CRGY - Earnings call transcript Q1 2024

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Operator

Greetings and welcome to Crescent Energy Q1 2024 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Reid Gallagher, Investor Relations. Thank you, Mr. Gallagher, you may begin.

Reid Gallagher

you Crescent's thank Conference Quarter and Call. morning for First joining XXXX Good

today our come and prepared will Our remarks from Kendall. CFO, CEO, Brandi Rockecharlie; David

commodity Our within during statements Q&A. Today's Executive may contain laws. and that Clay price strategies subject cause Todd These volatility, geopolitical other will of our call uncertainties, Chief forward-looking the to are and of securities differ statements business factors Rynd, risks other conflict, available or these President to and results meaning Investments, including our be also other projections expressed Accounting implied may Officer, and actual the our disclosures. those Vice statements global from in Falk; and federal

today's have call. We to statements obligation no update any after forward-looking

disclosure today's financial may non-GAAP addition, measures. discussion include regarding In

historical directly I For XX-Q our our our David? it earnings to financial non-GAAP measure, CEO. GAAP a please website. With measures reconciliation turn on comparable available reference the of to that, press release and over will most

David Rockecharlie

Good joining morning us. and thank you for

We have get over today, started. great eager go we are and to quarter another to

off to a into away this want hope is details, one, I you a from with we get XXXX things Before all few start. the take great begin call. Number I to

strategy, consistent would our execute what to continue we said we doing We do.

production are is Our returning scaled, low-decline cash we free base to generating flow, which significant our shareholders.

long-life in We projects inventory. development attractive high-return are our proven reinvesting and capital

long-term opportunistic our We of divestitures continue business, delivered portfolio. capital in actively are our and on to best operational our believe capital number offer quarter been compound business, of is gas with and strategy saw through prices the as two, our proven positioned. in high-growth realizations for on Crescent to uniquely a and outperform. return large-cap focused We with assets goals company. better gains exposure stronger enhancing We Crescent peer-leading combined execution. And and improving has our value a we record balance markets, own three, stability and discipline, acquisitions this float mid-cap strength. Number our and the returns-driven by of stock have productivity further investors accretive continued our capital well of for liquidity the the we complemented best-in-class sheet And the framework oil and to enhance and never capabilities M&A potential maintaining to our trading production

expectations will those now a discuss flow free in performance more quick EBITDA cash and performance. asset realizations financial bit strong by strong I driven consensus highlights, detail. We and on things Following this quarter, had both beating improved

team quarter On has the on gains continued side, production the well generating our side. and outperform, to this efficiencies in record operations productivity capital with continued sustained

guidance outperformance With have spend. of we increased maintaining the the year level full while that seeing, our strong we are capital production same

reduce overlap with cash way, premium marketing further existing one consistent to we've oil position footprint efforts we've to a able our Our position. across value-creation our our to our asset, ongoing the top of parts acquiring of Since of Western our gains Or blending efforts combined and took years. the across further a said sum discussed well before the all from successful in complementary operating both today in whole they our gains Ford potential about acquisitions a also recent year. These control included was Eagle Ford Western acquisition we've our Eagle underwriting. assets. excellent across Central Eagle operations campaign few the represent Eagle another on These Ford of as examples realize the recent Ford our the footprint over of implemented across free are Eagle savings built with they flow, the the a of we've And We've we than been and base margin is scale to performance continued not generate costs value meaningful of last stable bit to benefits improve production marketing balanced about this of its greater asset. exposure. synergy highlights continues were talked gas capital date: of profile the marketing represent our the basis Ford proactive through the last before, the our enthusiasm low-decline to but our and combination improvements

regions of We focused are we big on believers M&A. our sector, increasing efficiencies accretive our in compounding and our for and complementary in and our value are shareholders in core scale-driven the to value continue footprint through profitability

drilling implementing Speaking our which drive further efficiency our team across increased to program. by and has more Eagle on capital savings, program completions our the portfolio, has of simul-fracs been improvements able completions our to our Ford

