Hedging | Capital Markets | Capital Expenditure | Capex Decrease | Drilling Program-Rig Count | Capital Expenditure - 2020
Permian E&P Adds $26 WTI Hedges; Drops to Single Rig Program (-80%)
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Centennial Resource outlined a few steps the company is taking today.
The company made the following adjustments:
- Reduced operated rig program from five rigs to one (decrease of 80%)
- Anticipates spending 50% less than originally planned - this puts Centennial's updated 2020 capex at $320 million (down from $640 million) - this assumes that the company continues to run one rig for the remainder of the year
Hedge Update
Additionally, the Company has entered into fixed price oil swaps for April through September of 2020 to protect against possible, additional near-term declines in oil prices. During this period, the Company has hedged approximately 25,500 barrels per day of oil at a weighted average price of $26.08 per barrel.
"Adding hedges (swaps) at this price tells us the company has limited if any all belief in price recovery before September. This seems like more of a knee jerk reaction than a strategic move" said Rons Dixon CEO of Shale Experts.
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