Centennial Resource Development presents at EnerCom’s The Oil & Gas Conference®

Centennial Resources Development (ticker: CDEV) is a Denver-based independent oil company—a pure play Delaware Basin producer—with assets in the core of the southern Delaware Basin in West Texas’s Permian Basin.

Q2 highlights

  • Increased daily equivalent production 6 percent quarter-over-quarter and 94 percent year-over-year
  • Successful Third Bone Spring Sand result in Reeves County, Texas
  • Strong well results from multiple intervals in Southern Delaware Basin, including most productive wells to date
  • Executed firm sales agreement for significant portion of crude oil production
  • Secured firm transportation agreements for natural gas production through 2021
  • Unit costs at or below low-end of full-year guidance ranges
  • ~ 80,000 net acres in Reeves County, Texas and Lea County, New Mexico (90% operated)

Breakout session at the EnerCom conference

During CDEV’s breakout session at the 2018 EnerCom conference, management was asked the following questions:

  • What were the drivers behind lower costs in Q2, from a cost controls standpoint? From a G&A standpoint? From an LOE standpoint?
  • On the sand, have you seen any difference with pumping the in-basin sand?
  • You talked about the Bone Springs wells. Is depth a factor there? Do you have plans to extend them commercially down south?
  • On the northern edge, are you testing different zones?
  • Not to beat the point on the 3rd Bone Springs well, but when I think back to those early wells, there was a lot of water production alongside the oil production. What have you done to manage that? Towards the southern edge of the basin, how much does it thin out?
  • Following up with the oil-water in the wells. What’s your thought process on flowback strategies, potential damage to the reservoir? Coming out of Q2, do you see this as a relevant issue?
  • What are the market bases for ethane recovery? Monthly? Quarterly?
  • What is your strategy for sales with the transport side on the oil front? What are the key elements of the contract? I mean, from a pricing perspective, or maybe a volume perspective? Is it reasonable to having pricing exposure outside of Midland? But you’re still taking a pretty big transport fee. Is that a good way to think about how this is structured?
  • Are you staying competitive with respect to future differentials or fixed rates?
  • What is the duration of your contracts for the types of things we’ve discussed?
  • With pad drilling, is there a sizing element that might become a problem over the next few quarters?
  • With the oil delivery contracts, what risks do you assume in bringing the volume to the counterparty? Would you do a cash sell if you couldn’t move the barrels around?
  • What’s the advantage of your long-term plan to get well above 65,000 bpd by 2020?
  • Is there something specific about your acreage that is a driver for your company? Is it A&D? Are you looking to grow more?
  • Speaking hypothetically, with these types of companies, you can have a huge inventory, but in BPD terms, it’s not getting there. For your company, is there a number of years that you think it would take for an optimal inventory strategy?
  • Isn’t there going to be a large New Mexico state sale in early September? I don’t expect you to give too many details, but is it a data lease or something else?
  • There’s an emerging fear about a crowding out effect in the majors, particularly in the Permian. Do you worry about that, specifically with regards to takeaway resources?
  • Could give more details in your description of quarter to quarter development? Do you mean developing wells side by side, which would develop the highest ROR?

You can listen to Centennial’s presentation here.


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