It has been about a month since the last earnings report for Centennial Resource . Shares have added about 3.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Centennial Resource due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Centennial Resource Misses Q4 Earnings Estimates, Reserves Decline
Centennial Resource Development reported fourth-quarter 2020 adjusted loss of 17 cents per share, wider than the Zacks Consensus Estimate of a loss of 9 cents. Notably, the company had reported adjusted earnings of 4 cents per share in the year-ago quarter.
Quarterly revenues from oil and gas sales significantly dropped to $148 million from the prior year’s $256 million. However, the top line beat the consensus mark of $141 million.
The weak quarterly earnings can be attributed to reduced oil equivalent production volumes, partially compensated by lower lease operating expenses.
Operations:
Production
Overall production of 59,708 barrels of oil equivalent per day (Boe/d) declined from the year-ago period’s 79,734 Boe/d. Of the total output, 50.6% comprised crude oil.
Oil volumes deteriorated from 45,031 Bbls/d to 30,196 barrels per day (Bbls/d) in the December-end quarter. Natural gas production of 109,712 thousand cubic feet per day (Mcf/d) fell from the year-ago quarter’s 122,759 Mcf/d. Moreover, natural gas liquids (NGLs) production totaled 11,226 Bbls/d, down 21.2% from the year-ago quarter’s 14,242 Bbls/d.
Price Realizations
The company reported average realized crude price of $42.66 a barrel, down from the $56.94 witnessed in the fourth quarter of 2019. However, average natural gas price rose to $2.47 per Mcf from the prior year’s $2.34.
Operating Costs
Centennial’s total operating costs came in at $194.9 million in fourth-quarter 2020, lower than $229.7 million witnessed in the year-ago period, mainly due to reduced lease operating expenses.
On a per Boe basis, the company’s fourth-quarter lease operating expenses were $4.78, lower than the year-ago level of $5.30. Nevertheless, gathering processing and transportation costs flared up to $3.27 per Boe from the year-ago period’s $2.82.
Capital Expenditure & Balance Sheet
In December quarter, it incurred capital expenditure of only $29.9 million, of which $24.1 million was assigned to drilling and completion activities.
At the end of the fourth quarter, cash balance amounted to $5.8 million while long-term debt outstanding amounted to $1,068.6 million. Centennial had a net debt to capitalization of 29.1%. Notably, it had $330 million available under the revolving credit facility.
Cash Flow & Free Cash Flow
The company’s constant focus on cost reduction generated net cash of $171.4 million from operating activities. Notably, free cashflow generated during the quarter under review was $29 million.
Proved Reserves Decline
The upstream energy company reported proved reserves, as of Dec 31, 2020, at 298,902 MBoe, lower than year-ago reserves of 301,139 MBoe.
Guidance
Centennial projects 2021 production in the band of 56,000 to 63,000 Boe/d based on its capital budget of $260 to $310 million. Majority of the capital spending will be allocated for drilling and completion activities. Notably, it anticipates to complete 40-48 gross wells this year.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -33.33% due to these changes.
VGM Scores
Currently, Centennial Resource has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Centennial Resource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Centennial Resource (CDEV) Up 3.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Centennial Resource . Shares have added about 3.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Centennial Resource due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Centennial Resource Misses Q4 Earnings Estimates, Reserves Decline
Centennial Resource Development reported fourth-quarter 2020 adjusted loss of 17 cents per share, wider than the Zacks Consensus Estimate of a loss of 9 cents. Notably, the company had reported adjusted earnings of 4 cents per share in the year-ago quarter.
Quarterly revenues from oil and gas sales significantly dropped to $148 million from the prior year’s $256 million. However, the top line beat the consensus mark of $141 million.
The weak quarterly earnings can be attributed to reduced oil equivalent production volumes, partially compensated by lower lease operating expenses.
Operations:
Production
Overall production of 59,708 barrels of oil equivalent per day (Boe/d) declined from the year-ago period’s 79,734 Boe/d. Of the total output, 50.6% comprised crude oil.
Oil volumes deteriorated from 45,031 Bbls/d to 30,196 barrels per day (Bbls/d) in the December-end quarter. Natural gas production of 109,712 thousand cubic feet per day (Mcf/d) fell from the year-ago quarter’s 122,759 Mcf/d. Moreover, natural gas liquids (NGLs) production totaled 11,226 Bbls/d, down 21.2% from the year-ago quarter’s 14,242 Bbls/d.
Price Realizations
The company reported average realized crude price of $42.66 a barrel, down from the $56.94 witnessed in the fourth quarter of 2019. However, average natural gas price rose to $2.47 per Mcf from the prior year’s $2.34.
Operating Costs
Centennial’s total operating costs came in at $194.9 million in fourth-quarter 2020, lower than $229.7 million witnessed in the year-ago period, mainly due to reduced lease operating expenses.
On a per Boe basis, the company’s fourth-quarter lease operating expenses were $4.78, lower than the year-ago level of $5.30. Nevertheless, gathering processing and transportation costs flared up to $3.27 per Boe from the year-ago period’s $2.82.
Capital Expenditure & Balance Sheet
In December quarter, it incurred capital expenditure of only $29.9 million, of which $24.1 million was assigned to drilling and completion activities.
At the end of the fourth quarter, cash balance amounted to $5.8 million while long-term debt outstanding amounted to $1,068.6 million. Centennial had a net debt to capitalization of 29.1%. Notably, it had $330 million available under the revolving credit facility.
Cash Flow & Free Cash Flow
The company’s constant focus on cost reduction generated net cash of $171.4 million from operating activities. Notably, free cashflow generated during the quarter under review was $29 million.
Proved Reserves Decline
The upstream energy company reported proved reserves, as of Dec 31, 2020, at 298,902 MBoe, lower than year-ago reserves of 301,139 MBoe.
Guidance
Centennial projects 2021 production in the band of 56,000 to 63,000 Boe/d based on its capital budget of $260 to $310 million. Majority of the capital spending will be allocated for drilling and completion activities. Notably, it anticipates to complete 40-48 gross wells this year.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -33.33% due to these changes.
VGM Scores
Currently, Centennial Resource has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Centennial Resource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.