Q1 2022 Crescent Energy Co Earnings Call

May 11, 2022

Greetings and welcome to Cressa energy first quarter 2022 results conference call.

Greetings. Welcome to CRESA Energy First Quarter 2022 Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference,

Operator: Greetings. Welcome to Crescent Energy Q1 2022 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now turn the conference over to Emily Newport, Senior Vice President of Finance and Investor Relations. You may begin.

At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference.

Please press Star zero on your telephone keypad. Please note. This conference is being recorded I would now turn the conference over to Emily and Newport Senior Vice President of Finance and Investor Relations you may begin.

Please press star zero on your telephone keypad. Please note this conference is being recorded. I would now turn the conference over to Emily Newport, Senior Vice President of Finance and Investor Relations. You may begin.

Good morning, and thank you for joining us.

Emily Newport: Good morning, and thank you for joining Crescent's Q1 2022 earnings call. Our prepared remarks today will come from our CEO, David Rockecharlie, and our CFO, Brandi Kendall. Todd Falk, Chief Accounting Officer, Ben Conner, and Clay Rynd, both Executive Vice Presidents, are also here today and available during the Q&A. Today's call may contain projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties, including commodity price volatility, the continued impact of COVID-19, geopolitical conflict, including in Russia and Ukraine, and our business strategies, and other factors that may cause actual results to differ from those expressed or implied in these statements and/or other disclosures. We disclaim any obligation to update any forward-looking statements after today's call. In addition, today's discussion may include disclosure regarding non-GAAP financial measures.

Good morning and thank you for joining Crescent's first quarter 2022 earnings call. Our prepared remarks today will come from our CEO , David Rockitale and our CFO , Brandy Kendall. Todd Folt, Chief Accounting Officer, Ben Conner and Clay Wren, both Executive Vice Presidents, are also here today and available during the Q&A.

Our 2020.

Earnings call.

Our prepared remarks today will come from Marci.

Yeah, David Brockton, Charlie Yeah.

Hi, Sal.

Sure. Thanks Clay.

Right.

Kim Vice President.

Yes.

Right.

Today's call may contain projections and other forward.

Today's call may contain rejections and other forward-looking statements within the meaning of the federal security clause. These statements are subject to risks and uncertainties, including commodity price volatility, the continued impacts of COVID-19, geopolitical conflict, including in Russia and Ukraine, and our business strategy.

And then.

Right.

These statements are subject to risks and uncertainty.

Any commodity price volatility.

The impact of COVID-19.

Geopolitical conflicts.

Russia and.

Got it.

The other factors that may cause.

and other factors that may cause actual results to differ from those expressed or implied in these statements, hand, or other disclosures. We disclaim any obligation to update any forward-looking statements after today's call. In addition, today's discussion may include disclosure regarding non-GAAP financial measures.

Actual results could differ from those expressed or implied.

Sure.

Yes.

We disclaim any obligation to update these forward looking statements.

David.

In addition, today's discussion may include disclosures regarding non-GAAP financial measures.

A reconciliation of historical non-GAAP financial measures to the most directly comparable GAAP measure. Please reference our 10-Q and earnings press release available on our website.

Emily Newport: For reconciliation of historical non-GAAP financial measures to the most directly comparable GAAP measure, please reference our 10-Q and earnings press release available on our website. With that, I will turn it over to David.

For reconciliation of historical non-GAAP financial measures to the most directly comparable GAAP measure, please reference our 10Q and earnings press release available on our website. With that, I will turn it over to David. Great.

That I will turn it over to Pete.

Great. Thanks, Emily and good morning, everyone.

David Rockecharlie: Great. Thanks, Emily, and good morning, everyone. We appreciate you joining us today for our Q1 2022 earnings call. This is our Q1 to report full consolidated results after our merger with Contango in December. We've been trading publicly as Crescent Energy for about five months, and we look forward to providing more details today on our results, as well as our outlook for the large and differentiated business we've built. We will also take your specific questions at the end of our introductory remarks. Q1 was another solid quarter for our business. We generated significant free cash flow and solid investment returns across our asset base. We maintained a strong balance sheet and remained focused on returning capital to shareholders through our fixed quarterly dividend. As a reminder, we paid our first dividend as a public company in March, equal to $0.12 per share.

We appreciate you joining us today for our first quarter 2022 earnings call.

This is our first quarter to report all consolidated results after our merger with Katanga Linda.

This is our first quarter to report full consolidated results after our merger with Contango and Desil.

We've been trading publicly is crescent energy for about five months and we look forward to providing more details today on our results as well as our outlook for the large and differentiated business people.

We've been trading publicly as Crescent Energy for about five months, and we look forward to providing more details today on our results, as well as our outlook for the large and differentiated business.

We will also take your specific questions at the end of our introductory remarks.

We will also take your specific questions at the end of our introductory remarks. Q1 was another

Q1 was another solid quarter for us.

We generated significant free cash flow and solid investment returns across our asset base.

we generated significant free cash flow and solid investment returns across our assets.

We maintained a strong balance sheet and remain focused on returning capital to shareholders through our fixed quarterly dividend.

As a reminder, we paid our first dividend as a public company in March people to <unk> 12 per share.

David Rockecharlie: As a reminder, we paid our first dividend as a public company in March, equal to $0.12 per share. Additionally, we are pleased to have closed the highly accretive acquisition of assets in the Uinta Basin at the end of the quarter. The Uinta assets significantly increased our scale and added high margin oil production at a very attractive purchase price. Our comments about our 2022 outlook include the Uinta acquisition for nine months, and I would note that given the March 30 closing date, the operating results of this material and compelling acquisition will not begin to be reflected in our financial results until Q2 of this year. While performance is strong and Crescent continues to grow significantly, our strategy remains unchanged. We describe our strategy as focused on cash flow, risk management, and returns.

As a reminder, we paid our first evidence as a public company in March equal to 12 cents per share.

Additionally, we are pleased to have closed the highly accretive acquisition of assets in the Uinta basin.

David Rockecharlie: Additionally, we are pleased to have closed the highly accretive acquisition of assets in the Uinta Basin at the end of the quarter. The Uinta assets significantly increased our scale and added high margin oil production at a very attractive purchase price. Our comments about our 2022 outlook include the Uinta acquisition for nine months, and I would note that given the March 30 closing date, the operating results of this material and compelling acquisition will not begin to be reflected in our financial results until Q2 of this year. While performance is strong and Crescent continues to grow significantly, our strategy remains unchanged. We describe our strategy as focused on cash flow, risk management, and returns. We generate significant free cash flow from our large, diversified, and low decline producing asset base.

Additionally, we are pleased to have closed the highly accretive acquisition of assets in the UN to Basin.

At the end of the.

You went to assets significantly increased our scale and added high margin oil production at a very attractive price.

Uinta assets significantly increased our scale and added high margin oil production at a very attractive purpose.

Our comments about our 2020 outlook include the Uinta acquisition for nine months and I would note that given the March 30 closing date.

Our comments about our 2022 outlook include the Uinta Acquisition for nine months, and I would note that given the March 30 closing date, the operating results of this material and compelling acquisition will not begin to be reflected in our financial results until the second quarter of the show.

Operating results of this material and compelling acquisition not begin to be reflected in our financial results until the second quarter.

While performance is strong and Crescent continues to grow significantly our strategy remains unchanged.

While performance is strong and Crescent continues to grow significantly, our strategy remains unchanged. We describe our strategy as focused on cash flow, risk management, and return.

We describe our strategy is focused on cash flow risk management and returns.

We generate significant free cash flow from our large diversified and low declined producing asset base.

We generate significant free cash flow from our large diversified and low-declined producing asset base.

David Rockecharlie: We generate significant free cash flow from our large, diversified, and low decline producing asset base. We manage risk through a portfolio approach to asset selection and by maintaining our strong balance sheet supported by our hedge program. We seek to deliver strong returns on invested capital, both through internal development and complementary accretive acquisitions, in order to drive profitable long-term growth for shareholders. This is the same strategy we have executed for the last decade in the private markets across multiple commodity cycles, and we're sticking to it. Turning to the market backdrop. Following years of under-investment in the oil and gas sector, we are in a period of unique volatility, which has been driven by the rapid recovery of global economies post-pandemic and exacerbated by the war in Ukraine.

We manage risk through a portfolio approach to asset selection and by maintaining our strong balance sheet supported by our hedge program.

