Form SC 13D Centennial Resource Deve Filed by: Centennial Resource Development, LLC

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO § 240.13d-1(a) AND

AMENDMENTS THERETO FILED PURSUANT TO 240.13d-2(a)

 

 

Centennial Resource Development, Inc.

(Name of Issuer)

Class A Common Stock, par value $0.0001 per share

(Title of Class of Securities)

15136A 102

(CUSIP Number)

Tony Weber

NGP Energy Capital Management, L.L.C.

5221 N. O’Connor Blvd., Suite 1100

(972) 432-1440

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

October 11, 2016

(Date of Event which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

 

 

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

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CUSIP No.  15136A 102		Page 2 of 19

 

1		NAMES OF REPORTING PERSON   Centennial Resource Development, LLC
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a):  ☐        (b):  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   OO
5		CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   12,227,062
				8		SHARED VOTING POWER   -0 -
				9		SOLE DISPOSITIVE POWER   12,227,062
				10		SHARED DISPOSITIVE POWER   -0-
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   12,227,062
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   6.7%*
14		TYPE OF REPORTING PERSON   OO (Limited Liability Company)

 

*

The calculation assumes 183,050,000 shares of Class A Common Stock are outstanding, per information contained in the Issuer’s current reports on Form 8-K filed October 11, 2016 and October 14, 2016 with the Securities and Exchange Commission (the “SEC”). The assumed 183,050,000 shares of Class A Common Stock outstanding consist of (a) 164,349,079 shares of outstanding Class A Common Stock and (b) 19,155,921 common units (“CRP Common Units”) of Centennial Resource Production, LLC (“CRP”) which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement (as defined below) and as described further in Item 5.

 

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CUSIP No.  15136A 102		Page 3 of 19

 

1		NAMES OF REPORTING PERSON   NGP X US Holdings, L.P.
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a):  ☐        (b):  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   OO
5		CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   -0-
				8		SHARED VOTING POWER   14,909,023 (see items 3, 4 and 5)*
				9		SOLE DISPOSITIVE POWER   -0-
				10		SHARED DISPOSITIVE POWER   14,909,023 (see items 3, 4 and 5)*
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   14,909,023 (see items 3, 4 and 5)*
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   8.1%**
14		TYPE OF REPORTING PERSON   PN (Limited Partnership)

 

*	As further described in Item 5, NGP X US Holdings, L.P. may be deemed to beneficially own the shares of Class A Common Stock of the Issuer that are held by Centennial Resource Development, LLC (“CRD”) and NGP Centennial Follow-On LLC (“Follow-On”).

**

The calculation assumes 183,050,000 shares of Class A Common Stock are outstanding, per information contained in the Issuer’s current reports on Form 8-K filed October 11, 2016 and October 14, 2016 with the SEC. The assumed 183,050,000 shares of Class A Common Stock outstanding consist of (a) 164,349,079 shares of outstanding Class A Common Stock and (b) 19,155,921 CRP Common Units, which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement and as described further in Item 3.

 

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CUSIP No.  15136A 102		Page 4 of 19

 

1		NAMES OF REPORTING PERSON   NGP X Holdings GP, L.L.C.
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a):  ☐        (b):  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   OO
5		CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   -0-
				8		SHARED VOTING POWER   14,909,023 (see items 3, 4 and 5)*
				9		SOLE DISPOSITIVE POWER   -0-
				10		SHARED DISPOSITIVE POWER   14,909,023 (see items 3, 4 and 5)*
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   14,909,023 (see items 3, 4 and 5)*
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   8.1%**
14		TYPE OF REPORTING PERSON   OO (Limited Liability Company)

 

*	As further described in Item 5, NGP X Holdings GP, L.L.C. may be deemed to beneficially own the shares of Class A Common Stock of the Issuer that are held by CRD and Follow-On.

**

The calculation assumes 183,050,000 shares of Class A Common Stock are outstanding, per information contained in the Issuer’s current reports on Form 8-K filed October 11, 2016 and October 14, 2016 with the SEC. The assumed 183,050,000 shares of Class A Common Stock outstanding consist of (a) 164,349,079 shares of outstanding Class A Common Stock and (b) 19,155,921 CRP Common Units, which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement and as described further in Item 3.

 

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CUSIP No.  15136A 102		Page 5 of 19

 

1		NAMES OF REPORTING PERSON   NGP Natural Resources X, L.P.
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a):  ☐        (b):  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   OO
5		CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   -0-
				8		SHARED VOTING POWER   14,909,023 (see items 3, 4 and 5)*
				9		SOLE DISPOSITIVE POWER   -0-
				10		SHARED DISPOSITIVE POWER   14,909,023 (see items 3, 4 and 5)*
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   14,909,023 (see items 3, 4 and 5)*
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   8.1%**
14		TYPE OF REPORTING PERSON   PN (Limited Partnership)

 

*	As further described in Item 5, NGP Natural Resources X, L.P. may be deemed to beneficially own the shares of Class A Common Stock of the Issuer that are held by CRD and Follow-On.

**

The calculation assumes 183,050,000 shares of Class A Common Stock are outstanding, per information contained in the Issuer’s current reports on Form 8-K filed October 11, 2016 and October 14, 2016 with the SEC. The assumed 183,050,000 shares of Class A Common Stock outstanding consist of (a) 164,349,079 shares of outstanding Class A Common Stock and (b) 19,155,921 CRP Common Units, which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement and as described further in Item 3.

 

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CUSIP No.  15136A 102		Page 6 of 19

 

1		NAMES OF REPORTING PERSON   G.F.W. Energy X, L.P.
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a):  ☐        (b):  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   OO
5		CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   -0-
				8		SHARED VOTING POWER   14,909,023 (see items 3, 4 and 5)*
				9		SOLE DISPOSITIVE POWER   -0-
				10		SHARED DISPOSITIVE POWER   14,909,023 (see items 3, 4 and 5)*
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   14,909,023 (see items 3, 4 and 5)*
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   8.1%**
14		TYPE OF REPORTING PERSON   PN (Limited Partnership)

 

*	As further described in Item 5, G.F.W. Energy X, L.P. may be deemed to beneficially own the shares of Class A Common Stock of the Issuer that are held by CRD and Follow-On.

**

The calculation assumes 183,050,000 shares of Class A Common Stock are outstanding, per information contained in the Issuer’s current reports on Form 8-K filed October 11, 2016 and October 14, 2016 with the SEC. The assumed 183,050,000 shares of Class A Common Stock outstanding consist of (a) 164,349,079 shares of outstanding Class A Common Stock and (b) 19,155,921 CRP Common Units, which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement and as described further in Item 3.

 

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CUSIP No.  15136A 102		Page 7 of 19

 

1		NAMES OF REPORTING PERSON   GFW X, L.L.C.
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a):  ☐        (b):  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   OO
5		CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   -0-
				8		SHARED VOTING POWER   14,909,023 (see items 3, 4 and 5)*
				9		SOLE DISPOSITIVE POWER   -0-
				10		SHARED DISPOSITIVE POWER   14,909,023 (see items 3, 4 and 5)*
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   14,909,023 (see items 3, 4 and 5)*
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   8.1%**
14		TYPE OF REPORTING PERSON   OO (Limited Liability Company)

 

*	As further described in Item 5, GFW X, L.L.C. may be deemed to beneficially own the shares of Class A Common Stock of the Issuer that are held by CRD and Follow-On.

