Crescent Energy NYSE: CRGY reported record quarterly levered free cash flow in the second quarter of 2026 and raised its full-year production outlook, citing higher volumes, lower operating costs and accelerating savings from its Permian acquisition.
Chief Executive Officer David Rockecharlie said the company produced about 335,000 barrels of oil equivalent per day during the quarter, including approximately 140,000 barrels of oil per day. Crescent generated $418 million of levered free cash flow, a quarterly record, and $798 million of adjusted EBITDAX.
“Higher production, structurally lower costs, and record free cash flow reinforce both the strength of the business today and the long-term value creation opportunity ahead,” Rockecharlie said.
Guidance Raised as Costs Improve
Management increased 2026 total production guidance to a range of 327,000 to 335,000 Mboe/d and raised oil production expectations, though it did not provide a revised numerical oil guidance range during the call. The company also improved its adjusted operating expense outlook to $11 to $12 per Boe, a $0.50-per-Boe improvement.
Development capital guidance was unchanged at $1.325 billion to $1.425 billion. Chief Financial Officer Brandi Kendall said maintaining the capital range while increasing production expectations reflects capital-efficiency improvements across Crescent’s portfolio.
Kendall told analysts that capital spending is expected to land near the midpoint of the annual range. While the second quarter represented the company’s lowest capital quarter of the year, spending in the third and fourth quarters is expected to be relatively even.
Management expects oil and total production to decline naturally during the second half of 2026, largely because of the timing of wells placed on production. In the Permian, Crescent is transitioning from two-mile to three-mile laterals, which is expected to move more completions later in the quarter. Kendall said third-quarter oil production is expected to be in the mid-130,000-barrel-per-day range.
Permian Synergy Target Increased Again
Crescent increased its estimated annual synergy opportunity from its December Permian acquisition to $250 million to $300 million, roughly three times the original $90 million to $100 million target announced with the deal. The company said it had captured approximately $190 million of annualized synergies to date.
Rockecharlie said the company has completed the initial stabilization phase for the acquired assets and has moved into optimization. He said the savings are being driven by operational, infrastructure and commercial changes.
- Operational optimization: Crescent said it has reduced well costs by approximately 20% to 25% compared with the prior operator through planning, workover strategies, vendor management and standardized operating practices.
- Infrastructure optimization: The company cited artificial-lift and facilities improvements, equipment rationalization and field surveillance as contributors to a lower operating-cost structure.
- Commercial optimization: Crescent said it is improving marketing terms, takeaway costs and equipment contracting across the asset base.
Kendall said Crescent expects to realize the majority of the $250 million to $300 million synergy target by the end of 2026 and into 2027. She said the company sees further upside to free cash flow generation in 2027.
Chief Operating Officer Joey Hall said the company expects to see more impact from its own development planning in the latter half of 2026 and especially in 2027. During the first half, Crescent was largely executing the prior operator’s plan, he said. The company expects longer laterals, more wells per pad and potential completion-design changes to influence future well results.
Portfolio Operations and Resource Expansion
In the Eagle Ford, Crescent said well costs improved approximately 5% year over year and are now more than 25% below 2023 levels. The company attributed the performance to workover and artificial-lift programs, field execution and efficiency gains.
In the Uinta basin, drilling efficiency improved about 25% year over year, completion efficiency nearly doubled, and development costs declined nearly 20% to less than $800 per foot, according to Rockecharlie.
The company’s minerals and royalties business produced approximately 13,000 Mboe/d during the quarter. At current prices, Crescent expects the portfolio to generate about $200 million of EBITDA in 2026.
Management also highlighted potential to expand its inventory and improve breakeven economics across its nearly 1 million net acres. Rockecharlie said Crescent is spending more time evaluating additional formations and resource opportunities in the Permian, Eagle Ford and Uinta. In the Eagle Ford, he said the company expects its drilling program to be approximately evenly split between Eagle Ford and Austin Chalk wells by year-end.
Free Cash Flow Priorities Remain Centered on Deleveraging
Crescent ended the quarter with approximately $2.2 billion of liquidity, no near-term debt maturities and a weighted average debt maturity of about six years. On July 31, the company redeemed the remaining $259 million of its 2029 senior notes at par, reducing debt and annual interest expense.
The company declared a quarterly dividend of $0.12 per share. At current commodity prices, Kendall said Crescent expects to generate more than $1 billion of levered free cash flow in 2026.
While the company said its free cash flow can support debt reduction, acquisitions and share repurchases, Kendall said near-term excess cash flow is expected to remain focused on “rapid de-leveraging.” Crescent continues to evaluate acquisitions through a returns- and free-cash-flow-focused framework, but Executive Vice President of Investments Clay Rynd said the bar for additional deals remains high given the company’s internal value-creation opportunities.
About Crescent Energy (NYSE:CRGY)
Crescent Energy Co NYSE: CRGY is an independent exploration and production company focused on the acquisition, development and production of oil and natural gas resources in North America. Headquartered in Oklahoma City, the company's core business activities include the identification and appraisal of prospective acreage, the design and execution of drilling and completion programs, and the ongoing operation and optimization of producing wells. Crescent Energy's integrated approach emphasizes capital efficiency, reservoir quality and operational reliability to support sustainable cash flow generation over the commodity cycle.
Crescent Energy's operations are concentrated in the Permian Basin, with a particular focus on the Delaware Basin's stacked pay intervals.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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