Callon Petroleum Company
Company Summary
Description
Founded in 1950, we are an independent oil and natural gas company focused on growing production and reserves from our oil-weighted, multi-play, multi-pay assets in the Permian Basin.Website
http://www.callon.com/Operational Regions
- Permian Basin
- Midland Basin
Financial Data:
NYSE:CPE from Google FinanceTickers:
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CPE - New York Stock Exchange
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Investor Presentations
- 2021 Primexx Acquisition
- 2Q20 Investor Presentation (subscriber access)
- 4Q19 Investor Presentation (subscriber access)
- 3Q19 Investor Presentation (subscriber access)
- 2Q19 Investor Presentation (subscriber access)
- 1Q19 Earnings Update (subscriber access)
- 4Q18 Investor Presentation (subscriber access)
- 3Q18 Earnings Presentation (subscriber access)
- 2H18 Investor Presentation (subscriber access)
- 1Q18 Investor Presentation (subscriber access)
- Fourth Quarter 2017 Earnings Presentation (subscriber access)
- 3Q17 Earnings Presentation (subscriber access)
- 2Q17 Earnings Presentation (subscriber access)
- 1Q17 Earnings Presentation (subscriber access)
- Investor Presentation - April 2017 (subscriber access)
- Investor Presentation - February 2017 (subscriber access)
- 3Q16 Earnings Slides (subscriber access)
- June 2016 Earnings Presentation (subscriber access)
- June 2016 Investor Presentation (subscriber access)
Company Transactions
Date: 11/15/2021
Type: Acquisition
NOTES:
Callon Petroleum has signed a deal to divest non-core Eagle Ford acreage for $100 million. The deal includes 22,000 net acres in LaSalle Frio Counties, Texas, which produced 1.9 Mboe/d (66% oil.) The sale also eliminates $50 million in planned capital spending tied to drilling obligations for the next two years.
Callon Petroleum has signed a deal to divest non-core Eagle Ford acreage for $100 million. The deal includes 22,000 net acres in LaSalle Frio Counties, Texas, which produced 1.9 Mboe/d (66% oil.) The sale also eliminates $50 million in planned capital spending tied to drilling obligations for the next two years.
REGIONS:
Eagle Ford
Date: 10/15/2021
Type: Acquisition
BUYERS:
Callon Petroleum Company
SELLERS:
Primexx Energy Partners
DETAILS:
COST: 788 $MM
VOLUMES: 18 MBOE/d
ACRES: 35000 Acres
NOTES:
Callon Petroleum has signed a deal to acquire the oil and gas assets of Primexx Energy Partners in the Delaware Basin for $788 million in cash & stock. The assets include 35,000 net acres in Reeves County, Texas, and 2Q21 production of 18 Mboe/d (61% crude oil.) Callon will issue Primexx 9.19 million shares of stock and $440 million in cash, with closing expected in 4Q21. The cash portion of the deal comes from Callons credit facility, with plans to repay that via free cash flow and other in-process divestments.
Callon Petroleum has signed a deal to acquire the oil and gas assets of Primexx Energy Partners in the Delaware Basin for $788 million in cash & stock. The assets include 35,000 net acres in Reeves County, Texas, and 2Q21 production of 18 Mboe/d (61% crude oil.) Callon will issue Primexx 9.19 million shares of stock and $440 million in cash, with closing expected in 4Q21. The cash portion of the deal comes from Callons credit facility, with plans to repay that via free cash flow and other in-process divestments.
REGIONS:
Delaware Basin
Date: 6/30/2021
Type: Acquisition
NOTES:
Callon Petroleum entered a deal in April 2021 to divest $40 million in non-core Delaware Basin assets. The deal mainly covers natural gas properties with 3.4 Mboe/d (25% oil) in production and a small undeveloped acreage position.
Callon Petroleum entered a deal in April 2021 to divest $40 million in non-core Delaware Basin assets. The deal mainly covers natural gas properties with 3.4 Mboe/d (25% oil) in production and a small undeveloped acreage position.
REGIONS:
Delaware Basin
Date: 10/1/2020
Type: Acquisition
NOTES:
Callon Petroleum will be divesting an overriding royalty interest (ORRI) to a private investment vehicle ran by Kimmeridge Energy for $140 million in gross cash. The ORRI covers 3.5% of current daily production with a 2% ORRI on substantially all of Callons oil and gas leases.
Callon Petroleum will be divesting an overriding royalty interest (ORRI) to a private investment vehicle ran by Kimmeridge Energy for $140 million in gross cash. The ORRI covers 3.5% of current daily production with a 2% ORRI on substantially all of Callons oil and gas leases.
REGIONS:
Permian Basin
Date: 10/1/2020
Type: Acquisition
NOTES:
Callon Petroleum has entered into a deal to sell virtually all non-operated assets for gross cash proceeds of $30 million. The deal covered daily production of 1.6 Mboe/d (55% oil) and will close in November 2020.
Callon Petroleum has entered into a deal to sell virtually all non-operated assets for gross cash proceeds of $30 million. The deal covered daily production of 1.6 Mboe/d (55% oil) and will close in November 2020.
REGIONS:
Permian Basin
Date: 12/31/2019
Type: Merger
Date: 4/8/2019
Type: Acquisition
REGIONS:
Midland Basin
Date: 1/1/2019
Type: Acquisition
NOTES:
Callon Petroleum closed on its previously reported divestiture of non-core assets in the southern Midland Basin to Sequitur for net cash proceeds of $245 million.
Callon Petroleum closed on its previously reported divestiture of non-core assets in the southern Midland Basin to Sequitur for net cash proceeds of $245 million.
REGIONS:
Midland Basin
Date: 8/31/2018
Type: Acquisition
BUYERS:
Callon Petroleum Company
SELLERS:
Cimarex Energy Co.
DETAILS:
COST: 570 $MM
VOLUMES: 6.82 MBOE/d
ACRES: 28657 Acres
NOTES:
The land contains production of 6.82 Mboe/d (73% oil), an inventory of 212 identified horizontal drilling locations across three horizons and potential locations across the Second Bone Spring and Wolfcamp C.
The land contains production of 6.82 Mboe/d (73% oil), an inventory of 212 identified horizontal drilling locations across three horizons and potential locations across the Second Bone Spring and Wolfcamp C.
REGIONS:
Delaware Basin
Midland Basin
Date: 10/10/2017
Type: Acquisition
NOTES:
Brazos Midstream has closed on a deal with Callon Petroleum that includes the acquisition of Callon's natural gas gathering assets in the Southern Delaware Basin. The acquisition also concludes a long-term, fee-based agreement between Callon and Brazos Midstream that covers gas gathering and processing for acreage in Ward and Pecos Counties, Texas.
Brazos Midstream has closed on a deal with Callon Petroleum that includes the acquisition of Callon's natural gas gathering assets in the Southern Delaware Basin. The acquisition also concludes a long-term, fee-based agreement between Callon and Brazos Midstream that covers gas gathering and processing for acreage in Ward and Pecos Counties, Texas.
REGIONS:
Delaware Basin
Date: 6/5/2017
Type: Acquisition
NOTES:
Callon Petroleum reported that on June 5, 2017, they closed on the acquisition of 2,488 net acres in the Delaware Basin for $52.5 million. The deal was funded with cash on hand and proceeds from a recent note offering.
Callon Petroleum reported that on June 5, 2017, they closed on the acquisition of 2,488 net acres in the Delaware Basin for $52.5 million. The deal was funded with cash on hand and proceeds from a recent note offering.
REGIONS:
Delaware Basin
Date: 2/13/2017
Type: Acquisition
BUYERS:
Callon Petroleum Company
SELLERS:
American Resource Development, LLC
DETAILS:
COST: 615 $MM
VOLUMES: 1.95 MBOE/d
ACRES: 16098 Acres
REGIONS:
Delaware Basin
Date: 9/7/2016
Type: Acquisition
BUYERS:
Callon Petroleum Company
SELLERS:
Plymouth Petroleum LLC
DETAILS:
COST: 327 $MM
VOLUMES: 2.3 MBOE/d
ACRES: 5667 Acres
REGIONS:
Permian Basin
Date: 5/31/2016
Type: Acquisition
BUYERS:
Callon Petroleum Company
SELLERS:
Big Star Oil & Gas, LLC
DETAILS:
COST: 220 $MM
ACRES: 14089 Acres
NOTES:
Total consideration paid for the acquisition was approximately $220 million in cash and 9.3 million shares of Callon common stock.
Total consideration paid for the acquisition was approximately $220 million in cash and 9.3 million shares of Callon common stock.
REGIONS:
Permian Basin
Date: 5/31/2016
Type: Acquisition
REGIONS:
Permian Basin
News & Press Releases
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Press Releases
- Delivered production of approximately 102.0 Mboe/d (63% oil), above expectations, for the third quarter of 2020
- Posted accrued operational capital spending of $38.4 million, below consensus estimates, and lowered the top end of operational capital range to $510 million, a 15% reduction since announcing the modified development program in May 2020
- Generated net cash from operating activities of $135.7 million and free cash flow1 of $80.3 million for the third quarter
- Loss available to common stockholders of $680.4 million, or $17.12 per fully diluted share, driven by an impairment of evaluated oil and gas properties of $685.0 million, adjusted EBITDA1 of $170.9 million, and adjusted income per share1 of $0.64 for the third quarter of 2020
- Achieved lease operating expense ("LOE") of $45.9 million or $4.89 per Boe for the third quarter of 2020, an improvement of approximately 10%, on an absolute basis, over the comparable three-month period ended June 30, 2020
- Resumed completion and drilling activity with recent well costs for Eagle Ford and Delaware third quarter completions at $460 and $825 per lateral foot, respectively, exceeding previous targets as a result of continued operational efficiency gains
- Increased liquidity to nearly $600 million and reduced total net debt by approximately $160 million after transaction expenses through a series of strategic transactions including the issuance of $300 million of secured second lien notes, an overriding royalty interest ("ORRI") transaction, and a non-operated working interest sale
- Completed the fall borrowing base redetermination with a reaffirmed borrowing base of $1.7 billion which was subsequently reduced to $1.6 billion, reflecting a minimal reduction to account for the recent ORRI sale and second lien note issuance
- Entered into a privately negotiated debt exchange of $286 million of unsecured Senior Notes for new second lien notes, reducing net debt by an estimated $128 million, with an option for the counterparties and their affiliates to exchange additional unsecured Senior Notes up to approximately $104 million
- The Eagle Ford wells placed on production late in the third quarter averaged over 2,000 feet of completed lateral per day
- The combined six wells came in just below $475 per lateral foot with an average completed lateral length of approximately 7,500 feet
- In the Delaware, the six-well Amphitheater pad was placed on production during the final days of the third quarter and first week of the fourth quarter, with the project averaging a completion pace of just under nine stages per day or nearly 1,800 lateral feet per day
- The Amphitheater project averaged approximately 9,400 feet per well with an average well cost of less than $8 million ($825 per lateral foot)
- Initial production from the six-well Amphitheater pad recently reached a per well average of over 1,200 Boe per day (gross, ~84% oil) with total cumulative production of more than 140,000 Boe (gross, ~84% oil) in just over three weeks of production
- Over 95% of the volumes sourced for the Amphitheater completions utilized recycled produced water volumes sourced from Callon's own recycling facilities
- Free Cash Flow is a supplemental non-GAAP measure that is defined by the Company as Adjusted EBITDA less operational capital, capitalized interest, net interest expense and capitalized cash G&A (which excludes capitalized expense related to share-based awards). We believe free cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Free cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities, or as a measure of liquidity, or as an alternative to net income (loss).
- Adjusted Discretionary Cash Flow is a supplemental non-GAAP measure that Callon believes is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Adjusted Discretionary Cash Flow is defined by Callon as net cash provided by operating activities before changes in working capital, merger and integration expenses, and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the Company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Adjusted Discretionary Cash Flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.
- Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes non-cash valuation adjustments related to incentive compensation plans. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table contained within this release details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- Full Cash G&A Costs is a supplemental non-GAAP financial measure that Callon defines as Adjusted G&A – cash component plus capitalized G&A excluding capitalized expense related to share-based awards. Callon believes that the non-GAAP measure of Full Cash G&A Costs is useful because it provides users with a meaningful measure of our total recurring cash G&A costs, whether expensed or capitalized, and provides for greater comparability on a period-over-period basis. See the reconciliation provided above for further details.
- Adjusted Income available to common stockholders ("Adjusted Income") and Adjusted Income per fully diluted common share are supplemental non-GAAP measures that Callon believes are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of these items and non-cash valuation adjustments, which are detailed in the reconciliation provided.
- Adjusted diluted weighted average common shares outstanding ("Adjusted Diluted WASO") is a non-GAAP financial measure which includes the effect of potentially dilutive instruments that, under certain circumstances described below, are excluded from diluted weighted average common shares outstanding ("Diluted WASO"), the most directly comparable GAAP financial measure. When a loss available to common stockholders exists, all potentially dilutive instruments are anti-dilutive to the loss available to common stockholders per common share and therefore excluded from the computation of Diluted WASO. The effect of potentially dilutive instruments are included in the computation of Adjusted Diluted WASO for purposes of computing Adjusted Income per fully diluted common share.
- Callon calculates adjusted earnings before interest, income taxes, depreciation, depletion and amortization ("Adjusted EBITDA") as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization, (gains) losses on derivative instruments excluding net settled derivative instruments, non-cash stock-based compensation expense, merger and integration expense, loss on extinguishment of debt, and other operating expenses. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.
- Callon believes that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who engage in price risk management activities through the use of commodity derivative instruments and reflects the results of derivative settlements with expected cash flow impacts within total revenues.
- Total gross cash proceeds of approximately $465 million after original issue discount
- Estimated pro forma liquidity of $600 million after transaction expenses, with the next regularly scheduled borrowing base redetermination in spring 2021
- Flexibility to issue up to a total of $700 million of 2nd Lien Notes under the indenture, including, $300 million notes issued to Kimmeridge, $300 million reserved for potential exchanges of unsecured notes and up to an additional $100 million that may be issued to Kimmeridge under certain conditions and at its election
- Significant financial position improvements from the monetization of approximately 3.5% of current daily production with a resulting average net revenue interest (8/8ths basis) of over 74% for both our existing producing wells, as well as our undeveloped location inventory
- Private placement of $300 million in principal due 2025, issued at 98% of par and callable beginning in two years from the issuance date
- Cash coupon of 9.00%, payable semi-annually
- Concurrent issuance of approximately 7.27 million warrants at a strike price equal to the 20-day volume weighted average stock price prior to the closing date to be settled on a net share basis above the strike price if exercised (i.e., no additional common shares issued unless warrants exercised above the strike price with the number of shares issued calculated according to the warrant agreement)
- No maintenance-based financial covenants
- $140 million of gross cash proceeds received at closing
- 2.0% (on an 8/8ths basis) overriding royalty interest, proportionately reduced to Callon's net revenue interest, in substantially all Callon-operated oil and gas leaseholds with an effective date of October 1, 2020
- ORRI burdened by ad valorem and severance taxes and post-production costs, including gathering, handling, processing, separating, treating, compression, dehydrating, transportation, and marketing costs
- Estimated $30 million of gross cash proceeds receivable upon an anticipated closing date in early November
- Current daily production of approximately 1,600 barrels of oil equivalent (55% oil)
- Reduced the rate of gas flared by more than 30%
- Achieved the Company's best safety year on record
- Named a top workplace by the Houston Chronicle for the third year in a row
- Doubled the Company's water recycling capacity
- Transported over 90% of crude oil and water via pipelines
- Integration of the Callon and Carrizo workforces following the 2019 closing of the acquisition of Carrizo Oil & Gas, Inc.
- Delivered production of approximately 108.7 Mboe/d (65% oil), above the high end of guidance, for the second quarter of 2020
- Posted accrued operational capital spending of $85.1 million, 15% below the second quarter target of $100 million
- Generated net cash from operating activities of $97.8 million and free cash flow1 of $18.0 million for the second quarter
- Loss available to common stockholders of $1,564.7 million, or $3.94 per fully diluted share, driven by an impairment of evaluated oil and gas properties of $1,276.5 million, adjusted EBITDA1 of $153.4 million, and adjusted income per share1 of $0.01 for the second quarter of 2020
- Achieved lease operating expense ("LOE") of $50.8 million or $5.14 per Boe for the second quarter of 2020, an improvement of 10% over the comparable three-month period ended March 31, 2020
- Lowered cost structure with total operating expenses, including full cash G&A costs1, of $9.58/Boe in the quarter, 16% below the prior quarter
- Reduced Delaware and Midland drilling and completion costs versus the prior quarter by approximately $100 per 1,000 lateral feet, representing incremental savings of 11% and 17% respectively
- Announced a 1-for-10 reverse stock split effective as of the close of business on August 7, 2020
- Delaware well costs further reduced to approximately $850 per lateral foot, an 11% improvement versus the previous quarter and a 23% improvement versus our 2019 average of $1,100 per lateral foot; and
- Midland Basin well costs are now approaching approximately $500 per lateral foot, a 17% improvement over the first quarter and 37% improvement over 2019
- Free Cash Flow is a supplemental non-GAAP measure that is defined by the Company as Adjusted EBITDA less operational capital, capitalized interest, net interest expense and capitalized G&A excluding capitalized expense related to share-based awards. We believe free cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Free cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities, or as a measure of liquidity, or as an alternative to net income (loss).
- Adjusted Discretionary Cash Flow is a supplemental non-GAAP measure that Callon believes is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Adjusted Discretionary Cash Flow is defined by Callon as net cash provided by operating activities before changes in working capital, merger and integration expenses, and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the Company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Adjusted Discretionary Cash Flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.
- Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes non-cash valuation adjustments related to incentive compensation plans. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table contained within this release details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- Full Cash G&A Costs is a supplemental non-GAAP financial measure that Callon defines as Adjusted G&A – cash component plus capitalized G&A excluding capitalized expense related to share-based awards. Callon believes that the non-GAAP measure of Full Cash G&A Costs is useful because it provides users with a meaningful measure of our total recurring cash G&A costs, whether expensed or capitalized, and provides for greater comparability on a period-over-period basis. See the reconciliation provided above for further details.
- Adjusted Income available to common stockholders ("Adjusted Income") and Adjusted Income per fully diluted common share are supplemental non-GAAP measures that Callon believes are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided.
- Adjusted diluted weighted average common shares outstanding ("Adjusted Diluted WASO") is a non-GAAP financial measure which includes the effect of potentially dilutive instruments that, under certain circumstances described below, are excluded from diluted weighted average common shares outstanding ("Diluted WASO"), the most directly comparable GAAP financial measure. When a loss available to common stockholders exists, all potentially dilutive instruments are anti-dilutive to the loss available to common stockholders per common share and therefore excluded from the computation of Diluted WASO. The effect of potentially dilutive instruments are included in the computation of Adjusted Diluted WASO for purposes of computing Adjusted Income per fully diluted common share.
- Callon calculates adjusted earnings before interest, income taxes, depreciation, depletion and amortization ("Adjusted EBITDA") as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization, (gains) losses on derivative instruments excluding net settled derivative instruments, non-cash stock-based compensation expense, merger and integration expense, loss on extinguishment of debt, and other operating expenses. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.
- Callon believes that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who engage in price risk management activities through the use of commodity derivative instruments and reflects the results of derivative settlements with expected cash flow impacts within total revenues.
- Instituted updated safety procedures for all field employees and enhanced communication with our current vendors to ensure safe social distancing.
- Material reductions in general and administrative costs including: 35% compensation reduction for board members, 35% reduction in CEO target cash compensation, and at least 25% reduction in target cash compensation by all other officers. This is in addition to previously planned staff reductions and a suspension of hiring activity, contributing to an incremental 15% reduction from post-merger integration targets.
- The Company also announced today that it has further reduced activity, including the suspension of all completion activity in April and moving to one active drilling rig by mid-May. Callon currently forecasts total operational capital expenditures of approximately $250 - $325 million over the remaining three quarters of 2020, assuming resumption of completion activities in the second half of the year. The ultimate timing and level of activity will continue to be based on maximizing free cash flow in 2020 and 2021.
- Delivered production of approximately 101 Mboe/d (64% oil), above the high end of guidance, for the first quarter of 2020
- Realized fully diluted earnings per share of $0.55, adjusted income per share of $0.12, net income of $216.6 million, and adjusted EBITDA of $217.5 million(1) for the first quarter of 2020
- Achieved lease operating expense ("LOE") per Boe of $5.70 for the first quarter of 2020, an improvement of nearly 14% over the comparable three month period ended March 31, 2019
- Enhanced corporate liquidity position through incremental hedging and conversion of previous instruments to NYMEX oil swaps, basis hedges, and incremental gas hedges resulting in a mark-to market value of $245 million as of May 1, 2020
- Achieved new peak efficiency gains with recent Eagle Ford and Midland Basin projects delivering average daily completion rates of more than 2,000 lateral feet per day with completion costs of approximately $250 per lateral foot
- On May 7, completed the spring borrowing base redetermination for Callon's senior secured credit facility resulting in a facility commitment and elected borrowing base of $1.7 billion along with a new secured leverage ratio covenant to temporarily replace the previous total leverage ratio covenant until March 31, 2022
- Suspension of the total leverage ratio test until March 31, 2022
- Addition of a secured leverage ratio test of 3.0x
- Temporary waiver of the current ratio test
- Allowance for $400 million of junior secured debt without any reduction to the borrowing base
- An improvement of more than 80% in lateral feet completed per crew per day in the Midland Basin (as compared to the first quarter of 2019) with recent projects exceeding 2,000 lateral feet per day
- Recent completion costs in the Midland Basin and Eagle Ford Shale approaching roughly $250 per lateral foot in both areas, representing year over year improvements of roughly 50% and 33% respectively
- A reduction in average drilling days in the Delaware West area (legacy Carrizo properties) of more than 10%
- An increase in drilled footage per day in the Delaware East area (Ward County) of roughly 24% compared to 2019
- Results from recent mega-pad development in the Delaware East region are exceeding estimates for early time oil production while maintaining higher pressures from both the Lower and Upper Wolfcamp A utilizing restricted choke management techniques
- Callon currently expects to spend less than $100 million in operational capital in the second quarter of 2020
- Second quarter production is currently expected to be in excess of 105 Mboe/d, including the impact of planned curtailments through May 2020
- Assuming an improvement in benchmark commodity price and basis expectations for 2H20 and outlook for 2021, a potential return to modest completion activity at some point during 2H20 after suspending activity in April (associated total operational capital scenarios of $250 - $325 million for the remaining nine months of 2020, which includes the $100 million planned for the second quarter)
- We are not considering a scenario in which total operational capital for 2020 would exceed $525 - $600 million following a $278 million spend in the first quarter that converted a large number of uncompleted wells from year-end 2019 to production
- The Company expects to exit the second quarter with an inventory of approximately 70 drilled, uncompleted wells that will provide a potential path for capital efficient production additions in the coming months
- The Company expects to generate between $25 million and $100 million of free cash flow(2) during the final three quarters of 2020 under the range of "return to activity" scenarios assuming average WTI oil prices of $25 - $30/Bbl over that period
- Under these potential scenarios, full year 2020 oil production is estimated to be inline or above 1Q20 volumes and 2021 maintenance capital relative to fourth quarter 2020 volumes is estimated to be below $500 million
- First quarter LOE and cash G&A expenses, on an absolute basis, are expected to be the highest of any quarter for the full year
- Free Cash Flow is a supplemental non-GAAP measure. Free Cash Flow is defined by the Company as Adjusted EBITDA less operational capital, capitalized interest, net interest expense and capitalized G&A. We believe free cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Free cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities, or as a measure of liquidity, or as an alternative to net income (loss).
- Callon believes that the non-GAAP measure of Adjusted Discretionary Cash Flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Adjusted Discretionary Cash Flow is defined by Callon as net cash provided by operating activities before changes in working capital and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the Company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Adjusted Discretionary Cash Flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.
- Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes non-cash valuation adjustments related to incentive compensation plans, as well as other non-cash expenses. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table contained within this release details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- Callon believes that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per fully diluted common share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided.
- Callon calculates adjusted earnings before interest, income taxes, depreciation, depletion and amortization ("Adjusted EBITDA") as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization, (gains) losses on derivative instruments excluding net settled derivative instruments, non-cash stock-based compensation expense, merger and integration expense, loss on extinguishment of debt, and other operating expenses. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.
- Callon believes that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who engage in price risk management activities through the use of commodity derivative instruments and reflects the results of derivative settlements with expected cash flow impacts within total revenues.
- Operational capital spending of approximately $275 million
- Production between 100 and 102 MBoepd with an oil cut of 63% (three-stream basis)
- Lease operating expense between $54 and $56 million, or $5.95 to $6.15 per Boe2
- Gathering, processing, & transport ("GP&T") expense between $14 and $15 million, or $1.55 and $1.65 per Boe2
- Unhedged realized oil, natural gas, and NGL prices are expected to be between $45 and $46 per Bbl, $0.55 and $0.65 per Mcf, and $10 and $11 per Bbl respectively
- Net cash from derivative settlements is estimated to be approximately $25 million for the quarter
- The oil hedge portfolio now covers more than 16.5 million barrels of oil production for the remaining three quarters of 2020, nearly 85% of the expected production for the year. The oil hedge portfolio consists of swap agreements which are indexed to West Texas Intermediate-Cushing ("WTI"), Magellan East Houston ("MEH") and Brent crude at a weighted average price of approximately $43 per barrel.
- The Company has also mitigated locational risks related to oil sales, having hedged a majority of Midland and MEH crude basis exposure near parity to WTI. For the remaining three quarters of 2020, the Company has hedged approximately 6.5 million barrels of Midland-WTI basis at a weighted average price of -$1.23, and approximately 4.5 million barrels of MEH-WTI basis at a weighted average price of -$0.30.
- To further protect physical oil sales prices, Callon added over 25,000 Bbl/d of NYMEX WTI Roll swaps for May-September of 2020 at a weighted average price of -$1.67. Roll swaps provide protection against discounts to physical crude sales due to steep contango in the near-term forward month contracts. Sales price adjustments due to the shape of the near-term forward oil curve are a standard component of oil marketing agreements.
- Callon has also increased natural gas price protection:
- Approximately 50% of expected natural gas volumes for April 2020 to October 2020 are hedged under NYMEX Henry Hub contracts at a weighted average floor of $2.24/MMBtu.
- Approximately 30% of expected volumes for November 2020 to March 2021are hedged at a weighted average floor price of $2.45/MMBtu, with upside to nearly $3.00/MMBtu.
- 90% of Permian Basin gas sales for April 2020 to December 2020 are hedged at a Waha differential to NYMEX Henry Hub of -$1.08
- Joseph C. Gatto, Jr., President, Chief Executive Officer and Director;
- James P. Ulm, II, Senior Vice President and Chief Financial Officer;
- Dr. Jeff Balmer, Senior Vice President and Chief Operating Officer; and
- Michol L. Ecklund, Senior Vice President and General Counsel.
- Rex Bigler, Vice President – Asset Development, previously with Carrizo;
- Gregory F. Conaway, Vice President and Chief Accounting Officer, previously with Carrizo;
- J. Michael Hastings, Vice President – Marketing;
- Scott Hudson, Vice President – Drilling and Completions, previously with Carrizo;
- Liam Kelly, Vice President – Corporate Development;
- Jamin B. McNeil, Vice President - Production; and
- Michael J. O'Connor, Vice President – Permian.
- Lowered the authorized share request in the charter amendment proposal to 525 million shares from 750 million shares. With approval of this proposal, Callon will have the lowest ratio of authorized shares relative to outstanding shares among its peer group1 upon the closing of the merger while maintaining appropriate flexibility in its capital structure.
- To remove any potential for confusion or uncertainty with our shareholders, we have eliminated the double-trigger compensation that would be payable to Callon executive officers in the event of a merger-related termination of employment. As a result, the non-binding advisory vote on executive compensation will be removed from the proxy ballot for the Special Meeting of Shareholders.
- Reducing G&A costs, which have risen by over $12 million for the first nine months of 2019 versus 2018;
- Focusing its SIMOPS mega-pad development on its extensive stand-alone acreage;
- Delivering on generating true corporate-level free cash flow organically starting in the fourth quarter of this year assuming $50/bbl, as previously guided (page 14 of its February 26, 2019 presentation); and
- Engaging new, independent advisors to pursue a sale of Callon.
- Increased production by 8% year-over-year to 37.8 Mboe/d (78% oil)
- Generated an operating margin of $35.58 per Boe
- Realized fully diluted earnings per share of $0.21, adjusted earnings per share of $0.19, net income of $55.8 million, and adjusted EBITDA of $117.4 million(i)
- Reduced operational capital spending by 13% during the third quarter to $116.4 million, maintaining full year operational capital targets within the previously lowered guidance range
- Achieved lease operating expense ("LOE") per Boe of $5.65, an improvement of nearly 9% over the prior period
- Completed and placed on production large multi-interval, multi-pad projects in both the Midland and Delaware Basins with strong initial performance from both projects
- Callon believes that the non-GAAP measure of discretionary cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Discretionary cash flow is defined by Callon as net cash provided by operating activities before changes in working capital and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the Company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Discretionary cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.
- Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes certain non-recurring expenses and non-cash valuation adjustments related to incentive compensation plans, as well as non-cash corporate depreciation and amortization expense. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table contained within this release details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- Callon believes that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per fully diluted common share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided.
- Callon calculates adjusted earnings before interest, income taxes, depreciation, depletion and amortization ("Adjusted EBITDA") as net income (loss) before interest expense, income taxes, depreciation, depletion and amortization, asset retirement obligation accretion expense, (gains) losses on derivative instruments excluding net settled derivative instruments, impairment of oil and natural gas properties, non-cash equity based compensation, and other operating expenses. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.
- Callon believes that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who engage in price risk management activities through the use of commodity derivative instruments and reflects the results of derivative settlements with expected cash flow impacts within total revenues.
- Callon's stated strategy remains unchanged: As we have articulated in numerous quarterly investor calls, and on slide 20 of our recently filed investor presentation, Callon has been pursuing four strategic financial objectives: increase cash return on invested capital, generate free cash flow, reduce leverage and maintain a long-term focus. This transaction clearly advances each point of Callon's strategy.
- Scale is critical in an evolving industry landscape: As the shale industry turns from acreage acquisition to manufacturing mode, the efficiencies gained from large pad development and simultaneous operations are increasingly important for achieving a competitive cost structure. While Callon has made important progress implementing a scaled development model in select projects within its existing portfolio, the larger capital base of the combined company is expected to enhance its ability to optimize asset development through larger pad investments across the combined footprint on a sustained, repeatable basis.
- The highly achievable synergies reinforce the strategic rationale of the transaction: The combination is expected to generate $850 million in net present value from G&A and operational synergies, delivering over $2 per share of value to Callon shareholders. The Company has conviction for the operational synergies, reflecting in part the proven structural efficiencies from scale described above, but the transaction is supported even with conservative synergy assumptions. As ISS notes in its report, "G&A synergies seem achievable, and the deal seems accretive even without accounting for the operational synergies." 1
- The transaction strengthens Callon's credit profile: The combined high-quality asset base delivers both scale and geographic diversification, including access to premium crude markets, driving sustainable, high-margin oil-weighted production. The enhanced EBITDA profile and accelerated free cash flow generation also better position Callon to meet its target leverage metric of net debt to EBITDA below 2.0x. Two independent rating agencies have recognized the improved creditworthiness. Since the transaction announcement, Callon has been placed on positive credit watch by S&P and Moody's has confirmed a recent upgrade, commenting "This acquisition will be a credit positive for Callon." While pro forma credit metrics are largely unchanged, the combined business is better positioned to deliver substantial improvements to these metrics over time. Additionally, the combined company will benefit from a strong balance sheet, no near-term debt maturities and pro forma liquidity of more than $1 billion.
- A larger company brings greater predictability: ISS believes "what [Callon's] shareholders seem to be seeking is greater predictability." In fact, this combination is expected to enhance predictability. With increased size and scale, the combined company will be well positioned to withstand a changing industry landscape and commodity price volatility with a lower corporate free cash flow break-even cost of approximately $50 per barrel in 2020. In addition, the pro forma company is expected to benefit from balanced diversity of projects, cycle times and product markets, all supported by a larger capital base.
- Callon's post-announcement performance is consistent with peers: Against peers that most closely resemble Callon, our performance since announcement has been relatively in-line or better, reflecting the promise of the transaction. As ISS noted in its report, "Rather than looking at medians of imperfect peer sets, it may therefore be more informative for shareholders to compare CPE's TSR to that of individual peers."1 This was precisely what Callon articulated on slide 17 of our recent investor presentation, with additional detail on slides 28-30, when we identified peers by criteria especially relevant to investors as sector sentiment has been challenged these past several months: market cap, oil mix and leverage.
- Callon is confident in a successful integration: Callon is led by an experienced management team with a track-record of successful value-enhancing acquisitions. In recent years, the Company has repeatedly demonstrated the ability to achieve significant well cost savings and productivity improvements relative to predecessor operators and offset operators in both the Delaware and Midland basins. Importantly, Callon expects that a large portion of Carrizo employees will join the combined company, providing stability and support throughout the integration process.
- Research analysts overwhelmingly support the transaction: The vast majority of independent research analysts who follow Callon and Carrizo closely have expressed support for the combination and maintain a buy recommendation for Callon.
- Callon management incentives are aligned with shareholders and there is no transaction "success fee" – Paulson falsely claims that Callon executives are entitled to a "success fee" in connection with the Carrizo transaction. To the contrary, and as we have stated clearly in the proxy statement and other materials, any potential benefits are payable ONLY if the executive is terminated in connection with the transaction and are pursuant to a broad-based severance program for all employees.
- The transaction is immediately accretive to free cash flow per share – Paulson erroneously claims that the transaction is highly dilutive to free cash flow per share. This is fundamentally incorrect and misleading as Paulson's purported conclusion is derived from inconsistent methodologies: Paulson's calculation of Callon's stand-alone free cash flow EXCLUDES capitalized G&A and interest while their pro forma free cash flow figure INCLUDES capitalized G&A and interest. To the contrary, Callon reiterates that the combined company is projected to generate highly accretive free cash flow per share for Callon shareholders, including over $300 million1 of free cash flow in 2020-2021 at recent strip pricing.
- Research analysts overwhelmingly support the transaction – In a section entitled "Sell Side Research," Paulson selected dated and misleading quotes from research analysts while conveniently failing to acknowledge the fact that the vast majority of analysts have expressed support for the combination and maintain a buy recommendation for Callon – including a majority of the analysts quoted. Independent third parties agree that Callon will be a stronger company, including Callon being placed on positive credit watch by S&P after announcement of the transaction.
- Combines Complementary High-Quality Assets to Create a Self-Funded, High-Margin Oil Growth Company. On a pro forma basis, Callon will have an approximate 200,000 net acre footprint in the Permian Basin and Eagle Ford Shale, including over 90,000 net acres in the Delaware Basin, and approximately 2,500 total gross horizontal drilling locations. The Company expects that its high-margin, free cash flow generating assets in the Eagle Ford Shale will accelerate its value proposition from a deep drilling inventory in the Permian, enhancing returns while sustainably generating corporate-wide free cash flow. In addition, the combined company's balanced asset portfolio provides flexible and increasingly efficient capital allocation to manage cash conversion cycles and capital intensity profiles. Together with Carrizo, Callon also expects to maintain industry-leading margins and a low cost of supply on an "all-in" corporate basis.
- Better Positions the Company for Changing Industry Landscape and Commodity Price Volatility. The combined company will have increased size and scale to deliver on shareholder priorities of capital efficiency, corporate-level returns, and a path to returns on capital. With expanded capacity for larger projects, Callon will benefit from substantial improvements in capital efficiency and production uptime. Importantly, the combined portfolio is projected to lower the corporate free cash flow break-even from $55 per barrel to approximately $50 per barrel in 2020 and below $50 by 2021.
- Drives Significant and Achievable Synergies. The combination is expected to generate synergies of $850 million in net present value, delivering over $2 per share of value to Callon shareholders, which represents more than half of Callon's current share price. The Company expects to achieve annual run-rate operational synergies of $65-$85 million driven by Delaware drilling and completion cost savings and improved Permian production uptime, as well as cash G&A savings of $35-$45 million per year. Over time, Callon anticipates additional synergy value to be realized from optimized capital allocation, the integration of Delaware infrastructure and water management, increased hydrocarbon volumes for enhanced optionality for marketing and transportation and reductions to the cost of capital.
- Delivers Significant Value for Shareholders. This combination is immediately accretive to all key financial metrics including EPS, CFPS and FCFPS, debt adjusted growth per share and net asset value per share. Moreover, Callon is contributing a lower percentage of production and cash flow relative to its pro forma ownership in the combined company. While Carrizo is contributing essentially all near-term free cash flow, Callon shareholders are receiving 54% ownership in the combined company.
- Reinforces Callon's Financial Strength and Versatility. The combined company will have a strong balance sheet, investment grade credit metrics and no near-term debt maturities. Incremental free cash flow generation of approximately $100 million in 2020 at recent strip pricing will drive the combined company's leverage ratio to below 2.0x by the end of 2020, with additional upside from increased potential for asset monetization. Specifically, Callon has established a target of $300-$400 million of additional monetization proceeds for the combined company by year-end 2020, primarily from a combination of the following sources:
- Select acreage in the Eagle Ford Shale;
- Non-operated Permian properties and pruning of non-core Delaware properties; and
- Upfront proceeds from a joint venture or similar structure involving an expanded set of water infrastructure assets in both the Permian Basin and Eagle Ford Shale.
- Callon is a Premier Operator with Track Record of Successful M&A Integration. Callon is led by an experienced management team with a track record of successful value-enhancing acquisitions and portfolio optimization through non-core divestitures. In recent years the Company has demonstrated the ability to achieve significant well cost savings and productivity improvements relative to offset operators in both the Delaware and Midland basins.
- Result of Extensive Review by Independent and Qualified Board. The experienced Callon Board and its independent standing Strategic Planning Committee evaluated a broad range of strategic alternatives for maximizing shareholder value and considered a number of potential counterparties. After discussions at nine separate meetings, the Board approved the Carrizo transaction believing it would deliver the highest value to Callon shareholders. Importantly, this transaction does not preclude any future alternatives for Callon; rather, it better positions the combined company for future strategic opportunities, including a sale or merger.
- Combines Complementary High-Quality Assets to Create Self-Funded, High-Margin Oil Growth Company. On a pro forma basis, Callon will have an approximate 200,000 net acre footprint in the Permian Basin and Eagle Ford Shale, including over 90,000 net acres in the Delaware Basin, and approximately 2,500 total gross horizontal drilling locations. The Company expects that its high-margin Eagle Ford cash flow will accelerate its value proposition from a deep drilling inventory in the Permian, enhancing returns while sustainably generating corporate-wide free cash flow. In addition, the combined company's balanced asset portfolio provides flexible and increasingly efficient capital allocation to manage cash conversion cycles and capital intensity profiles. Together with Carrizo, Callon also expects to have a leading cost of supply on an "all-in" corporate basis.
- Immediately Accretive to All Key Financial Metrics. Callon expects this combination to be immediately accretive to EPS, CFPS and FCFPS, debt adjusted growth per share and net asset value per share. The Company also expects $100 million of incremental free cash flow in 2020, and double that in 2021, at recent strip prices through measured growth and realization synergies, further supporting Callon's deleveraging initiatives.
- Drives Substantial Identified Synergies. The combination is expected to generate synergies of $850 million in net present value, delivering over $2 per share of value to Callon shareholders. The Company expects to achieve annual run-rate operational synergies of $65-$85 million driven by Delaware drilling and completion (D&C) cost savings and improved Permian production uptime, as well as cash G&A savings of $35-$45 million per year. Over time, Callon anticipates further synergies to be realized from optimized capital allocation, the integration of Delaware infrastructure and water management, increased hydrocarbon volumes for enhanced optionality for marketing and transportation and reductions to the company's cost of capital.
- Reinforces Callon's Financial Strength and Versatility. The combined company will have a strong balance sheet with no near-term debt maturities and a 2020 corporate free cash flow break-even of approximately $50 per barrel. Importantly, significant free cash flow generation will drive the combined company's leverage ratio to below 2.0x in 2020 at recent strip pricing, with additional upside from increased potential for asset monetizations. Specifically, Callon has established a target of $300-$400 million of additional monetization proceeds for the combined company by year-end 2020, primarily from a combination of the following sources:
- Select acreage in the Eagle Ford Shale;
- Non-operated Permian properties and pruning of non-core Delaware properties; and
- Upfront proceeds from a joint venture or similar structure involving an expanded set of water infrastructure assets in both the Permian Basin and Eagle Ford Shale.
- Creates a self-funded, high-margin oil growth company with a leading cost of supply on an "all-in" corporate basis
- In addition to a strong foundation in the Permian Basin with almost two decades of delineated inventory, adds a well-established and repeatable free cash flow generating business in the Eagle Ford Shale
- Immediately accretive to all key per share financial metrics
- Delivers significant, tangible synergies that unlock value for the combined shareholder base
- Strong balance sheet and acceleration of deleveraging to < 2.0x in 2020
- Select acreage in the Eagle Ford Shale
- Non-operated Permian properties and pruning of non-core Delaware properties
- Upfront proceeds from a joint venture or similar structure involving an expanded set of water infrastructure assets in both the Permian Basin and Eagle Ford Shale
- A critical mass of complementary high-quality assets in the Permian to better compete in this dynamic basin;
- An integrated development program with scaled operations yielding meaningful cost reductions and cycle time improvements through the deployment of dedicated crews and equipment in simultaneous operations;
- Optimized capital allocation across the combined portfolio, including an expanded opportunity set for asset monetizations;
- An accelerated free cash platform that de-risks the capital structure by driving leverage below 2x, with a strong liquidity profile and no near-term maturities;
- Run-rate operational synergies of $65-$85 million and cash G&A savings of $35-$45 million per year driven by controllable, structural changes in the business; and
- Total synergy present value of $850 million, the majority of which accrues to Callon shareholders.
- Improving our cash return on capital invested
- Generating sustainable free cash flow
- Reducing our leverage using free cash flow and asset monetizations
- Focusing on the optimization of our core portfolio with a development model that maximizes the value of our multi-zone inventory
- Callon's stock price has fallen by 36% since the transaction was announced.
- Shareholders have lost $530 million in value.
- Callon is paying Carrizo a 25% premium, which is unjustifiable given the inferior assets of Carrizo, and results in the transfer of $240 million in value from Callon shareholders to Carrizo shareholders.
- Callon will lose its premium valuation as a "pure play" Permian producer, resulting in multiple contraction.
- Based on the multiples at which pure Permian producers trade, Callon's shares could be worth 64% more than its current value through a sale of the Company.
- Adding Carrizo's inferior Eagle Ford assets will permanently reduce the attractiveness of Callon to potential acquirers.
- Increased production by 40% year-over-year to 40.5 Mboe/d (77% oil)
- Generated an operating margin of $36.11 per Boe, a sequential increase of over 10%
- Reduced capital spending by $25 million during the second quarter, while placing approximately five additional net wells on production compared to the first quarter of 2019
- Recently placed on production the first multi-zone mega-pad employing simultaneous operations in the Delaware Basin with an average cost per lateral foot below 2020 targeted synergy levels
- Closed the divestiture of the Southern Midland Basin assets for net cash proceeds at closing of $245 million
- Completed the redemption of Callon preferred stock in the amount of $73 million, reducing annual dividend obligations by more than $7 million
- Announced the strategic acquisition of Carrizo Oil & Gas, Inc. ("Carrizo") in an all-stock transaction valued at $3.2 billion
- Callon believes that the non-GAAP measure of discretionary cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Discretionary cash flow is defined by Callon as net cash provided by operating activities before changes in working capital and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the Company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Discretionary cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.
- Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes certain non-recurring expenses and non-cash valuation adjustments related to incentive compensation plans, as well as non-cash corporate depreciation and amortization expense. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table here within details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- Callon believes that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per fully diluted common share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided here within.
- Callon calculates adjusted earnings before interest, income taxes, depreciation, depletion and amortization ("Adjusted EBITDA") as net income (loss) before interest expense, income taxes, depreciation, depletion and amortization, asset retirement obligation accretion expense, (gains) losses on derivative instruments excluding net settled derivative instruments, impairment of oil and natural gas properties, non-cash equity based compensation, and other operating expenses. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.
- Callon believes that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who engage in price risk management activities through the use of commodity derivative instruments and reflects the results of derivative settlements with expected cash flow impacts within total revenues.
- Increases Corporate and Delaware Basin Scale: On a pro forma basis, Callon will have an approximate 200,000 net acre footprint in the Permian Basin and Eagle Ford Shale, including over 90,000 net acres in the Delaware Basin, and approximately 2,500 total gross horizontal drilling locations. The companies produced a combined 102.3 MBoe/d in 1Q19 (71% oil) and generated pro forma LTM 1Q19 adjusted EBITDAX of $1.2 billion. With an expected total of 9 to 10 drilling rigs and 3 to 4 completion crews working during the course of 2020, predominantly in the Permian Basin, the combined entity will have the critical mass to realize supply chain savings and sustain simultaneous operations initiatives.
- Expands Portfolio of Complementary High-Quality Assets: Together with Carrizo, Callon will be a premier Texas operator with an extensive inventory of core Permian and Eagle Ford locations that compete for capital on a full-cycle basis. As a portfolio, our increased level of large project initiatives in the Permian Basin will be balanced by sustained investment in shorter cycle and less capital-intensive projects in the Eagle Ford Shale. Based on initial plans for capital allocation within the combined portfolio, Callon forecasts its free cash flow breakeven WTI crude oil price to progress to under $50/Bbl by 2021.
- Accelerates Free Cash Flow Generation: Callon expects this combination to be immediately accretive to free cash flow per share in 2020 with positive free cash flow generation of over $100 million at current strip pricing1 while maintaining double-digit production growth. The combination brings together a well-established and repeatable free cash flow generating business in the Eagle Ford Shale with Permian Basin assets that are rapidly transitioning to positive net cash flows with increasing investment in high-return projects. In addition, the combined company's corporate free cash flow will be increased through an optimized development plan in addition to corporate cost savings. This sustained free cash flow generation will accelerate Callon's deleveraging initiatives and improve its capacity to return capital to shareholders in the future.
- Maintains Callon's Financial Strength and Flexibility: Callon expects to have an enhanced credit profile due to broader scale and scope, and a substantial base of oil-weighted proved developed producing reserves. Importantly, significant free cash flow generation will drive the combined company's leverage ratio to below 2.0x in 2020 at current strip pricing. Additionally, upon closing, the combined company is anticipated to have pro forma liquidity of more than $1 billion under a new underwritten credit facility combined with no near-term debt maturities.
- Drives Substantial Identified Synergies: The combination is expected to generate a total of $850 million in net present value from the following categories of primary synergies:
- Annual run-rate operational synergies of $65 to $80 million attributed to a structural shift in the combined program development model, consisting of:
- Expanded large scale development in the Permian Basin, deploying simultaneous drilling and completion operations, improving production cycle times and reducing well costs;
- Optimized, integrated development schedule to capture efficiencies from continuous utilization of dedicated completion crews; and
- Improved uptime from concentrated development, resulting in reduced production downtime from offsetting completion operations.
- Estimated annual cash general and administrative savings of $35 million to $45 million.
- Optimized capital allocation initiatives, including a mix of shorter and longer cycle projects, select activity acceleration within a larger cash flow base and high-grading of drilling inventories.
- Integration of Delaware infrastructure and water management, expanding the opportunity for water recycling programs and increasing scale for potential monetization structures;
- Larger portfolio of non-core acreage for divestment and trades, high-grading overall returns on capital;
- Increased hydrocarbon volumes provide critical mass for marketing arrangements and ongoing initiatives to control critical parts of the value chain, including firm transportation on pipelines; and
- Cost of capital reductions, including opportunistic debt refinancings.
- An active and growing water management program focused upon minimizing fresh-water resource use through water recycling programs, optimized pipeline tie-ins, and water transport and disposal infrastructure;
- Reducing the number of oil spills by investing in enhanced facility design, state-of-the-art alarm and monitoring systems and upgraded weather-detection equipment;
- Promoting a culture of safety and execution via stringent contractor selection, leadership engagement, and mitigating risk of incidents and injuries;
- Supporting the communities in which the Company operates by contributing financial resources and volunteering for over fifty charities;
- Maintaining high ethical standards and effective corporate governance to ensure that the business is being operated responsibly, ethically and in a manner aligned with the interests of our shareholders;
- Aligning annual bonus objectives with longer-term mandates that will increase corporate level returns, enhance sustainable "life of field" development, and create shareholder value through balanced production growth, cost management, and free cash flow generation.
- Increased production to 40.3 Mboe/d (79% oil), an increase of 52% year-over-year
- Generated an operating margin of $32.57 per Boe
- Recently completed a five-well pad in the southern portion of WildHorse, developing an entire half section in the Wolfcamp A
- Initial 2nd Bone Spring shale well placed on production in the Delaware and showing positive early performance
- Continued strong production from a Middle Spraberry well drilled at Monarch as part of multi-well, co-development of three flow units
- Improved completion efficiency, measured in stages per day, by more than 25% compared to the same period in 2018
- Reduced average drilling and completion costs by 15% sequentially, resulting in an average cost per lateral foot below $1,000
- Announced the pending sale of certain non-core assets in the southern Midland Basin for estimated gross proceeds of $260 million, with potential contingency payments of up to $60 million based upon average annual commodity prices over a three-year period
- Reaffirmed a borrowing base of $1.1 billion, pro forma for the pending non-core asset sale
- Callon believes that the non-GAAP measure of discretionary cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Discretionary cash flow is defined by Callon as net cash provided by operating activities before changes in working capital and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the Company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Discretionary cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.
- Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes certain non-recurring expenses and non-cash valuation adjustments related to incentive compensation plans, as well as non-cash corporate depreciation and amortization expense. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table here within details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- Callon believes that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided here within.
- Callon calculates adjusted earnings before interest, income taxes, depreciation, depletion and amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.
- Callon believes that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who engage in price risk management activities through the use of commodity derivative instruments and reflects the results of derivative settlements with expected cash flow impacts within total revenues.
- Full-year 2018 production of 32.9 Mboe/d (79% oil), an increase of 44% over 2017 volumes and at the top of the 2018 guidance range with a higher oil cut
- Year-end proved reserves of 238.5 MMboe (76% oil), a year-over-year increase of 74% combined with an oil content that has remained consistently over 75% since commencing horizontal development in 2012
- Proved reserve additions replaced 690% of 2018 production at a "drill-bit" finding and development cost (i) of $7.03 per Boe and a proved developed finding and development cost(i) of $13.40 per Boe
- Generated an operating margin of $40.16 per Boe reflecting our high level of oil volumes, proactive investments in infrastructure and offtake relationships, and cost structure improvements
- Realized net income of $300.4 million and generated Adjusted EBITDA(i) of $432.5 million relative to cash drilling and completion capital expenditures of $403.5 million
- Completed the acquisition of 34,523 net working interest acres and 1,530 net mineral acres within our core operating areas, more than doubling our Delaware footprint since 2017, and also traded 4,420 net acres to further long-lateral development
- Divested 3,540 net acres as part of ongoing initiatives to monetize non-core assets and enhance returns on capital
- Executed firm transportation and marketing agreements that are expected to transition 25 MBbl/d of our gross oil production to a combination of Gulf Coast, Brent and waterborne pricing January 2020
- Fourth quarter 2018 production of 41.1 Mboe/d (81% oil), an increase of 55% over fourth quarter 2017 volumes and a sequential increase of 18%
- Generated $151.6 million of cash provided by operating activities, exceeding cash used in investing activities for operational capital additions of $127.8 million in the development of oil and natural gas properties
- Began building an inventory of drilled, uncompleted wells to support our transition to larger scale development in the Delaware Basin in 2019
- Callon believes that the non-GAAP measure of discretionary cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Discretionary cash flow is defined by Callon as net cash provided by operating activities before changes in working capital and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the Company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Discretionary cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.
- Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes certain non-recurring expenses and non-cash valuation adjustments related to incentive compensation plans, as well as non-cash corporate depreciation and amortization expense. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table here within details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- Callon believes that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided here within.
- Callon calculates adjusted earnings before interest, income taxes, depreciation, depletion and amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.
- Callon believes that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who engage in price risk management activities through the use of commodity derivative instruments and reflects the results of derivative settlements with expected cash flow impacts within total revenues.
- We believe "Drill-Bit F&D costs per Boe," "PD F&D costs per Boe", "Organic reserve replacement ratio", and "All-sources reserve replacement ratio" are non-GAAP metrics commonly used by Callon and other companies in our industry, as well as analysts and investors, to measure and evaluate the cost of replenishing annual production and adding proved reserves. The Company's definitions of "Drill-Bit F&D costs per Boe," "PD F&D costs per Boe" and "Organic reserve replacement ratio" and "All-sources reserve replacement ratio" may differ significantly from definitions used by other companies to compute similar measures and as a result may not be comparable to similar measures provided by other companies. Consequently, we provided the detail of our calculation within the included tables.
- Year-end pre-tax PV-10 value is a non-GAAP financial measure as defined by the SEC. Callon believes that the presentation of pre-tax PV-10 value is relevant and useful to its investors because it presents the discounted future net cash flows attributable to reserves prior to taking into account future corporate income taxes and the Company's current tax structure. The Company further believes investors and creditors use pre-tax PV-10 values as a basis for comparison of the relative size and value of its reserves as compared with other companies. The GAAP financial measure most directly comparable to pre-tax PV-10 is the standardized measure of discounted future net cash flows ("Standardized Measure"). Pre-tax PV-10 is calculated using the Standardized Measure before deducting future income taxes, discounted at 10 percent. The 12-month average benchmark pricing used to estimate proved reserves in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission ("SEC") and pre-tax PV-10 value for crude oil and natural gas was $65.56 per Bbl of WTI crude oil and $3.10 per MMBtu of natural gas at Henry Hub before differential adjustments. After differential adjustments, the Company's SEC pricing realizations for year-end 2018 were $58.40 per Bbl of oil and $3.64 per Mcf of natural gas.
- 2019 forecasted annual production of 39.5 - 41.5 MBoe/d (77% - 78% oil), representing growth of over 20% compared to current "street" consensus of 32.7 MBoe/d for 2018
- Planned sequential decrease in 2019 operational capital expenditures to a range of $500 to $525 million
- Running an average of five drilling rigs to support larger and more efficient, multi-well pad development
- Plan to place 47 - 49 net wells on production with an increase of approximately 15% in average net lateral length over the 2018 program
- Year-end 2018 proved reserves of 238.5 MMBoe (54% proved developed and 76% oil), an annual increase in total proved reserves of 74% and proved developed reserves of 85%
- Year-end 2018 PV-10 value1 of $3.1 billion
- Increased production to 34.9 MBOE/D (78% oil), an increase of 55% year-over-year
- Generated an operating margin of $41.22 per BOE, an increase of 27% year-over-year
- Recent multi-well pads at WildHorse outperforming early time type curve expectations by an average of 29%
- Second "mega-pad" placed on production in October and tracking early time performance of first "mega-pad" that is outperforming offset three-well pads by approximately 30%
- Extended preferred vendor agreement for completion services providing price certainty for the next five quarters
- Initiated delivery of disposal volumes to Goodnight Midstream saltwater disposal system within the Spur operating area, complementing recently enhanced recycling and operated saltwater disposal network
- Completed the previously announced acquisition of properties in the Delaware Basin
- Callon believes that the non-GAAP measure of discretionary cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Discretionary cash flow is defined by Callon as net cash provided by operating activities before changes in working capital and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Discretionary cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.
- Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes certain non-recurring expenses and non-cash valuation adjustments related to incentive compensation plans, as well as non-cash corporate depreciation and amortization expense. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table here within details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- Callon believes that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided here within.
- Callon calculates adjusted earnings before interest, income taxes, depreciation, depletion and amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.
- Callon believe that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who engage in price risk management activities through the use of commodity derivative instruments and reflects the results of derivative settlements with expected cash flow impacts within total revenues.
- Raised the midpoint of annual 2018 production guidance by 1,500 BOE/d as the result of solid year-to-date performance in the Spur area and the impact of production from the acquisition
- Reiterated production target of over 40,000 BOE/d for 4Q18
- Raised the midpoint of net operated horizontal wells placed on production by 9% due to incremental activity on the acquired properties, realized drilling and completion efficiencies, and a sustained increase in non-operated activities on both legacy and acquired properties
- Reduced full year 2018 LOE guidance by 4% as incremental benefits from strategic infrastructure investments are realized
- Increased production to 29.0 MBOE/D (76% oil), an increase of 30% year-over-year
- Reduced lease operating expense by 10% year-over-year to $4.99 per BOE
- Generated an operating margin of $44.17 per BOE, an increase of 37% year-over-year
- Recent Wolfcamp A wells in the Fairway area of WildHorse outperforming oil type curves by approximately 30%
- Successful Wolfcamp A wells at Spur, including the initiation of pad co-development of the Upper and Lower Wolfcamp A, significantly outperforming initial operated wells
- Continued outperformance from ten-well downspacing test at Fairway through more than 200 days of production
- First "mega-pad" placed on production in July and performing favorably against offset three-well pads
- Announced entry into a definitive agreement and completed related financings to acquire approximately 28,657 net surface acres in the Delaware Basin, providing near-term value contribution from current production as well as upside potential, with the transaction projected to close later in the third quarter
- Executed a multi-year firm transportation agreement covering 15,000 barrels of oil per day to Gulf Coast destination points and corresponding long-term sales agreements for equivalent volumes based on Gulf Coast and international pricing benchmarks
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow is calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), accretion expense, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided above. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- Increased production to 26.6 MBoepd (77% oil), an increase of 30% year-over-year
- Reduced lease operating expense by 18% year-over-year to $5.45 per BOE
- Generated a first quarter operating margin of $44.31 per BOE, an increase of 30% year-over-year
- Successful early results from Wolfcamp A down-spacing test in Howard County with 10-well spacing exceeding the performance of offsetting eight-well spacing pads
- Initial production rates from the first two-well pad targeting the upper and lower Wolfcamp A intervals in Ward County have reached approximately 1,700 Boepd (85% oil) to date from each of the wells within the first 20 days of production
- Improved drilling efficiency in the Delaware Basin has resulted in a greater than 25% increase in footage per day through the first six operated wells
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow is calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), accretion expense, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided above. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- Full-year 2017 production of 22.9 MBOE/d (78% oil), an increase of 50% over 2016 volumes
- Fourth quarter 2017 production of 26.5 MBOE/d (79% oil), a sequential quarterly increase of 18%
- Year-end proved reserves of 137.0 MMBOE (78% oil), a year-over-year increase of 50%
- Organic reserve replacement(i) of 566% of 2017 production at a "Drill-Bit" finding and development cost concept(i) of $8.21 per BOE on a two-stream basis
- Reduced lease operating expense to $4.84 per BOE in the fourth quarter of 2017, a sequential quarterly decrease of 5%, contributing to a total reduction of 27% since the first quarter of 2017
- Generated a fourth quarter operating margin of $40.51 per BOE
- Currently operating five horizontal rigs and two dedicated completion crews
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow is calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), accretion expense, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided above. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- We believe "Drill-Bit F&D costs," "PD F&D costs" and "Organic reserve replacement" ratios are non-GAAP metrics commonly used by Callon and other companies in our industry, as well as analysts and investors, to measure and evaluate the cost of replenishing annual production and adding proved reserves. The Company's definitions of "Drill-Bit F&A costs," "PD F&D costs" and "Organic reserve replacement" may differ significantly from definitions used by other companies to compute similar measures and as a result may not be comparable to similar measures provided by other companies. Consequently, we provided the detail of our calculation within the included tables.
- Fourth quarter 2017 production of approximately 26.5 MBoe/d (79% oil)
- Full year 2017 annual production growth of over 50%
- Operational capital expenditures for 2018 are expected to be $500 to $540 million dollars, with approximately 40% allocated to the Delaware Basin and 60% to the Midland Basin
- Expect to spud 47 to 50 net wells and place 43 to 46 net wells on production
- Forecast 2018 production growth of approximately 30% to 40%
- Increased production by 36% year-over-year, with an increased percentage of oil volumes
- Reduced lease operating expense by 9% on a sequential basis to $5.08 per BOE, contributing to a total reduction of 23% since the first quarter of 2017
- Generated a third quarter operating margin of $32.58 per BOE
- First operated Delaware Basin Lower Wolfcamp A well had a 24 hour peak flowing rate of 238 BOE/d per 1,000' (82% oil)
- Successful return to Ranger drilling program with two Lower Wolfcamp B wells outperforming previous type curves
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow is calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), remaining asset retirement obligations related to our divested offshore properties, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided above. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- shortages of diesel fuel for drilling and completion equipment, causing operational delays;
- oil pipeline curtailments that limited production optimization on recently completed wells; and
- elevated natural gas gathering line pressures that necessitated intermittent flaring and created increased backpressure on producing wells.
- the new guidance range for the third quarter;
- a baseline assumption that elevated operational inefficiencies across several key oil service functions will be experienced into year-end (under this scenario of reduced efficiency, Callon anticipates that approximately three fewer net wells will be placed on production during the year relative to previous operational plans); and
- an annualized production reduction of 200 Boe/d due to deferrals of non-operated activity, including approximately 650 Boe/d of impact in the fourth quarter of 2017.
- Completed delineation of Wolfcamp A zone across aerial extent of Howard County position
- Successful Lower Spraberry well density test leading to 15% uplift in Monarch inventory
- Deployed 4th rig to Delaware basin and began operated drilling program at Spur in July
- Increased production by 9% quarter over quarter, driven primarily by higher oil mix (79%)
- Reduced lease operating expense per BOE by 15% from previous quarter
- Increased borrowing base to $650 million with a company-elected commitment of $500 million
- Raised $200 million in a senior notes offering that priced at a yield-to-worst of 5.2%
- Revising guidance to lower lease operating expense per unit and increase the oil mix for fiscal year 2017
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow is calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), remaining asset retirement obligations related to our divested offshore properties, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided below. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet its future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenue is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- Daily production of 20.4 MBOE/d (78% oil), a sequential quarterly increase of 11% in total daily production and 14% increase in daily oil production
- Lease operating expense, including workovers, of $6.61 per BOE, a sequential quarterly decrease of 17%
- Two Wolfcamp A wells in Howard County (WildHorse area) reached average 30-day peak production rates of 237 BOE/d per 1,000 feet of completed lateral (91% oil) with a third continuing to build to peak production rates
- Increase in northern Howard County Wolfcamp A type curve (7,500' drilled lateral) to 1.3 MMBOE (85% oil)
- Closed the Ameredev transaction in mid-February and subsequently signed purchase and sale agreements for the acquisition of an additional 2,626 net acres in Ward County (Spur area) for $54.3 million, establishing a position of over 19,300 net surface acres in the Delaware Basin
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow and discretionary cash flow per diluted share are calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), remaining asset retirement obligations related to our divested offshore properties, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided below. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet its future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenues is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- Full-year 2016 production of 15.2 MBOE/d (77% oil), an increase of 59% over 2015 volumes
- Fourth quarter 2016 production of 18.4 MBOE/d (76% oil), a sequential quarterly increase of 11%
- Year-end proved reserves of 91.6 MMBOE (78% oil), a yearly increase of 69%
- Organic reserve replacement(i) of 311% of 2016 production at a "Drill-Bit" finding and development cost concept(i) of $8.77 per BOE on a two-stream basis
- GAAP loss per diluted common share of $0.02 and Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), of $0.08
- Entered into agreements for multiple acquisitions during 2016, forming two new core operating areas and increasing our total acreage footprint by approximately 41,000 net acres
- Currently operating three horizontal rigs, including two in WildHorse and one in Monarch
- Increased full-year 2017 production guidance to a range of 22.5 – 25.5 MBOE/d, an increase of approximately 60% over 2016 based on the midpoint of guidance
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow and discretionary cash flow per diluted share are calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), remaining asset retirement obligations related to our divested offshore properties, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided below. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet its future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenues is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- We believe "Drill-Bit F&D costs," "PD F&D costs" and "Organic reserve replacement" ratios are non-GAAP metrics commonly used by Callon and other companies in our industry, as well as analysts and investors, to measure and evaluate the cost of replenishing annual production and adding proved reserves. The Company's definitions of "Drill-Bit F&D costs," "PD F&D costs" and "Organic reserve replacement" may differ significantly from definitions used by other companies to compute similar measures and as a result may not be comparable to similar measures provided by other companies. Consequently, we provided the detail of our calculation within the included tables.
- Approximately 27,552 gross (16,098 net) surface acres, centered around a contiguous position in Ward County, Texas, with additional acreage in Pecos and Reeves Counties, Texas;
- Current net production of approximately 1,945 barrels of oil equivalent per day (71% oil) for the month of October 2016 based on information provided by the seller, including production from 20 gross operated horizontal wells currently producing from the Wolfcamp and Bone Spring formations;
- Estimated delineated base inventory of 481 gross (206 net) identified horizontal drilling locations targeting the Wolfcamp A and B zones with an average lateral length of approximately 7,500 feet, including 36% of the inventory comprised of 10,000 foot laterals;
- Additional potential horizontal drilling locations from both delineated and emerging prospective zones in the Wolfcamp and Bone Spring formations;
- Established infrastructure ownership, including five salt water disposal wells and over 13 miles of gathering lines and gas lift return lines; and
- An agreement to acquire up to an additional 1,006 net acres in Ward County, mutually identified by Callon and Ameredev, if such leasehold acquisitions are consummated prior to closing of the Ameredev acquisition.
- Net daily production of 16,598 barrels of oil equivalent per day ("BOE/d"), an increase of 23% compared to the second quarter of 2016
- GAAP income per diluted common share of $0.14 and Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), of $0.09
- Closed the Plymouth Acquisition and related common stock financing, expanding our WildHorse area footprint to over 20,000 net acres and total Midland Basin acreage to over 40,000 net acres
- Continued strong performance from our initial Wolfcamp A completion in Howard County (Silver City Unit A 01H), with cumulative production of over 192,000 BOE (89% oil) in the first 110 days on production
- Commenced program development of the WildHorse area with a two-well pad targeting both the Wolfcamp A and Lower Spraberry zones in northwest Howard County
- Refinanced our Term Loan with the issuance of Senior Notes, reducing our cost of capital and establishing a benchmark, publicly-traded security for future financing opportunities
- Raised 2016 full year production guidance to a range of 15,250 – 15,550 BOE/d and reaffirmed operational capital guidance for 2016 of $140 million
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow and discretionary cash flow per diluted share are calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), remaining asset retirement obligations related to our divested offshore properties, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided below. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet its future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenues is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- Approximately 6,916 gross (5,667 net) surface acres, primarily located in Howard County, Texas;
- Over 75% of acreage offsetting Callon's position in northwest Howard County, providing opportunities for shared infrastructure and extended laterals across Callon's pro forma footprint in this area;
- 167 gross (112 net) identified horizontal drilling locations targeting the Wolfcamp A, Lower Spraberry and Wolfcamp B zones, increasing Callon's existing inventory of drilling locations in these delineated zones in its WildHorse operating region by over 90%, assuming current development spacing of six to eight wells per section;
- Additional potential horizontal drilling locations from emerging prospective zones and increased well density being evaluated;
- Current net production of approximately 2,300 barrels of oil equivalent per day ("Boe/d") (86% oil) from 9 horizontal (gross) and 16 vertical wells (gross) based on information provided by the seller;
- Estimated 12.2 million barrels of oil equivalent ("MMBoe") (87% oil) of net proved reserves as of September 1, 2016 based on Callon's evaluation and interpretation of reserve and production information provided by the seller, as well as Callon's analysis of available geologic and other data. The Company cannot assure you that this estimate is accurate. Callon's estimate of proved reserves has not been reviewed by Callon's independent reserve engineers, and Callon may revise these estimates following ownership and operation of these properties;
- Overriding royalty interests in three 480 acre units offsetting the acreage, one of which is operated by Callon; and
- Upon closing of the pending acquisition, we will assume operatorship of over 90% of the acquired acreage and own an estimated 82% average working interest (62% average net revenue interest).
- Gary A. Newberry was appointed Senior Vice President and Chief Operating Officer and will continue to lead all aspects of operations managed by direct reports Jerry Weant, Vice President of Land and Michael O'Connor, Vice President of Permian Operations
- Joseph C. Gatto, Jr. was appointed President, in addition to his current role as Chief Financial Officer and Treasurer
- Mitzi P. Conn was appointed to the newly created position of Vice President and Chief Accounting Officer and will report to Mr. Gatto.
- Net daily production of 13,451 barrels of oil equivalent per day ("BOE/d"), an increase of 8% compared to the first quarter of 2016, comprised of 77% oil volume
- Estimated July 2016 net daily production of over 16,000 BOE/d after a prolonged period of production downtime in June 2016 caused by offsetting completions activity at the Carpe Diem field, compounded by the impact of electrical outages
- Lease operating expense, including workovers, of $5.97 per barrel of oil equivalent ("BOE"), a decrease of 3% from the first quarter of 2016
- GAAP loss per diluted common share of $0.61 and Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), of $0.05
- Closed two Midland Basin transactions for a total purchase price of $362.6 million, including the establishment of a new core operating area in Howard County
- Completed first Callon-operated Wolfcamp A well (completed lateral length of 7,363') in northern Howard County which has produced approximately 48,600 BOE (90% oil) in the first 30 days after being placed on production in early July 2016
- Borrowing base increased 28% from $300 million to $385 million following the closing of recent transactions
- Recently added second horizontal rig to be focused in the WildHorse area in Howard County
- Signed purchase and sale agreement for the acquisition of an incremental 4% working interest in the Casselman and Bohannon fields (the "CaBo area")
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow and discretionary cash flow per diluted share are calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), remaining asset retirement obligations related to our divested offshore properties, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided below. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet its future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenues is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their effects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- Net daily production of 12,440 barrels of oil equivalent per day ("BOE/d"), an increase of 17% compared to the fourth quarter of 2015, comprised of 79% oil volume
- Adjusted Total Revenues of $38.4 million, a non-GAAP financial measure(i)
- Lease operating expense, including workovers, of $6.15 per barrel of oil equivalent ("BOE"), a decrease of 5% from the fourth quarter of 2015
- Adjusted cash G&A, a non-GAAP financial measure(i), of $3.55 per BOE, a decrease of 7% from the previous quarter
- Adjusted EBITDA, a non-GAAP financial measure(i), of $25.6 million, representing a margin of approximately 67% of Adjusted Total Revenues, a non-GAAP financial measure(i)
- Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), of $0.00 and a GAAP loss per diluted common share of $0.51
- Announced two Midland Basin transactions and the establishment of a new core operating area in Howard County
- Raised over $300 million in common stock through public offerings to fund pending acquisitions
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow and discretionary cash flow per diluted share are calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), remaining asset retirement obligations related to our divested offshore properties, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided below. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet its future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenues is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their affects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- Approximately 17,298 gross (14,089 net) surface acres, primarily located in Howard County, Texas, with additional acreage in Martin, Borden and Dawson counties, Texas;
- 178 gross (165 net) identified horizontal drilling locations targeting the Wolfcamp A, Lower Spraberry and Wolfcamp B zones which are currently producing on the Big Star acreage and directly offsetting fields, using an initial assumption of horizontal development with six to eight wells per section;
- Largely contiguous lease positions allowing for average lateral lengths of over 8,300 feet;
- Five currently producing horizontal wells, including three Wolfcamp A and two Lower Spraberry horizontal wells with average 30-day peak production rates of 1,165 barrels of oil equivalent per day ("Boe/d");
- 124 gross (112 net) additional potential horizontal drilling locations targeting the Wolfcamp D (Cline) and Middle Spraberry zones which are producing from surrounding fields in Howard County;
- Estimated net daily production of 1,931 Boe/d (82% oil) for the first quarter of 2016; and
- Approximately 4.1 million Boe (71% oil) of net proved developed producing reserves as of January 1, 2016, based on our evaluation and interpretation of reserve and production information provided by the sellers, as well as our analysis of available geologic and other data. We cannot assure you that this estimate is accurate. Our estimate of proved reserves has not been reviewed by our independent reserve engineers, and we may revise our estimates following ownership and operation of these properties.
- Formation of an area of mutual interest with TRP Energy, LLC ("TRP") in western Reagan County, Texas, through the joint acquisition from a private party of 4,745 net acres (with a 55% share to Callon) north of the Garrison Draw field; and
- Callon's simultaneous sale of a 27.5% interest in the Garrison Draw field to TRP.
