Why Centennial Resource Development Stock Dropped 5% at the Open on September 1
Shares of U.S. onshore oil and natural gas production company Centennial Resource Development (NASDAQ: CDEV) fell roughly 5% at the open on Sept. 1. A similar drop happened on the last day of August as well, and for the very same reason.
The energy sector has been hard-hit by the efforts to slow the spread of COVID-19. When governments around the world effectively shut down their economies, demand for oil and natural gas plummeted, pushing prices for these energy commodities sharply lower. Although economic activity is starting to pick up again, an energy supply glut continues to pressure commodity prices. Moreover, the recovery has been anything but robust. So exploration and production companies like Centennial Resource Development are facing notable headwinds. Adding to the concerns here is the company's debt-heavy balance sheet, with a financial-debt-to-equity ratio of roughly 4.5.
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Source Fool.com
