UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 2.02. | Results of Operations and Financial Condition. |
On January 20, 2022, Crescent Energy Company (the “Company”) disclosed certain information relating to its reserves, PV-0 and PV-10 and its open derivatives contracts as of December 31, 2021 in a press release discussed in greater detail in Item 7.01 Such information is set forth below:
2021 Year End Reserves
Crescent’s year-end 2021 proved reserves totaled 532 MMBoe, of which 86% were proved developed and 54% were liquids. The first year decline rate of Crescent’s proved developed producing reserves, based on production type curves used in the Company’s third party reserve reports, is 17%.
Crescent’s proved reserves and associated PV-0 and PV-10 estimates as of December 31, 2021 were prepared or audited by its independent reserve engineers in accordance with applicable rules and guidelines of the Securities and Exchange Commission (“SEC”). At year-end, the Company’s proved reserves PV-10, utilizing SEC pricing(4), was $5.2 billion.
| Proved Reserves | Present Value(1) | |||||||||||||||||||||||
| Net Oil (MMBbl) |
Net Gas (Bcf) |
Net NGL (MMBbl) |
Net Total (MMBoe) |
PV-0 $MM |
PV-10 $MM |
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| Proved Developed |
158 | 1,405 | 66 | 459 | $ | 7,495 | $ | 4,305 | ||||||||||||||||
| Proved Undeveloped |
52 | 65 | 10 | 73 | $ | 1,896 | $ | 854 | ||||||||||||||||
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| Total Proved Reserves |
210 | 1,470 | 76 | 532 | $ | 9,391 | $ | 5,159 | ||||||||||||||||
Risk Management - Commodity Hedging
The following table details the Company’s open commodity derivative contracts as of December 31, 2021. Crescent is approximately two-thirds hedged in 2022 at the midpoint of the production guidance range.
| WTI | Brent | Natural Gas | NGLs | |||||||||||||||||||||||||||||
| Volume (MBbl) |
Avg Price ($/Bbl) |
Volume (MBbl) |
Avg Price ($/Bbl) |
Volume (BBtu) |
Avg Price $/MMBtu |
Volume (MBbl) |
Avg Price $/Bbl |
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| Q1’22 |
2,862 | $ | 61.67 | 123 | $ | 56.35 | 22,534 | $ | 2.79 | 914 | $ | 17.20 | ||||||||||||||||||||
| Q2’22 |
2,664 | $ | 61.20 | 125 | $ | 56.35 | 21,690 | $ | 2.77 | 873 | $ | 17.13 | ||||||||||||||||||||
| Q3’22 |
2,519 | $ | 59.69 | 126 | $ | 56.36 | 20,634 | $ | 2.76 | 610 | $ | 29.87 | ||||||||||||||||||||
| Q4’22 |
2,419 | $ | 59.75 | 126 | $ | 56.36 | 20,180 | $ | 2.78 | 587 | $ | 29.74 | ||||||||||||||||||||
| FY’23 |
7,627 | $ | 58.50 | 527 | $ | 52.52 | 57,278 | $ | 2.54 | — | — | |||||||||||||||||||||
| FY’24 |
2,975 | $ | 57.35 | 189 | $ | 63.71 | 9,604 | $ | 3.16 | — | — | |||||||||||||||||||||
Note: As of 12/31/21. Included in the figures above are minor Henry Hub collar positions totaling 510 BBtu, 550 BBtu, and 9,150 BBtu in Q1 2022, 2023 and 2024, respectively. For the same periods, these collars have a weighted average floor price of $3.00 / MMBtu, $2.63 / MMBtu and $3.00 / MMBtu, respectively and a weighted average ceiling price of $3.41 / MMBtu, $3.01 / MMBtu and $3.87 / MMBtu, respectively. Weighted average price for collar positions calculated using the December 31, 2021 strip.
| (1) | Adjusted EBITDAX, Levered Free Cash Flow, PV-10, PV-0 and Cash G&A are non-GAAP financial measures. Please see “Non-GAAP Measures” for further discussion of such measures. |
| (2) | Dividends are subject to board approval and applicable law. |
| (3) | Net leverage as of September 30, 2021 and production for the nine month period ended September 30, 2021 are presented on pro forma basis for the business combination between Independence and Contango. Net leverage calculated as pro forma net debt as of September 30, 2021 divided by annualized pro forma Adjusted EBITDAX for the nine months ended September 30, 2021. |
| (4) | Proved reserve estimates based on SEC pricing of $66.56 per Bbl for WTI oil and $3.60 per MMBtu for Henry Hub natural gas. |
| (5) | Midstream operating expense reflected in Operating Expense. |
| (6) | Other capex includes midstream and field development, leasehold, P&A and sustainability/ESG initiatives. |
| (7) | Value Reporting Foundation’s SASB Standard for Oil & Gas - Exploration & Production. |
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| Item 7.01. | Regulation FD Disclosure. |
On January 20, 2022, the Company announced preliminary 2022 guidance in conjunction with scheduled analyst and investor meetings. A copy of the Company’s press release relating to such guidance is furnished as Exhibit 99.1 to this report on Form 8-K and is incorporated herein by this reference.
On January 20, 2022, the Company posted an updated investor presentation to its website www.crescentenergyco.com entitled “A Differentiated U.S. Energy Company.” A copy of the investor presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by this reference. The information contained on the Company’s website shall not be deemed part of this report.
The information contained in this report, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” with the U.S. Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
Description | |
| 99.1 | Press Release, dated January 20, 2022. | |
| 99.2 | Investor Presentation, dated January 20, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 20, 2022
| CRESCENT ENERGY COMPANY | ||
| By: | /s/ Bo Shi | |
| Name: | Bo Shi | |
| Title: | General Counsel | |
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