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Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-254300

The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell, nor a solicitation of an offer to buy, the notes in any jurisdiction where the offer or sale is not permitted.

$150,000,000

% Exchangeable Senior Notes due 2028

of

Centennial Resource Production, LLC

Fully and Unconditionally Guaranteed by

Centennial Resource Development, Inc.

and the Subsidiary Guarantors

Centennial Resource Production, LLC (“Centennial Resource Production”), a wholly owned subsidiary of Centennial Resource Development, Inc. (“Centennial Resource Development”), is offering $150,000,000 aggregate principal amount of Centennial Resource Production’s     % exchangeable senior notes due 2028 (the “notes”). In addition, Centennial Resource Production has granted the underwriters an option, which is exercisable within 30 days after the date of this prospectus supplement, to purchase up to an additional $22,500,000 aggregate principal amount of notes, solely to cover over-allotments.

MATURITY; INTEREST

Centennial Resource Production will pay interest on the notes at an annual rate of     %, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021. The notes will mature on April 1, 2028, unless earlier exchanged, redeemed or repurchased by us.

EXCHANGE

Noteholders may exchange their notes at their option only in the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of Centennial Resource Development’s Class A common stock (the “common stock”) exceeds 130% of the exchange price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) if the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the exchange rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the common stock, as described in this prospectus supplement; (4) if Centennial Resource Production calls such notes for redemption; and (5) at any time from, and including, January 3, 2028 until the close of business on the second scheduled trading day immediately before the maturity date. Centennial Resource Production will settle exchanges by paying or delivering, as applicable, cash, shares of common stock or a combination of cash and shares of common stock, at Centennial Resource Production’s election, based on the applicable exchange rate(s). The initial exchange rate is                  shares per $1,000 principal amount of notes, which represents an initial exchange price of approximately $     per share, and is subject to adjustment as described in this prospectus supplement. If a “make-whole fundamental change” (as defined in this prospectus supplement) occurs, then the exchange rate will in certain circumstances be increased for a specified period of time.

REDEMPTION AND REPURCHASE

The notes will be redeemable, in whole or in part (subject to the partial redemption limitation described in this prospectus supplement), at Centennial Resource Production’s option at any time, and from time to time, on or after April 7, 2025 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of common stock exceeds 130% of the exchange price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date Centennial Resource Production sends the related redemption notice; and (2) the trading day immediately before the date Centennial Resource Production sends such notice. In addition, calling any note for redemption will constitute a make-whole fundamental change with respect to that note, in which case the exchange rate applicable to the exchange of that note will be increased in certain circumstances if it is exchanged with an exchange date occurring during the period from, and including, the date we send the redemption notice to, and including, the second business day immediately before the related redemption date.

If a “fundamental change” (as defined in this prospectus supplement) occurs, then, except as described in this prospectus supplement, noteholders may require us to repurchase their notes at a cash repurchase price equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.

RANKING

The notes will be Centennial Resource Production’s senior, unsecured obligations and will be equal in right of payment with Centennial Resource Production’s senior, unsecured indebtedness, senior in right of payment to Centennial Resource Production’s indebtedness that is expressly subordinated to the notes in right of payment and effectively subordinated to Centennial Resource Production’s secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The notes will be structurally subordinated to all indebtedness and other liabilities, including trade payables, and (to the extent Centennial Resource Production is not a holder thereof) preferred equity, if any, of Centennial Resource Production’s subsidiaries that do not guarantee the notes.

GUARANTEES

The notes will be fully and unconditionally guaranteed, on a senior, unsecured basis, by Centennial Resource Development and the subsidiary guarantors described in this prospectus supplement.

LISTING; COMMON STOCK

No public market currently exists for the notes, and Centennial Resource Production does not intend to apply to list the notes on any securities exchange or for quotation on any inter-dealer quotation system. The common stock is listed on The Nasdaq Capital Market under the symbol “CDEV.” On March 12, 2021, the last reported sale price of the common stock was $5.75 per share.

An investment in the notes involves risks. See “Risk Factors” beginning on page S-12.

Neither the Securities and Exchange Commission nor any state or foreign securities commission or regulatory authority has approved or disapproved of the notes or the shares of common stock, if any, issuable upon the exchange of the notes or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.

Centennial Resource Production expects to deliver the notes in book-entry form through the facilities of The Depository Trust Company on or about                 , 2021.

Book-Running Managers

Senior Co-Managers

Co-Managers

Prospectus supplement dated                 , 2021.

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TABLE OF CONTENTS

Prospectus Supplement

Prospectus

As used in this prospectus supplement, “Centennial Resource Development,” “we,” “our” and “us” refer to Centennial Resource Development, Inc. and its consolidated subsidiaries, except where expressly noted otherwise or if otherwise implied by the context , and “Centennial Resource Production” refers to Centennial Resource Production, LLC, a wholly owned subsidiary of Centennial Resource Development.

In deciding whether to purchase the notes, you should rely only on the information contained or incorporated by reference in this prospectus supplement and any related pricing term sheet. Neither we nor any of the underwriters has authorized anyone to provide you with additional or different information. If anyone provides you with additional or different information, you should not rely on it.

We and the underwriters are offering to sell the notes only in places where offers and sales are permitted. You should not assume that the information included or incorporated by reference in this prospectus supplement is accurate as of any date other than the respective dates of the documents in which the information is contained. Our business, financial condition, results of operations and prospects could have changed since those dates.

This prospectus supplement does not constitute an offer to sell or the solicitation of an offer to purchase any notes in any jurisdiction or to any person where the offer or solicitation is not permitted.

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Centennial, the Centennial logo and other trademarks or service marks of Centennial Resource Development, Inc. appearing in this prospectus supplement are the property of Centennial Resource Development, Inc. This prospectus supplement may contain additional trade names, trademarks and service marks of others, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus supplement may appear without the ^® or TM symbols.

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RISK FACTORS

Investing in the notes involves a high degree of risk. In addition to the other information included and incorporated by reference in this prospectus supplement (including the risk factors described in our Annual Report on Form 10-K that is incorporated by reference in this prospectus supplement), you should carefully consider the risks described or referred to below before deciding to purchase the notes. The occurrence of any of these risks may materially harm our business, results of operations and financial condition. As a result, the trading price of the notes and the common stock may decline, and you might lose part or all of your investment. As used in this section, (i) “we,” “our” and “us” refer to Centennial Resource Development, Inc. and its consolidated subsidiaries, unless the context requires otherwise; (ii) “Centennial Resource Development” and “parent guarantor” refer to Centennial Resource Development, Inc. and not to its subsidiaries; (iii) “Centennial Resource Production” refers to Centennial Resource Production, LLC and not to its subsidiaries; and (iv) the Class A common stock of Centennial Resource Development, par value $0.0001 per share, is referred to as the “common stock.”

The notes and guarantees will be unsecured obligations and will be effectively subordinated to all existing and future secured indebtedness of Centennial Resource Production and the guarantors, as applicable, and structurally subordinated to the existing and future indebtedness of any of our existing or future non-guarantor subsidiaries.

The notes will be Centennial Resource Production’s senior, unsecured obligations and will rank equal in right of payment with Centennial Resource Production’s senior, unsecured indebtedness (including the existing Senior Notes (as defined below under the caption “—Description of Other Indebtedness”)), senior in right of payment to Centennial Resource Production’s indebtedness that is expressly subordinated to the notes in right of payment and effectively subordinated to Centennial Resource Production’s secured indebtedness (including indebtedness under the revolving credit facility), to the extent of the value of the collateral securing that indebtedness. In addition, the notes will be structurally subordinated to all indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our current and future non-guarantor subsidiaries. As of December 31, 2020, excluding Centennial Resource Production’s subsidiaries and intercompany indebtedness, Centennial Resource Production had $1,102.9 million principal amount of outstanding indebtedness for borrowed money, of which $457.1 million was secured indebtedness, and the parent guarantor and the subsidiary guarantor’s outstanding indebtedness for borrowed money as of that date consisted of guarantees of our indebtedness for borrowed money. As of December 31, 2020, Centennial Resource Production’s non-guarantor subsidiaries had no indebtedness or other liabilities. The indenture governing the notes will not prohibit us or our subsidiaries from incurring additional indebtedness, including senior or secured indebtedness, in the future.

If a bankruptcy, liquidation, dissolution, reorganization or similar proceeding occurs with respect to Centennial Resource Production or any guarantor, then the holders of any secured indebtedness that Centennial Resource Production or such guarantor, as applicable, may then have outstanding may proceed directly against the assets securing that indebtedness. Accordingly, those assets will not be available to satisfy any outstanding amounts under any unsecured indebtedness of Centennial Resource Production (including the notes) or such guarantor (including such guarantor’s guarantee), as applicable, unless the secured indebtedness is first repaid in full. The remaining assets, if any, would then be allocated pro rata among the holders of unsecured indebtedness of Centennial Resource Production (including the notes) or such guarantor (including such guarantor’s guarantee), as applicable. There may be insufficient assets remaining to pay amounts due on any or all amounts then due.

If a bankruptcy, liquidation, dissolution, reorganization or similar proceeding occurs with respect to any of non-guarantor subsidiary of Centennial Resource Production, then Centennial Resource Production, as a direct or indirect common equity owner of that subsidiary (and, accordingly, holders of Centennial Resource Production’s indebtedness, including the notes), will be subject to the prior claims of that subsidiary’s creditors, including trade creditors and preferred equity holders. Centennial Resource Production may never receive any amounts from that subsidiary to satisfy amounts due under the notes.