- Net daily production of 10,598 barrels of oil equivalent per day ("BOE/d"), an increase of 9% compared to the third quarter of 2015, comprised of 80% oil volume
- Lease operating expense, including workovers, of $6.47 per barrel of oil equivalent ("BOE"), a decrease of 19% from the third quarter of 2015
- Adjusted EBITDA, a non-GAAP financial measure(i), of $31.8 million, representing a margin of approximately 73% of Adjusted Total Revenues, a non-GAAP financial measure(i)
- Adjusted Income available to common shareholders, a non-GAAP financial measure(i), of $0.05 per diluted share based on total average diluted shares outstanding of 73.0 million shares
- "Drill-bit" finding and development costs(i) of $8.98 per BOE for the year ended December 31, 2015 related to a 22 million BOE ("MMBOE") increase in total proved reserves from extensions and discoveries, net of revisions
- "All-sources" reserve replacement(i) of 711% of 2015 production volumes
- Increased total hedging portfolio to 64% and 36% of expected 2016 oil and natural gas volumes, respectively, based on the midpoint of current estimates
- Exchanged 719,000 common shares for 120,000 shares of Series A cumulative preferred stock with a total liquidation value of $6 million
- Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow and discretionary cash flow per diluted share are calculated using net income (loss) adjusted for certain items including depreciation, depletion and amortization, the impact of financial derivatives (including the mark-to-market effects, net of cash settlements and premiums paid or received related to our financial derivatives), remaining asset retirement obligations related to our divested offshore properties, restructuring and other non-recurring costs, deferred income taxes and other non-cash income items.
- Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table above details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
- We believe that the non-GAAP measure of Adjusted income available to common shareholders ("Adjusted Income") and Adjusted Income per diluted share are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided below. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted Income and Adjusted Income per diluted share above were computed in accordance with GAAP.
- We calculate Adjusted Earnings before Interest, Income Taxes, Depreciation, Depletion and Amortization ("Adjusted EBITDA") as Adjusted Income plus interest expense, income tax expense (benefit) and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, we believe that Adjusted EBITDA provides additional information with respect to our performance or ability to meet its future debt service, capital expenditures and working capital requirements. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the Adjusted EBITDA we present may not be comparable to similarly titled measures of other companies.
- We believe that the non-GAAP measure of Adjusted Total Revenues is useful to investors because it provides readers with a revenue value more comparable to other companies who account for derivative contracts and hedges and include their affects in revenue. We believe Adjusted Total Revenue is also useful to investors as a measure of the actual cash inflows generated during the period.
- We believe "Drill-bit F&D costs" and "All-sources reserve replacement" ratios are non-GAAP metrics commonly used by Callon and other companies in our industry, as well as analysts and investors, to measure and evaluate the cost of replenishing annual production and adding proved reserves. The Company's definitions of drill-bit F&D costs and all-sources reserve replacement may differ significantly from definitions used by other companies to compute similar measures and as a result may not be comparable to similar measures provided by other companies. Consequently, we provided the detail of our calculation within the included tables.
- Expected fourth quarter 2015 net daily production of 10,500 – 10,700 barrels of oil equivalent per day ("BOE/d"), comprised of 79% - 81% oil volumes
- Expected fourth quarter 2015 lease operating expense of $6.40 – $6.60 per barrel of oil equivalent ("BOE")
- Forecasted 2016 net daily production range of 11,500 – 12,000 BOE/d (78% - 80% oil) with an associated operational capital budget of $75 - $80 million
- Estimated total (two-stream) proved reserves of 54.3 million barrels of oil equivalent ("BOE") at December 31, 2015, an increase of 65% over the prior year-end, of which 80% are comprised of oil volumes and 53% are classified as proved developed
- Continued strong performance of the Lower Spraberry program, supporting a type curve in excess of 1 million BOE for a normalized 7,500' drilled lateral well
- Completion of an incremental working interest acquisition in the Casselman-Bohannon focus area
- Addition of oil and natural gas hedges, increasing total portfolio to 63% and 37%, respectively, of expected 2016 volumes based on midpoint estimates
- Estimated December 2015 net daily production of 170 BOE/d (75% oil), including production from three established horizontal zones in the Lower Spraberry, Middle Spraberry and Wolfcamp B, in addition to legacy vertical production
- 305 net acres located primarily in Midland County, Texas
- 19 gross (13.7 net) operated horizontal wells scheduled to be placed on production, all in the Central Midland Basin
- 17 gross (12.6 net) operated wells target the Lower Spraberry shale and two gross (1.1 net) wells targeting the Wolfcamp B shale
- All wells completed from pads ranging from two to three wells
- 2 gross (0.4 net) non-operated horizontal wells scheduled to be placed on production
- 10,000' lateral wells that leverage Callon's existing acreage position
- Targeting the Lower Spraberry and Wolfcamp A in Midland County
- Operational capital budget of $75 - $80 million, including drilling and completion and related facilities expenditures (excluding capitalized expenses)
- Based on attained well costs for laterals completed with approximately 1,500 pounds of proppant per foot
- $4.2 million for a 5,000' drilled lateral length well
- $5.8 million for a 9,000' drilled lateral length well
- Approximately 60% of operational capital accrued in the first half of 2016
- Based on attained well costs for laterals completed with approximately 1,500 pounds of proppant per foot
1/19/2021 - Callon Petroleum Company Schedules Fourth Quarter 2020 Conference Call for February 25, 2021
Callon Petroleum Company Schedules Fourth Quarter 2020 Conference Call for February 25, 2021
Source: PR Newswire
Orignial Article: https://contentapi.cision...
HOUSTON, Jan. 19, 2021 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its fourth quarter and full year 2020 financial and operating results.
Webcast:
Date: February 25, 2021
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: www.callon.com
Select "News and Events" under the "Investors" section of the website.
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release fourth quarter and full year 2020 results after market close on Wednesday, February 24, 2021.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-fourth-quarter-2020-conference-call-for-february-25-2021-301210534.html
SOURCE Callon Petroleum Company
Article Date
1/19/2021Callon Petroleum Company Announces Upsized Debt Exchange
Source: PR Newswire
HOUSTON, Nov. 9, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that the counterparties to the privately negotiated debt exchange announced on November 2nd have agreed to exercise substantially all of the remaining capacity under the negotiated agreement.
Under the terms of the upsized transaction, the Company will now exchange a total of $389 million of principal of the Company's existing unsecured senior notes (the "Senior Notes") for $217 million aggregate principal of new 9.00% Second Lien Notes due 2025, payable semi-annually (the "Second Lien Notes"), to be issued by Callon at a weighted average exchange ratio of approximately $557 per $1,000 of principal exchanged. Participants in the exchange will receive a total of 1.76 million warrants with a strike price of $5.60.
Over 63% of the existing Senior Notes to be exchanged are due 2023 and 2024.
Upon completion of the exchange, Callon's total net debt will be reduced by approximately $172 million and total cash interest expense by approximately $6 million. The total amount outstanding under the Second Lien Notes will be $517 million ($617 million assuming the exercise of the debt exchange option held by the majority owner of the Second Lien Notes which will be reserved until September 30, 2021) relative to a total permitted principal amount of $700 million.
The private debt exchange is scheduled to close on November 17th. Callon currently expects the borrowing base under its credit facility to remain unchanged at $1.6 billion, and its next scheduled redetermination will take place in May 2021.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements including the words "believe," "expect," "may," "will," "forecast," "outlook," "assume," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, as of this date, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes 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. These statements are subject to a number of known and unknown risks and uncertainties, which may cause the Company's actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements including risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upsized-debt-exchange-301168371.html
SOURCE Callon Petroleum Company
Article Date
11/9/2020Callon Petroleum Company Announces Third Quarter 2020 Results
Source: PR Newswire
HOUSTON, Nov. 2, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three and nine months ended September 30, 2020.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Recent Highlights
Joe Gatto, President and Chief Executive Officer commented, "During the third quarter, our operations team continued to execute on our cost reduction efforts, posting meaningful gains that bolstered our free cash flow generation to approximately $100 million over the last two quarters. These achievements coupled with our recent strategic initiatives to improve liquidity and propel our debt reduction efforts have placed us in a much better position as we look to close out 2020 with the resumption of moderated development across all three of our asset areas."
He continued, "Well performance from our modified stacking and spacing program has met or exceeded expectations, confirming the merits of our life-of-field development model that will preserve the future value of our inventory while simultaneously delivering near-term economic returns at current strip prices. Moreover, our focus on cost control and operational efficiency through scaled development is pushing us towards even lower cost thresholds that should generate improved cash flow and lower break-even pricing over time."
Mr. Gatto closed by sharing, "Alongside these operational and strategic achievements, we have continued to focus on operating safely, with a clear vision for reducing our environmental impact, maintaining our social awareness and treatment of our workforce, and strengthening our alignment with the needs of our shareholders. The recent issuance of our inaugural Sustainability report provides a clear and well-documented picture of where we stand and the path to continuously improving in each of these three critical areas. As we finalize the details of our 2021 budget and activity levels, our focus will be on our debt reduction efforts, maintaining a low cost development and operations structure, and creating durable and cogent changes that not only enhance shareholder returns but also positively impact our employees, communities, and our broader stakeholder group."
Private Debt Exchange
Callon also announced another meaningful step today in the execution of its deleveraging plan. On November 2nd, the Company entered into a privately negotiated agreement with certain holders of its outstanding unsecured debt securities to exchange $286 million of principal of the Company's existing unsecured Senior Notes (the "Senior Notes") for $158 million aggregate principal of new 9.00% Second Lien Notes due 2025, payable semi-annually (the "Second Lien Notes"), to be issued by Callon at a weighted average exchange ratio of approximately $555 per $1,000 of principal exchanged. Over 60% of the existing Senior Notes to be exchanged are due 2023 and 2024. Upon completion of the exchange, Callon's total net debt will be reduced by approximately $128 million and total cash interest expense by approximately $5 million.
In addition, certain other affiliated parties have the option to exchange up to an additional approximately $104 million of principal of Senior Notes under the same exchange terms. At full participation, the estimated total debt reduction and total cash interest expense reduction would be approximately $175 million and $7 million, respectively.
Participants in the exchange will also receive between 1.16 and 1.76 million warrants, dependent on final participation levels, with a strike price of $5.60 which is consistent with the strike price for the warrants issued recently in relation to the Company's initial issuance of Second Lien Notes that was announced on October 1st.
The private debt exchange is scheduled to close on November 17th. Callon currently expects the borrowing base under its credit facility to remain unchanged at $1.6 billion, and its next scheduled redetermination will take place in May 2021.
Operations Update
At September 30, 2020, Callon had 1,479 gross (1,305.9 net) horizontal wells producing from established flow units in the Permian Basin and Eagle Ford Shale. Net daily production for the three months ended September 30, 2020 grew 170% to 102.0 Mboe/d (63% oil), as compared to the same period of 2019.
For the three months ended September 30, 2020, Callon drilled zero horizontal wells and placed a combined 12 gross (11.4 net) horizontal wells on production, all of which were turned to production late in the quarter. The Company reactivated two completion crews, one each in the Eagle Ford and Delaware Basin, both of which completed previously drilled multi-well projects during September. Subsequently, one of the two completion crews has been released and three drilling rigs have resumed operations, two restarting operations in the Midland and Delaware Basin during September and the third reactivated in the Eagle Ford during October. The Company expects to operate three drilling rigs and a single completion crew during the fourth quarter.
Recent project costs and well performance reflect a continuation of the operational efficiency levels achieved during the second quarter of 2020 and support the enhanced stacking and spacing efforts. Some of the highlights include:
Capital Expenditures
For the three months ended September 30, 2020, Callon incurred $38.4 million in operational capital expenditures on an accrual basis. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis:
Three Months Ended September 30, 2020 | ||||||||||||
Operational | Capitalized | Capitalized | Total Capital | |||||||||
Capital (a) | Interest | G&A | Expenditures | |||||||||
(In thousands) | ||||||||||||
Cash basis (b) | $110,689 | $17,769 | $8,719 | $137,177 | ||||||||
Timing adjustments (c) | (66,596) | 2,906 | — | (63,690) | ||||||||
Non-cash items | (5,685) | — | 1,532 | (4,153) | ||||||||
Accrual basis | $38,408 | $20,675 | $10,251 | $69,334 | ||||||||
(a) | Includes seismic, land, technology, and other items. |
(b) | Cash basis is presented here to help users of financial information reconcile amounts from the cash flow statement to the balance sheet by accounting for timing related changes in working capital that align with our development pace and rig count. |
(c) | Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. As Callon has resumed a moderated pace of development activity, management expects for a more normalized relationship between accrual and cash-based capex figures in future periods. |
Hedging
For the three months ended September 30, 2020, Callon recognized a loss from the settlement of derivative contracts of $5.5 million. Callon has continued to actively manage its hedge portfolio adding nearly 5.7 million barrels or 15,500 barrels per day of WTI NYMEX coverage for 2021. This raises the percentage of NYMEX coverage via collars to nearly 90% and raises the average ceiling price to over $46 per barrel, providing incremental upside while maintaining the price floor within one dollar of the previous weighted average position. In addition, the Company has improved its Brent-based hedges, raising the average floor from approximately $38 per barrel to almost $41 per barrel and increasing coverage by just over 300,000 barrels per year. Additional coverage for natural gas pricing was achieved through the addition of more than 10,000,000 MMBtu of Waha basis swaps, improving the weighted average differential by $0.16 per MMBtu.
Accounting for the Company's recent adjustments, total hedge coverage for 2021 is now more than 60% of anticipated oil production and just under 60% of anticipated natural gas production. Details regarding the Company's full hedge positions can be found in the hedge summary within the earnings release or within the appendix of the third quarter 2020 earnings slide deck on the website.
Operating and Financial Results
The following table presents summary information for the periods indicated:
Three Months Ended | ||||||
September 30, 2020 | June 30, 2020 | |||||
Net production | ||||||
Oil (MBbls) | 5,875 | 6,396 | ||||
Natural gas (MMcf) | 10,261 | 11,009 | ||||
NGLs (MBbls) | 1,802 | 1,657 | ||||
Total barrels of oil equivalent (MBoe) | 9,387 | 9,888 | ||||
Total daily production (Boe/d) | 102,029 | 108,664 | ||||
Oil as % of total daily production | 63 | % | 65 | % | ||
Average realized sales price (excluding impact of settled derivatives) | ||||||
Oil (per Bbl) | $39.43 | $20.41 | ||||
Natural gas (per Mcf) | 1.47 | 1.11 | ||||
NGLs (per Bbl) | 12.78 | 8.74 | ||||
Total (per Boe) | 28.73 | 15.90 | ||||
Average realized sales price (including impact of settled derivatives) | ||||||
Oil (per Bbl) | $39.00 | $33.82 | ||||
Natural gas (per Mcf) | 1.17 | 0.97 | ||||
NGLs (per Bbl) | 12.78 | 8.74 | ||||
Total (per Boe) | 28.14 | 24.42 | ||||
Revenues (in thousands) | ||||||
Oil | $231,654 | $130,513 | ||||
Natural gas | 15,034 | 12,242 | ||||
NGLs | 23,025 | 14,479 | ||||
Total | $269,713 | $157,234 | ||||
Additional per Boe data | ||||||
Sales price (a) | $28.73 | $15.90 | ||||
Lease operating expense | 4.89 | 5.14 | ||||
Production taxes | 1.72 | 1.05 | ||||
Gathering, transportation and processing | 2.36 | 2.03 | ||||
Operating margin | $19.76 | $7.68 | ||||
Depletion, depreciation and amortization | $12.17 | $14.05 | ||||
General and administrative (G&A) | $0.88 | $1.01 | ||||
Adjusted G&A 1 | ||||||
Cash component (b) | $0.87 | $0.69 | ||||
Non-cash component | $0.18 | $0.15 | ||||
(a) | Excludes the impact of settled derivatives. |
(b) | Excludes the amortization of equity-settled, share-based incentive awards. |
Revenue. For the quarter ended September 30, 2020, Callon reported revenue of $269.7 million, which excluded revenue from the sales of commodities purchased from a third-party of $20.3 million. Revenues including the gain or loss from the settlement of derivative contracts ("Adjusted Total Revenue"1) were $264.2 million, reflecting the impact of a $5.5 million loss from the settlement of derivative contracts. Average daily production for the quarter was 102.0 Mboe/d, compared to average daily production of 108.7 Mboe/d in the second quarter of 2020. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended September 30, 2020, the net (gain) loss on commodity derivative contracts includes the following (in thousands):
Three Months Ended | ||
(Gain) loss on oil derivatives | $16,606 | |
(Gain) loss on natural gas derivatives | 7,296 | |
(Gain) loss on NGL derivatives | 2,421 | |
(Gain) loss on commodity derivative contracts | $26,323 | |
For the quarter ended September 30, 2020, the cash (paid) received for commodity derivative settlements includes the following (in thousands):
Three Months Ended | ||
Cash (paid) received on oil derivatives | $2,130 | |
Cash (paid) received on natural gas derivatives | (1,677) | |
Cash received for commodity derivative settlements | $453 | |
Lease Operating Expenses, including workover ("LOE"). LOE per Boe for the three months ended September 30, 2020 was $4.89 per Boe, compared to LOE of $5.14 per Boe in the second quarter of 2020. The decrease in LOE per Boe was driven by improved field practices and a reduction in base operating costs in the third quarter of 2020 as compared to the second quarter of 2020.
Production Taxes, including ad valorem taxes. Production taxes were $1.72 per Boe for the three months ended September 30, 2020, representing approximately 6.0% of revenue before the impact of derivative settlements.
Gathering, Transportation and Processing Expenses. Gathering, transportation and processing costs for the three months ended September 30, 2020 were $22.2 million as compared to $20.0 million in the second quarter of 2020. In 2020, the Company began reporting gathering, transportation and processing costs separately due to the assumption of processing agreements in the Carrizo acquisition and certain contract modifications effective January 1, 2020. As such, the Company now records contractual fees associated with gathering, processing, treating and compression, as well as any transportation fees incurred to deliver the product to the purchaser, as gathering, transportation and processing expense. These fees were historically recorded as a reduction of revenue depending on when control transferred to the purchaser.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended September 30, 2020 was $12.17 per Boe compared to $14.05 per Boe in the second quarter of 2020. The decrease in DD&A is primarily driven by the impairment of evaluated oil and gas properties recognized in the second quarter of 2020.
Impairment of Evaluated Oil and Gas Properties. Callon recognized an impairment of evaluated oil and gas properties of $685.0 million for the three months ended September 30, 2020 due primarily to the continued decline in the average realized prices for sales of oil and gas. The decrease in the trailing 12-month average realized price as of September 30, 2020 resulted in a reduction of proved oil and gas reserve volumes of less than 2% of our December 31, 2019 proved oil and gas reserves volumes. For the three months ended June 30, 2020, the Company recognized an impairment of evaluated oil and gas properties of $1.3 billion.
G&A. G&A for the three months ended September 30, 2020 was $8.2 million, or $0.88 per Boe, and G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A" 1) was $9.8 million, or $1.04 per Boe, for the three months ended September 30, 2020 compared to $8.3 million, or $0.84 per Boe, for the second quarter of 2020. The cash component of Adjusted G&A was $8.1 million, or $0.87 per Boe, for the three months ended September 30, 2020 compared to $6.8 million, or $0.69 per Boe, for the second quarter of 2020. Adjusted G&A was slightly higher in the third quarter of 2020 as compared to the second quarter of 2020 due to slightly higher contractor and employee relocation expenses.
For the three months ended September 30, 2020 and June 30, 2020, G&A and Adjusted G&A, which excludes the amortization of equity-settled and share-based incentive awards, are calculated as follows (in thousands):
Three Months Ended | |||||
September 30, 2020 | June 30, 2020 | ||||
Total G&A expense | $8,224 | $10,024 | |||
Change in the fair value of liability share-based awards (non-cash) | 1,582 | (1,720) | |||
Adjusted G&A – total | 9,806 | 8,304 | |||
Restricted stock share-based compensation (non-cash) and other non-recurring expenses | (1,674) | (1,509) | |||
Adjusted G&A – cash component | $8,132 | $6,795 | |||
Capitalized cash G&A | $6,831 | $6,740 | |||
Full Cash G&A Costs | $14,963 | $13,535 | |||
Income Tax Expense. Callon provides for income taxes at the statutory rate of 21% adjusted for permanent differences expected to be realized. As a result of the valuation allowance that Callon recorded against its net deferred tax assets, we did not have any income tax expense for the three months ended September 30, 2020, compared to income tax expense of $51.3 million for the three months ended June 30, 2020.
Loss Available to Common Stockholders. We recorded a loss available to common stockholders for the three months ended September 30, 2020 of $680.4 million, or $17.12 per diluted share, as compared to a loss available to common stockholders of $1.6 billion, or $39.41 per diluted share, for the second quarter of 2020, retroactively adjusted for the Company's 1-for-10 reverse stock split effective August 7, 2020. The loss was primarily due to the impairment of evaluated oil and gas properties of $685.0 million for the three months ended September 30, 2020.
Adjusted EBITDA. Adjusted EBITDA for the third quarter of 2020 was $170.9 million as compared to $153.4 million for the second quarter of 2020. The increase in Adjusted EBITDA from the second quarter of 2020 was primarily due to an approximate 93% increase in the average realized price of oil. This was partially offset by decreased sequential production.
Guidance
Callon is updating guidance for the full year and updating previous ranges to reflect adjustments related to strong well performance, improved operational efficiency, expanded firm transportation agreements, and the effect of both the non-operated properties sale and the ORRI transaction.
Full Year | ||
2020 Guidance | ||
Total production (Mboe/d) | 100.0 - 101.0 | |
Oil production | 63% | |
Gas production | 19% | |
NGL production | 18% | |
Income statement expenses ($MM) | ||
LOE, including workovers | $200 - $205 | |
Gathering, processing, and transportation | $73 - $78 | |
Production taxes, including ad valorem (% unhedged revenue) | 7% | |
Adjusted G&A: cash component (a) | $30 - $35 | |
Adjusted G&A: non-cash component (b) | $3 - $5 | |
Cash interest expense | $90 - $95 | |
Effective income tax rate (%) | 22% | |
Capital expenditures ($MM, accrual basis) | ||
Total operational capital (c) | $500 - $510 | |
Capitalized interest | $85 - $90 | |
Capitalized G&A | $30 - $33 | |
Gross operated wells drilled / completed | 87 - 89 / 80 - 82 |
(a) | Excludes the amortization of equity-settled, share-based incentive awards. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. |
(c) | Includes facilities, equipment, seismic, land and other items. Excludes capitalized expense. |
In August, the Company provided an initial outlook for 2021 which included a "maintenance capital" plan targeting average daily production of 90 to 95 MBoe per day from an operational capital spending level of approximately $400 million. For 2021, the Company is now expected to achieve average daily production of 90 to 92 MBoe per day, with the reduction resulting from the combined effect of the recent ORRI transaction and non-operated properties sale, offset partly by improved well performance and operational efficiency gains. These improvements are reflected in management's updated expectations of operational capital spending for 2021 which is now estimated to be in the range of $375 to $400 million. As a result, management estimates that this program at current prices will yield meaningful additional free cash flow.
Third Quarter 2020 Earnings Conference Call
The Company's conference call to discuss third quarter results is scheduled for Tuesday, November 3, 2020, at 9:00 am CST. The presentation slides and associated webcast can both be found at www.callon.com located on the "News/Events" page within the Investors section on the site or by clicking on the link below.
www.callon.com/investors/news-events/ir-calendar
Hedge Portfolio Summary
The following tables summarize Callon's open derivative contracts for the remainder of 2020 and the full year 2021, updated for changes through October 29, 2020:
For the Remainder | For the Full Year | ||||||
Oil contracts (WTI) | of 2020 | of 2021 | |||||
Swap contracts | |||||||
Total volume (Bbls) | 2,496,880 | 1,377,000 | |||||
Weighted average price per Bbl | $42.10 | $42.00 | |||||
Collar contracts | |||||||
Total volume (Bbls) | 1,501,440 | 9,423,275 | |||||
Weighted average price per Bbl | |||||||
Ceiling (short call) | $45.00 | $46.78 | |||||
Floor (long put) | $35.00 | $39.21 | |||||
Short put contracts | |||||||
Total volume (Bbls) | 552,000 | — | |||||
Weighted average price per Bbl | $42.50 | $— | |||||
Long call contracts | |||||||
Total volume (Bbls) | 460,000 | — | |||||
Weighted average price per Bbl | $67.50 | $— | |||||
Short call contracts | |||||||
Total volume (Bbls) | 460,000 | (2) | 4,825,300 | (2) | |||
Weighted average price per Bbl | $55.00 | $63.62 | |||||
Oil contracts (Brent ICE) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | — | 848,300 | |||||
Weighted average price per Bbl | $— | $37.36 | |||||
Collar contracts | |||||||
Total volume (Bbls) | — | 730,000 | |||||
Weighted average price per Bbl | |||||||
Ceiling (short call) | $— | $50.00 | |||||
Floor (long put) | $— | $45.00 | |||||
Oil contracts (Midland basis differential) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 1,380,000 | 3,022,900 | |||||
Weighted average price per Bbl | ($1.89) | $0.26 | |||||
Oil contracts (Argus Houston MEH basis differential) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 1,435,202 | — | |||||
Weighted average price per Bbl | $0.03 | $— | |||||
Oil contracts (Argus Houston MEH swaps) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | — | 1,060,375 | |||||
Weighted average price per Bbl | $— | $38.94 | |||||
(2) | Premiums from the sale of call options were used to increase the fixed price of certain simultaneously executed price swaps. |
For the Remainder | For the Full Year | ||||||
Natural gas contracts (Henry Hub) | of 2020 | of 2021 | |||||
Swap contracts | |||||||
Total volume (MMBtu) | 1,633,000 | 11,123,000 | |||||
Weighted average price per MMBtu | $2.05 | $2.60 | |||||
Collar contracts (three-way collars) | |||||||
Total volume (MMBtu) | 1,525,000 | 1,350,000 | |||||
Weighted average price per MMBtu | |||||||
Ceiling (short call) | $2.72 | $2.70 | |||||
Floor (long put) | $2.45 | $2.42 | |||||
Floor (short put) | $2.00 | $2.00 | |||||
Collar contracts (two-way collars) | |||||||
Total volume (MMBtu) | 1,525,000 | 9,550,000 | |||||
Weighted average price per MMBtu | |||||||
Ceiling (short call) | $3.25 | $3.04 | |||||
Floor (long put) | $2.67 | $2.59 | |||||
Short call contracts | |||||||
Total volume (MMBtu) | 2,013,000 | 7,300,000 | |||||
Weighted average price per MMBtu | $3.50 | $3.09 | |||||
Natural gas contracts (Waha basis differential) | |||||||
Swap contracts | |||||||
Total volume (MMBtu) | 4,421,000 | 16,425,000 | |||||
Weighted average price per MMBtu | ($0.91) | ($0.42) | |||||
For the Remainder | For the Full Year | ||||||
NGL contracts (OPIS Mont Belvieu Purity Ethane) | of 2020 | of 2021 | |||||
Swap contracts | |||||||
Total volume (Bbls) | — | 1,825,000 | |||||
Weighted average price per Bbl | $— | $7.62 | |||||
Adjusted Income and Adjusted EBITDA. The Company reported loss available to common stockholders of $680.4 million, or $17.12 per fully diluted share, for the three months ended September 30, 2020, and adjusted income available to common stockholders of $25.6 million, or $0.64 per fully diluted share. The following tables reconcile the Company's income (loss) available to common stockholders to adjusted income, and the Company's net income (loss) to adjusted EBITDA:
Three Months Ended | ||||||||
September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||
(In thousands, except per share data) | ||||||||
Income (loss) available to common stockholders | ($680,384) | ($1,564,731) | $47,180 | |||||
(Gain) loss on derivative contracts | 27,038 | 126,965 | (21,809) | |||||
Gain (loss) on commodity derivative settlements, net | (5,540) | 84,208 | 1,011 | |||||
Non-cash stock-based compensation expense (benefit) | (94) | 2,761 | 644 | |||||
Impairment of evaluated oil and gas properties | 684,956 | 1,276,518 | — | |||||
Merger and integration expense | 2,465 | 8,067 | 5,943 | |||||
Other (income) expense | 3,567 | 6,759 | (175) | |||||
Tax effect on adjustments above(a) | (149,602) | (316,108) | 3,021 | |||||
Change in valuation allowance | 143,152 | 377,645 | — | |||||
Loss on redemption of preferred stock | — | — | 8,304 | |||||
Adjusted Income | $25,558 | $2,084 | $44,119 | |||||
Adjusted Income per fully diluted common share | $0.64 | $0.05 | $1.93 | |||||
Basic WASO(b) | 39,746 | 39,707 | 22,831 | |||||
Diluted WASO (GAAP)(b) | 39,746 | 39,707 | 22,846 | |||||
Effective of potentially dilutive instruments(b) | 35 | 12 | — | |||||
Adjusted Diluted WASO(b) | 39,781 | 39,719 | 22,846 | |||||
(a) | Calculated using the federal statutory rate of 21%. |
(b) | All share and per share amounts have been retroactively adjusted for the Company's 1-for-10 reverse stock split effective August 7, 2020. |
Three Months Ended | ||||||||
September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||
(In thousands) | ||||||||
Net income (loss) | ($680,384) | ($1,564,731) | $55,834 | |||||
(Gain) loss on derivative contracts | 27,038 | 126,965 | (21,809) | |||||
Gain (loss) on commodity derivative settlements, net | (5,540) | 84,208 | 1,011 | |||||
Non-cash stock-based compensation expense (benefit) | (94) | 2,761 | 644 | |||||
Impairment of evaluated oil and gas properties | 684,956 | 1,276,518 | — | |||||
Merger and integration expense | 2,465 | 8,067 | 5,943 | |||||
Other (income) expense | 3,567 | 6,759 | (161) | |||||
Income tax expense | — | 51,251 | 17,902 | |||||
Interest expense | 24,683 | 22,682 | 739 | |||||
Depreciation, depletion and amortization | 114,201 | 138,930 | 57,235 | |||||
Adjusted EBITDA | $170,892 | $153,410 | $117,338 | |||||
Free Cash Flow. Free cash flow was $80.3 million for the three months ended September 30, 2020. Free cash flow is reconciled to operating cash flow in the following table:
Three Months Ended | ||||||
September 30, 2020 | June 30, 2020 | |||||
(In thousands) | ||||||
Net cash provided by operating activities | $135,701 | $97,801 | ||||
Changes in working capital and other | 14,473 | 40,078 | ||||
Change in accrued hedge settlement | (5,993) | (14,480) | ||||
Cash interest expense | 24,246 | 21,944 | ||||
Merger and integration expense | 2,465 | 8,067 | ||||
Adjusted EBITDA | 170,892 | 153,410 | ||||
Less: Operational capital (accrual) | 38,408 | 85,087 | ||||
Less: Capitalized interest | 20,675 | 20,924 | ||||
Less: Interest expense | 24,683 | 22,682 | ||||
Less: Capitalized cash G&A | 6,831 | 6,740 | ||||
Free cash flow | $80,295 | $17,977 | ||||
Adjusted Discretionary Cash Flow. Operating cash flow was $135.7 million and adjusted discretionary cash flow was $151.2 million for the three months ended September 30, 2020. Adjusted discretionary cash flow is reconciled to operating cash flow in the following table:
Three Months Ended | ||||||||
September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | ($680,384) | ($1,564,731) | $55,834 | |||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 114,201 | 138,930 | 57,235 | |||||
Impairment of evaluated oil and gas properties | 684,956 | 1,276,518 | — | |||||
Amortization of non-cash debt related items | 437 | 738 | 739 | |||||
Deferred income tax expense | — | 51,251 | 17,902 | |||||
(Gain) loss on derivative contracts | 27,038 | 126,965 | (21,809) | |||||
Cash (paid) received for commodity derivative settlements, net | 453 | 98,688 | 1,011 | |||||
(Gain) loss on sale of other property and equipment | — | — | (13) | |||||
Non-cash stock-based compensation expense (benefit) | (94) | 2,761 | 644 | |||||
Merger and integration expense | 2,465 | 8,067 | — | |||||
Other, net | 2,099 | 3,521 | — | |||||
Adjusted discretionary cash flow | $151,171 | $142,708 | $111,543 | |||||
Changes in working capital | (12,990) | (36,839) | 2,803 | |||||
Payments to settle asset retirement obligations | — | — | (654) | |||||
Merger and integration expense | (2,465) | (8,067) | — | |||||
Payments to settle vested liability share-based awards | (15) | (1) | — | |||||
Net cash provided by operating activities | $135,701 | $97,801 | $113,692 | |||||
Adjusted Total Revenue. Adjusted total revenue for the three months ended September 30, 2020 was $264.2 million and is reconciled to total operating revenues in the following table:
Three Months Ended | |||||||||
September 30, 2020 | June 30, 2020 | September 30, 2019 | |||||||
(In thousands) | |||||||||
Operating Revenues | |||||||||
Oil | $231,654 | $130,513 | $148,210 | ||||||
Natural gas | 15,034 | 12,242 | 7,168 | ||||||
Natural gas liquids | 23,025 | 14,479 | — | ||||||
Total operating revenues (3) | $269,713 | $157,234 | $155,378 | ||||||
Gain (loss) on commodity derivative settlements, net | (5,540) | 84,208 | 1,011 | ||||||
Adjusted total revenue | $264,173 | $241,442 | $156,389 | ||||||
(3) | Excludes sales of purchased oil and gas | ||
Callon Petroleum Company | ||||||
Consolidated Balance Sheets | ||||||
(In thousands, except par and per share data) | ||||||
(Unaudited) | ||||||
September 30, 2020 | December 31, 2019 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $10,500 | $13,341 | ||||
Accounts receivable, net | 112,536 | 209,463 | ||||
Fair value of derivatives | 9,821 | 26,056 | ||||
Other current assets | 27,049 | 19,814 | ||||
Total current assets | 159,906 | 268,674 | ||||
Oil and natural gas properties, full cost accounting method: | ||||||
Evaluated properties | 2,916,542 | 4,682,994 | ||||
Unevaluated properties | 1,758,132 | 1,986,124 | ||||
Total oil and natural gas properties, net | 4,674,674 | 6,669,118 | ||||
Operating lease right-of-use assets | 29,519 | 63,908 | ||||
Other property and equipment, net | 32,920 | 35,253 | ||||
Deferred tax asset | — | 115,720 | ||||
Deferred financing costs | 24,850 | 22,233 | ||||
Other assets, net | 15,472 | 19,932 | ||||
Total assets | $4,937,341 | $7,194,838 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | $332,979 | $490,442 | ||||
Operating lease liabilities | 19,458 | 42,858 | ||||
Fair value of derivatives | 34,950 | 71,197 | ||||
Other current liabilities | 30,013 | 47,750 | ||||
Total current liabilities | 417,400 | 652,247 | ||||
Long-term debt | 3,190,273 | 3,186,109 | ||||
Operating lease liabilities | 28,906 | 37,088 | ||||
Asset retirement obligations | 49,542 | 48,860 | ||||
Fair value of derivatives | 35,705 | 32,695 | ||||
Other long-term liabilities | 11,411 | 14,531 | ||||
Total liabilities | 3,733,237 | 3,971,530 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock, $0.01 par value, 52,500,000 shares authorized; 39,749,985 and 39,659,001 shares outstanding, respectively(4) | 397 | 3,966 | ||||
Capital in excess of par value | 3,210,991 | 3,198,076 | ||||
Retained earnings (Accumulated deficit) | (2,007,284) | 21,266 | ||||
Total stockholders' equity | 1,204,104 | 3,223,308 | ||||
Total liabilities and stockholders' equity | $4,937,341 | $7,194,838 | ||||
(4) | All share amounts (except par value) have been retroactively adjusted for the Company's 1-for-10 reverse stock split effective August 7, 2020. | |||
Callon Petroleum Company | |||||||||||
Consolidated Statements of Operations | |||||||||||
(In thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Operating revenues: | |||||||||||
Oil | $231,654 | $148,210 | $627,934 | $450,036 | |||||||
Natural gas | 15,034 | 7,168 | 33,305 | 25,441 | |||||||
Natural gas liquids | 23,025 | — | 55,627 | — | |||||||
Sales of purchased oil and gas | 20,313 | — | 21,469 | — | |||||||
Total operating revenues | 290,026 | 155,378 | 738,335 | 475,477 | |||||||
Operating Expenses: | |||||||||||
Lease operating | 45,870 | 19,668 | 149,091 | 66,511 | |||||||
Production and ad valorem taxes | 16,110 | 11,866 | 46,151 | 33,810 | |||||||
Gathering, transportation and processing | 22,200 | — | 56,615 | — | |||||||
Cost of purchased oil and gas | 21,282 | — | 22,450 | — | |||||||
Depreciation, depletion and amortization | 114,201 | 56,130 | 384,594 | 179,275 | |||||||
General and administrative | 8,224 | 9,388 | 26,573 | 34,729 | |||||||
Impairment of evaluated oil and gas properties | 684,956 | — | 1,961,474 | — | |||||||
Merger and integration | 2,465 | 5,943 | 26,362 | 5,943 | |||||||
Other operating | 4,425 | (161) | 8,548 | 931 | |||||||
Total operating expenses | 919,733 | 102,834 | 2,681,858 | 321,199 | |||||||
Income (Loss) From Operations | (629,707) | 52,544 | (1,943,523) | 154,278 | |||||||
Other (Income) Expenses: | |||||||||||
Interest expense, net of capitalized amounts | 24,683 | 739 | 67,843 | 2,218 | |||||||
(Gain) loss on derivative contracts | 27,038 | (21,809) | (97,966) | 31,415 | |||||||
Other (income) expense | (1,044) | (122) | (149) | (270) | |||||||
Total other (income) expense | 50,677 | (21,192) | (30,272) | 33,363 | |||||||
Income (Loss) Before Income Taxes | (680,384) | 73,736 | (1,913,251) | 120,915 | |||||||
Income tax expense | — | (17,902) | (115,299) | (29,444) | |||||||
Net Income (Loss) | (680,384) | 55,834 | (2,028,550) | 91,471 | |||||||
Preferred stock dividends | — | (350) | — | (3,997) | |||||||
Loss on redemption of preferred stock | — | (8,304) | — | (8,304) | |||||||
Income (Loss) Available to Common Stockholders | ($680,384) | $47,180 | ($2,028,550) | $79,170 | |||||||
Income (Loss) Available to Common Stockholders Per Common Share (4): | |||||||||||
Basic | ($17.12) | $2.07 | ($51.09) | $3.47 | |||||||
Diluted | ($17.12) | $2.07 | ($51.09) | $3.47 | |||||||
Weighted Average Common Shares Outstanding (4): | |||||||||||
Basic | 39,746 | 22,831 | 39,707 | 22,805 | |||||||
Diluted | 39,746 | 22,846 | 39,707 | 22,841 | |||||||
(4) | All share and per share amounts have been retroactively adjusted for the Company's 1-for-10 reverse stock split effective August 7, 2020. | |||
Callon Petroleum Company | |||||||||||
Consolidated Statements of Cash Flows | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | ($680,384) | $55,834 | ($2,028,550) | $91,471 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 114,201 | 57,235 | 384,594 | 182,738 | |||||||
Impairment of evaluated oil and gas properties | 684,956 | — | 1,961,474 | — | |||||||
Amortization of non-cash debt related items | 437 | 739 | 1,582 | 2,218 | |||||||
Deferred income tax expense | — | 17,902 | 115,299 | 29,444 | |||||||
(Gain) loss on derivative contracts | 27,038 | (20,798) | (97,966) | 31,415 | |||||||
Cash (paid) received for commodity derivative settlements | 453 | — | 101,754 | (436) | |||||||
Loss on sale of other property and equipment | — | (13) | — | 36 | |||||||
Non-cash expense related to equity share-based awards | 1,485 | 1,569 | 6,302 | 7,868 | |||||||
Change in the fair value of liability share-based awards | (1,579) | (925) | (6,607) | 106 | |||||||
Payments to settle asset retirement obligations | — | (654) | — | (1,425) | |||||||
Payments for cash-settled restricted stock unit awards | (15) | — | (770) | (1,425) | |||||||
Other, net | 2,099 | — | 6,510 | — | |||||||
Changes in current assets and liabilities: | |||||||||||
Accounts receivable | (16,930) | (21,081) | 96,110 | 17,600 | |||||||
Other current assets | (2,208) | 929 | (6,556) | (5,172) | |||||||
Current liabilities | 6,148 | 23,216 | (107,979) | (13,038) | |||||||
Other | — | (261) | — | (2,662) | |||||||
Net cash provided by operating activities | 135,701 | 113,692 | 425,197 | 338,738 | |||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (137,177) | (143,995) | (567,746) | (503,425) | |||||||
Acquisitions | — | (1,418) | — | (40,788) | |||||||
Proceeds from sale of assets | 139,739 | 5,656 | 149,818 | 279,952 | |||||||
Cash paid for settlements of contingent consideration arrangements, net | — | — | (40,000) | — | |||||||
Other, net | 1,427 | — | 8,261 | — | |||||||
Net cash provided by (used in) investing activities | 3,989 | (139,757) | (449,667) | (264,261) | |||||||
Cash flows from financing activities: | |||||||||||
Borrowings on senior secured revolving credit facility | 312,000 | 221,000 | 5,087,500 | 581,000 | |||||||
Payments on senior secured revolving credit facility | (737,000) | (126,000) | (5,347,500) | (581,000) | |||||||
Issuance of 9.00% Second Lien Senior Secured Notes due 2025 | 300,000 | — | 300,000 | — | |||||||
Discount on the issuance of 9.00% Second Lien Senior Secured Notes due 2025 | (35,270) | — | (35,270) | — | |||||||
Issuance of warrants | 23,909 | — | 23,909 | — | |||||||
Payment of preferred stock dividends | — | (350) | — | (3,997) | |||||||
Payment of deferred financing costs | (301) | — | (6,312) | (31) | |||||||
Tax withholdings related to restricted stock units | (107) | (316) | (495) | (2,174) | |||||||
Redemption of preferred stock | — | (73,012) | — | (73,017) | |||||||
Other, net | 79 | — | (203) | — | |||||||
Net cash provided by (used in) financing activities | (136,690) | 21,322 | 21,629 | (79,219) | |||||||
Net change in cash and cash equivalents | 3,000 | (4,743) | (2,841) | (4,742) | |||||||
Balance, beginning of period | 7,500 | 16,052 | 13,341 | 16,051 | |||||||
Balance, end of period | $10,500 | $11,309 | $10,500 | $11,309 | |||||||
Non-GAAP Financial Measures
This news release refers to non-GAAP financial measures such as "Free Cash Flow," "Adjusted Discretionary Cash Flow," "Adjusted G&A," "Full Cash G&A Costs," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the Company's wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "may," "will," "forecast," "outlook," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, as of this date, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil, natural gas and natural gas liquids ("NGLs") prices or a prolonged period of low oil, natural gas or NGLs prices and the effects of actions by, or disputes among or between significant oil and natural gas producing countries, general economic conditions, including the availability of credit and access to existing lines of credit; the effects of excess supply of oil and natural gas resulting from reduced demand caused by the COVID-19 pandemic and the actions of certain oil and natural gas producing countries; our ability to drill and complete wells; operational, regulatory and environment risks; cost and availability of equipment and labor; our ability to finance our activities; the ultimate timing, outcome and results of integrating the operations of Carrizo Oil & Gas, Inc. and Callon; and the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all; and other risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
1) See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations.
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-third-quarter-2020-results-301165446.html
SOURCE Callon Petroleum Company
Article Date
11/3/202010/12/2020 - Callon Petroleum Company Schedules Third Quarter 2020 Conference Call for November 3, 2020
Callon Petroleum Company Schedules Third Quarter 2020 Conference Call for November 3, 2020
Source: PR Newswire
HOUSTON, Oct. 12, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its third quarter 2020 financial and operating results.
Webcast:
Date: November 3, 2020
Time: 9:00 a.m. Central Time (10:00 a.m. Eastern Time)
Webcast: www.callon.com | |
Select "News and Events" under the "Investors" section of the website. |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release third quarter 2020 results after market close on Monday, November 2, 2020.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-third-quarter-2020-conference-call-for-november-3-2020-301150345.html
SOURCE Callon Petroleum Company
Article Date
10/12/2020Callon Petroleum Company Announces $170 Million in Asset Monetizations and $300 Million Issuance of Secured Second Lien Notes
Source: PR Newswire
HOUSTON, Oct. 1, 2020 /PRNewswire/ -- Callon Petroleum Company ("Callon" or the "Company") (NYSE: CPE) today announced additional initiatives to enhance liquidity, consistent with the Company's commitment to proactively addressing its capital structure. The transactions announced today immediately strengthen Callon's balance sheet and enhance near-term liquidity, well ahead of debt maturities and with the support of key financial stakeholders.
The Company has entered into an overriding royalty interest ("ORRI") transaction with a private investment vehicle managed by Kimmeridge Energy ("Kimmeridge"), an energy-focused private equity firm, that generated gross cash proceeds of $140 million dollars. Callon has also issued $300 million of principal value second lien secured notes ("2nd Lien Notes") to Kimmeridge. The proceeds of the Kimmeridge transactions will be used to reduce borrowings on the Company's credit facility by nearly a third to approximately $1 billion. Separately, Callon recently entered into a definitive agreement to sell substantially all of its non-operated assets for gross cash proceeds of $30 million.
The Company has completed the fall borrowing base redetermination for its senior secured credit facility resulting in a reaffirmation of Callon's borrowing base at $1.7 billion. The borrowing base and elected commitment were subsequently reduced to $1.6 billion in consideration of the ORRI sale and total 2nd Lien Notes capacity.
President and CEO Joe Gatto commented, "These transactions represent an important step forward in delivering on our stated goals to improve Callon's liquidity position. Absolute debt reduction is also accelerated, complementing our free cash flow generation that has been bolstered by the significant synergies realized from the Carrizo acquisition. Importantly, the asset monetizations are accretive to our 2021 leverage metrics given a blended transaction multiple of approximately 6.5 times projected operating cash flow at current strip pricing. We will continue to pursue initiatives that improve our financial position and are encouraged by the expanding spectrum of actionable alternatives that have emerged as we execute on our strategic plan as a scaled operator in premier operating areas."
Highlights of the combined transactions:
2nd Lien Notes overview:
ORRI overview:
Non-operated working interest overview:
Advisors
Jefferies LLC acted as financial advisor to Callon for the issuance of the 2nd Lien Notes and for the ORRI transaction. RBC Capital Markets acted as lead financial advisor for the ORRI transaction. Kirkland & Ellis LLP acted as legal advisor to Callon for the issuance of the 2nd Lien Notes and for the ORRI transaction. TenOaks Energy Advisors acted as sell-side advisor for the non-operated working interest sale.
Barclays acted as exclusive financial advisor and Sidley Austin LLP acted as legal advisor to Kimmeridge.
Callon Petroleum Company
Callon Petroleum Company is an independent oil and natural gas company focused on the acquisition, exploration, and development of high-quality assets in the leading oil plays of West and South Texas.
Kimmeridge
Founded in 2012, Kimmeridge is a private equity firm based in New York and Denver focused purely on the development of low-cost unconventional oil and gas assets in the US upstream energy sector. The firm is differentiated by its direct investment approach, deep technical knowledge, active portfolio management and proprietary research and data gathering.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include future levels of drilling activity and associated production and cash flow expectations; the Company's production guidance and capital expenditure forecast; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "may," "will," "forecast," "outlook," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, as of this date, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil, natural gas and natural gas liquids ("NGLs") prices or a prolonged period of low oil, natural gas or NGLs prices and the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries, such as Saudi Arabia and other oil and natural gas producing countries, such as Russia, with respect to production levels or other matters related to the price of oil, general economic conditions, including the availability of credit and access to existing lines of credit, the effects of excess supply of oil and natural gas resulting from reduced demand caused by the COVID-19 pandemic and the actions of certain oil and natural gas producing countries, our ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, our ability to finance our activities, the ultimate timing, outcome and results of integrating the operations of Carrizo and Callon and the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all, and other risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact:
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-170-million-in-asset-monetizations-and-300-million-issuance-of-secured-second-lien-notes-301142402.html
SOURCE Callon Petroleum Company
Article Date
10/1/2020Callon Petroleum Company Releases Inaugural 2019 Sustainability Report
Source: PR Newswire
HOUSTON, Sept. 29, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today released its inaugural sustainability report. The online report outlines Callon's commitment to environmental responsibility, health and safety, community engagement, governance, and business ethics. The report is available on the Company's website at www.callon.com/sustainability.
Commenting on the inaugural report, President and Chief Executive Officer Joe Gatto shared, "At Callon, we understand that success is dependent upon our ability to operate responsibly, think strategically, and continue to evolve our business to meet the long-term expectations of our stakeholders. We seek to exemplify our core values in how we operate our business, care for our employees, enrich our communities, and minimize our impact on the environment. Our inaugural sustainability report reflects the ongoing efforts of the entire Callon team to build a sustainable business and pursue continuous improvement in our operations."
Based on investor feedback, Callon's 2019 Sustainability Report is informed by the Sustainability Accounting Standards Board (SASB) standards for Oil & Gas and includes the following highlights and achievements:
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-releases-inaugural-2019-sustainability-report-301139204.html
SOURCE Callon Petroleum Company
Article Date
9/29/2020Callon Petroleum Company Announces Second Quarter 2020 Results
Source: PR Newswire
HOUSTON, Aug. 4, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three and six months ended June 30, 2020.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Recent Highlights
Joe Gatto, President and Chief Executive Officer commented, "Our operational and financial results for the second quarter reflect Callon's commitment to thoughtful capital allocation and operational execution that we have overlaid on an exceptional, diversified asset base. As oil markets began to erode in March, our team acted quickly to reduce capital activity while maintaining a clear focus on near and long-term operating goals. As a result, our drilling and completion costs are down across the board, second quarter production was well ahead of estimates, and operating costs continue to decline beyond our targeted synergy goals."
He continued, "Our success in reducing our cost structure, combined with leading capital efficiency from strong well productivity and well cost reductions, positioned us to generate free cash flow this quarter. This is just the first step as we have developed a longer-term plan designed to consistently generate free cash flow while maintaining production levels with a reduced reinvestment rate. After moving past the working capital cash impact of expenditures incurred in the first quarter, a meaningful portion of which added to our current inventory of drilled, uncompleted wells, we will be dedicating all of our expected free cash flow to credit facility reductions and forecast our current credit facility balance to decline into year end and continue into 2021."
Mr. Gatto also shared, "Despite tremendous business, social, and personal hurdles resulting from the current pandemic and extreme turbulence in the financial markets, our team has remained focused on synergy realization and the integration of people, systems, and processes. Our operational and financial results highlight our progress as an organization and I applaud the Callon team for persevering through an incredibly difficult past few months. Importantly, we remain committed to their safety and that of our vendors, partners, and communities."
Operations Update
At June 30, 2020, Callon had 1,471 gross (1,298.0 net) horizontal wells producing from established flow units in the Permian Basin and Eagle Ford Shale. Net daily production for the three months ended June 30, 2020 grew 168% to 108.7 Mboe/d (65% oil), as compared to the same period of 2019.
For the three months ended June 30, 2020, Callon drilled 29 gross (27.0 net) horizontal wells and placed a combined 26 gross (24.9 net) horizontal wells on production. During the course of the quarter, all rigs and completion crews ceased activity upon completion of projects in progress. The Company does not have any active rigs or completion crews at this time but does intend to resume development activity during the third quarter. Near-term operational activity will be focused on completing a drilled, uncompleted inventory of approximately 70 wells in both the Permian Basin and Eagle Ford Shale with one dedicated completion crew. The Company also intends to return two to three drilling rigs to service later in the third quarter for the balance of the year.
During the second quarter in the Delaware Basin, the seven-well Dorothy Sansom project was placed on production in April, consisting of targets in the 3rd Bone Spring Shale, Wolfcamp A (2), Upper Wolfcamp B, Lower Wolfcamp B (2), and Wolfcamp C. Initial results have been positive with cumulative production (adjusted for shut-ins during the quarter) matching or exceeding production from primary zones in the Crowley-St. Clair project which was completed in 2019. Comparable wells in the Wolfcamp A and B zones on the Dorothy Sansom project were drilled and completed offsetting parent wells, unlike the unbounded Crowley-St. Claire wells. The current performance is encouraging for future development of offset wells in the area.
At the WildHorse area in the Midland Basin, the Company brought online the nine-well Dunkin/Horton/Wright project that had previously been deferred during the early portion of the quarter. The project consists of Wolfcamp A wells (4), Lower Spraberry wells (3), and a Wolfcamp B and Middle Spraberry test. Initial production from the Wolfcamp A and B has exceeded expectations and significantly outperformed 2019 vintage Wolfcamp A offsets in the immediate area through the first fifty days. Early results from the Middle Spraberry are encouraging for potential future development in the area as production currently continues to outpace initial type curve estimates.
In the Eagle Ford, the Company placed on production the Pena project with a portion of the wells reaching first production at the very end of March and the remainder falling into early April. These wells have produced over 75,000 cumulative Boe (~90% oil) on average (1.2 MMBoe in total) through the first 120 days online, matching type curve expectations.
During the second quarter, Callon saw additional gains in operational efficiency, with average development costs improving. Some of the highlights include:
Marketing
The Company entered into short-term fixed price contracts in May and June for Eagle Ford Shale production to secure firm transportation and also mitigate the effect of the calendar month average ("CMA") roll calculation on realized pricing. Those fixed price contracts have since returned to our previous MEH linked pricing structure. Callon recently secured incremental firm transportation for production volumes to ensure delivery of barrels produced from the Eagle Ford assets to improve market options for the future.
In addition, the Company has entered into a multi-year agreement with a diverse global player in waterborne oil markets that will be purchasing up to 10,000 barrels per day of oil of Permian Basin production at Brent-linked prices for volumes delivered under our firm transportation agreement to the Houston Ship Channel area on the Echo Pipeline. In April, we began delivering 15,000 barrels per day into the Corpus refinery complex under our firm transportation agreement on Gray Oak pipeline. These barrels are part of multi-year term sales agreements receiving a combination of Brent and MEH based pricing.
Minimal production volumes that were voluntarily shut-in by the Company during the second quarter have been returned to production. The Company is not subject to repayment of volumes or cover cost at second quarter pricing since it met all sales obligations during the quarter.
Capital Expenditures
For the three months ended June 30, 2020, Callon incurred $85.1 million in operational capital expenditures on an accrual basis. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis:
Three Months Ended June 30, 2020 | ||||||||||||
Operational | Capitalized | Capitalized | Total Capital | |||||||||
Capital (a) | Interest | G&A | Expenditures | |||||||||
(In thousands) | ||||||||||||
Cash basis (b) | $174,594 | $24,787 | $6,740 | $206,121 | ||||||||
Timing adjustments (c) | (90,780) | (3,863) | — | (94,643) | ||||||||
Non-cash items | 1,273 | — | 2,162 | 3,435 | ||||||||
Accrual basis | $85,087 | $20,924 | $8,902 | $114,913 | ||||||||
(a) | Includes seismic, land, technology, and other items. |
(b) | Cash basis is presented here to help users of financial information reconcile amounts from the cash flow statement to the balance sheet by accounting for timing related changes in working capital that align with our development pace and rig count. |
(c) | Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Hedging
For the three months ended June 30, 2020, Callon recognized a hedge gain of $84.2 million consisting of settled positions and monetization of certain future oil positions. During the course of the quarter and through July, the Company has continued to add hedge coverage for oil, natural gas, and ethane in 2021, and restructured certain oil swaps for the remaining six months of 2020 into two-way collars providing additional upside for oil prices to as high as $45 per barrel. Average floor prices for the second half of 2020 for WTI NYMEX oil contracts are approximately $40 per barrel covering just over nine million barrels of production, or roughly 80% of projected oil production for the remainder of 2020.
The Company took advantage of an improved natural gas outlook and entered into a combination of NYMEX Henry Hub swaps and collars for 2021 providing coverage for over 22,000 BBtu or just over 60,000 MMBtu per day at an average floor price $2.61 per MMBtu. Natural gas production is now approximately 70% hedged for the remainder of 2020 and just over 60% hedged for 2021. Details regarding the Company's full hedge positions can be found in the hedge summary within the earnings release or within the appendix of the second quarter 2020 earnings slide deck on the website.
Operating and Financial Results
The following table presents summary information for the periods indicated:
Three Months Ended | |||||||||
June 30, 2020 | March 31, 2020 | June 30, 2019 | |||||||
Net production | |||||||||
Oil (MBbls) | 6,396 | 5,847 | 2,848 | ||||||
Natural gas (MMcf) | 11,009 | 9,793 | 5,031 | ||||||
NGLs (MBbls) | 1,657 | 1,707 | — | ||||||
Total barrels of oil equivalent (MBoe) | 9,888 | 9,186 | 3,687 | ||||||
Total daily production (Boe/d) | 108,664 | 100,955 | 40,516 | ||||||
Oil as % of total daily production | 65 | % | 64 | % | 77 | % | |||
Average realized sales price (excluding impact of settled derivatives) | |||||||||
Oil (per Bbl) | $20.41 | $45.45 | $56.44 | ||||||
Natural gas (per Mcf) | 1.11 | 0.62 | 1.26 | ||||||
NGLs (per Bbl) | 8.74 | 10.62 | — | ||||||
Total (per BOE) | 15.90 | 31.56 | 45.31 | ||||||
Average realized sales price (including impact of settled derivatives) | |||||||||
Oil (per Bbl) | $33.82 | $48.90 | $54.87 | ||||||
Natural gas (per Mcf) | 0.97 | 1.13 | 1.91 | ||||||
NGLs (per Bbl) | 8.74 | 10.62 | — | ||||||
Total (per Boe) | 24.42 | 34.30 | 44.99 | ||||||
Revenues (in thousands) | |||||||||
Oil | $130,513 | $265,767 | $160,728 | ||||||
Natural gas | 12,242 | 6,029 | 6,324 | ||||||
NGLs | 14,479 | 18,123 | — | ||||||
Total revenues | 157,234 | 289,919 | 167,052 | ||||||
Additional per Boe data | |||||||||
Sales price (a) | $15.90 | $31.56 | $45.31 | ||||||
Lease operating expense | 5.14 | 5.70 | 6.18 | ||||||
Production taxes | 1.05 | 2.14 | 3.02 | ||||||
Gathering, transportation and processing | 2.03 | 1.57 | — | ||||||
Operating margin | $7.68 | $22.15 | $36.11 | ||||||
Depletion, depreciation and amortization | $14.05 | $14.31 | $17.12 | ||||||
General and administrative (G&A) | $1.01 | $0.91 | $2.87 | ||||||
Adjusted G&A (b) | |||||||||
Cash component (c) | $0.69 | $1.20 | $2.42 | ||||||
Non-cash component | 0.15 | 0.41 | 0.68 | ||||||
(a) | Excludes the impact of settled derivatives. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | Excludes the amortization of equity-settled, share-based incentive awards. |
Total Revenue. For the quarter ended June 30, 2020, Callon reported total revenue of $157.2 million and total revenue including the gain or loss from the settlement of derivative contracts ("Adjusted Total Revenue"(1)) of $241.4 million, reflecting the impact of an $84.2 million gain from the settlement of derivative contracts. Average daily production for the quarter was 108.7 Mboe/d, compared to average daily production of 101.0 Mboe/d in the first quarter of 2020. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended June 30, 2020, the net (gain) loss on commodity derivative contracts includes the following (in thousands):
Three Months Ended | ||
(Gain) loss on oil derivatives | $122,369 | |
(Gain) loss on natural gas derivatives | 4,695 | |
(Gain) loss on NGL derivatives | (4) | |
(Gain) loss on commodity derivative contracts | $127,060 | |
For the quarter ended June 30, 2020, the cash (paid) received for commodity derivative settlements includes the following (in thousands):
Three Months Ended | ||
Cash (paid) received on oil derivatives | $100,470 | |
Cash (paid) received on natural gas derivatives | (1,782) | |
Cash received for commodity derivative settlements | $98,688 | |
Lease Operating Expenses, including workover ("LOE"). LOE per Boe for the three months ended June 30, 2020 was $5.14 per Boe, compared to LOE of $5.70 per Boe in the first quarter of 2020. The decrease in LOE per Boe was driven by improved field practices and a reduction in workovers during the second quarter of 2020 as compared to the first quarter of 2020.
Production Taxes, including ad valorem taxes. Production taxes were $1.05 per Boe for the three months ended June 30, 2020, representing approximately 6.6% of total revenue before the impact of derivative settlements.
Gathering, Transportation and Processing Expenses. Gathering, transportation and processing costs for the three months ended June 30, 2020 were $20.0 million as compared to $14.4 million in the first quarter of 2020 due to firm transportation contracts that began in the second quarter of 2020. In 2020, the Company began reporting gathering, transportation and processing costs separately due to the assumption of processing agreements in the Carrizo acquisition and certain contract modifications effective January 1, 2020. As such, the Company now records contractual fees associated with gathering, processing, treating and compression, as well as any transportation fees incurred to deliver the product to the purchaser, as gathering, transportation and processing expense. These fees were historically recorded as a reduction of revenue depending on when control transferred to the purchaser.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended June 30, 2020 was consistent at $14.05 per Boe compared to $14.31 per Boe in the first quarter of 2020.
Impairment of Evaluated Oil and Gas Properties. Callon recognized an impairment of evaluated oil and gas properties of $1.3 billion for the three months ended June 30, 2020 due primarily to declines in the average realized prices for sales of oil and gas. The decrease in the trailing 12-month average realized price as of June 30, 2020 resulted in a reduction our proved oil and gas reserve volumes of less than 2% of our December 31, 2019 proved oil and gas reserves volumes. The Company did not recognize an impairment of evaluated oil and gas properties during the first quarter of 2020.
G&A. G&A for the three months ended June 30, 2020 was $10.0 million, or $1.01 per Boe, and G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A" 1) was $8.3 million, or $0.84 per Boe, for the three months ended June 30, 2020 compared to $14.8 million, or $1.62 per Boe, for the first quarter of 2020. The cash component of Adjusted G&A was $6.8 million, or $0.69 per Boe, for the three months ended June 30, 2020 compared to $11.1 million, or $1.20 per Boe, for the first quarter of 2020. The reductions in G&A were driven by the realization of post-merger synergies and further reductions to payroll and non-payroll expenses following the pandemic, including compensation reductions for executives and the board of directors.
For the three months ended June 30, 2020 and March 31, 2020, G&A and Adjusted G&A, which excludes the amortization of equity-settled and share-based incentive awards, are calculated as follows (in thousands):
Three Months Ended | |||||
June 30, 2020 | March 31, 2020 | ||||
Total G&A expense | $10,024 | $8,325 | |||
Change in the fair value of liability share-based awards (non-cash) | (1,720) | 6,516 | |||
Adjusted G&A – total | 8,304 | 14,841 | |||
Restricted stock share-based compensation (non-cash) and other non-recurring expenses | (1,509) | (3,776) | |||
Adjusted G&A – cash component | $6,795 | $11,065 | |||
Capitalized cash G&A | $6,740 | $7,570 | |||
Full Cash G&A Costs | $13,535 | $18,635 | |||
Income Tax Expense. Callon provides for income taxes at the statutory rate of 21% adjusted for permanent differences expected to be realized. Callon recorded income tax expense of $51.3 million for the three months ended June 30, 2020, compared to income tax expense of $64.0 million for the three months ended March 31, 2020. Primarily as a result of the impairment of evaluated oil and gas properties recognized during the second quarter of 2020, Callon recorded a valuation allowance against its net deferred tax assets reducing the net deferred tax assets to zero.
Loss Available to Common Stockholders. We recorded a loss available to common stockholders for the three months ended June 30, 2020 of $1.6 billion, or $3.94 per diluted share, as compared to income available to common stockholders of $216.6 million, or $0.55 per diluted share, for the first quarter of 2020. The loss was primarily due to the impairment of evaluated oil and gas properties of $1.3 billion as well as a loss on derivative contracts of approximately $127.0 million recorded during the second quarter of 2020.
Adjusted EBITDA1. Adjusted EBITDA for the second quarter of 2020 was $153.4 million as compared to $217.5 million for the first quarter of 2020. The decrease in Adjusted EBITDA from the first quarter of 2020 was primarily due to an approximate 30% decrease in the average realized price of oil. This was partially offset by increased sequential production as well as a decrease in operating expenses as described above.
Guidance
Callon is reinstating guidance for the full year and updating previous ranges to reflect adjustments to its operational plan and associated expectations.
Full Year | ||
2020 Guidance | ||
Total production (Mboe/d) | 99.0 - 101.0 | |
Oil production | 64% | |
Gas production | 18% | |
NGL production | 18% | |
Income statement expenses ($MM) | ||
LOE, including workovers | $205 - $215 | |
Gathering, processing, and transportation | $60 - $65 | |
Production taxes, including ad valorem (% unhedged revenue) | 7% | |
Adjusted G&A: cash component (a) | $30 - $35 | |
Adjusted G&A: non-cash component (b) | $5 - $7 | |
Cash interest expense | $90 - $95 | |
Effective income tax rate (%) | 22% | |
Capital expenditures ($MM, accrual basis) | ||
Total operational capital (c) | $500 - $525 | |
Capitalized interest | $80 - $85 | |
Capitalized G&A | $25 - $30 | |
Gross operated wells drilled / completed | 87-89 / 80-82 |
(a) | Excludes the amortization of equity-settled, share-based incentive awards. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | Includes facilities, equipment, seismic, land and other items. Excludes capitalized expenses. |
In addition to the updated 2020 guidance provided in the previous table, the Company's initial outlook for 2021 for a "maintenance capital" plan will include average daily production of 90 to 95 MBoe per day from an operational capital spending level of approximately $400 million. Management believes that this program at current prices will yield meaningful additional free cash flow.
Reverse Stock Split
Today the Company also announced that its Board of Directors has approved a reverse stock split of the Company's outstanding shares of common stock at a ratio of 1-for-10, which was approved by the Company's shareholders at the Company's annual meeting of shareholders on June 8, 2020. The reverse stock split will become effective as of the close of business on August 7, 2020 and the Company's common stock will begin trading on a split-adjusted basis on the NYSE at market open on August 10, 2020. The par value of the common stock will not be adjusted in connection with the reverse stock split.
The reverse stock split is intended to, among other things, improve the opportunity for institutional ownership. Upon completion of the reverse stock split, each 10 pre-split shares of common stock outstanding will be automatically combined into one issued and outstanding share of common stock. Any fractional shares that result from the reverse stock split will be canceled, and shareholders who would otherwise hold fractional shares as a result of the reverse stock split will be entitled to receive cash (without interest and subject to applicable withholding taxes) in lieu of such fractional shares. The number of outstanding shares of common stock will be reduced from approximately 397,476,674 as of July 31, 2020 to approximately 39,747,667 shares (without giving effect to the liquidation of fractional shares). The Board has also approved a proportionate reduction of the total number of authorized shares of the Company's common stock pursuant to an amendment to the Company's Certificate of Incorporation. The total number of shares of common stock that the Company is authorized to issue will be reduced from 525,000,000 to 52,500,000 shares.
