Centennial Resources Dev (CDEV) Q1 Results - May 7

[dan_s]

Derrick Whitfield at Stifel on 5-7-2019
Centennial Resource Development, Inc. (CDEV, $10.05, Buy; Target $17.00)

Centennial reports solid quarter across the board - - We view the release as positive. The positives include i) a total and oil production beat (4.2% and 1.9% above consensus, respectively), ii) an EBITDAX beat (4.9% above consensus) due to higher than expected production and lower than expected opex, iii) positive initial results (~114% above our type curve) from the Strong Fundamental A T45H well targeting the 3rd BS Sand interval in the company's Miramar operating area, and iv) strong initial results (~84% above our type curve) from the Doc Martens Unit (3 wells using 660' spacing) targeting the UWC-A in the company's eastern Reeves operating area. The only negative was higher than expected capex (5.7% above consensus); however, full-year 2019 capex guidance was reiterated.
Net-net, the company's production and EBITDAX beat, along with strong initial well results should outweigh the higher than expected Q119 capex.
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DENVER, May 6, 2019 (GLOBE NEWSWIRE) - Centennial Resource Development, Inc. (“Centennial” or the
“Company”) (NASDAQ: CDEV) today announced financial and operational results for the first quarter 2019.
Financial and Operational Highlights:

• Increased daily oil and equivalent production volumes 28% and 33% year-over-year, respectively

• Completed twenty gross wells, with approximately half placed on production in March

• Announced strong well results from multiple intervals in the Northern and Southern Delaware Basins

• Reported successful Third Bone Spring Sand step-out well in Reeves County, Texas

• Demonstrated cost discipline with unit costs at or below the low-end of guidance

• Maintained conservative balance sheet and strong liquidity

Financial Results
For the first quarter, Centennial reported a net loss of $8.1 million, or $0.03 per diluted share. This includes a $31.3
million non-cash impairment charge to non-core undeveloped leasehold. First quarter results compare to net income
of $66.1 million, or $0.25 per diluted share, in the prior year period.

Average daily crude oil production increased 28% to 40,508 barrels of oil per day (“Bbls/d”) compared to the prior
year period. Average daily total equivalent production increased 33% year-over-year or 3.5% quarter-over-quarter.

“Centennial’s six-rig drilling program delivered a very strong operational quarter. We posted some remarkable well
results, maintained unit cost control and brought all production to sales through firm transportation and sales
agreements we have in place,” said Mark G. Papa, Chairman and Chief Executive Officer.
“Centennial remains on-track to deliver on its 2019 goals with a focus on maintaining a strong balance sheet.”