Crescent Energy Co

Previous wording

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide the reader of the financial statements with a narrative from the perspective of management on the financial condition, results of operations, liquidity and certain other factors that may affect the Company's operating results. The following discussion and analysis should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 ("Annual Report"), as well as our unaudited condensed consolidated financial statements for the three months ended March 31, 2025 and 2024. The following information updates the discussion of our financial condition provided in our previous filings, and analyzes the changes in the results of operations between the three months ended March 31, 2025 and 2024. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, commodity price volatility, capital requirements and uncertainty of obtaining additional funding on terms acceptable to the Company, realized oil, natural gas and NGL prices, the timing and amount of future production of oil, natural gas and NGLs, shortages of equipment, supplies, services and qualified personnel, as well as those factors discussed below and elsewhere in this Quarterly Report and in our Annual Report, particularly under “Risk Factors” and “Cautionary Statement Regarding Forward Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. Unless otherwise stated or the context otherwise indicates, all references to “we,” “us,” “our,” "Crescent" and the “Company” or similar expressions refer to Crescent Energy Company and its subsidiaries.

Current wording

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide the reader of the financial statements with a narrative from the perspective of management on the financial condition, results of operations, liquidity and certain other factors that may affect the Company's operating results. The following discussion and analysis should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 ("Annual Report"), our Quarterly Report on Form 10-Q for the period ended March 31, 2025, as well as our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024. The following information updates the discussion of our financial condition provided in our previous filings, and analyzes the changes in the results of operations between the three and six months ended June 30, 2025 and 2024. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, commodity price volatility, capital requirements and uncertainty of obtaining additional funding on terms acceptable to the Company, realized oil, natural gas and NGL prices, the timing and amount of future production of oil, natural gas and NGLs, shortages of equipment, supplies, services and qualified personnel, as well as those factors discussed below and elsewhere in this Quarterly Report and in our Annual Report, particularly under “Risk Factors” and “Cautionary Statement Regarding Forward Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. Unless otherwise stated or the context otherwise indicates, all references to “we,” “us,” “our,” "Crescent" and the “Company” or similar expressions refer to Crescent Energy Company and its subsidiaries.

Previous wording

During the last several years, prices of crude oil, natural gas and NGLs have experienced periodic downturns and sustained volatility, impacted by geopolitical events, such as Russia’s invasion of Ukraine and the related sanctions imposed on Russia, Hamas' attack against Israel and the ensuing conflict and escalation of tensions in the Middle East, supply chain constraints, elevated interest rates, U.S. international trade and tariff policy developments and responses thereto and costs of capital and political and regulatory uncertainties. Furthermore, the United States has experienced, and may continue to experience, a significant inflationary environment, which began in 2022 that, along with international geopolitical risks and market responses to the announcement of certain tariff policies by the Trump Administration, has contributed to concerns of a potential recession in the United States in 2025 that has created further volatility. In April 2025, OPEC announced an agreement to phase out oil output cuts by increasing 411,000 barrels per day, starting in May 2025. The actions of OPEC with respect to oil production levels and announcements of potential changes in such levels may result in further volatility in commodity prices and the oil and natural gas industry generally. Such volatility may lead to a more difficult investing and planning environment for us and our customers. While we use derivative instruments to partially mitigate the impact of commodity price volatility, our revenues and operating results depend significantly upon the prevailing prices for oil and natural gas.

Current wording

During the last several years, prices of crude oil, natural gas and NGLs have experienced periodic downturns and sustained volatility, impacted by geopolitical events, such as Russia’s invasion of Ukraine and the related sanctions imposed on Russia, Hamas' attack against Israel and the ensuing conflict and escalation of tensions in the Middle East, including the conflict with Iran, supply chain constraints, elevated interest rates, U.S. international trade and tariff policy developments and responses thereto and costs of capital and political and regulatory uncertainties. Furthermore, the United States has experienced, and may continue to experience, a significant inflationary environment, which began in 2022 that, along with international geopolitical risks and market responses to the announcement of certain tariff policies by the Trump Administration, has contributed to concerns of a potential recession in the United States in 2025 that has created further volatility. OPEC has announced that it is phasing out oil output cuts by increasing 411,000 barrels per day, each month from May to July 2025 and then increasing to 548,000 barrels per day in August 2025. The actions of OPEC with respect to oil production levels and announcements of potential changes in such levels may result in further volatility in commodity prices and the oil and natural gas industry generally. Such volatility may lead to a more difficult investing and planning environment for us and our customers. While we use derivative instruments to partially mitigate the impact of commodity price volatility, our revenues and operating results depend significantly upon the prevailing prices for oil and natural gas.

Previous wording

During the three months ended March 31, 2025, we recorded an impairment expense of $45.6 million related to oil and natural gas properties. See NOTE 5 – Fair Value Measurements to the unaudited financial statements included in Part I. Item 1. Financial Statements. A further decline of future commodity prices or a decrease in estimates of oil and natural gas reserves for these assets would likely result in an impairment charge. The actual amount of impairment incurred, if any, for these properties will depend on a variety of factors including, but not limited to, subsequent forward price curve changes, weighted-average cost of capital, operating cost estimates and future capital expenditures estimates. An estimate of the sensitivity to changes in assumptions in our fair value calculations is not practicable, given the numerous assumptions (e.g. reserves, pace and timing of development plans, commodity prices, capital expenditures, operating costs, drilling and development costs, inflation and discount rates) that can materially affect our estimates. Unfavorable adjustments to some of the above listed assumptions would likely be offset by favorable adjustments in other assumptions. For example, the impact of sustained reduced commodity prices would likely be partially offset by lower costs.