**

The calculation assumes 183,050,000 shares of Class A Common Stock are outstanding, per information contained in the Issuer’s current reports on Form 8-K filed October 11, 2016 and October 14, 2016 with the SEC. The assumed 183,050,000 shares of Class A Common Stock outstanding consist of (a) 164,349,079 shares of outstanding Class A Common Stock and (b) 19,155,921 CRP Common Units, which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement and as described further in Item 3.

 

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CUSIP No.  15136A 102		Page 8 of 19

 

1		NAMES OF REPORTING PERSON   NGP Energy Capital Management, L.L.C.
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions) (a):  ☐        (b):  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   OO
5		CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)  ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   -0-
				8		SHARED VOTING POWER   19,155,921 (see items 3, 4 and 5)*
				9		SOLE DISPOSITIVE POWER   -0-
				10		SHARED DISPOSITIVE POWER   19,155,921
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   19,155,921(see items 3, 4 and 5)*
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)  ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   10.5%**
14		TYPE OF REPORTING PERSON   OO (Limited Liability Company)

 

*	As further described in Item 5, NGP Energy Capital Management, L.L.C. may be deemed to beneficially own the shares of Class A Common Stock of the Issuer that are held by CRD, Follow-On and Celero Energy Company, LP.

**

The calculation assumes 183,050,000 shares of Class A Common Stock are outstanding, per information contained in the Issuer’s current reports on Form 8-K filed October 11, 2016 and October 14, 2016 with the SEC. The assumed 183,050,000 shares of Class A Common Stock outstanding consist of (a) 164,349,079 shares of outstanding Class A Common Stock and (b) 19,155,921 CRP Common Units, which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement and as described further in Item 3.

 

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Item 1.

Security and Issuer

This Schedule 13D (the “Schedule 13D”) relates to (i) Class A Common Stock, par value $0.0001 (“Class A Common Stock”) of Centennial Resource Development, Inc. (formerly known as Silver Run Acquisition Corporation), a Delaware corporation (the “Issuer”) having a CUSIP No. of 15136A 102, (ii) Class C Common Stock, par value $0.0001 of the Issuer (“Class C Common Stock”) and (iii) common units (“CRP Common Units”) of Centennial Resource Production, LLC (“CRP”), a subsidiary of the Issuer, which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement (as defined below). The principal executive offices of the Issuer are located at 1401 Seventeenth Street, Suite 1000, Denver, Colorado 80202.

 

Item 2.

Identity and Background

The information set forth in or incorporated by reference in Item 4 of this Schedule 13D is incorporated by reference in its entirety into this Item 2.

(a),(f) This Schedule 13D is being filed jointly by each of the following persons:

 

(i)

Centennial Resource Development, LLC, a Delaware limited liability company (“CRD”);

 

(ii)

NGP X US Holdings, L.P. a Delaware limited partnership (“NGP X US Holdings”);

 

(iii)

NGP X Holdings GP, L.L.C., a Delaware limited liability company (“NGP X US Holdings GP”);

 

(iv)

NGP Natural Resources X, L.P., a Delaware limited partnership (“NGP NR X”);

 

(v)

G.F.W. Energy X, L.P., a Delaware limited partnership (“GFW Energy X”);

 

(vi)

GFW X, L.L.C., a Delaware limited liability company (“GFW X”); and

 

(vii)

NGP Energy Capital Management, L.L.C., a Texas limited liability company (“NGP ECM”).

CRD, NGP X US Holdings, NGP X US Holdings GP, NGP NR X, GFW Energy X, GFW X and NGP ECM are collectively referred to as the “Reporting Persons.”

The Reporting Persons have entered into a Joint Filing Agreement, dated the date hereof, a copy of which is filed with this Schedule 13D as Exhibit A (which is hereby incorporated by reference) pursuant to which the Reporting Persons have agreed to file this statement jointly in accordance with the provisions of Rule 13d-1(k)(1) under the Securities and Exchange Act of 1934, as amended (the “Act”). Information with respect to each Reporting Person is given solely by such Reporting Person, and no Reporting Person assumes responsibility for the accuracy or completeness of the information furnished by any other Reporting Person.

Certain information required by this Item 2 concerning the executive officers, directors and managers of the Reporting Persons is set forth on Schedule I, attached hereto, which is incorporated herein by reference.

(b) The address of the principal office of CRD, NGP X US Holdings, NGP X US Holdings GP, NGP NR X, GFW Energy X, GFW X and NGP ECM is 5221 N. O’Connor Boulevard, Suite 1100, Irving, Texas 75039.

(c) The name, residence or business address, present principal occupation or employment and citizenship of each director, executive officer, trustees, general partners, managing members and control persons, as applicable, of each of the Reporting Persons are listed on Schedule I hereto.

 

(i)

CRD’s principal business is to hold shares of Class A Common Stock, Class C Common Stock and CRP Common Units, as applicable;

 

(ii)

NGP X US Holdings is a fund managed by NGP ECM whose primary business activity is investing in various companies;

 

(iii)

NGP X US Holdings GP’s primary business is to hold general partner interests in NGP X US Holdings;

 

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(iv)

NGP NR X is a fund managed by NGP ECM whose primary business activity is investing in various companies;

 

(v)

GFW Energy X’s principal business is to hold general partner interests in NGP NR X;

 

(vi)

GFW X’s principal business is to hold general partner interests in GFW Energy X; and

 

(vii)

NGP ECM’s principal business is to manage various private investment funds, including NGP X US Holdings and NGP NR X.

(d) During the last five years, none of the Reporting Persons or the persons named in Schedule I has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors).

(e) During the last five years, none of the Reporting Persons or the persons named in Schedule I was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding has been or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, U.S. federal or state securities laws or finding any violations with respect to such laws.

 

Item 3.

Source and Amount of Funds or Other Consideration

On October 11, 2016 (the “Closing Date”), CRD, NGP Centennial Follow-On LLC, a Delaware limited liability company (“Follow-On”), Celero Energy Company, LP, a Delaware limited partnership (“Celero” and, together with CRD and Follow-On, the “Centennial Contributors”), Centennial Resource Production, LLC, a Delaware limited liability company (“CRP”) and New Centennial, LLC, a Delaware limited liability company (“NewCo”) consummated (the “Closing”) the sale of 89% of the outstanding membership interests in CRP to the Issuer, pursuant to (i) that certain Contribution Agreement, dated as of July 6, 2016 (as amended by Amendment No. 1 thereto, dated as of July 29, 2016, the “Contribution Agreement”), by and among the Centennial Contributors, CRP and NewCo, (ii) that certain Assignment Agreement, dated as of October 7, 2016, between NewCo and Silver Run Acquisition Corporation and (iii) that certain Joinder Agreement, dated as of October 7, 2016, by Silver Run Acquisition Corporation. The acquisition and the other transactions contemplated by the Contribution Agreement are collectively referred to herein as the “Business Combination.”

