What would it take for Crescent to increase rig activity, perhaps by one or two rigs?

David Rockecharlie stated that in the current environment, they prioritize capturing high-margin cash flow and returning it to the balance sheet and investors, rather than increasing rig activity into a higher price environment. “We think in today's environment, we should be grabbing as much cash flow as we can for the benefit of investors. So we don't see increasing rig activity into a higher price environment. We see producing barrels at really high margin and returning cash to the balance sheet and investors.”

How does the negative Waha spot price (around negative $4) impact operations, and are they considering holding back turn-in lines or shutting in wells?

Brandi Kendall stated that they are very well hedged from a Waha standpoint for the next 24 months, in the mid-$2s, providing significant protection. “So I would say as we sit here today, we are very well hedged from a Waha standpoint over the next probably 24 months in the kind of the mid-2s. I feel like we have a lot of protection there.”

How much of the Q1 production beat was driven by faster cycle times in the Permian versus base production outperformance?

Brandi Kendall indicated it was roughly 50-50 between better cycle times in the Permian and optimizing the base production. “I'd say it's roughly 50-50, better cycle times in the Permian and then just optimizing the base.”

CRGY

Crescent Energy (CRGY) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Energy· May 5, 2026

Source: earnings call transcript

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

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

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

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

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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	—	—	—	—

CRGY operating KPIs by quarter

CRGY operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Production	268K boe/d We produced 268,000 barrels of oil equivalent per day for the quarter, including 106,000 barrels of oil per day and generated approximately $239 million of levered free cash flow. Source: earnings call transcript	341K boe/d We produced a record 341,000 barrels of oil equivalent per day for the quarter, including 140,000 barrels of oil per day and generated $192 million of levered free cash flow. Source: earnings call transcript	~335K boe/d We produced approximately 335,000 barrels of oil equivalent per day during the quarter, including approximately 140,000 barrels of oil per day and generated a record $418 million of levered free cash flow. Source: earnings call transcript	—
Oil production	106K bbl/d We produced 268,000 barrels of oil equivalent per day for the quarter, including 106,000 barrels of oil per day and generated approximately $239 million of levered free cash flow. Source: earnings call transcript	140K bbl/d We produced a record 341,000 barrels of oil equivalent per day for the quarter, including 140,000 barrels of oil per day and generated $192 million of levered free cash flow. Source: earnings call transcript	~140K bbl/d We produced approximately 335,000 barrels of oil equivalent per day during the quarter, including approximately 140,000 barrels of oil per day and generated a record $418 million of levered free cash flow. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

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

Waha Gas Price Volatility Current

Spot price around negative $4

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

Working Capital Draw Q1 FY26

$140 million

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

What to watch in Q2 FY26

Working Capital Unwind

Next quarter

Current $140 million draw in Q1 FY26

Target Unwind

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.

Find out whether CRGY delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.