.2 million, subject to customary post closing adjustments.
Minerals Acquisition
In July 2025, we acquired a portfolio of oil and natural gas mineral interests located in various U.S. oil and gas basins from an unrelated third-party for total cash consideration of approximately $67.9 million, subject to customary purchase price adjustments. The Minerals Acquisition consideration transferred is inclusive of customary post closing adjustments of $4.4 million which are recorded in Accounts receivable, net on the condensed consolidated balance sheets as of September 30, 2025. The purchase price was funded using borrowings from our Revolving Credit Facility.
Central Eagle Ford Acquisition
In October 2024, we acquired from unaffiliated third parties certain interests in oil and gas properties, rights and related assets located in Atascosa, Frio, La Salle and McMullen Counties, Texas for aggregate consideration of approximately $156.0 million, including certain customary purchase price adjustments (the “Central Eagle Ford Acquisition”).
The Central Eagle Ford Acquisition has been accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, with Crescent being identified as the accounting acquirer. From the date of the Central Eagle Ford Acquisition through December 31, 2024, revenues and net income associated with operations acquired through the Central Eagle Ford Acquisition were $10.4 million and $3.1 million, respectively. We recognized transaction related expenses of $5.6 million within General and administrative expense on the condensed consolidated statements of operations for the year ended December 31, 2024.
Eagle Ford Minerals Acquisition
In February 2024, we acquired a portfolio of oil and natural gas mineral interests located in the Karnes Trough of the Eagle Ford Basin from an unrelated third-party (the "Eagle Ford Minerals Acquisition") for total cash consideration of approximately $25.0 million, including customary purchase price adjustments. The purchase price was funded using borrowings from our Revolving Credit Facility.
Pro Forma Financial Information
The following table summarizes our unaudited pro forma financial information for the nine months ended September 30, 2024 as if the SilverBow Merger and Central Eagle Ford Acquisition each occurred on January 1, 2024 (unaudited):
Nine Months Ended September 30, 2024 | |||||||||||
| (in thousands) | |||||||||||
| Revenues | $ | ||||||||||
Net income | |||||||||||
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Consideration Transferred
The following table summarizes the consideration transferred and the net assets acquired for our acquisitions during 2025 and 2024 that impact the periods presented:
| Asset Acquisitions | Business Combinations | ||||||||||||||||||||||||||||||||||||||||||||||
Minerals Acquisition | Ridgemar Acquisition | Webb Gas Acquisition | Eagle Ford Minerals Acquisition | SilverBow Merger | Central Eagle Ford Acquisition | ||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Consideration transferred: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash consideration: | |||||||||||||||||||||||||||||||||||||||||||||||
Cash | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Settlement of SilverBow Equity Awards in cash | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Equity consideration: | |||||||||||||||||||||||||||||||||||||||||||||||
Fair value of Class A Common Stock issued | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Settlement of SilverBow Equity Awards in Class A Common Stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Fair value of contingent earn-out consideration | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Transaction costs capitalized | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Assets acquired and liabilities assumed: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Accounts receivable, net | |||||||||||||||||||||||||||||||||||||||||||||||
| Derivative assets – current | |||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Other current assets | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil and natural gas properties - proved | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil and natural gas properties - unproved | |||||||||||||||||||||||||||||||||||||||||||||||
| Field and other property and equipment | |||||||||||||||||||||||||||||||||||||||||||||||
| Derivative assets – noncurrent | |||||||||||||||||||||||||||||||||||||||||||||||
| Other assets | |||||||||||||||||||||||||||||||||||||||||||||||
| Accounts payable and accrued liabilities | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Acquired deferred acquisition consideration | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Other current liabilities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Short-term debt | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax liability | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Asset retirement obligations | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Net assets acquired | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
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Divestitures
During 2025, we have entered into agreements with certain unrelated third-party buyers to sell non-core assets as part of our previously announced non-core asset divestiture program for total consideration in excess of $800.0 million, subject to customary purchase price adjustments and transaction costs. Through September 30, 2025, we have received $114.8 million in cash proceeds and expect to receive the remaining proceeds during the fourth quarter of 2025 upon the closing of the remaining transactions. Certain of these transactions, which are expected to close in the fourth quarter, met the criteria of held for sale as of September 30, 2025. In connection with transactions classified as held for sale, we performed an assessment of the fair value of the associated net assets and liabilities and determined certain of those assets were impaired. During the three and nine months ended September 30, 2025, we recorded impairment expense of $73.5 million and $122.2 million, respectively, to write down the carrying value of the associated oil and natural gas properties to the estimated transaction price less cost to sell. In addition, we recorded a loss of $1.6 million and a gain of $11.1 million on the sale of such assets for the three and nine months ended September 30, 2025, respectively.
During the nine months ended September 30, 2024, we sold non-core assets to unrelated third-party buyers for $29.7 million in aggregate net cash proceeds and recorded a gain on the sale of assets of $19.4 million.
The table below summarizes the balance sheet information associated with assets and liabilities held for sale related to the transactions as of the balance sheet date.
| September 30, 2025 | |||||
| (in thousands) | |||||
| ASSETS | |||||
| Current assets: | |||||
| Accounts receivable, net | $ | ||||
| Derivative assets – current | |||||
| Total current assets | |||||
| Property, plant and equipment: | |||||
| Oil and natural gas properties at cost, successful efforts method | |||||
| Proved | |||||
| Oil and natural gas properties at cost, successful efforts method | |||||
| Field and other property and equipment, at cost | |||||
| Total property, plant and equipment | |||||
| Less: accumulated depreciation, depletion, amortization and impairment | ( | ||||
| Property, plant and equipment, net | |||||
| Derivative assets – noncurrent | |||||
| Investments in equity affiliates | |||||
| TOTAL ASSETS | $ | ||||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable and accrued liabilities | $ | ( | |||
| Other current liabilities | ( | ||||
| Total current liabilities | ( | ||||
| Asset retirement obligations | ( | ||||
| Total liabilities | $ | ( | |||
NOTE 4 – Derivatives
In the normal course of business, we are exposed to certain risks including changes in the prices of oil, natural gas and NGLs which may impact the cash flows associated with the sale of our future oil and natural gas production. We enter into derivative contracts with lenders under our Revolving Credit Facility that consist of either a single derivative instrument or a combination of instruments to manage our exposure to these risks.
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As of September 30, 2025, our commodity derivative instruments consisted of fixed price and basis swaps and collars which are described below:
Fixed Price and Basis Swaps: Fixed price swaps receive a fixed price and pay a floating market price to the counterparty on the notional amount. Our basis swaps fix the basis differentials between the index price at which we sell our production as compared to the index price used in the basis swap. Under a swap contract, we will receive payment if the settlement price is less than the fixed price and will be required to make a payment to the counterparty if the settlement price is greater than the fixed price.
Two-Way and Three-Way Collars: Two-way collars provide a minimum (“fixed floor price”) and maximum (“fixed ceiling price”) price on a notional amount of sales volume. Under a two-way collar, we will receive payment if the settlement price is less than the fixed floor price and make a payment to the counterparty if the settlement price is greater than the fixed ceiling price. We would not be required to make a payment or receive payment if the settlement price falls between the fixed floor price and fixed ceiling price. A three-way collar adds a secondary lower price below the fixed floor price (“fixed subfloor price”). In this structure, if the settlement price falls between the fixed floor price and the fixed subfloor price, we receive payment equal to the difference between the fixed floor price and the settlement price. If the settlement price falls below the fixed subfloor price, we receive payment equal to the difference between the fixed floor price and the fixed subfloor price. We still make a payment to the counterparty if the settlement price is greater than the fixed ceiling price, and we would still not be required to make or receive payment if the settlement price falls between the fixed ceiling price and the fixed floor price.
20
The following table details our net volume positions by commodity as of September 30, 2025:
| Production Period | Volumes | Weighted Average Fixed Price | |||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Crude oil swaps – WTI (Bbls): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
2026 (1) | $ | ||||||||||||||||||||||||||||||||||||||||||||||
2026 (2) | $ | ||||||||||||||||||||||||||||||||||||||||||||||
2027 (3) | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| Crude oil two-way collars – WTI (Bbls): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | - | $ | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | - | $ | ||||||||||||||||||||||||||||||||||||||||||||
2026 (4) | $ | - | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Crude oil three-way collars – WTI (Bbls): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | - | $ | - | $ | ||||||||||||||||||||||||||||||||||||||||||
| Crude oil two-way collars – Brent (Bbls): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | - | $ | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | - | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Natural gas swaps (MMBtu): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
2027 (5) | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| Natural gas two-way collars (MMBtu): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | - | $ | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | - | $ | ||||||||||||||||||||||||||||||||||||||||||||
| NGL swaps (Bbls): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| Crude oil basis swaps (Bbls): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| Natural gas basis swaps (MMBtu): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $( | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $( | ||||||||||||||||||||||||||||||||||||||||||||||
| 2027 | $( | ||||||||||||||||||||||||||||||||||||||||||||||
| Calendar Month Average roll swaps (Bbls): | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | ||||||||||||||||||||||||||||||||||||||||||||||
(1) Represents outstanding crude oil swap options exercisable by the counterparty until December 2025.
(2) Represents outstanding crude oil swap options exercisable by the counterparty until June 2026.
(3) Represents outstanding crude oil swap options exercisable by the counterparty until December 2026.
(4) Represents outstanding crude oil collar options exercisable by the counterparty until December 2025.
(5) Represents outstanding natural gas swap options exercisable by the counterparty until December 2026.
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Ridgemar Contingent Consideration: Pursuant to the Ridgemar Contingent Consideration, the former owners of Ridgemar are entitled to receive contingent consideration payments from us if the daily average price of NYMEX WTI crude oil exceeds certain thresholds during specified quarterly periods. For each quarterly period in 2026, we will be required to pay $15.0 70 15.0 75 12.5 70
We use derivative commodity instruments and enter into swap contracts that are governed by International Swaps and Derivatives Association ("ISDA") master agreements. The following table shows the effects of master netting arrangements on the fair value of our derivative contracts and contingent earn-out consideration as of September 30, 2025 and December 31, 2024:
| Gross Fair Value | Effect of Counterparty Netting | Net Carrying Value | |||||||||||||||
| (in thousands) | |||||||||||||||||
| September 30, 2025 | |||||||||||||||||
| Assets: | |||||||||||||||||
| Derivative assets – current | $ | $ | ( | $ | |||||||||||||
| Derivative assets – noncurrent | ( | ||||||||||||||||
| Total assets | $ | $ | ( | $ | |||||||||||||
| Liabilities: | |||||||||||||||||
| Derivative liabilities – current | $ | ( | $ | $ | ( | ||||||||||||
| Other current liabilities | ( | ( | |||||||||||||||
| Derivative liabilities – noncurrent | ( | ( | |||||||||||||||
| Other liabilities | ( | ( | |||||||||||||||
| Total liabilities | $ | ( | $ | $ | ( | ||||||||||||
| December 31, 2024 | |||||||||||||||||
| Assets: | |||||||||||||||||
| Derivative assets – current | $ | $ | ( | $ | |||||||||||||
| Derivative assets – noncurrent | ( | ||||||||||||||||
| Total assets | $ | $ | ( | $ | |||||||||||||
| Liabilities: | |||||||||||||||||
| Derivative liabilities – current | $ | ( | $ | $ | ( | ||||||||||||
| Derivative liabilities – noncurrent | ( | ( | |||||||||||||||
| Total liabilities | $ | ( | $ | $ | ( | ||||||||||||
See NOTE 5 – Fair Value Measurements for more information.
22
The amounts of gain (loss) recognized in gain (loss) on derivatives in our condensed consolidated statements of operations were as follows for the three and nine months ended September 30, 2025 and 2024:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Realized gain (loss) on oil positions | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Realized gain (loss) on natural gas positions | ( | ||||||||||||||||||||||
| Realized gain (loss) on NGL positions | ( | ||||||||||||||||||||||
| Total realized gain (loss) on derivatives | ( | ||||||||||||||||||||||
| Unrealized gain (loss) on commodity derivatives | |||||||||||||||||||||||
| Unrealized gain (loss) on contingent earn-out consideration | |||||||||||||||||||||||
| Total unrealized gain (loss) on derivatives | |||||||||||||||||||||||
| Gain (loss) on derivatives | $ | $ | $ | $ | ( | ||||||||||||||||||
NOTE 5 – Fair Value Measurements
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Generally, the determination of fair value requires the use of significant judgment and different approaches and models under varying circumstances. Under a market-based approach, we consider prices of similar assets, consult with brokers and experts or employ other valuation techniques. Under an income-based approach, we generally estimate future cash flows and then discount them at a risk-adjusted rate. We classify the inputs used to measure the fair value of our financial assets and liabilities into the following hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Quoted market prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active or other than quoted prices that are observable, either directly or indirectly, and can be corroborated by observable market data.
Level 3: Unobservable inputs that reflect management’s best estimates and assumptions of what market participants would use in measuring the fair value of an asset or liability.
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of significance for a particular input to the fair value measurement requires judgment and may affect our valuation of the fair value assets and liabilities within the fair value hierarchy levels.
23
Recurring Fair Value Measurements
The following table presents the fair value of our derivative assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 by level within the fair value hierarchy:
| Fair Value Measurement Using | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| September 30, 2025 | |||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||
| Derivative assets | $ | $ | $ | $ | |||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||
| Derivative liabilities | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Contingent earn-out consideration | ( | ( | |||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||
| Derivative assets | $ | $ | $ | $ | |||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||
| Derivative liabilities | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Non-Recurring Fair Value Measurements
Certain nonfinancial assets and liabilities are measured at fair value on a non-recurring basis. We utilize fair value measurements on a non-recurring basis to value our oil and natural gas properties when events and circumstances indicate a possible decline in the recoverability of the carrying amount of such property. When a triggering event is identified, we compare the carrying amount of our oil and natural gas properties to the estimated undiscounted cash flows our oil and natural gas properties will generate to determine if the carrying amount is recoverable. We perform this analysis on an asset pool basis. If the carrying amount exceeds the estimated undiscounted cash flows, we will write-down the carrying amount of the oil and natural gas properties to fair value. The Level 3 inputs used to determine such fair value are primarily based upon internally developed cash flow models and estimated net proceeds upon the potential sale of an asset pool. Significant Level 3 assumptions associated with discounted cash flows include, but are not limited to, estimates of reserves, future commodity prices, future production estimates, and discount rates commensurate with the risk associated with realizing the projected cash flows.
We also perform a separate impairment analysis when certain assets are classified as held for sale. The analysis is based on the agreed-upon proceeds less costs to sell, a Level 2 fair value measurement. For assets classified as held for sale during the three and nine months ended September 30, 2025, the carrying value of the net assets to be divested exceeded the fair value implied by the expected net proceeds, resulting in an impairment of $73.5 million and $122.2 million, respectively, to our proved oil and natural gas properties. See NOTE 3 – Acquisitions and Divestitures.
Our other non-recurring fair value measurements include the estimates of the fair value of assets and liabilities acquired through business combinations. Our business combinations are accounted for using the acquisition method under GAAP, which requires all assets acquired and liabilities assumed in the acquisitions to be recorded at fair values at the acquisition date of each transaction. Oil and natural gas properties are valued based on an income approach using a discounted cash flow model utilizing Level 3 inputs, including internally generated development and production profiles and price and cost assumptions. Net derivative liabilities assumed in acquisitions are valued based on Level 2 inputs similar to the Company's other commodity price derivatives. See NOTE 3 – Acquisitions and Divestitures.
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Other Fair Value Measurements
The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments. Our long-term debt obligations under our Revolving Credit Facility also approximates fair value because the associated variable rates of interest are market based. The fair value of the Senior Notes (as defined herein) as of September 30, 2025 and December 31, 2024 was approximately $3,197.6 million and $3,113.8 million, respectively, based on quoted market prices or Level 1 inputs.
NOTE 6 – Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following as of September 30, 2025 and December 31, 2024:
| September 30, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Accounts payable and accrued liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued lease and asset operating expense | |||||||||||
| Accrued capital expenditures | |||||||||||
| Accrued general and administrative expense | |||||||||||
| Accrued gathering, transportation and marketing expense | |||||||||||
| Accrued revenue and royalties payable | |||||||||||
| Accrued interest expense | |||||||||||
| Accrued severance taxes | |||||||||||
| Other | |||||||||||
| Total accounts payable and accrued liabilities | $ | $ | |||||||||
NOTE 7 – Debt
Senior Notes
Tender Offer and Redemption of 2028 Notes
In June 2025, we commenced a cash tender offer (the "Tender Offer") to purchase a portion of our outstanding 9.250 % Senior Notes due 2028 (the "2028 Notes"), pursuant to which approximately $306.1 million aggregate principal amount of 2028 Notes were validly tendered and not validly withdrawn at or prior to July 22, 2025, the final tender date, subsequent to our balance sheet date. In addition to the Tender Offer, we elected to redeem (the “2028 Notes Redemption”) an aggregate principal amount of the 2028 Notes equal to $193.9 million, at a price of 104.625 % of the unpaid principal amount of the 2028 Notes, plus accrued and unpaid interest, if any, to, but excluding, July 25, 2025, the redemption date. After giving effect to the 2028 Notes Redemption and the Tender Offer, the aggregate principal amount of the 2028 Notes outstanding is $500.0 million. Combined, we purchased the 2028 Notes at a blended price of 104.472 % of par and incurred a loss on the extinguishment of debt of approximately $29.2
2034 Notes
In July 2025, we issued $600.0 million aggregate principal amount of 8.375 % senior notes due 2034 (the "2034 Notes") at par (the “2034 Notes Offering”). The 2034 Notes bear interest at an annual rate of 8.375 %, which is payable on January 15 and July 15 of each year, and mature on January 15, 2034. The proceeds from the 2034 Notes Offering were approximately $588.1 million after deducting the initial purchasers' discount and offering expenses. We used the net proceeds to finance the consideration of the Tender Offer, the 2028 Notes Redemption and to repay a portion of our outstanding balance under our Revolving Credit Facility.