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We conduct all of our operations through our subsidiaries and will rely on our subsidiaries to make payments under the notes.

We conduct all of our operations through our subsidiaries. Accordingly, our ability to pay amounts due on the notes will depend on the cash flows of our subsidiaries and their ability to make distributions to us. None of our subsidiaries has guaranteed or otherwise become obligated with respect to the notes. Furthermore, none of our subsidiaries is under any obligation to make payments to us, and any payments to us would depend on the earnings or financial condition of our subsidiaries and various business considerations. Statutory, contractual or other restrictions may also limit our subsidiaries’ ability to pay dividends or make distributions, loans or advances to us. For these reasons, we may not have access to any assets or cash flows of our subsidiaries to make payments on the notes.

We and the guarantors may incur substantial additional indebtedness. This could increase the risks associated with the notes.

Subject to the restrictions in the indentures governing the Senior Notes and in other instruments governing our other outstanding indebtedness (including Centennial Resource Production’s revolving credit facility), we and our subsidiaries may incur substantial additional indebtedness (including secured indebtedness) in the future. Although Centennial Resource Production’s revolving credit facility and the indenture governing the Senior Notes contain restrictions on the incurrence of additional indebtedness, these restrictions will be subject to waiver and a number of significant qualifications and exceptions, and indebtedness incurred in compliance with these restrictions could be substantial. As of December 31, 2020, we had $1,102.9 million principal amount of outstanding indebtedness for borrowed money on a consolidated basis. All obligations under our revolving credit facility are secured and, as a result, are effectively senior to the notes (to the extent of the value of the collateral securing such obligations).

If we or a guarantor incurs any additional indebtedness that ranks equally with the notes or that guarantor’s guarantee, as applicable, including additional unsecured indebtedness or trade payables, then the holders of that indebtedness will be entitled to share ratably with holders of the notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of us or that guarantor, as applicable. This may have the effect of reducing the amount of proceeds paid to holders of the notes in connection with such a distribution.

Any increase in our level of indebtedness will have several important effects on our future operations, including, without limitation:

Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt. Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the notes.

On a consolidated basis as of December 31, 2020, we had $1,102.9 million principal amount of outstanding indebtedness for borrowed money. We will incur $150.0 million (or, if the underwriters fully exercise their option to purchase additional notes, $172.5 million) principal amount of indebtedness as a result of this offering. We may also incur additional indebtedness to meet future financing needs. Our indebtedness could have

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significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, including the notes, and our cash needs may increase in the future. In addition, Centennial Resource Production’s existing senior notes and credit agreement contain, and any future indebtedness that we may incur may contain, financial and other restrictive covenants that limit our ability to operate our business, raise capital or make payments under our other indebtedness. If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.

Our leverage and debt service obligations may adversely affect our financial condition, results of operations, business prospects and our ability to make payments on the notes.

On a consolidated basis as of December 31, 2020, we had $1,102.9 million principal amount of outstanding indebtedness for borrowed money. Our level of indebtedness could affect our operations in several ways, including the following:

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We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under applicable debt instruments, which may not be successful.

Our ability to make scheduled payments on or to refinance our indebtedness depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including the notes.

If our cash flows and capital resources are insufficient to fund debt service obligations, we may be forced to reduce or delay investments and capital expenditures, sell assets, seek additional capital or restructure or refinance indebtedness. Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet debt service and other obligations. Centennial Resource Production’s existing credit facility and the indentures governing the Senior Notes currently restrict Centennial Resource Production’s ability to dispose of assets and Centennial Resource Production’s use of the proceeds from such disposition. We may not be able to consummate those dispositions, and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet scheduled debt service obligations.

We may be unable to raise the funds necessary to repurchase the notes for cash following a fundamental change, or to pay any cash amounts due upon exchange, and our future indebtedness may limit our ability to repurchase the notes or pay cash upon their exchange.

Noteholders may, subject to a limited exception described in this prospectus supplement, require us to repurchase their notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any. See “Description of Notes—Fundamental Change Permits Noteholders to Require Us to Repurchase Notes.” In addition, upon exchange, we will satisfy part or all of our exchange obligation in cash unless we elect to settle exchanges solely in shares of common stock. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the notes or pay the cash amounts due upon exchange. In addition, applicable law, regulatory authorities and the agreements governing our future indebtedness may restrict our ability to repurchase the notes or pay the cash amounts due upon exchange. Our failure to repurchase notes or to pay the cash amounts due upon exchange when required will constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full. If the repayment of such other indebtedness were to be accelerated after any applicable notice or grace periods, then we may not have sufficient funds to repay that indebtedness and repurchase the notes or make cash payments upon their exchange.

Not all events that may adversely affect the trading price of the notes and the common stock will result in an adjustment to the exchange rate.

We will adjust the exchange rate of the notes for certain events, including:

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See “Description of Notes—Exchange Rights—Exchange Rate Adjustments.” We are not required to adjust the exchange rate for other events, such as third-party tender offers or an issuance of common stock (or securities exercisable for, or convertible into, common stock) for cash, that may adversely affect the trading price of the notes and the common stock. An event may occur that adversely affects the noteholders and the trading price of the notes and the underlying shares of common stock but that does not result in an adjustment to the exchange rate.

Not all significant restructuring transactions will constitute a fundamental change, in which case you will not have the right to require us to repurchase your notes for cash.

If certain corporate events called “fundamental changes” occur, you will have the right to require us to repurchase your notes for cash. See “Description of Notes—Fundamental Change Permits Noteholders to Require Us to Repurchase Notes.” However, the definition of “fundamental change” is limited to specific corporate events and does not include all events that may adversely affect our financial condition or the trading price of the notes. For example, a leveraged recapitalization, refinancing, restructuring or acquisition by us may not constitute a fundamental change that would require us to repurchase the notes. Nonetheless, these events could significantly increase the amount of our indebtedness, harm our credit rating or adversely affect our capital structure and the trading price of the notes.

The increase to the exchange rate resulting from a make-whole fundamental change may not adequately compensate noteholders for the lost option value of their notes. In addition, a variety of transactions that do not constitute a make-whole fundamental change may significantly reduce the option value of the notes without a corresponding increase to the exchange rate.

If certain corporate events that constitute a “make-whole fundamental change” occur, then we will, in certain circumstances, temporarily increase the exchange rate. See “Description of Notes—Exchange Rights—Increase in Exchange Rate in Connection with a Make-Whole Fundamental Change.” The amount of the increase to the exchange rate will depend on the date on which the make-whole fundamental change becomes effective and the applicable “stock price.” While the increase to the exchange rate is designed to compensate noteholders for the lost option value of their notes resulting from a make-whole fundamental change, the increase is only an approximation and may not adequately compensate noteholders for the loss in option value. In addition, if the applicable “stock price” is greater than $     per share or less than $     per share (in each case, subject to adjustment), then we will not increase the exchange rate for the make-whole fundamental change. Moreover, we will not increase the exchange rate pursuant to these provisions to an amount that exceeds                  shares per $1,000 principal amount of notes, subject to adjustment.

Furthermore, the definition of make-whole fundamental change is limited to certain specific transactions. Accordingly, the make-whole fundamental change provisions of the indenture will not protect noteholders from other transactions that could significantly reduce the option value of the notes. For example, a spin-off or sale of a subsidiary or business division with volatile earnings, or a change in our line of business, could significantly affect the trading characteristics of the common stock and reduce the option value of the notes without constituting a make-whole fundamental change that results in a temporary increase to the exchange rate.

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In addition, our obligation to increase the exchange rate in connection with a make-whole fundamental change could be considered a penalty, in which case its enforceability would be subject to general principles of reasonableness and equitable remedies.

There is currently no trading market for the notes. If an active trading market for the notes does not develop, then noteholders may be unable to sell their notes at desired times or prices, or at all.

The notes are a new class of securities for which no market currently exists. We do not intend to apply to list the notes on any securities exchange or for quotation on any inter-dealer quotation system. Although the underwriters have advised us that they intend to make a market in the notes, they are not obligated to do so and may discontinue any market-making activity at any time and without notice. Accordingly, an active market for the notes may never develop, and, even if one develops, it may not be maintained. If an active trading market for the notes does not develop or is not maintained, then the market price and liquidity of the notes will be adversely affected and noteholders may not be able to sell their notes at desired times or prices, or at all.

The liquidity of the trading market, if any, and future trading prices of the notes will depend on many factors, including, among other things, the trading price and volatility of the common stock, prevailing interest rates, our dividend yield, financial condition, results of operations, business, prospects and credit quality relative to our competitors, the market for similar securities and the overall securities market. Many of these factors are beyond our control. Historically, the market for exchangeable debt has been volatile. Market volatility could significantly harm the market for the notes, regardless of our financial condition, results of operations, business, prospects or credit quality.

Volatility in the trading price and volume of the common stock, the condition of the financial markets, prevailing interest rates and other factors could significantly affect the trading price of the notes.

We expect that the trading price of the common stock will significantly affect the trading price of the notes, which could result in greater volatility in the trading price of the notes than would be expected for non-exchangeable securities. The trading price of the common stock will likely continue to fluctuate in response to the factors described or referred to elsewhere in this section, under the caption “Cautionary Note Regarding Forward-Looking Statements” or in the documents we have incorporated by reference in this prospectus supplement or for reasons unrelated to our operations, many of which are beyond our control, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors or suppliers regarding their own performance, as well as industry conditions and general financial, economic and political instability.

