HOUSTON - Crescent Energy Company (NYSE: CRGY), a U.S. energy firm with assets in Texas and the Rockies, has initiated a public offering of 18 million shares of its Class A common stock. Trading near its 52-week high of $15.54, the company's stock has shown robust momentum with a 34% return over the past year. According to InvestingPro analysis, the company appears to be trading above its Fair Value. The offering, announced today, is part of the company's strategy to fund its upcoming acquisition of Ridgemar (Eagle Ford (NYSE:F)) LLC, which is expected to be finalized in the first quarter of 2025.
This offering is being made through an effective shelf registration statement on Form S-3 with the U.S. Securities and Exchange Commission (SEC). While the acquisition of Ridgemar is not dependent on this offering, and vice versa, the company plans to use the net proceeds to cover a portion of the acquisition's cash consideration. Should the acquisition not proceed, the funds raised will be directed towards reducing Crescent’s debt under its revolving credit facility or for general corporate purposes.
Crescent has also proposed to give underwriters a 30-day option to purchase up to 2.7 million additional shares at the public offering price, less underwriting discounts and commissions. The joint book-running managers for this offering include Wells Fargo (NYSE:WFC) Securities, LLC, KKR Capital Markets LLC, Raymond (NS:RYMD) James & Associates, Inc., and Evercore Group L.L.C.
The completion of the offering is subject to market conditions, and there is no certainty as to when or if the offering may be finalized, or regarding the final size and terms.
Investors interested in the offering can obtain copies of the preliminary prospectus supplement and the accompanying prospectus, as well as the final prospectus supplement when available, from the aforementioned financial institutions.
This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The sale of Class A common stock will not be lawful in any jurisdiction where such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
In other recent news, Crescent Energy has entered into an agreement to acquire assets in the Eagle Ford region from Ridgemar Energy for an upfront payment of $905 million. The acquisition, which is part of Crescent's strategy to expand its presence in the Eagle Ford area, is expected to close in the first quarter of 2025. The company anticipates that the acquisition will enhance several key financial metrics, including Operating Cash Flow and Levered Free Cash Flow.
In the third quarter of 2024, Crescent Energy reported record production levels of 219,000 barrels of oil equivalent per day, surpassing previous expectations. This success is attributed to the effective integration of the SilverBow (NYSE:SBOW) acquisition. The company also revised its production outlook upward for the third consecutive quarter, with anticipated capital expenditures ranging from $425 million to $455 million for the remainder of the year.
Crescent Energy's Q3 financial results also revealed an adjusted EBITDA of approximately $430 million and a levered free cash flow of $160 million. The company continues to explore strategic mergers and acquisitions while maintaining a solid balance sheet, with net leverage standing at 1.5 times. These recent developments reflect Crescent Energy's commitment to disciplined capital allocation and sustainable growth for long-term shareholder value.
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