Delaware Basin Pure-Play

Third Quarter 2021

Earnings Presentation

November 3, 2021

Important Information

Forward-Looking Statements

The information in this presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this presentation, 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 presentation, the words "could," "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. We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the development, production, gathering and sale of oil and natural gas. These risks include, but are not limited to, commodity price volatility, the COVID-19 pandemic and governmental responses thereto, inflation, lack of availability of drilling and production equipment and services, environmental and weather risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating oil and gas reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures and the other risks described in our filings with the Securities and Exchange Commission. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation.

Use of Non-GAAP Financial Measures

This presentation includes non-GAAP financial measures, such as Adjusted EBITDAX, free cash flow (deficit), net debt, net debt to last twelve months ("LTM") EBITDAX and net debt to last quarter annualized ("LQA") EBITDAX. Please refer to slide 18 for a reconciliation of Adjusted EBITDAX to net income, the most comparable GAAP measure. We believe Adjusted EBITDAX is useful as it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to financing methods or capital structure. We exclude the items listed on slide 18 from net income (loss) in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable assets, none of which are components of Adjusted EBITDAX. Our presentation of Adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.

Please refer to slide 19 for a reconciliation of free cash flow (deficit) to net cash provided by operating activities, the most comparable GAAP measure. We believe free cash flow (deficit) is a useful indicator of the Company's ability to internally fund its exploration and development activities and to service or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities or accounts payable related to capital expenditures. The Company believes that this measure, as so adjusted, presents a meaningful indicator of the Company's actual sources and uses of capital associated with its operations conducted during the applicable period. Our computations of free cash flow (deficit) may not be comparable to other similarly titled measures of other companies. Free cash flow (deficit) should not be considered as an alternative to, or more meaningful than, cash provided by operating activities as determined in accordance with GAAP or as indicator of our operating performance or liquidity.

The Company defines net debt as the aggregate principal amount of the Company's long-term debt, minus cash and cash equivalents. The Company presents this metric to help evaluate its capital structure and financial leverage and believes that it is widely used by professional research analysts, including credit analysts, and others in the evaluation of total leverage.

The Company defines net debt to LTM EBITDAX as net debt (defined above) divided by Adjusted EBITDAX (reconciled on slide 18) for the prior twelve-month period. The Company defines net debt to LQA EBITDAX as net debt divided by Adjusted EBITDAX for the prior quarter multiplied by four. The Company presents these metrics to show trends that investors may find useful in understanding the Company's ability to service its debt. These metrics are widely used by professional research analysts, including credit analysts, in the valuation and comparison of companies in the oil and gas exploration and production industry.

2

Centennial Resource Development Overview

Core Acreage and Strong Execution Track Record

P

Asset Map (~75,500 Net Acres)3

FCF profile

 Generated FCF for five consecutive quarters

supports organic

 Expect Net Debt / LTM EBITDAX to be ~1.5x by YE'211

NM:

de-leveraging and

~23,900

NM

net acres

absolute debt

 No senior note maturities until early 2026

TX

reduction

 ~$494mm of liquidity as of 9/30/21

P

 Continue to generate solid well results

Lea

Proven operational

 Maintaining structural improvements to cost structure

AcreageNM

execution

 2021 drilling program driving increased capital efficiency

 Two-rig drilling program to continue into 2022

P

 Proven development from 10 distinct zones across the

TX:

High-quality asset

Northern and Southern Delaware

~51,600

net acres

with significant

 15+ years of economic inventory2

inventory depth

 Minimal Federal exposure (<5%)

 Natural gas and NGL exposure providing uplift to cash flow

P

 Minimizing emissions through increased gas capture

Reeves

Continued focus on

 Additional improvements in sustainability through water

Acreage

recycling program and utilization of dual-fuel operations

Divested Acreage

ESG initiatives

 Published inaugural Corporate Sustainability Report in

Q1'21

TX

(1) Based on current strip pricing

(2)

Assuming a two-rig drilling program and $45/Bbl oil pricing

3

(3)

Pro forma net acreage figure calculated off 12/31/2020 net acreage; adjusted for pending ~6,200 net acre Southern Delaware divestiture

Centennial Q3 2021 Earnings Highlights

  • Generated record free cash flow of ~$77mm, fifth consecutive quarter of positive FCF

Improved

~125% free cash flow growth and 35% EBITDAX

Cash Flow

growth quarter-over-quarter

Profile

Raising FY'21 free cash flow guidance to $200 - 220mm,

up from prior guidance of $140 - 170mm

Continued debt repayment and rapid organic de-leveraging

Balance

Repaid $50mm of revolver borrowings

Reduced net debt / LTM EBITDAX to 2.1x from 3.0x at

Sheet

6/30/21 (1.5x net debt / LQA EBITDAX at 9/30/21)

Focus

Announced accretive sale of non-core assets in southern

Q3 Earnings Highlights

Reeves County for $101 million, proceeds will be used to

pay down revolver borrowings

Increased average daily oil production 5% quarter-over-

quarter

Asset

Delivered solid well results from both Northern and

Southern Delaware Basins

Quality

Natural gas and NGL exposure providing uplift to cash

flow (57% increase in natural gas & NGL revenue quarter-over-quarter)

4

Q3 2021 Financial Results Summary

Operational execution & higher commodity prices driving accelerated FCF generation & de-leveraging

Total Production (MBoe/d)

Oil Gas & NGL

61.6 +6% 65.1

54.2

28.2 31.9 +5% 33.5

Total Revenues ($ mm)

Oil

Gas & NGL

$289

+24%

$233

$87

$192

$55

+57%

$201

$59

$177

+14%

$134

EBITDAX ($ mm)

+35%

$127

$100

$171

Q1

Q2

Q3

2021

2021

2021

Free Cash Flow ($ mm)

$77

+126%

$34

$11

Q1

Q2

Q3

2021

2021

2021

Q1

Q2

Q3

2021

2021

2021

Credit Facility Borrowings ($ mm)1

$291

$255(20%)

$205

Q1

Q2

Q3

2021

2021

2021

Q1

Q2

Q3

2021

2021

2021

Net Debt / LTM EBITDAX

4.3x

3.0x (0.9x)

2.1x

Q1

Q2

Q3

2021

2021

2021

Note: Amounts may not sum due to rounding

(1) Q1'21 borrowings shown pro forma for Senior Secured Second Lien note redemption which occurred on 4/14/21

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Centennial Resource Development Inc. published this content on 03 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2021 09:01:09 UTC.