We may, at our option, redeem all or a portion of the 2034 Notes at any time on or after July 15, 2028 at certain redemption prices. We may also redeem up to 40 % of the aggregate principal amount of the 2034 Notes before July 15, 2028 with an amount of cash not greater than the net proceeds that we raise in certain equity offerings at a redemption price equal to
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At September 30, 2025, we had aggregate principal amounts outstanding of (i) $0.5 billion of the 2028 Notes, (ii) $1.1 billion of 7.625 % senior notes due 2032 (the "2032 Notes"), (iii) $1.0 billion of 7.375 % senior notes due 2033 (the "2033 Notes" and, collectively with the 2028 Notes, the 2032 Notes and the 2034 Notes, the "Senior Notes") and (iv) $0.6 billion of the 2034 Notes.
The Senior Notes are our senior unsecured obligations and the Senior Notes and the related guarantees rank equally in right of payment with the borrowings under our Revolving Credit Facility and any of our other future senior indebtedness and senior to any of our future subordinated indebtedness. The Senior Notes are guaranteed on a senior unsecured basis by each of our existing and future subsidiaries that will guarantee our Revolving Credit Facility. The Senior Notes and the guarantees are effectively subordinated to all of our secured indebtedness (including all borrowings and other obligations under our Revolving Credit Facility) to the extent of the value of the collateral securing such indebtedness and structurally subordinated in right of payment to all existing and future indebtedness and other liabilities (including trade payables) of any future subsidiaries that do not guarantee the Senior Notes.
The indentures governing the Senior Notes contain covenants that, among other things, limit the ability of our restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends or distributions in respect of its equity or redeem, repurchase or retire its equity or subordinated indebtedness; (iii) transfer or sell assets; (iv) make investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from any non-Guarantor restricted subsidiary to it; (vii) consolidate, merge or transfer all or substantially all of its assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries.
If we experience certain kinds of changes of control accompanied by a ratings decline, holders of the Senior Notes may require us to repurchase all or a portion of their notes at certain redemption prices. The Senior Notes are not listed, and we do not intend to list the notes in the future, on any securities exchange, and currently there is no public market for the notes.
For additional details on the Senior Notes, refer to Note 8 - Debt in Item 8. Financial Statements and Supplementary Data included in our Annual Report.
Revolving Credit Facility
Overview
We are party to a senior secured reserve-based revolving credit agreement (as amended, restated, amended and restated or otherwise modified to date, the "Revolving Credit Facility") with Wells Fargo Bank, N.A., as administrative agent for the lenders and letter of credit issuer, and the lenders from time to time party thereto. Our Revolving Credit Facility matures on April 10, 2029, but contains terms that if certain conditions regarding our outstanding 2028 Notes exist on November 16, 2027, it will mature on November 16, 2027.
At September 30, 2025, we had $72.0 million of borrowings and $17.9 million in letters of credit outstanding under the Revolving Credit Facility.
The obligations under the Revolving Credit Facility remain secured by first priority liens on substantially all of the Company’s and the guarantors’ tangible and intangible assets, including without limitation, oil and natural gas properties and associated assets and equity interests owned by the Company and such guarantors. In connection with each redetermination of the borrowing base, the Company must maintain mortgages on at least 85 % of the net present value, discounted at 9 % per annum (“PV-9”) of the oil and natural gas properties that constitute borrowing base properties. The Company’s domestic direct and indirect subsidiaries are required to be guarantors under the Revolving Credit Facility, subject to certain exceptions.
The borrowing base is subject to semi-annual scheduled redeterminations on or about April 1 and October 1 of each year, as well as (i) elective borrowing base interim redeterminations at our request not more than twice during any consecutive 12-month period or the required lenders not more than once during any consecutive 12-month period and (ii) elective borrowing base interim redeterminations at our request following any acquisition of oil and natural gas properties with a purchase price in the aggregate of at least 5.0 % of the then effective borrowing base. The borrowing base will be automatically reduced upon (i) the issuance of certain permitted junior lien debt and other permitted additional debt, (ii) the sale or other disposition of
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borrowing base properties if the aggregate PV-9 of such properties sold or disposed of is in excess of 5.0 % of the borrowing base then in effect and (iii) early termination or set-off of swap agreements (a) the administrative agent relied on in determining the borrowing base or (b) if the value of such swap agreements so terminated is in excess of 5.0 % of the borrowing base then in effect.
In October 2025, in connection with the borrowing base redetermination of our Revolving Credit Facility, we entered into the Thirteenth Amendment (the “Credit Agreement Amendment”) to the credit agreement governing our Revolving Credit Facility. Among other things, the Credit Agreement Amendment provides for (i) an automatic $1.3 billion increase in the borrowing base from $2.6 billion to $3.9 billion, effective upon the consummation Vital Energy Merger, subject to the satisfaction of certain conditions, (ii) an extension of the maturity date for any revolving loans to October 22, 2030 from April 10, 2029, (iii) a reduction in the applicable margin, so that loans under the Credit Agreement will be priced based on the Secured Overnight Financing Rate (SOFR) plus 1.75 % to 2.75 % , a reduction of 0.25 %, and (iv) an increase in the aggregate maximum credit amount under Crescent’s credit facility from $3.0 billion to $6.0 billion. The Credit Agreement Amendment maintains the aggregate elected commitments at $2.0 billion.
Interest
Borrowings under the Revolving Credit Facility bear interest at either (i) a U.S. dollar alternative base rate (based on the prime rate, the federal funds effective rate or an adjusted secured overnight financing rate (“SOFR”), plus an applicable margin or (ii) SOFR, plus an applicable margin, at the election of the borrowers. The applicable margin varies based upon our borrowing base utilization then in effect. The fee payable for unused revolving commitments at September 30, 2025 is 0.375 % per year and fees incurred are included within interest expense on our condensed consolidated statements of operations. Our weighted average interest rate on loan amounts outstanding as of September 30, 2025 was 6.99 %. We had no borrowing outstanding under the Revolving Credit Facility at December 31, 2024.
Covenants
The Revolving Credit Facility contains certain covenants that restrict the payment of cash dividends, certain borrowings, sales of assets, loans to others, investments, merger activity, commodity swap agreements, liens and other transactions without the adherence to certain financial covenants or the prior consent of our lenders. We are subject to a (i) maximum leverage ratio and (ii) current ratio financial covenants calculated as of the last day of each fiscal quarter. The Revolving Credit Facility also contains representations, warranties, indemnifications and affirmative and negative covenants, including events of default relating to nonpayment of principal, interest or fees, inaccuracy of representations or warranties in any material respect when made or when deemed made, violation of covenants, bankruptcy and insolvency events, certain unsatisfied judgments and change of control. If an event of default occurs and we are unable to cure such default, the lenders will be able to accelerate maturity and exercise other rights and remedies.
Letters of Credit
From time to time, we may request the issuance of letters of credit for our own account. Letters of credit accrue interest at a rate equal to the margin associated with SOFR borrowings. At September 30, 2025 and December 31, 2024, we had letters of credit outstanding of $17.9 million and $21.2 million, respectively, which reduce the amount available to borrow under our Revolving Credit Facility.
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Total Debt Outstanding
The following table summarizes our debt balances as of September 30, 2025 and December 31, 2024:
| Debt Outstanding | Letters of Credit Issued | Borrowing Base | Maturity | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| September 30, 2025 | |||||||||||||||||||||||
| Revolving Credit Facility | $ | $ | $ | 4/10/2029 | |||||||||||||||||||
| — | — | 2/15/2028 | |||||||||||||||||||||
| — | — | 4/1/2032 | |||||||||||||||||||||
| — | — | 1/15/2033 | |||||||||||||||||||||
| — | — | 1/15/2034 | |||||||||||||||||||||
| Less: Unamortized discount, premium and issuance costs | ( | ||||||||||||||||||||||
| Total long-term debt | $ | ||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Revolving Credit Facility | $ | $ | $ | 4/10/2029 | |||||||||||||||||||
| — | — | 2/15/2028 | |||||||||||||||||||||
| — | — | 4/1/2032 | |||||||||||||||||||||
| — | — | 1/15/2033 | |||||||||||||||||||||
| Less: Unamortized discount, premium and issuance costs | ( | ||||||||||||||||||||||
| Total long-term debt | $ | ||||||||||||||||||||||
NOTE 8 – Asset Retirement Obligations
Our ARO liabilities are based on our net ownership in wells and facilities and management’s estimate of the costs to abandon and remediate those wells and facilities together with management’s estimate of the future timing of the costs to be incurred. The following table summarizes activity related to our ARO liabilities for the nine months ended September 30, 2025:
| As of September 30, 2025 | |||||
| (in thousands) | |||||
| Balance at beginning of period | $ | ||||
Additions (1) | |||||
| Retirements | ( | ||||
| Sale | ( | ||||
| Accretion expense | |||||
| Balance at end of period | |||||
| Less: current portion | ( | ||||
| Balance at end of period, noncurrent portion | $ | ||||
(1) For the nine months ended September 30, 2025, our ARO additions primarily related to oil and natural gas properties acquired in the Ridgemar Acquisition. See NOTE 3 – Acquisitions and Divestitures for additional information.
NOTE 9 – Commitments and Contingencies
From time to time, we may be a plaintiff or defendant in a pending or threatened legal proceeding arising in the normal course of business. In accordance with ASC 450, Contingencies, an accrual is recorded for a material loss contingency when its occurrence is probable and damages are reasonably estimable based on the anticipated most likely outcome or the minimum amount within a range of possible outcomes.
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Legal proceedings are inherently unpredictable, and unfavorable resolutions can occur. Assessing contingencies is highly subjective and requires judgement about uncertain future events. When evaluating contingencies related to legal proceedings, we may be unable to estimate losses due to a number of factors, including potential defenses, the procedural status of the matter in question, the presence of complex legal and/or factual issues, and the ongoing discovery and/or development of information important to the matter. We are unable to make an estimate of the range of reasonably possible losses related to our contingencies, but we are currently unaware of any proceedings that, in the opinion of management, will individually or in the aggregate have a material adverse effect on our financial position, results of operations or cash flows.
We are subject to extensive federal, state and local environmental laws and regulations. These laws and regulations regulate the discharge of materials into the environment and may require us to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. We believe we are currently in compliance with all applicable federal, state and local regulations. Accordingly, no significant liability or loss associated with environmental remediation was recognized as of September 30, 2025.
NOTE 10 – Equity-Based Compensation Awards
Overview
We and certain of our subsidiaries have entered into incentive compensation award agreements to grant profits interests, restricted stock units ("RSUs"), performance stock units ("PSUs") and other incentive awards to our employees, our Manager, as defined within NOTE 11 – Related Party Transactions, and non-employee directors. The following table summarizes compensation cost we recognized in connection with our equity-based compensation awards for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Equity-based compensation expense (income): | (in thousands) | |||||||||||||||||||||||||
| Liability-classified profits interest awards | $ | $ | $ | $ | ||||||||||||||||||||||
| Equity-classified profits interest awards | ( | ( | ||||||||||||||||||||||||
| Equity-classified LTIP RSU awards | ||||||||||||||||||||||||||
| Equity-classified LTIP PSU awards | ||||||||||||||||||||||||||
| Equity-classified Manager PSUs | ||||||||||||||||||||||||||
SilverBow Merger awards | ||||||||||||||||||||||||||
| Total equity-based compensation expense (income) | $ | $ | $ | $ | ||||||||||||||||||||||
| Tax benefit related to equity-based compensation awards | $ | $ | $ | $ | ||||||||||||||||||||||
Our incentive compensation awards may contain certain service-based, performance-based, and market-based vesting conditions, which are further discussed below.
Equity-classified LTIP RSU Awards
During the three and nine months ended September 30, 2025, we granted 0.1 million and 0.9 million, respectively, equity-classified LTIP RSUs under the Crescent Energy Company 2021 Equity Incentive Plan to certain directors, officers and employees. Each LTIP RSU represents the contingent right to receive one 9.54 and $10.91 , respectively. The LTIP RSUs will vest over a period of one to three years 0.1 million and 0.2 million LTIP RSUs that vested, respectively.
Equity-classified Manager PSU Awards
During the three and nine months ended September 30, 2025, in conjunction with the 2025 Class A Redemption, the closing of the Ridgemar Acquisition, our Class A Repurchases, the Corporate Simplification and LTIP RSU vesting, the number of shares of our Class A Common Stock increased less than 0.1 million and 67.6 million, respectively. As a result, the number of equity-
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classified PSU target shares of Class A Common Stock related to the award of PSUs granted to the Manager under the Crescent Energy Company 2021 Manager Incentive Plan (referred to herein as the Incentive Compensation) increased by approximately 5.4 million shares for the nine months ended September 30, 2025. We accounted for this increase as a change in estimate and recognized additional expense of $77.9 million for the nine months ended September 30, 2025. See NOTE 1 – Organization and Basis of Presentation for more information on the 2025 Class A Redemption and NOTE 3 – Acquisitions and Divestitures for more information on the Ridgemar Acquisition. For more information on the Incentive Compensation, including the performance-based vesting criteria applicable thereto, see NOTE 11 – Related Party Transactions - Management Agreement.
NOTE 11 – Related Party Transactions
KKR Group
Management Agreement
Crescent Energy Company has a management agreement (the "Management Agreement") with KKR Energy Assets Manager LLC (the "Manager"). Pursuant to the Management Agreement, the Manager provides the Company with members of its executive management team and certain management services. The Management Agreement has a term of three years , with automatic three-year renewals, unless the Company or the Manager elects not to renew the Management Agreement. The current term automatically renewed in December 2024 for an additional three-year term ending December 7, 2027.
As consideration for the services rendered pursuant to the Management Agreement and the Manager’s overhead, including compensation of members of its executive management team, the Manager is entitled to receive compensation from the Company equal to $69.5 million per annum ("Manager Compensation"), which is included in General and administrative expenses on our condensed consolidated statements of operations. As the Company's business and assets expand, Manager Compensation will increase by an amount equal to 1.5 % per annum of the net proceeds from all future issuances of our primary equity securities by the Company (including in connection with acquisitions). See NOTE 3 – Acquisitions and Divestitures for more information.
Prior to the Corporate Simplification, the Manager Compensation was reduced proportionally by the percentage of OpCo Units held as redeemable noncontrolling interests, with such amount distributed concurrently to the holders of redeemable noncontrolling interests. This cash distribution to the holders of redeemable noncontrolling interests did not represent additional Manager Compensation; rather, it represented an ordinary cash distribution to the holders of redeemable noncontrolling interests. In certain instances in our financial statements and other disclosures, we clarify the underlying event that requires us to make such distributions.
During the three and nine months ended September 30, 2025, we recorded general and administrative expense of $17.4 million and $47.9 million, respectively, related to the Manager Compensation and concurrently made cash distributions of $8.8 million during the nine months ended September 30, 2025 to our redeemable noncontrolling interests. After the Corporate Simplification, there are no longer any outstanding redeemable noncontrolling interests in OpCo, and as such, we will no longer make cash distributions to the holders of redeemable noncontrolling interests. During the three and nine months ended September 30, 2024, we recorded general and administrative expense of $11.5 million and $28.4 million, respectively, and made cash distributions of $5.6 million and $17.6 million, respectively, to our redeemable noncontrolling interests related to the Management Agreement. At both September 30, 2025 and December 31, 2024, we had $17.4
Additionally, the Manager is entitled to receive incentive compensation ("Incentive Compensation") under which the Manager is targeted to receive 10 % of our outstanding Class A Common Stock based on the achievement of certain performance-based measures. The Incentive Compensation consists of five tranches that settle over a five-year period beginning in 2024, and each tranche relates to a target number of shares of Class A Common Stock equal to 2 % of the outstanding Class A Common Stock as of the time such tranche is settled. Performance goals are evaluated on absolute stock price performance and relative stock price performance versus a set of our peers and there is no vesting based solely on time. The certification of the Company's level of achievement with respect to the first three-year -performance period under the Incentive Compensation is in process and is expected to be completed in 2025. Based on the level of achievement with respect to the performance goals applicable to such tranche, the Manager is entitled to the settlement of such tranche with respect to a number of shares of Class A Common Stock ranging from 0 % to 4.8 % of the outstanding Class A Common Stock at the time each tranche is settled so long as the Manager continuously provides services to us through the end of the performance period applicable to a tranche. During the three and nine months ended September 30, 2025, we recorded non-cash general and administrative expense of $22.5 million and $139.3 million, respectively, related to Incentive Compensation. During the three and nine months ended September 30,
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2024, we recorded general and administrative expense of $84.6 million and $132.4 million, respectively, related to Incentive Compensation. See NOTE 10 – Equity-Based Compensation Awards for more information.
KKR Funds
From time to time, we may invest in upstream oil and gas assets alongside EIGF II and/or other KKR funds ("KKR Funds") pursuant to the terms of the Management Agreement. In these instances, certain of our consolidated subsidiaries enter into Master Service Agreements ("MSA") with entities owned by KKR Funds, pursuant to which our subsidiaries provide certain services to such KKR Funds, including the allocation of the production and sale of oil, natural gas and NGLs, collection and disbursement of revenues, operating expenses and general and administrative expenses in the respective oil and natural gas properties, and the payment of all capital costs associated with the ongoing operations of the oil and natural gas assets. Our subsidiaries settle balances due to or due from KKR Funds on a quarterly basis. The administrative costs associated with these MSAs are allocated by us to KKR Funds based on (i) an actual basis for direct expenses we may incur on their behalf or (ii) an allocation of such charges between the various KKR Funds based on the estimated use of such services by each party. As of September 30, 2025 and December 31, 2024, we had a related party receivable of $1.2 million and $4.3 million, respectively, included within Accounts receivable – affiliates and a related party payable of $7.9 million and $1.2 million, respectively, included within Accounts payable – affiliates on our condensed consolidated balance sheets associated with KKR Funds transactions.
