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Related Party Transactions | 12 Months Ended
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Dec. 31, 2024
Related Party Transactions [Abstract] |
Related Party Transactions | Related Party Transactions KKR Group Management Agreement Crescent Energy Company has a management agreement (the "Management Agreement") with KKR Energy Assets Manager LLC (the "Manager"). Pursuant to the Management Agreement, the Manager provides the Company with its senior executive management team and certain management services. The Management Agreement had an initial term of three years that began in 2021 and was automatically renewed in December 2024 for an additional three-year term ending December 7, 2027 and will have automatic three-year renewals thereafter, unless the Company or the Manager elects not to renew the Management Agreement. As consideration for the services rendered pursuant to the Management Agreement and the Manager’s overhead, including compensation of the executive management team, the Manager is entitled to receive compensation from the Company equal to $51.3 million per annum ("Manager Compensation") (calculated based on the Company's pro rata relative ownership of OpCo multiplied by $69.4 million (the "Base Input"), which is included in General administrative expenses on our consolidated statements of operations. As the Company's business and assets expand, the Base Input will increase by an amount equal to 1.5% per annum of the net proceeds from all future issuances of our primary equity securities by the Company (including in connection with acquisitions) and increased by $14.0 million during the year ended December 31, 2024 in conjunction with the closing of the SilverBow Merger and December 2024 Equity Issuance. However, the Base Input will not increase from the issuance of the Company's shares upon the redemption or exchange of OpCo Units. See NOTE 3 – Acquisitions and Divestitures for more information. The Company expects its ownership percentage of OpCo will increase over time through the redemption of OpCo Units for shares of Class A Common Stock or the issuance of additional shares of Class A Common Stock. As this occurs, the Manager Compensation pursuant to the formula defined in the Management Agreement, which is reflected in our consolidated statements of operations, will increase. In order to pay the Manager Compensation, the Company must first receive a cash distribution from OpCo, and any such cash distribution necessitates a concurrent pro rata cash distribution to the holders of redeemable noncontrolling interests. This cash distribution to the holders of redeemable noncontrolling interests does not represent additional Manager Compensation; rather, it represents an ordinary cash distribution to the holders of redeemable noncontrolling interests. In certain instances in our financial statements and other disclosures, we clarify the underlying event that requires us to make such distributions, not because the distributions to the holders of redeemable noncontrolling interests are made for such purpose (e.g. Cash distributions to redeemable noncontrolling interests initiated by Class A common stock dividend, Cash distributions to redeemable noncontrolling interests initiated by Manager Compensation and Cash contributions from (cash distributions to) redeemable noncontrolling interests initiated by income taxes). During the years ended December 31, 2024, 2023 and 2022, we recorded general and administrative expense of $41.3 million, $23.8 million and $14.3 million, respectively, related to the Manager Compensation and concurrently made cash distributions of $22.2 million, $33.2 million and $32.3 million in 2024, 2023 and 2022 to our redeemable noncontrolling interests. At December 31, 2024, we reduced redeemable noncontrolling interests by $4.5 million for the OpCo distribution declaration to redeemable noncontrolling interests that will be paid during the first quarter of 2025. At December 31, 2024, we had $17.4 million and $13.9 million, included within Accounts payable - affiliates on the consolidated balance sheets for Crescent Energy Company's fee associated with the Manager Compensation and cash distributions to be paid to our redeemable noncontrolling interests in the first quarter of 2025. Additionally, the Manager is entitled to receive incentive compensation ("Incentive Compensation") under which the Manager is targeted to receive 10% of our outstanding Class A Common Stock based on the achievement of certain performance-based measures. The Incentive Compensation consists of five tranches that settle over a five-year period beginning in 2024, and each tranche relates to a target number of shares of Class A common stock equal to 2% of the outstanding Class A common stock as of the time such tranche is settled. So long as the Manager continuously provides services to us until the end of the performance period applicable to a tranche, the Manager is entitled to settlement of such tranche with respect to a number of shares of Class A common stock ranging from 0% to 4.8% of the outstanding Class A Common Stock at the time each tranche is settled. During the years ended December 31, 2024, 2023 and 2022, we recorded general and administrative expense of $188.1 million, $68.0 million and $24.3 million, respectively, related to the Incentive Compensation. See NOTE 13 – Equity-Based Compensation Awards for more information. KKR Funds From time to time, we may invest