Centennial Resource Development (CDEV) Tops Q4 EPS by 2c

Centennial Resource Development (NASDAQ: CDEV) reported Q4 EPS of $0.06, $0.02 better than the analyst estimate of $0.04. Revenue for the quarter came in at $256.4 million versus the consensus estimate of $242.51 million.

Announced Leadership Transition

• Mark G. Papa to retire as Chairman and Chief Executive Officer, effective May 31, 2020
• Sean R. Smith will succeed Mr. Papa as Chief Executive Officer
• Steven J. Shapiro to be named non-executive Chairman of the Board

Centennial will continue to maintain a strong balance sheet during the current commodity price environment. As a result, Centennial expects to reduce its operated rig program from five currently to four at the beginning of April. Assuming planned activity levels and current commodity prices, the Company is targeting crude oil production growth of 3% during 2020.

“In today’s uncertain commodity price environment, balance sheet strength is much more important than production growth,” said Papa. “Our 2020 capital budget is a prudent decision to preserve high-quality inventory and maintain a low leverage profile.”

The estimated fiscal year 2020 total capital budget is approximately $590 million to $690 million, which represents a reduction of 28% compared to 2019. Total D&C costs are estimated to be $490 million to $550 million, of which essentially all is associated with operated activity. Centennial has allocated approximately $90 million to $120 million to facilities, infrastructure and other, with the remaining $10 million to $20 million to be spent on land.

Beginning in the second quarter, Centennial expects to operate three rigs in Reeves County. The Company will focus its Reeves County activity in the Upper Wolfcamp A and Third Bone Spring Sand zones, while continuing to develop and test additional zones. The remaining operated rig and associated D&C capital will be allocated to its Lea County position. (For a summary table of Centennial’s 2020 operational guidance, please see the Appendix to this press release.)

For earnings history and earnings-related data on Centennial Resource Development (CDEV) click here.

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