David Rockecharlie: We manage risk through a portfolio approach to asset selection and by maintaining our strong balance sheet supported by our hedge program. We seek to deliver strong returns on invested capital, both through internal development and complementary accretive acquisitions, in order to drive profitable long-term growth for shareholders. This is the same strategy we have executed for the last decade in the private markets across multiple commodity cycles, and we're sticking to it. Turning to the market backdrop. Following years of under-investment in the oil and gas sector, we are in a period of unique volatility, which has been driven by the rapid recovery of global economies post-pandemic and exacerbated by the war in Ukraine. In terms of the conflict's impact on the commodity market, it does not fundamentally alter our view of an already tight global supply-demand balance, but it introduces additional volatility and upward price risk.

We manage risk through a portfolio approach to asset selection and by maintaining our strong balance sheet supported by our Hedge Program.

And we seek to deliver strong returns on invested capital.

and we seek to deliver strong returns on invested capital.

Through internal development and complementary accretive acquisitions in order to drive profitable long term growth for shareholders.

both through internal development and complementary accretive acquisitions in order to drive profitable, long-term growth for shareholders.

This is the same strategy, we have executed for the last decade in the private markets across multiple commodity cycles, and we're sticking to it.

This is the same strategy we have executed for the last decade in the private markets across multiple commodity cycles and we're sticking to it.

Turning to the market backdrop following years of Underinvestment in the oil and gas sector. We are in a period of volatility.

Turning to the market backdrop, following years of underinvestment in the oil and gas sector, we are in a period of unique volatility.

It has been driven by the rapid recovery of global economies.

which has been driven by the rapid recovery of global economies post-pandemic and exacerbated by the war in Ukraine.

And exacerbated by the more in Ukraine.

In terms of the conflicts impact on the commodity market. It does not fundamentally alter our view of an already tight global supply demand balance.

David Rockecharlie: In terms of the conflict's impact on the commodity market, it does not fundamentally alter our view of an already tight global supply-demand balance, but it introduces additional volatility and upward price risk. Today, oil and natural gas prices are approaching near record levels. To reflect today's commodity prices, we revised our 2022 guidance to $1.35 billion of adjusted EBITDA and $575 million of levered free cash flow at the midpoint, assuming $100 WTI and $6 Henry Hub. Again, this guidance includes the Uinta assets for nine months of 2022. Our proved PV-10 at $3.31 NYMEX pricing totals $8.2 billion, and we have an industry-leading first-year decline rate in the range of 20%. We believe the stability of production and cash flow is a key differentiator for Crescent.

In terms of the conflict's impact on the commodity market, it does not fundamentally alter our view of an already tight global supply-demand balance.

But it introduces additional volatility and upward price risk.

but it introduces additional volatility and upward price risk.

Today oil and natural gas prices are approaching near record levels.

Today, oil and natural gas prices are approaching near record.

David Rockecharlie: Today, oil and natural gas prices are approaching near record levels. To reflect today's commodity prices, we revised our 2022 guidance to $1.35 billion of adjusted EBITDA and $575 million of levered free cash flow at the midpoint, assuming $100 WTI and $6 Henry Hub. Again, this guidance includes the Uinta assets for nine months of 2022. Our proved PV-10 at $3.31 NYMEX pricing totals $8.2 billion, and we have an industry-leading first-year decline rate in the range of 20%. We believe the stability of production and cash flow is a key differentiator for Crescent. It lowers our capital intensity and allows us to pursue profitable growth through development of our large low-risk resource base and opportunistic, and complementary acquisitions.

To reflect today's commodity prices, we've revised our 2022 guidance to one <unk> three 5 billion of adjusted EBITDA and $575 million of Levered free cash flow.

To reflect today's commodity prices, we revised our 2022 guidance to $1.35 billion of adjusted EBITDA and $575 million of levered free cash flow at the midpoint, assuming $100 WTI and $6 Henry Hub.

Midpoint, assuming $100 <unk> and.

$6 Henry hub.

Again this guidance includes the Uinta assets for nine months of 2022.

Again, this guidance includes the UNTA assets for nine months of 2020.

Our proved PV 10 at $3 31, Nymex pricing totals.

Our approved PP10 at 331 NIMEX pricing totals $8.2 billion. And we have an industry-leading first-year decline rate in the range of 20%.

Totals eight $2 billion and we have an industry, leading first year decline rate in the range of 20%.

We believe the stability of production and cash flow is a key differentiator for crescent.

We believe the stability of production and cash flow is a key differentiator for Crescent.

It lowers our capital intensity and allows us to pursue profitable growth through development of our large resource base and opportunistic and complementary acquisitions.

It lowers our capital intensity and allows us to pursue profitable growth through development of our large, low-risk resource base and opportunistic and complementary acquisition.

David Rockecharlie: It lowers our capital intensity and allows us to pursue profitable growth through development of our large low-risk resource base and opportunistic, and complementary acquisitions. Consistent with our commitment to return cash to shareholders and in the context of closing the Uinta acquisition, today, we declared a $0.17 per share dividend payable in Q2, representing a 40% increase to last quarter's dividend. Our LTM net leverage remains low at 1.3 times, and we are generating significant free cash flow following the close of the Uinta acquisition. From an operational perspective, we continue to operate 3 rigs as we invest in the development of our high return multi-year inventory in our core Eagle Ford and Uinta positions. Crescent's large held by production resource base provides the ability to generate strong returns on capital invested while we maintain or moderately grow our production organically.

Consistent with our commitment to return cash to shareholders and in the context of closing the Uinta acquisition today.

David Rockecharlie: Consistent with our commitment to return cash to shareholders and in the context of closing the Uinta acquisition, today, we declared a $0.17 per share dividend payable in Q2, representing a 40% increase to last quarter's dividend. Our LTM net leverage remains low at 1.3 times, and we are generating significant free cash flow following the close of the Uinta acquisition. From an operational perspective, we continue to operate 3 rigs as we invest in the development of our high return multi-year inventory in our core Eagle Ford and Uinta positions. Crescent's large held by production resource base provides the ability to generate strong returns on capital invested while we maintain or moderately grow our production organically.

consistent with our commitment to return cash to shareholders and in the context of closing the UN to acquisition.

Today, we declared a <unk> 17 per share dividend payable in the second quarter.

Today we declare a 17 cents per share dividend payable and second

Representing a 40% increase to last quarter's dividend.

representing a 40% increase to last quarter still.

Our LTM net leverage remains low at one three times and we are generating significant free cash flow following the close Uinta acquisition.

Our LTM net leverage remains low at 1.3 times, and we are generating significant free cash flow following the close of the UNTAC acquisition.

From an.

<unk> perspective, we continue to operate three rigs as we invest in the development of our high return multi year inventory in our core Eagle Ford and you went to positions.

From an operational perspective, we continue to operate three rigs as we invest in the development of our high-return, multi-year inventory in our core Eagle Fruit and Uintah position.

Presidents large held by production resource base provides the ability to generate strong returns on capital invested while we maintain a moderate moderately grow our production organically.

Crescent's large held-by-production resource base provides the ability to generate strong returns on capital invested while we maintain or moderately grow our production organics.

In addition to our stable base business, we continue to look for ways to drive shareholder value through opportunistic accretive acquisitions that add cash flow and.

David Rockecharlie: In addition to our stable base business, we continue to look for ways to drive shareholder value through opportunistic, accretive acquisitions that add cash flow and NAV at attractive valuations. While the commodity price environment has changed quickly, we continue to see an attractive backdrop for industry consolidation, as the supply of assets and subscale businesses for sale is increasing steadily, far outweighing buyer demand. As always, we will continue to be disciplined and focused on investment returns in connection with capital investments on our existing assets, as well as potential acquisitions. We believe we have proven our ability to capture attractive assets, integrate them into our portfolio, and apply our strong operating skills to find synergies and create value for shareholders.

In addition to our stable base business, we continue to look for ways to drive shareholder value through opportunistic, accretive acquisitions that add cash flow and NAV at attractive valuations.

At attractive valuations.

While the commodity price environment has changed quickly we continue to see an attractive backdrops three industry consolidation.

While the commodity price environment has changed quickly, we continue to see an attractive backdrop for industry consolidation, as the supply of assets and subscale businesses for sale is increasing steadily, far outweighing buyer demand.

