Crescent Energy to Acquire Eagle Ford Assets from Devon Energy - SILVERBOW RESOURCES INC

Hello, everyone. Thank you for joining us and welcome to the Crescent Energy Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press start 1 again. I will now hand the conference over to Reid Gallagher, Investor Relations. Reid, please go ahead. Thank you, Operator, and good morning, everyone We appreciate you joining us to discuss Crescence's announced acquisition. With me today are our CEO, David Brockecharlie, our COO, Joey Hall, and our CFO, Brandi Kendall. Our Executive Vice President of Investments, Clay Rind, will also be available during Q&A. A replay of today's call will be available by webcast and accessible from our website. Please note that the information reported on this call speaks only as of today, October 8, 2026, and therefore, time-sensitive information may no longer be accurate as of the time of the replay listening or transcript reading. In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-thinking statements reflect the current views of Crescent's management. However, various risks, uncertainties, and contingencies could cause our actual results, performance, or achievements to differ materially from those expressed in the statements made by Management. The listener is encouraged to read our annual report on Form 10-K, our current reports on Form 8-K as well as our quarterly reports on Forum 10-Q to understand those risks, uncertainties, and contingencies as well to review additional disclosures associated with the pending acquisition. The pending acquisition, which is currently expected to close in the fourth quarter of 2026 or early 2027, is subject to customary closing conditions and receipt of required regulatory approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act. Now, I would like to turn the call over to David. Good morning, and thank you for joining us. Today, Crescent announced an agreement to acquire Devon Energy's Evilford assets for a net purchase price of approximately $3.85 billion. This is another logical and valuable step forward for Crescient, and it is a continuation of the same strategy we've executed consistently for more than a decade. Acquire high-quality assets at attractive returns. Apply our proven operating strategy to improve performance and create long-term value through free cash flow. By combining both investing and operating expertise, we have built Crescent into a top-ten independent operator with a world-class Eagleford position, where we will now be the second-largest producer. We have a streamlined portfolio of scaled assets across the Eagleford, Permian, and Uinta basins, and we have significant operational upside embedded in our portfolio. You've seen us deliver on that upside so far this year with operational improvement on a unique trajectory in our sector. We are driving down well costs and enhancing margins to extend our inventory life, reduce our break-evens, and increase free cash flow and returns across our portfolio, As we highlight our operational capabilities, I want to recognize the hard work and outstanding performance of everyone on Team Crescent who has helped us deliver on our integration and operational value creation year to date. Cresent is strongly positioned and we were ready to seize this opportunity. Our ability to acquire these assets accelerates and expands the operational value-creation potential within our business today. this addition to our portfolio solidifies Crescent's position in the Eagleford as truly world-class. As we integrate these assets and continue to drive operational value creation, our measure of success remains the same. We want to deliver multiples on invested capital. Crescant already presents a differentiated value proposition in the sector, and we believe this acquisition enhances our ability to achieve that goal. With that, I want to begin with a few key takeaways about the acquisition. First, the strategic fit is truly differentiated. We have owned royalties under these assets for more than a decade and have operations directly offset. We know the acreage, the geology, and the operating environment as well as any asset in our own portfolio today. The acquisition adds approximately 68,000 barrels of oil equivalent production per day, nearly 40,000 barrel of oil production per day, and more than 600 net locations in the Carnes Trough, with economics that compete with anything in the lower 48. Second, the acquisition returns are compelling and the accretion is meaningful. We are acquiring premier assets for approximately three-time EBITDA and adding Tier 1 inventory for less than $2 million per net location. We expect base returns in excess of our two-times multiple uninvested capital target and significant accretion across all key metrics, including cash flow, free cash flow and net asset value. Third, this acquisition accelerates and expands our operational value creation efforts that are already underway. ProForma Crescent has lower break-even inventory, higher margin cash flow, and lower capital intensity, all driving enhanced free cash flow generation. We see significant opportunity to make these premier assets even better and have identified approximately $140 million in annual synergy potential. And finally, this acquisition is transformational for our market-leading Royalties platform. Our existing minerals ownership overlaps substantially with the acquired assets, and the transaction includes approximately $50 million of incremental Royalties EBITDA. In addition to the added scale, we will now operate a significantly higher portion of the Crescent Royalties portfolio, meaningfully improving visibility into future development