Crescent Energy (CRGY) Valuation Update - Dec 8

[dan_s]

CRGY closed at $14.20 on December 6th.

On December 3rd the Company announced a significant acquisition of assets in the South Texas Eagle Ford that are producing ~20,000 Boepd of current production (~70% liquids) from Ridgemar Energy. To get an idea of what the Company will be acquiring in Q1 2025 go to the link below and go through their December 3rd slides: https://crescentenergyco.com/investors/events-presentations/

My current valuation stays at $23/share, with upside to that if their 2025 guidance confirms my model assumptions. I have increased my operating cash flow "cushion" due to the unknown of when the acquisition will close. In addition to current production of ~20,000 Boepd, that should increase the Company's production to ~285,000 Boepd in 2025, Crescent Energy adds ~100 net low-risk / high-return horizontal drilling locations in the core of the Eagle Ford.

On December 5th four highly respected energy sector analysts submitted updated price target to TipRanks.
> $22 by Raymond James
> $21 by Wells Fargo
> $18 by Truist Financial
> $16 by JP Morgan
> $19.25 average of these 4 updated price targets

Crescent Energy is the 3rd largest oil producer in the South Texas Eagle Ford / Austion Chalk play. It is important to remember that South Texas has ample pipeline takeaway capacity, so the Company gets much better natural gas prices than the Permian Basin companies. If Crescent Point's realized natural gas price averages $3.00/mcf in 2025 they should generate over $7.00/share of operating cash flow next year. TipRanks' CFPS forecast is $7.08 for 2025.