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Centennial Resource Development Announces First Quarter 2021 Results

DENVER, May 04, May 04, 2021 (GLOBE NEWSWIRE via COMTEX) --

Centennial Resource Development, Inc. ("Centennial" or the "Company") (NASDAQ: CDEV) today announced first quarter 2021 financial and operational results.

Recent Financial and Operational Highlights

Financial Results

For the first quarter, Centennial generated net cash from operating activities of $72.3 million and free cash flow of $10.6 million. The Company reported a net loss during the quarter of $34.6 million, or $0.12 per diluted share, compared to a net loss of $548.0 million, or $1.99 per diluted share, in the prior year period.

Total equivalent production during the first quarter averaged 54,202 barrels of oil equivalent per day ("Boe/d") compared to 71,820 Boe/d in the prior year period. Average daily crude oil production for the quarter was 28,239 barrels of oil per day ("Bbls/d") compared to 41,512 Bbls/d in the prior year period. Impacted by Winter Storm Uri and related power outages, a majority of the Company's production was offline during a seven-day period in February.

"Our team successfully resumed operational activity during the quarter, while delivering production and costs in-line with expectations in spite of the challenges posed by severe winter weather," said Sean R. Smith, Chief Executive Officer. "Most importantly, Centennial has now transitioned to a sustainable free cash flow generating company. At current strip pricing, we expect to continue to repay borrowings on our credit facility and organically delever the balance sheet through year-end."

In addition to its impact on production, severe winter weather during the quarter also affected certain revenue and cost items. For the first quarter, revenue from natural gas sales increased 100% compared to the prior quarter, driven by higher natural gas prices due to extreme cold temperatures across the state of Texas and surrounding regions. Additionally, Centennial incurred higher than expected lease operating expense ("LOE") related to elevated electricity costs. LOE for the quarter totaled $25.9 million and, excluding one-time costs, was estimated to be $24.1 million, or $4.93 per Boe. Lastly, higher natural gas prices drove an increase in gathering, processing and transportation expense.

"Higher natural gas revenue more than offset increased operating costs during the quarter. We expect our unit cost metrics to return to normalized levels beginning in the second quarter and have reiterated our full-year production and cost targets," said Smith.

First Quarter Operational Results

Using multi-well pads and extended laterals, Centennial continues to efficiently develop its Delaware Basin acreage position. For the full quarter, the Company operated a two-rig drilling program with one completion crew and realized additional efficiencies. These continued improvements, combined with structural design changes, have resulted in lower drilling and completion costs.

"During the quarter, we reduced our spud to rig release times by 11% compared to the prior year period, while increasing our average lateral length by 17%," said Smith. "As a result, our operations team achieved an average gross well cost of $795 per lateral foot for the quarter. We are very pleased with these results and will remain focused on driving additional efficiencies throughout the year."

Total capital expenditures incurred for the quarter were $72.9 million. First quarter drilling, completion and facilities costs totaled $70.6 million, reflecting higher operational activity than originally expected. During the quarter, Centennial replaced its previous drilling rigs with more efficient walking rigs, which the Company expects to further reduce cycle times going forward. Infrastructure, land and other capital expenditures totaled $2.3 million.

Convertible Senior Notes Offering

In March, Centennial issued $170 million of 3.25% convertible senior notes due 2028 for net proceeds of $163.7 million. Net proceeds from the offering were used to redeem at par the $127.1 million 8.00% second lien senior secured notes due 2025 (the "senior secured notes") subsequent to quarter-end, to repay borrowings under the revolving credit facility and to fund the cost of entering into a capped call transaction to minimize potential future dilution. Upon maturity of the convertible senior notes, the Company has the flexibility to settle these notes through cash, stock or a combination thereof at Centennial's discretion. As a result of the redemption, the Company improved its liquidity position through the elimination of the $31.8 million credit facility availability blocker associated with the senior secured notes that had previously restricted access to the full borrowing base.

