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Debt | 12 Months Ended
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Dec. 31, 2021
Debt Disclosure [Abstract] |
Debt | Debt $500.0 million Senior Notes Issuance On May 6, 2021, Independence Energy Finance LLC (n/k/a Crescent Energy Finance LLC), our wholly owned subsidiary, issued $500.0 million aggregate principal amount of 7.25% Senior Notes due 2026 (the "Senior Notes"). The Senior Notes bear interest at an annual rate of 7.25%, which is payable on May 1 and November 1 of each year and mature on May 1, 2026. The Senior Notes are our senior unsecured obligations and the Senior Notes and the related guarantees rank equally in right of payment with the borrowings under our Revolving Credit Facility and any of our other future senior indebtedness and senior to any of our future subordinated indebtedness. The Senior Notes are guaranteed on a senior unsecured basis by each of our existing and future subsidiaries that will guarantee our Revolving Credit Facility. The Senior Notes and the guarantees are effectively subordinated to all of our secured indebtedness (including all borrowings and other obligations under our Revolving Credit Facility) to the extent of the value of the collateral securing such indebtedness and structurally subordinated in right of payment to all existing and future indebtedness and other liabilities (including trade payables) of any future subsidiaries that do not guarantee the Senior Notes. The Senior Notes indenture contains covenants that, among other things, limit the ability of the our restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends or distributions in respect of its equity or redeem, repurchase or retire its equity or subordinated indebtedness; (iii) transfer or sell assets; (iv) make investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from any non-Guarantor restricted subsidiary to it; (vii) consolidate, merge or transfer all or substantially all of its assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. We may, at our option, redeem all or a portion of the Senior Notes at any time on or after May 1, 2023 at certain redemption prices. We may also redeem up to 40% of the aggregate principal amount of the Senior Notes before May 1, 2023 with an amount of cash not greater than the net proceeds that we raise in certain equity offerings at a redemption price equal to 107.250% of the principal amount of the Senior Notes being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, prior to May 1, 2023, we may redeem some or all of the Senior Notes at a price equal to 100% of the principal amount thereof, plus a "make-whole" premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If we experience certain kinds of changes of control accompanied by a ratings decline, holders of the Senior Notes may require us to repurchase all or a portion of their notes at certain redemption prices. The Senior Notes are not listed, and we do not intend to list the notes in the future, on any securities exchange, and currently there is no public market for the notes. See NOTE 16 – Subsequent Events for discussion of the issuance of an additional $200.0 million in aggregate principal amount of 7.25% Senior Notes due 2026 during 2022. Revolving Credit Facility Overview In connection with the Senior Notes issuance, we entered into a senior secured reserve-based revolving credit agreement (as amended, restated, amended and restated or otherwise modified to date, the "Revolving Credit Facility") with Wells Fargo Bank, N.A., as administrative agent for the lenders and letter of credit issuer, and the lenders from time to time party thereto. The Revolving Credit Facility matures on May 6, 2025. In September 2021, we entered into the first amendment to the Revolving Credit Facility. The first amendment to the Revolving Credit Facility, amongst other things, increased the committed amount from $500.0 million up to $700.0 million and increased our borrowing base from $850.0 million to $1.3 billion. At December 31, 2021, we had $543.0 million of borrowings under the Revolving Credit Facility and $20.7 million in outstanding letters of credit. The obligations under the Revolving Credit Facility remain secured by first priority liens on substantially all of the Company’s and the guarantors’ tangible and intangible assets, including without limitation, oil and natural gas properties and associated assets and equity interests owned by the Company and such guarantors. In connection with each redetermination of the borrowing base, the Company must maintain mortgages on at least 85% of the net present value, discounted at 9% per annum (“PV-9”) of the oil and natural gas properties that constitute borrowing base properties. The Company’s domestic direct and indirect subsidiaries are required to be guarantors under the Revolving Credit Facility, subject to certain exceptions. The borrowing base is subject to semi-annual scheduled redeterminations on or about April 1 and October 1 of each year, as well as (i) elective borrowing base interim redeterminations at our request not more than twice during any consecutive 12-month period or the required lenders not more than once during any consecutive 12-month