and cash flow generation. Pro forma for the transaction, Crescent Royalties is a bigger, better business and well-positioned in both scale and quality versus public royalties peers. In summary, this is a very attractive addition to our portfolio, but it is more than just an asset acquisition. It is another major step on our journey to create a leading energy company. Over the last three years, Cresent has built a world-class position in the Eagleford. Since June 2023, we've announced nine major Eagleford acquisitions and realized more than $200 million of annual synergies. We have a proven track record in the basin, acquiring assets at attractive value, integrating them efficiently, and improving their operating and financial performance. We have lowered well costs, increased lateral lengths, improved completion efficiency, optimized field operations, and captured commercial benefits from our growing scale. And we have a lot more operational value creation still ahead of us. This transaction gives us the opportunity to expand our proven playbook in the heart of our core operating area. With that, I'll pass the call over to Joey. Thanks, David, and good morning, everybody. Building on that introduction, these assets accelerate and expand Crescent's opportunity to create value through operational improvements. We're adding high-margin production and more than 600 Tier 1 net locations to our portfolio, driving a step change in capital efficiency and free cash flow generation. The Carnes TROP is one of the lowest break-even oil resources in the lower 48, and Devin's recent well results demonstrate the potential of these assets. Pro forma for the transaction, Crescent will have approximately six years of sub-$50 break-Even inventory, approximately 10 years of sub-$60 break-even inventory, and more than 15 years of total inventory life. And while these assets are extremely high quality, we see a significant opportunity to improve the performance by executing our playbook. We have identified approximately $140 million of synergy potential across drilling and completions, LOE, and marketing. The clearest example of operational upside here is development optimization, where we see significant potential to improve well cost and increase capital efficiency through longer lateral development and surface design efficiencies. This isn't new for us. Across our five most recent acquisitions, we've increased average lateral length by more than 25% versus previous operators, driving a step change in cost structure, increasing returns, and lowering break-evens. With this change alone, we expect to deliver approximately $100 million in annual synergies from the Devon assets. Our message today is straightforward. These are premier assets that clearly expand Crescent's upside, and our track record demonstrates our ability to make them even better. On a personal note, while today's focus is on the business merits of this transaction, I want to recognize the hard work and dedication of the Devin Eagleford team. I look forward to meeting you soon and welcoming those of you who will join us here at Crescent. And with that, I'll turn it over to Brandy. Thanks, Joey. We are acquiring these assets for a net purchase price of approximately $3.85 billion, with a July 1st effective date and an expected closing in the fourth quarter of 2026 or early 2020. We expect to fund the acquisition through a balanced combination of debt and equity, designed to preserve balance sheet strength and support efficiency leveraging. As part of the equity financing, KKR, a long-standing investor and strategic partner, has committed $500 million in support of the transaction. From an investment perspective, the transaction is consistent with our disciplined underwriting framework. The existing production base provides meaningful valuation support, including approximately $2.3 billion of approved developed PV-10 plus significant royalties cash flow, while the acquired Tier 1 inventory and identified operating improvements provide additional upside. We expect returns exceeding our two-times MYC threshold, a payback period of less than five years, and meaningful accretion across all e-meters. Importantly, these assets also improve the capital efficiency of the entire Crescent business. We expect the pro forma company to maintain approximately 170,000 barrels of oil production per day with approximately $1.8 billion of annual development capital, representing a maintenance-free investment rate approximately 5% lower than our standalone business. The combination of high-quality inventory, lower capital intensity, and increased margins translates into greater free cash flow capacity. This is important not only for long-term shareholder returns, but also for our ability to reduce debt following closing. Turning to the balance sheet, our acquisition financing maintains our strong financial position, and our near-term capital allocation priority will continue to be deleveraging. We intend to maintain our fixed dividend and preserve strong liquidity while directing excess free cash flow toward debt reduction. Our hedge strategy is an important part of protecting the capital we invest and our deleveraging path. We've added meaningful incremental hedges alongside the acquisition to lock in attractive commodity prices and increase cash flow visibility during the initial debt reduction period. Combined with the strong free cashflow capacity of the pro forma business and our disciplined financing approach, this supports our targets of approximately 1.5 times leverage at year-end 2027 and approaching one times at year-end 2028 based on current SERP pricing. We believe the increased scale, stronger free cash