Crescent Energy Co (NYSE:CRGY), with a market capitalization of $3 billion and total debt of $3.23 billion, has entered into an agreement that revises the terms of its existing credit facility, the company disclosed in a recent SEC filing.
The amendment, made by Crescent Energy Finance LLC, a wholly-owned subsidiary, and its lenders, aims to enhance the financial flexibility of the Houston-based crude petroleum and natural gas company. According to InvestingPro analysis, the company operates with a significant debt burden, making this amendment particularly significant for its financial structure.
The Eleventh Amendment to the Credit Agreement, dated December 17, 2024, introduces a reduction in the applicable margin for loans, which will now be priced at SOFR plus 2.00% to 3.00% or an adjusted base rate plus 1.00% to 2.00%, contingent on the credit facility's utilization rate. The amendment also eliminates the credit spread adjustment.
A significant provision of the amendment permits Crescent Energy to incur up to $500 million of additional indebtedness from December 17, 2024, until the next scheduled borrowing base redetermination on April 1, 2025. This additional debt will be exempt from the typical borrowing base reduction requirement, provided it does not surpass the $500 million cap.
Despite these changes, the company's borrowing base remains at $2.6 billion, with elected commitments holding steady at $2 billion. This stability in the borrowing base, combined with the company's $2.71 billion in revenue and $1.47 billion in EBITDA, reflects its market position. InvestingPro data reveals more insights about Crescent Energy's financial health, with comprehensive analysis available in the Pro Research Report, part of the extensive coverage of over 1,400 US stocks.
This financial maneuver demonstrates Crescent Energy's strategic approach to managing its capital structure and debt profile, with current metrics showing a debt-to-equity ratio of 1.13 and a current ratio of 0.93. The amendment could potentially lower borrowing costs and provide a cushion for future investments or debt management strategies. For deeper insights into Crescent Energy's valuation and financial metrics, visit InvestingPro, where you'll find detailed analysis and additional ProTips about the company's performance and outlook.
In other recent news, Crescent Energy has been making significant strides in its financial performance and strategic growth. The company announced a substantial acquisition of Ridgemar Energy for $905 million, which is expected to add approximately 20,000 barrels of oil equivalent per day to Crescent's production. To fund this acquisition, Crescent initiated a public offering of approximately 18 million shares and issued $300 million in senior notes, according to Raymond (NS:RYMD) James and Truist Securities.
As part of these recent developments, Crescent also raised its target to $22 and received a Strong Buy rating from Raymond James, while Truist Securities maintained a Buy rating and increased the stock's price target to $18. The acquisition is projected to be approximately 10% accretive to Crescent's free cash flow figures for both 2025 and 2026, indicating a potential increase in the company's financial performance.
In addition, Crescent reported record production levels of 219,000 barrels of oil equivalent per day in the third quarter of 2024, surpassing previous expectations. The company revised its production outlook upward for the third consecutive quarter, with anticipated capital expenditures ranging from $425 million to $455 million for the remainder of the year. Crescent reported an adjusted EBITDA of approximately $430 million and a levered free cash flow of $160 million.
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