Crescent Energy Co

Previous wording

Crescent is a differentiated U.S. energy company committed to delivering value for shareholders through a disciplined growth through acquisition strategy and consistent return of capital. Our long-life, balanced portfolio combines stable cash flows from low-decline production with deep, high-quality development inventory. Our activities are focused in Texas and the Rocky Mountain region. Our Class A Common Stock trades on the NYSE under the symbol “CRGY.”

Current wording

Crescent is a differentiated energy company committed to delivering value through a disciplined, returns-driven growth through acquisition strategy and consistent return of capital. Our long-life, balanced portfolio combines significant cash flow from stable production with a deep, high-quality development inventory. Our activities are focused in the Eagle Ford, Permian and Uinta Basins, and we own minerals and royalty interests across premier U.S. oil and natural gas basins, primarily operated by large, well-capitalized companies, with a core focus in the Eagle Ford. Our Class A Common Stock trades on the NYSE under the symbol “CRGY.”

Previous wording

During the last several years, prices of crude oil, natural gas and NGLs have experienced periodic downturns and sustained volatility, impacted by the COVID-19 pandemic and recovery, 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 with Lebanon and Yemen), supply chain constraints, elevated interest rates and costs of capital and political and regulatory uncertainties, including any proposed tariffs. 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, has contributed to concerns of a potential recession in the United States in 2025 that has created further volatility. In December 2024, OPEC announced an extension of its production cuts of approximately 2.2 million barrels per day through the end of March 2025. The actions of OPEC with respect to oil production levels and announcements of potential changes in such levels, including agreement on and compliance with production cuts, 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, recent developments in Venezuela, 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 2026 that has created further volatility. For example, OPEC 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. While actual production significantly diverged from these announced targets, as several OPEC members were unable to meet the planned increases when others continued to overproduce, 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

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 relatively stable through 2024. 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. 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."

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 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. Tariffs announced in 2025 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 and in 2025, 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 previously have resulted in and such issues, as well as certain proposed tariffs, may in the future 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."

Previous wording

During 2023, an affiliate of KKR exercised its redemption right with respect to approximately 30.6 million OpCo Units, and such OpCo Units were exchanged for an equivalent number of shares of Class A Common Stock and a corresponding number of shares of Class B Common Stock were cancelled (the "2023 Class A Redemption"). Approximately 27.6 million of those shares of Class A Common Stock were subsequently distributed to certain of its legacy investors in privately-managed funds and accounts. The remaining 3.0 million shares of Class A Common Stock were subsequently sold by affiliates of KKR at a price per share of $10.90, pursuant to Rule 144, through a broker-dealer. We did not receive any proceeds or incur any material expenses associated with the 2023 Class A Redemption.

Current wording

In March 2025, Independence Energy Aggregator L.P., the entity through which certain private investors in affiliated KKR entities held their interests in us, exercised its redemption right with respect to 2.9 million OpCo Units, and such OpCo Units were exchanged for an equivalent number of shares of Class A Common Stock and a corresponding number of shares of Class B Common Stock were cancelled (the "2025 Class A Redemption"). The shares of Class A Common Stock were sold by Independence Energy Aggregator L.P. at a price per share of $9.91, pursuant to Rule 144, through a broker-dealer. We did not receive any proceeds or incur any material expenses related to the 2025 Class A Redemption.

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 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 from the March 2024 Offering to finance the majority of the consideration of a cash tender offer of our 7.25% senior notes due 2026 (the "2026 Notes") and the redemption of any remaining 2026 Notes (collectively, the "Tender Offer and Redemption") following such cash tender offer of all of the aggregate principal amount of the 2026 Notes outstanding for $714.8 million after including extinguishment costs. We used the proceeds from the December 2024 Offering to repay the amounts outstanding under our Revolving Credit Facility.

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 $819 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, we agreed to pay up to $170.0 million in earn-out consideration paid quarterly in fiscal years 2026 and 2027 based on the quarterly NYMEX WTI price of crude oil in fiscal years 2026 and 2027 (collectively, the "Ridgemar Consideration”).

Current wording

On December 3, 2024, we entered into the Ridgemar Acquisition Agreement, pursuant to which we acquired all of the outstanding equity interests in Ridgemar. On January 31, 2025, we acquired all of the outstanding equity interests in Ridgemar for $807.2 million in cash and 5.5 million shares of our Class A Common Stock. 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. We accounted for the Ridgemar Acquisition as an asset acquisition. See NOTE 3 – Acquisitions and Divestituresfor additional information.

