How are energy investors positioned?
HOUSTON - Crescent Energy Co (NYSE:CRGY), an energy company with a market capitalization of $3.74 billion and significant EBITDA of $1.47 billion in the last twelve months, announced today that it expects to report positive cash settlements on its hedge positions for the fourth quarter and full year of 2024. According to InvestingPro analysis, the company appears to be slightly overvalued at current levels, though analysts maintain positive growth expectations. The preliminary data indicates the company will report $42 million received for the three months ended December 31, 2024, and $25 million for the twelve-month period.
This financial outcome stems from a combination of net cash received on the settlement of derivatives and the settlement of acquired derivative contracts related to the SilverBow (NYSE:SBOW) Merger. Specifically, for the quarter ending December 31, 2024, Crescent settled derivatives with a net cash inflow of $8 million and received $34 million from the settlement of acquired contracts. Over the entire year, despite a net cash payment of $36 million on derivative settlements, the company benefited from $61 million in settlements of acquired contracts. The company maintains a gross profit margin of 54.5%, though InvestingPro data indicates it operates with a significant debt burden.
Crescent Energy highlighted that these figures are preliminary and could be subject to change. The final results will be included in the company's Annual Report on Form 10-K for the year ended December 31, 2024. The settlements are expected to be reported as positive adjustments in the Statements of Cash Flows and will contribute to Adjusted EBITDAX, a non-GAAP financial measure that reflects earnings before interest, taxes, depreciation, amortization, and exploration expenses.
The company's disclosure comes as part of its Form 8-K filing with the Securities and Exchange Commission, which details the results of operations and financial condition. Crescent Energy, formerly known as IE PubCo Inc., is a Delaware-incorporated company headquartered in Houston, Texas, operating within the crude petroleum and natural gas industry. The stock has shown strong momentum, gaining over 32% in the past six months, with InvestingPro offering additional insights through its comprehensive Pro Research Report, available for over 1,400 US stocks.
Investors should note that the information provided is based on current expectations and subject to various assumptions, risks, and uncertainties, meaning that actual final results may differ from the current estimates.
This report is based on a press release statement from Crescent Energy and has not been independently verified.
In other recent news, Crescent Energy has been the subject of multiple analyst updates, following the company's acquisition of Ridgemar Energy. JPMorgan increased the price target for Crescent Energy to $18.00, citing improved productivity trends and the potential impact of the Ridgemar acquisition. The firm expects Crescent Energy's fourth-quarter production to align with consensus estimates, with an estimated EBITDAX of $489 million. Mizuho (NYSE:MFG) Securities also adjusted its outlook on Crescent Energy, raising the stock's price target to $17.00 while maintaining a neutral stance. The revision follows the firm's anticipation of Crescent Energy's upcoming quarterly performance aligning closely with consensus estimates.
Raymond (NSE:RYMD) James updated its stance on Crescent Energy, increasing the price target from $20.00 to $22.00, while reiterating a strong buy rating for the stock. This adjustment follows Crescent's announcement of a significant acquisition and subsequent financial actions. Truist Securities also adjusted its outlook on Crescent Energy, increasing the stock's price target to $18.00 while maintaining a buy rating. The revision follows Crescent Energy's announcement of a substantial $905 million acquisition.
In addition to these developments, Crescent Energy recently amended the terms of its existing credit facility, maintaining a $2.6 billion base, aiming to enhance the financial flexibility of the company. These are recent developments that have occurred in the company.
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