Second Quarter 2020 Earnings Conference Call
The Company's conference call to discuss second quarter results is scheduled for Wednesday, August 5, 2020, at 8:00 am CDT. The presentation slides and associated webcast can both be found at www.callon.com located on the "News/Events" page within the Investors section on the site or by clicking on the link below.
www.callon.com/investors/news-events/ir-calendar
Hedge Portfolio Summary
The following tables summarize Callon's open derivative contracts for the remaining two quarters of 2020 and the full year 2021, updated for changes through July 31, 2020:
For the Remainder | For the Full Year | ||||||
Oil contracts (WTI) | of 2020 | of 2021 | |||||
Swap contracts | |||||||
Total volume (Bbls) | 6,291,880 | 1,377,000 | |||||
Weighted average price per Bbl | $42.08 | $42.00 | |||||
Collar contracts | |||||||
Total volume (Bbls) | 2,863,040 | 3,741,250 | |||||
Weighted average price per Bbl | |||||||
Ceiling (short call) | $45.00 | $45.02 | |||||
Floor (long put) | $35.00 | $40.00 | |||||
Short put contracts | |||||||
Total volume (Bbls) | 1,104,000 | — | |||||
Weighted average price per Bbl | $42.50 | $— | |||||
Long call contracts | |||||||
Total volume (Bbls) | 920,000 | — | |||||
Weighted average price per Bbl | $67.50 | $— | |||||
Short call contracts | |||||||
Total volume (Bbls) | 920,000 | (a) | 4,825,300 | (a) | |||
Weighted average price per Bbl | $55.00 | $63.62 | |||||
Short call swaption contracts | |||||||
Total volume (Bbls) | — | 730,000 | (b) | ||||
Weighted average price per Bbl | $— | $47.00 | |||||
Oil contracts (WTI Calendar Month Average Roll) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 3,864,000 | — | |||||
Weighted average price per Bbl | ($2.75) | $— | |||||
Oil contracts (Brent ICE) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 184,000 | 1,272,450 | |||||
Weighted average price per Bbl | $46.15 | $38.24 | |||||
Oil contracts (Midland basis differential) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 3,094,700 | 4,015,100 | |||||
Weighted average price per Bbl | ($1.75) | $0.40 | |||||
Oil contracts (Argus Houston MEH basis differential) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 3,256,004 | — | |||||
Weighted average price per Bbl | $0.06 | $— | |||||
Oil contracts (Argus Houston MEH swaps) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 368,000 | 2,969,050 | |||||
Weighted average price per Bbl | $57.71 | $39.48 | |||||
(a) | Premiums from the sale of call options were used to increase the fixed price of certain simultaneously executed price swaps. |
(b) | The short call swaption contract has an exercise expiration date of October 30, 2020. |
For the Remainder | For the Full Year | |||||
Natural gas contracts (Henry Hub) | of 2020 | of 2021 | ||||
Swap contracts | ||||||
Total volume (MMBtu) | 8,566,000 | 12,923,000 | ||||
Weighted average price per MMBtu | $2.07 | $2.66 | ||||
Collar contracts (three-way collars) | ||||||
Total volume (MMBtu) | 2,755,000 | 1,350,000 | ||||
Weighted average price per MMBtu | ||||||
Ceiling (short call) | $2.73 | $2.70 | ||||
Floor (long put) | $2.47 | $2.42 | ||||
Floor (short put) | $2.00 | $2.00 | ||||
Collar contracts (two-way collars) | ||||||
Total volume (MMBtu) | 1,525,000 | 7,750,000 | ||||
Weighted average price per MMBtu | ||||||
Ceiling (short call) | $3.25 | $2.93 | ||||
Floor (long put) | $2.67 | $2.55 | ||||
Long call contracts | ||||||
Total volume (MMBtu) | 3,036,000 | — | ||||
Weighted average price per MMBtu | $3.50 | $— | ||||
Short call contracts | ||||||
Total volume (MMBtu) | 6,072,000 | 7,300,000 | ||||
Weighted average price per MMBtu | $3.50 | $3.09 | ||||
Natural gas contracts (Waha basis differential) | ||||||
Swap contracts | ||||||
Total volume (MMBtu) | 12,885,000 | 6,387,500 | ||||
Weighted average price per MMBtu | ($0.92) | ($0.58) | ||||
For the Remainder | For the Full Year | |||||
NGL contracts (OPIS Mont Belvieu Purity Ethane) | of 2020 | of 2021 | ||||
Swap contracts | ||||||
Total volume (Bbls) | — | 1,825,000 | ||||
Weighted average price per Bbl | $— | $7.62 | ||||
Adjusted Income and Adjusted EBITDA. The Company reported loss available to common stockholders of $1,564.7 million, or $3.94 per fully diluted share, for the three months ended June 30, 2020, and adjusted income available to common stockholders of $2.1 million, or $0.01 per fully diluted share. The following tables reconcile the Company's income (loss) available to common stockholders to adjusted income, and the Company's net income (loss) to adjusted EBITDA:
Three Months Ended | ||||||||
June 30, 2020 | March 31, 2020 | June 30, 2019 | ||||||
(In thousands, except per share data) | ||||||||
Income (loss) available to common stockholders | ($1,564,731) | $216,565 | $53,357 | |||||
(Gain) loss on derivative contracts | 126,965 | (251,969) | (14,036) | |||||
Gain (loss) on commodity derivative settlements, net | 84,208 | 25,126 | (1,157) | |||||
Non-cash stock-based compensation expense (benefit) | 2,761 | (2,972) | 904 | |||||
Impairment of evaluated oil and gas properties | 1,276,518 | — | — | |||||
Merger and integration expense | 8,067 | 15,830 | — | |||||
Other (income) expense | 6,759 | (1,029) | 770 | |||||
Tax effect on adjustments above(a) | (316,108) | 45,153 | 2,839 | |||||
Change in valuation allowance | 377,645 | — | — | |||||
Adjusted Income | $2,084 | $46,704 | $42,677 | |||||
Adjusted Income per fully diluted common share | $0.01 | $0.12 | $0.19 | |||||
Basic WASO | 397,084 | 396,682 | 228,051 | |||||
Diluted WASO (GAAP) | 397,084 | 396,836 | 228,411 | |||||
Effective of potentially dilutive instruments | 114 | — | — | |||||
Adjusted Diluted WASO | 397,198 | 396,836 | 228,411 | |||||
(a) | Calculated using the federal statutory rate of 21%. |
Three Months Ended | ||||||||
June 30, 2020 | March 31, 2020 | June 30, 2019 | ||||||
(In thousands) | ||||||||
Net income (loss) | ($1,564,731) | $216,565 | $55,180 | |||||
(Gain) loss on derivative contracts | 126,965 | (251,969) | (14,036) | |||||
Gain (loss) on commodity derivative settlements, net | 84,208 | 25,126 | (1,157) | |||||
Non-cash stock-based compensation expense (benefit) | 2,761 | (2,972) | 904 | |||||
Impairment of evaluated oil and gas properties | 1,276,518 | — | — | |||||
Merger and integration expense | 8,067 | 15,830 | — | |||||
Other (income) expense | 6,759 | (1,029) | 935 | |||||
Income tax expense | 51,251 | 64,048 | 16,691 | |||||
Interest expense | 22,682 | 20,478 | 741 | |||||
Depreciation, depletion and amortization | 138,930 | 131,463 | 64,590 | |||||
Adjusted EBITDA | $153,410 | $217,540 | $123,848 | |||||
Free Cash Flow. Free cash flow was $18.0 million for the three months ended June 30, 2020. Free cash flow is reconciled to operating cash flow in the following table:
Three Months Ended | |||
June 30, 2020 | |||
(In thousands) | |||
Net cash provided by operating activities | $97,801 | ||
Changes in working capital and other | 40,078 | ||
Change in accrued hedge settlement | (14,480) | ||
Cash interest expense | 21,944 | ||
Merger and integration expense | 8,067 | ||
Adjusted EBITDA | 153,410 | ||
Less: Operational capital (accrual) | 85,087 | ||
Less: Capitalized interest | 20,924 | ||
Less: Interest expense | 22,682 | ||
Less: Capitalized cash G&A (excludes stock-based compensation) | 6,740 | ||
Free cash flow | $17,977 | ||
Adjusted Discretionary Cash Flow. Operating cash flow was $97.8 million and adjusted discretionary cash flow was $142.7 million for the three months ended June 30, 2020. Adjusted discretionary cash flow is reconciled to operating cash flow in the following table:
Three Months Ended | ||||||||
June 30, 2020 | March 31, 2020 | June 30, 2019 | ||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | ($1,564,731) | $216,565 | $55,180 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 138,930 | 131,463 | 64,590 | |||||
Impairment of evaluated oil and gas properties | 1,276,518 | — | — | |||||
Amortization of non-cash debt related items | 738 | 407 | 741 | |||||
Deferred income tax expense | 51,251 | 64,048 | 16,691 | |||||
(Gain) loss on derivative contracts | 126,965 | (251,969) | (14,036) | |||||
Cash (paid) received for commodity derivative settlements, net | 98,688 | 2,613 | (1,157) | |||||
(Gain) loss on sale of other property and equipment | — | — | 21 | |||||
Non-cash stock-based compensation expense (benefit) | 2,761 | (2,972) | 904 | |||||
Non-cash loss on early extinguishment of debt | — | — | — | |||||
Merger and integration expense | 8,067 | 15,830 | — | |||||
Other, net | 3,521 | 890 | — | |||||
Adjusted discretionary cash flow | $142,708 | $176,875 | $122,934 | |||||
Changes in working capital | (36,839) | 31,404 | 27,789 | |||||
Payments to settle asset retirement obligations | — | — | (107) | |||||
Merger and integration expense | (8,067) | (15,830) | — | |||||
Payments to settle vested liability share-based awards | (1) | (754) | (129) | |||||
Net cash provided by operating activities | $97,801 | $191,695 | $150,487 | |||||
Adjusted Total Revenue. Adjusted total revenue for the three months ended June 30, 2020 was $241.4 million and is reconciled to total operating revenues in the following table:
Three Months Ended | |||||||||
June 30, 2020 | March 31, 2020 | June 30, 2019 | |||||||
(In thousands) | |||||||||
Operating Revenues | |||||||||
Oil | $130,513 | $265,767 | $160,728 | ||||||
Natural gas | 12,242 | 6,029 | 6,324 | ||||||
Natural gas liquids | 14,479 | 18,123 | — | ||||||
Total operating revenues | $157,234 | $289,919 | $167,052 | ||||||
Gain (loss) on commodity derivative settlements, net | 84,208 | 25,126 | (1,157) | ||||||
Adjusted total revenue | $241,442 | $315,045 | $165,895 | ||||||
Callon Petroleum Company | ||||||
Consolidated Balance Sheets | ||||||
(In thousands, except par and per share data) | ||||||
(Unaudited) | ||||||
June 30, 2020 | December 31, 2019 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $7,500 | $13,341 | ||||
Accounts receivable, net | 95,839 | 209,463 | ||||
Fair value of derivatives | 31,563 | 26,056 | ||||
Other current assets | 28,828 | 19,814 | ||||
Total current assets | 163,730 | 268,674 | ||||
Oil and natural gas properties, full cost accounting method: | ||||||
Evaluated properties | 3,777,956 | 4,682,994 | ||||
Unevaluated properties | 1,762,860 | 1,986,124 | ||||
Total oil and natural gas properties, net | 5,540,816 | 6,669,118 | ||||
Operating lease right-of-use assets | 35,926 | 63,908 | ||||
Other property and equipment, net | 32,444 | 35,253 | ||||
Deferred tax asset | — | 115,720 | ||||
Deferred financing costs | 25,993 | 22,233 | ||||
Other assets, net | 11,224 | 19,932 | ||||
Total assets | $5,810,133 | $7,194,838 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | $405,596 | $511,622 | ||||
Operating lease liabilities | 24,355 | 42,858 | ||||
Fair value of derivatives | 32,683 | 71,197 | ||||
Other current liabilities | 15,053 | 26,570 | ||||
Total current liabilities | 477,687 | 652,247 | ||||
Long-term debt | 3,350,730 | 3,186,109 | ||||
Operating lease liabilities | 30,729 | 37,088 | ||||
Asset retirement obligations | 48,765 | 48,860 | ||||
Fair value of derivatives | 8,678 | 32,695 | ||||
Other long-term liabilities | 12,160 | 14,531 | ||||
Total liabilities | 3,928,749 | 3,971,530 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock, $0.01 par value, 525,000,000 shares authorized; 397,396,922 and 396,600,022 shares outstanding, respectively | 3,974 | 3,966 | ||||
Capital in excess of par value | 3,204,310 | 3,198,076 | ||||
Retained earnings (Accumulated deficit) | (1,326,900) | 21,266 | ||||
Total stockholders' equity | 1,881,384 | 3,223,308 | ||||
Total liabilities and stockholders' equity | $5,810,133 | $7,194,838 | ||||
Callon Petroleum Company | |||||||||||
Consolidated Statements of Operations | |||||||||||
(In thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Operating revenues: | |||||||||||
Oil | $130,513 | $160,728 | $396,280 | $301,826 | |||||||
Natural gas | 12,242 | 6,324 | 18,271 | 18,273 | |||||||
Natural gas liquids | 14,479 | — | 32,602 | — | |||||||
Total operating revenues | 157,234 | 167,052 | 447,153 | 320,099 | |||||||
Operating Expenses: | |||||||||||
Lease operating | 50,838 | 22,776 | 103,221 | 46,843 | |||||||
Production and ad valorem taxes | 10,361 | 11,131 | 30,041 | 21,944 | |||||||
Gathering, transportation and processing | 20,037 | — | 34,415 | — | |||||||
Depreciation, depletion and amortization | 138,930 | 63,137 | 270,393 | 123,145 | |||||||
General and administrative | 10,024 | 10,564 | 18,349 | 25,341 | |||||||
Impairment of evaluated oil and gas properties | 1,276,518 | — | 1,276,518 | — | |||||||
Merger and integration expenses | 8,067 | — | 23,897 | — | |||||||
Other operating | 4,135 | 935 | 4,135 | 1,092 | |||||||
Total operating expenses | 1,518,910 | 108,543 | 1,760,969 | 218,365 | |||||||
Income (Loss) From Operations | (1,361,676) | 58,509 | (1,313,816) | 101,734 | |||||||
Other (Income) Expenses: | |||||||||||
Interest expense, net of capitalized amounts | 22,682 | 741 | 43,160 | 1,479 | |||||||
(Gain) loss on derivative contracts | 126,965 | (14,036) | (125,004) | 53,224 | |||||||
Other (income) expense | 2,157 | (67) | 895 | (148) | |||||||
Total other (income) expense | 151,804 | (13,362) | (80,949) | 54,555 | |||||||
Income (Loss) Before Income Taxes | (1,513,480) | 71,871 | (1,232,867) | 47,179 | |||||||
Income tax expense | (51,251) | (16,691) | (115,299) | (11,542) | |||||||
Net Income (Loss) | (1,564,731) | 55,180 | (1,348,166) | 35,637 | |||||||
Preferred stock dividends | — | (1,823) | — | (3,647) | |||||||
Income (Loss) Available to Common Stockholders | ($1,564,731) | $53,357 | ($1,348,166) | $31,990 | |||||||
Income (Loss) Available to Common Stockholders Per Common Share: | |||||||||||
Basic | ($3.94) | $0.23 | ($3.40) | $0.14 | |||||||
Diluted | ($3.94) | $0.23 | ($3.40) | $0.14 | |||||||
Weighted Average Common Shares Outstanding: | |||||||||||
Basic | 397,084 | 228,051 | 396,884 | 227,917 | |||||||
Diluted | 397,084 | 228,411 | 396,884 | 228,599 | |||||||
Callon Petroleum Company | |||||||||||
Consolidated Statements of Cash Flows | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended June | Six Months Ended June | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | ($1,564,731) | $55,180 | ($1,348,166) | $35,637 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 138,930 | 64,590 | 270,393 | 125,503 | |||||||
Impairment of evaluated oil and gas properties | 1,276,518 | — | 1,276,518 | — | |||||||
Amortization of non-cash debt related items | 738 | 741 | 1,145 | 1,479 | |||||||
Deferred income tax expense | 51,251 | 16,691 | 115,299 | 11,542 | |||||||
(Gain) loss on derivative contracts | 126,965 | (14,036) | (125,004) | 53,224 | |||||||
Cash (paid) received for commodity derivative settlements | 98,688 | (1,157) | 101,301 | (1,447) | |||||||
Loss on sale of other property and equipment | — | 21 | — | 49 | |||||||
Non-cash expense related to equity share-based awards | 1,041 | 1,754 | 4,817 | 6,299 | |||||||
Change in the fair value of liability share-based awards | 1,720 | (850) | (5,028) | 1,031 | |||||||
Payments to settle asset retirement obligations | — | (107) | — | (771) | |||||||
Payments for cash-settled restricted stock unit awards | (1) | (129) | (755) | (1,425) | |||||||
Other, net | 3,521 | — | 4,411 | — | |||||||
Changes in current assets and liabilities: | |||||||||||
Accounts receivable | (2,833) | 44,071 | 113,040 | 38,681 | |||||||
Other current assets | (3,567) | (3,807) | (4,348) | (6,101) | |||||||
Current liabilities | (30,439) | (10,251) | (114,127) | (36,254) | |||||||
Other | — | (2,224) | — | (2,401) | |||||||
Net cash provided by operating activities | 97,801 | 150,487 | 289,496 | 225,046 | |||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (206,121) | (166,219) | (430,569) | (359,430) | |||||||
Acquisitions | — | (11,423) | — | (39,370) | |||||||
Proceeds from sale of assets | (161) | 260,417 | 10,079 | 274,296 | |||||||
Cash paid for settlements of contingent consideration arrangements, net | — | — | (40,000) | — | |||||||
Other, net | 6,992 | — | 6,834 | — | |||||||
Net cash provided by (used in) investing activities | (199,290) | 82,775 | (453,656) | (124,504) | |||||||
Cash flows from financing activities: | |||||||||||
Borrowings on senior secured revolving credit facility | 484,500 | 140,000 | 4,775,500 | 360,000 | |||||||
Payments on senior secured revolving credit facility | (384,500) | (365,000) | (4,610,500) | (455,000) | |||||||
Payment of preferred stock dividends | — | (1,823) | — | (3,647) | |||||||
Payment of deferred financing costs | (5,736) | (31) | (6,011) | (31) | |||||||
Tax withholdings related to restricted stock units | (75) | (833) | (388) | (1,858) | |||||||
Other, net | — | (5) | (282) | (5) | |||||||
Net cash provided by (used in) financing activities | 94,189 | (227,692) | 158,319 | (100,541) | |||||||
Net change in cash and cash equivalents | (7,300) | 5,570 | (5,841) | 1 | |||||||
Balance, beginning of period | 14,800 | 10,482 | 13,341 | 16,051 | |||||||
Balance, end of period | $7,500 | $16,052 | $7,500 | $16,052 | |||||||
Non-GAAP Financial Measures
This news release refers to non-GAAP financial measures such as "Free Cash Flow," "Adjusted Discretionary Cash Flow," "Adjusted G&A," "Full Cash G&A Costs," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the Company's wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "may," "will," "forecast," "outlook," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, as of this date, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil, natural gas and natural gas liquids ("NGLs") prices or a prolonged period of low oil, natural gas or NGLs prices and the effects of actions by, or disputes among or between significant oil and natural gas producing countries, general economic conditions, including the availability of credit and access to existing lines of credit; the effects of excess supply of oil and natural gas resulting from reduced demand caused by the COVID-19 pandemic and the actions of certain oil and natural gas producing countries; our ability to drill and complete wells; operational, regulatory and environment risks; cost and availability of equipment and labor; our ability to finance our activities; the ultimate timing, outcome and results of integrating the operations of Carrizo Oil & Gas, Inc. and Callon; and the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all; and other risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
1) See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations.
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-second-quarter-2020-results-301106056.html
SOURCE Callon Petroleum Company
Article Date
8/4/20207/24/2020 - Callon Petroleum Company Schedules Second Quarter 2020 Conference Call for August 5, 2020
Callon Petroleum Company Schedules Second Quarter 2020 Conference Call for August 5, 2020
Source: PR Newswire
HOUSTON, July 24, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its second quarter 2020 financial and operating results.
Webcast:
Date: August 5, 2020
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: www.callon.com | |
Select "News and Events" under the "Investors" section of the website. |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release second quarter 2020 results after market close on Tuesday, August 4, 2020.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-second-quarter-2020-conference-call-for-august-5-2020-301099244.html
SOURCE Callon Petroleum Company
Article Date
7/24/20205/26/2020 - Callon Petroleum Company Announces Termination of the Exchange Offer and Consent Solicitations
Callon Petroleum Company Announces Termination of the Exchange Offer and Consent Solicitations
Source: PR Newswire
HOUSTON, May 26, 2020 /PRNewswire/ -- Callon Petroleum Company ("Callon" or the "Company") (NYSE: CPE) today announced that it terminated its previously announced private exchange offer (the "Exchange Offer") to holders of its outstanding 6.25% Senior Notes due 2023 (the "2023 Notes"), 8.25% Senior Notes due 2025 (the "2025 Notes" and, together with the 2023 Notes, the "Carrizo Notes"), 6.125% Senior Notes due 2024 (the "2024 Notes") and 6.375% Senior Notes due 2026 (the "2026 Notes" and, together with the 2024 Notes, the "Callon Notes" and, together with the Carrizo Notes, the "Old Notes") to exchange their Old Notes for up to $300,000,000 aggregate principal amount of newly issued 8.00% Second Lien Senior Secured Notes due 2025 (the "New Notes"). All Old Notes previously tendered in the Exchange Offer and not validly withdrawn will be promptly returned to their respective holders. No Old Notes will be accepted for exchange and no New Notes will be issued.
This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Callon Petroleum Company
Callon Petroleum Company is an independent oil and natural gas company focused on the acquisition, exploration, and development of high-quality assets in the leading oil plays of South and West Texas.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the Exchange Offer and Consent Solicitations; wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "may," "will," "forecast," "outlook," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, as of this date, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil, natural gas and natural gas liquids ("NGLs") prices or a prolonged period of low oil, natural gas or NGLs prices and the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries, such as Saudi Arabia and other oil and natural gas producing countries, such as Russia, with respect to production levels or other matters related to the price of oil, general economic conditions, including the availability of credit and access to existing lines of credit, the effects of excess supply of oil and natural gas resulting from reduced demand caused by the COVID-19 pandemic and the actions of certain oil and natural gas producing countries, our ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, our ability to finance our activities, the ultimate timing, outcome and results of integrating the operations of Carrizo and Callon and the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all, and other risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact:
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-termination-of-the-exchange-offer-and-consent-solicitations-301064879.html
SOURCE Callon Petroleum Company
Article Date
5/26/2020Callon Petroleum Company Announces Commencement of Exchange Offer and Consent Solicitations for Outstanding 6.25% Senior Notes due 2023, 6.125% Senior Notes due 2024, 8.25% Senior Notes due 2025, and 6.375% Senior Notes due 2026
Source: PR Newswire
HOUSTON, May 11, 2020 /PRNewswire/ -- Callon Petroleum Company ("Callon" or the "Company") (NYSE: CPE) today announced it has commenced a private exchange offer (the "Exchange Offer") to each Eligible Holder (as defined below) of its 6.25% Senior Notes due 2023 (the "2023 Notes"), its 8.25% Senior Notes due 2025 (the "2025 Senior Notes" and, together with the 2023 Notes, the "Carrizo Notes"), its 6.125% Senior Notes due 2024 (the "2024 Notes") and its 6.375% Senior Notes due 2026 (the "2026 Notes" and, together with the 2024 Notes, the "Callon Notes" and, together with the Carrizo Notes, the "Old Notes") to exchange their Old Notes for up to $300,000,000 aggregate principal amount (the "Maximum Exchange Amount") of newly issued 8.00% Second Lien Senior Secured Notes due 2025 (the "New Notes"), in each case upon the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement, dated May 11, 2020 (the "Offering Memorandum").
The following table sets forth the consideration to be offered to Eligible Holders of the Old Notes in the Exchange Offer:
Title of Series of Old Notes | CUSIP No. / ISIN | Aggregate Outstanding Principal Amount | Early Exchange Consideration (as defined below), if tendered and not withdrawn prior to the Early Tender Date (as defined below)(1) | Late Exchange Consideration (as defined below), if tendered after the Early Tender Date and prior to the Expiration Date (as defined below)(1) | Acceptance Priority Level |
6.25% Senior Notes due 2023 | 144577AH6/US144577AH67 | $650,000,000 | $400 | $350 | 1 |
6.125% Senior Notes due 2024 | 13123XAT9/US13123XAT90; AN7061566/USU1303XAD85 | $600,000,000 | $400 | $350 | 2 |
8.25% Senior Notes due 2025 | 144577AJ2/US144577AJ24 | $250,000,000 | $400 | $350 | 3 |
6.375% Senior Notes due 2026 | 13123XAZ5/US13123XAZ50 | $400,000,000 | $400 | $350 | 4 |
(1) | Total principal amount of New Notes for each $1,000 principal amount of Old Notes tendered and accepted for exchange. |
Eligible Holders who tender their Old Notes at or prior to 5:00 p.m., New York City Time, on May 22, 2020, unless extended (such time and date as it may be extended, the "Early Tender Date"), will be eligible to receive $400 principal amount of New Notes (the "Early Exchange Consideration") for each $1,000 principal amount of Old Notes tendered and accepted for exchange. Eligible Holders tendering Old Notes after the Early Tender Date and at or prior to 11:59 p.m., New York City time, on June 8, 2020, unless extended (such time and date as it may be extended, the "Expiration Date"), will be eligible to receive $350 principal amount of New Notes (the "Late Exchange Consideration") for each $1,000 principal amount of Old Notes tendered for exchange. In the event that the aggregate amount of New Notes to be issued in respect of Old Notes validly tendered (and not validly withdrawn) would exceed the Maximum Exchange Amount, Old Notes will be accepted on a prorated basis within the applicable Acceptance Priority Level.
In addition to the consideration described above, the Company will pay in cash accrued and unpaid interest on the Old Notes accepted in the Exchange Offer from the applicable latest interest payment date to, but not including, the settlement date for the Exchange Offer, which will occur promptly after the Expiration Date and is expected to occur on June 10, 2020. Interest on the New Notes will accrue from the date of issuance of the New Notes.
In conjunction with the Exchange Offer, the Company is soliciting consents (the "Consent Solicitations") from holders of each series of Old Notes ("Consents") to certain proposed amendments to the indentures governing each of the Old Notes (the "Old Notes Indentures") to eliminate substantially all of the restrictive covenants and certain of the default provisions contained therein (the "Proposed Amendments"). The Company must receive Consents from holders representing a majority of the outstanding principal amount of each series of Old Notes to adopt the Proposed Amendments with respect to the applicable Old Notes Indenture (the "Requisite Consents"). Following consummation of the Exchange Offer and the Consent Solicitations, any holders of the Old Notes that do not participate in the Exchange Offer would rank effectively junior to the New Notes to the extent of the value of the collateral securing the New Notes.
Eligible Holders of Old Notes may not tender Old Notes without delivering the related Consents, and Eligible Holders of Old Notes may not deliver Consents without tendering the related Old Notes. The Exchange Offer and Consent Solicitations may be terminated, withdrawn, amended or extended at any time and for any reason. Neither of the Exchange Offer is conditioned upon any minimum amount of Old Notes tendered or the receipt of the Requisite Consents to the Proposed Amendments.
Tenders of Old Notes in the Exchange Offer may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on May 22, 2020, unless extended (as it may be extended, the "Withdrawal Deadline"). Old Notes (including Old Notes tendered after the Withdrawal Deadline) may not be withdrawn from the Exchange Offer and the related Consents may not be revoked from the Consent Solicitations after the Withdrawal Deadline, subject to applicable law.
The Exchange Offer and Consent Solicitations will only be made, and the New Notes are only being offered and issued, to holders of Old Notes who are (a) reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), or (b) not "U.S. persons" as defined in Rule 902 under the Securities Act and are in compliance with Regulation S under the Securities Act (any such holder, an "Eligible Holder"). Only Eligible Holders who have completed and returned the eligibility letter are authorized to receive or review the Offering Memorandum or to participate in the Exchange Offer and Consent Solicitations. Eligible Holders of the Old Notes who desire to obtain and complete an eligibility form should contact the information agent and exchange agent, D.F. King & Co., at (877) 896-3192 (toll-free) or (212) 269-5550 (for banks and brokers) or email cpe@dfking.com.
Eligible Holders of the Old Notes are urged to carefully read the Offering Memorandum before making any decision with respect to the Exchange Offer and Consent Solicitations. None of the Company, the dealer managers, the trustees with respect to the Old Notes and the New Notes, the information and exchange agent or any affiliate of any of them makes any recommendation as to whether Eligible Holders of the Old Notes should exchange their Old Notes for New Notes in the Exchange Offer, and no one has been authorized by any of them to make such a recommendation. Eligible Holders must make their own decision as to whether to tender Old Notes and, if so, the principal amount of Old Notes to tender.
The New Notes and the Exchange Offer have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offer and Consent Solicitations are not being made to Eligible Holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Callon Petroleum Company
Callon Petroleum Company is an independent oil and natural gas company focused on the acquisition, exploration, and development of high-quality assets in the leading oil plays of South and West Texas.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the Company's Exchange Offer and Consent Solicitations; wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "may," "will," "forecast," "outlook," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, as of this date, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil, natural gas and natural gas liquids ("NGLs") prices or a prolonged period of low oil, natural gas or NGLs prices and the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries, such as Saudi Arabia and other oil and natural gas producing countries, such as Russia, with respect to production levels or other matters related to the price of oil, general economic conditions, including the availability of credit and access to existing lines of credit, the effects of excess supply of oil and natural gas resulting from reduced demand caused by the COVID-19 pandemic and the actions of certain oil and natural gas producing countries, our ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, our ability to finance our activities, the ultimate timing, outcome and results of integrating the operations of Carrizo and Callon and the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all, and other risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact:
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:SOURCE Callon Petroleum Company
Article Date
5/11/2020Callon Petroleum Company Announces First Quarter 2020 Results
Source: PR Newswire
HOUSTON, May 11, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended March 31, 2020.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Recent Actions
In response to the recent commodity price collapse and the global impact of the novel coronavirus pandemic (COVID-19), Callon has taken a number of steps to ensure the safety of our team members, their families, and our service providers, as well as preserve the integrity and value of our business. Some of these recent actions include:
Recent Highlights
Joe Gatto, President and Chief Executive Officer commented, "Beginning in early March, our team began taking decisive action to align our activity levels with the current economic environment. We also quickly moved to enhance our cash flow protection through strategic hedging initiatives which provide support as we transition the business to lower levels of activity. Additionally, the leadership team, along with our Board, has made the decision to pare costs through voluntary G&A reductions."
He continued, "Our operational and financial performance since the beginning of the year clearly demonstrates the collective effort of our organization to execute on our post-merger integration plan and drive the synergies that will position us to manage through a challenging time for our industry. We have developed numerous scenarios that support returning to a modest level of completion activity in the next few months, and our decisions will be based on our outlook for sustainable, unhedged returns on capital that generate incremental value. These scenarios will also be governed by the optimization of free cash flow(2) for debt reduction over the balance of the year while preparing ourselves for a solid foundation into 2021."
Credit Facility and Liquidity
Callon recently completed the spring redetermination for its senior secured credit facility. The borrowing base and elected commitment were both set at $1.7 billion, relative to a previous elected commitment of $2.0 billion. As of March 31, the drawn balance on the facility was $1.35 billion. Other key elements of the credit facility following the redetermination process include:
Operations Update
At March 31, 2020, Callon had 1,439 gross (1,268 net) horizontal wells producing from established flow units in the Permian Basin and Eagle Ford Shale. Net daily production for the three months ended March 31, 2020 grew 150% to 101.0 Mboe/d (64% oil), as compared to the same period of 2019.
For the three months ended March 31, 2020, Callon drilled 40 gross (39.4 net) horizontal wells and placed a combined 36 gross (30.8 net) horizontal wells on production. Of the wells placed on production, 61% were in the Eagle Ford Shale with the remaining 39% in the Permian Basin.
Callon continued to post meaningful gains in efficiency driven by the significant shift to simultaneous operations across the entirety of the asset base. Some of the operational highlights include:
The Company recently reduced development activity, relative to the plan previous communicated in the update provided on March 17, in response to further weakness in the commodity prices. All completion activity was suspended in April after the completion of recent projects in the Delaware and Midland Basins. Operations has also reduced drilling activity and expects to be transitioning to a single rig by mid-May.
Recently, Callon entered into additional marketing arrangements to ensure placement of its production volumes. Currently, approximately 60,000 gross barrels of oil per day ("Bbl/d") are covered by term sales agreements with an agreement for an additional 20,000 to 25,000 barrels currently under negotiation. Additionally, the Company holds 15,000 Bbls/d of firm transport capacity and will add another 10,000 Bbls/d during the third quarter to support movement of oil volumes from the Permian Basin to Gulf Coast markets.
Callon has been closely monitoring field level economics to make decisions regarding voluntary production curtailment decisions. The Company has shut-in approximately 1,500 Bbl/d (gross) through April and expects to reach over 3,000 Bbl/d (gross) during May. June volumes are currently under evaluation. In addition, Callon has deferred the flowback of a recently completed project in the WildHorse area until expected netbacks improve.
Capital Expenditures
For the three months ended March 31, 2020, Callon incurred $277.6 million in operational capital expenditures on an accrual basis. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
Three Months Ended March 31, 2020 | ||||||||||||||||
Operational | Capitalized | Capitalized | Total Capital | |||||||||||||
Capital (a) | Interest | G&A | Expenditures | |||||||||||||
Cash basis (b) | $ | 197,483 | $ | 19,395 | $ | 7,570 | $ | 224,448 | ||||||||
Timing adjustments (c) | 84,594 | 4,590 | — | 89,184 | ||||||||||||
Non-cash items | (4,437) | — | (168) | (4,605) | ||||||||||||
Accrual basis | $ | 277,640 | $ | 23,985 | $ | 7,402 | $ | 309,027 | ||||||||
(a) | Includes seismic, land, technology, and other items. |
(b) | Cash basis is presented here to help users of financial information reconcile amounts from the cash flow statement to the balance sheet by accounting for timing related changes in working capital that align with our development pace and rig count. |
(c) | Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
Three Months Ended | |||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||
Net production | |||||||||
Oil (MBbls) | 5,847 | 3,234 | 2,858 | ||||||
Natural gas (MMcf) | 9,793 | 5,530 | 4,619 | ||||||
NGLs (MBbls) | 1,707 | 135 | — | ||||||
Total barrels of oil equivalent (MBoe) | 9,186 | 4,291 | 3,628 | ||||||
Total daily production (Boe/d) | 100,955 | 46,641 | 40,311 | ||||||
Oil as % of total daily production | 64 | % | 75 | % | 79 | % | |||
Average realized sales price (excluding impact of settled derivatives) | |||||||||
Oil (per Bbl) | $45.45 | $56.61 | $49.37 | ||||||
Natural gas (per Mcf) | 0.62 | 1.98 | 2.59 | ||||||
NGLs (per Bbl) | 10.62 | 15.37 | — | ||||||
Total (per BOE) | 31.56 | 45.70 | 42.18 | ||||||
Average realized sales price (including impact of settled derivatives) | |||||||||
Oil (per Bbl) | $48.90 | $55.33 | $48.83 | ||||||
Natural gas (per Mcf) | 1.13 | 2.12 | 2.86 | ||||||
NGLs (per Bbl) | 10.62 | 15.37 | — | ||||||
Total (per Boe) | 34.30 | 44.92 | 42.11 | ||||||
Revenues (in thousands) | |||||||||
Oil | $265,767 | $183,071 | $141,098 | ||||||
Natural gas | 6,029 | 10,949 | 11,949 | ||||||
NGLs | 18,123 | 2,075 | — | ||||||
Total revenues | 289,919 | 196,095 | 153,047 | ||||||
Additional per Boe data | |||||||||
Sales price (a) | $31.56 | $45.70 | $42.18 | ||||||
Lease operating expense | 5.70 | 5.90 | 6.63 | ||||||
Production taxes | 2.14 | 2.06 | 2.98 | ||||||
Gathering, transportation and processing | 1.57 | — | — | ||||||
Operating margin | $22.15 | $37.74 | $32.57 | ||||||
Depletion, depreciation and amortization | $14.31 | $14.30 | $16.59 | ||||||
Adjusted G&A (b) | |||||||||
Cash component (c) | $1.20 | $2.41 | $2.28 | ||||||
Non-cash component | $0.41 | 0.53 | 0.44 | ||||||
(a) | Excludes the impact of settled derivatives. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | Excludes the amortization of equity-settled, share-based incentive awards. |
Total Revenue. For the quarter ended March 31, 2020, Callon reported total revenue of $289.9 million and total revenue including the gain or loss from the settlement of derivative contracts ("Adjusted Total Revenue,"(1)) of $315.0 million, reflecting the impact of a $25.1 million gain from the settlement of derivative contracts. Average daily production for the quarter was 101.0 Mboe/d, compared to average daily production of 46.6 Mboe/d in the fourth quarter of 2019. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended March 31, 2020, the net gain (loss) on commodity derivative instruments includes the following (in thousands):
Three Months Ended | ||
Gain (loss) on oil derivatives | $257,323 | |
Gain (loss) on natural gas derivatives | (6,829) | |
Gain (loss) on total commodity derivatives | $250,494 | |
For the quarter ended March 31, 2020, the cash received (paid) for commodity derivative settlements includes the following (in thousands):
Three Months Ended | ||
Cash paid on oil derivatives | ($1,777) | |
Cash received on gas derivatives | 4,390 | |
Cash received for commodity derivative settlements | $2,613 | |
Lease Operating Expenses, including workover ("LOE"). LOE per Boe for the three months ended March 31, 2020 was $5.70 per Boe, compared to LOE of $5.90 per Boe in the fourth quarter of 2019. LOE on a per unit basis is fairly consistent with the previous quarter.
Production Taxes, including ad valorem taxes. Production taxes were $2.14 per Boe for the three months ended March 31, 2020, representing approximately 6.8% of total revenue before the impact of derivative settlements.
Gathering, Transportation and Processing Expenses. Gathering, transportation and processing costs for the three months ended March 31, 2020 were $14.4 million. The increase is primarily due to the assumption of processing agreements in the Carrizo acquisition and certain contract modifications effective January 1, 2020. As such, the Company now records contractual fees associated with gathering, processing, treating and compression, as well as any transportation fees incurred to deliver the product to the purchaser, as gathering, transportation and processing expense. These fees were historically recorded as a reduction of revenue depending on when control transferred to the purchaser.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended March 31, 2020 was consistent at $14.31 per Boe compared to $14.30 per Boe in the fourth quarter of 2019.
General and Administrative ("G&A"). G&A was $8.3 million, or $0.91 per Boe, and G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure1) was $14.8 million, or $1.62 per Boe, for the three months ended March 31, 2020 and $12.6 million, or $2.94 per Boe, for the fourth quarter of 2019. The cash component of Adjusted G&A was $11.1 million, or $1.20 per Boe, for the three months ended March 31, 2020 compared to $10.3 million, or $2.41 per Boe, for the fourth quarter of 2019.
For the three months ended March 31, 2020, G&A and Adjusted G&A, which excludes the amortization of equity-settled and share-based incentive awards, are calculated as follows (in thousands):
Three Months Ended | ||
Total G&A expense | $8,325 | |
Change in the fair value of liability share-based awards (non-cash) | 6,516 | |
Adjusted G&A – total | 14,841 | |
Restricted stock share-based compensation (non-cash) | (3,776) | |
Adjusted G&A – cash component | $11,065 | |
Income Tax Expense. Callon provides for income taxes at the statutory rate of 21% adjusted for permanent differences expected to be realized. Callon recorded income tax expense of $64.0 million for the three months ended March 31, 2020, compared to income tax expense of $5.9 million for the three months ended December 31, 2019. The change in income tax expense is largely proportional to the amount of income before income taxes generated in the respective periods.
Outlook
Due to uncertain nature of the current commodity markets and the underlying supply and demand landscape, Callon will not be providing full year guidance for 2020. As market dynamics evolve in the upcoming months, the Company will be in a better position to comment on the details surrounding long term expectations. In the interim, Callon believes the following commentary may provide additional insight to investors:
First Quarter 2020 Earnings Conference Call
The Company has posted presentation slides accompanying this earnings release and an associated, pre-recorded webcast discussion on the Company's website. The presentation slides and associated webcast can both be found at www.callon.com located on the "News/Events" page within the Investors section on the site. The Company's previously scheduled conference call to discuss first quarter results on Monday, May 11, 2020, at 10:00 am CDT is canceled.
Hedge Portfolio Summary
The following table summarizes Callon's open derivative positions as of March 31, 2020 for the periods indicated:
For the Remainder | For the Full Year | ||||||
Oil contracts (WTI) | of 2020 | of 2021 | |||||
Swap contracts | |||||||
Total volume (Bbls) | 13,085,720 | — | |||||
Weighted average price per Bbl | $42.11 | $— | |||||
Swap contracts with short puts | |||||||
Total volume (Bbls) | 1,650,000 | — | |||||
Weighted average price per Bbl | |||||||
Swap | $56.06 | $— | |||||
Floor (short put) | $42.50 | $— | |||||
Short call contracts | |||||||
Total volume (Bbls) | 2,750,000 | (1) | 4,825,300 | (1) | |||
Weighted average price per Bbl | $45.59 | $63.62 | |||||
Oil contracts (Brent ICE) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 366,000 | — | |||||
Weighted average price per Bbl | $46.15 | $— | |||||
Oil contracts (Midland basis differential) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 6,574,800 | 4,015,100 | |||||
Weighted average price per Bbl | ($1.24) | $0.40 | |||||
Oil contracts (Argus Houston MEH basis differential) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 4,612,205 | — | |||||
Weighted average price per Bbl | ($0.24) | $— | |||||
Oil contracts (Argus Houston MEH swaps) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 504,500 | — | |||||
Weighted average price per Bbl | $58.22 | $— | |||||
Natural gas contracts (Henry Hub) | |||||||
Collar contracts (three-way collars) | |||||||
Total volume (MMBtu) | 3,665,000 | 1,350,000 | |||||
Weighted average price per MMBtu | |||||||
Ceiling (short call) | $2.74 | $2.70 | |||||
Floor (long put) | $2.48 | $2.42 | |||||
Floor (short put) | $2.00 | $2.00 | |||||
Swap contracts | |||||||
Total volume (MMBtu) | 9,170,000 | — | |||||
Weighted average price per MMBtu | $2.20 | $— | |||||
Short call contracts | |||||||
Total volume (MMBtu) | 9,075,000 | 7,300,000 | |||||
Weighted average price per MMBtu | $3.50 | $3.09 | |||||
Natural gas contracts (Waha basis differential) | |||||||
Swap contracts | |||||||
Total volume (MMBtu) | 18,982,000 | — | |||||
Weighted average price per MMBtu | ($1.08) | $— | |||||
(1) | Premiums from the sale of call options were used to increase the fixed price of certain simultaneously executed price swaps. |
Adjusted Income and Adjusted EBITDA. The Company reported income available to common stockholders of $216.6 million, or $0.55 per fully diluted share, for the three months ended March 31, 2020, and Adjusted Income available to common stockholders of $46.7 million, or $0.12 per fully diluted share. The following tables reconcile the Company's income (loss) available to common stockholders to Adjusted Income, and the Company's net income (loss) to Adjusted EBITDA:
Three Months Ended | ||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
(In thousands except per share data) | ||||||||
Income (loss) available to common stockholders | $216,565 | ($23,543) | ($21,367) | |||||
(Gain) loss on derivative contracts | (251,969) | 30,694 | 67,260 | |||||
Gain (loss) on commodity derivative settlements, net | 25,126 | (3,353) | (290) | |||||
Non-cash stock-based compensation expense | (2,972) | 3,390 | 6,426 | |||||
Merger and integration expense | 15,830 | 68,420 | — | |||||
Other (income) expense | (1,029) | — | — | |||||
Loss on extinguishment of debt | — | 4,881 | — | |||||
Tax effect on adjustments above | 45,153 | (21,847) | (15,413) | |||||
Adjusted Income (1) | $46,704 | $58,642 | $36,616 | |||||
Adjusted Income per fully diluted common share (1) | $0.12 | $0.24 | $0.16 | |||||
Three Months Ended | ||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
(In thousands) | ||||||||
Net income (loss) | $216,565 | ($23,543) | ($19,543) | |||||
(Gain) loss on derivative contracts | (251,969) | 30,694 | 67,260 | |||||
Gain (loss) on commodity derivative settlements, net | 25,126 | (3,353) | (290) | |||||
Non-cash stock-based compensation expense | (2,972) | 3,390 | 6,426 | |||||
Merger and integration expense | 15,830 | 68,420 | — | |||||
Other (income) expense | (1,029) | 145 | 157 | |||||
Income tax (benefit) expense | 64,048 | 5,857 | (5,149) | |||||
Interest expense | 20,478 | 689 | 738 | |||||
Depreciation, depletion and amortization | 131,463 | 63,198 | 60,913 | |||||
Loss on extinguishment of debt | — | 4,881 | — | |||||
Adjusted EBITDA (1) | $217,540 | $150,378 | $110,512 | |||||
Adjusted Discretionary Cash Flow. Operating cash flow was $191.7 million and adjusted discretionary cash flow, a non-GAAP measure(1), was $176.9 million for the three months ended March 31, 2020. Adjusted discretionary cash flow is reconciled to operating cash flow in the following table:
Three Months Ended | ||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $216,565 | ($23,543) | ($19,543) | |||||
Adjustments to reconcile net income to cash provided by | ||||||||
Depreciation, depletion and amortization | 131,463 | 63,198 | 60,913 | |||||
Amortization of non-cash debt related items | 407 | 689 | 738 | |||||
Deferred income tax (benefit) expense | 64,048 | 5,857 | (5,149) | |||||
(Gain) loss on derivatives, net of settlements | (251,969) | 30,694 | 67,260 | |||||
Cash (paid) received for commodity derivative settlements, net | 2,613 | (3,353) | (290) | |||||
(Gain) loss on sale of other property and equipment | — | (126) | 28 | |||||
Non-cash stock-based compensation expense | (2,972) | 3,417 | 6,426 | |||||
Non-cash loss on early extinguishment of debt | — | 4,881 | — | |||||
Merger and integration expense | 15,830 | 68,420 | — | |||||
Other, net | 890 | — | — | |||||
Adjusted discretionary cash flow (1) | $176,875 | $150,134 | $110,383 | |||||
Changes in working capital | 31,404 | 58,587 | (33,864) | |||||
Payments to settle asset retirement obligations | — | (2,723) | (664) | |||||
Merger and integration expense | (15,830) | (68,420) | — | |||||
Payments to settle vested liability share-based awards | (754) | — | (1,296) | |||||
Net cash provided by operating activities | $191,695 | $137,578 | $74,559 | |||||
Adjusted Total Revenue. Adjusted total revenue(1) for the three months ended March 31, 2020 was $315.0 million and is reconciled to total operating revenues in the following table:
Three Months Ended | |||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||
(In thousands) | |||||||||
Operating Revenues | |||||||||
Oil | $265,767 | $183,071 | $141,098 | ||||||
Natural gas | 6,029 | 10,949 | 11,949 | ||||||
Natural gas liquids | 18,123 | 2,075 | — | ||||||
Total operating revenues | $289,919 | $196,095 | $153,047 | ||||||
Gain (loss) on commodity derivative settlements, net | 25,126 | (3,353) | (290) | ||||||
Adjusted total revenue | $315,045 | $192,742 | $152,757 | ||||||
Callon Petroleum Company | ||||||
March 31, 2020 | December 31, 2019 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $14,800 | $13,341 | ||||
Accounts receivable, net | 93,006 | 209,463 | ||||
Fair value of derivatives | 224,665 | 26,056 | ||||
Other current assets | 24,280 | 19,814 | ||||
Total current assets | 356,751 | 268,674 | ||||
Oil and natural gas properties, full cost accounting method: | ||||||
Evaluated properties | 5,036,095 | 4,682,994 | ||||
Unevaluated properties | 1,809,104 | 1,986,124 | ||||
Total oil and natural gas properties, net | 6,845,199 | 6,669,118 | ||||
Operating lease right-of-use assets | 56,050 | 63,908 | ||||
Other property and equipment, net | 33,216 | 35,253 | ||||
Deferred tax asset | 51,250 | 115,720 | ||||
Deferred financing costs | 21,383 | 22,233 | ||||
Fair value of derivatives | 1,983 | 9,216 | ||||
Other assets, net | 14,129 | 10,716 | ||||
Total assets | $7,379,961 | $7,194,838 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | $525,326 | $511,622 | ||||
Operating lease liabilities | 37,686 | 42,858 | ||||
Fair value of derivatives | 4,851 | 71,197 | ||||
Other current liabilities | 15,905 | 26,570 | ||||
Total current liabilities | 583,768 | 652,247 | ||||
Long-term debt | 3,250,912 | 3,186,109 | ||||
Operating lease liabilities | 35,746 | 37,088 | ||||
Asset retirement obligations | 50,531 | 48,860 | ||||
Deferred tax liability | — | — | ||||
Fair value of derivatives | 4,257 | 32,695 | ||||
Other long-term liabilities | 11,844 | 14,531 | ||||
Total liabilities | 3,937,058 | 3,971,530 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock, $0.01 par value, 525,000,000 shares authorized; 396,738,180 and | 3,967 | 3,966 | ||||
Capital in excess of par value | 3,201,105 | 3,198,076 | ||||
Retained earnings | 237,831 | 21,266 | ||||
Total stockholders' equity | 3,442,903 | 3,223,308 | ||||
Total liabilities and stockholders' equity | $7,379,961 | $7,194,838 | ||||
Callon Petroleum Company | |||||
Three Months Ended March 31, | |||||
2020 | 2019 | ||||
Operating revenues: | |||||
Oil | $265,767 | $141,098 | |||
Natural gas | 6,029 | 11,949 | |||
Natural gas liquids | 18,123 | — | |||
Total operating revenues | 289,919 | 153,047 | |||
Operating Expenses: | |||||
Lease operating | 52,383 | 24,067 | |||
Production and ad valorem taxes | 19,680 | 10,813 | |||
Gathering, transportation and processing | 14,378 | — | |||
Depreciation, depletion and amortization | 131,463 | 60,184 | |||
General and administrative | 8,325 | 14,777 | |||
Merger and integration expenses | 15,830 | — | |||
Other operating | — | 157 | |||
Total operating expenses | 242,059 | 109,998 | |||
Income From Operations | 47,860 | 43,049 | |||
Other (Income) Expenses: | |||||
Interest expense, net of capitalized amounts | 20,478 | 738 | |||
(Gain) loss on derivative contracts | (251,969) | 67,260 | |||
Other income | (1,262) | (257) | |||
Total other (income) expense | (232,753) | 67,741 | |||
Income (Loss) Before Income Taxes | 280,613 | (24,692) | |||
Income tax (expense) benefit | (64,048) | 5,149 | |||
Net Income (Loss) | 216,565 | (19,543) | |||
Preferred stock dividends | — | (1,824) | |||
Income (Loss) Available to Common Stockholders | $216,565 | ($21,367) | |||
Income (Loss) Available to Common Stockholders Per Common Share: | |||||
Basic | $0.55 | ($0.09) | |||
Diluted | $0.55 | ($0.09) | |||
Weighted Average Common Shares Outstanding: | |||||
Basic | 396,682 | 227,784 | |||
Diluted | 396,836 | 227,784 | |||
Callon Petroleum Company | |||||
Three Months Ended March 31, | |||||
2020 | 2019 | ||||
Cash flows from operating activities: | |||||
Net income (loss) | $216,565 | ($19,543) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation, depletion and amortization | 131,463 | 60,913 | |||
Amortization of non-cash debt related items | 407 | 738 | |||
Deferred income tax (benefit) expense | 64,048 | (5,149) | |||
(Gain) loss on derivative contracts | (251,969) | 67,260 | |||
Cash (paid) received for commodity derivative settlements | 2,613 | (290) | |||
Loss on sale of other property and equipment | — | 28 | |||
Non-cash expense related to equity share-based awards | 3,776 | 4,545 | |||
Change in the fair value of liability share-based awards | (6,748) | 1,881 | |||
Payments to settle asset retirement obligations | — | (664) | |||
Payments for cash-settled restricted stock unit awards | (754) | (1,296) | |||
Other, net | 890 | — | |||
Changes in current assets and liabilities: | |||||
Accounts receivable | 115,873 | (5,390) | |||
Other current assets | (781) | (2,294) | |||
Current liabilities | (83,688) | (26,003) | |||
Other | — | (177) | |||
Net cash provided by operating activities | 191,695 | 74,559 | |||
Cash flows from investing activities: | |||||
Capital expenditures | (224,448) | (193,211) | |||
Acquisitions | — | (27,947) | |||
Proceeds from sale of assets | 10,240 | 13,879 | |||
Cash paid for settlements of contingent consideration arrangements, net | (40,000) | — | |||
Other, net | (158) | — | |||
Net cash used in investing activities | (254,366) | (207,279) | |||
Cash flows from financing activities: | |||||
Borrowings on senior secured revolving credit facility | 4,291,000 | 220,000 | |||
Payments on senior secured revolving credit facility | (4,226,000) | (90,000) | |||
Payment of preferred stock dividends | — | (1,824) | |||
Payment of deferred financing costs | (275) | — | |||
Tax withholdings related to restricted stock units | (313) | (1,025) | |||
Other, net | (282) | — | |||
Net cash provided by financing activities | 64,130 | 127,151 | |||
Net change in cash and cash equivalents | 1,459 | (5,569) | |||
Balance, beginning of period | 13,341 | 16,051 | |||
Balance, end of period | $14,800 | $10,482 | |||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Free Cash Flow," "Adjusted Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the Company's wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "may," "will," "forecast," "outlook," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, as of this date, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil, natural gas and natural gas liquids ("NGLs") prices or a prolonged period of low oil, natural gas or NGLs prices and the effects of actions by, or disputes among or between significant oil and natural gas producing countries, general economic conditions, including the availability of credit and access to existing lines of credit; the effects of excess supply of oil and natural gas resulting from reduced demand caused by the COVID-19 pandemic and the actions of certain oil and natural gas producing countries; our ability to drill and complete wells; operational, regulatory and environment risks; cost and availability of equipment and labor; our ability to finance our activities; the ultimate timing, outcome and results of integrating the operations of Carrizo Oil & Gas, Inc. and Callon; and the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all; and other risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
1) | See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations | |
2) | Free cash flow ("FCF") defined as Adjusted EBITDA minus the sum of operational capital, capitalized interest, capitalized G&A, and interest expense. Adjusted EBITDA is a non-GAAP financial measure; please refer to the Important Disclosures for a definition on Adjusted EBITDA as calculated by Callon and the Appendix for reconciliation. | |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-first-quarter-2020-results-301056316.html
SOURCE Callon Petroleum Company
Article Date
5/11/2020Callon Petroleum Company Schedules First Quarter 2020 Conference Call for May 11th, 2020
Source: PR Newswire
HOUSTON, May 4, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its first quarter 2020 financial and operating results.
Webcast and Conference Call:
Date: May 11, 2020
Time: 10:00 a.m. Central Time (11:00 a.m. Eastern Time)
Webcast: | |
Select "News and Events" under the "Investors" section of the website. |
Conference Call:
Domestic: | 1-888-317-6003 |
Canada: | 1-866-284-3684 |
International: | 1-412-317-6061 |
Access code: | 3226979 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release first quarter 2020 results prior to market open on Monday, May 11th, 2020.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-first-quarter-2020-conference-call-for-may-11th-2020-301051622.html
SOURCE Callon Petroleum Company
Article Date
5/4/2020Callon Petroleum Company Receives Continued Listing Standard Notice from NYSE and Provides Response and Operational Update
Source: PR Newswire
HOUSTON, April 16, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon") today announced that on April 10, 2020, it received formal notice from the New York Stock Exchange ("NYSE") that the average closing price of Callon's shares of common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price for continued listing on the NYSE.
As required by the NYSE, Callon has responded to the NYSE regarding its intent to cure the deficiency to return to compliance with the NYSE continued listing requirements within the six-month cure period. Callon intends to put forth a proposal for a reverse stock split in connection with its annual meeting of shareholders.
Update for 2020 Outlook
Callon's integration process and associated synergy capture has progressed ahead of schedule in the first quarter despite the challenges of the current economic and operating environment. Current expectations for first quarter operational results1 include:
Callon provided an update to the 2020 capital program on March 17th, reducing full year capital expectations by more than 25% from $975 million to a range of $700 to $725 million. Since then, the Company has taken additional steps to further reduce planned spending for the year in line with Callon's commitment to free cash flow generation. We will be detailing these incremental capital plan reductions with first quarter 2020 disclosures, which include an immediate reduction to one completion crew and a reduction to three drilling rigs by next month. These actions will further reduce our average run-rate capital spending for the remainder of 2020 relative to the first quarter beyond the March 17th estimate of approximately 50%, and shift completion activity and wells placed on production out of the second quarter.
In addition to the estimated $35 to $45 million of run-rate corporate cost savings from the Carrizo transaction, Callon is targeting an additional $15 - $20 million of cash G&A cost reductions for a total decrease of 40% from combined 2019 levels. This incremental reduction represents approximately 15% of the initial 2020 cash G&A budget (combined capitalized and expensed components), led by voluntary reductions in compensation by all of Callon's directors and officers. Board members have agreed to reduce their compensation by 35%, and our Chief Executive Officer has agreed to reduce his salary by 20% and his total target cash compensation by 35%. All other officers have agreed to reduce their total target cash compensation by at least 25%, including salary reductions of 15% and 10% by senior vice presidents and vice presidents, respectively.
President and Chief Executive Officer, Joe Gatto stated, "During a very turbulent first quarter, our team has remained focused and has quickly pivoted our program to allow for greater flexibility while ramping down activity to match the needs of this commodity environment. Our execution as a scaled operator has been solid to begin the year and we will now turn that execution focus on meaningful reductions in both capital expenditures and our cost structure. In addition, the well productivity initiatives discussed during our 2019 fourth quarter call have driven consistently positive outcomes from our first quarter projects and pave the way for improved capital efficiency from substantially reduced spending."
Gatto continued, "Callon remains focused on maximizing liquidity and reducing leverage to endure the current commodity downturn. Management and the Board's top priority is emerging from this volatile period with a robust business that is prepared to take advantage of an improving economic environment."
Marketing and Hedging Updates
Consistent with past practices, Callon maintains a portfolio of multi-year term sales contracts with numerous creditworthy customers and marketers. These term sales agreements are less prone to the risk of pipeline-related cuts as Callon has dedicated buyers to support the physical placement of nominated barrels on pipelines. Altogether, the Company has approximately 60,000 barrels per day of term sales agreements and is negotiating another contract for 25,000 barrels of oil per day (Bbl/d). Callon also maintains long-term firm transport capacity for 25,000 Bbl/d to support sales of Permian Basin volumes to the Gulf Coast refining and export markets and has contracted interim transport arrangements in the Eagle Ford as well. Collectively, our physical oil marketing and pipeline agreements support diversified pricing across Midland, Magellan East Houston ("MEH"), Brent and waterborne benchmark points.
In addition, we have continued to add meaningful hedge protection to support our financial goals:
2Q20 | 3Q20 | 4Q20 | 2Q-4Q 2020 | |||
WTI NYMEX (Bbls, $/Bbl) | ||||||
Swaps | ||||||
Total Volumes | 5,177,900 | 5,400,400 | 5,072,420 | 15,650,720 | ||
Total Daily Volumes | 56,900 | 58,700 | 55,135 | 56,912 | ||
Avg. Swap | $41.78 | $42.65 | $44.18 | $42.87 | ||
ICE BRENT (Bbls, $/Bbl) | ||||||
Swaps | ||||||
Total Volumes | 182,000 | 184,000 | - | 366,000 | ||
Total Daily Volumes | 2,000 | 2,000 | - | 1,331 | ||
Avg. Swap | $46.15 | $46.15 | - | $46.15 | ||
NYMEX WTI VS ICE BRENT DIFFERENTIAL (Bbls, $/Bbl) | ||||||
Swaps | ||||||
Total Volumes | 396,800 | - | - | 396,800 | ||
Total Daily Volumes | 4,313 | - | - | 1,443 | ||
Avg. Swap | ($4.00) | - | - | ($4.00) | ||
MAGELLAN EAST HOUSTON FIXED PRICE (Bbls/$/Bbl) | ||||||
Swaps | ||||||
Total Volumes | 136,500 | 184,000 | 184,000 | 504,500 | ||
Total Daily Volumes | 1,500 | 2,000 | 2,000 | 1,835 | ||
Avg. Swap Price | $59.61 | $58.23 | $57.19 | $58.22 | ||
MAGELLAN EAST HOUSTON DIFFERENTIAL VS WTI-CUSHING (Bbls/$/Bbl) | ||||||
Swaps | ||||||
Total Volumes | 1,266,201 | 1,820,802 | 1,435,202 | 4,522,205 | ||
Total Daily Volumes | 13,914 | 19,791 | 15,600 | 16,444 | ||
Avg. Swap Price | ($1.22) | $0.08 | $0.03 | ($0.30) | ||
MIDLAND-CUSHING DIFFERENTIAL (Bbls/$/Bbl) | ||||||
Swaps | ||||||
Total Volumes | 1,965,600 | 2,217,200 | 2,392,000 | 6,574,800 | ||
Total Daily Volumes | 21,600 | 24,100 | 26,000 | 23,908 | ||
Avg. Swap Price | ($1.84) | ($1.13) | ($0.84) | ($1.23) | ||
NYMEX WTI CMA ROLL (Bbls/$/Bbl) | ||||||
Swaps | ||||||
Total Volumes | 1,383,500 | 2,484,000 | - | 3,867,500 | ||
Total Daily Volumes | 15,203 | 27,000 | - | 14,064 | ||
Avg. Swap Price | ($1.71) | ($1.65) | - | ($1.67) | ||
2Q20 | 3Q20 | 4Q20 | 2Q-4Q 2020 | |||
NYMEX HENRY HUB (MMBtu, $/MMBtu) | ||||||
Swaps | ||||||
Total Volumes | 3,640,000 | 3,680,000 | 1,850,000 | 9,170,000 | ||
Total Daily Volumes | 40,000 | 40,000 | 20,109 | 33,345 | ||
Avg. Swap Price | $2.18 | $2.18 | $2.28 | $2.20 | ||
Three-way Collars | ||||||
Total Volumes | 910,000 | 920,000 | 1,835,000 | 3,665,000 | ||
Total Daily Volumes | 10,000 | 10,000 | 19,946 | 13,327 | ||
Avg. Short Call Price | $2.75 | $2.75 | $2.73 | $2.74 | ||
Avg. Long Put Price | $2.50 | $2.50 | $2.46 | $2.48 | ||
Avg. Short Put Price | $2.00 | $2.00 | $2.00 | $2.00 | ||
Total NYMEX Volume Hedged (MMBtu) | 4,550,000 | 4,600,000 | 3,685,000 | 14,655,000 | ||
Average NYMEX Ceiling Price ($/MMBtu) | $2.29 | $2.29 | $2.50 | $2.35 | ||
Average NYMEX Floor Price ($/MMBtu) | $2.24 | $2.24 | $2.37 | $2.31 | ||
WAHA DIFFERENTIAL (MMBtu, $/MMBtu) | ||||||
Swaps | ||||||
Total Volumes | 6,097,000 | 6,624,000 | 6,261,000 | 18,982,000 | ||
Total Daily Volumes | 67,000 | 72,000 | 68,054 | 69,025 | ||
Avg. Swap Price | ($1.42) | ($1.03) | ($0.81) | ($1.08) | ||
NYSE Cure Period
The recently-received NYSE notification described above does not affect Callon's business operations or its SEC reporting requirements and does not conflict with or cause an event of default under any of Callon's material debt or other agreements.
During the six-month cure period, Callon's shares of common stock will continue to trade on the NYSE, subject to compliance with other continued listing requirements. Under NYSE rules, Callon can regain compliance at any time during the cure period if on the last trading day of any calendar month during the cure period, its common stock has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month.
About Callon Petroleum
Callon Petroleum Company is an independent oil and natural gas company focused on the acquisition, exploration, and development of high-quality assets in the leading oil plays of South and West Texas.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the Company's expected first quarter results; wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2020 production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans", "may", "will", "should", "could" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those expected or projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices; our ability to drill and complete wells, operational, regulatory and environment risks; the cost and availability of equipment and labor; our ability to finance our activities; the ultimate timing, outcome and results of integrating the operations of Carrizo and Callon; the effects of the business combination of Carrizo and Callon, including the Company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all; and other risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Additional Information and Where to Find It
The Company intends to file a preliminary proxy statement and a form of associated proxy card with the SEC in connection with the solicitation of proxies for the Company's 2020 Annual Meeting of Shareholders. THE COMPANY'S SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE DEFINITIVE PROXY STATEMENT, THE ACCOMPANYING CARD AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The Company's shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC free of charge at the SEC's website at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab.
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers will be participants in the solicitation of proxies from the Company's shareholders in connection with the matters to be considered at the Company's 2020 Annual Meeting of Shareholders. Information about the Company's directors and executive officers is available in the Company's proxy statement filed with the SEC on March 27, 2019 with respect to the Company's 2019 Annual Meeting of Shareholders and, with respect to directors and executive officers appointed following such date, in certain of the Company's other SEC filings made subsequent to the date of such proxy statement. To the extent holdings of the Company's securities by such directors or executive officers have changed since the amounts printed in the proxy statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Changes in Beneficial Ownership on Form 4 filed with the SEC.
Contact information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
1 We have prepared the first quarter estimates in good faith based upon our internal reporting and accruals as of and for the three months ended March 31, 2020. Such estimates are preliminary and subject to change as we finalize our financial and operating data for the first quarter of 2020. Important factors that could cause actual results to differ materially are set forth under "Cautionary Statement Regarding Forward-Looking Statements." | ||||
2 Assumes production at the midpoint of the projected quarterly expectations range. | ||||
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-receives-continued-listing-standard-notice-from-nyse-and-provides-response-and-operational-update-301042308.html
SOURCE Callon Petroleum Company
Article Date
4/16/20202/10/2020 - Callon Petroleum Company Schedules Fourth Quarter 2019 Conference Call for February 27, 2020
Callon Petroleum Company Schedules Fourth Quarter 2019 Conference Call for February 27, 2020
Source: PR Newswire
HOUSTON, Feb. 10, 2020 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its fourth quarter 2019 financial and operating results.
Webcast and Conference Call:
Date: Thursday, February 27, 2020
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: | |
Select "News and Events" under the "Investors" section of the website. |
Conference Call: | ||
Domestic: | 1-888-317-6003 | |
Canada: | 1-866-284-3684 | |
International: | 1-412-317-6061 | |
Access code: | 8524953 | |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release fourth quarter 2019 results after market close on Wednesday, February 26, 2020.
About Callon Petroleum Company
Callon Petroleum is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-fourth-quarter-2019-conference-call-for-february-27-2020-301002211.html
SOURCE Callon Petroleum Company
Article Date
2/10/202012/20/2019 - Callon and Carrizo Complete Merger
Callon and Carrizo Complete Merger
Source: PR Newswire
HOUSTON, Dec. 20, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon") today announced that it has completed its acquisition of Carrizo Oil & Gas, Inc. ("Carrizo").
As previously announced, current Carrizo shareholders will receive 1.75 shares of Callon common stock for each share of Carrizo common stock they own. After the close of trading today, Carrizo common stock will no longer be listed for trading on the NASDAQ. In addition, Carrizo intends to request that its reporting obligations under the Securities Exchange Act of 1934 be suspended.
Callon Leadership Team
Callon also announced the officer slate of the combined company. As previously announced, the Callon senior leadership team will continue with the company:
The Callon leadership team also includes:
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in Texas. This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; Callon's 2019 production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of Callon's business plans and strategy, as well as statements including the words "believe," "expect," "plans," "may," "will," "should," "could," and words of similar meaning. These statements reflect Callon's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and Callon undertakes 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. Some of the factors which could affect Callon's future results and could cause results to differ materially from those expressed in Callon's forward-looking statements include the volatility of oil and natural gas prices; ability to drill and complete wells; operational, regulatory and environment risks; cost and availability of equipment and labor; Callon's ability to finance Callon's activities; the ultimate timing, outcome and results of integrating the operations of Carrizo and Callon; the effects of the business combination of Carrizo and Callon, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all; and other risks more fully discussed in Callon's filings with the Securities and Exchange Commission, including Callon's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on Callon's website or the SEC's website at www.sec.gov.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-and-carrizo-complete-merger-300978459.html
SOURCE Callon Petroleum Company
Article Date
12/20/201912/20/2019 - Callon and Carrizo Shareholders Approve Merger
Callon and Carrizo Shareholders Approve Merger
Source: PR Newswire
HOUSTON, Dec. 20, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon") and Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) ("Carrizo") today announced that both companies' common shareholders voted to approve all proposals necessary for the parties' pending all-stock transaction at today's respective special meetings held by each company. The merger is expected to close by end of business today, December 20, 2019. Under the terms of the merger agreement, Carrizo shareholders will receive 1.75 shares of Callon common stock for each share of Carrizo common stock they own.
"We appreciate the strong support we received for our combination," said Joe Gatto, President and Chief Executive Officer of Callon. "Together with Carrizo, we are creating a leading oil and gas company that is positioned to accelerate the achievement of our stated goals regarding increasing returns on capital and sustainable free cash flow generation. As a larger enterprise, we will employ a more efficient scaled development model that will drive a lower cost of supply and underpin resilient performance over time. We look forward to delivering to our shareholders and other stakeholders the significant benefits we believe this combination provides."
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
About Carrizo
Carrizo Oil & Gas, Inc. is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas from resource plays located in the United States. Our current operations are principally focused on proven, producing oil and gas plays in the Eagle Ford Shale in South Texas and the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the expected timing of the closing of the merger; the results, effects, benefits and synergies of the merger; wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; Callon's 2019 production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of Callon's business plans and strategy, as well as statements including the words "believe," "expect," "plans," "may," "will," "should," "could," and words of similar meaning. These statements reflect Callon's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and Callon undertakes 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. Some of the factors which could affect Callon's future results and could cause results to differ materially from those expressed in Callon's forward-looking statements include finalization of closing matters and satisfaction of closing conditions; the volatility of oil and natural gas prices; ability to drill and complete wells; operational, regulatory and environment risks; cost and availability of equipment and labor; Callon's ability to finance Callon's activities; the ultimate timing, outcome and results of integrating the operations of Carrizo and Callon; the effects of the business combination of Carrizo and Callon, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all; and other risks more fully discussed in Callon's filings with the Securities and Exchange Commission, including Callon's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on Callon's website or the SEC's website at www.sec.gov.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
Contact for Carrizo
Jeffrey P. Hayden, CFA
Vice President - Financial Planning and Analysis
(713) 328-1044
or
Kim Pinyopusarerk
Manager - Investor Relations
(713) 358-6430
View original content:http://www.prnewswire.com/news-releases/callon-and-carrizo-shareholders-approve-merger-300978373.html
SOURCE Callon Petroleum Company
Article Date
12/20/2019ISS Recommends Callon And Carrizo Shareholders Each Vote "For" Transaction
Source: PR Newswire
HOUSTON, Nov. 20, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") and Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) ("Carrizo") today announced that proxy advisory firm Institutional Shareholder Services ("ISS"), upon review of Callon's revised offer, now recommends that Callon shareholders vote "FOR" the acquisition of Carrizo and related proposals, as put forth in the proxy supplement filed on November 18, 2019. Additionally, ISS maintained its recommendation that Carrizo common shareholders vote "FOR" the acquisition by Callon.
In its updated report regarding Callon, dated November 19, 2019, ISS stated, "Given the material improvement in terms, along with the strategic rationale for the merger, as noted in our original analysis, support FOR the transaction is now warranted."1
Joe Gatto, President and Chief Executive Officer of Callon, stated, "We are pleased that ISS recognizes the strategic merits and financial benefits of the transaction with Carrizo and supports our Board's unanimous recommendation that shareholders vote 'FOR' the transaction. Combining with Carrizo will accelerate our strategy and strengthen Callon's positioning in the evolving industry landscape, creating a leading oil and gas company with scaled development operations poised to deliver durable free cash flow generation through commodity price volatility. We strongly urge all Callon shareholders to follow the recommendation of ISS and vote 'FOR' the amended merger agreement with Carrizo and related proposals."
Callon and Carrizo expect that the transaction will close during the fourth quarter of 2019, subject to approval by shareholders of both companies and other customary closing conditions.
Callon Special Meeting of Shareholders
The Special Meeting of Callon shareholders will be reconvened, and then adjourned before conducting any business, on December 13, 2019 until December 20, 2019, at 9:00 a.m. Central Time in the Advice & Counsel meeting room of the Hotel ZaZa, 9787 Katy Freeway, Houston, Texas. All shareholders of record of Callon common stock as of the close of business on October 7, 2019 will be entitled to vote their shares either in person or by proxy at the shareholder meeting.
Carrizo Special Meeting of Shareholders
The Special Meeting of Carrizo shareholders will be held on December 20, 2019, at 9:00 a.m. Central Time, at Two Allen Center, The Forum, 1200 Smith Street, 12th Floor, Houston, Texas 77002. All shareholders of record of Carrizo common stock as of the close of business on November 29, 2019, will be entitled to vote their shares either in person or by proxy at the shareholder meeting. Any proxies previously submitted by Carrizo shareholders with respect to the special meeting convened and adjourned on November 14, 2019 will not be counted. Carrizo shareholders must submit a new proxy in order for their votes to be counted.
Each vote is very important, regardless of the number of shares owned. Your failure to vote your shares of common stock or your abstention from voting will have the same effect as a vote "AGAINST" the transaction.
Callon Proxy Information
If you have any questions, need assistance in completing the proxy card, or need additional copies of the proxy materials, please call the firm assisting Callon with the solicitation of proxies:
INNISFREE M&A INCORPORATED
TOLL-FREE at +1 (888) 750-5834 (From the U.S. or Canada)
Carrizo Proxy Information
If you have any questions, need assistance in completing the proxy card, or need additional copies of the proxy materials, please call the firm assisting Carrizo with the solicitation of proxies:
MACKENZIE PARTNERS, INC.
TOLL-FREE at (800) 322-2885
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. This news release is posted on Callon's website at www.callon.com and will be archived for subsequent review under the "News" link on the top of the homepage.
About Carrizo
Carrizo is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas from resource plays located in the United States. Our current operations are principally focused on proven, producing oil and gas plays in the Eagle Ford Shale in South Texas and the Permian Basin in West Texas.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communications herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon) has filed, and the Securities and Exchange Commission (the "SEC") has declared effective, a registration statement on Form S-4 (the "Registration Statement"), which contains a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. This communication is not a substitute for the joint proxy statement/prospectus (or the supplement thereto) or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and/or send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS (AND SUPPLEMENT THERETO), AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus (and supplement thereto), as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus (and supplement thereto) and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for reconvening the shareholder meetings or for completing the proposed transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
Contact for Carrizo
Jeffrey P. Hayden, CFA
Vice President - Financial Planning and Analysis
(713) 328-1044
or
Kim Pinyopusarerk
Manager - Investor Relations
(713) 358-6430
1 Permission to use quotations was neither sought nor obtained.
View original content:http://www.prnewswire.com/news-releases/iss-recommends-callon-and-carrizo-shareholders-each-vote-for-transaction-300961839.html
SOURCE Callon Petroleum Company
Article Date
11/20/201911/18/2019 - Paulson & Co. Drops Opposition to Proposed Carrizo Merger & Will Vote In Favor of the Transaction
Paulson & Co. Drops Opposition to Proposed Carrizo Merger & Will Vote In Favor of the Transaction
Source: PR Newswire
NEW YORK, Nov. 18, 2019 /PRNewswire/ -- Paulson & Co. Inc. ("Paulson"), as manager of funds holding shares of Callon Petroleum Company ("Callon" or the "Company") (NYSE: CPE), announced it no longer opposes the proposed acquisition of Carrizo Oil & Gas Inc. ("Carrizo") (NASDAQ: CRZO) and will vote its shares in favor of the transaction.
The revised merger terms provide substantial benefits to Callon shareholders. The revision reduces the exchange ratio from 2.05 to 1.75, reduces the premium paid to Carrizo from 25% to 6.7%, lowers the authorized share request from 750 million to 525 million, and eliminates the golden parachute entitlement to Callon management.
While Paulson believes that a pure Permian focused producer would be a more attractive alternative, Paulson respects that different shareholders might have different viewpoints on this matter. As such, although Paulson no longer opposes the transaction, it has reduced its investment position in Callon.
About Paulson & Co. Inc.
Paulson, founded in 1994, is an investment management firm headquartered in New York.
Cautionary Statement
Paulson & Co. Inc. ("Paulson") is not soliciting proxies in connection with any matter brought before shareholders of the companies identified in this letter or press release.
Clients, funds and accounts managed by Paulson (the "Paulson Clients") may from time to time beneficially own, and/or have an economic interest in, shares of the companies discussed in this letter and as a result, the Paulson Clients have an economic interest in the forward-looking statements, estimates and projections discussed above and their impact on the companies discussed in this letter. The Paulson Clients are in the business of trading – buying and selling – securities, and may trade in the securities of the companies discussed in this letter. You should also assume that the Paulson Clients may from time to time sell all or a portion of their holdings of one or more of the companies in open market transactions or otherwise (including via short sales), buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls, swaps or other derivative instruments relating to some or all of such shares, regardless of the views expressed in this letter.
The views contained in this letter and press release represent the opinions of Paulson as of the date hereof. Paulson reserves the right to change any of its opinions expressed herein at any time, but is under no obligation to update the data, information or opinions contained herein. Under no circumstances is this letter or press release intended to be, nor should it be construed as advice or a recommendation to enter into or conclude any transaction or buy or sell any security (whether on the terms shown herein or otherwise). This letter should not be construed as legal, tax, investment, financial or other advice. Additionally, this letter should not be construed as an offer to buy any investment in any fund or account managed by Paulson.
Contact:
Marcelo Kim
Paulson & Co. Inc.
212-599-6628
View original content:http://www.prnewswire.com/news-releases/paulson--co-drops-opposition-to-proposed-carrizo-merger--will-vote-in-favor-of-the-transaction-300959905.html
SOURCE Paulson & Co. Inc.
Article Date
11/18/201911/14/2019 - Callon And Carrizo Announce Amended Merger Agreement
Callon And Carrizo Announce Amended Merger Agreement
Source: PR Newswire
HOUSTON, Nov. 14, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) and Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) today announced an amendment to the existing terms of their agreement for Callon to acquire Carrizo in an all-stock transaction.
