Crescent Energy Company

What they do

Crescent holds working interests in 1,019 thousand net acres plus 443 thousand net mineral and royalty acres, primarily in Texas and Utah. As of December 31, 2025 it reported 950 MMBoe of net proved working-interest reserves (61% oil and liquids) and 26 MMBoe of mineral and royalty reserves, with its three core basins representing approximately 96% of proved reserves. Production is weighted toward oil and liquids, and the company is managed by an indirect subsidiary of KKR under a Management Agreement.

Revenue drivers

• Eagle Ford — Largest position by reserves and production, with 537 MMBoe of net proved reserves (56% oil and liquids), 62,702 MBoe of 2025 net production and $4.55 billion of net proved PV-10 as of year-end 2025.
• Permian — Highest liquids mix, with 350 MMBoe of net proved reserves (69% oil and liquids), $3.07 billion of net proved PV-10 and the focus of an integration and synergy program following acquisition.
• Uinta — Smaller but higher-margin barrel, with 51 MMBoe of net proved reserves (57% oil and liquids) and $528 million of net proved PV-10 as of year-end 2025.
• Minerals and royalties — Non-operated mineral and royalty interests contribute 26 MMBoe of net proved reserves (59% oil and liquids), $420 million of PV-10 and 2,634 MBoe of 2025 net production.

Recent performance

In second quarter 2026, Crescent reported net income of $494 million, Adjusted Net Income of $263 million and record Adjusted EBITDAX of $798 million. Production averaged 335 MBoe/d, including 140 MBoe/d of oil, with capital expenditures excluding acquisitions of $284 million. The company generated record operating cash flow of $707 million and record Levered Free Cash Flow of $418 million, and reported operating expense of $13.38/Boe.

Strategy

Management describes a free-cash-flow-focused model, having held an average reinvestment rate of roughly 45% of Adjusted EBITDAX since 2021 rather than outspending cash flow for growth. The company targets long-life, low-decline production — PDP five-year and ten-year annual decline rates of approximately 12% and 8% — to reduce maintenance capital. Priorities include Permian optimization, where the synergy target was raised to approximately $250 million to $300 million with about $190 million captured to date, and deleveraging through debt repayment while paying a fixed $0.12 quarterly dividend.

Risks

• Commodity price volatility — Revenue, profitability and liquidity depend on oil, natural gas and NGL prices, and sustained low prices could reduce economically producible reserves and trigger impairment of oil and gas properties.
• High leverage — Long-term debt was $5.17 billion against $5.16 billion of shareholders' equity at June 30, 2026, leaving the company exposed to interest rates and refinancing conditions.
• Decline rates and reserve replacement — The company must spend substantial capital to replace reserves and sustain production, and its estimated 2026 PDP decline rate is 29%.
• KKR management dependence — Crescent relies on its Manager, an indirect KKR subsidiary, for its senior executive management team and services including strategic planning and acquisition screening.

Outlook

Management raised 2026 total production guidance to 327-335 MBoe/d and lowered adjusted operating expense guidance to $11.00-$12.00/Boe and production taxes to 5.0%-6.0% of commodity revenue, while keeping development capital at $1,325-$1,425 million. The company stated it had approximately $2.0 billion of pro forma liquidity and no near-term maturities after redeeming the remaining $259 million of 7.75% senior notes due 2029 at par in July 2026.