Crescent Energy Buys Devon’s Eagle Ford Assets for $3.85B, Targets $140M in Synergies

Key Points

• Crescent Energy will acquire Devon Energy’s Eagle Ford assets for approximately $3.85 billion, adding about 68,000 barrels of oil equivalent per day, nearly 40,000 barrels of oil per day and more than 600 net drilling locations. The deal is expected to close in the fourth quarter of 2026 or early 2027, pending approvals.
• The acquisition is expected to generate approximately $140 million in annual synergies, driven primarily by longer lateral wells and development efficiencies. Crescent plans to maintain activity near current levels while lowering capital requirements and targeting full synergy capture in 2027.
• The transaction will be funded with debt and equity, including a $500 million commitment from KKR, and will delay Crescent’s deleveraging timeline by about 12 months. Management is targeting leverage of roughly 1.5 times by the end of 2027 and near one times by the end of 2028 while maintaining its fixed dividend.

Crescent Energy NYSE: CRGY said it has agreed to acquire Devon Energy’s Eagle Ford assets for a net purchase price of about $3.85 billion, a transaction the company expects to close in the fourth quarter of 2026 or early 2027, subject to customary conditions and regulatory approvals.

Chief Executive Officer David Rockecharlie said the acquisition expands Crescent’s position in the Eagle Ford and would make the company the basin’s second-largest producer on a pro forma basis. The assets add approximately 68,000 barrels of oil equivalent per day of production, including nearly 40,000 barrels of oil per day, along with more than 600 net locations in the Karnes Trough.

“We have owned Royalties under these assets for more than a decade and have operations directly offset,” Rockecharlie said, describing the assets as a differentiated strategic fit for the company. He said Crescent expects the transaction to add Tier 1 inventory with economics that compete with other Lower 48 opportunities.

Transaction Metrics and Financing

Crescent said it is acquiring the assets for about three times EBITDA and for less than $2 million per net location. The company expects returns exceeding its target of a two-times multiple on invested capital, a payback period of less than five years, and accretion to cash flow, free cash flow and net asset value.

The acquisition will be financed through a mix of debt and equity, according to Chief Financial Officer Brandi Kendall. KKR, a longstanding Crescent investor and strategic partner, has committed $500 million in support of the transaction.

Kendall said the acquired production base includes approximately $2.3 billion of proved developed PV-10, in addition to royalties-related cash flow and potential value from operating improvements. The transaction has a July 1 effective date.

Following the closing, Crescent intends to prioritize debt reduction while maintaining its fixed dividend and liquidity position. The company said it has added incremental commodity hedges to provide cash-flow visibility during the initial deleveraging period. As of the call, Crescent was roughly 50% hedged on oil production for 2027, with approximately two-thirds of that position in swaps and one-third in collars.

Management is targeting leverage of about 1.5 times by year-end 2027 and approaching one time by year-end 2028, based on current share pricing. Kendall said the transaction keeps Crescent on its path toward an investment-grade credit profile, although its expected deleveraging timeline is effectively delayed by about 12 months.

Operational Synergy Plans

Crescent identified approximately $140 million of annual synergy potential across drilling and completions, lease operating expense and marketing. The company expects to capture the full amount during 2027 and have it reflected in its run-rate results exiting that year.

Chief Operating Officer Joey Hall said the largest source of anticipated savings is development optimization, particularly through longer lateral wells and surface-design efficiencies. Crescent expects approximately $100 million in annual synergies from longer-lateral development alone.

Hall said Crescent has increased average lateral lengths by more than 25% compared with prior operators across its five most recent acquisitions of scale. On the Devon assets, Crescent cited plans to increase average lateral lengths from approximately 6,500 feet to 11,500 feet.

Management said it does not plan to accelerate activity materially following the acquisition. Instead, Rockecharlie said Crescent expects to maintain activity near existing levels while producing similar volumes with lower capital requirements. The pro forma company is expected to maintain about 170,000 barrels of oil production per day with approximately $1.8 billion of annual development capital, implying a maintenance reinvestment rate roughly 5% lower than Crescent’s standalone standard.

The company expects the combined portfolio to have about six years of inventory with breakevens below $50 per barrel, about 10 years below $60 per barrel, and more than 15 years of total inventory life. Management said the 600 identified net locations do not include potential refracturing opportunities.

Royalties Platform Expands

The acquisition also adds about $50 million of royalties EBITDA and increases Crescent’s operating control over its royalties portfolio. Executive Vice President of Investments Clay Rynd said Crescent has discussed its royalties business as a roughly $200 million annual EBITDA operation, and the transaction increases expected cash flow by more than 20% to approximately $250 million.

Before the transaction, Crescent operated about 10% of royalties-related cash flow, according to management. Pro forma for the deal, the company expects to operate about 40% to 50% of the position, providing line of sight into roughly half of the platform’s cash flow.

Rockecharlie said Crescent remains in the process of evaluating strategic alternatives for its minerals and royalties position. The company had previously indicated a 12- to 18-month evaluation period and said the transaction could support the same or a faster timeline.

Management also said it does not expect to be a cash taxpayer in 2027 and likely not in 2028, with more detailed tax guidance expected alongside its formal 2027 outlook.

About Crescent Energy (NYSE:CRGY)

Crescent Energy Company is an independent, U.S.-based energy company engaged in the acquisition, development, and operation of oil and natural gas properties. Its production portfolio includes crude oil, natural gas, and natural gas liquids, with an emphasis on established assets that offer ongoing development opportunities.

The company's operations are concentrated in several major U.S. onshore producing regions, including the Eagle Ford, the Uinta Basin, and other assets across the Rocky Mountain and central United States.

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