Crescent Energy Company

Ladies and gentlemen, greetings and welcome to the Crescent Energy Q4 Fiscal Year 2024 results. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on the telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Reid Gallagher, Investor Relations. Please go ahead.

Good morning, and thank you for joining Crescent's fourth quarter and full year 2024 conference call. Today's prepared remarks will come from our CEO, David Rocacharli, and our CFO, Brandi Kendall. Our Executive Vice President of Investments, Clay Rind, will also be available during Q&A. Today's call may contain projections and other forward-looking statements. These statements are subject to risks and uncertainties, including commodity price volatility, global geopolitical conflict, our business strategies, and other factors that may cause actual results to differ from those expressed or implied in these statements and our other disclosures. We have no obligation to update any forward-looking statements after today's call. In addition, today's discussion may include disclosure regarding non-GAAP financial measures. For reconciliation of historical non-GAAP financial measures to the most directly comparable GAAP measure, please reference our 10-K and earnings press release. available under the investor section on our website. With that, I will turn it over to David.

Good morning, and thank you for joining us. Yesterday, Crescent posted financial and operating results. In summary, it was a great quarter and a great year for our business. Before we get into the details, I want to begin with a few key points that I hope you take away from this call. First, 2024 was a transformational year for our business. highlighted by impressive financial and operational execution alongside significant and profitable growth from accretive acquisitions that more than doubled our core Eagleford position, cementing Crescent as a top three producer in a premier basin. Our talented team continues to deliver, creating value in numerous ways with increased well productivity, improved capital costs, and accelerated outsized synergy capture. Second, We expect continued outperformance in 2025. Our advantaged asset base provides the unique flexibility to invest in both oil and gas weighted development. And our operational plan is designed to maximize free cash flow generation and returns for our investors through commodity price cycles. And finally, Crescent has never been better positioned to capitalize on the opportunity ahead of us. With consistent execution of our strategy, we have become a bigger and better business, and I am confident that through disciplined investing and safe and efficient operations, we can continue to deliver value for our shareholders and achieve our goal of becoming an investment-grade company. Following those quick highlights, I will now discuss our results in a bit more detail. We reported impressive financial results for the fourth quarter, with our advantaged low-decline production base generating significant free cash flow and continued improvements in capital efficiency. With strong execution from our team, we exceeded expectations across both production and capital. With this outperformance, alongside accelerated synergy capture, we generated approximately $260 million of free cash flow for the quarter, well above Wall Street expectations. In the Eagle Fruit, we continue to build momentum and enhance returns with increased well productivity alongside even stronger capital execution, demonstrating the depth of our inventory and the dedication of our operating team. Our team has consistently exceeded expectations and made our business better at every turn, finding gold buried in both our base business and acquired assets. For example, we recently completed the first U-turn wells on our legacy acreage in the fourth quarter of this year. These advanced wells generate significant cost savings relative to standard shorter laterals, and our recent optimization efforts have generated production in line with traditional development. We expect U-turn wells to be only a small part of our overall development strategy in 2025 and beyond, that they are a valuable tool as we optimize our acreage position and the long-term development plan of our assets. As we acquire assets, a key part of our strategy is to improve operations through our ownership. Our significant depth of experience operating in the Eagle Ford has enabled us to identify and capture synergies as we've grown. Our largest acquisition of 2024, Silver Bow, continues to outperform our expectations. with realized annual synergies in excess of $100 million at the top end of our recently increased target range. While we are extremely pleased with the value created to date, there is still opportunity for more, and we are increasing our target synergy range by approximately 15% on top of the increase announced on our third quarter call. Our more recent acquisition of Ridgemar Energy, which closed in January, represents another opportunity for incremental value creation. The integration is still early days, but we are excited about the potential optimization across our pro forma footprint. In the Uinta, we continue to see solid results from our development program, which is largely focused on the proven Ute-Limbut formation since we acquired the asset in 2022. The Uinta is unique relative to other premier basins in the U.S. in that its true resource potential is only beginning to be understood by the broader industry. We entered the basin through a transaction at a discount to production value as horizontal development was just beginning in the area. Because of our advantaged entry point, we've been patient in our development of the asset as other operators have spent meaningful risk capital to delineate the substantial resource opportunity in the basin. In 2024, with meaningful performance data from offset operator activity, we allocated prudent capital to incremental formations beyond our core Hewton Butte development and are seeing some exciting early time results. Of particular note is the early performance of our Eastern Joint Venture, designed to delineate the eastern extent of our acreage, a previously untapped resource, requiring no initial capital risk for our investors. While very early time, This three-well pad targeting the upper cube with wells in the Castle Peak, Black Shale, and Douglas Creek formations has averaged approximately 1,500 barrels of oil per day per well over the first 30 days of production, exceeding our previous core Ute-Limbut development. While initial data from our resource delineation is still limited, it has been encouraging. We will be patient as we monitor the results and take a methodical approach to capture the substantial long-term resource upside across our assets. Our team's consistent operational execution and the impressive performance of our existing assets have fueled our differentiated growth through acquisition strategy to date. And 2024 was a transformational year for our business. Through five separate transactions, totaling more than $3 billion invested since year end 2023, we have cemented Crescent as a top operator in the Eagleford, significantly scaled our business, and meaningfully enhanced our asset portfolio. Our 2024 performance and acquisitions have positioned us well for continued success in 2025. Our operating plan for the coming year is focused on flexibility and free cash flow. maximizing returns on our capital, and reflecting the advantaged commodity diversification across our inventory. Following the successful integration of our acquisitions, we are now able to apply our operating approach and business plan to the acquired assets as part of our overall portfolio. We plan to run four to five rigs over the course of the year, largely focused in the Eagle Fruit across all phase windows, including our dry gas assets in Webb County to capitalize on recent natural gas pricing tailwinds. This plan translates into production of 254 to 264,000 barrels of oil equivalent per day and $925 million to $1.025 billion of capital, or $975 million at the midpoint. we expect to deliver strong performance across the business from our 2025 operating plan. And as always, in 2025, we are focused on investment returns and free cash flow, which looks to surpass current Wall Street estimates at like-for-like commodity prices, supporting our return of capital, further strengthening our balance sheet, and maintaining Crescent's strong positioning for continued growth through opportunistic and accretive M&A. Crescent has never been better positioned to capitalize on what is in front of us. We are coming into this year a better business with increased scale, an enhanced asset portfolio, and a solid balance sheet. The M&A and A&D markets remain active, and we are busier than ever. We look at more than 100 potential transactions a year and have demonstrated both our patience and preparedness, executing 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. Growth for growth's sake has no place in our business, and every acquisition we complete has cleared a rigorous and consistent screening and evaluation process. While it is our business to remain disciplined and focused on finding the next attractive acquisition opportunity, As investors and operators, we manage our asset portfolio through opportunistic divestitures of non-core assets as well. We seek to maximize value by identifying assets in our portfolio that may be more attractive in another's hands and contribute to the streamlining of our operational footprint and allocation of resources. To that end, we divested roughly $50 million of non-core assets in 2024. and we have a meaningful pipeline of non-core assets under evaluation for opportunistic divestiture as we look forward. I am confident that we have the team, the assets, the balance sheet, and the strategy to generate profitable growth and value creation for our shareholders over the long term. With that, I'll turn the call over to Brandy to provide more detail on the quarter.