flow generation, and clear path to deleveraging support continued progress toward an investment-grade credit profile. With that, I'll turn the call back to David. Thanks, Brandi. In summary, this acquisition represents another logical and valuable step forward for Crescent as we add high-quality assets and attractive value in the heart of our core operating area. I'd like to leave you with our key takeaways. First, this acquisition solidifies Crescent's world-class Eagleford position, and the strategic fit is truly differentiated. We have a proven track record of Eagleford value creation, and we have owned royalties under these assets for more than a decade. We also have existing operations directly offset these assets. This gives us differentiated conviction in the opportunity and our ability to execute. Second, the returns are compelling and the accretion is meaningful. We're acquiring premier assets for approximately three times EBITDA and adding tier one inventory for less than $2 million per net location. Third, this acquisition accelerates our operational value creation efforts. Proforma Crescent has lower break-even inventory, higher margins, and lower capital intensity. These are tier one assets, but we see significant opportunity to make them even better. And finally, this acquisition is transformational for our market-leading royalties platform with greater scale, increased operatorship, and enhanced development visibility. We have built a business that is very well positioned versus public peers. Pro forma for the transaction, Crescent will produce approximately 400,000 barrels of oil equivalent per day with approximately 170,000 barrel of oil per day and will be the second largest operator in the Eagle Fruit. We have a streamlined portfolio of scaled assets and we have significant operational upside embedded in our portfolio. As we integrate these assets and continue to drive operational value creation within our business, our measure of success remains the same. We want to deliver multiples on invested capital. Crescent presents a differentiated value proposition in the sector and we believe this acquisition enhances our ability to achieve that goal. Before we go to questions, I'd like to once again recognize everyone on Team Crescent, including our investors and the communities where we operate. We are building something special, and we remain focused on safe and efficient operations that will continue to drive long-term value for our investors. And lastly, as Joey said earlier to the Devon Eagleford team, we look forward to welcoming you to Team Cresent. We have a great opportunity ahead of us. With that, we'll open it up for Q&A. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press start 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&E roster. your first question comes from the line of neil dingman with william blair your line is open please go ahead uh morning team david team and congrats uh fantastic uh assets you're adding um my david my first question is just you know you mentioned in the prepared remarks that i'm sure nothing changes about the free cash flow focus you all have um could you talk about activity i know I think they were running kind of two to three rigs. You know, you add those to yours. Do you anticipate kind of the same type of program? Or, you know, or I guess my sort of follow-up question with that is, you now, how much is that predicated on higher prices? Because I would assume you could get to that if prices stay at these very, you known, solid levels. You can get to one-times leverage much quicker if you'd be a little bit more active, but wondering how you feel about that? Yeah, great question. Good news. Very simple answer. Same as always. We're about maximizing free cash flow and returns. So we're effectively going to keep activity at about the same level. But I think the highlight is that by folding this into the company, we see significant capital allocation flexibility. So, we think we're going to deliver effectively the same production with less capital, just more capital efficiency. which is greater free cash flow for investors. Great to hear. And then just secondly, just you mentioned very quickly on the royalties. Is that something now that you guys are getting now to have a pretty decent-sized position that you could spin that off or somehow just doesn't seem like you're getting a ton of value for that quite yet. Now with this addition, is there something you could do to, I don't know, monetize or get some value in that much quicker? Hey, Neil, it's Clay. You know, I think we hit it in the prepared remarks, but this is a total game changer for the royalties business. So when you think about our royalties businesses, you know, we've been talking to the market about it being a $200 million a year EBITDA business. We highlight the slides. You know this grows the cash flow by more than 20%, so we're highlighting about $250 million of cash flow generation. But I think more importantly, we take a business where we were the operator on about 10% of our cash flow, and we make it 40%, right? Because we already had royalties on this position, and then we're buying a number of royalties in this position. And so now we control a little bit. We have line of sight on cash flow of about half of our kind of cash flow today, which we think is really compelling strategically. So I think, you know, what we say is it's clearly a super high-value part of the business, and we are committed to maximizing that value for our shareholders here, and we think this transaction just kind of further enhances that. And then I'll just finish with David. We announced in the first quarter that we were going to take 