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    CRGY
    Earnings call· Mar 2026(Q1 FY26)

    Crescent Energy Q1 FY26 earnings call CRGY

    May 5, 2026 Source

    Executive summary

    Crescent Energy Q1 FY26 — Record Production & Permian Integration Ahead of Plan

    Crescent Energy delivered a strong Q1 FY26, marked by record production and significant free cash flow generation, driven by operational efficiencies and accelerated Permian integration. The company's unique investing and operating expertise continues to yield impressive results, positioning it for sustained value creation and disciplined capital allocation in the months and years ahead. Management remains focused on maximizing cash flow and maintaining a strong balance sheet.

    Highlights

    5

    • Achieved record production of 341,000 boe/d, including 140,000 bbl/d of oil, exceeding expectations.

    • Generated $192 million of levered free cash flow in Q1 FY26.

    • Permian integration is ahead of plan, capturing $120 million in synergies to date, exceeding the original target.

    • Realized over $500,000 of savings per well in the Permian compared to the prior operator.

    • Ended the quarter with approximately $2 billion of liquidity.

    Concerns

    2

    • Waha spot gas prices were around negative $4, though the company is well-hedged for the next 24 months.

    • Experienced a $140 million working capital draw during the quarter, expected to unwind next quarter.

    Guidance & targets

    6
    CategoryTargetConfidence
    Levered Free Cash Flow
    $1 billion
    high materiality
    High
    Minerals and Royalties EBITDA
    approximately $200 million
    medium materiality
    High
    Minerals business leverage
    1.5x or below
    medium materiality
    High
    FY26 Production
    between the mid and the high point
    high materiality
    High
    FY26 Capital
    between the mid and the high point
    high materiality
    High
    Cash taxpayer status
    cash taxpayer
    low materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Eagle Ford
    Continued to see steady efficiency gains, increasing use of Simulfrac completions to reduce costs and accelerate volumes. Strengthened the 2026 development program through an active ground game, increasing lateral lengths and working interest.
    Efficiency gains: steadySimulfrac completions: increased use2026 development program: strengthened through increased lateral lengths and working interest
    		————
    Permian
    Off to a strong start with integration ahead of plan, capturing $120 million in synergies to date, exceeding the original target. Improved operational planning, added 100,000 incremental lateral feet to the 2026 plan, accelerated cycle times, and achieved significant well cost reductions.
    Integration: ahead of planSynergies captured: $120 million to date (exceeded original target)Operational planning: improvedIncremental lateral feet added to 2026 plan: 100,000Cycle times: accelerated (100 producing days ahead on 2026 development plan)Well cost savings: over $500,000 per well vs. prior operatorWell cost reduction: $25/footSimulfrac usage: approaching 50% of wells this year
    		————
    Uinta
    Experienced strong execution with well costs down roughly 20% year-on-year. Activity remains focused on the core Uteland Butte development, with additional capital invested towards prudent delineation of broader resource opportunities.
    Well costs: down roughly 20% year-on-yearActivity focus: core Uteland Butte developmentResource opportunity: prudent delineation of broader resource
    		————
    Minerals and Royalties
    Showed strong performance, with the portfolio expected to generate approximately $200 million of EBITDA in 2026, representing a meaningful increase versus original guidance. Management expects to achieve a leverage ratio of 1.5x or below for this business by year-end.
    EBITDA expectation FY26: approximately $200 millionLeverage target: 1.5x or below by year-end
    		————

    Operational metrics

    16
    Adjusted EBITDA
    $690 million
    Q1 FY26

    Company-wide adjusted EBITDA.

    Total Production Volume
    341,000record
    Q1 FY26

    Record production for the quarter.

    Oil Production Volume
    140,000
    Q1 FY26

    Oil production volume for the quarter.

    Permian Synergies Captured
    $120 millionexceeded original target
    Q1 FY26

    Synergies captured to date from the Permian acquisition.

    Permian Well Cost Savings
    over $500,000vs. prior operator
    Q1 FY26

    Savings achieved per well in the Permian.

    Permian Incremental Lateral Feet Added
    100,000
    2026 plan

    Incremental lateral feet added to the 2026 plan through offset acreage trades and land optimization.

    Permian Cycle Time Acceleration
    100ahead
    2026 development plan

    Producing days ahead on the 2026 Permian development plan.

    Uinta Well Cost Reduction
    ~20%
    YoY

    Year-on-year reduction in well costs in the Uinta basin.

    Liquidity
    approximately $2 billion
    Q1 FY26

    Total liquidity at the end of the quarter.

    Dividend Per Share
    $0.12
    Q1 FY26

    Dividend declared per share for the quarter.

    Working Capital Draw
    $140 million
    Q1 FY26

    Working capital draw during the quarter, expected to unwind next quarter.

    Oil Realization vs WTI
    99%of WTI
    Q1 FY26

    Oil realizations as a percentage of WTI, driven by MEH-linked barrels.

