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Crescent Energy Boosts Portfolio with Eagle Ford Acquisition: Expands Non-Operated Assets

Big announcement! Crescent Energy is set to bolster its inventory in the play by acquiring operated and working interests from Mesquite Energy.

Crescent Energy Co. seals a $600 million cash deal to acquire assets in the Eagle Ford Shale from Mesquite Energy Inc. (formerly Sanchez Energy).

Crescent has announced that their definitive purchase agreement with Mesquite Energy grants them operatorship and working interests, leading to a substantial expansion of Crescent's presence in the Eagle Ford region. This deal builds upon the shale play's impressive streak of successful mergers and acquisitions, which began with a strong first quarter. The assets acquired from Mesquite Energy encompass approximately 75,000 contiguous net acres, predominantly situated in Dimmit and Webb counties, Texas.

Growth and Operational Control in Eagle Ford

The acquired asset brings a large, proven inventory with significant growth potential, effectively doubling Crescent's operated Eagle Ford inventory. Crescent sees additional upside in the Austin Chalk and Upper Eagle Ford formations.
Crescent is acquiring over $700 million of proven developed producing PV-10 value, reflecting the asset's financial value and stability.
The transaction is expected to immediately enhance operating cash flow, free cash flow, and net asset value, showcasing the positive financial benefits for Crescent.
Post-transaction, Crescent will significantly increase its non-operated interest from approximately 15% to around 50% in the acquired assets. Crescent will operate approximately 90% of its Eagle Ford position, consolidating operational control and establishing a prominent presence in the region.
The acquisition expands Crescent's base of predictable cash flow, with the acquired assets currently producing an average of about 20,000 barrels of oil equivalent per day (boe/d), mostly consisting of liquids (70%). The asset's 12-month decline rate of 17% provides stability and consistent production levels.

“As operator, we look forward to engaging with all stakeholders to improve performance and maximize value across this high-quality asset base,” David Rockecharlie said.

According to Crescent CEO, this acquisition solidifies the company's position as a leading consolidator in the Eagle Ford region. He stated that it aligns with their long-standing strategy of low-risk acquisitions and exploitation.

Having been an active non-operated owner of these assets for the past six years, they are well acquainted with them and foresee significant potential for growth by increasing their scale and assuming operational control. As the operator, they are eager to collaborate with all stakeholders to enhance performance and maximize the value of this exceptional asset base.

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Energy Giant Baytex Makes a Bold Move: Snaps Up Ranger Oil in $2.5 Billion Deal

Baytex Energy Group has announced that it will acquire Eagle Ford exploration and production company, Ranger Oil, for approximately $2.5 billion in cash and stock, which includes taking over the company's existing debt. Upon the successful closure of the acquisition, Baytex will have a controlling stake of approximately 63% in the newly merged company, leaving Ranger shareholders with around 37%. This significant move is in line with a trend of substantial mergers and acquisitions in the Eagle Ford area, with Marathon Oil, Devon Energy, and Chesapeake Energy among the companies involved in recent transactions.

Skye MS LLC purchased a package deal from Black Bear, which included over 120 miles of natural gas pipelines and eight active metered locations. Black Bear Transmission LLC, based in Houston, successfully finalized the sale of gas gathering assets owned by BBT Mississippi LLC (BBT MS) to Skye MS LLC of Columbia, Mississippi. The specific amount of the transaction remains undisclosed. BBT MS is the proud owner and operator of a fee-based, natural gas transmission system that efficiently supplies gas to utility, industrial, and power generation customers. It facilitates the connection of wellhead production in Mississippi to regional long-haul pipelines.

The United States government has announced a significant investment of $7.3 billion from the 2022 Inflation Reduction Act (IRA) to support clean energy initiatives led by rural electric cooperatives. These projects aim to reduce energy costs, enhance reliability, and promote sustainability for rural communities, where energy costs tend to be higher than in urban areas. This investment marks a substantial effort toward decarbonizing rural America while supporting job creation and infrastructure improvements.

The U.S. oil and natural gas rig count experienced a slight decline, falling by four to a total of 633 rigs for the week ending August 21. Despite this modest drop, industry analysts have noted a surprising resilience in both oil supply and natural gas prices as the year progresses, suggesting that the market may be more robust than previously anticipated.

Investors remain strongly bearish on petroleum prices, even as confidence grows that the U.S. Federal Reserve will cut interest rates to boost consumer and business spending. Last week, fund managers returned to selling oil futures and options, as the brief rally from the previous week quickly lost steam and negative sentiment took hold once again. Hedge funds and other money managers offloaded 48 million barrels across the six major futures and options contracts in the week ending August 20. This marks the sixth time in seven weeks that funds have been sellers, reducing their positions by a staggering 346 million barrels since early July, based on data from exchanges and regulators.

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