"This offering enabled Centennial to redeem our highest coupon and nearest note maturity at par. The transaction strengthens our maturity profile, reduces interest costs and improves liquidity," said Smith. "We now have a nearly five-year runway until our first senior unsecured note maturity in 2026, which provides significant financial flexibility."

Capital Structure and Liquidity

In April, Centennial's bank group reaffirmed its borrowing base at $700 million. At March 31, 2021, Centennial had approximately $11 million in cash on hand and $160 million of borrowings outstanding under its revolving credit facility which reflects a temporary repayment using the net proceeds from the convertible senior notes offering. Adjusted for the April redemption of its senior secured notes using credit facility borrowings, Centennial's pro forma liquidity position increased by approximately $76 million from year-end to $416 million, which is based on its $700 million borrowing base, $291 million in borrowings outstanding and $4 million in current letters of credit outstanding, plus cash on hand.

A comparison between recent periods of Centennial's liquidity, including the pro forma impact of the redemption of Centennial's senior secured notes in April, is provided below:

($'s in millions)       December 31, 2020  March 31, 2021    March 31, 2021
                        (Actual)           (Actual)          (Pro Forma)
Borrowing Base          $     700.0        $    700.0        $    700.0
Facility Amount               668.2             668.2             700.0
Less: RCF Borrowings          (330.0 )          (160.0 )          (290.8 )
Less: Letters of Credit       (4.3   )          (4.3   )          (4.3   )
Plus: Cash                    5.8               10.9              10.9
Liquidity               $     339.7        $    514.8        $    415.8
 Amounts as of March 31, 2021 in this column have been adjusted to reflect the pro forma effects of (i) $130.8 million in borrowings under the revolving credit facility ("RCF") that were used to fund the April redemption at par of all the senior secured notes and accrued interest and (ii) the removal of the $31.8 million RCF availability blocker.

Hedge Position

For the remainder of 2021, Centennial has a total of 13,811 Bbls/d of oil hedged, consisting of approximately 88% fixed price swaps. For the second quarter 2021, the Company currently has 17,500 Bbls/d of oil hedged at weighted per barrel average fixed prices of $43.18 WTI and $54.98 Brent. Also for the second quarter, the Company has 2,500 Bbls/d of WTI oil collars in place with a weighted average floor and ceiling price of $42.00 per barrel and $51.14 per barrel, respectively. Notably, the Company has significantly less oil hedges during the third and fourth quarters of 2021. For the second half of 2021, the Company has 7,500 Bbls/d and 2,000 Bbls/d of oil hedged at weighted per barrel average fixed prices of $45.74 WTI and $48.38 Brent, respectively. Also during this time period, the Company has 1,250 Bbls/d of WTI oil collars in place with a weighted average floor and ceiling price of $44.60 per barrel and $53.28 per barrel, respectively. For 2022, Centennial has 500 Bbls/d of oil hedged during the first quarter at a fixed price of $60.72 per barrel WTI. In addition, Centennial has certain crude oil basis swaps in place for 2021 and certain natural gas hedges in place for 2021 and 2022. (For a summary table of Centennial's derivative contracts as of April 30, 2021, please see the Appendix to this press release.)

Quarterly Report on Form 10-Q

Centennial's financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, which is expected to be filed with the U.S. Securities and Exchange Commission ("SEC") on May 5, 2021.

Conference Call and Webcast

Centennial will host an investor conference call on Wednesday, May 5, 2021 at 8:00 a.m. Mountain (10:00 a.m. Eastern) to discuss first quarter 2021 operating and financial results. Interested parties may join the webcast by visiting Centennial's website at www.cdevinc.com and clicking on the webcast link or by dialing (844) 348-0017, or (213) 358-0877 for international calls, (Conference ID: 7578513) at least 15 minutes prior to the start of the call. A replay of the call will be available on Centennial's website or by phone at (855) 859-2056 (Conference ID: 7578513) for a seven-day period following the call.

About Centennial Resource Development, Inc.