In addition, the condition of the financial markets and changes in prevailing interest rates can have an adverse effect on the trading price of the notes. For example, prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future, and we would expect an increase in prevailing interest rates to depress the trading price of the notes. The market price of the common stock could also be affected by possible sales of common stock by investors who view the notes as a more attractive means of equity participation in us and by hedging or arbitrage trading activity that we expect to develop involving the common stock. This trading activity could, in turn, affect the trading price of the notes.

Future sales of common stock or equity-linked securities could depress the trading price of the common stock and the notes.

We may conduct future offerings of the common stock, preferred stock or other securities that are convertible into or exercisable for the common stock to finance our operations or fund acquisitions, or for other purposes. We cannot predict the size of future issuances or the effect, if any, that they may have on the market price for the common stock. The indenture for the notes will not restrict our ability to issue additional equity securities in the future. If we issue additional shares of common stock or rights to acquire shares of common

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stock, if any of our existing stockholders sells a substantial amount of common stock, or if the market perceives that such issuances or sales may occur, then the trading price of the common stock, and, accordingly, the notes may significantly decline. In addition, our issuance of additional shares of common stock will dilute the ownership interests of our existing common stockholders, including noteholders who have received shares of common stock upon exchange of their notes.

We will make only very limited covenants in the indenture, and these limited covenants may not protect your investment.

Many debt instruments contain provisions that are designed to restrict the borrower’s activities and operations in a manner that is designed to preserve the borrower’s ability to make payments on the related indebtedness when due. These provisions include financial and operating covenants, and restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the borrower or any of its subsidiaries. The indenture for the notes will not contain any of these covenants or restrictions or otherwise place any meaningful restrictions on our ability to operate our business as management deems appropriate. For example, we and our subsidiaries may be able to incur substantial additional debt in the future, subject to the restrictions contained in our debt instruments, some of which may be secured debt. The indenture governing the notes will not restrict us from incurring additional debt, securing existing or future debt, recapitalizing our debt or taking a number of other actions that could reduce our ability to make payments on the notes when due. As a result, your investment in the notes may not be as protected as an investment in an instrument that contains some or all of these types of covenants and restrictions.

Regulatory actions, changes in market conditions and other events may adversely affect the trading price and liquidity of the notes and the ability of investors to implement an exchangeable note arbitrage trading strategy.

We expect that many investors in the notes, including potential purchasers of the notes from investors in this offering, will seek to employ an exchangeable note arbitrage strategy. Under this strategy, investors typically short sell a certain number of shares of common stock and adjust their short position over time while they continue to hold the notes. Investors may also implement this type of strategy by entering into swaps on the common stock in lieu of, or in addition to, short selling shares of common stock.

The SEC and other regulatory authorities have implemented various rules and taken certain actions, and may in the future adopt additional rules and take other actions, that may impact those engaging in short selling activity involving equity securities (including the common stock). These rules and actions include Rule 201 of SEC Regulation SHO, the adoption by the Financial Industry Regulatory Authority, Inc., and the national securities exchanges of a “limit up-limit down” program, the imposition of market-wide circuit breakers that halt trading of securities for certain periods following specific market declines, and the implementation of certain regulatory reforms required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Any governmental or regulatory action that restricts investors’ ability to effect short sales of the common stock or enter into equity swaps on the common stock could depress the trading price of, and the liquidity of the market for, the notes.

In addition, the liquidity of the market for the common stock and other market conditions could deteriorate, which could reduce, or eliminate entirely, the number of shares available for lending in connection with short sale transactions and the number of counterparties willing to enter into an equity swap on the common stock with a note investor. These and other market events could make implementing an exchangeable note arbitrage strategy prohibitively expensive or infeasible. If investors in this offering or potential purchasers of the notes that seek to employ an exchangeable note arbitrage strategy are unable to do so on commercial terms, or at all, then the trading price of, and the liquidity of the market for, the notes may significantly decline.

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A court may subordinate the guarantees to the other indebtedness of the respective guarantors, or may void the guarantees altogether, and require noteholders to return any payments they receive from any guarantor.

U.S. bankruptcy laws and state fraudulent transfer laws permit courts to subordinate claims against a guarantor’s guarantee to the other indebtedness of the guarantor, or void the guarantee altogether, if, at the time it incurred the guarantee, the guarantor:

Furthermore, a court may void a guarantee if it concludes that the guarantee was incurred for our benefit, and only indirectly for the benefit of the applicable guarantor, and that, accordingly, the guarantee was incurred for less than fair consideration or constituted a fraudulent conveyance or transfer. Under these laws, a court may require any person that receives a payment under any guarantee to return that payment to the applicable guarantor or to a fund for the benefit of the guarantor’s creditors.

The test for determining whether a guarantor is insolvent for purposes of these laws varies depending on the particular law applied. Although a court may apply a different standard, a guarantor will generally be considered to be insolvent if:

For these purposes, contingent, un-liquidated and un-matured liabilities constitute debt.

Each guarantee will contain a provision that is designed to limit the applicable guarantor’s liability to the maximum amount that it could incur without causing the incurrence of the guarantee to be a fraudulent transfer. However, this provision may not be effective to protect the guarantees from being voided under fraudulent transfer laws.

If a guarantee is voided or otherwise found to be unenforceable, then noteholders will not have a claim against the applicable guarantor and will be able to look only to us, and any other guarantor, to the extent its guarantee is enforceable, for payment under the notes. In that event, the notes will be structurally subordinated to all indebtedness and other liabilities of the guarantor whose guarantee was voided or found to be unenforceable.

The subsidiaries that will guarantee the notes will be automatically released from those guarantees upon the occurrence of certain events.

Under the indenture that will govern the notes, a subsidiary’s guarantee of the notes may be released without action by, or the consent of, any holder of the notes under certain circumstances. If any subsidiary guarantee is released, no holder of the notes will have a claim as a creditor against that subsidiary, and the indebtedness and other liabilities, including trade payables, whether secured or unsecured, of that subsidiary will be structurally senior to the claim of any holders of the notes. See “Description of Notes—Guarantees—Release of Guarantees.”

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You may be subject to tax if Centennial Resource Production adjusts, or fails to adjust, the exchange rate of the notes, even though you will not receive a corresponding cash distribution.

The exchange rate of the notes is subject to adjustment in certain circumstances, including the payment of cash dividends by the parent guarantor. If the exchange rate is adjusted as a result of a distribution that is taxable to the parent guarantor’s common stockholders, such as a cash dividend, you may be deemed to have received a dividend subject to U.S. federal income tax, without the corresponding receipt of any cash. In addition, a failure to adjust (or to adjust adequately) the exchange rate after an event that increases your proportionate interest in the parent guarantor could be treated as a deemed taxable dividend to you. If a make-whole fundamental change occurs prior to the maturity date (including if Centennial Resource Production issues a notice of redemption), under some circumstances, Centennial Resource Production will increase the exchange rate for notes exchanged in connection with that make-whole fundamental change or notice of redemption. Such increase may also be treated as a distribution subject to U.S. federal income tax as a dividend. If you are a non-U.S. holder (as defined in “Material U.S. Federal Income Tax Considerations”), any deemed dividend would generally be subject to U.S. federal withholding tax at a 30% rate, or such lower rate as may be specified by an applicable treaty. Any U.S. federal withholding tax or backup withholding may be withheld from or set off against payments on the notes or any shares of common stock owned by you or from any proceeds of any subsequent sale, redemption or other disposition or exchange of such notes (including the retirement of such notes) or such common stock or other funds or assets of yours. The Internal Revenue Service has proposed regulations addressing the amount and timing of deemed distributions, obligations of withholding agents and filing and notice obligations of issuers, which, if adopted, could affect the U.S. federal income tax treatment of beneficial owners of notes deemed to receive such a distribution. See “Description of Notes—Exchange Rights—Exchange Rate Adjustments,” “Description of Notes—Exchange Rights—Increase in Exchange Rate in Connection with a Make-Whole Fundamental Change” and “Material U.S. Federal Income Tax Considerations.”

Non-U.S. holders may be subject to U.S. federal income tax because the parent guarantor is considered a United States real property holding corporation.

Because Centennial Resource Production believes that the parent guarantor currently is, and expects it to remain for the foreseeable future, a “United States real property holding corporation” (a “USRPHC”) within the meaning of the Foreign Investment in Real Property Tax Act of 1980 and Section 897 of the Internal Revenue Code of 1986, as amended (the “Code”) (“FIRPTA”), a non-U.S. holder of the notes or common stock will be subject to U.S. federal income tax in respect of gain realized in connection with a sale, certain redemptions or other taxable disposition of notes or common stock and may be subject to U.S. withholding tax in respect of payments in connection with a sale, redemption or other taxable disposition of the notes or common stock, in each case, if such non-U.S. holder exceeds certain ownership levels. In addition, a non-U.S. holder that exceeds such ownership levels may be subject to special rules under FIRPTA (including certain procedural requirements) upon an exchange of the notes. Non-U.S. holders are urged to consult their tax advisors with respect to the U.S. federal income tax consequences of acquiring, owning, exchanging and disposing of the notes or common stock. See the discussion under the heading “Material U.S. Federal Income Tax Considerations—Consequences to Non-U.S. Holders.”

A rating agency may not rate the notes or may assign a rating that is lower than expected.