KKR Capital Markets LLC ("KCM")
We may engage KCM, an affiliate of KKR Group, for capital market transactions primarily including notes offerings and equity offerings. In July 2025, in connection with 2034 Notes offering, we paid $1.5 million in fees to KCM. The following table summarizes fees, discounts and commissions paid to KCM by Crescent in connection with our debt and equity transactions:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
| Amounts paid to KCM | $ | $ | $ | $ | |||||||||||||||||||
Other Transactions
In March 2024, OpCo repurchased 2.3 million OpCo Units from Independence Energy Aggregator L.P. for $22.7 million. Refer to further discussion in NOTE 1 – Organization and Basis of Presentation.
During the three and nine months ended September 30, 2025, we made cash distributions of $0.6 million and $8.4 million, respectively, to our redeemable noncontrolling interests related to their pro rata share of cash distributions made to Crescent Energy Company to pay dividends and income taxes. During the three and nine months ended September 30, 2024, we made cash distributions of $8.1 million and $24.4 million, respectively, to our redeemable noncontrolling interests related to their pro rata share of cash distributions made to Crescent Energy Company to pay dividends and income taxes. As a result of the Corporate Simplification, such pro rata distributions were eliminated.
In addition, during the three and nine months ended September 30, 2025, we reimbursed KKR $0.6 million and $2.4 million, respectively, for costs incurred on our behalf. During the nine months ended September 30, 2024, we reimbursed KKR $1.4 million for costs incurred on our behalf.
At December 31, 2024, we had $0.7
Board of Directors
We have a ten-year office lease with an affiliate of Crescent Real Estate LLC. John C. Goff, the Chairman of our Board of Directors, is affiliated with Crescent Real Estate LLC. The terms of the lease provide for annual base rent of $0.4 million increasing to $0.5 million over the life of the agreement.
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We may be required to fund certain workover costs, and we will be required to fund plugging and abandonment costs related to producing assets held by Chama, an Investment in equity affiliates on our condensed consolidated balance sheets. During the three and nine months ended September 30, 2025, we funded $3.2 million and $5.2 million, respectively, to Chama associated with the plugging and abandonment costs.
NOTE 12 – Earnings Per Share
We have two classes of common stock in the form of Class A Common Stock and Class B Common Stock. Our shares of Class A Common Stock are entitled to dividends. Shares of Class B Common Stock do not participate in dividends or undistributed earnings, but receive pro rata distributions from OpCo through their ownership of OpCo Units. After the Corporate Simplification, there are no Class B Common Stock outstanding. We apply the two-class method for purposes of calculating earnings per share (“EPS”). The two-class method determines earnings per share of Common Stock and participating securities according to dividends or dividend equivalents declared during the period and each security's respective participation rights in undistributed earnings and losses. Net income (loss) per share - diluted excludes the effect of 2.4 million and 2.7 million of RSUs and PSUs, respectively, for the three months ended September 30, 2025 and September 30, 2024 that were not included in the computation of earnings per share because to do so would have been antidilutive to our net loss.
The following table sets forth the computation of basic and diluted net income (loss) per share:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands, except share and per share amounts) | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Less: net (income) loss attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
| Less: net (income) loss attributable to redeemable noncontrolling interests | ( | ( | ( | ||||||||||||||||||||
| Net income (loss) attributable to Crescent Energy - basic | ( | ( | |||||||||||||||||||||
| Add: Reallocation of net income attributable to redeemable noncontrolling interest for the dilutive effect of RSUs | ( | ||||||||||||||||||||||
| Add: Reallocation of net income attributable to redeemable noncontrolling interest for the dilutive effect of PSUs | ( | ||||||||||||||||||||||
| Net income (loss) attributable to Crescent Energy - diluted | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average Class A Common Stock outstanding - basic | |||||||||||||||||||||||
| Add: dilutive effect of RSUs | |||||||||||||||||||||||
| Add: dilutive effect of PSUs | |||||||||||||||||||||||
| Weighted-average Class A Common Stock outstanding – diluted | |||||||||||||||||||||||
| Weighted-average Class B Common Stock outstanding – basic and diluted | |||||||||||||||||||||||
| Net income (loss) per share: | |||||||||||||||||||||||
| Class A Common Stock – basic | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Class A Common Stock – diluted | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Class B Common Stock – basic and diluted | $ | $ | $ | $ | |||||||||||||||||||
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NOTE 13 – Segment Information
We have evaluated how we are organized and managed and have identified one reportable segment, which is the exploration and production of crude oil, natural gas and NGLs. We consider our gathering, processing and marketing functions as ancillary to our oil and gas producing activities. Substantially all of our operations and assets are located onshore in the United States, and substantially all of our revenues are attributable to United States customers.
The Company’s Chief Operating Decision Maker ("CODM") is the Chief Executive Officer. The CODM uses measures of profitability including Net income (loss) on the condensed consolidated statement of operations to assess performance and determine resource allocation. The CODM uses these metrics to make key operating decisions, including the determination of allocation of capital between development of existing oil and gas properties and the acquisition of additional oil and gas properties, and the identification and divestiture of non-core assets. The measure of segment assets is reported on the Consolidated balance sheets as Total assets. We do not have intra-entity sales or transfers.
The table below provides information about the Company’s single reportable segment:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Lease operating expense | |||||||||||||||||||||||
| Workover expense | |||||||||||||||||||||||
| Asset operating expense | |||||||||||||||||||||||
| Gathering, transportation and marketing | |||||||||||||||||||||||
| Production and other taxes | |||||||||||||||||||||||
| Depreciation, depletion and amortization | |||||||||||||||||||||||
| Impairment of oil and natural gas properties | |||||||||||||||||||||||
| Midstream and other operating expense | |||||||||||||||||||||||
| General and administrative expense excluding equity-based compensation | |||||||||||||||||||||||
| Equity-based compensation expense | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
Other segment items | ( | ( | ( | ||||||||||||||||||||
| Net income (loss) | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Total development of oil and natural gas properties | $ | $ | $ | $ | |||||||||||||||||||
Other segment items include Exploration expense, Gain (loss) on derivatives, (Gain) loss on sale of assets and Loss from extinguishment of debt from our condensed consolidated statements of operations.
NOTE 14 – Subsequent Events
Dividend
On November 3, 2025, the Board of Directors approved a quarterly cash dividend of $0.12 0.48 per share on an annualized basis, to be paid to shareholders of our Class A Common Stock with respect to the third quarter of 2025. The quarterly dividend is payable on December 1, 2025 to shareholders of record as of the close of business on November 17, 2025.
The payment of quarterly cash dividends is subject to management’s evaluation of our financial condition, results of operations and cash flows in connection with such payments and approval by our Board of Directors. Management and the Board of Directors will evaluate any future changes in cash dividends on a quarterly basis.
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Item 2. Management’s discussion and analysis of financial condition and results of operations
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide the reader of the financial statements with a narrative from the perspective of management on the financial condition, results of operations, liquidity and certain other factors that may affect the Company's operating results. The following discussion and analysis should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 ("Annual Report"), our Quarterly Report on Form 10-Q for the period ended March 31, 2025 and June 30, 2025, as well as our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024. The following information updates the discussion of our financial condition provided in our previous filings, and analyzes the changes in the results of operations between the three and nine months ended September 30, 2025 and 2024. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, commodity price volatility, capital requirements and uncertainty of obtaining additional funding on terms acceptable to the Company, realized oil, natural gas and NGL prices, the timing and amount of future production of oil, natural gas and NGLs, shortages of equipment, supplies, services and qualified personnel, as well as those factors discussed below and elsewhere in this Quarterly Report and in our Annual Report, particularly under “Risk Factors” and “Cautionary Statement Regarding Forward Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. Unless otherwise stated or the context otherwise indicates, all references to “we,” “us,” “our,” "Crescent" and the “Company” or similar expressions refer to Crescent Energy Company and its subsidiaries.
Business
Crescent is a differentiated U.S. energy company committed to delivering value for shareholders through a disciplined growth through acquisition strategy and consistent return of capital. Our long-life, balanced portfolio combines stable cash flows from low-decline production with deep, high-quality development inventory. Our activities are focused in Texas and the Rocky Mountain region.
Vital Energy Merger
In August 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Vital Energy, Inc., a Delaware corporation ("Vital"), pursuant to which we agreed to acquire Vital in an all-equity transaction through a series of mergers (collectively, the "Vital Energy Merger"). See NOTE 3 – Acquisitions and Divestitures included in Part I. Item 1. Financial Statements of this Quarterly Report for more information. This Quarterly Report is filed before the completion of the Vital Energy Merger, and information set forth herein only relates to the results of operations for Crescent for the quarter and year-to-date periods ended September 30, 2025 and 2024 and does not include any operational or financial information for Vital for such periods.
Geopolitical developments and economic environment
During the last several years, prices of crude oil, natural gas and NGLs have experienced periodic downturns and sustained volatility, impacted by geopolitical events, such as Russia’s invasion of Ukraine and the related sanctions imposed on Russia, Hamas' attack against Israel and the ensuing conflict and escalation of tensions in the Middle East, including the conflict with Iran, supply chain constraints, elevated interest rates, U.S. international trade and tariff policy developments and responses thereto and costs of capital and political and regulatory uncertainties. Furthermore, the United States has experienced, and may continue to experience, a significant inflationary environment, which began in 2022 that, along with international geopolitical risks and market responses to the announcement of certain tariff policies by the Trump Administration, has contributed to concerns of a potential recession in the United States in 2025 that has created further volatility. OPEC has announced that it is phasing out oil output cuts by increasing 411,000 barrels per day, each month from May to July 2025 and then increasing to 548,000 barrels per day in August 2025. The actions of OPEC with respect to oil production levels and announcements of potential changes in such levels may result in further volatility in commodity prices and the oil and natural gas industry generally. Such volatility may lead to a more difficult investing and planning environment for us and our customers. While we
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use derivative instruments to partially mitigate the impact of commodity price volatility, our revenues and operating results depend significantly upon the prevailing prices for oil and natural gas.
During the three and nine months ended September 30, 2025, we recorded impairment expense of $73.5 million and $122.2 million, respectively, related to oil and natural gas properties. See NOTE 5 – Fair Value Measurements to the unaudited financial statements included in Part I. Item 1. Financial Statements. Certain of our conventional proved oil and natural gas properties in Oklahoma, which have a carrying value of $276.3 million, have limited cushion between their carrying value and estimated undiscounted cash flows at the current forward commodity price curve as of September 30, 2025. A further decline of future commodity prices or a decrease in estimates of oil and natural gas reserves for these assets would likely result in an impairment charge. The actual amount of impairment incurred, if any, for these properties will depend on a variety of factors including, but not limited to, subsequent forward price curve changes, weighted-average cost of capital, operating cost estimates and future capital expenditures estimates. An estimate of the sensitivity to changes in assumptions in our fair value calculations is not practicable, given the numerous assumptions (e.g. reserves, pace and timing of development plans, commodity prices, capital expenditures, operating costs, drilling and development costs, inflation and discount rates) that can materially affect our estimates. Unfavorable adjustments to some of the above listed assumptions would likely be offset by favorable adjustments in other assumptions. For example, the impact of sustained reduced commodity prices would likely be partially offset by lower costs.
Due to the cyclical nature of the oil and gas industry, fluctuating demand for oilfield goods and services can put pressure on the pricing structure within our industry. As commodity prices rise, the cost of oilfield goods and services generally also increase, while during periods of commodity price declines, oilfield costs typically lag and do not adjust downward as fast as oil prices do. The U.S. inflation rate has remained relatively stable through 2024 and 2025, after an extended period of elevation. Inflationary pressures have resulted in and may result in additional increases to the costs of our oilfield goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise. Recently announced tariffs and any further tariffs may also increase our operating costs. Sustained levels of inflation and certain other market pressures have caused the U.S. Federal Reserve and other central banks to increase interest rates in 2022 and 2023. Although the U.S. Federal Reserve made cuts to benchmark interest rates in 2024 and recently in September 2025, there is no guarantee that additional cuts will occur. Although the financial health of the oil and gas industry has shown improvement as compared to prior periods, to the extent elevated interest rates and inflation remain, we may experience further cost increases for our operations, including oilfield services, labor costs and equipment. Higher oil and natural gas prices may cause the costs of materials and services to continue to rise. We cannot predict any future trends in the rate of inflation, any subsequent monetary policy changes, and a significant increase in inflation, to the extent we are unable to recover higher costs through higher oil and natural gas prices and revenues, would negatively impact our business, financial condition and results of operations. See Part I, Item 1A. Risk Factors—"Risks related to the oil and natural gas industry—Inflationary issues and associated changes in monetary policy previously have resulted in and such issues, as well as certain proposed tariffs, may in the future result in additional increases to the cost of our goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise" in our Annual Report.
Capital market transactions
2025 Senior Notes Offerings
Tender Offer and Redemption of 2028 Notes
In June 2025, we commenced a cash tender offer (the "Tender Offer") to purchase a portion of our outstanding 9.250% Senior Notes due 2028 (the "2028 Notes"), pursuant to which approximately $306.1 million aggregate principal amount of 2028 Notes were validly tendered and not validly withdrawn at or prior to July 22, 2025, the final tender date, subsequent to our balance sheet date. In addition to the Tender Offer, we elected to redeem (the “2028 Notes Redemption”) an aggregate principal amount of the 2028 Notes equal to $193.9 million, at a price of 104.625% of the unpaid principal amount of the 2028 Notes, plus accrued and unpaid interest, if any, to, but excluding, July 25, 2025, the redemption date. After giving effect to the 2028 Notes Redemption and the Tender Offer, the aggregate principal amount of the 2028 Notes outstanding is $500.0 million. Combined, we purchased the 2028 Notes at a blended price of 104.472% of par and incurred a loss on the extinguishment of debt of approximately $29.2 million, including the write-off of associated deferred financing costs, during the three and nine months ended September 30, 2025.
2034 Notes
In July 2025, we issued $600.0 million aggregate principal amount of 8.375% senior notes due 2034 (the "2034 Notes") at par (the “2034 Notes Offering”). The 2034 Notes bear interest at an annual rate of 8.375%, which is payable on January 15 and July
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15 of each year, and mature on January 15, 2034. The proceeds from the 2034 Notes Offering were approximately $588.1 million after deducting the initial purchasers' discount and offering expenses. We used the net proceeds to finance the consideration of the Tender Offer, the 2028 Notes Redemption and to repay a portion of our outstanding balance under our Revolving Credit Facility.
Revolving Credit Facility
In October 2025, in connection with the borrowing base redetermination of our Revolving Credit Facility, we entered into the Thirteenth Amendment (the “Credit Agreement Amendment”) to the credit agreement governing our Revolving Credit Facility. Among other things, the Credit Agreement Amendment provides for (i) an automatic $1.3 billion increase in the borrowing base from $2.6 billion to $3.9 billion, effective upon the consummation Vital Energy Merger, subject to the satisfaction of certain conditions, (ii) an extension of the maturity date for any revolving loans to October 22, 2030 from April 10, 2029, (iii) a reduction in the applicable margin, so that loans under the Credit Agreement will be priced based on the Secured Overnight Financing Rate (SOFR) plus 1.75% to 2.75% , a reduction of 0.25%, and (iv) an increase in the aggregate maximum credit amount under Crescent’s credit facility from $3.0 billion to $6.0 billion. The Credit Agreement Amendment maintains the aggregate elected commitments at $2.0 billion.
Corporate Simplification
In April 2025, we announced that our corporate structure had been simplified through the elimination of the Company’s Up-C structure through the exercise by the holders of all remaining shares of Class B Common Stock of their redemption rights with respect to all of their OpCo Units (the “Corporate Simplification”). Prior to the Corporate Simplification, the Up-C structure provided for holders of Crescent’s then-outstanding Class B Common Stock, par value $0.0001 per share (“Class B Common Stock”), which had voting (but no economic) rights with respect to Crescent, to hold a corresponding amount of economic, non-voting units of OpCo (“OpCo Units”), which were generally redeemable or exchangeable for Class A Common Stock on the terms and conditions set forth in OpCo’s Amended and Restated Limited Liability Company Agreement (“OpCo LLC Agreement”). Pursuant to the aforementioned exercise of such right in the Corporate Simplification, all OpCo Units (other than those held by Crescent) were exchanged for an equivalent number of shares of Class A Common Stock and all outstanding shares of Class B Common Stock were cancelled. As a result of the Corporate Simplification, all of the Company’s common stockholders now hold Class A Common Stock. See NOTE 11 – Related Party Transactions for more information.
2025 Equity Transactions
In March 2025, Independence Energy Aggregator L.P., the entity through which certain private investors in affiliated KKR entities held their interests in us, exercised its redemption right with respect to 2.9 million OpCo Units, and such OpCo Units were exchanged for an equivalent number of shares of Class A Common Stock and a corresponding number of shares of Class B Common Stock were cancelled (the "2025 Class A Redemption"). The shares of Class A Common Stock were sold by Independence Energy Aggregator L.P. at a price per share of $9.91, pursuant to Rule 144, through a broker-dealer. We did not receive any proceeds or incur any material expenses related to the March 2025 Class A Redemption.
Share repurchase program
Our Board of Directors authorized a stock repurchase program on March 4, 2024 with an approved limit of $150.0 million and a two-year term. Such repurchases may be made from time to time in the open market, in privately negotiated transactions, through purchases made in accordance with the Rule 10b5-1 of the Exchange Act or by such other means as will comply with applicable state and federal securities laws. The timing of any repurchases under the stock repurchase program will depend on market conditions, contractual limitations and other considerations. The program may be extended, modified, suspended or discontinued at any time, and does not obligate us to repurchase any dollar amount or number of securities. During 2024, we utilized $30.5 million to repurchase a combination of Class A Common Stock and OpCo Units. During the nine months ended September 30, 2025, we repurchased 4.1 million shares of our Class A Common Stock for $33.5 million, at an average price of $8.21 per share. When combining the Class A Repurchases with the 2024 Equity Transactions, the remaining amount under the authorized plan is approximately $86.0 million as of September 30, 2025.
