Crescent Vitality Firm has introduced the signing of a definitive settlement to accumulate Eagle Ford belongings from Ridgemar Vitality for upfront consideration of $905 million plus future oil worth contingent consideration, topic to customary buy worth changes.
The acquisition is immediately offset Crescent’s core Central Eagle Ford place and builds upon its vital acquisition exercise within the Eagle Ford over the previous 18 months, totaling greater than $4 billion of accretive M&A. The transaction, which has an efficient date of October 1, is anticipated to shut within the first quarter of 2025, topic to customary closing situations.
“This transaction continues to spotlight our skill to make the most of our investing and working experience to establish and purchase high-quality belongings, effectively combine them into our enterprise and drive further worth by means of improved operations. With accelerated synergies captured from the combination of SilverBow and our current bolt-on acquisition, our full group is prepared and keen so as to add the Ridgemar belongings to our core working footprint within the Eagle Ford,” mentioned David Rockecharlie, CEO of Crescent. “These belongings contribute significant scale, improve Crescent’s money margins, improve our oil-weighting and prolong our low-risk stock life, all at a pretty and extremely accretive valuation. I stay assured in our skill to capitalize on our robust momentum and proceed our worthwhile progress trajectory in the direction of our funding grade ambitions.”
Transaction highlights
- Complementary operations immediately offset core place – Including vital and contiguous scale offset Crescent’s current footprint in Frio, Atascosa, La Salle and McMullen counties with potential for significant working efficiencies
- Enticing valuation and accretive to key monetary metrics – The transaction, valued at 2.7x EBITDA, is accretive to Working Money Stream, Levered Free Money Stream(1) and web asset worth, with robust anticipated cash-on-cash returns
- Strengthens the Crescent asset portfolio – Roughly 20 Mboe/d of high-margin, oil-weighted manufacturing and ~140 nicely understood, high-return areas that instantly compete for capital and prolong Crescent’s low-risk stock life
- Maintains robust steadiness sheet and Funding Grade credit score metrics – Leverage neutral-to-accretive transaction with balanced consideration combine. Crescent’s web debt to trailing 12-month Adjusted EBITDAX ratio anticipated to be at or under the Firm’s publicly said most leverage goal of 1.5x(2)
(1) Non-GAAP monetary measure. Please see “Non-GAAP Measures” for an outline of the relevant metric.
(2) Crescent defines leverage because the ratio of consolidated web debt to consolidated Adjusted EBITDAX (non-GAAP).