We do not intend to seek to have the notes rated by any rating agency. However, if one or more rating agencies rate the notes and assign a rating that is lower than the rating that investors expect, or reduce their rating in the future, then the trading price of the common stock and the notes could significantly decline.

In addition, market perceptions of our creditworthiness will directly affect the trading price of the notes. Accordingly, if a ratings agency downgrades or withdraws our existing credit rating, or puts us on credit watch, then the trading price of the notes will likely decline.

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Provisions in the indenture could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the notes and the indenture could make a third party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their notes for cash. In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the exchange rate. In either case, and in other cases, our obligations under the notes and the indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of the common stock may view as favorable.

You may be unable to exchange your notes before January 3, 2028, and the trading price of the notes could be less than the value of the consideration into which they could otherwise be exchanged.

Before January 3, 2028, you may exchange your notes only if specific conditions are met. If these conditions are not met, then you will not be able to exchange your notes and receive the cash, shares of common stock or combination of cash and shares, as applicable, into which the notes would otherwise be exchangeable. As a result, the notes may trade at prices that are less than the value of the consideration into which they would otherwise be exchangeable.

Fluctuations in the trading price of the common stock after you elect to exchange your notes may cause you to receive less valuable consideration than expected.

Under the notes, an exchanging holder will be exposed to fluctuations in the value of the common stock during the period from the date such holder surrenders notes for exchange until the date we settle our exchange obligation. We will generally have the right to settle exchanges in cash, shares of common stock or a combination of cash and shares. If we elect to settle exchanges solely in cash or in a combination of cash and shares, then the consideration due upon exchange will be determined based on the volume-weighted average price of the common stock during the related “observation period,” which is defined under the caption “Description of Notes—Definitions” and will consist of 40 consecutive “VWAP trading days.” Except in certain circumstances, the observation period will begin after the related exchange date. Accordingly, if the price of the common stock decreases during this period, the amount or value of consideration you receive will be adversely affected. In addition, if the market price of the common stock at the time we settle any exchange is below the average volume-weighted average price of the common stock during the related observation period, then the value of any shares of common stock that you will receive upon such settlement will be less than the value of the common stock used to determine the number of shares that you will receive. If we elect to satisfy our exchange obligation solely in shares of common stock upon exchange of any notes, then we will deliver such shares, together with cash in lieu of any fractional share, on the second business day following the relevant exchange date. Accordingly, if the trading price of the common stock declines during this time, then you may receive less consideration, or consideration that is less valuable, than expected.

Your investment in the notes may be harmed if we redeem the notes.

We may not redeem the notes at our option at any time before April 7, 2025. We will have the right to redeem the notes, in whole or in part, in certain circumstances and subject to certain limitations on or after April 7, 2025. See “Description of Notes—Optional Redemption.” If we redeem your notes, then you may not be entitled to benefit from potential future appreciation in the trading price of the common stock, and you may be unable to reinvest any proceeds from the redemption in comparable investments at favorable interest rates. In addition, a redemption of less than all of the outstanding notes will likely harm the liquidity of the market for the unredeemed notes following the redemption. Accordingly, if your notes are not redeemed in a partial redemption, then you may be unable to sell your notes at the times you desire or at favorable prices, if at all, and the trading price of your notes may decline.

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Our management may spend the proceeds of this offering in ways with which you may disagree or that may not be profitable.

Although we have described in this prospectus supplement, under the caption “Use of Proceeds,” how we currently intend to use the net proceeds from this offering, our management will have broad discretion to apply the net proceeds, and investors will rely on our management’s judgment in spending the net proceeds. Our management may use the proceeds in ways that do not earn a profit or otherwise result in the creation of stockholder value. In addition, pending our use of the proceeds, we may invest the proceeds primarily in instruments that do not produce significant income or that may lose value.

The accounting method for the notes could adversely affect our reported financial condition and results.

We intend to early adopt the Financial Accounting Standards Board’s Accounting Standards Update, which we refer to as ASU 2020-06. Following such early adoption, we expect the notes to initially be reflected on our balance sheets at their principal amount net of issuance costs, and we expect that the issuance costs associated with the notes we are offering will be amortized into interest expense over the term of the notes. ASU 2020-06 also eliminates the treasury stock method for exchangeable instruments that can be settled in whole or in part with equity and instead requires application of the “if-converted” method. Under the “if-converted” method, diluted earnings per share would generally be calculated assuming that all the notes were exchanged solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the if-converted method may reduce our reported diluted earnings per share.

Furthermore, if any of the conditions to the exchangeability of the notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the notes as a current, rather than a long-term, liability. This reclassification could be required even if no noteholders exchange their notes and could materially reduce our reported working capital.

The capped call transactions may affect the value of the notes and the common stock.

In connection with the pricing of the notes, we and Centennial Resource Development expect to enter into privately negotiated capped call transactions with the option counterparties. The capped call transactions will cover, subject to customary adjustments, the number of shares of common stock initially underlying the notes. The capped call transactions are expected generally to reduce potential dilution to the common stock upon exchange of the notes and/or at our election (subject to certain conditions) offset any cash payments we are required to make in excess of the aggregate principal amount of exchanged notes, as the case may be, with such reduction or offset subject to a cap. If the underwriters exercise their option to purchase additional notes, we and Centennial Resource Development expect to enter into additional capped call transactions with the option counterparties.

We have been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to the common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of the common stock or the notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the common stock and/or purchasing or selling the common stock or other securities of ours in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so on each exercise date of the capped call transactions or following any repurchase, redemption or early exchange of the notes, in each case if we exercise our option to terminate the relevant portion of the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of the common stock or the notes, which could affect a noteholder’s ability to exchange the notes and, to the extent the activity occurs during any observation period related to an exchange of the notes, it could affect the number of shares, if any, and value of the consideration that a noteholder will receive upon exchange of the notes.

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In addition, if any such capped call transaction fails to become effective, whether or not this offering of the notes is completed, the option counterparty party thereto may unwind its hedge positions with respect to the common stock, which could adversely affect the value of the common stock and, if the notes have been issued, the value of the notes.

The capped call transactions are separate transactions entered into by us with the option counterparties, are not part of the terms of the notes and will not change the holders’ rights under the notes. As a holder of the notes, you will not have any rights with respect to the capped call transactions.

We and Centennial Resource Development are subject to counterparty risk with respect to the capped call transactions, and the capped call may not operate as planned.

The option counterparties are financial institutions, and we and Centennial Resource Development will be subject to the risk that any or all of them might default under the capped call transactions. Our and Centennial Resource Development’s exposure to the credit risk of the option counterparties will not be secured by any collateral. Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions. If an option counterparty becomes subject to insolvency proceedings, we and Centennial Resource Development will become unsecured creditors in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty. Our and Centennial Resource Development’s exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price subject to the cap and in the volatility of the common stock. In addition, upon a default by an option counterparty, we and Centennial Resource Development may suffer more dilution than we currently anticipate with respect to the common stock. We and Centennial Resource Development can provide no assurances as to the financial stability or viability of the option counterparties.

Because the notes will initially be held in book-entry form, noteholders must rely on DTC’s procedures to receive communications relating to the notes and to exercise their rights and remedies.

We will initially issue the notes in the form of one or more “global notes” registered in the name of Cede & Co., as nominee of DTC. Beneficial interests in global notes will be shown on, and transfers of global notes will be effected only through, the records maintained by DTC. Except in limited circumstances, we will not issue certificated notes. See “Description of Notes—Book Entry, Settlement and Clearance.” Accordingly, if you own a beneficial interest in a global note, then you will not be considered an owner or holder of the notes. Instead, DTC or its nominee will be the sole holder of the notes. Payments of principal, interest and other amounts on global notes will be made to the paying agent, who will remit the payments to DTC. We expect that DTC will then credit those payments to the DTC participant accounts that hold book-entry interests in the global notes and that those participants will credit the payments to indirect DTC participants. Unlike persons who have certificated notes registered in their names, owners of beneficial interests in global notes will not have the direct right to act on our solicitations for consents or requests for waivers or other actions from noteholders. Instead, those beneficial owners will be permitted to act only to the extent that they have received appropriate proxies to do so from DTC or, if applicable, a DTC participant. The applicable procedures for the granting of these proxies may not be sufficient to enable owners of beneficial interests in global notes to vote on any requested actions on a timely basis. In addition, notices and other communications relating to the notes will be sent to DTC. We expect DTC to forward any such communications to DTC participants, which in turn would forward such communications to indirect DTC participants, but we can make no assurances that you timely receive any such communications.

Holding notes will not, in itself, confer any rights with respect to the common stock.

Noteholders will generally not be entitled to any rights with respect to the common stock (including voting rights and rights to receive any dividends or other distributions on the common stock). However, noteholders will be subject to all changes affecting the common stock to the extent the trading price of the notes depends on the market price of the common stock and to the extent they receive shares of common stock upon exchange of their

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notes. For example, if we propose an amendment to our charter documents that requires stockholder approval, then a noteholder will not, as such, be entitled to vote on the amendment, although the noteholder will be subject to any changes implemented by that amendment in the powers, preferences or special rights of the common stock.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The information discussed in this prospectus supplement 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 (the “Exchange Act”). All statements, other than statements of historical fact included in this prospectus supplement, 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 prospectus supplement, 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. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties relating to, among other matters, the risks discussed under “Risk Factors” in this prospectus supplement as well as those discussed under the headings “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, any subsequently filed Quarterly Reports on Form 10-Q and any subsequently filed Current Reports on Form 8-K, which are incorporated by reference in this prospectus supplement.