Our supply of assets of scale businesses for sale is increasing steadily are outweighing buyer demand.

As always we will continue to be disciplined and focused on investment returns in connection with capital investments on our existing assets as well as potential acquisitions.

As always, we will continue to be disciplined and focused on investment returns in connection with capital investments on our existing assets, as well as potential acquisitions.

We believe we have proven our ability to capture attractive assets integrate them into our portfolio and apply our strong operating skills to find synergies and create value for shareholders.

We believe we have proven our ability to capture attractive assets, integrate them into our portfolio and apply our strong operating skills to find synergies and create value for shareholders.

Following our December 2021 merger with contango.

David Rockecharlie: Following our December 2021 merger with Contango and subsequent Uinta acquisition, we have made significant progress on business integration, while also beginning to better position our large scale enterprise in the capital markets as a new public company. We anticipate completing our integration efforts and continuing to execute our capital market strategy throughout the remainder of 2022. Brandy will provide some more detail on both of these activities later on the call. I will now go into a little more detail on the highly accretive acquisition of our Uinta assets, as this is the most recent example of our strong M&A capabilities at work. The assets are a great addition to our existing Rockies footprint and will add substantial cash flow while maintaining our strong balance sheet.

Following our December 2021 merger with Contango and subsequent Uinta acquisition, we have made significant progress on business integration while also beginning to better position our large-scale enterprise in the capital markets as a new public.

Subsequent to Uinta acquisition, we have made significant progress on business integration, while also beginning to better position, our large scale enterprise in the capital markets as a new public company.

We anticipate completing our integration efforts and continuing to execute our capital market strategy throughout the remainder of 2022.

Randy will provide some more detail on both of these activities later on the call.

Brandy will provide some more detail on both of these activities later on.

I will now go into a little more detail on the highly accretive acquisition of argument assets. As this is the most recent example of our strong M&A capabilities.

I will now go into a little more detail on the highly accretive acquisition of our UNTA assets, as this is the most recent example of our strong M&A capabilities.

The assets are a great addition to our existing Rockies footprint.

The assets are a great addition to our existing Rockies footprint and will add substantial cash flow while maintaining our strong balance.

Substantial cash flow, while maintaining our strong balance sheet.

<unk> assets are 65% oil and nearly 100% operated with high margins and low operating costs enhancing our overall asset portfolio in these areas.

The Uinta assets are 65% oil and nearly 100% operated with high margins and low operating costs, enhancing our overall asset portfolio in these areas.

David Rockecharlie: The Uinta assets are 65% oil and nearly 100% operated with high margins and low operating costs, enhancing our overall asset portfolio in these areas. Consideration at closing in March was $690 million for assets with $1 billion of proved developed PV-10 at NYMEX pricing as of 31 March, and substantial development upside. We were able to move extremely quickly to capture these complementary assets in a unique situation due to our familiarity with the assets, our existing operating capabilities, and our strong balance sheet. In summary, this acquisition is consistent with our strategy to drive shareholder returns through significant free cash flow generation and profitable growth from strong returns on capital invested in low risk development and opportunistic acquisitions that are accretive to NAV.

Consideration at closing in March.

With $690 million for assets with a $1 billion of proved developed PV 10 at Nymex pricing as of March 31.

with 690 million for assets with a billion dollars approved to develop PB10 at NYMEX pricing as of March 31st and substantial development upside.

A substantial development upside.

We were able to move extremely quickly to capture these complementary assets and a unique situations due to our familiarity with the assets.

We were able to move extremely quickly to capture these complementary assets in a unique situation due to our familiarity with the asset.

Our existing operating capabilities and our strong balance sheet.

our existing operating capabilities and our strong balance.

In summary, this acquisition is consistent with our strategy to drive shareholder returns through significant free cash flow generation and profitable growth from strong returns on capital invested in low risk development and opportunistic acquisitions that are accretive to NAV.

In summary, this acquisition is consistent with our strategy to drive shareholder returns through significant free cash flow generation and profitable growth from strong returns on capital invested in low-risk development and opportunistic acquisitions that are created and approved.

Since closing the Uinta acquisition, roughly six weeks ago, we've made significant progress integrating the operations of these assets.

Since closing the Uintah acquisition roughly six weeks ago, we've made significant progress integrating the operations of these assets.

David Rockecharlie: Since closing the Uinta acquisition roughly 6 weeks ago, we've made significant progress integrating the operations of these assets. At close, we took over operations from EP Energy and have maintained their 2 rig development program. While still in the early days, the transition has been smooth thanks to our strong operational leadership and the talented field staff we gained in the acquisition. We are actively engaging with local agencies about our operating plans and practices, including on the permitting side. Continuing to discuss our assets and operations, I want to reiterate that ESG is an integral part of everything we do. We plan to issue our 2021 ESG report later this year, which will include short- and long-term ESG targets with a focus on EHS and emissions. During Q1, we joined the Oil and Gas Methane Partnership 2.0 initiative or OGMP 2.0.

At close we took over operations from EP energy and have maintained their two rig development program.

At close, we took over operations from ED Energy and have maintained their two rig development.

While still in the early days the transition has been smooth thanks to our strong operational leadership and the talented field staff, we gained in the acquisition.

While still in the early days, the transition has been smooth, thanks to our strong operational leadership and the talented field staff we gained in the acquisition.

We're actively engaging with local agencies about our operating plans and practices, including on the permitting side.

We are actively engaging with local agencies about our operating plans and practices, including on the permitting.

Continuing to discuss our assets and operations I want to reiterate that ESG is an integral part of everything we do.

Continuing to discuss our assets and operations, I want to reiterate that ESG is an integral part of everything we do.

We plan to issue our 2021 ESG report later this year, which will include short and long term ESG targets with a focus on EHS and emissions.

We plan to issue our 2021 ESG report later this year, which will include short and long-term ESG targets with a focus on EHS and emissions.

During the first quarter, we joined the oil and gas methane partnership to point out of initiatives.

During the first quarter, we joined the Oil and Gas Methane Partnership 2.0 Initiative or OGMP 2.0.

David Rockecharlie: During Q1, we joined the Oil and Gas Methane Partnership 2.0 initiative or OGMP 2.0. We believe reducing methane emissions is critical to slowing the impact of climate change, and the first step to methane reduction is high quality measurement data. The rigorous OGMP 2.0 framework will aid our efforts to create targeted programs to reduce emissions, accurately report our data, and help us to be positioned as an industry leader in emissions reduction. We will continue to keep you updated on our progress in this area. I'll now turn the call over to Brandi to cover our Q1 2022 financial results and 2022 outlook.

Oh GMP to point out.

We believe reducing methane emissions is critical to slowing the impacts of climate change.

We believe reducing methane emissions is critical to slowing the impact of climate change, and the first step to methane reduction is high quality measurement.

David Rockecharlie: We believe reducing methane emissions is critical to slowing the impact of climate change, and the first step to methane reduction is high quality measurement data. The rigorous OGMP 2.0 framework will aid our efforts to create targeted programs to reduce emissions, accurately report our data, and help us to be positioned as an industry leader in emissions reduction. We will continue to keep you updated on our progress in this area. I'll now turn the call over to Brandi to cover our Q1 2022 financial results and 2022 outlook.

And the first step to methane production with high quality measurement.

The rigorous <unk> two framework will aid our efforts to create targeted programs to reduce emissions accurately report our data and help us to be positioned as an industry leader and emissions reduction.

The rigorous OGMP 2.0 framework will aid our efforts to create targeted programs to reduce emissions, accurately report our data, and help us to be positioned as an industry leader in emissions reduction. We will continue to keep you updated.

We will continue to keep you updated on our progress in this area.

I'll now turn the call over to Randy to cover our first quarter 2022 financial results and 2022.

I'll now turn the call over to Brandy to cover our first quarter 2022 financial results and 2022 outlook.

Thanks, David and good morning, everyone.

Brandi Kendall: Thanks, David, and good morning, everyone. We are off to a great start in 2022. We remain focused on cash flow priorities 1A and 1B, shareholder returns, and the balance sheet. As David mentioned, we announced the $0.17 per share dividend, which is a 40% increase to the prior quarter. Consistent with our dividend framework of 10% of adjusted EBITDAX, we intend to pay $0.17 per share quarterly for the remainder of the year, generating an attractive 4% yield based on recent trading prices. On the balance sheet, we exited the quarter with LTM leverage at 1.3 times. On 30 March 2022, we closed the Uinta Basin transaction for cash consideration of approximately $690 million.

