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Centennial (CDEV) Q4 Earnings Miss Estimates, Reserves Decline
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Centennial Resource Development, Inc. 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.
Centennial Resource Development, Inc. Price, Consensus and EPS Surprise
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.
Zacks Rank & Key Picks
Centennial currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) , Antero Resources Corporation (AR - Free Report) and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback and Antero Resources carry a Zacks Rank #2 (Buy), Matadorsports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
Antero Resources has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
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Centennial (CDEV) Q4 Earnings Miss Estimates, Reserves Decline
Centennial Resource Development, Inc. 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.
Centennial Resource Development, Inc. Price, Consensus and EPS Surprise
Centennial Resource Development, Inc. price-consensus-eps-surprise-chart | Centennial Resource Development, Inc. Quote
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.
Zacks Rank & Key Picks
Centennial currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) , Antero Resources Corporation (AR - Free Report) and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback and Antero Resources carry a Zacks Rank #2 (Buy), Matadorsports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
Antero Resources has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>