Forward-looking statements may include statements about:

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All forward-looking statements speak only as of the date they are made and we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. You should not place undue reliance on these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including but not limited to those risks described under “Risk Factors” in this prospectus supplement as well as those discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, any subsequently filed Quarterly Reports on Form 10-Q and any subsequently filed Current Reports on Form 8-K, all of which are incorporated by reference herein. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

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 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.

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USE OF PROCEEDS

We estimate that the net proceeds from this offering will be approximately $     million (or approximately $     million if the underwriters fully exercise their option to purchase additional notes), after deducting the underwriting discounts and commissions and our estimated offering expenses. We intend to use approximately $     million of the net proceeds to fund the cost of entering into the capped call transactions described under the caption “Description of the Concurrent Capped Call Transactions.” We intend to use the remainder of the net proceeds to redeem all of the outstanding Senior Secured Notes and for general corporate purposes, including to repay outstanding borrowings under our revolving credit facility. We will have broad discretion over the uses of the net proceeds from this offering. If the underwriters exercise their option to purchase additional notes, then we intend to use a portion of the proceeds from the sale of the additional notes, up to approximately $     million, to enter into additional capped call transactions as described under “Description of the Concurrent Capped Call Transactions,” as well as to repay additional outstanding borrowings under our revolving credit facility.

As of December 31, 2020, Centennial Resource Production had $330.0 million of outstanding borrowings at a weighted average interest rate of 3.25% under the credit agreement. Our revolving credit facility matures in May 2023. As of December 31, 2020, we had $127.1 million aggregate principal amount of our Senior Secured Notes outstanding.

Pending the uses described above, we intend to repay outstanding borrowings under our revolving credit facility.

Affiliates of certain of the underwriters are lenders under the credit agreement and may hold Senior Secured Notes. Accordingly, certain of the underwriters and their affiliates may receive a portion of the net proceeds from this offering through any repayment of borrowings under the credit agreement and/or the redemption of the Senior Secured Notes. Please read “Underwriting (Conflicts of Interest).” As of December 31, 2020, affiliates of Riverstone held approximately $106.3 million of Senior Secured Notes.

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CAPITALIZATION

The following table presents our cash and cash equivalents and our capitalization as of December 31, 2020:

This table should be read in conjunction with the other information included or incorporated by reference into this prospectus supplement, including our consolidated financial statements and related notes.

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DIVIDEND POLICY

Our ability to pay dividends is governed by (i) the provisions of Delaware corporation law, (ii) Centennial Resource Development’s Third Amended and Restated Certificate of Incorporation and Second Amended and Restated Bylaws, (iii) the indentures related to Centennial Resource Production’s outstanding senior notes and (iv) the credit agreement. We have not paid any cash dividends on our common stock to date. Our board of directors may from time to time consider whether or not to institute a dividend policy. It is our present intention to retain any earnings for use in our business operations and, accordingly, we do not anticipate the board of directors declaring any dividends in the near future.

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DESCRIPTION OF NOTES

We will issue the notes under an indenture (the “base indenture”), to be dated as of the initial closing date of this offering, between us and UMB Bank, N.A., as trustee (the “trustee”), as supplemented by a supplemental indenture (the base indenture, as so supplemented, the “indenture”), to be dated as of the initial closing date of this offering, among us, the guarantors and the trustee.

The following is a summary of certain provisions of the notes, the guarantees and the indenture. It is only a summary and is not complete. We qualify this summary by referring you to the indenture and the notes, because they, and not this summary, define your rights as a holder of the notes and the guarantees. We will provide you with a copy of the indenture, which includes the form of the notes and contains the guarantees, as provided under the caption “Where You Can Find Additional Information; Incorporation of Certain Documents by Reference.” In addition, the indenture and the notes will be deemed to include certain terms that are made a part of the indenture and the notes pursuant to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).

This “Description of Notes” section supplements and, to the extent inconsistent therewith, supersedes the information in the accompanying prospectus under the caption “Description of Debt Securities of Centennial Resource Production, LLC and Guarantees.”

Certain terms used in this summary are defined below under the caption “—Definitions.” Certain other terms used in this summary are defined in the indenture.

In this section, references to (i) “we,” “us” and “our” refer to Centennial Resource Production, LLC only and not to any of its subsidiaries; (ii) “parent guarantor” refer to Centennial Resource Development, Inc. only and not to any of its subsidiaries; (iii) any “guarantor” refer to such guarantor only and not to any of its subsidiaries; (iv) any “note” refer to any authorized denomination of a note, unless the context requires otherwise; and (v) “common stock” refer to the parent guarantor’s Class A common stock, par value $0.0001 per share.

Generally

The notes will:

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The indenture will not contain any financial covenants and will not limit us or our subsidiaries from incurring additional indebtedness, paying dividends or issuing or repurchasing any securities. Except to the extent described below under the captions “—Exchange Rights—Increase in Exchange Rate in Connection with a Make-Whole Fundamental Change,” “—Fundamental Change Permits Noteholders to Require Us to Repurchase Notes” and “—Consolidation, Merger and Asset Sale,” the indenture will not contain any provisions designed to protect noteholders upon a highly leveraged transaction involving us or any guarantor or a decline in our or any guarantor’s credit rating as a result of a recapitalization, takeover, highly leveraged transaction or other restructuring involving us or any guarantor.

Without the consent of any noteholder, we may issue additional notes under the indenture with the same terms as the notes we are offering (except for certain differences, such as the date as of which interest begins to accrue and the first interest payment date for such additional notes). However, such additional notes (and any notes that have been resold after they have been purchased or otherwise acquired by us or our subsidiaries) must be identified by a separate CUSIP number or by no CUSIP number if they are not fungible, for U.S. federal income tax or federal securities laws purposes, with other notes we issue under the indenture.

We do not intend to list the notes on any securities exchange or include them in any automated inter-dealer quotation system.

Absent manifest error, a person in whose name a note is registered on the registrar’s books will be considered to be the holder of that note for all purposes, and only registered noteholders (which, in the case of notes held through DTC, will initially be DTC’s nominee, Cede & Co.) will have rights under the indenture as noteholders.

Subject to applicable law, we, the parent guarantor or our or the parent guarantor’s respective subsidiaries may directly or indirectly repurchase notes in the open market or otherwise, whether through private or public tender or exchange offers, cash-settled swaps or other cash-settled derivatives. Any notes that we, the parent guarantor or our or the parent guarantor’s respective subsidiaries have purchased or otherwise acquired will be deemed to remain outstanding until such time as we deliver them to the trustee for cancellation. However, subject to the terms of the indenture, notes that we or any of our affiliates own will be deemed not to be outstanding for purposes of determining whether the noteholders have concurred in any direction, waiver or consent.

Payments on the Notes

We will pay (or cause the paying agent to pay) the principal of, interest on, and any cash consideration due upon exchange of, any global note by wire transfer of immediately available funds. We will pay (or cause the

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paying agent to pay) the principal of, interest on, and any cash consideration due upon exchange of, any physical note as follows:

To be timely, a written request referred to in the first bullet point above must be delivered no later than the “close of business” (as defined below under the caption “—Definitions”) on the following date: (i) with respect to the payment of any interest due on an interest payment date, the immediately preceding regular record date; (ii) with respect to any cash consideration due upon exchange, the relevant “exchange date” (as defined below under the caption “—Exchange Procedures”); and (iii) with respect to any other payment, the date that is 15 calendar days immediately before the date such payment is due.

If the due date for a payment on a note is not a “business day” (as defined below under the caption “—Definitions”), then such payment may be made on the immediately following business day and no interest will accrue on such payment as a result of the related delay. Solely for purposes of the immediately preceding sentence, a day on which the applicable place of payment is authorized or required by law or executive order to close or be closed will be deemed not to be a “business day.”

Registrar, Paying Agent and Exchange Agent

We will maintain one or more offices or agencies in the continental United States where notes may be presented for registration of transfer or for exchange, payment, and exchange pursuant to the provisions described below under the caption “—Exchange Rights,” which we refer to as the “registrar,” “paying agent” and “exchange agent,” respectively. We have appointed the trustee as the initial registrar, paying agent and exchange agent and its offices in New York, New York, as places where notes may be presented for payment. However, we may change the registrar, paying agent and exchange agent, and we or any of our subsidiaries may choose to act in that capacity as well, without prior notice to the noteholders.

Transfers and Exchanges

For purposes of the notes, the description below under this section titled “—Transfers and Exchanges” supersedes, in its entirety, the information in the accompanying prospectus under the caption “Description of Debt Securities of Centennial Resource Production, LLC and Guarantees—Transfer and Exchange.”

A noteholder may transfer or exchange its notes at the office of the registrar in accordance with the indenture. We, the trustee and the registrar may require the noteholder to, among other things, deliver appropriate endorsements or transfer instruments, and such certificates or other documentation or evidence as we or they may reasonably require to determine that such transfer or exchange complies with applicable securities laws. We, the guarantors, the trustee and the registrar may refuse to register the transfer or exchange of any note that is subject to exchange, redemption or required repurchase.