Centennial Resource Development, Inc. is an independent oil and natural gas company focused on the development of oil and associated liquids-rich natural gas reserves in the Permian Basin. The Company's assets and operations, which are held and conducted through Centennial Resource Production, LLC, are concentrated in the Delaware Basin, a sub-basin of the Permian Basin. For additional information about the Company, please visit www.cdevinc.com.

Cautionary Note Regarding Forward-Looking Statements

The information in this press release 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 press release, 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 press release, the words "could," "may," "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.

Forward-looking statements may include statements about:

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, inflation, lack of availability of drilling and production equipment and services, environmental 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 SEC.

Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any oil and gas reserve estimate depends on the quality of available data, the interpretation of such data, and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

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 press release.

1) Free Cash Flow is a non-GAAP financial measure. See "Non-GAAP Financial Measures" included within the Appendix of this press release for related disclosures and a reconciliation to net cash provided by operating activities, our most directly comparable financial measure calculated and presented in accordance with GAAP.

Contact:

Hays Mabry

Director, Investor Relations

(832) 240-3265

ir@cdevinc.com

Centennial Resource Development, Inc.

Operating Highlights

                                                            Three Months Ended March 31,
                                                            2021               2020
Net revenues (in thousands):
Oil sales                                                   $    133,726       $    170,505
Natural gas sales                                           35,451             8,358
NGL sales                                                   23,214             13,906
Oil and gas sales                                           $    192,391       $    192,769
Average sales prices:
Oil (per Bbl)                                               $    52.62         $    45.14
Effect of derivative settlements on average price (per Bbl) (9.43        )     (0.01        )
Oil net of hedging (per Bbl)                                $    43.19         $    45.13
Average NYMEX price for oil (per Bbl)                       $    57.84         $    46.19
Oil differential from NYMEX                                 (5.22        )     (1.05        )
Natural gas (per Mcf)                                       $    3.79          $    0.78
Effect of derivative settlements on average price (per Mcf) 0.12               --
Natural gas net of hedging (per Mcf)                        $    3.91          $    0.78
Average NYMEX price for natural gas (per Mcf)               $    3.44          $    1.88
Natural gas differential from NYMEX                         0.35               (1.10        )
NGL (per Bbl)                                               $    29.78         $    14.30
Net production:
Oil (MBbls)                                                 2,542              3,778
Natural gas (MMcf)                                          9,343              10,715
NGL (MBbls)                                                 780                972
Total (MBoe)                                                4,878              6,536
Average daily net production:
Oil (Bbls/d)                                                28,239             41,512
Natural gas (Mcf/d)                                         103,806            117,751
NGL (Bbls/d)                                                8,662              10,683
Total (Boe/d)                                               54,202             71,820
(1) Calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Boe.

Centennial Resource Development, Inc.

Operating Expenses

                                                  Three Months Ended March 31,
                                                  2021          2020
Operating costs (in thousands):
Lease operating expenses                          $     25,861  $     32,639
Severance and ad valorem taxes                    12,583        16,573
Gathering, processing and transportation expenses 20,625        16,939
Operating costs per Boe:
Lease operating expenses                          $     5.30    $     4.99
Severance and ad valorem taxes                    2.58          2.54
Gathering, processing and transportation expenses 4.23          2.59

Centennial Resource Development, Inc.

Consolidated Statements of Operations (unaudited)

(in thousands, except per share data)

                                                                Three Months Ended March 31,
                                                                2021               2020
Operating revenues
Oil and gas sales                                               $    192,391       $    192,769
Operating expenses
Lease operating expenses                                        25,861             32,639
Severance and ad valorem taxes                                  12,583             16,573
Gathering, processing and transportation expenses               20,625             16,939
Depreciation, depletion and amortization                        63,783             101,258
Impairment and abandonment expense                              9,200              611,300
Exploration and other expenses                                  1,095              4,009
General and administrative expenses                             25,256             18,870
Total operating expenses                                        158,403            801,588
Net gain (loss) on sale of long-lived assets                    44                 245
Income (loss) from operations                                   34,032             (608,574      )
Other income (expense)
Interest expense                                                (17,485      )     (16,421       )
Net gain (loss) on derivative instruments                       (51,199      )     (8,505        )
Other income (expense)                                          7                  (53           )
Total other income (expense)                                    (68,677      )     (24,979       )
Income (loss) before income taxes                               (34,645      )     (633,553      )
Income tax (expense) benefit                                    --                 83,208
Net income (loss)                                               (34,645      )     (550,345      )
Less: Net (income) loss attributable to noncontrolling interest --                 2,362
Net income (loss) attributable to Class A Common Stock          $    (34,645 )     $    (547,983 )
Income (loss) per share of Class A Common Stock:
Basic                                                           $    (0.12   )     $    (1.99    )
Diluted                                                         $    (0.12   )     $    (1.99    )