We are off to a great start in 2020, we remain focused on cash flow priorities, one a and one b shareholder returns in the balance sheet.

off to a great start in 2022. We remain focused on cash flow priorities 1A and 1B, shareholder returns in the balance sheet. As David mentioned, we announced the 17 cents per share dividend, which is a 40% increase to the prior quarter. Consistent with our dividend framework of 10% of adjusted EBITDAX, we intend to pay 17 cents per share quarterly for the remainder of the year, generating an attractive 4% yield based on recent trading prices.

As David mentioned, we announced a 17 cents per share dividend, which is a 40% increase to the prior quarter.

With our dividend framework of 10% of adjusted EBITDAX, We intend to pay 17 cents per share quarterly for the remainder of the year generating attractive 4% yield based on recent trading prices.

On the balance sheet, we exited the quarter with LTM leverage at one three times.

On the balance sheet, we exit the quarter with LTM leverage at 1.3 times. On March 30th, we closed the Uinta Basin transaction for cash consideration of approximately 690 million dollars.

On March 30th he closed the Uinta basin transaction for cash consideration of approximately $690 million.

Yes.

In conjunction with the transaction our lenders authorized an increase the elected commitment amount under the existing revolving credit facility $1 3 billion from $700 million.

In conjunction with the transaction, our lenders authorized an increase of the elected commitment amount under the existing revolving credit facility to 1.3 billion from 700 million dollars.

Operator: In conjunction with the transaction, our lenders authorized an increase of the elected commitment amount under the existing revolving credit facility to $1.3 billion from $700 million. Additionally, we issued a $200 million tack on during the quarter, with proceeds used to reduce RBL borrowings, consistent with our strategy of not being overly reliant on the bank RBL market. For Q1 2022, we produced 120 net MBOE per day, in line with our previous guidance excluding Uinta, and generated $195 million of adjusted EBITDAX and $89 million of levered free cash flow. As a reminder, these results do not include the contribution from the Uinta assets since the transaction closed at the end of the quarter. Operating expense, excluding production and other taxes of $15.97 per BOE, were in line with guidance.

Brandi Kendall: In conjunction with the transaction, our lenders authorized an increase of the elected commitment amount under the existing revolving credit facility to $1.3 billion from $700 million. Additionally, we issued a $200 million tack on during the quarter, with proceeds used to reduce RBL borrowings, consistent with our strategy of not being overly reliant on the bank RBL market. For Q1 2022, we produced 120 net MBOE per day, in line with our previous guidance excluding Uinta, and generated $195 million of adjusted EBITDAX and $89 million of levered free cash flow. As a reminder, these results do not include the contribution from the Uinta assets since the transaction closed at the end of the quarter. Operating expense, excluding production and other taxes of $15.97 per BOE, were in line with guidance.

Additionally, we issued $200 million tack on during the quarter with proceeds used to reduce our borrowings consistent with our strategy of not being overly reliant on the RV market.

Additionally, we issued $200 million tax on during the quarter with proceeds used to reduce RVL borrowings consistent with our strategy of not being overly reliant on the bank RVL heart.

For the first quarter of 2022, we produced 120 net Boe per day in line with our previous guidance, excluding Uinta and generated $195 million of adjusted <unk> and $89 million of Levered free cash flow.

For the first quarter of 2022, we produced 120 net MBOE per day in line with our previous guidance excluding UENTA and generated $195 million of adjusted EBITAC and $89 million of levered pre-cash flow.

As a reminder, these results do not include the contribution from strides.

As a reminder, these results do not include the contribution from the UN to access since the transaction closed at the end of the quarter.

The transaction closed at the end of the quarter.

Operating expenses, excluding production and other taxes that $15 97 per BOE were in line with guidance adjusted for contractual commodity linked costs costs, which increased in the higher client.

Operating expenses, excluding production and other taxes of $15.97 per BOE were in line with guidance adjusted for contractual commodity-length costs, which increased in the higher commodity price environment.

Operator: Adjusted for contractual commodity-linked costs. Costs which increased in the higher commodity price environment. Recall that our guidance was originally set at $75 a barrel, roughly $20 a barrel less than the Q1 oil price. About $0.25 to $0.50 of our operating costs are contractually indexed to commodity prices such as CO2 prices for our Wyoming tertiary recovery assets and certain gathering and processing costs. These higher contractual commodity-linked costs were more than offset by higher realized prices and improved margins. Our expectation for OPEX excluding taxes per BOE for the remainder of the year is in line with our expectations, with the exception of these contractual commodity-linked costs. As we increase our guidance price deck from $75 a barrel to $100 per barrel for the remainder of the year, we increased our cash OPEX excluding taxes by $0.50 per BOE.

Brandi Kendall: Adjusted for contractual commodity-linked costs. Costs which increased in the higher commodity price environment. Recall that our guidance was originally set at $75 a barrel, roughly $20 a barrel less than the Q1 oil price. About $0.25 to $0.50 of our operating costs are contractually indexed to commodity prices such as CO2 prices for our Wyoming tertiary recovery assets and certain gathering and processing costs. These higher contractual commodity-linked costs were more than offset by higher realized prices and improved margins. Our expectation for OPEX excluding taxes per BOE for the remainder of the year is in line with our expectations, with the exception of these contractual commodity-linked costs. As we increase our guidance price deck from $75 a barrel to $100 per barrel for the remainder of the year, we increased our cash OPEX excluding taxes by $0.50 per BOE.

Recall that our guidance was originally set at $75 a barrel roughly $20 a barrel less than the Q1 oil price.

Recall that our guidance was originally set at $75 barrel, roughly $20 barrel less than the Q1 oil price.

25 to 50 of our operating costs are contractually index declining prices.

about 25 to 50 cents of our operating costs are contractually indexed to commodity prices, such as CO2 prices for our Wyoming tertiary recovery assets and certain gathering and processing costs. But these higher contractual commodity-linked costs were more than offset by higher realized prices and improved margins.

<unk> prices.

Tertiary recovery assets at certain gathering and processing for these higher contractual commodity linked costs were more than offset by higher realized prices and improve margins.

Our expectation for Opex, excluding taxes per Boe for the remainder of the year is in line with our expectations with the exception of these contractual commodity linked Scott.

Our expectations for OPEX excluding taxes for BOE for the remainder of the year is in line with our expectations with the exception of these contractual commodity-length costs.

As we increased our guidance by stack from $75 a barrel 100 dollar a barrel for the remainder of the year, we increased our cash opex, excluding taxes by 50 cents.

and we increase their guidance price tax from $75 per hour to $100 per hour for the remainder of the year. We increase our cash off tax excluding taxes by 50 cents per BOE.

Her Ely.

Again this increase in cost is expected to be offset by higher realized prices.

Operator: Again, this increase in cost is expected to be offset by higher realized prices. Going forward, beginning in Q2, we expect the Uinta assets will reduce our operating expense, excluding production and other taxes per unit by over 10%. Adjusted recurring cash G&A totaled $1.69 per BOE, which is in line with previous expectations excluding Uinta. Going forward, we expect recurring adjusted cash G&A to be roughly $1.50 as the Uinta assets add minimal G&A to our business. Now, this calculation excludes certain non-recurring expenses we incurred associated with the Contango merger, the Uinta acquisition, and the formation of Crescent Energy as a new public company. We expect an incremental $10 to 15 million of one-time expenses for the remainder of 2022, including post-merger integration and other transaction-related costs. We invested roughly $85 million in Q1.

Brandi Kendall: Again, this increase in cost is expected to be offset by higher realized prices. Going forward, beginning in Q2, we expect the Uinta assets will reduce our operating expense, excluding production and other taxes per unit by over 10%. Adjusted recurring cash G&A totaled $1.69 per BOE, which is in line with previous expectations excluding Uinta. Going forward, we expect recurring adjusted cash G&A to be roughly $1.50 as the Uinta assets add minimal G&A to our business. Now, this calculation excludes certain non-recurring expenses we incurred associated with the Contango merger, the Uinta acquisition, and the formation of Crescent Energy as a new public company. We expect an incremental $10 to 15 million of one-time expenses for the remainder of 2022, including post-merger integration and other transaction-related costs. We invested roughly $85 million in Q1.

