Crescent Energy Company

As we've acquired assets over time, a key part of our strategy is to improve operations through our ownership, and you are seeing the direct result of this with our recent well performance. On the capital side, we're seeing incremental savings versus the first half of the year, increasing returns and free cash flow. By combining the strength and expertise of our newly integrated organization of talented we've been able to drive further efficiencies across our program utilizing the latest available technology. For example, we are planning horseshoe U-shaped wells in select areas to unlock meaningful inventory where land considerations may not have allowed for traditional development. We've been able to bring simulfrac completions to the Silver Bow assets, meaningfully increasing efficiency and driving down development costs. We've also had great success to date working with our service providers to drive down costs alongside operating efficiencies, which combined has lowered well costs 10% relative to the first half of this year. While the capital savings on the acquired assets are encouraging, they represent only a fraction of the synergies we've already achieved from the Silverdome transaction. When we originally announced the acquisition, we put forward what we believed were significant and ambitious synergy targets, and we've been able to deliver far ahead of schedule. With approximately $65 million of annualized uplift realized to date across capital, overhead, operating costs, and interest expense, we've already hit our original target range. As we've spent more time with the assets under our control, we believe there is more opportunity than we originally anticipated. and we have increased our expected synergy range by more than 20%. On the integration front, our 2023 acquisitions in the Western Eagleford have also continued to drive strong free cash flow with a dramatic step change in well productivity versus the prior operator and approximately $70 million of annualized operational gains relative to our $850 million of combined purchase price. Through the hard work and dedication of our talented people, We've achieved all this in the first year under our operatorship by bringing industry best practices to the field, and we look forward to finding opportunities for further value across our scaled position in the basin. In the Uinta, we continue to see strong results from our development program, which to date has remained largely focused on the proven Ute-Land Butte formation. The Uinta is at an exciting stage of its evolution, and we are pleased to see incremental public activity and recognition of the impressive resource potential and advantaged economics in the basin. We entered the basin in 2022 through a transaction at a discount to PDP value, with any development potential generating incremental returns for our investors. While we remain focused on the most proven formations with our current development program, We have begun to allocate prudent capital to incremental horizons now that other operators have spent meaningful capital to delineate and further prove the impressive potential across the play. We've also been active seeking more creative and efficient pathways to de-risk the full upside across our position and recently entered into a small joint venture to test the easternmost extent of our acreage with no upfront capital required. While still early in our evaluation, our initial results have been encouraging, but we will continue to monitor the data, both from our wells and from offset operators, and be patient as we limit risk and capture the substantial resource upside across our assets. Our consistent ability to improve operations and generate meaningful synergies has given us further conviction on our growth through acquisition strategy, and we see a significant market opportunity ahead of us. Silverbow was the largest acquisition we have completed to date as a public company, and we have followed our proven acquisition and integration playbook with great results. And since, we have had another successful closing and integration with our bolt-on in the central Eagle Fruit. The acquisition added incremental assets in a key operating area and represented a uniquely attractive opportunity. with low decline oil production, high return inventory, and increased operating flexibility with minerals, midstream, and substantial surface ownership. We acquired the assets at a cost of capital more typically representative of operated working interest opportunities, but received the additional benefits of the minerals, surface, and midstream infrastructure, which we were pleased to add to our portfolio. We have a large pipeline of M&A opportunities ahead of us, but we will remain prudent in our underwriting. We screen 150 to 200 potential transactions a year and have executed zero to three each year consistently. We are focused on compounding significant capital over time at attractive rates of return, and we quickly pass on opportunities that don't meet our underwriting criteria. Despite recent volatility, The market remains active, and with our increased scale, strong operating and financial performance, and solid balance sheet, we are extremely well positioned for profitable growth and further value creation for our stakeholders over the remainder of 2024 and beyond. With that, I'll turn the call over to Brandi to provide more detail on the quarter.

Thanks, David. Preference results for the quarter build on our impressive performance over the first half of the year, with approximately $430 million of adjusted EBITDA and approximately $160 million in leverage-free cash flow. We had $211 million of capital expenditures during the quarter, better than forecast as the team continues to generate incremental savings in the field. We brought online 27 gross-operated wells in the Eagleford and 10 gross-operated wells in the Uinta, all of which are generating strong initial results. With recent commodity volatility, we are focused on maintaining both operational and financial flexibility and generating attractive returns across our development program. We optimized DNC activity on the Silver Bowl assets after taking over operatorship to target higher returning liquid weighted development to take advantage of relative commodity pricing. Turning to our outlook for the remainder of 2024. As David mentioned, we have enhanced our guidance for the third time this year and improved our second half capital outlook to $425 to $455 million, a 10% improvement from the initial guidance provided at the closing of the Silver Bowl acquisition. This updated outlook reflects five months of Silver Bowl contribution and highlights the strength of our business and the impressive achievements of our operating team. Looking into 2025, we expect to remain flexible around activity levels and capital allocation. commodity volatility persists, focusing on cash flow generation and attractive returns on the capital we choose to invest. Our balance sheet remains strong coming out of the quarter with net leverage of 1.5 times within our publicly stated range of 1 to 1.5 times. We have $1.5 billion of liquidity with no near-term maturity. We've also been actively evaluating portfolio optimization opportunities and have divested approximately $50 million of non-core assets this year. generating an attractive return for our investors, and also accelerating debt repayment. While we are a growth through acquisition business, we bring an investor mindset to everything we do and are constantly evaluating our portfolio for potential divestitures to maximize value to our shareholders. Alongside earnings yesterday, we announced another dividend of 12 cents per share and further repurchases under our active buyback program, which is now 20% utilized year-to-date at a weighted average share price of $10.07. Together, our dividend and repurchases have equated to a peer-leading 5% annualized yield. We have dramatically transformed the equity positioning of our business since becoming public with a simplified and enhanced dividend framework and significantly increased flow in trading liquidity highlighted by our recent addition to the S&P 600 index. With that, I'll turn the call back over to David for closing remarks.

Thank you, Brandi. Before we wrap up, I want to reiterate a few key takeaways from this quarter. First, our business continues to generate impressive results and significant free cash flow. We've improved guidance for the third consecutive time this year, achieving our stated production targets with more efficient capital spend. Our advantaged asset profile has consistently exceeded expectations and our operating team continues to find more and more efficiencies to maximize cash flow for our investors from both newly acquired and legacy assets. Second, Application of our proven integration process on the Silver Bowl business has generated value beyond initial expectations. We've combined the strongest talent from both organizations to enhance operations across the business. We are ahead of schedule on synergy capture, achieving our initial target within just a few months of closing. And we've increased our total synergy expectation by more than 20%. Finding ways to capture value beyond our acquisition underwriting is a demonstrated strength of our platform. And lastly, we see significant opportunity ahead of us to continue on our profitable growth trajectory. We said last quarter that we were just getting started, and that remains true today. We built this business with ambitious goals, and despite our recent successes, we remain focused on operational execution, profitable growth, and long-term value creation for our shareholders. We have the unique combination of operating and investing expertise required to execute on our growth through acquisition strategy, and we will continue to do exactly what we've said we are going to do. We believe Crescent offers a uniquely compelling value proposition in our sector, and we are determined to prove it. With that, I'll open it up for Q&A. Operator?