Current wording

During the three and six months ended June 30, 2025, we recorded impairment expense of $3.0 million and $48.6 million, respectively, related to oil and natural gas properties. See NOTE 5 – Fair Value Measurements to the unaudited financial statements included in Part I. Item 1. Financial Statements. Certain of our conventional proved oil and natural gas properties in Oklahoma, which have a carrying value of $262.0 million, have limited cushion between their carrying value and estimated undiscounted cash flows at the current forward commodity price curve as of June 30, 2025. A further decline of future commodity prices or a decrease in estimates of oil and natural gas reserves for these assets would likely result in an impairment charge. The actual amount of impairment incurred, if any, for these properties will depend on a variety of factors including, but not limited to, subsequent forward price curve changes, weighted-average cost of capital, operating cost estimates and future capital expenditures estimates. An estimate of the sensitivity to changes in assumptions in our fair value calculations is not practicable, given the numerous assumptions (e.g. reserves, pace and timing of development plans, commodity prices, capital expenditures, operating costs, drilling and development costs, inflation and discount rates) that can materially affect our estimates. Unfavorable adjustments to some of the above listed assumptions would likely be offset by favorable adjustments in other assumptions. For example, the impact of sustained reduced commodity prices would likely be partially offset by lower costs.

Previous wording

Due to the cyclical nature of the oil and gas industry, fluctuating demand for oilfield goods and services can put pressure on the pricing structure within our industry. As commodity prices rise, the cost of oilfield goods and services generally also increase, while during periods of commodity price declines, oilfield costs typically lag and do not adjust downward as fast as oil prices do. The U.S. inflation rate began increasing in 2021, peaked in the middle of 2022 and began to gradually decline in the second half of 2022 and into 2023 and has remained elevated but relatively stable through 2024 and the first quarter of 2025. Inflationary pressures have resulted in and may result in additional increases to the costs of our oilfield goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise. Recent tariffs and any further tariffs may also increase our operating costs. Sustained levels of high inflation have likewise caused the U.S. Federal Reserve and other central banks to increase interest rates in 2022, continuing through 2023. The U.S. Federal Reserve made cuts to benchmark interest rates in 2024 and it is currently anticipated that it will make additional cuts; however, there is no guarantee that such additional cuts will occur. Although the financial health of the oil and gas industry has shown improvement as compared to prior periods, to the extent elevated inflation remains, we may experience further cost increases for our operations, including oilfield services, labor costs and equipment. Higher oil and natural gas prices may cause the costs of materials and services to continue to rise. We cannot predict any future trends in the rate of inflation and a significant increase in inflation, to the extent we are unable to recover higher costs through higher oil and natural gas prices and revenues, would negatively impact our business, financial condition and results of operations. See Part I, Item 1A. Risk Factors—"Risks related to the oil and natural gas industry—Continuing or worsening inflationary issues and associated changes in monetary policy have resulted in and may result in additional increases to the cost of our goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise" in our Annual Report.

Current wording

Due to the cyclical nature of the oil and gas industry, fluctuating demand for oilfield goods and services can put pressure on the pricing structure within our industry. As commodity prices rise, the cost of oilfield goods and services generally also increase, while during periods of commodity price declines, oilfield costs typically lag and do not adjust downward as fast as oil prices do. The U.S. inflation rate has remained relatively stable through 2024 and 2025, after an extended period of elevation. Inflationary pressures have resulted in and may result in additional increases to the costs of our oilfield goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise. Recently announced tariffs and any further tariffs may also increase our operating costs. Sustained levels of inflation and certain other market pressures have caused the U.S. Federal Reserve and other central banks to increase interest rates in 2022 and 2023. Although the U.S. Federal Reserve made cuts to benchmark interest rates in 2024, there is no guarantee that additional cuts will occur. Although the financial health of the oil and gas industry has shown improvement as compared to prior periods, to the extent elevated interest rates and inflation remain, we may experience further cost increases for our operations, including oilfield services, labor costs and equipment. Higher oil and natural gas prices may cause the costs of materials and services to continue to rise. We cannot predict any future trends in the rate of inflation, any subsequent monetary policy changes, and a significant increase in inflation, to the extent we are unable to recover higher costs through higher oil and natural gas prices and revenues, would negatively impact our business, financial condition and results of operations. See Part I, Item 1A. Risk Factors—"Risks related to the oil and natural gas industry—Inflationary issues and associated changes in monetary policy have previously resulted in and such issues, as well as certain proposed tariffs, may result in additional increases to the cost of our goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise" in our Annual Report.

