Crescent Energy to Acquire Vital Energy in $3.1 Billion All-Stock Transaction, Establishing a Top 10 Independent Oil and Gas Company
Crescent Energy Company (NYSE: CRGY) (“Crescent” or the “Company”) and Vital Energy, Inc. (NYSE: VTLE) (“Vital”) jointly announced today that they have entered into a definitive merger agreement under which Crescent will acquire Vital in an all-stock transaction valued at approximately $3.1 billion, inclusive of Vital’s net debt. The transformative deal is designed to create one of the top ten independent oil and gas producers in the United States, combining complementary assets, a disciplined free cash flow–oriented strategy, and a management team with deep operational and financial expertise.
The combined company will operate with a clear focus on sustainable shareholder value creation. By integrating the high-quality asset portfolios of both Crescent and Vital, the new enterprise expects to deliver robust cash flows, enhance operational efficiency, and maintain financial flexibility to adapt to dynamic market conditions. The transaction reflects the continued consolidation trend within the U.S. energy sector, where scale, capital discipline, and free cash flow generation have become essential competitive advantages.
Transaction Details
Under the terms of the Merger Agreement, each Vital shareholder will receive 1.9062 shares of Crescent Class A common stock for every share of Vital common stock held. This exchange ratio represents a 5% premium relative to the 30-day volume weighted average price (“VWAP”) exchange ratio and a 15% premium to Vital’s 30-day VWAP as of August 22, 2025.
The all-stock nature of the deal ensures that both sets of shareholders remain aligned in the long-term success of the combined enterprise. Post-closing, Crescent shareholders will hold a majority interest, while Vital shareholders will own a meaningful stake in the enlarged company, benefiting from synergies, improved financial strength, and a stronger growth trajectory.
Strategic and Financial Benefits
The transaction is positioned as highly compelling for both Crescent and Vital shareholders, offering a series of immediate and long-term advantages:
- Attractive Acquisition Returns and Significant Accretion
- Crescent expects to achieve strong cash-on-cash investment returns, supported by the combined companies’ existing production base.
- The merger is forecasted to be highly accretive across key metrics, including cash flow from operations (CFFO), free cash flow (FCF), and net asset value (NAV) per share.
- Annual synergies of approximately $90–$100 million are expected immediately, with the potential for additional cost reductions and operating efficiencies as integration progresses.
- Consistent Strategy Focused on Free Cash Flow and Attractive Returns
- Crescent will apply its disciplined approach of lower activity and higher free cash flow generation to Vital’s assets.
- This strategy aligns with Crescent’s long-standing business model, which emphasizes consistent capital discipline, shareholder returns, and maintaining a leading dividend program among peers.
- Enhanced Balance Sheet and Financial Position
- The combined business will strengthen Crescent’s progress toward an investment-grade credit profile, supported by leverage accretion and a clear divestiture pipeline.
- Crescent plans to monetize approximately $1 billion in non-core assets, streamlining operations and sharpening focus on the most profitable basins.
- Strengthened Growth Through Acquisition Platform
- Crescent has developed a proven model of accretive growth through disciplined acquisitions and operational execution.
- With more than $60 billion of addressable opportunities surrounding the expanded footprint, the company is well-positioned to continue executing strategic M&A to drive future value.
- Creation of a Top 10 Independent Producer
- The pro forma entity will rank among the top ten independent U.S. oil and gas companies.
- With a scalable asset base across the Eagle Ford, Permian, and Uinta basins, Crescent will manage more than a decade of high-quality drilling inventory, ensuring long-term production visibility.
Leadership Commentary
John Goff, Chairman of Crescent’s Board of Directors, emphasized the transformative nature of the acquisition:
“This transaction is transformative for Crescent and fully aligned with our strategy. Our track record of returns-driven growth through disciplined M&A has already cemented Crescent as a top-tier independent. With this acquisition of Vital, alongside a robust pipeline of non-core divestitures, we sharpen our focus, expand our opportunity set, and position the company for sustained value creation. We also see a clear line of sight to achieving investment-grade credit status, which will further enhance our ability to grow and reward shareholders.”
David Rockecharlie, Chief Executive Officer of Crescent Energy, highlighted the financial and operational advantages for investors:
“The combination represents compelling value for all shareholders, offering strong acquisition returns and accretion across every key financial measure. Crescent has always prioritized free cash flow generation, and when we apply our proven model to Vital’s assets, we create sustainable and durable value. With the acquisition and our $1 billion divestiture pipeline, we will be more focused, more scaled, and better positioned than ever to deliver long-term value to shareholders.”
Jason Pigott, President and Chief Executive Officer of Vital Energy, underscored the strategic rationale for Vital shareholders:
“This merger recognizes the significant value that Vital has created over the years. By combining with Crescent, we create a premier mid-cap operator with enhanced scale, capital allocation flexibility, and the ability to drive efficiencies across a much larger asset base. Our shareholders will benefit from strong free cash flow generation, a fortified balance sheet, and consistent capital returns. Most importantly, this transaction acknowledges the hard work and dedication of our employees, who have been instrumental in building Vital into a highly respected independent producer.”
Industry Context and Outlook
The Crescent-Vital merger comes at a time of heightened consolidation within the oil and gas sector. With volatility in commodity prices, increasing investor demands for returns, and rising capital discipline, independent producers are turning to scale and efficiency as critical levers for competitiveness.
By establishing itself as a top 10 independent, Crescent gains the scale necessary to compete effectively with larger players, while maintaining the agility of a mid-cap operator. The combination also ensures a diverse geographic footprint across three premier U.S. basins, enabling flexibility in capital allocation and risk management.
Furthermore, the focus on free cash flow aligns the company with shifting investor preferences, where consistent dividends, share repurchases, and disciplined reinvestment are prioritized over unrestrained production growth. Crescent’s management has repeatedly emphasized that this deal is not about chasing size for its own sake, but about creating a durable platform capable of delivering sustainable value across commodity cycles.
