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Related Party Transactions
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
KKR Group

Management Agreement
In connection with the Merger Transactions, we entered into a management agreement (the "Management Agreement") with KKR Energy Assets Manager LLC (the "Manager"). Pursuant to the Management Agreement, the Manager provides the Company with its senior executive management team and certain management services. The Management Agreement has an initial term of three years and shall renew automatically at the end of the initial term for an additional three-year period unless the Company or the Manager elects not to renew the Management Agreement.

As consideration for the services rendered pursuant to the Management Agreement and the Manager’s overhead, including compensation of the executive management team, the Manager is entitled to receive compensation ("Management Compensation") on a quarterly basis equal to our pro rata share (based on our relative ownership of OpCo) of $53.3 million. This amount will increase over time as our ownership percentage of OpCo increases. In addition, as our business and assets expand, Management Compensation may increase by an amount equal to 1.5% per annum of the net proceeds from all future issuances of our equity securities (including in connection with acquisitions). However, incremental Management Compensation will not apply to the issuance of our shares upon the redemption or exchange of OpCo Units. During the years ended December 31, 2022 and 2021, we recorded general and administrative expense of $14.3 million and $0.9 million, respectively, and made cash distributions of $32.3 million in December 31, 2022 to our redeemable noncontrolling interests related to the Management Agreement. We did not make any cash distributions to our redeemable noncontrolling interest during the year ended December 31, 2021. In addition, at December 31, 2022 and 2021 we accrued $13.3 million and $3.6 million, included within Accounts payable - affiliates on the consolidated balance sheets, for distributions to our redeemable noncontrolling interests in OpCo related to the Management Agreement which will be paid during the first quarter of 2023.

Additionally, the Manager is entitled to receive incentive compensation ("Incentive Compensation") under which the Manager is targeted to receive 10% of our outstanding Class A Common Stock based on the achievement of certain performance-based
measures. The Incentive Compensation consists of five tranches that settle over a five-year period beginning in 2024, and each tranche relates to a target number of shares of Class A common stock equal to 2% of the outstanding Class A common stock as of the time such tranche is settled. So long as the Manager continuously provides services to us until the end of the performance period applicable to a tranche, the Manager is entitled to settlement of such tranche with respect to a number of shares of Class A common stock ranging from 0% to 4.8% of the of the outstanding Class A Common Stock at the time each tranche is settled. During the year ended December 31, 2022 and 2021, we recorded general and administrative expense of $24.3 million and $1.1 million respectively, related to the Incentive Compensation. See NOTE 13 – Incentive Compensation Arrangements for more information.

KKR Funds
From time to time, we may invest in upstream oil and gas assets alongside EIGF II and/or other KKR funds ("KKR Funds") pursuant to the terms of the Management Agreement. In these instances, certain of our consolidated subsidiaries enter into Master Service Agreements ("MSA") with entities owned by KKR Funds, pursuant to which our subsidiaries provide certain services to such KKR Funds, including the allocation of the production and sale of oil, natural gas and NGLs, collection and disbursement of revenues, operating expenses and general and administrative expenses in the respective oil and natural gas properties, and the payment of all capital costs associated with the ongoing operations of the oil and natural gas assets. Our subsidiaries settle balances due to or due from KKR Funds on a monthly basis. The administrative costs associated with these MSAs are allocated by us to KKR Funds based on (i) an actual basis for direct expenses we may incur on their behalf or (ii) an allocation of such charges between the various KKR Funds based on the estimated use of such services by each party. As of December 31, 2022 and 2021, we had a related party receivable of $0.8 million and $3.3 million included within Accounts receivable – affiliates and $14.0 million and $3.4 million included within Accounts payable – affiliates on our consolidated balance sheets associated with KKR Funds transactions.

Secondary Offering
During the year ended December 31, 2022, KKR Capital Markets LLC ("KCM"), an affiliate of KKR Group, received $1.3 million in underwriter discounts and commissions in connection with the Offering. Concurrently with the closing of the Offering, we repurchased an aggregate of approximately 2.6 million OpCo Units from PT Independence for $36.2 million and cancelled a corresponding number of our Class B Common Stock. Refer to further discussion in NOTE 1 – Organization and Basis of Presentation regarding the Equity Transactions.

