Crescent Q2 Earnings and Revenues Beat Estimates, Rise Y/Y

The quarter was marked by solid production, lower operating costs and record cash generation. Crescent produced 335 thousand barrels of oil equivalent per day (MBoe/d), which beat our consensus mark of 331 MBoe/d, while adjusted operating expenses were about 9% below the prior annual guidance midpoint.

CRGY's Production Base Remains Strong

Total production averaged 335 MBoe/d, up from 263 MBoe/d in the year-ago quarter. Oil production increased to 140 thousand barrels per day (MBbls/d) from 108 MBbls/d. The figure was also above our consensus estimate of 136 MBbls/d.

Natural gas production rose to 715 million cubic feet per day (MMcf/d) from 644 MMcf/d, while NGL production increased to 76 MBbls/d from 48 MBbls/d. Natural gas production was 2.5% below our consensus estimate, while NGL production was 7.6% above our consensus estimate.

During the quarter, Crescent drilled 43 gross operated wells and brought 32 gross operated wells online. Capital expenditures, excluding acquisitions, totaled $284 million.

Crescent's Permian Momentum Accelerates

Crescent continued to make progress in the Permian, where it has moved from the stabilization phase following the acquisition into optimization.

Permian production totaled 124 MBoe/d, with oil accounting for 42% of volumes. Capital spending in the basin was $104 million. Crescent drilled nine gross wells and turned 12 gross wells in line during the quarter.

Importantly, the company increased its Permian synergy target to $250-$300 million, roughly three times the original target of $90-$100 million. Approximately $190 million of annualized synergies have already been captured.

The gains are being driven by lower well and operating costs, improved workover and artificial-lift programs, better field operations and commercial optimization. Management expects a large portion of the updated synergy target to be captured as the company exits 2026 and moves into 2027.

CRGY's Eagle Ford Operations Stay Efficient

The Eagle Ford business produced 169 MBoe/d, with oil representing 39% of volumes. Capital spending totaled $147 million. Crescent drilled 26 gross wells and brought 16 gross wells online during the quarter.

Operational efficiencies remain a key driver in the basin. Well costs have declined more than 25% since 2023, while workover and artificial-lift optimization are supporting base production. CRGY is also seeing encouraging results from the Austin Chalk, which could expand its economic drilling inventory.

CRGY Sees Further Cost Gains in Uinta

CRGY continued to improve drilling and completion efficiency in the Uinta Basin. Year-to-date drilling efficiency increased to roughly 1,600 feet per day from about 1,300 feet in the 2025 program. Completion efficiency increased to approximately 3,000 lateral feet per day from about 1,600 feet.

Simulfrac utilization reached 100% of gross wells turned in line, while drilling, completion and facilities costs declined to below $800 per foot from approximately $950 in the 2025 program.

These efficiencies are helping CRGY lower development costs and improve returns across its portfolio.

CRGY 's Revenue Mix Benefits From Oil

Oil remained the largest revenue contributor at $1.23 billion,more than doubling from $602.5 million in the year-ago quarter. The figure was also above our consensus estimate by 18.9%.

Natural gas revenues declined to $33.8 million from $159 million, while NGL revenues increased to $129.4 million from $98.1 million. Midstream and other revenues totaled $5 million compared with $38.4 million a year earlier.  Natural gas revenues declined 61.2%, and NGL revenues declined 5.8%, while Midstream and other revenues declined 17% compared with our Consensus estimates.

Average realized oil prices before derivative settlements were $96.61 per barrel, up significantly from $61.47 a year ago. Natural gas realizations, however, declined to 52 cents per Mcf from $2.71. NGL prices fell to $18.67 per barrel from $22.59.

The company's total realized price before derivative settlements increased to $45.63 per Boe from $35.96 a year ago.

CRGY's Cash Flow & Balance Sheet

CRGY generated record adjusted EBITDAX of $798 million, up from $513.9 million in the year-ago quarter. Levered free cash flow reached a record $418 million, while operating cash flow totaled a record $707 million.

The company ended June with approximately $2.2 billion of liquidity. Total debt was approximately $5.17 billion, while net debt stood at $4.9 billion. Consolidated net leverage was 1.6 times.

CRGY further strengthened its balance sheet in July by redeeming the remaining $259 million of its 7.75% senior notes due 2029 at par. The transaction reduced interest expense and eliminated the company's nearest debt maturity. Pro forma liquidity following the redemption was expected to remain around $2 billion.

CRGY's board of directors declared a fixed quarterly dividend of 12 cents per share. As of June 30, CRGY had approximately $336 million remaining under its share-repurchase authorization.

CRGY's Minerals Business Adds Cash Flow

The minerals and royalties business produced 13 MBoe/d, more than doubling from 6 MBoe/d in the prior-year quarter. Oil production from the business increased to 6 MBbls/d from 2 MBbls/d. Average realized prices before derivatives totaled $51.45 per Boe, compared with $34.95 a year earlier. Operating expenses were $4.26 per Boe compared with $5.40 in the prior-year period.  The business generated $49.4 million of adjusted EBITDAX during the quarter compared with $15.9 million a year earlier.

CRGY Raises 2026 Outlook

This Zacks Rank #3 (Hold) company raised its 2026 total production guidance to 327-335 MBoe/d from 320-335 MBoe/d. The expected oil mix remains 40-42%. The company lowered adjusted operating expense guidance to $11-$12 per Boe from $11.50-$12.50. Production tax guidance was reduced to 5-6% of commodity revenues from 6-7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Importantly, Crescent maintained its development capital guidance at $1.325-$1.425 billion, despite the higher production outlook. The combination of increased volumes and lower operating costs is expected to support additional free cash flow.

At current commodity prices, management expects to generate more than $1 billion of levered free cash flow in 2026. Crescent intends to use its financial flexibility to maintain the dividend, reduce debt and pursue accretive acquisitions or opportunistic share repurchases.

Important Earnings at a Glance

While we have discussed CRGY’s second-quarter results in detail, let us take a look at three other key reports in this space.

San Antonio, TX-based oil and gas refining and marketing service provider, Valero Energy Corporation VLO, reported second-quarter 2025 adjusted earnings of $2.28 per share, which beat the Zacks Consensus Estimate of $1.73. However, the bottom line declined from the year-ago quarter’s level of $2.71. The better-than-expected quarterly results can be attributed to an increase in refining margins per barrel of throughput and lower total cost of sales. The positives were partially offset by a decline in refining throughput volumes and renewable diesel sales volumes.

The company had cash and cash equivalents of $4.5 billion at the end of the second quarter. As of June 30, 2025, it had a total debt of $8.4 billion and finance-lease obligations of $2.3 billion.

Houston, TX-based oil and gas equipment and services provider, Halliburton Company HAL, reported second-quarter 2025 adjusted net income of 55 cents per share, which was in line with the Zacks Consensus Estimate but below the year-ago quarter’s profit of 80 cents (adjusted). The numbers reflect softer activity in the North American region, partly offset by international growth.

As of June 30, 2025, the company had approximately $2 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. Halliburton reported second-quarter capital expenditure of $354 million, up from our projection of $338.2 million.

Norway-based integrated oil and gas operator, Equinor ASA EQNR, reported second-quarter 2025 adjusted earnings per share of 64 cents, which missed the Zacks Consensus Estimate of 66 cents. The bottom line declined 25% from the year-ago quarter’s level of 84 cents. Weak quarterly results can be attributed to lower liquids production across major segments and reduced liquids prices. Natural declines and portfolio divestments in Nigeria and Azerbaijan also contributed to the decrease in overall production.

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