Centennial Resource Development Announces Reaffirmation of Borrowing Base and Improvement to Liquidity Position
October 13 2020 - 3:39PM
Centennial Resource Development, Inc. (“Centennial” or the
“Company”) (NASDAQ: CDEV) today announced that its bank group, led
by JPMorgan Chase Bank, N.A., has reaffirmed the Company’s $700
million borrowing base. As a result, given a reduction in revolver
borrowings and outstanding letters of credit, Centennial’s
liquidity position has improved since June 30, 2020.
As of September 30, 2020, after making
repayments of $15 million during the third quarter, Centennial had
$355 million of borrowings outstanding under its revolving credit
facility and approximately $5 million in cash on hand. At September
30, 2020, Centennial’s pro forma total liquidity was $314 million,
based on its balance sheet position, the $32 million availability
blocker and $4 million in current outstanding letters of credit. As
a result, the Company’s liquidity increased by approximately $17
million, or 6%, compared to the prior quarter.
“Centennial appreciates the ongoing support from
its lenders with the reaffirmation of the borrowing base. We
believe this outcome reflects our high-quality asset base and
recent reductions to field-level costs,” said Sean R. Smith, Chief
Executive Officer. “Additionally, we are pleased to have
organically increased the Company’s liquidity position through debt
repayment and anticipate an improving free cash flow and liquidity
profile through the end of the year.”
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 in the Delaware Basin, a
sub-basin of the Permian Basin. For additional information about
the Company, please visit www.cdevinc.com.
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:
-
volatility of oil, natural gas and NGL prices or a prolonged period
of low oil, natural gas or NGL prices and the effects of actions
by, or disputes among or between, members of the Organization of
Petroleum Exporting Countries (“OPEC”), such as Saudi Arabia, and
other oil and natural gas producing countries, such as Russia, with
respect to production levels or other matters related to the price
of oil;
- the
effects of excess supply of oil and natural gas resulting from the
reduced demand caused by the COVID-19 pandemic and the actions by
certain oil and natural gas producing countries;
- 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, 2019, 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.
Contact:Hays MabryDirector,
Investor Relations(832) 240-3265ir@cdevinc.com
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