in upstream oil and gas assets alongside EIGF II and/or other KKR funds ("KKR Funds") pursuant to the terms of the Management Agreement. In these instances, certain of our consolidated subsidiaries enter into Master Service Agreements ("MSA") with entities owned by KKR Funds, pursuant to which our subsidiaries provide certain services to such KKR Funds, including the allocation of the production and sale of oil, natural gas and NGLs, collection and disbursement of revenues, operating expenses and general and administrative expenses in the respective oil and natural gas properties, and the payment of all capital costs associated with the ongoing operations of the oil and natural gas assets. Our subsidiaries settle balances due to or due from KKR Funds on a quarterly basis. The administrative costs associated with these MSAs are allocated by us to KKR Funds based on (i) an actual basis for direct expenses we may incur on their behalf or (ii) an allocation of such charges between the various KKR Funds based on the estimated use of such services by each party. As of December 31, 2024 and 2023, we had a related party receivable of $4.3 million and $0.1 million, respectively, included within Accounts receivable – affiliates and a related party payable of $1.2 million and $27.9 million, respectively, included within Accounts payable – affiliates on our consolidated balance sheets associated with KKR Funds transactions. KKR Capital Markets LLC ("KCM") We engage KCM, an affiliate of KKR Group, for capital market transactions including notes offerings, credit facility structuring and equity offerings. The following table summarizes fees, discounts and commissions paid to KCM by Crescent in connection with our debt and equity transactions:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (in millions)
Amounts paid to KCM | $ | 8.7 |  |  | $ | 5.2 |  |  | $ | 3.5 |
We recorded these fees to debt issuance costs within Long-term debt (note offerings) and Other assets (credit facility structuring) or APIC (equity offerings). At December 31, 2023 we had a related party payable of $0.3 million, included within Accounts payable - affiliates on our consolidated balance sheet associated with KCM transactions. Other Transactions In March 2024, OpCo repurchased 2.3 million OpCo Units from Independence Energy Aggregator L.P., the entity through which certain private investors in affiliated KKR entities held their interests in us, for $22.7 million. See NOTE 10 – Equity and Redeemable Noncontrolling Interests for more information. During the years ended December 31, 2024, 2023 and 2022, we made cash distributions of $32.5 million, $57.1 million and $97.0 million to our redeemable noncontrolling interests related to their pro rata share of cash distributions made to Crescent Energy Company to pay dividends and income taxes. In addition, during the years ended December 31, 2024, 2023 and 2022, we reimbursed KKR $2.4 million, $1.5 million and $1.8 million for costs incurred on our behalf. At December 31, 2024 we had $0.7 million accrued within Accounts payable - affiliates for reimbursable costs and distributions to our redeemable noncontrolling interests for their pro rata share of taxes which will be paid during the first quarter of 2025. During the year ended December 31, 2023, we signed a ten-year office sublease agreement with KKR. The terms of the lease provide for an annual base rent of approximately $0.7 million. Upon lease commencement in December 2023, we recorded a $5.3 million right-of-use asset in Other assets, an operating lease liability of $0.4 million in Other current liabilities and $4.9 million in Other liabilities on the consolidated balance sheets. At December 2023 we also recorded our allocated share of leasehold improvement cost from KKR of $6.6 million to Accounts payable - affiliates and Field and other property and equipment, at cost on the consolidated balance sheets that was subsequently paid during 2024. Board of Directors During the year ended December 31, 2023, we signed a ten-year office lease with an affiliate of Crescent Real Estate LLC. John C. Goff, the Chairman of our Board of Directors, is affiliated with Crescent Real Estate LLC. The terms of the lease provide for annual base rent of approximately $0.3 million, increasing over the term of the lease, and the payment by one of our subsidiaries of certain other customary expenses. In addition, the lease provides for reimbursement of our costs up to $1.1 million for tenant improvements, which we were reimbursed the full amount during the year ended December 31, 2024. In addition, during the year ended December 31, 2024 we entered into an amendment to the original lease agreement for additional office space. Under the amended agreement our annual base rent is $0.4 million increasing to $0.5 million over the life of the agreement. Upon lease commencement in April 2023, we recorded a $2.4 million right-of-use asset in Other assets, an operating lease liability of $0.1 million in Other current liabilities and $2.3 million in Other liabilities on the consolidated balance sheets. We may be required to fund certain workover costs, and we will be required to fund plugging and abandonment costs related to producing assets held by Chama, an Investment in equity affiliates on our consolidated balance sheets. During the year ended December 31, 2024, we funded $4.7 million to Chama associated with the plugging and abandonment costs.

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