Acquisitions and divestitures
Acquisitions
Ridgemar Acquisition
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On December 3, 2024, we entered into the Membership Interest Purchase Agreement (the “Ridgemar Acquisition Agreement”) pursuant to which we acquired all of the outstanding equity interests in Ridgemar (Eagle Ford) LLC (“Ridgemar”). On January 31, 2025, we acquired all of the outstanding equity interests in Ridgemar (Eagle Ford) LLC ("Ridgemar") for $807.2 million in cash and 5.5 million shares of our Class A Common Stock (the "Ridgemar Acquisition"). In addition, up to $170.0 million in contingent earn-out consideration may be paid in fiscal years 2026 and 2027 if quarterly NYMEX WTI prices of crude oil are above certain thresholds in 2026 and 2027 (collectively, the "Ridgemar Contingent Consideration”). We accounted for the Ridgemar Acquisition as an asset acquisition.
SilverBow Merger
On July 30, 2024, we consummated the SilverBow Merger. See NOTE 3 – Acquisitions and Divestitures included in Part I. Item 1. Financial Statements of this Quarterly Report. Immediately following the SilverBow Merger, Crescent Energy Company completed a series of internal transactions following which the assets of SilverBow Resources, Inc. ("SilverBow") and its subsidiary became held by subsidiaries of Crescent Energy Finance LLC. In connection with the SilverBow Merger, Crescent issued 51.6 million shares of Class A Common Stock and paid $382.4 million in cash to former SilverBow shareholders, including amounts payable in respect of outstanding SilverBow equity awards. In connection with the closing of the SilverBow Merger, we repaid all of SilverBow’s outstanding indebtedness.
Other Acquisitions
In January 2025, we acquired additional interests in Crescent operated oil and gas properties located in Webb County, Texas from unaffiliated third parties for aggregate consideration of approximately $21.2 million, subject to customary post closing adjustments.
In July 2025, we acquired a portfolio of oil and natural gas mineral interests located in various U.S. oil and gas basins from an unrelated third-party for total cash consideration of approximately $67.9 million, subject to customary purchase price adjustments. The Minerals Acquisition consideration transferred is inclusive of customary post closing adjustments of $4.4 million which are recorded in Accounts receivable, net on the condensed consolidated balance sheets as of September 30, 2025. The purchase price was funded using borrowings from our Revolving Credit Facility.
In October 2024, we acquired from unaffiliated third parties certain interests in oil and gas properties, rights and related assets located in Atascosa, Frio, La Salle and McMullen Counties, Texas for aggregate consideration of approximately $156.0 million, including certain customary purchase price adjustments.
In February 2024, we acquired a portfolio of oil and natural gas mineral interests located in the Karnes Trough of the Eagle Ford Basin from an unrelated third-party (the "Eagle Ford Minerals Acquisition") for total cash consideration of approximately $25.0 million, including customary purchase price adjustments. The purchase price was funded using borrowings from our Revolving Credit Facility.
Divestitures
During 2025, we have entered into agreements with certain unrelated third-party buyers to sell non-core assets as part of our previously announced non-core asset divestiture program for total consideration in excess of $800.0 million, subject to customary purchase price adjustments and transaction costs. Through September 30, 2025, we have received $114.8 million in cash proceeds and expect to receive the remaining proceeds during the fourth quarter of 2025 upon the closing of the remaining transactions. Certain of these transactions, which are expected to close in the fourth quarter, met the criteria of held for sale as of September 30, 2025. In connection with transactions classified as held for sale, we performed an assessment of the fair value of the associated net assets and liabilities and determined certain of those assets were impaired. During the three and nine months ended September 30, 2025, we recorded impairment expense of $73.5 million and $122.2 million, respectively, to write down the carrying value of the associated oil and natural gas properties to the estimated transaction price less cost to sell. In addition, we recorded a loss of $1.6 million and a gain of $11.1 million on the sale of such assets for the three and nine months ended September 30, 2025, respectively.
During the nine months ended September 30, 2024, we sold non-core assets to unrelated third-party buyers for $29.7 million in aggregate net cash proceeds and recorded a gain on the sale of assets of $19.4 million.
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Income Taxes
Crescent is a holding company and its sole material asset is OpCo Units. OpCo is a partnership and is generally not subject to U.S. federal and certain state taxes. Crescent is subject to U.S. federal and certain state taxes on its allocable share of any taxable income of OpCo. Historically, our effective tax rate has been lower than the U.S. federal statutory income tax rate of 21% primarily due to effects of removing income and losses related to our noncontrolling interests and redeemable noncontrolling interests. However, as part of our Corporate Simplification, we expect our effective rate to be more in line with the U.S. federal statutory income tax rate plus our blended state income tax rate. Our effective tax rate for the three months ended September 30, 2025 was driven higher primarily due to our increased ownership of OpCo in 2025. In addition to increasing our effective tax rate, the Corporate Simplification and the 2025 Class A Redemption increased our Deferred tax liability by $136.9 million with an offsetting decrease in Additional paid-in capital.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The OBBBA is a significant piece of tax legislation that includes provisions that permanently restore an EBITDA-based section 163(j) calculation for tax years beginning after December 31, 2024 and restore 100% bonus depreciation under section 168(k) for property acquired and placed in service after January 19, 2025, deferring the recognition of a significant portion of current federal tax for multiple years.
Stewardship
We seek to improve the assets we own and acquire to deliver enhanced financial returns, operations and stewardship. We believe that being a responsible operator will produce better outcomes, creating a net benefit for society and the environment, while delivering attractive returns for our investors. We view exceptional sustainability performance as an opportunity to differentiate Crescent from its peers, mitigate risks and strengthen operational performance as well as benefit our stakeholders and the communities in which we operate.
We are members of the Oil & Gas Methane Partnership 2.0 Initiative, or OGMP 2.0, and received Gold Standard pathway ratings in 2022, 2023 and 2024 for our credible plan to more accurately measure our methane emissions. OGMP 2.0 is the United Nations Environment Programme's flagship oil and gas reporting and mitigation program and the leading industry standard for methane emissions reporting. We also established a Sustainability Advisory Council, an outside council comprising leading experts across key sustainability topics, to advise management and our Board of Directors on sustainability-related issues. See additional materials on our website at www.crescentenergyco.com/sustainability. The sustainability-related information found and/or provided in the Company’s sustainability reports or on the Company’s website in general is not intended or deemed to be incorporated by reference in this Quarterly Report.
How we evaluate our operations
We use a variety of financial and operational metrics to assess the performance of our oil, natural gas and NGL operations, including:
•Production volumes sold,
•Commodity prices and differentials,
•Operating expenses,
•Adjusted EBITDAX (non-GAAP), and
•Levered Free Cash Flow (non-GAAP)
Development program and capital budget
Our development program, which consists of expenditures for drilling, completion and recompletion activities, and related facilities, is designed to prioritize the generation of attractive risk-adjusted returns and meaningful free cash flow and is inherently flexible, with the ability to modify our capital program as necessary to react to the current market environment.
We expect to fund our 2025 capital program through cash flow from operations. Due to the flexible nature of our capital program and the fact that the majority of our acreage is held by production, we could choose to defer a portion or all of these planned capital expenditures depending on a variety of factors, including, but not limited to, the success of our drilling activities, prevailing and anticipated prices for oil, natural gas and NGLs and resulting well economics, the availability of
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necessary equipment, infrastructure and capital, the receipt and timing of required regulatory permits and approvals, seasonal conditions, drilling and acquisition costs and the level of participation by other interest owners.
Management Agreement
Crescent Energy Company has a management agreement (the "Management Agreement") with KKR Energy Assets Manager LLC (the "Manager"). Pursuant to the Management Agreement, the Manager provides the Company with members of its executive management team and certain management services. The Management Agreement has a term of three years, with automatic three-year renewals, unless the Company or the Manager elects not to renew the Management Agreement. The current term automatically renewed in December 2024 for an additional three-year term ending December 7, 2027.
As consideration for the services rendered pursuant to the Management Agreement and the Manager’s overhead, including compensation of members of its executive management team, the Manager is entitled to receive compensation from the Company equal to $69.5 million per annum ("Manager Compensation"), which is included in General and administrative expenses on our condensed consolidated statements of operations. As the Company's business and assets expand, Manager Compensation will increase by an amount equal to 1.5% per annum of the net proceeds from all future issuances of our primary equity securities by the Company (including in connection with acquisitions). See NOTE 3 – Acquisitions and Divestitures included in Part I. Item 1. Financial Statements of this Quarterly Report for more information.
Prior to the Corporate Simplification, the Manager Compensation was reduced proportionally by the percentage of OpCo Units held as redeemable noncontrolling interests, with such amount distributed concurrently to the holders of redeemable noncontrolling interests. This cash distribution to the holders of redeemable noncontrolling interests did not represent additional Manager Compensation; rather, it represented an ordinary cash distribution to the holders of redeemable noncontrolling interests. In certain instances in our financial statements and other disclosures, we clarify the underlying event that requires us to make such distributions.
Additionally, the Manager is entitled to receive incentive compensation ("Incentive Compensation") under which the Manager is targeted to receive 10% of our outstanding Class A Common Stock based on the achievement of certain performance-based measures. The Incentive Compensation consists of five tranches that settle over a five-year period beginning in 2024, and each tranche relates to a target number of shares of Class A Common Stock equal to 2% of the outstanding Class A Common Stock as of the time such tranche is settled. Performance goals are evaluated on absolute stock price performance and relative stock price performance versus a set of our peers and there is no vesting based solely on time. The certification of the Company's level of achievement with respect to the first three-year-performance period under the Incentive Compensation is in process and is expected to be completed in 2025. Based on the level of achievement with respect to the performance goals applicable to such tranche, the Manager is entitled to the settlement of such tranche with respect to a number of shares of Class A Common Stock ranging from 0% to 4.8% of the outstanding Class A Common Stock at the time each tranche is settled so long as the Manager continuously provides services to us through the end of the performance period applicable to a tranche. Accordingly, as our Class A Common Stock share count increases, the number of equity-classified Manager PSU target Class A Shares granted under the Crescent Energy Company 2021 Manager Incentive Plan increases.
Sources of revenues
Our revenues are primarily derived from the sale of our oil, natural gas and NGL production and are influenced by production volumes and realized prices, excluding the effect of our commodity derivative contracts. Pricing of commodities are subject to supply and demand as well as seasonal, political and other conditions that we generally cannot control. Our revenues may vary significantly from period to period as a result of changes in volumes of production sold or changes in commodity prices. The following table illustrates our production revenue mix for each of the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Oil | 72 | % | 77 | % | 70 | % | 78 | % | |||||||||||||||
| Natural gas | 17 | % | 11 | % | 19 | % | 11 | % | |||||||||||||||
| NGLs | 11 | % | 12 | % | 11 | % | 11 | % | |||||||||||||||
In addition, revenue from our midstream assets is supported by commercial agreements that have established minimum volume commitments. These midstream revenues, as well as revenue associated with crude oil blending, comprise the majority of our midstream and other revenue. Midstream and other revenue accounts for 5% or less of our total revenues for the three and nine months ended September 30, 2025 and 2024.
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Production volumes sold
The following table presents historical sales volumes for our properties:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Oil (MBbls) | 9,455 | 7,927 | 28,417 | 20,932 | |||||||||||||||||||
| Natural gas (MMcf) | 58,026 | 50,935 | 175,552 | 121,502 | |||||||||||||||||||
| NGLs (MBbls) | 4,109 | 3,708 | 12,685 | 9,001 | |||||||||||||||||||
| Total (MBoe) | 23,235 | 20,124 | 70,361 | 50,183 | |||||||||||||||||||
| Daily average (MBoe/d) | 253 | 219 | 258 | 183 | |||||||||||||||||||
Total sales volume increased 3,111 MBoe and increased 20,178 MBoe during the three and nine months ended September 30, 2025, respectively, compared to the three and nine months ended September 30, 2024. The increase for the three and nine months ended September 30, 2025 was primarily due to the SilverBow Merger and the Ridgemar Acquisition.
Commodity prices and differentials
Our results of operations depend upon many factors, particularly the price of commodities and our ability to market our production effectively.
The oil and natural gas industry is cyclical and commodity prices can be highly volatile. In recent years, commodity prices have been subject to significant fluctuations, either as a result of the geopolitical events, such as Russia’s invasion of Ukraine and the associated sanctions imposed on Russia, and the Israel-Hamas conflict and the broader conflict in the Middle East, including with Iran, actions taken by OPEC, sustained elevated inflation, U.S. trade policy and the imposition of tariffs and increased U.S. drilling activity or otherwise. Uncertainty persists regarding OPEC’s actions, overall U.S. drilling activity, the imposition of increased tariffs and resulting consequences, inflation and the armed conflicts in Ukraine and the Middle East. Additionally, market concern regarding a potential recession, among other factors, contributes to increased volatility in the price for oil and natural gas.
In order to reduce the impact of fluctuations in oil and natural gas prices on revenues, we regularly enter into derivative contracts with respect to a portion of the estimated oil, natural gas and NGL production through various transactions that fix the future prices received. We plan to continue the practice of entering into economic hedging arrangements to reduce near-term exposure to commodity prices, protect cash flow and corporate returns and maintain our liquidity.
The following table presents the percentages of our production that was economically hedged through the use of derivative contracts:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Oil | 60 | % | 76 | % | 58 | % | 67 | % | |||||||||||||||
| Natural gas | 57 | % | 55 | % | 58 | % | 47 | % | |||||||||||||||
| NGLs | 9 | % | 9 | % | 9 | % | 4 | % | |||||||||||||||
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The following table sets forth the average NYMEX oil and natural gas prices and our average realized prices for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Oil (Bbl): | |||||||||||||||||||||||
| Average NYMEX | $ | 64.93 | $ | 75.10 | $ | 66.70 | $ | 77.54 | |||||||||||||||
| Realized price (excluding derivative settlements) | 63.07 | 69.19 | 63.99 | 72.71 | |||||||||||||||||||
Realized price (including derivative settlements) (1) | 64.93 | 66.93 | 65.42 | 67.31 | |||||||||||||||||||
| Natural Gas (Mcf): | |||||||||||||||||||||||
| Average NYMEX | $ | 3.07 | $ | 2.16 | $ | 3.39 | $ | 2.10 | |||||||||||||||
| Realized price (excluding derivative settlements) | 2.49 | 1.55 | 2.80 | 1.73 | |||||||||||||||||||
Realized price (including derivative settlements) (1) | 2.56 | 2.00 | 2.75 | 2.30 | |||||||||||||||||||
| NGLs (Bbl): | |||||||||||||||||||||||
| Realized price (excluding derivative settlements) | $ | 22.53 | $ | 23.53 | $ | 23.52 | $ | 24.56 | |||||||||||||||
Realized price (including derivative settlements) (1) | 22.57 | 23.56 | 23.39 | 24.58 | |||||||||||||||||||
(1) The realized price presented above does not include $14.7 million or $49.6 million received from the settlement of acquired oil, gas and NGL derivative contracts for the three and nine months ended September 30, 2025, respectively, and does not include $26.3 million received from the settlement of acquired oil, gas and NGL derivative contracts for the three and nine months ended September 30, 2024.
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Results of operations:
Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Revenues
The following table provides the components of our revenues, respective average realized prices and net sales volumes for the periods indicated:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||
| Revenues (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil | $ | 596,288 | $ | 548,430 | $ | 47,858 | 9 | % | |||||||||||||||||||||||||||||||||||||||
| Natural gas | 144,462 | 78,790 | 65,672 | 83 | % | ||||||||||||||||||||||||||||||||||||||||||
| Natural gas liquids | 92,589 | 87,253 | 5,336 | 6 | % | ||||||||||||||||||||||||||||||||||||||||||
| Midstream and other | 33,240 | 30,401 | 2,839 | 9 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 866,579 | $ | 744,874 | $ | 121,705 | 16 | % | |||||||||||||||||||||||||||||||||||||||
| Average realized prices, before effects of derivative settlements: | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil ($/Bbl) | $ | 63.07 | $ | 69.19 | $ | (6.12) | (9) | % | |||||||||||||||||||||||||||||||||||||||
| Natural gas ($/Mcf) | 2.49 | 1.55 | 0.94 | 61 | % | ||||||||||||||||||||||||||||||||||||||||||
| NGLs ($/Bbl) | 22.53 | 23.53 | (1.00) | (4) | % | ||||||||||||||||||||||||||||||||||||||||||
| Total ($/Boe) | 35.87 | 35.50 | 0.37 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||
| Net sales volumes: | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil (MBbls) | 9,455 | 7,927 | 1,528 | 19 | % | ||||||||||||||||||||||||||||||||||||||||||
| Natural gas (MMcf) | 58,026 | 50,935 | 7,091 | 14 | % | ||||||||||||||||||||||||||||||||||||||||||
| NGLs (MBbls) | 4,109 | 3,708 | 401 | 11 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total (MBoe) | 23,235 | 20,124 | 3,111 | 15 | % | ||||||||||||||||||||||||||||||||||||||||||
| Average daily net sales volumes: | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil (MBbls/d) | 103 | 86 | 17 | 20 | % | ||||||||||||||||||||||||||||||||||||||||||
| Natural gas (MMcf/d) | 631 | 554 | 77 | 14 | % | ||||||||||||||||||||||||||||||||||||||||||
| NGLs (MBbls/d) | 45 | 40 | 5 | 13 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total (MBoe/d) | 253 | 219 | 34 | 16 | % | ||||||||||||||||||||||||||||||||||||||||||
Oil revenue. Oil revenue increased $47.9 million, or 9%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024. This was driven by a $105.7 million increase from higher sales volume (17 MBbls/d, or 20%), partially offset by lower realized oil prices that resulted in a decrease of $57.8 million (a decrease of 9% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger and the Ridgemar Acquisition. The decrease in realized oil prices was due to lower index prices partially offset by more favorable price differentials.
Natural gas revenue. Natural gas revenue increased $65.7 million, or 83%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024. This was driven by higher natural gas prices that resulted in an increase of $54.7 million (an increase of 61% per Mcf) and a $11.0 million increase from higher sales volume (77 MMcf/d, or 14%). The increase in sales volumes was primarily due to the SilverBow Merger and the Ridgemar Acquisition. The increase in realized natural gas prices was due to higher index prices.