In connection with the Business Combination, (i) the Issuer contributed $1,485,999,739.31 to CRP, (ii) CRP paid the Centennial Contributors $1,186,744,348 in aggregate cash consideration, (iii) the Centennial Contributors retained an aggregate of 20,000,000 CRP Common Units, representing approximately 11% of the outstanding membership interests in CRP, with (A) 12,227,062 CRP Common Units being retained by CRD, (B) 3,526,040 CRP Common Units being retained by Follow-On and (C) 4,246,898 CRP Common Units being retained by Celero, (iii) the Issuer issued to the Centennial Contributors 20,000,000 shares of Class C Common Stock, par value $0.0001 per share (the “Class C Common Stock”), in the same proportions that the Centennial Contributors held CRP Common Units following the Closing and (iv) the Issuer issued to CRD one share of Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”). The remaining CRP Common Units, which represent approximately 89% of the outstanding membership interests in CRP, were issued to the Issuer. The Issuer is sole manager of CRP. As the sole manager, the Issuer has been delegated authority to control all of the day-to-day business affairs and decision making of CRP without the approval of any other member, unless otherwise stated in the Fifth Amended and Restated Limited Liability Company Agreement of CRP, dated as of October 11, 2016 (the “A&R LLC Agreement”).

The holders of CRP Common Units may cause CRP to redeem, from time to time, all or a portion of their CRP Common Units for, at CRP’s option, newly-issued shares of the Issuer’s Class A Common Stock on a one-for-one basis or a cash payment equal to the average of the volume-weighted closing price of one share of Class A Common Stock for the five trading days prior to the date the holder delivers a notice of redemption for each CRP Common Unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications). Upon any such redemption or exchange of CRP Common Units, a corresponding number of shares of Class C Common Stock will be cancelled.

A holder of Class C Common Stock may transfer shares of Class C Common Stock to any transferee (other than the Issuer) only if, and only to the extent permitted by the A&R LLC Agreement, such holder also simultaneously transfers an equal number of such holder’s CRP Common Units to such transferee in compliance with the A&R LLC

 

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Agreement. Holders of Class C Common Stock vote together as a single class with holders of Class A Common Stock on all matters properly submitted to a vote of the stockholders of the Issuer. Holders of Class C Common Stock are not entitled to any dividends from the Issuer and are not entitled to receive any of the Issuer’s assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Issuer’s affairs.

For so long as the Series A Preferred Stock remains outstanding, CRD is entitled to nominate one director for election to the Issuer’s board of directors (the “board”) in connection with any vote of its stockholders for the election of directors, and the vote of CRD is the only vote required to elect such nominee to the board. CRD, as the holder of the Series A Preferred Stock, is not entitled to any dividends from the Issuer, but is entitled to preferred distributions in liquidation in the amount of $0.0001 per share of Series A Preferred Stock. The Series A Preferred Stock is redeemable by the Issuer (a) at such time as CRD and its affiliates cease to own, in the aggregate, at least 5,000,000 CRP Common Units and/or shares of Class A Common Stock (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and other similar transactions), (b) at any time at CRD’s option or (c) upon a breach by CRD of the transfer restrictions relating to the Series A Preferred Stock.

Following the Closing on the Closing Date, Follow-On distributed 844,079 CRP Common Units to Carlyle Partners VI Centennial Holdings L.P., a Delaware limited partnership (“Carlyle”) and member of Follow-On, pursuant to that certain Redemption Agreement by and between Follow-On and Carlyle dated as of the Closing Date (the “Redemption Agreement”). Following such distribution, the Issuer exchanged such CRP Common Units for an equivalent amount of shares of Class A Common Stock and the cancellation of a corresponding number of shares of Class C Common Stock. After giving effect to the aforementioned transactions (collectively, the “Redemption”), Follow-On owned 2,681,961 CRP Common Units. In addition, in connection with such transactions, affiliates of Carlyle, Follow-On and NGP X US Holdings entered into a Coordination Agreement (the “Coordination Agreement”), pursuant to which Carlyle agreed not to offer, sell, contract to sell, pledge or otherwise dispose of any shares of Class A Common Stock other than (i) to affiliates of Carlyle or (ii) concurrently with and on a proportionate basis with sales of Class A Common Stock by Follow-On and NGP X US Holdings.

The terms, rights, obligations and preferences of the Series A Preferred Stock are set forth in that certain Certificate of Designation of Series A Preferred Stock (the “Certificate of Designation”) filed by the Issuer with the Secretary of State of the State of Delaware on October 11, 2016.

The descriptions of the Contribution Agreement, A&R LLC Agreement, the Redemption Agreement, the Coordination Agreement and the Certificate of Designation set forth in this Item 3 do not purport to be complete and are qualified in their entirety by reference to the full text of the Contribution Agreement, A&R LLC Agreement, the Redemption Agreement, the Coordination Agreement and the Certificate of Designation, which have been filed as Exhibit B, Exhibit C, Exhibit D, Exhibit E and Exhibit F, respectively, and are incorporated herein by reference.

 

Item 4.

Purpose of Transaction

The information set forth in or incorporated by reference in Item 2, Item 3, Item 5, Item 6 and Schedule I of this Schedule 13D is incorporated by reference in its entirety into this Item 4.

The Centennial Contributors were issued (i) CRP Common Units, which are exchangeable into shares of Class A Common Stock of the Issuer, and (ii) Class C Common Stock pursuant to the Business Combination and hold such CRP Common Units for investment purposes. The Reporting Persons may change their plans or proposals in the future.

The following describes plans or proposals, including those in connection with the purchase, that the Reporting Persons may have with respect to the matters set forth in Item 4(a)-(j) of Schedule 13D.

Amended and Restated Limited Liability Agreement of CRP

Following the completion of the Business Combination, the Issuer operates its business through CRP and its subsidiaries. At the Closing, the Issuer and the Centennial Contributors entered into CRP’s A&R LLC Agreement. Under the A&R LLC Agreement, the Issuer became a member and the sole manager of CRP. The A&R LLC Agreement provides, among other things, the following terms.

 

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Distributions. The A&R LLC Agreement allows for distributions to be made by CRP to its members on a pro rata basis out of “distributable cash” (as defined in the A&R LLC Agreement). CRP may make distributions out of distributable cash periodically to the extent permitted by the debt agreements of CRP and necessary to enable the Issuer to cover its operating expenses and other obligations, as well as to make dividend payments, if any, to the holders of our Class A Common Stock. In addition, the A&R LLC Agreement generally requires CRP to make pro rata distributions to its members in an amount at least sufficient to allow its members to pay their taxes.

CRP Common Unit Redemption Right. The A&R LLC Agreement provides a redemption right to the Centennial Contributors which entitles them to cause CRP to redeem, from time to time, all or a portion of their CRP Common Units for, at CRP’s option, newly-issued shares of the Issuer’s Class A Common Stock on a one-for-one basis or a cash payment equal to the average of the volume-weighted closing price of one share of Class A Common Stock for the five trading days prior to the date the Centennial Contributors deliver a notice of redemption for each CRP Common Unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications). In the event of a “reclassification event” (as defined in the A&R LLC Agreement), the manager is to ensure that each CRP Common Unit is redeemable for the same amount and type of property, securities or cash that a share of Class A Common Stock becomes exchangeable for or converted into as a result of such “reclassification event.” Upon the exercise of the redemption right, the Centennial Contributor will surrender its CRP Common Units to CRP for cancellation. The A&R LLC Agreement requires that we contribute cash or shares of our Class A Common Stock to CRP in exchange for a number of CRP Common Units in CRP equal to the number of CRP Common Units to be redeemed from the Centennial Contributor. CRP will then distribute such cash or shares of Class A Common Stock to such Centennial Contributor to complete the redemption. Upon the exercise of the redemption right, the Issuer may, at its option, effect a direct exchange of cash or Class A Common Stock for such CRP Common Units in lieu of such a redemption. Upon the redemption or exchange of CRP Common Units held by a Centennial Contributor, a corresponding number of shares of Class C Common Stock will be cancelled.