Under the amended terms, Carrizo shareholders will receive 1.75 shares of Callon common stock for each share of Carrizo common stock they own. With the amended exchange ratio, Callon shareholders will own approximately 58% of the combined company and Carrizo shareholders will own approximately 42% on a fully diluted basis. Based on the closing prices of Callon and Carrizo common shares on the pre-announcement date of July 12, 2019, the amended exchange ratio represents a premium of 6.7% to Carrizo shareholders.
Joe Gatto, President and Chief Executive Officer of Callon, said, "Since announcing the transaction, we have had extensive and valued dialogue with our shareholders, who have expressed support for the industrial logic and strategic merits of this transaction. In recognition of evolving investor expectations for a successful combination in the current environment, we have agreed to revised terms with Carrizo that enable value-creation opportunities for both shareholder bases."
Mr. Gatto continued, "Our strategy remains unaltered: we are creating a leading oil and gas company with a larger cash flow base to employ more efficient scaled development of our pro-forma Permian Basin position of over 100,000 net acres. With increased size and scale driving achievable synergies, the combined company will benefit from a leading cost of supply on an 'all-in' corporate basis and be well positioned to deliver durable free cash flow generation through commodity price volatility. The combination accelerates Callon's stated strategy to increase returns, generate free cash flow, reduce leverage, and maintain a long-term focus while also enhancing optionality in the evolving industry landscape. We will continue to work closely with Carrizo to successfully complete the transaction and deliver to our shareholders the significant benefits we believe this combination provides."
S.P. "Chip" Johnson, IV, President and Chief Executive Officer of Carrizo, commented, "We continue to be very excited to join forces with Callon and believe, in light of today's market environment, the revised terms offer compelling near- and long-term value for Carrizo shareholders. We believe that a combination with Callon creates the most value for our shareholders. Under the revised terms of the merger, Carrizo shareholders will have meaningful participation in the upside of a strong company that reflects current investor priorities, and benefits from the enhanced operational efficiencies needed to be a low-cost producer in today's dynamic pricing environment. We look forward to closing the transaction and realizing our potential as a combined company."
Additional Details about the Transaction
The Boards of Directors of both Callon and Carrizo have unanimously reaffirmed their support for the transaction as modified by the amendment to the merger agreement. In addition, each of the Carrizo directors remains committed to vote his or her shares in favor of the transaction.
The amendment to the merger agreement adjusts the Carrizo termination fee to $20 million in certain circumstances, including in some instances in which a competing transaction for Carrizo has been proposed. The amendment also eliminates Carrizo's obligation to reimburse Callon's expenses if Carrizo's shareholders do not approve the transaction and increases the amount of Carrizo's expenses that Callon would reimburse by $2.5 million if Callon's shareholders do not approve the transaction.
Callon and Carrizo intend to file supplemental proxy materials with the Securities and Exchange Commission in the coming days. The companies continue to expect to close the transaction during the fourth quarter of 2019, subject to the approval of shareholders of both companies.
Callon Special Meeting of Shareholders
In addition to the amendment to the merger agreement, Callon announced that its Board of Directors has approved the following revisions to the proposals before the Special Meeting of Shareholders:
Callon also announced its intention to convene and immediately adjourn the Special Meeting of Shareholders on November 14, 2019, to continue soliciting proxies from Callon shareholders. Callon intends to reconvene the Special Meeting on December 13, 2019, and readjourn until December 20, 2019, at 9:00 a.m. CT.
The Callon Board reiterates its belief that approving the Carrizo transaction is in the best interests of all Callon shareholders and urges all shareholders to vote FOR the proposals set forth in the proxy materials.
Carrizo Special Meeting of Shareholders
Carrizo announced that it will convene and immediately adjourn its Special Meeting of Shareholders on November 14, 2019, to allow Carrizo shareholders time to consider the revised terms of the merger and to allow Carrizo to solicit new proxies from Carrizo shareholders. Carrizo intends to reconvene its Special Meeting on December 20, 2019, at 9:00 a.m. CT.
The Carrizo Board recommends that Carrizo's common shareholders vote FOR the merger agreement as well as all other proposals set forth in the proxy materials.
Callon Proxy Information
If you have any questions, need assistance in completing the proxy card, or need additional copies of the proxy materials, please call the firm assisting Callon with the solicitation of proxies:
INNISFREE M&A INCORPORATED
TOLL-FREE at +1 (888) 750-5834 (From the U.S. or Canada)
Carrizo Proxy Information
If you have any questions, need assistance in completing the proxy card, or need additional copies of the proxy materials, please call the firm assisting Carrizo with the solicitation of proxies:
MACKENZIE PARTNERS, INC.
TOLL-FREE at (800) 322-2885
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
About Carrizo
Carrizo Oil & Gas, Inc. is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas from resource plays located in the United States. Our current operations are principally focused on proven, producing oil and gas plays in the Eagle Ford Shale in South Texas and the Permian Basin in West Texas.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communications herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon has filed, and the Securities and Exchange Commission (the "SEC") has declared effective, a registration statement on Form S-4 (the "Registration Statement"), which contains a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and/or send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for reconvening shareholder meetings and completing the proposed transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of the revised transaction or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, the quarter ended June 30, 2019, and the quarter ended September 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, the quarter ended June 30, 2019, and the quarter ended September 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
Contact for Carrizo
Jeffrey P. Hayden, CFA
Vice President - Financial Planning and Analysis
(713) 328-1044
or
Kim Pinyopusarerk
Manager - Investor Relations
(713) 358-6430
1 Relative to the companies in Callon's 2019 annual meeting proxy peer group.
View original content:http://www.prnewswire.com/news-releases/callon-and-carrizo-announce-amended-merger-agreement-300958293.html
SOURCE Callon Petroleum Company
Article Date
11/14/2019Paulson & Co. Votes Against Proposed Callon Acquisition of Carrizo
Source: PR Newswire
NEW YORK, Nov. 6, 2019 /PRNewswire/ -- Paulson & Co. Inc. ("Paulson"), as manager of funds holding 21.6 million shares, or 9.5% of those outstanding, of Callon Petroleum Company ("Callon" or the "Company") (NYSE: CPE), today voted its Callon shares against the proposed acquisition of Carrizo Oil & Gas Inc. ("Carrizo") (NASDAQ: CRZO).
Paulson notes that Institutional Shareholder Services ("ISS") and Glass Lewis & Co. ("Glass Lewis") both recommend that Callon shareholders vote against the Company's proposed acquisition of Carrizo. Both proxy advisors provide valuable, independent perspectives to constituencies concerning proxy matters.
Callon shareholders and analysts have expressed a strong interest in our views and have communicated that they share many of our concerns. The Callon Board, which has to date been unresponsive to any of our communications, should listen to its shareholders.
If, on November 14th, Callon shareholders reject the approval of the proposed acquisition, Paulson requests that the Callon Board should follow the will of its shareholders and direct management to focus on:
As ISS states, a standalone Callon would be less risky and, combined with a reduction in its own operating costs, a shorter path to shareholder value than an overpriced acquisition. As Glass Lewis concludes, investors could be pleasantly surprised once the Company begins to generate positive free cash flow on a standalone basis, or if the board actively solicited interest from would-be suitors, which the board didn't do before signing the merger agreement with Carrizo.
About Paulson & Co. Inc.
Paulson, founded in 1994, is an investment management firm headquartered in New York.
Contact Details
Marcelo Kim
Paulson & Co. Inc.
212-599-6628
Cautionary Statement
Paulson & Co. Inc. ("Paulson") is not soliciting proxies in connection with any matter brought before shareholders of the companies identified in this letter or press release.
Clients, funds and accounts managed by Paulson (the "Paulson Clients") may from time to time beneficially own, and/or have an economic interest in, shares of the companies discussed in this letter and as a result, the Paulson Clients have an economic interest in the forward-looking statements, estimates and projections discussed above and their impact on the companies discussed in this letter. The Paulson Clients are in the business of trading – buying and selling – securities, and may trade in the securities of the companies discussed in this letter. You should also assume that the Paulson Clients may from time to time sell all or a portion of their holdings of one or more of the companies in open market transactions or otherwise (including via short sales), buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls, swaps or other derivative instruments relating to some or all of such shares, regardless of the views expressed in this letter.
The views contained in this letter and press release represent the opinions of Paulson as of the date hereof. Paulson reserves the right to change any of its opinions expressed herein at any time, but is under no obligation to update the data, information or opinions contained herein. Under no circumstances is this letter or press release intended to be, nor should it be construed as advice or a recommendation to enter into or conclude any transaction or buy or sell any security (whether on the terms shown herein or otherwise). This letter should not be construed as legal, tax, investment, financial or other advice. Additionally, this letter should not be construed as an offer to buy any investment in any fund or account managed by Paulson.
View original content:http://www.prnewswire.com/news-releases/paulson--co-votes-against-proposed-callon-acquisition-of-carrizo-300953225.html
SOURCE Paulson & Co. Inc.
Article Date
11/6/2019Callon Petroleum Company Announces Third Quarter 2019 Results
Source: PR Newswire
HOUSTON, Nov. 4, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three and nine months ended September 30, 2019.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Third Quarter and Recent Highlights
"The hard work by our team throughout this quarter has continued to produce exceptional results with production ahead of expectations, operating expenses moving lower, and discretionary cash flow in line with operational capital spending. Our successful mega-pad development projects are not only generating significant and durable cost savings but have exhibited solid productivity. In addition, the continued efforts to optimize previously acquired assets have resulted in incremental value to shareholders as our team has made noteworthy progress on well productivity and operational costs across our expanded asset base," commented Joe Gatto, Callon's President and Chief Executive Officer. He continued, "We remain focused on preparing to integrate the Callon and Carrizo teams and operations upon closing and will strive to exceed our own expectations for capital efficiency and targeted synergy capture. In the current commodity environment, we recognize the need to be a low cost producer and are prepared to execute a program that will drive free cash flow generation, optimize asset development, accelerate deleveraging efforts, and deliver improved returns on invested capital to our shareholders in the near term."
Operations Update
At September 30, 2019, we had 492 gross (335.3 net) horizontal wells producing in the Permian Basin. Net daily production for the three months ended September 30, 2019 grew 8% to 37.8 Mboe/d (78% oil), as compared to the same period of 2018, or 25% when accounting for divested volumes from the sale of our Southern Midland Basin assets.
For the three months ended September 30, 2019, we drilled 12 gross (11.0 net) horizontal wells and placed a combined 16 gross (15.6 net) horizontal wells on production. The majority of wells placed on production were associated with two large multi-well developments, one each in the Delaware and Midland basins as described below. The two additional wells were placed on production at the end of September.
The Rag Run mega-pad, Callon's initial large-scale development project in the Delaware Basin, was placed on production near the end of July and includes co-development of two Wolfcamp A flow units and the Wolfcamp B with simultaneous operations of two completion crews. Through the first 90 days of production, these wells have averaged approximately 1,000 Boe per day (~80% oil). This project was placed on production using a more conservative choke management strategy than previous wells, which the Company expects to employ on future developments of this nature to optimize long-term well performance. The significant drilling and completion cost savings realized on this initial Delaware mega-pad, which resulted in an average total well cost of less than $1,100 per lateral foot, are representative of the synergy capture the Company expects to attain in 2020 and beyond after closing the pending acquisition and shifting to larger pad development as part of normal operations in the Delaware Basin.
The seven well project that was placed on production in the Midland Basin at the beginning of September included a multi-interval development of three Lower Spraberry and four Wolfcamp A wells within the Fairway area of our Howard County assets. Through the first 50 days, the combined seven wells have achieved average daily production of approximately 850 Boe per day (~90% oil). These wells were drilled and completed offsetting historical producing wells and have performed in-line with the offset single well pads in these sections.
Capital Expenditures
For the three months ended September 30, 2019, we incurred $116.4 million in operational capital expenditures (including other items) on an accrual basis as compared to $133.5 million in the second quarter of 2019, representing a decrease of 13%. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
Three Months Ended September 30, 2019 | |||||||||||||||
Operational | Capitalized | Capitalized | Total Capital | ||||||||||||
Capital (a) | Interest | G&A | Expenditures | ||||||||||||
Cash basis (b) | $ | 121,457 | $ | 15,165 | $ | 7,373 | $ | 143,995 | |||||||
Timing adjustments (c) | (5,044) | 2,965 | — | (2,079) | |||||||||||
Non-cash items | — | — | 866 | 866 | |||||||||||
Accrual basis | $ | 116,413 | $ | 18,130 | $ | 8,239 | $ | 142,782 | |||||||
(a) | Includes facilities, equipment, seismic, land and other items. Excludes capitalized expenses. |
(b) | Cash basis is presented here to help users of financial information reconcile amounts from the cash flow statement to the balance sheet by accounting for timing related changes in working capital that align with our development pace and rig count. |
(c) | Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
Three Months Ended | |||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | |||||||||
Net production | |||||||||||
Oil (MBbls) | 2,725 | 2,848 | 2,521 | ||||||||
Natural gas (MMcf) | 4,538 | 5,031 | 4,144 | ||||||||
Total (Mboe) | 3,481 | 3,687 | 3,212 | ||||||||
Average daily production (Boe/d) | 37,837 | 40,516 | 34,913 | ||||||||
% oil (Boe basis) | 78 | % | 77 | % | 78 | % | |||||
Oil and natural gas revenues (in thousands) | |||||||||||
Oil revenue | $ | 148,210 | $ | 160,728 | $ | 142,601 | |||||
Natural gas revenue | 7,168 | 6,324 | 18,613 | ||||||||
Total revenue | 155,378 | 167,052 | 161,214 | ||||||||
Impact of settled derivatives | 1,011 | (1,157) | (9,239) | ||||||||
Adjusted Total Revenue (i) | $ | 156,389 | $ | 165,895 | $ | 151,975 | |||||
Average realized sales price | |||||||||||
(excluding impact of settled derivatives) | |||||||||||
Oil (per Bbl) | $ | 54.39 | $ | 56.44 | $ | 56.57 | |||||
Natural gas (per Mcf) | 1.58 | 1.26 | 4.49 | ||||||||
Total (per BOE) | 44.64 | 45.31 | 50.19 | ||||||||
Average realized sales price | |||||||||||
(including impact of settled derivatives) | |||||||||||
Oil (per Bbl) | $ | 54.01 | $ | 54.87 | $ | 52.87 | |||||
Natural gas (per Mcf) | 2.03 | 1.91 | 4.51 | ||||||||
Total (per BOE) | 44.93 | 44.99 | 47.31 | ||||||||
Additional per BOE data | |||||||||||
Sales price (a) | $ | 44.64 | $ | 45.31 | $ | 50.19 | |||||
Lease operating expense | 5.65 | 6.18 | 5.77 | ||||||||
Production taxes | 3.41 | 3.02 | 3.20 | ||||||||
Operating margin | $ | 35.58 | $ | 36.11 | $ | 41.22 | |||||
Depletion, depreciation and amortization | $ | 16.09 | $ | 17.07 | $ | 15.02 | |||||
Adjusted G&A (b) | |||||||||||
Cash component (c) | $ | 2.52 | $ | 2.42 | $ | 2.17 | |||||
Non-cash component | 0.44 | 0.68 | 0.57 | ||||||||
(a) | Excludes the impact of settled derivatives. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | Excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended September 30, 2019, Callon reported total revenue of $155.4 million and total revenue including settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $156.4 million, including the impact of a $1.0 million gain from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's total operating revenue. Average daily production for the quarter was 37.8 Mboe/d, compared to average daily production of 40.5 Mboe/d in the second quarter of 2019, a period which included volumes associated with our southern Midland Basin divestiture that closed on June 12, 2019. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended September 30, 2019, the net gain (loss) on commodity derivative instruments includes the following:
Three Months Ended September 30, 2019 | |||||||
In Thousands | Per Unit | ||||||
Oil derivatives | |||||||
Net gain (loss) on settlements | $ | (1,045) | $ | (0.38) | |||
Net gain (loss) on fair value adjustments | 25,767 | ||||||
Total gain (loss) on oil derivatives | 24,722 | ||||||
Natural gas derivatives | |||||||
Net gain (loss) on settlements | 2,056 | $ | 0.45 | ||||
Net gain (loss) on fair value adjustments | (733) | ||||||
Total gain (loss) on natural gas derivatives | 1,323 | ||||||
Total commodity derivatives | |||||||
Net gain (loss) on settlements | 1,011 | $ | 0.29 | ||||
Net gain (loss) on fair value adjustments | 25,034 | ||||||
Total gain (loss) on total commodity derivatives | $ | 26,045 | |||||
Lease Operating Expenses, including workover ("LOE"). LOE per Boe for the three months ended September 30, 2019 was $5.65 per Boe, compared to LOE of $6.18 per Boe in the second quarter of 2019. The decrease on a per unit basis was attributable to a reduction in chemical usage, repairs and maintenance, and workovers compared to the previous period.
Production Taxes, including ad valorem taxes. Production taxes were $3.41 per Boe for the three months ended September 30, 2019, representing approximately 7.6% of total revenue before the impact of derivative settlements. The incremental increase as compared to the second quarter of 2019 and third quarter of 2018 is due to an increase in ad valorem taxes based upon a higher valuation of our oil and gas properties by the taxing jurisdictions.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended September 30, 2019 was $16.09 per Boe compared to $17.07 per Boe in the second quarter of 2019. The decrease was attributed to lower future development costs for PUD locations relative to our historical rate.
General and Administrative ("G&A"). G&A was $9.4 million, or $2.70 per Boe, and G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $10.3 million, or $2.96 per Boe, for the three months ended September 30, 2019 compared to $10.6 million, or $2.87 per Boe, and $11.4 million, or $3.10 per Boe, respectively, for the second quarter of 2019. The cash component of Adjusted G&A was $8.8 million, or $2.52 per Boe, for the three months ended September 30, 2019 compared to $8.9 million, or $2.42 per Boe, for the second quarter of 2019.
For the three months ended September 30, 2019, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
Three Months Ended | |||
Total G&A expense | $ | 9,388 | |
Change in the fair value of liability share-based awards (non-cash) | 926 | ||
Adjusted G&A – total | 10,314 | ||
Restricted stock share-based compensation (non-cash) | (1,525) | ||
Corporate depreciation & amortization (non-cash) | (3) | ||
Adjusted G&A – cash component | $ | 8,786 | |
Income Tax Expense. Callon provides for income taxes at the statutory rate of 21% adjusted for permanent differences expected to be realized. We recorded an income tax expense of $17.9 million for the three months ended September 30, 2019, compared to income tax expense of $16.7 million for the three months ended June 30, 2019. The change in income tax expense is based upon net income generated in the respective periods.
Updated 2019 Guidance (Stand-Alone Callon)
The Company is updating guidance for the full year 2019 to reflect positive operational performance throughout the first three quarters of the year. This updated guidance does not take into effect the Carrizo merger, which is expected to close in the fourth quarter, subject to shareholder approvals.
Third Quarter | Year to Date | Updated Full Year | |||
2019 Actual | 2019 Actual | 2019 Guidance | |||
Total production (Mboe/d) (a) | 37.8 | 39.5 | 39.2 - 39.6 | ||
% oil | 78% | 78% | 78% | ||
Income statement expenses (per Boe) | |||||
LOE, including workovers | $5.65 | $6.16 | $5.75 - $6.25 | ||
Production taxes, including ad valorem (% unhedged revenue) | 8% | 7% | 7% | ||
Adjusted G&A: cash component (b) | $2.52 | $2.41 | $2.00 - $2.50 | ||
Adjusted G&A: non-cash component (c) | $0.44 | $0.52 | $0.50 - $1.00 | ||
Cash interest expense (d) | $0.00 | $0.00 | $0.00 | ||
Effective income tax rate | 24% | 24% | 22% | ||
Capital expenditures ($MM, accrual basis) | |||||
Total operational (e) | $116 | $405 | $495 - $520 | ||
Capitalized interest and G&A expenses | $26 | $84 | $100 - $105 | ||
Net operated horizontal wells placed on production | 16 | 43 | 48 - 50 |
(a) | Year to date 2019 actual production reflects volumes associated with southern Midland Basin properties divested on June 12, 2019. |
(b) | Excludes the amortization of equity-settled, share-based incentive awards, corporate depreciation and amortization, and pending merger-related expenses. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(d) | All cash interest expense anticipated to be capitalized. |
(e) | Includes facilities, equipment, seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following table summarizes our open derivative positions as of September 30, 2019:
For the Remainder | For the Full Year | For the Full Year | ||||||||||
Oil contracts (WTI) | of 2019 | of 2020 | of 2021 | |||||||||
Puts | ||||||||||||
Total volume (Bbls) | 230,000 | — | — | |||||||||
Weighted average price per Bbl | $ | 65.00 | $ | — | $ | — | ||||||
Put spreads | ||||||||||||
Total volume (Bbls) | 230,000 | — | — | |||||||||
Weighted average price per Bbl | ||||||||||||
Floor (long put) | $ | 65.00 | $ | — | $ | — | ||||||
Floor (short put) | $ | 42.50 | $ | — | $ | — | ||||||
Collar contracts with short puts (three-way collars) | ||||||||||||
Total volume (Bbls) | 1,196,000 | 5,124,000 | — | |||||||||
Weighted average price per Bbl | ||||||||||||
Ceiling (short call) | $ | 67.46 | $ | 65.46 | $ | — | ||||||
Floor (long put) | $ | 56.54 | $ | 55.45 | $ | — | ||||||
Floor (short put) | $ | 43.65 | $ | 44.66 | $ | — | ||||||
Collar contracts (two-way collars) | ||||||||||||
Total volume (Bbls) | 276,000 | — | — | |||||||||
Weighted average price per Bbl | ||||||||||||
Ceiling (short call) | $ | 60.00 | $ | — | $ | — | ||||||
Floor (long put) | $ | 55.00 | $ | — | $ | — | ||||||
Short call | ||||||||||||
Total volume (Bbls) | — | — | 1,825,000 | (a) | ||||||||
Weighted average price per Bbl | $ | — | $ | — | $ | 63.00 | ||||||
Swap contracts | ||||||||||||
Total volume (Bbls) | 276,000 | 1,098,000 | — | |||||||||
Weighted average price per Bbl | $ | 60.17 | $ | 56.17 | $ | — | ||||||
Oil contracts (Brent ICE) | ||||||||||||
Collar contracts with short puts (three-way collars) | ||||||||||||
Total volume (Bbls) | — | 837,500 | — | |||||||||
Weighted average price per Bbl | ||||||||||||
Ceiling (short call) | $ | — | $ | 70.00 | $ | — | ||||||
Floor (long put) | $ | — | $ | 58.24 | $ | — | ||||||
Floor (short put) | $ | — | $ | 50.00 | $ | — | ||||||
Oil contracts (Midland basis differential) | ||||||||||||
Swap contracts | ||||||||||||
Total volume (Bbls) | 2,176,000 | 4,576,000 | 1,095,000 | |||||||||
Weighted average price per Bbl | $ | (2.50) | $ | (1.29) | $ | 1.00 | ||||||
Oil contracts (Argus Houston MEH basis differential) | ||||||||||||
Swap contracts | ||||||||||||
Total volume (Bbls) | — | 1,439,205 | — | |||||||||
Weighted average price per Bbl | $ | — | $ | 2.40 | $ | — | ||||||
Natural gas contracts (Henry Hub) | ||||||||||||
Collar contracts (two-way collars) | ||||||||||||
Total volume (MMBtu) | 598,000 | — | — | |||||||||
Weighted average price per MMBtu | ||||||||||||
Ceiling (short call) | $ | 3.50 | $ | — | $ | — | ||||||
Floor (long put) | $ | 3.13 | $ | — | $ | — | ||||||
Swap contracts | ||||||||||||
Total volume (MMBtu) | 155,000 | — | — | |||||||||
Weighted average price per MMBtu | $ | 2.87 | $ | — | $ | — | ||||||
Natural gas contracts (Waha basis differential) | ||||||||||||
Swap contracts | ||||||||||||
Total volume (MMBtu) | 2,116,000 | 4,758,000 | — | |||||||||
Weighted average price per MMBtu | $ | (1.18) | $ | (1.12) | $ | — | ||||||
(a) | Premiums from the sale of call options were used to increase the fixed price of certain simultaneously executed price swaps. |
Income (Loss) Available to Common Stockholders. The Company reported net income available to common shareholders of $47.2 million, or $0.21 per fully diluted share, and Adjusted Income available to common shareholders of $42.9 million, or $0.19 per fully diluted share, for the three months ended September 30, 2019. Adjusted Income, a non-GAAP financial measure(i), adjusts our income available to common stockholders to reflect our theoretical tax provision for prior period quarters as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure, the Company's income available to common stockholders to Adjusted Income and the Company's net income to Adjusted EBITDA(i), a non-GAAP financial measure, (in thousands):
Three Months Ended | |||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | |||||||||
Income (loss) available to common stockholders | $ | 47,180 | $ | 53,357 | $ | 36,108 | |||||
(Gain) loss on derivatives, net of settlements | (20,798) | (15,193) | 25,100 | ||||||||
Change in the fair value of share-based awards | (925) | (850) | 879 | ||||||||
Merger and integration expense | 5,943 | — | — | ||||||||
Other operating expense | (175) | 770 | — | ||||||||
Tax effect on adjustments above | 3,351 | 3,207 | (5,456) | ||||||||
Change in valuation allowance | — | — | (8,323) | ||||||||
Loss on redemption of preferred stock | 8,304 | — | — | ||||||||
Adjusted Income (i) | $ | 42,880 | $ | 41,291 | $ | 48,308 | |||||
Adjusted Income per fully diluted common share (i) | $ | 0.19 | $ | 0.18 | $ | 0.21 | |||||
Three Months Ended | |||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | |||||||||
Net income (loss) | $ | 55,834 | $ | 55,180 | $ | 37,931 | |||||
(Gain) loss on derivatives, net of settlements | (20,798) | (15,193) | 25,100 | ||||||||
Non-cash stock-based compensation expense | 644 | 904 | 2,587 | ||||||||
Merger and integration expense | 5,943 | — | — | ||||||||
Other operating expense | (161) | 935 | 1,435 | ||||||||
Income tax (benefit) expense | 17,902 | 16,691 | 1,487 | ||||||||
Interest expense | 739 | 741 | 711 | ||||||||
Depreciation, depletion and amortization | 57,107 | 64,374 | 48,977 | ||||||||
Accretion expense | 128 | 216 | 202 | ||||||||
Adjusted EBITDA (i) | $ | 117,338 | $ | 123,848 | $ | 118,430 | |||||
Discretionary Cash Flow. Operating cash flow was $113.7 million and discretionary cash flow, a non-GAAP measure(i), was $111.5 million for the three months ended September 30, 2019. Discretionary cash flow is reconciled to operating cash flow in the following table (in thousands):
Three Months Ended | |||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 55,834 | $ | 55,180 | $ | 37,931 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 57,107 | 64,374 | 48,977 | ||||||||
Accretion expense | 128 | 216 | 202 | ||||||||
Amortization of non-cash debt related items | 739 | 741 | 708 | ||||||||
Deferred income tax (benefit) expense | 17,902 | 16,691 | 1,487 | ||||||||
(Gain) loss on derivatives, net of settlements | (20,798) | (15,193) | 25,100 | ||||||||
(Gain) loss on sale of other property and equipment | (13) | 21 | (102) | ||||||||
Non-cash expense related to equity share-based awards | 1,569 | 1,754 | 1,708 | ||||||||
Change in the fair value of liability share-based awards | (925) | (850) | 879 | ||||||||
Discretionary cash flow (i) | $ | 111,543 | $ | 122,934 | $ | 116,890 | |||||
Changes in working capital | 2,803 | 27,789 | (347) | ||||||||
Payments to settle asset retirement obligations | (654) | (107) | (507) | ||||||||
Payments to settle vested liability share-based awards | — | (129) | — | ||||||||
Net cash provided by operating activities | $ | 113,692 | $ | 150,487 | $ | 116,036 | |||||
Callon Petroleum Company | |||||||
Consolidated Balance Sheets | |||||||
(in thousands, except par and per share data) | |||||||
September 30, 2019 | December 31, 2018 | ||||||
ASSETS | Unaudited | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 11,309 | $ | 16,051 | |||
Accounts receivable | 114,120 | 131,720 | |||||
Fair value of derivatives | 25,032 | 65,114 | |||||
Other current assets | 14,912 | 9,740 | |||||
Total current assets | 165,373 | 222,625 | |||||
Oil and natural gas properties, full cost accounting method: | |||||||
Evaluated properties | 4,830,499 | 4,585,020 | |||||
Less accumulated depreciation, depletion, amortization and impairment | (2,458,026) | (2,270,675) | |||||
Evaluated oil and natural gas properties, net | 2,372,473 | 2,314,345 | |||||
Unevaluated properties | 1,405,993 | 1,404,513 | |||||
Total oil and natural gas properties, net | 3,778,466 | 3,718,858 | |||||
Operating lease right-of-use assets | 24,447 | — | |||||
Other property and equipment, net | 24,770 | 21,901 | |||||
Restricted investments | 3,490 | 3,424 | |||||
Deferred financing costs | 5,081 | 6,087 | |||||
Fair value of derivatives | 11,209 | — | |||||
Other assets, net | 4,087 | 6,278 | |||||
Total assets | $ | 4,016,923 | $ | 3,979,173 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 243,481 | $ | 261,184 | |||
Operating lease liabilities | 19,196 | — | |||||
Accrued interest | 25,660 | 24,665 | |||||
Cash-settleable restricted stock unit awards | 535 | 1,390 | |||||
Asset retirement obligations | 1,250 | 3,887 | |||||
Fair value of derivatives | 8,941 | 10,480 | |||||
Other current liabilities | 1,948 | 13,310 | |||||
Total current liabilities | 301,011 | 314,916 | |||||
Senior secured revolving credit facility | 200,000 | 200,000 | |||||
6.125% senior unsecured notes due 2024 | 596,337 | 595,788 | |||||
6.375% senior unsecured notes due 2026 | 394,317 | 393,685 | |||||
Operating lease liabilities | 4,995 | — | |||||
Asset retirement obligations | 8,294 | 10,405 | |||||
Cash-settleable restricted stock unit awards | 1,737 | 2,067 | |||||
Deferred tax liability | 39,007 | 9,564 | |||||
Fair value of derivatives | 2,573 | 7,440 | |||||
Other long-term liabilities | — | 100 | |||||
Total liabilities | 1,548,271 | 1,533,965 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized; 0 and 1,458,948 shares outstanding, respectively | — | 15 | |||||
Common stock, $0.01 par value, 300,000,000 shares authorized; 228,372,081 and 227,582,575 shares outstanding, respectively | 2,284 | 2,276 | |||||
Capital in excess of par value | 2,421,559 | 2,477,278 | |||||
Retained earnings (accumulated deficit) | 44,809 | (34,361) | |||||
Total stockholders' equity | 2,468,652 | 2,445,208 | |||||
Total liabilities and stockholders' equity | $ | 4,016,923 | $ | 3,979,173 | |||
Callon Petroleum Company | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(Unaudited; in thousands, except per share data) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues: | |||||||||||||||
Oil sales | $ | 148,210 | $ | 142,601 | $ | 450,036 | $ | 380,500 | |||||||
Natural gas sales | 7,168 | 18,613 | 25,441 | 45,229 | |||||||||||
Total operating revenues | 155,378 | 161,214 | 475,477 | 425,729 | |||||||||||
Operating expenses: | |||||||||||||||
Lease operating expenses | 19,668 | 18,525 | 66,511 | 44,705 | |||||||||||
Production taxes | 11,866 | 10,263 | 33,810 | 26,265 | |||||||||||
Depreciation, depletion and amortization | 56,002 | 48,257 | 178,690 | 122,407 | |||||||||||
General and administrative | 9,388 | 9,721 | 31,705 | 26,779 | |||||||||||
Merger and integration expense | 5,943 | — | 5,943 | — | |||||||||||
Settled share-based awards | — | — | 3,024 | — | |||||||||||
Accretion expense | 128 | 202 | 585 | 626 | |||||||||||
Other operating expense | (161) | 1,435 | 931 | 3,750 | |||||||||||
Total operating expenses | 102,834 | 88,403 | 321,199 | 224,532 | |||||||||||
Income from operations | 52,544 | 72,811 | 154,278 | 201,197 | |||||||||||
Other (income) expenses: | |||||||||||||||
Interest expense, net of capitalized amounts | 739 | 711 | 2,218 | 1,765 | |||||||||||
(Gain) loss on derivative contracts | (21,809) | 34,339 | 31,415 | 55,374 | |||||||||||
Other income | (122) | (1,657) | (270) | (2,571) | |||||||||||
Total other (income) expense | (21,192) | 33,393 | 33,363 | 54,568 | |||||||||||
Income before income taxes | 73,736 | 39,418 | 120,915 | 146,629 | |||||||||||
Income tax expense | 17,902 | 1,487 | 29,444 | 2,463 | |||||||||||
Net income | 55,834 | 37,931 | 91,471 | 144,166 | |||||||||||
Preferred stock dividends | (350) | (1,823) | (3,997) | (5,471) | |||||||||||
Loss on redemption of preferred stock | (8,304) | — | (8,304) | — | |||||||||||
Income available to common stockholders | $ | 47,180 | $ | 36,108 | $ | 79,170 | $ | 138,695 | |||||||
Income per common share: | |||||||||||||||
Basic | $ | 0.21 | $ | 0.16 | $ | 0.35 | $ | 0.65 | |||||||
Diluted | $ | 0.21 | $ | 0.16 | $ | 0.35 | $ | 0.65 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 228,322 | 227,564 | 228,054 | 213,409 | |||||||||||
Diluted | 228,469 | 228,140 | 228,557 | 214,079 | |||||||||||
Callon Petroleum Company | |||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||
(Unaudited; in thousands) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 55,834 | $ | 37,931 | $ | 91,471 | $ | 144,166 | |||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation, depletion and amortization | 57,107 | 48,977 | 182,153 | 124,430 | |||||||||||
Accretion expense | 128 | 202 | 585 | 626 | |||||||||||
Amortization of non-cash debt related items | 739 | 708 | 2,218 | 1,749 | |||||||||||
Deferred income tax expense | 17,902 | 1,487 | 29,444 | 2,463 | |||||||||||
Loss on derivatives, net of settlements | (20,798) | 25,100 | 30,979 | 29,696 | |||||||||||
(Gain) loss on sale of other property and equipment | (13) | (102) | 36 | (80) | |||||||||||
Non-cash expense related to equity share-based awards | 1,569 | 1,708 | 7,868 | 4,466 | |||||||||||
Change in the fair value of liability share-based awards | (925) | 879 | 106 | 1,428 | |||||||||||
Payments to settle asset retirement obligations | (654) | (507) | (1,425) | (1,080) | |||||||||||
Payments for cash-settled restricted stock unit awards | — | — | (1,425) | (4,990) | |||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable | (21,081) | (56,764) | 17,600 | (54,384) | |||||||||||
Other current assets | 929 | 3,885 | (5,172) | (1,665) | |||||||||||
Current liabilities | 23,216 | 47,741 | (13,038) | 64,801 | |||||||||||
Other | (261) | 4,791 | (2,662) | 4,389 | |||||||||||
Net cash provided by operating activities | 113,692 | 116,036 | 338,738 | 316,015 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (143,995) | (156,982) | (503,425) | (455,352) | |||||||||||
Acquisitions | (1,418) | (550,592) | (40,788) | (595,984) | |||||||||||
Acquisition deposit | — | 27,600 | — | — | |||||||||||
Proceeds from sale of assets | 5,656 | 5,249 | 279,952 | 8,326 | |||||||||||
Net cash provided by (used in) investing activities | (139,757) | (674,725) | (264,261) | (1,043,010) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings on senior secured revolving credit facility | 221,000 | 105,000 | 581,000 | 270,000 | |||||||||||
Payments on senior secured revolving credit facility | (126,000) | (40,000) | (581,000) | (230,000) | |||||||||||
Issuance of 6.375% senior unsecured notes due 2026 | — | — | — | 400,000 | |||||||||||
Issuance of common stock | — | 7 | — | 288,364 | |||||||||||
Payment of preferred stock dividends | (350) | (1,823) | (3,997) | (5,471) | |||||||||||
Payment of deferred financing costs | — | (1,296) | (31) | (9,960) | |||||||||||
Tax withholdings related to restricted stock units | (316) | (216) | (2,174) | (1,804) | |||||||||||
Redemption of preferred stock | (73,012) | — | (73,017) | — | |||||||||||
Net cash provided by (used in) financing activities | 21,322 | 61,672 | (79,219) | 711,129 | |||||||||||
Net change in cash and cash equivalents | (4,743) | (497,017) | (4,742) | (15,866) | |||||||||||
Balance, beginning of period | 16,052 | 509,146 | 16,051 | 27,995 | |||||||||||
Balance, end of period | $ | 11,309 | $ | 12,129 | $ | 11,309 | $ | 12,129 | |||||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Tuesday, November 5, 2019, to discuss its third quarter 2019 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
Date/Time: | Tuesday, November 5, 2019, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
Webcast: | Select "IR Calendar" under the "Investors" section of the website: www.callon.com. |
Presentation Slides: | Select "Presentations" under the "Investors" section of the website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
Toll Free: | 1-888-317-6003 |
Canada Toll Free: | 1-866-284-3684 |
International: | 1-412-317-6061 |
Access code: | 1044236 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc. ("Carrizo").
Additional Information and Where to Find It
In connection with the proposed transaction, Callon has filed, and the SEC has declared effective, a registration statement on Form S-4 (the "Registration Statement"), which contains a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and/or send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Contact Information
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
i) | See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-third-quarter-2019-results-300951019.html
SOURCE Callon Petroleum Company
Article Date
11/4/2019Callon Urges Shareholders To Vote "For" The Acquisition Of Carrizo
Source: PR Newswire
HOUSTON, Nov. 4, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") issued the following statement in response to a report by Institutional Shareholder Services ("ISS") regarding Callon's all-stock acquisition of Carrizo Oil & Gas, Inc. (NASDAQ: CRZO). Callon strongly disagrees with ISS's recommendation and believes the following points are essential to understanding the merits of the transaction:
Callon encourages investors to review its recently filed investor presentation that highlights the benefits of the Carrizo transaction in more detail. The presentation is available on the Investor Relations section of the Company's website at https://ir.callon.com/ as well as on https://www.sec.gov/.
As previously announced on July 15, 2019, Callon and Carrizo have entered into a definitive agreement under which Callon will acquire Carrizo in an all-stock transaction that was unanimously approved by each company's boards of directors. Callon expects that the transaction will close during the fourth quarter of 2019, subject to approval by both Callon and Carrizo shareholders and other customary closing conditions.
The Special Meeting of Callon shareholders will be held on November 14, 2019, at 9:00 A.M. Central Time in the Advice & Counsel meeting room of the Hotel ZaZa, 9787 Katy Freeway, Houston, Texas. All shareholders of record of Callon common stock as of the close of business on October 7, 2019, will be entitled to vote their shares either in person or by proxy at the shareholder meeting. Each vote is very important, regardless of the number of shares owned. Your failure to vote your shares of common stock or your abstention from voting will have the same effect as a vote "AGAINST" the transaction.
The Callon Board reiterates its belief that approving the Carrizo transaction is in the best interests of all Callon shareholders and urges all shareholders to vote FOR the Carrizo merger agreement as well as all other proposals set forth in the proxy materials at the upcoming Special Meeting.
If you have any questions, need assistance in completing the proxy card, or need additional copies of the proxy materials, please call the firm assisting Callon with the solicitation of proxies:
INNISFREE M&A INCORPORATED
TOLL-FREE at +1 (888) 750-5834 (From the U.S. or Canada)
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon has filed, and the Securities and Exchange Commission (the "SEC") has declared effective, a registration statement on Form S-4 (the "Registration Statement"), which contains a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and/or send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-urges-shareholders-to-vote-for-the-acquisition-of-carrizo-300950683.html
SOURCE Callon Petroleum Company
Article Date
11/4/201910/23/2019 - Callon Provides Update Regarding Carrizo Transaction
Callon Provides Update Regarding Carrizo Transaction
Source: PR Newswire
HOUSTON, Oct. 23, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today issued the following statement regarding its previously announced pending all-stock acquisition of Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) ("Carrizo").
Yesterday, Callon filed an investor presentation highlighting the benefits of the Carrizo transaction. The presentation is available on the Investor Relations section of the Company's website at https://ir.callon.com/ as well as on https://www.sec.gov/.
As the presentation makes clear, Callon is led by an experienced Board of Directors and management team with a track record of successful value-enhancing acquisitions, significant cost savings, and productivity improvements. The Carrizo acquisition is compelling and we expect it will also deliver substantial value to shareholders. Far from precluding any future alternatives for Callon, this transaction improves strategic optionality and creates a stronger and more attractive company for investors as well as prospective buyers or merger partners.
By contrast with a letter and presentation which Paulson & Co. Inc. ("Paulson") issued the same day, and which contain a number of objectively false and misleading statements about the merger, our investor presentation and proxy statement lay out the salient facts clearly and in detail - including that:
Additional facts about the transaction are included in an investor presentation and the definitive proxy statement in connection with the transaction, both of which are available on the Investor Relations section of the Company's website at https://ir.callon.com/ as well as on https://www.sec.gov/.
The Callon Board unanimously recommends shareholders vote "FOR" the Carrizo merger agreement as well as all other proposals set forth in the proxy materials at the upcoming Special Meeting. The Special Meeting will be held on November 14, 2019, at 9:00 A.M. Central Time in the Advice & Counsel meeting room of the Hotel ZaZa, 9787 Katy Freeway, Houston, Texas. All shareholders of record of Callon common stock as of the close of business on October 7, 2019, will be entitled to vote their shares either in person or by proxy at the shareholder meeting. Each vote is very important, regardless of the number of shares owned. Your failure to vote your shares of common stock or your abstention from voting will have the same effect as a vote "AGAINST" the transaction.
Callon expects that the transaction will close during the fourth quarter of 2019, subject to approval by both Callon and Carrizo shareholders and other customary closing conditions.
If you have any questions, need assistance in completing the proxy card, or need additional copies of the proxy materials, please call the firm assisting Callon with the solicitation of proxies:
INNISFREE M&A INCORPORATED
TOLL-FREE at +1 (888) 750-5834 (From the U.S. or Canada)
JP Morgan and Goldman Sachs & Co. LLC are serving as financial advisors to Callon and Kirkland & Ellis LLP is serving legal advisor to Callon.
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon) has filed, and the Securities and Exchange Commission (the "SEC") has declared effective, a registration statement on Form S-4 (the "Registration Statement"), which contains a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and/or send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Supplemental Non-GAAP Financial Measures
This communication includes free cash flow, which is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements to assess our liquidity. We define free cash flow as net cash provided by operating activities before changes in working capital less capital expenditures (inclusive of operational capital expenditures, seismic, leasehold and other expenditures, as well as capitalized general and administrative expense and capitalized interest expense). Management believes that free cash flow provides useful information in assessing the impact of our ability to generate cash flow in excess of capital requirements and to return cash to shareholders. Free cash flow should not be considered an alternative to net cash provided by operating activities or any other GAAP measures. We have not provided a reconciliation of projected free cash flow to projected net cash provided by operating activities and capital expenditures used in net cash provided by investing activities, the most comparable financial measures calculated in accordance with GAAP. We are unable to project net cash provided by operating activities for any future period because such metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. We are unable to project these timing differences with any reasonable degree of accuracy without unreasonable efforts such as predicting the timing of our and our customers' payments, with accuracy to a specific day, months in advance.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
1 Free cash flow calculation is inclusive of interest expense, dividends, capitalized G&A, capitalized interest, contingency payments and transaction expenses.
View original content:http://www.prnewswire.com/news-releases/callon-provides-update-regarding-carrizo-transaction-300944384.html
SOURCE Callon Petroleum Company
Article Date
10/23/2019Paulson & Co. Reiterates Opposition to Destructive Carrizo Deal
Source: PR Newswire
NEW YORK, Oct. 22, 2019 /PRNewswire/ -- Paulson & Co. Inc. ("Paulson"), as manager of funds holding 21.6 million shares, or 9.5% of those outstanding, of Callon Petroleum Company ("Callon" or the "Company") (NYSE: CPE), today sent a follow-up letter to the board of Callon, released a presentation exposing numerous flaws in Callon's statements of the purported benefits of the proposed acquisition of Carrizo Oil & Gas Inc. ("Carrizo") (NASDAQ: CRZO) and reiterated its opposition to the deal.
Paulson's opposition is based on the following additional points:
1) The Carrizo transaction has already destroyed substantial shareholder value and if consummated will permanently impair Callon's value proposition. Since the deal was announced, Callon's stock price has declined by 42%, with shareholders losing $614 million in value. This is due to the unjustified 25% premium offered to buy Carrizo and the proposed dilutive Callon share issuance of over 86%. Even accounting for the general decline in the E&P sector, Callon's shares have severely underperformed. Callon is clearly better off without this deal, in which case this decline should be reversed.
2) The transaction enriches management, not shareholders. We are shocked that, as part of this transaction, Callon shareholders will entitle up to a $10.7 million golden parachute or "success fee" to Joseph Gatto, James Ulm, Michol Ecklund and Mitzi Conn for structuring a deal in which Callon shareholders have lost over half a billion dollars. As if this weren't enough, Callon's shareholders must pay Carrizo management an additional $29 million in change-in-control payments. When added to financial advisory fees of $30 million, shareholders are being asked to entitle not one, but two, management teams and their bankers nearly $70 million for the massive destruction of shareholder value. If the transaction closes, shareholders will not only suffer steep losses, they will be paying fees to the parties responsible for causing the destruction in value. The proposed compensation agreements are an insult to shareholders and a mockery of good corporate governance.
3) Callon's net debt explodes from $1.2 billion to $3.5 billion while Callon inexplicably claims that this deal improves its balance sheet. Estimated annual cash interest expense and preferred dividends will nearly triple from $69 million to $184 million annually. Based on consensus estimates, Net Debt/2020E EBITDA is expected to go from 1.9x stand-alone to 2.4x pro-forma, including preferred stock. The leverage impact from any asset sales is unclear because Callon has not provided sufficient detail.
4) Callon management uses unreliable and non-conforming financial metrics to try to persuade shareholders into approving this transaction. Callon seemingly overestimates what combined "free cash flow" is available for shareholders for 2020-2021. By capitalizing cash interest expense and excluding preferred dividends ($368 million), capitalizing a portion of G&A expenses, and excluding transaction expenses of $94.5 million and contingent payments to ExL of $75 million, Callon dramatically overstates its free cash flow projections.
5) Callon claims that this deal is accretive on free cash flow per share, yet our calculations based on management's disclosures imply the deal is highly dilutive. In its definitive proxy, Callon represents that on a stand-alone basis its adjusted operating cash flow less capital expenditures for 2020-2021 equals $242 million, or $1.06/share. In comparison, in its deal press releases, Callon says that pro-forma for the merger it expects to generate $300 million of "free cash flow", or $0.72/share for 2020-2021. Based on these, figures, which exclude the above-mentioned costs, the proposed deal is dilutive to free cash flow per share by an extraordinary 32%.
6) $600 million out of the $850 million of total synergies are derived from capitalizing unrealistic operational benefits, which most analysts and investors heavily discount. In addition, Callon's synergy projections overlook the $252 million value transfer from the premium paid, exclude $60 million of value loss attributable to restrictions on tax attributes, and ignore the fact that the remaining purported synergies are shared 54% and 46% by Callon and Carrizo shareholders respectively.
7) If Callon's board really wants to maximize value for its shareholders, in the event this deal does not close, it should explore an immediate sale with the formal engagement of independent advisers. As part of such sale, Callon must reach out to companies of all sizes, including larger ones who would be interested in entering or increasing their Permian exposure. Shareholders recognize that Callon is too small to be cost-efficient and the best path forward to generate value is to pursue a sale of the company.
We believe that Callon's board and management is pursuing the transaction to entrench and enrich themselves. To justify a value-destructive deal, Callon presents shareholders with unreliable, non-GAAP financial metrics. In our view, shareholders would be better off instead if the Carrizo transaction did not proceed and Callon was to be sold. Accordingly, Paulson will vote its shares against the Carrizo transaction and against all of the proposed shareholder resolutions.
The full letter and presentation are attached to this press release.
About Paulson & Co. Inc.
Paulson, founded in 1994, is an investment management firm headquartered in New York.
Contact Details
Marcelo Kim
Paulson & Co. Inc.
212-599-6628
Cautionary Statement
Paulson & Co. Inc. ("Paulson") is not soliciting proxies in connection with any matter brought before shareholders of the companies identified in this letter or press release.
Clients, funds and accounts managed by Paulson (the "Paulson Clients") may from time to time beneficially own, and/or have an economic interest in, shares of the companies discussed in this letter and as a result, the Paulson Clients have an economic interest in the forward-looking statements, estimates and projections discussed above and their impact on the companies discussed in this letter. The Paulson Clients are in the business of trading – buying and selling – securities, and may trade in the securities of the companies discussed in this letter. You should also assume that the Paulson Clients may from time to time sell all or a portion of their holdings of one or more of the companies in open market transactions or otherwise (including via short sales), buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls, swaps or other derivative instruments relating to some or all of such shares, regardless of the views expressed in this letter.
The views contained in this letter and press release represent the opinions of Paulson as of the date hereof. Paulson reserves the right to change any of its opinions expressed herein at any time, but is under no obligation to update the data, information or opinions contained herein. Under no circumstances is this letter or press release intended to be, nor should it be construed as advice or a recommendation to enter into or conclude any transaction or buy or sell any security (whether on the terms shown herein or otherwise). This letter should not be construed as legal, tax, investment, financial or other advice. Additionally, this letter should not be construed as an offer to buy any investment in any fund or account managed by Paulson.
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SOURCE Paulson & Co. Inc.
Article Date
10/22/201910/22/2019 - Callon Files Investor Presentation Highlighting Significant Benefits of Transaction with Carrizo
Callon Files Investor Presentation Highlighting Significant Benefits of Transaction with Carrizo
Source: PR Newswire
HOUSTON, Oct. 22, 2019 Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has filed an investor presentation with the Securities and Exchange Commission (the "SEC") in connection with its previously announced pending all-stock acquisition of Carrizo Oil & Gas, Inc. (NASDAQ: CRZO).
The investor presentation is available on the Investor Relations section of the Company's website at https://ir.callon.com/ as well as on https://www.sec.gov/.
Highlights of the transaction include:
The Callon Board unanimously recommends shareholders vote "FOR" the Carrizo merger agreement as well as all other proposals set forth in the proxy materials at the upcoming Special Meeting. The Special Meeting will be held on November 14, 2019, at 9:00 A.M. Central Time in the Advice & Counsel meeting room of the Hotel ZaZa, 9787 Katy Freeway, Houston, Texas. All shareholders of record of Callon common stock as of the close of business on October 7, 2019, will be entitled to vote their shares either in person or by proxy at the shareholder meeting. Each vote is very important, regardless of the number of shares owned. Your failure to vote your shares of common stock or your abstention from voting will have the same effect as a vote "AGAINST" the transaction.
Callon expects that the transaction will close during the fourth quarter of 2019, subject to approval by both Callon and Carrizo shareholders and other customary closing conditions.
If you have any questions, need assistance in completing the proxy card, or need additional copies of the proxy materials, please call the firm assisting Callon with the solicitation of proxies: |
INNISFREE M&A INCORPORATED |
TOLL-FREE at +1 (888) 750-5834 (From the U.S. or Canada) |
JP Morgan and Goldman Sachs are serving as financial advisors to Callon and Kirkland & Ellis LLP is serving legal advisor to Callon.
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon Petroleum Company ("Callon") has filed, and the Securities and Exchange Commission (the "SEC") has declared effective, a registration statement on Form S-4 (the "Registration Statement"), which contains a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and/or send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Supplemental Non-GAAP Financial Measures
This communication includes free cash flow, which is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements to assess our liquidity. We define free cash flow as net cash provided by operating activities before changes in working capital less capital expenditures. Management believes that free cash flow provides useful information in assessing the impact of our ability to generate cash flow in excess of capital requirements and to return cash to shareholders. Free cash flow should not be considered an alternative to net cash provided by operating activities or any other GAAP measures. We have not provided a reconciliation of projected free cash flow to projected net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP. We are unable to project net cash provided by operating activities for any future period because such metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. We are unable to project these timing differences with any reasonable degree of accuracy without unreasonable efforts such as predicting the timing of our and our customers' payments, with accuracy to a specific day, months in advance.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-files-investor-presentation-highlighting-significant-benefits-of-transaction-with-carrizo-300942543.html
SOURCE Callon Petroleum Company
Article Date
10/22/2019Callon Provides Operational Update for Third Quarter of 2019
Source: PR Newswire
HOUSTON, Oct. 21, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today provided an interim operational update for the third quarter of 2019 including expected ranges for production, capital expenses, lease operating expenses and commodity pricing.
Callon expects production for the third quarter of 2019 to be between 37.5 and 37.9 MBoed (~78% oil). Lease operating expenses for the period are expected to be between $19.5 and $20 million on an absolute basis or in the range of $5.60 to $5.80 per Boe. Operational Capital spending for the third quarter is expected to be between $114 and $118 million, which is in line with projected full year operational capital expenditures between $495 and $520 million. The combined total of capitalized interest and capitalized G&A for third quarter is expected to be between $26 and $27 million. Pre-hedge realized prices for the quarter are projected to be roughly $54 per barrel and $1.55 per Mcf for natural gas.
"We have continued to make significant progress towards our goal of enhanced shareholder value through growing, repeatable free cash flow generation," said Joe Gatto, President and Chief Executive Officer of Callon. "Our field level performance during the third quarter exemplified our team's ongoing efforts to reduce capital and operating costs which translates into enhanced capital efficiency across the combined asset footprint in 2020 and beyond. This incremental value will accrue to our shareholders as we execute on our deleveraging goals and improve overall shareholder returns."
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon Petroleum Company ("Callon") has filed, and the Securities and Exchange Commission (the "SEC") has declared effective, a registration statement on Form S-4 (the "Registration Statement"), which contains a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and/or send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Supplemental Non-GAAP Financial Measures
This communication includes free cash flow, which is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements to assess our liquidity. We define free cash flow as net cash provided by operating activities before changes in working capital less capital expenditures. Management believes that free cash flow provides useful information in assessing the impact of our ability to generate cash flow in excess of capital requirements and to return cash to shareholders. Free cash flow should not be considered as an alternative to net cash provided by operating activities or any other measure of liquidity in accordance with GAAP.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-provides-operational-update-for-third-quarter-of-2019-300941426.html
SOURCE Callon Petroleum Company
Article Date
10/21/201910/10/2019 - Callon Announces Filing of Definitive Proxy Statement in Connection with Proposed Merger with Carrizo
Callon Announces Filing of Definitive Proxy Statement in Connection with Proposed Merger with Carrizo
Source: PR Newswire
HOUSTON, Oct. 10, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that it has filed definitive proxy materials with the U.S. Securities and Exchange Commission in connection with the Company's pending all-stock acquisition of Carrizo Oil & Gas, Inc. (Nasdaq: CRZO). Callon will commence mailing the joint proxy statement / prospectus to its shareholders on or about October 11, 2019.
The Callon Special Meeting of Shareholders to vote on the transaction is scheduled for November 14, 2019, at 9:00 A.M. Central Time, and will be held in the Advice & Counsel meeting room of the Hotel ZaZa, 9787 Katy Freeway, Houston, Texas. All shareholders of record of Callon common stock as of the close of business on October 7, 2019, will be entitled to vote their shares either in person or by proxy at the shareholder meeting.
Following a comprehensive independent review, with the assistance of independent financial and legal advisors, the Callon Board of Directors believes this transaction is in the best interests of the Company and its shareholders and unanimously recommends that shareholders vote "FOR" the proposal to approve the merger agreement, as well as all other proposals set forth in the proxy materials.
As previously announced on July 15, 2019, the combination of Callon and Carrizo will create a differentiated oil and gas company with scaled development operations focused on premier asset bases and supported by accelerated cash flow and capital efficiency. Highlights of the transaction include:
Callon's experienced independent Board of Directors has successfully repositioned the business from a micro-cap offshore entity to a Permian focused growth company with high-quality assets and a track record of successful M&A integration. The Callon Board has an independent standing Strategic Planning Committee that continually evaluates and considers all alternatives for maximizing shareholder value. Importantly, this transaction does not preclude any future alternatives, but rather it strengthens Callon's optionality relating to future strategic transactions.
Callon today also announced that the Board of Directors of the combined company will consist of 11 members, including Callon's eight current Board members and the following individuals from the Carrizo Board: Frances Aldrich Sevilla-Sacasa, S.P. Johnson IV and Steven A. Webster. Collectively, the companies believe the expanded Board is comprised of individuals with the experience, breadth and perspective to continue guiding the company to create value for all the company's stakeholders.
Callon shareholders are encouraged to read the definitive proxy materials, which describe, among other things, the process that led to the proposed transaction with Carrizo, the reasons for the Callon Board's confidence in this combination and the recommendation that shareholders vote "FOR" the merger agreement, as well as the other proposals set forth on the proxy card. Each vote is very important, regardless of the number of shares owned. Your failure to vote your shares of common stock or your abstention from voting will have the same effect as a vote "AGAINST" the transaction.
Callon expects that the transaction will close during the fourth quarter of 2019, subject to approval by both Callon and Carrizo shareholders and other customary closing conditions.
If you have any questions, need assistance in completing the proxy card or need additional copies of the proxy materials, please call the firm assisting Callon with the solicitation of proxies: |
INNISFREE M&A INCORPORATED |
TOLL-FREE at +1 (888) 750-5834 (From the U.S. or Canada) |
About the Directors
Frances Aldrich Sevilla-Sacasa
Ms. Aldrich Sevilla-Sacasa has a distinguished career as an executive in the private banking industry. Most recently, she served as the Chief Executive Officer of Banco Itaú International, Miami, Florida, from 2012 to 2016. Prior to that time, her career included roles as Interim Dean of the University of Miami School of Business, President of U.S. Trust, Bank of America Private Wealth Management and President and Chief Executive Officer of US Trust Company. She previously served in a variety of roles with Citigroup's private banking business, including President of Latin America Private Banking, President of Europe Private Banking and Head of International Trust Business. Ms. Aldrich Sevilla-Sacasa currently serves on the Boards of publicly-traded Camden Property Trust and Delaware Funds, a mutual fund company. She holds a Bachelor of Arts Degree from the University of Miami and an M.B.A. from the Thunderbird School of Global Management.
S.P. Johnson IV
Mr. Johnson is co-founder of Carrizo and has served as its President and Chief Executive Officer since December 1993. Prior to that, he worked for Shell Oil Company for 15 years, where his managerial positions included Operations Superintendent, Manager of Planning and Finance and Manager of Development Engineering. Mr. Johnson has previously served as a director of Basic Energy Services, Inc., an oilfield service provider, and as a director of Pinnacle Gas Resources, Inc., a coalbed methane exploration and production company. Mr. Johnson is a Registered Petroleum Engineer and holds a B.S. in Mechanical Engineering from the University of Colorado.
Steven A. Webster
Mr. Webster is co-founder of Carrizo and has served as Chairman of its Board of Directors since June 1997. Mr. Webster serves as Managing Partner of AEC Partners, a private equity firm focused on investments in energy business he co-founded the firm in 2016, and Avista Capital Partners LP, a private equity firm that he co-founded in 2005. Previously, Mr. Webster served as the Chairman of DLJMB Global Energy Partners, a specialty group that sourced, executed and managed DLJMB III's energy related investments; President and Chief Executive Officer of R&B Falcon Corporation, an offshore drilling contractor; and Chairman and Chief Executive Officer of Falcon Drilling Company, which he founded in 1988. Mr. Webster currently serves on the Board of Directors at Camden Property Trust, Oceaneering and Era Group. He holds an M.B.A. from Harvard Business School where he was a Baker Scholar. He also holds a B.S. in Industrial Management and an Honorary Doctorate in Management from Purdue University.
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon Petroleum Company ("Callon") has filed, and the Securities and Exchange Commission (the "SEC") has declared effective, a registration statement on Form S-4 (the "Registration Statement"), which contains a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and/or send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Supplemental Non-GAAP Financial Measures
This communication includes free cash flow, which is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements to assess our liquidity. We define free cash flow as net cash provided by operating activities before changes in working capital less capital expenditures. Management believes that free cash flow provides useful information in assessing the impact of our ability to generate cash flow in excess of capital requirements and to return cash to shareholders. Free cash flow should not be considered as an alternative to net cash provided by operating activities or any other measure of liquidity in accordance with GAAP. We have not provided a reconciliation of projected free cash flow to projected net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP. We are unable to project net cash provided by operating activities for any future period because this metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. We are unable to project these timing differences with any reasonable degree of accuracy without unreasonable efforts such as predicting the timing of its and customers' payments, with accuracy to a specific day, months in advance.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-announces-filing-of-definitive-proxy-statement-in-connection-with-proposed-merger-with-carrizo-300935092.html
SOURCE Callon Petroleum Company
Article Date
10/10/201910/7/2019 - Callon Petroleum Company Schedules Third Quarter 2019 Conference Call for November 5, 2019
Callon Petroleum Company Schedules Third Quarter 2019 Conference Call for November 5, 2019
Source: PR Newswire
HOUSTON, Oct. 7, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its third quarter 2019 financial and operating results.
Webcast and Conference Call:
Date: November 5, 2019
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: | |
Select "IR Calendar" under the "Investors" section of the website. |
Conference Call: | ||
Domestic: | 1-888-317-6003 | |
Canada: | 1-866-284-3684 | |
International: | 1-412-317-6061 | |
Access code: | 1044236 | |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release third quarter 2019 results after market close on Monday, November 4, 2019.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-third-quarter-2019-conference-call-for-november-5-2019-300933326.html
SOURCE Callon Petroleum Company
Article Date
10/7/2019Callon Highlights Compelling Value Proposition of Transaction with Carrizo
Source: PR Newswire
HOUSTON, Sept. 26, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today posted Investor Materials to the Company's website in connection with its pending all-stock acquisition of Carrizo Oil & Gas, Inc. (Nasdaq: CRZO). The Investor Materials detail the benefits of the combined company, which will enable Callon to accelerate its free cash flow, capital efficiency and deleveraging goals through an optimized model of large-scale development.
The Investor Materials are now available on the Investor Relations section of Callon's website, as well as www.sec.gov. The Investor Materials can also be downloaded here: https://ir.callon.com/presentations
"The strategic and financial benefits of Callon's combination with Carrizo are compelling," said Joe Gatto, President and Chief Executive Officer of Callon. "We are creating a differentiated oil and gas company with scaled development operations focused on premier asset bases and supported by accelerated cash flow and capital efficiency. Additionally, the pro forma company's leading cash margins will enable us to navigate commodity price volatility and allow for reliable, continuous development of the combined portfolio. Together, we will be well-positioned to accelerate our strategy and deliver significant value to our shareholders."
Benefits of the combination highlighted in the Investor Materials include:
As previously announced on July 15, 2019, Callon will acquire Carrizo in an all-stock transaction. Upon approval, Callon shareholders will own approximately 54% of the combined company, and Carrizo shareholders will own approximately 46%, on a fully diluted basis. The all-stock transaction is intended to be tax-free to Carrizo shareholders. Importantly, the Callon Board evaluated and considered several alternatives for maximizing shareholder value over the past two years before entering into the Carrizo transaction. Moreover, the Board firmly believes that the pro forma company will have improved optionality to maximize shareholder value in the context of future industry consolidation.
Subsequent Events
As part of the integration planning process, Callon has refined its views regarding the scope of asset monetizations post-closing. As a stand-alone company, Callon has realized cash proceeds of over $280 million from acreage divestitures and trades in 2019 and used those proceeds for debt reduction and redemption of higher cost preferred shares. Callon has established a target of $300 - $400 million of additional monetization proceeds for the combined company by year-end 2020, primarily from a combination of the following sources:
Callon has also added to its stand-alone hedge portfolio since its last earnings release. The current portfolio, set forth below, provides for downside protection on Nymex WTI and ICE Brent benchmark pricing for approximately 2.2 million barrels of oil volumes in fourth quarter of 2019 and 7.1 million barrels for the calendar year 2020. In addition, hedges were added for oil volumes that will be priced on the Magellan East Houston pricing point beginning in 2020 (~1.4 MMBbls @ +$2.40/Bbl).
Oil Benchmark Hedges | 4Q19 | FY 2020 |
WTI NYMEX (Bbls, $/Bbl) | ||
Swaps | ||
Total Volumes | 276,000 | 1,098,000 |
Total Daily Volumes | 3,000 | 3,000 |
Avg. Swap | $60.17 | $56.17 |
Three-way Collars | ||
Total Volumes | 1,196,000 | 5,124,000 |
Total Daily Volumes | 13,000 | 14,000 |
Avg. Long Put | $56.54 | $55.45 |
Two-way Collars | ||
Total Volumes | 276,000 | - |
Total Daily Volumes | 3,000 | - |
Avg. Floor | $55.00 | - |
Put Options | ||
Total Volumes | 230,000 | - |
Total Daily Volumes | 2,500 | - |
Avg. Put Price | $65.00 | - |
Put Spreads | ||
Total Volumes | 230,000 | - |
Total Daily Volumes | 2,500 | - |
Avg. Long Put Price | $65.00 | - |
Total Volume Hedged (Bbl) | 2,208,000 | 6,222,000 |
ICE BRENT (Bbls, $/Bbl) | ||
Three-way Collars | ||
Total Volumes | - | 837,500 |
Total Daily Volumes | - | 2,288 |
Avg. Long Put Price | - | $58.24 |
Total Volume Hedged (Bbl) | 837,500 | |
Oil Benchmark Hedge Total | 2,208,000 | 7,059,500 |
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon Petroleum Company ("Callon") has filed with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 (the "Registration Statement"), which contains a preliminary joint proxy statement of Callon and Carrizo that also constitutes a preliminary prospectus of Callon. The information in the preliminary joint proxy statement/prospectus is not complete and may be changed. After the Registration Statement is declared effective by the SEC, Callon and Carrizo intend to mail a definitive proxy statement/prospectus to shareholders of Callon and shareholders of Carrizo. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Supplemental Non-GAAP Financial Measures
This communication includes free cash flow, which is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements to assess our liquidity. We define free cash flow as net cash provided by operating activities before changes in working capital less capital expenditures. Management believes that free cash flow provides useful information in assessing the impact of our ability to generate cash flow in excess of capital requirements and to return cash to shareholders. Free cash flow should not be considered as an alternative to net cash provided by operating activities or any other measure of liquidity in accordance with GAAP.
Contact for Callon
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
View original content to download multimedia:http://www.prnewswire.com/news-releases/callon-highlights-compelling-value-proposition-of-transaction-with-carrizo-300925693.html
SOURCE Callon Petroleum Company
Article Date
9/26/20199/9/2019 - Callon Comments on Paulson & Co. Filing
Callon Comments on Paulson & Co. Filing
Source: PR Newswire
HOUSTON, Sept. 9, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today issued the following statement in response to the filing by Paulson & Co. Inc.:
Callon maintains an open dialogue with all of our shareholders and welcomes constructive input toward the shared goal of maximizing shareholder value. Our Board of Directors is committed to acting in the best interests of Callon shareholders and will continue to take actions to deliver returns on their behalf.
The Board routinely surveys the strategic landscape and evaluates various opportunities to maximize shareholder value in the context of the prevailing operational, financial and strategic environments and remains committed to this ongoing effort. To this end, the Callon Board, with the assistance of outside financial and legal advisors, carefully evaluated the combination with Carrizo and determined that the transaction delivers compelling value to Callon shareholders.
We remain confident in the strategic and financial benefits of our combination with Carrizo, which will create a leading oil and gas company with scaled development operations focused on the Permian Basin in a transaction that is accretive on all per share metrics. The pro forma company will allocate more capital to the Permian Basin than the combined Callon and Carrizo standalone development plans, supported by strong free cash flow from the Eagle Ford Shale.
The benefits of the combination will include:
Further, as evidenced by our strong second quarter 2019 operational and financial results, we continue to make significant progress delivering on our strategy. We started the year by focusing on four key areas that we firmly believe will create significant value for investors over time:
The combination of our two high quality asset bases and complementary teams accelerates our ability to deliver on these goals on a sustained basis.
Callon and Carrizo continue to expect that the transaction will close during the fourth quarter of 2019, subject to customary closing conditions, including the approval of shareholders of both companies.
As previously announced on July 15, 2019, Callon and Carrizo entered into a definitive agreement under which Callon will acquire Carrizo in an all-stock transaction valued at $3.2 billion. Under the terms of the agreement, Carrizo shareholders will receive a fixed exchange ratio of 2.05 Callon shares for each share of Carrizo common stock they own. Following the close of the transaction, Callon shareholders will own approximately 54% of the combined company, and Carrizo shareholders will own approximately 46%, on a fully diluted basis. The all-stock transaction is intended to be tax-free to Carrizo shareholders.
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications herein do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication herein do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo Oil & Gas, Inc.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon Petroleum Company ("Callon") has filed with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 (the "Registration Statement"), which contains a preliminary joint proxy statement of Callon and Carrizo that also constitutes a preliminary prospectus of Callon. The information in the preliminary joint proxy statement/prospectus is not complete and may be changed. After the Registration Statement is declared effective by the SEC, Callon and Carrizo intend to mail a definitive proxy statement/prospectus and accompanying WHITE proxy cards to shareholders of Callon and shareholders of Carrizo. This communication is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the SEC and send to Callon's shareholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's shareholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's shareholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019, and the quarter ended June 30, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Contact for Callon
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
(281) 589-5200
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SOURCE Callon Petroleum Company
Article Date
9/9/2019Paulson & Co. Opposes Callon Petroleum's Proposed Acquisition of Carrizo Oil & Gas
Source: PR Newswire
NEW YORK, Sept. 9, 2019 /PRNewswire/ -- Paulson & Co. Inc. ("Paulson"), as manager of funds holding 21.6 million shares, or 9.5% of those outstanding, of Callon Petroleum Company ("Callon" or the "Company") (NYSE: CPE), today sent a letter to the board of Callon. The letter informs Callon that Paulson plans to vote its shares against the proposed acquisition of Carrizo Oil & Gas Inc. ("Carrizo") (NASDAQ: CRZO) and urges the board and management to pursue a sale of the Company.
The letter outlines the reasons why Paulson opposes the proposed acquisition:
The sharp decline in the Company's stock price since the transaction announcement on July 15, 2019 demonstrates the market's judgement of the value-eroding nature of the proposed acquisition. Holding only 0.5% of the Company's shares outstanding, the board and management have not been meaningfully exposed to the value that has been lost by Callon shareholders. If the board is truly interested in its shareholders, given the magnitude of the difference between the current stock price of Callon and its takeover value, it should pursue a sale of Callon.
The full letter is attached to this press release.
About Paulson & Co. Inc.
Paulson, founded in 1994, is an investment management firm headquartered in New York.
Contact Details
Marcelo Kim
Paulson & Co. Inc.
212-599-6628
Cautionary Statement
Paulson & Co. Inc. ("Paulson") is not soliciting proxies in connection with any matter brought before shareholders of the companies identified in this letter or press release.
Clients, funds and accounts managed by Paulson (the "Paulson Clients") may from time to time beneficially own, and/or have an economic interest in, shares of the companies discussed in this letter and as a result, the Paulson Clients have an economic interest in the forward-looking statements, estimates and projections discussed above and their impact on the companies discussed in this letter. The Paulson Clients are in the business of trading – buying and selling – securities, and may trade in the securities of the companies discussed in this letter. You should also assume that the Paulson Clients may from time to time sell all or a portion of their holdings of one or more of the companies in open market transactions or otherwise (including via short sales), buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls, swaps or other derivative instruments relating to some or all of such shares, regardless of the views expressed in this letter.
The views contained in this letter and press release represent the opinions of Paulson as of the date hereof. Paulson reserves the right to change any of its opinions expressed herein at any time, but is under no obligation to update the data, information or opinions contained herein. Under no circumstances is this letter or press release intended to be, nor should it be construed as advice or a recommendation to enter into or conclude any transaction or buy or sell any security (whether on the terms shown herein or otherwise). This letter should not be construed as legal, tax, investment, financial or other advice. Additionally, this letter should not be construed as an offer to buy any investment in any fund or account managed by Paulson.
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SOURCE Paulson & Co. Inc.
Article Date
9/9/2019Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
HOUSTON, Aug. 21, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Simmons Energy European Energy Conference
The Company will participate in the Simmons Energy European Energy Conference on Wednesday, August 28th, and Thursday August 29th, 2019.