Other Transactions
During the year ended December 31, 2022, we incurred $0.7 million in fees to KCM in connection with their role as book-running manager of the Additional 2026 Notes (as defined in NOTE 8 – Debt). We recorded these fees as debt issuance costs within Long-term debt on the consolidated balance sheets. Additionally, we paid $1.5 million in fees to KCM related to the amendment to our Revolving Credit Facility, which increased our borrowing base and elected commitment amount in connection with the Uinta Transaction. We recorded these fees as debt issuance costs within Other assets on the consolidated balance sheets. See NOTE 8 – Debt.

During the year ended December 31, 2021, we paid $1.6 million in fees to KCM, for services provided as a book-running manager in connection with the issuance of our 2026 Notes in May 2021 and recorded as debt issuance costs within Long-term debt on the consolidated balance sheets. Additionally, we paid $0.1 million to KKR Capstone Americas LLC for professional fees support related to insurance and employee benefits due diligence and placement and recorded as General and administrative expense on the combined and consolidated statements of operations.

During the year ended December 31, 2022, we made cash distributions of $18.1 million to our redeemable noncontrolling interests related to their pro rata share of cash distributions made to Crescent Energy Company to pay income taxes. At December 31, 2022 we had $0.1 million accrued within Accounts payable - affiliates for distributions to our redeemable noncontrolling interests in OpCo related to their pro rata share of taxes which will be paid during the first quarter of 2023.

FDL

Certain of our consolidated subsidiaries previously entered into an Oil and Natural Gas Property Operating and Services Agreement (the “FDL Agreement”) with FDL Operating LLC ("FDL"). As of December 31, 2021, we had a net related party receivable due from FDL totaling $16.9 million, included within Accounts receivable – affiliates on our consolidated balance sheets, which was settled during the year ended December 31, 2022.

Pursuant to the FDL Agreement, FDL was engaged to manage the day-to-day operations of the business activities of certain of our consolidated subsidiaries, including allocating to us and other interest holders the production and sale of oil, natural gas and
natural gas liquids, collection and disbursement of revenues, operating expenses and general and administrative expenses in the respective oil and natural gas properties and the payment of all capital costs associated with the ongoing operations of such properties. As part of the engagement, FDL will then allocate the revenues, operating expenses, general and administrative expenses and cash collected to us and others as appropriate. We settled balances due to or due from FDL on a monthly basis.

On September 20, 2021 we provided notice that we are terminating the FDL Agreement effective on March 31, 2022 and, as part of the termination principal terms, we agreed to pay up to $6.7 million in wind down costs and additional severance costs for certain qualifying, dedicated employees, of which any unused portion will be returned to us at the end of the wind down period. During the year ended December 31, 2021, we recorded $3.3 million of general and administrative expense associated with the termination and had $1.9 million remaining in an escrow account to fund these wind down costs at December 31, 2022.

In May 2022, we repurchased all of the noncontrolling interests and working interests in our assets held directly by affiliates of FDL for aggregate consideration of approximately $8.8 million, effectively purchasing the remainder of FDL's management ownership of certain of our consolidated subsidiaries. Subsequent to this transaction, FDL is no longer a related party and we have no remaining relationship with FDL other than the payment of wind down costs, which we expect to be fully funded by the amount already deposited in escrow and recorded as Other assets on our consolidated balance sheets.

RPM

Prior to 2022, an affiliate of KKR Group had a Master Management Services Agreement (the “MSA”) with a subsidiary of RPM Energy Management Partnership L.P. (“RPM”) to act as the manager of certain mineral and non-operated assets controlled by our consolidated subsidiaries. Pursuant to the MSA and under management of certain KKR affiliated entities, RPM managed the day-to-day operations of the business activities of certain of our oil and natural gas properties. We reimbursed RPM for all reasonable out-of-pocket expenses incurred for fulfilling its obligations under the MSA (“Allocable Overhead Costs”). The Allocable Overhead Costs were charged to us on an actual basis without mark-up or subsidy. As such, the Allocable Overhead Costs approximated reasonable market rates and were representative of the expenses that we would have incurred had we not entered into the MSA. We settled balances due to or due from RPM on a monthly basis.
On December 31, 2021, we terminated our relationship with RPM. As of December 31, 2021 we had a payable due to RPM of $1.7 million included within Accounts payable – affiliates on our consolidated balance sheets which was settled in 2022.