NGL revenue. NGL revenue increased $5.3 million, or 6%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024. This was driven primarily by a $9.4 million increase from higher sales volume (5 MBbls/d, or 13%), partially offset by lower realized NGL prices that resulted in a decrease of $4.1 million (a decrease of 4% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger and more gas related drilling.
42
Midstream and other revenue. Midstream and other revenue increased $2.8 million, or 9%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, driven primarily by higher sulfur revenues and higher oil blending revenues in 2025.
Expenses
The following table summarizes our expenses for the periods indicated and includes a presentation on a per Boe basis, as we use this information to evaluate our performance relative to our peers and to identify and measure trends we believe may require additional analysis:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||
| Expenses (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating expense | $ | 386,883 | $ | 326,544 | $ | 60,339 | 18 | % | |||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 298,450 | 251,498 | 46,952 | 19 | % | ||||||||||||||||||||||||||||||||||||||||||
| Impairment of oil and natural gas properties | 73,527 | — | 73,527 | NM* | |||||||||||||||||||||||||||||||||||||||||||
| General and administrative expense | 74,275 | 159,677 | (85,402) | (53) | % | ||||||||||||||||||||||||||||||||||||||||||
| Other operating costs | 2,643 | 14,577 | (11,934) | NM* | |||||||||||||||||||||||||||||||||||||||||||
| Total expenses | $ | 835,778 | $ | 752,296 | $ | 83,482 | 11 | % | |||||||||||||||||||||||||||||||||||||||
| Selected expenses per Boe: | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating expense | $ | 16.65 | $ | 16.23 | $ | 0.42 | 3 | % | |||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 12.84 | 12.50 | 0.34 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||
* NM = Not meaningful.
Operating expense. Operating expense increased $60.3 million, or 18%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, driven primarily by the following factors:
(i)Lease and Asset operating expense increased $33.8 million, or 22%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and increased $0.43 per Boe, or 6%, to $8.05 per Boe. This $33.8 million increase was driven primarily by higher production from the SilverBow Merger and the Ridgemar Acquisition, which was more than offset on a per Boe basis with the additional acquired volumes and cost reduction measures on our legacy assets.
(ii)Gathering, transportation and marketing expense increased $4.0 million, or 4%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and decreased $0.42 per Boe, or 9%, to $4.02 per Boe. The absolute dollar increase was driven primarily by the SilverBow Merger and the Ridgemar Acquisition.
(iii)Production and other taxes increased $12.3 million, or 28%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and increased $0.24 per Boe, or 11%, to $2.39 per Boe. This net increase was driven primarily by higher oil and gas revenues, which increased the tax base on which our production and other taxes are calculated.
(iv)Workover expense increased $7.8 million, or 51%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and increased $0.23 per Boe, or 30%, to $0.99 per Boe. This increase was primarily driven by the SilverBow Merger and the Ridgemar Acquisition.
(v)Midstream and other operating expense increased $2.5 million, or 10%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to increased crude oil blending expense. Our crude oil blending expense is more than offset by oil blending revenue included as part of our Midstream and other revenue.
Depreciation, depletion and amortization. In the three months ended September 30, 2025, depreciation, depletion and amortization increased $47.0 million, or 19%, compared to the three months ended September 30, 2024, driven primarily by increased production from the SilverBow Merger and the Ridgemar Acquisition.
Impairment expense. During the three months ended September 30, 2025, we recorded an impairment of $73.5 million to write down the value of certain assets classified as held for sale to expected net proceeds.
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General and administrative expense. General and administrative expense ("G&A") decreased $85.4 million, or 53%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease was driven by (i) a decrease in equity-based compensation expense of $64.5 million, (2024 includes additional expense of $64.4 million due to change in estimate), and (ii) $33.4 million lower transaction and nonrecurring related expenses, partially offset by higher recurring G&A due to the SilverBow Merger and the Ridgemar Acquisition.
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||
| General and administrative expense (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
| Recurring general and administrative expense | $ | 30,522 | $ | 18,011 | $ | 12,511 | 69 | % | |||||||||||||||||||||||||||||||||||||||
| Transaction and nonrecurring expenses | 19,643 | 53,083 | (33,440) | (63) | % | ||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | 24,110 | 88,583 | (64,473) | (73) | % | ||||||||||||||||||||||||||||||||||||||||||
| Total general and administrative expense | $ | 74,275 | $ | 159,677 | $ | (85,402) | (53) | % | |||||||||||||||||||||||||||||||||||||||
| General and administrative expense per Boe: | |||||||||||||||||||||||||||||||||||||||||||||||
| Recurring general and administrative expense | $ | 1.31 | $ | 0.90 | $ | 0.41 | 46 | % | |||||||||||||||||||||||||||||||||||||||
| Transaction and nonrecurring expenses | 0.85 | 2.64 | (1.79) | (68) | % | ||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | 1.04 | 4.40 | (3.36) | (76) | % | ||||||||||||||||||||||||||||||||||||||||||
Other operating costs. Other operating costs include exploration expense and gain on sale of assets. Other operating costs decreased by $11.9 million, compared to the three months ended September 30, 2024, primarily driven by $13.5 million lower exploration expense recognized during the three months ended September 30, 2025, partially offset by a $1.6 million higher loss on sale of assets.
Interest expense. In the three months ended September 30, 2025, we incurred interest expense of $72.6 million, as compared to $61.8 million in the three months ended September 30, 2024, a 17% increase. This increase was driven primarily by higher average debt balances driven by the Ridgemar Acquisition.
Loss on extinguishment of debt. During the three months ended September 30, 2025, we incurred a loss on extinguishment of debt of $29.2 million related to $22.3 million premium for the Tender Offer and Redemption of the 2028 Notes and $6.9 million related to the write-off of outstanding deferred finance costs related to the 2028 Notes. During the three months ended September 30, 2024, we incurred a loss on the extinguishment of debt related to the make whole provision and premium related to the repayment of SilverBow’s Second Lien Notes due 2028 of $36.5 million.
Gain (loss) on derivatives. We have entered into derivative contracts to manage our exposure to commodity price risks that impact our revenues and have derivative gains and losses related to our contingent earn-out consideration. Our gain on derivatives during the three months ended September 30, 2025 changed by $41.2 million primarily due to changes in commodity prices relative to our strike price.
Income tax benefit (expense). We are a corporation that is subject to U.S. federal and state income taxes on our allocable share of any taxable income from OpCo. OpCo is a partnership and is generally not subject to U.S. federal and certain state taxes. For the three months ended September 30, 2025 and 2024, we recognized income tax benefit of $4.0 million and tax benefit of $1.6 million, respectively, for an effective tax rate of 28.2% and 22.7%, respectively. Historically, our effective tax rate has been lower than the U.S. federal statutory income tax rate of 21% primarily due to effects of removing income and losses related to our noncontrolling interests and redeemable noncontrolling interests. However, as part of our Corporate Simplification, we expect our effective rate to be more in line with the U.S. federal statutory income tax rate plus our blended state income tax rate. Our effective tax rate for the three months ended September 30, 2025 was driven higher primarily due to our increased ownership of OpCo in 2025.
Adjusted EBITDAX (non-GAAP) and Levered Free Cash Flow (non-GAAP)
Adjusted EBITDAX and Levered Free Cash Flow are supplemental non-GAAP financial measures used by our management to assess our operating results and liquidity. See “—Non-GAAP financial measures” section below for their definitions and application.
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The following table presents a reconciliation of Adjusted EBITDAX (non-GAAP) and Levered Free Cash Flow (non-GAAP) to net income (loss) and Levered Free Cash Flow (non-GAAP) to Net cash provided by operating activities, the most directly comparable financial measures, respectively, calculated in accordance with GAAP:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (10,269) | $ | (5,579) | $ | (4,690) | 84 | % | |||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile to Adjusted EBITDAX: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 72,629 | 61,840 | |||||||||||||||||||||||||||||||||||||||||||||
| Loss from extinguishment of debt | 29,248 | 36,513 | |||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | (4,032) | (1,640) | |||||||||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 298,450 | 251,498 | |||||||||||||||||||||||||||||||||||||||||||||
| Exploration expense | 1,002 | 14,565 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-cash (gain) loss on derivatives | (33,859) | (91,672) | |||||||||||||||||||||||||||||||||||||||||||||
| Impairment expense | 73,527 | — | |||||||||||||||||||||||||||||||||||||||||||||
| Non-cash equity-based compensation expense | 23,788 | 88,583 | |||||||||||||||||||||||||||||||||||||||||||||
| (Gain) loss on sale of assets | 1,641 | 12 | |||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense | (209) | (1,631) | |||||||||||||||||||||||||||||||||||||||||||||
Certain redeemable noncontrolling interest distributions made by OpCo (1) | — | (4,656) | |||||||||||||||||||||||||||||||||||||||||||||
Transaction and nonrecurring expenses (2) | 19,938 | 56,311 | |||||||||||||||||||||||||||||||||||||||||||||
| Settlement of acquired derivative contracts | 14,685 | 26,291 | |||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDAX (non-GAAP) | $ | 486,539 | $ | 430,435 | $ | 56,104 | 13 | % | |||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile to Levered Free Cash Flow: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, excluding non-cash amortization of deferred financing costs, discounts, and premiums | (69,009) | (57,854) | |||||||||||||||||||||||||||||||||||||||||||||
| Loss from extinguishment of debt, excluding non-cash write-off of deferred financing costs, discounts, premiums and SilverBow Merger transaction related costs | (22,360) | — | |||||||||||||||||||||||||||||||||||||||||||||
Current income tax benefit (expense) | 14,680 | (3,466) | |||||||||||||||||||||||||||||||||||||||||||||
| Tax-related redeemable noncontrolling interest distributions made by OpCo | (605) | (211) | |||||||||||||||||||||||||||||||||||||||||||||
| Development of oil and natural gas properties | (204,778) | (211,215) | |||||||||||||||||||||||||||||||||||||||||||||
| Levered Free Cash Flow (non-GAAP) | $ | 204,467 | $ | 157,689 | $ | 46,778 | 30 | % | |||||||||||||||||||||||||||||||||||||||
(1)In our calculation of Adjusted EBITDAX and Levered Free Cash Flow, we reflected Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management. After giving effect to the Corporate Simplification, the Company owns 100% of outstanding OpCo Units and no longer makes distributions to the holders of redeemable noncontrolling interests in OpCo.
(2)Transaction and nonrecurring expenses of $19.9 million for the three months ended September 30, 2025 were primarily related to Vital Energy Merger costs, divestiture transactions and legal settlements. Transaction and nonrecurring expenses of $56.3 million for the three months ended September 30, 2024 were primarily related to our merger costs, capital markets transactions and integration expenses.
45
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 473,060 | $ | 367,956 | $ | 105,104 | 29 | % | |||||||||||||||
| Changes in operating assets and liabilities | (74,015) | (85,021) | |||||||||||||||||||||
Certain redeemable noncontrolling interest distributions made by OpCo (1) | — | (4,656) | |||||||||||||||||||||
| Tax-related redeemable noncontrolling interest contributions (distributions) made by OpCo | (605) | (211) | |||||||||||||||||||||
Transaction and nonrecurring expenses (2) | 19,938 | 56,311 | |||||||||||||||||||||
| Loss from extinguishment of debt, excluding non-cash write-off of deferred financing costs, discounts, premiums and SilverBow Merger transaction related costs | (22,360) | — | |||||||||||||||||||||
Other adjustments and operating activities | 13,227 | 34,525 | |||||||||||||||||||||
| Development of oil and natural gas properties | (204,778) | (211,215) | |||||||||||||||||||||
| Levered Free Cash Flow (non-GAAP) | $ | 204,467 | $ | 157,689 | $ | 46,778 | 30 | % | |||||||||||||||
(1)In our calculation of Adjusted EBITDAX and Levered Free Cash Flow, we reflected Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management. After giving effect to the Corporate Simplification, the Company owns 100% of outstanding OpCo Units and no longer makes distributions to the holders of redeemable noncontrolling interests in OpCo.
(2)Transaction and nonrecurring expenses of $19.9 million for the three months ended September 30, 2025 were primarily related to Vital Energy Merger costs, divestiture transactions and legal settlements. Transaction and nonrecurring expenses of $56.3 million for the three months ended September 30, 2024 were primarily related to our merger costs, capital markets transactions and integration expenses.
Adjusted EBITDAX (non-GAAP) increased by $56.1 million, or 13%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily driven by additional production generated by the SilverBow Merger and the Ridgemar Acquisition.
Levered Free Cash Flow (non-GAAP) increased by $46.8 million, or 30%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily driven by increased Adjusted EBITDAX, partially offset by additional interest expense and the loss from extinguishment of debt.
46
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Revenues
The following table provides the components of our revenues, respective average realized prices and net sales volumes for the periods indicated:
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||
| Revenues (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil | $ | 1,818,435 | $ | 1,521,946 | $ | 296,489 | 19 | % | |||||||||||||||||||||||||||||||||||||||
| Natural gas | 490,903 | 210,008 | 280,895 | 134 | % | ||||||||||||||||||||||||||||||||||||||||||
| Natural gas liquids | 298,306 | 221,103 | 77,203 | 35 | % | ||||||||||||||||||||||||||||||||||||||||||
| Midstream and other | 107,091 | 102,573 | 4,518 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 2,714,735 | $ | 2,055,630 | $ | 659,105 | 32 | % | |||||||||||||||||||||||||||||||||||||||
| Average realized prices, before effects of derivative settlements: | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil ($/Bbl) | $ | 63.99 | $ | 72.71 | $ | (8.72) | (12) | % | |||||||||||||||||||||||||||||||||||||||
| Natural gas ($/Mcf) | 2.80 | 1.73 | 1.07 | 62 | % | ||||||||||||||||||||||||||||||||||||||||||
| NGLs ($/Bbl) | 23.52 | 24.56 | (1.04) | (4) | % | ||||||||||||||||||||||||||||||||||||||||||
| Total ($/Boe) | 37.06 | 38.92 | (1.86) | (5) | % | ||||||||||||||||||||||||||||||||||||||||||
| Net sales volumes: | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil (MBbls) | 28,417 | 20,932 | 7,485 | 36 | % | ||||||||||||||||||||||||||||||||||||||||||
| Natural gas (MMcf) | 175,552 | 121,502 | 54,050 | 44 | % | ||||||||||||||||||||||||||||||||||||||||||
| NGLs (MBbls) | 12,685 | 9,001 | 3,684 | 41 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total (MBoe) | 70,361 | 50,183 | 20,178 | 40 | % | ||||||||||||||||||||||||||||||||||||||||||
| Average daily net sales volumes: | |||||||||||||||||||||||||||||||||||||||||||||||
| Oil (MBbls/d) | 104 | 76 | 28 | 37 | % | ||||||||||||||||||||||||||||||||||||||||||
| Natural gas (MMcf/d) | 643 | 443 | 200 | 45 | % | ||||||||||||||||||||||||||||||||||||||||||
| NGLs (MBbls/d) | 46 | 33 | 13 | 39 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total (MBoe/d) | 258 | 183 | 75 | 41 | % | ||||||||||||||||||||||||||||||||||||||||||
Oil revenue. Oil revenue increased $296.5 million, or 19%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. This was driven by a $544.3 million increase from higher sales volume (28 MBbls/d, or 37%), partially offset by lower realized oil prices that resulted in a decrease of $247.8 million (a decrease of 12% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger and the Ridgemar Acquisition. The decrease in realized oil prices was due to lower index prices partially offset by more favorable price differentials.
Natural gas revenue. Natural gas revenue increased $280.9 million, or 134%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. This was driven by a $93.2 million increase from higher sales volume (200 MMcf/d, or 45%) and higher natural gas prices that resulted in an increase of $187.7 million (an increase of 62% per Mcf). The increase in sales volumes was primarily due to the SilverBow Merger and the Ridgemar Acquisition. The increase in realized natural gas prices was due to higher index prices.
NGL revenue. NGL revenue increased $77.2 million, or 35%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. This was driven primarily by a $90.5 million increase from higher sales volume (13 MBbls/d, or 39%), partially offset by lower realized NGL prices that resulted in a decrease of $13.3 million (a decrease of 4% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger and the Ridgemar Acquisition.
Midstream and other revenue. Midstream and other revenue increased $4.5 million, or 4%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, driven primarily by higher sulfur revenues and partially offset by lower Midstream revenues in 2025.
47
Expenses
The following table summarizes our expenses for the periods indicated and includes a presentation on a per Boe basis, as we use this information to evaluate our performance relative to our peers and to identify and measure trends we believe may require additional analysis:
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||
| Expenses (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating expense | $ | 1,180,425 | $ | 924,351 | $ | 256,074 | 28 | % | |||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 878,079 | 640,444 | 237,635 | 37 | % | ||||||||||||||||||||||||||||||||||||||||||
| Impairment of oil and natural gas properties | 122,159 | — | 122,159 | NM* | |||||||||||||||||||||||||||||||||||||||||||
| General and administrative expense | 255,657 | 249,532 | 6,125 | 2 | % | ||||||||||||||||||||||||||||||||||||||||||
| Other operating costs | (4,249) | (4,679) | 430 | NM* | |||||||||||||||||||||||||||||||||||||||||||
| Total expenses | $ | 2,432,071 | $ | 1,809,648 | $ | 622,423 | 34 | % | |||||||||||||||||||||||||||||||||||||||
| Selected expenses per Boe: | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating expense | $ | 16.78 | $ | 18.42 | $ | (1.64) | (9) | % | |||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 12.48 | 12.76 | (0.28) | (2) | % | ||||||||||||||||||||||||||||||||||||||||||
* NM = Not meaningful.
Operating expense. Operating expense increased $256.1 million, or 28%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, driven primarily by the following factors:
(i)Lease and Asset operating expense increased $94.9 million, or 20%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, and decreased $1.31 per Boe, or 14%, to $7.95 per Boe. This $94.9 million increase was driven primarily by higher production from the SilverBow Merger and the Ridgemar Acquisition, which was more than offset on a per Boe basis with the additional acquired volumes and cost reduction measures on our legacy assets.
(ii)Gathering, transportation and marketing expense increased $80.0 million, or 36%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, and decreased $0.15 per Boe, or a 3% percentage, to $4.33 per Boe. The absolute dollar increase was driven primarily by the SilverBow Merger and the Ridgemar Acquisition.