Centennial Resource Development, Inc.

Consolidated Balance Sheets (unaudited)

(in thousands, except share and per share data)

                                                                                                                                                                              March 31, 2021        December 31, 2020
ASSETS
Current assets
Cash and cash equivalents                                                                                                                                                     $     10,936          $     5,800
Accounts receivable, net                                                                                                                                                      70,571                54,557
Prepaid and other current assets                                                                                                                                              5,502                 5,229
Total current assets                                                                                                                                                          87,009                65,586
Property and Equipment
Oil and natural gas properties, successful efforts method
Unproved properties                                                                                                                                                           1,192,712             1,209,205
Proved properties                                                                                                                                                             4,475,972             4,395,473
Accumulated depreciation, depletion and amortization                                                                                                                          (1,940,672      )     (1,877,832      )
Total oil and natural gas properties, net                                                                                                                                     3,728,012             3,726,846
Other property and equipment, net                                                                                                                                             12,161                12,650
Total property and equipment, net                                                                                                                                             3,740,173             3,739,496
Noncurrent assets
Operating lease right-of-use assets                                                                                                                                           2,381                 3,176
Other noncurrent assets                                                                                                                                                       18,758                19,167
TOTAL ASSETS                                                                                                                                                                  $     3,848,321       $     3,827,425
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses                                                                                                                                         $     144,958         $     110,439
Operating lease liabilities                                                                                                                                                   2,697                 3,155
Other current liabilities                                                                                                                                                     46,536                18,274
Total current liabilities                                                                                                                                                     194,191               131,868
Noncurrent liabilities
Long-term debt, net                                                                                                                                                           1,063,754             1,068,624
Asset retirement obligations                                                                                                                                                  17,158                17,009
Deferred income taxes                                                                                                                                                         2,589                 2,589
Operating lease liabilities                                                                                                                                                   --                    422
Other noncurrent liabilities                                                                                                                                                  11,726                2,952
Total liabilities                                                                                                                                                             1,289,418             1,223,464
Commitments and contingencies (Note 10)
Shareholders' equity
Common stock, $0.0001 par value, 620,000,000 shares authorized:
Class A: 290,792,727 shares issued and 279,124,752 shares outstanding at March 31, 2021 and 290,645,623 shares issued and 278,551,901 shares outstanding at December 31, 2020 29                    29
Additional paid-in capital                                                                                                                                                    2,994,020             3,004,433
Retained earnings (accumulated deficit)                                                                                                                                       (435,146        )     (400,501        )
Total shareholders' equity                                                                                                                                                    2,558,903             2,603,961
Noncontrolling interest                                                                                                                                                       --                    --
Total equity                                                                                                                                                                  2,558,903             2,603,961
TOTAL LIABILITIES AND EQUITY                                                                                                                                                  $     3,848,321       $     3,827,425

Centennial Resource Development, Inc.

