Centennial Resources Dev (CDEV) Q4 Results - Feb 25
Posted: Tue Feb 25, 2020 12:45 pm
Note below is from Stifel on 2/25/2020. CDEV is high on my Watch List. I will take a hard look at it in March.
Centennial Resource Development, Inc. (CDEV, $2.67, Buy; Target $6.10)
Centennial announces strong Q419 results and 2020 outlook and discloses its leadership succession plan - Derrick Whitfield
We view the release as slightly positive. The positives include: i) a material total and oil production beat (4.1% and 3.9% above consensus, respectively) on lower than expected capex (8.6% below consensus), ii) a strong EBITDA beat (6.6% above consensus) driven by lower costs, iii) the sale of its produced water assets for $225mm to reduce debt and outspend in 2020, iv) a capital-efficient 2020 outlook (oil volumes 2.6% below consensus, capex 18.1% below consensus), and v) strong operational results from wells in the Northern and Southern Delaware project areas. The negatives include: i) Mark Papa's retirement announcement, ii) higher than expected LOE cost guidance associated with SWD sale, and iii) higher than expected GP&T cost guidance due to lower renewal rates for unused natural gas capacity. Net-net, we believe the quarter and capital-efficient guide will soften the blow associated with the loss of an industry icon.
Centennial Resource Development, Inc. (CDEV, $2.67, Buy; Target $6.10)
Centennial announces strong Q419 results and 2020 outlook and discloses its leadership succession plan - Derrick Whitfield
We view the release as slightly positive. The positives include: i) a material total and oil production beat (4.1% and 3.9% above consensus, respectively) on lower than expected capex (8.6% below consensus), ii) a strong EBITDA beat (6.6% above consensus) driven by lower costs, iii) the sale of its produced water assets for $225mm to reduce debt and outspend in 2020, iv) a capital-efficient 2020 outlook (oil volumes 2.6% below consensus, capex 18.1% below consensus), and v) strong operational results from wells in the Northern and Southern Delaware project areas. The negatives include: i) Mark Papa's retirement announcement, ii) higher than expected LOE cost guidance associated with SWD sale, and iii) higher than expected GP&T cost guidance due to lower renewal rates for unused natural gas capacity. Net-net, we believe the quarter and capital-efficient guide will soften the blow associated with the loss of an industry icon.