Document
1.011.01false--12-31Q3202000016585660.00010.000162000000062000000028065034110341192901044270275811346103411927831727200.030.020.020.010.010.0050.010.0050.053750.068750.080.053750.068750.080.0050.003750.0050.00375P5Y15000000000.00010.00011000000100000010101010P1YP3YP3Y 0001658566 2020-01-01 2020-09-30 0001658566 2020-10-30 0001658566 2020-09-30 0001658566 2019-12-31 0001658566 us-gaap:SeriesAPreferredStockMember 2020-09-30 0001658566 us-gaap:SeriesAPreferredStockMember 2019-12-31 0001658566 us-gaap:CommonClassAMember 2019-12-31 0001658566 us-gaap:CommonClassAMember 2020-09-30 0001658566 us-gaap:ConvertibleCommonStockMember 2019-12-31 0001658566 us-gaap:ConvertibleCommonStockMember 2020-09-30 0001658566 us-gaap:SeriesAPreferredStockMember 2018-12-31 0001658566 us-gaap:SeriesAPreferredStockMember 2019-03-31 0001658566 2019-01-01 2019-09-30 0001658566 2019-07-01 2019-09-30 0001658566 2020-07-01 2020-09-30 0001658566 cdev:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2020-01-01 2020-09-30 0001658566 cdev:SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2019-01-01 2019-09-30 0001658566 cdev:SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2020-01-01 2020-09-30 0001658566 cdev:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2019-01-01 2019-09-30 0001658566 2019-09-30 0001658566 2018-12-31 0001658566 us-gaap:NoncontrollingInterestMember 2020-09-30 0001658566 us-gaap:RetainedEarningsMember 2019-12-31 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2020-06-30 0001658566 us-gaap:ParentMember 2020-04-01 2020-06-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001658566 us-gaap:ParentMember 2019-12-31 0001658566 2020-01-01 2020-03-31 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-09-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001658566 2020-04-01 2020-06-30 0001658566 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2020-06-30 0001658566 us-gaap:NoncontrollingInterestMember 2020-07-01 2020-09-30 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-06-30 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001658566 us-gaap:RetainedEarningsMember 2020-03-31 0001658566 us-gaap:RetainedEarningsMember 2020-09-30 0001658566 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-12-31 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001658566 us-gaap:RetainedEarningsMember 2020-06-30 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001658566 us-gaap:ParentMember 2020-07-01 2020-09-30 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2019-12-31 0001658566 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2020-09-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001658566 us-gaap:NoncontrollingInterestMember 2020-03-31 0001658566 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2020-03-31 0001658566 us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember 2020-04-01 2020-06-30 0001658566 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2020-03-31 0001658566 2020-03-31 0001658566 us-gaap:ParentMember 2020-09-30 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2020-03-31 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:ParentMember 2020-04-01 2020-06-30 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2020-09-30 0001658566 us-gaap:NoncontrollingInterestMember 2020-06-30 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001658566 us-gaap:ParentMember 2020-01-01 2020-03-31 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0001658566 us-gaap:ParentMember 2020-06-30 0001658566 us-gaap:ParentMember 2020-03-31 0001658566 us-gaap:NoncontrollingInterestMember 2019-12-31 0001658566 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2019-12-31 0001658566 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0001658566 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001658566 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001658566 2020-06-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:CommonClassCMember us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-06-30 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2019-06-30 0001658566 us-gaap:RetainedEarningsMember 2018-12-31 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2018-12-31 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-03-31 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2019-09-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001658566 2019-01-01 2019-03-31 0001658566 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001658566 2019-04-01 2019-06-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001658566 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2019-09-30 0001658566 us-gaap:RetainedEarningsMember 2019-06-30 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001658566 us-gaap:ParentMember 2019-07-01 2019-09-30 0001658566 us-gaap:NoncontrollingInterestMember 2019-09-30 0001658566 us-gaap:RetainedEarningsMember 2019-03-31 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001658566 us-gaap:ParentMember 2019-01-01 2019-03-31 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:CommonClassCMember us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001658566 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0001658566 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001658566 2019-03-31 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2019-03-31 0001658566 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2019-03-31 0001658566 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001658566 us-gaap:NoncontrollingInterestMember 2019-07-01 2019-09-30 0001658566 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2018-12-31 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:NoncontrollingInterestMember 2019-07-01 2019-09-30 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001658566 us-gaap:ConvertibleCommonStockMember us-gaap:CommonStockMember 2018-12-31 0001658566 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2019-06-30 