Why Is Crescent Energy (CRGY) Up 24.7% Since Last Earnings Report?

It has been about a month since the last earnings report for Crescent Energy (CRGY). Shares have added about 24.7% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Crescent Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.

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

Crescent Energy Company reported second-quarter 2026 adjusted earnings of 69 cents per share, beating the Zacks Consensus Estimate of 59 cents by 16.95%. The bottom line also increased from the year-ago adjusted earnings of 43 cents. The outperformance was supported by strong production, higher oil realizations and continued operating efficiencies.

The Houston, TX-based oil and gas exploration and production company’s revenues of $1.4 billion beat the Zacks Consensus Estimate of $1.22 billion by 13.2%. The top line also increased sharply from $898 million in the year-ago quarter.

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.

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.

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.

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.

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.

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.

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.

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.

Raises 2026 Outlook

The 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%.

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.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 12.5% due to these changes.

VGM Scores

At this time, Crescent Energy has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Crescent Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Crescent Energy belongs to the Zacks Alternative Energy - Other industry. Another stock from the same industry, Expand Energy (EXE), has gained 7.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Expand Energy reported revenues of $1.83 billion in the last reported quarter, representing a year-over-year change of -9.5%. EPS of $1.33 for the same period compares with $1.10 a year ago.

Expand Energy is expected to post earnings of $1.41 per share for the current quarter, representing a year-over-year change of +45.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.4%.

Expand Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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This article originally published on Zacks Investment Research (zacks.com).

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