    Crude Pricing Off MEH
    70-75%
    Q1 FY26

    Percentage of crude across the business that prices off MEH.

    Capital Allocation to Liquids
    90%+
    Current

    Current allocation of capital to liquids-oriented drilling.

    Permian Well Cost Reduction per foot
    $25reduction
    Q1 FY26

    Reduction in well cost per foot in the Permian due to operational efficiencies like DGB fleets.

    Permian Simulfrac Usage
    approaching 50%
    this year

    Expected percentage of wells in the Permian to be completed with Simulfrac this year.

    Industry KPIs

    5
    MetricValueDetails
    D c efficiency rig activity100days
    Realized price differential99%%
    Basin level production volume341,000boe/d
    Cost of supply unit cash cost$25$/foot
    FCF shareholder distributions$192MUSD

    Deals & partnerships

    1
    Vital assets (prior operator)Acquisition of Permian assets

    The integration of the Permian acquisition is ahead of plan, with significant synergies and well cost reductions already realized. Focus on stabilizing assets and then optimizing operations.

    Risks & headwinds

    2
    Waha Gas Price VolatilityCurrent

    Spot price around negative $4

    Mitigation: Well hedged for next 24 months in the mid-$2s.

    Working Capital DrawQ1 FY26

    $140 million

    Mitigation: Expected to unwind next quarter, largely related to Q4 A&D transactions.

    What to watch in Q2 FY26

    5

    Working Capital Unwind

    Next quarter
    Current$140 million draw in Q1 FY26
    TargetUnwind

    Why it matters

    Indicates efficient cash management and reversal of a temporary cash outflow, impacting free cash flow.

    Working capital, I would expect that to unwind next quarter and it would say largely related to the A&D transactions that we closed on at the end of the fourth quarter.

    Q&A highlights

    8

    How much upside is already being seen in the Vital (Permian) assets regarding operational efficiency?

    Joey Hall explained they moved from stabilizing to optimizing the assets. Key wins include rebidding services to use dynamically gas blending fleets, displacing 55-75% of diesel, leading to a $25/foot reduction in well costs. Future plans involve larger pads and Simulfrac usage, approaching 50% of wells this year.

    “Some of the first things that we did was rebid our services, which was incredibly timely because we had some 100% diesel fleets out there operating and we were able through the bidding process to find some dynamically gas blending fleets, DGB fleets.”

    asked by Neal Dingmann · answered by Jerome Hall

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q1 Performance and Operational Excellence

    Crescent Energy reported a record production of 341,000 boe/d, including 140,000 bbl/d of oil, exceeding expectations due to faster cycle times and base production optimization. The company generated $192 million in levered free cash flow and improved its cost of capital through an opportunistic refinancing, reducing interest expense and extending maturities. This strong execution underscores Crescent's ability to deliver better returns and profitable growth.

    02

    Permian Integration Success

    The integration of Permian assets is ahead of schedule, with $120 million in synergies captured to date, surpassing the original target. Key improvements include enhanced operational planning, adding 100,000 incremental lateral feet to the 2026 plan, accelerating cycle times by 100 producing days, and reducing well costs by over $500,000 per well compared to the prior operator. These achievements reflect Crescent's operating model and track record of improving acquired assets.

    03

    Uinta and Eagle Ford Efficiencies

    In the Eagle Ford, the company continues to implement Simulfrac completions, reducing costs and accelerating volumes, while strengthening the 2026 development program through increased lateral lengths and working interest. The Uinta basin saw well costs reduced by approximately 20% year-on-year, with activity focused on the core Uteland Butte development and prudent delineation of broader resource opportunities, indicating significant potential for value creation.

    04

    Minerals and Royalties Business Growth

    The Minerals and Royalties portfolio is expected to generate approximately $200 million of EBITDA in 2026, representing a meaningful increase from original guidance. This high-margin cash flow business provides valuable exposure to cost-free organic growth. Management aims to achieve a leverage ratio of 1.5x or below for the minerals business by year-end, demonstrating financial discipline.

    05

    Capital Allocation and Financial Strength

    Crescent maintains a disciplined capital allocation framework, including a $0.12 per share dividend, a commitment to a strong balance sheet with $2 billion in liquidity and no near-term debt maturities. The company's expected $1 billion in levered free cash flow for 2026 provides significant flexibility to reduce debt, fund accretive M&A, and repurchase shares when appropriate, focusing on long-term per share value creation.

    06

    Strategic Focus and Future Outlook

    The company emphasizes its unique combination of investing and operating expertise, which has transformed it into a top 10 U.S. independent oil and gas producer. Management expects to be between the mid and high point of both production and capital guidance for FY26, driven by continued operational improvements and a focus on long-term per share value creation, with a steady focus on maintaining production levels and driving cost efficiencies.

    AI-generated summary of the company’s earnings call. Not investment advice.