Issuer Change of Control. In connection with the occurrence of a “manager change of control” (as defined in the A&R LLC Agreement), the Issuer has the right to require each other member of CRP to cause CRP to redeem some or all of such member’s CRP Common Units and a corresponding number of shares of Class C Common Stock, in each case, effective immediately prior to the consummation of the manager change of control. From and after the date of such redemption, the CRP Common Units and shares of Class C Common Stock subject to such redemption shall be deemed to be transferred to the Issuer and each such member shall cease to have any rights with respect to the CRP Common Units and shares of Class C Common Stock subject to such redemption (other than the right to receive shares of Class A Common Stock pursuant to such redemption).

Certificate of Designation

On the Closing Date, the Issuer filed the Certificate of Designation with the Secretary of State of the State of Delaware, which sets forth the terms, rights, obligations and preferences of Series A Preferred Stock owned by CRD. CRD may not transfer the Series A Preferred Stock or any rights, powers, preferences or privileges thereunder except to an affiliate (as defined in the A&R LLC Agreement) of CRD. CRD, as the holder of the Series A Preferred Stock, is not entitled to vote on any matter on which stockholders generally are entitled to vote. In addition, CRD, as the holder of Series A Preferred Stock, is not entitled to any dividends from the Issuer but is entitled to receive, after payment or provision for debts and liabilities and prior to any distribution in respect of Class A Common Stock or any other junior securities, liquidating distributions in an amount equal to $0.0001 per share of Series A Preferred Stock in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Issuer’s affairs.

The Series A Preferred Stock is not convertible into any other security of the Issuer, but is redeemable for the par value thereof by the Issuer (1) at such time that the Centennial Contributors and their affiliates cease to hold, in the aggregate, at least 5,000,000 CRP Common Units and/or shares of Class A Common Stock (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and other similar transactions), (2) at any time at the option of the holder thereof or (3) upon a breach of the transfer restrictions described above. For so long as the Series A Preferred Stock remains outstanding, CRD, as the holder, is entitled to nominate one director for election to the board in connection with any vote of the Issuer’s stockholders for the election of directors, and the vote of CRD will be the only vote required to elect the Series A Director to the board. So long as the Series A Preferred Stock remains outstanding, vacancies on the Issuer’s board resulting from the death, resignation, retirement, disqualification or removal of a Series A Director will be filled only by the affirmative vote of the holder of the Series A Preferred Stock.

 

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The descriptions of the A&R LLC Agreement and the Certificate of Designation set forth in this Item 4 do not purport to be complete and are qualified in their entirety by reference to the full text of the A&R LLC Agreement and the Certificate of Designation, which have been filed as Exhibit C and Exhibit F, respectively, and are incorporated herein by reference.

 

Item 5.

Interest in Securities of the Issuer

The information contained in rows 7, 8, 9, 10, 11 and 13 on the cover pages of this Schedule 13D and the information set forth or incorporated by reference in Items 2, 3, 4, 6 and Schedule I are hereby incorporated herein by reference.

(a)-(b) The following disclosure assumes that a total of 183,050,000 shares of Class A Common Stock are outstanding per information contained in the Issuer’s current reports on Form 8-K filed October 11, 2016 and October 14, 2016 with the SEC. The assumed 183,050,000 outstanding shares consist of (a) 164,349,079 shares of outstanding Class A Common Stock and (b) 19,155,921 CRP Common Units which are exchangeable for shares of Class A Common Stock of the Issuer on a one-for one basis at any time, subject to the terms and conditions of the A&R LLC Agreement and which the Reporting Persons have assumed are exchanged for shares of Class A Common Stock for purposes of this Item 5.

 

(i)

CRD is the sole record owner of, and has the sole power to vote and dispose of, 12,227,062 (6.7%) shares of Class A Common Stock;

 

(ii)

NGP X US Holdings, NGP X US Holdings GP, NGP NR X, GFW Energy X, GFW X and NGP ECM do not directly own any shares of Class A Common Stock. NGP X US Holdings owns 99% of CRD, and certain members of CRD’s management team own the remaining 1%. As a result, NGP X US Holdings may be deemed to indirectly beneficially own the shares held by CRD. NGP X US Holdings disclaims beneficial ownership of these shares except to the extent of its pecuniary interest therein. NGP X US Holdings GP (the sole general partner of NGP X US Holdings), NGP NR X (the sole member of NGP X US Holdings GP), GFW Energy X (the sole general partner of NGP NR X) and GFW X (the sole general partner of G.F.W. Energy X) may each be deemed to share voting and dispositive power over the reported shares and therefore may also be deemed to be the beneficial owner of these shares. GFW X has delegated full power and authority to manage NGP X US Holdings to NGP ECM and accordingly, NGP ECM may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these 12,227,062 (6.7%) shares of Class A Common Stock.

 

(iii)

Celero Energy Management, LLC, the general partner of Celero (“Celero GP”), has voting and dispositive power over the 4,246,898 (2.3%) shares of Class A Common Stock owned by Celero. The board of managers of Celero GP consists of David Hayes, Bruce Selkirk and Christopher Ray. None of such persons individually have voting and dispositive power over these shares, and the board of managers of Celero GP acts by majority vote and thus each such person is not deemed to beneficially own the shares held by Celero GP. Natural Gas Partners VIII, L.P. (“NGP VIII”) owns 94.7% of the membership interests of Celero GP, and the remaining 5.3% is held by certain members of Celero’s management team and other minority owners. As a result, NGP VIII may be deemed to indirectly beneficially own these shares. NGP VIII disclaims beneficial ownership of these shares except to the extent of its pecuniary interest therein. G.F.W. Energy VIII, L.P. (the sole general partner of NGP VIII) and GFW VIII, L.L.C. (the sole general partner of G.F.W. Energy VIII, L.P.) may each be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these shares. GFW VIII, L.L.C. has delegated full power and authority to manage NGP VIII to NGP ECM and accordingly, NGP ECM may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these shares 4,246,898 (2.3%) shares of Class A Common Stock.

 

(iv)

Follow-On owns 2,681,961 (1.5%) shares of Class A Common Stock. Follow-On is managed by its managing member, NGP X US Holdings. As such, NGP X US Holdings has voting and dispositive power over these shares. NGP X US Holdings disclaims beneficial ownership of these shares except to the extent of its pecuniary interest therein . NGP X US Holdings GP (the sole general partner of

 

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NGP X US Holdings), NGP NR X (the sole member of NGP X US Holdings GP), GFW Energy X (the sole general partner of NGP NR X) and GFW X (the sole general partner of G.F.W. Energy X) may each be deemed to share voting and dispositive power over the reported shares and therefore may also be deemed to be the beneficial owner of these shares. GFW X has delegated full power and authority to manage NGP X US Holdings to NGP ECM and accordingly, NGP ECM may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these 2,681,961 (1.5%) shares of Class A Common Stock.