Again, this increase in cost is expected to be offset by higher realized prices.

And going forward and beginning in the second quarter. We expect that you want to ask that will reduce our operating expenses, excluding production and other taxes.

And going forward and beginning in the second quarter, we expect that you want to ask us will reduce our operating expense, excluding production and other taxes per unit by over 10%.

Nate by over 10%.

Adjusted recurring cash G&A totaled $1 69 per BOE, which is in line with previous expectations exclude anything like that.

Adjusted recurring cash GNA totaled $1.69 for BOEs, which is in line with previous expectations, excluding UENTA. Going forward, we expect recurring adjusted cash GNA to be roughly $1.50, as the UENTA assets add minimal GNA to our business.

Going forward, we expect recurring adjusted cash G&A to be roughly a dollar.

You want that asset add minimal G&A to our business.

Yes, its calculation excludes certain nonrecurring expenses, we incurred as they deal with the contango merger. He went to acquisition and the formation of an energy as a new public company, we expect an incremental $10 million to $15 million of one time expenses for the remainder of 2022.

No, this calculation excludes certain non-recurring expenses. We incurred associated with the Ketango merger, the UN to acquisition, and the formation of Press and Energy as a new public company. We expect an incremental $10 to $15 million one time expenses for the remainder of 2022, including post-merger integration and other transaction related costs. We invested roughly $10 million for the remainder of 2022, including post-merger integration and other transaction related costs.

<unk> post merger integration and other transaction related costs.

We invested roughly $85 million in the first quarter.

Nine operated Eagle Ford Wells, we brought online during the quarter are showing promising.

Operator: The 9 operated Eagle Ford wells we brought online during the quarter are showing promising early results with an expected payback of less than 12 months and the potential to generate more than 3 times our investment at today's commodity prices. Our 2022 capital budget is unchanged at $600 to 700 million, with more than 80% allocated to the operated development in the Eagle Ford and Uinta Basin. Like our peers, we are seeing inflationary pressures and potential for logistical and other process delays across the business. We are closely monitoring the changing landscape as the pressures change month to month. Our people and relationships are some of the best in the industry, and we continue to find new ideas to safely offset some of these pressures.

Brandi Kendall: The 9 operated Eagle Ford wells we brought online during the quarter are showing promising early results with an expected payback of less than 12 months and the potential to generate more than 3 times our investment at today's commodity prices. Our 2022 capital budget is unchanged at $600 to 700 million, with more than 80% allocated to the operated development in the Eagle Ford and Uinta Basin. Like our peers, we are seeing inflationary pressures and potential for logistical and other process delays across the business. We are closely monitoring the changing landscape as the pressures change month to month. Our people and relationships are some of the best in the industry, and we continue to find new ideas to safely offset some of these pressures.

The nine-operated Eagleford Wells we brought online during the quarter are showing promising early results with an expected payback of less than 12 months and the potential to generate more than three times our investment at today's commodity price.

Early results with an expected payback of less than 12 months and the potential to generate more than three times, our investment I think commodity prices.

Our 2020 capital budget is unchanged at $600 million to $700 million with more than 80% allocated to the operated development for <unk>.

Our 2022 capital budget is unchanged at $600 to $700 million with more than 80 percent allocated to the Operative Development in the Eastward and Uenta Basin.

Like our peers, we are seeing inflationary pressures and potential of our logistical and other process delays across the business.

Like our peers, we are seeing inflationary pressures and potential for logistical and other process delays across the system.

We are closely monitoring the changing landscape as the pressures change my mind.

We are closely monitoring the changing landscape as the pressures change month to month.

Our people and relationships there some of the best in the industry and we continue to find new ways new ideas, just basically offset some of these pressures.

Our people and relationships are some of the best in the industry and we continue to find new ideas to safely offset some of these pressures.

Based on what we know today, we believe our capital ratios accurately corporate's expected inflation as our.

Operator: Based on what we know today, we believe our capital range accurately incorporates expected inflation as our February guidance incorporated a 10% to 15% increase in capital costs year-over-year. We are seeing additional pressure around 5% or so in cost inflation for the remainder of the year, but believe this is covered in our guidance range. Today, we are continuing to operate 1 rig in the Eagle Ford and 2 rigs in the Uinta. Our planned Q2 wells are expected to commence production at the end of the quarter, which should drive modest growth in the H2 of the year. We expect our capital spend cadence to be fairly even over the remainder of the year. Hedging is core to our risk management strategy, and we utilize hedging to achieve a couple of objectives. First, to protect the balance sheet.

Brandi Kendall: Based on what we know today, we believe our capital range accurately incorporates expected inflation as our February guidance incorporated a 10% to 15% increase in capital costs year-over-year. We are seeing additional pressure around 5% or so in cost inflation for the remainder of the year, but believe this is covered in our guidance range. Today, we are continuing to operate 1 rig in the Eagle Ford and 2 rigs in the Uinta. Our planned Q2 wells are expected to commence production at the end of the quarter, which should drive modest growth in the H2 of the year. We expect our capital spend cadence to be fairly even over the remainder of the year. Hedging is core to our risk management strategy, and we utilize hedging to achieve a couple of objectives. First, to protect the balance sheet.

Based on what we know today, we believe our capital range accurately incorporates expected inflation as our

February guidance incorporated a 10% to 15% increase in capital costs year over year, we are seeing additional pressure right at 5% or so in cost inflation for the remainder of the year I believe it's covered in our guidance range.

February guidance incorporated at 10% to 15% increase in capital costs year over year. We are seeing additional pressure around 5% or so in cost translations for the remainder of the year. I believe this is covered in our guidance range.

Today, we are continuing to operate one rig in the Eagle Arctic two right and that you want that.

Today, we are continuing to operate one rig in the eagle herd and two rigs in the UNDF. Our plan second quarter wells are expected to commence production at the end of the quarter, which should drive modest growth in the back half of the year.

Our planned second quarter wells are expected to commence production at the end of the quarter, which should drive modest growth in the back half of the year.

We expect our capital spend cadence to be fairly even over the remainder of the year.

Yeah.

As you can as core to our risk management strategy, we utilize hedging to achieve a couple of objectives first to protect the balance sheet second lock in expected returns when we commit capital drilling or acquisition.

Hedging is core to our risk management strategy, and we utilize hedging to achieve a couple of objectives. First, to protect the balance sheet, second, to lock in expected returns when we commit capital drilling or acquisitions, and third, to maintain exposure to future commodity prices.

Operator: Second, to lock in expected returns when we commit capital to drilling or acquisitions. Third, to maintain exposure to future commodity prices. Consistent with the strategy upon signing the Uinta transaction, we entered into additional oil swaps covering about 80% of our acquired Uinta PP for a 3-year period to protect our expected returns on capital invested. Today, more than 50% of our current hedge book was entered into in connection with acquisitions, which means that our recent acquisitions are outperforming from a price perspective relative to how we underwrote them. For example, we hedged the Uinta acquisition at $70 to $80 per barrel, and the current $100 per barrel oil price environment provides significant upside to our underwriting. We maintain attractive long-term exposure to future commodity prices with only 12% of our proved developed reserves hedged today.

Brandi Kendall: Second, to lock in expected returns when we commit capital to drilling or acquisitions. Third, to maintain exposure to future commodity prices. Consistent with the strategy upon signing the Uinta transaction, we entered into additional oil swaps covering about 80% of our acquired Uinta PP for a 3-year period to protect our expected returns on capital invested. Today, more than 50% of our current hedge book was entered into in connection with acquisitions, which means that our recent acquisitions are outperforming from a price perspective relative to how we underwrote them. For example, we hedged the Uinta acquisition at $70 to $80 per barrel, and the current $100 per barrel oil price environment provides significant upside to our underwriting. We maintain attractive long-term exposure to future commodity prices with only 12% of our proved developed reserves hedged today.

And third to maintain exposure to heat your body.

Consistent with this strategy for signing that you went to transaction, we entered into additional oil swaps covering about 80% of our acquired U S. S. E T for a three year period to protect our expected returns on capital invested.

Consistent with the strategy of unsigning the UN to Transaction, we entered into additional oil slots covering about 80% of our acquired UN to PPP for a three-year period to protect our expected returns on capital invested.

Today more than 50% of our current hedge book with entered into in connection with acquisition, which means that our recent acquisitions are outperforming price perspective relative to how we underwrite that.