Consolidated Statements of Cash Flows (unaudited)

(in thousands)

                                                                                  Three Months Ended March 31,
                                                                                  2021               2020
Cash flows from operating activities:
Net income (loss)                                                                 $    (34,645 )     $    (550,345 )
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization                                          63,783             101,258
Stock-based compensation expense - equity awards                                  4,585              6,409
Stock-based compensation expense - liability awards                               10,414             --
Impairment and abandonment expense                                                9,200              611,300
Deferred tax expense (benefit)                                                    --                 (83,208       )
Net (gain) loss on sale of long-lived assets                                      (44          )     (245          )
Non-cash portion of derivative (gain) loss                                        28,313             8,452
Amortization of debt issuance costs and discount                                  1,847              799
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable                                        (14,997      )     41,026
(Increase) decrease in prepaid and other assets                                   (264         )     (263          )
Increase (decrease) in accounts payable and other liabilities                     4,154              (34,365       )
Net cash provided by operating activities                                         72,346             100,818
Cash flows from investing activities:
Acquisition of oil and natural gas properties                                     (433         )     (5,795        )
Drilling and development capital expenditures                                     (46,152      )     (161,895      )
Purchases of other property and equipment                                         (181         )     (486          )
Proceeds from sales of oil and natural gas properties                             168                1,200
Net cash used in investing activities                                             (46,598      )     (166,976      )
Cash flows from financing activities:
Proceeds from borrowings under revolving credit facility                          70,000             195,000
Repayment of borrowings under revolving credit facility                           (240,000     )     (135,000      )
Proceeds from issuance of convertible senior notes                                170,000            --
Debt issuance costs                                                               (5,444       )     --
Premiums paid on capped call transactions                                         (14,688      )     --
Restricted stock used for tax withholdings                                        (477         )     (208          )
Net cash (used in) provided by financing activities                               (20,609      )     59,792
Net increase (decrease) in cash, cash equivalents and restricted cash             5,139              (6,366        )
Cash, cash equivalents and restricted cash, beginning of period                   8,339              15,543
Cash, cash equivalents and restricted cash, end of period                         $    13,478        $    9,177

Reconciliation of cash, cash equivalents and restricted cash presented on the Consolidated Statements of Cash Flows for the periods presented:

                                                 Three Months Ended March 31,
                                                 2021          2020
Cash and cash equivalents                        $    10,936   $    3,841
Restricted cash                                  2,542         5,336
Total cash, cash equivalents and restricted cash $    13,478   $    9,177

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), our earnings release contains non-GAAP financial measures as described below.

Adjusted EBITDAX

Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDAX as net income before interest expense, income taxes, depreciation, depletion and amortization, exploration and other expenses, impairment and abandonment expenses, non-cash gains or losses on derivatives, stock-based compensation and gains and losses from the sale of assets. Adjusted EBITDAX is not a measure of net income as determined by GAAP.

Our management believes Adjusted EBITDAX is useful as it allows them 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 our financing methods or capital structure. We exclude the items listed above from net income 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 costs 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 nonrecurring items. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.

The following table presents a reconciliation of Adjusted EBITDAX to net income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP:

                                                          Three Months Ended March 31,
(in thousands)                                            2021               2020
Adjusted EBITDAX reconciliation to net income:
Net income (loss) attributable to Class A Common Stock    $    (34,645 )     $    (547,983 )
Net income (loss) attributable to noncontrolling interest --                 (2,362        )
Interest expense                                          17,485             16,421
Income tax expense (benefit)                              --                 (83,208       )
Depreciation, depletion and amortization                  63,783             101,258
Impairment and abandonment expenses                       9,200              611,300
Non-cash derivative (gain) loss                           28,313             8,452
Stock-based compensation expense                          14,624             5,892
Exploration and other expenses                            1,095              4,009
(Gain) loss on sale of long-lived assets                  (44          )     (245          )
Adjusted EBITDAX                                          $    99,811        $    113,534
(1) Includes stock-based compensation for equity awards and also for cash-based liability awards that have not yet been settled in cash, both of which relate to general and administrative employees only. Stock-based compensation amounts for geographical and geophysical personnel are included within the Exploration and other expenses line item.

Free Cash Flow (Deficit)

Free cash flow (deficit) is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define free cash flow (deficit) as net cash provided by operating activities before changes in working capital, less incurred capital expenditures.

Our management believes 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.

