CDEV Stock: From $4.26 To $4.87 (14.32% Increase) Intraday Explanation

By Amit Chowdhry ● May 5, 2021
  • The stock price of Centennial Resource Development Inc (NASDAQ: CDEV) increased from $4.26 to $4.87 (up 14.32%) during intraday trading. This is why it happened.

The stock price of Centennial Resource Development Inc (NASDAQ: CDEV) increased from $4.26 to $4.87 (up 14.32%) during intraday trading. Investors are responding positively to the company’s first-quarter 2021 financial and operational results.

These are the highlights:

— Generated free cash flow for the third consecutive quarter

— Increased pro forma liquidity by 22% compared to year-end

— Issued $170 million of 3.25% convertible senior notes due 2028

— Redeemed at par $127 million of 8.00% second lien senior secured notes due 2025

— Delivered first quarter average well costs below $800 per lateral foot

Financial Results

— For the first quarter, Centennial generated net cash from operating activities of $72.3 million and free cash flow1 of $10.6 million. The Company reported a net loss during the quarter of $34.6 million, or $0.12 per diluted share, compared to a net loss of $548.0 million, or $1.99 per diluted share, in the prior year period.

— The total equivalent production during the first quarter averaged 54,202 barrels of oil equivalent per day (“Boe/d”) compared to 71,820 Boe/d in the prior year period. Average daily crude oil production for the quarter was 28,239 barrels of oil per day (“Bbls/d”) compared to 41,512 Bbls/d in the prior year period. Impacted by Winter Storm Uri and related power outages, a majority of the Company’s production was offline during a seven-day period in February.

In addition to the impact on production, severe winter weather during the quarter also affected certain revenue and cost items. For the first quarter, revenue from natural gas sales increased 100% compared to the prior quarter, driven by higher natural gas prices due to extreme cold temperatures across the state of Texas and surrounding regions. And Centennial incurred higher than expected lease operating expense (“LOE”) related to elevated electricity costs. LOE for the quarter totaled $25.9 million and, excluding one-time costs, was estimated to be $24.1 million, or $4.93 per Boe. Lastly, higher natural gas prices drove an increase in gathering, processing and transportation expense.

KEY QUOTES:

“Our team successfully resumed operational activity during the quarter, while delivering production and costs in-line with expectations in spite of the challenges posed by severe winter weather. Most importantly, Centennial has now transitioned to a sustainable free cash flow generating company. At current strip pricing, we expect to continue to repay borrowings on our credit facility and organically delever the balance sheet through year-end.”

“Higher natural gas revenue more than offset increased operating costs during the quarter. We expect our unit cost metrics to return to normalized levels beginning in the second quarter and have reiterated our full-year production and cost targets.”

— Sean R. Smith, Chief Executive Officer

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.