Previous wording

In March 2024, we issued $700.0 million aggregate principal amount of 7.625% senior notes due 2032 (the "2032 Notes") at par (the “March 2024 Offering”). In December 2024, we issued an additional $400.0 million, aggregate principal amount of 2032 Notes at 100.250% of par (the "December 2024 Offering," and together with the March 2024 Offering, the "2032 Notes Offerings"). The aggregate proceeds from the 2032 Notes Offering were approximately $1,080.7 million, after deducting the initial purchasers' discount and offering expenses. We used the net proceeds to finance the majority of the consideration of the Tender Offer and Redemption (each term as defined below) of all of the aggregate principal amount of the 2026 Notes outstanding for $714.8 million after including extinguishment costs, as discussed further below. We used the proceeds from the December 2024 Offering to repay the amounts outstanding under our Revolving Credit Facility.

Current wording

In July 2025, we issued $600.0 million aggregate principal amount of 8.375% senior notes due 2034 (the "2034 Notes") at par (the “2034 Notes Offering”). The 2034 Notes bear interest at an annual rate of 8.375%, which is payable on January 15 and July 15 of each year, and mature on January 15, 2034. The proceeds from the 2034 Notes Offering were approximately $588.1 million after deducting the initial purchasers' discount and offering expenses. We used the net proceeds to finance the consideration of the Tender Offer and to repay a portion of our outstanding balance under our Revolving Credit Facility.

Previous wording

Our Board of Directors authorized a stock repurchase program on March 4, 2024 with an approved limit of $150.0 million and a two-year term. Such repurchases may be made from time to time in the open market, in privately negotiated transactions, through purchases made in accordance with the Rule 10b5-1 of the Exchange Act or by such other means as will comply with applicable state and federal securities laws. The timing of any repurchases under the stock repurchase program will depend on market conditions, contractual limitations and other considerations. The program may be extended, modified, suspended or discontinued at any time, and does not obligate us to repurchase any dollar amount or number of securities. During 2024, we utilized $30.5 million to repurchase a combination of Class A Common Stock and OpCo units. During the three months ended March 31, 2025, we repurchased 0.5 million shares of our Class A Common Stock for $5.3 million, at an average price of $10.58 per share. During April 2025, we repurchased 2.9 million shares of our Class A Common Stock for $23.1 million, at an average price of $7.87 per share. After share repurchases in early April 2025, the remaining amount under the authorized plan is approximately $91.0 million as of April 30, 2025.

Current wording

Our Board of Directors authorized a stock repurchase program on March 4, 2024 with an approved limit of $150.0 million and a two-year term. Such repurchases may be made from time to time in the open market, in privately negotiated transactions, through purchases made in accordance with the Rule 10b5-1 of the Exchange Act or by such other means as will comply with applicable state and federal securities laws. The timing of any repurchases under the stock repurchase program will depend on market conditions, contractual limitations and other considerations. The program may be extended, modified, suspended or discontinued at any time, and does not obligate us to repurchase any dollar amount or number of securities. During 2024, we utilized $30.5 million to repurchase a combination of Class A Common Stock and OpCo Units. During the three and six months ended June 30, 2025, we repurchased 3.6 million and 4.1 million shares of our Class A Common Stock for $28.2 million and $33.5 million, at an average price of $7.88 and $8.21 per share, respectively. When combining the Class A Repurchases with the 2024 Equity Transactions, the remaining amount under the authorized plan is approximately $86.0 million as of June 30, 2025.

Previous wording

On December 3, 2024, we entered into the Membership Interest Purchase Agreement (the “Ridgemar Acquisition Agreement”) pursuant to which we acquired all of the outstanding equity interests in Ridgemar (Eagle Ford) LLC (“Ridgemar”). In connection with the closing of the Ridgemar Acquisition in the first quarter of 2025, we paid $812.5 million in cash and issued 5.5 million shares of our Class A Common Stock to former Ridgemar owners, before any customary post closing adjustments (the "Ridgemar Acquisition"). In addition, up to $170.0 million in contingent earn-out consideration may be paid in fiscal years 2026 and 2027 if quarterly NYMEX WTI prices of crude oil are above certain thresholds in 2026 and 2027 (collectively, the "Ridgemar Contingent Consideration”). We accounted for the Ridgemar Acquisition as an asset acquisition.

Current wording

On December 3, 2024, we entered into the Membership Interest Purchase Agreement (the “Ridgemar Acquisition Agreement”) pursuant to which we acquired all of the outstanding equity interests in Ridgemar (Eagle Ford) LLC (“Ridgemar”). On January 31, 2025, we acquired all of the outstanding equity interests in Ridgemar (Eagle Ford) LLC ("Ridgemar") for $807.2 million in cash and 5.5 million shares of our Class A Common Stock issued to former Ridgemar owners (the "Ridgemar Acquisition"). The Ridgemar Acquisition consideration transferred is inclusive of customary post closing adjustments of $14.1 million, which are recorded in Accounts receivable, net on the condensed consolidated balance sheets as of June 30, 2025. In addition, up to $170.0 million in contingent earn-out consideration may be paid in fiscal years 2026 and 2027 if quarterly NYMEX WTI prices of crude oil are above certain thresholds in 2026 and 2027 (collectively, the "Ridgemar Contingent Consideration”). We accounted for the Ridgemar Acquisition as an asset acquisition.

