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Acquisitions and Divestitures | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions and Divestitures | Acquisitions and Divestitures During the three years ended December 31, 2024, we completed the following acquisitions and divestitures: Acquisitions SilverBow Merger On July 30, 2024, we consummated the transactions contemplated by the Agreement and Plan of Merger, dated May 15, 2024 (the transactions contemplated therein, the "SilverBow Merger"), between Crescent, SilverBow Resources, Inc. ("SilverBow"), Artemis Acquisition Holdings Inc. ("Artemis Holdings"), Artemis Merger Sub Inc. ("Merger Sub Inc.") and Artemis Merger Sub II LLC ("Merger Sub LLC"). The SilverBow Merger has been accounted for as a business combination using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), with Crescent being identified as the accounting acquirer. Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of Crescent, merged with and into SilverBow (the "Initial Merger"), with SilverBow surviving the merger (the "Initial Surviving Corporation"), and immediately following the Initial Merger, the Initial Surviving Corporation merged with and into Merger Sub LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Artemis Holdings, a Delaware corporation and a direct wholly owned subsidiary of Crescent (the "Subsequent Merger" and together with the Initial Merger, the "Mergers"), with Merger Sub LLC continuing as the surviving company of the Subsequent Merger (the "Subsequent Surviving Company") as a direct wholly owned subsidiary of Artemis Holdings. Promptly following the completion of the Mergers, Artemis Holdings contributed the Subsequent Surviving Company to Crescent Energy OpCo LLC, a Delaware limited liability company, of which Crescent is the managing member, which in turn contributed the Subsequent Surviving Company to its wholly owned subsidiary, Crescent Energy Finance, a Delaware limited liability company. Subject to the terms and conditions of the Merger Agreement, each share of SilverBow's common stock, par value $0.01 per share ("SilverBow Common Stock") issued and outstanding immediately prior to the merger close date, was converted into the right to receive, pursuant to an election made and not revoked, one of the following forms of consideration: (A) 3.125 shares of Crescent Class A Common Stock, (B) a combination of 1.866 shares of Crescent Class A Common Stock and $15.31 in cash or (C) $38.00 in cash, subject to an aggregate cap of $400.0 million on the total cash consideration payable for the SilverBow Common Stock in the SilverBow Merger. The Merger Agreement also provided that each outstanding SilverBow restricted stock unit, performance-based stock unit (assuming maximum performance) and in-the money stock option, whether vested or unvested, held by certain employees and directors of SilverBow (collectively, the "SilverBow Equity Awards") became fully vested and was canceled and converted into a right to receive a cash payment (less the exercise price in the case of stock options) or, in the case of the restricted stock units and performance-based stock units, a partial cash payment and partial settlement in shares of Crescent Class A Common Stock. Each stock option with an exercise price that equaled or exceeded the amount of such cash payment was cancelled for no consideration. See the table below for consideration transferred and preliminary purchase price allocation. Certain data necessary to complete the final purchase price allocation is not yet available, including final tax returns that provide the underlying tax basis of SilverBow’s assets and liabilities. We expect to complete the purchase price allocation during the 12-month period following the acquisition date. Crescent issued 51.6 million shares of Class A Common Stock in the SilverBow Merger and paid $382.4 million in cash to former SilverBow shareholders, including amounts payable in respect of outstanding SilverBow equity awards. See NOTE 13 – Equity-Based Compensation Awards. From the date of the SilverBow Merger through December 31, 2024, revenues and net income associated with operations acquired through the SilverBow Merger were $430.2 million and $156.9 million, respectively. We recognized transaction related expenses of $42.8 million within General and administrative expense on the consolidated statements of operations for the year ended December 31, 2024. The following table summarizes our unaudited pro forma financial information for the years ended December 31, 2024 and 2023 as if the SilverBow Merger and Central Eagle Ford Acquisition occurred on January 1, 2023 (unaudited):
| Year Ended December 31,
| 2024 |  | 2023
| (in thousands)
Revenues | $ | 3,582,776 |  |  | $ | 3,610,300 |
Net income | 10,158 |  |  | 782,563 |
As part of the SilverBow Merger we acquired a deferred acquisition liability from historical SilverBow acquisitions. Per the terms of the acquired contract we were required to make a $75.0 million payment in the fourth quarter of 2024 related to deferred purchase consideration of $50.0 million and a WTI-based contingent earn-out payment of $25.0 million since the average settlement price of WTI was between $75 per barrel and $80 per barrel during the 12-month period that began in December 2023. During 2024 we reorganized our business, primarily as a result of the SilverBow Merger, which included one-time termination costs and exit costs for the closure of one of our offices. During the year ended December 31, 2024, we expect the total amount of one-time employee termination benefits incurred to be $11.4 million and lease termination and other costs of $5.5 million, of which $14.3 million were recognized in General and Administrative expense and $2.7 million were recognized in Asset operating expense, respectively, on the consolidated statements of operations. The following is a reconciliation of our restructuring liability, which is included within Accounts payable and accrued liabilities on the consolidated balance sheets.