the than X over just gains basin. best what date, Our With look D&C now our completions driven team to has ago. not among faster performance past years, be now could the our the If at prouder. the I our has is in we years XX% are team several all accomplished

consistently in resources nearly developing Eagle We safely, the more our and Ford. than are anyone efficiently

foot. are proppant assets recent seeing massive most capital acquired this our we we Utah, prior optimization. wells a our As to results design roughly early Eagle equally on development D&C outperformance assets. In design on the cost only completion well from Western we seeing are position, increase Ford, increase our which a Ford exciting touched smaller roughly our legacy, the from consistent horizontal I in with In both quarter, time Western on we last XXX% this recent performance the represents shift a in seeing the when versus are on Eagle utilized pounds operator, with but We in efficiency completion with performance guidance, and combined the the per Uinta. of touched X,XXX

Crescent. Building versus remains enhanced productivity doubled strong. With as XX% long-term more per optimism for this becoming capital clearer our implemented on for improved operations, can generating our on in returns flow to successful on over our Uinta a we capital, plans are Western results potential and results this recently completions, us, our are means but our and time, financial foot. see seeing our completion our improved These and enhancing increases profile, through data, potential and operational creating which shareholders minimal pounds D&C value investment inventory a a than which had of significantly the are with long-term date the further opportunistic production acquiring value-creation improving approach, and attractive accretive Eagle through investing into incremental always costs. the for of focus assets only on compounding discipline we cash operational efficiencies our design our the are change that larger focused about clearer own we We've M&A. executing with most we've To business value The to of days through through capital you bit our returns the the positions. asset overall record a supports our early X,XXX implications and at track As of and XXX data value roughly portfolio. previous seeing and we've results time are Ford and still uplift roughly quarter,

We of looking risk-adjusted that been small, but and or Recently, looking are are headlines, returns. market set. deals for opportunities number large-cap our fits patiently attractive invest to at for vigilant we constantly making a skill there value, have and opportunistic in large the

Eagle on Karnes compelling assets million a County. and asset executed bolt-on we existing Ford our a small minerals with portfolio. attractive cash generate in existing in yield to quarter, This complementary These the an $XX portfolio enhance our flow minerals

roughly is and today XX,XXX oil generates barrels that X,XXX by footprint equivalent royalty acquisitions. the minerals annual Ford about flow, focused day; M&A, value of Eagle appreciated acres; mean covers Our fully Rockies; per the believe in market. When which cash and $XX talk adding don't approximately only net we across produces we doesn't through through roughly million

than our asset we for accelerate opportunities portfolio management, shareholders our portfolio by attractive simplifying business. To looking the market, and that watching our past assets months, the divested to noncore over value value have divesting $XXX for million effect, constantly noncore are portfolio. XX through of our and crystallizing assets from including more We

close we opportunistic signed in of million, quarter, divestiture in which Basin Permian quarter. to second the for additional roughly noncore an we $XX assets This expect the

well have operating remain and solid we confident financial we of recent opportunity one our our record growth successful XXXX the track that, are M&A Brandi over largest to more provide value on the of beyond. With remainder Brandi? and turn history. With balance sheet, further of performance strong for we and integration, of forward, creation and detail Looking over quarter. to that the positioned call accretive pipelines in I'll the asset

Brandi Kendall

Thanks, David.