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

Current wording

On July 30, 2024, we consummated the SilverBow Merger. Immediately following the SilverBow Merger, Crescent Energy Company completed a series of internal transactions following which the assets of 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. See NOTE 3 – Acquisitions and Divestituresfor additional information.

Previous wording

In January 2025, we acquired from unaffiliated third parties additional interests in Crescent operated oil and gas properties, rights and related assets located in Webb County, Texas for aggregate consideration of approximately $21.2 million, subject to customary post closing adjustments.

Current wording

In January 2025, we acquired additional interests in Crescent operated oil and gas properties located in Webb County, Texas from unaffiliated third parties for aggregate consideration of approximately $21.2 million, subject to customary post closing adjustments (the “Webb Gas Acquisition”).

Previous wording

In October 2024, we acquired from unaffiliated third parties certain interests in oil and gas properties, rights and related assets located in Atascosa, Frio, La Salle and McMullen Counties, Texas for aggregate consideration of approximately $156.0 million, including certain customary purchase price adjustments.

Current wording

In October 2024, we acquired from unaffiliated third parties certain interests in oil and gas properties, rights and related assets located in Atascosa, Frio, La Salle and McMullen Counties, Texas for aggregate consideration of approximately $156.0 million, including certain customary purchase price adjustments in the Central Eagle Ford Acquisition.

Previous wording

We are members of the Oil & Gas Methane Partnership 2.0 Initiative, or OGMP 2.0, and received Gold Standard pathway ratings in 2022, 2023 and 2024 for our credible plan to more accurately measure our methane emissions. OGMP 2.0 is the United Nations Environment Programme's flagship oil and gas reporting and mitigation program and the leading industry standard for methane emissions reporting. We also established a Sustainability Advisory Council, an outside council comprising leading exports across key sustainability topics, to advise management and our Board of Directors on sustainability-related issues. See additional materials on our website at www.crescentenergyco.com/sustainability. However, please note that the contents and other materials on our website in general, are not intended or deemed to be incorporated into this Annual Report by reference.

Current wording

We are members of the Oil & Gas Methane Partnership 2.0 Initiative, or OGMP 2.0, and in 2025, following consecutive years on OGMP 2.0 Gold Standard pathway, we achieved the OGMP 2.0 Gold Standard Reporting designation for our credible plan to more accurately measure our methane emissions. OGMP 2.0 is the United Nations Environment Programme's flagship oil and gas reporting and mitigation program and the leading industry standard for methane emissions reporting. We previously established a Sustainability Advisory Council, an outside council comprising leading experts across key sustainability topics, to advise management and our Board on sustainability-related issues. See additional materials on our website at www.crescentenergyco.com/sustainability. However, please note that the contents and other materials on our website in general, are not intended or deemed to be incorporated into this Annual Report by reference.

Previous wording

Our development program, which consists of expenditures for drilling, completion and recompletion activities, is designed to prioritize the generation of attractive risk-adjusted returns and meaningful free cash flow and is inherently flexible, with the ability to modify our capital program as necessary to react to the current market environment.

Current wording

Our development program, which consists of expenditures for drilling and completion activities, is designed to prioritize the generation of attractive risk-adjusted returns and meaningful free cash flow and is inherently flexible, with the ability to modify our capital program as necessary to react to the current market environment.

Previous wording

Total sales volume increased 19,104 MBoe during the year ended December 31, 2024 compared to 2023. The increase is primarily due to the SilverBow Merger and our Western Eagle Ford Acquisitions, which closed in the second half of 2023.

Current wording

Total sales volume increased 21,380 MBoe during the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase is 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 COVID-19 pandemic and recovery, Russia’s invasion of Ukraine and the associated sanctions imposed on Russia, the Israel-Hamas conflict and the broader conflict in the Middle East, actions taken by OPEC, sustained elevated inflation and increased U.S. drilling activity or otherwise. Uncertainty persists regarding OPEC’s actions, increased U.S. drilling, proposed tariffs, inflation and the armed conflicts in Ukraine and the Middle East. Additionally, market concern regarding the health of the global banking sector and any resultant recessionary effects contributed, among other factors, 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 the recent events in Venezuela and expected increase in Venezuelan crude being brought to market, Russia’s invasion of Ukraine and the associated sanctions imposed on Russia, the Israel-Hamas conflict and the broader conflict in the Middle East, actions taken by OPEC, sustained levels of inflation and increased U.S. drilling activity or otherwise. Uncertainty persists regarding OPEC’s actions, increased

Previous wording

(1)The realized price presented above does not include $60.8 million received from the settlement of acquired oil, gas and NGL derivative contracts for the year ended December 31, 2024. For the years ended December 31, 2023 and 2022, the realized price presented above does not include $61.5 million and $49.9 million paid for the settlement of acquired oil derivative contracts, respectively.