Barclays CEO Energy-Power Conference
The Company will present at the Barclays CEO Energy-Power Conference on Wednesday, September 4, 2019. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
Contact Information
Mark Brewer
Director of Investor Relations
or
Kate Schilling
Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300904554.html
SOURCE Callon Petroleum Company
Article Date
8/21/2019Callon Petroleum Company Announces Second Quarter 2019 Results
Source: PR Newswire
HOUSTON, Aug. 6, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three and six months ended June 30, 2019.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Second Quarter and Recent Highlights
"Our team's performance continued to exceed expectations during the second quarter with stronger production and lower capital spending than forecasted. We remain on track to meet all of the goals that we laid out for the market back in February while delivering on a seamless integration process to cement a highly accretive acquisition opportunity that will benefit shareholders of both Callon and Carrizo. Our operational efficiency in the Midland Basin during the second quarter and successful completion of our first Delaware mega-pad project are emblematic of the value creation that underpins the strategic rationale in combining these two high performing companies," commented Joe Gatto, Callon's President and Chief Executive Officer. He continued, "We are steadfast in our commitment to accelerating the achievement of our core goals of boosting returns on invested capital, reducing leverage, generating sustainable free cash flow growth and improving the overall long-term outlook for our shareholders. With this strategic combination, which will be enhanced by the eminently achievable, tangible synergies identified, we will unlock significant value for shareholders in the near term as the highly efficient and sustainable development program we have outlined advances all of our goals. We are very pleased with our integration progress and equally excited about the tremendous value proposition created by merging our two organizations."
Operations Update
At June 30, 2019, we had 487 gross (330.2 net) horizontal wells producing in the Permian Basin. Net daily production for the three months ended June 30, 2019 grew 40% to 40.5 Mboe/d (77% oil), at the top of the previously announced range of expectations (provided in the July 15, 2019 press release), as compared to the same period of 2018.
For the three months ended June 30, 2019, we drilled 15 gross (14.3 net) horizontal wells, and placed a combined 18 gross (15.9 net) horizontal wells on production. Almost all of the wells were focused in the Midland Basin and included two six-well projects targeting three development zones that were placed on line under budget due to sustained, realized capital efficiencies. As part of our larger scale development model in the Midland Basin, a five well project in central Howard County achieved an average peak IP-30 rate of 1,346 Boe/d (91% oil), equating to 155 Boe/d per lateral foot. In addition, a two-well pad in the Delaware was placed on line, targeting co-development of the 2nd Bone Spring Shale and Lower Wolfcamp A.
Additional activity during the quarter in the Delaware Basin was focused on the completion of our first large scale development project, involving co-development of two Wolfcamp A flow units and the Wolfcamp B. Significant improvements in drilling and completion costs resulted in an average total well cost of less than $1,100 per lateral foot. These savings were realized through highly efficient simultaneous drilling and completion operation techniques that will be the focal point of the 2020 capital development program across the pro forma asset portfolio. In addition, water sourcing for the completion operations utilized over 1.6 million barrels from our Delaware recycling facilities, resulting in significant savings versus traditional sourcing methods. The wells from this project were recently placed on flow back and are in the early stages of production.
Callon has reduced its number of active drilling rigs from six to four and is running a single completion crew after building a substantial inventory of drilled, uncompleted locations, in accordance with the previously communicated capital program expectations. In addition, the field optimization project initiated during the first quarter of 2019 in the Delaware Basin has been completed and all associated wells have been returned to production.
Capital Expenditures
For the six months ended June 30, 2019, we incurred $133.5 million in operational capital expenditures (including other items) on an accrual basis as compared to $155.2 million in the first quarter of 2019, representing a decrease of 14%. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
Three Months Ended June 30, 2019 | ||||||||||||||||
Operational | Capitalized | Capitalized | Total Capital | |||||||||||||
Capital (a) | Interest | G&A | Expenditures | |||||||||||||
Cash basis (b) | $ | 138,018 | $ | 21,962 | $ | 6,239 | $ | 166,219 | ||||||||
Timing adjustments (c) | (4,547) | (3,225) | — | (7,772) | ||||||||||||
Non-cash items | — | — | 2,207 | 2,207 | ||||||||||||
Accrual basis | $ | 133,471 | $ | 18,737 | $ | 8,446 | $ | 160,654 | ||||||||
(a) | Includes seismic, land and other items. |
(b) | Cash basis is presented here to help users of financial information reconcile amounts from the cash flow statement to the balance sheet by accounting for timing related changes in working capital that align with our development pace and rig count. |
(c) | Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
Three Months Ended | ||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||
Net production | ||||||||||||
Oil (MBbls) | 2,848 | 2,858 | 1,995 | |||||||||
Natural gas (MMcf) | 5,031 | 4,619 | 3,839 | |||||||||
Total (Mboe) | 3,687 | 3,628 | 2,635 | |||||||||
Average daily production (Boe/d) | 40,516 | 40,311 | 28,954 | |||||||||
% oil (Boe basis) | 77 | % | 79 | % | 76 | % | ||||||
Oil and natural gas revenues (in thousands) | ||||||||||||
Oil revenue | $ | 160,728 | $ | 141,098 | $ | 122,613 | ||||||
Natural gas revenue | 6,324 | 11,949 | 14,462 | |||||||||
Total revenue | 167,052 | 153,047 | 137,075 | |||||||||
Impact of settled derivatives | (1,157) | (290) | (7,980) | |||||||||
Adjusted Total Revenue (i) | $ | 165,895 | $ | 152,757 | $ | 129,095 | ||||||
Average realized sales price | ||||||||||||
Oil (per Bbl) | $ | 56.44 | $ | 49.37 | $ | 61.46 | ||||||
Natural gas (per Mcf) | 1.26 | 2.59 | 3.77 | |||||||||
Total (per BOE) | 45.31 | 42.18 | 52.02 | |||||||||
Average realized sales price | ||||||||||||
Oil (per Bbl) | $ | 54.87 | $ | 48.83 | $ | 57.38 | ||||||
Natural gas (per Mcf) | 1.91 | 2.86 | 3.81 | |||||||||
Total (per BOE) | 44.99 | 42.11 | 48.99 | |||||||||
Additional per BOE data | ||||||||||||
Sales price (a) | $ | 45.31 | $ | 42.18 | $ | 52.02 | ||||||
Lease operating expense | 6.18 | 6.63 | 4.99 | |||||||||
Production taxes | 3.02 | 2.98 | 2.86 | |||||||||
Operating margin | $ | 36.11 | $ | 32.57 | $ | 44.17 | ||||||
Depletion, depreciation and amortization | $ | 17.07 | $ | 16.47 | $ | 14.70 | ||||||
Adjusted G&A (b) | ||||||||||||
Cash component (c) | $ | 2.42 | $ | 2.28 | $ | 2.69 | ||||||
Non-cash component | 0.68 | 0.44 | 0.64 | |||||||||
(a) | Excludes the impact of settled derivatives. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | Excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended June 30, 2019, Callon reported total revenue of $167.1 million and total revenue including settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $165.9 million, including the impact of a $1.2 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's total operating revenue. Average daily production for the quarter was 40.5 Mboe/d compared to average daily production of 40.3 Mboe/d in the first quarter of 2019. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended June 30, 2019, the net gain (loss) on commodity derivative instruments includes the following:
Three Months Ended June 30, 2019 | |||||||
In Thousands | Per Unit | ||||||
Oil derivatives | |||||||
Net gain (loss) on settlements | $ | (4,461) | $ | (1.57) | |||
Net gain (loss) on fair value adjustments | 13,310 | ||||||
Total gain (loss) on oil derivatives | 8,849 | ||||||
Natural gas derivatives | |||||||
Net gain (loss) on settlements | 3,304 | $ | 0.65 | ||||
Net gain (loss) on fair value adjustments | (1,430) | ||||||
Total gain (loss) on natural gas derivatives | 1,874 | ||||||
Total commodity derivatives | |||||||
Net gain (loss) on settlements | (1,157) | $ | (0.32) | ||||
Net gain (loss) on fair value adjustments | 11,880 | ||||||
Total gain (loss) on total commodity derivatives | $ | 10,723 | |||||
Lease Operating Expenses, including workover ("LOE"). LOE per Boe for the three months ended June 30, 2019 was $6.18 per Boe, compared to LOE of $6.63 per Boe in the first quarter of 2019. The decrease on a per unit basis was attributable to a reduction in maintenance activities and increased water recycling, which lowered our water disposal costs compared to the previous period.
Production Taxes, including ad valorem taxes. Production taxes were $3.02 per Boe for the three months ended June 30, 2019, representing approximately 6.7% of total revenue before the impact of derivative settlements. The incremental increase as compared to the first quarter of 2019 and second quarter of 2018 is due to an increase in ad valorem taxes based upon a higher valuation of our oil and gas properties by the taxing jurisdictions, resulting from an increased number of producing wells in the current period, as a result of our horizontal drilling program and acquisition efforts.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended June 30, 2019 was $17.07 per Boe compared to $16.47 per Boe in the first quarter of 2019. The decrease is partially attributed to recent dispositions with a lower relative cost per BOE.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $11.4 million, or $3.10 per Boe, for the three months ended June 30, 2019 compared to $9.9 million, or $2.72 per Boe, for the first quarter of 2019. The cash component of Adjusted G&A was $8.9 million, or $2.42 per Boe, for the three months ended June 30, 2019 compared to $8.3 million, or $2.28 per Boe, for the first quarter of 2019.
For the three months ended June 30, 2019, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
Three Months Ended | |||
Total G&A expense | $ | 10,564 | |
Change in the fair value of liability share-based awards (non-cash) | 859 | ||
Adjusted G&A – total | 11,423 | ||
Restricted stock share-based compensation (non-cash) | (1,687) | ||
Corporate depreciation & amortization (non-cash) | (807) | ||
Adjusted G&A – cash component | $ | 8,929 | |
Income tax expense. Callon provides for income taxes at the statutory rate of 21% adjusted for permanent differences expected to be realized. We recorded an income tax expense of $16.7 million for the three months ended June 30, 2019, compared to income tax benefit of $5.1 million for the three months ended March 31, 2019. The change in income tax expense (benefit) is based upon net income (loss) generated in the respective periods.
Reaffirmed 2019 Guidance (stand alone Callon)
There is no change to the Company's previously updated full year guidance (provided June 13, 2019), which accounted for the impact of the sale of non-core assets and an announced acreage trade. This reaffirmed guidance does not take into effect the Carrizo merger, which is expected to close in the fourth quarter, subject to shareholder and regulatory approvals.
Second Quarter | First Half | Reaffirmed Full Year | ||||
2019 Actual | 2019 Actual | 2019 Guidance | ||||
Total production (Mboe/d) | 40.5 | 40.4 | 38.0 - 39.5 | |||
% oil | 77% | 78% | 78% - 79% | |||
Income statement expenses (per Boe) | ||||||
LOE, including workovers | $6.18 | $6.40 | $5.50 - $6.50 | |||
Production taxes, including ad valorem (% unhedged revenue) | 7% | 7% | 7% | |||
Adjusted G&A: cash component (a) | $2.42 | $2.35 | $2.00 - $2.50 | |||
Adjusted G&A: non-cash component (b) | $0.68 | $0.56 | $0.50 - $1.00 | |||
Cash interest expense (c) | $0.00 | $0.00 | $0.00 | |||
Effective income tax rate | 23% | 24% | 22% | |||
Capital expenditures ($MM, accrual basis) | ||||||
Total operational (d) | $133 | $289 | $495 - $520 | |||
Capitalized interest and G&A expenses | $27 | $58 | $100 - $105 | |||
Net operated horizontal wells placed on production | 16 | 27 | 47 - 49 |
(a) | Excludes stock-based compensation and corporate depreciation and amortization. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | All cash interest expense anticipated to be capitalized. |
(d) | Includes facilities, equipment, seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following table summarizes our open derivative positions as of June 30, 2019:
For the Remainder | For the Full Year | For the Full Year | |||||||||
Oil contracts (WTI) | of 2019 | of 2020 | of 2021 | ||||||||
Puts | |||||||||||
Total volume (Bbls) | 460,000 | — | — | ||||||||
Weighted average price per Bbl | $ | 65.00 | $ | — | $ | — | |||||
Put spreads | |||||||||||
Total volume (Bbls) | 460,000 | — | — | ||||||||
Weighted average price per Bbl | |||||||||||
Floor (long put) | $ | 65.00 | $ | — | $ | — | |||||
Floor (short put) | $ | 42.50 | $ | — | $ | — | |||||
Collar contracts with short puts (three-way collars) | |||||||||||
Total volume (Bbls) | 2,392,000 | 3,294,000 | — | ||||||||
Weighted average price per Bbl | |||||||||||
Ceiling (short call) | $ | 67.46 | $ | 65.72 | $ | — | |||||
Floor (long put) | $ | 56.54 | $ | 55.69 | $ | — | |||||
Floor (short put) | $ | 43.65 | $ | 44.47 | $ | — | |||||
Oil contracts (Midland basis differential) | |||||||||||
Swap contracts | |||||||||||
Total volume (Bbls) | 4,137,500 | 4,576,000 | 1,095,000 | ||||||||
Weighted average price per Bbl | $ | (2.64) | $ | (1.29) | $ | 1.00 | |||||
Oil contracts (Argus Houston MEH basis differential) | |||||||||||
Swap contracts | |||||||||||
Total volume (Bbls) | — | 552,000 | — | ||||||||
Weighted average price per Bbl | $ | — | $ | 3.30 | $ | — | |||||
Natural gas contracts (Henry Hub) | |||||||||||
Collar contracts (two-way collars) | |||||||||||
Total volume (MMBtu) | 1,196,000 | — | — | ||||||||
Weighted average price per MMBtu | |||||||||||
Ceiling (short call) | $ | 3.50 | $ | — | $ | — | |||||
Floor (long put) | $ | 3.13 | $ | — | $ | — | |||||
Swap contracts | |||||||||||
Total volume (MMBtu) | 1,397,000 | — | — | ||||||||
Weighted average price per MMBtu | $ | 2.89 | $ | — | $ | — | |||||
Natural gas contracts (Waha basis differential) | |||||||||||
Swap contracts | |||||||||||
Total volume (MMBtu) | 4,232,000 | 4,758,000 | — | ||||||||
Weighted average price per MMBtu | $ | (1.18) | $ | (1.12) | $ | — | |||||
Income (Loss) Available to Common Shareholders. The Company reported net income available to common shareholders of $53.4 million for the three months ended June 30, 2019 and Adjusted Income available to common shareholders of $41.3 million, or $0.18 per fully diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income available to common stockholders to reflect our theoretical tax provision for prior period quarters as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income available to common stockholders to Adjusted Income and the Company's net income to Adjusted EBITDA(i), a non-GAAP financial measure, (in thousands):
Three Months Ended | |||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | |||||||||
Income (loss) available to common stockholders | $ | 53,357 | $ | (21,367) | $ | 48,650 | |||||
(Gain) loss on derivatives, net of settlements | (15,193) | 66,970 | 8,572 | ||||||||
Change in the fair value of share-based awards | (850) | 1,881 | (463) | ||||||||
Other operating expense | 770 | — | — | ||||||||
Settled share-based awards | — | 3,024 | — | ||||||||
Tax effect on adjustments above | 3,207 | (15,094) | (1,703) | ||||||||
Change in valuation allowance | — | — | (10,562) | ||||||||
Adjusted Income (i) | $ | 41,291 | $ | 35,414 | $ | 44,494 | |||||
Adjusted Income per fully diluted common share (i) | $ | 0.18 | $ | 0.16 | $ | 0.21 | |||||
Three Months Ended | |||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | |||||||||
Net income (loss) | $ | 55,180 | $ | (19,543) | $ | 50,474 | |||||
(Gain) loss on derivatives, net of settlements | (15,193) | 66,970 | 8,572 | ||||||||
Non-cash stock-based compensation expense | 904 | 3,402 | 1,164 | ||||||||
Settled share-based awards | — | 3,024 | — | ||||||||
Other operating expense | 935 | 157 | 1,767 | ||||||||
Income tax (benefit) expense | 16,691 | (5,149) | 481 | ||||||||
Interest expense | 741 | 738 | 594 | ||||||||
Depreciation, depletion and amortization | 64,374 | 60,672 | 39,387 | ||||||||
Accretion expense | 216 | 241 | 206 | ||||||||
Adjusted EBITDA (i) | $ | 123,848 | $ | 110,512 | $ | 102,645 | |||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended June 30, 2019 was $122.9 million and is reconciled to operating cash flow in the following table (in thousands):
Three Months Ended | |||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 55,180 | $ | (19,543) | $ | 50,474 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 64,374 | 60,672 | 39,387 | ||||||||
Accretion expense | 216 | 241 | 206 | ||||||||
Amortization of non-cash debt related items | 741 | 738 | 588 | ||||||||
Deferred income tax (benefit) expense | 16,691 | (5,149) | 481 | ||||||||
(Gain) loss on derivatives, net of settlements | (15,193) | 66,970 | 8,572 | ||||||||
(Gain) loss on sale of other property and equipment | 21 | 28 | 22 | ||||||||
Non-cash expense related to equity share-based awards | 1,754 | 4,545 | 1,627 | ||||||||
Change in the fair value of liability share-based awards | (850) | 1,881 | (463) | ||||||||
Discretionary cash flow (i) | $ | 122,934 | $ | 110,383 | $ | 100,894 | |||||
Changes in working capital | 27,789 | (33,864) | 8,978 | ||||||||
Payments to settle asset retirement obligations | (107) | (664) | (207) | ||||||||
Payments to settle vested liability share-based awards | (129) | (1,296) | (1,901) | ||||||||
Net cash provided by operating activities | $ | 150,487 | $ | 74,559 | $ | 107,764 | |||||
Callon Petroleum Company | ||||||||
Consolidated Balance Sheets | ||||||||
(in thousands, except par and per share data) | ||||||||
June 30, 2019 | December 31, 2018 | |||||||
ASSETS | Unaudited | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 16,052 | $ | 16,051 | ||||
Accounts receivable | 93,039 | 131,720 | ||||||
Fair value of derivatives | 13,164 | 65,114 | ||||||
Other current assets | 15,841 | 9,740 | ||||||
Total current assets | 138,096 | 222,625 | ||||||
Oil and natural gas properties, full cost accounting method: | ||||||||
Evaluated properties | 4,665,761 | 4,585,020 | ||||||
Less accumulated depreciation, depletion, amortization and impairment | (2,399,886) | (2,270,675) | ||||||
Evaluated oil and natural gas properties, net | 2,265,875 | 2,314,345 | ||||||
Unevaluated properties | 1,429,624 | 1,404,513 | ||||||
Total oil and natural gas properties, net | 3,695,499 | 3,718,858 | ||||||
Operating lease right-of-use assets | 31,904 | — | ||||||
Other property and equipment, net | 23,363 | 21,901 | ||||||
Restricted investments | 3,468 | 3,424 | ||||||
Deferred financing costs | 5,427 | 6,087 | ||||||
Fair value of derivatives | 11,679 | — | ||||||
Other assets, net | 6,061 | 6,278 | ||||||
Total assets | $ | 3,915,497 | $ | 3,979,173 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 221,452 | $ | 261,184 | ||||
Operating lease liabilities | 24,141 | — | ||||||
Accrued interest | 22,695 | 24,665 | ||||||
Cash-settleable restricted stock unit awards | 819 | 1,390 | ||||||
Asset retirement obligations | 3,103 | 3,887 | ||||||
Fair value of derivatives | 17,251 | 10,480 | ||||||
Other current liabilities | 2,472 | 13,310 | ||||||
Total current liabilities | 291,933 | 314,916 | ||||||
Senior secured revolving credit facility | 105,000 | 200,000 | ||||||
6.125% senior unsecured notes due 2024 | 596,154 | 595,788 | ||||||
6.375% senior unsecured notes due 2026 | 394,106 | 393,685 | ||||||
Operating lease liabilities | 7,680 | — | ||||||
Asset retirement obligations | 9,315 | 10,405 | ||||||
Cash-settleable restricted stock unit awards | 2,568 | 2,067 | ||||||
Deferred tax liability | 21,106 | 9,564 | ||||||
Fair value of derivatives | 3,663 | 7,440 | ||||||
Other long-term liabilities | 100 | 100 | ||||||
Total liabilities | 1,431,625 | 1,533,965 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized; 1,458,948 shares outstanding | 15 | 15 | ||||||
Common stock, $0.01 par value, 300,000,000 shares authorized; 228,263,955 and 227,582,575 shares outstanding, respectively | 2,283 | 2,276 | ||||||
Capital in excess of par value | 2,483,945 | 2,477,278 | ||||||
Accumulated deficit | (2,371) | (34,361) | ||||||
Total stockholders' equity | 2,483,872 | 2,445,208 | ||||||
Total liabilities and stockholders' equity | $ | 3,915,497 | $ | 3,979,173 | ||||
Callon Petroleum Company | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(Unaudited; in thousands, except per share data) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues: | |||||||||||||||
Oil sales | $ | 160,728 | $ | 122,613 | $ | 301,826 | $ | 237,898 | |||||||
Natural gas sales | 6,324 | 14,462 | 18,273 | 26,617 | |||||||||||
Total operating revenues | 167,052 | 137,075 | 320,099 | 264,515 | |||||||||||
Operating expenses: | |||||||||||||||
Lease operating expenses | 22,776 | 13,141 | 46,843 | 26,179 | |||||||||||
Production taxes | 11,131 | 7,539 | 21,944 | 16,002 | |||||||||||
Depreciation, depletion and amortization | 62,921 | 38,733 | 122,688 | 74,151 | |||||||||||
General and administrative | 10,564 | 8,289 | 22,317 | 17,057 | |||||||||||
Settled share-based awards | — | — | 3,024 | — | |||||||||||
Accretion expense | 216 | 206 | 457 | 424 | |||||||||||
Other operating expense | 935 | 1,767 | 1,092 | 2,315 | |||||||||||
Total operating expenses | 108,543 | 69,675 | 218,365 | 136,128 | |||||||||||
Income from operations | 58,509 | 67,400 | 101,734 | 128,387 | |||||||||||
Other (income) expenses: | |||||||||||||||
Interest expense, net of capitalized amounts | 741 | 594 | 1,479 | 1,053 | |||||||||||
(Gain) loss on derivative contracts | (14,036) | 16,554 | 53,224 | 21,036 | |||||||||||
Other income | (67) | (703) | (148) | (914) | |||||||||||
Total other (income) expense | (13,362) | 16,445 | 54,555 | 21,175 | |||||||||||
Income (loss) before income taxes | 71,871 | 50,955 | 47,179 | 107,212 | |||||||||||
Income tax (benefit) expense | 16,691 | 481 | 11,542 | 976 | |||||||||||
Net income (loss) | 55,180 | 50,474 | 35,637 | 106,236 | |||||||||||
Preferred stock dividends | (1,823) | (1,824) | (3,647) | (3,647) | |||||||||||
Income (loss) available to common stockholders | $ | 53,357 | $ | 48,650 | $ | 31,990 | $ | 102,589 | |||||||
Income (loss) per common share: | |||||||||||||||
Basic | $ | 0.23 | $ | 0.23 | $ | 0.14 | $ | 0.50 | |||||||
Diluted | $ | 0.23 | $ | 0.23 | $ | 0.14 | $ | 0.50 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 228,051 | 210,698 | 227,917 | 206,309 | |||||||||||
Diluted | 228,411 | 211,465 | 228,599 | 207,027 | |||||||||||
Callon Petroleum Company | |||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||
(Unaudited; in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | 55,180 | $ | 50,474 | $ | 35,637 | $ | 106,236 | |||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation, depletion and amortization | 64,374 | 39,387 | 125,046 | 75,453 | |||||||||||
Accretion expense | 216 | 206 | 457 | 424 | |||||||||||
Amortization of non-cash debt related items | 741 | 588 | 1,479 | 1,041 | |||||||||||
Deferred income tax (benefit) expense | 16,691 | 481 | 11,542 | 976 | |||||||||||
(Gain) loss on derivatives, net of settlements | (15,193) | 8,572 | 51,777 | 4,594 | |||||||||||
Loss on sale of other property and equipment | 21 | 22 | 49 | 22 | |||||||||||
Non-cash expense related to equity share-based awards | 1,754 | 1,627 | 6,299 | 2,758 | |||||||||||
Change in the fair value of liability share-based awards | (850) | (463) | 1,031 | 549 | |||||||||||
Payments to settle asset retirement obligations | (107) | (207) | (771) | (573) | |||||||||||
Payments for cash-settled restricted stock unit awards | (129) | (1,901) | (1,425) | (4,990) | |||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable | 44,071 | 10,447 | 38,681 | 2,380 | |||||||||||
Other current assets | (3,807) | (5,611) | (6,101) | (5,550) | |||||||||||
Current liabilities | (10,251) | 4,123 | (36,254) | 17,061 | |||||||||||
Other | (2,224) | 19 | (2,401) | (402) | |||||||||||
Net cash provided by operating activities | 150,487 | 107,764 | 225,046 | 199,979 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (166,219) | (187,040) | (359,430) | (298,370) | |||||||||||
Acquisitions | (11,423) | (6,469) | (39,370) | (45,392) | |||||||||||
Acquisition deposit | — | (28,500) | — | (27,600) | |||||||||||
Proceeds from sale of assets | 260,417 | 3,077 | 274,296 | 3,077 | |||||||||||
Net cash provided by (used in) investing activities | 82,775 | (218,932) | (124,504) | (368,285) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings on senior secured revolving credit facility | 140,000 | 85,000 | 360,000 | 165,000 | |||||||||||
Payments on senior secured revolving credit facility | (365,000) | (160,000) | (455,000) | (190,000) | |||||||||||
Issuance of 6.375% senior unsecured notes due 2026 | — | 400,000 | — | 400,000 | |||||||||||
Issuance of common stock | — | 288,357 | — | 288,357 | |||||||||||
Payment of preferred stock dividends | (1,823) | (1,824) | (3,647) | (3,647) | |||||||||||
Payment of deferred financing costs | (31) | (8,664) | (31) | (8,664) | |||||||||||
Tax withholdings related to restricted stock units | (833) | (1,028) | (1,858) | (1,589) | |||||||||||
Other financing activities | (5) | — | (5) | — | |||||||||||
Net cash provided by (used in) financing activities | (227,692) | 601,841 | (100,541) | 649,457 | |||||||||||
Net change in cash and cash equivalents | 5,570 | 490,673 | 1 | 481,151 | |||||||||||
Balance, beginning of period | 10,482 | 18,473 | 16,051 | 27,995 | |||||||||||
Balance, end of period | $ | 16,052 | $ | 509,146 | $ | 16,052 | $ | 509,146 | |||||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Wednesday, August 7, 2019, to discuss second quarter 2019 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
Date/Time: | Wednesday, August 7, 2019, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
Webcast: | Select "IR Calendar" under the "Investors" section of the website: www.callon.com. |
Presentation Slides: | Select "Presentations" under the "Investors" section of the website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
Toll Free: | 1-888-317-6003 |
Canada Toll Free: | 1-866-284-3684 |
International: | 1-412-317-6061 |
Access code: | 9809640 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
No Offer or Solicitation
Communications in this news release do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communication in this news release do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon and Carrizo intend to file materials with the Securities and Exchange Commission (the "SEC"), including a Registration Statement on Form S-4 of Callon (the "Registration Statement") that will include a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. After the Registration Statement is declared effective by the SEC, Callon and Carrizo intend to mail a definitive proxy statement/prospectus to stockholders of Callon and shareholders of Carrizo. This news release is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file the SEC and send to Callon's stockholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's stockholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward Looking Statements
Certain statements in this news release concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed Carrizo transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's stockholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019 and quarter ended June 30, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
i) See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-second-quarter-2019-results-300897294.html
SOURCE Callon Petroleum Company
Article Date
8/6/20197/24/2019 - Callon Petroleum Company Schedules Second Quarter 2019 Conference Call for August 7, 2019
Callon Petroleum Company Schedules Second Quarter 2019 Conference Call for August 7, 2019
Source: PR Newswire
HOUSTON, July 24, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its second quarter 2019 financial and operating results.
Webcast and Conference Call:
Date: August 7, 2019
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: www.callon.com | |
Select "IR Calendar" under the "Investors" section of the website. |
Conference Call: | |
Domestic: | 1-888-317-6003 |
Canada: | 1-866-284-3684 |
International: | 1-412-317-6061 |
Access code: | 9809640 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release second quarter 2019 results after market close on Tuesday, August 6, 2019.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-second-quarter-2019-conference-call-for-august-7-2019-300890423.html
SOURCE Callon Petroleum Company
Article Date
7/24/2019Callon to Acquire Carrizo in All-Stock Transaction
Source: PR Newswire
HOUSTON, July 15, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) and Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today announced that their Boards of Directors have unanimously approved a definitive agreement under which Callon will acquire Carrizo in an all-stock transaction valued at $3.2 billion. This highly complementary combination will create a leading oil and gas company with scaled development operations across a portfolio of core oil-weighted assets in both the Permian Basin and Eagle Ford Shale.
Under the terms of the agreement, Carrizo shareholders will receive a fixed exchange ratio of 2.05 Callon shares for each share of Carrizo common stock they own. This represents $13.12 per Carrizo share based on Callon's closing common stock price on July 12 and a premium of 18% to Carrizo's trailing 60-day volume weighted average price. Following the close of the transaction, Callon shareholders will own approximately 54% of the combined company, and Carrizo shareholders will own approximately 46%, on a fully diluted basis. The all-stock transaction is intended to be tax-free to Carrizo shareholders.
"We are excited about this transformational transaction, creating a differentiated oil and gas company by integrating core asset bases in premier basins. Together with Carrizo, we will accelerate our free cash flow, capital efficiency and deleveraging goals through an optimized model of large-scale development across the portfolio. We will also benefit from leading cash margins to navigate commodity price volatility and allow for reliable, continuous development of the combined asset base. With a deep inventory of high rate-of-return well locations in well-established areas and substantial upside opportunities for organic inventory delineation, we will be able drive differentiated growth deploying our life-of-field development model for many years to come," said Joe Gatto, President and Chief Executive Officer of Callon. "As a larger organization, Callon will be well-positioned to benefit from an expanded infrastructure footprint and critical mass for our production marketing and supply chain functions and also leverage our technology and data capture initiatives across a broader base. Importantly, this combination brings together two organizations grounded in strong values and a shared commitment to responsible operations, integrity, and a drive to deliver leading results. We look forward to welcoming Carrizo's employees and joining forces as a Houston-based company focused on the development of a premier Texas asset base to create enhanced value for all of our stakeholders."
S.P. "Chip" Johnson, IV, President and Chief Executive Officer of Carrizo, commented, "We believe that Callon is the ideal partner for Carrizo. Through our combination, we bring together a strong foundation of Midland Basin and Eagle Ford Shale assets and overlay a substantial Delaware acreage position and value proposition that will be unlocked through an integrated plan of large-scale program development. This all-stock transaction provides Carrizo shareholders with the opportunity to participate in the significant near- and long-term upside potential of the merged company. We look forward to a bright future for our employees and all of our stakeholders and expect a seamless integration."
Strategic and Financial Benefits of the Transaction
In addition, Callon has identified further synergies that are anticipated to be realized over time:
Governance and Leadership
The transaction has been unanimously approved by the Boards of Directors at both Callon and Carrizo. In addition, each of the Carrizo directors has committed to vote his or her shares in favor of the transaction.
Upon closing, the Board of Directors of the combined company will consist of 11 members, including Callon's eight current Board members and three to be appointed from the Board of Carrizo. The combined company will be led by Callon's executive management team and will remain headquartered in Houston, Texas.
Timing and Approvals
The transaction, which is expected to close during the fourth quarter of 2019, is subject to customary closing conditions and regulatory approvals, including the approval of shareholders of both companies.
Second Quarter Updates
For the second quarter of 2019, Callon expects daily production of between 40.0 and 40.5 MBoed with approximately 77% coming from oil. Total capital expenditures, inclusive of capitalized expenses and on an accrual basis, is expected to be between $162.5 and $167.5 million with operational capital representing approximately $132.5 to $137.5 million of that estimate. Lease operating expense for the second quarter is expected to be between $6.30 and $6.50 per Boe.
For the second quarter of the year, Carrizo expects crude oil production to be approximately 44,400 Bbls/d, exceeding the high-end of the Company's guidance range. Total production is expected to be approximately 65,600 Boe/d. This is below the low-end of the Company's guidance range for the quarter of 66,500-67,500 Boe/d as its production during June was materially impacted by weather-related downtime at a third-party gas processing plant in the Delaware Basin. In total, third-party midstream issues negatively impacted the Company's production by more than 4,000 Boe/d during the second quarter. Carrizo currently expects drilling, completion, and infrastructure (DC&I) capital expenditures to be $130-$135 million in the second quarter and expects to meet or beat its second quarter guidance ranges for expense items.
Advisors
J.P. Morgan LLC is serving as exclusive financial advisor to Callon and Kirkland & Ellis LLP is serving as legal advisor to Callon. JPMorgan Chase Bank, N.A. and BofA Merrill Lynch provided underwritten financing to Callon to support the transaction. RBC Capital Markets, LLC and Lazard are serving as financial advisors to Carrizo and Baker Botts L.L.P. is serving as legal advisor to Carrizo.
Conference Call and Webcast
The companies will host a joint conference call and webcast today at 8:30 a.m. ET / 7:30 a.m. CT to discuss the transaction.
The conference call can be accessed by dialing (800) 374-1355 within the United States and (270) 855-8553 for all other locations. The confirmation code is 2381448. Participants should dial in 10 minutes prior to the scheduled start time.
A live webcast of the conference call and associated presentation materials will be available in the investor relations section of each company's website at ir.callon.com and https://ir.carrizo.com/investor-relations/default.aspx.
A replay of the conference call will be available approximately two hours after completion of the conference call through July 29, 2019 and can be accessed by dialing (800) 585-8367 from the United States or (404) 537-3406 from outside the United States. The replay confirmation code is 2381448. The webcast will be archived in the investor relations section of each company's website.
About Callon
Callon is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
About Carrizo
Carrizo Oil & Gas, Inc. is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas from resource plays located in the United States. Our current operations are principally focused on proven, producing oil and gas plays in the Eagle Ford Shale in South Texas and the Permian Basin in West Texas.
No Offer or Solicitation
Communications in this news release do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Communications in this news release do not constitute a notice of redemption with respect to or an offer to purchase or sell (or the solicitation of an offer to purchase or sell) any preferred stock of Carrizo.
Additional Information and Where to Find It
In connection with the proposed transaction, Callon and Carrizo intend to file materials with the SEC, including a Registration Statement on Form S-4 of Callon (the "Registration Statement") that will include a joint proxy statement of Callon and Carrizo that also constitutes a prospectus of Callon. After the Registration Statement is declared effective by the SEC, Callon and Carrizo intend to mail a definitive proxy statement/prospectus to stockholders of Callon and shareholders of Carrizo. This news release is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Callon or Carrizo may file with the Securities and Exchange Commission (the "SEC") and send to Callon's stockholders and/or Carrizo's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF CALLON AND CARRIZO ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CALLON AND CARRIZO WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CALLON, CARRIZO AND THE PROPOSED TRANSACTION.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Callon and Carrizo with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Callon will be available free of charge from Callon's website at www.callon.com under the "Investors" tab or by contacting Callon's Investor Relations Department at (281) 589-5200 or IR@callon.com. Copies of documents filed with the SEC by Carrizo will be available free of charge from Carrizo's website at www.carrizo.com under the "Investor Relations" tab or by contacting Carrizo's Investor Relations Department at (713) 328-1055 or IR@carrizo.com.
Participants in the Proxy Solicitation
Callon, Carrizo and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Callon's stockholders and Carrizo's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Callon is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on March 27, 2019. Information regarding the executive officers and directors of Carrizo is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 2, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this news release concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Callon's or Carrizo's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of Callon's stockholders or Carrizo's shareholders to approve the transaction and related matters; whether any redemption of Carrizo's preferred stock will be necessary or will occur prior to the closing of the transaction; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Callon and Carrizo; the effects of the business combination of Callon and Carrizo, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Callon's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, each of which is on file with the SEC and available from Callon's website at www.callon.com under the "Investors" tab, and in other documents Callon files with the SEC, and in Carrizo's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequent Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, each of which is on file with the SEC and available from Carrizo's website at www.carrizo.com under the "Investor Relations" tab, and in other documents Carrizo files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Callon nor Carrizo assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Supplemental Non-GAAP Financial Measures
This presentation includes non-GAAP measures, such as adjusted EBITDA, Free Cash Flow and other measures identified as non-GAAP. Management also uses adjusted EBITDAX, which reflects adjusted EBITDA plus exploration and abandonment expense. Reconciliations are available below.
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation, depletion and amortization, asset retirement obligation accretion expense, exploration expense, (gains) losses on derivative instruments excluding net settled derivative instruments, impairment of oil and natural gas properties, non-cash equity based compensation, other income, gains and losses from the sale of assets and other non-cash operating items. Management believes adjusted EBITDA is useful because it allows it to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of adjusted EBITDA. Our presentation of adjusted EBITDA should not be construed as an inference that our results will be unaffected by unusual or non-recurring items.
Free Cash Flow is also a supplemental non-GAAP financial measure that is used by management and external users of our financial statements to assess our liquidity. We define Free Cash Flow as net cash provided by operating activities less capital expenditures attributable to continuing operations. Management believes that Free Cash Flow provides useful information in assessing the impact of our ability to generate cash flow in excess of capital requirements and to return cash to shareholders. Free cash Flow should not be considered as an alternative to net cash provided by operating activities or any other measure of liquidity in accordance with GAAP. Free Cash Flow is also a supplemental non-GAAP financial measure that is used by management and external users of our financial statements to assess our liquidity. We define Free Cash Flow as net cash provided by operating activities less capital expenditures attributable to continuing operations. Management believes that Free Cash Flow provides useful information in assessing the impact of our ability to generate cash flow in excess of capital requirements and to return cash to shareholders. Free cash Flow should not be considered as an alternative to net cash provided by operating activities or any other measure of liquidity in accordance with GAAP. We have not provided a reconciliation of projected Free Cash Flow to projected net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP. We are unable to project net cash provided by operating activities for any future period because this metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. We are unable to project these timing differences with any reasonable degree of accuracy without unreasonable efforts such as predicting the timing of its and customers' payments, with accuracy to a specific day, months in advance.
Non-GAAP Reconciliation | |||||||||
Adjusted EBITDA Reconciliation | 2Q18 | 3Q18 | 4Q18 | 1Q19 | LTM EBITDA | ||||
Net income (loss) available to common shareholders | $ 78,745 | $112,226 | $409,490 | $124,835 | $ 725,296 | ||||
Dividends on preferred stock | 6,298 | 6,280 | 6,191 | 6,184 | 24,953 | ||||
Accretion on preferred stock | 740 | 771 | 793 | 801 | 3,105 | ||||
Loss on redemption of preferred stock | - | - | - | - | - | ||||
Income tax expense (benefit) | 964 | 2,367 | 9,138 | (184,544) | (172,075) | ||||
Depreciation, depletion and amortization | 112,023 | 129,287 | 143,074 | 136,235 | 520,619 | ||||
Interest expense, net | 16,193 | 16,117 | 16,626 | 17,189 | 66,125 | ||||
(Gain) loss on derivatives, net | 84,266 | 89,727 | (263,325) | 150,544 | 61,212 | ||||
Cash paid for commodity derivative settlements, net | (32,063) | (35,501) | (33,191) | (2,928) | (103,683) | ||||
Non-cash general and administrative, net | 8,370 | 5,770 | 508 | 10,541 | 25,189 | ||||
Loss on extinguishment of debt | - | - | 910 | - | 910 | ||||
Non-recurring and other expense, net | 4,264 | (1,091) | (1,163) | 4,358 | 6,368 | ||||
Acquisition expense | 1,767 | 1,435 | 1,333 | 157 | 4,692 | ||||
Adjusted EBITDA | $281,567 | $327,388 | $290,384 | $263,372 | $ 1,162,711 | ||||
Acquisitions - pro forma adjustments | 50,380 | ||||||||
Divestitures - pro forma adjustments | (50,214) | ||||||||
Adjusted EBITDA, inclusive of pro forma adjustments | $ 1,162,877 | ||||||||
Contacts for Callon
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
(281) 589-5200
or
Kate Schilling
Senior IR Analyst
Callon Petroleum Company
(281) 589-5200
Contacts for Carrizo
Jeffrey P. Hayden, CFA
VP - Financial Planning and Analysis
(713) 328-1044
or
Kim Pinyopusarerk
Manager - Investor Relations
(713) 358-6430
1 Current strip prices as of July 12, 2019
View original content:http://www.prnewswire.com/news-releases/callon-to-acquire-carrizo-in-all-stock-transaction-300884540.html
SOURCE Callon Petroleum Company
Article Date
7/15/20196/18/2019 - Callon Petroleum Company Announces Redemption of 10.00% Series A Cumulative Preferred Stock
Callon Petroleum Company Announces Redemption of 10.00% Series A Cumulative Preferred Stock
Source: PR Newswire
HOUSTON, June 18, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) (the "Company" or "Callon") today announced it has given notice for the redemption (the "Redemption") of all outstanding shares of the Company's 10.00% Series A Cumulative Preferred Stock (CUSIP: 13123X409) (the "Preferred Shares").
The redemption date of the Preferred Shares will be on July 18, 2019 (the "Redemption Date"). The Preferred Shares will be redeemed at a redemption price equal to $50.00 per share, plus an amount equal to all accrued and unpaid dividends in an amount equal to $0.24 per share, for a total redemption price of $50.24 per share (the "Redemption Price"). On and after the Redemption Date, the Preferred Shares will no longer be deemed outstanding, dividends on the Preferred Shares shall cease to accrue, and all rights of the holders with respect to such Preferred Shares will terminate, except the right of the holders to receive the Redemption Price, without interest.
Regular dividends on the Preferred Shares for the second quarter of 2019 will be paid on June 30, 2019 to each holder of record on June 13, 2019.
The Company has designated American Stock Transfer & Trust Company, LLC to act as the Redemption Agent. Questions regarding the Redemption may be directed to the Redemption Agent at the following address and telephone numbers: American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219, Attn: Corporate Actions, Telephone: (718) 921-8200. Any Preferred Shares represented by certificates may by surrendered to the Redemption Agent at the address listed above in exchange for the Redemption Price. All Preferred Shares held in book-entry form through the Depository Trust Company ("DTC") will be redeemed in accordance with the procedures of DTC.
Unless otherwise noted, the holders of Preferred Shares are not required to take any action to effect the Redemption, as contemplated herein.
This press release does not constitute a notice of redemption under the Certificate of Designation governing the Preferred Shares and is qualified in its entirety by reference to the redemption notice issued by or on behalf of the Company.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; Callon's 2019 production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of Callon's business plans and strategy, as well as statements including the words "believe," "expect," "plans," "may," "will," "should," "could," and words of similar meaning. These statements reflect Callon's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and Callon undertakes 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. Some of the factors which could affect Callon's future results and could cause results to differ materially from those expressed in Callon's forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, Callon's ability to finance Callon's activities and other risks more fully discussed in Callon's filings with the Securities and Exchange Commission, including Callon's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on Callon's website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-redemption-of-10-00-series-a-cumulative-preferred-stock-300869572.html
SOURCE Callon Petroleum Company
Article Date
6/18/20196/13/2019 - Callon Petroleum Company Announces Closing Of Southern Midland Basin Divestiture And Updates 2019 Guidance
Callon Petroleum Company Announces Closing Of Southern Midland Basin Divestiture And Updates 2019 Guidance
Source: PR Newswire
HOUSTON, June 13, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or "we" or "our") announced today that it closed on the previously announced divestiture of non-core assets in the southern Midland Basin to Sequitur Permian, LLC for net cash proceeds of $245 million, subject to customary post-closing adjustments. Net cash proceeds were adjusted for an effective date of January 1, 2019, and do not include potential contingent consideration payments of up to $60 million based on West Texas Intermediate average annual pricing over a three-year period.
Joe Gatto, President and Chief Executive Officer commented, "We remain on a clear path to attain the various objectives we have outlined for investors. This transaction is a meaningful step forward on our deleveraging goals which will also be advanced by our cash flow generation in coming quarters."
Updated 2019 Guidance
Callon is updating its full year guidance to account for the impact of this divestiture and a previously announced acreage trade involving producing properties in Midland County. In addition, management is lowering its estimates for operational capital expenditures to reflect realized efficiencies and cost reductions.
Previous Full Year | Updated Full Year | ||||
2019 Guidance | 2019 Guidance | ||||
Total production (Mboe/d) | 39.5 - 41.5 | 38.0 - 39.5 | |||
% oil | 77% - 78% | 78% - 79% | |||
Income statement expenses (per Boe) | |||||
LOE, including workovers | $5.50 - $6.50 | $5.50 - $6.50 | |||
Production taxes, including ad valorem (% unhedged revenue) | 7 % | 7 % | |||
Adjusted G&A: cash component (a) | $2.00 - $2.50 | $2.00 - $2.50 | |||
Adjusted G&A: non-cash component (b) | $0.50 - $1.00 | $0.50 - $1.00 | |||
Cash interest expense (c) | $0.00 | $0.00 | |||
Effective income tax rate | 22% | 22% | |||
Capital expenditures ($MM, accrual basis) | |||||
Total operational (d) | $500 - $525 | $495 - $520 | |||
Capitalized interest and G&A expenses | $100 - $105 | $100 - $105 | |||
Net operated horizontal wells placed on production | 47 - 49 | 47 - 49 |
a) | Excludes stock-based compensation and corporate depreciation and amortization. Adjusted G&A is a non-GAAP financial measure; see our most recent earnings release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see our most recent earnings release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
c) | All cash interest expense anticipated to be capitalized. |
d) | Includes facilities, equipment, seismic, land and other items. Excludes capitalized expenses. |
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated oil and gas production; Callon's 2019 production guidance, taxes and capital, operating and G&A expenditure forecasts; and the implementation of Callon's business plans and strategy, as well as statements including the words "believe," "expect," "plans," "may," "will," "should," "could," and words of similar meaning. These statements reflect Callon's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and Callon undertakes 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. Some of the factors which could affect Callon's future results and could cause results to differ materially from those expressed in Callon's forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, Callon's ability to finance Callon's activities and other risks more fully discussed in Callon's filings with the Securities and Exchange Commission, including Callon's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on Callon's website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-closing-of-southern-midland-basin-divestiture-and-updates-2019-guidance-300866731.html
SOURCE Callon Petroleum Company
Article Date
6/13/2019Callon Petroleum Company Announces Upcoming Investor Event
Source: PR Newswire
HOUSTON, June 10, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor event:
J. P. Morgan Chase 2019 Energy Conference
The Company will present at the J.P. Morgan Chase 2019 Energy Conference on Tuesday, June 18, 2019 at 12:00 PM Eastern Daylight Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-event-300864459.html
SOURCE Callon Petroleum Company
Article Date
6/10/2019Callon Petroleum Company Launches Sustainability Website
Source: PR Newswire
HOUSTON, June 5, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the launch of a new segment of its website dedicated to the Company's sustainability practices. The new webpages provide an overview of Callon's commitment to maintaining environmentally responsible operations and detail the progress the Company has made promoting environmental stewardship, safety, community engagement, and strong governance.
Highlights from Callon's ESG initiatives, which are outlined in greater detail on the new webpages, include:
"As demonstrated by Callon's stated values and past investments, we are dedicated to social and environmentally responsible practices that are beneficial to not only our shareholders, but all of our stakeholders. Our ongoing efforts will ensure that these principles will be a consistent guidepost for our business on a go-forward basis and remain entrenched in our culture," said Joe Gatto, President and Chief Executive Officer. "We will continue to be proactive in our initiatives, and periodically update the market as we evolve the active management of this important foundation of our business."
For more information on Callon's ESG initiatives, please visit www.callon.com/sustainability.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-launches-sustainability-website-300862131.html
SOURCE Callon Petroleum Company
Article Date
6/5/2019Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
HOUSTON, June 5, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on June 28, 2019 to stockholders of record as of June 14, 2019. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-declares-series-a-preferred-dividend-300860740.html
SOURCE Callon Petroleum Company
Article Date
6/5/2019Callon Petroleum Company Announces First Quarter 2019 Results
Source: PR Newswire
HOUSTON, May 6, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended March 31, 2019.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Highlights
"We are ahead of our plan to build out an inventory of drilled, uncompleted wells to extend our usage of a larger pad development model, applying this concept to the Delaware Basin as we continue to build upon our success in the Midland Basin. Capitalizing on the efficiencies of larger development, we delivered a sequential decrease in average drilling and completion cost per lateral foot of 15% in the first quarter. Our drilling plan is quickly progressing to the point where we will decrease to four drilling rigs and start larger Delaware Basin pad completions towards the end of the second quarter." commented Joe Gatto, President and Chief Executive Officer. He continued, "The previously announced sale of our Ranger properties will streamline our operations with a focus on three core operating areas with well-established infrastructure. Since we did not have any planned Ranger activity in 2019, the divestiture will not impact our base 2019 activity levels, but will allow us to optimize our 2020 capital allocation with the removal of Ranger drilling obligations. Upon closing, all cash proceeds will be directed to bolstering our financial position. We remain focused on executing our 2019 plan within our previously announced budget range, with the benefit of incremental cash flow from commodity realizations above our planning case flowing to the bottom line and the benefit our shareholders."
Operations Update
At March 31, 2019, we had 524 gross (395.4 net) horizontal wells producing from eight established flow units in the Permian Basin. Net daily production for the three months ended March 31, 2019 grew 52% to 40.3 Mboe/d (79% oil) as compared to the same period of 2018.
For the three months ended March 31, 2019, we drilled 21 gross (16.4 net) horizontal wells, and placed a combined 13 gross (11.2 net) horizontal wells on production. Wells placed on production during the quarter were completed in the Lower Spraberry, Middle Spraberry, Wolfcamp A and Wolfcamp B within the Midland Basin and the Lower Wolfcamp A within the Delaware Basin.
Midland Basin
We brought 11 gross (9.2 net) wells on production in the Midland Basin during the first quarter with the majority of activity coming from our Monarch area. Our Middle Spraberry well, the Kendra Amanda PSA 33 MS, an 8,000 foot lateral, which was completed as part of a multi-well pad project, has achieved a 30-day average production rate of approximately 110 Boe per thousand lateral feet (90% oil) and continues to perform well.
Near the end of the quarter, in the WildHorse area in Howard County, we began flowback on a five-well pad that employed half section development in the Wolfcamp A. While not all wells have reached 30 days of production, the combined five-well average for current accumulated production includes an average peak rate of over 1,500 Boe per day (92% oil) or approximately 175 Boe per thousand lateral feet.
The previously disclosed outage at a third party gas processing facility in Martin County has been resolved and we currently do not forecast any impact to second quarter production.
Delaware Basin
At our Spur area in Ward County, we placed on production the Wally World A1 01LA and A2 02LA, both Lower Wolfcamp A wells, which together have achieved cumulative production of over 100,000 Boe (84% oil) during their first 30 days of production. Recently, a two-well pad featuring 2nd Bone Spring shale and Lower Wolfcamp A co-development at Spur, was completed and placed on production. Both wells have performed as expected during their limited time on production and we will continue to monitor and compare to third party offsets in the area.
The field optimization project that was initiated during the first quarter of 2019 is progressing and is expected to be completed near the end of the second quarter. We currently expect deferred production related to wells shut in for repairs to average 1,600 Boe per day (79% oil) for the second quarter.
Capital Expenditures
For the three months ended March 31, 2019, we incurred $155.2 million in operational capital expenditures (including other items) on an accrual basis as compared to $141.2 million in the fourth quarter of 2018. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
Three Months Ended March 31, 2019 | ||||||||||||||||
Operational | Capitalized | Capitalized | Total Capital | |||||||||||||
Capital (a) | Interest | G&A | Expenditures | |||||||||||||
Cash basis (b) | $ | 164,277 | $ | 18,589 | $ | 10,345 | $ | 193,211 | ||||||||
Timing adjustments (c) | (9,109) | 1,255 | — | (7,854) | ||||||||||||
Non-cash items | — | — | 354 | 354 | ||||||||||||
Accrual basis | $ | 155,168 | $ | 19,844 | $ | 10,699 | $ | 185,711 | ||||||||
(a) | Includes seismic, land and other items. |
(b) | Cash basis is presented here to help users of financial information reconcile amounts from the cash flow statement to the balance sheet by accounting for timing related changes in working capital that align with our development pace and rig count. |
(c) | Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
Three Months Ended | ||||||||||||
March 31, 2019 | December 31, 2018 | March 31, 2018 | ||||||||||
Net production | ||||||||||||
Oil (MBbls) | 2,858 | 3,076 | 1,851 | |||||||||
Natural gas (MMcf) | 4,619 | 4,225 | 3,240 | |||||||||
Total (Mboe) | 3,628 | 3,780 | 2,391 | |||||||||
Average daily production (Boe/d) | 40,311 | 41,087 | 26,567 | |||||||||
% oil (Boe basis) | 79 | % | 81 | % | 77 | % | ||||||
Oil and natural gas revenues (in thousands) | ||||||||||||
Oil revenue | $ | 141,098 | $ | 150,398 | $ | 115,286 | ||||||
Natural gas revenue | 11,949 | 11,497 | 12,154 | |||||||||
Total revenue | 153,047 | 161,895 | 127,440 | |||||||||
Impact of settled derivatives | (290) | (1,594) | (8,459) | |||||||||
Adjusted Total Revenue (i) | $ | 152,757 | $ | 160,301 | $ | 118,981 | ||||||
Average realized sales price | ||||||||||||
Oil (per Bbl) | $ | 49.37 | $ | 48.89 | $ | 62.28 | ||||||
Natural gas (per Mcf) | 2.59 | 2.72 | 3.75 | |||||||||
Total (per BOE) | 42.18 | 42.83 | 53.30 | |||||||||
Average realized sales price | ||||||||||||
Oil (per Bbl) | $ | 48.83 | $ | 48.52 | $ | 57.47 | ||||||
Natural gas (per Mcf) | 2.86 | 2.62 | 3.89 | |||||||||
Total (per BOE) | 42.11 | 42.41 | 49.76 | |||||||||
Additional per BOE data | ||||||||||||
Sales price (a) | $ | 42.18 | $ | 42.83 | $ | 53.30 | ||||||
Lease operating expense | 6.63 | 6.47 | 5.45 | |||||||||
Production taxes | 2.98 | 2.51 | 3.54 | |||||||||
Operating margin | $ | 32.57 | $ | 33.85 | $ | 44.31 | ||||||
Depletion, depreciation and amortization | $ | 16.47 | $ | 15.74 | $ | 14.81 | ||||||
Adjusted G&A (b) | ||||||||||||
Cash component (c) | $ | 2.28 | $ | 2.03 | $ | 2.74 | ||||||
Non-cash component | 0.44 | 0.50 | 0.51 | |||||||||
(a) | Excludes the impact of settled derivatives. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | Excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended March 31, 2019, Callon reported total revenue of $153.0 million and total revenue including settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $152.8 million, including the impact of a $0.3 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's total operating revenue. Average daily production for the quarter was 40.3 Mboe/d compared to average daily production of 41.1 Mboe/d in the fourth quarter of 2018. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended March 31, 2019, Callon recognized the following hedging-related items (in thousands, except per unit data):
Three Months Ended March 31, 2019 | |||||||
In Thousands | Per Unit | ||||||
Oil derivatives | |||||||
Net loss on settlements | $ | (1,542) | $ | (0.54) | |||
Net loss on fair value adjustments | (66,826) | ||||||
Total loss on oil derivatives | $ | (68,368) | |||||
Natural gas derivatives | |||||||
Net gain on settlements | $ | 1,252 | $ | 0.27 | |||
Net loss on fair value adjustments | (144) | ||||||
Total gain on natural gas derivatives | $ | 1,108 | |||||
Total oil & natural gas derivatives | |||||||
Net loss on settlements | $ | (290) | $ | (0.07) | |||
Net loss on fair value adjustments | (66,970) | ||||||
Total loss on total oil & natural gas derivatives | $ | (67,260) | |||||
Lease Operating Expenses, including workover ("LOE"). LOE per Boe for the three months ended March 31, 2019 was $6.63 per Boe, compared to LOE of $6.47 per Boe in the fourth quarter of 2018. The increase on a per unit basis was primarily attributed to a 1.9% decrease in daily production.
Production Taxes, including ad valorem taxes. Production taxes were $2.98 per Boe for the three months ended March 31, 2019, representing approximately 7.1% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended March 31, 2019 was $16.47 per Boe compared to $15.74 per Boe in the fourth quarter of 2018. The increase on a per unit basis was primarily attributable to an increase in our depreciable asset base and assumed future development costs related to undeveloped proved reserves relative to our estimated proved reserves as a result of additions made through our horizontal drilling efforts.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $9.9 million, or $2.72 per Boe, for the three months ended March 31, 2019 compared to $9.6 million, or $2.53 per Boe, for the fourth quarter of 2018. The cash component of Adjusted G&A was $8.3 million, or $2.28 per Boe, for the three months ended March 31, 2019 compared to $7.7 million, or $2.03 per Boe, for the fourth quarter of 2018.
For the three months ended March 31, 2019, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
Three Months Ended | |||
Total G&A expense | $ | 11,753 | |
Change in the fair value of liability share-based awards (non-cash) | (1,889) | ||
Adjusted G&A – total | 9,864 | ||
Restricted stock share-based compensation (non-cash) | (1,500) | ||
Corporate depreciation & amortization (non-cash) | (88) | ||
Adjusted G&A – cash component | $ | 8,276 | |
Settled share-based awards. During the first quarter of 2019, the Company settled certain of the outstanding share-based award agreements of two former officers of the Company, resulting in the $3.0 million recorded on the consolidated statements of operations as settled share-based awards.
Income tax expense. Callon provides for income taxes at the statutory rate of 21% adjusted for permanent differences expected to be realized. We recorded an income tax benefit of $5.1 million for the three months ended March 31, 2019, compared to income tax expense of $5.6 million for the three months ended December 31, 2018. The change in income tax is primarily related to the change in our tax position in 2018, when the Company's tax position transitioned from a net deferred tax asset position to a net deferred tax liability position, thereby unwinding the valuation allowance balance to $0 as of December 31, 2018.
2019 Guidance
The Company is maintaining the current full year guidance until the announced sale of non-core assets closes, which is expected to occur during the second quarter. Upon closing, the Company will update applicable guidance categories, but does not expect any changes to the operational capital guidance for the year.
First Quarter | Full Year | |||
2019 Actual | 2019 Guidance | |||
Total production (Mboe/d) | 40.3 | 39.5 - 41.5 | ||
% oil | 79% | 77% - 78% | ||
Income statement expenses (per Boe) | ||||
LOE, including workovers | $6.63 | $5.50 - $6.50 | ||
Production taxes, including ad valorem (% unhedged revenue) | 7% | 7% | ||
Adjusted G&A: cash component (a) | $2.28 | $2.00 - $2.50 | ||
Adjusted G&A: non-cash component (b) | $0.44 | $0.50 - $1.00 | ||
Cash interest expense (c) | $0.00 | $0.00 | ||
Effective income tax rate | 21% | 22% | ||
Capital expenditures ($MM, accrual basis) | ||||
Total operational (d) | $155 | $500 - $525 | ||
Capitalized interest and G&A expenses | $31 | $100 - $105 | ||
Net operated horizontal wells placed on production | 11 | 47 - 49 |
(a) | Excludes stock-based compensation and corporate depreciation and amortization. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | All interest expense anticipated to be capitalized. |
(d) | Includes facilities, equipment, seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following tables summarize our open derivative positions as of March 31, 2019 for the periods indicated:
For the Remainder | For the Full Year | ||||||
Oil contracts (WTI) | of 2019 | of 2020 | |||||
Puts | |||||||
Total volume (Bbls) | 687,500 | — | |||||
Weighted average price per Bbl | $ | 65.00 | $ | — | |||
Put spreads | |||||||
Total volume (Bbls) | 687,500 | — | |||||
Weighted average price per Bbl | |||||||
Floor (long put) | $ | 65.00 | $ | — | |||
Floor (short put) | $ | 42.50 | $ | — | |||
Collar contracts combined with short puts (three-way collars) | |||||||
Total volume (Bbls) | 3,484,000 | 915,000 | |||||
Weighted average price per Bbl | |||||||
Ceiling (short call) | $ | 67.56 | $ | 65.02 | |||
Floor (long put) | $ | 56.58 | $ | 55.00 | |||
Floor (short put) | $ | 43.62 | $ | 45.00 | |||
Collar contracts (two-way collars) | |||||||
Total volume (Bbls) | — | 732,000 | |||||
Weighted average price per Bbl | |||||||
Ceiling (short call) | $ | — | $ | 64.63 | |||
Floor (long put) | $ | — | $ | 55.00 | |||
Oil contracts (Midland basis differential) | |||||||
Swap contracts | |||||||
Total volume (Bbls) | 5,102,000 | 4,576,000 | |||||
Weighted average price per Bbl | $ | (3.95) | $ | (1.29) | |||
Natural gas contracts (Henry Hub) | |||||||
Collar contracts (two-way collars) | |||||||
Total volume (MMBtu) | 2,697,500 | — | |||||
Weighted average price per MMBtu | |||||||
Ceiling (short call) | $ | 3.68 | $ | — | |||
Floor (long put) | $ | 3.09 | $ | — | |||
Swap contracts | |||||||
Total volume (MMBtu) | 1,852,000 | — | |||||
Weighted average price per MMBtu | $ | 2.88 | $ | — | |||
Natural gas contracts (Waha basis differential) | |||||||
Swap contracts | |||||||
Total volume (MMBtu) | 5,961,000 | 4,758,000 | |||||
Weighted average price per MMBtu | $ | (1.19) | $ | (1.12) | |||
Income (Loss) Available to Common Shareholders. The Company reported net loss available to common shareholders of $21.4 million for the three months ended March 31, 2019 and Adjusted Income available to common shareholders of $35.4 million, or $0.16 per fully diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income available to common stockholders to reflect our theoretical tax provision for prior period quarters as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income available to common stockholders to Adjusted Income and the Company's net income to Adjusted EBITDA(i), a non-GAAP financial measure, (in thousands):
Three Months Ended | |||||||||||
March 31, 2019 | December 31, 2018 | March 31, 2018 | |||||||||
Income (loss) available to common stockholders | $ | (21,367) | $ | 154,370 | $ | 53,937 | |||||
(Gain) loss on derivatives, net of settlements | 66,970 | (105,512) | (3,978) | ||||||||
Change in the fair value of share-based awards | 1,881 | (1,053) | 1,012 | ||||||||
Settled share-based awards | 3,024 | — | — | ||||||||
Tax effect on adjustments above | (15,094) | 22,379 | 622 | ||||||||
Change in valuation allowance | — | (30,281) | (11,753) | ||||||||
Adjusted Income (i) | $ | 35,414 | $ | 39,903 | $ | 39,840 | |||||
Adjusted Income per fully diluted common share (i) | $ | 0.16 | $ | 0.17 | $ | 0.20 | |||||
Three Months Ended | |||||||||||
March 31, 2019 | December 31, 2018 | March 31, 2018 | |||||||||
Net income (loss) | $ | (19,543) | $ | 156,194 | $ | 55,761 | |||||
(Gain) loss on derivatives, net of settlements | 66,970 | (105,512) | (3,978) | ||||||||
Non-cash stock-based compensation expense | 3,402 | 770 | 2,143 | ||||||||
Settled share-based awards | 3,024 | — | — | ||||||||
Acquisition expense | 157 | 1,333 | 548 | ||||||||
Income tax (benefit) expense | (5,149) | 5,647 | 495 | ||||||||
Interest expense | 738 | 735 | 460 | ||||||||
Depreciation, depletion and amortization | 60,672 | 60,301 | 36,066 | ||||||||
Accretion expense | 241 | 248 | 218 | ||||||||
Adjusted EBITDA (i) | $ | 110,512 | $ | 119,716 | $ | 91,713 | |||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended March 31, 2019 was $110.4 million and is reconciled to operating cash flow in the following table (in thousands):
Three Months Ended | |||||||||||
March 31, 2019 | December 31, 2018 | March 31, 2018 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | (19,543) | $ | 156,194 | $ | 55,761 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 60,672 | 60,301 | 36,066 | ||||||||
Accretion expense | 241 | 248 | 218 | ||||||||
Amortization of non-cash debt related items | 738 | 734 | 453 | ||||||||
Deferred income tax (benefit) expense | (5,149) | 5,647 | 495 | ||||||||
(Gain) loss on derivatives, net of settlements | 66,970 | (105,512) | (3,978) | ||||||||
(Gain) loss on sale of other property and equipment | 28 | (64) | — | ||||||||
Non-cash expense related to equity share-based awards | 4,545 | 1,823 | 1,131 | ||||||||
Change in the fair value of liability share-based awards | 1,881 | (1,053) | 1,012 | ||||||||
Discretionary cash flow (i) | $ | 110,383 | $ | 118,318 | $ | 91,158 | |||||
Changes in working capital | (33,864) | 33,710 | 4,512 | ||||||||
Payments to settle asset retirement obligations | (664) | (389) | (366) | ||||||||
Payments to settle vested liability share-based awards | (1,296) | — | (3,089) | ||||||||
Net cash provided by operating activities | $ | 74,559 | $ | 151,639 | $ | 92,215 | |||||
Callon Petroleum Company | ||||||||
Consolidated Balance Sheets | ||||||||
(in thousands, except par and per share data) | ||||||||
March 31, 2019 | December 31, 2018 | |||||||
ASSETS | Unaudited | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 10,482 | $ | 16,051 | ||||
Accounts receivable | 137,110 | 131,720 | ||||||
Fair value of derivatives | 11,372 | 65,114 | ||||||
Other current assets | 12,034 | 9,740 | ||||||
Total current assets | 170,998 | 222,625 | ||||||
Oil and natural gas properties, full cost accounting method: | ||||||||
Evaluated properties | 4,760,071 | 4,585,020 | ||||||
Less accumulated depreciation, depletion, amortization and impairment | (2,333,589) | (2,270,675) | ||||||
Evaluated oil and natural gas properties, net | 2,426,482 | 2,314,345 | ||||||
Unevaluated properties | 1,432,118 | 1,404,513 | ||||||
Total oil and natural gas properties, net | 3,858,600 | 3,718,858 | ||||||
Operating lease right-of-use assets | 40,977 | — | ||||||
Other property and equipment, net | 22,413 | 21,901 | ||||||
Restricted investments | 3,450 | 3,424 | ||||||
Deferred financing costs | 5,742 | 6,087 | ||||||
Fair value of derivatives | 385 | — | ||||||
Other assets, net | 6,269 | 6,278 | ||||||
Total assets | $ | 4,108,834 | $ | 3,979,173 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 230,990 | $ | 261,184 | ||||
Operating lease liabilities | 29,134 | — | ||||||
Accrued interest | 25,920 | 24,665 | ||||||
Cash-settleable restricted stock unit awards | 1,060 | 1,390 | ||||||
Asset retirement obligations | 3,771 | 3,887 | ||||||
Fair value of derivatives | 24,550 | 10,480 | ||||||
Other current liabilities | 8,512 | 13,310 | ||||||
Total current liabilities | 323,937 | 314,916 | ||||||
Senior secured revolving credit facility | 330,000 | 200,000 | ||||||
6.125% senior unsecured notes due 2024 | 595,971 | 595,788 | ||||||
6.375% senior unsecured notes due 2026 | 393,896 | 393,685 | ||||||
Operating lease liabilities | 11,751 | — | ||||||
Asset retirement obligations | 10,189 | 10,405 | ||||||
Cash-settleable restricted stock unit awards | 2,252 | 2,067 | ||||||
Deferred tax liability | 4,415 | 9,564 | ||||||
Fair value of derivatives | 6,983 | 7,440 | ||||||
Other long-term liabilities | 995 | 100 | ||||||
Total liabilities | 1,680,389 | 1,533,965 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized; 1,458,948 shares outstanding | 15 | 15 | ||||||
Common stock, $0.01 par value, 300,000,000 shares authorized; 227,884,091 and 227,582,575 shares outstanding, respectively | 2,279 | 2,276 | ||||||
Capital in excess of par value | 2,481,879 | 2,477,278 | ||||||
Accumulated deficit | (55,728) | (34,361) | ||||||
Total stockholders' equity | 2,428,445 | 2,445,208 | ||||||
Total liabilities and stockholders' equity | $ | 4,108,834 | $ | 3,979,173 | ||||
Callon Petroleum Company | |||||||
Consolidated Statements of Operations | |||||||
(Unaudited; in thousands, except per share data) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Operating revenues: | |||||||
Oil sales | $ | 141,098 | $ | 115,286 | |||
Natural gas sales | 11,949 | 12,154 | |||||
Total operating revenues | 153,047 | 127,440 | |||||
Operating expenses: | |||||||
Lease operating expenses | 24,067 | 13,039 | |||||
Production taxes | 10,813 | 8,463 | |||||
Depreciation, depletion and amortization | 59,767 | 35,417 | |||||
General and administrative | 11,753 | 8,769 | |||||
Settled share-based awards | 3,024 | — | |||||
Accretion expense | 241 | 218 | |||||
Acquisition expense | 157 | 548 | |||||
Total operating expenses | 109,822 | 66,454 | |||||
Income from operations | 43,225 | 60,986 | |||||
Other (income) expenses: | |||||||
Interest expense, net of capitalized amounts | 738 | 460 | |||||
Loss on derivative contracts | 67,260 | 4,481 | |||||
Other income | (81) | (211) | |||||
Total other (income) expense | 67,917 | 4,730 | |||||
Income (loss) before income taxes | (24,692) | 56,256 | |||||
Income tax (benefit) expense | (5,149) | 495 | |||||
Net income (loss) | (19,543) | 55,761 | |||||
Preferred stock dividends | (1,824) | (1,824) | |||||
Income (loss) available to common stockholders | $ | (21,367) | $ | 53,937 | |||
Income per common share: | |||||||
Basic | $ | (0.09) | $ | 0.27 | |||
Diluted | $ | (0.09) | $ | 0.27 | |||
Weighted average common shares outstanding: | |||||||
Basic | 227,784 | 201,921 | |||||
Diluted | 227,784 | 202,588 | |||||
Callon Petroleum Company | |||||||
Consolidated Statements of Cash Flows | |||||||
(Unaudited; in thousands) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (19,543) | $ | 55,761 | |||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 60,672 | 36,066 | |||||
Accretion expense | 241 | 218 | |||||
Amortization of non-cash debt related items | 738 | 453 | |||||
Deferred income tax (benefit) expense | (5,149) | 495 | |||||
(Gain) loss on derivatives, net of settlements | 66,970 | (3,978) | |||||
Loss on sale of other property and equipment | 28 | — | |||||
Non-cash expense related to equity share-based awards | 4,545 | 1,131 | |||||
Change in the fair value of liability share-based awards | 1,881 | 1,012 | |||||
Payments to settle asset retirement obligations | (664) | (366) | |||||
Payments for cash-settled restricted stock unit awards | (1,296) | (3,089) | |||||
Changes in current assets and liabilities: | |||||||
Accounts receivable | (5,390) | (8,067) | |||||
Other current assets | (2,294) | 61 | |||||
Current liabilities | (26,003) | 12,938 | |||||
Other | (177) | (420) | |||||
Net cash provided by operating activities | 74,559 | 92,215 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (193,211) | (111,330) | |||||
Acquisitions | (27,947) | (38,923) | |||||
Acquisition deposit | — | 900 | |||||
Proceeds from sale of assets | 13,879 | — | |||||
Net cash used in investing activities | (207,279) | (149,353) | |||||
Cash flows from financing activities: | |||||||
Borrowings on senior secured revolving credit facility | 220,000 | 80,000 | |||||
Payments on senior secured revolving credit facility | (90,000) | (30,000) | |||||
Payment of preferred stock dividends | (1,824) | (1,824) | |||||
Tax withholdings related to restricted stock units | (1,025) | (560) | |||||
Net cash provided by financing activities | 127,151 | 47,616 | |||||
Net change in cash and cash equivalents | (5,569) | (9,522) | |||||
Balance, beginning of period | 16,051 | 27,995 | |||||
Balance, end of period | 10,482 | 18,473 | |||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Tuesday, May 7, 2019, to discuss first quarter 2019 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
Date/Time: | Tuesday, May 7, 2019, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
Webcast: | Select "IR Calendar" under the "Investors" section of the website: www.callon.com. |
Presentation Slides: | Select "Presentations" under the "Investors" section of the website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
Toll Free: | 1-888-317-6003 |
Canada Toll Free: | 1-866-284-3684 |
International: | 1-412-317-6061 |
Access code: | 3634060 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; Callon's 2019 production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of Callon's business plans and strategy, as well as statements including the words "believe," "expect," "plans," "may," "will," "should," "could," and words of similar meaning. These statements reflect Callon's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and Callon undertakes 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. Some of the factors which could affect Callon's future results and could cause results to differ materially from those expressed in Callon's forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, Callon's ability to finance Callon's activities and other risks more fully discussed in Callon's filings with the Securities and Exchange Commission, including Callon's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on Callon's website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
i) | See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-first-quarter-2019-results-300844478.html
SOURCE Callon Petroleum Company
Article Date
5/6/2019Callon Petroleum Company Announces Divestiture of Non-Core Assets
Source: PR Newswire
HOUSTON, April 8, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or "we") today announced it has entered into a definitive agreement regarding the sale of certain non-core assets in the Midland Basin for initial cash proceeds of $260 million, subject to customary purchase price adjustments. The agreement also provides for potential incremental cash payments of up to $60 million based upon future commodity prices with upside participation starting at the $60/Bbl West Texas Intermediate level.