Today, more than 50% of our current hedgebook was entered into a connection with acquisitions, which means that our recent acquisitions are outperforming from a price perspective relative to how we underwrote that.

For example, we had to deal with the acquisition of 70 to $80 per barrel in the current 100 dollar per barrel oil price environment pricing Thats right alright.

For example, we hedge the UN to acquisition at $70 to $80 per barrel and the current $100 per barrel oil price environment provides significant upside to our underwriting.

We maintain attractive long term exposure to future client prices with only 12% of our proved developed reserves hedged today.

We maintain attractive long-term exposure to future commodity prices with only 12 percent of our approved developed reserves hedge today.

However, we are more hedged today than our midsize E&P peers, but 60% hedged for the remainder of 2022, and we know that it makes our 2022 adjusted EBITDAX understated relative to peers I mean, the strength of our asset base.

However, we are more hedged today than our mid-sized EMP peers with 60% hedge for the remainder of 2022. And we know this makes our 2022 adjusted effects understated relative to peers and means the strength of our occupation.

Operator: However, we are more hedged today than our mid-sized E&P peers with 60% hedged for the remainder of 2022. We know this makes our 2022 adjusted EBITDA understated relative to peers and meets the strength of our asset base. Moving to our capital markets priorities. We continue to engage with the market to expand our followership, improve our float, and increase equity research coverage. We recognize that the current market positioning and awareness of Crescent is not yet at a level consistent with peers of similar size. This is a key piece of our strategic plan for 2022, and we are committed to an active approach to building awareness of our story and accessibility to invest in the stock through increased liquidity over time. In summary, we believe Crescent is well-positioned in today's market.

Brandi Kendall: However, we are more hedged today than our mid-sized E&P peers with 60% hedged for the remainder of 2022. We know this makes our 2022 adjusted EBITDA understated relative to peers and meets the strength of our asset base. Moving to our capital markets priorities. We continue to engage with the market to expand our followership, improve our float, and increase equity research coverage. We recognize that the current market positioning and awareness of Crescent is not yet at a level consistent with peers of similar size. This is a key piece of our strategic plan for 2022, and we are committed to an active approach to building awareness of our story and accessibility to invest in the stock through increased liquidity over time. In summary, we believe Crescent is well-positioned in today's market.

Yes.

Moving to our capital markets priorities, we continue to engage with the market to expand or followership approve our float increased equity research coverage.

Moving to our capital market's priorities, we continue to engage with the market to expand our followership, improve our flow, and increase equity research coverage. We recognize that the current market positioning and awareness of precedent is not yet at a level consistent with peers of similar size.

Neither the current market positioning and awareness of precedent not yet at a level consistent with peers of similar size.

It's the key piece of our strategic plan for 2022, and we are committed to an active approach to building awareness of our story.

This is a key piece of our strategic plan for 2022 and we are committed to an active approach to building awareness of our story and accessibility to invest in the stock through increased liquidity over time.

Its ability to invest in the stock through increased liquidity over time.

In summary, we believe crescent is well positioned in today's market.

In summary, we believe precedent is well-positioned in today's market. Your focus on generating cash flow, making disciplined investments, maintaining our strong balance sheet, and returning cash to investors. And with that, I'll turn the call back to David.

Our focus on generating cash flow, making disciplined investments maintaining our strong balance sheet and returning cash to investors and with that I'll turn the call back to David.

Operator: We are focused on generating cash flow, making disciplined investments, maintaining our strong balance sheet, and returning cash to investors. With that, I'll turn the call back to David.

Brandi Kendall: We are focused on generating cash flow, making disciplined investments, maintaining our strong balance sheet, and returning cash to investors. With that, I'll turn the call back to David.

Thanks Brady.

Thanks, Brandy. Before we take your questions, let me quickly summarize today's key highlight.

David Rockecharlie: Thanks, Brandi. Before we take your questions, let me quickly summarize today's key highlights. First, we have a proven strategy to add value. We focus on cash flow, risk, and returns. We've been successfully executing this strategy for the last decade, and the results are apparent in our Q1 earnings update. Second, we are a large-scale business with $1.35 billion of projected 2022 adjusted EBITDA at $100 oil and proved PV-10 of $8.2 billion at the 3/31 strip pricing. Again, this EBITDA guidance includes the Uinta assets for nine months of 2022. We are continuing to run 3 operated rigs across our deep inventory of low risk and high return drilling opportunities. Scale is incredibly important to be competitive in today's E&P industry. Lastly, we have a proven track record of adding value through complementary acquisitions.

Before we take your questions. Let me quickly summarize today's key highlights.

First we have a proven strategy to add value, we focus on cash flow.

First, we have a proven strategy to add value. We focus on cash flow.

Risk and returns.

We've been successfully executing this strategy for the last decade and the results are apparent in our first quarter earnings.

We've been successfully executing this strategy for the last decade and the results are apparent in our first quarter.

Second we are a large scale business with 1.35 billion of projected 2022, adjusted EBITDA at $100 oil.

And second, we are a large-scale business with $1.35 billion of projected 2022 adjusted EBITDA at $100 oil and proved PV10 of $8.2 billion at the $331 strip price.

Proved PV 10 of $8 2 billion at the $3 31 strip pricing.

Again this EBITDA guidance includes the Uinta assets for nine months of 2022.

Again, the Zeba.guidance includes the Uinta Assets for nine months of 2020.

We are continuing to run three operated rigs across our deep inventory of low risk and high return drilling opportunities scaled is incredibly important to be competitive in today's E&P upstream.

We are continuing to run three operated rigs across our deep inventory of low risk and high return drilling opportunities.

scale is incredibly important to be competitive in today's EMP industry.

Lastly, we have a proven track record of adding value through complementary access.

Lastly, we have a proven track record of adding value through complimentary acquisition.

Experienced and talented professionals across our entire business are able to identify accretive opportunities.

Experienced and talented professionals across our entire business are able to identify and create opportunities, operate safely, capture financial and operational synergies, and maintain our strong capital structure, as demonstrated once again this quarter with our acquisition of the event-to-pay sign.

David Rockecharlie: Experienced and talented professionals across our entire business are able to identify accretive opportunities, operate safely, capture financial and operational synergies, and maintain our strong capital structure, as demonstrated once again this quarter with our acquisition of the Uinta Basin assets. The accretive acquisition added substantial cash flow and a multi-year inventory of high return oil-weighted development. It increased our oil weighting and the percentage of production that is operated across our portfolio while maintaining a strong balance sheet. We were well-positioned to acquire this asset on an accelerated timeframe with our strong balance sheet and operating model that combines an investor mindset with deep operational expertise. We believe this transaction captures what Crescent is uniquely able to do with our disciplined cash flow-based operating model. Thanks again for joining us today and for your interest in our company. We will now be happy to take your questions.

Operating safely capture financial and operational synergies and maintain our strong capital structure demonstrated once again this quarter with our acquisition of <unk> assets.

Accretive acquisition added substantial cash flow in a multi year inventory of high return oil weighted development.

Decree of acquisition added substantial cash flow and a multi-year inventory of high-return oil-weighted developments.

It increased our oil weighting and the percentage of production that is operated across our portfolio.

is increased our oil weighting and the percentage of production that is operated across our portfolio on maintaining a strong balance.

Maintaining a strong balance sheet.

We were well positioned to acquire this asset on an accelerated timeframe with our strong balance sheet and operating model that combines investor mindset with deep operational expertise.

We were well-positioned to acquire this asset on an accelerated timeframe with our strong balance sheet and operating model that combines and best reminds us with deep operational expertise.

We believe this transaction captures what crescent is uniquely able to do.

David Rockecharlie: We believe this transaction captures what Crescent is uniquely able to do with our disciplined cash flow-based operating model. Thanks again for joining us today and for your interest in our company. We will now be happy to take your questions.

We believe this transaction captures what Crescent is uniquely able to do with our disciplined cash flow based offer.

With our disciplined cash flow based operating model.

Thanks, again for joining us today and for your interest in our company, we will now be happy to take your questions.

Thanks again for joining us today and for your interest in our company. We will now be happy to take questions.

Thank you if he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.

Neal Dingmann: Our first question is from Neal Dingmann with Truist Securities. Please proceed. Oh, Neal. David. Okay. That's what I thought. Maybe if I can get one last one, and Ben, maybe for you or Dan. Just could you talk how this would top the zero inflation? I mean, my thought is not too much.

