Crescent Energy Co. has agreed to acquire SilverBow Resources Inc. in a transaction valued at $2.1 billion.
The combine would create the second largest operator in the Eagle Ford with a portfolio of about 250,000 boe/d (~40% oil) of low-decline, long-life production estimated at yearend.
While the Eagle Ford asset accounts for about 70% of estimated 2024 production and about 70% of the 2024 estimated capital program, the company considers the Rockies the second core area of operation.
Crescent expects “scaled enterprise advantages and complementary assets” to drive annual synergies of $65-100 million through immediate cost of capital savings and operating efficiencies.
The combination “solidifies Crescent as a leading operator in the Eagle Ford and strengthens the company’s growth platform with increased scale. The combined company will have an attractive and balanced portfolio of stable, low-decline and highly cash-generative production with a deep inventory of proven drilling locations, well-positioned for flexible capital allocation through commodity cycles,” said David Rockecharlie, Crescent chief executive officer.
Pro forma for the transaction, Crescent shareholders will own about 69-79% of the company and SilverBow shareholders will own about 21-31%.
SilverBow shareholders will receive 3.125 shares of Crescent Class A common stock for each share of SilverBow common stock, with the option to elect to receive all or a portion of the proceeds in cash at a value of $38 per share, subject to possible pro ration with a maximum total cash consideration for the transaction of $400 million.
Subject to customary closing conditions, including approval of shareholders and regulatory agencies, the deal is targeted to close by the end of this year’s third quarter.
After close, the Crescent board of directors will increase to 11 members with the addition of 2 directors to be designated by SilverBow. John Goff will continue to serve as non-executive chairman and David Rockecharlie will continue to serve as chief executive officer of the combined company. The new Crescent Energy Co. will remain headquartered in Houston.