We have appointed the trustee’s offices in New York, New York, as places where notes may be presented for registration of transfer or for exchange. However, we may change the registrar or act as the registrar ourselves without prior notice to the noteholders. A holder of a beneficial interest in a note in global form may transfer or exchange such beneficial interest in accordance with the indenture and the “depositary procedures” (as defined below under the caption “—Definitions”). See “—Book Entry, Settlement and Clearance—Book-Entry Procedures for Global Notes.”

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Interest

The notes will bear cash interest at an annual rate of     %, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021, to the noteholders of record of the notes as of the close of business on the immediately preceding March 15 and September 15 (whether or not a business day), respectively. Interest will accrue from, and including, the last date to which interest has been paid or duly provided for (or, if no interest has been paid or duly provided for, from, and including, the date the notes are initially issued) to, but excluding, the next interest payment date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

In addition to the stated interest on the notes referred to above, special interest will accrue on the notes in the circumstances described below under the caption “—Events of Default—Special Interest as Sole Remedy for Certain Reporting Defaults.” All references in this prospectus supplement to interest on the notes include any special interest payable on the notes, unless the context requires otherwise.

Guarantees

For purposes of the notes, the description below under this section titled “—Guarantees” supersedes, in its entirety, the information in the accompanying prospectus under the caption “Description of Debt Securities of Centennial Resource Production, LLC and Guarantees—Guarantees.”

Generally

Subject to the provisions described below, the parent guarantor and the “subsidiary guarantors” (as defined below under the caption “—Definitions”) will fully and unconditionally guarantee, on a senior, unsecured basis, our obligations under the indenture and the notes, including the due and punctual payment of the principal of, and interest on, the notes, and all of our other obligations under the notes. Except as described below under the caption “—Future Subsidiary Guarantors,” none of our or the parent guarantor’s other existing or future subsidiaries will be required to guarantee the notes. Noteholders may exercise their remedies against the guarantors without first having to proceed directly against us. The terms of the guarantees will be set forth in the indenture, and the guarantees will not be represented by any separate physical certificate.

Future Subsidiary Guarantors

If, after the date the notes are first issued, any subsidiary of the parent guarantor (excluding us) or ours that is organized and existing under the laws of the United States of America, any State thereof or the District of Columbia guarantees any “covered debt securities” (as defined below under the caption “—Definitions”), then we will, as soon as reasonably practicable but no later than 10 business days after such subsidiary guarantees such covered debt securities, cause such subsidiary to execute an amended or supplemental indenture causing such subsidiary to become a subsidiary guarantor under the indenture.

Release of Guarantees

The indenture will provide that the guarantee of a guarantor will be automatically released, and such guarantor’s obligations under such guarantee will be automatically released and discharged, and, in each case, be of no future force and effect, upon the occurrence of any of the following events:

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However, the last two bullet points will apply only to the guarantees of the subsidiary guarantors, and the parent guarantor’s guarantee will not be automatically released pursuant to such two bullet points. In addition, as described below under the caption “—Consolidation, Merger and Asset Sale,” following certain guarantor business combination events involving a guarantor, a successor guarantor entity will succeed to such guarantor and the predecessor guarantor will be discharged from its obligations under the indenture and the notes.

For the avoidance of doubt, the provisions described above will not limit the operation of the provisions described below under the caption “—Exchange Rights—Effect of Common Stock Change Event.” Accordingly, if a parent guarantor business combination event, a subsidiary guarantor business combination event or any other merger or consolidation involving a guarantor constitutes a common stock change event whose reference property includes any securities of any person (whether such guarantor or another person), then that person will be required to execute a supplemental indenture in accordance with the provisions described below under the caption “—Exchange Rights—Effect of Common Stock Change Event—Execution of Supplemental Indenture.”

Ranking

The notes will be our senior, unsecured obligations and will be:

The guarantee of each guarantor will be such guarantor’s senior, unsecured obligation and will be:

The indenture will not prohibit us or the guarantors from incurring additional indebtedness, including secured indebtedness, which would be effectively senior to the notes or the guarantees, as applicable, to the extent of the value of the collateral securing that indebtedness, or indebtedness that would rank equal in right of payment with the notes or the guarantees, as applicable. The indenture will also not prohibit our non-guarantor subsidiaries from incurring any additional indebtedness or other liabilities that would be structurally senior to our obligations under the notes.

In the event of our or any guarantor’s bankruptcy, liquidation, reorganization or other winding up, our or that guarantor’s assets that secure any indebtedness will not be available to make payments under the notes or that guarantor’s guarantee unless all of that indebtedness is first paid in full. In the event of the bankruptcy, liquidation, reorganization or other winding up of any of our non-guarantor subsidiaries, we, as a common equity

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holder of that subsidiary, and, therefore, the noteholders, will rank behind that subsidiary’s creditors, including that subsidiary’s trade creditors, and (to the extent we are not a holder thereof) that subsidiary’s preferred equity holders. Even if we were a creditor of any of our non-guarantor subsidiaries, our rights as a creditor would be effectively subordinated to any security interest of others in the assets of that subsidiary, to the extent of the value of those assets, and would be subordinated to any indebtedness of that subsidiary that is senior in right of payment to that held by us.

Our non-guarantor subsidiaries will have no obligations under the notes. The ability of our non-guarantor subsidiaries to pay dividends or make other payments to us is restricted by, among other things, corporate and other laws and by agreements to which our subsidiaries may become a party. Accordingly, we may be unable to gain access to the cash flow or assets of our subsidiaries to enable us to make payments on the notes.

As of December 31, 2020, excluding our subsidiaries and intercompany indebtedness, we had $1,102.9 million principal amount of outstanding indebtedness for borrowed money, of which $457.1 million was secured indebtedness, and the parent guarantor and the subsidiary guarantor’s outstanding indebtedness for borrowed money as of that date consisted of guarantees of our indebtedness for borrowed money. As of December 31, 2020, our non-guarantor subsidiaries had no indebtedness or other liabilities.

See “Risk Factors—The notes and guarantees will be unsecured obligations and will be effectively subordinated to all existing and future secured indebtedness of Centennial Resource Production and the guarantors, as applicable, and structurally subordinated to the existing and future indebtedness of any of our existing or future non-guarantor subsidiaries.”

Optional Redemption

We may not redeem the notes at our option at any time before April 7, 2025. Subject to the terms of the indenture, we have the right, at our election, to redeem all, or any portion (subject to the partial redemption limitation described below) in an authorized denomination, of the notes, at any time, and from time to time, on a redemption date on or after April 7, 2025 and on or before the 40th “scheduled trading day” (as defined below under the caption “—Definitions”) immediately before the maturity date, for cash, but only if the “last reported sale price” (as defined below under the caption “—Definitions”) per share of common stock exceeds 130% of the “exchange price” (as defined below under the caption “—Definitions”) on (i) each of at least 20 “trading days” (as defined below under the caption “—Definitions”), whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. In addition, calling any note for redemption will constitute a “make-whole fundamental change” (as defined below under the caption “—Definitions”) with respect to that note, in which case the exchange rate applicable to the exchange of that note will be increased in certain circumstances if it is exchanged with an exchange date occurring during the period from, and including, the date we send the redemption notice to, and including, the second business day immediately before the related redemption date. If we elect to redeem less than all of the outstanding notes, then the redemption will not constitute a make-whole fundamental change with respect to the notes not called for redemption, and holders of the notes not called for redemption will not be entitled to an increased exchange rate for such notes as described above on account of the redemption, except to the limited extent described further below.

The redemption date will be a business day of our choosing that is no more than 65, nor less than 45, scheduled trading days after the date we send the related redemption notice, as described below. However, if, in accordance with the provisions described below under the caption “—Exchange Rights—Settlement upon Exchange—Settlement Method,” we elect to settle all exchanges with an exchange date that occurs on or after the date we send such redemption notice and on or before the second business day immediately before the related redemption date by physical settlement, then we may instead elect to choose a redemption date that is a business day no more than 60, nor less than 15, calendar days after the date we send such redemption notice.

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The redemption price for any note called for redemption will be the principal amount of such note plus accrued and unpaid interest on such note to, but excluding, the redemption date. However, if the redemption date is after a regular record date and on or before the next interest payment date, then (i) the holder of such note at the close of business on such regular record date will be entitled, notwithstanding such redemption, to receive, on or, at our election, before such interest payment date, the unpaid interest that would have accrued on such note to, but excluding, such interest payment date; and (ii) the redemption price will not include accrued and unpaid interest on such note to, but excluding, such redemption date.

We will send to each applicable noteholder notice of the redemption containing certain information set forth in the indenture, including the redemption price and the redemption date.

If only a portion of a note is subject to redemption and that note is exchanged in part, then the exchanged portion of that note will be deemed to be from the portion of that note that was subject to redemption.

If we elect to redeem less than all of the outstanding notes, then the excess of the principal amount of notes outstanding as of the time we send the related redemption notice over the aggregate principal amount of notes set forth in such redemption notice as being subject to redemption must be at least $50.0 million (such requirement, the “partial redemption limitation”). In addition, if we elect to redeem less than all of the outstanding notes, and the holder of any note, or any owner of a beneficial interest in any global note, is reasonably not able to determine, before the close of business on the 42nd scheduled trading day (or, if, as described above, we irrevocably elect physical settlement for all exchanges with an exchange date that occurs on or after the date we send the related redemption notice and on or before the second business day immediately before the related redemption date, the 10th calendar day) immediately before the relevant redemption date, whether such note or beneficial interest, as applicable, is to be redeemed pursuant to such redemption, then such holder or owner, as applicable, will be entitled to exchange such note or beneficial interest, as applicable, at any time before the close of business on the second business day immediately before such redemption date, and each such exchange will be deemed to be of a note called for redemption for purposes of these redemption provisions and the provisions described below under the captions “—Exchange Rights—When the Notes May Be Exchanged—Exchange Upon Redemption” and “—Exchange Rights—Increase in Exchange Rate in Connection with a Make-Whole Fundamental Change.”