Previous wording

On July 30, 2024, we consummated the SilverBow Merger. See “—NOTE 3 – Acquisitions and Divestitures. Immediately following the SilverBow Merger, Crescent Energy Company completed a series of internal transactions following which the assets of SilverBow Resources, Inc. ("SilverBow") and its subsidiary became held by subsidiaries of Crescent Energy Finance LLC. In connection with the SilverBow Merger, Crescent issued 51.6 million shares of Class A Common Stock and paid $382.4 million in cash to former SilverBow shareholders, including amounts payable in respect of outstanding SilverBow equity awards. In connection with the closing of the SilverBow Merger, we repaid all of SilverBow’s outstanding indebtedness.

Current wording

On July 30, 2024, we consummated the SilverBow Merger. See NOTE 3 – Acquisitions and Divestitures included in Part I. Item 1. Financial Statements of this Quarterly Report. Immediately following the SilverBow Merger, Crescent Energy Company completed a series of internal transactions following which the assets of SilverBow Resources, Inc. ("SilverBow") and its subsidiary became held by subsidiaries of Crescent Energy Finance LLC. In connection with the SilverBow Merger, Crescent issued 51.6 million shares of Class A Common Stock and paid $382.4 million in cash to former SilverBow shareholders, including amounts payable in respect of outstanding SilverBow equity awards. In connection with the closing of the SilverBow Merger, we repaid all of SilverBow’s outstanding indebtedness.

Previous wording

During the three months ended March 31, 2025, we sold non-core assets to unrelated third-party buyers for $6.9 million in aggregate cash proceeds and recorded a gain of $10.9 million on the sale of such assets. In addition, in March 2025, we entered into the purchase and sale agreement to sell certain of our non-core assets to an unrelated third-party buyer for $83.0 million in aggregate cash proceeds, subject to customary purchase price adjustments. The transaction closed during the second quarter of 2025.

Current wording

In March 2025, we entered into the purchase and sale agreement to sell certain of our non-core assets to an unrelated third-party buyer for $83.0 million in aggregate cash proceeds, subject to customary purchase price adjustments. The transaction closed during the second quarter of 2025. We performed an assessment of the fair value of the associated assets and liabilities and recorded an impairment of $48.6 million to the carrying value of the associated oil and natural gas properties during the six months ended June 30, 2025.

Previous wording

As consideration for the services rendered pursuant to the Management Agreement and the Manager’s overhead, including compensation of members of its executive management team, the Manager was entitled to receive compensation from the Company equal to $52.5 million per annum ("Manager Compensation") (calculated based on the Company's pro rata relative ownership of OpCo as of March 31, 2025 multiplied by $69.5 million (the "Base Input")), which is included in General and administrative expenses on our condensed consolidated statements of operations. After giving effect to the Corporate Simplification, the Company's relative ownership of OpCo is 100% and the Manager Compensation is now $69.5 million per annum, or 100% of the Base Input, and our concurrent pro rata distribution to the holders of redeemable noncontrolling interests in OpCo was eliminated. As the Company's business and assets expand, the Base Input will increase by an amount equal to 1.5% per annum of the net proceeds from all future issuances of our primary equity securities by the Company (including in connection with acquisitions). However, the Base Input will not increase from the issuance of the Company's shares upon the redemption or exchange of OpCo Units, should there be any outstanding in the future. See NOTE 3 – Acquisitions and Divestitures for more information.

Current wording

As consideration for the services rendered pursuant to the Management Agreement and the Manager’s overhead, including compensation of members of its executive management team, the Manager is entitled to receive compensation from the Company equal to $69.5 million per annum ("Manager Compensation"), which is included in General and administrative expenses on our condensed consolidated statements of operations. As the Company's business and assets expand, Manager Compensation will increase by an amount equal to 1.5% per annum of the net proceeds from all future issuances of our primary equity securities by the Company (including in connection with acquisitions). See NOTE 3 – Acquisitions and Divestitures included in Part I. Item 1. Financial Statements of this Quarterly Report for more information.

Previous wording

In order to pay the Manager Compensation, the Company must first receive a cash distribution from OpCo, and prior to the Corporate Simplification, any such cash distribution necessitated a concurrent pro rata cash distribution to the holders of redeemable noncontrolling interests. This cash distribution to the holders of redeemable noncontrolling interests did not represent additional Manager Compensation; rather, it represented an ordinary cash distribution to the holders of redeemable noncontrolling interests. In certain instances in our financial statements and other disclosures, we clarify the underlying event that requires us to make such distributions, not because the distributions to the holders of redeemable noncontrolling interests were made for such purpose (e.g. Cash distributions to redeemable noncontrolling interests initiated by Class A common stock dividend, Cash distributions to redeemable noncontrolling interests initiated by Manager Compensation and Cash contributions from (cash distributions to) redeemable noncontrolling interests initiated by income taxes).

Current wording

Prior to the Corporate Simplification, the Manager Compensation was reduced proportionally by the percentage of OpCo Units held as redeemable noncontrolling interests, with such amount distributed concurrently to the holders of redeemable noncontrolling interests. This cash distribution to the holders of redeemable noncontrolling interests did not represent additional Manager Compensation; rather, it represented an ordinary cash distribution to the holders of redeemable noncontrolling interests. In certain instances in our financial statements and other disclosures, we clarify the underlying event that requires us to make such distributions.

