Crescent Energy Co. is expanding its Eagle Ford Shale footprint in South Texas with a $250 million cash acquisition, management said.
The Houston-based independent is purchasing incremental working interest in its operated Western Eagle Ford assets.
The transaction follows a recent $600 million acquisition of operatorship in the assets that was completed in July. That deal nearly doubled Crescent’s operated Eagle Ford inventory, giving the firm “substantial potential upside from the Austin Chalk and Upper Eagle Ford,” the company said.
Houston-based Crescent was formed in late 2021 through the merger of Independence Energy LLC and Contango Oil & Gas Co. Crescent operations are focused primarily in the Eagle Ford and the Uinta Basin.
The latest acquisition “is consistent with our strategy to grow opportunistically through accretive acquisitions, adding low decline cash flow and high quality inventory at attractive valuations while maintaining financial strength,” said CEO David Rockecharlie. “With increased scale and operational control, we believe there are significant opportunities to realize meaningful synergies across our broader Eagle Ford footprint.”
With the purchase, which is expected to close this month, Crescent would operate about 90% of its broader Eagle Ford position.
“Crescent expects meaningful improvements in capital efficiencies, operating performance and basin-wide synergies from its increased scale and operatorship,” management said.
The acquired assets currently are producing about 12,000 boe/d (70% liquids), and have an estimated decline rate of 13% over the next 12 months. The assets are primarily in Dimmit and Webb counties.
Following the acquisition, Crescent expects full-year 2023 production to average 146,000-151,000 boe/d. Capital expenditures are now expected to total $580-630 million.
The $600 million deal earlier this year cemented Crescent’s position “as a leading consolidator in the Eagle Ford and is consistent with the low-risk, acquire and exploit strategy that we’ve employed for the past decade,” Rockecharlie said in May. “We know these assets well as an active non-operated owner for the last six years and see meaningful upside potential through increased scale and operatorship.”
In other South Texas merger and acquisition news, Magnolia Oil & Gas Corp. this week announced a deal to purchase about 48,000 net acres in the Giddings field from an undisclosed seller for $300 million.
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