(iii)Production and other taxes increased $64.2 million, or 60%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, and increased $0.30 per Boe, or 14%, to $2.43 per Boe. This net increase was driven primarily by higher oil and gas revenues, which increased the tax base on which our production and other taxes are calculated.
(iv)Workover expense increased $13.3 million, or 29%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, and decreased $0.07 per Boe, or 8%, to $0.83 per Boe. This absolute dollar increase was primarily driven by the SilverBow Merger and the Ridgemar Acquisition.
(v)Midstream and other operating expense increased $3.8 million, or 5%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to increased crude oil blending expense. Our crude oil blending expense is more than offset by oil blending revenue included as part of our Midstream and other revenue.
Depreciation, depletion and amortization. In the nine months ended September 30, 2025, depreciation, depletion and amortization increased $237.6 million, or 37%, compared to the nine months ended September 30, 2024, driven primarily by increased production from the SilverBow Merger and the Ridgemar Acquisition.
Impairment expense. During the nine months ended September 30, 2025, we recorded an impairment of $122.2 million to write down the value of certain assets classified as held for sale to expected net proceeds.
General and administrative expense. General and administrative expense ("G&A") increased $6.1 million, or 2%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase was driven by (i) higher recurring G&A due to the SilverBow Merger and the Ridgemar Acquisition and (ii) an increase in equity-based
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compensation expense of $5.3 million (2025 and 2024 include an additional true-up expense of $77.9 million and $85.5 million, respectively, due to change in estimate), partially offset by $39.5 million lower transaction and nonrecurring related expenses.
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||
| General and administrative expense (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
| Recurring general and administrative expense | $ | 87,609 | $ | 47,269 | $ | 40,340 | 85 | % | |||||||||||||||||||||||||||||||||||||||
| Transaction and nonrecurring expenses | 23,732 | 63,215 | (39,483) | (62) | % | ||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | 144,316 | 139,048 | 5,268 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total general and administrative expense | $ | 255,657 | $ | 249,532 | $ | 6,125 | 2 | % | |||||||||||||||||||||||||||||||||||||||
| General and administrative expense per Boe: | |||||||||||||||||||||||||||||||||||||||||||||||
| Recurring general and administrative expense | $ | 1.25 | $ | 0.94 | $ | 0.31 | 33 | % | |||||||||||||||||||||||||||||||||||||||
| Transaction and nonrecurring expenses | 0.34 | 1.26 | (0.92) | (73) | % | ||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | 2.05 | 2.77 | (0.72) | (26) | % | ||||||||||||||||||||||||||||||||||||||||||
Other operating costs. Other operating costs include exploration expense and gain on sale of assets. Other operating costs increased by $0.4 million, compared to the nine months ended September 30, 2024, primarily driven by a $8.3 million lower gain on sale of assets, partially offset by $7.9 million lower exploration expense recognized during the nine months ended September 30, 2025.
Interest expense. In the nine months ended September 30, 2025, we incurred interest expense of $221.0 million, as compared to $146.9 million in the nine months ended September 30, 2024. This increase was driven primarily by higher average debt balances driven by the SilverBow Merger and the Ridgemar Acquisition.
Loss on extinguishment of debt. During the nine months ended September 30, 2025, we incurred a loss on extinguishment of debt of our 2028 Notes of $29.2 million related to $22.3 million premium for the Tender Offer and Redemption of the 2028 Notes and $6.9 million related to the write-off of outstanding deferred finance costs related to the 2028 Notes. During the nine months ended September 30, 2024, we incurred a loss on the extinguishment of $59.1 million composed of (i) $22.6 million related to our 7.250% senior notes due 2026 (the "2026 Notes"), of which $14.8 million is associated with the premium and interest paid for the Tender Offer and Redemption and $7.8 million is related to the write-off of related outstanding deferred finance costs and (ii) $36.5 million related to the make whole provision and premium associated with the repayment of SilverBow’s Second Lien Notes.
Gain (loss) on derivatives. We have entered into derivative contracts to manage our exposure to commodity price risks that impact our revenues and have derivative gains and losses related to our contingent earn-out consideration. Our gain on derivatives consideration during the nine months ended September 30, 2025 changed by $167.8 million, from a comparable loss during the nine months ended September 30, 2024 primarily due to changes in commodity prices relative to our strike prices.
Income tax benefit (expense). We are a corporation that is subject to U.S. federal and state income taxes on our allocable share of any taxable income from OpCo. OpCo is a partnership and is generally not subject to U.S. federal and certain state taxes. For the nine months ended September 30, 2025 and 2024, we recognized income expense of $39.6 million and $5.7 million, respectively, for an effective tax rate of 20.0% and 15.0%, respectively. Historically, our effective tax rate has typically been lower than the U.S. federal statutory income tax rate of 21% primarily due to effects of removing income and losses related to our noncontrolling interests and redeemable noncontrolling interests. However, as part of our Corporate Simplification, we expect our effective rate to be more in line with the U.S. federal statutory income tax rate plus our blended state income tax rate. Our effective tax rate for the nine months ended September 30, 2025 was driven higher primarily due to our increased ownership of OpCo in 2025.
Adjusted EBITDAX (non-GAAP) and Levered Free Cash Flow (non-GAAP)
Adjusted EBITDAX and Levered Free Cash Flow are supplemental non-GAAP financial measures used by our management to assess our operating results and liquidity. See “—Non-GAAP financial measures” section below for their definitions and application.
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The following table presents a reconciliation of Adjusted EBITDAX (non-GAAP) and Levered Free Cash Flow (non-GAAP) to net income (loss) and Levered Free Cash Flow (non-GAAP) to Net cash provided by operating activities, the most directly comparable financial measures, respectively calculated in accordance with GAAP:
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 158,143 | $ | 32,262 | $ | 125,881 | 390 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile to Adjusted EBITDAX: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 221,029 | 146,885 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss from extinguishment of debt | 29,248 | 59,095 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 39,638 | 5,678 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | 878,079 | 640,444 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exploration expense | 6,882 | 14,758 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash (gain) loss on derivatives | (132,221) | (38,422) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment expense | 122,159 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash equity-based compensation expense | 143,281 | 139,048 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Gain) loss on sale of assets | (11,131) | (19,437) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense | (440) | (2,405) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Certain redeemable noncontrolling interest distributions made by OpCo (1) | (4,242) | (15,438) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transaction and nonrecurring expenses (2) | 29,844 | 74,773 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Settlement of acquired derivative contracts | 49,580 | 26,291 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDAX (non-GAAP) | $ | 1,529,849 | $ | 1,063,532 | $ | 466,317 | 44 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile to Levered Free Cash Flow: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, excluding non-cash amortization of deferred financing costs, discounts, and premiums | (209,868) | (137,104) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss from extinguishment of debt, excluding non-cash write-off of deferred financing costs, discounts, premiums and SilverBow Merger transaction related costs | (22,360) | (14,817) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current income tax benefit (expense) | (2,806) | (15,907) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax-related redeemable noncontrolling interest distributions made by OpCo | (865) | (340) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Development of oil and natural gas properties | (677,031) | (524,618) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Levered Free Cash Flow (non-GAAP) | $ | 616,919 | $ | 370,746 | $ | 246,173 | 66 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
(1)In our calculation of Adjusted EBITDAX and Levered Free Cash Flow, we reflected Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management. After giving effect to the Corporate Simplification, the Company owns 100% of outstanding OpCo Units and no longer makes distributions to the holders of redeemable noncontrolling interests in OpCo.
(2)Transaction and nonrecurring expenses of $29.8 million for the nine months ended September 30, 2025 were primarily related to Vital Energy Merger and Ridgemar Acquisition costs, transaction costs related to our divestitures and the SilverBow Merger and legal settlement costs. Transaction and nonrecurring expenses of $74.8 million for the nine months ended September 30, 2024 were primarily related to our merger costs, capital markets transactions and integration expenses.
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| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 1,309,140 | $ | 838,652 | $ | 470,488 | 56 | % | |||||||||||||||
| Changes in operating assets and liabilities | (52,257) | (34,721) | |||||||||||||||||||||
Certain redeemable noncontrolling interest distributions made by OpCo (1) | (4,242) | (15,438) | |||||||||||||||||||||
| Tax-related redeemable noncontrolling interest contributions (distributions) made by OpCo | (865) | (340) | |||||||||||||||||||||
Transaction and nonrecurring expenses (2) | 29,844 | 74,773 | |||||||||||||||||||||
| Loss from extinguishment of debt, excluding non-cash write-off of deferred financing costs, discounts, premiums and SilverBow Merger transaction related costs | (22,360) | (14,817) | |||||||||||||||||||||
Other adjustments and operating activities | 34,690 | 47,255 | |||||||||||||||||||||
| Development of oil and natural gas properties | (677,031) | (524,618) | |||||||||||||||||||||
| Levered Free Cash Flow (non-GAAP) | $ | 616,919 | $ | 370,746 | $ | 246,173 | 66 | % | |||||||||||||||
(1)In our calculation of Adjusted EBITDAX and Levered Free Cash Flow, we reflected Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management. After giving effect to the Corporate Simplification, the Company owns 100% of outstanding OpCo Units and no longer makes distributions to the holders of redeemable noncontrolling interests in OpCo.
(2)Transaction and nonrecurring expenses of $29.8 million for the nine months ended September 30, 2025 were primarily related to Vital Energy Merger and Ridgemar Acquisition costs, transaction costs related to our divestitures and the SilverBow Merger and legal settlement costs. Transaction and nonrecurring expenses of $74.8 million for the nine months ended September 30, 2024 were primarily related to our merger costs, capital markets transactions and integration expenses.
Adjusted EBITDAX (non-GAAP) increased by $466.3 million, or 44%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by additional production generated by the SilverBow Merger and the Ridgemar Acquisition, partially offset by lower commodity pricing.
Levered Free Cash Flow (non-GAAP) increased by $246.2 million, or 66%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily driven by increased Adjusted EBITDAX, partially offset by additional interest expense and development of oil and natural gas properties.
Liquidity and capital resources
Our primary sources of liquidity are cash flow from operations, proceeds from equity and debt offerings and borrowings under a senior secured reserve-based revolving credit agreement (as amended, restated, amended and restated or otherwise modified to date, the “Revolving Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent for the lenders and letter of credit issuer, and the lenders from time to time party thereto. Our primary expected uses of capital are for debt repayment, dividends to shareholders, development of our existing assets and acquisitions, and our share repurchase program.
Our development program is designed to prioritize the generation of meaningful free cash flow and attractive risk-adjusted returns and is inherently flexible, with the ability to scale our capital program as necessary to react to the existing market environment and ongoing asset performance. See “—Development program and capital budget” above for additional discussion of our capital program.
We plan to continue our practice of entering into economic hedging arrangements to reduce the impact of the near-term volatility of commodity prices and the resulting impact on our cash flow from operations. A key tenet of our focused risk management efforts is an active economic hedge strategy to mitigate near-term price volatility while maintaining long-term exposure to underlying commodity prices. Our commodity derivative program focuses on entering into forward commodity contracts when investment decisions regarding reinvestment in existing assets or new acquisitions are finalized, targeting economic hedges for a portion of expected production generated by the capital investment as well as adding incremental derivatives to our production base over time. Our active derivative program allows us to protect margins and corporate returns, and to maintain a strong balance sheet through commodity cycles.
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The following table presents our cash balances and outstanding borrowings at the end of each period presented:
| September 30, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Cash and cash equivalents | $ | 3,531 | $ | 132,818 | |||||||
| Long-term debt | 3,221,409 | 3,049,255 | |||||||||
In connection with the closing of the Ridgemar Acquisition in the first quarter of 2025, we paid in total $807.2 million in cash after customary purchase price adjustments. We funded the cash to close, less the initial deposit, with cash on hand and borrowings under our Revolving Credit Facility. Based on our planned capital spending, our forecasted cash flows and projected levels of indebtedness, we expect to maintain compliance with the covenants under our debt agreements. Further, based on current market indications, we expect to meet in the ordinary course of business other contractual cash commitments to third parties pursuant to the various agreements described under the heading “Contractual obligations” in our Annual Report, recognizing we may be required to meet such commitments even if our business plan assumptions were to change.
Cash flows
The following table summarizes our cash flows for the periods indicated:
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 1,309,140 | $ | 838,652 | |||||||||||||||||||||||||
| Net cash used in investing activities | (1,519,029) | (834,376) | |||||||||||||||||||||||||||
| Net cash provided by (used in) financing activities | (7,568) | 165,065 | |||||||||||||||||||||||||||
Net cash provided by operating activities. Net cash provided by operating activities for the nine months ended September 30, 2025 increased by $470.5 million, or 56%, compared to the nine months ended September 30, 2024 primarily due to higher net income after adjusting for non-cash items and working capital changes.
Net cash used in investing activities. Net cash used in investing activities for the nine months ended March 31, 2025 increased by $684.7 million, or a 82%, compared to the nine months ended September 30, 2024, primarily due to $554.7 million of additional acquisitions of oil and natural gas properties in 2025 due to the cash consideration for the Ridgemar Acquisition and $223.8 million additional cash used in our development capital expenditures.
Net cash used in financing activities. Net cash used in financing activities for the nine months ended September 30, 2025 was $7.6 million, primarily a result of our Class A Common Stock dividend, repurchases of Class A Common Stock and cash distributions to our redeemable noncontrolling interests; partially offset by net cash received in our debt transactions and Revolving Credit Facility borrowings. Net cash provided by financing activities for the nine months ended September 30, 2024 was $165.1 million, driven primarily a result of net cash received in our debt transactions, partially offset by the repurchase of OpCo Units, our redeemable noncontrolling interests distributions and our Class A Common Stock dividend.
Debt agreements
Senior Notes
Tender Offer and Redemption of 2028 Notes
In June 2025, we commenced a cash tender offer (the "Tender Offer") to purchase a portion of our outstanding 9.250% Senior Notes due 2028 (the "2028 Notes"), pursuant to which approximately $306.1 million aggregate principal amount of 2028 Notes were validly tendered and not validly withdrawn at or prior to July 22, 2025, the final tender date, subsequent to our balance sheet date. In addition to the Tender Offer, we elected to redeem (the “2028 Notes Redemption”) an aggregate principal amount of the 2028 Notes equal to $193.9 million, at a price of 104.625% of the unpaid principal amount of the 2028 Notes, plus accrued and unpaid interest, if any, to, but excluding, July 25, 2025, the redemption date. After giving effect to the 2028 Notes Redemption and the Tender Offer, the aggregate principal amount of the 2028 Notes outstanding is $500.0 million. Combined, we purchased the 2028 Notes at a blended price of 104.472% of par and incurred a loss on the extinguishment of debt of
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approximately $29.2 million, including the write-off of associated deferred financing costs, during the three and nine months ended September 30, 2025.
2034 Notes
In July 2025, we issued $600.0 million aggregate principal amount of 8.375% senior notes due 2034 (the "2034 Notes") at par (the “2034 Notes Offering”). The 2034 Notes bear interest at an annual rate of 8.375%, which is payable on January 15 and July 15 of each year, and mature on January 15, 2034. The proceeds from the 2034 Notes Offering were approximately $588.1 million after deducting the initial purchasers' discount and offering expenses. We used the net proceeds to finance the consideration of the Tender Offer, the 2028 Notes Redemption and to repay a portion of our outstanding balance under our Revolving Credit Facility.
We may, at our option, redeem all or a portion of the 2034 Notes at any time on or after July 15, 2028 at certain redemption prices. We may also redeem up to 40% of the aggregate principal amount of the 2034 Notes before July 15, 2028 with an amount of cash not greater than the net proceeds that we raise in certain equity offerings at a redemption price equal to 108.375% of the principal amount of the 2034 Notes being redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date. In addition, prior to July 15, 2028, we may redeem some or all of the 2034 Notes at a price equal to 100% of the principal amount thereof, plus a “make-whole” premium, plus accrued and unpaid interest, if any, to, but excluding the redemption date.
At September 30, 2025, we had aggregate principal amounts outstanding of (i) $0.5 billion of the 2028 Notes, (ii) $1.1 billion of 7.625% senior notes due 2032 (the "2032 Notes"), (iii) $1.0 billion of 7.375% senior notes due 2033 (the "2033 Notes" and, collectively with the 2028 Notes, the 2032 Notes and the 2034 Notes, the "Senior Notes") and (iv) $0.6 billion of the 2034 Notes.
The Senior Notes are our senior unsecured obligations and the Senior Notes and the related guarantees rank equally in right of payment with the borrowings under our Revolving Credit Facility and any of our other future senior indebtedness and senior to any of our future subordinated indebtedness. The Senior Notes are guaranteed on a senior unsecured basis by each of our existing and future subsidiaries that will guarantee our Revolving Credit Facility. The Senior Notes and the guarantees are effectively subordinated to all of our secured indebtedness (including all borrowings and other obligations under our Revolving Credit Facility) to the extent of the value of the collateral securing such indebtedness and structurally subordinated in right of payment to all existing and future indebtedness and other liabilities (including trade payables) of any future subsidiaries that do not guarantee the Senior Notes.
The indentures governing the Senior Notes contain covenants that, among other things, limit the ability of our restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends or distributions in respect of its equity or redeem, repurchase or retire its equity or subordinated indebtedness; (iii) transfer or sell assets; (iv) make investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from any non-Guarantor restricted subsidiary to it; (vii) consolidate, merge or transfer all or substantially all of its assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries.
If we experience certain kinds of changes of control accompanied by a ratings decline, holders of the Senior Notes may require us to repurchase all or a portion of their notes at certain redemption prices. The Senior Notes are not listed, and we do not intend to list the notes in the future, on any securities exchange, and currently there is no public market for the notes.
For additional details on the Senior Notes, refer to Note 8 - Debt in Item 8. Financial Statements and Supplementary Data included in our Annual Report.