period and (ii) elective borrowing base interim redeterminations at our request following any acquisition of oil and natural gas properties with a purchase price in the aggregate of at least 5.0% of the then effective borrowing base. The borrowing base will be automatically reduced upon (i) the issuance of certain permitted junior lien debt and other permitted additional debt, (ii) the sale or other disposition of borrowing base properties if the aggregate PV-9 of such properties sold or disposed of is in excess of 5.0% of the borrowing base then in effect and (iii) early termination or set-off of swap agreements (a) the administrative agent relied on in determining the borrowing base or (b) if the value of such swap agreements so terminated is in excess of 5.0% of the borrowing base then in effect. ,. The combined proceeds from the Senior N otes issuance, Revolving Credit Facility and Noncontrolling Interest Carve-Out were used to fully repay all amounts outstanding under our Prior Credit Agreements (as defined below), which were then terminated upon the repayment of the remaining principal and accrued interest. Interest Borrowings under the Revolving Credit Facility bear interest at either a U.S. dollar alternative base rate (based on the prime rate, the federal funds effective rate or an adjusted London Interbank Offered Rate (“LIBOR”)), plus an applicable margin or LIBOR, plus an applicable margin, at the election of the borrowers. The applicable margin varies based upon our borrowing base utilization then in effect. The fee payable for the unused revolving commitments is 0.5% per year and is included within interest expense on our combined and consolidated statements of operations. Our weighted average interest rate on loan amounts outstanding as of December 31, 2021 was 3.125%. Covenants The Revolving Credit Facility contains certain covenants that restrict the payment of cash dividends, certain borrowings, sales of assets, loans to others, investments, merger activity, commodity swap agreements, liens and other transactions without the adherence to certain financial covenants or the prior consent of our lenders. We are subject to (i) maximum leverage ratio and (ii) current ratio financial covenants calculated as of the last day of each fiscal quarter. The Revolving Credit Facility also contains representations, warranties, indemnifications and affirmative and negative covenants, including events of default relating to nonpayment of principal, interest or fees, inaccuracy of representations or warranties in any material respect when made or when deemed made, violation of covenants, bankruptcy and insolvency events, certain unsatisfied judgments and change of control. If an event of default occurs and we are unable to cure such default, the lenders will be able to accelerate maturity and exercise other rights and remedies. Letters of Credit From time to time, we may request the issuance of letters of credit for our own account. Letters of credit accrue interest at a rate equal to the margin associated with LIBOR borrowings. At December 31, 2021, we had letters of credit outstanding of $20.7 million, which reduces the amount available to borrow under our Revolving Credit Facility. Prior Credit Agreements At December 31, 2020, certain of our subsidiaries had revolving credit facilities with syndicates of lenders. The amounts we were able to borrow under each of the Prior Credit Agreements was limited by a borrowing base, which was based on the oil and natural gas properties, proved reserves, total indebtedness and other factors and was consistent with customary lending criteria. On May 6, 2021, we early terminated the Prior Credit Agreements with the proceeds from the issuance of the Senior Notes and the Noncontrolling Interest Carve-out and borrowings under our Revolving Credit Facility. The following table summarizes our debt balances as of December 31, 2021 and 2020:
| As of December 31, 2021
| Debt Outstanding |  | Letters of Credit Issued |  | Borrowing Base |  | Maturity
| (in thousands)
Revolving Credit Facility | $ | 543,000 |  |  | $ | 20,653 |  |  | $ | 1,300,000 |  |  | 5/6/2025
7.25% Senior Notes due 2026 | 500,000 |  |  | — |  |  | — |  |  | 5/1/2026
Less: Unamortized discount and issuance costs | (12,594) |  |  |  |  |  |  |
Total long-term debt | $ | 1,030,406 |  |  |  |  |  |  |
| As of December 31, 2020
| Debt Outstanding |  | Letters of Credit Issued |  | Borrowing Base |  | Maturity
| (in thousands)
Independence Upstream Holdings LLC | $ | 32,500 |  |  | $ | — |  |  | $ | 100,000 |  |  | 6/7/2022
Independence Minerals Holdings LLC | 15,000 |  |  | — |  |  | 37,000 |  |  | 10/25/2024
KNR Resource Investors LP | 5,565 |  |  | 250 |  |  | 12,000 |  |  | 6/7/2022
Renee Acquisition LLC | 101,310 |  |  | 5,667 |  |  | 145,000 |  |  | 1/31/2023
Newark Acquisition I LP | 135,400 |  |  | 6,280 |  |  | 190,000 |  |  | 5/31/2023
Bridge Energy Holdings LLC | 35,800 |  |  | 5,574 |  |  | 50,000 |  |  | 7/21/2022
Venado EF LP | 156,500 |  |  | — |  |  | 160,000 |  |  | 3/10/2022
VOG Palo Verde LP | 269,000 |  |  | — |  |  | 320,000 |  |  | 2/28/2023
Total long-term debt | $ | 751,075 |  |  |  |  |  |  |

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