Previous wording

Additionally, the Manager is entitled to receive incentive compensation ("Incentive Compensation") under which the Manager is targeted to receive 10% of our outstanding Class A Common Stock based on the achievement of certain performance-based measures. The Incentive Compensation consists of five tranches that settle over a five-year period beginning in 2024, and each tranche relates to a target number of shares of Class A Common Stock equal to 2% of the outstanding Class A Common Stock as of the time such tranche is settled. Performance goals are evaluated on absolute stock price performance and relative stock price performance versus a set of our peers and there is no vesting based solely on time. The certification of the Company's level of achievement with respect to the first three-year-performance period under the Incentive Compensation is in process and is expected to be completed in 2025. Based on the level of achievement with respect to the performance goals applicable to such tranche, the Manager is entitled to settlement of such tranche with respect to a number of shares of Class A Common Stock ranging from 0% to 4.8% of the of the outstanding Class A Common Stock at the time each tranche is settled so long as the Manager continuously provides services to us until the end of the performance period applicable to a tranche. Accordingly, as our Class A Common Stock share count increases, the number of equity-classified Manager PSU target Class A Shares granted under the Crescent Energy Company 2021 Manager Incentive Plan increases.

Current wording

Additionally, the Manager is entitled to receive incentive compensation ("Incentive Compensation") under which the Manager is targeted to receive 10% of our outstanding Class A Common Stock based on the achievement of certain performance-based measures. The Incentive Compensation consists of five tranches that settle over a five-year period beginning in 2024, and each tranche relates to a target number of shares of Class A Common Stock equal to 2% of the outstanding Class A Common Stock as of the time such tranche is settled. Performance goals are evaluated on absolute stock price performance and relative stock price performance versus a set of our peers and there is no vesting based solely on time. The certification of the Company's level of achievement with respect to the first three-year-performance period under the Incentive Compensation is in process and is expected to be completed in 2025. Based on the level of achievement with respect to the performance goals applicable to such tranche, the Manager is entitled to settlement of such tranche with respect to a number of shares of Class A Common

Previous wording

In addition, revenue from our midstream assets is supported by commercial agreements that have established minimum volume commitments. These midstream revenues, as well as revenue associated with crude oil blending, comprise the majority of our midstream and other revenue. Midstream and other revenue accounts for 6% or less of our total revenues for the three months ended March 31, 2025 and 2024.

Current wording

In addition, revenue from our midstream assets is supported by commercial agreements that have established minimum volume commitments. These midstream revenues, as well as revenue associated with crude oil blending, comprise the majority of our midstream and other revenue. Midstream and other revenue accounts for 5% or less of our total revenues for the three and six months ended June 30, 2025 and 2024.

Previous wording

Total sales volume increased 8,129 MBoe during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase for the three months ended March 31, 2025 was primarily due to the SilverBow Merger and the

Current wording

Total sales volume increased 8,937 MBoe and increased 17,066 MBoe during the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024. The increase for the three and six months ended June 30, 2025 was primarily due to the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

The oil and natural gas industry is cyclical and commodity prices can be highly volatile. In recent years, commodity prices have been subject to significant fluctuations, either as a result of the geopolitical events, such as Russia’s invasion of Ukraine and the associated sanctions imposed on Russia, and the Israel-Hamas conflict and the broader conflict in the Middle East, actions taken by OPEC, sustained elevated inflation, U.S. trade policy and the imposition of tariffs and increased U.S. drilling activity or otherwise. Uncertainty persists regarding OPEC’s actions, increased U.S. drilling, the imposition of increased tariffs and resulting consequences, inflation and the armed conflicts in Ukraine and the Middle East. Additionally, market concern regarding a potential recession, among other factors, contributes to increased volatility in the price for oil and natural gas.

Current wording

The oil and natural gas industry is cyclical and commodity prices can be highly volatile. In recent years, commodity prices have been subject to significant fluctuations, either as a result of the geopolitical events, such as Russia’s invasion of Ukraine and the associated sanctions imposed on Russia, and the Israel-Hamas conflict and the broader conflict in the Middle East, including with Iran, actions taken by OPEC, sustained elevated inflation, U.S. trade policy and the imposition of tariffs and increased U.S. drilling activity or otherwise. Uncertainty persists regarding OPEC’s actions, increased U.S. drilling, the imposition of increased tariffs and resulting consequences, inflation and the armed conflicts in Ukraine and the Middle East. Additionally, market concern regarding a potential recession, among other factors, contributes to increased volatility in the price for oil and natural gas.

Previous wording

(1)The realized price presented above does not include $17.9 million received from the settlement of acquired oil, gas and NGL derivative contracts for the three months ended March 31, 2025.

Current wording

(1)The realized price presented above does not include $17.0 million or $34.9 million received from the settlement of acquired oil, gas and NGL derivative contracts for the three and six months ended June 30, 2025, respectively.

Previous wording

Oil revenue. Oil revenue increased $145.8 million, or 31%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This was driven by a $204.1 million increase from higher sales volume (32 MBbls/d, or 46%), partially offset by lower realized oil prices that resulted in a decrease of $58.3 million (a decrease of 9% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger and the Ridgemar Acquisition. The decrease in realized oil prices was due to lower index prices and higher price differentials.

