December 04, 2024 [Oil Field Technology]- Crescent Energy has announced the signing of a definitive agreement to acquire Eagle Ford assets from Ridgemar Energy for upfront consideration of US$905 million plus future oil price contingent consideration, subject to customary purchase price adjustments. The acquisition is directly offset Crescent’s core Central Eagle Ford position and builds upon its significant acquisition activity in the Eagle Ford over the past 18 months, totalling more than US$4 billion of accretive M&A. The transaction, which has an effective date of 1 October is expected to close in 1Q25, subject to customary closing conditions.
Highlights
Complementary operations directly offset core position – Adding significant and contiguous scale offset Crescent’s existing footprint in Frio, Atascosa, La Salle and McMullen counties with potential for meaningful operating efficiencies
Attractive valuation and accretive to key financial metrics – The transaction, valued at 2.7x EBITDA, is accretive to Operating Cash Flow, Levered Free Cash Flow and net asset value, with strong expected cash-on-cash returns
Strengthens the Crescent asset portfolio – Approximately 20 million boe/d of high-margin, oil-weighted production and ~140 well understood, high-return locations that immediately compete for capital and extend Crescent’s low-risk inventory life
Maintains strong balance sheet and Investment Grade credit metrics – Leverage neutral-to-accretive transaction with balanced consideration mix. Crescent’s net debt to trailing 12-month Adjusted EBITDAX ratio expected to be at or below the Company’s publicly stated maximum leverage target of 1.5x
“This transaction continues to highlight our ability to utilise our investing and operating expertise to identify and acquire high-quality assets, efficiently integrate them into our business and drive additional value through improved operations. With accelerated synergies captured from the integration of SilverBow and our recent bolt-on acquisition, our full team is ready and eager to add the Ridgemar assets to our core operating footprint in the Eagle Ford,” said Crescent CEO David Rockecharlie. “These assets contribute meaningful scale, enhance Crescent’s cash margins, increase our oil-weighting and extend our low-risk inventory life, all at an attractive and highly accretive valuation. I remain confident in our ability to capitalise on our strong momentum and continue our profitable growth trajectory towards our investment grade ambitions.”
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