Ford of expect in significant XXX,XXX $XXX in of and of spend of gross expenditures quarter heaviest performance extremely of our production As brought oil at strong operated X and entire We approximately wells are gross our the barrels day, million posting commodity and equivalents current averaging with which which wells are our the Xx levered quarter, and $XXX We prices. during million free be Eagle capital has per cash cash operated returns all Uinta, capital record David XX in target first exceed year. expected results to mentioned, million flow. to $XX adjusted early-time flow, for invested another strong online EBITDA we generating quarter the had of been of the

the for to Turning of XXXX. outlook remainder our

we guidance X% levels production reaffirming we oil to generate expect million. full of today's flow As day, represents substantial capital relative cash production roughly which commodity XXX,XXX equivalent million $XXX guidance barrels to per while and mentioned, to David in prices, XXXX XXX,XXX to At beyond. our increased year of increase free $XXX to XXXX a

our all know, creating priority our for is investors. top value As you

of and on In addition in to a number as in ways our markets strong performance, executed capital that the we've well. operational financial goal different

public of to than corporate and positioning since peer-leading enhanced we've provides trading increased fund we've a a structure. our transactions We've our with Through few just followership XX markets effectively ago. transformed accretive the truly growth, framework, investor more our to as more directly, to which became both the yield. overhang announced we recently shareholders dividend have with eliminated a and and side, private certainty of doubled access our value on equity work meaningfully We a simplified addition debt years more public in research under and towards proven our liquidity we've capital series our float investor the analysts. Creating capital simplicity another new and we equity

average roughly price portion an increasing shareholders further buyback to program, a with million of on shares share executed per authorized also our of returns of We share. the $X.XX at repurchase X.X our

overhang use Class repurchase private our A that B to to authorization is Class the shares. we and will million eliminated, remaining Now $XXX opportunistically both look

our quarter, call the back both turn refinanced liquidity notes over strategy. With growth already ensuring and strong flexibility I'll credit the our that, to and also significant we facility, on and During continue David. our executing credit successfully XXXX our to profile improving

David Rockecharlie

Thank you, Brandi.

to I quarter. few takeaways again highlight wrap want up, a key this we Before from

said we we've to going First, what continued demonstrate to we priorities, have do. were towards our performance strategic consistent doing

M&A, goal to, and alluded investor capital a the We've and equity peer-leading Brandi year markets a initial dividend a As strong to framework, strongly our track XXXX positioned in company demonstrated access. couldn't prudent we've and start. a of of establishing Crescent is business our with prouder of and size to record our float analyst a be capital off great with for date. XXXX public was I followership, achieved accretive through accomplishments line a liquid our presence of continued

value driving assets finally, We positioned capital well continue production in operational never We've realizations beat. impressive execution, spend. And performance, further this significant quarter change to better production flow free Crescent a been guidance a without our for has cash increased and Second, with record saw creation. outperform. best-in-class stronger

have allows which an our us is relative efficiency, a reflected advantaged to cash in profile current decline capital We stable flow don't significant and which to peers, free generate we believe asset rate attractive valuation. our with

make and to capital vision the We company. in have must-own markets Crescent momentum mid-cap a a

up prices and the execute large-cap to Q&A. potential I'll a of capabilities exposure stability and proven combined for have unique high-growth strategy open operating of oil own value discipline, business, Operator? the the to with Crescent for gas growth-through-acquisition mid-cap required it is stock of investing We with and that, and best the believe on expertise to a combination a and long-term company. With

Operator

of line Securities. the from Dingmann comes with Truist question first Neal The Instructions] [Operator

Neal Dingmann

it what quarter. specifically, allocation, you versus capital which today, my Nice out of to Brandi there Eagle at focus look you of on have the or maybe in remainder more other opinion do all the or makes you question price you just discounted David, first see seems deals, strong or Ford me to with sense believe you for still your year? as lean a where stock quite potential

David Rockecharlie

Yes. Thanks for the question.

us focused thing business the it which is and is as is free to keep the first on the just do the from the I think with we simple. cash you balance flow best dividend. investors, And the to know, the thing sheet

in there. And the opportunistic. about we balance we've positioning we've after dividend. we think and again, thing us. your I good it's I this do we to highlighted to think So feel is that, program the think capital for we done feel value current quarter like buyback I And really question, the looking to then starting what with just But needed very we're markets, sheet have the and the and available the

Neal Dingmann

think the this just that combination of opco a a Makes then last sort repurchases, [ we just guess, to same? should a other more mix sense. regular the secondly, just we the of capital I'm any specifically stock and Yes. just just that -- ] quarter, shareholder structure, lot of way? on base div wondering and just saw will be the repurchases of simplified about a And like you've continue I return balance now will Or that sheet,

Brandi Kendall

Yes.