Except as set forth or incorporated by reference in this Item 5 or Schedule I, none of the persons named in Item 2 or Schedule I beneficially owns shares of Class A Common Stock of the Issuer.

(c) There have been no reportable transactions with respect to the shares of Class A Common Stock within the last 60 days by the Reporting Persons or, to the Reporting Persons’ knowledge, the Other Persons, except for the acquisition of beneficial ownership of the shares of Class A Common Stock being reported on this Schedule 13D.

(d) To the Reporting Persons’ knowledge, no person other than the Reporting Persons, the Other Reporting Persons or the persons named in Schedule I has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the respective securities beneficially owned by such persons.

(e) Not applicable.

 

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information set forth or incorporated in Items 1, 3, 4 and 5 is hereby incorporated herein by reference.

Registration Rights Agreement

In connection with the Closing, on October 11, 2016, the Issuer entered into an amended and restated registration rights agreement (the “Registration Rights Agreement”) with the Centennial Contributors and certain other signatories thereto, pursuant to which the Centennial Contributors are entitled to certain registration, demand and piggyback rights relating to shares of Class A Common Stock issuable upon the future redemption or exchange of the CRP Common Units owned by the Centennial Contributors and their permitted transferees.

Coordination Agreement

In connection with the Closing, on October 11, 2016, affiliates of Carlyle, Follow-On and NGP X US Holdings entered into a Coordination Agreement, pursuant to which Carlyle agreed not to offer, sell, contract to sell, pledge or otherwise dispose of any shares of Class A Common Stock received in connection with the Redemption other than (i) to affiliates of Carlyle or (ii) concurrently with and on a proportionate basis with sales of Class A Common Stock by Follow-On and NGP X US Holdings.

The descriptions of the Registration Rights Agreement and the Coordination Agreement set forth in this Item 6 do not purport to be complete and are qualified in their entirety by reference to the full text of the Registration Rights Agreement and the Coordination Agreement, which have been filed as Exhibit G and Exhibit E, respectively, and are incorporated herein by reference.

 

Item 7.

Material to Be Filed as Exhibits

 

Exhibit A –		Joint Filing Agreement*
Exhibit B –		Contribution Agreement, dated as of July 6, 2016, by and among Centennial Resource Development, LLC, NGP Centennial Follow-On LLC, Celero Energy Company, LP, Centennial Resource Production, LLC and New Centennial, LLC (incorporated by reference to Annex A to Issuer’s Definitive Proxy Statement on Schedule 14A filed on September 23, 2016).

 

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Exhibit C –		Fifth Amended and Restated Limited Liability Company Agreement of Centennial Resource Production, LLC, dated as of October 11, 2016 (incorporated by reference to Exhibit 10.5 to Issuer’s current report on Form 8-K filed on October 11, 2016).
Exhibit D –		Redemption Agreement by and between NGP Centennial Follow-On LLC and Carlyle Partners VI Centennial Holdings, L.P.*
Exhibit E –		Coordination Agreement, dated as of October 11, 2016, by and among NGP Centennial Follow-On LLC, NGP X US Holdings, L.P. and CP VI-A Centennial, L.P.*
Exhibit F –		Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 3.2 to Issuer’s current report on Form 8-K filed on October 11, 2016).
Exhibit G –		Amended and Restated Registration Rights Agreement, dated as of October 11, 2016, by and among Centennial Resource Development, Inc. (formerly known as Silver Run Acquisition Corporation), Silver Run Sponsor, LLC, the individuals party thereto, Centennial Resource Development, LLC, NGP Centennial Follow-On LLC, Celero Energy Company, LP and Riverstone Centennial Holdings, L.P. (incorporated by reference to Exhibit 4.1 to Issuer’s current report on Form 8-K filed on October 11, 2016).

 

*	Filed Herewith

 

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SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: October 21, 2016

 

		CENTENNIAL RESOURCE DEVELOPMENT, LLC
		By:		/s/ Ward Polzin
		Name:     Ward Polzin
		Title:       Chief Executive Officer
		NGP X US HOLDINGS, L.P.
		By:		NGP X US Holdings GP, L.L.C., its general partner
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Person
		NGP X HOLDINGS GP, L.L.C.
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Person
		NGP NATURAL RESOURCES X, L.P.
		By:		G.F.W. Energy X, L.P., its general partner
		By:		GFW X, L.L.C., its general partner
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Member
		G.F.W. ENERGY X, L.P.
		By:		GFW X, L.L.C., its general partner
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Member

 

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		GFW X, L.L.C.
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Member
		NGP ENERGY CAPITAL MANAGEMENT, L.LC.
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Member

 

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SCHEDULE I

The name and business address of each of the executive officers, managers and directors of each of the Reporting Persons are set forth below. The present principal occupation or employment of each of the executive officer, managers and directors of each of the Reporting Persons are also set forth below (outside of similar positions held with respect to other entities directly or indirectly managed or advised by the Issuer).

Centennial Resource Development, LLC

 

Name		Present Principal Occupation or Employment		Business Address		Citizenship
Ward Polzin		Chief Executive Officer and Manager		(1)		United States
Bret Siepman		Manager		(1)		United States
Chris Carter		Manager		(1)		United States
David Hayes		Manager		(1)		United States
Martin Sumner		Manager		(1)		United States
Christopher Ray		Manager		(1)		United States
Tony Weber		Manager		(1)		United States

NGP X US Holdings LLC

 

Name

Present Principal Occupation or Employment

Business Address

Citizenship

N/A

NGP X Holdings GP, L.L.C.

 

Name

Present Principal Occupation or Employment

Business Address

Citizenship

N/A

NGP Natural Resources X, L.P.

 

Name

Present Principal Occupation or Employment

Business Address

Citizenship

N/A

G.F.W. Energy X, L.P.

 

Name

Present Principal Occupation or Employment

Business Address

Citizenship

N/A

GFW X, L.L.C.

 

Name

Present Principal Occupation or Employment

Business Address

Citizenship

N/A

NGP Energy Capital Management, L.L.C.

 

Name		Present Principal Occupation or Employment		Business Address		Citizenship
Chris Carter		Executive Committee Member		(1)		United States
Tony Weber		Executive Committee Member		(1)		United States
Christopher Ray		Executive Committee Member		(1)		United States
Craig Glick		Executive Committee Member		(1)		United States
Jill Lampert		Executive Committee Member		(1)		United States

 

(1)	5221 N. O’Connor Boulevard, Suite 1100, Irving, Texas 75039.

