Centennial Resource Files for IPO

By Chris Lange Updated Jan 13, 6:27AM EST · Published Jun 23, 11:50AM EDT

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Centennial Resource Files for IPO — © Thinkstock

Centennial Resource Development has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were given in the offering, but it is valued up to $100 million, although this number is normally just a placeholder. The company intends to list its shares on the Nasdaq Global Select Market under the symbol CDEV.

The underwriters for the offering are Credit Suisse and Barclays.

This independent oil and natural gas company is focused on the development and acquisition of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. The assets are concentrated in the Delaware Basin, a sub-basin of the Permian. Its properties consist of large, contiguous acreage blocks in Reeves, Ward and Pecos counties in West Texas.

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As of June 15, 2016, the company’s portfolio included 61 operated producing horizontal wells. The horizontal wells span an area approximately 45 miles long by 20 miles wide where it has established commercial production in five distinct zones: the 3rd Bone Spring Sandstone, Upper Wolfcamp A, Lower Wolfcamp A, Wolfcamp B and Wolfcamp C. As a result, the company has broadly appraised its acreage across various geographic areas and stratigraphic zones, which it expects will allow the company to efficiently develop its drilling inventory with a focus on maximizing returns to stockholders.

Centennial Resource has leased or acquired roughly 42,500 net acres predominantly located in the southern portion of the Delaware Basin, where production and reserves typically contain a higher percentage of oil and natural gas liquids and a correspondingly lower percentage of natural gas compared to the northern portion of the Delaware Basin. After temporarily suspending drilling activity at the end of March 2016 to preserve capital, the company added one horizontal rig in June and expects to add a second horizontal rig in the fourth quarter of 2016. During 2015, it operated, on average, one rig and placed 13 horizontal wells on production.

The net proceeds from the offering are intended to be used to repay indebtedness, with the remainder to be put toward general corporate purposes.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.