Crescent Energy (CRGY) M&A announcement summary

Deal rationale and strategic fit

• Adds ~1 MM gross acres of oil-weighted Eagle Ford assets, including 600+ Tier 1 net locations normalized to 10,000-ft laterals.

• Adds ~68,000 boe/d, nearly 40,000 bbl/d of oil and high-margin production in the Karnes Trough.

• Ranks as the Eagle Ford’s second-largest producer; pro forma production expected at ~400,000 boe/d, including ~170,000 bbl/d of oil.

• Existing minerals ownership, directly offsetting operations and basin expertise support familiarity with the acreage, geology and operating environment.

Financial terms and conditions

• Net purchase price of ~$3.85B after estimated adjustments; July 1, 2026 effective date, with closing expected in Q4 2026 or early 2027.

• Valued at ~3x EBITDA and less than $2M per Tier 1 net location; expected returns exceed 2x MOIC, with payback in less than five years.

• Funding planned from cash on hand and a balanced mix of debt and equity; KKR committed $500M, with debt commitments from JPMorgan Chase Bank and RBC Capital Markets.

• Pro forma annual development capital expected at ~$1.8B; maintenance reinvestment rate estimated at ~45–50%, versus ~50% standalone.

• Leverage targets are ~1.5x at YE 2027 and ~1.0x at YE 2028; liquidity expected at ~$1B, with no near-term maturities.

Synergies and expected cost savings

• Identified ~$140M/year in opportunities: ~$100M from drilling and completions, ~$20M from lease operating expenses and ~$20M from marketing.

• Longer laterals, development optimization and pad design are expected to drive savings; underwritten average lateral length is ~11,500 ft versus ~6,500 ft under the prior operator.

• Full $140M of synergies expected to be captured during 2027 and reflected in the run rate exiting the year.

• Management expects operational gains to offset inflationary pressures, citing prior success improving lateral lengths and cost structures.