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Centennial Resource Development : EnerCom Oil & Gas Conference Presentation

08/16/2021 | 03:53pm EDT

Core Oil

Delaware Basin Pure-Play


Oil & Gas Conference

August 16, 2021

Important Information

Forward-Looking Statements

The information in this presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words "could," "believe," "anticipate," "intend," "estimate," "expect," "project," "goal," "plan," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the development, production, gathering and sale of oil and natural gas. These risks include, but are not limited to, commodity price volatility, the COVID-19 pandemic and governmental responses thereto, inflation, lack of availability of drilling and production equipment and services, environmental and weather risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating oil and gas reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures and the other risks described in our filings with the Securities and Exchange Commission. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation.

Use of Non-GAAP Financial Measures

This presentation includes non-GAAP financial measures, such as Adjusted EBITDAX, free cash flow (deficit), net debt and net debt to last twelve months ("LTM") EBITDAX. Please refer to slide 20 for a reconciliation of Adjusted EBITDAX to net income, the most comparable GAAP measure. We believe Adjusted EBITDAX is useful as it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to financing methods or capital structure. We exclude the items listed on slide 20 from net income (loss) in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable assets, none of which are components of Adjusted EBITDAX. Our presentation of Adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.

Please refer to slide 21 for a reconciliation of free cash flow (deficit) to net cash provided by operating activities, the most comparable GAAP measure. We believe free cash flow (deficit) is a useful indicator of the Company's ability to internally fund its exploration and development activities and to service or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities or accounts payable related to capital expenditures. The Company believes that this measure, as so adjusted, presents a meaningful indicator of the Company's actual sources and uses of capital associated with its operations conducted during the applicable period. Our computations of free cash flow (deficit) may not be comparable to other similarly titled measures of other companies. Free cash flow (deficit) should not be considered as an alternative to, or more meaningful than, cash provided by operating activities as determined in accordance with GAAP or as indicator of our operating performance or liquidity.

The Company defines net debt as the aggregate principal amount of the Company's long-term debt, minus cash and cash equivalents. The Company presents this metric to help evaluate its capital structure and financial leverage and believes that it is widely used by professional research analysts, including credit analysts, and others in the evaluation of total leverage.

The Company defines net debt to LTM EBITDAX as net debt (defined above) divided by Adjusted EBITDAX (reconciled on slide 20) for the prior twelve-month period. The Company presents this metric to show trends that investors may find useful in understanding the Company's ability to service its debt. This metric is widely used by professional research analysts, including credit analysts, in the valuation and comparison of companies in the oil and gas exploration and production industry.



  1. Centennial Overview
  2. Review of Q2'21 Results
  3. Discuss Centennial's use of data science in order to drive capital efficiency


Centennial Resource Development Overview

Core Acreage and Strong Execution Track Record

PLarge, contiguous

Acreage in core of the Northern & Southern Delaware

Asset Map

~81,700 net acres

acreage position in the

 ~97% operated and ~88% held by production

Delaware Basin core


Minimal Federal exposure (~4%)



 Maintaining significant improvements to cost structure

Proven operational

2021 drilling program driving increased capital efficiency and



carrying operational improvements forward

 Two-rig flat drilling program for 2021



High-quality asset with

Proven development from 10 distinct zones across the



Northern and Southern Delaware


significant inventory

net acres


15+ years of economic inventory1

PFCF profile supports

 Generated record FCF and reduced total debt outstanding in Q2

 Expect net debt / LTM EBITDAX to be below 2.0x by YE'21

organic de-leveraging and

~$445mm of liquidity as of 6/30/21

strong liquidity profile

 No senior note maturities until early 2026



 Minimizing emissions through increased gas capture


Continued focus on

Improvements in sustainability through water recycling

program, minimizing water trucking and utilization of dual-fuel

ESG initiatives



Published inaugural Corporate Sustainability Report



net acres

(1) Assuming a two-rig flat program and $45/Bbl oil pricing


Centennial Resource Development Q2'21 Highlights

    • Generated free cash flow of ~$34mm, representing fourth consecutive quarter of positive FCF
      • Expect FY'21 FCF of ~$140 - 170mm1
    • Continued debt repayment and rapid organic de-leveraging
      • Repaid $35mm of revolver borrowings2
      • Reduced net debt / LTM EBITDAX to 3.0x from 4.3x at 3/31/21
      • Reduced net debt / LQA EBITDAX to 2.1x from 2.7x at 3/31/21
    • Increased average daily oil production 13% QoQ
    • Delivered solid well results from both Northern and Southern Delaware Basins
    • Continued to drive strong operational efficiencies
      • Reduced average spud to rig release days by 18% QoQ
    • Initiated solid base of oil hedges for FY'22 at an average price of >$64 / Bo WTI
  1. Assuming current strip prices

(2) Assumes 3/31/21 borrowings of $290mm pro forma for the Senior Secured Second Lien note redemption that occurred on 4/14/21


This is an excerpt of the original content. To continue reading it, access the original document here.


Centennial Resource Development Inc. published this content on 16 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 August 2021 19:52:02 UTC.

© Publicnow 2021
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Financials (USD)
Sales 2021 909 M - -
Net income 2021 53,4 M - -
Net Debt 2021 931 M - -
P/E ratio 2021 32,0x
Yield 2021 -
Capitalization 1 931 M 1 931 M -
EV / Sales 2021 3,15x
EV / Sales 2022 2,56x
Nbr of Employees -
Free-Float 62,6%
Duration : Period :
Centennial Resource Development, Inc. Technical Analysis Chart | CDEV | US15136A1025 | MarketScreener
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 15
Last Close Price 6,91 $
Average target price 7,36 $
Spread / Average Target 6,51%
EPS Revisions
Managers and Directors
Sean R. Smith Chief Executive Officer & Director
George S. Glyphis Chief Financial Officer & Vice President
Steven J. Shapiro Non-Executive Chairman
Colleen C. Proctor Vice President-Information Technology
Matthew R. Garrison Chief Operating Officer & Vice President
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