0001658566 us-gaap:NoncontrollingInterestMember 2019-03-31 0001658566 2019-06-30 0001658566 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-09-30 0001658566 us-gaap:NoncontrollingInterestMember 2018-12-31 0001658566 us-gaap:ParentMember 2019-04-01 2019-06-30 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:CommonClassAMember us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:ParentMember 2019-07-01 2019-09-30 0001658566 us-gaap:ParentMember 2019-09-30 0001658566 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001658566 us-gaap:ParentMember 2018-12-31 0001658566 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001658566 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001658566 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001658566 us-gaap:ParentMember 2019-06-30 0001658566 us-gaap:RetainedEarningsMember 2019-09-30 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember 2019-07-01 2019-09-30 0001658566 us-gaap:NoncontrollingInterestMember 2019-06-30 0001658566 us-gaap:ParentMember 2019-03-31 0001658566 2020-07-31 0001658566 cdev:ConversionofClassCCommonStocktoClassACommonStockMember us-gaap:CommonClassAMember 2020-04-02 2020-04-02 0001658566 us-gaap:CommonClassAMember 2020-04-02 2020-04-02 0001658566 cdev:NGPXUSHoldingsL.P.Member us-gaap:CommonClassAMember 2020-07-31 0001658566 cdev:CentennialResourceProductionLLCMember 2019-12-31 0001658566 cdev:SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2017-11-30 0001658566 us-gaap:LetterOfCreditMember us-gaap:LineOfCreditMember 2020-09-30 0001658566 cdev:SeniorSecuredNoteDue2025Member us-gaap:SeniorNotesMember 2020-05-22 0001658566 cdev:SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2020-09-30 0001658566 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-01-01 2020-09-30 0001658566 cdev:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2019-03-15 0001658566 cdev:SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2017-11-30 2017-11-30 0001658566 srt:MaximumMember srt:ScenarioForecastMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-07-01 2021-12-31 0001658566 us-gaap:SeniorNotesMember 2020-01-01 2020-09-30 0001658566 us-gaap:SeniorNotesMember 2020-05-22 2020-05-22 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-09-30 0001658566 cdev:SeniorSecuredNoteDue2025Member us-gaap:SeniorNotesMember 2020-05-22 2020-05-22 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-05-01 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-05-01 2020-05-01 0001658566 srt:ScenarioForecastMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2022-04-01 2023-03-31 0001658566 srt:ScenarioForecastMember cdev:SeniorSecuredNoteDue2025Member us-gaap:SeniorNotesMember 2020-05-23 2022-06-01 0001658566 2020-05-22 2020-05-22 0001658566 cdev:SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2020-05-22 2020-05-22 0001658566 cdev:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2019-03-15 2019-03-15 0001658566 srt:ScenarioForecastMember us-gaap:SeniorNotesMember 2020-05-23 2022-06-01 0001658566 cdev:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2020-09-30 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-03-31 0001658566 srt:MaximumMember srt:ScenarioForecastMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2023-03-31 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:SubsequentEventMember 2020-10-08 0001658566 srt:MaximumMember srt:ScenarioForecastMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2022-01-01 2022-12-31 0001658566 cdev:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2020-05-22 2020-05-22 0001658566 srt:MaximumMember srt:ScenarioForecastMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2022-03-31 0001658566 us-gaap:SeniorNotesMember 2019-12-31 0001658566 cdev:SeniorSecuredNoteDue2025Member us-gaap:SeniorNotesMember 2019-12-31 0001658566 cdev:SeniorNotesDue2027Member us-gaap:SeniorNotesMember 2019-12-31 0001658566 us-gaap:SeniorNotesMember 2020-09-30 0001658566 cdev:SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2019-12-31 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-12-31 0001658566 cdev:SeniorSecuredNoteDue2025Member us-gaap:SeniorNotesMember 2020-09-30 0001658566 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-01-01 2019-12-31 0001658566 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-01-01 2019-12-31 0001658566 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-04-26 2020-09-30 0001658566 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember cdev:AdjustedForStatutoryReserveRequirementsLondonInterbankOfferedRateLIBORMember 2019-04-26 2020-09-30 0001658566 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember cdev:AdjustedForStatutoryReserveRequirementsLondonInterbankOfferedRateLIBORMember 2019-04-26 2020-09-30 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:FederalFundsEffectiveSwapRateMember 2020-07-01 2020-09-30 0001658566 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-04-26 2020-09-30 0001658566 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-07-01 2020-09-30 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember cdev:OneMonthLondonInterbankOfferedRateLIBORMember 2020-07-01 2020-09-30 0001658566 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-07-01 2020-09-30 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:FederalFundsEffectiveSwapRateMember 2019-01-01 2019-12-31 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember cdev:OneMonthLondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2018-05-04 2018-05-04 0001658566 us-gaap:RestrictedStockMember 2020-01-01 2020-09-30 0001658566 us-gaap:RestrictedStockMember 2020-09-30 0001658566 us-gaap:RestrictedStockMember 2019-12-31 0001658566 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0001658566 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-09-30 0001658566 us-gaap:EmployeeStockOptionMember 2020-07-01 2020-09-30 0001658566 us-gaap:PerformanceSharesMember 2020-07-01 