Crescent Power Co. has accomplished the acquisition of Ridgemar (Eagle Ford) LLC for an upfront worth of $905 million, rising its footprint in Texas’ Eagle Ford shale.
“We’re happy to finish this accretive acquisition, which additional scales our core Eagle Ford place as we additionally welcome many gifted new members to the Crescent Power group”, chief govt David Rockecharlie mentioned in an organization assertion.
“This acquisition demonstrates our disciplined method to creating shareholder worth by combining our investing and operational experience to amass and effectively combine high-quality property whereas sustaining a robust monetary profile.
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“These property improve our oil-weighted manufacturing and lengthen our low-risk stock, reinforcing our means to ship sustained money circulate and returns.
“We stay centered on executing our technique of worthwhile development and advancing our investment-grade ambitions”.
Asserting the settlement December 3, 2024, Houston, Texas-based Crescent mentioned then the transaction with Ridgemar “builds upon its important acquisition exercise within the Eagle Ford over the previous 18 months, totaling greater than $4 billion of accretive M&A [mergers and acquisitions]”.
The acquisition offers Crescent “roughly 20 Mboe/d [thousand barrels of oil equivalent a day] of high-margin, oil-weighted manufacturing and ~140 properly understood, high-return places that instantly compete for capital and lengthen Crescent’s low-risk stock life”, Crescent mentioned.
It added, “The transaction, valued at 2.7x EBITDA [earnings before interests, taxes, depreciation and amortization], is accretive to working money circulate, levered free money circulate and internet asset worth, with sturdy anticipated cash-on-cash returns”.
The bottom upfront consideration consists of $830 million in money and over 5.45 million shares from Crescent’s frequent inventory.
Moreover Crescent owes Ridgemar, additionally primarily based in Houston, an oil price-contingent consideration of as much as $170 million. Crescent pays $15 million per quarter in 2026 and $12.5 million per quarter in 2027 if the common quarterly West Texas Intermediate (WTI) worth is greater than or equal to $70 a barrel. If the common quarterly WTI worth is larger than or equal to $75 per barrel, Crescent pays $15 million per quarter in 2026, in response to the December announcement.
Crescent issued senior notes with an combination principal quantity of $400 million to assist pay for the money portion of the transaction, in response to a regulatory disclosure December 13, 2024.
The brand new issuance, involving noteholders in a earlier $700 million bond sale, bears an annual curiosity of seven.625 % and a maturity date of 2032 – the identical phrases because the earlier providing.
Crescent had $136.15 million in money and money equivalents on the finish of the third quarter of 2024, in response to its newest outcomes. Present property totaled $864.71 million, whereas Crescent owed $929.75 million in present liabilities on the finish of the interval.
Jefferies LLC served as monetary advisor to Crescent within the transaction with Ridgemar, whereas Kirkland & Ellis LLP served as authorized counsel.
Ridgemar’s monetary advisor was RBC Capital Markets LLC. Power and Vinson & Elkins LLP served as its authorized counsel.
Moreover the Eagle Ford, Crescent additionally operates within the Uinta Basin in Utah.
Crescent produced 219,000 boed on common within the third quarter of 2024, in response to its newest outcomes. That consisted of 39 % oil and 58 % liquids.
To contact the creator, e-mail jov.onsat@rigzone.com
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