Current wording

Oil revenue. Oil revenue increased $102.9 million, or 21%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This was driven by a $242.1 million increase from higher sales volume (35 MBbls/d, or 48%), partially offset by lower realized oil prices that resulted in a decrease of $139.2 million (a decrease of 19% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger and the Ridgemar Acquisition. The decrease in realized oil prices was due to lower index prices partially offset by more favorable price differentials.

Previous wording

Natural gas revenue. Natural gas revenue increased $107.5 million, or 134%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This was driven by a $48.5 million increase from higher sales volume (252 MMcf/d, or 63%) and higher natural gas prices that resulted in an increase of $59.0 million (an increase of 46% per Mcf). The increase in sales volumes was primarily due to the SilverBow Merger. The increase in realized natural gas prices was due to higher index prices offset by higher price differentials.

Current wording

Natural gas revenue. Natural gas revenue increased $107.7 million, or 210%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This was driven by a $37.4 million increase from higher sales volume (272 MMcf/d, or 73%) and higher natural gas prices that resulted in an increase of $70.3 million (an increase of 79% per Mcf). The increase in sales volumes was primarily due to the SilverBow Merger and the Ridgemar Acquisition. The increase in realized natural gas prices was due to higher index prices.

Previous wording

NGL revenue. NGL revenue increased $40.6 million, or 61%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This was driven primarily by a $43.3 million increase from higher sales volume (19 MBbls/d, or 68%), partially offset by lower realized NGL prices that resulted in a decrease of $2.7 million (a decrease of 2% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger.

Current wording

NGL revenue. NGL revenue increased $31.2 million, or 47%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This was driven primarily by a $39.7 million increase from higher sales volume (18 MBbls/d, or 60%), partially offset by lower realized NGL prices that resulted in a decrease of $8.5 million (a decrease of 8% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

Midstream and other revenue. Midstream and other revenue decreased $1.2 million, or 3%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, driven primarily by lower sulfur revenues in 2025, partially offset by higher oil blending revenues.

Current wording

Midstream and other revenue. Midstream and other revenue increased $2.9 million, or 8%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, driven primarily by higher sulfur revenues in 2025.

Previous wording

Operating expense. Operating expense increased $99.3 million, or 33%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, driven primarily by the following factors:

Current wording

Operating expense. Operating expense increased $96.4 million, or 33%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, driven primarily by the following factors:

Previous wording

(i)Lease and asset operating expense increased $30.0 million, or 18%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and decreased $2.47 per Boe, or 23%, to $8.27 per Boe. This $30.0 million increase was driven primarily by higher production from the SilverBow Merger and the Ridgemar Acquisition, which was more than offset on a per Boe basis with the additional acquired volumes and cost reduction measures on our other assets.

Current wording

(i)Lease and asset operating expense increased $31.1 million, or 21%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and decreased $2.43 per Boe, or 24%, to $7.55 per Boe. This $31.1 million increase was driven primarily by higher production from the SilverBow Merger and the Ridgemar Acquisition, which was more than offset on a per Boe basis with the additional acquired volumes and cost reduction measures on our other assets.

Previous wording

(ii)Gathering, transportation and marketing expense increased $35.7 million, or 51%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and decreased $0.08 per Boe, or 2%, to $4.53 per Boe. The increase was driven primarily by the SilverBow Merger and the Ridgemar Acquisition, which was more than offset on a per Boe basis with the additional acquired volumes.

Current wording

(ii)Gathering, transportation and marketing expense increased $40.2 million, or 61%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and increased $0.04 per Boe, or 1%, to $4.44 per Boe. The increase was driven primarily by the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

(iii)Production and other taxes increased $27.9 million, or 86%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and increased $0.44 per Boe, or 20%, to $2.60 per Boe. This net increase was driven primarily by higher oil and gas revenues, which increased the tax base on which our production and other taxes are calculated.

Current wording

(iii)Production and other taxes increased $24.0 million, or 77%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and increased $0.22 per Boe, or 11%, to $2.30 per Boe. This net increase was driven primarily by higher oil and gas revenues, which increased the tax base on which our production and other taxes are calculated.

Previous wording

(iv)Workover expense increased $3.7 million, or 30%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and decreased $0.13 per Boe, or 16%, to $0.69 per Boe. This increase was primarily driven by the SilverBow Merger.

Current wording

(iv)Workover expense increased $1.8 million, or 10%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and decreased $0.36 per Boe, or 31%, to $0.81 per Boe. This increase was primarily driven by the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

(v)Midstream and other operating expense increased $2.1 million in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to increased crude oil blending expense. The additional crude oil blending expense is more than offset by additional oil blending revenue included as part of our Midstream and other revenue.

Current wording

(v)Midstream and other operating expense decreased $0.8 million, or 3%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to decreased crude oil blending expense. Our crude oil blending expense is more than offset by oil blending revenue included as part of our Midstream and other revenue.