2020-09-30 0001658566 cdev:CashsettledRestrictedStockMember 2020-07-01 2020-09-30 0001658566 us-gaap:RestrictedStockMember 2020-07-01 2020-09-30 0001658566 us-gaap:EmployeeStockMember 2020-01-01 2020-09-30 0001658566 cdev:CashsettledRestrictedStockMember 2019-01-01 2019-09-30 0001658566 us-gaap:EmployeeStockOptionMember 2019-07-01 2019-09-30 0001658566 cdev:CashsettledPerformanceStockMember 2019-07-01 2019-09-30 0001658566 us-gaap:EquityMember 2020-01-01 2020-09-30 0001658566 us-gaap:PerformanceSharesMember 2019-01-01 2019-09-30 0001658566 us-gaap:EquityMember 2019-01-01 2019-09-30 0001658566 us-gaap:RestrictedStockMember 2019-01-01 2019-09-30 0001658566 cdev:LiabilityAwardMember 2019-01-01 2019-09-30 0001658566 us-gaap:EmployeeStockMember 2019-07-01 2019-09-30 0001658566 cdev:CashsettledRestrictedStockMember 2020-01-01 2020-09-30 0001658566 cdev:CashsettledRestrictedStockMember 2019-07-01 2019-09-30 0001658566 cdev:LiabilityAwardMember 2020-07-01 2020-09-30 0001658566 us-gaap:EmployeeStockMember 2019-01-01 2019-09-30 0001658566 us-gaap:EquityMember 2020-07-01 2020-09-30 0001658566 us-gaap:EquityMember 2019-07-01 2019-09-30 0001658566 cdev:CashsettledPerformanceStockMember 2019-01-01 2019-09-30 0001658566 cdev:LiabilityAwardMember 2020-01-01 2020-09-30 0001658566 us-gaap:PerformanceSharesMember 2020-01-01 2020-09-30 0001658566 us-gaap:RestrictedStockMember 2019-07-01 2019-09-30 0001658566 cdev:LiabilityAwardMember 2019-07-01 2019-09-30 0001658566 us-gaap:PerformanceSharesMember 2019-07-01 2019-09-30 0001658566 cdev:CashsettledPerformanceStockMember 2020-01-01 2020-09-30 0001658566 cdev:CashsettledPerformanceStockMember 2020-07-01 2020-09-30 0001658566 us-gaap:EmployeeStockMember 2020-07-01 2020-09-30 0001658566 us-gaap:PerformanceSharesMember 2020-09-30 0001658566 us-gaap:PerformanceSharesMember 2019-12-31 0001658566 srt:MinimumMember cdev:CashsettledRestrictedStockMember 2020-07-01 2020-09-30 0001658566 cdev:A2019EmployeeStockPurchasePlanMember 2019-05-01 0001658566 cdev:CashsettledRestrictedStockMember 2020-09-30 0001658566 cdev:A2016LongTermIncentivePlanMember 2016-10-07 0001658566 us-gaap:EmployeeStockOptionMember 2020-09-30 0001658566 us-gaap:EmployeeStockOptionMember cdev:A2016LongTermIncentivePlanMember 2020-01-01 2020-09-30 0001658566 srt:MaximumMember cdev:CashsettledRestrictedStockMember 2020-07-01 2020-09-30 0001658566 cdev:CashsettledPerformanceStockMember 2020-09-30 0001658566 cdev:A2019EmployeeStockPurchasePlanMember 2020-09-30 0001658566 cdev:A2016LongTermIncentivePlanMember 2020-04-29 2020-04-29 0001658566 cdev:A2016LongTermIncentivePlanMember 2020-09-30 0001658566 srt:DirectorMember us-gaap:RestrictedStockMember 2020-01-01 2020-09-30 0001658566 srt:OfficerMember us-gaap:RestrictedStockMember 2020-01-01 2020-09-30 0001658566 cdev:ICEBrentMember cdev:CrudeOilSwapPeriodTwoDomain us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodTwoDomain us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:CrudeOilBasisSwapPeriodFourMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:CrudeOilBasisSwapPeriodTwoMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodFourMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:ICEBrentMember cdev:CrudeOilSwapPeriodFourMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:CrudeOilBasisSwapPeriodFourMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodFiveMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:ICEBrentMember cdev:CrudeOilSwapPeriodThreeMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodOneMemberDomain us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodOneMemberDomain us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodTwoDomain us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:CrudeOilBasisSwapPeriodThreeMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:CrudeOilBasisSwapPeriodThreeMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:CrudeOilBasisSwapPeriodOneMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodThreeMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:ICEBrentMember cdev:CrudeOilSwapPeriodFiveMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:CrudeOilBasisSwapPeriodTwoMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:ICEBrentMember cdev:CrudeOilSwapPeriodFiveMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodThreeMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:ICEBrentMember cdev:CrudeOilSwapPeriodThreeMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:ICEBrentMember cdev:CrudeOilSwapPeriodFourMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:ICEBrentMember cdev:CrudeOilSwapPeriodTwoDomain us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodFourMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:CrudeOilBasisSwapPeriodOneMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NYMEXWTIMember cdev:CrudeOilSwapPeriodFiveMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:CurrentLiabilitiesMember us-gaap:NondesignatedMember 2019-12-31 0001658566 cdev:NonCurrentLiabilitiesMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NoncurrentAssetsMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:CurrentAssetsMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:CurrentLiabilitiesMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:CrudeOilCollarsPeriodOneMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:CrudeOilCollarsPeriodOneMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NaturalGasCollarsPeriodTwoMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasCollarsPeriodOneMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NaturalGasCollarsPeriodTwoMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NaturalGasCollarsPeriodOneMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodThreeMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodFourMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodFiveMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NaturalGasBasisSwapPeriodOneMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodOneMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodFiveMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodOneMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodFourMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodTwoMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodThreeMember us-gaap:NondesignatedMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasSwapsHenryHubPeriodTwoMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:NaturalGasBasisSwapPeriodOneMember us-gaap:NondesignatedMember 2020-09-30 0001658566 cdev:SeniorSecuredNoteDue2025Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2020-09-30 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:LineOfCreditMember 2019-12-31 0001658566 cdev:SeniorSecuredNoteDue2025Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-12-31 0001658566 cdev:SeniorNotesDue2027Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2020-09-30 0001658566 cdev:SeniorNotesDue2026Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2020-09-30 0001658566 cdev:SeniorNotesDue2027Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-12-31 0001658566 cdev:SeniorNotesDue2026Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-12-31 0001658566 us-gaap:RevolvingCreditFacilityMember us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:LineOfCreditMember 2020-09-30 0001658566 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001658566 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001658566 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001658566 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001658566 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001658566 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-09-30 0001658566 cdev:ProvedPropertyMember us-gaap:FairValueMeasurementsNonrecurringMember 2019-12-31 0001658566 cdev:ProvedPropertyMember us-gaap:FairValueMeasurementsNonrecurringMember 2020-01-01 2020-09-30 0001658566 cdev:ProvedPropertyMember us-gaap:FairValueMeasurementsNonrecurringMember 2020-09-30 0001658566 srt:MinimumMember cdev:ProvedPropertyMember 2020-01-01 2020-09-30 0001658566 srt:MaximumMember cdev:ProvedPropertyMember 2020-07-01 2020-09-30 0001658566 us-gaap:RestrictedStockMember 2020-07-01 2020-09-30 0001658566 us-gaap:RestrictedStockMember 2019-07-01 2019-09-30 0001658566 us-gaap:WarrantMember 2019-01-01 2019-09-30 0001658566 us-gaap:CommonClassCMember 2020-07-01 2020-09-30 0001658566 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-09-30 0001658566 us-gaap:EmployeeStockMember 2019-01-01 2019-09-30 0001658566 us-gaap:WarrantMember 2019-07-01 2019-09-30 0001658566 us-gaap:EmployeeStockOptionMember 2020-07-01 2020-09-30 0001658566 us-gaap:EmployeeStockMember 2020-01-01 2020-09-30 0001658566 us-gaap:CommonClassCMember 2019-07-01 2019-09-30 0001658566 us-gaap:WarrantMember 2020-07-01 2020-09-30 0001658566 us-gaap:RestrictedStockMember 2020-01-01 2020-09-30 0001658566 us-gaap:WarrantMember 2020-01-01 2020-09-30 0001658566 us-gaap:CommonClassCMember 2020-01-01 2020-09-30 0001658566 us-gaap:EmployeeStockMember 2020-07-01 2020-09-30 0001658566 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0001658566 us-gaap:EmployeeStockMember 2019-07-01 2019-09-30 0001658566 us-gaap:RestrictedStockMember 2019-01-01 2019-09-30 0001658566 us-gaap:EmployeeStockOptionMember 2019-07-01 2019-09-30 0001658566 us-gaap:CommonClassCMember 2019-01-01 2019-09-30 0001658566 cdev:LucidEnergyDelawareLLCMember srt:AffiliatedEntityMember 2019-12-31 0001658566 cdev:LucidEnergyDelawareLLCMember srt:AffiliatedEntityMember 2020-09-30 0001658566 cdev:LucidEnergyDelawareLLCMember srt:AffiliatedEntityMember 2020-07-01 2020-09-30 0001658566 cdev:LucidEnergyDelawareLLCMember srt:AffiliatedEntityMember 2020-01-01 2020-09-30 0001658566 cdev:LucidEnergyDelawareLLCMember srt:AffiliatedEntityMember 2019-07-01 2019-09-30 0001658566 cdev:LucidEnergyDelawareLLCMember srt:AffiliatedEntityMember 2019-01-01 2019-09-30 0001658566 cdev:SeniorSecuredNoteDue2025Member us-gaap:SeniorNotesMember srt:AffiliatedEntityMember cdev:DebtExchangeTransactionMember 2020-07-01 2020-09-30 0001658566 cdev:SeniorNotesDue2026Member us-gaap:SeniorNotesMember srt:AffiliatedEntityMember cdev:DebtExchangeTransactionMember 2020-07-01 2020-09-30 0001658566 cdev:SeniorNotesDue2027Member us-gaap:SeniorNotesMember srt:AffiliatedEntityMember cdev:DebtExchangeTransactionMember 2020-07-01 2020-09-30 0001658566 cdev:PermianBasinAgreementMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasAndNaturalGasLiquidsMember srt:MinimumMember 2020-01-01 2020-09-30 0001658566 cdev:NaturalGasAndNaturalGasLiquidsMember srt:MaximumMember 2020-01-01 2020-09-30 0001658566 srt:CrudeOilMember 2020-01-01 2020-09-30 0001658566 srt:CrudeOilMember 2020-07-01 2020-09-30 0001658566 srt:NaturalGasReservesMember 2019-07-01 2019-09-30 0001658566 srt:CrudeOilMember 2019-01-01 2019-09-30 0001658566 srt:NaturalGasLiquidsReservesMember 2019-07-01 2019-09-30 0001658566 srt:NaturalGasLiquidsReservesMember 2020-01-01 2020-09-30 0001658566 srt:NaturalGasLiquidsReservesMember 2020-07-01 2020-09-30 0001658566 srt:NaturalGasReservesMember 2020-01-01 2020-09-30 0001658566 srt:CrudeOilMember 2019-07-01 2019-09-30 0001658566 srt:NaturalGasReservesMember 2020-07-01 2020-09-30 0001658566 srt:NaturalGasLiquidsReservesMember 2019-01-01 2019-09-30 0001658566 srt:NaturalGasReservesMember 2019-01-01 2019-09-30 0001658566 srt:MaximumMember 2020-09-30 0001658566 srt:MaximumMember 2020-01-01 2020-09-30 0001658566 srt:MinimumMember 2020-01-01 2020-09-30 0001658566 cdev:DrillingRigleasecostsMember 2020-01-01 2020-09-30 0001658566 us-gaap:LetterOfCreditMember us-gaap:LineOfCreditMember us-gaap:SubsequentEventMember 2020-10-30 xbrli:shares iso4217:USD xbrli:shares xbrli:pure cdev:redetermination iso4217:USD utreg:MMBTU iso4217:USD cdev:bbl utreg:bbl utreg:D utreg:bbl iso4217:USD utreg:MMBTU