Joe Gatto, President and Chief Executive Officer commented, "We are delivering on our commitment to drive enhanced capital efficiency by monetizing lower margin, non-core properties that have not competed for capital on a sustained basis. The proceeds from this divestiture will accelerate our debt reduction initiatives and also provide the opportunity to retire our preferred stock, reducing our cash financing costs. In addition, the transaction streamlines our business with a resulting focus on three core operating areas. We are actively optimizing our operations, which we believe will reduce capital intensity and increase returns on capital for our shareholders."
The divestiture encompasses our Ranger operating area in the southern Midland Basin which includes approximately 9,850 net Wolfcamp acres (66% working interest), over 80 currently producing horizontal wells that have been drilled since 2012 and 70 net, delineated locations that exceed our internal threshold of an IRR of greater than 25% at strip pricing. Daily production from these assets averaged approximately 4,000 Boe/d (52% oil) in February 2019. Our capital plans for the year are unchanged as there was no planned activity in the Ranger area for 2019. Updated full year guidance will be provided upon closing of the sale.
In addition to the pending divestiture, we completed a strategic trade during the first quarter of 2019 that expanded our contiguous position in northwest Howard County through the addition of two incremental long-lateral DSUs in exchange for low working interest properties in Midland County. The trade resulted in a net increase of approximately 167 net acres to Callon's Midland Basin leasehold position and generated $14 million in cash proceeds to Callon. Our resulting asset base is now well-positioned for the efficient, large pad development model that we are increasingly deploying across our portfolio.
Jefferies LLC acted as exclusive financial advisor to Callon in connection with the Ranger divestiture transaction.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
This news release is posted on Callon's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; Callon's 2019 production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of Callon's business plans and strategy, as well as statements including the words "believe," "expect," "plans," "may," "will," "should," "could," and words of similar meaning. These statements reflect Callon's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and Callon undertakes 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. Some of the factors which could affect Callon's future results and could cause results to differ materially from those expressed in Callon's forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, Callon's ability to finance Callon's activities and other risks more fully discussed in Callon's filings with the Securities and Exchange Commission, including Callon's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on Callon's website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-divestiture-of-non-core-assets-300826411.html
SOURCE Callon Petroleum Company
Article Date
4/8/2019Callon Petroleum Company Schedules First Quarter 2019 Conference Call for May 7, 2019
Source: PR Newswire
HOUSTON, April 4, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its first quarter 2019 financial and operating results.
Webcast and Conference Call:
Date: Tuesday, May 7, 2019
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: www.callon.com | |
Select "IR Calendar" under the "Investors" section of the website. |
Conference Call:
Domestic: | 1-888-317-6003 | |||||
Canada: | 1-866-284-3684 | |||||
International: | 1-412-317-6061 | |||||
Access code: | 3634060 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release first quarter 2019 results after market close on Monday, May 6, 2019.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-first-quarter-2019-conference-call-for-may-7-2019-300824960.html
SOURCE Callon Petroleum Company
Article Date
4/4/2019Callon Petroleum Company Announces Upcoming Investor Event
Source: PR Newswire
HOUSTON, March 19, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor event:
Scotia Howard Weil 2019 Energy Conference
The Company will present at the Scotia Howard Weil 2019 Energy Conference on Monday, March 25, 2019 at 2:30 PM Central Daylight Time.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-event-300814286.html
SOURCE Callon Petroleum Company
Article Date
3/19/2019Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
HOUSTON, March 5, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on March 29, 2019 to stockholders of record as of March 15, 2019. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-declares-series-a-preferred-dividend-300800081.html
SOURCE Callon Petroleum Company
Article Date
3/5/2019Callon Petroleum Company Announces Fourth Quarter 2018 Results
Source: PR Newswire
HOUSTON, Feb. 26, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months and full-year ended December 31, 2018.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
2018 Highlights
Fourth Quarter 2018 Highlights
Joe Gatto, President and Chief Executive Officer commented, "The past year represented a significant inflection point in the maturity of our Permian operations and progression to a development model that will drive increased capital efficiency and corporate returns. The critical steps we took this past year will assist in our transition to full-field development, employing larger pad concepts as part of an integrated technical and operational approach to multi-zone resource monetization. We enter 2019 with a substantial proved reserve base approaching 250 million BOE that has consistently carried one of the highest percentages of oil across our peer group since we commenced horizontal development. As part of the maturation of our business, our corporate decline rates have also moderated over the last few years, setting the stage for decreasing capital intensity as more capital will contribute to incremental production growth and less capital will be needed for replacement. This dynamic, combined with the impact of larger scale program development in the Delaware Basin that will emerge around mid-year, provides a solid foundation for quality growth in 2019 and beyond." He continued, "As the industry landscape evolves, operators are faced with the choice of pursuing short-term benefits at the expense of future reinvestment opportunities, capital efficiency and longer-term growth trajectory. We remain steadfast in our long-term value focus, employing resource development concepts and pace of activity that will keep us on a path to sustainable free cash flow generation at WTI prices in the low $50s from repeatable investments in our high quality asset base."
Operations Update
At December 31, 2018, we had 466 gross (364 net) horizontal wells producing from eight established flow units in the Permian Basin. Net daily production for the three months ended December 31, 2018 grew 55% to 41.1 Mboe/d (81% oil) as compared to the same period of 2017. Full year production for 2018 averaged 32.9 Mboe/d (79% oil) reflecting growth of 44% over 2017 volumes.
For the three months ended December 31, 2018, we drilled 17 gross (15.3 net) horizontal wells, and placed a combined 19 gross (17.2 net) horizontal wells on production. Wells placed on production during the quarter totaled approximately 106,000 net lateral feet and were completed in the upper and lower intervals of the Lower Spraberry, Wolfcamp A and Wolfcamp B within the Midland Basin and the Lower Wolfcamp A within the Delaware Basin.
Midland Basin
We brought nine gross wells online in the Monarch area in the fourth quarter achieving an average peak 24-hour rate of 235 Boe per thousand lateral feet with an average oil cut of 86%. More recent wells in the Monarch area demonstrate consistency in our well results across multiple zones with the Casselman 40 pad, a Wolfcamp A and B co-development project, averaging approximately 150 barrels of oil per thousand lateral feet in early time flowback. Additional multi-interval pad development projects targeting both upper and lower flow units in the Lower Spraberry, coupled with a Middle Spraberry well, are currently flowing back with encouraging early time results relative to offsetting wells.
In the WildHorse area in Howard County, we placed on production a three-well pad which produced an average of approximately 190 Boe (90% oil) per day per thousand lateral feet per well through the first 30 days. During the first quarter of 2019, we will be completing a five-well pad developing the Wolfcamp A on 10-well spacing, building upon our successful pilot test in the Fairway area of WildHorse last year.
The previously disclosed outage at a third party gas processing facility in Martin County has persisted into the first quarter as the plant is brought back on a gradual basis. We expect a normalized level of gas processing to resume during the month of March. We estimate lost natural gas and NGL volumes during the fourth quarter of approximately 9,800 Mcfe/d, with no impact to our oil volumes. We currently expect an impact of approximately 4,000 Mcfe/d in the first quarter of 2019.
Delaware Basin
At our Spur area in Ward County, we placed on production six gross wells with an average completed lateral length of just under 8,000 feet. A two-well development including the Teewinot A1 04LA and A2 05LA wells have demonstrated strong performance since being turned to production in December. The two wells averaged approximately 390 Boe (85% oil) per day per thousand lateral feet through the first 70 days of production resulting in total production of nearly 260,000 Boe in just over two months. The Rock Garden A 08 LA and 01 LA wells, which were completed separately and brought on production during the third and latter part of the fourth quarter respectively, have each averaged approximately 1,300 Boe (88% oil) per day over their first 60 days. Additionally, the Limber Pine A2 05LA and A1 01LA wells, brought on production in November and December respectively, have each also averaged approximately 1,175 Boe (85% oil) per day through their first 60 days on production.
We continue to build an inventory of drilled, uncompleted wells at Spur in preparation for larger pad development projects which are slated for completion during the second half of the year and are expected to provide meaningful production growth into year-end 2019 and early 2020. As part of our increased scale of planned development, we continue to enhance our field operations through an addition to our existing recycling facility. The addition will bring our total recycling capacity to 60,000 barrels of water per day, reducing our sourcing and disposal costs on a go forward basis while also reducing our environmental impact in the regional area.
Following the acquisition of a significant producing asset base in September 2018, we have advanced several initiatives to improve operational reliability and reduce operating costs. We will be accelerating our maintenance and field optimization projects over the next three months, requiring a voluntary shut-in of production during that time. We expect this deferral of production will impact our productive capacity by roughly 1,000 Boe/d during the first quarter with a decreased impact in the second quarter as the project is expected to be completed in April.
Capital Expenditures
For the twelve months ended December 31, 2018, we incurred $546.1 million in cash operational capital expenditures (including other items) of $127.8 million in the fourth quarter, which represented a $21.7 million decrease from the third quarter. In the fourth quarter, we spent approximately $92.4 million on drilling and completion and $35.4 million on facilities, equipment, and other items on a cash basis. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
Three Months Ended December 31, 2018 | ||||||||||||||||
Operational | Capitalized | Capitalized | Total Capital | |||||||||||||
Capital (a) | Interest | G&A | Expenditures | |||||||||||||
Cash basis (b) | $ | 127,823 | $ | 20,159 | $ | 7,839 | $ | 155,821 | ||||||||
Timing adjustments (c) | 13,354 | (2,659) | — | 10,695 | ||||||||||||
Non-cash items | — | — | 353 | 353 | ||||||||||||
Accrual basis | $ | 141,177 | $ | 17,500 | $ | 8,192 | $ | 166,869 | ||||||||
(a) | Includes seismic, land and other items. |
(b) | Cash basis is presented here to help users of financial information reconcile amounts from the cash flow statement to the balance sheet by accounting for timing related changes in working capital that align with our development pace and rig count. |
(c) | Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results | ||||||||||||
The following table presents summary information for the periods indicated: | ||||||||||||
Three Months Ended, | ||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | ||||||||||
Net production | ||||||||||||
Oil (MBbls) | 3,076 | 2,521 | 1,936 | |||||||||
Natural gas (MMcf) | 4,225 | 4,144 | 3,018 | |||||||||
Total (Mboe) | 3,780 | 3,212 | 2,439 | |||||||||
Average daily production (Boe/d) | 41,087 | 34,913 | 26,511 | |||||||||
% oil (Boe basis) | 81 | % | 78 | % | 79 | % | ||||||
Oil and natural gas revenues (in thousands) | ||||||||||||
Oil revenue | $ | 150,398 | $ | 142,601 | $ | 104,132 | ||||||
Natural gas revenue (a) | 11,497 | 18,613 | 14,081 | |||||||||
Total operating revenues | 161,895 | 161,214 | 118,213 | |||||||||
Impact of settled derivatives | (1,594) | (9,239) | (4,501) | |||||||||
Adjusted Total Revenue (i) | $ | 160,301 | $ | 151,975 | $ | 113,712 | ||||||
Average realized sales price (excluding impact of settled derivatives) | ||||||||||||
Oil (Bbl) | $ | 48.89 | $ | 56.57 | $ | 53.79 | ||||||
Natural gas (Mcf) | 2.72 | 4.49 | 4.67 | |||||||||
Total (Boe) | 42.83 | 50.19 | 48.47 | |||||||||
Average realized sales price (including impact of settled derivatives) | ||||||||||||
Oil (Bbl) | $ | 48.52 | $ | 52.87 | $ | 51.28 | ||||||
Natural gas (Mcf) | 2.62 | 4.51 | 4.78 | |||||||||
Total (Boe) | 42.41 | 47.31 | 46.62 | |||||||||
Additional per Boe data | ||||||||||||
Sales price (b) | $ | 42.83 | $ | 50.19 | $ | 48.47 | ||||||
Lease operating expense (c) | 6.47 | 5.77 | 4.84 | |||||||||
Gathering and treating expense (a) | — | — | 0.57 | |||||||||
Production taxes | 2.51 | 3.20 | 2.55 | |||||||||
Operating margin | $ | 33.85 | $ | 41.22 | $ | 40.51 | ||||||
Depletion, depreciation and amortization | $ | 15.74 | $ | 15.02 | $ | 14.98 | ||||||
Adjusted G&A (d) | ||||||||||||
Cash component (e) | $ | 2.03 | $ | 2.17 | $ | 2.46 | ||||||
Non-cash component | 0.50 | 0.57 | 0.54 | |||||||||
(a) | On January 1, 2018, the Company adopted the revenue recognition accounting standard. Consequently, natural gas gathering and treating expenses for the three and twelve months ended December 31, 2018 were accounted for as a reduction to revenue. |
(b) | Excludes the impact of settled derivatives. |
(c) | Excludes gathering and treating expense. |
(d) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(e) | Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended December 31, 2018, Callon reported total revenue of $161.9 million and total revenue including settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $160.3 million, including the impact of a $1.6 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's total operating revenue. Average daily production for the quarter was 41.1 Mboe/d compared to average daily production of 34.9 Mboe/d in the third quarter of 2018. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended December 31, 2018, Callon recognized the following hedging-related items (in thousands, except per unit data):
Three Months Ended December 31, 2018 | ||||||||
In Thousands | Per Unit | |||||||
Oil derivatives | ||||||||
Net loss on settlements | $ | (1,157) | $ | (0.37) | ||||
Net gain on fair value adjustments | 101,693 | |||||||
Total gain on oil derivatives | $ | 100,536 | ||||||
Natural gas derivatives | ||||||||
Net loss on settlements | $ | (437) | $ | (0.10) | ||||
Net gain on fair value adjustments | 3,819 | |||||||
Total gain on natural gas derivatives | $ | 3,382 | ||||||
Total oil & natural gas derivatives | ||||||||
Net loss on settlements | $ | (1,594) | $ | (0.42) | ||||
Net gain on fair value adjustments | 105,512 | |||||||
Total gain on total oil & natural gas derivatives | $ | 103,918 | ||||||
Lease Operating Expenses, including workover ("LOE"). LOE per Boe for the three months ended December 31, 2018 was $6.47 per Boe, compared to LOE of $5.77 per Boe in the third quarter of 2018. The increase in this metric resulted primarily from an increase in costs associated with recently acquired assets that reflect a higher historical operating cost.
Production Taxes, including ad valorem taxes. Production taxes were $2.51 per Boe for the three months ended December 31, 2018, representing approximately 6% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended December 31, 2018 was $15.74 per Boe compared to $15.02 per Boe in the third quarter of 2018. The increase on a per unit basis was primarily attributable to greater increases in our depreciable asset base and assumed future development costs related to undeveloped proved reserves as compared to the estimated total proved reserve base.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $9.6 million, or $2.53 per Boe, for the three months ended December 31, 2018 compared to $8.8 million, or $2.74 per Boe, for the third quarter of 2018. The cash component of Adjusted G&A was $7.7 million, or $2.03 per Boe, for the three months ended December 31, 2018 compared to $7.0 million, or $2.17 per Boe, for the third quarter of 2018.
For the three months ended December 31, 2018, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
Three Months Ended | ||||
Total G&A expense | $ | 8,514 | ||
Change in the fair value of liability share-based awards (non-cash) | 1,069 | |||
Adjusted G&A – total | 9,583 | |||
Restricted stock share-based compensation (non-cash) | (1,802) | |||
Corporate depreciation & amortization (non-cash) | (94) | |||
Adjusted G&A – cash component | $ | 7,687 | ||
Income tax expense. Callon provides for income taxes at a statutory rate of 21% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses, restricted stock windfalls and shortfalls, and state income taxes. We recorded an income tax expense of $5.6 million for the three months ended December 31, 2018 which relates to deferred federal and State of Texas gross margin tax. As of December 31, 2017, the valuation allowance was $60,919. During 2018, the Company's tax position transitioned from a net deferred tax asset position to a net deferred tax liability position, thereby unwinding the valuation allowance balance to $0 as of December 31, 2018. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision of $30.3 million (or $0.13 per diluted share) for the quarter as if the valuation allowance did not exist.
Proved Reserves
DeGolyer and MacNaughton prepared estimates of Callon's reserves as of December 31, 2018.
As of December 31, 2018, our estimated net proved reserves grew 74% from prior year-end, totaling 238.5 MMboe and included 180.1 MMBbls of oil and 350.5 Bcf of natural gas with a standardized measure of discounted future net cash flows of $2.9 billion. Oil constituted approximately 76% of our total estimated equivalent net proved reserves and approximately 72% of our total estimated equivalent proved developed reserves. We added 85.0 MMboe of new reserves in extensions and discoveries through our development efforts in our operating areas, where we drilled a total of 70 gross (57.5 net) wells. We purchased reserves in place of 39.7 MMboe in a significant Delaware acquisition as well as bolt-on acquisitions completed within the Permian Basin and reduced our estimated net proved reserves through net revisions of previous estimates of 2.0 MMboe and reclassifications of 9.1 MMboe to probable reserves. Our net revisions of previous estimates were primarily related to technical revisions of proved undeveloped reserves. We reclassified 19 proved undeveloped ("PUD") locations to probable reserves, primarily due to acreage trades and changes in our development plan, including larger pad development concepts and co-development of zones. These changes resulted in the anticipated drilling of PUD locations being moved beyond five years from initial booking. The changes in our proved reserves are as follows (in Mboe):
Proved reserves: | |||
Reserves at December 31, 2017 | 136,974 | ||
Extensions and discoveries | 84,955 | ||
Purchase of reserves in place | 39,683 | ||
Revisions to previous estimates | (2,021) | ||
Reclassifications due to changes in development plan | (9,065) | ||
Production | (12,018) | ||
Reserves at December 31, 2018 | 238,508 | ||
Callon replaced 690% of 2018 production as calculated by the sum of reserve extensions and discoveries, divided by annual production ("Organic reserve replacement ratio," a non-GAAP financial measure(i)). The Company's finding and development costs from extensions and discoveries ("Drill-bit F&D costs per Boe," a non-GAAP financial measure(i)) were $7.03 per Boe calculated as accrual costs incurred for exploration and development divided by the reserves (in barrels of oil equivalent) added from extensions and discoveries. In addition, the Company had proved developed finding and development costs ("PD F&D costs per Boe," a non-GAAP financial measure(i)) of $13.40 per Boe.
Senior Management Promotions
As part of Callon's focus on leadership development to support the execution of our strategy, Michol Ecklund has been promoted to the role Senior Vice President, General Counsel and Corporate Secretary. In this new role, Michol will leverage her prior experience in human resources, environmental, social and governance (ESG) matters, and philanthropy, while continuing to provide legal advice to Callon. In addition, Liam Kelly has been promoted to the role of Vice President of Corporate Development, continuing to lead our business development efforts as well as manage our corporate planning team.
2019 Guidance
Full Year | Full Year | |||
2018 Actual | 2019 Guidance | |||
Total production (Mboe/d) | 32.9 | 39.5 - 41.5 | ||
% oil | 79% | 77% - 78% | ||
Income statement expenses (per Boe) | ||||
LOE, including workovers | $5.76 | $5.50 - $6.50 | ||
Production taxes, including ad valorem (% unhedged revenue) | 6% | 7% | ||
Adjusted G&A: cash component (a) | $2.35 | $2.00 - $2.50 | ||
Adjusted G&A: non-cash component (b) | $0.55 | $0.50 - $1.00 | ||
Cash interest expense (c) | $0.00 | $0.00 | ||
Effective income tax rate | 22% | 22% | ||
Capital expenditures ($MM, accrual basis) | ||||
Total operational (d) | $583 | $500 - $525 | ||
Capitalized interest and G&A expenses | $84 | $100 - $105 | ||
Net operated horizontal wells placed on production | 54 | 47 - 49 |
(a) | Excludes stock-based compensation and corporate depreciation and amortization. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | All interest expense anticipated to be capitalized. |
(d) | Includes facilities, equipment, seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary | ||||||||
The following table summarizes our open derivative positions as of December 31, 2018 for the periods indicated: | ||||||||
For the Full Year of | For the Full Year of | |||||||
Oil contracts (WTI) | 2019 | 2020 | ||||||
Puts | ||||||||
Total volume (Bbls) | 912,500 | — | ||||||
Weighted average price per Bbl | $ | 65.00 | $ | — | ||||
Put spreads | ||||||||
Total volume (Bbls) | 912,500 | — | ||||||
Weighted average price per Bbl | ||||||||
Floor (long put) | $ | 65.00 | $ | — | ||||
Floor (short put) | $ | 42.50 | $ | — | ||||
Collar contracts combined with short puts (three-way collars) | ||||||||
Total volume (Bbls) | 4,564,000 | — | ||||||
Weighted average price per Bbl | ||||||||
Ceiling (short call) | $ | 67.62 | $ | — | ||||
Floor (long put) | $ | 56.60 | $ | — | ||||
Floor (short put) | $ | 43.60 | $ | — | ||||
Oil contracts (Midland basis differential) | ||||||||
Swap contracts | ||||||||
Total volume (Bbls) | 4,746,500 | 4,024,000 | ||||||
Weighted average price per Bbl | $ | (4.72) | $ | (1.51) | ||||
Natural gas contracts (Henry Hub) | ||||||||
Collar contracts (two-way collars) | ||||||||
Total volume (MMBtu) | 8,282,500 | — | ||||||
Weighted average price per MMBtu | ||||||||
Ceiling (short call) | $ | 3.46 | $ | — | ||||
Floor (long put) | $ | 2.91 | $ | — | ||||
Natural gas contracts (Waha basis differential) | ||||||||
Swap contracts | ||||||||
Total volume (MMBtu) | 11,321,000 | 4,758,000 | ||||||
Weighted average price per MMBtu | $ | (1.23) | $ | (1.12) | ||||
Income (Loss) Available to Common Shareholders. The Company reported net income available to common shareholders of $154.4 million for the three months ended December 31, 2018 and Adjusted Income available to common shareholders of $39.9 million, or $0.17 per diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income available to common stockholders to Adjusted Income and the Company's net income to Adjusted EBITDA (in thousands):
Three Months Ended | ||||||||||||
Adjusted Income per fully diluted common share: | December 31, 2018 | September 30, 2018 | December 31, 2017 | |||||||||
Income available to common stockholders | $ | 154,370 | $ | 36,108 | $ | 21,001 | ||||||
Net (gain) loss on derivatives, net of settlements | (105,512) | 25,100 | 26,037 | |||||||||
Change in the fair value of liability share-based awards | (1,053) | 879 | 865 | |||||||||
Tax effect on adjustments above | 22,379 | (5,456) | (9,416) | |||||||||
Change in valuation allowance | (30,281) | (8,323) | (8,285) | |||||||||
Adjusted Income | $ | 39,903 | $ | 48,308 | $ | 30,202 | ||||||
Adjusted Income per fully diluted common share | $ | 0.17 | $ | 0.21 | $ | 0.15 | ||||||
Three Months Ended | ||||||||||||
Adjusted EBITDA: | December 31, 2018 | September 30, 2018 | December 31, 2017 | |||||||||
Net income | $ | 156,194 | $ | 37,931 | $ | 22,824 | ||||||
Net (gain) loss on derivatives, net of settlements | (105,512) | 25,100 | 26,037 | |||||||||
Non-cash stock-based compensation expense | 770 | 2,587 | 2,101 | |||||||||
Acquisition expense | 1,333 | 1,435 | (112) | |||||||||
Income tax expense | 5,647 | 1,487 | 248 | |||||||||
Interest expense | 735 | 711 | 461 | |||||||||
Depreciation, depletion and amortization | 60,301 | 48,977 | 37,222 | |||||||||
Accretion expense | 248 | 202 | 154 | |||||||||
Adjusted EBITDA | $ | 119,716 | $ | 118,430 | $ | 88,935 | ||||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended December 31, 2018 was $118.3 million and is reconciled to operating cash flow in the following table (in thousands):
Three Months Ended | ||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 156,194 | $ | 37,931 | $ | 22,824 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||
Depreciation, depletion and amortization | 60,301 | 48,977 | 37,222 | |||||||||
Accretion expense | 248 | 202 | 154 | |||||||||
Amortization of non-cash debt related items | 734 | 708 | 455 | |||||||||
Deferred income tax expense | 5,647 | 1,487 | 247 | |||||||||
(Gain) loss on derivatives, net of settlements | (105,512) | 25,100 | 26,037 | |||||||||
Gain on sale of other property and equipment | (64) | (102) | — | |||||||||
Non-cash expense related to equity share-based awards | 1,823 | 1,708 | 1,240 | |||||||||
Change in the fair value of liability share-based awards | (1,053) | 879 | 865 | |||||||||
Discretionary cash flow | $ | 118,318 | $ | 116,890 | $ | 89,044 | ||||||
Changes in working capital | 33,710 | (347) | $ | (8,642) | ||||||||
Payments to settle asset retirement obligations | (389) | (507) | (216) | |||||||||
Net cash provided by operating activities | $ | 151,639 | $ | 116,036 | $ | 80,186 | ||||||
PV-10: Pre-tax PV-10, a non-GAAP measure(i), as of December 31, 2018 is reconciled below to the standardized measure of discounted future net cash flows (in thousands):
As of December 31, 2018 | ||||
Standardized measure of discounted future net cash flows | $ | 2,941,293 | ||
Add: 10 percent annual discount, net of income taxes | 3,716,571 | |||
Add: future undiscounted income taxes | 782,470 | |||
Undiscounted future net cash flows | 7,440,334 | |||
Less: 10 percent annual discount without tax effect | (4,291,127) | |||
Total Proved Reserves - Pre-tax PV-10 | 3,149,207 | |||
Total Proved Developed Reserves - Pre-tax PV-10 | 2,222,049 | |||
Total Proved Undeveloped Reserves - Pre-tax PV-10 | $ | 927,158 | ||
F&D and Reserve Replacement: The following table reconciles Drill-bit finding and development costs per boe(i) ("Drill-bit F&D per boe), Proved Developed finding and developed costs per boe(i) (PD F&D), Organic Reserve Replacement Ratio(i), and All-sources reserve replacement ratio(i); all of which are non-GAAP measures:
Calculation | 2018 | ||||
Parameters | Metrics | ||||
Production (Mboe) | (A) | 12,018 | |||
Proved reserve data | |||||
Proved reserves (Mboe) | |||||
Total Proved extensions, discoveries, and other additions | (B) | 84,955 | |||
Proved Undeveloped extensions, discoveries, and other additions, net of revisions | (C) | 52,526 | |||
Proved Undeveloped transfers to Proved Developed | (D) | 11,075 | |||
Total Proved additions, net of revisions and reclassifications | (E) | 113,552 | |||
Total Proved extensions, discoveries, and other additions, net of revisions | (F) | 82,934 | |||
Costs Incurred: | |||||
Acquisition costs: | |||||
Evaluated properties | $ 347,305 | ||||
Unevaluated properties | 466,816 | ||||
Development costs | (G) | 259,410 | |||
Exploration costs | (H) | 323,458 | |||
Total costs incurred | $ 1,396,989 | ||||
Drill-bit F&D costs per Boe (two-stream) | (G + H) / (F) | $7.03 | |||
PD F&D per Boe (two-stream) | (G + H) / (B - C + D) | $13.40 | |||
Organic reserve replacement ratio | (F) / (A) | 690% | |||
All-sources reserve replacement ratio | (E) / (A) | 945% | |||
Callon Petroleum Company Consolidated Balance Sheets (in thousands, except par and per share values and share data) | |||||||
December 31, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 16,051 | $ | 27,995 | |||
Accounts receivable | 131,720 | 114,320 | |||||
Fair value of derivatives | 65,114 | 406 | |||||
Other current assets | 9,740 | 2,139 | |||||
Total current assets | 222,625 | 144,860 | |||||
Oil and natural gas properties, full cost accounting method: | |||||||
Evaluated properties | 4,585,020 | 3,429,570 | |||||
Less accumulated depreciation, depletion, amortization and impairment | (2,270,675) | (2,084,095) | |||||
Net evaluated oil and natural gas properties | 2,314,345 | 1,345,475 | |||||
Unevaluated properties | 1,404,513 | 1,168,016 | |||||
Total oil and natural gas properties, net | 3,718,858 | 2,513,491 | |||||
Other property and equipment, net | 21,901 | 20,361 | |||||
Restricted investments | 3,424 | 3,372 | |||||
Deferred tax asset | — | 52 | |||||
Deferred financing costs | 6,087 | 4,863 | |||||
Acquisition deposit | — | 900 | |||||
Other assets, net | 6,278 | 5,397 | |||||
Total assets | $ | 3,979,173 | $ | 2,693,296 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 261,184 | $ | 162,878 | |||
Accrued interest | 24,665 | 9,235 | |||||
Cash-settleable restricted stock unit awards | 1,390 | 4,621 | |||||
Asset retirement obligations | 3,887 | 1,295 | |||||
Fair value of derivatives | 10,480 | 27,744 | |||||
Other current liabilities | 13,310 | — | |||||
Total current liabilities | 314,916 | 205,773 | |||||
Senior secured revolving credit facility | 200,000 | 25,000 | |||||
6.125% senior unsecured notes due 2024 | 595,788 | 595,196 | |||||
6.375% senior unsecured notes due 2026 | 393,685 | — | |||||
Asset retirement obligations | 10,405 | 4,725 | |||||
Cash-settleable restricted stock unit awards | 2,067 | 3,490 | |||||
Deferred tax liability | 9,564 | 1,457 | |||||
Fair value of derivatives | 7,440 | 1,284 | |||||
Other long-term liabilities | 100 | 405 | |||||
Total liabilities | 1,533,965 | 837,330 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized: 1,458,948 shares outstanding | 15 | 15 | |||||
Common stock, $0.01 par value, 300,000,000 shares authorized; 227,582,575 and 201,836,172 shares outstanding, respectively | 2,276 | 2,018 | |||||
Capital in excess of par value | 2,477,278 | 2,181,359 | |||||
Accumulated deficit | (34,361) | (327,426) | |||||
Total stockholders' equity | 2,445,208 | 1,855,966 | |||||
Total liabilities and stockholders' equity | $ | 3,979,173 | $ | 2,693,296 | |||
Callon Petroleum Company Consolidated Statements of Operations (in thousands, except per share data) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating revenues: | |||||||||||||||
Oil sales | $ | 150,398 | $ | 104,132 | $ | 530,898 | $ | 322,374 | |||||||
Natural gas sales | 11,497 | 14,082 | 56,726 | 44,100 | |||||||||||
Total operating revenues | 161,895 | 118,214 | 587,624 | 366,474 | |||||||||||
Operating expenses: | |||||||||||||||
Lease operating expenses | 24,475 | 13,201 | 69,180 | 49,907 | |||||||||||
Production taxes | 9,490 | 6,228 | 35,755 | 22,396 | |||||||||||
Depreciation, depletion and amortization | 59,502 | 36,543 | 181,909 | 115,714 | |||||||||||
General and administrative | 8,514 | 8,172 | 35,293 | 27,067 | |||||||||||
Settled share-based awards | — | — | — | 6,351 | |||||||||||
Accretion expense | 248 | 154 | 874 | 677 | |||||||||||
Acquisition expense | 1,333 | (112) | 5,083 | 2,916 | |||||||||||
Total operating expenses | 103,562 | 64,186 | 328,094 | 225,028 | |||||||||||
Income from operations | 58,333 | 54,028 | 259,530 | 141,446 | |||||||||||
Other (income) expenses: | |||||||||||||||
Interest expense, net of capitalized amounts | 735 | 461 | 2,500 | 2,159 | |||||||||||
(Gain) loss on derivative contracts | (103,918) | 30,536 | (48,544) | 18,901 | |||||||||||
Other income | (325) | (41) | (2,896) | (1,311) | |||||||||||
Total other (income) expense | (103,508) | 30,956 | (48,940) | 19,749 | |||||||||||
Income before income taxes | 161,841 | 23,072 | 308,470 | 121,697 | |||||||||||
Income tax (benefit) expense | 5,647 | 248 | 8,110 | 1,273 | |||||||||||
Net income | 156,194 | 22,824 | 300,360 | 120,424 | |||||||||||
Preferred stock dividends | (1,824) | (1,823) | (7,295) | (7,295) | |||||||||||
Income available to common stockholders | $ | 154,370 | $ | 21,001 | $ | 293,065 | $ | 113,129 | |||||||
Income per common share: | |||||||||||||||
Basic | $ | 0.68 | $ | 0.10 | $ | 1.35 | $ | 0.56 | |||||||
Diluted | $ | 0.68 | $ | 0.10 | $ | 1.35 | $ | 0.56 | |||||||
Shares used in computing income per common share: | |||||||||||||||
Basic | 227,580 | 201,835 | 216,941 | 201,526 | |||||||||||
Diluted | 228,191 | 202,426 | 217,596 | 202,102 | |||||||||||
Callon Petroleum Company Consolidated Statements of Cash Flows (in thousands) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | 156,194 | $ | 22,824 | $ | 300,360 | $ | 120,424 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation, depletion and amortization | 60,301 | 37,222 | 184,731 | 118,051 | |||||||||||
Accretion expense | 248 | 154 | 874 | 677 | |||||||||||
Amortization of non-cash debt related items | 734 | 455 | 2,483 | 2,150 | |||||||||||
Deferred income tax (benefit) expense | 5,647 | 247 | 8,110 | 1,273 | |||||||||||
Net (gain) loss on derivatives, net of settlements | (105,512) | 26,037 | (75,816) | 10,429 | |||||||||||
(Gain) loss on sale of other property and equipment | (64) | — | (144) | 62 | |||||||||||
Non-cash expense related to equity share-based awards | 1,823 | 1,240 | 6,289 | 8,254 | |||||||||||
Change in the fair value of liability share-based awards | (1,053) | 865 | 375 | 3,288 | |||||||||||
Payments to settle asset retirement obligations | (389) | (216) | (1,469) | (2,047) | |||||||||||
Payments for cash-settled restricted stock unit awards | — | — | (4,990) | (13,173) | |||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable | 37,033 | (32,347) | (17,351) | (44,495) | |||||||||||
Other current assets | (5,936) | 444 | (7,601) | 108 | |||||||||||
Current liabilities | 9,510 | 23,413 | 74,311 | 30,947 | |||||||||||
Other long-term liabilities | (6,065) | — | (278) | 121 | |||||||||||
Other assets, net | (832) | (152) | (2,230) | (1,528) | |||||||||||
Other | — | — | — | (4,650) | |||||||||||
Net cash provided by operating activities | 151,639 | 80,186 | 467,654 | 229,891 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (155,821) | (152,621) | (611,173) | (419,839) | |||||||||||
Acquisitions | (122,809) | (3,952) | (718,793) | (718,456) | |||||||||||
Acquisition deposit | — | (900) | — | 45,238 | |||||||||||
Proceeds from sales of assets | 683 | 20,525 | 9,009 | 20,525 | |||||||||||
Additions to other assets | (3,100) | — | (3,100) | — | |||||||||||
Net cash used in investing activities | (281,047) | (136,948) | (1,324,057) | (1,072,532) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings on senior secured revolving credit facility | 230,000 | 25,000 | 500,000 | 25,000 | |||||||||||
Payments on senior secured revolving credit facility | (95,000) | — | (325,000) | — | |||||||||||
Issuance of 6.125% senior unsecured notes due 2024 | — | — | — | 200,000 | |||||||||||
Premium on the issuance of 6.125% senior unsecured notes due 2024 | — | — | — | 8,250 | |||||||||||
Issuance of 6.375% senior unsecured notes due 2026 | — | — | 400,000 | — | |||||||||||
Payment of deferred financing costs | 530 | (28) | (9,430) | (7,194) | |||||||||||
Issuance of common stock | (376) | — | 287,988 | — | |||||||||||
Payment of preferred stock dividends | (1,824) | (1,824) | (7,295) | (7,295) | |||||||||||
Tax withholdings related to restricted stock units | — | — | (1,804) | (1,118) | |||||||||||
Net cash provided by financing activities | 133,330 | 23,148 | 844,459 | 217,643 | |||||||||||
Net change in cash and cash equivalents | 3,922 | (33,614) | (11,944) | (624,998) | |||||||||||
Balance, beginning of period | 12,129 | 61,609 | 27,995 | 652,993 | |||||||||||
Balance, end of period | 16,051 | 27,995 | $ | 16,051 | $ | 27,995 | |||||||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Wednesday, February 27, 2019, to discuss fourth quarter 2018 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
Date/Time: | Wednesday, February 27, 2019, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
Webcast: | Select "IR Calendar" under the "Investors" section of the Company's website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
Domestic: | 1-888-317-6003 |
Canada: | 1-866-284-3684 |
International: | 1-412-317-6061 |
Access code: | 6127927 |
An archive of the conference call webcast will also be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2019 production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans", "may", "will", "should", "could" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
(i) | See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-fourth-quarter-2018-results-300802580.html
SOURCE Callon Petroleum Company
Article Date
2/26/2019Callon Petroleum Company Provides 2019 Outlook and Year End Proved Reserves
Source: PR Newswire
HOUSTON, Feb. 12, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced its 2019 capital expenditure budget, reflecting a combination of financial discipline and capital efficiency gains.
Joe Gatto, President and Chief Executive Officer of Callon, stated, "Our 2019 capital program highlights our commitment to generate free cash flow in the near-term as we transition to scaled development of our high quality asset base. Strong cash operating margins underpin our plan and are complemented by capital efficiency improvements resulting from multi-well pad development in the Delaware Basin, increasing lateral lengths across our portfolio and a significant reduction in facilities spending. Even under our flat $50/Bbl WTI oil price assumption, we expect to be free cash flow positive in the fourth quarter of 2019 with a full year outspend that is almost half of our 2018 projection. In addition, although our production growth rate will be lower than previous years, the combination of a well-established Midland Basin operation and the emerging impact of large pad development in the Delaware Basin positions us for a sustained trajectory over the longer term with capital expenditures within or below internal cash flows." He continued, "Our tremendous progress maturing the business in recent years now allows us to benefit from repeatable well investments that will drive improved corporate-level returns due to scale efficiencies, reduced facilities needs and shallower production decline rates on a consolidated basis. Any improvement in commodity prices would further enhance that return on capital profile, as we have no plans to increase capital investment in 2019 with higher oil prices."
2019 Capital Expenditures Budget
Callon expects operational capital expenditures to range between $500 and $525 million in 2019, with infrastructure and facilities capital comprising approximately 15% of operational capital. The percentage of operational expenditures allocated to the Delaware Basin is planned to increase to approximately 60% of the total with a transition to larger pad development in our Spur area as the year progresses to capture additional capital efficiencies and optimize development of our multi-zone resource base. Specifically, our average pad size in the Spur area is expected to more than double relative to our 2018 activity. As a result, completion activity will be primarily focused on the Midland Basin in the first half of the year and shift to a high proportion of multi-well pads in the Delaware Basin in the second half of 2019, accelerating production growth into year-end while maximizing capital efficiency. The program is also designed to optimize production and resource recovery from multiple zones through various co-development concepts that are tailored to specific operating areas. As a result, we will target seven discrete flow units in 2019, but the largest amount of wells are scheduled for the Wolfcamp A (upper and lower intervals).
Importantly, our plan also incorporates a 15% increase in lateral length to approximately 8,400 feet as our highly contiguous Delaware Basin position enters program development, enabling us to place more net lateral feet on production in 2019 despite a decrease in net wells placed on line (47 to 49 wells) relative to 2018. Based upon this level of activity and associated allocation of capital, we are guiding to an average daily production rate range of 39.5 to 41.5 MBoe/d with an associated oil cut of 77% to 78%.
We are currently operating six rigs and one dedicated completion crew. We expect to reduce the number of active rigs from six to four by mid-year after building a sufficient inventory of wells awaiting completion to provide operational flexibility for an increased proportion of larger pad concepts. We began 2019 with one dedicated completion crew and intend to reactivate a second crew to reduce cycle times on large development pads once the necessary drilling activity has been completed.
In addition to operational capital expenditures, we forecast 2019 capitalized general & administrative expenses (cash component) of approximately $25 to $30 million and expect to capitalize 100% of cash interest expense that would otherwise be reflected on the income statement. Based upon current market interest rates, we estimate an applicable weighted average interest rate on our total average debt balances to be approximately 6%. In total, we forecast total capital expenditures (including estimated total capitalized expenses) of $615 million at the midpoint for 2019. This amount also includes land and seismic expenditures associated with the execution of our operational program. To the extent we identify accretive "bolt-on" land acquisition opportunities, we expect that these non-organic capital costs would be funded by divestitures of non-core properties or monetization of infrastructure investments.
2018 Proved Reserves
The Company recently completed the reserve audit for the year ended December 31, 2018 with its independent reserve auditor, DeGolyer and MacNaughton. As of December 31, 2018, Callon's estimated total proved reserves were 238.5 MMBoe, a 74% increase over the previous year-end. The proved reserves estimate is comprised of 76% oil and 54% proved developed estimated volumes. The PV-10 value1 of proved reserves at year-end 2018 was $3.1 billion, with a proved developed producing reserves value of $2.2 billion.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
Non-GAAP Disclosure
PV-10
Year-end pre-tax PV-10 value is a non-GAAP financial measure as defined by the SEC. Callon believes that the presentation of pre-tax PV-10 value is relevant and useful to its investors because it presents the discounted future net cash flows attributable to reserves prior to taking into account future corporate income taxes and the Company's current tax structure. The Company further believes investors and creditors use pre-tax PV-10 values as a basis for comparison of the relative size and value of its reserves as compared with other companies.
The GAAP financial measure most directly comparable to pre-tax PV-10 is the standardized measure of discounted future net cash flows ("Standardized Measure"). Pre-tax PV-10 is calculated using the Standardized Measure before deducting future income taxes, discounted at 10%. The Company expects to include a full reconciliation of pre-tax PV-10 to the GAAP financial measure of Standardized Measure in its Earnings Press Release on Form 8-K for the fourth quarter 2018 financial and operating results, which it intends to file with the SEC on February 26, 2019.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2019 production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "may," "will," "forecast," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes 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. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
Director of Investor Relations
1-281-589-5200
1 A non-GAAP financial measure: The 12-month average benchmark pricing used to estimate proved reserves in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission ("SEC") and pre-tax PV-10 value for crude oil and natural gas was $65.56 per Bbl of WTI crude oil and $3.10 per MMBtu of natural gas at Henry Hub before differential adjustments. After differential adjustments, the Company's SEC pricing realizations for year-end 2018 were $58.40 per Bbl of oil and $3.64 per Mcf of natural gas. Please refer to the Non-GAAP Disclosure at the end of this release for information regarding pre-tax PV-10.
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-provides-2019-outlook-and-year-end-proved-reserves-300793544.html
SOURCE Callon Petroleum Company
Article Date
2/12/2019Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
HOUSTON, Feb. 4, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Credit Suisse 24th Annual Energy Summit
The Company will present at the Credit Suisse 24th Annual Energy Summit hosted by Credit Suisse on Tuesday, February 12, 2019 at 8:05 AM Mountain Standard Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300789037.html
SOURCE Callon Petroleum Company
Article Date
2/4/20191/28/2019 - Callon Petroleum Company Schedules Fourth Quarter 2018 Conference Call for February 27, 2019
Callon Petroleum Company Schedules Fourth Quarter 2018 Conference Call for February 27, 2019
Source: PR Newswire
HOUSTON, Jan. 28, 2019 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its fourth quarter 2018 financial and operating results.
Webcast and Conference Call:
Date: Wednesday, February 27, 2019
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: www.callon.com | |
Select "IR Calendar" under the "Investors" section of the website. |
Conference Call:
Domestic: | 1-888-317-6003 | |||||
Canada: | 1-866-284-3684 | |||||
International: | 1-412-317-6061 | |||||
Access code: | 6127927 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release fourth quarter 2018 results after market close on Tuesday, February 26, 2019.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-fourth-quarter-2018-conference-call-for-february-27-2019-300785146.html
SOURCE Callon Petroleum Company
Article Date
1/28/2019Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
NATCHEZ, Miss., Dec. 4, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on December 31, 2018 to stockholders of record as of December 14, 2018. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
1-281-589-5279
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-declares-series-a-preferred-dividend-300757900.html
SOURCE Callon Petroleum Company
Article Date
12/4/2018Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
NATCHEZ, Miss., Nov. 26, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Jefferies 2018 Energy Conference
The Company will present at the Jefferies 2018 Energy Conference on Tuesday, November 27, 2018 at 10:20 AM Central Standard Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Bank of America Merrill Lynch 2018 Leveraged Finance Conference
The Company will participate in the Bank of America Merrill Lynch 2018 Leveraged Finance Conference on Tuesday, December 4, 2018, in Boca Raton, Florida.
Capital One 2018 Energy Conference
The Company will participate in the Capital One 2018 Energy Conference on Wednesday, December 5, 2018, in New Orleans, Louisiana.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300755061.html
SOURCE Callon Petroleum Company
Article Date
11/26/201811/6/2018 - Callon Petroleum Announces Jeffrey Balmer to Succeed Gary Newberry as Chief Operating Officer
Callon Petroleum Announces Jeffrey Balmer to Succeed Gary Newberry as Chief Operating Officer
Source: PR Newswire
NATCHEZ, Miss., Nov. 6, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that Jeffrey S. Balmer will succeed Gary A. Newberry as Senior Vice President and Chief Operating Officer, effective December 10, 2018. Mr. Balmer will join Callon this month and Mr. Newberry will retire from the Company in January 2019.
Joe Gatto, President and CEO, said, "Gary has been instrumental to the success of our Permian Basin operations since joining Callon in 2010. He has helped us establish a winning culture and earn a reputation as a responsible operator that is well-respected across the industry. Though he will be missed, his legacy of integrity and the high standards of operational excellence and discipline he established will always be a part of our business. We wish him all the best in his well-deserved retirement and thank him for staying on to work with Jeff and facilitate a seamless transition over the next few months." He continued, "I am excited for Jeff to join our executive leadership team as we enter the next phase of Callon's growth. His proven leadership of large scale operations in the Permian and other unconventional plays will be invaluable as we advance the capital efficient development of our highly productive asset base."
Mr. Newberry is retiring from Callon after a highly successful career that spans over 40 years in the oil and gas sector. He commented, "My decision to join Callon almost ten years ago was driven by the demonstrated core values of the Company along with the strategic direction to build a top-tier onshore business. After building out a strong team to develop our premier acreage position, Callon is operating at a high level across all disciplines. Under the leadership of Joe and an expanded senior management group that now includes Jeff's considerable experience base, combined with a dedicated and talented team at all levels of the Company, I am confident that Callon is poised to achieve even greater levels of success."
Mr. Balmer added, "Gary is well-known across the Permian as an outstanding leader, and I am honored to follow in his footsteps. Similarly, I have long regarded Callon as an innovative and rapidly growing player in the basin. I am excited to join the team and help advance our strategic initiatives as a maturing Permian operator."
Mr. Balmer joins another recent addition to Callon's senior technical team, James L. Hawkins, who was appointed as Vice President, Subsurface Technology in May of this year. With over 25 years of experience in the Permian Basin, Mr. Hawkins previously held senior petrophysicist and geologist roles at Apache Corporation, Energen Resources, and Schlumberger Limited since 2005, leading multi-disciplinary teams involved with reservoir characterization and optimizing completion designs.
About Jeffrey S. Balmer
Mr. Balmer has 30 years of operations and subsurface leadership experience in the energy industry. His most recent role was Vice President and General Manager, Southern Operating Area for Encana Corporation with responsibility for all of Encana's upstream operations in the Permian Basin. After joining Encana in 2008, he held various leadership roles including Vice President and General Manager, Western Operating Area, managing operations in the Eagle Ford, DJ, San Juan, Piceance and Wind River Basins, and Vice President, Emerging Plays. Prior to joining Encana, Mr. Balmer served in a variety of roles, including senior positions with ConocoPhillips, Burlington Resources and ExxonMobil Corporation. He holds B.S. and Ph.D. degrees in Petroleum Engineering, in addition to an M.S. in Environmental and Planning Engineering, from Missouri University of Science and Technology (formerly University of Missouri – Rolla).
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Mark Brewer
Director of Investor Relations
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-announces-jeffrey-balmer-to-succeed-gary-newberry-as-chief-operating-officer-300744923.html
SOURCE Callon Petroleum Company
Article Date
11/6/2018Callon Petroleum Company Announces Third Quarter 2018 Results
Source: PR Newswire
NATCHEZ, Miss., Nov. 6, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three and nine months ended September 30, 2018.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the third quarter of 2018 and other recent data points include:
"Callon continued to drive strong operational execution in the third quarter as evidenced by sustained operating margins in excess of 80% for a fifth consecutive quarter. I am extremely pleased with our organization's ability to seamlessly integrate our recent bolt-on acquisition in the Delaware Basin while continuing to drive efficiencies across the entire Callon portfolio," commented Joe Gatto, President and Chief Executive Officer. He continued, "We have entered a phase of sustained growth and visibility with the maturing of our business model, characterized by increased efficiencies from larger scale developments, strategic partnerships with leading service providers and tactical development of multiple zones to preserve robust returns in our inventory for the long run. As stated previously, we expect to generate solid positive free cash flows at the field level in the fourth quarter of 2018 as we target corporate level free cash flow generation by the latter portion of 2019."
Operations Update
At September 30, 2018, we had 453 gross (348.2 net) horizontal wells producing from eight established flow units in the Permian Basin. Net daily production for the three months ended September 30, 2018 grew 55% to 34.9 MBOE/D (78% oil) as compared to the same period of 2017.
For the three months ended September 30, 2018, we drilled 19 gross (15.2 net) horizontal wells and placed a combined 18 gross (13.8 net) horizontal wells on production targeting the Wolfcamp A, Wolfcamp B, and Lower Spraberry intervals.
Midland Basin
During the third quarter, just over 70% of the net wells placed on production were located in the Midland Basin, with all three of our primary areas contributing new production during the quarter. In our WildHorse area, the Wright and Gibson pads were placed on production in late-July and mid-August and have exceeded early time oil type curve expectations by roughly 20% and 38%, respectively. At Monarch, our first "mega-pad", the Casselman 16 pad, oil production is outperforming offsetting, legacy pads by approximately 30%. We recently placed our second "mega-pad" on production in October, and these six wells produced at an average rate of 183 Boepd per 1,000 lateral feet during the first 22 days online.
Delaware Basin
In the Delaware Basin, wells which have reached peak production during the third quarter achieved an average peak IP30 of approximately 150 Boepd per 1,000 lateral feet with an average oil cut of 82%. Our upper and lower Wolfcamp A pair test at the Rendezvous pad continues to perform extremely well and has now eclipsed approximately 425,000 Boe (combined) through the first 200 days of production. Also during the quarter, the Effie Ponder 33-18 05H well, an upper Wolfcamp A well that landed approximately 100 feet below offsetting 3rd Bone Spring production, was completed by the previous operator and brought on production in the River Tract portion of our newly acquired acreage. The well has achieved an IP24 of 143 Boepd and IP30 of 103 Boepd per 1,000 lateral feet (respectively) with an average oil cut of 91%.
Regional Gas Plant Downtime
Beginning in late September, production from our WildHorse area was disrupted due to a plant outage at a third party gas processing facility in Martin County. We expect the plant to return to full service by mid-December and have successfully managed to reroute a portion of our base gas and natural gas liquids volumes through other facilities in the interim. We forecast a net loss of approximately 7,500 to 9,000 Mcfepd on average for the 4th quarter due to this outage, but do not expect any impact to our oil volumes.
Infrastructure and Operational Efficiency
We have continued to realize significant benefits from infrastructure investments, most of which have recently been focused on our Spur footprint in the Delaware Basin. The new recycling facilities are online and we were able to recycle over 600,000 barrels of water for use in our frac operations in Ward County during the third quarter. Additionally, the new Goodnight Midstream water disposal system is now operational and has begun servicing our core Spur footprint. In the Midland Basin, the company was able to utilize more than 900,000 barrels of recycled water for completion operations in the Monarch area during the quarter. These ongoing initiatives are expected to reduce the future needs for water sourcing and disposal and will drive cost savings from both reduced capital and lease operating expenses.
As we have transitioned to larger pad development concepts, including our recent "mega-pads", our completion efficiency has improved through the broader application of simultaneous operations, which we expect will continue to increase in future periods. Additionally, the Company recently extended its preferred vendor agreement for completion services related to two dedicated crews that will provide price certainty for well completion costs through the 2019 calendar year.
Capital Expenditures
For the nine months ended September 30, 2018, we incurred $418.2 million in cash operational capital expenditures (including other items) including $149.5 million in the third quarter, which represented a $14.0 million decrease from the second quarter. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
Three Months Ended September 30, 2018 | ||||||||||||||||
Operational | Capitalized | Capitalized | Total Capital | |||||||||||||
Capital (a) | Interest | G&A | Expenditures | |||||||||||||
Cash basis (b) | $ | 149,454 | $ | 560 | $ | 6,968 | $ | 156,982 | ||||||||
Timing adjustments (c) | 10,001 | 15,973 | — | 25,974 | ||||||||||||
Non-cash items | — | — | 1,776 | 1,776 | ||||||||||||
Accrual (GAAP) basis | $ | 159,455 | $ | 16,533 | $ | 8,744 | $ | 184,732 | ||||||||
(a) | Includes seismic, land and other items. |
(b) | Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
(c) | Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results | ||||||||||||
The following table presents summary information for the periods indicated: | ||||||||||||
Three Months Ended | ||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||
Net production | ||||||||||||
Oil (MBbls) | 2,521 | 1,995 | 1,591 | |||||||||
Natural gas (MMcf) | 4,144 | 3,839 | 2,900 | |||||||||
Total (MBOE) | 3,212 | 2,635 | 2,074 | |||||||||
Average daily production (BOE/d) | 34,913 | 28,954 | 22,543 | |||||||||
% oil (BOE basis) | 78 | % | 76 | % | 77 | % | ||||||
Oil and natural gas revenues (in thousands) | ||||||||||||
Oil revenue | $ | 142,601 | $ | 122,613 | $ | 73,349 | ||||||
Natural gas revenue (a) | 18,613 | 14,462 | 11,265 | |||||||||
Total revenue | 161,214 | 137,075 | 84,614 | |||||||||
Impact of settled derivatives | (9,239) | (7,980) | (1,214) | |||||||||
Adjusted Total Revenue (i) | $ | 151,975 | $ | 129,095 | $ | 83,400 | ||||||
Average realized sales price | ||||||||||||
Oil (Bbl) | $ | 56.57 | $ | 61.46 | $ | 46.10 | ||||||
Natural gas (Mcf) | 4.49 | 3.77 | 3.88 | |||||||||
Total (BOE) | 50.19 | 52.02 | 40.80 | |||||||||
Average realized sales price | ||||||||||||
Oil (Bbl) | $ | 52.87 | $ | 57.38 | $ | 45.24 | ||||||
Natural gas (Mcf) | 4.51 | 3.81 | 3.94 | |||||||||
Total (BOE) | 47.31 | 48.99 | 40.21 | |||||||||
Additional per BOE data | ||||||||||||
Sales price (b) | $ | 50.19 | $ | 52.02 | $ | 40.80 | ||||||
Lease operating expense (c) | 5.77 | 4.99 | 5.08 | |||||||||
Gathering and treating expense (a) | — | — | 0.52 | |||||||||
Production taxes | 3.20 | 2.86 | 2.62 | |||||||||
Operating margin | $ | 41.22 | $ | 44.17 | $ | 32.58 | ||||||
Depletion, depreciation and amortization | $ | 15.02 | $ | 14.70 | $ | 13.75 | ||||||
Adjusted G&A (d) | ||||||||||||
Cash component (e) | $ | 2.17 | $ | 2.69 | $ | 2.50 | ||||||
Non-cash component | 0.57 | 0.64 | 0.65 | |||||||||
(a) | On January 1, 2018, the Company adopted the revenue recognition accounting standard. Consequently, natural gas gathering and treating expenses for the three and nine months ended September 30, 2018 were accounted for as a reduction to revenue. |
(b) | Excludes the impact of settled derivatives. |
(c) | Excludes gathering and treating expense. |
(d) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(e) | Excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended September 30, 2018, Callon reported total revenue of $161.2 million and total revenue including settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $152.0 million, including the impact of an $9.2 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's revenue. Average daily production for the quarter was 34.9 MBOE/d compared to average daily production of 29.0 MBOE/d in the second quarter of 2018. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended September 30, 2018, Callon recognized the following hedging-related items (in thousands, except per unit data):
In Thousands | Per Unit | ||||||
Oil derivatives | |||||||
Net loss on settlements | $ | (9,306) | $ | (3.70) | |||
Net loss on fair value adjustments | (24,476) | ||||||
Total loss on oil derivatives | $ | (33,782) | |||||
Natural gas derivatives | |||||||
Net gain on settlements | $ | 67 | $ | 0.02 | |||
Net loss on fair value adjustments | (624) | ||||||
Total loss on natural gas derivatives | $ | (557) | |||||
Total oil & natural gas derivatives | |||||||
Net loss on settlements | $ | (9,239) | $ | (2.88) | |||
Net loss on fair value adjustments | (25,100) | ||||||
Total loss on total oil & natural gas derivatives | $ | (34,339) | |||||
Lease Operating Expenses, including workover ("LOE"). LOE per BOE for the three months ended September 30, 2018 was $5.77 per BOE, compared to LOE of $4.99 per BOE in the second quarter of 2018. The increase in this metric was primarily related to an increase in costs from workover activity on our properties.
Production Taxes, including ad valorem taxes. Production taxes were $3.20 per BOE for the three months ended September 30, 2018, representing approximately 6.4% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended September 30, 2018 was $15.02 per BOE compared to $14.70 per BOE in the second quarter of 2018. The increase on a per unit basis was primarily attributable to greater increases in our depreciable asset base and assumed future development costs related to undeveloped proved reserves as compared to the estimated total proved reserve base.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $8.8 million, or $2.74 per BOE, for the three months ended September 30, 2018 compared to $8.8 million, or $3.33 per BOE, for the second quarter of 2018. The cash component of Adjusted G&A was $7.0 million, or $2.17 per BOE, for the three months ended September 30, 2018 compared to $7.1 million, or $2.69 per BOE, for the second quarter of 2018.
For the three months ended September 30, 2018, G&A and Adjusted G&A, which excludes the change in fair value of liability share-based awards, amortization of equity-settled share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
Three Months Ended | |||
Total G&A expense | $ | 9,721 | |
Plus: Change in the fair value of liability share-based awards (non-cash) | (921) | ||
Adjusted G&A – total | 8,800 | ||
Less: Restricted stock share-based compensation (non-cash) | (1,730) | ||
Less: Corporate depreciation & amortization (non-cash) | (102) | ||
Adjusted G&A – cash component | $ | 6,968 | |
Income tax expense. Callon provides for income taxes at a statutory rate of 21% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses, restricted stock windfalls and shortfalls, and state income taxes. We recorded an income tax expense of $1.5 million for the three months ended September 30, 2018 which relates to deferred state franchise tax. At September 30, 2018 we had a valuation allowance of $30.3 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision of $8.3 million (or $0.04 per diluted share) for the quarter as if the valuation allowance did not exist.
2018 Guidance
The Company adopted the Revenue from Contracts with Customers accounting standard on January 1, 2018. Starting with the first quarter of 2018, certain natural gas gathering and treating expenses were accounted for as a reduction to revenue. Based upon current levels of operational efficiency, the impact of a temporary gas plant outage on commodity mix, and non-operated activity, the Company is updating full year 2018 guidance as follows:
Third Quarter | Year to Date | Full Year | ||||
2018 Actual | 2018 Actual | 2018 Guidance | ||||
Total production (MBOE/d) | 34.9 | 30.2 | 32.0 - 33.0 | |||
% oil | 78% | 77% | 77% - 78% | |||
Income statement expenses (per BOE) | ||||||
LOE, including workovers | $5.77 | $5.43 | $5.00 - $6.00 | |||
Production taxes, including ad valorem (% unhedged revenue) | 6% | 6% | 7% | |||
Adjusted G&A: cash component (a) | $2.17 | $2.50 | $1.75 - $2.50 | |||
Adjusted G&A: non-cash component (b) | $0.57 | $0.58 | $0.50 - $1.00 | |||
Cash interest expense (c) | $0.00 | $0.00 | $0.00 | |||
Effective income tax rate | 22% | 22% | 22% | |||
Capital expenditures ($MM, accrual basis) | ||||||
Operational (d) | $159 | $442 | $560 | |||
Capitalized expenses | $25 | $59 | $75 - $85 | |||
Net operated horizontal wells placed on production | 14 | 37 | 50 - 52 |
(a) | Excludes stock-based compensation and corporate depreciation and amortization. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(b) | Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
(c) | All cash interest expense anticipated to be capitalized. |
(d) | Includes seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary | |||||||||||
The following tables summarize our open derivative positions for the periods indicated: | |||||||||||
For the Remainder | For the Full Year | For the Full Year | |||||||||
Oil contracts (WTI) | of 2018 | of 2019 | of 2020 | ||||||||
Swap contracts | |||||||||||
Total volume (Bbls) | 552,000 | — | — | ||||||||
Weighted average price per Bbl | $ | 52.07 | $ | — | $ | — | |||||
Collar contracts (two-way collars) | |||||||||||
Total volume (Bbls) | 92,000 | 1,095,000 | — | ||||||||
Weighted average price per Bbl | |||||||||||
Ceiling (short call) | $ | 60.50 | $ | 80.00 | $ | — | |||||
Floor (long put) | $ | 50.00 | $ | 65.00 | $ | — | |||||
Collar contracts combined with short puts (three-way collars) | |||||||||||
Total volume (Bbls) | 874,000 | 3,469,000 | — | ||||||||
Weighted average price per Bbl | |||||||||||
Ceiling (short call option) | $ | 60.86 | $ | 63.71 | $ | — | |||||
Floor (long put option) | $ | 48.95 | $ | 53.95 | $ | — | |||||
Short put option | $ | 39.21 | $ | 43.95 | $ | — | |||||
Puts | |||||||||||
Total volume (Bbls) | 276,000 | 1,825,000 | — | ||||||||
Weighted average price per Bbl | $ | 65.00 | $ | 65.00 | $ | — | |||||
Oil contracts (Midland basis differential) | |||||||||||
Swap contracts | |||||||||||
Total volume (Bbls) | 1,518,000 | 4,746,500 | 4,024,000 | ||||||||
Weighted average price per Bbl | $ | (5.30) | $ | (4.72) | $ | (1.51) | |||||
Natural gas contracts (Henry Hub) | |||||||||||
Swap contracts | |||||||||||
Total volume (MMBtu) | 1,380,000 | — | — | ||||||||
Weighted average price per MMBtu | $ | 2.91 | $ | — | $ | — | |||||
Collar contracts (two-way collars) | |||||||||||
Total volume (MMBtu) | 552,000 | 3,727,500 | — | ||||||||
Weighted average price per MMBtu | |||||||||||
Ceiling (short call) | $ | 3.19 | $ | 3.13 | $ | — | |||||
Floor (long put) | $ | 2.75 | $ | 2.72 | $ | — | |||||
Natural gas contracts (Waha basis differential) | |||||||||||
Swap contracts | |||||||||||
Total volume (MMBtu) | 552,000 | 9,490,000 | 2,196,000 | ||||||||
Weighted average price per MMBtu | $ | (1.14) | $ | (1.25) | $ | (1.14) | |||||
Income Available to Common Shareholders. The Company reported net income available to common shareholders of $36.1 million for the three months ended September 30, 2018 and Adjusted Income available to common shareholders of $48.3 million, or $0.21 per fully diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income available to common stockholders to Adjusted Income and the Company's net income to Adjusted EBITDA(i), a non-GAAP financial measure, (in thousands):
Three Months Ended | |||||||||||
Adjusted Income per fully diluted common share: | September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||
Income available to common stockholders | $ | 36,108 | $ | 48,650 | $ | 15,257 | |||||
Net loss on derivatives, net of settlements | 25,100 | 8,572 | 12,947 | ||||||||
Change in the fair value of share-based awards | 879 | (463) | 732 | ||||||||
Tax effect on adjustments above | (5,456) | (1,703) | (4,788) | ||||||||
Change in valuation allowance | (8,323) | (10,562) | (6,064) | ||||||||
Adjusted Income (i) | $ | 48,308 | $ | 44,494 | $ | 18,084 | |||||
Adjusted Income per fully diluted common share (i) | $ | 0.21 | $ | 0.21 | $ | 0.09 | |||||
Three Months Ended | |||||||||||
Adjusted EBITDA: | September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||
Net income | $ | 37,931 | $ | 50,474 | $ | 17,081 | |||||
Net loss on derivatives, net of settlements | 25,100 | 8,572 | 12,947 | ||||||||
Non-cash stock-based compensation expense | 2,587 | 1,164 | 1,952 | ||||||||
Acquisition expense | 1,435 | 1,767 | 205 | ||||||||
Income tax expense | 1,487 | 481 | 237 | ||||||||
Interest expense | 711 | 594 | 444 | ||||||||
Depreciation, depletion and amortization | 48,977 | 39,387 | 29,132 | ||||||||
Accretion expense | 202 | 206 | 131 | ||||||||
Adjusted EBITDA (i) | $ | 118,430 | $ | 102,645 | $ | 62,129 | |||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended September 30, 2018 was $116.9 million and is reconciled to operating cash flow in the following table (in thousands):
Three Months Ended | |||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 37,931 | $ | 50,474 | $ | 17,081 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 48,977 | 39,387 | 29,132 | ||||||||
Accretion expense | 202 | 206 | 131 | ||||||||
Amortization of non-cash debt related items | 708 | 588 | 441 | ||||||||
Deferred income tax expense | 1,487 | 481 | 237 | ||||||||
Net loss on derivatives, net of settlements | 25,100 | 8,572 | 12,947 | ||||||||
(Gain) loss on sale of other property and equipment | (102) | 22 | — | ||||||||
Non-cash expense related to equity share-based awards | 1,708 | 1,627 | 1,219 | ||||||||
Change in the fair value of liability share-based awards | 879 | (463) | 732 | ||||||||
Discretionary cash flow (i) | $ | 116,890 | $ | 100,894 | $ | 61,920 | |||||
Changes in working capital | (347) | 8,978 | (7,777) | ||||||||
Payments to settle asset retirement obligations | (507) | (207) | (250) | ||||||||
Payments to settle vested liability share-based awards | — | (1,901) | — | ||||||||
Net cash provided by operating activities | $ | 116,036 | $ | 107,764 | $ | 53,893 | |||||
Callon Petroleum Company Consolidated Balance Sheets (in thousands, except par and per share values and share data) | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
ASSETS | Unaudited | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 12,129 | $ | 27,995 | ||||
Accounts receivable | 168,753 | 114,320 | ||||||
Fair value of derivatives | 4,289 | 406 | ||||||
Other current assets | 3,804 | 2,139 | ||||||
Total current assets | 188,975 | 144,860 | ||||||
Oil and natural gas properties, full cost accounting method: | ||||||||
Evaluated properties | 4,305,189 | 3,429,570 | ||||||
Less accumulated depreciation, depletion, amortization and impairment | (2,208,066) | (2,084,095) | ||||||
Net evaluated oil and natural gas properties | 2,097,123 | 1,345,475 | ||||||
Unevaluated properties | 1,385,529 | 1,168,016 | ||||||
Total oil and natural gas properties | 3,482,652 | 2,513,491 | ||||||
Other property and equipment, net | 21,738 | 20,361 | ||||||
Restricted investments | 3,413 | 3,372 | ||||||
Deferred tax asset | — | 52 | ||||||
Deferred financing costs | 6,406 | 4,863 | ||||||
Acquisition deposit | — | 900 | ||||||
Other assets, net | 5,552 | 5,397 | ||||||
Total assets | $ | 3,708,736 | $ | 2,693,296 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 251,754 | $ | 162,878 | ||||
Accrued interest | 27,325 | 9,235 | ||||||
Cash-settleable restricted stock unit awards | 2,422 | 4,621 | ||||||
Asset retirement obligations | 4,464 | 1,295 | ||||||
Fair value of derivatives | 47,167 | 27,744 | ||||||
Total current liabilities | 333,132 | 205,773 | ||||||
Senior secured revolving credit facility | 65,000 | 25,000 | ||||||
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs | 595,729 | 595,196 | ||||||
6.375% senior unsecured notes due 2026, net of unamortized deferred financing costs | 392,799 | — | ||||||
Asset retirement obligations | 5,428 | 4,725 | ||||||
Cash-settleable restricted stock unit awards | 2,818 | 3,490 | ||||||
Deferred tax liability | 3,917 | 1,457 | ||||||
Fair value of derivatives | 15,440 | 1,284 | ||||||
Other long-term liabilities | 6,165 | 405 | ||||||
Total liabilities | 1,420,428 | 837,330 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized; 1,458,948 shares outstanding | 15 | 15 | ||||||
Common stock, $0.01 par value, 300,000,000 shares authorized; 227,567,936 and 201,836,172 shares outstanding, respectively | 2,276 | 2,018 | ||||||
Capital in excess of par value | 2,474,748 | 2,181,359 | ||||||
Accumulated deficit | (188,731) | (327,426) | ||||||
Total stockholders' equity | 2,288,308 | 1,855,966 | ||||||
Total liabilities and stockholders' equity | $ | 3,708,736 | $ | 2,693,296 | ||||
Callon Petroleum Company Consolidated Statements of Operations (Unaudited; in thousands, except per share data) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating revenues: | |||||||||||||||
Oil sales | $ | 142,601 | $ | 73,349 | $ | 380,500 | $ | 218,242 | |||||||
Natural gas sales | 18,613 | 11,265 | 45,229 | 30,019 | |||||||||||
Total operating revenues | 161,214 | 84,614 | 425,729 | 248,261 | |||||||||||
Operating expenses: | |||||||||||||||
Lease operating expenses | 18,525 | 11,624 | 44,705 | 36,708 | |||||||||||
Production taxes | 10,263 | 5,444 | 26,265 | 16,168 | |||||||||||
Depreciation, depletion and amortization | 48,257 | 28,525 | 122,407 | 79,172 | |||||||||||
General and administrative | 9,721 | 7,259 | 26,779 | 18,894 | |||||||||||
Settled share-based awards | — | — | — | 6,351 | |||||||||||
Accretion expense | 202 | 131 | 626 | 523 | |||||||||||
Acquisition expense | 1,435 | 205 | 3,750 | 3,027 | |||||||||||
Total operating expenses | 88,403 | 53,188 | 224,532 | 160,843 | |||||||||||
Income from operations | 72,811 | 31,426 | 201,197 | 87,418 | |||||||||||
Other (income) expenses: | |||||||||||||||
Interest expense, net of capitalized amounts | 711 | 444 | 1,765 | 1,698 | |||||||||||
(Gain) loss on derivative contracts | 34,339 | 14,162 | 55,374 | (11,636) | |||||||||||
Other income | (1,657) | (498) | (2,571) | (1,270) | |||||||||||
Total other (income) expense | 33,393 | 14,108 | 54,568 | (11,208) | |||||||||||
Income before income taxes | 39,418 | 17,318 | 146,629 | 98,626 | |||||||||||
Income tax expense | 1,487 | 237 | 2,463 | 1,026 | |||||||||||
Net income | 37,931 | 17,081 | 144,166 | 97,600 | |||||||||||
Preferred stock dividends | (1,823) | (1,824) | (5,471) | (5,471) | |||||||||||
Income available to common stockholders | $ | 36,108 | $ | 15,257 | $ | 138,695 | $ | 92,129 | |||||||
Income per common share: | |||||||||||||||
Basic | $ | 0.16 | $ | 0.08 | $ | 0.65 | $ | 0.46 | |||||||
Diluted | $ | 0.16 | $ | 0.08 | $ | 0.65 | $ | 0.46 | |||||||
Shares used in computing income per common share: | |||||||||||||||
Basic | 227,564 | 201,827 | 213,409 | 201,422 | |||||||||||
Diluted | 228,140 | 202,337 | 214,079 | 201,995 | |||||||||||
Callon Petroleum Company Consolidated Statements of Cash Flows (Unaudited; in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 37,931 | $ | 17,081 | $ | 144,166 | $ | 97,600 | |||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation, depletion and amortization | 48,977 | 29,132 | 124,430 | 80,829 | |||||||||||
Accretion expense | 202 | 131 | 626 | 523 | |||||||||||
Amortization of non-cash debt related items | 708 | 441 | 1,749 | 1,695 | |||||||||||
Deferred income tax expense | 1,487 | 237 | 2,463 | 1,026 | |||||||||||
Net (gain) loss on derivatives, net of settlements | 25,100 | 12,947 | 29,696 | (15,608) | |||||||||||
(Gain) loss on sale of other property and equipment | (102) | — | (80) | 62 | |||||||||||
Non-cash expense related to equity share-based awards | 1,708 | 1,219 | 4,466 | 7,014 | |||||||||||
Change in the fair value of liability share-based awards | 879 | 732 | 1,428 | 2,423 | |||||||||||
Payments to settle asset retirement obligations | (507) | (250) | (1,080) | (1,831) | |||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable | (56,764) | (4,338) | (54,384) | (12,148) | |||||||||||
Other current assets | 3,885 | (38) | (1,665) | (336) | |||||||||||
Current liabilities | 47,741 | 1,854 | 64,801 | 7,534 | |||||||||||
Other long-term liabilities | 5,500 | 1 | 5,787 | 121 | |||||||||||
Long-term prepaid | — | (4,650) | — | (4,650) | |||||||||||
Other assets, net | (709) | (606) | (1,398) | (1,376) | |||||||||||
Payments to settle vested liability share-based awards | — | — | (4,990) | (13,173) | |||||||||||
Net cash provided by operating activities | 116,036 | 53,893 | 316,015 | 149,705 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (156,982) | (121,128) | (455,352) | (267,218) | |||||||||||
Acquisitions | (550,592) | (8,015) | (595,984) | (714,504) | |||||||||||
Acquisition deposit | 27,600 | — | — | 46,138 | |||||||||||
Proceeds from sale of assets | 5,249 | — | 8,326 | — | |||||||||||
Net cash used in investing activities | (674,725) | (129,143) | (1,043,010) | (935,584) | |||||||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings on senior secured revolving credit facility | 105,000 | — | 270,000 | — | |||||||||||
Payments on senior secured revolving credit facility | (40,000) | — | (230,000) | — | |||||||||||
Issuance of 6.125% senior unsecured notes due 2024 | — | — | — | 200,000 | |||||||||||
Premium on the issuance of 6.125% senior unsecured notes due 2024 | — | — | — | 8,250 | |||||||||||
Issuance of 6.375% senior unsecured notes due 2026 | — | — | 400,000 | — | |||||||||||
Issuance of common stock | 7 | — | 288,364 | — | |||||||||||
Payment of preferred stock dividends | (1,823) | (1,824) | (5,471) | (5,471) | |||||||||||
Payment of deferred financing costs | (1,296) | (401) | (9,960) | (7,166) | |||||||||||
Tax withholdings related to restricted stock units | (216) | (65) | (1,804) | (1,118) | |||||||||||
Net cash provided by financing activities | 61,672 | (2,290) | 711,129 | 194,495 | |||||||||||
Net change in cash and cash equivalents | (497,017) | (77,540) | (15,866) | (591,384) | |||||||||||
Balance, beginning of period | 509,146 | 139,149 | 27,995 | 652,993 | |||||||||||
Balance, end of period | $ | 12,129 | $ | 61,609 | $ | 12,129 | $ | 61,609 | |||||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Wednesday, November 7, 2018, to discuss third quarter 2018 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
Date/Time: | Wednesday, November 7, 2018, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
Webcast: | Select "IR Calendar" under the "Investors" section of the website: www.callon.com. |
Presentation Slides: | Select "Presentations" under the "Investors" section of the website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
Toll Free: | 1-888-317-6003 |
Canada Toll Free: | 1-866-284-3684 |
International: | 1-412-317-6061 |
Access code: | 5488988 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2018 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
i) | See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-third-quarter-2018-results-300744973.html
SOURCE Callon Petroleum Company
Article Date
11/6/201810/15/2018 - Callon Petroleum Company Schedules Third Quarter 2018 Conference Call for November 7, 2018
Callon Petroleum Company Schedules Third Quarter 2018 Conference Call for November 7, 2018
Source: PR Newswire
NATCHEZ, Miss., Oct. 15, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its third quarter 2018 financial and operating results.