Current wording

(1)The realized price presented above does not include $83.1 million and $60.8 million received from the settlement of acquired oil, gas and NGL derivative contracts for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2023, the realized price presented above does not include $61.5 million paid for the settlement of acquired oil derivative contracts.

Previous wording

Oil revenue. Oil revenue increased $379.5 million, or 22%, in 2024 compared to 2023. This increase was driven by a $407.9 million increase from higher sales volumes (15 MBbl/d, or 22%), partially offset by lower realized oil prices that resulted in a decrease of $28.4 million (a decline of 1% per Bbl). The increase in sales volumes was primarily driven the SilverBow Merger and our Western Eagle Ford Acquisitions, which closed in the second half of 2023. The decrease in realized oil prices was due to lower index prices, which was partially offset by price realizations.

Current wording

Oil revenue. Oil revenue increased $242.3 million, or 11%, in 2025 compared to 2024. This increase was driven by a $583.0 million increase from higher sales volumes (22 MBbl/d, or 27%), partially offset by lower realized oil prices that resulted in a decrease of $340.7 million (a decline of 13% 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 decreased $21.2 million, or 6%, in 2024 compared to 2023. This decrease was driven by lower realized natural gas prices that resulted in a decrease of $170.6 million (a decline of 33% per Mcf), partially offset by a $149.4 million increase from higher sales volumes (143 MMcf/d, or 40%). The increase in sales volumes was primarily due to the SilverBow Merger and our Western Eagle Ford Acquisitions, which closed in the second half of 2023. The decrease in realized natural gas prices was due to lower index prices and associated realizations.

Current wording

Natural gas revenue. Natural gas revenue increased $323.7 million, or 93%, in 2025 compared to 2024. This increase was driven by higher realized natural gas prices that resulted in an increase of $221.0 million (an increase of 49% per Mcf) and a $102.7 million increase from higher sales volumes (148 MMcf/d, or 30%). 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 benchmark prices.

Previous wording

NGL revenue. NGL revenue increased $124.1 million, or 64%, in 2024 compared to 2023. This increase was driven by a $106.5 million increase from higher sales volumes (13 MBbl/d, or 57%) and higher realized NGL prices that resulted in an increase of $17.6 million (an increase of 6% per Bbl). The increase in sales volumes was primarily driven by the SilverBow Merger and our Western Eagle Ford Acquisitions, which closed in the second half of 2023.

Current wording

NGL revenue. NGL revenue increased $73.6 million, or 23%, in 2025 compared to 2024. This increase was driven by a $101.8 million increase from higher sales volumes (12 MBbl/d, or 33%), partially offset by lower realized NGL prices that resulted in a decrease of $28.2 million (a decline of 7% 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 increased $66.0 million, or 97%, in 2024 compared to 2023, due to higher oil blending revenues in 2024.

Current wording

Midstream and other revenue. Midstream and other revenue increased $9.2 million, or 7%, in 2025 compared to 2024, driven primarily by higher sulfur revenues, higher oil blending and marketing revenues in 2025.

Previous wording

Operating expense. Total operating expense increased $199.7 million, or 19%, in 2024 compared to 2023, driven primarily by the following factors:

Current wording

Operating expense. Total operating expense increased $309.6 million, or 24%, in 2025 compared to 2024, driven primarily by the following factors:

Previous wording

(i)Lease and asset operating expenses increased $50.1 million, or 9%, in 2024 compared to 2023. Additionally, lease and asset operating expense per Boe decreased $2.09 per Boe from $10.67 per Boe to $8.58 per Boe. This $50.1 million increase was driven primarily by higher production from the SilverBow Merger and Western Eagle Ford Acquisitions, which closed in the second half of 2023, partially offset by cost reduction measures on our other assets. The additional costs from our acquisitions was more than offset on a per Boe basis with the additional volumes and cost reduction measures.

