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Centennial Resource Development Announces Second Quarter 2019 Financial and Operational Results and Increases 2019 Production Targets While Lowering Cost Guidance.

ENPNewswire-August 6, 2019--Centennial Resource Development Announces Second Quarter 2019 Financial and Operational Results and Increases 2019 Production Targets While Lowering Cost Guidance

(C)2019 ENPublishing -

Release date- 05082019 - Centennial Resource Development, Inc.('Centennial' or the 'Company') (NASDAQ: CDEV) today announced financial and operational results for the second quarter 2019.

Financial and Operational Highlights: Reported 38 percent increase in daily oil and 32 percent increase in equivalent production volumes year-over-year

Increased 2019 oil and total company production guidance by 5 percent and 8 percent, respectively

Generated strong operational efficiencies that drove drilling and completion activity ahead of schedule

Plan to reduce operated rig count from six to five in September 2019

Reduced full-year unit cost guidance as a result of year-to-date cost discipline

Delivered best oil producing well to date and four of the top five wells in Company history

Maintained conservative balance sheet and strong liquidity

Financial Results

For the second quarter 2019, Centennial reported net income of $17.9 million, or $0.07 per diluted share, compared to $63.5 million, or $0.24 per diluted share, in the prior year period.

Average daily crude oil production increased 38 percent to 43,105 barrels of oil per day ('Bbls/d') compared to the prior year period. Average total equivalent production increased 32 percent in the second quarter and 33 percent for the first six months of 2019 compared to prior year periods.

'Centennial delivered a solid second quarter. Better than expected individual well results coupled with increased efficiencies have allowed us to raise our production targets for the year, while reducing our full-year rig guidance and maintaining our initial capital expenditure guidance,' said Mark G. Papa, Chairman and Chief Executive Officer. 'Based on six months of strong results, Centennial has increased its previous 2019 oil growth target from 12 percent to 18 percent and total company growth target from 8 percent to 17 percent. Additionally, as a result of our cost control efforts, we are lowering our unit cost guidance for the full-year.'

Operational Update

Centennial reported a number of strong wells across multiple intervals in the Delaware Basin, including some of its best wells to date from both New Mexico and Texas. In Lea County, New Mexico, Centennial reported its two best wells completed in Company history. Drilled in the area where Centennial reported success earlier in the year from the Second Bone Spring, the Chorizo 12 State Com 601H (100% WI) was completed in the Third Bone Spring interval with an approximate 9,800-foot effective lateral. The well achieved an initial 30-day production rate of 2,961 barrels of oil equivalent per day ('Boe/d') (86% oil) and 260 Bbls/d of oil per 1,000 foot of lateral.

'The Chorizo represents Centennial's best well drilled to date and has produced over 110,000 barrels of oil during its first sixty days on production. The well exceeded our type curve for the area and gives us further confidence as we continue to push the Third Bone Spring north on our acreage,' Papa said.

Drilled south of the Chorizo well, the three Duck Hunt wells were vertically stacked in the First, Second and Third Bone Spring intervals. The Duck Hunt 1 State Com 301H, 501H and 601H (average 58% WI) wells were drilled with an approximate lateral length of 6,900 feet. The wells averaged 2,207 Boe/d per well (83% oil), or 266 Bbls/d of oil per 1,000 foot of lateral for the initial 30-day production period.

'Our recent results in Lea County have been outstanding. The Duck Hunt wells were our first test to directly stack the various Bone Spring Sands. We saw strong well performance from each interval,' Papa said. 'We plan to develop the majority of wells in this area on multi-well pads with extended laterals, further increasing operational efficiencies and economic returns.'

In Reeves County, Texas, Centennial reported outstanding results from a co-development test of the Third Bone Spring Sand and Upper Wolfcamp A intervals. On the border of Reeves and Ward Counties, the Red Rock T34H, T17H, U30H and U13H (average 77% WI) wells were drilled using a stacked, staggered pattern with approximate 9,500-foot laterals. Completed in the Third Bone Spring Sand, the Red Rock T34H and T17H achieved an average initial 30-day production rate of 2,689 Boe/d per well (70% oil), or 182 Bbls/d of oil per 1,000 foot of lateral. Targeting the Upper Wolfcamp A, the Red RockU30H and U13H averaged 2,390 Boe/d per well (74% oil) for the initial 30-day production period, or 201 Bbls/d of oil per 1,000 foot of lateral.