12 to 18 months to kind of evaluate our minerals position. And as Clay said, this is a game changer, and you should assume that, you know, we're on the same or faster timeline than we were in the first quarter. Great to hear. Thanks, David. Thanks, Clay. Your next question comes from the line of Noah Hungness with Wells Fargo. Your line is open. Please go ahead. Morning. Thanks for getting me on. For my first question here, I wanted to ask on the REFRAC opportunities, you all spoke about the 600 tier one net locations, but how can we think about the amount of REFAC opportunities you have on the asset? Clay Johnson Hey, it's Clay. You know, I think as we – one of the things we love about this asset is, you know, Joey mentioned the quality of the resource. So as we think about those 600 locations, that does not include Refrex. So that is full D&C across Bay Assa. We certainly think the opportunity for incremental resource here is plentiful, but that's upside for us today. And so those 600 are locations that don't include Refrax. Great. That's helpful. Great, that's helpful. And then the next question is on just your hedge book. Is there a certain percent that you'll be looking to hedge via the pro forma production or is it like a floor that you'd be looking for to lock in just to kind of how are you thinking about that given where the strip is today? Hey Noah, it's Brandi. So, I had mentioned in the prepared remarks that we've been active hedging NCU signing of the purchase agreement to really protect the deleveraging pathway. As we sit here today, we're roughly 50 percent hedged on oil for 2027, and I would say of that position, roughly two-thirds are swaps and one-third are callers. that's great congrats again your next question comes from the line of john abbott with wolf research your line is open please go ahead hey good morning first question right the deal comes with 600 locations you know based on your commentary it seems like these assets would receive a greater amount of activity so how do you think about inventory with the asset it, how should we think about oil production on this asset versus other areas in your ego sort of going forward? Yeah, great question. Happy to take it. As you know, John, we're very focused on maintaining stable levels of activity to gain efficiency, and we're not looking to go accelerate here. But we think this has a huge depth of inventory, as we said. it's also a very high quality inventory. The other thing you're seeing throughout the course of the year to date on Crescent is we're making significant progress lowering our cost structure, lowering break-evens, and even adding to our existing inventory. So long story short, in the presentation, we disclosed approximately six years of sub-50 inventory, 10 years of sub 60 and then we think we see significant upside beyond that as we continue to execute appreciate it and then just one follow-up question here you talk you call out about 140 million savings in the presentation how have you sort of risked that number hey john how are you this morning um you know i i mean this is 140 million dollars worth that we feel fairly confident in. The reason I say that is a majority of that is on the DMC side and a majority that is in our ability to increase lateral links. You know, this puzzle is pretty simple. You're taking 5,000 foot lateral link blocks and adding them together, or two 6,000 foot lateral links blocks and then adding them all together. We know Devin had some early success in drilling these longer laterals we've had success in drilling these longer lateral so i mean that that's the primary way that we're going to achieve these synergies the other one is that anytime you increase scale you and you include opportunities to improve your cost structure and so we know that's a given as well and so i would put high confidence in um 140 million and maybe what i'd add these are all areas where we've have a really strong track record of executing and capturing in prior acquisitions. And we expect to capture the entirety of the 140 throughout the course of 2027. So fully captured in our run rate as we exit next year. Thank you, Brandi and Joey. Your next question comes from the line of Philip Youngworth with BMO. Your line is open. Please go ahead. Thanks, and congrats on the deal. Wondering how you see the base decline on the Eagleford for oil and gas, and then just how you are thinking about base decline at the corporate level now, just given the changes to the portfolio over the years. Yeah, great question. Also, an easy answer. You know, we always target lower decline rates than is typical in the industry, and the way we operate naturally allows those declines to settle in. So you've seen us really settle the decline in on the acquisition we made in the Permian last year. These assets come in with a modestly higher decline rate, but our view of the overall portfolio will stay on the same trajectory, moderating down towards 25% decline over time. Okay, great. And then you've also streamlined the portfolio through divestitures quite a bit, just with the larger Eagleford scale, number two in the basin now. Do you think it makes sense to look at additional pruning, or are you pretty happy with where the legacy assets sit at this point? Yeah, as you recognize, we made a transformational step to exit non-core assets last year. the exit of those assets has gone great in terms of operational efficiency and what I'll call capturing incremental value from just consolidating around these core positions. So we like what we have today and we're going to stick to it and we think it's just a great portfolio. Sounds good. Thanks, guys. Your next question comes from the line