Why Centennial Resource Development Stock Rocketed 15% Today
Shares of U.S. energy company Centennial Resource Development (NASDAQ: CDEV) rose over 10% at the open on Sept. 16. After quickly losing around half that advance, the stock started on another upswing, rising to a gain of 15% by around 2 p.m. EDT.
Rising oil prices is what moved this exploration and production name today. However, it's important to note that even after a 15% price advance, the stock remains 85% lower so far in 2020. It has not been a very good year for oil or the companies that drill for it, thanks in large part to demand declines related to COVID-19. Complicating things for Centennial Resource Development is a heavy debt load, with the driller's financial debt-to-equity ratio at a worryingly high 4.5 times or so. Since higher oil prices would make it much easier for the company to shoulder its debt obligations, it makes sense that the shares advanced along with oil.
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Source Fool.com