Notwithstanding anything to the contrary above, we may not redeem any notes if the principal amount of the notes has been accelerated and such acceleration has not been rescinded on or before the redemption date (including as a result of the payment of the related redemption price and any related interest described above on the redemption date).

Exchange Rights

Generally

Noteholders will have the right to exchange their notes (or any portion of a note in an authorized denomination), in the circumstances described below, into consideration that consists, at our election, of cash, shares of common stock or a combination of cash and shares of common stock (together with cash in lieu of any fractional share, if applicable), based on an initial exchange rate of                  shares per $1,000 principal amount of notes (which represents an initial exchange price of approximately $     per share).

Noteholders may exchange their notes only in the circumstances described below under the caption “—When the Notes May Be Exchanged.”

Treatment of Interest upon Exchange

We will not adjust the exchange rate to account for any accrued and unpaid interest on any note being exchanged, and, except as described below, our delivery of the consideration due in respect of the exchange will

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be deemed to fully satisfy and discharge our obligation to pay the principal of, and accrued and unpaid interest, if any, on, such note to, but excluding, the exchange date. As a result, except as described below, any accrued and unpaid interest on an exchanged note will be deemed to be paid in full rather than cancelled, extinguished or forfeited. In addition, if the consideration due upon exchange consists of both cash and shares of common stock, then accrued and unpaid interest that is deemed to be paid therewith will be deemed to be paid first out of such cash.

Notwithstanding anything to the contrary above, if the exchange date of a note is after a regular record date and before the next interest payment date, then:

However, such noteholder need not deliver such cash:

Accordingly, for the avoidance of doubt, all noteholders as of the close of business on the regular record date immediately before the maturity date, or as of the close of business on the regular record date immediately before a redemption date or fundamental change repurchase date described above, will receive the full interest payment that would have been due on the next interest payment regardless of whether their notes have been exchanged after such regular record date.

When the Notes May Be Exchanged

Noteholders may exchange their notes only in the circumstances set forth below. However, in no event may notes be exchanged after the close of business on the second scheduled trading day immediately before the maturity date.

Exchange Upon Satisfaction of Common Stock Sale Price Condition

A noteholder may exchange its notes during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of common stock exceeds 130% of the exchange price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter.

Exchange Upon Satisfaction of Note Trading Price Condition

A noteholder may exchange its notes during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) if the “trading price” (as defined below under the caption “—Definitions”) per $1,000 principal amount of notes, as

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determined following a request by a noteholder in accordance with the procedures described below, for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the exchange rate on such trading day. We refer to this condition as the “trading price condition.”

The trading price will be determined by the bid solicitation agent as described below and the definition of “trading price.” The bid solicitation agent (if not us) will have no obligation to determine the trading price of the notes unless we have requested such determination in writing, and we will have no obligation to make such request (or seek bids ourselves) unless a noteholder provides us with reasonable evidence that the trading price per $1,000 principal amount of notes would be less than 98% of the product of the last reported sale price per share of common stock and the exchange rate. If a noteholder provides such evidence, then we will instruct the bid solicitation agent to (or, if we are acting as the bid solicitation agent, we will) determine the trading price of the notes beginning on the next trading day and on each successive trading day until the trading price per $1,000 principal amount of notes is greater than or equal to 98% of the product of the last reported sale price per share of common stock on such trading day and the exchange rate on such trading day. If the trading price condition has been met as described above, then we will notify the noteholders of the same. If, on any trading day after the trading price condition has been met as described above, the trading price per $1,000 principal amount of notes is greater than or equal to 98% of the product of the last reported sale price per share of common stock on such trading day and the exchange rate on such trading day, then we will notify the noteholders of the same.

We will act as the initial bid solicitation agent. However, we may change the bid solicitation agent, and we may appoint any of our subsidiaries to act in that capacity as well, without prior notice to the noteholders.

Exchange Upon Specified Corporate Events

Certain Distributions

If, before January 3, 2028, the parent guarantor elects to:

then, in either case, we will send notice of such distribution, and of the related right to exchange notes, to noteholders at least 45 scheduled trading days before the “ex-dividend date” (as defined below under the caption “—Definitions”) for such distribution (or, if later in the case of any such separation of rights issued pursuant to a stockholder rights plan or the occurrence of any such triggering event under a stockholder rights plan, as soon as reasonably practicable after we become aware that such separation or triggering event has occurred or will occur). However, if we are then otherwise permitted to settle exchanges by physical settlement (and, for the avoidance of doubt, we have not elected (or been deemed to have elected) another settlement method to apply,

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including pursuant to the provision described in the third sentence under the caption “—Settlement upon Exchange—Settlement Method” below), then we may instead elect to provide such notice at least 10 scheduled trading days before such ex-dividend date. In that event, we will be required to settle all exchanges with an exchange date occurring on or after the date we provide such notice and on or before the business day immediately before the ex-dividend date for such distribution (or any earlier announcement by the parent guarantor that such distribution will not take place) by physical settlement, and we will describe the same in the notice. Once we have sent such notice, noteholders may exchange their notes at any time until the earlier of the close of business on the business day immediately before such ex-dividend date and our announcement that such distribution will not take place. However, the notes will not become exchangeable on account of such distribution (but we will still be required to send notice of such distribution as described above) if each noteholder participates, at the same time and on the same terms as holders of the common stock, and solely by virtue of being a noteholder, in such distribution without having to exchange such noteholder’s notes and as if such noteholder held a number of shares of common stock equal to the product of (i) the exchange rate in effect on the record date for such distribution; and (ii) the aggregate principal amount (expressed in thousands) of notes held by such noteholder on such record date.

Certain Corporate Events

If a fundamental change, make-whole fundamental change (other than a make-whole fundamental change pursuant to clause (ii) of the definition thereof) or “common stock change event” (as defined below under the caption “—Effect of Common Stock Change Event”) occurs (other than a merger or other business combination transaction that is effected solely to change our or the parent guarantor’s jurisdiction of incorporation and that does not constitute a fundamental change or a make-whole fundamental change), then, in each case, noteholders may exchange their notes at any time from, and including, the effective date of such transaction or event to, and including, the 35th trading day after such effective date (or, if such transaction or event also constitutes a fundamental change (other than an “exempted fundamental change,” as defined below under the caption “—Fundamental Change Permits Noteholders to Require Us to Repurchase Notes—No Repurchase Right in Certain Circumstances”), to, but excluding, the related fundamental change repurchase date). No later than the second business day after such effective date, we will send notice to the noteholders of such transaction or event, such effective date and the related right to exchange notes. If we do not provide such notice by the second business day after such effective date, then the last day on which the notes are exchangeable will be extended by the number of business days from, and including, the second business day after such effective date to, but excluding, the date we provide the notice.

Exchange Upon Redemption

If we call any note for redemption, then the holder of such note may exchange such note at any time before the close of business on the second business day immediately before the related redemption date (or, if we fail to pay the redemption price due on such redemption date in full, at any time until such time as we pay such redemption price in full).

Exchanges During Free Exchangeability Period

A noteholder may exchange its notes at any time from, and including, January 3, 2028 until the close of business on the second scheduled trading day immediately before the maturity date.

Exchange Procedures

To exchange a beneficial interest in a global note, the owner of the beneficial interest must:

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To exchange all or a portion of a physical note, the holder of such note must:

Notes may be surrendered for exchange only after the “open of business” (as defined below under the caption “—Definitions”) and before the close of business on a day that is a business day.

We will pay any documentary, stamp or similar issue or transfer tax or duty due on the issue or delivery of any shares of common stock upon exchange, except any tax or duty that is due because the exchanging noteholder requests those shares to be registered in a name other than the noteholder’s name.

We refer to the first business day on which the requirements described above to exchange a note are satisfied as the “exchange date,” subject to the provision described in the last sentence under the caption “—Settlement upon Exchange—Delivery of the Exchange Consideration.”

If a noteholder has validly delivered a “fundamental change repurchase notice” (as defined below under the caption “—Fundamental Change Permits Noteholders to Require Us to Repurchase Notes”) with respect to a note, then such note may not be exchanged, except to the extent (i) such notice is withdrawn in accordance with the procedures described below; or (ii) we fail to pay the related fundamental change repurchase price for such note.

Settlement upon Exchange

Generally

Upon exchange of any note, we may choose to pay or deliver, as applicable, either cash (“cash settlement”), shares of common stock (“physical settlement”) or a combination of cash and shares of common stock (“combination settlement”), as described below. We refer to each of these settlement methods as a “settlement method.” If cash settlement or combination settlement applies to an exchange, then the consideration due will be determined over an “observation period” (as defined below under the caption “—Definitions”) consisting of 40 consecutive “VWAP trading days” (as defined below under the caption “—Definitions”).