Current wording

(i)Lease and asset operating expenses increased $135.8 million, or 21%, in 2025 compared to 2024. Additionally, lease and asset operating expense per Boe decreased $0.50 per Boe from $8.58 per Boe to $8.08 per Boe. This $135.8 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 legacy assets.

Previous wording

(iii)Production and other taxes decreased $0.3 million, or 0%, in 2024 compared to 2023 and decreased $0.78 per Boe, or 26%, to $2.21 per Boe. This decrease was driven primarily by lower effective tax rates and increased gathering, transportation and marketing expense, which decreased the tax base upon which our production and other taxes are calculated.

Current wording

(iii)Production and other taxes increased $56.8 million, or 35%, in 2025 compared to 2024 and increased $0.10 per Boe, or 5%, to $2.31 per Boe. This increase was driven primarily by higher oil and gas revenues, which increased the tax base upon which our production and other taxes are calculated.

Previous wording

(iv)Workover expense increased $1.9 million in 2024 compared to 2023, and decreased $0.25 per Boe from $1.07 per Boe to $0.82 per Boe. This increase was primarily caused by the SilverBow Merger.

Current wording

(iv)Workover expense increased $14.2 million in 2025 compared to 2024, and decreased $0.04 per Boe from $0.82 per Boe to $0.78 per Boe. This absolute dollar increase was primarily driven by the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

(v)Midstream operating expense increased $70.3 million, or 177%, in 2024 compared to 2023, primarily due to increased crude oil blending expense. The additional crude oil blending expense was 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 increased $6.8 million, or 6%, in 2025 compared to 2024, primarily due to increased crude oil blending and marketing expenses, which was more than offset by additional oil blending and marketing revenue included as part of our Midstream and other revenue.

Previous wording

Depreciation, depletion and amortization. Depreciation, depletion and amortization increased $273.7 million, or 41%, in 2024 compared to 2023, driven primarily by increased production from the SilverBow Merger and our Western Eagle Ford Acquisitions and an increased DD&A rate.

Current wording

Depreciation, depletion and amortization. Depreciation, depletion and amortization increased $217.4 million, or 23%, in 2025 compared to 2024, driven primarily by increased production from the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

Impairment expense. During the years ended December 31, 2024 and 2023, we evaluated our Oil and natural gas properties and Investments in equity affiliates and determined that certain amounts were impaired. As a result of our evaluations, during the year ended December 31, 2024, we recorded an impairment expense of $161.5 million related to Oil and natural gas properties that were determined not to be recoverable. During the year ended December 31, 2023, we recorded an impairment expense of $153.5 million, including $149.6 million related to Oil and natural gas properties that were determined not to be recoverable and $3.9 million related to Investments in equity affiliates.

Current wording

Impairment expense. During the years ended December 31, 2025 and 2024, we evaluated our oil and natural gas properties and determined that certain amounts were impaired. As a result of our evaluations, during the year ended December 31, 2025, we recorded impairment charges of $254.6 million, including an impairment of $233.7 million to write down the carrying value of associated oil and natural gas properties to the estimated transaction price less cost to sell, and $20.8 million related to office lease impairments as part of our restructuring costs. During the year ended December 31, 2024, we recorded an impairment expense of $161.5 million related to oil and natural gas properties that were determined not to be recoverable.

Previous wording

General and administrative expense. General and administrative expense ("G&A") increased $195.3 million, or 139%, in 2024 compared to 2023, driven primarily by (i) an increase in equity-based compensation expense of $110.5 million (2024 and 2023 include additional catch up expense of $121.8 million and $30.4 million, respectively, due to change in estimate), (ii) $63.8 million higher transaction and nonrecurring related expenses primarily driven by the SilverBow Merger and (iii) higher recurring G&A, primarily driven by higher Manager Compensation expense. The increase in the Manager Compensation expense is due to an increase in public ownership of Class A Common Stock and a corresponding increase in ownership of OpCo as a result of (i) our equity issuances, and (ii) share redemptions for our Class A Common Stock.

