The completion of a merger between Centennial Resource Development and Colgate Energy Partners has solidified Permian Resources as the dominant player in the highly profitable Delaware Basin. As the largest pure-play exploration and production company in the region, Permian Resources is poised for significant growth and success.
With an impressive drilling program and ambitious development plans for the future, the company is set to become a powerhouse in the industry. Led by experienced co-CEOs, Permian Resources has already generated positive market reaction and anticipation.
As trading of its common stock begins, investors eagerly await further announcements regarding buybacks and dividends. The mega merger has undoubtedly positioned Permian Resources as a force to be reckoned with in the Permian Basin.
Key Takeaways
- The merger between Centennial Resource Development and Colgate Energy Partners created the largest pure-play E&P company in the Delaware Basin.
- Permian Resources plans to reduce its drilling program from eight rigs to seven rigs in November.
- The company expects total production during Q4 to be 140K-150K boe/day, with approximately 52% being oil.
- Permian Resources aims to spud around 145 gross wells and complete 150 gross wells in FY 2023, with a production target of 150K-165K boe/day. They also plan to generate $1.1B-$1.3B of free cash flow for the year and return capital to shareholders through dividends and share repurchases.
Merger Details
The merger between Centennial Resource Development (CDEV) and Colgate Energy Partners has created the largest pure-play E&P company in the Delaware Basin. This merger has significant operational impact and growth potential for the newly formed entity, known as Permian Resources.
Currently, Permian Resources operates an eight-rig drilling program, which will be reduced to a seven-rig program in November. Despite this reduction, the company is still expected to achieve a total production of 140K-150K boe/day in Q4, with approximately 52% being oil.
Looking ahead, Permian Resources has ambitious plans for FY 2023, aiming to spud around 145 gross wells and complete 150 gross wells. The production target for that year is 150K-165K boe/day, with a goal of generating $1.1B-$1.3B of free cash flow.
This merger has positioned Permian Resources as a dominant player in the industry, with the potential for significant growth and operational success.
FY 2023 Development Plan
Permian Resources has set ambitious plans for its FY 2023 development, aiming to spud approximately 145 gross wells and complete around 150 gross wells. These plans demonstrate the company's commitment to capital allocation and maximizing production targets.
With a production target of 150K-165K boe/day, Permian Resources aims to significantly increase its output and become a powerhouse in the oil and gas industry.
Additionally, the company plans to generate $1.1B-$1.3B of free cash flow for the full year, which will enable it to return capital to shareholders through dividends and share repurchases.
These strategic initiatives highlight Permian Resources' focus on delivering value to its investors while driving growth and operational excellence in the highly competitive Permian Basin.
Leadership
After the completion of the merger, co-CEOs Will Hickey and James Walter have taken on the responsibility of leading Permian Resources, guiding the company's strategic direction and overseeing its operations and management. The appointment of co-CEOs reflects the company's commitment to a strong leadership structure.
With their expertise and experience, Hickey and Walter are well-equipped to navigate the challenges and opportunities that lie ahead. As co-CEOs, they will work together to set the strategic direction for Permian Resources, ensuring that the company stays on track to achieve its goals and objectives.
They will also be responsible for overseeing the day-to-day operations and management of the company, ensuring that resources are allocated efficiently and effectively.
The co-CEO structure will provide a strong leadership foundation for Permian Resources as it continues to grow and expand its presence in the industry.
Stock Trading
Following the completion of the merger, investors can now actively trade shares of Permian Resources on the stock market.
Here is what you need to know about the stock trading of Permian Resources:
- Ticker Symbol: Permian Resources common stock will trade on Nasdaq under the ticker symbol PR. This new stock symbol represents the merged entity.
- Commencement of Trading: The trading of Permian Resources stock will begin on September 2. Investors can now buy and sell shares of the company on the stock market.
- Investor Interest: The market has shown positive interest in the merger deal, with Truist Securities upgrading Centennial shares to Buy. This merger is considered transformational for the company, positioning Permian Resources among the best SMID cap E&P companies.
- Expectations: Investors and analysts are eagerly awaiting future announcements regarding buybacks and dividends. The stock performance and investor sentiment will be closely monitored as the company executes its strategic plans.