 

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Index to Exhibits

 

Exhibit A –		Joint Filing Agreement*
Exhibit B –		Contribution Agreement, dated as of July 6, 2016, by and among Centennial Resource Development, LLC, NGP Centennial Follow-On LLC, Celero Energy Company, LP, Centennial Resource Production, LLC and New Centennial, LLC (incorporated by reference to Annex A to Issuer’s Definitive Proxy Statement on Schedule 14A filed on September 23, 2016).
Exhibit C –		Fifth Amended and Restated Limited Liability Company Agreement of Centennial Resource Production, LLC, dated as of October 11, 2016 (incorporated by reference to Exhibit 10.5 to Issuer’s current report on Form 8-K filed on October 11, 2016).
Exhibit D –		Redemption Agreement by and between NGP Centennial Follow-On LLC and Carlyle Partners VI Centennial Holdings, L.P.*
Exhibit E –		Coordination Agreement, dated as of October 11, 2016, by and among NGP Centennial Follow-On LLC, NGP X US Holdings, L.P. and CP VI-A Centennial, L.P.*
Exhibit F –		Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 3.2 to Issuer’s current report on Form 8-K filed on October 11, 2016).
Exhibit G –		Amended and Restated Registration Rights Agreement, dated as of October 11, 2016, by and among Centennial Resource Development, Inc. (formerly known as Silver Run Acquisition Corporation), Silver Run Sponsor, LLC, the individuals party thereto, Centennial Resource Development, LLC, NGP Centennial Follow-On LLC, Celero Energy Company, LP and Riverstone Centennial Holdings, L.P. (incorporated by reference to Exhibit 4.1 to Issuer’s current report on Form 8-K filed on October 11, 2016).

 

*	Filed Herewith

 

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Exhibit A

JOINT FILING AGREEMENT

This will confirm the agreement by and among all the undersigned that the Schedule 13D filed on or about this date and any amendments thereto with respect to beneficial ownership by the undersigned of shares of Common Stock of Centennial Resource Development, Inc. is being filed on behalf of each of the undersigned in accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934. This agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

October 21, 2016

 

		CENTENNIAL RESOURCE DEVELOPMENT, LLC
		By:		/s/ Ward Polzin
				Ward Polzin
				Chief Executive Officer
		NGP X US HOLDINGS, L.P.
		By:		NGP X Holdings GP, L.L.C., its general partner
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Person
		NGP X HOLDINGS GP, L.L.C.
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Person
		NGP NATURAL RESOURCES X, L.P.
		By:		G.F.W. Energy X, L.P., its general partner
		By:		GFW X, L.L.C., its general partner
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Member

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		G.F.W. ENERGY X, L.P.
		By:		GFW X, L.L.C., its general partner
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Member
		GFW X, L.L.C.
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Member
		NGP ENERGY CAPITAL MANAGEMENT, L.LC.
		By:		/s/ Tony Weber
				Tony Weber
				Authorized Member

Exhibit D

Execution

REDEMPTION AGREEMENT

This Redemption Agreement (this “Agreement”) is made and entered into effective as of immediately following the Recapitalization (as defined below), by and between NGP Centennial Follow-On LLC, a Delaware limited liability company (“Follow-On”), and Carlyle Partners VI Centennial Holdings, L.P., a Delaware limited partnership (“Carlyle”). Follow-On and Carlyle are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”

W I T N E S S E T H

WHEREAS, reference is made to that certain (i) Contribution Agreement dated as of July 6, 2016 by and among the Follow-On, Centennial Resource Production, LLC, a Delaware limited liability company (“CRP”), Centennial Resource Development, LLC, a Delaware limited liability company, Celero Energy Company, LP, a Delaware limited partnership, and New Centennial, LLC, a Delaware limited liability company (as amended by that certain Amendment No. 1 to Contribution Agreement dated July 29, 2016 and as may be further amended or supplemented from time to time, the “Contribution Agreement”) and (ii) Third Amended and Restated Limited Liability Company Agreement of Follow-On dated as of the date hereof (as amended from time to time, the “LLC Agreement”).

WHEREAS, on the date hereof, Follow-On has effected a recapitalization pursuant to which Carlyle’s previous interests in Follow-On were recapitalized into the Interests (as defined in the LLC Agreement) in Follow-On as set forth in the LLC Agreement (the “Recapitalization”);

WHEREAS, Carlyle has agreed to transfer to Follow-On, 53.3054% of the Interests in Follow-On held by Carlyle (the “Redeemed Interests”) in exchange for the receipt by Carlyle from Follow-On of the distribution of the Closing Consideration (defined below), upon the terms and conditions hereinafter set forth; and

NOW, THEREFORE, for and in consideration of the mutual covenants, promises and agreements hereinafter set forth, and for other good and valuable consideration set forth herein below, the parties hereto hereby agree as follows:

ARTICLE I

REDEMPTION; CLOSING; CERTAIN COVENANTS

Section 1.1 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place immediately after, and subject to, the consummation of the transactions contemplated by the Contribution Agreement.

Section 1.2 Redemption of Redeemed Interests. In accordance with, and upon and subject to the terms and conditions of, this Agreement, Carlyle hereby sells, assigns and transfers to Follow-On, and Follow-On hereby redeems, accepts and receives from Carlyle, all of Carlyle’s right, title and interest in and to the Redeemed Interests.

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Section 1.3 Distribution as Consideration for Redeemed Units. As consideration for the Redeemed Interests (but subject to the making of the Carlyle Cash Payment), Follow-On shall distribute to Carlyle at Closing (the “Closing Consideration”): (a) 844,079 Common Units (as defined in the Fifth Amended and Restated Limited Liability Company Agreement of CRP dated as of the date hereof (the “CRP LLC Agreement”)) in CRP, (b) 844,079 shares of Class C Common Stock of Centennial Resource Development, Inc. (f/k/a Silver Run Acquisition Corporation), a Delaware corporation (“CRD”) (the equity consideration set forth in clauses (a) and (b), the “Equity Consideration”), and (c) $49,454,849.51 cash, which will payable concurrently with the payment of the Effective Date Cash Distribution (as defined in the LLC Agreement (the “Carlyle Cash Payment”). After giving effect to the foregoing, Carlyle holds 844,079 Common Units (as so defined) of CRP.

Carlyle acknowledges and agrees that, subject to the making of the Carlyle Cash Payment, the Closing Consideration constitutes full and complete payment for, and adequate consideration for, the Redeemed Interests being sold by Carlyle and for all covenants and agreements being made by Carlyle in this Agreement. Carlyle shall reasonably cooperate with the Parties to minimize the amount of any taxes required to be withheld or deducted with respect to the transactions contemplated by this Agreement, including the provision of any forms, certifications or other information required or requested to establish a reduction or exemption of any such withholding or deduction.

Section 1.4 Intended Tax Treatment. The parties intend that the transaction described in Section 1.2 and 1.3 be treated for United States federal and applicable state income tax purposes as a distribution of property governed by Section 731(a) and Section 731(b) of the Internal Revenue Code, and each party shall make all applicable income tax filings consistent with such treatment, except as otherwise required by applicable law.

Section 1.5 Certain Covenants. Carlyle hereby covenants and agrees that, as soon as practicable after the date hereof, Carlyle and its affiliates will consummate a series of transactions pursuant to which (a) the exchange rights applicable to the Equity Consideration pursuant to the CRP LLC Agreement will be exercised by affiliates of Carlyle and, in exchange for such Equity Consideration, such affiliates of Carlyle will receive shares of Class A Common Stock of CRD (the “Common Stock”) and (b) such Common Stock will be transferred to CP VI-A Centennial, L.P., a Delaware limited partnership (the “Carlyle Splitter Partnership”) (such transactions, the “Carlyle Transactions”).