Webcast and Conference Call: | ||||
Date: Wednesday, November 7, 2018 | ||||
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time) | ||||
Webcast: | ||||
Select "IR Calendar" under the "Investors" section of the website. | ||||
Conference Call: | ||||
Domestic: 1-888-317-6003 | ||||
Canada: 1-866-284-3684 | ||||
International: 1-412-317-6061 | ||||
Access code: 5488988 | ||||
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release third quarter 2018 results after market close on Tuesday, November 6, 2018.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-third-quarter-2018-conference-call-for-november-7-2018-300731093.html
SOURCE Callon Petroleum Company
Article Date
10/15/2018Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
NATCHEZ, Miss., Sept. 24, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Johnson Rice & Company 2018 Energy Conference
The Company will participate in the Johnson Rice & Company 2018 Energy Conference hosted by Johnson Rice & Company on Tuesday, September 25, 2018, in New Orleans, LA.
BMO Energy Leadership Forum
The Company will participate in the BMO Energy Leadership Forum hosted by BMO on Tuesday, October 2 & Wednesday, October 3, 2018 in Raleigh, North Carolina.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
SOURCE Callon Petroleum Company
Article Date
9/24/20189/4/2018 - Callon Petroleum Company Announces Closing of Delaware Basin Acquisition and Updates 2018 Guidance
Callon Petroleum Company Announces Closing of Delaware Basin Acquisition and Updates 2018 Guidance
Source: PR Newswire
NATCHEZ, Miss., Sept. 4, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that its wholly owned subsidiary, Callon Petroleum Operating Company, closed on its previously announced acquisition of oil and natural gas assets in the southern Delaware Basin from Cimarex Energy Co. for total cash consideration of approximately $538.6 million, including customary purchase price adjustments and the deposit paid upon signing, on August 31, 2018. The acquisition includes approximately 28,000 net surface acres primarily adjacent to Callon's Spur operating area in Ward County. In addition to the closing of this acquisition, Callon provided an update to its full year 2018 guidance to reflect the revised full year outlook.
Key highlights include:
Joe Gatto, President and Chief Executive Officer, commented, "We are excited to get to work on our new combined Spur footprint, and have already started the completion of a previously drilled Lower Wolfcamp A well and commenced drilling of an additional well on the acquired acreage. As previously discussed, this strategic "bolt-on" acquisition is highly contiguous to our legacy footprint and will offer significant advantages from extended lateral lengths and shared infrastructure. Our team has done a great job of preparing for the transition since the transaction announcement in May, and we expect to have a seamless integration into our Spur operations."
2018 Guidance Update
Callon has updated its 2018 guidance for the acquisition and the results of operations through August 2018.
|
Prior Full Year |
Updated Full Year | |||
|
2018 Guidance |
2018 Guidance | |||
|
Total production (MBOE/d) |
29.5 - 32.0 |
31.5 - 33.0 | ||
|
% oil |
77% |
76% | ||
|
Income statement expenses (per BOE) |
||||
|
LOE, including workovers |
$5.25 - $6.25 |
$5.00 - $6.00 | ||
|
Production taxes, including ad valorem (% of unhedged revenue) |
6% |
7% | ||
|
Adjusted G&A: cash component (a) |
$1.75 - $2.50 |
$1.75 - $2.50 | ||
|
Adjusted G&A: non-cash component (b) |
$0.50 - $1.00 |
$0.50 - $1.00 | ||
|
Interest expense (c) |
$0.00 |
$0.00 | ||
|
Effective income tax rate |
22% |
22% | ||
|
Capital expenditures ($MM, accrual basis) |
||||
|
Operational (d) |
$500 - $540 |
$530 - $560 | ||
|
Capitalized expenses |
$60 - $70 |
$75 - $85 | ||
|
Net operated horizontal wells placed on |
43 – 46 |
47 - 50 |
|
(a) |
Excludes stock-based compensation and corporate depreciation and amortization. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. |
|
(c) |
All interest expense anticipated to be capitalized. |
|
(d) |
Includes seismic, land and other items. Excludes capitalized expenses. |
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production; the Company's 2018 production guidance and expense forecast; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities, cost and availability of goods, services and facilities necessary for our operations, and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Supplemental Non-GAAP Financial Measures
This release includes non-GAAP measures including Adjusted G&A. Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes certain non-recurring expenses and non-cash valuation adjustments related to incentive compensation plans. We believe that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-closing-of-delaware-basin-acquisition-and-updates-2018-guidance-300705967.html
SOURCE Callon Petroleum Company
Article Date
9/4/2018Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
NATCHEZ, Miss., Aug. 30, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Barclays CEO Energy-Power Conference
The Company will present at the Barclays CEO Energy-Power Conference hosted by Barclays on Wednesday, September 5, 2018 at 12:25 PM Eastern Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Johnson Rice & Company 2018 Energy Conference
The Company will participate in the Johnson Rice & Company 2018 Energy Conference hosted by Johnson Rice & Company on Tuesday, September 25, 2018, in New Orleans, LA.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300705072.html
SOURCE Callon Petroleum Company
Article Date
8/30/20188/24/2018 - Callon Petroleum Company Announces Extension of Exchange Offer for Its 6.375% Senior Notes due 2026
Callon Petroleum Company Announces Extension of Exchange Offer for Its 6.375% Senior Notes due 2026
Source: PR Newswire
NATCHEZ, Miss., Aug. 24, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has extended the deadline with respect to its offer to exchange up to $400 million aggregate principal amount of its outstanding unregistered 6.375% Senior Notes due 2026 (the "Old Notes") for an equivalent amount of its new 6.375% Senior Notes due 2026 registered under the Securities Act of 1933, as amended (the "New Notes"). As a result of the extension, the exchange offer is now scheduled to expire at 5:00 p.m. (EDT) on August 30, 2018, unless further extended.
The exchange offer was scheduled to expire on August 23, 2018 at 5:00 p.m. (EDT). As of 5:00 p.m. on August 23, 2018, $399,832,000 in aggregate principal amount, or 99.958%, of the Old Notes had been validly tendered and not withdrawn. Except for the extension of the expiration date, all of the other terms of the exchange offer remain as set forth in the exchange offer prospectus, dated July 27, 2018, filed with the U.S. Securities and Exchange Commission. The extension of the exchange offer has been made to allow holders of Old Notes who have not yet tendered their Old Notes for New Notes additional time to do so.
Copies of the prospectus and the other exchange offer materials may be obtained from U.S. Bank National Association, the exchange agent for the offer. Please contact the exchange agent with any questions regarding the exchange offer by telephone at 1-800-934-6802 or by mail at U.S. Bank National Association, Attn: Corporate Actions, 111 Fillmore Avenue, St. Paul, MN 55107.
No Offer or Solicitation
This press release is for informational purposes only and is neither an offer to buy nor a solicitation of an offer to sell any Old Notes or New Notes. The exchange offer is being made only pursuant to the exchange offer prospectus, which is being distributed to holders of the Old Notes and has been filed with the Securities and Exchange Commission ("SEC") as part of the Company's registration statement on Form S-4 (File No. 333-217287), which was declared effective on July 27, 2018.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements regarding the closing of the exchange offer and the time frame in which the exchange offer will occur, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect the Company's future results and could cause results to differ materially from those expressed in its forward-looking statements are more fully discussed in its filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Mark Brewer
Director of Investor Relations
281-589-5279
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-extension-of-exchange-offer-for-its-6-375-senior-notes-due-2026--300701947.html
SOURCE Callon Petroleum Company
Article Date
8/24/2018Callon Petroleum Company Announces Second Quarter 2018 Results
Source: PR Newswire
NATCHEZ, Miss., Aug. 6, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three and six months ended June 30, 2018.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the second quarter of 2018 and other recent data points include:
Joe Gatto, President and Chief Executive Officer, commented, "Our second quarter results reflect our continued commitment to maximizing returns while thoughtfully growing our business with the support of leading internal cash margins. Halfway through the year, we have drilled and completed more wells than originally anticipated while still managing our capital spending within our original expectations. The team's continued efforts to reduce operating costs have allowed us to nearly match our operating margins from the first quarter, despite lower realized commodity prices." He continued, "We have been preparing for the integration of our recently announced acquisition into a combined Spur business plan and are looking forward to contributions from both the production base of acquired properties as well as incremental drilling and completion activity on the new footprint later this year, driving an expected combined production rate of over 40,000 BOE/d in the fourth quarter. Additionally, we have been preparing for growing production volumes with recent additions to our hedging program and a new firm transportation agreement that is a meaningful first step to increasing our exposure to pricing points outside of the Permian Basin."
Operations Update
At June 30, 2018, we had 267 gross (200.9 net) horizontal wells producing from eight established flow units in the Permian Basin. Net daily production for the three months ended June 30, 2018 grew approximately 30% to 29.0 MBOE/D (76% oil) as compared to the same period of 2017. The Company expects production for the month of July to be approximately 31.1 MBOE/D (78% oil).
For the three months ended June 30, 2018, we drilled 18 gross (13.7 net) horizontal wells and placed a combined 15 gross (13.7 net) horizontal wells on production.
Midland Basin
During the second quarter, approximately 60% of the net wells placed on production were located in the Midland Basin, with the majority of these wells within our WildHorse area. Of the wells placed on production at WildHorse, over 90% were placed on production during the month of June. These wells had an average lateral length of roughly 8,400 feet. The only wells placed on production in our Monarch area in Midland County were our Casselman 40 21AH and 14H, a Wolfcamp A and B pair test. These wells reached a peak thirty day average of 173 BOE (81% oil) and 214 BOE (83% oil) per lateral foot respectively. Through the first 100 days of production, both have outperformed the 5,000 foot oil type curve for this area.
In the Fairway area of WildHorse, our recent Barclays B Unit pad and Players three-well pad (06AH, 07AH, and 08AH) have both outperformed their respective oil type curves by 29% and 33% (on average) through the initial 40 days of production. Nearby, the Open A2 #1AH and A3 #3AH wells that comprised our 10-well spacing test continue to outperform offsetting comparable pads with eight-well spacing after more than 200 days of production.
Delaware Basin
The Rendezvous A1 #01LA and A2 #09UA, which were placed on production in April, have collectively produced over 260,000 BOE (~85% oil) in their first 100 days on production, significantly outperforming all previous Callon wells at our Spur area. The wells were completed with approximately 7,500 and 7,800 foot laterals, respectively. During the middle of the quarter, we placed the Moran A1 01LA on production with a completed lateral length of just under 5,800 feet. Through the first 75 days of production, the Moran well has produced approximately 80,000 BOE (~75% oil). In June, the Rag Run A1 #01LA and 134 South #25CH wells were completed with lateral lengths of approximately 9,300 and 4,800 feet, respectively, and placed on production. The A1 #01LA has produced approximately 75,000 BOE (~85% oil) through the first 40 days of production. The 134 South #25CH, our first Wolfcamp C test on our Delaware acreage position, has produced over 23,000 BOE (~80% oil) through 43 days.
Firm Transportation Agreement
Recently, the Company executed a firm transportation agreement for dedicated capacity on a new pipeline system that will connect with a regional gathering system which currently transports oil volumes under long-term agreements from our properties in Howard, Ward, Reagan and Upton counties to multiple marketing points in the Permian Basin. Subject to completion of the new pipeline system, which will have delivery points in several locations along the Gulf Coast, we will have a commitment of 15,000 Bbls per day for a multi-year term. Multi-year, firm sales agreements covering all 15,000 barrels have already been agreed upon with established buyers in the Gulf Coast region.
Infrastructure and Operational Efficiency
During the second quarter, significant progress was made in the planned infrastructure build out across our operating areas. All planned work at our Ranger area has been completed. At Spur, our new recycling facilities and recycling frac pits are complete, the majority of water transfer line work has been finished, and we have finished the installation of a new power substation.
Continued focus on operational efficiencies resulted in the company placing more wells on production during the second quarter than originally anticipated. Compared to the first quarter, the company placed nearly double the amount of net lateral feet on production during the second quarter, with over half of that coming in June. We have begun to increase our water recycling efforts and have recycled over a half million barrels of produced water through the first half of 2018. The company expects to continue ramping those volumes during the second half of the year. We also recently renewed the contract on a fifth drilling rig for a term of two years.
Capital Expenditures
For the three months ended June 30, 2018, we incurred $163.5 million in cash operational capital expenditures (including other items) compared to $105.3 million in the first quarter of 2018. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended June 30, 2018 | |||||||||||||||
|
Operational |
Capitalized |
Capitalized |
Total Capital | ||||||||||||
|
Capital (a) |
Interest |
G&A |
Expenditures | ||||||||||||
|
Cash basis (b) |
$ |
163,462 |
$ |
19,189 |
$ |
4,389 |
$ |
187,040 |
|||||||
|
Timing adjustments (c) |
2,500 |
(7,139) |
— |
(4,639) |
|||||||||||
|
Non-cash items |
— |
— |
427 |
427 |
|||||||||||
|
Accrual (GAAP) basis |
$ |
165,962 |
$ |
12,050 |
$ |
4,816 |
$ |
182,828 |
|||||||
|
(a) |
Includes seismic, land and other items. |
|
(b) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(c) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | |||||||||||
|
June 30, 2018 |
March 31, 2018 |
June 30, 2017 | |||||||||
|
Net production |
|||||||||||
|
Oil (MBbls) |
1,995 |
1,851 |
1,596 |
||||||||
|
Natural gas (MMcf) |
3,839 |
3,240 |
2,550 |
||||||||
|
Total (MBOE) |
2,635 |
2,391 |
2,021 |
||||||||
|
Average daily production (BOE/d) |
28,954 |
26,567 |
22,209 |
||||||||
|
% oil (BOE basis) |
76 |
% |
77 |
% |
79 |
% | |||||
|
Oil and natural gas revenues (in thousands) |
|||||||||||
|
Oil revenue |
$ |
122,613 |
$ |
115,286 |
$ |
72,885 |
|||||
|
Natural gas revenue (a) |
14,462 |
12,154 |
9,398 |
||||||||
|
Total revenue |
137,075 |
127,440 |
82,283 |
||||||||
|
Impact of cash-settled derivatives |
(7,980) |
(8,459) |
(267) |
||||||||
|
Adjusted Total Revenue (i) |
$ |
129,095 |
$ |
118,981 |
$ |
82,016 |
|||||
|
Average realized sales price (excluding impact of cash settled derivatives) |
|||||||||||
|
Oil (Bbl) |
$ |
61.46 |
$ |
62.28 |
$ |
45.67 |
|||||
|
Natural gas (Mcf) |
3.77 |
3.75 |
3.69 |
||||||||
|
Total (BOE) |
52.02 |
53.30 |
40.71 |
||||||||
|
Average realized sales price (including impact of cash settled derivatives) |
|||||||||||
|
Oil (Bbl) |
$ |
57.38 |
$ |
57.47 |
$ |
45.47 |
|||||
|
Natural gas (Mcf) |
3.81 |
3.89 |
3.70 |
||||||||
|
Total (BOE) |
48.99 |
49.76 |
40.58 |
||||||||
|
Additional per BOE data |
|||||||||||
|
Sales price (b) |
$ |
52.02 |
$ |
53.30 |
$ |
40.71 |
|||||
|
Lease operating expense (c) |
4.99 |
5.45 |
5.56 |
||||||||
|
Gathering and treating expense (a) |
— |
— |
0.45 |
||||||||
|
Production taxes |
2.86 |
3.54 |
2.38 |
||||||||
|
Operating margin |
$ |
44.17 |
$ |
44.31 |
$ |
32.32 |
|||||
|
Depletion, depreciation and amortization |
$ |
14.70 |
$ |
14.81 |
$ |
12.97 |
|||||
|
Adjusted G&A (d) |
|||||||||||
|
Cash component (e) |
$ |
2.69 |
$ |
2.74 |
$ |
2.67 |
|||||
|
Non-cash component |
0.64 |
0.51 |
0.53 |
||||||||
|
(a) |
On January 1, 2018, the Company adopted the revenue recognition accounting standard. Consequently, natural gas gathering and treating expenses for the three and six months ended June 30, 2018 were accounted for as a reduction to revenue. |
|
(b) |
Excludes the impact of cash-settled derivatives. |
|
(c) |
Excludes gathering and treating expense. |
|
(d) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(e) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended June 30, 2018, Callon reported total revenue of $137.1 million and total revenue including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $129.1 million, including the impact of an $8.0 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's revenue. Average daily production for the quarter was 29.0 MBOE/d compared to average daily production of 26.6 MBOE/d in the first quarter of 2018. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended June 30, 2018, Callon recognized the following hedging-related items (in thousands, except per unit data):
|
In Thousands |
Per Unit | ||||||
|
Oil derivatives |
|||||||
|
Net loss on settlements |
$ |
(8,131) |
$ |
(4.08) |
|||
|
Net loss on fair value adjustments |
(8,311) |
||||||
|
Total loss on oil derivatives |
$ |
(16,442) |
|||||
|
Natural gas derivatives |
|||||||
|
Net gain on settlements |
$ |
151 |
$ |
0.04 |
|||
|
Net loss on fair value adjustments |
(263) |
||||||
|
Total loss on natural gas derivatives |
$ |
(112) |
|||||
|
Total oil & natural gas derivatives |
|||||||
|
Net loss on settlements |
$ |
(7,980) |
$ |
(3.03) |
|||
|
Net loss on fair value adjustments |
(8,574) |
||||||
|
Total loss on total oil & natural gas derivatives |
$ |
(16,554) |
|||||
Lease Operating Expenses, including workover ("LOE"). LOE per BOE for the three months ended June 30, 2018 was $4.99 per BOE, compared to LOE of $5.45 per BOE in the first quarter of 2018. The decrease in this metric resulted primarily from a decrease in saltwater disposal costs and an increase in production volumes period over period.
Production Taxes, including ad valorem taxes. Production taxes were $2.86 per BOE for the three months ended June 30, 2018, representing approximately 5.5% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended June 30, 2018 was $14.70 per BOE compared to $14.81 per BOE in the first quarter of 2018. The decrease is attributable to our increased estimated proved reserves relative to our depreciable base and assumed future development costs related to undeveloped proved reserves as a result of additions made through our horizontal drilling efforts and acquisitions.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $8.8 million, or $3.33 per BOE, for the three months ended June 30, 2018 compared to $7.8 million, or $3.25 per BOE, for the first quarter of 2018. The cash component of Adjusted G&A was $7.1 million, or $2.69 per BOE, for the three months ended June 30, 2018 compared to $6.5 million, or $2.74 per BOE, for the first quarter of 2018.
For the three months ended June 30, 2018, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Three Months Ended | |||
|
Total G&A expense |
$ |
8,289 |
|
|
Plus: Change in the fair value of liability share-based awards (non-cash) |
484 |
||
|
Adjusted G&A – total |
8,773 |
||
|
Less: Restricted stock share-based compensation (non-cash) |
(1,587) |
||
|
Less: Corporate depreciation & amortization (non-cash) |
(109) |
||
|
Adjusted G&A – cash component |
$ |
7,077 |
|
Income tax expense. Callon provides for income taxes at a statutory rate of 21% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses, restricted stock windfalls and shortfalls, and state income taxes. We recorded an income tax expense of $0.5 million for the three months ended June 30, 2018 which relates to deferred state franchise tax. At June 30, 2018 we had a valuation allowance of $38.6 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision of $10.6 million (or $0.05 per diluted share) for the quarter as if the valuation allowance did not exist.
2018 Guidance
The Company adopted the Revenue from Contracts with Customers accounting standard on January 1, 2018. Starting with the first quarter of 2018, certain natural gas gathering and treating expenses were accounted for as a reduction to revenue. The Company expects to provide updated guidance upon the closing of the previous announced acquisition of assets in the Delaware Basin for $570 million.
|
Second Quarter |
First Half |
Full Year | |||
|
2018 Actual |
2018 Actual |
2018 Guidance | |||
|
Total production (MBOE/d) |
29.0 |
27.8 |
29.5 - 32.0 | ||
|
% oil |
76% |
77% |
77% | ||
|
Income statement expenses (per BOE) |
|||||
|
LOE, including workovers |
$4.99 |
$5.21 |
$5.25 - $6.25 | ||
|
Production taxes, including ad valorem (% unhedged revenue) |
5% |
6% |
6% | ||
|
Adjusted G&A: cash component (a) |
$2.69 |
$2.71 |
$1.75 - $2.50 | ||
|
Adjusted G&A: non-cash component (b) |
$0.64 |
$0.58 |
$0.50 - $1.00 | ||
|
Interest expense (c) |
$0.00 |
$0.00 |
$0.00 | ||
|
Effective income tax rate |
22% |
22% |
22% | ||
|
Capital expenditures ($MM, accrual basis) |
|||||
|
Operational (d) |
$166 |
$283 |
$500 - $540 | ||
|
Capitalized expenses |
$17 |
$33 |
$60 - $70 | ||
|
Net operated horizontal wells placed on production |
14 |
23 |
43 - 46 |
|
(a) |
Excludes stock-based compensation and corporate depreciation and amortization. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. |
|
(c) |
All interest expense anticipated to be capitalized. |
|
(d) |
Includes seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following tables summarize our open derivative positions for the periods indicated:
|
For the Remainder |
For the Full Year |
For the Full Year | |||||||||
|
Oil contracts (WTI) |
of 2018 |
of 2019 |
of 2020 | ||||||||
|
Swap contracts |
|||||||||||
|
Total volume (Bbls) |
1,104,000 |
— |
— |
||||||||
|
Weighted average price per Bbl |
$ |
52.07 |
$ |
— |
$ |
— |
|||||
|
Collar contracts (two-way collars) |
|||||||||||
|
Total volume (Bbls) |
184,000 |
— |
— |
||||||||
|
Weighted average price per Bbl |
|||||||||||
|
Ceiling (short call) |
$ |
60.50 |
$ |
— |
$ |
— |
|||||
|
Floor (long put) |
$ |
50.00 |
$ |
— |
$ |
— |
|||||
|
Collar contracts combined with short puts (three-way collars) |
|||||||||||
|
Total volume (Bbls) |
1,748,000 |
3,469,000 |
— |
||||||||
|
Weighted average price per Bbl |
|||||||||||
|
Ceiling (short call option) |
$ |
60.86 |
$ |
63.71 |
$ |
— |
|||||
|
Floor (long put option) |
$ |
48.95 |
$ |
53.95 |
$ |
— |
|||||
|
Short put option |
$ |
39.21 |
$ |
43.95 |
$ |
— |
|||||
|
Puts |
|||||||||||
|
Total volume (Bbls) |
552,000 |
1,825,000 |
— |
||||||||
|
Weighted average price per Bbl |
$ |
65.00 |
$ |
65.00 |
$ |
— |
|||||
|
Oil contracts (Midland basis differential) |
|||||||||||
|
Swap contracts |
|||||||||||
|
Total volume (Bbls) |
2,208,000 |
4,380,000 |
3,660,000 |
||||||||
|
Weighted average price per Bbl |
$ |
(4.26) |
$ |
(4.77) |
$ |
(1.47) |
|||||
|
Natural gas contracts (Henry Hub) |
|||||||||||
|
Swap contracts |
|||||||||||
|
Total volume (MMBtu) |
2,760,000 |
— |
— |
||||||||
|
Weighted average price per MMBtu |
$ |
2.91 |
$ |
— |
$ |
— |
|||||
|
Collar contracts (two-way collars) |
|||||||||||
|
Total volume (MMBtu) |
1,104,000 |
2,372,500 |
— |
||||||||
|
Weighted average price per MMBtu |
|||||||||||
|
Ceiling (short call) |
$ |
3.19 |
$ |
2.95 |
$ |
— |
|||||
|
Floor (long put) |
$ |
2.75 |
$ |
2.65 |
$ |
— |
|||||
|
Natural gas contracts (Waha basis differential) |
|||||||||||
|
Swap contracts |
|||||||||||
|
Total volume (MMBtu) |
1,104,000 |
2,190,000 |
2,196,000 |
||||||||
|
Weighted average price per MMBtu |
$ |
(1.14) |
$ |
(1.14) |
$ |
(1.14) |
|||||
Income Available to Common Shareholders. The Company reported net income available to common shareholders of $48.7 million for the three months ended June 30, 2018 and Adjusted Income available to common shareholders of $44.5 million, or $0.21 per fully diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income available to common stockholders to Adjusted Income and the Company's net income to Adjusted EBITDA, a non-GAAP financial measure, (in thousands):
|
Three Months Ended | |||||||||||
|
June 30, 2018 |
March 31, 2018 |
June 30, 2017 | |||||||||
|
Income available to common stockholders |
$ |
48,650 |
$ |
53,937 |
$ |
31,566 |
|||||
|
Change in valuation allowance |
(10,562) |
(11,753) |
(11,194) |
||||||||
|
Net (gain) loss on derivatives, net of settlements |
6,772 |
(3,143) |
(6,995) |
||||||||
|
Change in the fair value of share-based awards |
(366) |
799 |
(315) |
||||||||
|
Settled share-based awards |
— |
— |
4,128 |
||||||||
|
Adjusted Income |
$ |
44,494 |
$ |
39,840 |
$ |
17,190 |
|||||
|
Adjusted Income per fully diluted common share |
$ |
0.21 |
$ |
0.20 |
$ |
0.09 |
|||||
|
Three Months Ended | |||||||||||
|
June 30, 2018 |
March 31, 2018 |
June 30, 2017 | |||||||||
|
Net income |
$ |
50,474 |
$ |
55,761 |
$ |
33,390 |
|||||
|
Net (gain) loss on derivatives, net of settlements |
8,572 |
(3,978) |
(10,761) |
||||||||
|
Non-cash stock-based compensation expense |
1,164 |
2,143 |
499 |
||||||||
|
Settled share-based awards |
— |
— |
6,351 |
||||||||
|
Acquisition expense |
1,767 |
548 |
2,373 |
||||||||
|
Income tax expense |
481 |
495 |
322 |
||||||||
|
Interest expense |
594 |
460 |
589 |
||||||||
|
Depreciation, depletion and amortization |
39,387 |
36,066 |
26,765 |
||||||||
|
Accretion expense |
206 |
218 |
208 |
||||||||
|
Adjusted EBITDA |
$ |
102,645 |
$ |
91,713 |
$ |
59,736 |
|||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended June 30, 2018 was $100.9 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||||
|
June 30, 2018 |
March 31, 2018 |
June 30, 2017 | |||||||||
|
Cash flows from operating activities: |
|||||||||||
|
Net income |
$ |
50,474 |
$ |
55,761 |
$ |
33,390 |
|||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
|||||||||||
|
Depreciation, depletion and amortization |
39,387 |
36,066 |
26,765 |
||||||||
|
Accretion expense |
206 |
218 |
208 |
||||||||
|
Amortization of non-cash debt related items |
588 |
453 |
589 |
||||||||
|
Deferred income tax expense |
481 |
495 |
323 |
||||||||
|
Net (gain) loss on derivatives, net of settlements |
8,572 |
(3,978) |
(10,761) |
||||||||
|
Loss on sale of other property and equipment |
22 |
— |
62 |
||||||||
|
Non-cash expense related to equity share-based awards |
1,627 |
1,131 |
4,865 |
||||||||
|
Change in the fair value of liability share-based awards |
(463) |
1,012 |
1,982 |
||||||||
|
Discretionary cash flow |
$ |
100,894 |
$ |
91,158 |
$ |
57,423 |
|||||
|
Changes in working capital |
8,978 |
4,512 |
(8,968) |
||||||||
|
Payments to settle asset retirement obligations |
(207) |
(366) |
(816) |
||||||||
|
Payments to settle vested liability share-based awards |
(1,901) |
(3,089) |
(4,511) |
||||||||
|
Net cash provided by operating activities |
$ |
107,764 |
$ |
92,215 |
$ |
43,128 |
|||||
|
Callon Petroleum Company | |||||||
|
Consolidated Balance Sheets | |||||||
|
(in thousands, except par and per share values and share data) | |||||||
|
June 30, 2018 |
December 31, 2017 | ||||||
|
ASSETS |
Unaudited |
||||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
509,146 |
$ |
27,995 |
|||
|
Accounts receivable |
111,964 |
114,320 |
|||||
|
Fair value of derivatives |
11,569 |
406 |
|||||
|
Other current assets |
7,689 |
2,139 |
|||||
|
Total current assets |
640,368 |
144,860 |
|||||
|
Oil and natural gas properties, full cost accounting method: |
|||||||
|
Evaluated properties |
3,814,242 |
3,429,570 |
|||||
|
Less accumulated depreciation, depletion, amortization and impairment |
(2,158,225) |
(2,084,095) |
|||||
|
Net evaluated oil and natural gas properties |
1,656,017 |
1,345,475 |
|||||
|
Unevaluated properties |
1,144,138 |
1,168,016 |
|||||
|
Total oil and natural gas properties |
2,800,155 |
2,513,491 |
|||||
|
Other property and equipment, net |
21,514 |
20,361 |
|||||
|
Restricted investments |
3,393 |
3,372 |
|||||
|
Deferred tax asset |
26 |
52 |
|||||
|
Deferred financing costs |
5,749 |
4,863 |
|||||
|
Fair value of derivatives |
2,299 |
— |
|||||
|
Acquisition deposit |
28,500 |
900 |
|||||
|
Other assets, net |
5,322 |
5,397 |
|||||
|
Total assets |
$ |
3,507,326 |
$ |
2,693,296 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued liabilities |
$ |
193,981 |
$ |
162,878 |
|||
|
Accrued interest |
11,351 |
9,235 |
|||||
|
Cash-settleable restricted stock unit awards |
1,781 |
4,621 |
|||||
|
Asset retirement obligations |
2,284 |
1,295 |
|||||
|
Fair value of derivatives |
35,948 |
27,744 |
|||||
|
Total current liabilities |
245,345 |
205,773 |
|||||
|
Senior secured revolving credit facility |
— |
25,000 |
|||||
|
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs |
595,552 |
595,196 |
|||||
|
6.375% senior unsecured notes due 2026, net of unamortized deferred financing costs |
392,907 |
— |
|||||
|
Asset retirement obligations |
7,782 |
4,725 |
|||||
|
Cash-settleable restricted stock unit awards |
1,900 |
3,490 |
|||||
|
Deferred tax liability |
2,431 |
1,457 |
|||||
|
Fair value of derivatives |
11,136 |
1,284 |
|||||
|
Other long-term liabilities |
665 |
405 |
|||||
|
Total liabilities |
1,257,718 |
837,330 |
|||||
|
Commitments and contingencies |
|||||||
|
Stockholders' equity: |
|||||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized; 1,458,948 shares outstanding |
15 |
15 |
|||||
|
Common stock, $0.01 par value, 300,000,000 shares authorized; 227,507,031 and 201,836,172 shares outstanding, respectively |
2,275 |
2,018 |
|||||
|
Capital in excess of par value |
2,472,155 |
2,181,359 |
|||||
|
Accumulated deficit |
(224,837) |
(327,426) |
|||||
|
Total stockholders' equity |
2,249,608 |
1,855,966 |
|||||
|
Total liabilities and stockholders' equity |
$ |
3,507,326 |
$ |
2,693,296 |
|||
|
Callon Petroleum Company | |||||||||||||||
|
Consolidated Statements of Operations | |||||||||||||||
|
(Unaudited; in thousands, except per share data) | |||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
Operating revenues: |
|||||||||||||||
|
Oil sales |
$ |
122,613 |
$ |
72,885 |
$ |
237,898 |
$ |
144,893 |
|||||||
|
Natural gas sales |
14,462 |
9,398 |
26,617 |
18,754 |
|||||||||||
|
Total operating revenues |
137,075 |
82,283 |
264,515 |
163,647 |
|||||||||||
|
Operating expenses: |
|||||||||||||||
|
Lease operating expenses |
13,141 |
12,145 |
26,179 |
25,084 |
|||||||||||
|
Production taxes |
7,539 |
4,820 |
16,002 |
10,723 |
|||||||||||
|
Depreciation, depletion and amortization |
38,733 |
26,213 |
74,151 |
50,646 |
|||||||||||
|
General and administrative |
8,289 |
6,430 |
17,057 |
11,636 |
|||||||||||
|
Settled share-based awards |
— |
6,351 |
— |
6,351 |
|||||||||||
|
Accretion expense |
206 |
208 |
424 |
392 |
|||||||||||
|
Acquisition expense |
1,767 |
2,373 |
2,315 |
2,822 |
|||||||||||
|
Total operating expenses |
69,675 |
58,540 |
136,128 |
107,654 |
|||||||||||
|
Income from operations |
67,400 |
23,743 |
128,387 |
55,993 |
|||||||||||
|
Other (income) expenses: |
|||||||||||||||
|
Interest expense, net of capitalized amounts |
594 |
589 |
1,053 |
1,254 |
|||||||||||
|
(Gain) loss on derivative contracts |
16,554 |
(10,494) |
21,036 |
(25,797) |
|||||||||||
|
Other income |
(703) |
(64) |
(914) |
(772) |
|||||||||||
|
Total other (income) expense |
16,445 |
(9,969) |
21,175 |
(25,315) |
|||||||||||
|
Income before income taxes |
50,955 |
33,712 |
107,212 |
81,308 |
|||||||||||
|
Income tax expense |
481 |
322 |
976 |
789 |
|||||||||||
|
Net income |
50,474 |
33,390 |
106,236 |
80,519 |
|||||||||||
|
Preferred stock dividends |
(1,824) |
(1,824) |
(3,647) |
(3,647) |
|||||||||||
|
Income available to common stockholders |
$ |
48,650 |
$ |
31,566 |
$ |
102,589 |
$ |
76,872 |
|||||||
|
Income per common share: |
|||||||||||||||
|
Basic |
$ |
0.23 |
$ |
0.16 |
$ |
0.50 |
$ |
0.38 |
|||||||
|
Diluted |
$ |
0.23 |
$ |
0.16 |
$ |
0.50 |
$ |
0.38 |
|||||||
|
Shares used in computing income per common share: |
|||||||||||||||
|
Basic |
210,698 |
201,386 |
206,309 |
201,220 |
|||||||||||
|
Diluted |
211,465 |
201,905 |
207,027 |
201,823 |
|||||||||||
|
Callon Petroleum Company | |||||||||||||||
|
Consolidated Statements of Cash Flows | |||||||||||||||
|
(Unaudited; in thousands) | |||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net income |
$ |
50,474 |
$ |
33,390 |
$ |
106,236 |
$ |
80,519 |
|||||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
|||||||||||||||
|
Depreciation, depletion and amortization |
39,387 |
26,765 |
75,453 |
51,697 |
|||||||||||
|
Accretion expense |
206 |
208 |
424 |
392 |
|||||||||||
|
Amortization of non-cash debt related items |
588 |
589 |
1,041 |
1,254 |
|||||||||||
|
Deferred income tax expense |
481 |
323 |
976 |
789 |
|||||||||||
|
Net (gain) loss on derivatives, net of settlements |
8,572 |
(10,761) |
4,594 |
(28,555) |
|||||||||||
|
Loss on sale of other property and equipment |
22 |
62 |
22 |
62 |
|||||||||||
|
Non-cash expense related to equity share-based awards |
1,627 |
4,865 |
2,758 |
5,795 |
|||||||||||
|
Change in the fair value of liability share-based awards |
(463) |
1,982 |
549 |
1,691 |
|||||||||||
|
Payments to settle asset retirement obligations |
(207) |
(816) |
(573) |
(1,581) |
|||||||||||
|
Changes in current assets and liabilities: |
|||||||||||||||
|
Accounts receivable |
10,447 |
(3,744) |
2,380 |
(7,810) |
|||||||||||
|
Other current assets |
(5,611) |
(874) |
(5,550) |
(298) |
|||||||||||
|
Current liabilities |
4,123 |
(4,223) |
17,061 |
5,680 |
|||||||||||
|
Other long-term liabilities |
200 |
120 |
287 |
120 |
|||||||||||
|
Other assets, net |
(181) |
(247) |
(689) |
(770) |
|||||||||||
|
Payments to settle vested liability share-based awards |
(1,901) |
(4,511) |
(4,990) |
(13,173) |
|||||||||||
|
Net cash provided by operating activities |
107,764 |
43,128 |
199,979 |
95,812 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Capital expenditures |
(187,040) |
(79,936) |
(298,370) |
(146,090) |
|||||||||||
|
Acquisitions |
(6,469) |
(58,004) |
(45,392) |
(706,489) |
|||||||||||
|
Acquisition deposit |
(28,500) |
— |
(27,600) |
46,138 |
|||||||||||
|
Proceeds from sale of assets |
3,077 |
— |
3,077 |
— |
|||||||||||
|
Net cash used in investing activities |
(218,932) |
(137,940) |
(368,285) |
(806,441) |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Borrowings on senior secured revolving credit facility |
85,000 |
— |
165,000 |
— |
|||||||||||
|
Payments on senior secured revolving credit facility |
(160,000) |
— |
(190,000) |
— |
|||||||||||
|
Issuance of 6.125% senior unsecured notes due 2024 |
— |
200,000 |
— |
200,000 |
|||||||||||
|
Premium on the issuance of 6.125% senior unsecured notes due 2024 |
— |
8,250 |
— |
8,250 |
|||||||||||
|
Issuance of 6.375% senior unsecured notes due 2026 |
400,000 |
— |
400,000 |
— |
|||||||||||
|
Issuance of common stock |
288,357 |
— |
288,357 |
— |
|||||||||||
|
Payment of preferred stock dividends |
(1,824) |
(1,823) |
(3,647) |
(3,647) |
|||||||||||
|
Payment of deferred financing costs |
(8,664) |
(6,765) |
(8,664) |
(6,765) |
|||||||||||
|
Tax withholdings related to restricted stock units |
(1,028) |
(974) |
(1,589) |
(1,053) |
|||||||||||
|
Net cash provided by financing activities |
601,841 |
198,688 |
649,457 |
196,785 |
|||||||||||
|
Net change in cash and cash equivalents |
490,673 |
103,876 |
481,151 |
(513,844) |
|||||||||||
|
Balance, beginning of period |
18,473 |
35,273 |
27,995 |
652,993 |
|||||||||||
|
Balance, end of period |
$ |
509,146 |
$ |
139,149 |
$ |
509,146 |
$ |
139,149 |
|||||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Tuesday, August 7, 2018, to discuss second quarter 2018 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Tuesday, August 7, 2018, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Select "IR Calendar" under the "Investors" section of the website: www.callon.com. |
|
Presentation Slides: |
Select "Presentations" under the "Investors" section of the website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
8210968 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2018 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
|
i) |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-second-quarter-2018-results-300692576.html
SOURCE Callon Petroleum Company
Article Date
8/6/20187/16/2018 - Callon Petroleum Company Schedules Second Quarter 2018 Conference Call for August 7, 2018
Callon Petroleum Company Schedules Second Quarter 2018 Conference Call for August 7, 2018
Source: PR Newswire
NATCHEZ, Miss., July 16, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its second quarter 2018 financial and operating results.
|
Webcast and Conference Call: | ||
|
Date: Tuesday, August 7, 2018 | ||
|
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
||
|
Select "IR Calendar" under the "Investors" section of the website. | ||
|
Conference Call: | ||
|
Domestic: |
1-888-317-6003 | |
|
Canada: |
1-866-284-3684 | |
|
International: |
1-412-317-6061 | |
|
Access code: |
8210968 | |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release second quarter 2018 results after market close on Monday, August 6, 2018.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-second-quarter-2018-conference-call-for-august-7-2018-300680771.html
SOURCE Callon Petroleum Company
Article Date
7/16/2018Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., June 12, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
J.P. Morgan 2018 Energy Conference
The Company will present at the J.P. Morgan 2018 Energy Conference hosted by J.P. Morgan on Tuesday, June 19, 2018 at 10:40 AM Eastern Daylight Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300665036.html
SOURCE Callon Petroleum Company
Article Date
6/12/2018Callon Petroleum Company Announces Closing of $400 Million Offering of Senior Unsecured Notes Due 2026
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., June 7, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") announced today the closing of its private offering of $400 million aggregate principal amount of its 6.375% senior unsecured notes due 2026 (the "notes") at an issue price of 100% of the principal amount of the notes. The notes will mature on July 1, 2026, unless redeemed in accordance with their terms prior to such date. The notes were offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to certain non-U.S. persons in accordance with Regulation S under the Securities Act.
The net proceeds of the offering, after deducting initial purchasers' discounts and commissions and estimated offering expenses, were approximately $394 million. A portion of the net proceeds from the offering is expected to be used to partially fund the previously disclosed purchase from Cimarex Energy Co. of certain producing oil and gas properties and undeveloped acreage in the Delaware Basin. The balance of the net proceeds from the offering is expected to be used to repay amounts borrowed under the Company's senior secured revolving credit facility and the remaining proceeds, if any, for general corporate purposes. If the pending acquisition is not consummated, the Company intends to use the net proceeds from the offering to fund a portion of its exploration and development activities, a potential redemption of its preferred stock, and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness, and working capital. The notes are guaranteed on a senior unsecured basis by the Company's wholly-owned subsidiary, Callon Petroleum Operating Company, and may be guaranteed by certain future subsidiaries. Interest on the notes is payable semi-annually.
The notes and the related guarantees have not been registered under the Securities Act or any state securities laws and unless so registered, the notes and the related guarantees may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company has entered into a registration rights agreement with respect to the notes and the related guarantees. The notes and the related guarantees are expected to be eligible for trading by persons reasonably believed to be qualified institutional buyers in the United States under Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135c under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes and the related guarantees or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and natural gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements regarding the consummation of the pending acquisition and completion of related financings and the time frame in which these transactions will occur, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect the Company's future results and could cause results to differ materially from those expressed in its forward-looking statements are more fully discussed in its filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Mark Brewer
Director of Investor Relations
281-589-5279
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-closing-of-400-million-offering-of-senior-unsecured-notes-due-2026-300661774.html
SOURCE Callon Petroleum Company
Article Date
6/7/2018Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., June 5, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on June 29, 2018 to stockholders of record as of June 15, 2018. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
1-800-451-1294
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-declares-series-a-preferred-dividend-300658919.html
SOURCE Callon Petroleum Company
Article Date
6/5/20185/31/2018 - Callon Petroleum Company Announces Pricing of Upsized $400 Million Senior Unsecured Notes Offering
Callon Petroleum Company Announces Pricing of Upsized $400 Million Senior Unsecured Notes Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 31, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") announced today that it has priced $400 million aggregate principal amount of its 6.375% senior unsecured notes due 2026 (the "notes") in a private offering that is exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). This represents an increase of $100 million over the aggregate principal amount previously announced. The sale of the notes is expected to close on June 7, 2018, subject to customary closing conditions. The notes will be initially guaranteed on a senior unsecured basis by the Company's wholly-owned subsidiary, Callon Petroleum Operating Company, and may be guaranteed in the future by other subsidiaries.
A portion of the net proceeds from the offering is expected to be used to partially fund the previously disclosed purchase from Cimarex Energy Co. of certain producing oil and gas properties and undeveloped acreage in the Delaware Basin. The balance of the net proceeds from the offering is expected to be used to repay amounts borrowed under the Company's senior secured revolving credit facility and the remaining proceeds, if any, for general corporate purposes. If the pending acquisition is not consummated, the Company intends to use the net proceeds from the offering to fund a portion of its exploration and development activities, a potential redemption of its preferred stock, and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness, and working capital.
The notes and the related guarantees to be offered have not been registered under the Securities Act or any state securities laws and unless so registered, the notes and the related guarantees may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company will enter into a registration rights agreement with respect to the notes and the related guarantees. The notes and the related guarantees are expected to be eligible for trading by persons reasonably believed to be qualified institutional buyers in the United States under Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135c under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes and the related guarantees or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and natural gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements regarding the consummation of the pending acquisition and completion of related financings and the time frame in which these transactions will occur, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect the Company's future results and could cause results to differ materially from those expressed in its forward-looking statements are more fully discussed in its filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Mark Brewer
Director of Investor Relations
281-589-5279
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-pricing-of-upsized-400-million-senior-unsecured-notes-offering-300657700.html
SOURCE Callon Petroleum Company
Article Date
5/31/20185/31/2018 - Callon Petroleum Company Announces Launch of $300 Million Senior Unsecured Notes Offering
Callon Petroleum Company Announces Launch of $300 Million Senior Unsecured Notes Offering
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., May 31, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that, subject to market and other conditions, it intends to offer $300 million aggregate principal amount of senior unsecured notes due 2026 (the "notes") in a private offering that is exempt from registration under the Securities Act of 1933, as amended (the "Securities Act").
A portion of the net proceeds from the offering is expected to be used to partially fund the previously disclosed purchase from Cimarex Energy Co. of certain producing oil and gas properties and undeveloped acreage in the Delaware Basin. The balance of the net proceeds, if any, from the offering is expected to be used for general corporate purposes. If the pending acquisition is not consummated, the Company intends to use the net proceeds from the offering to fund a portion of its exploration and development activities, a potential redemption of its preferred stock, and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness, and working capital.
The notes and the related guarantees to be offered have not been registered under the Securities Act or any state securities laws and unless so registered, the notes and the related guarantees may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company will enter into a registration rights agreement with respect to the notes and the related guarantees. The notes and the related guarantees are expected to be eligible for trading by persons reasonably believed to be qualified institutional buyers in the United States under Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135c under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes and the related guarantees or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and natural gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements regarding the consummation of the pending acquisition and completion of related financings and the time frame in which these transactions will occur, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect the Company's future results and could cause results to differ materially from those expressed in its forward-looking statements are more fully discussed in its filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Mark Brewer
Director of Investor Relations
281-589-5279
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-launch-of-300-million-senior-unsecured-notes-offering-300657293.html
SOURCE Callon Petroleum Company
Article Date
5/31/2018Callon Petroleum Company Announces Election of New Directors to the Board
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 14, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that at the annual meeting of shareholders held on May 10, 2018, the shareholders of the Company elected Maj. Gen. (Ret.) Barbara J. Faulkenberry and Joseph C. Gatto, Jr., the Company's President and Chief Executive Officer, to the Company's Board of Directors (the "Board"). The shareholders also re-elected Board Chairman Richard L. Flury. General Faulkenberry and Messrs. Flury and Gatto were each nominated to the Board of Directors by management in the Company's proxy statement dated March 23, 2018.
Our newest independent Board member, Major General (Ret.) Faulkenberry, retired from the U.S. Air Force in 2014 as a Major General (2-stars) after a 32-year career. Her last assignment was as Vice Commander (COO) and interim Commander (CEO) of a 37,000-person organization conducting Department of Defense air logistics including cargo/passenger, air refueling, and patient movements across the globe. During her military career, General Faulkenberry served in a wide variety of operational and leadership positions, including Director of Mobility Forces for the U.S. Central Command during the drawdown of forces in Iraq and the simultaneous buildup in Afghanistan. Her staff assignments included experience in operations, logistics, strategy, governmental affairs and leadership development. She is currently an independent director for USA Truck, a publicly-traded provider of trucking and capacity solutions services across North America, where she serves as chair of the Technology Committee and as a member of the Nominating and Corporate Governance Committee. She holds a Bachelor of Science degree from the Air Force Academy, an MBA from Georgia College, and a Master of National Security from the National Defense University. Major General (Ret.) Faulkenberry has been appointed to serve on the Audit Committee, the Nominating and Corporate Governance Committee, and the Strategic Planning Committee.
Mr. Flury commented, "We are very pleased to add Barbara and Joe to Callon's Board of Directors as both will contribute meaningfully to the Company's strategic plans and growth as an organization. Their additions reflect our desire to continue advancing diversity of thought and experience on the Board. Barbara's thirty-plus years of experience in operations, logistics, and leadership will be an asset as we continue to optimize execution as a leading operator focused on sustained value creation. As a member of the management team, Joe has been a critical element to Callon's strategic growth in the Permian Basin, and we welcome his further contributions as a member the Board. On behalf of the Board, we look forward to leveraging both new members' insights and expertise to build upon Callon's success in the years to come."
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
Mark Brewer
Director of Investor Relations
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-election-of-new-directors-to-the-board-300647924.html
SOURCE Callon Petroleum Company
Article Date
5/14/2018Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., May 3, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Tudor, Pickering, Holt & Co. 14th Annual Hotter 'N Hell Conference
The Company will participate in the Tudor, Pickering, Holt & Co. 14th Annual Hotter 'N Hell Conference hosted by Tudor, Pickering, Holt & Co. on Tuesday, May 15, 2018, in Houston, Texas.
Barclays High Yield Bond & Syndicated Loan Conference
The Company will present at the Barclays High Yield Bond & Syndicated Loan Conference hosted by Barclays on Tuesday, May 22, 2018 at 4:05 PM Mountain Daylight Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300642259.html
SOURCE Callon Petroleum Company
Article Date
5/3/2018Callon Petroleum Company Announces First Quarter 2018 Results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., May 2, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended March 31, 2018.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the first quarter of 2018 and other recent data points include:
Joe Gatto, President and Chief Executive Officer, commented, "We are pleased to deliver another solid quarter of execution while positioning ourselves for an increased level of baseline activity. During the first quarter, we added a fifth horizontal drilling rig and made substantial progress completing our Delaware Basin infrastructure initiatives to support the next phase of program development on our Permian footprint. Similar to our proactive past investments in the Midland Basin, our established facilities and takeaway investments in the Spur area will help preserve our leading cash margins for the long-term." He continued, "The first quarter also produced drilling and completion efficiency gains that were ahead of expectations. Combined with strong well productivity across the portfolio and a low-cost operating structure, the stage is set for robust production growth and cash flow generation in the coming quarters."
Operations Update
At March 31, 2018, we had 247 gross (184.5 net) horizontal wells producing from eight established flow units in the Permian Basin. Net daily production for the three months ended March 31, 2018 grew approximately 30% to 26.6 thousand barrels of oil equivalent per day (77% oil) as compared to the same period of 2017.
For the three months ended March 31, 2018, we drilled 16 gross (13.2 net) horizontal wells in the Spur, WildHorse, and Monarch areas. We placed a combined 15 gross (9.0 net) horizontal wells on production in the quarter.
Midland Basin
During the first quarter, nearly all wells placed on production were located in the Midland Basin, with the majority of this activity split between our Ranger area in Reagan County and our Monarch area in Midland County. Wells placed on production in Reagan County averaged approximately 7,300 feet of completed lateral. At Monarch, new wells averaged just under 6,000 feet. During the last week of the quarter, two wells were placed on production in Howard County.
Our initial Wolfcamp A down-spacing test in the Fairway area of WildHorse has yielded encouraging results through the first 120 days of production. Compared to offset two-well pads completed with a similar design, the test wells, the Open A2 #1AH and Open A3 #3AH, have both eclipsed the cumulative oil production of each of the four offset wells. The Company will continue monitoring production from the test wells over the next few months prior to initiating any additional testing of reduced spacing at WildHorse.
Delaware Basin
Our first two-well pad in the Spur area targeting two flow units in the Wolfcamp A was completed and placed on production in April. Each of the wells, the Rendezvous A1 #01LA and A2 #09UA, has achieved a production rate of approximately 1,700 Boepd (85% oil) per well during the first 20 days of production and continue to be optimized.
Callon continues to progress efficiency gains as our activity levels increase in the Delaware Basin. Through our first six operated wells, the Company has continued to improve drilling day cycle times, with our most recent well reflecting an improvement of greater than 25% in daily footage compared to our first well drilled in Spur. Additionally, we have been proactive in our infrastructure build-out to support long-term development efficiency and sustained cash margins, similar to our past efforts in the Midland Basin. We have recently progressed or completed a number of infrastructure projects including: multiple saltwater disposal upgrades, installation of water transfer lines, installation of recycling facilities, build-out of two separate one million barrel recycle pits and installation of numerous tank batteries to accommodate future drilling activity. Additionally, we expect to have new tank batteries tied into Medallion pipeline during the second quarter, increasing our longer-term take-away capacities and providing additional delivery point optionality under our current gathering agreement.
Capital Expenditures
For the three months ended March 31, 2018, we incurred $105.3 million in cash operational capital expenditures (including other items) compared to $128.7 million in the fourth quarter of 2017. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended March 31, 2018 | ||||||||||||||||
|
Operational |
Capitalized |
Capitalized |
Total Capital | |||||||||||||
|
Capital (a) |
Interest |
G&A |
Expenditures | |||||||||||||
|
Cash basis (b) |
$ |
105,330 |
$ |
813 |
$ |
5,187 |
$ |
111,330 |
||||||||
|
Timing adjustments (c) |
11,472 |
9,255 |
— |
20,727 |
||||||||||||
|
Non-cash items |
— |
— |
1,110 |
1,110 |
||||||||||||
|
Accrual (GAAP) basis |
$ |
116,802 |
$ |
10,068 |
$ |
6,297 |
$ |
133,167 |
||||||||
|
(a) |
Includes seismic, land and other items. |
|
(b) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(c) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | ||||||||||||
|
March 31, 2018 |
December 31, 2017 |
March 31, 2017 | ||||||||||
|
Net production |
||||||||||||
|
Oil (MBbls) |
1,851 |
1,936 |
1,434 |
|||||||||
|
Natural gas (MMcf) |
3,240 |
3,018 |
2,422 |
|||||||||
|
Total (MBOE) |
2,391 |
2,439 |
1,838 |
|||||||||
|
Average daily production (BOE/d) |
26,567 |
26,511 |
20,422 |
|||||||||
|
% oil (BOE basis) |
77% |
79% |
78% |
|||||||||
|
Oil and natural gas revenues (in thousands) |
||||||||||||
|
Oil revenue |
$ |
115,286 |
$ |
104,132 |
$ |
72,008 |
||||||
|
Natural gas revenue (a) |
12,154 |
14,081 |
9,355 |
|||||||||
|
Total revenue |
127,440 |
118,213 |
81,363 |
|||||||||
|
Impact of cash-settled derivatives |
(8,459) |
(4,501) |
(2,491) |
|||||||||
|
Adjusted Total Revenue (i) |
$ |
118,981 |
$ |
113,712 |
$ |
78,872 |
||||||
|
Average realized sales price |
||||||||||||
|
Oil (Bbl) |
$ |
62.28 |
$ |
53.79 |
$ |
50.21 |
||||||
|
Natural gas (Mcf) |
3.75 |
4.67 |
3.86 |
|||||||||
|
Total (BOE) |
53.30 |
48.47 |
44.27 |
|||||||||
|
Average realized sales price |
||||||||||||
|
Oil (Bbl) |
$ |
57.47 |
$ |
51.28 |
$ |
48.45 |
||||||
|
Natural gas (Mcf) |
3.89 |
4.78 |
3.88 |
|||||||||
|
Total (BOE) |
49.76 |
46.62 |
42.91 |
|||||||||
|
Additional per BOE data |
||||||||||||
|
Sales price (b) |
$ |
53.30 |
$ |
48.47 |
$ |
44.27 |
||||||
|
Lease operating expense (c) |
5.45 |
4.84 |
6.61 |
|||||||||
|
Gathering and treating expense (a) |
— |
0.57 |
0.43 |
|||||||||
|
Production taxes |
3.54 |
2.55 |
3.21 |
|||||||||
|
Operating margin |
$ |
44.31 |
$ |
40.51 |
$ |
34.02 |
||||||
|
Depletion, depreciation and amortization |
$ |
14.81 |
$ |
14.98 |
$ |
13.29 |
||||||
|
Adjusted G&A (d) |
||||||||||||
|
Cash component (e) |
$ |
2.74 |
$ |
2.46 |
$ |
2.43 |
||||||
|
Non-cash component |
0.51 |
0.54 |
0.57 |
|||||||||
|
(a) |
On January 1, 2018, the Company adopted the revenue recognition accounting standard. Consequently, natural gas gathering and treating expenses for the three months ended March 31, 2018 were accounted for as a reduction to revenue. |
|
(b) |
Excludes the impact of cash-settled derivatives. |
|
(c) |
Excludes gathering and treating expense. |
|
(d) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(e) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended March 31, 2018, Callon reported total revenue of $127.4 million and total revenue including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $118.9 million, including the impact of an $8.5 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's revenue. Average daily production for the quarter was 26.6 MBOE/d compared to average daily production of 26.5 MBOE/d in the fourth quarter of 2017. Average realized prices, including and excluding the effects of hedging, are detailed above.
Hedging impacts. For the quarter ended March 31, 2018, Callon recognized the following hedging-related items (in thousands, except per unit data):
|
In Thousands |
Per Unit | |||||||
|
Oil derivatives |
||||||||
|
Net loss on settlements |
$ |
(8,916) |
$ |
(4.81) |
||||
|
Net gain on fair value adjustments |
4,067 |
|||||||
|
Total loss on oil derivatives |
$ |
(4,849) |
||||||
|
Natural gas derivatives |
||||||||
|
Net gain on settlements |
$ |
457 |
$ |
0.14 |
||||
|
Net loss on fair value adjustments |
(89) |
|||||||
|
Total gain on natural gas derivatives |
$ |
368 |
||||||
|
Total oil & natural gas derivatives |
||||||||
|
Net loss on settlements |
$ |
(8,459) |
$ |
(3.54) |
||||
|
Net gain on fair value adjustments |
3,978 |
|||||||
|
Total loss on total oil & natural gas derivatives |
$ |
(4,481) |
||||||
Lease Operating Expenses, including workover ("LOE"). LOE per BOE for the three months ended March 31, 2018 was $5.45 per BOE, compared to LOE of $4.84 per BOE in the fourth quarter of 2017. The increase in this metric was primarily related to interim water hauling in Reagan County and certain equipment rental expenses.
Production Taxes, including ad valorem taxes. Production taxes were $3.54 per BOE for the three months ended March 31, 2018, representing approximately 6.6% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended March 31, 2018 was $14.81 per BOE compared to $14.98 per BOE in the fourth quarter of 2017. The decrease is attributable to our increased estimated proved reserves relative to our depreciable base and assumed future development costs related to undeveloped proved reserves as a result of additions made through our horizontal drilling efforts and acquisitions.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $7.8 million, or $3.25 per BOE, for the three months ended March 31, 2018 compared to $7.3 million, or $3.00 per BOE, for the fourth quarter of 2017. The cash component of Adjusted G&A was $6.5 million, or $2.74 per BOE, for the three months ended March 31, 2018 compared to $6.0 million, or $2.46 per BOE, for the fourth quarter of 2017.
For the three months ended March 31, 2018, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Three Months Ended | |||
|
Total G&A expense |
$ |
8,769 |
|
|
Less: Change in the fair value of liability share-based awards (non-cash) |
(991) |
||
|
Adjusted G&A – total |
7,778 |
||
|
Less: Restricted stock share-based compensation (non-cash) |
(1,105) |
||
|
Less: Corporate depreciation & amortization (non-cash) |
(124) |
||
|
Adjusted G&A – cash component |
$ |
6,549 |
|
Income tax expense. Callon provides for income taxes at a statutory rate of 21% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses, restricted stock windfalls and shortfalls, and state income taxes. We recorded an income tax expense of $0.5 million for the three months ended March 31, 2018 which relates to deferred State of Texas gross margin tax. At March 31, 2018 we had a valuation allowance of $49.2 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision of $11.8 million (or $0.06 per diluted share) for the quarter as if the valuation allowance did not exist.
2018 Guidance Update
The Company adopted the Revenue from Contracts with Customers accounting standard on January 1, 2018. Starting with the first quarter of 2018, certain natural gas gathering and treating expenses were accounted for as a reduction to revenue.
|
First Quarter |
Full Year | |||
|
2018 Actual |
2018 Guidance | |||
|
Total production (MBOE/d) |
26.6 |
29.5 - 32.0 | ||
|
% oil |
77% |
77% | ||
|
Income statement expenses (per BOE) |
||||
|
LOE, including workovers |
$5.45 |
$5.25 - $6.25 | ||
|
Production taxes, including ad valorem (% unhedged revenue) |
7% |
6% | ||
|
Adjusted G&A: cash component (a) |
$2.74 |
$1.75 - $2.50 | ||
|
Adjusted G&A: non-cash component (b) |
$0.51 |
$0.50 - $1.00 | ||
|
Interest expense (c) |
$0.00 |
$0.00 | ||
|
Effective income tax rate |
22% |
22% | ||
|
Capital expenditures ($MM, accrual basis) |
||||
|
Operational (d) |
$117 |
$500 - $540 | ||
|
Capitalized expenses |
$16 |
$60 - $70 | ||
|
Net operated horizontal wells placed on production |
9 |
43 - 46 |
|
(a) |
Excludes stock-based compensation and corporate depreciation and amortization. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. |
|
(c) |
All interest expense anticipated to be capitalized. |
|
(d) |
Includes seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following tables summarize our open derivative positions for the periods indicated:
|
For the Remainder of |
For the Full Year of | ||||||
|
Oil contracts (WTI) |
2018 |
2019 | |||||
|
Swap contracts |
|||||||
|
Total volume (MBbls) |
1,559 |
— |
|||||
|
Weighted average price per Bbl |
$ |
51.88 |
$ |
— |
|||
|
Collar contracts (two-way collars) |
|||||||
|
Total volume (MBbls) |
275 |
— |
|||||
|
Weighted average price per Bbl |
|||||||
|
Ceiling (short call) |
$ |
60.50 |
$ |
— |
|||
|
Floor (long put) |
50.00 |
— |
|||||
|
Collar contracts combined with short puts (three-way collars) |
|||||||
|
Total volume (MBbls) |
2,612 |
3,469 |
|||||
|
Weighted average price per Bbl |
|||||||
|
Ceiling (short call option) |
$ |
60.86 |
$ |
63.71 |
|||
|
Floor (long put option) |
48.95 |
53.95 |
|||||
|
Short put option |
39.21 |
43.95 |
|||||
|
For the Remainder of |
For the Full Year of | ||||||
|
Oil contracts (Midland basis differential) |
2018 |
2019 | |||||
|
Swap contracts |
|||||||
|
Volume (MBbls) |
3,895 |
— |
|||||
|
Weighted average price per Bbl |
$ |
(0.86) |
$ |
— |
|||
|
For the Remainder of |
For the Full Year of | ||||||
|
Natural gas contracts (Henry Hub) |
2018 |
2019 | |||||
|
Swap contracts |
|||||||
|
Total volume (BBtu) |
4,125 |
— |
|||||
|
Weighted average price per MMBtu |
$ |
2.91 |
$ |
— |
|||
Income Available to Common Shareholders. The Company reported net income available to common shareholders of $53.9 million for the three months ended March 31, 2018 and Adjusted Income available to common shareholders of $39.8 million, or $0.20 per fully diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income available to common stockholders to Adjusted Income and the Company's net income to Adjusted EBITDA (in thousands):
|
Three Months Ended | ||||||||||||
|
March 31, 2018 |
December 31, 2017 |
March 31, 2017 | ||||||||||
|
Income available to common stockholders |
$ |
53,937 |
$ |
21,001 |
$ |
45,305 |
||||||
|
Change in valuation allowance |
(11,753) |
(8,285) |
(13,119) |
|||||||||
|
Net (gain) loss on derivatives, net of settlements |
(3,143) |
16,924 |
(11,566) |
|||||||||
|
Change in the fair value of share-based awards |
799 |
562 |
(189) |
|||||||||
|
Adjusted Income |
$ |
39,840 |
$ |
30,202 |
$ |
20,431 |
||||||
|
Adjusted Income per fully diluted common share |
$ |
0.20 |
$ |
0.15 |
$ |
0.10 |
||||||
|
Three Months Ended | ||||||||||||
|
March 31, 2018 |
December 31, 2017 |
March 31, 2017 | ||||||||||
|
Net income |
$ |
55,761 |
$ |
22,824 |
$ |
47,129 |
||||||
|
Net gain on derivatives, net of settlements |
(3,978) |
26,037 |
(17,794) |
|||||||||
|
Non-cash stock-based compensation expense |
2,143 |
2,101 |
639 |
|||||||||
|
Acquisition expense |
548 |
(112) |
450 |
|||||||||
|
Income tax expense |
495 |
248 |
466 |
|||||||||
|
Interest expense |
460 |
461 |
665 |
|||||||||
|
Depreciation, depletion and amortization |
36,066 |
37,222 |
24,932 |
|||||||||
|
Accretion expense |
218 |
154 |
184 |
|||||||||
|
Adjusted EBITDA |
$ |
91,713 |
$ |
88,935 |
$ |
56,671 |
||||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended March 31, 2018 was $91.2 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||||
|
March 31, 2018 |
December 31, 2017 |
March 31, 2017 | |||||||||
|
Cash flows from operating activities: |
|||||||||||
|
Net income |
$ |
55,761 |
$ |
22,824 |
$ |
47,129 |
|||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
|||||||||||
|
Depreciation, depletion and amortization |
36,066 |
37,222 |
24,932 |
||||||||
|
Accretion expense |
218 |
154 |
184 |
||||||||
|
Amortization of non-cash debt related items |
453 |
455 |
665 |
||||||||
|
Deferred income tax expense |
495 |
247 |
466 |
||||||||
|
Net (gain) loss on derivatives, net of settlements |
(3,978) |
26,037 |
(17,794) |
||||||||
|
Non-cash expense related to equity share-based awards |
1,131 |
1,240 |
930 |
||||||||
|
Change in the fair value of liability share-based awards |
1,012 |
865 |
(291) |
||||||||
|
Discretionary cash flow |
$ |
91,158 |
$ |
89,044 |
$ |
56,221 |
|||||
|
Changes in working capital |
4,512 |
(8,642) |
5,890 |
||||||||
|
Payments to settle asset retirement obligations |
(366) |
(216) |
(765) |
||||||||
|
Payments to settle vested liability share-based awards |
(3,089) |
— |
(8,662) |
||||||||
|
Net cash provided by operating activities |
$ |
92,215 |
$ |
80,186 |
$ |
52,684 |
|||||
|
Callon Petroleum Company Consolidated Balance Sheets (in thousands, except par and per share values and share data) | ||||||||
|
March 31, 2018 |
December 31, 2017 | |||||||
|
ASSETS |
Unaudited |
|||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ |
18,473 |
$ |
27,995 |
||||
|
Accounts receivable |
122,411 |
114,320 |
||||||
|
Fair value of derivatives |
4,210 |
406 |
||||||
|
Other current assets |
2,078 |
2,139 |
||||||
|
Total current assets |
147,172 |
144,860 |
||||||
|
Oil and natural gas properties, full cost accounting method: |
||||||||
|
Evaluated properties |
3,598,868 |
3,429,570 |
||||||
|
Less accumulated depreciation, depletion, amortization and impairment |
(2,119,599) |
(2,084,095) |
||||||
|
Net evaluated oil and natural gas properties |
1,479,269 |
1,345,475 |
||||||
|
Unevaluated properties |
1,174,385 |
1,168,016 |
||||||
|
Total oil and natural gas properties |
2,653,654 |
2,513,491 |
||||||
|
Other property and equipment, net |
21,173 |
20,361 |
||||||
|
Restricted investments |
3,382 |
3,372 |
||||||
|
Deferred tax asset |
26 |
52 |
||||||
|
Deferred financing costs |
4,588 |
4,863 |
||||||
|
Acquisition deposit |
— |
900 |
||||||
|
Other assets, net |
5,524 |
5,397 |
||||||
|
Total assets |
$ |
2,835,519 |
$ |
2,693,296 |
||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
Current liabilities: |
||||||||
|
Accounts payable and accrued liabilities |
$ |
187,267 |
$ |
162,878 |
||||
|
Accrued interest |
18,491 |
9,235 |
||||||
|
Cash-settleable restricted stock unit awards |
4,081 |
4,621 |
||||||
|
Asset retirement obligations |
2,784 |
1,295 |
||||||
|
Fair value of derivatives |
25,912 |
27,744 |
||||||
|
Total current liabilities |
238,535 |
205,773 |
||||||
|
Senior secured revolving credit facility |
75,000 |
25,000 |
||||||
|
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs |
595,374 |
595,196 |
||||||
|
Asset retirement obligations |
7,717 |
4,725 |
||||||
|
Cash-settleable restricted stock unit awards |
2,392 |
3,490 |
||||||
|
Deferred tax liability |
1,950 |
1,457 |
||||||
|
Fair value of derivatives |
2,942 |
1,284 |
||||||
|
Other long-term liabilities |
465 |
405 |
||||||
|
Total liabilities |
924,375 |
837,330 |
||||||
|
Commitments and contingencies |
||||||||
|
Stockholders' equity: |
||||||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized; 1,458,948 shares outstanding |
15 |
15 |
||||||
|
Common stock, $0.01 par value, 300,000,000 shares authorized; 201,947,883 and 201,836,172 shares outstanding, respectively |
2,019 |
2,018 |
||||||
|
Capital in excess of par value |
2,182,599 |
2,181,359 |
||||||
|
Accumulated deficit |
(273,489) |
(327,426) |
||||||
|
Total stockholders' equity |
1,911,144 |
1,855,966 |
||||||
|
Total liabilities and stockholders' equity |
$ |
2,835,519 |
$ |
2,693,296 |
||||
|
Callon Petroleum Company Consolidated Statements of Operations (Unaudited; in thousands, except per share data) |
||||||||
|
Three Months Ended March 31, | ||||||||
|
2018 |
2017 | |||||||
|
Operating revenues: |
||||||||
|
Oil sales |
$ |
115,286 |
$ |
72,008 |
||||
|
Natural gas sales |
12,154 |
9,355 |
||||||
|
Total operating revenues |
127,440 |
81,363 |
||||||
|
Operating expenses: |
||||||||
|
Lease operating expenses |
13,039 |
12,937 |
||||||
|
Production taxes |
8,463 |
5,904 |
||||||
|
Depreciation, depletion and amortization |
35,417 |
24,433 |
||||||
|
General and administrative |
8,769 |
5,206 |
||||||
|
Accretion expense |
218 |
184 |
||||||
|
Acquisition expense |
548 |
450 |
||||||
|
Total operating expenses |
66,454 |
49,114 |
||||||
|
Income from operations |
60,986 |
32,249 |
||||||
|
Other (income) expenses: |
||||||||
|
Interest expense, net of capitalized amounts |
460 |
665 |
||||||
|
(Gain) loss on derivative contracts |
4,481 |
(15,303) |
||||||
|
Other income |
(211) |
(708) |
||||||
|
Total other (income) expense |
4,730 |
(15,346) |
||||||
|
Income before income taxes |
56,256 |
47,595 |
||||||
|
Income tax expense |
495 |
466 |
||||||
|
Net income |
55,761 |
47,129 |
||||||
|
Preferred stock dividends |
(1,824) |
(1,824) |
||||||
|
Income available to common stockholders |
$ |
53,937 |
$ |
45,305 |
||||
|
Income per common share: |
||||||||
|
Basic |
$ |
0.27 |
$ |
0.23 |
||||
|
Diluted |
$ |
0.27 |
$ |
0.22 |
||||
|
Shares used in computing income per common share: |
||||||||
|
Basic |
201,921 |
201,054 |
||||||
|
Diluted |
202,588 |
201,740 |
||||||
|
Callon Petroleum Company Consolidated Statements of Cash Flows (Unaudited; in thousands) |
||||||||
|
Three Months Ended March 31, | ||||||||
|
2018 |
2017 | |||||||
|
Cash flows from operating activities: |
||||||||
|
Net income |
$ |
55,761 |
$ |
47,129 |
||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
||||||||
|
Depreciation, depletion and amortization |
36,066 |
24,932 |
||||||
|
Accretion expense |
218 |
184 |
||||||
|
Amortization of non-cash debt related items |
453 |
665 |
||||||
|
Deferred income tax expense |
495 |
466 |
||||||
|
Net gain on derivatives, net of settlements |
(3,978) |
(17,794) |
||||||
|
Non-cash expense related to equity share-based awards |
1,131 |
930 |
||||||
|
Change in the fair value of liability share-based awards |
1,012 |
(291) |
||||||
|
Payments to settle asset retirement obligations |
(366) |
(765) |
||||||
|
Changes in current assets and liabilities: |
||||||||
|
Accounts receivable |
(8,067) |
(4,066) |
||||||
|
Other current assets |
61 |
576 |
||||||
|
Current liabilities |
12,938 |
9,903 |
||||||
|
Other long-term liabilities |
87 |
— |
||||||
|
Other assets, net |
(507) |
(523) |
||||||
|
Payments to settle vested liability share-based awards |
(3,089) |
(8,662) |
||||||
|
Net cash provided by operating activities |
92,215 |
52,684 |
||||||
|
Cash flows from investing activities: |
||||||||
|
Capital expenditures |
(111,330) |
(66,154) |
||||||
|
Acquisitions |
(38,923) |
(648,485) |
||||||
|
Acquisition deposit |
900 |
46,138 |
||||||
|
Net cash used in investing activities |
(149,353) |
(668,501) |
||||||
|
Cash flows from financing activities: |
||||||||
|
Borrowings on senior secured revolving credit facility |
80,000 |
— |
||||||
|
Payments on senior secured revolving credit facility |
(30,000) |
— |
||||||
|
Payment of preferred stock dividends |
(1,824) |
(1,824) |
||||||
|
Tax withholdings related to restricted stock units |
(560) |
(79) |
||||||
|
Net cash provided by (used in) financing activities |
47,616 |
(1,903) |
||||||
|
Net change in cash and cash equivalents |
(9,522) |
(617,720) |
||||||
|
Balance, beginning of period |
27,995 |
652,993 |
||||||
|
Balance, end of period |
$ |
18,473 |
$ |
35,273 |
||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA" and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Thursday, May 3, 2018, to discuss first quarter 2018 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Thursday, May 3, 2018, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Select "IR Calendar" under the "Investors" section of the website: www.callon.com. |
|
Presentation Slides: |
Select "Presentations" under the "Investors" section of the website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
4895442 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2018 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5279
|
i) |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-first-quarter-2018-results-300641376.html
SOURCE Callon Petroleum Company
Article Date
5/2/2018Callon Petroleum Company Schedules First Quarter 2018 Conference Call for May 3, 2018
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., April 19, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its first quarter 2018 financial and operating results.