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tell will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for a participant using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

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Our first question is from Neal Dingmann with Truth Securities. Please proceed.

Our first question is from Neal Dingman with Truist Securities, please proceed.

Operator: Our first question is from Neal Dingmann with Truist Securities. Please proceed.

Well David first of all my question is first maybe a little bit on op, specifically in the U S. I'm. Just wondering can you talk a little bit how integration is gone and then a few other things like that can you speak to early results. There. You know are you seeing I know you've got a couple of rigs so it might be too early but just your thoughts on how the wells.

Neal Dingmann: Oh, Neal. David. Okay. That's what I thought. Maybe if I can get one last one, and Ben, maybe for you or Dan. Just could you talk how this would top the zero inflation? I mean, my thought is not too much. I'm not too worried about just the pure inflation, but just, you know, can you talk about logistics, about the challenges of just making sure you can continue to get rigs, spreads, you know, drill pipe, casing, everything in the future? Just talk about, you know, you all lock things in. What's just your confidence as you continue to run your active program?

Well, maybe that's the first call. My question is first, maybe a little bit on ops, specifically on the UNTEM. I just want to keep talking a little bit how integration has gone. And then,

few other things on this unit. Can you speak to early results there? Are you seeing – I know you've got a couple of rigs, so it might be too early. Just your thoughts on how the wells are looking versus when you all were sort of modeling looking at the deal, maybe just any more color you could talk about. I just don't think the market's fully appreciate that, so I might be going to some more colors.

We are working versus when you all were sort of modeling looking at the deal maybe just any more color you can talk about it.

As I said I, just don't think the market. It's really a question that somebody can give us more color as we could.

Sure Hey, Neil It's Ben Good question as David mentioned in his opening remarks. The we're early into the integration six weeks and so what we'd say is just we're very pleased with the organization.

Sure. Hey Neil, it's Ben. Good question. As David mentioned in his opening remarks, you know, we're early into the integration, six weeks in, so what we'd say is just...

We're very pleased with the organization and the field that we've taken over and all of the communications we've had with really all the stakeholders across the asset. We're still, you know, getting in and diving deeper relative to underwriting. I think what I'd say is performance is as we expected in terms of underwriting.

Field that.

That we've taken over and all the communications, we've had with really all the stakeholders across the asset.

We're still getting in and diving deeper relative to underwriting what I'd say is performance is as we expected in terms of underwriting.

The organization brought on 12 wells during the quarter, it's early and those results, but they look good and I think what we're more excited about the opportunities that we're seeing that we thought just in terms of being able to get there and continue to program that he had and seeing opportunities for further value creation. So what I'd say is it's still early but kind of as expected and we're excited about the outlook.

The organization brought on 12 wells during the quarter. It's early in those results, but they look good, and I think what we're more excited about is the opportunities that we're seeing that we thought just in terms of being able to get there and continue the program that EP had and seeing opportunities for further value creation. So what I'd say is it's still early, but kind of as expected, and we're excited about the outcome.

Great to hear and then my my sudden Piper bedroom, Randy just on shareholder returns you got a nice solid base. There could you just talk about plans for that I mean, what what do you think how.

No, great to hear. Then my side of the pipe for David and Brandy just going, show them turns, you got a nice solid base there. But you just talked about plans for that. I mean, what do you think, you know, how much do you need to push that? What do you think is appropriate versus continuing to use cash for scale? I'm just wondering how you think about balancing those two going forward.

How much can you push that homeaway or what do you think is appropriate versus continued.

Continue to use cash for scale I'm, just wondering how you're thinking about balancing those two going forward.

Hey, Neil Good morning, it's Randy So I'd say no intention to increase our base dividend for the balance of the year and we plan to use incremental or that incremental free cash flow that we're generating in these higher prices to continue to pay down debt or selectively pursue.

It's brandy, so they know intention to increase our base dividend for the balance of the year and we plan to use incremental or the incremental free cash flow that we're generating at these higher prices to continue to pay down debt or selectively pursue acquisitions that expect to pay out at that 17 cents per share per quarter for the remainder of the year, which is a reminder with a 40% increase versus

Acquisitions are expected to pay out at that 17 cents per share per quarter for the remainder of the year, which just as a reminder, that was a 40% increase versus <unk>.

First is Q1.

Okay.

Okay, so I thought maybe if I can get one last one and then maybe figure it out just to talk obviously top user on all that inflation. I mean, my thought is not too much. I'm too not too worried about just the pure inflation, but just, you know, if you talk about logistics about the challenges of just making sure you can continue to get rigs, spreads, you know, drill pipe, AC and everything in the future, just talk about, you know, you all walk things in, what's just your confidence as you continue to run your interactive program.

And then maybe if I can get one last one and then maybe just.

Could you talk obviously about Google I know that's the equation I mean, my my thought is not so much on tier two that are too worried about just the pure replace them, but just you know you talked about logistics about the challenges just making sure you can continue to get rigs.

Neal Dingmann: I'm not too worried about just the pure inflation, but just, you know, can you talk about logistics, about the challenges of just making sure you can continue to get rigs, spreads, you know, drill pipe, casing, everything in the future? Just talk about, you know, you all lock things in. What's just your confidence as you continue to run your active program?

Fred you don't drill pipe casing everything in the future just talking about you all watch things and what this district confidence and you continue to run that and you're at the program.

Yeah, I hate to say it again and Randy can cover some of the numbers I think she hit on it but certainly experiencing.

Ben Conner: Yeah. Hey, it's Ben again. Brandi can cover, you know, some of the numbers. I think she hit on it, but certainly experiencing, you know, an evolving and tighter market overall. What I'd say is that with the 1 rig in the Eagle Ford and taking over a well-planned 2-rig development, you know, overall it's an operation that we feel really confident about. I think we highlighted and forecasted kind of the inflation generally that we expected within our guidance. Where I'd say we've seen a little bit more tightness in the market that we're managing through is really around pipe and sand.

Yeah, hey, it's been again, and Brandi can cover some of the numbers, I think she hit on it, but...

certainly experiencing an evolving and tighter market overall. What I'd say is that with the one rig and the Eagleford and taking over a well-planned two-rig development, overall, it's an operation that we feel really confident about. I think we highlighted and forecasted the inflation generally that we expected within our guidance. Where I'd say we've seen a little bit more tightness in the market that we're managing through is really around pipe and sand.

<unk> and tighter market overall, what I'd say is exactly what the one rig in the Eagle Ford and taking over a well planned two rig development you know overall, it's an operation that we feel really confident about and I think we highlighted and forecast it as kind of the inflation generally that we expected them within our guidance, where I'd say we have.

Seeing a little bit more tightness in the market that we're managing through is really around pipe in sand.

And so really just kind of managing ahead and through planning just making sure that that doesn't impact the logistics and the overall planning of the operation. So I'd say, we're managing through it and that it's well within our capital guidance, but I'd say those are the two heightened areas, where we're seeing a little bit more pressure month over month.

And so really just kind of managing ahead and through planning, just making sure that that doesn't impact, you know, the logistics and the overall planning of the operation. So I'd say we're managing through it and it's well within our capital guidance, but I'd say those are the two heightened areas where we're seeing a little bit more pressure month over month.

Ben Conner: Really just kind of managing ahead and through planning, just making sure that that doesn't impact, you know, the logistics and the overall planning of the operations. I'd say we're managing through it, and it's well within our capital guidance, but I'd say those are the two heightened areas where we're seeing a little bit more pressure, month-over-month.

Very good thank you.

Operator: Very good. Thank you. Our next question is from Joseph McKay with Wells Fargo. Please proceed.

Neal Dingmann: Very good. Thank you.

Yeah.

Our next question is from Joseph Mackay with Wells Fargo. Please proceed.

Our next question is from Joseph McKay with Wells Fargo. Please proceed.

Operator: Our next question is from Joseph McKay with Wells Fargo. Please proceed.

Hey, guys. Thanks for taking the time for my for my questions. I was just wondering if you could talk about kind of some of the underlying assumptions for the Uinta.

Hey guys, thanks for taking the time for my questions. I was just wondering if you could talk about kind of some of the underlying assumptions for the Uintah, just in terms of location count. Would you characterize them as conservative? And if so, what would offer some potential upside there in terms of location count or well performance moving forward?