of Tim Riesvan with KeyBank Capital Markets. Your line is open. Please go ahead. Good morning, folks. Excuse me. Thank you for taking our questions. At the first one, I know some of my priors were addressed. I know the funding structure is still a work in progress as you evaluate capital markets. Can you talk about the assumptions behind that year-end 27 and year-ending 28 leverage targets? And obviously, it sounds like there's no asset sales being contemplated. So can you just kind of roughly talk about how to get there? that one and a half times at the end of this year yeah hey tim it's brandy um she probably saw from the press releases this morning we did launch a primary equity offering i mentioned my prepared remarks half of that is already covered through the kkr commitment so expect the balance of the transaction to be funded with a mix of debt and free cash flow so i can't comment on you know other kind of specific capital markets transactions that feel really good with respect to where we sit today. With respect to the equity that just launched, it's half covered. The free cash flow capacity of this business allows us to significantly delever. And then as I mentioned on the prior question, we've locked in significant hedges on the 2027 cash flow to feel very good about the deleveraging pathway to get to that 1.5 times, 27x. Okay. That's helpful. And then just to repeat, I'm sorry, I think this was mentioned a bit in your comments. On the royalties segment, did you say you operate now 40% of your position and 50% of cash flow? Is that the correct numbers? Yeah, that's right. So about 40% to 50% of the position, we operate pro forma. And that's up to 10% free transaction, so step change from an operating control. Okay. I appreciate that. My other questions were answered. Thanks, folks. Your next question comes from the line of Gabe Dowd with Truist. Your line is open. Please go ahead. Thanks, operator. morning everyone and congrats on the uh acquisition was just curious if we could go back to some of the synergies that you laid out curious on the dnc opportunity like what what would the baseline be and i guess i'm just curious that there's any uh contemplation for inflationary pressures embedded in that in that synergy target or it seems like maybe you're expecting to still deliver that net of any uh inflationary pressures yeah hey it's david i'll take it first uh the The simple answer is we operate offset here, so we're just really coming next door and continuing to do what we do, and generally what I would say is all of our investors know we've been on an operational improvement plan all year. We're continuing to execute there, and so from our perspective, operational performance is going to offset any inflation, so it's going to be a lot of work, but we're going to feel great about what we've laid out here, and then our goal is to continue to try to get more but i'll let joey add to that yeah gabe you know just uh you know restating what i answered earlier you know most of this is you know pretty simple and pretty straightforward just increasing lateral links then on the loe side you know again we're just taking advantage of scale i mean this is our backyard unlike whenever we acquired the vital asset in the permian now we're just adding to our position taking advantage of our expertise as clay's made very clear we understand these assets we've had line of sight into them for over 10 years and the lateral link piece is you know just you know very simple to execute and you can see on slide 10 i mean going from an average of 6 500 to 11 500 i mean that's a step change in cost structure and we've been doing this across our acreage um so we're just we're confident we can execute on it and uh looking forward to uh hitting that target and it's david just one more thing i'd add again just to make sure you've got some of the history here these assets were in a pretty wonky jv structure through multiple operators um over the years that just got unwound last year So there's a lot to do here. Right, right, right. Okay. No, thanks, guys. That's helpful. And then just a quick follow-up, maybe back to the minerals piece, and this was discussed earlier, obviously, but just curious, I think earlier this year when you first introduced present royalties, there was maybe a 12 to 18-month kind of window when it felt like you'd have an answer on the strategic lever that you could maybe pull there. So maybe now six to 12 months, since that's about six months ago. Is that a fair, like, window to still maybe hold you to on making a decision there? Absolutely. Okay. All right. Great. Thanks, guys. Your next question comes from the line of Oliver Huang with TPH Research. Your line is open. Please go ahead. Good morning, David, Brandy, and Joey. Congrats on the deal, and thanks for taking our questions. I think most of them have been asked, but just a couple. Just when speaking to production, I know the $68,000 a day is a July estimate. Just assuming that there's continuous activity between now and closing from Devin, is that a fair number to think about exiting the year when the deal officially closes? And are there any ducks that you all would also be inheriting? Hey, it's David. The short answer is yes, we'd expect what I'll call maintenance level of activities and transitioning into our business that way. Perfect. And then just a second question on NOL benefits. Are there any coming alongside the deal? I know you all were pretty shielded for the next couple of years, but just wanted to get the latest thoughts on cash tax assumptions and if the runway might be getting pushed out even a bit further. Hey, Oliver. It's Brandy. We do not expect to be a cash