01—Abstract
Summary
Summary of the 10-K filed February 26, 2018. Cited figures are marked; the original filing is the authoritative source.
Centennial Resource Development, Inc. (now Permian Resources Corporation) reported that for the year ended December 31, 2017 it generated total net revenues of $429.9 milliona, up from a combined $98.8 million in 2016, with net income attributable to common shareholders of $75.6 million.
The company is an independent oil and gas producer focused on the Delaware Basin in the Permian Basin, with 181 producing horizontal wells, approximately 84,718 net acres, and total proved reserves of 186,454 MBoe at December 31, 2017, of which 60% were proved undeveloped. Pre-tax PV 10% of proved reserves was $1,748.1 millionb, and the standardized measure of discounted future net cash flows was $1,503.3 million. Total 2017 capital expenditures were $696.4 million, including $624.1 million for drilling and completion.
The company's 2018 capital budget is $885 million to $1,050 millionc, funded by operating cash flow and borrowings. Operating cash flow was $259.9 million in 2017. Long-term debt was $390.8 million, consisting of $400.0 million of 5.375% senior notes due 2026, and $474.1 million of availability remained under CRP's revolving credit facility at year end.
The company acquired GMT Exploration properties for $350.0 milliond in June 2017 and agreed to sell 8,600 undeveloped net acres and 12 gross producing wells in Reeves County for $140.7 million, expected to close March 1, 2018. The company reported that it does not pay dividends and intends to retain earnings. Its largest purchasers were Shell Trading (US) Company at 33%, BP America at 16%, and Eagleclaw Midstream Ventures at 14% of 2017 revenue.
02—Key points
Key Highlights
- Total net revenues of $429.9 million in 2017 versus $98.8 million combined for 2016, with net income attributable to common shareholders of $75.6 million
- Total proved reserves of 186,454 MBoe at December 31, 2017, of which 40% were proved developed; standardized measure of $1,503.3 million
- 2017 production of 11,630 MBoe (31,864 Boe/d), with oil at 6,994 MBbls, and 181 operated producing horizontal wells at year end
- Total 2017 capital expenditures of $696.4 million, with 2018 capital budget guided to $885 million to $1,050 million
- Long-term debt of $390.8 million from 5.375% senior notes due 2026, with $474.1 million of available borrowing capacity under the revolving credit facility and no borrowings outstanding
- Acquired GMT properties for $350.0 million in June 2017 and entered agreement to divest 8,600 net acres and 12 gross wells in Reeves County for $140.7 million
- Customer concentration: Shell Trading (US) Company 33%, BP America 16%, and Eagleclaw Midstream Ventures 14% of 2017 revenue
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 26, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $429.90M— | — |
| Operating Expenses | $324.62M— | — |
| Operating Income | $114.08M— | — |
| Interest Expense | $5.73M— | — |
| Net Income | $75.57M— | — |
| EPS (Basic) | $0.32— | — |
| EPS (Diluted) | $0.32— | — |
| Shares Outstanding (Basic) | 235.45M— | — |
| Shares Outstanding (Diluted) | 239.75M— | — |
05—Questions
Frequently Asked Questions
How much did the company's revenue and profitability change in 2017?
Total net revenues were $429.9 million for the year ended December 31, 2017, compared with $98.8 million on a combined basis for 2016. Net income attributable to common shareholders was $75.6 million, or $0.32 per diluted share. The filing attributes the revenue increase to higher production volumes from drilling and acquisitions, along with higher realized prices for oil, natural gas and NGLs.
What are the company's reserves and how much is undeveloped?
Total proved reserves were 186,454 MBoe at December 31, 2017, including 100,933 MBbls of oil. Proved undeveloped reserves were 111,525 MBoe, or 60% of total proved reserves, and the company stated that all PUD drilling locations are scheduled to be drilled within five years of booking.
How is the company funding its capital program and what is its debt position?
The company funded 2017 capital expenditures of $696.4 million with operating cash flow, the $390.8 million net proceeds of senior notes, Class A share issuances and borrowings. At year end it had no borrowings under the revolving credit facility, with $474.1 million of available capacity, and $400.0 million of 5.375% senior notes due 2026 outstanding. The company expects to fund its 2018 budget of $885 million to $1,050 million with cash flow and borrowings.
Does the company pay dividends?
No. The company has not paid any cash dividends on its Class A or Class C Common Stock to date, and it intends to retain earnings for use in its business operations. The board does not anticipate declaring dividends in the foreseeable future.
How concentrated is the company's customer base?
Sales are concentrated among a small number of purchasers. In 2017, Shell Trading (US) Company accounted for 33%, BP America for 16%, and Eagleclaw Midstream Ventures for 14% of total revenue. The company states that the loss of any major purchaser would not have a material adverse effect because crude oil and natural gas are fungible products with numerous purchasers.
06—Continue