So the just same. of more

reminder, fixed directed then, As was dividend you we'll came last framework the per When the $X.XX B buyback, repurchase shares. with and shares. out towards dividend B initially, enhanced it to Class we opportunistically Class mentioned, quarter, we right, A Class as the share. of our moved a And both

a As gone. that of from is David we've lot progress private overhang standpoint view now investor positioning equity an made mentioned, and the

forward. it shares So really, on classes going use opportunistically of to we'll look both

Operator

comes line with question Huang Next from of Oliver TPH. the

Hsu-Lei Huang

of laid revised volumes. on quarter. looking XXXX out at Congrats the for We're nice the on kind guidance

the the be the year has day the that of if to through constitute moving for Any would QX wells rolling being the how this wondering just trying all in new of is much color are X,XXX remainder outperformance. helpful. operational uplift in new seen per to are Really the attributed that Just Boe been you the through to understand wells there is planned that update. kind pieces able forward of walk that

Brandi Kendall

Oliver, it's Brandi.

performance X,XXX in increased if a both the increase drivers day for Eagle day, completions barrels is ] the same in out highlighted prepared you The adjust full that net of well the we're result the as remarks, as barrels [ Ford of Western the we more as year production we and Utah. So X,XXX by really the of the guide divestiture. intense small the seeing a

believe trends updated we ] guidance So we're reflects [ performance seeing. that the that the currently

range time for the towards being. of the would I So midpoint new you point guidance the

Hsu-Lei Huang

on especially there that we free what equity maybe agree continues Okay. That's see beyond helpful. on buyback. throughout us the and to our terms up kind fairly is numbers, opportunistic or able pace commentary, inflect of the undervalued the as color But all And a higher sure kind offer of to just follow-up any looking all I of I'm you for buybacks flow know in repurchased in are to at year? as of cash just screen you that QX, aggression you we start kind the all would as well. of move

Brandi Kendall

anything say opportunistic as an tool. than won't we mean I I other it Yes. view

[indiscernible] dividend organic M&A it's sheet then the capital and that's whether program. or return-generating opportunities, framework and us, a our balance our For remains the allocation

value But we So after to buyback stock, the for great again, we have our those view items. in as us. it's as X a right, tool see

Operator

Next from Giroue line with question comes Jarrod the Stephens. of

Jarrod Giroue

and production hoping on a Well, give quarter. of a little color the remainder you on quick year. for strong capital a questions. was the I could the of maybe Congrats couple cadence

Brandi Kendall

Brandi. it's Jarrod,

start So on I'll maybe side. the capital

the the quarter $XXX this date to the we talked capital XX% We So production, of quarter-over-quarter then be first be our standpoint, year production single and to still earnings, spend capital to the to of inventory. in our bringing and ] updated digits flat down half have alongside front we expect of what on of expect we year, to oil at to heaviest the half-weighted, be similar a expect low about year-end March kind would we're so over relatively towards million. From as of trend [ though, expect midpoint. do our course just oil-weighted upwards

Jarrod Giroue

the original year. plan X in this think then I of Chalk, to terms wells And Austin drill the Perfect. was Chalk

drilling schedule. still curious that the was Just if in

John Rynd

early-time what right. there. we'd Yes. about you that's the tell set we the And still really feel That's But plan. opportunity is results, excited

Operator

from comes Raymond with the James. question Next Freeman John line of

John Freeman

quarter. Nice

on in last follow-up response, a Just the your Brandi. question

cadence, of through came came So how were on? wells production XX when ratable nature in to the of the sort the quarter? they about that about the there XQ thinking weighted Just and timing just back-end any wells? those on sort Was XQ those anything of

