Crescent Energy Company (CRGY): A Bull Case Theory
We came across a bullish thesis on Crescent Energy Company on Valueinvestorsclub.com by slim. In this article, we will summarize the bulls’ thesis on CRGY. Crescent Energy Company's share was trading at $8.88 as of August 4th. CRGY’s trailing and forward P/E were 20.31 and 4.82, respectively according to Yahoo Finance.
View of an oil & gas exploratory platform, surrounded by a vast expanse of sea & sky.
Crescent Energy Company (CRGY), an acquisition-driven oil and gas exploration and production firm managed by KKR, trades at just 3.4x EBITDA and offers a compelling 28% free cash flow yield alongside a 5% dividend yield. Formed in 2021 through the merger of KKR-backed Independence Energy and Contango Oil & Gas, CRGY employs an “acquire-and-exploit” strategy focused on disciplined capital allocation and cash-on-cash returns. It targets a 2x multiple of invested capital with quick payback periods, while maintaining a reinvestment rate below 50%, ensuring operations are fully funded from cash flow. CRGY has consistently paid dividends for 13 years and currently distributes $0.12 per share quarterly.
The company has executed eight major acquisitions since 2021, most notably merging with SilverBow Resources in 2024 and acquiring Ridgemar LLC in early 2025, solidifying its position as the third-largest oil and gas producer in the Eagle Ford. Management by KKR provides scale, financial strength, and alignment, with CEO David Rockecharlie also leading KKR’s Energy Real Assets platform. John Goff, a renowned value investor and CRGY board chairman with a 4% stake, adds further credibility and strategic oversight.
Recent moves to simplify the capital structure by eliminating the UP-C framework and collapsing share classes enhance transparency and liquidity. CRGY boasts a 15-year drilling inventory and significant natural gas exposure, with 60% of 2025 production hedged at favorable prices. With strong cash generation, a history of disciplined growth, and catalysts including continued M&A execution, CRGY offers an attractive risk/reward profile supported by best-in-class sponsors and proven operators.
Previously, we covered a bullish thesis on Valaris Limited (VAL) by Alpha Ark in February 2024, which highlighted the company’s strong fleet positioning, improving financials, and upside from rising offshore drilling rates. The company’s stock price has depreciated by approximately 1.1% since our coverage. This is because the offshore recovery thesis partially played out. The thesis still stands as fundamentals remain strong. Slim shares a similar view on energy but emphasizes CRGY’s acquisition-driven onshore strategy and cash generation.
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