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2020
OR
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                     to                   
Commission file number 001-37697
 
CENTENNIAL RESOURCE DEVELOPMENT, INC.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
 
47-5381253
(State of Incorporation)
 
(I.R.S. Employer Identification No.)
1001 Seventeenth Street, Suite 1800
Denver, Colorado 80202
(Registrant’s telephone number, including area code): (720) 499-1400
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share
 
CDEV
 
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
Accelerated filer 
 
Non-accelerated filer

 
Smaller reporting company 
 
Emerging growth company
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of October 31, 2020, there were 278,341,440 shares of Class A Common Stock, par value $0.0001 per share outstanding.
 



TABLE OF CONTENTS
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




GLOSSARY OF OIL AND NATURAL GAS TERMS
The following are abbreviations and definitions of certain terms used in this Quarterly Report on Form 10-Q, which are commonly used in the oil and natural gas industry:

Bbl. One stock tank barrel of 42 U.S. gallons liquid volume used herein in reference to crude oil, condensate or NGLs.

Bbl/d. One Bbl per day.

Boe. One barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil. This is an energy content correlation and does not reflect a value or price relationship between the commodities.

Boe/d. One Boe per day.

Btu. One British thermal unit, which is the quantity of heat required to raise the temperature of a one-pound mass of water by one-degree Fahrenheit.

Completion. The process of preparing an oil and gas wellbore for production through the installation of permanent production equipment, as well as perforation and fracture stimulation to optimize production.
Development well. A well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.
Differential. An adjustment to the price of oil or natural gas from an established spot market price to reflect differences in the quality and/or location of oil or natural gas.
Exploratory well. A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir.
Field. An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

Flush production. First yield from a flowing oil well during its most productive period after it is first completed and put online.

Formation. A layer of rock which has distinct characteristics that differs from nearby rock.

Horizontal drilling. A drilling technique used in certain formations where a well is drilled vertically to a certain depth and then drilled at a right angle within a specified interval.

ICE Brent. Brent crude oil traded on the Intercontinental Exchange, Inc. (ICE).

LIBOR. London Interbank Offered Rate.

MBbl. One thousand barrels of crude oil, condensate or NGLs.

MBoe. One thousand Boe.

Mcf. One thousand cubic feet of natural gas.

Mcf/d. One Mcf per day.

MMBtu. One million British thermal units.

MMcf. One million cubic feet of natural gas.

NGL. Natural gas liquids. These are naturally occurring substances found in natural gas, including ethane, butane, isobutane, propane and natural gasoline, that can be collectively removed from produced natural gas, separated into these substances and sold.


3


NYMEX. The New York Mercantile Exchange.

Operator. The individual or company responsible for the development and/or production of an oil or natural gas well or lease.

Proved developed reserves. Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well.

Proved reserves. The estimated quantities of oil, NGLs and natural gas that geological and engineering data demonstrate with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic and operating conditions.

Proved undeveloped reserves or PUD. Proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for completion or recompletion. 

Realized price. The cash market price less differentials.

Recompletion. The completion for production of an existing wellbore in another formation from that which the well has been previously completed.

Reserves. Estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and natural gas or related substances to market and all permits and financing required to implement the project.

Reservoir. A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

Royalty interest. An interest in an oil or gas property entitling the owner to shares of the production free of costs of exploration, development and production operations.

Spot market price. The cash market price without reduction for expected quality, transportation and demand adjustments.

Wellbore. The hole drilled by a drill bit that is equipped for oil and natural gas production once the well has been completed. Also called well or borehole.

Working interest. The interest in an oil and gas property (typically a leasehold interest) that gives the owner the right to drill, produce and conduct operations on the property and to a share of production, subject to all royalties and other burdens and to all costs of exploration, development and operations and all risks in connection therewith.

Workover. Operations on a producing well to restore or increase production.

WTI. West Texas Intermediate is a grade of crude oil used as a benchmark in oil pricing.

4


GLOSSARY OF CERTAIN OTHER TERMS
The following are definitions of certain other terms that are used in this Quarterly Report on Form 10-Q:
Business Combination. The acquisition of approximately 89% of the outstanding membership interests in CRP from the Centennial Contributors, which closed on October 11, 2016, and the other transactions contemplated by the Contribution Agreement.
Centennial Contributors. The legacy owners of CRP, who sold approximately 89% of the outstanding membership interests in CRP to the Company in connection with the Business Combination. On April 2, 2020, the Centennial Contributors converted all of their remaining CRP Common Units (and corresponding shares of Class C Common Stock) for Class A Common Stock, which eliminated their entire ownership interest in CRP.
The Company, we, our or us. (i) Centennial Resource Development, Inc. and its consolidated subsidiaries including CRP, following the closing of the Business Combination and (ii) Silver Run Acquisition Corporation prior to the closing of the Business Combination.
Class A Common Stock. Our Class A Common Stock, par value $0.0001 per share.
Class C Common Stock. Our Class C Common Stock, par value $0.0001 per share, which was issued to the Centennial Contributors in connection with the Business Combination.
Contribution Agreement. The Contribution Agreement, dated as of July 6, 2016, among the Centennial Contributors, CRP and NewCo, as amended by Amendment No. 1 thereto, dated as of July 29, 2016, and the Joinder Agreement, dated as of October 7, 2016, by the Company.
CRP. Centennial Resource Production, LLC, a Delaware limited liability company.
CRP Common Units. The units representing common membership interests in CRP.
NewCo. New Centennial, LLC, a Delaware limited liability company controlled by affiliates of Riverstone.
Riverstone. Riverstone Investment Group LLC and its affiliates, including Silver Run Sponsor, LLC, a Delaware limited liability company, collectively.
Voting common stock. Our Class A Common Stock and Class C Common Stock.


5


CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “goal,” “plan,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under “Item 1A. Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”) and the risk factors and other cautionary statements contained in our other filings with the United States Securities and Exchange Commission (“SEC”).
Forward-looking statements may include statements about:
volatility of oil, natural gas and NGL prices or a prolonged period of low oil, natural gas or NGL prices and the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries (“OPEC”), such as Saudi Arabia, and other oil and natural gas producing countries, such as Russia, with respect to production levels or other matters related to the price of oil;
the effects of excess supply of oil and natural gas resulting from the reduced demand caused by the COVID-19 pandemic and the actions by certain oil and natural gas producing countries;
our business strategy and future drilling plans; 
our reserves and our ability to replace the reserves we produce through drilling and property acquisitions; 
our drilling prospects, inventories, projects and programs; 
our financial strategy, liquidity and capital required for our development program; 
our realized oil, natural gas and NGL prices; 
the timing and amount of our future production of oil, natural gas and NGLs; 
our hedging strategy and results; 
our competition and government regulations; 
our ability to obtain permits and governmental approvals; 
our pending legal or environmental matters; 
the marketing and transportation of our oil, natural gas and NGLs; 
our leasehold or business acquisitions; 
cost of developing our properties;
our anticipated rate of return;
general economic conditions; 
credit markets; 
uncertainty regarding our future operating results; and 
our plans, objectives, expectations and intentions contained in this Quarterly Report that are not historical.
You should not place undue reliance on these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including but not limited to those risks described under “Item 1A. Risk Factors” in this Quarterly Report and in our 2019 Annual Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

6


Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.
Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Quarterly Report are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied by the forward-looking statements.
All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
All forward-looking statements, expressed or implied, are made only as of the date of this Quarterly Report. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report.



7


PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
CENTENNIAL RESOURCE DEVELOPMENT, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share and per share amounts)
 
September 30, 2020
 
December 31, 2019
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
5,177

 
$
10,223

Accounts receivable, net
51,352

 
101,912

Prepaid and other current assets
7,980

 
7,994

Total current assets
64,509

 
120,129

Property and Equipment
 
 
 
Oil and natural gas properties, successful efforts method
 
 
 
Unproved properties
1,282,833

 
1,470,903

Proved properties
4,319,617

 
3,962,175

Accumulated depreciation, depletion and amortization
(1,804,014
)
 
(931,737)

Total oil and natural gas properties, net
3,798,436

 
4,501,341

Other property and equipment, net
13,319

 
14,612

Total property and equipment, net
3,811,755

 
4,515,953

Noncurrent assets
 
 
 
Operating lease right-of-use assets
4,025

 
11,841

Other noncurrent assets
42,747

 
40,365

TOTAL ASSETS
$
3,923,036

 
$
4,688,288

LIABILITIES AND EQUITY
 
 
 
Current liabilities
 
 
 
Accounts payable and accrued expenses
$
116,377

 
$
244,309

Operating lease liabilities
3,415

 
9,232

Other current liabilities
913

 
925

Total current liabilities
120,705

 
254,466

Noncurrent liabilities
 
 
 
Long-term debt, net
1,092,241

 
1,057,389

Asset retirement obligations
18,125

 
16,874

Deferred income taxes
2,589

 
85,504

Operating lease liabilities
1,097

 
3,354

Other noncurrent liabilities
456

 

Total liabilities
1,235,213

 
1,417,587

Commitments and contingencies (Note 11)


 


Shareholders’ equity
 
 
 
Preferred stock, $0.0001 par value, 1,000,000 shares authorized:
 
 
 
Series A: No shares issued and outstanding at September 30, 2020 and 1 share issued and outstanding at December 31, 2019

 

Common stock, $0.0001 par value, 620,000,000 shares authorized:
 
 
 
Class A: 290,104,427 shares issued and 278,317,272 shares outstanding at September 30, 2020 and 280,650,341 shares issued and 275,811,346 shares outstanding at December 31, 2019
29

 
28

Class C (Convertible): No shares issued and outstanding at September 30, 2020 and 1,034,119 shares issued and outstanding at December 31, 2019

 

Additional paid-in capital
2,999,640

 
2,975,756

Retained earnings (accumulated deficit)
(311,846
)
 
282,336

Total shareholders’ equity
2,687,823

 
3,258,120

Noncontrolling interest

 
12,581

Total equity
2,687,823

 
3,270,701

TOTAL LIABILITIES AND EQUITY
$
3,923,036

 
$
4,688,288

The accompanying notes are an integral part of these unaudited consolidated financial statements.

8


CENTENNIAL RESOURCE DEVELOPMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2020
 
2019
 
2020
 
2019
Operating revenues
 
 
 
 
 
 
 
Oil and gas sales
$
149,101

 
$
229,130

 
$
432,379

 
$
687,938

Operating expenses
 
 
 
 
 
 
 
Lease operating expenses
24,543

 
42,330

 
83,021

 
107,077

Severance and ad valorem taxes
7,839

 
12,213

 
30,108

 
45,519

Gathering, processing and transportation expenses
19,130

 
20,853

 
53,353

 
52,120

Depreciation, depletion and amortization
89,444

 
112,720

 
283,722

 
321,392

Impairment and abandonment expense
19,904

 
6,745

 
650,629

 
42,427

Exploration and other expenses
2,670

 
2,869

 
10,730

 
9,246

General and administrative expenses
17,582

 
20,036

 
54,446

 
56,589

Total operating expenses
181,112

 
217,766

 
1,166,009

 
634,370

Net gain (loss) on sale of long-lived assets
145

 
(22
)
 
388

 
(15
)
Income (loss) from operations
(31,866
)
 
11,342

 
(733,242
)
 
53,553

 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
Interest expense
(17,718
)
 
(15,246
)
 
(51,510
)
 
(39,843
)
Gain on exchange of debt

 

 
143,443

 

Net gain (loss) on derivative instruments
(1,968
)
 
1,522

 
(40,330
)
 
(2,221
)
Other income (expense)
23

 
62

 
(29
)
 
321

Total other income (expense)
(19,663
)
 
(13,662
)
 
51,574

 
(41,743
)
 
 
 
 
 
 
 
 
Income (loss) before income taxes
(51,529
)
 
(2,320
)
 
(681,668
)
 
11,810

Income tax (expense) benefit

 
(1,393
)
 
85,124

 
(5,058
)
Net income (loss)
(51,529
)
 
(3,713
)
 
(596,544
)
 
6,752

Less: Net (income) loss attributable to noncontrolling interest

 
128

 
2,362

 
(572
)
Net income (loss) attributable to Class A Common Stock
$
(51,529
)
 
$
(3,585
)
 
$
(594,182
)
 
$
6,180

 
 
 
 
 


 


Income (loss) per share of Class A Common Stock:
 
 
 
 
 
 
 
Basic
$
(0.19
)
 
$
(0.01
)
 
$
(2.14
)
 
$
0.02

Diluted
$
(0.19
)
 
$
(0.01
)
 
$
(2.14
)
 
$
0.02

The accompanying notes are an integral part of these unaudited consolidated financial statements.


9


CENTENNIAL RESOURCE DEVELOPMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)
 
Nine Months Ended September 30,
 
2020

2019
Cash flows from operating activities:
 
 
 
Net income (loss)
$
(596,544
)
 
$
6,752

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation, depletion and amortization
283,722

 
321,392

Stock-based compensation expense
16,164

 
21,351

Impairment and abandonment expense
650,629

 
42,427

Deferred tax expense (benefit)
(85,124
)
 
5,058

Net (gain) loss on sale of long-lived assets
(388
)
 
15

Non-cash portion of derivative (gain) loss
(1,103
)
 
14

Amortization of debt issuance costs and discount
4,112

 
2,070

Gain on exchange of debt
(143,443
)
 

Changes in operating assets and liabilities:
 
 
 
(Increase) decrease in accounts receivable
48,139

 
(47,771
)
(Increase) decrease in prepaid and other assets
(2,825
)
 
(995
)
Increase (decrease) in accounts payable and other liabilities
(43,107
)
 
34,562

Net cash provided by operating activities
130,232

 
384,875

Cash flows from investing activities:
 
 
 
Acquisition of oil and natural gas properties
(7,689
)
 
(73,346
)
Drilling and development capital expenditures
(300,660
)
 
(644,945
)
Purchases of other property and equipment
(1,035
)
 
(8,207
)
Proceeds from sales of oil and natural gas properties
1,375

 
28,378

Net cash used in investing activities
(308,009
)
 
(698,120
)
Cash flows from financing activities:
 
 
 
Proceeds from borrowings under revolving credit facility
490,000

 
345,000

Repayment of borrowings under revolving credit facility
(310,000
)
 
(525,000
)
Proceeds from issuance of senior notes

 
496,175

Debt exchange and debt issuance costs
(6,650
)
 
(7,200
)
Restricted stock used for tax withholdings
(598
)
 
(911
)
Net cash provided by financing activities
172,752

 
308,064

Net increase (decrease) in cash, cash equivalents and restricted cash
(5,025
)
 
(5,181
)
Cash, cash equivalents and restricted cash, beginning of period
15,543

 
21,422

Cash, cash equivalents and restricted cash, end of period
$
10,518

 
$
16,241

The accompanying notes are an integral part of these unaudited consolidated financial statements.

10


CENTENNIAL RESOURCE DEVELOPMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (continued)
(in thousands)
 
Nine Months Ended September 30,
 
2020

2019
Supplemental cash flow information
 
 
 
Cash paid for interest
$
48,331

 
$
27,985

Operating lease liability payments:
 
 
 
Cash used in operating activities
5,510

 
16,808

Cash used in investing activities
2,019

 
13,946

Supplemental non-cash activity
 
 
 
Accrued capital expenditures included in accounts payable and accrued expenses
$
13,593

 
$
120,238

Asset retirement obligations incurred, including revisions to estimates
579

 
1,075

Right-of-use assets recognized (derecognized) with offsetting operating lease liabilities
(3,711
)
 
35,686

Change in Senior Notes from debt exchange
 
 
 
Senior Secured Notes issued in the debt exchange, net of debt discount
106,030

 

2026 Senior Notes extinguished in the debt exchange, net of unamortized debt issue costs
(108,632
)
 

2027 Senior Notes extinguished in the debt exchange, net of unamortized discount and debt issue costs
(140,840
)
 

Reconciliation of cash, cash equivalents and restricted cash presented on the consolidated statements of cash flows for the periods presented:
 
Nine Months Ended September 30,
 
2020
 
2019
Cash and cash equivalents
$
5,177

 
$
10,933

Restricted cash(1)
5,341

 
5,308

Total cash, cash equivalents and restricted cash
$
10,518

 
$
16,241

 
(1) 
Included in Prepaid and other current assets and Other noncurrent assets line items in the consolidated balance sheets.


The accompanying notes are an integral part of these unaudited consolidated financial statements.