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Each Party hereby represents and warrants to the other Party that the following statements are true and correct as of the Closing, with the exception of Sections 2.5 and 2.6, which representations and warranties are made by Carlyle only:

Section 2.1 Organization; Authority. Such Party (i) is duly organized, validly existing and in good standing under the laws of the State of Delaware as a limited liability company or limited partnership, as applicable, and (ii) has the full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder and thereunder.

 

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Section 2.2 Due Execution. This Agreement has been duly and validly executed and delivered by such Party and, assuming the due authorization, execution and delivery thereof by and on behalf of the other Party, constitutes valid, binding and enforceable obligations of such Party enforceable in accordance with their terms, except to the extent such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors in general.

Section 2.3 No Conflict. Neither the execution and delivery of this Agreement, nor the taking of any actions contemplated hereby, will conflict with or result in a breach of any of the provisions of, or constitute a default, event of default or event creating a right of acceleration, termination or cancellation of any obligation under any instrument, note, mortgage, contract, judgment, order, award, decree or other agreement or restriction to which such Party is a party or by which such Party is bound.

Section 2.4 Litigation. There is no claim, cause of action or other litigation or any judicial, administrative or investigative proceedings pending or, to the best of such Party’s knowledge, threatened against such Party that would reasonably be expected to have a material adverse effect on the performance of such Party’s obligations hereunder.

Section 2.5 Redeemed Interests. With respect to Carlyle only:

(a) Prior to giving effect to the transactions contemplated hereby, Carlyle is the record and beneficial owner of the Redeemed Interests.

(b) At the Closing (and subject to the making of the Carlyle Cash Payment), Carlyle will transfer the Redeemed Interests to Follow-On free and clear of (i) any lien, hypothecation, pledge, collateral assignment, security interest, charge or encumbrance of any kind, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent (including any agreement to give any of the foregoing) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing, other than, in each case, the restrictions under applicable securities laws and the LLC Agreement and (ii) any purchase option, right of first refusal, right of first offer, call or similar right of a third party, other than, in each case, as set forth in the LLC Agreement. None of the Redeemed Interests is subject to any voting trust or other contract, agreement, arrangement, commitment or understanding, written or oral, restricting or otherwise relating to the voting or disposition of the Redeemed Interests, other than this Agreement and the LLC Agreement. Except as contemplated herein, there are no outstanding warrants, options, agreements, convertible or exchangeable securities or other commitments pursuant to which Carlyle is or may become obligated to sell any of the Redeemed Interests.

(c) After giving effect to the Carlyle Transactions, the Carlyle Splitter Partnership will be record and beneficial owners of the Common Stock.

Section 2.6 Acknowledgement. With respect to Carlyle only, Carlyle acknowledges that it has made its own analysis of the fairness of the transactions contemplated hereby and has not relied on any advice or recommendation by Follow-On or any of its partners, directors, officers, agents or affiliates with respect to its decision to enter into this Agreement and to

 

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consummate the transactions contemplated hereby. Carlyle has knowledge and experience in financial or business matters such that Carlyle is capable of evaluating the merits and risks of the decision to sell the Redeemed Interests. Carlyle is an “accredited investor” as that term is defined in Rule 501 promulgated under the Securities Act. In addition, Carlyle has had sufficient opportunity and time to investigate and review the business, management and financial affairs of Follow-On, and has had sufficient access to management of Follow-On, before its decision to enter into this Agreement, and has had the opportunity to consult with all advisers it deems appropriate or necessary to consult with in connection with this Agreement and any action arising hereunder, including legal, tax and accounting advisers. Carlyle acknowledges that, in connection with its entry into this Agreement and consummation of the transactions contemplated hereby, Carlyle has not relied on any representations or warranties of Follow-On, or any partner, director, officer, affiliate or representative of Follow-On, except for those representations or warranties set forth in this Article II.

ARTICLE III

INDEMNIFICATION BY CARLYLE

Carlyle shall indemnify and hold Follow-On harmless from and in respect of any and all claims, losses, damages, liabilities and expenses (including, without limitation, settlement costs and any legal or other expenses for investigating or defending any actions or threatened actions) reasonably incurred by Follow-On in connection with each and all of the following:

(a) Any misrepresentation or breach of any representation or warranty made by Carlyle in or in connection with this Agreement;

(b) The nonfulfillment or breach of any covenant, agreement or obligation of Carlyle contained in or contemplated by this Agreement; and

(c) Any and all sales, use, transfer, withholding or similar taxes impose with respect to the transactions contemplated by this Agreement.

ARTICLE IV

MISCELLANEOUS

Section 4.1 Survival of Representations, Warranties and Covenants. The representations, warranties and covenants contained herein shall survive the Closing.

Section 4.2 Notices. All notices, communications and deliveries hereunder shall be made in writing signed by or on behalf of the Party making the same and shall be delivered by registered or certified mail (return receipt requested) or by any national overnight courier service (with postage and other fees prepaid) as follows:

If to Follow-On, to:

NGP Centennial Follow-On LLC

c/o NGP X US Holdings, L.P.

5221 N. O’Connor Blvd., Suite 1100

Irving, TX 75039

Attention:

 

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If to Carlyle, to:

Carlyle Partners VI Centennial Holdings, L.P.

c/o The Carlyle Group

1001 Pennsylvania Avenue N.W., Suite 220S

Washington, DC 20004

Attention: Gregory Nikodem

Section 4.3 Expenses. All legal, accounting, and other costs and expenses incurred by a Party in connection with this Agreement and the transactions contemplated hereby, including attorneys’ fees, shall be borne by the Party incurring such fees.

Section 4.4 Entire Agreement; Amendment. This Agreement represents the entire agreement among the Parties with respect to the subject matter hereof, and may be amended only by a written instrument signed by each of the Parties.

Section 4.5 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, personal representatives, successors and assigns. This Agreement shall not be assignable by either Party without the prior written consent of the non-assigning Party.

Section 4.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Any facsimile or pdf copies hereof or signature hereon shall, for all purposes, be deemed originals.

Section 4.7 Further Assurance. The Parties hereto each agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement.

Section 4.8 Waiver. Any Party’s failure to enforce any provision of this Agreement will not in any way be construed as a waiver of any such provision, nor prevent such Party thereafter from enforcing each and every other provision of this Agreement. The rights granted to the Parties herein are cumulative and will not constitute a waiver of any Party’s right to assert all other legal remedies available to it under the circumstances.

Section 4.9 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any conflict or choice of law provision that would result in the imposition of another state’s law.

Section 4.10 No Third-Party Beneficiaries. This Agreement is solely for the benefit of the Parties and their respective successors or permitted assigns, and it is not the intention of the Parties to confer any rights upon any third parties.

 

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Section 4.11 Compliance with Terms of Operating Agreement. Each Party acknowledges and agrees that the transactions contemplated by this Agreement are in accordance with and comply with the terms of the LLC Agreement and hereby waives any provision of LLC Agreement providing to the contrary.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written.

 

SIGNATURE PAGE TO

REDEMPTION AGREEMENT

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written.