Current wording

General and administrative expense. General and administrative expense ("G&A") increased $135.9 million, or 40%, in 2025 compared to 2024, driven primarily by (i) higher recurring G&A due to the SilverBow Merger and the Ridgemar Acquisition; (ii) an increase in equity-based compensation expense of $55.6 million (2025 and 2024 include additional catch up expense of $146.5 million and $121.8 million, respectively, due to change in estimate) and (iii) $30.4 million higher 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 $22.2 million compared to 2023, primary driven by a $29.4 million higher gain on sale of assets recognized in 2024, partially offset by $7.3 million in higher exploration expenses.

Current wording

Other operating costs. Other operating costs include exploration expense and gain on sale of assets. Other operating costs decreased by $117.9 million compared to 2024, primary driven by a $118.1 million higher gain on sale of assets recognized in 2025.

Previous wording

Interest expense. In 2024, we incurred interest expense of $216.3 million, as compared to $145.8 million in 2023, a 48% increase. The increase was primarily driven by higher average debt balances driven by the SilverBow Merger and the Western Eagle Ford Acquisitions.

Current wording

Interest expense. In 2025, we incurred interest expense of $298.4 million, as compared to $216.3 million in 2024, a 38% increase. The increase was primarily driven by higher average debt balances driven by the SilverBow Merger and the Ridgemar Acquisition.

Previous wording

Loss on extinguishment of debt. In 2024, we incurred a loss on the extinguishment of debt of $59.1 million composed of (i) $22.6 million related our 2026 Notes, of which $14.8 million is associated with the premium and interest paid for the Tender Offer and Redemption and $7.8 million is related to the write-off of related outstanding deferred finance costs and (ii) $36.5 million related to the make whole provision and premium associated with the repayment of SilverBow’s Second Lien Notes.

Current wording

Loss on extinguishment of debt. In 2025, we incurred a loss on the extinguishment of debt of our 2028 Notes of $29.2 million related to $22.3 million premium for the Tender Offer and the 2028 Notes Redemption and $6.9 million related to the write-off of outstanding deferred finance costs related to the 2028 Notes. In 2024, we incurred a loss on the extinguishment of debt of $59.1 million composed of (i) $22.6 million related our 2026 Notes, of which $14.8 million is associated with the premium and interest paid for the Tender Offer and Redemption and $7.8 million is related to the write-off of related outstanding deferred finance costs and (ii) $36.5 million related to the make whole provision and premium associated with the repayment of SilverBow’s Second Lien Notes.

Previous wording

Gain (loss) on derivatives. We have entered into derivative contracts to manage our exposure to commodity price risks that impact our revenue. Our loss on commodity derivatives during 2024, changed by $281.3 million, or 168%, from a gain during 2023 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 revenue and have derivative gains and losses related to our contingent earn-out consideration. Our gain on derivatives during 2025, changed by $417.2 million, from a comparable loss during 2024 primarily due to changes in commodity prices relative to our strike prices.

Previous wording

Income tax benefit (expense). For the years ended December 31, 2024 and 2023 we recognized income tax benefit of $31.1 million and $23.2 million, respectively, for an effective tax rate of 18.4% and 6.7%, respectively. Our effective tax rate is typically 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 increased in 2024 primarily due to our increased ownership of OpCo in 2024 and a corresponding decrease in the amount of income attributed to our noncontrolling and redeemable noncontrolling interests.

Current wording

Income tax benefit (expense). For the years ended December 31, 2025 and 2024 we recognized income tax expense of $34.5 million and income tax benefit of $31.1 million, respectively, for an effective tax rate of 17.1% and 18.4%, respectively. Historically, 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. However, as part of our Corporate Simplification, we expect our effective tax 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 decreased in 2025 primarily driven by our divestitures combined with timing of income allocated to our noncontrolling interests and redeemable noncontrolling interests.

Previous wording

(1)In our calculation of Adjusted EBITDAX and Levered Free Cash Flow, we reflect Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management.

Current wording

(1)In our calculation of Adjusted EBITDAX and Levered Free Cash Flow, we reflect Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management. After giving effect to the Corporate Simplification, the Company owns 100% of outstanding OpCo Units and no longer makes distributions to holders of redeemable noncontrolling interests in OpCo.

Previous wording

(2)Transaction and nonrecurring expenses of $82.5 million during the year ended December 31, 2024 were primarily related to the SilverBow Merger, capital markets transactions and integration expenses. Transaction and nonrecurring expenses of $22.6 million for the year ended December 31, 2023 were primarily related to the Western Eagle Ford Acquisitions and system integration expenses.