Joseph McKay: Hey, guys. Thanks for taking the time for my questions. I was just wondering if you could talk about kinda some of the underlying assumptions for the Uinta, just in terms of location count. You know, would you characterize them as conservative? If so, what would offer some potential upside there, you know, in terms of location count or well performance moving forward?

In terms of location count how would you characterize them as conservative and if so what.

You know, what what would offer some potential upside there.

You know in terms of location counter well performance moving forward.

Yeah, Hey, it's been first thing I would start out is that we were able to buy this asset at a pretty interesting valuation based on the underlying production.

Yeah, hey, hey, it's been first thing I would start out is that we were able to buy this asset at a pretty interesting valuation based on the underlying production and it certainly

Ben Conner: Yeah. Hey, it's Ben. First thing I would start out is that we were able to buy this asset at a pretty interesting valuation based on the underlying production. It certainly came with some high confidence development locations, which we're actively developing today. We are excited about the prospects of a future resource, and you know, I think we talked about it when we announced the transaction. We see, you know, meaningful development opportunity across the asset base. You know, we're gonna be what I'd say is late followers on some of the exciting things that are happening in the basin, and we're focused really on Uteland development, which has been kind of the primary focus area across the basin, across multiple operators.

And it certainly came with some some high confidence development locations, which were actively developing today.

some high-competence development locations which we're actively developing today.

We are excited about the prospects of future resource.

We are excited about the prospects of future resource and, you know, I think we talked about it when we announced the transaction, we see, you know, meaningful development opportunity across the asset base.

I think we talked about it in when we announced the transaction we see a meaningful.

Development opportunity across the asset base.

But we're gonna be a what.

But, you know, we're going to be, what I'd say, is late followers on some of the exciting things that are happening in the basin and we're focused really on youth and beauty development.

What I'd say is late followers on some of the exciting things that are happening in the basin and we're focused really on you wouldn't be development, which has been kind of a primary focus area across the basin across multiple operators. So I think as we continue to look forward. We'll continue to focus on those areas that had been meaningfully derisked, but over time as other.

which has been kind of the primary focus area across the basin, across multiple operators. So I think as we continue to look forward, we'll continue to focus on those areas that have been meaningfully derisked. But over time, as other operators continue to do work and as we see results and continue to do the good work on our asset base, I think there is some exciting resource optionality that will continue to follow and track over time. So I think that's where you see it.

Ben Conner: I think as we, you know, continue to look forward, we'll continue to focus on those areas that have been meaningfully de-risked. Over time, as other operators continue to do work and as we see results and continue to, you know, do the good work on our asset base, I think there is, you know, some exciting resource optionality that, you know, we'll continue to follow and track over time. I think that's where you'd see it, you know, in our head at the current moment.

Operators continue to do work and as we see results and continued to do the good work on our asset base I think there is.

Some exciting resource optionality that we.

We will continue to follow and track over time, So I think that's where you'd see it.

And our head of at the current moment.

And I'll, maybe just add a point or so just with what you went to it does to the pro forma business that we hit on right. We're running one rig in the Eagle Ford and two rigs in and you went that.

Brandi Kendall: I'll maybe just add a point or so just with what Uinta does to the pro forma business. We hit on, right, we're running one rig in the Eagle Ford and two rigs in Uinta, that does result in fairly even capital spend cadence for the remainder of the year. From a production standpoint, we averaged 120 MBOE per day in Q1 on a standalone basis, ex Uinta and expect Q2 to be 15% to 20% higher, production-wise when you factor in Uinta. Just to give you context as to what the rest of the year kind of looks like for the pro forma business.

And I'll maybe just add a point or so just with what UNTA does to the pro-form of business. So we hit on running one rig and then you go forward in two rigs in UNTA that does result in fairly even capital spend cadence for the remainder of the year. From a production standpoint, we averaged 120 MVAs per day in Q1 on a standalone basis.

That does result in fairly even.

Even capital spend cadence for the remainder of the year from a production standpoint, we averaged 120 <unk> per day in Q1 on a standalone basis.

You went to an expected Q2 to be 15% to 20% higher.

You went to an expect Q2 to be 15% to 20% higher production-wise when you factor in Ewentif. So just to give you context as to what the rest of the year kind of looks like for the pro-form of the year.

Production wise when you factor in you went that it's getting your contacts as to what the rest of that the year kind of looks like for the pro forma business.

Gotcha. Thank you. That's very helpful. Then one more on the OIBDA real quick no. Some of your peers in basin of kind of explored using rail takeaway to get down to the Gulf Coast I know, it's kind of still early days for you guys in the asset, but do you have any thoughts around that.

Joseph McKay: Gotcha. Thank you. That's very helpful. Then one more on the Uinta real quick. You know, some of your peers in the Basin have kind of explored using rail as takeaway to get down to the Gulf Coast. I know it's kinda still early days for you guys in the asset, but do you have any thoughts around that, in terms, you know, on, in the longer term in terms of in-basin pricing or like expanded takeaway options?

Gotcha, thank you, that's very helpful. Then one more on the Uinta real quick. Some of your peers in Basin have kind of explored using RAIL as takeaway to get down to the Gulf Coast. I know it's kind of still early days for you guys in the asset, but do you have any thoughts around that in the longer term, in terms of in Basin pricing or expanded takeaway options?

You know on the longer term in terms of our in basin pricing or expanded takeaway options.

Yeah to your point I think we're still kind of early days in terms of becoming experts, but rail capacity has meaningfully grown in the basin and Gulf Coast refiners really like the greatest crude there. So I think that's a place where you'll continue to see growing takeaway capacity or our volumes specifically, we do have contracted and for the most part.

Yeah, to your point, I think we're still kind of early days in terms of becoming experts, but rail capacity has meaningfully grown in the basin and Gulf Coast refiners really like the grade of crude there. So I think that's a place where you'll continue to see growing takeaway capacity. Our volume specifically, we do have contracted and for the most part, you know, are contracted to go to the local refinery. So we feel good about the visibility there, but the optionality in the basin continues to grow as people continue to invest.

Ben Conner: Yeah. To your point, I think we're still kind of early days in terms of becoming experts, but rail capacity has meaningfully grown in the basin, and Gulf Coast refiners really like the grade of crude there. I think that's a place where you'll continue to see growing takeaway capacity. Our volume specifically, we do have contracted and for the most part, you know, are contracted to go to the local refineries, so we feel good about the visibility there, but the optionality in the basin continues to grow as people continue to invest in takeaway capacity.

Art you know are contracted to go to the local refineries. So we feel good about the visibility there, but the optionality in the base and continues to grow as people continue to invest in and takeaway capacity.

And then maybe just specifically on on debt, so and the broader business, we had really strong for the quarter and they were high nineties, we do expect those to drop.

And then maybe just specifically on diffs, so as a broader business, we had really strong diffs for the quarter. They were high in 90s. We do expect those to drop to lower 90s pro forma for the thing you went to.

Brandi Kendall: Maybe just specifically on diffs. As a broader business, we had really strong diffs for the quarter. They were high 90s. We do expect those to drop to lower 90s pro forma for the Uinta starting in Q2.

So lower 90 of pro forma for the D. Do you want to add.

Starting in Q2.

Okay.

Gotcha. Thank you very much that's helpful. That's all for me Thanks, Joe.

Gotcha. Thank you very much. That's helpful. That's all from me.

Joseph McKay: Gotcha. Thank you very much. That's helpful. That's all for me.

Brandi Kendall: Thanks, Joe.

At this time, we have no more questions in queue. So I'd like to turn the conference back over to management for closing comments.

At this time, we have no more questions in queue, so I would like to turn the conference back over to management for closing comments.

Operator: At this time, we have no more questions in queue, so I would like to turn the conference back over to management for closing comments.

Great. Thank you all again for joining us this quarter and supporting the company. We appreciate it and we look forward to keeping you all are well informed and speaking again next quarter. Thank you.

Great. Thank you all again for joining this quarter and supporting the company. We appreciate it and we look forward to keeping you all well informed and speaking again next quarter. Thank you.

David Rockecharlie: Great. Thank you all again for joining this quarter and supporting the company. We appreciate it, and we look forward to keeping you all well informed and speaking again next quarter. Thank you.

Thank you. This does conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.

Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

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Q1 2022 Crescent Energy Co Earnings Call

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