Previous wording

Depreciation, depletion and amortization. In the three months ended March 31, 2025, depreciation, depletion and amortization increased $106.0 million, or 60%, compared to the three months ended March 31, 2024, driven primarily by increased production from the SilverBow Merger and the Ridgemar Acquisition.

Current wording

Depreciation, depletion and amortization. In the three months ended June 30, 2025, depreciation, depletion and amortization increased $84.7 million, or 40%, compared to the three months ended June 30, 2024, driven primarily by increased production from the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

Impairment expense. During the three months ended March 31, 2025, we recorded an impairment of $45.6 million to write down the value of certain assets classified as held for sale to expected net proceeds.

Current wording

Impairment expense. During the three months ended June 30, 2025, we recorded an impairment of $3.0 million to write down the value of certain assets to expected net proceeds.

Previous wording

General and administrative expense. General and administrative expense ("G&A") increased $14.1 million, or 33%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase was driven by (i) higher recurring G&A due to higher Manager Compensation expense as a result of our equity issuances and share redemptions for our Class A Common Stock, and (ii) $0.7 million higher transaction and nonrecurring related expenses, partially offset by a decrease in equity-based compensation expense of $1.5 million (2025 and 2024 include an additional catch up expense of $8.6 million and $14.1 million, respectively due to change in estimate).

Current wording

General and administrative expense. General and administrative expense ("G&A") increased $77.5 million, or 164%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase was driven by (i) higher recurring G&A due to the SilverBow Merger and the Ridgemar Acquisition and (ii) an increase in equity-based compensation expense of $71.3 million (2025 and 2024 include an additional expense of $69.3 million and $7.0 million, respectively due to change in estimate), partially offset by $6.7 million lower transaction and nonrecurring related expenses.

Previous wording

Other operating costs. Other operating costs include exploration expense and gain on sale of assets. Other operating costs decreased by $10.6 million, compared to the three months ended March 31, 2024, primarily driven by a $10.9 million higher gain on sale of assets, partially offset by $0.3 million higher exploration expense recognized during the three months ended March 31, 2025.

Current wording

Other operating costs. Other operating costs include exploration expense and gain on sale of assets. Other operating costs increased by $22.9 million, compared to the three months ended June 30, 2024, primarily driven by a $17.5 million lower gain on sale of assets, partially offset by $5.4 million higher exploration expense recognized during the three months ended June 30, 2025.

Previous wording

Interest expense. In the three months ended March 31, 2025, we incurred interest expense of $73.2 million, as compared to $42.7 million in the three months ended March 31, 2024, a 71% increase. This increase was driven primarily by higher average debt balances driven by our Ridgemar Acquisition and the SilverBow Merger.

Current wording

Interest expense. In the three months ended June 30, 2025, we incurred interest expense of $75.2 million, as compared to $42.4 million in the three months ended June 30, 2024, a 78% increase. This increase was driven primarily by higher average debt balances driven by the Ridgemar Acquisition and the SilverBow Merger.

Previous wording

Income tax benefit (expense). We are a corporation that is subject to U.S. federal and state income taxes on our allocable share of any taxable income from OpCo. OpCo is a partnership and is generally not subject to U.S. federal and certain state taxes. For the three months ended March 31, 2025 and March 31, 2024, we recognized income tax expense of $2.6 million and income tax benefit of $4.2 million, respectively, for an effective tax rate of 30.7% and 11.5%, respectively. Our effective tax rate has typically been lower than the U.S. federal statutory income tax rate of 21% primarily due to effects of removing income and losses related to our noncontrolling interests and redeemable noncontrolling interests. Our effective tax rate for the three months ended March 31, 2025 was driven higher primarily due to our increased ownership of OpCo in 2025, temporary timing difference of certain deductions and a higher state tax rate due to the apportionment changes created by the Ridgemar Acquisition.

Current wording

Income tax benefit (expense). We are a corporation that is subject to U.S. federal and state income taxes on our allocable share of any taxable income from OpCo. OpCo is a partnership and is generally not subject to U.S. federal and certain state taxes. For the three months ended June 30, 2025 and 2024, we recognized income tax expense of $41.1 million and $11.5 million, respectively, for an effective tax rate of 20.2% and 14.1%, respectively. Historically, our effective tax rate has been lower than the U.S. federal statutory income tax rate of 21% primarily due to effects of removing income and losses related to our noncontrolling interests and redeemable noncontrolling interests. However, as part of our Corporate Simplification, we expect our effective rate to be more in line with the U.S. federal statutory income tax rate plus our blended state income tax rate. Our effective tax rate for the three months ended June 30, 2025 was driven higher primarily due to our increased ownership of OpCo in 2025.

Previous wording

Adjusted EBITDAX (non-GAAP) increased by $216.1 million, or 69%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily driven by additional production generated by the SilverBow Merger and the Ridgemar Acquisition.

Current wording

Adjusted EBITDAX (non-GAAP) increased by $194.1 million, or 61%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily driven by additional production generated by the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

Levered Free Cash Flow (non-GAAP) increased by $175.5 million, or 265%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily driven by increased Adjusted EBITDAX, partially offset by additional interest expense.

Current wording

Levered Free Cash Flow (non-GAAP) increased by $23.9 million, or 16%, in the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily driven by increased Adjusted EBITDAX, partially offset by additional interest expense and development of oil and natural gas properties.

