What’s new
- Crescent Energy (NYSE: CRGY) signed a definitive agreement to acquire Vital Energy (NYSE: VTLE) in an all-stock deal valued at ~$3.1B (incl. debt), creating a top-10 independent with a clear path toward an investment-grade profile.
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Headline terms
- Consideration: 1.9062 CRGY shares per VTLE share.
- Ownership: ~77% CRGY / ~23% VTLE pro forma.
- Target close: Q4’25, subject to customary approvals.
Strategic rationale (at a glance)
- Scaled, multi-basin footprint across Permian, Eagle Ford, Uinta with ~1 million net acres and flexible capital allocation.
- Business plan emphasizes lower activity / higher FCF, with a $1B non-core divestiture pipeline to sharpen focus and de-risk.
- Establishes Crescent as a top-10 independent with stronger relevance to public-market investors.
Pro forma snapshot (2025E)
- EV: ~$9.1B
- Production: ~397 Mboe/d (~64% liquids)
- EBITDA: ~$3.4B
- Leverage at close: ~1.5×; liquidity ~ $1.5B expected
- Reserves (PV-10): PD ~$9.7B, 1P ~$12.5B
- Inventory: ~1,600 low-risk locations (total ~3,100)
Synergies, accretion & returns
- $90–100MM immediate annual cost synergies (corp OH, financing, interest), plus identified ops efficiencies; 5-yr PV-10 synergies ~ $350MM.
- Management guides to > $4B combined FCF over five years at strip; playbook is to high-grade/devise lower reinvestment for stronger per-share metrics.
- Capital returns unchanged: fixed $0.12/sh quarterly dividend and $150MM buyback (authorization in place).
Why it matters (operator & basin read-through)
- Permian foothold grows while Crescent keeps optionality across Eagle Ford/Uinta; expect activity rationalization on legacy VTLE acreage near-term as CRGY prioritizes FCF and high-graded locations.
- Balance sheet and scale improvements support lower cost of capital and continued M&A-driven roll-up in surrounding opportunity sets (>$60B identified).
