Centennial Resource enters up to $1.5 billion amended, restated five-year revolver

By Wendy Van Sickle

Columbus, Ohio, Feb. 23 – Centennial Resource Development, Inc.’s subsidiary, Centennial Resource Production, LLC, entered into a third amended and restated credit agreement on Feb. 18 with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

There is a maximum revolving credit amount of $1.5 billion, an initial borrowing base of $1.15 billion and total elected commitments of $750 million.

The maturity date is Feb. 18, 2027.

The borrowing base depends on, among other things, the quantities of Centennial Resource Production’s proved oil and natural gas reserves, estimated cash flows from these reserves and Centennial Resource Production’s commodity hedge positions.

Borrowings bear interest at SOFR plus a margin ranging from 225 basis points to 325 bps, depending on utilization.

The commitment fee ratings form 37 bps to 50 bps, depending on utilization.

The borrower must comply with a ratio of consolidated current assets to consolidated current liabilities of at least 1 to 1 and a leverage ratio of no more than 3.5 to 1.

JPMorgan, Citibank, NA and Royal Bank of Canada are the joint lead arrangers and bookrunners. Wells Fargo Bank, NA and PNC Bank, NA are the co-syndication agents. Canadian Imperial Bank of Commerce, New York Branch, Fifth Third Bank and Truist Bank are the co-documentation agents.

Centennial Resource is a Denver-based oil and natural gas company with properties in the core of the Southern Delaware Basin.

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