Previous wording

Loss on extinguishment of debt. During the three months ended March 31, 2025, we did not incur a loss on the extinguishment of debt. During the three months ended March 31, 2024, we incurred a loss on the extinguishment of our 2026 Notes of $22.6 million related to the $14.8 million premium and interest paid for the Tender Offer and Redemption of the 2026 Notes and $7.8 million related to the write-off of outstanding deferred finance costs related to the 2026 Notes.

Current wording

Loss on extinguishment of debt. During the six months ended June 30, 2025, we did not have an extinguishment of debt. During the six months ended June 30, 2024, we incurred a loss on the extinguishment of our 2026 Notes of $22.6 million related to the $14.8 million premium and interest paid for the Tender Offer and Redemption of the 2026 Notes and $7.8 million related to the write-off of outstanding deferred finance costs related to the 2026 Notes.

Previous wording

Gain (loss) on derivatives. We have entered into derivative contracts to manage our exposure to commodity price risks that impact our revenues. Our loss on commodity derivatives during thethree months ended March 31, 2025 changed by $14.1 million, or 13%, from a comparable loss during the three months ended March 31, 2024 primarily due to changes in commodity prices relative to our strike price.

Current wording

Gain (loss) on derivatives. We have entered into derivative contracts to manage our exposure to commodity price risks that impact our revenues and have derivative gains and losses related to our contingent earn-out consideration. Our gain on derivatives consideration during the six months ended June 30, 2025 changed by $209.0 million, or 206.0%, from a comparable loss during the six months ended June 30, 2024 primarily due to changes in commodity prices relative to our strike price.

Previous wording

(2)Transaction and nonrecurring expenses of $10.1 million for the three months ended March 31, 2025 were primarily related to uncapitalized transaction costs related to the Ridgemar Acquisition and transaction costs related to our divestitures and the SilverBow Merger. Transaction and nonrecurring expenses of $2.9 million for the three months ended March 31, 2024 were primarily related to our capital markets transactions and integration expenses.

Current wording

(2)Transaction and nonrecurring expenses of $9.9 million for the six months ended June 30, 2025 were primarily related to uncapitalized transaction costs related to the Ridgemar Acquisition and transaction costs related to our divestitures and the SilverBow Merger, partially offset by proceeds from a legal settlement. Transaction and nonrecurring expenses of $18.5 million for the six months ended June 30, 2024 were primarily related to our merger costs, capital markets transactions and integration expenses.

Previous wording

(2)Transaction and nonrecurring expenses of $10.1 million for the three months ended March 31, 2025 were primarily related to uncapitalized transaction costs related to the Ridgemar Acquisition and transaction costs related to our divestitures and the SilverBow Merger. Transaction and nonrecurring expenses of $2.9 million for the three months ended March 31, 2024 were primarily related to our capital markets transactions and integration expenses.

Current wording

(2)Transaction and nonrecurring expenses of $9.9 million for the six months ended June 30, 2025 were primarily related to uncapitalized transaction costs related to the Ridgemar Acquisition and transaction costs related to our divestitures and the SilverBow Merger, partially offset by proceeds from a legal settlement. Transaction and nonrecurring expenses of $18.5 million for the six months ended June 30, 2024 were primarily related to our merger costs, capital markets transactions and integration expenses.

Previous wording

In connection with the closing of the Ridgemar Acquisition in the first quarter of 2025, we paid in total $812.5 million in cash to former Ridgemar owners after customary purchase price adjustments. We funded the cash to close, less the initial deposit, with cash on hand and borrowings under our Revolving Credit Facility. Based on our planned capital spending, our forecasted cash flows and projected levels of indebtedness, we expect to maintain compliance with the covenants under our debt agreements. Further, based on current market indications, we expect to meet in the ordinary course of business other contractual cash commitments to third parties pursuant to the various agreements described under the heading “Contractual obligations” in our Annual Report, recognizing we may be required to meet such commitments even if our business plan assumptions were to change.

Current wording

In connection with the closing of the Ridgemar Acquisition in the first quarter of 2025, we paid in total $807.2 million in cash to former Ridgemar owners after customary purchase price adjustments. We funded the cash to close, less the initial deposit, with cash on hand and borrowings under our Revolving Credit Facility. Based on our planned capital spending, our forecasted cash flows and projected levels of indebtedness, we expect to maintain compliance with the covenants under our debt agreements. Further, based on current market indications, we expect to meet in the ordinary course of business other contractual cash commitments to third parties pursuant to the various agreements described under the heading “Contractual obligations” in our Annual Report, recognizing we may be required to meet such commitments even if our business plan assumptions were to change.

Previous wording

Net cash provided by operating activities. Net cash provided by operating activities for the three months ended March 31, 2025 increased by $153.3 million, or 83%, compared to the three months ended March 31, 2024 primarily due to higher net income after adjusting for non-cash items and partially offset by working capital changes.

Current wording

Net cash provided by operating activities. Net cash provided by operating activities for the six months ended June 30, 2025 increased by $365.4 million, or 77.6%, compared to the six months ended June 30, 2024 primarily due to higher net income after adjusting for non-cash items and working capital changes.