taxpayer in 2027 or likely 2028, but we'll provide more guidance alongside our formal 27 guide. Awesome. Thanks for the time. Your next question comes from the line of Charles Mead with Johnson Rice. Your line is open. Please go ahead. it's good morning david uh joey and brandy um and to the rest of the crescent team uh david i uh i apologize i hopped on a few minutes late so i may have missed some of the details early on the call but i'm wondering if you could characterize these uh 600 locations uh a bit more perhaps you know what what fraction of those are are eagleford versus austin chalk and uh and also if there's a you know i don't want to say down space but maybe like wine racking within an existing kind of fully developed unit, if there's any aspect of that. Yeah, great question. The simple answer is most of it is lower Eagleford and call it Eagleford in general. We do have very good success in our existing business in the Austin Chalk. So we see that as a great area as well. And we do think there will be a lot of locations there over time, and some are included here, but you can assume it's mostly Eagleford. And then to your question on, call it development approach, one of the reasons we don't want to go really fast right away is we do believe there is strong optimization potential around where we land, how we complete. As Joey said, we're going to go redo development plans and make sure we get longer laterals. And I think some of that, I think you said line racking, so I'll use that term. But we think that's still to be determined from an optimization perspective. So we see significant upside there as well. But our expectations around the Eagleford, which is very well known to us, are high, but we see very significant opportunity elsewhere on the assets, including the Austin Chalk. Yeah, Charles, I can't add much to that. I mean, we've got, in the way you asked your question, we've Got all of those in the development strategy. But again, core lower Eagleford, some Enfield, and Austin Chalke. And, you know, I really like to emphasize the Austin ChalKE because, you know, we're one of the largest developers of the Austin ChalKe, and we're really looking forward to the upside that this acreage presents us as well got it that that's great detail david and joey and and perhaps picking up on that that optimization thread um you know this this part of the eagle for this is really yeah i think it's you know there's no primary leasing available anymore i mean this is this is all locked up but uh you know with a new operator you you perhaps have some new currencies some different you know different trade currency so i'm curious how would you Do you characterize the opportunities to optimize the map or the assets, you know, assets around you? Yeah, great question. The simple answer is we see tremendous opportunities, as we've said for many years. Yes, there are some large-scale players in the Eagleford. We're obviously the second largest now. But when you look at the map and you look AT the availability of the play, there's still a lot of fragmentation. And so to your point, we think there's more opportunity to bolt on or trade down the road to optimize the position we've got. So we have a world-class position out here, and that is really, really valuable in terms of being able to optimize the land position we're got. That's great. Thank you. Your next question comes from the line of Greg Brody with Bank of America. Your line is open. Please go ahead. good morning guys and congrats on the transaction um clearly this this makes the company larger and scale and helps towards your investment grade thesis but um the leverage is picking up here so can you just talk about how you think of how you think about this impacts the ig story from your perspective Yeah. So I would characterize it as it's unchanged, right? So we're financing this transaction in line with our, you know, stated long-term target of one time. I think we continue to be on the same deleveraging pathway that we were on pre this transaction. It's just 12 months delayed. So, you mentioned not only are we a bigger business, but we're also better in a lot of respects. We're oilier. Our margins are higher. Our reinvestment rate is lower. Our free cash flow generation is higher. So I think we're continuing on that pathway. Greg? Yeah, that all makes sense. Just a question for you. The KKR commitment, is that a backstop to get to the billion or is that 500 committed and then there's the potential to upsize the equity as part of the transaction? I'm just wondering of how committed is the KK are in terms, with respect to the billion-dollar raise, and potentially more? Yeah, the short answer, again, without talking about the offering in general, is fully committed capital. We're really pleased with very strong support from one of our long-term investors. So that's a $500 million commitment. And then, to your point, that gives us really high confidence that we're going to get the equity that we've announced into the company very quickly. So, yeah, fully supportive from KKR and intending to come in at that amount to the company alongside this acquisition. Thank you for the time. We have reached the end of the Q&A session. I will now turn the call back to David Rockcharlie, CEO, for closing remarks. Again, thank you all for joining us. Thank you to everybody on Team Crescent for everything you do to support the company. And we really look forward to talking to you all again around the third quarter earnings. And as you know, the performance year to date through the second quarter has been great. So thank you. This concludes today's call. Thank You for attending. You may now disconnect. Thank you.