Eagle Ford Shale’s Power Shift: Crescent Energy’s Bold Acquisition of SilverBow Resources
In early Q1 of 2023, Kimmeridge Energy Management expressed interest in SilverBow Resources, but withdrew its proposal, clearing the path for Crescent Energy to step in with a new offer. Crescent Energy's acquisition of SilverBow Resources is targeted to close by the end of Q3 2024 for $2.1 billion and will elevate Crescent Energy to the position of the second-largest operator in the Eagle Ford Shale, signifying a substantial shift in power within the region. Figure 1 shows the geographical coverage of Crescent Energy and SilverBow Resources using the TGS Well Data Analytics application. SilverBow is displayed in purple and Crescent in teal, with a combined total net acreage of 451,000 in the Eagle Ford Shale. Crescent Energy has produced nearly 16.2 MMboe over the last year, averaging 44,358 boe/d. In contrast, SilverBow Resources was among the top producers in the Eagle Ford Shale, with an average production rate of 14,064 boe/d and a net production of 91.4 MBoe/d in the first quarter of 2024, according to TGS Well Data Analytics, as illustrated in Figure 1.
Figure 1. TGS Well Data Analytics application showing the geographical coverage of SilverBow in southeast Texas and Crescent Energy company assets within the United States, including some production analysis charts illustrating production per lateral feet and total BOE/d over the past decade across Eagle Ford Shale.
Crescent Energy's long-term strategic focus, per their recent press release, is to expand their operations in the Eagle Ford Shale. This acquisition aligns perfectly with that vision. With industry-wide consolidation ongoing, this acquisition offers numerous benefits for Crescent Energy as a leading operator in the Eagle Ford Shale. It creates opportunities to drive significant annual synergies of $65 to $100 million through the immediate cost of capital savings and operating efficiencies, improving Crescent’s operational efficiency and profitability, as illustrated in Figure 2 (from Crescent Energy’s acquisitions investor presentation of May 2024). The acquisition is anticipated to improve capital allocation and free cash flow, positioning Crescent Energy for future growth and expansion of its operations in the Eagle Ford Shale. The acquisition will also strengthen Crescent’s position in the market and improve its bargaining power. As a result, Crescent will have a larger portfolio, producing approximately 250k boe/d with low decline and long life.
Figure 2. Crescent Energy is set to acquire SilverBow Resources. An investor presentation from May 2024 highlighting adjacent assets emphasizes significant opportunities for efficiency and value creation
The deal provides Crescent with more resources, positioning the company for further growth through profitable mergers and acquisitions. The acquisition of SilverBow Resources by Crescent Energy is poised to have significant impacts on Crescent Energy’s operations and the oil and gas industry in the Eagle Ford Shale.
With TGS Well Data Analytics, this kind of benchmarking and analysis can be performed rapidly. For further details on Well Data Analytics or to schedule a demo, please contact us at WDPSales@tgs.com.
