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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Centennial Resource Development, Inc.    CDEV

CENTENNIAL RESOURCE DEVELOPMENT, INC.

(CDEV)
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Centennial Resource Development : Q3 2020 Centennial Resource Development Earnings Conference Call Presentation

11/02/2020 | 04:45pm EST

Core Oil

Delaware Basin Pure-Play

Third Quarter 2020

Earnings Presentation

November 2, 2020

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 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 19 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 19 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 20 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 notes outstanding 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 19) 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.

2

Centennial Resource Development - Permian Pure-Play

  • Large, contiguous acreage position located in the oil-window of the Delaware Basin
    • >80,000 net acres, <5% Federal exposure
    • >95% operated
    • >85% held by production
  • High quality asset base
  • Proven operational execution
  • Reducing cost structure
    • >35% reduction in well costs vs. FY'191
    • >35% reduction in LOE/Boe vs. Q3'192
  • No near-term debt maturities
  • Solid liquidity position

Northern Delaware (NM) - Lea County

NM

TX

Lea

NM: ~23,500

net acres

Southern Delaware (TX) - Reeves County

Ward

NM

TX

Reeves

Pecos

TX: ~57,500

net acres

Note: Acreage statistics as of 9/30/20; does not include mineral or surface acreage positions; maps represent acreage position as of 12/31/19

(1)

Based on updated well cost target mid-point of ~$800/ft vs FY 2019 average of ~$1,275/ft

3

(2)

Based on Q3'20 LOE of $3.87/Boe vs Q3'19 LOE of $6.03/Boe

Centennial Resource Development Recent Highlights

  • Generated free cash flow of ~$10.5mm during Q3'20, expect incremental FCF in Q4'20
  • Organically increased liquidity by $17mm, or 6%1, during Q3'20
    • Borrowing base reaffirmed at $700mm
    • Repaid $15mm of revolver borrowings
  • Reduced operating expenses through several field-level initiatives
    • Q3'20 LOE per unit decreased by 7% vs Q2'20 and 36% vs Q3'19
  • Lowered well cost target by 11% to ~$800 / ft.2
  • Increased full-year production targets, while reducing total capital expenditure and unit cost guidance
  • Resumed operational activity with solid results
  • Added incremental oil and gas hedges primarily targeting FY 2021

(1) Utilizes current letters of credit of ~$4.3mm (as of 11/2/20); letters of credit were ~$8.8mm as of 9/30/20

(2) Represents total completed well costs - including drilling, completion, facilities and flowback costs

4

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

Disclaimer

Centennial Resource Development Inc. published this content on 02 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2020 21:44:03 UTC


© Publicnow 2020
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Financials (USD)
Sales 2020 554 M - -
Net income 2020 -618 M - -
Net Debt 2020 1 113 M - -
P/E ratio 2020 -1,09x
Yield 2020 -
Capitalization 648 M 648 M -
EV / Sales 2020 3,18x
EV / Sales 2021 2,70x
Nbr of Employees -
Free-Float 62,6%
Chart CENTENNIAL RESOURCE DEVELOPMENT, INC.
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Centennial Resource Development, Inc. Technical Analysis Chart | CDEV | US15136A1025 | MarketScreener
Technical analysis trends CENTENNIAL RESOURCE DEVELOPMENT, INC.
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 15
Average target price 1,89 $
Last Close Price 2,43 $
Spread / Highest target 44,0%
Spread / Average Target -22,1%
Spread / Lowest Target -58,8%
EPS Revisions
Managers and Directors
NameTitle
Sean R. Smith Chief Executive Officer & Director
Steven J. Shapiro Non-Executive Chairman
Matthew R. Garrison Chief Operating Officer & Vice President
George S. Glyphis Chief Financial Officer & Vice President
Colleen C. Proctor Vice President-Information Technology
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