Introductory Note
On April 5, 2022, Crescent Energy Company (the “Company”) filed a Current Report on Form 8-K (the “Original Report”) with the U.S. Securities and Exchange Commission (the “SEC”). The Original Report disclosed the consummation of the previously announced acquisition contemplated by the Membership Interest Purchase Agreement (the “Purchase Agreement”) dated February 15, 2022, by and among Javelin VentureCo, LLC (the “Purchaser”), a subsidiary of the Company, Crescent Energy OpCo LLC, a Delaware limited liability company, and Verdun Oil Company II LLC, a Delaware limited liability company (the “Seller”), pursuant to which the Purchaser agreed to purchase from Seller all of the issued and outstanding membership interests of Javelin Uinta, LLC, a Texas limited liability company and wholly owned subsidiary of the Seller that holds certain exploration and production assets (the “Uinta Basin Assets”) located in the State of Utah (such transactions contemplated by the Purchase Agreement, collectively, the “Uinta Acquisition”).
This Current Report on Form 8-K/A (this “Amendment”) amends the Original Report to include the financial statements required by Item 9.01(a) and the pro forma financial information required by Item 9.01(b). In addition, this Amendment provides certain disclosure updates as described further under Item 8.01 below. Except as provided herein, the disclosures made in the Original Report remain unchanged.
On or about the date of this Amendment, the Company intends to file Amendment No. 1 to its Registration Statement on Form S-1 (the “Amended Registration Statement”) relating to the proposed offering by the Company of shares of its Class A common stock, par value $0.0001 per share. In connection with the filing of such Amended Registration Statement, the Company is providing to potential investors certain disclosures that have been revised since the original filing of the Registration Statement, the relevant excerpts of which are set forth below. Capitalized terms used but not defined herein shall have the meaning assigned thereto in the Registration Statement.
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Summary Reserve Data based on NYMEX Pricing
The following table provides historical reserves, PV-0 and PV-10 as of December 31, 2021 for Crescent Energy Company and the reserves acquired in the Uinta Acquisition using average annual NYMEX forward-month contract pricing in effect as of March 31, 2022 (“NYMEX Pricing”). We have included this reserve sensitivity in order to provide an additional method of presentation of the fair value of our assets and the cash flows that we expect to generate from those assets based on the market’s forward-looking pricing expectations as of March 31, 2022. The historical 12-month pricing average in our 2021 disclosures under the heading “Summary Reserve Data based on SEC Pricing” does not reflect the oil and natural gas futures. We believe that the use of forward prices provides investors with additional useful information about our reserves, as the forward prices are based on the market’s forward-looking expectations of oil and natural gas prices as of a certain date, although we caution investors that this information should be viewed as a helpful alternative, not a substitute, for the data presented based on SEC Pricing. In addition, we believe strip pricing provides relevant and useful information because it is widely used by investors in our industry as a basis for comparing the relative size and value of our proved reserves to our peers and in particular addresses the impact of differentials compared with our peers. Our estimated historical reserves, PV-0 and PV-10 based on NYMEX Pricing, were otherwise prepared on the same basis as our estimations based on SEC Pricing reserves for the comparable period. Reserve estimates using NYMEX Pricing are calculated using the internal systems of the management of the Company and have not been prepared or audited by an independent, third-party reserve engineer, but otherwise contain the same parameters, except for price and minor system differences.
| | | | | | | | |
| | | Crescent
Energy
Company | | | Uinta
Acquisition | |
| | | As of December 31, 2021 (1) | |
Net Proved Reserves: | | | | | | | | |
Oil (MBbls) | | | 211,497 | | | | 43,252 | |
Natural gas (MMcf) | | | 1,533,009 | | | | 141,439 | |
NGLs (MBbls) (3) | | | 78,790 | | | | — | |
Total Proved Reserves (MBoe) | | | 545,788 | | | | 66,825 | |
PV-0 (millions) (2) | | $ | 11,931 | | | $ | 2,025 | |
PV-10 (millions) (2) | | $ | 6,781 | | | $ | 1,466 | |
Net Proved Developed Reserves: | | | | | | | | |
Oil (MBbls) | | | 159,332 | | | | 25,162 | |
Natural gas (MMcf) (3) | | | 1,467,322 | | | | 94,028 | |
NGLs (MBbls) (3) | | | 68,653 | | | | — | |
2
