Crescent Energy Co. 2026 Q2 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the period ended June 30, 2026. Crescent Energy Co. (CRGY) is a U.S. energy company focused on the Eagle Ford, Permian, and Uinta Basins. The company operates through a simplified corporate structure following the elimination of its Up-C structure in 2025. Key strategic activities in the period included the integration of the Vital Energy Merger (consummated December 2025) and continued mineral acquisitions in the Eagle Ford.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Total Revenues | $1,394.95 million | $2,577.78 million |
| Net Income (Attributable to Crescent) | $492.77 million | $72.92 million |
| Diluted EPS (Class A) | $1.30 | $0.21 |
| Adjusted EBITDAX (Non-GAAP) | $797.94 million | $1,487.67 million |
| Levered Free Cash Flow (Non-GAAP) | $417.68 million | $609.52 million |
| Operating Cash Flow | $706.79 million (Q2 only) | $1,115.98 million (YTD) |
| Long-Term Debt | $5,166.02 million | $5,166.02 million |
| Cash & Cash Equivalents | $264.88 million | $264.88 million |
| Production (Total MBoe/d) | 335 | 338 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 55% ($497 million) in Q2 2026 compared to Q2 2025, driven by a 104% increase in oil revenue due to higher realized prices ($96.61/Bbl vs. $61.47/Bbl) and a 30% increase in oil sales volumes. Natural gas revenue declined 79% due to lower realized prices ($0.52/Mcf vs. $2.71/Mcf).
- Profitability: Net income attributable to Crescent Energy surged to $492.77 million in Q2 2026 from $153.22 million in Q2 2025. This was significantly aided by a $181.88 million gain on derivatives in Q2 2026, compared to a $198.59 million gain in the prior year, though the six-month period showed a $524.71 million loss on derivatives due to commodity price movements relative to strike prices.
- Expense Management: General and administrative expenses decreased 51% in Q2 2026 ($61.49 million vs. $124.61 million), primarily due to a $72.1 million reduction in equity-based compensation expense.
- Debt Restructuring: In March 2026, the company issued $690 million of 2.750% Convertible Senior Notes due 2031 and used proceeds to redeem all outstanding 2028 Notes ($500 million) and repurchase a portion of 2029 Notes. This resulted in a $17.4 million loss on extinguishment of debt for the six-month period.
Guidance, Outlook, and Risks
- Capital Program: Management expects to fund the 2026 capital program through cash flow from operations. The program is flexible and may be adjusted based on commodity prices and market conditions.
- Dividends: The Board approved a quarterly cash dividend of $0.12 per share for Q2 2026, payable August 31, 2026. This represents an annualized rate of $0.48 per share.
- Stock Repurchases: The company has an active repurchase program with approximately $336 million remaining as of June 30, 2026. No shares were repurchased under the program in Q2 2026.
- Risks: Key risks include commodity price volatility, geopolitical instability (specifically conflicts in the Middle East and Ukraine), inflationary pressures on operating costs, and the potential dilution from the conversion of 2031 Convertible Notes. The company maintains a significant hedging program, with 66% of oil and 52% of natural gas production hedged for the quarter.
Investor Verification Checklist
- Derivative Impact: Verify the sensitivity of net income to commodity price fluctuations, noting the significant swing from a $181M gain in Q2 to a $525M loss YTD on derivatives.
- Debt Covenants: Confirm compliance with the Revolving Credit Facility and the new CRF Credit Facility covenants, particularly the leverage and current ratio requirements.
- Acquisition Integration: Assess the operational and financial integration progress of the Vital Energy Merger and the impact on production volumes and cost structures.
- Convertible Notes: Review the terms of the 2031 Convertible Notes, specifically the conversion price ($14.89) and the capped call transactions designed to mitigate dilution.
- Contingent Consideration: Monitor the Ridgemar Acquisition earn-out payments, which totaled $45 million in the first half of 2026 based on WTI price thresholds.