Market Reaction
Investors and analysts have eagerly awaited the market reaction to the mega merger of Centennial Resource Development and Colgate Energy Partners, and it is now time to analyze the response.
The market has shown positive interest in the merger deal, with Truist Securities upgrading Centennial shares to Buy after the merger. This merger is considered transformational for the company, positioning Permian Resources as one of the best SMID cap E&P companies.
Investor sentiment is high, as they anticipate future announcements regarding buybacks and dividends. The merger has provided a boost to the future prospects of Permian Resources, as it now operates the largest pure-play E&P company in the Delaware Basin.
The market reaction highlights the confidence and optimism surrounding the merger and its potential for long-term success.
Operational Changes
With the completion of the mega merger, the operational changes at Permian Resources are now worth examining. The merger has brought about several changes aimed at improving operational efficiency and optimizing production. Here are the key operational changes at Permian Resources:
- Streamlined drilling program: The company currently operates an eight-rig drilling program, which will be reduced to a seven-rig program in November. This adjustment allows for better resource allocation and cost optimization.
- Focus on production targets: Permian Resources has set ambitious production targets for FY 2023, aiming to spud approximately 145 gross wells and complete around 150 gross wells. The production target for FY 2023 is 150K-165K boe/day. This emphasis on production optimization will drive the company's growth and profitability.
- Free cash flow generation: As part of its strategic plan, Permian Resources aims to generate $1.1B-$1.3B of free cash flow for the full year. This focus on generating positive cash flow will support the company's financial strength and enable it to return capital to shareholders through dividends and share repurchases.
- Leadership guidance: With the appointment of co-CEOs Will Hickey and James Walter, Permian Resources now has experienced leaders who will guide the company's strategic direction. Their expertise will contribute to the operational changes and ensure effective execution of the company's plans.
These operational changes at Permian Resources demonstrate the company's commitment to enhancing operational efficiency and optimizing production, positioning it as a powerhouse in the industry.
Future Outlook
The future outlook for Permian Resources is promising as it positions itself as a dominant player in the industry. With the completion of the merger and the creation of the largest pure-play E&P company in the Delaware Basin, Permian Resources is well-positioned for growth.
The company has strategic initiatives in place to drive production growth, including a planned reduction in the drilling program and a focus on spudding and completing a significant number of wells in FY 2023. With an expected total production of 140K-150K boe/day in Q4 and a production target of 150K-165K boe/day in FY 2023, Permian Resources aims to generate substantial free cash flow and return capital to shareholders through dividends and share repurchases.
The market has shown positive interest in the merger deal, and investors and analysts are eagerly anticipating future announcements regarding buybacks and dividends.
Frequently Asked Questions
What Were the Financial Terms of the Merger Between Centennial Resource Development and Colgate Energy Partners?
The financial terms of the merger between Centennial Resource Development and Colgate Energy Partners have not been explicitly mentioned in the provided information. Further details regarding the financial aspects of the merger are not available.
How Will the Merger Between Centennial Resource Development and Colgate Energy Partners Impact the Overall Market Share of Permian Resources in the Delaware Basin?
The merger between Centennial Resource Development and Colgate Energy Partners is expected to have a significant impact on the market share of Permian Resources in the Delaware Basin. The financial terms of the merger will be crucial in determining the extent of this impact.
What Factors Led to the Decision to Reduce the Drilling Program From Eight Rigs to Seven in November?
Factors such as operational efficiency, cost optimization, and market conditions contributed to the decision to reduce the drilling program from eight rigs to seven in November. This decision was made to ensure optimal resource allocation and maintain profitability.
How Does Permian Resources Plan to Generate $1.1b-$1.3b of Free Cash Flow in FY 2023?
Permian Resources plans to generate $1.1B-$1.3B of free cash flow in FY 2023 through its growth projections. The company aims to spud 145 gross wells, complete 150 gross wells, and return capital to shareholders through dividends and share repurchases.
What Are the Expectations for Future Dividends and Share Repurchases for Permian Resources?
Future dividends and share repurchases for Permian Resources are anticipated as part of their capital return plan. With a focus on generating free cash flow of $1.1B-$1.3B in FY 2023, the company aims to reward shareholders and enhance value through these strategic initiatives.