Brandi Kendall

question. good John,

a handful those wells came online of say towards I quarter. So would the of end the

this didn't they quarter's So much production outperformance. to contribute

John Freeman

obviously, are and the Uinta, quantify just where all Eagle then And to other terms cycle But times? per you would then just any of all for footage what Ford and highlighting gains in kind had times in to possible see follow-up slides for that that just per mean be day. drilling that I efficiency the would the kind of what of the translates the I Perfect. cycle mean, it. it way you Got is of say purposes? comparison huge day from in ballpark sort to fluid there completion me, and pumped

David Rockecharlie

Yes.

it's John, So David.

think that well couple would save cycle asking it, there. days maybe respond way us in a we'd the the a I full of you're it

given were already ago. year having, a performance So we the call it, meaningful pretty improvement

Operator

Wells Fargo. from Next question of Chang the comes line Hanwen with

Hanwen Chang

would the ahead targeted gain the X, and on discuss goals you capital activities accelerating if ongoing consider of With XXXX you efficiency your of Specifically, D&C achieved are you could in flexibility activity X highlighted schedule? Slide plan?

David Rockecharlie

question. Great David. It's

on capital, just sure through I we best company can And capital, outsized want grow manage the or first that deploy through drive is then is as and When business to our answer and a based foremost. getting returns view M&A. our I expect. really to we're drill we is that reminder, slightly growth opportunistically think maybe make we want production the the the bit on plan to returns maintain we way our

we context, to rising that way about in activity the our the think asset into that. opportunity not in So accelerate look prices base, we and would

guidance our of benefit price today a cash that think going I to the rising free X- is will investors business in of to flow basic intact, X-rig to come and environment. remain a extra

Hanwen Chang

for Eagle acquisition, conventional or your elaborate Regarding low-decline appetite in assets? mineral recent on Ford the could you mineral investment

John Rynd

This is Clay.

of on focused in So look I think on at been consistent kind We this. we've particular existing our everything, footprint.

So I an value-driven, the know area and footprint, that mineral our think we we think well as acquisition, opportunistic, within was about accretive.

kind So the from highlighted boxes us an of strength. core conventional as kind financially, we perspective, business return it of of all a strong importantly, for of low-decline the checked most investment clearly, opportunity. And that then as something opportunity kind a think we've

to where And us an to going to expect our so fit you us make opportunity those area we of that forward. continue where framework, that's look if find for add And would opportunities sense. they can kind expect

Operator

Next Hamid line question Tarek with the of comes from JPMorgan.

Nevin Mathew

is wondering both on Ford. the X current Nevin from for And on is the Eagle bit you This of could environment, Uinta seeing? Tarek. acquisition in which what you're more touch Western the and if was the I a more active

John Rynd

It's Clay.

the As David had We've opportunities that having a just been the through but been footprint. the looking across We've synergy this it's on has year last assets efficiencies the a acquired at the I on in year, very excitement large think, look year. very of Ford active just activity. call our on active if we activity highlighted Eagle we're and see, focused certainly the a side year M&A remarks, some pickup kind in this you transactions. We'll very at in corporate opening mentioned in very space,

where to into we from acquisition I So value. expect lean that an would opportunity us see perspective clearly

across we asset about And we also say operate so where I'd excited already excited our can base, where add at value. certainly we're that. But

think we're seeing find board. the I give active that the So Ford efficiency to opportunity would the the side excitement on recent across But clearly, we're there. Eagle us

Operator

reached for to Rockecharlie like the would of David question-and-answer end and comments. over I now to Ladies we session. turn have closing floor the gentlemen,

David Rockecharlie

appreciate all Great. for company. opportunity to of speaking the time. call every you all quarter and the catch again forward joining to for the up next And look again with Thank we you and supporting

Operator

Thank today's you. This concludes teleconference.

at You your may lines this disconnect your Thank participation. time. you for

Crescent Energy (CRGY) 7 May 242024 Q1 Earnings call transcript