Current wording

(2)Transaction and nonrecurring expenses of $137.4 million during the year ended December 31, 2025 were primarily related to the Vital Energy Merger and the Ridgemar Acquisition transition costs, divestiture and restructuring costs, and legal settlement costs. Transaction and nonrecurring expenses of $82.5 million for the year ended December 31, 2024 were primarily related to the SilverBow Merger, capital markets transactions and integration expenses.

Previous wording

(1)In our calculation of Adjusted EBITDAX and Levered Free Cash Flow, we reflect Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management.

Current wording

(1)In our calculation of Adjusted EBITDAX and Levered Free Cash Flow, we reflect Manager Compensation as if 100% of OpCo were owned and managed by the Company, to reflect consistent earnings and liquidity measures not impacted by the amount of OpCo's ownership under management. After giving effect to the Corporate Simplification, the Company owns 100% of outstanding OpCo Units and no longer makes distributions to holders of redeemable noncontrolling interests in OpCo.

Previous wording

(2)Transaction and nonrecurring expenses of $82.5 million during the year ended December 31, 2024 were primarily related to the SilverBow Merger, capital markets transactions and integration expenses. Transaction and nonrecurring expenses of $22.6 million for the year ended December 31, 2023 were primarily related to the Western Eagle Ford Acquisitions and system integration expenses.

Current wording

(2)Transaction and nonrecurring expenses of $137.4 million during the year ended December 31, 2025 were primarily related to the Vital Energy Merger and the Ridgemar Acquisition transition costs, divestiture and restructuring costs, and legal settlement costs. Transaction and nonrecurring expenses of $82.5 million for the year ended December 31, 2024 were primarily related to the SilverBow Merger, capital markets transactions and integration expenses.

Previous wording

Adjusted EBITDAX (non-GAAP) increased by $575.6 million or 56% in 2024, compared to 2023, driven primarily by additional production generated by the SilverBow Merger and our Western Eagle Ford Acquisitions, which closed in the second half of 2023.

Current wording

Adjusted EBITDAX (non-GAAP) increased by $467.3 million or 29% in 2025, compared to 2024, driven primarily by additional production generated by the SilverBow Merger and the Ridgemar Acquisition, partially offset by lower oil pricing.

Previous wording

Levered Free Cash Flow (non-GAAP) increased by $320.0 million or 103% in 2024 compared to 2023, driven primarily by increased Adjusted EBITDAX of $575.6 million, partially offset by $166.9 million of increased capital expenditures, additional interest expense, a loss from extinguishment of debt and income taxes.

Current wording

Levered Free Cash Flow (non-GAAP) increased by $226.0 million or 36% in 2025 compared to 2024, driven primarily by increased Adjusted EBITDAX of $467.3 million, partially offset by $158.0 million of increased development of oil and natural gas properties expenditures and additional interest expense, excluding non-cash amortization.

Previous wording

Our primary sources of liquidity are cash flow from operations, proceeds from equity and debt offerings and borrowings under a senior secured reserve-based revolving credit agreement (as amended, restated, amended and restated or otherwise modified to date, the “Revolving Credit Facility") with Wells Fargo Bank, N.A., as administrative agent for the lenders and letter of credit issuer, and the lenders from time to time party thereto. Our primary expected uses of capital are for dividends to shareholders, our share repurchase program, debt repayment, development of our existing assets and acquisitions.

Current wording

Our primary sources of liquidity are cash flow from operations, proceeds from equity and debt offerings and borrowings under a senior secured reserve-based revolving credit agreement. Our primary expected uses of capital are for dividends to shareholders, our share repurchase program, debt repayment, including open market repurchases of our senior notes, development of our existing assets and acquisitions.

Previous wording

In connection with the closing of the Ridgemar Acquisition in the first quarter of 2025, we paid in total $819 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 subsequently described under the heading “Contractual obligations,”recognizing we may be required to meet such commitments even if our business plan assumptions were to change.

Current wording

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 subsequently described under the heading “Contractual obligations,”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 year ended December 31, 2024 increased by $287.3 million, or 31%, compared to 2023, primarily due to higher net income after adjusting for non-cash items, partially offset by working capital changes.

Current wording

Net cash provided by operating activities. Net cash provided by operating activities for the year ended December 31, 2025 increased by $457.1 million, or 37%, compared to 2024, primarily due to higher net income after adjusting for non-cash items and working capital changes.