Crescent Energy NYSE: CRGY executives used the company’s fourth-quarter and full-year 2025 earnings call to emphasize a year of major portfolio change, rising free cash flow generation, and a capital returns framework that includes dividends, debt reduction, and share repurchases. Management also introduced a new dedicated minerals platform, Crescent Royalties, which leaders described as a key catalyst intended to help investors better recognize the value of the company’s long-standing minerals and royalties portfolio.
Management highlights a “transformational” 2025
Chief Executive Officer David Rockecharlie said 2025 marked a “transformational year” for Crescent, leaving the company entering 2026 with “more scale, more focus, and more opportunity.” He framed the update around three themes: strong base business performance and momentum; a more focused operated footprint in three basins; and a more compelling equity value proposition, including “upside catalysts” such as the minerals business.
Rockecharlie said Crescent is now a “focused and scaled operator” in the Eagle Ford, Permian, and Uinta basins. He added that the company executed nearly $5 billion of transactions in 2025, including more than $4 billion of acquisitions at “less than 3x EBITDA” and nearly $1 billion of divestitures of non-core assets at “over 5x EBITDA.” The company described that approach as recycling capital out of non-core positions into higher-return opportunities where Crescent can apply its operating playbook.
Fourth-quarter results: production and free cash flow
For the fourth quarter, Rockecharlie said Crescent produced 268,000 barrels of oil equivalent per day (boe/d), including 106,000 barrels of oil per day, and generated approximately $239 million of Levered Free Cash Flow.
Chief Financial Officer Brandi Kendall reported fourth-quarter Adjusted EBITDA of approximately $536 million and capital expenditures of $226 million, alongside the $239 million of Levered Free Cash Flow. Kendall said the results underscored Crescent’s free cash flow capacity and “lower capital intensity operating model.”
Operationally, Rockecharlie said the company increased drilling and completion efficiencies, extended lateral lengths, and expanded simulfrac operations across its footprint. Those initiatives contributed to a 15% year-over-year reduction in drilling and completion cost per foot and helped drive full-year capital spending outperformance, according to management.
Permian integration, updated synergy targets, and 2026 activity levels
Rockecharlie called Crescent’s entry into the Permian “a defining step” and said integration has progressed “seamlessly.” He said the acquisition was “immediately accretive across key metrics,” with “highly attractive cash-on-cash returns,” and that the company’s synergy targets are now “100% higher” than what it underwrote. Management attributed the increase to greater visibility into operational efficiencies, overhead optimization, marketing improvements, and balance sheet opportunities.
During Q&A, Kendall said Crescent had already captured more than $40 million of synergies, largely from overhead and “duplicative public company expenses,” as well as “cost of capital synergies.” She said the doubled annual synergy target is about $190 million, with roughly half tied to operations and the rest tied to additional overhead, incremental marketing synergies, and further cost-of-capital opportunities. Chief Operating Officer Joey Mahmoud provided examples of expected operational benefits, including increasing wells per pad to enable simulfrac, increasing lateral lengths through land trades, supply chain benefits from scale, and operating cost opportunities such as artificial lift optimization.
Looking to 2026, Rockecharlie said Crescent expects to run a six-to-seven rig program across its footprint:
- Eagle Ford: four rigs across multiple windows, which management said provides flexibility to pursue the highest returns across commodity cycles.
- Uinta: one rig targeting the Uteland Butte formation, with continued delineation following the success of the company’s Eastern JV.
- Permian: a disciplined one-to-two rig program as the company “right-sizes” capital and operational intensity.
Kendall told analysts she expects relatively flat oil volumes in both the Eagle Ford and the Permian during 2026. She also said the corporate base decline rate was in the “high twenties” pro forma for the merger and divestitures, with expectations to return to a corporate target of 25% or below over the next 12 to 18 months.
In response to a question about fourth-quarter Permian oil rates, management said there were no additional transactions and noted that the base business outperformed production expectations in the quarter. Kendall also said the Vital business did not bring on new wells after early October, and described that business as being in decline, which she said translates into a “pretty flat oil production cadence” for 2026.
Crescent Royalties: dedicated minerals platform and growth plans
Rockecharlie announced the formation of Crescent Royalties, describing it as a milestone in building a leading royalties business. He said Crescent has been acquiring minerals and royalties assets for nearly 15 years and has built “one of the largest and most established” platforms in the sector, anchored by a core position in the Eagle Ford. Management said the minerals portfolio contributes approximately $160 million of annual cash flow.
Rockecharlie said placing the minerals assets in a dedicated capital structure is intended to enhance strategic flexibility and create “additional pathways” for long-term value recognition. In Q&A, he emphasized that the minerals business has been “a core business” with “significant embedded value,” and described the assets as among the “lowest cost in the lower 48.”
Executives also discussed growth and underwriting expectations for the royalties business. Management said it views the current step as “step one” in helping shareholders recognize value. The company’s team said it has compounded the minerals business at 20% annual growth over the last five years, and that prospective acquisitions will be evaluated with the same framework used elsewhere at the company, including a focus on cash flow orientation, “two times multiple of money,” and accretion to net asset value per share and free cash flow per share.
Capital returns: dividend, debt paydown, and buyback flexibility
Kendall outlined what she called an “all-of-the-above” return of capital framework supported by free cash flow. Crescent declared a $0.12 per share quarterly dividend, which Kendall said equates to an approximately 5% annualized yield. She also said the company repaid more than $700 million of debt during the quarter and retains capacity to continue deleveraging through 2026.
In addition, Kendall said Crescent increased its share repurchase authorization to $400 million, describing it as flexibility to repurchase shares during periods of market dislocation. When asked how Crescent prioritizes buybacks versus other uses of cash, Kendall said the balance sheet and base dividend remain the top priorities, while the increased authorization is meant to allow the company to be opportunistic if the stock becomes “significantly dislocated.”
On leverage, Kendall said there was no fundamental change in how the company thinks about leverage across the business, and reiterated a long-term target of one times. She added that Crescent expects to be below 1.5 times by year-end for the minerals-related financing, citing significant asset coverage given how the asset class trades relative to that leverage target.
Rockecharlie closed the call by reiterating management’s view that Crescent’s base business is performing with momentum, the portfolio is now more focused and scaled following 2025’s transactions, and the company sees multiple catalysts ahead—highlighting the minerals platform as a key area of opportunity.
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.
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