Revolving Credit Facility
In connection with the issuance of the 2026 Notes in May 2021, Crescent Energy Finance LLC entered into the Revolving Credit Facility. The Revolving Credit Facility matures on April 10, 2029. At September 30, 2025, our elected commitment amount was approximately $2.0 billion and we had $72.0 million of outstanding borrowings, $17.9 million in outstanding letters of credit and approximately $1.9 billion of availability under the Revolving Credit Facility.
Borrowings under the Revolving Credit Facility bear interest at either a (i) U.S. dollar alternative base rate (based on the prime rate, the federal funds effective rate or an adjusted secured overnight financing rate ("SOFR"), plus an applicable margin, or (ii) SOFR, plus an applicable margin, at the election of the borrowers. The applicable margin varies based upon our borrowing base utilization then in effect. The fee payable for the unused revolving commitments at September 30, 2025 is 0.375% per year. Our
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weighted average interest rate on loan amounts outstanding as of September 30, 2025 was 6.99% and we had no borrowings outstanding under the Revolving Credit Facility as of December 31, 2024.
The borrowing base under the Revolving Credit Facility was $2.6 billion as of September 30, 2025 and December 31, 2024.The borrowing base is subject to semi-annual scheduled redeterminations on or about April 1 and October 1 of each year, as well as (i) elective borrowing base interim redeterminations at our request not more than twice during any consecutive 12-month period or the required lenders not more than once during any consecutive 12-month period and (ii) elective borrowing base interim redeterminations at our request following any acquisition of oil and natural gas properties with a purchase price in the aggregate of at least 5.0% of the then effective borrowing base. The borrowing base will be automatically reduced upon (a) the issuance of certain permitted junior lien debt and other permitted additional debt, (b) the sale or other disposition of borrowing base properties if the aggregate net present value, discounted at 9% per annum (“PV-9”) of such properties sold or disposed of is in excess of 5.0% of the borrowing base then in effect and (c) early termination or set-off of swap agreements (x) the administrative agent relied on in determining the borrowing base or (y) if the value of such swap agreements so terminated is in excess of 5.0% of the borrowing base then in effect.
The obligations under the Revolving Credit Facility remain secured by first priority liens on substantially all of our and the guarantors’ tangible and intangible assets, including without limitation, oil and natural gas properties and associated assets and equity interests owned by us and such guarantors. In connection with each redetermination of the borrowing base, we must maintain mortgages on at least 85% of the PV-9 of the oil and gas properties that constitute borrowing base properties. Our domestic direct and indirect subsidiaries are required to be guarantors under the Revolving Credit Facility, subject to certain exceptions.
The Revolving Credit Facility contains certain covenants that restrict the payment of cash dividends, certain borrowings, sales of assets, loans to others, investments, merger activity, commodity swap agreements, liens and other transactions without the adherence to certain financial covenants or the prior consent of our lenders. We are subject to (i) maximum leverage ratio and (ii) current ratio financial covenants calculated as of the last day of each fiscal quarter. The Revolving Credit Facility also contains representations, warranties, indemnifications and affirmative and negative covenants, including events of default relating to nonpayment of principal, interest or fees, inaccuracy of representations or warranties in any material respect when made or when deemed made, violation of covenants, bankruptcy and insolvency events, certain unsatisfied judgments and a change of control. If an event of default occurs and we are unable to cure such event of default, the lenders will be able to accelerate maturity and exercise other rights and remedies. At September 30, 2025, we were in compliance with each of the covenants under the Revolving Credit Facility and expect to remain in compliance with these covenants for the foreseeable future.
In October 2025, in connection with the borrowing base redetermination of our Revolving Credit Facility, we entered into the Thirteenth Amendment (the “Credit Agreement Amendment”) to the credit agreement governing our Revolving Credit Facility. Among other things, the Credit Agreement Amendment provides for (i) an automatic $1.3 billion increase in the borrowing base from $2.6 billion to $3.9 billion, effective upon the consummation Vital Energy Merger, subject to the satisfaction of certain conditions, (ii) an extension of the maturity date for any revolving loans to October 22, 2030 from April 10, 2029, (iii) a reduction in the applicable margin, so that loans under the Credit Agreement will be priced based on the Secured Overnight Financing Rate (SOFR) plus 1.75% to 2.75% , a reduction of 0.25%, and (iv) an increase in the aggregate maximum credit amount under Crescent’s credit facility from $3.0 billion to $6.0 billion. The Credit Agreement Amendment maintains the aggregate elected commitments at $2.0 billion.
Capital expenditures
Our acquisition and development expenditures consist of acquisitions of proved and unproved property, expenditures associated with the development of our oil and natural gas properties and other asset additions. Cash expenditures for drilling, completion and recompletion activities and related facilities are presented as "Development of oil and natural gas properties" in investing activities on our condensed consolidated statements of cash flows.
We expect to fund our 2025 capital program, excluding acquisitions through cash flow from operations. The amount and timing of capital expenditures on development of oil and natural gas properties is substantially within our control due to the held-by-production nature of our assets. We regularly review our capital expenditures throughout the year and could choose to adjust our investments based on a variety of factors, including but not limited to the success of our drilling activities, prevailing and anticipated prices for oil, natural gas and NGLs, the availability of necessary equipment, infrastructure and capital, the receipt and timing of required regulatory permits and approvals, seasonal conditions, drilling and acquisition costs and the level of participation by other interest owners. Any postponement or elimination of our development drilling program could result in a
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reduction of proved reserve volumes, the related Standardized Measure. These risks could materially affect our business, financial condition and results of operations.
The table below presents our capital expenditures and related metrics that we use to evaluate our business for the periods presented:
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Total development of oil and natural gas properties | $ | 677,031 | $ | 524,618 | |||||||||||||||||||
| Change in accruals or other non-cash adjustments | 14,342 | (57,073) | |||||||||||||||||||||
| Cash used in development of oil and natural gas properties | 691,373 | 467,545 | |||||||||||||||||||||
Cash used in acquisition of oil and natural gas properties | 942,465 | 387,775 | |||||||||||||||||||||
| Non-cash acquisition of oil and natural gas properties | 82,145 | 611,423 | |||||||||||||||||||||
| Total expenditures on acquisition and development of oil and natural gas properties | $ | 1,715,983 | $ | 1,466,743 | |||||||||||||||||||
Our cash used in the development of oil and natural gas properties was higher during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase is related to an increase in our operations and related timing of invoices. We used cash of $942.5 million in the nine months ended September 30, 2025 for the acquisition of oil and natural gas properties, primarily related to the Ridgemar Acquisition and Minerals Acquisition, as compared to $387.8 million in 2024 for the acquisition of oil and natural gas properties, primarily related to the SilverBow Merger in 2024 (see Notes to condensed consolidated financial statements, NOTE 3 – Acquisitions and Divestitures included in Part I. Item 1. Financial Statements of this Quarterly Report).
Contractual obligations
As of September 30, 2025, there have been no material changes to the contractual obligations previously disclosed in our Annual Report.
Dividends
Our future dividends depend on our level of earnings, financial requirements and other factors and will be subject to approval by our Board of Directors, applicable law and the terms of our existing debt documents, including the indentures governing the Senior Notes.
We paid cash dividends of $0.36 per share of our Class A Common Stock to shareholders during the nine months ended September 30, 2025.
On November 3, 2025, the Board of Directors approved a quarterly cash dividend of $0.12 per share, or $0.48 per share on an annualized basis, to be paid to shareholders of our Class A Common Stock with respect to the third quarter of 2025. The quarterly dividend is payable on December 1, 2025 to shareholders of record as of the close of business on November 17, 2025.
The payment of quarterly cash dividends is subject to management’s evaluation of our financial condition, results of operations and cash flows in connection with such payments and approval by our Board of Directors. In light of current economic conditions, management will evaluate any future increases in cash dividend on a quarterly basis.
Critical accounting policies and estimates
This discussion and analysis of our financial and results of operations are based upon our unaudited condensed consolidated financial statements. A complete list of our significant accounting policies is described in Note 2 – Summary of Significant Accounting Policies in our audited financial statements as of and for the year ended December 31, 2024 in our Annual Report. Refer also to "Critical accounting estimates" in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report. There have been no changes to our significant accounting policies and critical accounting estimates as of September 30, 2025.
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Non-GAAP financial measures
Our MD&A includes financial measures that have not been calculated in accordance with U.S. GAAP. These non-GAAP measures include the following:
•Adjusted EBITDAX; and
•Levered Free Cash Flow
These are supplemental non-GAAP financial measures used by our management to assess our operating results and assist us to make our investment decisions. We believe that the presentation of these non-GAAP financial measures provides investors with greater transparency with respect to our results of operations, as well as liquidity and capital resources, and that these measures are useful for period-to-period comparison of results.
We define 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 gain (loss) on derivatives, impairment expense, equity-based compensation, (gain) loss on sale of assets, other (income) expense and transaction and nonrecurring expenses. Additionally, we further subtract certain redeemable noncontrolling interest distributions made by OpCo and settlement of acquired derivative contracts. We included “Certain-redeemable noncontrolling interest distributions made by OpCo" to reflect Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management. After giving effect to the Corporate Simplification, the Company owns 100% of outstanding OpCo Units and no longer makes distributions to the holders of redeemable noncontrolling interests in OpCo.
Adjusted EBITDAX is not a measure of performance as determined by GAAP. We believe Adjusted EBITDAX is a useful performance measure because it allows for an effective evaluation of our operating performance when compared against our peers, without regard to financing methods, corporate form or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDAX because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP, of which such measure is the most comparable GAAP measure. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax burden, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDAX. Our presentation of Adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or nonrecurring items. Our computations of Adjusted EBITDAX may not be identical to other similarly titled measures of other companies. In addition, the Revolving Credit Facility and Senior Notes include a calculation of Adjusted EBITDAX for purposes of covenant compliance.
We define Levered Free Cash Flow as Adjusted EBITDAX less interest expense, excluding non-cash amortization of deferred financing costs, discounts, and premiums, loss from extinguishment of debt, excluding non-cash write-off of deferred financing costs, discounts, premiums and SilverBow Merger transaction related costs, current income tax benefit (expense), tax-related redeemable noncontrolling interest distributions made by OpCo and development of oil and natural gas properties. Levered Free Cash Flow does not take into account amounts incurred on acquisitions.
Levered Free Cash Flow is not a measure of liquidity as determined by GAAP. Levered Free Cash Flow is a supplemental non-GAAP liquidity measure that is used by our management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We believe Levered Free Cash Flow is a useful liquidity measure because it allows for an effective evaluation of our operating and financial performance and the ability of our operations to generate cash flow that is available to reduce leverage or distribute to our equity holders. Levered Free Cash Flow should not be considered as an alternative to, or more meaningful than, Net cash flow provided by operating activities as determined in accordance with GAAP, of which such measure is the most comparable GAAP measure, or as an indicator of actual liquidity, operating performance or investing activities. Our computations of Levered Free Cash Flow may not be comparable to other similarly titled measures of other companies.
Adjusted EBITDAX and Levered Free Cash Flow should be read in conjunction with the information contained in our condensed consolidated financial statements prepared in accordance with GAAP. For a reconciliation of these non-GAAP measures to the nearest comparable GAAP measures, see “—Results of Operations—Adjusted EBITDAX (non-GAAP) and Levered Free Cash Flow (non-GAAP)” above.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk, including the effects of adverse changes in commodity prices and interest rates as described below. The primary objective of the following information is to provide quantitative and qualitative information about our potential exposure to market risks. The term “market risk” refers to the risk of loss arising from adverse changes in commodity prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses but rather indicators of reasonably possible losses.
Commodity price risk
Our major market risk exposure is in the pricing that we receive for our oil, natural gas and NGLs production.
Pricing for oil, natural gas and NGLs has been volatile and unpredictable for several years, and we expect this volatility to continue in the future. The prices we receive for our production depend on many factors outside of our control, such as the strength of the global economy and global supply and demand for the commodities we produce.
To reduce the impact of fluctuations in oil, natural gas and NGLs prices on our cash flows, we regularly enter into commodity derivative contracts with respect to certain of our oil, natural gas and NGL production through various transactions that limit the risks of fluctuations of future prices. A key tenet of our focused risk management effort is an active economic hedge strategy to mitigate near-term price volatility while maintaining long-term exposure to underlying commodity prices. Our hedging program allows us to preserve capital and protect margins and corporate returns through commodity cycles and return capital to investors. Future transactions may include price swaps whereby we will receive a fixed price for our production and pay a variable market price to the contract counterparty. Additionally, we may enter into collars, whereby we receive the excess, if any, of the fixed floor over the floating rate or pay the excess, if any, of the floating rate over the fixed ceiling. These economic hedging activities are intended to limit our near-term exposure to product price volatility and to maintain stable cash flows, a strong balance sheet and attractive corporate returns.
As of September 30, 2025, our derivative portfolio had an aggregate notional value of approximately $3.1 billion, and the fair market value of our commodity derivative contracts was a net asset of $88.8 million. We determine the fair value of our oil and natural gas commodity derivatives using valuation techniques that utilize market quotes and pricing analysis. Inputs include publicly available prices and forward price curves generated from a compilation of data gathered from third parties.
Based upon our open commodity derivative positions at September 30, 2025, a hypothetical 10% increase or decrease in the NYMEX WTI, Brent price, Henry Hub Index price, NGL prices and basis prices would change our net commodity derivative position. If prices increased by 10%, our derivative position would change by approximately $198.6 million. If prices decreased by 10%, our derivative position would change by approximately $168.4 million. The hypothetical change in fair value could be a gain or a loss depending on whether commodity prices decrease or increase.
Derivative assets and liabilities are classified on our condensed consolidated balance sheets as risk management assets and liabilities. We use derivative instruments and enter into swap contracts which are governed by International Swaps and Derivatives Association (“ISDA”) master agreements. Amounts not offset on our condensed consolidated balance sheets represent positions that do not meet all of the conditions to be netted on such balance sheet, such as the legally enforceable right of offset or the execution of a master netting arrangement. See Notes to condensed consolidated financial statements, NOTE 4 – Derivatives included in Part I. Item 1. Financial Statements of this Quarterly Report for additional discussion.
Counterparty and customer credit risk
Our cash and cash equivalents are exposed to concentrations of credit risk. We manage and control this risk by investing these funds with major financial institutions. We often have balances in excess of the federally insured limits.
We sell oil, natural gas and NGLs to various types of customers. Credit is extended based on an evaluation of our customer’s financial conditions and historical payment record. The future availability of a ready market for oil, natural gas and NGLs depends on numerous factors outside of our control, none of which can be predicted with certainty.
We do not believe the loss of any single customer would materially impact our operating results because oil, natural gas and NGLs are fungible products with well-established markets and numerous purchasers.
To minimize the credit risk in derivative instruments, it is our policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions deemed by our management as competent and competitive market makers.
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Additionally, our ISDAs allow us to net positions with the same counterparty to minimize credit risk exposure. The creditworthiness of our counterparties is subject to periodic review.
Interest rate risk
At September 30, 2025, we had $72.0 million of variable rate debt outstanding. Assuming no change in the amount outstanding, the impact on interest expense of a 1% increase or decrease in the average interest rate would be an approximate $0.5 million increase or decrease in interest expense on our variable rate debt outstanding for the nine months ended September 30, 2025.
Item 4. Controls and Procedures
Limitations on effectiveness of controls and procedures
We maintain disclosure controls and procedures ("Disclosure Controls") within the meaning of Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our Disclosure Controls are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Our Disclosure Controls are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our Disclosure Controls, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Evaluation of disclosure controls and procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our Disclosure Controls were effective.
Changes in internal control over financial reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), during the three months ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Part II – Other Information
Item 1. Legal Proceedings
The Company may, from time to time, be involved in litigation and claims arising out of its operations in the normal course of business. We are currently unaware of any proceedings that, in the opinion of management, will individually or in the aggregate have a material adverse effect on our financial position, results of operations or cash flows. Additional information required for this Item is provided in Notes to condensed consolidated financial statements, Note 9 – Commitments and Contingencies included in Part I. Item 1. Financial Statements of this Quarterly Report, which is incorporated by reference into this Item.
Item 1A. Risk Factors
There are a number of risks that we believe are applicable to our business and the oil and gas industry in which we operate. These risks are described elsewhere in this report or our other filings with the SEC, including the section entitled “Item 1A. Risk Factors” beginning on page 35 in our Annual Report. If any of the risks and uncertainties described within our Annual Report, our other filings with the SEC or elsewhere in this Quarterly Report actually occur, our business, financial condition or results of operations could be materially and adversely affected.
Tariffs and other trade measures could adversely affect our results of operations, financial position and cash flows.
In April 2025, the U.S. government announced a baseline tariff of 10% on products from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits. As a result of the new administration's trade policy, tariffs have increased and may continue to increase our material input costs. We may not be able to fully mitigate the impact of these increased costs or pass price increases on to our customers.
The imposition of further tariffs by the United States on a broader range of imports, further retaliatory trade measures taken in response to additional tariffs, or a global recession could increase costs in our supply chain or reduce demand for oil and natural gas, which would adversely affect our results of operations, including potential write-downs of our asset carrying values.
The ultimate impact of these trade measures on our business operations and financial results is uncertain and may be affected by various factors, including whether and when such trade measures are implemented, the timing when such measures may become effective, and the amount, scope, or nature of such trade measures, and our ability to execute strategies to mitigate the negative impacts.
Failure to complete the Vital Energy Merger on the terms and timeline currently contemplated or at all, could negatively impact the price of shares of Crescent Class A Common Stock, as well as Crescent’s ongoing and future businesses and financial results.
If the Vital Energy Merger is not completed for any reason, Crescent’s ongoing and future businesses and financial results may be adversely affected and, without realizing any of the benefits of having completed the Vital Energy Merger, Crescent will be subject to a number of risks, including the following:
•Crescent will be required to pay their respective costs relating to the Vital Energy Merger, which are substantial, such as legal, accounting, financial advisory and printing fees, whether or not the Vital Energy Merger is completed;
•time and resources committed by Crescent’s management to matters relating to the Vital Energy Merger could otherwise have been devoted to pursuing other beneficial opportunities;
•Crescent may experience negative reactions from financial markets, including negative impacts on the prices of its common stock, including to the extent that the current market price reflects a market assumption that the Vital Energy Merger will be completed;
•Crescent may experience negative reactions from employees, customers or vendors; and
•since the Merger Agreement restricts the conduct of Crescent’s business prior to completion of the Vital Energy Merger, Crescent may not have been able to take certain actions during the pendency of the Vital Energy Merger that would have benefited it as an independent company and the opportunity to take such actions may no longer be available.
