Texas-based exploration and production (E&P) firms Independence Energy LLC and Contango Oil & Gas Co. have created Crescent Energy Co. after completing an all-stock transaction.

Contango

Houston-based Crescent, whose assets are across the Lower 48, had pro forma production of about 119,000 boe/d during 3Q2021. The Independence portfolio spanned the Eagle Ford Shale, Rockies, Permian Basin and Midcontinent, while Contango had assets in the Midcontinent, Permian, Rockies and in the Gulf of Mexico.

“We believe the current market environment provides opportunity to significantly grow Crescent and create meaningful shareholder value by executing our differentiated strategy focused on cash flow, risk management and investment returns,” said Crescent CEO David Rockecharlie.

The company plans to prioritize “cash flow through financial discipline and risk management.” This would also include acquiring and developing a portfolio of low-risk assets.

Crescent is to be managed by global investment firm KKR & Co. Inc. through its Energy Real Assets Platform. 

When the merger was announced in June, the  equity market capitalization was valued at about $4.8 billion, with an enterprise value of about $5.7 billion. Contango projected that the new E&P would have unlevered free cash flow of $375-400 million in 2022.

“We appreciate the strong support for this transaction from the Contango shareholders, which we view as further affirmation of the significant benefits it will deliver,” said Crescent Chairman John Goff. “The combined expertise of the Contango and KKR teams, along with a much greater scale, affords us the ability to continue to take advantage of industry consolidation.”

Crescent began trading Wednesday on the New York Stock Exchange under the ticker symbol “CRGY.” Contango is no longer listed for trading.