| One-time employee termination benefits |  | Lease termination and other costs |  | Total
| (in thousands)
December 31, 2023 | $ | — |  |  | $ | — |  |  | $ | — |
Costs incurred and charged to expense | 11,433 |  |  | 5,516 |  |  | 16,949 |
Costs paid | (6,531) |  |  | (5,516) |  |  | (12,047) |
December 31, 2024 | $ | 4,902 |  |  | $ | — |  |  | $ | 4,902 |
Other Acquisitions Central Eagle Ford Acquisition In October 2024, we acquired from unaffiliated third parties certain interests in oil and gas properties, rights and related assets located in Atascosa, Frio, La Salle and McMullen Counties, Texas for aggregate consideration of approximately $156.0 million, including certain customary purchase price adjustments (the “Central Eagle Ford Acquisition”). The Central Eagle Ford Acquisition has been accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, with Crescent being identified as the accounting acquirer. From the date of the Central Eagle Ford Acquisition through December 31, 2024, revenues and net income associated with operations acquired through the Central Eagle Ford Acquisition were $10.4 million and $3.1 million, respectively. We recognized transaction related expenses of $5.6 million within General and administrative expense on the consolidated statements of operations for the year ended December 31, 2024. Eagle Ford Minerals Acquisition In February 2024, we acquired a portfolio of oil and natural gas mineral interests located in the Karnes Trough of the Eagle Ford Basin from an unrelated third-party (the "Eagle Ford Minerals Acquisition") for total cash consideration of approximately $25.0 million, including customary purchase price adjustments. The purchase price was funded using borrowings under our Revolving Credit Facility. Western Eagle Ford Acquisitions In July 2023, we consummated the acquisition contemplated by the Purchase and Sale Agreement, dated as of May 2, 2023, between our subsidiary and Comanche Holdings, LLC ("Comanche Holdings") and SN EF Maverick, LLC ("SN EF Maverick," and together with Comanche Holdings, the "Seller"), pursuant to which we agreed to acquire operatorship and incremental working interests (the "July Western Eagle Ford Acquisition") in certain of our existing Western Eagle Ford assets from the Seller for aggregate cash consideration of approximately $592.7 million, including capitalized transaction costs and certain final purchase price adjustments. In October 2023, we consummated the unrelated acquisition contemplated by the Purchase and Sale Agreement, dated as of August 22, 2023, between our subsidiary and an unaffiliated third party, pursuant to which we agreed to acquire certain incremental working interests in oil and natural gas properties (the "October Western Eagle Ford Acquisition," and together with the July Western Eagle Ford Acquisition, the "Western Eagle Ford Acquisitions") in certain of our existing Western Eagle Ford assets from the seller for aggregate cash consideration of approximately $235.1 million, including certain customary purchase price adjustments. Uinta Transaction In March 2022, we consummated the acquisition contemplated by the Membership Interest Purchase Agreement dated February 15, 2022 (the “Purchase Agreement” and the transactions contemplated therein, the “Uinta Transaction”) between certain of our subsidiaries, including OpCo, and Verdun Oil Company II LLC, a Delaware limited liability company, pursuant to which we purchased all of the issued and outstanding membership interests of Uinta AssetCo, LLC, a Texas limited liability company that holds all development and production assets of, and certain obligations formerly held by EP Energy E&P Company, L.P. located in the State of Utah. Upon closing of the Uinta Transaction, we paid $621.3 million in cash consideration and transaction fees and assumed certain commodity derivatives. The Uinta Transaction was funded with cash on hand and borrowings under our Revolving Credit Facility (as defined in NOTE 8 - Debt). In addition, subsequent to the closing date but during the year ended December 31, 2022, we recorded $11.1 million in customary purchase price adjustments that increased our total purchase price to $632.4 million. In connection with the closing of the Uinta Transaction, we entered into an amendment to our Revolving Credit Facility to, among other things, increase the borrowing base to $1.8 billion and the elected commitment amount to $1.3 billion (see NOTE 8 – Debt). We incurred financing costs of $13.4 million associated with this amendment, which are recorded as debt issuance costs within Other assets on the consolidated balance sheets. Subsequent to the closing of the Uinta Transaction in 2022, we settled certain acquired oil commodity derivative positions and entered into new commodity derivative contracts for 2022 with a swap price of $75 per barrel for a net cost of $54.1 million, including restructuring fees. Consideration Transferred The following table summarizes the consideration transferred and the net assets acquired for our significant asset acquisitions and business combinations during the three years ended December 31, 2024 that impact the periods presented:
| Asset Acquisitions |  | Business Combinations
| Eagle Ford Minerals Acquisition |  | July Western Eagle Ford Acquisition |  | October Western Eagle Ford Acquisition |  | Uinta Transaction |  | SilverBow Merger |  | Central Eagle Ford Acquisition
(in thousands) |  |
Consideration transferred: |  |  |  |  |  |  |  |  |  |  |
Cash consideration: |  |  |  |  |  |  |  |  |  |  |
Cash paid | $ | 25,000 |  |  | $ | 592,735 |  |  | $ | 235,069 |  |  | $ | 632,400 |  |  | $ | 358,092 |  |  | $ | 156,031 |
Settlement of SilverBow Equity Awards in cash | — |  |  | — |  |  | — |  |  | — |  |  | 18,858 |  |  | — |
Equity consideration: |  |  |  |  |  |  |  |  |  |  |
Fair value of Class A Common Stock issued to SilverBow Common stockholders | — |  |  | — |  |  | — |  |  | — |  |  | 595,294 |  |  | — |
Settlement of SilverBow Equity Awards in Class A Common Stock | — |  |  | — |  |  | — |  |  | — |  |  | 16,129 |  |  | — |
Total | $ | 25,000 |  |  | $ | 592,735 |  |  | $ | 235,069 |  |  | $ | 632,400 |  |  | $ | 988,373 |  |  | $ | 156,031 |
Assets acquired and liabilities assumed: |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 5,200 |  |  | $ | — |
Accounts receivable, net | — |  |  | — |  |  | — |  |  | — |  |  | 140,073 |  |  | — |
Derivative assets – current | — |  |  | — |  |  | — |  |  | — |  |  | 100,601 |  |  | — |
Prepaid expenses | — |  |  | 355 |  |  | — |  |  | — |  |  | 6,154 |  |  | — |
Other current assets | — |  |  | — |  |  | — |  |  | — |  |  | 945 |  |  | — |
Oil and natural gas properties - proved | 12,865 |  |  | 595,025 |  |  | 239,573 |  |  | 785,150 |  |  | 1,980,500 |  |  | 144,085 |
Oil and natural gas properties - unproved | 12,135 |  |  | 22,310 |  |  | 9,819 |  |  | 70,057 |  |  | 207,191 |  |  | — |
Field and other property and equipment | — |  |  | — |  |  | — |  |  | 8,374 |  |  | 4,586 |  |  | 17,848 |
Derivative assets – noncurrent | — |  |  | — |  |  | — |  |  | — |  |  | 37,870 |  |  | — |
Other assets | — |  |  | — |  |  | — |  |  | — |  |  | 25,199 |  |  | — |
Accounts payable and accrued liabilities | — |  |  | (12,668) |  |  | (5,790) |  |  | — |  |  | (196,963) |  |  | (1,212) |
Acquired deferred acquisition consideration | — |  |  | — |  |  | — |  |  | — |  |  | (76,550) |  |  | — |
Other current liabilities | — |  |  | — |  |  | — |  |  | — |  |  | (10,029) |  |  | — |
Derivative liabilities – current | — |  |  | — |  |  | — |  |  | (179,696) |  |  | — |  |  | — |
Short-term debt | — |  |  | — |  |  | — |  |  | — |  |  | (37,500) |  |  | — |
Long-term debt | — |  |  | — |  |  | — |  |  | — |  |  | (1,103,125) |  |  | — |
Deferred tax liability | — |  |  | — |  |  | — |  |  | — |  |  | (58,670) |  |  | — |
Asset retirement obligations | — |  |  | (10,541) |  |  | (7,908) |  |  | (37,203) |  |  | (25,683) |  |  | (4,690) |
Other liabilities | — |  |  | (1,746) |  |  | (625) |  |  | (14,282) |  |  | (11,426) |  |  | — |
Net assets acquired | $ | 25,000 |  |  | $ | 592,735 |  |  | $ | 235,069 |  |  | $ | 632,400 |  |  | $ | 988,373 |  |  | $ | 156,031 |
Divestitures During the years ended 2024 and 2023, we sold non-core assets to unrelated third-party buyers for $54.8 million and $28.9 million in aggregate cash proceeds, respectively, and recorded a gain of approximately $29.4 million during the year ended 2024 on the sale of these assets. Permian Basin Divestiture On November 4, 2022, we entered into a definitive purchase and sale agreement with an unaffiliated third party to sell certain of our non-core producing properties and related oil and natural gas leases in Ector County in the Permian Basin in exchange for cash consideration, subject to customary purchase price adjustments, of $80.0 million. We closed this transaction in December 2022 and recorded a loss of $0.9 million during the year ended December 31, 2022. Exaro In April 2022, our equity method investee, Exaro Energy III, LLC ("Exaro"), entered into a purchase and sale agreement to sell its operations in the Jonah Field in Wyoming. During the year ended December 31, 2022, we received a distribution from Exaro of $6.8 million primarily as a result of the sale. Chama In February 2022, we contributed all of the assets and prospects in the U.S.Gulf formerly owned by Contango to Chama in exchange for a 9.4% interest in Chama, which interest was valued at $3.8 million. As a result, we derecognized the assets and liabilities that were contributed to Chama from our consolidated balance sheets and recorded an investment in equity affiliates for our interest in Chama, as well as a $4.5 million gain related to the deconsolidation of these assets and liabilities. John Goff, the Chairman of our Board of Directors, holds an approximate interest of 17.5% in Chama, and the remaining interests are held by other investors. Pursuant to the Limited Liability Company Agreement of Chama, we may be required to fund certain workover costs, and we will be required to fund plugging and abandonment costs related to the producing assets we contributed to Chama.

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