 

SIGNATURE PAGE TO

REDEMPTION AGREEMENT

Exhibit E

Execution

COORDINATION AGREEMENT

This Coordination Agreement (this “Agreement”) is made and entered into effective as of October 11, 2016 (the “Effective Date”), by and among (i) NGP Centennial Follow-On LLC, a Delaware limited liability company (“Follow-On”), (ii) NGP X US Holdings, L.P., a Delaware limited partnership (“Holdings” and together with Follow-On and Holdings, each an “NGP Party” and collectively the “NGP Parties”), and (iii) CP VI-A Centennial, L.P., a Delaware limited partnership (the “Carlyle Party”). Each NGP Party and the Carlyle Party are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”

W I T N E S S E T H

WHEREAS, reference is made to that certain (i) Contribution Agreement dated as of July 6, 2016 by and among the Follow-On, Centennial Resource Production, LLC, a Delaware limited liability company (“CRP”), Centennial Resource Development, LLC, a Delaware limited liability company, Celero Energy Company, LP, a Delaware limited partnership (“Celero”), and New Centennial, LLC, a Delaware limited liability company (as amended by that certain Amendment No. 1 to Contribution Agreement dated July 29, 2016 and as may be further amended or supplemented from time to time, the “Contribution Agreement”), (ii) Redemption Agreement dated as of the date hereof by and between Follow-On and Carlyle Partners VI Centennial Holdings, L.P., a Delaware limited partnership (the “Redemption Agreement”), and (iii) Amended and Restated Registration Rights Agreement dated as of the date hereof by and among Centennial Resource Development, Inc. (f/k/a Silver Run Acquisition Corporation), a Delaware corporation, Silver Run Sponsor, LLC, a Delaware limited liability company, Centennial Resource Development, LLC, a Delaware limited liability company, Follow-On, Celero and certain other party thereto (the “Registration Rights Agreement”);

WHEREAS, in connection with the transactions contemplated by the Contribution Agreement, and pursuant to the Redemption Agreement and other related transactions, the Carlyle Party received shares of Class A Common Stock of Centennial Resource Development, Inc. (f/k/a Silver Run Acquisition Corporation), a Delaware corporation (the “Common Stock”); and

WHEREAS, in connection with the execution and delivery of the Redemption Agreement by Follow-On, the Parties have agreed to certain sale restrictions applicable to the shares of Common Stock held by the Carlyle Party as set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

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ARTICLE I

Agreements Related to Common Stock

Section 1.1 Sale Restrictions. Other than as set forth in Section 1.2, the Carlyle Party hereby agrees that until the termination of this Agreement in accordance with Section 2.1, the Carlyle Party will not, other than to its affiliates, (a) offer, sell, contract to sell, pledge or otherwise dispose of directly or indirectly any shares of Common Stock or securities convertible into or exchangeable or exercisable for any shares of Common Stock, (b) enter into a transaction which would have the same effect, or (c) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of shares of Common Stock, in each case (i) whether any such aforementioned transaction is to be settled by delivery of shares of Common Stock or such other securities, in cash or otherwise and (ii) solely with respect to any Common Stock received by the Carlyle Party or its affiliates with respect to its indirect ownership of equity interests of CRP immediately prior to the date hereof. Any of the foregoing are referred to as a “Transfer” for purposes of this Agreement, and “Transferred” has a corresponding meaning.

Section 1.2 Permitted Sales. At any time an NGP Party or any affiliate of an NGP Party desires to Transfer any shares of its Common Stock during the term of this Agreement (each, a “NGP Sale”), the NGP Parties shall provide written notice to the Carlyle Party as soon as practicable and in any event at least one business day prior to the date of such NGP Sale (or, in respect of any NGP Sale resulting from the exercise of any demand or piggyback rights pursuant to the Registration Rights Agreement, as soon as practicable and in any event one business day prior to the delivery of any notice of exercise thereof in accordance with the Registration Rights Agreement). Notwithstanding anything to the contrary in Section 1.1, the Carlyle Party shall be permitted to Transfer in the aggregate at the time of any such NGP Sale, or as soon as practicable thereafter, a number of shares of Common Stock equal to the product of (a) the number of shares of Common Stock then held by the Carlyle Party and (b) the NGP Sale Percentage. For purposes of this Section 1.2, “NGP Sale Percentage” shall mean, with respect to any NGP Sale, the fraction, expressed as a percentage, obtained by dividing (a) the number of shares of Common Stock proposed to be Transferred by all of the NGP Parties and its affiliates in such NGP Sale divided by (b) the aggregate number of shares of Common Stock held by all of the NGP Parties and its affiliates immediately prior to giving effect to such NGP Sale. In the event the number of shares of Common Stock to be Transferred by the NGP Parties and their affiliates in any NGP Sale is reduced for any reason, the number of shares of Common Stock permitted to be Transferred by the Carlyle Party pursuant to this Section 1.2 shall be proportionately reduced.

ARTICLE II

Miscellaneous

Section 2.1 Term; Termination. The term of this Agreement shall commence on the date hereof and shall continue until such time as the NGP Parties cease to hold any shares of Common Stock and any equity interests in CRP.

 

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Section 2.2 Notices. All notices, communications and deliveries hereunder shall be made in writing signed by or on behalf of the Party making the same and shall be delivered by registered or certified mail (return receipt requested) or by any national overnight courier service (with postage and other fees prepaid) as follows:

If to any NGP Party, to:

c/o NGP X US Holdings, L.P.

5221 N. O’Connor Blvd., Suite 1100

Irving, TX 75039

Attention:

If to the Carlyle Party, to:

c/o The Carlyle Group

1001 Pennsylvania Avenue N.W., Suite 220S

Washington, DC 20004

Attention: Gregory Nikodem

Section 2.3 Expenses. All legal, accounting, and other costs and expenses incurred by a Party in connection with this Agreement and the transactions contemplated hereby, including attorneys’ fees, shall be borne by the Party incurring such fees.

Section 2.4 Entire Agreement; Amendment. This Agreement represents the entire agreement among the Parties with respect to the subject matter hereof, and may be amended only by a written instrument signed by each of the Parties.

Section 2.5 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, personal representatives, successors and assigns. This Agreement shall not be assignable by either Party without the prior written consent of the non-assigning Party; provided that, if Carlyle Transfers any of its Common Stock to an affiliate pursuant to Section 1.1, such affiliate shall agree to be bound by the restrictions set forth in this Agreement, whereupon such affiliate will be deemed a “Carlyle Party” for all purposes hereunder.

Section 2.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Any facsimile or pdf copies hereof or signature hereon shall, for all purposes, be deemed originals.

Section 2.7 Further Assurances. The Parties hereto each agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement.

Section 2.8 Waiver. Any Party’s failure to enforce any provision of this Agreement will not in any way be construed as a waiver of any such provision, nor prevent such Party thereafter from enforcing each and every other provision of this Agreement. The rights granted to the Parties herein are cumulative and will not constitute a waiver of any Party’s right to assert all other legal remedies available to it under the circumstances.

 

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Section 2.9 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any conflict or choice of law provision that

Section 2.10 No Third-Party Beneficiaries. This Agreement is solely for the benefit of the Parties and their respective successors or permitted assigns, and it is not the intention of the Parties to confer any rights upon any third parties.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first above written.

 

SIGNATURE PAGE TO

COORDINATION AGREEMENT

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first above written.

 

SIGNATURE PAGE TO

COORDINATION AGREEMENT

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