'The Red Rocks represent our first four-well test co-developing the Third Bone Spring Sand and Upper Wolfcamp A intervals. The positive analogous production results between the two zones are key and further underscore the quality of our Third Bone Spring Sand inventory in Reeves County,' Papa said. 'We now have multiple successful tests pairing the Third Bone Spring Sand and Upper Wolfcamp A intervals, proving the viability of co-developing our two highest rate-of-return intervals in Reeves County.'

Total capital expenditures incurred for the quarter were $237.4 million. During the second quarter, drilling and completion capital expenditures incurred were $179.8 million. Centennial's facilities, infrastructure and other totaled $44.6 million for the quarter, with an additional $13.0 million spent on land.

'Our operations team has increased efficiencies through reduced drilling days and shortened completion times. As a result, we completed twenty gross wells during the quarter, ahead of our original expectations,' said Papa.

Updated 2019 Operational Plans and Targets

Centennial plans to reduce its operated rig count from six to five in September 2019, maintaining a five-rig drilling program for the remainder of the year. Centennial expects the number of spud and completed gross wells to be near the high-end of its initial 2019 guidance ranges. The Company's full-year capital budget remains unchanged. Centennial also lowered its full-year 2019 guidance ranges for G&A, GP&T and DD&A on a per unit basis.

'Operational efficiencies gained to date will allow us to spud and complete more wells during the year while operating fewer rigs than previously expected,' said Papa. 'The efforts by our operations team have resulted in lower drilling and completion costs and reduced drilling days, providing us the confidence to maintain our full-year total capital expenditure guidance.'

Capital Structure and Liquidity

As of June 30, 2019, Centennial had $28 million in cash on hand, with zero borrowings under its revolving credit facility and $900 million of long-term debt. Centennial's total liquidity was $828 million, based on $800 million of elected commitments under its revolving credit facility and letters of credit outstanding as of June 30, 2019.

Quarterly Report on Form 10-Q

Centennial's financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the three months ended June 30, 2019, which is expected be filed with the U.S. Securities and Exchange Commission ('SEC') on August 5, 2019.

Conference Call and Webcast

Centennial will host an investor conference call on Tuesday, August 6, 2019 at 9:00 a.m.Mountain (11:00 a.m. Eastern) to discuss second quarter 2019 operating and financial results. Interested parties may join the webcast by visiting Centennial's website at and clicking on the webcast link or by dialing (800) 789-3525, or (442) 268-1041 for international calls, Conference ID: 1857979 at least 15 minutes prior to the start of the call. A replay of the call will be available on Centennial's website or by phone at (855) 859-2056 Conference ID: 1857979 for a 14-day period following the call.

About Centennial Resource Development, Inc.

Centennial Resource Development, Inc. is an independent oil and natural gas company focused on the development of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. The Company's assets and operations, which are held and conducted through Centennial Resource Production, LLC, are concentrated exclusively in the Delaware Basin, a sub-basin of the Permian Basin.

Cautionary Note Regarding Forward-Looking Statements

The information in this press release 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 press release, 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 press release, the words 'could,' 'may', '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.

Forward-looking statements may include statements about: our business strategy and future drilling plans; our reserves and our ability to replace the reserves we produce through drilling and property acquisitions; our drilling prospects, inventories, projects and programs; our financial strategy, liquidity and capital required for our development program; our realized oil, natural gas and NGL prices; the timing and amount of our future production of oil, natural gas and NGLs; our hedging strategy and results; our competition and government regulations; our ability to obtain permits and governmental approvals; our pending legal or environmental matters; the marketing and transportation of our oil, natural gas and NGLs; our leasehold or business acquisitions; cost of developing our properties; our anticipated rate of return; general economic conditions; credit markets; uncertainty regarding our future operating results; our plans, objectives, expectations and intentions contained in this press release that are not historical and the other factors described in our Annual Report on Form 10-K for the year ended December 31, 2018, and any updates to those factors set forth in our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

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, 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 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 SEC.

Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

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 press release.


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Publication:ENP Newswire
Date:Aug 6, 2019
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