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If the Merger Agreement is terminated under specified circumstances, Crescent may be required to pay Vital a termination fee of $76.9 million. If the Merger Agreement is terminated because of a failure of Crescent’s stockholders to approve the proposals required to complete the Vital Energy Merger, Crescent may be required to reimburse the other party for its transaction expenses in an amount equal to $5.5 million. In addition, any delay in completing the Vital Energy Merger, including as a result of a prolonged U.S. government shutdown, may significantly reduce the synergies and other benefits that Crescent expects to achieve if it successfully completes the Vital Energy Merger within the expected timeframe and integrates its business.
Current Crescent stockholders will have a reduced ownership and voting interest after the consummation of the Vital Energy Merger compared to their current ownership and thus will exercise less influence over management.
Based on the number of issued and outstanding shares of Crescent Class A Common Stock and Vital Common Stock as of October 16, 2025 and October 22, 2025,respectively, and the exchange ratio as set forth in the Merger Agreement, it is expected that, on a fully-diluted basis, current Crescent stockholders will collectively own approximately 78% and current Vital stockholders will collectively own approximately 22% of the outstanding shares of Crescent Class A Common Stock (without giving effect to any shares of Crescent Class A Common Stock held by Vital stockholders prior to the Vital Energy Merger, if any). As a result of the Vital Energy Merger, current Crescent stockholders will own a smaller percentage of the combined company than they currently own of, and as a result will have less influence on the management and policies of the combined company post-Vital Energy Merger than they now have on the management and policies of Crescent. In addition, Crescent may issue additional equity from time to time, including prior to the consummation of the Vital Energy Merger, which would further reduce stockholders’ ownership and voting interest in the combined company.
The Merger Agreement subjects Crescent to restrictions on its business activities while the Vital Energy Merger is pending.
Crescent has agreed that, until the earlier of the effective time and the termination of the Merger Agreement, except (i) as provided in Crescent’s disclosure letter, (ii) as required by applicable law, (iii) as expressly required or permitted by the Merger Agreement or (iv) with the prior written consent of Vital (which consent will not be unreasonably withheld, delayed or conditioned), it will, and will cause each of its subsidiaries to, use commercially reasonable efforts to conduct its businesses in the ordinary course, including by using commercially reasonable efforts to preserve substantially intact its present business organization and assets and preserve its existing relationships with its key customers, suppliers, lessors and others with which it has significant business dealings. These restrictions could prevent Crescent from pursuing certain business opportunities that arise prior to the earlier of the effective time and the termination of the Merger Agreement and are outside the ordinary course of business.
Crescent will be subject to business uncertainties while the Vital Energy Merger is pending, which could adversely affect its business.
In connection with the pendency of the Vital Energy Merger, it is possible that certain persons with whom Crescent has a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with Crescent, as the case may be, as a result of the Vital Energy Merger, which could negatively affect Crescent’s revenues, earnings and cash flows, as well as the market price of Crescent Class A Common Stock, regardless of whether the Vital Energy Merger is completed.
Under the terms of the Merger Agreement, Crescent is subject to certain restrictions on the conduct of its business prior to the effective time, which may adversely affect its ability to execute certain of its business strategies. Limitations on Crescent include, among other things, the ability to issue capital stock, declare dividends and the ability to acquire other businesses, in each case, subject to certain exceptions set forth in the Merger Agreement. Such limitations could negatively affect Crescent’s businesses and operations prior to the completion of the Vital Energy Merger.
As a result of the shutdown of the federal government, Crescent has determined to rely on Section 8(a) of the Securities Act to cause the registration statement on Form S-4 related to the Vital Energy Merger to become effective automatically. Crescent’s reliance on Section 8(a) could result in a number of adverse consequences, including the potential need for Crescent to file a post-effective amendment and each of Crescent and Vital to distribute an updated joint proxy/prospectus to
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shareholders to address comments provided by the SEC, or a stop order issued preventing use of the registration statement, and a corresponding stock price decline or other negative results.
The registration statement on Form S-4 related to the Vital Energy Merger is expected to become automatically effective by operation of Section 8(a) of the Securities Act on the 20th calendar day after the most recent amendment of the registration statement filed with the SEC, in lieu of the SEC declaring the registration statement effective following the completion of its review. Prior to the shutdown of the federal government and the filing the registration statement on Form S-4 related to the Vital Energy Merger, the SEC indicated to Crescent that they have not completed their review of the registration statement, may have comments and would continue to review upon the federal government reopening. Although Crescent’s reliance on Section 8(a) does not relieve Crescent, Vital and other parties from the responsibility for the adequacy and accuracy of the disclosure set forth in the registration statement and for ensuring that the registration statement complies with applicable requirements, use of Section 8(a) poses a risk that, after the date of the joint proxy statement/prospectus which forms a part of the registration statement on Form S-4 related to the Vital Energy Merger, Crescent may be required to file a post-effective amendment to the registration statement and Crescent and Vital may be required to distribute an updated joint proxy/prospectus to shareholders, or otherwise delay the closing of the Vital Energy Merger, if changes to the information in the joint proxy/prospectus are required, or if a stop order under Section 8(d) of the Securities Act prevents continued use of the registration statement. These or similar events could cause the trading price of the Crescent Class A Common Stock to decline or result in other negative results.
Crescent will incur significant transaction and merger-related costs in connection with the Vital Energy Merger, which may be in excess of those anticipated by Crescent.
Crescent has incurred and expects to continue to incur a number of non-recurring costs associated with the Vital Energy Merger, many of which are payable regardless of whether or not the Vital Energy Merger is completed. These fees and costs have been, and will continue to be, substantial. These costs include, among others, employee retention costs, fees paid to legal, accounting and financial advisors, severance and benefit costs, fees related to regulatory filings and notices, filing fees and printing and mailing fees. Crescent will also incur transaction fees and costs related to the integration of the companies, which may be substantial. Moreover, Crescent may incur additional unanticipated expenses in connection with the Vital Energy Merger and the integration, including costs associated with any stockholder litigation related to the Vital Energy Merger.
The costs described above, as well as other unanticipated costs and expenses, could have an adverse effect on the financial condition and operating results of Crescent or, following the completion of the Vital Energy Merger, the combined company.
Crescent may be a target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Vital Energy Merger from being completed.
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Crescent’s liquidity and financial condition. Lawsuits that may be brought against the parties to the Merger Agreement or their respective directors could also seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the Merger Agreement already implemented and to otherwise enjoin the parties from consummating the Vital Energy Merger. If a plaintiff is successful in obtaining an injunction prohibiting completion of the Vital Energy Merger, then that injunction may delay or prevent the Vital Energy Merger from being completed, which may adversely affect Crescent’s ongoing and future businesses, financial position and results of operations.
One of the conditions to the Closing is that no injunction by any court, governmental, regulatory or administrative agency or commission or other governmental authority or instrumentality has been entered and continues to be in effect and no law has been adopted or is effective, in either case that prohibits or makes illegal the Vital Energy Merger. Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Vital Energy Merger, then that injunction may delay or prevent the Vital Energy Merger from being completed within the expected timeframe or at all, which may adversely affect Crescent’s ongoing and future businesses, financial position and results of operations.
The Vital Energy Merger may be completed even though material adverse changes subsequent to the announcement of the Vital Energy Merger, such as industry-wide changes or other events, may occur.
In general, either Crescent or Vital may refuse to complete the Vital Energy Merger if there is a material adverse change affecting the other party. However, some types of changes do not permit either party to refuse to complete the Vital Energy
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Merger, even if such changes would have a material adverse effect on either of the parties. For example, a worsening of Crescent’s financial condition or results of operations due to a decrease in commodity prices or general economic conditions would not, in and of itself, give the Vital the right to refuse to complete the Vital Energy Merger. In addition, the Crescent and Vital have the ability, but are under no obligation, to the extent permitted by law, to waive any material adverse change that results in the failure of a closing condition and instead proceed with completing the Vital Energy Merger. If adverse changes occur that affect either party but the parties are still required or voluntarily decide to complete the Vital Energy Merger, Crescent Class A Common Stock share price and Crescent’s business and financial results after the Vital Energy Merger may suffer.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table sets forth information with respect to our repurchases of shares of Class A Common Stock during the quarter ended September 30, 2025.
| Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs. (in thousands) | ||||||||||
7/1/2025 - 7/31/2025 | — | $— | — | $85,984 | ||||||||||
8/1/2025 - 8/31/2025 | — | — | — | $85,984 | ||||||||||
9/1/2025 - 9/30/2025 | — | — | — | $85,984 | ||||||||||
Our Board of Directors authorized a stock repurchase program on March 4, 2024 with an approved limit of $150.0 million and a two-year term. Repurchases may be of our Class A Common Stock, prior to the Corporate Simplification, or of OpCo Units (with the cancellation of a corresponding number of shares of our Class B Common Stock). As of September 30, 2025, we had approximately $86.0 million of repurchase authorization under such program remaining. Such repurchases may be made by Crescent or, prior to the Corporate Simplification, by OpCo, and may be made from time to time in the open market, in a privately negotiated transaction, through purchases made in accordance with the Rule 10b5-1 of the Exchange Act or by such other means as will comply with applicable state and federal securities laws. The timing of any repurchases under the stock repurchase program will depend on market conditions, contractual limitations and other considerations. The program may be extended, modified, suspended or discontinued at any time, and does not obligate us to repurchase any dollar amount or number of securities.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended September 30, 2025, no director or officer of the Company adopted terminated
Item 6. Exhibits
Exhibit No. | Description | ||||
2.1# | Agreement and Plan of Merger, dated May 15, 2024, by and among Crescent Energy Company, Artemis Acquisition Holdings Inc., Artemis Merger Sub Inc., Artemis Merger Sub II LLC and SilverBow Resources, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K, filed with Securities and Exchange Commission on May 16, 2024). | ||||
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2.2# | Membership Interest Purchase Agreement, dated December 3, 2024, by and between Crescent Energy Finance LLC, Crescent Energy Company, Ridgemar Energy Operating, LLC and Ridgemar (Eagle Ford) LLC. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2024). | ||||
2.3# | Closing Agreement, dated January 31, 2025, by and among Crescent Energy Finance LLC, Crescent Energy Company, Ridgemar Energy Operating, LLC and Ridgemar (Eagle Ford) LLC. (incorporated by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K, filed with Securities and Exchange Commission on January 31, 2025). | ||||
2.4# | Agreement and Plan of Merger, dated as of August 24, 2025, by and among Crescent Energy Company, Vital Energy, Inc., Venus Merger Sub I Inc. and Merger Sub II LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 25, 2025). | ||||
3.1 | Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 7, 2021). | ||||
3.2 | Amended and Restated By-Laws of Registrant (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 7, 2021). | ||||
| 4.1 | Indenture, dated as of May 6, 2021, among Crescent Energy Finance LLC (f/k/a Independence Energy Finance LLC), the guarantors named therein, and U.S. Bank Trust Company, National Association, as successor to U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 10, 2022). | ||||
| 4.2 | First Supplemental Indenture, dated as of January 14, 2022, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as successor to U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 10, 2022). | ||||
| 4.3 | Second Supplemental Indenture, dated as of February 10, 2022, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 10, 2022). | ||||
| 4.4 | Third Supplemental Indenture, dated as of April 1, 2022, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2022). | ||||
| 4.5 | Fourth Supplemental Indenture, dated as of April 20, 2022, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.5 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2022). | ||||
| 4.6 | Fifth Supplemental Indenture, dated as of October 12, 2022, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.6 to the Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 9, 2022). | ||||
| 4.7 | Sixth Supplemental Indenture, dated as of March 6, 2023, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.10 to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2023). | ||||
| 4.8 | Indenture, dated as of February 1, 2023, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2023). | ||||
| 4.9 | First Supplemental Indenture, dated as of July 20, 2023, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 21, 2023). | ||||
| 4.10 | Second Supplemental Indenture, dated as of September 12, 2023, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 12, 2023). | ||||
| 4.11 | Third Supplemental Indenture, dated as of December 8, 2023, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 8, 2023). | ||||
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| 4.12 | Fourth Supplemental Indenture, dated as of September 3, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.14 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2024). | ||||
| 4.13 | Fifth Supplemental Indenture, dated as of November 7, 2024 among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee. (incorporated by reference to Exhibit 4.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission on February 26, 2025). | ||||
| 4.14 | Sixth Supplemental Indenture, dated as of March 24, 2025 among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.14 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2025). | ||||
| 4.15 | Seventh Supplemental Indenture, dated as of July 7, 2025 among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.15 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2025). | ||||
| 4.16 | Indenture, dated as of March 26, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 28, 2024). | ||||
| 4.17 | First Supplemental Indenture, dated as of September 3, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.16 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2024). | ||||
| 4.18 | Second Supplemental Indenture, dated as of November 7, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 13 2024). | ||||
| 4.19 | Third Supplemental Indenture, dated as of December 11, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 13 2024). | ||||
| 4.20 | Fourth Supplemental Indenture, dated as of March 24, 2025, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.19 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2025). | ||||
| 4.21 | Fifth Supplemental Indenture, dated as of July 7, 2025 among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.21 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2025). | ||||
| 4.22 | Indenture, dated as of June 14, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 18, 2024). | ||||
| 4.23 | First Supplemental Indenture, dated as of September 3, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 9, 2024). | ||||
| 4.24 | Second Supplemental Indenture, dated as of September 9, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 9, 2024). | ||||
| 4.25 | Third Supplemental Indenture, dated as of November 7, 2024, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee. (incorporated by reference to Exhibit 4.23 to the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission on February 26, 2025). | ||||
| 4.26 | Fourth Supplemental Indenture, dated as of March 24, 2025, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.24 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2025). | ||||
| 4.27 | Fifth Supplemental Indenture, dated as of July 7, 2025 among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.27 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2025). | ||||
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| 4.28 | Indenture, dated as of July 8, 2025, among Crescent Energy Finance LLC, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 11, 2025). | ||||
| 10.1 | Indemnification Agreement, dated May 5, 2025, by and between Crescent Energy Company and Conrad Langenhagen (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2025). | ||||
| 10.2 | Indemnification Agreement, dated June 2, 2025, by and between Crescent Energy Company and Jerome Hall (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2025). | ||||
| 10.3 | Form of Change in Control Agreement (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2025). | ||||
| 10.4 | Voting and Support Agreement, dated as of August 24, 2025, by and among Crescent Energy Company, Vital Energy, Inc. and PT Independence Energy Holdings LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 25, 2025). | ||||
| 10.5 | Voting and Support Agreement, dated as of August 24, 2025, by and among Crescent Energy Company, Vital Energy, Inc. and Independence Energy Aggregator L.P. (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 25, 2025). | ||||
| 10.6 | Form of Voting and Support Agreement, dated as of August 24, 2025, by and among Crescent Energy Company, Vital Energy, Inc. and certain affiliates of John C. Goff (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 25, 2025). | ||||
| 10.7 | Third Amendment to Management Agreement, dated as of August 24, 2025, by and among Crescent Energy Company and KKR Energy Assets Manager LLC (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 25, 2025). | ||||
| 10.8 | Thirteenth Amendment to Credit Agreement, dated October 22, 2025, by and among Crescent Energy Finance LLC, certain subsidiaries of Crescent Energy Finance LLC, as guarantors, Wells Fargo Bank, National Association, as administrative agent, collateral agent and a letter of credit issuer, and the other lenders and letter of credit issuers party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 24, 2025). | ||||
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
32.1** | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
101* | Interactive data files (formatted as Inline XBRL) | ||||
104* | Cover Page Interactive Data File (contained in Exhibit 101). | ||||
* Filed herewith
** Furnished herewith.
# Certain annexes, schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted annexes, schedules and exhibits upon request by the U.S. Securities and Exchange Commission.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CRESCENT ENERGY COMPANY | ||||||||
| (Registrant) | ||||||||
| November 3, 2025 | /s/ David Rockecharlie | |||||||
| David Rockecharlie | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
| November 3, 2025 | /s/ Brandi Kendall | |||||||
| Brandi Kendall | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
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FAQ
What were Crescent Energy (CRGY) Q3 2025 revenues and profit?
Q3 2025 revenue was $866.6 million, and net loss attributable to Crescent was $9.5 million.
How much cash did CRGY generate year-to-date from operations?
Net cash provided by operating activities for the nine months ended September 30, 2025 was $1.31 billion.
What are the key terms of the Ridgemar acquisition disclosed by CRGY?
Crescent paid $807.2 million in cash and issued 5.5 million Class A shares, with up to $170.0 million in contingent consideration.
What did Crescent Energy announce regarding Vital Energy?
Crescent agreed to acquire Vital Energy in an all‑equity deal at an exchange ratio of 1.9062 Crescent Class A shares per Vital share.
What is CRGY’s debt and cash position at quarter-end?
Long‑term debt was $3.22 billion; cash and cash equivalents were $3.5 million as of September 30, 2025.
How did CRGY’s capital structure change in 2025?
A Corporate Simplification eliminated Class B stock; Class A shares outstanding were 254,631,591 as of October 31, 2025.
Did CRGY record any notable non-cash charges in Q3 2025?
Yes. Crescent recognized an $73.5 million impairment of oil and natural gas properties in Q3 2025.
Crescent Energy Company
NYSE:CRGY
CRGY Rankings
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Nov 3, 2025
[8-K] Crescent Energy Co Reports Material Event
Oct 24, 2025
[8-K] Crescent Energy Co Reports Material Event
Oct 7, 2025
[8-K] Crescent Energy Co Reports Material Event
CRGY Stock Data
2.15B
217.04M
4.18%
95.11%
6.27%
Oil & Gas Integrated
Crude Petroleum & Natural Gas
United States
HOUSTON