Settlement Method

We will have the right, as described below, to elect the settlement method applicable to the exchange of any notes. Except as described below, we must use the same settlement method for all exchanges with the same exchange date, but we will not be obligated to use the same settlement method for exchanges with different exchange dates. All exchanges with an exchange date that occurs on or after January 3, 2028 will be settled using the same settlement method, and we will send notice of such settlement method to noteholders no later than the open of business on January 3, 2028. If we elect a settlement method for an exchange with an exchange date that occurs before January 3, 2028, then we will send notice of such settlement method to the exchanging noteholder

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no later than the close of business on the business day immediately after the exchange date. However, as described above under the captions “ —Optional Redemption” and “—When the Notes May Be Exchanged—Exchange Upon Specified Corporate Events—Certain Distributions,” we may in certain circumstances elect that physical settlement apply to all exchanges with an exchange date occurring during the periods referred to under those captions. Notwithstanding anything to the contrary described above, if we call any notes for redemption, then (i) we will specify in the related redemption notice (and, in the case of a redemption of less than all outstanding notes, in a notice simultaneously sent to all holders of notes not called for redemption) the settlement method that will apply to all exchanges with an exchange date that occurs on or after the date we send such redemption notice and on or before the second business day before the related redemption date; and (ii) if the related redemption date is on or after January 3, 2028, then such settlement method must be the same settlement method that applies to all exchanges with an exchange date that occurs on or after January 3, 2028.

If we do not timely elect a settlement method with respect to any exchange, then we will be deemed to have elected the “default settlement method” (as defined below). If we timely elect combination settlement with respect to an exchange but do not timely notify the exchanging noteholder of the applicable “specified dollar amount” (as defined below under the caption “ —Definitions”), then the specified dollar amount for such exchange will be deemed to be $1,000 per $1,000 principal amount of notes. For the avoidance of doubt, our failure to timely elect a settlement method or specify the applicable specified dollar amount will not constitute a default under the indenture.

The “default settlement method” will initially be combination settlement with a specified dollar amount of $1,000 per $1,000 principal amount of notes. However, we may, from time to time, change the default settlement method by sending notice of the new default settlement method to the noteholders. In addition, we may, by notice to the noteholders, elect to irrevocably fix the settlement method or to irrevocably elect combination settlement and eliminate a specified dollar amount or range of specified dollar amounts. If we make such an irrevocable election, then such election will apply to all note exchanges with an exchange date that is on or after the date we send such notice. In addition, if we irrevocably elect combination settlement and eliminate a specified dollar amount or range of specified dollar amounts, then we will, if needed, simultaneously change the default settlement method to combination settlement with a specified dollar amount that is consistent with such irrevocable election. However, in all cases, no such irrevocable election or default settlement method change will affect any settlement method theretofore elected (or deemed to be elected) with respect to any note pursuant to the indenture. For the avoidance of doubt, such an irrevocable election, if made, will be effective without the need to amend the indenture or the notes, including pursuant to the provisions described in the seventh bullet point of the third paragraph under the caption “—Modification and Amendment” below. However, we may nonetheless choose to execute such an amendment at our option.

If we change the default settlement method or irrevocably fix the settlement method pursuant to the provisions described above, then the parent guarantor will either post the default settlement method or fixed settlement method, as applicable, on its website or disclose the same in a current report on Form 8-K (or any successor form) that is filed with, or furnished to, the SEC.

Consideration Due Upon Exchange

The consideration due upon exchange of each $1,000 principal amount of a note will be as follows:

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However, in lieu of delivering any fractional share of common stock otherwise due upon exchange, we will pay cash based on (i) the daily VWAP on the applicable exchange date (or, if such exchange date is not a VWAP trading day, the immediately preceding VWAP trading day), in the case of physical settlement; or (ii) the daily VWAP on the last VWAP trading day of the applicable observation period, in the case of combination settlement.

If a noteholder exchanges more than one note on an exchange date, then the consideration due upon such exchange will (in the case of any global note, to the extent permitted by, and practicable under, the depositary procedures) be computed based on the total principal amount of notes exchanged on such exchange date by that noteholder.

Delivery of the Exchange Consideration

Except as described below under the captions “—Exchange Rate Adjustments” and “—Effect of Common Stock Change Event,” we will pay or deliver, as applicable, the consideration due upon exchange as follows: (i) if cash settlement or combination settlement applies, on the second business day immediately after the last VWAP trading day of the observation period for such exchange; and (ii) if physical settlement applies, on the second business day immediately after the exchange date for such exchange. However, if physical settlement applies to the exchange of any note with an exchange date that is after the regular record date immediately before the maturity date, then, solely for purposes of such exchange, we will pay or deliver, as applicable, the consideration due upon such exchange on the maturity date (or, if the maturity date is not a business day, the next business day) and the exchange date will instead be deemed to be the second scheduled trading day immediately before the maturity date.

When Exchanging Noteholders Become Stockholders of Record

The person in whose name any share of common stock is issuable upon exchange of any note will be deemed to become the holder of record of that share as of the close of business on (i) the exchange date for such exchange, in the case of physical settlement; or (ii) the last VWAP trading day of the observation period for such exchange, in the case of combination settlement.

Exchange Rate Adjustments

Generally

The exchange rate will be adjusted for the events described below. However, we are not required to adjust the exchange rate for these events (other than a stock split or combination or a tender or exchange offer) if each noteholder participates, at the same time and on the same terms as holders of the common stock, and solely by virtue of being a holder of notes, in such transaction or event without having to exchange such noteholder’s notes and as if such noteholder held a number of shares of common stock equal to the product of (i) the exchange rate in effect on the related record date; and (ii) the aggregate principal amount (expressed in thousands) of notes held by such noteholder on such date.

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where:

If any dividend, distribution, stock split or stock combination of the type described in this paragraph (1) is declared or announced, but not so paid or made, then the exchange rate will be readjusted, effective as of the date the parent guarantor’s board of directors determines not to pay such dividend or distribution or to effect such stock split or stock combination, to the exchange rate that would then be in effect had such dividend, distribution, stock split or stock combination not been declared or announced.

where:

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To the extent such rights, options or warrants are not so distributed, the exchange rate will be readjusted to the exchange rate that would then be in effect had the increase to the exchange rate for such distribution been made on the basis of only the rights, options or warrants, if any, actually distributed. In addition, to the extent that shares of common stock are not delivered after the expiration of such rights, options or warrants (including as a result of such rights, options or warrants not being exercised), the exchange rate will be readjusted to the exchange rate that would then be in effect had the increase to the exchange rate for such distribution been made on the basis of delivery of only the number of shares of common stock actually delivered upon exercise of such rights, option or warrants.

For purposes of this paragraph (2) and the provisions described above under the caption “—When the Notes May Be Exchanged—Exchange Upon Specified Corporate Events—Certain Distributions,” in determining whether any rights, options or warrants entitle holders of the common stock to subscribe for or purchase shares of common stock at a price per share that is less than the average of the last reported sale prices per share of common stock for the 10 consecutive trading days ending on, and including, the trading day immediately before the date the distribution of such rights, options or warrants is announced, and in determining the aggregate price payable to exercise such rights, options or warrants, there will be taken into account any consideration the parent guarantor receives for such rights, options or warrants and any amount payable on exercise thereof, with the value of such consideration, if not cash, to be determined by us in good faith and in a commercially reasonable manner.

then the exchange rate will be increased based on the following formula:

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where:

However, if FMV is equal to or greater than SP, then, in lieu of the foregoing adjustment to the exchange rate, each noteholder will receive, for each $1,000 principal amount of notes held by such noteholder on the record date for such distribution, at the same time and on the same terms as holders of the common stock, and without having to exchange its notes, the amount and kind of shares of capital stock, evidences of indebtedness, assets, property, rights, options or warrants that such noteholder would have received if such noteholder had owned, on such record date, a number of shares of common stock equal to the exchange rate in effect on such record date.

To the extent such distribution is not so paid or made, the exchange rate will be readjusted to the exchange rate that would then be in effect had the adjustment been made on the basis of only the distribution, if any, actually made or paid.

where:

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Notwithstanding anything to the contrary, (i) if any VWAP trading day of the observation period for a note whose exchange will be settled pursuant to cash settlement or combination settlement occurs during the spin-off valuation period for such spin-off, then, solely for purposes of determining the exchange rate for such VWAP trading day for such exchange, such spin-off valuation period will be deemed to consist of the trading days occurring in the period from, and including, the ex-dividend date for such spin-off to, and including, such VWAP trading day; and (ii) if the exchange date for a note whose exchange will be settled pursuant to physical settlement occurs during the spin-off valuation period for such spin-off, then, solely for purposes of determining the consideration due in respect of such exchange, such spin-off valuation period will be deemed to consist of the trading days occurring in the period from, and including, the ex-dividend date for such spin-off to, and including, such exchange date.

To the extent any dividend or distribution of the type described above in this paragraph (3)(b) is declared but not made or paid, the exchange rate will be readjusted to the exchange rate that would then be in effect had the adjustment been made on the basis of only the dividend or distribution, if any, actually made or paid.

where:

However, if D is equal to or greater than SP, then, in lieu of the foregoing adjustment to the exchange rate, each noteholder will receive, for each $1,000 principal amount of notes held by such noteholder on the record date for such dividend or distribution, at the same time and on the same terms as holders of the common stock, and without having to exchange its notes, the amount of cash that such noteholder would have received if such noteholder had owned, on such record date, a number of shares of common stock equal to the exchange rate in effect on such record date. To the extent such dividend or distribution is declared but not made or paid, the exchange rate will be readjusted to the exchange rate that would then be in effect had the adjustment been made on the basis of only the dividend or distribution, if any, actually made or paid.

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where: