Centennial Resource Development Inc. recently closed the previously announced sale of noncore assets to affiliates of Henry Resources LLC and Pickering Energy Partners LP for a cash purchase price of $101 million.
“This divestiture enhances our financial flexibility as we head into next year,” Centennial CEO Sean R. Smith commented in a company release on Dec. 1.
Centennial Resource Development is a Denver-based independent oil and natural gas company focused on the Permian Basin whose approximately 71,500 net acres are concentrated in the Delaware Basin.
The properties sold include approximately 6,200 net leasehold acres and related assets located on the southernmost portion of the company’s Reeves County, Texas position. Third quarter estimated average net production associated with the divested acreage was approximately 1,600 boe/d (64% oil), or less than 3% of total company production.
According to statements made by Smith in early November, Centennial’s near-term capital is focused on other areas of its portfolio and plans for proceeds from the sale were to reduce borrowings on the company’s revolver.
As of Sept. 30, Centennial had roughly $494 million of liquidity with no senior note maturities until early 2026. The company expected net debt / last 12-month EBITDAX to be about 1.5 times by year-end 2021, according to an investor presentation published on Nov. 3.
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