11


CENTENNIAL RESOURCE DEVELOPMENT, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)
(in thousands)


 
Common Stock
 
Preferred Stock
 
 
 
 
 
 
 
 
 
 
 
Class A
 
Class C
 
Series A
 
Additional Paid-In Capital
 
Retained Earnings (Accumulated Deficit)
 
Total Shareholders’ Equity
 
Non-controlling Interest
 
Total Equity
 
Shares

Amount

Shares

Amount

Shares

Amount
 
 
 
 
 
Balance at December 31, 2019
280,650

 
$
28

 
1,034

 
$

 

 
$

 
$
2,975,756

 
$
282,336

 
$
3,258,120

 
$
12,581

 
$
3,270,701

Restricted stock issued
1,305

 

 

 

 

 

 

 

 

 

 

Restricted stock forfeited
(406
)
 

 

 

 

 

 

 

 

 

 

Restricted stock used for tax withholding
(78
)
 

 

 

 

 

 
(208
)
 

 
(208
)
 

 
(208
)
Issuance of Class A common stock under Employee Stock Purchase Plan
59

 

 

 

 

 

 
230

 

 
230

 

 
230

Stock-based compensation

 

 

 

 

 

 
6,409

 

 
6,409

 

 
6,409

Net income (loss)

 

 

 

 

 

 

 
(547,983
)
 
(547,983
)
 
(2,362
)
 
(550,345
)
Balance at March 31, 2020
281,530

 
28

 
1,034

 

 

 

 
2,982,187

 
(265,647
)
 
2,716,568

 
10,219

 
2,726,787

Restricted stock issued
80

 

 

 

 

 

 

 

 

 

 

Restricted stock forfeited
(352
)
 

 

 

 

 

 

 

 

 

 

Restricted stock used for tax withholding
(83
)
 

 

 

 

 

 
(93
)
 

 
(93
)
 

 
(93
)
Stock-based compensation

 

 

 

 

 

 
4,727

 

 
4,727

 

 
4,727

Conversion of common stock from Class C to Class A, net of tax
1,034

 

 
(1,034
)
 

 

 

 
8,011

 

 
8,011

 
(10,219
)
 
(2,208
)
Net income (loss)

 

 

 

 

 

 

 
5,330

 
5,330

 

 
5,330

Balance at June 30, 2020
282,209

 
28

 

 

 

 

 
2,994,832

 
(260,317
)
 
2,734,543

 

 
2,734,543

Restricted stock issued
8,272

 
1

 

 

 

 

 
(1
)
 

 

 

 

Restricted stock forfeited
(104
)
 

 

 

 

 

 

 

 

 

 

Restricted stock used for tax withholding
(377
)
 

 

 

 

 

 
(297
)
 

 
(297
)
 

 
(297
)
Issuance of Class A common stock under Employee Stock Purchase Plan
104

 

 

 

 

 

 
78

 

 
78

 

 
78

Stock-based compensation

 

 

 

 

 

 
5,028

 

 
5,028

 

 
5,028

Net income (loss)

 

 

 

 

 

 

 
(51,529
)
 
(51,529
)
 

 
(51,529
)
Balance at September 30, 2020
290,104

 
$
29

 

 
$

 

 
$

 
$
2,999,640

 
$
(311,846
)
 
$
2,687,823

 
$

 
$
2,687,823


12


CENTENNIAL RESOURCE DEVELOPMENT, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited) (continued)
(in thousands)
 
Common Stock
 
Preferred Stock
 
 
 
 
 
 
 
 
 
 
 
Class A
 
Class C
 
Series A
 
Additional Paid-In Capital
 
Retained Earnings (Accumulated Deficit)
 
Total Shareholders Equity
 
Non-controlling Interest
 
Total Equity
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
Balance at December 31, 2018
265,859

 
$
27

 
12,003

 
$
1

 

 
$

 
$
2,833,611

 
$
266,538

 
$
3,100,177

 
$
143,692

 
$
3,243,869

Restricted stock issued
436

 

 

 

 

 

 

 

 

 

 

Restricted stock forfeited

 

 

 

 

 

 

 

 

 

 

Restricted stock used for tax withholding
(24
)
 

 

 

 

 

 
(291
)
 

 
(291
)
 

 
(291
)
Stock-based compensation

 

 

 

 

 

 
6,483

 

 
6,483

 

 
6,483

Net income (loss)

 

 

 

 

 

 

 
(8,112
)
 
(8,112
)
 
(425
)
 
(8,537
)
Balance at March 31, 2019
266,271

 
27

 
12,003

 
1

 

 

 
2,839,803

 
258,426

 
3,098,257

 
143,267

 
3,241,524

Restricted stock issued
4

 

 

 

 

 

 

 

 

 

 

Restricted stock forfeited
(16
)
 

 

 

 

 

 

 

 

 

 

Restricted stock used for tax withholding
(4
)
 

 

 

 

 

 
(41
)
 

 
(41
)
 

 
(41
)
Stock-based compensation

 

 

 

 

 

 
6,758

 

 
6,758

 

 
6,758

Net income (loss)

 

 

 

 

 

 

 
17,877

 
17,877

 
1,125

 
19,002

Balance at June 30, 2019
266,255

 
27

 
12,003

 
1

 

 

 
2,846,520

 
276,303

 
3,122,851

 
144,392

 
3,267,243

Restricted stock issued
3,466

 

 

 

 

 

 

 

 

 

 

Restricted stock forfeited
(30
)
 

 

 

 

 

 

 

 

 

 

Restricted stock used for tax withholding
(107
)
 

 

 

 

 

 
(579
)
 

 
(579
)
 

 
(579
)
Stock-based compensation

 

 

 

 

 

 
8,110

 

 
8,110

 

 
8,110

Conversion of common stock from Class C to Class A, net of tax
10,860

 
1

 
(10,860
)
 
(1
)
 

 

 
113,098

 

 
113,098