Free cash flow (deficit) is not a financial measure that is determined in accordance with GAAP. Accordingly, the following table presents a reconciliation of free cash flow (deficit) to net cash provided by operating activities, which is the most directly comparable financial measure calculated and presented in accordance with GAAP:

                                          Three Months Ended March 31,
(in thousands)                            2021              2020
Net cash provided by operating activities $    72,346       $    100,818
Changes in working capital:
Accounts receivable                       14,997            (41,026      )
Prepaid and other assets                  264               263
Accounts payable and other liabilities    (4,154      )     34,365
Discretionary cash flow                   83,453            94,420
Less: total capital expenditures incurred (72,900     )     (175,400     )
Free cash flow (deficit)                  $    10,553       $    (80,980 )

The following table summarizes the approximate volumes and average contract prices of swap contracts the Company had in place as of March 31, 2021 and additional contracts entered into through April 30, 2021:

                                   Period                        Volume     Volume    Wtd. Avg. Crude Price ($/Bbl)
                                                                 (Bbls)     (Bbls/d)
Crude oil swaps
NYMEX WTI                          April 2021 - June 2021        1,183,000  13,000    $43.18
                                   July 2021 - September 2021    736,000    8,000     45.87
                                   October 2021 - December 2021  644,000    7,000     45.59
                                   January 2022 - March 2022     45,000     500       60.72
ICE Brent                          April 2021 - June 2021        409,500    4,500     $54.98
                                   July 2021 - September 2021    184,000    2,000     48.25
                                   October 2021 - December 2021  184,000    2,000     48.50
                                   Period                        Volume     Volume    Wtd. Avg. Collar Price Ranges ($/Bbl)
                                                                 (Bbls)     (Bbls/d)
Crude oil collars                  April 2021 - June 2021        227,500    2,500     $42.00 - $51.14
                                   July 2021 - September 2021    138,000    1,500     46.33 - 55.40
                                   October 2021 - December 2021  92,000     1,000     42.00 - 50.10
                                   Period                        Volume     Volume    Wtd. Avg. Differential ($/Bbl)
                                                                 (Bbls)     (Bbls/d)
Crude oil basis differential swaps April 2021 - June 2021        1,183,000  13,000    $0.11
                                   July 2021 - September 2021    736,000    8,000     0.26
                                   October 2021 - December 2021  644,000    7,000     0.26
 These crude oil swap transactions are settled based on either the NYMEX WTI or ICE Brent oil price, as applicable, on each trading day within the specified monthly settlement period versus the contractual swap price for the volumes stipulated.
 These crude oil collars are settled based on the NYMEX WTI price on each trading day within the specified monthly settlement period versus the contractual floor and ceiling prices for the volumes stipulated.
 These oil basis swap transactions are settled based on the difference between the arithmetic average of ARGUS MIDLAND WTI and ARGUS WTI CUSHING indices, during each applicable monthly settlement period.
                                     Period                        Volume     Volume     Wtd. Avg. Gas Price
                                                                   (MMBtu)    (MMBtu/d)  ($/MMBtu)
Natural gas swaps                    April 2021 - June 2021        3,640,000  40,000     $2.89
                                     July 2021 - September 2021    3,680,000  40,000     2.89
                                     October 2021 - December 2021  3,680,000  40,000     2.95
                                     January 2022 - March 2022     1,800,000  20,000     3.00
                                     Period                        Volume     Volume     Wtd. Avg. Differential
                                                                   (MMBtu)    (MMBtu/d)  ($/MMBtu)
Natural gas basis differential swaps April 2021 - June 2021        3,640,000  40,000     $(0.30)
                                     July 2021 - September 2021    3,680,000  40,000     (0.30)
                                     October 2021 - December 2021  3,680,000  40,000     (0.28)
                                     January 2022 - March 2022     1,800,000  20,000     (0.26)
(1) These natural gas swap contracts are settled based on the NYMEX Henry Hub price on each trading day within the specified monthly settlement period versus the contractual swap price for the volumes stipulated.
(2) These natural gas basis swap contracts are settled based on the difference between the Inside FERC's West Texas WAHA price and the NYMEX price of natural gas, during each applicable monthly settlement period.

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