Webcast and Conference Call:
Date: Thursday, May 3, 2018
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
|
Webcast: | |
|
Select "IR Calendar" under the "Investors" section of the website. | |
|
Conference Call: |
||
|
Domestic: |
1-888-317-6003 | |
|
Canada: |
1-866-284-3684 | |
|
International: |
1-412-317-6061 | |
|
Access code: |
4895442 | |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release first quarter 2018 results after market close on Wednesday, May 2, 2018.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5279
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-first-quarter-2018-conference-call-for-may-3-2018-300633126.html
SOURCE Callon Petroleum Company
Article Date
4/19/2018Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., March 19, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Scotia Howard Weil 2018 Energy Conference
The Company will present at the 2018 Energy Conference hosted by Scotia Howard Weil in New Orleans, LA on Monday, March 26, 2018 at 3:20 PM Central Time.
IPAA 24th Annual OGIS New York
The Company will present at the 24th Annual Oil & Gas Investment Symposium hosted by the Independent Petroleum Association of America in New York, NY on Monday, April 9, 2018 at 3:05 PM Eastern Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300615058.html
SOURCE Callon Petroleum Company
Article Date
3/19/2018Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., March 5, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on March 30, 2018 to stockholders of record as of March 15, 2018. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
1-800-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-declares-series-a-preferred-dividend-300606809.html
SOURCE Callon Petroleum Company
Article Date
3/5/2018Callon Petroleum Company Announces Fourth Quarter 2017 Results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., Feb. 27, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months and full-year ended December 31, 2017.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the fourth quarter of 2017, and other recent data points, include:
Joe Gatto, President and Chief Executive Officer commented, "Our full year results for 2017 highlight solid execution by our team, resulting in annual production growth of more than 50% and a greater than 25% reduction in lease operating expense over the course of the year. Our operating margins improved 30% over 2016 and our oil content remained just below 80%, contributing to strong internal cash flow generation. Importantly, these top tier cash margins, coupled with drill-bit finding and development cost below $10 per BOE, are a fundamental driver of corporate level returns that continue to improve in parallel with our growth in producing assets. We have recently increased our operating activity to five drilling rigs and plan to remain at this pace for the balance of 2018 as we incorporate larger pad development concepts into our program and drive steady improvement in our net cash flow profile over the course of the year."
Operations Update
At December 31, 2017, we had 232 gross (171.8 net) horizontal wells producing from eight established flow units in the Permian Basin. Net daily production for the three months ended December 31, 2017 grew approximately 44% to 26.5 thousand barrels of oil equivalent per day (approximately 79% oil) as compared to the same period of 2016. Full year production for 2017 averaged 22,940 barrels of oil equivalent per day (approximately 78% oil) reflecting growth of 50% over 2016 volumes.
Midland Basin
During the fourth quarter, over 50% of the wells placed on production were from our WildHorse area with an average completed lateral length of approximately 7,300 feet. This area continues to be a key area of production growth for the company and is projected to comprise in excess of 30% of our total gross drilling activity in 2018. Completed lateral lengths are projected to average over 8,000 feet and the majority of activity will continue to focus predominantly on the development of the Wolfcamp A.
In our Monarch area, we placed six wells on production during the quarter. Activity in this area continues to focus on the Lower Spraberry which has consistently generated some of the highest returns in our portfolio. The three-well Kendra pad, with average completed lateral lengths of approximately 10,350, has produced over 236,000 BOE (87% oil) over the first 90 days online. Additionally, we commenced production of our first multi-well pad that utilized recycled flowback water volumes and plan to increase recycling activity in Monarch with upcoming wells. Our 2018 activity plan for Monarch will feature two separate "mega-pad" concepts incorporating simultaneous development of two contiguous three-well pads. Each pad will be drilled concurrently by dedicated rigs and all six wells placed on production at the same time. We expect these larger pads to be placed on production during the second half of the year.
In Reagan County at the Ranger area, our first Wolfcamp C well, together with two Lower Wolfcamp B wells, was completed during the fourth quarter and began flowback in January. The Wolfcamp C well continues to produce under natural flowing pressure with recent production rates in excess of 1,000 BOE/d (85% - 90% oil) and is still in the process of establishing a peak rate. We anticipate drilling four (gross) additional Wolfcamp C wells in Ranger during the course of 2018 with an average working interest of approximately 55%.
Delaware Basin
We recently completed drilling of our first two-well pad in the area and also added a second rig to our Spur development program in February. As part of this increased activity, we plan to enhance our existing saltwater disposal capacity of over 100,000 barrels per day with the connection to a pipeline system operated by Goodnight Midstream that will move water disposal volumes outside of our operating area. In addition, we are in the final stages of establishing a recycling program in this area and targeting usage of up to 50% recycled volumes for completion operations by year end 2018. During the fourth quarter, the Saratoga 7LA well came online and has produced at an average daily rate of approximately 1,015 BOE/d (83% oil) during its first 56 days of production.
Capital Expenditures
For the three months ended December 31, 2017, we incurred $115.8 million in accrued operational capital expenditures (excluding other items) compared to $113.4 million in the third quarter of 2017. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended December 31, 2017 | ||||||||||||||
|
Operational |
Capitalized |
Capitalized |
Total Capital | |||||||||||
|
Capital |
Other (a) |
Interest |
G&A |
Expenditures | ||||||||||
|
Cash basis (b) |
$ |
123,664 |
$ |
5,006 |
$ |
18,848 |
$ |
5,103 |
$ |
152,621 | ||||
|
Timing adjustments (c) |
(7,910) |
— |
(9,140) |
— |
(17,050) | |||||||||
|
Non-cash items |
— |
— |
— |
1,173 |
1,173 | |||||||||
|
Accrual (GAAP) basis |
$ |
115,754 |
$ |
5,006 |
$ |
9,708 |
$ |
6,276 |
$ |
136,744 | ||||
|
(a) |
Includes seismic, land and other items. |
|
(b) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(c) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
We also divested certain infrastructure during the fourth quarter for proceeds of just over $20 million. We anticipate Callon will have additional opportunities to selectively monetize other infrastructure and facilities investments as we leverage strategic partnerships and increasingly transition to the use of recycled water volumes in our completion operations.
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | |||||||||||
|
December 31, 2017 |
September 30, 2017 |
December 31, 2016 | |||||||||
|
Net production |
|||||||||||
|
Oil (MBbls) |
1,936 |
1,591 |
1,287 |
||||||||
|
Natural gas (MMcf) |
3,018 |
2,900 |
2,412 |
||||||||
|
Total (MBOE) |
2,439 |
2,074 |
1,689 |
||||||||
|
Average daily production (BOE/d) |
26,511 |
22,543 |
18,359 |
||||||||
|
% oil (BOE basis) |
79 |
% |
77 |
% |
76 |
% | |||||
|
Oil and natural gas revenues (in thousands) |
|||||||||||
|
Oil revenue |
$ |
104,132 |
$ |
73,349 |
$ |
60,559 |
|||||
|
Natural gas revenue |
14,081 |
11,265 |
8,522 |
||||||||
|
Total |
118,213 |
84,614 |
69,081 |
||||||||
|
Impact of cash-settled derivatives |
(4,501) |
(1,214) |
2,079 |
||||||||
|
Adjusted Total Revenue (i) |
$ |
113,712 |
$ |
83,400 |
$ |
71,160 |
|||||
|
Average realized sales price (excluding impact of cash settled derivatives) |
|||||||||||
|
Oil (Bbl) |
$ |
53.79 |
$ |
46.10 |
$ |
47.05 |
|||||
|
Natural gas (Mcf) |
4.67 |
3.88 |
3.53 |
||||||||
|
Total (BOE) |
48.47 |
40.80 |
40.90 |
||||||||
|
Average realized sales price (including impact of cash settled derivatives) |
|||||||||||
|
Oil (Bbl) |
$ |
51.28 |
$ |
45.24 |
$ |
48.87 |
|||||
|
Natural gas (Mcf) |
4.78 |
3.94 |
3.43 |
||||||||
|
Total (BOE) |
46.62 |
40.21 |
42.13 |
||||||||
|
Additional per BOE data |
|||||||||||
|
Sales price (a) |
$ |
48.47 |
$ |
40.80 |
$ |
40.90 |
|||||
|
Lease operating expense (b) |
4.84 |
5.08 |
7.96 |
||||||||
|
Gathering and treating expense |
0.57 |
0.52 |
0.40 |
||||||||
|
Production taxes |
2.55 |
2.62 |
2.20 |
||||||||
|
Operating margin |
$ |
40.51 |
$ |
32.58 |
$ |
30.34 |
|||||
|
Depletion, depreciation and amortization |
$ |
14.98 |
$ |
13.75 |
$ |
13.06 |
|||||
|
Adjusted G&A (c) |
|||||||||||
|
Cash component (d) |
$ |
2.46 |
$ |
2.50 |
$ |
2.84 |
|||||
|
Non-cash component |
0.54 |
0.65 |
0.54 |
||||||||
|
(a) |
Excludes the impact of cash settled derivatives. |
|
(b) |
Excludes gathering and treating expense. |
|
(c) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(d) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended December 31, 2017, Callon reported total revenue of $118.2 million and total revenue including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $113.7 million, including the impact of a $4.5 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's revenue. Average daily production for the quarter was 26.5 MBOE/d compared to average daily production of 22.5 MBOE/d in the third quarter of 2017. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended December 31, 2017, Callon recognized the following hedging-related items (in thousands, except per unit data):
|
Three Months Ended December 31, 2017 | ||||||||
|
In Thousands |
Per Unit | |||||||
|
Oil derivatives |
||||||||
|
Net loss on settlements |
$ |
(4,854) |
$ |
(2.51) |
||||
|
Net loss on fair value adjustments |
(26,010) |
|||||||
|
Total loss on oil derivatives |
$ |
(30,864) |
||||||
|
Natural gas derivatives |
||||||||
|
Net gain on settlements |
$ |
353 |
$ |
0.11 |
||||
|
Net loss on fair value adjustments |
(26) |
|||||||
|
Total gain on natural gas derivatives |
$ |
327 |
||||||
|
Total oil & natural gas derivatives |
||||||||
|
Net loss on settlements |
$ |
(4,501) |
$ |
(1.85) |
||||
|
Net loss on fair value adjustments |
(26,036) |
|||||||
|
Total loss on total oil & natural gas derivatives |
$ |
(30,537) |
||||||
Lease Operating Expenses, including workover and gathering expense ("LOE"). LOE per BOE for the three months ended December 31, 2017 was $5.41 per BOE, compared to LOE of $5.60 per BOE in the third quarter of 2017. The decrease in this metric resulted primarily from an increase in production period over period.
Production Taxes, including ad valorem taxes. Production taxes were $2.55 per BOE for the three months ended December 31, 2017, representing approximately 5.3% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended December 31, 2017 was $14.98 per BOE compared to $13.75 per BOE in the third quarter of 2017. The increase on a per unit basis was primarily attributable to greater increases in our depreciable asset base and assumed future development costs related to undeveloped proved reserves as compared to the estimated total proved reserve base.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $7.3 million, or $3.00 per BOE, for the three months ended December 31, 2017 compared to $6.5 million, or $3.15 per BOE, for the third quarter of 2017. The cash component of Adjusted G&A was $6.0 million, or $2.46 per BOE, for the three months ended December 31, 2017 compared to $5.2 million, or $2.50 per BOE, for the third quarter of 2017.
For the three months ended December 31, 2017, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Three Months Ended | |||
|
Total G&A expense |
$ |
8,173 |
|
|
Less: Change in the fair value of liability share-based awards (non-cash) |
(844) |
||
|
Adjusted G&A – total |
7,329 |
||
|
Less: Restricted stock share-based compensation (non-cash) |
(1,202) |
||
|
Less: Corporate depreciation & amortization (non-cash) |
(125) |
||
|
Adjusted G&A – cash component |
$ |
6,002 |
|
Income tax expense. Callon typically provides for income taxes at a statutory rate of 35% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses and state income taxes. We recorded an income tax expense of $0.2 million for the three months ended December 31, 2017 which relates to deferred State of Texas gross margin tax. At December 31, 2017 we had a valuation allowance of $60.9 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision of $8.3 million (or $0.04 per diluted share) for the quarter as if the valuation allowance did not exist.
Proved Reserves
The Company recently completed the reserve audit for the year ended December 31, 2017 with its independent reserve auditor, DeGolyer and MacNaughton. As of December 31, 2017, Callon's estimated total proved reserves were 137.0 MMBOE, a 50% increase over the previous year-end. The proved reserves estimate is comprised of 78% oil of which our total proved developed estimated volumes are comprised of 75% oil.
The following table presents the progression of our estimated net proved oil and natural gas reserves from December 31, 2016 to 2017, and in each case, prepared in accordance with the rules and regulations of the SEC.
|
Proved developed and undeveloped reserves |
Oil (MBbls) |
Natural Gas (MMcf) |
Total (MBOE) | |||||
|
As of December 31, 2016 |
71,145 |
122,611 |
91,580 |
|||||
|
Revisions to previous estimates |
(5,171) |
6,336 |
(4,115) |
|||||
|
Extensions and discoveries |
39,267 |
48,648 |
47,375 |
|||||
|
Purchases, net of sales, of reserves in place |
8,388 |
12,711 |
10,507 |
|||||
|
Production |
(6,557) |
(10,896) |
(8,373) |
|||||
|
As of December 31, 2017 |
107,072 |
179,410 |
136,974 |
|||||
Callon added a total of 47.4 MMBOE in 2017 from horizontal development of our properties, replacing 566% of 2017 production as calculated by the sum of reserve extensions and discoveries, divided by annual production ("Organic reserve replacement"). The Company's finding and development costs from extensions and discoveries ("Drill-Bit F&D costs") were $8.21 per BOE calculated as accrual costs incurred for exploration and development divided by the reserves (in barrels of oil equivalent) added from extensions and discoveries. See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations.
Guidance Update
As a result of the Tax Cuts and Jobs Act, signed into law in December 2017 and effective January 1, 2018, the new federal statutory income tax rate was reduced to 21% from 35%. In addition, the Company adopted the Revenue from Contracts with Customers accounting standard on January 1, 2018. Starting with the first quarter of 2018, certain natural gas gathering and treating expenses will be accounted for as a reduction to revenue.
|
2017 Actual |
2018 Forecast | |||
|
Total production (MBOE/d) |
22.9 |
29.5 - 32.0 | ||
|
% oil |
78% |
77% | ||
|
Income statement expenses (per BOE) |
||||
|
LOE, including workovers |
$5.46 |
$5.25 - $6.25 | ||
|
Production taxes, including ad valorem (% unhedged revenue) |
6% |
6% | ||
|
Adjusted G&A: cash component (a) |
$2.51 |
$1.75 - $2.50 | ||
|
Adjusted G&A: non-cash component (b) |
$0.57 |
$0.50 - $1.00 | ||
|
Interest expense (c) |
$0.00 |
$0.00 | ||
|
Statutory income tax rate |
36% |
22% | ||
|
Capital expenditures ($MM, accrual basis) |
||||
|
Operational (net of monetizations) (d) |
$389 |
$500 - $540 | ||
|
Capitalized expenses |
$48 |
$60 - $70 | ||
|
Net operated horizontal wells placed on production |
37 |
43 - 46 |
|
(a) |
Excludes stock-based compensation and corporate depreciation and amortization. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. |
|
(c) |
All interest expense anticipated to be capitalized. |
|
(d) |
Includes seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following tables summarize our open derivative positions for the periods indicated:
|
For the Full Year of |
For the Full Year of | ||||||
|
Oil contracts (WTI) |
2018 |
2019 | |||||
|
Swap contracts |
|||||||
|
Total volume (MBbls) |
2,009 |
— |
|||||
|
Weighted average price per Bbl |
$ |
51.78 |
$ |
— |
|||
|
Collar contracts (two-way collars) |
|||||||
|
Total volume (MBbls) |
365 |
— |
|||||
|
Weighted average price per Bbl |
|||||||
|
Ceiling (short call) |
$ |
60.50 |
$ |
— |
|||
|
Floor (long put) |
$ |
50.00 |
$ |
— |
|||
|
Collar contracts combined with short puts (three-way collars) |
|||||||
|
Total volume (MBbls) |
3,468 |
1,825 |
|||||
|
Weighted average price per Bbl |
|||||||
|
Ceiling (short call option) |
$ |
60.86 |
$ |
62.40 |
|||
|
Floor (long put option) |
$ |
48.95 |
$ |
53.00 |
|||
|
Short put option |
$ |
39.21 |
$ |
43.00 |
|||
|
For the Full Year of |
For the Full Year of | ||||||
|
Oil contracts (Midland basis differential) |
2018 |
2019 | |||||
|
Swap contracts |
|||||||
|
Volume (MBbls) |
5,289 |
— |
|||||
|
Weighted average price per Bbl |
$ |
(0.86) |
$ |
— |
|||
|
|
For the Full Year of |
For the Full Year of | |||||
|
Natural gas contracts |
2018 |
2019 | |||||
|
Collar contracts (Henry Hub, two-way collars) |
|||||||
|
Total volume (BBtu) |
720 |
— |
|||||
|
Weighted average price per MMBtu |
|||||||
|
Ceiling (short call option) |
$ |
3.84 |
$ |
— |
|||
|
Floor (long put option) |
$ |
3.40 |
$ |
— |
|||
|
Swap contracts (Henry Hub) |
|||||||
|
Total volume (BBtu) |
3,366 |
— |
|||||
|
Weighted average price per MMBtu |
$ |
2.95 |
$ |
— |
|||
Income (Loss) Available to Common Shareholders. The Company reported net income available to common shareholders of $21.0 million for the three months ended December 31, 2017 and Adjusted Income available to common shareholders of $30.2 million, or $0.15 per diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income (loss) available to common stockholders to Adjusted Income and the Company's net income (loss) to Adjusted EBITDA (in thousands):
|
Three Months Ended | |||||||||||
|
December 31, 2017 |
September 30, 2017 |
December 31, 2016 | |||||||||
|
Income (loss) available to common stockholders |
$ |
21,001 |
$ |
15,257 |
$ |
(3,570) |
|||||
|
Change in valuation allowance |
(8,285) |
(6,064) |
559 |
||||||||
|
Net loss on derivatives, net of settlements |
16,924 |
8,416 |
7,170 |
||||||||
|
Change in the fair value of share-based awards |
562 |
475 |
590 |
||||||||
|
Loss on early extinguishment of debt |
— |
— |
8,374 |
||||||||
|
Adjusted Income |
$ |
30,202 |
$ |
18,084 |
$ |
13,123 |
|||||
|
Adjusted Income per fully diluted common share |
$ |
0.15 |
$ |
0.09 |
$ |
0.08 |
|||||
|
Three Months Ended | |||||||||||
|
December 31, 2017 |
September 30, 2017 |
December 31, 2016 | |||||||||
|
Net income (loss) |
$ |
22,824 |
$ |
17,081 |
$ |
(1,746) |
|||||
|
Net loss on derivatives, net of settlements |
26,037 |
12,947 |
11,030 |
||||||||
|
Non-cash stock-based compensation expense |
2,101 |
1,952 |
1,718 |
||||||||
|
Loss on early extinguishment of debt |
— |
— |
12,883 |
||||||||
|
Acquisition expense |
(112) |
205 |
1,263 |
||||||||
|
Income tax expense |
248 |
237 |
48 |
||||||||
|
Interest expense |
461 |
444 |
1,369 |
||||||||
|
Depreciation, depletion and amortization |
37,222 |
29,132 |
22,512 |
||||||||
|
Accretion expense |
154 |
131 |
196 |
||||||||
|
Adjusted EBITDA |
$ |
88,935 |
$ |
62,129 |
$ |
49,273 |
|||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended December 31, 2017 was $89.0 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||||
|
December 31, 2017 |
September 30, 2017 |
December 31, 2016 | |||||||||
|
Cash flows from operating activities: |
|||||||||||
|
Net income (loss) |
$ |
22,824 |
$ |
17,081 |
$ |
(1,746) |
|||||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|||||||||||
|
Depreciation, depletion and amortization |
37,222 |
29,132 |
22,512 |
||||||||
|
Accretion expense |
154 |
131 |
196 |
||||||||
|
Amortization of non-cash debt related items |
455 |
441 |
744 |
||||||||
|
Deferred income tax expense |
247 |
237 |
48 |
||||||||
|
Net loss on derivatives, net of settlements |
26,037 |
12,947 |
11,030 |
||||||||
|
Loss on early extinguishment of debt |
— |
— |
9,883 |
||||||||
|
Non-cash expense related to equity share-based awards |
1,240 |
1,219 |
811 |
||||||||
|
Change in the fair value of liability share-based awards |
865 |
732 |
908 |
||||||||
|
Discretionary cash flow |
$ |
89,044 |
$ |
61,920 |
$ |
44,386 |
|||||
|
Changes in working capital |
(8,642) |
(7,777) |
$ |
(7,832) |
|||||||
|
Payments to settle asset retirement obligations |
(216) |
(250) |
(576) |
||||||||
|
Net cash provided by operating activities |
$ |
80,186 |
$ |
53,893 |
$ |
35,978 |
|||||
|
F&D and Reserve Replacement | ||||||
|
Calculation |
2017 | |||||
|
Parameters |
Metrics | |||||
|
Production (MBOE) |
(A) |
8,373 |
||||
|
Proved reserve data |
||||||
|
Proved reserves (MBOE) |
||||||
|
Total (MBOE) extensions and discoveries |
(B) |
47,375 |
||||
|
PUD additions |
(C) |
24,322 |
||||
|
PUDs transferred to PDP |
(D) |
8,281 |
||||
|
Total annual reserve additions, net of revisions |
(E) |
53,767 |
||||
|
Capital costs (in thousands) |
||||||
|
Property acquisition costs |
||||||
|
Exploration costs |
$ |
239,453 |
||||
|
Development costs |
279,424 |
|||||
|
Unevaluated properties |
||||||
|
Exploration costs |
(F) |
6,374 |
||||
|
Transfers to evaluated properties |
(131,170) |
|||||
|
Leasehold and seismic |
5,006 |
|||||
|
Total capital costs incurred |
(G) |
$ |
389,075 |
|||
|
Drill-Bit F&D costs per BOE (two-stream) |
(G) / (B) |
$ |
8.21 |
|||
|
PD F&D per BOE (two-stream) |
(G - F) / (B - C + D) |
$ |
12.21 |
|||
|
Organic reserve replacement ratio |
(B) / (A) |
566 |
% | |||
|
All-sources reserve replacement ratio |
(E) / (A) |
642 |
% | |||
|
Callon Petroleum Company | |||||||
|
Consolidated Balance Sheets | |||||||
|
(in thousands, except par and per share values and share data) | |||||||
|
December 31, 2017 |
December 31, 2016 | ||||||
|
ASSETS |
|||||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
27,995 |
$ |
652,993 |
|||
|
Accounts receivable |
114,320 |
69,783 |
|||||
|
Fair value of derivatives |
406 |
103 |
|||||
|
Other current assets |
2,139 |
2,247 |
|||||
|
Total current assets |
144,860 |
725,126 |
|||||
|
Oil and natural gas properties, full cost accounting method: |
|||||||
|
Evaluated properties |
3,429,570 |
2,754,353 |
|||||
|
Less accumulated depreciation, depletion, amortization and impairment |
(2,084,095) |
(1,947,673) |
|||||
|
Net evaluated oil and natural gas properties |
1,345,475 |
806,680 |
|||||
|
Unevaluated properties |
1,168,016 |
668,721 |
|||||
|
Total oil and natural gas properties, net |
2,513,491 |
1,475,401 |
|||||
|
Other property and equipment, net |
20,361 |
14,114 |
|||||
|
Restricted investments |
3,372 |
3,332 |
|||||
|
Deferred tax asset |
52 |
— |
|||||
|
Deferred financing costs |
4,863 |
3,092 |
|||||
|
Acquisition deposit |
900 |
46,138 |
|||||
|
Other assets, net |
5,397 |
384 |
|||||
|
Total assets |
$ |
2,693,296 |
$ |
2,267,587 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued liabilities |
$ |
162,878 |
$ |
95,577 |
|||
|
Accrued interest |
9,235 |
6,057 |
|||||
|
Cash-settleable restricted stock unit awards |
4,621 |
8,919 |
|||||
|
Asset retirement obligations |
1,295 |
2,729 |
|||||
|
Fair value of derivatives |
27,744 |
18,268 |
|||||
|
Total current liabilities |
205,773 |
131,550 |
|||||
|
Senior secured revolving credit facility |
25,000 |
— |
|||||
|
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs |
595,196 |
390,219 |
|||||
|
Asset retirement obligations |
4,725 |
3,932 |
|||||
|
Cash-settleable restricted stock unit awards |
3,490 |
8,071 |
|||||
|
Deferred tax liability |
1,457 |
90 |
|||||
|
Fair value of derivatives |
1,284 |
28 |
|||||
|
Other long-term liabilities |
405 |
295 |
|||||
|
Total liabilities |
837,330 |
534,185 |
|||||
|
Commitments and contingencies |
|||||||
|
Stockholders' equity: |
|||||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized: 1,458,948 shares outstanding |
15 |
15 |
|||||
|
Common stock, $0.01 par value, 300,000,000 shares authorized; 201,836,172 and 201,041,320 shares outstanding, respectively |
2,018 |
2,010 |
|||||
|
Capital in excess of par value |
2,181,359 |
2,171,514 |
|||||
|
Accumulated deficit |
(327,426) |
(440,137) |
|||||
|
Total stockholders' equity |
1,855,966 |
1,733,402 |
|||||
|
Total liabilities and stockholders' equity |
$ |
2,693,296 |
$ |
2,267,587 |
|||
|
Callon Petroleum Company | |||||||||||||||
|
Consolidated Statements of Operations | |||||||||||||||
|
(in thousands, except per share data) | |||||||||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Operating revenues: |
|||||||||||||||
|
Oil sales |
$ |
104,132 |
$ |
60,559 |
$ |
322,374 |
$ |
177,652 |
|||||||
|
Natural gas sales |
14,082 |
8,522 |
44,100 |
23,199 |
|||||||||||
|
Total operating revenues |
118,214 |
69,081 |
366,474 |
200,851 |
|||||||||||
|
Operating expenses: |
|||||||||||||||
|
Lease operating expenses |
13,201 |
14,124 |
49,907 |
38,353 |
|||||||||||
|
Production taxes |
6,228 |
3,717 |
22,396 |
11,870 |
|||||||||||
|
Depreciation, depletion and amortization |
36,543 |
22,051 |
115,714 |
71,369 |
|||||||||||
|
General and administrative |
8,172 |
6,562 |
27,067 |
26,317 |
|||||||||||
|
Settled share-based awards |
— |
— |
6,351 |
— |
|||||||||||
|
Accretion expense |
154 |
196 |
677 |
958 |
|||||||||||
|
Write-down of oil and natural gas properties |
— |
— |
— |
95,788 |
|||||||||||
|
Acquisition expense |
(112) |
1,263 |
2,916 |
3,673 |
|||||||||||
|
Total operating expenses |
64,186 |
47,913 |
225,028 |
248,328 |
|||||||||||
|
Income (loss) from operations |
54,028 |
21,168 |
141,446 |
(47,477) |
|||||||||||
|
Other (income) expenses: |
|||||||||||||||
|
Interest expense, net of capitalized amounts |
461 |
1,369 |
2,159 |
11,871 |
|||||||||||
|
Loss on early extinguishment of debt |
— |
12,883 |
— |
12,883 |
|||||||||||
|
Loss on derivative contracts |
30,536 |
8,952 |
18,901 |
20,233 |
|||||||||||
|
Other income |
(41) |
(338) |
(1,311) |
(637) |
|||||||||||
|
Total other (income) expense |
30,956 |
22,866 |
19,749 |
44,350 |
|||||||||||
|
Income (loss) before income taxes |
23,072 |
(1,698) |
121,697 |
(91,827) |
|||||||||||
|
Income tax (benefit) expense |
248 |
48 |
1,273 |
(14) |
|||||||||||
|
Net income (loss) |
22,824 |
(1,746) |
120,424 |
(91,813) |
|||||||||||
|
Preferred stock dividends |
(1,823) |
(1,824) |
(7,295) |
(7,295) |
|||||||||||
|
Income (loss) available to common stockholders |
$ |
21,001 |
$ |
(3,570) |
$ |
113,129 |
$ |
(99,108) |
|||||||
|
Income (loss) per common share: |
|||||||||||||||
|
Basic |
$ |
0.10 |
$ |
(0.02) |
$ |
0.56 |
$ |
(0.78) |
|||||||
|
Diluted |
$ |
0.10 |
$ |
(0.02) |
$ |
0.56 |
$ |
(0.78) |
|||||||
|
Shares used in computing income (loss) per common share: |
|||||||||||||||
|
Basic |
201,835 |
166,258 |
201,526 |
126,258 |
|||||||||||
|
Diluted |
202,426 |
166,258 |
202,102 |
126,258 |
|||||||||||
|
Callon Petroleum Company | |||||||||||||||
|
Consolidated Statements of Cash Flows | |||||||||||||||
|
(in thousands) | |||||||||||||||
|
Three Months Ended December 31, |
Twelve Months Ended December 31, | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net income (loss) |
$ |
22,824 |
$ |
(1,746) |
$ |
120,424 |
$ |
(91,813) |
|||||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
|||||||||||||||
|
Depreciation, depletion and amortization |
37,222 |
22,512 |
118,051 |
73,072 |
|||||||||||
|
Write-down of oil and natural gas properties |
— |
— |
— |
95,788 |
|||||||||||
|
Accretion expense |
154 |
196 |
677 |
958 |
|||||||||||
|
Amortization of non-cash debt related items |
455 |
744 |
2,150 |
3,115 |
|||||||||||
|
Deferred income tax (benefit) expense |
247 |
48 |
1,273 |
(14) |
|||||||||||
|
Loss on derivatives, net of settlements |
26,037 |
11,030 |
10,429 |
38,135 |
|||||||||||
|
Loss on sale of other property and equipment |
— |
— |
62 |
— |
|||||||||||
|
Non-cash loss on early extinguishment of debt |
— |
9,883 |
— |
9,883 |
|||||||||||
|
Non-cash expense related to equity share-based awards |
1,240 |
811 |
8,254 |
2,765 |
|||||||||||
|
Change in the fair value of liability share-based awards |
865 |
908 |
3,288 |
6,953 |
|||||||||||
|
Payments to settle asset retirement obligations |
(216) |
(576) |
(2,047) |
(1,471) |
|||||||||||
|
Changes in current assets and liabilities: |
|||||||||||||||
|
Accounts receivable |
(32,347) |
(13,611) |
(44,495) |
(30,055) |
|||||||||||
|
Other current assets |
444 |
(535) |
108 |
(786) |
|||||||||||
|
Current liabilities |
23,413 |
5,473 |
30,947 |
25,288 |
|||||||||||
|
Other long-term liabilities |
— |
10 |
121 |
96 |
|||||||||||
|
Long-term prepaid |
— |
— |
(4,650) |
— |
|||||||||||
|
Other assets, net |
(152) |
831 |
(1,528) |
(840) |
|||||||||||
|
Payments for cash-settled restricted stock unit awards |
— |
— |
(13,173) |
(10,300) |
|||||||||||
|
Net cash provided by operating activities |
80,186 |
35,978 |
229,891 |
120,774 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Capital expenditures |
(152,621) |
(67,334) |
(419,839) |
(190,032) |
|||||||||||
|
Acquisitions |
(3,952) |
(352,622) |
(718,456) |
(654,679) |
|||||||||||
|
Acquisition deposit |
(900) |
(13,438) |
45,238 |
(46,138) |
|||||||||||
|
Proceeds from sales of mineral interest and equipment |
20,525 |
1,639 |
20,525 |
24,562 |
|||||||||||
|
Net cash used in investing activities |
(136,948) |
(431,755) |
(1,072,532) |
(866,287) |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Borrowings on senior secured revolving credit facility |
25,000 |
— |
25,000 |
217,000 |
|||||||||||
|
Payments on senior secured revolving credit facility |
— |
— |
— |
(257,000) |
|||||||||||
|
Payments on term loans |
— |
(300,000) |
— |
(300,000) |
|||||||||||
|
Issuance of 6.125% senior unsecured notes due 2024 |
— |
400,000 |
200,000 |
400,000 |
|||||||||||
|
Premium on the issuance of 6.125% senior unsecured notes due 2024 |
— |
— |
8,250 |
— |
|||||||||||
|
Payment of deferred financing costs |
(28) |
(10,153) |
(7,194) |
(10,793) |
|||||||||||
|
Issuance of common stock |
— |
634,862 |
— |
1,357,577 |
|||||||||||
|
Payment of preferred stock dividends |
(1,824) |
(1,824) |
(7,295) |
(7,295) |
|||||||||||
|
Tax withholdings related to restricted stock units |
— |
— |
(1,118) |
(2,207) |
|||||||||||
|
Net cash provided by financing activities |
23,148 |
722,885 |
217,643 |
1,397,282 |
|||||||||||
|
Net change in cash and cash equivalents |
(33,614) |
327,108 |
(624,998) |
651,769 |
|||||||||||
|
Balance, beginning of period |
61,609 |
325,885 |
652,993 |
1,224 |
|||||||||||
|
Balance, end of period |
$ |
27,995 |
$ |
652,993 |
$ |
27,995 |
$ |
652,993 |
|||||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA," "Adjusted Total Revenue," "Drill-Bit F&D costs," "PD F&D costs" and "Organic reserve replacement." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Wednesday, February 28, 2018, to discuss fourth quarter and full-year 2017 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Wednesday, February 28, 2018, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Select "IR Calendar" under the "Investors" section of the Company's website: www.callon.com. |
|
Presentation Slides: |
Select "Presentations" under the "Investors" section of the Company's website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
|
Domestic: |
1-888-317-6003 |
|
Canada: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
2180929 |
An archive of the conference call webcast will also be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2018 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
Contact information:
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5279
|
_________________________________________ | |
|
i) |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-fourth-quarter-2017-results-300605258.html
SOURCE Callon Petroleum Company
Article Date
2/27/2018Callon Petroleum Company Provides Operations Update and 2018 Capital Budget
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., Feb. 1, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced an operational update and 2018 capital expenditure budget, including an associated drilling activity and production forecast.
Joe Gatto, President and Chief Executive Officer of Callon, shared "We are extremely pleased with the strong sequential production growth of 18% in the fourth quarter of 2017, including over 20% growth in oil volumes. Our oil production percentage continues to be amongst the highest within the Permian Basin peer group and is an underlying driver of our leading cash margins." He continued, "Looking into 2018, Callon will remain focused on increasing activity on a measured basis as we continue to pull forward robust well-level economics across our footprint to support an upward trajectory of corporate level returns, while also maintaining a solid financial position. Importantly, we will be seeking to complement our strong margins with capital efficiency enhancements, including larger pad development concepts and the use of local sand in our completion designs. As we continue to progress multi-pad development in the Midland Basin and add a second dedicated rig in the Delaware Basin, we expect to see another significant production increase after the first quarter, with multiple projects coming online during the second and third quarters."
Operational Update
During the fourth quarter of 2017, the Company produced an estimated 26.5 MBoe/d with oil comprising 79% of volumes. The Company placed 12.5 total net wells online during the quarter, including 11.5 net wells in the Midland Basin and 1 net well in the Delaware Basin. Full year 2017 production is expected to be approximately 22.9 Boe/d, with oil accounting for 78% of volumes. Capital spending for the fourth quarter is estimated to be approximately $115 million, not including the net effect of completed infrastructure monetizations. Inclusive of these monetizations, the net cash outlay is expected to be approximately $95 million for the quarter.
Inclement weather during January has resulted in production curtailments in excess of our historical downtime assumptions in both the Delaware and Midland basins. The impact of this downtime is reflected in our full year 2018 production guidance.
2018 Capital Expenditures Budget
Callon expects total operational capital expenditures to range between $500 and $540 million in 2018 (excluding capitalized expenses), including the assumption of potential cost inflation of 10% for drilling and completion activities at the midpoint of the range. Planned activity is to be allocated relatively equally between the Delaware Basin (40%) and Midland Basin (60%) and is assumed to be over 98% operated by Callon. The Company expects to add a fifth drilling rig in the first quarter and continue to utilize two dedicated completion crews throughout the year. In addition, the program assumes the spud of 47 to 50 net wells with 43 to 46 wells placed on production in 2018. Overall, the Company forecasts 2018 average daily production of 29.5 to 32.0 MBoe/d (77% oil).
In the Delaware basin, planned activity is expected to focus primarily on development of the Wolfcamp A. In the Midland Basin, the drilling program will be primarily underpinned by activity in the Monarch areas focused on Lower Spraberry pad development and activity in the WildHorse area focused on Wolfcamp A pad development. Callon will also continue to selectively delineate emerging zones including the Wolfcamp C in both the Midland and Delaware Basins and the second Bone Spring shale in the Delaware Basin.
Upcoming Events
Callon expects to publish an updated investor presentation to the IR section of its website after market close on Monday, February 5th.
Additionally, the Company will present at the 23rd Annual Credit Suisse Energy Summit on Wednesday, February 14, 2018 at 7:30 am Mountain Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2018 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "forecast," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
Director of Investor Relations
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-provides-operations-update-and-2018-capital-budget-300592287.html
SOURCE Callon Petroleum Company
Article Date
2/1/20181/18/2018 - Callon Petroleum Company Schedules Fourth Quarter 2017 Conference Call for February 28, 2018
Callon Petroleum Company Schedules Fourth Quarter 2017 Conference Call for February 28, 2018
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., Jan. 18, 2018 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) plans to host a conference call to discuss its fourth quarter 2017 financial and operating results.
Webcast and Conference Call:
Date: Wednesday, February 28, 2018
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
|
Webcast: | ||||||||||||
|
Select "IR Calendar" under the "Investors" section of the website Company's website. | ||||||||||||
|
Conference Call: |
|||||||||
|
Domestic: |
1-888-317-6003 | ||||||||
|
Canada: |
1-866-284-3684 | ||||||||
|
International: |
1-412-317-6061 | ||||||||
|
Access code: |
2180929 | ||||||||
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release fourth quarter 2017 results after market close on Tuesday, February 27, 2018.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-281-589-5279
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-fourth-quarter-2017-conference-call-for-february-28-2018-300584762.html
SOURCE Callon Petroleum Company
Article Date
1/18/2018Callon Petroleum Appoints James Ulm as Chief Financial Officer
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., Dec. 7, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon") today announced that James "Jim" Ulm, II has been named Senior Vice President and Chief Financial Officer of Callon with an anticipated effective date of December 11, 2017.
Mr. Ulm has more than 30 years of experience in the energy industry with responsibilities including finance, accounting, strategic planning, business development and risk management. His most recent position has been as founder and managing partner of New Vista Energy Partners, a private E&P company focused on emerging resource plays in the Permian and Anadarko Basins. Previously, he served as CFO for three private companies, including with Fieldwood Energy, LLC where he was responsible for financial and accounting management, planning and the integration of several large acquisitions. Prior to these roles, Mr. Ulm served for almost ten years as the CFO for Pogo Producing Company, a publicly-traded oil and gas company which had meaningful operations in the Permian Basin. Earlier in his career, he held finance and accounting leadership roles with Newfield Exploration Company and American Exploration Company. Mr. Ulm holds an MBA and an undergraduate degree in Accounting, both from the University of Texas.
"I am very pleased to have Jim join our executive leadership team as we enter our next stage of growth, and continue to scale and expand our operations," said Joe Gatto, Chief Executive Officer and President of Callon. "We certainly expect that Jim's depth of experience with independent oil and gas operators and years of financial leadership will prove to be invaluable assets as Callon executes a corporate strategy designed to generate leading shareholder value in the Permian Basin."
As of the effective date of Mr. Ulm's appointment, Correne Loeffler, currently interim CFO, will retain her role as Callon's Treasurer. Mr. Gatto commented, "We are grateful for Correne's contributions as interim CFO over the past several months and the leadership she will continue to provide within Callon in the future."
In addition, Callon recently added to its senior management team with the appointment of Michol Ecklund as Vice President and General Counsel. Prior to joining Callon, Ms. Ecklund served as Deputy General Counsel, Operations Law at Marathon Oil Company. During her 15-year tenure at Marathon, she held management positions across the legal organization in a variety of disciplines and geographic operating areas. Prior to her time with Marathon, she worked for Baker Botts L.L.P. in Houston. Ms. Ecklund holds a Bachelor of Arts degree from Rice University and a Juris Doctor degree from Harvard Law School.
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Mark Brewer
Director of Investor Relations
1-281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-appoints-james-ulm-as-chief-financial-officer-300568558.html
SOURCE Callon Petroleum Company
Article Date
12/7/2017Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., Dec. 5, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on December 29, 2017 to stockholders of record as of December 15, 2017. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
1-800-451-1294
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-declares-series-a-preferred-dividend-300566141.html
SOURCE Callon Petroleum Company
Article Date
12/5/2017Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., Nov. 17, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Jefferies 2017 Energy Conference
The Company will participate in the Jefferies 2017 Energy Conference hosted by Jefferies LLC in Houston, Texas on Tuesday, November 28, 2017.
Capital One Securities, Inc. 12th Annual Energy Conference
The Company will present at the Capital One Securities, Inc. 12th Annual Energy Conference on Wednesday, December 6th at 1:00 pm Central Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300558663.html
SOURCE Callon Petroleum Company
Article Date
11/17/2017Callon Petroleum Company Announces Third Quarter 2017 Results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
NATCHEZ, Miss., Nov. 6, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended September 30, 2017.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the third quarter of 2017, and other recent data points include:
Joe Gatto, Chief Executive Officer and President commented, "This quarter's results speak to our team's commitment to generating strong returns by focusing on driving down costs while extracting the best well results possible from our premier asset base. Consistent improvement in our already strong cash margins, despite production deferrals during the quarter, is evidence that we are taking the correct steps to create shareholder value. Our goal is to manage growth as a function of creating returns on our capital investment. We have been consistent in our focus on these priorities and will continue to be into 2018." He continued, "Callon's well results were strong across all four of our operations areas during the third quarter, including our first operated well in the Delaware Basin. Early well results in the fourth quarter have been equally strong and we are excited about our prospects for 2018."
Operations Update
At September 30, 2017, we had 218 gross (161.2 net) horizontal wells producing from seven established flow units in the Permian Basin. Net daily production for the three months ended September 30, 2017 grew approximately 36% to 22.5 thousand barrels of oil equivalent per day (approximately 77% oil) as compared to the same period of 2016.
For the three months ended September 30, 2017, we operated four horizontal drilling rigs, drilling 13 gross (10.3 net) horizontal wells in the Spur, WildHorse, Ranger and Monarch areas. We placed a combined 11 gross (10.1 net) horizontal wells on production in the quarter in these areas.
In the Delaware Basin, we drilled and completed our first operated Lower Wolfcamp A well, the Sleeping Indian A1 #1LA well. The well is currently outperforming the 7,500 foot type curve, with an oil cut of approximately 82%. We recently completed our second operated well, the Saratoga A1 #7LA and have placed the well on flowback. We expect to commence multi-well pad development prior to the end of this year with co-development of the Upper and Lower Wolfcamp A.
In the Midland Basin, we were active across all three focus areas: WildHorse, Ranger and Monarch. In Howard County at our WildHorse area, we placed multiple Wolfcamp A wells on production during the second half of the quarter. The wells are cleaning up and have shown similar productivity to our previous wells in the area on an early time basis. Our plans are to continue program development of multiple zones across our footprint and we also expect to test tighter Wolfcamp A spacing, at 10 wells per section, in 2018.
In Reagan County at our Ranger area, our first operated Lower Wolfcamp B wells since 2015 are outperforming the type curve by more than 20%. During the quarter, we drilled our first Wolfcamp C well in this area, which is scheduled for completion during the fourth quarter along with two additional Lower Wolfcamp B wells. We currently do not account for any Wolfcamp C locations in our delineated inventory.
At our Monarch area in Midland County, we drilled a three-well pad consisting of our longest wells to date at an average of over 21,000 feet true measured depth. The completed lateral length for these wells averaged approximately 10,600 feet and the wells are entering their fourth week of flowback.
Infrastructure investment continued to be a key focus in the third quarter. We realized an impressive reduction in lease operating expenses this quarter, and we expect this infrastructure investment to continue to improve operating margins as well as position Callon as an environmentally-responsible operator for the long term. We continued to invest in saltwater disposal wells in the Midland Basin and Delaware Basin, resulting in increased disposal capacity and reduced disposal costs. In addition, we have begun utilizing recycled water volumes in the Midland Basin and are currently preparing infrastructure at our Spur asset to implement water recycling for our planned two rig program in 2018. Importantly, after developing a substantial base of Callon-owned infrastructure, we are now positioned to selectively monetize portions of our asset base while ensuring reliable operations. As an initial step in this initiative, we expect to complete at least $20 million of such transactions in the fourth quarter, with other identified transactions expected to close by the end of the first quarter of 2018.
|
Capital Expenditures | ||||||||||||||||||||
|
For the three months ended September 30, 2017, we incurred $112.7 million in cash operational capital expenditures (excluding other items) compared to $64.0 million in the second quarter of 2017. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands): | ||||||||||||||||||||
|
Three Months Ended September 30, 2017 | ||||||||||||||||||||
|
Operational |
Capitalized |
Capitalized |
Total Capital | |||||||||||||||||
|
Capital |
Other (a) |
Interest |
G&A |
Expenditures | ||||||||||||||||
|
Cash basis (b) |
$ |
112,667 |
$ |
3,767 |
$ |
479 |
$ |
4,215 |
$ |
121,128 |
||||||||||
|
Timing adjustments (c) |
711 |
— |
9,119 |
— |
9,830 |
|||||||||||||||
|
Non-cash items |
— |
— |
— |
1,133 |
1,133 |
|||||||||||||||
|
Accrual (GAAP) basis |
$ |
113,378 |
$ |
3,767 |
$ |
9,598 |
$ |
5,348 |
$ |
132,091 |
||||||||||
|
(a) |
Includes seismic, land and other items. |
|
(b) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(c) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
|
Operating and Financial Results | ||||||||||||
|
The following table presents summary information for the periods indicated: | ||||||||||||
|
Three Months Ended | ||||||||||||
|
September 30, 2017 |
June 30, 2017 |
September 30, 2016 | ||||||||||
|
Net production: |
||||||||||||
|
Oil (MBbls) |
1,591 |
1,596 |
1,153 |
|||||||||
|
Natural gas (MMcf) |
2,900 |
2,550 |
2,244 |
|||||||||
|
Total production (MBOE) |
2,074 |
2,021 |
1,527 |
|||||||||
|
Average daily production (BOE/d) |
22,543 |
22,209 |
16,598 |
|||||||||
|
% oil (BOE basis) |
77 |
% |
79 |
% |
76 |
% | ||||||
|
Oil and natural gas revenues (in thousands): |
||||||||||||
|
Oil revenue |
$ |
73,349 |
$ |
72,885 |
$ |
49,095 |
||||||
|
Natural gas revenue |
11,265 |
9,398 |
6,832 |
|||||||||
|
Total revenue |
84,614 |
82,283 |
55,927 |
|||||||||
|
Impact of cash-settled derivatives |
(1,214) |
(267) |
4,091 |
|||||||||
|
Adjusted Total Revenue (i) |
$ |
83,400 |
$ |
82,016 |
$ |
60,018 |
||||||
|
Average realized sales price: |
||||||||||||
|
Oil (Bbl) (excluding impact of cash settled derivatives) |
$ |
46.10 |
$ |
45.67 |
$ |
42.58 |
||||||
|
Oil (Bbl) (including impact of cash settled derivatives) |
45.24 |
45.47 |
46.27 |
|||||||||
|
Natural gas (Mcf) (excluding impact of cash settled derivatives) |
$ |
3.88 |
$ |
3.69 |
$ |
3.04 |
||||||
|
Natural gas (Mcf) (including impact of cash settled derivatives) |
3.94 |
3.70 |
2.97 |
|||||||||
|
Total (BOE) (excluding impact of cash settled derivatives) |
$ |
40.80 |
$ |
40.71 |
$ |
36.63 |
||||||
|
Total (BOE) (including impact of cash settled derivatives) |
40.21 |
40.58 |
39.30 |
|||||||||
|
Additional per BOE data: |
||||||||||||
|
Sales price (excluding impact of cash settled derivatives) |
$ |
40.80 |
$ |
40.71 |
$ |
36.63 |
||||||
|
Lease operating expense (excluding gathering and treating |
||||||||||||
|
expense) |
5.08 |
5.56 |
6.16 |
|||||||||
|
Gathering and treating expense |
0.52 |
0.45 |
0.36 |
|||||||||
|
Production taxes |
2.62 |
2.38 |
2.28 |
|||||||||
|
Operating margin |
$ |
32.58 |
$ |
32.32 |
$ |
27.83 |
||||||
|
Depletion, depreciation and amortization |
$ |
13.75 |
$ |
12.97 |
$ |
11.33 |
||||||
|
Adjusted G&A (a) |
||||||||||||
|
Cash component (b) |
$ |
2.50 |
$ |
2.67 |
$ |
2.38 |
||||||
|
Non-cash component |
0.65 |
0.53 |
0.58 |
|||||||||
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended September 30, 2017, Callon reported total revenue of $84.6 million and total revenue including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $83.4 million, including the impact of a $1.2 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's revenue. Average daily production for the quarter was 22.5 MBOE/d compared to average daily production of 22.2 MBOE/d in the second quarter of 2017. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended September 30, 2017, Callon recognized the following hedging-related items (in thousands, except per unit data):
|
In Thousands |
Per Unit | ||||||
|
Oil derivatives |
|||||||
|
Net loss on settlements |
$ |
(1,373) |
$ |
(0.86) |
|||
|
Net loss on fair value adjustments |
(12,811) |
||||||
|
Total loss on oil derivatives |
$ |
(14,184) |
|||||
|
Natural gas derivatives |
|||||||
|
Net gain on settlements |
$ |
159 |
$ |
0.06 |
|||
|
Net loss on fair value adjustments |
(137) |
||||||
|
Total gain on natural gas derivatives |
$ |
22 |
|||||
|
Total oil & natural gas derivatives |
|||||||
|
Net loss on settlements |
$ |
(1,214) |
$ |
(0.59) |
|||
|
Net loss on fair value adjustments |
(12,948) |
||||||
|
Total loss on total oil & natural gas derivatives |
$ |
(14,162) |
|||||
Lease Operating Expenses, including workover and gathering expense ("LOE"). LOE per BOE for the three months ended September 30, 2017 was $5.60 per BOE, compared to LOE of $6.01 per BOE in the second quarter of 2017. The decrease in this metric resulted primarily from a decrease in the number of workovers period over period.
Production Taxes, including ad valorem taxes. Production taxes were $2.62 per BOE for the three months ended September 30, 2017, representing approximately 6.4% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended September 30, 2017 was $13.75 per BOE compared to $12.97 per BOE in the second quarter of 2017. The increase on a per unit basis was primarily attributable to greater increases in our depreciable asset base and assumed future development costs related to undeveloped proved reserves as compared to the estimated total proved reserve base.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $6.5 million, or $3.15 per BOE, for the three months ended September 30, 2017 compared to $6.5 million, or $3.20 per BOE, for the second quarter of 2017. The cash component of Adjusted G&A was $5.2 million, or $2.50 per BOE, for the three months ended September 30, 2017 compared to $5.4 million, or $2.67 per BOE, for the second quarter of 2017.
For the three months ended September 30, 2017, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Three Months Ended | |||
|
Total G&A expense |
$ |
7,259 |
|
|
Less: Change in the fair value of liability share-based awards (non-cash) |
(731) |
||
|
Adjusted G&A – total |
6,528 |
||
|
Less: Restricted stock share-based compensation (non-cash) |
(1,198) |
||
|
Less: Corporate depreciation & amortization (non-cash) |
(146) |
||
|
Adjusted G&A – cash component |
$ |
5,184 |
|
Income tax expense. Callon typically provides for income taxes at a statutory rate of 35% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses and state income taxes. We recorded an income tax expense of $0.2 million for the three months ended September 30, 2017 which relates to deferred State of Texas gross margin tax. At September 30, 2017 we had a valuation allowance of $109.8 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision of $6.1 million (or $0.03 per diluted share) for the quarter as if the valuation allowance did not exist.
|
2017 Guidance Update | |||
|
Fourth Quarter | |||
|
2017 Guidance | |||
|
Total production (BOE/d) |
24,000 - 25,500 | ||
|
% oil |
77 % | ||
|
Income Statement Expenses (per BOE) |
|||
|
LOE, including workovers |
$5.75 - $6.25 | ||
|
Gathering and treating |
$0.55 - $0.65 | ||
|
Production taxes, including ad valorem (% unhedged revenue) |
7% | ||
|
Adjusted G&A: cash component (a) |
$2.25 - $2.50 | ||
|
Adjusted G&A: non-cash component (b) |
$0.55 - $0.65 | ||
|
Interest expense (c) |
$0.00 | ||
|
Effective income tax rate |
0% | ||
|
Capital expenditures ($MM, accrual basis) |
|||
|
Total Operational (net of monetizations) (d) |
$108 - $112 ($88 - $92) | ||
|
Capitalized expenses (cash component) |
$13 - $17 | ||
|
Net operated horizontal well completions |
|||
|
Midland Basin |
~12 | ||
|
Delaware Basin |
~1 | ||
|
(a) |
Excludes stock-based compensation and corporate depreciation and amortization. See the Non-GAAP related disclosures referenced in the footnote (b) below. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. The reconciliation above provides a reconciliation of third quarter 2017 G&A expense on a GAAP basis to Adjusted G&A expense, a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking non-GAAP financial measure without unreasonable effort because of the number of estimated variables that could affect the final value. Accordingly, investors are cautioned not to place undue reliance on this information. |
|
(c) |
All interest expense anticipated to be capitalized. |
|
(d) |
Includes seismic, land and other items. Excludes capitalized expenses. |
|
Hedge Portfolio Summary | |||||||
|
The following tables summarize our open derivative positions for the periods indicated: | |||||||
|
For the Remainder of |
For the Full Year of | ||||||
|
Oil contracts (WTI) |
2017 |
2018 | |||||
|
Swap contracts combined with short puts (enhanced swaps) |
|||||||
|
Total volume (MBbls) |
184 |
— |
|||||
|
Weighted average price per Bbl |
|||||||
|
Swap |
$ |
44.50 |
$ |
— |
|||
|
Short put option |
$ |
30.00 |
$ |
— |
|||
|
Swap contracts |
|||||||
|
Total volume (MBbls) |
184 |
1,825 |
|||||
|
Weighted average price per Bbl |
$ |
45.74 |
$ |
51.42 |
|||
|
Deferred premium put spread option |
|||||||
|
Total volume (MBbls) |
253 |
— |
|||||
|
Premium per Bbl |
$ |
2.45 |
$ |
— |
|||
|
Weighted average price per Bbl |
|||||||
|
Long put option |
$ |
50.00 |
$ |
— |
|||
|
Short put option |
$ |
40.00 |
$ |
— |
|||
|
Collar contracts (two-way collars) |
|||||||
|
Total volume (MBbls) |
340 |
— |
|||||
|
Weighted average price per Bbl |
|||||||
|
Ceiling (short call) |
$ |
58.19 |
$ |
— |
|||
|
Floor (long put) |
$ |
47.50 |
$ |
— |
|||
|
Call option contracts |
|||||||
|
Total volume (MBbls) |
169 |
— |
|||||
|
Premium per Bbl |
$ |
1.82 |
$ |
— |
|||
|
Weighted average price per Bbl |
|||||||
|
Short call strike price (a) |
$ |
50.00 |
$ |
— |
|||
|
Long call strike price (a) |
$ |
50.00 |
$ |
— |
|||
|
Collar contracts combined with short puts (three-way collars) |
|||||||
|
Total volume (MBbls) |
— |
3,468 |
|||||
|
Weighted average price per Bbl |
|||||||
|
Ceiling (short call option) |
$ |
— |
$ |
60.86 |
|||
|
Floor (long put option) |
$ |
— |
$ |
48.95 |
|||
|
Short put option |
$ |
— |
$ |
39.21 |
|||
|
(a) |
Offsetting contracts. |
|
For the Remainder of |
For the Full Year of | ||||||
|
Oil contracts (Midland basis differential) |
2017 |
2018 | |||||
|
Swap contracts |
|||||||
|
Volume (MBbls) |
552 |
5,109 |
|||||
|
Weighted average price per Bbl |
$ |
(0.52) |
$ |
(0.90) |
|||
|
For the Remainder of |
For the Full Year of | ||||||
|
Natural gas contracts (Henry Hub) |
2017 |
2018 | |||||
|
Collar contracts combined with short puts (three-way collars) |
|||||||
|
Total volume (BBtu) |
368 |
— |
|||||
|
Weighted average price per MMBtu |
|||||||
|
Ceiling (short call option) |
$ |
3.71 |
$ |
— |
|||
|
Floor (long put option) |
$ |
3.00 |
$ |
— |
|||
|
Short put option |
$ |
2.50 |
$ |
— |
|||
|
Collar contracts (two-way collars) |
|||||||
|
Total volume (BBtu) |
856 |
720 |
|||||
|
Weighted average price per MMBtu |
|||||||
|
Ceiling (short call option) |
$ |
3.77 |
$ |
3.84 |
|||
|
Floor (long put option) |
$ |
3.23 |
$ |
3.40 |
|||
|
Swap contracts |
|||||||
|
Total volume (BBtu) |
124 |
— |
|||||
|
Weighted average price per MMBtu |
$ |
3.39 |
$ |
— |
|||
Income (Loss) Available to Common Shareholders. The Company reported net income available to common shareholders of $15.3 million for the three months ended September 30, 2017 and Adjusted Income available to common shareholders of $18.1 million, or $0.09 per diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income (loss) available to common stockholders to Adjusted Income and the Company's net income (loss) to Adjusted EBITDA (in thousands):
|
Three Months Ended | |||||||||||
|
September 30, 2017 |
June 30, 2017 |
September 30, 2016 | |||||||||
|
Income available to common stockholders |
$ |
15,257 |
$ |
31,566 |
$ |
19,315 |
|||||
|
Change in valuation allowance |
(6,064) |
(11,194) |
(7,907) |
||||||||
|
Net (gain) loss on derivatives, net of settlements |
8,416 |
(6,995) |
(679) |
||||||||
|
Change in the fair value of share-based awards |
475 |
(315) |
2,192 |
||||||||
|
Settled share-based awards |
— |
4,128 |
— |
||||||||
|
Adjusted Income |
$ |
18,084 |
$ |
17,190 |
$ |
12,921 |
|||||
|
Adjusted Income per fully diluted common share |
$ |
0.09 |
$ |
0.09 |
$ |
0.09 |
|||||
|
Three Months Ended | |||||||||||
|
September 30, 2017 |
June 30, 2017 |
September 30, 2016 | |||||||||
|
Net income |
$ |
17,081 |
$ |
33,390 |
$ |
21,139 |
|||||
|
Net (gain) loss on derivatives, net of settlements |
12,947 |
(10,761) |
(1,044) |
||||||||
|
Non-cash stock-based compensation expense |
1,952 |
499 |
4,150 |
||||||||
|
Settled share-based awards |
— |
6,351 |
— |
||||||||
|
Acquisition expense |
205 |
2,373 |
456 |
||||||||
|
Income tax (benefit) expense |
237 |
322 |
(62) |
||||||||
|
Interest expense |
444 |
589 |
831 |
||||||||
|
Depreciation, depletion and amortization |
29,132 |
26,765 |
17,733 |
||||||||
|
Accretion expense |
131 |
208 |
187 |
||||||||
|
Adjusted EBITDA |
$ |
62,129 |
$ |
59,736 |
$ |
43,390 |
|||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended September 30, 2017 was $61.9 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||||
|
September 30, 2017 |
June 30, 2017 |
September 30, 2016 | |||||||||
|
Cash flows from operating activities: |
|||||||||||
|
Net income |
$ |
17,081 |
$ |
33,390 |
$ |
21,139 |
|||||
|
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
|
Depreciation, depletion and amortization |
29,132 |
26,765 |
17,733 |
||||||||
|
Accretion expense |
131 |
208 |
187 |
||||||||
|
Amortization of non-cash debt related items |
441 |
589 |
810 |
||||||||
|
Deferred income tax expense |
237 |
323 |
(62) |
||||||||
|
Net (gain) loss on derivatives, net of settlements |
12,947 |
(10,761) |
(1,044) |
||||||||
|
Loss on sale of other property and equipment |
— |
62 |
— |
||||||||
|
Non-cash expense related to equity share-based awards |
1,219 |
4,865 |
608 |
||||||||
|
Change in the fair value of liability share-based awards |
732 |
1,982 |
3,371 |
||||||||
|
Discretionary cash flow |
$ |
61,920 |
$ |
57,423 |
$ |
42,742 |
|||||
|
Changes in working capital |
$ |
(7,777) |
$ |
(8,968) |
$ |
2,927 |
|||||
|
Payments to settle asset retirement obligations |
(250) |
(816) |
(576) |
||||||||
|
Payments to settle vested liability share-based awards |
— |
(4,511) |
— |
||||||||
|
Net cash provided by operating activities |
$ |
53,893 |
$ |
43,128 |
$ |
45,093 |
|||||
|
Callon Petroleum Company | |||||||
|
Consolidated Balance Sheets | |||||||
|
(in thousands, except par and per share values and share data) | |||||||
|
September 30, 2017 |
December 31, 2016 | ||||||
|
ASSETS |
Unaudited |
||||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
61,609 |
$ |
652,993 |
|||
|
Accounts receivable |
81,973 |
69,783 |
|||||
|
Fair value of derivatives |
3,333 |
103 |
|||||
|
Other current assets |
2,583 |
2,247 |
|||||
|
Total current assets |
149,498 |
725,126 |
|||||
|
Oil and natural gas properties, full cost accounting method: |
|||||||
|
Evaluated properties |
3,283,985 |
2,754,353 |
|||||
|
Less accumulated depreciation, depletion, amortization and impairment |
(2,026,809) |
(1,947,673) |
|||||
|
Net evaluated oil and natural gas properties |
1,257,176 |
806,680 |
|||||
|
Unevaluated properties |
1,173,614 |
668,721 |
|||||
|
Total oil and natural gas properties |
2,430,790 |
1,475,401 |
|||||
|
Other property and equipment, net |
18,626 |
14,114 |
|||||
|
Restricted investments |
3,362 |
3,332 |
|||||
|
Deferred financing costs |
5,209 |
3,092 |
|||||
|
Fair value of derivatives |
1,121 |
— |
|||||
|
Acquisition deposit |
— |
46,138 |
|||||
|
Prepaid |
4,650 |
— |
|||||
|
Other assets, net |
827 |
384 |
|||||
|
Total assets |
$ |
2,614,083 |
$ |
2,267,587 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued liabilities |
$ |
147,338 |
$ |
95,577 |
|||
|
Accrued interest |
18,375 |
6,057 |
|||||
|
Cash-settleable restricted stock unit awards |
4,158 |
8,919 |
|||||
|
Asset retirement obligations |
1,841 |
2,729 |
|||||
|
Fair value of derivatives |
6,380 |
18,268 |
|||||
|
Total current liabilities |
178,092 |
131,550 |
|||||
|
Senior secured revolving credit facility |
— |
— |
|||||
|
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs |
595,115 |
390,219 |
|||||
|
Asset retirement obligations |
3,163 |
3,932 |
|||||
|
Cash-settleable restricted stock unit awards |
2,626 |
8,071 |
|||||
|
Deferred tax liability |
1,158 |
90 |
|||||
|
Fair value of derivatives |
659 |
28 |
|||||
|
Other long-term liabilities |
405 |
295 |
|||||
|
Total liabilities |
781,218 |
534,185 |
|||||
|
Commitments and contingencies |
|||||||
|
Stockholders' equity: |
|||||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized; 1,458,948 shares outstanding |
15 |
15 |
|||||
|
Common stock, $0.01 par value, 300,000,000 shares authorized; 201,827,995 and 201,041,320 shares outstanding, respectively |
2,018 |
2,010 |
|||||
|
Capital in excess of par value |
2,179,258 |
2,171,514 |
|||||
|
Accumulated deficit |
(348,426) |
(440,137) |
|||||
|
Total stockholders' equity |
1,832,865 |
1,733,402 |
|||||
|
Total liabilities and stockholders' equity |
$ |
2,614,083 |
$ |
2,267,587 |
|||
|
Callon Petroleum Company | |||||||||||||||
|
Consolidated Statements of Operations | |||||||||||||||
|
(Unaudited; in thousands, except per share data) | |||||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Operating revenues: |
|||||||||||||||
|
Oil sales |
$ |
73,349 |
$ |
49,095 |
$ |
218,242 |
$ |
117,093 |
|||||||
|
Natural gas sales |
11,265 |
6,832 |
30,019 |
14,677 |
|||||||||||
|
Total operating revenues |
84,614 |
55,927 |
248,261 |
131,770 |
|||||||||||
|
Operating expenses: |
|||||||||||||||
|
Lease operating expenses |
11,624 |
9,961 |
36,708 |
24,229 |
|||||||||||
|
Production taxes |
5,444 |
3,478 |
16,168 |
8,153 |
|||||||||||
|
Depreciation, depletion and amortization |
28,525 |
17,303 |
79,172 |
49,318 |
|||||||||||
|
General and administrative |
7,259 |
7,891 |
18,894 |
19,755 |
|||||||||||
|
Settled share-based awards |
— |
— |
6,351 |
— |
|||||||||||
|
Accretion expense |
131 |
187 |
523 |
762 |
|||||||||||
|
Write-down of oil and natural gas properties |
— |
— |
— |
95,788 |
|||||||||||
|
Acquisition expense |
205 |
456 |
3,027 |
2,410 |
|||||||||||
|
Total operating expenses |
53,188 |
39,276 |
160,843 |
200,415 |
|||||||||||
|
Income (loss) from operations |
31,426 |
16,651 |
87,418 |
(68,645) |
|||||||||||
|
Other (income) expenses: |
|||||||||||||||
|
Interest expense, net of capitalized amounts |
444 |
831 |
1,698 |
10,502 |
|||||||||||
|
(Gain) loss on derivative contracts |
14,162 |
(5,135) |
(11,636) |
11,281 |
|||||||||||
|
Other income |
(498) |
(122) |
(1,270) |
(299) |
|||||||||||
|
Total other (income) expense |
14,108 |
(4,426) |
(11,208) |
21,484 |
|||||||||||
|
Income (loss) before income taxes |
17,318 |
21,077 |
98,626 |
(90,129) |
|||||||||||
|
Income tax (benefit) expense |
237 |
(62) |
1,026 |
(62) |
|||||||||||
|
Net income (loss) |
17,081 |
21,139 |
97,600 |
(90,067) |
|||||||||||
|
Preferred stock dividends |
(1,824) |
(1,824) |
(5,471) |
(5,471) |
|||||||||||
|
Income (loss) available to common stockholders |
$ |
15,257 |
$ |
19,315 |
$ |
92,129 |
$ |
(95,538) |
|||||||
|
Income (loss) per common share: |
|||||||||||||||
|
Basic |
$ |
0.08 |
$ |
0.14 |
$ |
0.46 |
$ |
(0.85) |
|||||||
|
Diluted |
$ |
0.08 |
$ |
0.14 |
$ |
0.46 |
$ |
(0.85) |
|||||||
|
Shares used in computing income (loss) per common share: |
|||||||||||||||
|
Basic |
201,827 |
136,983 |
201,422 |
112,925 |
|||||||||||
|
Diluted |
202,337 |
137,483 |
201,995 |
112,925 |
|||||||||||
|
Callon Petroleum Company | |||||||||||||||
|
Consolidated Statements of Cash Flows | |||||||||||||||
|
(Unaudited; in thousands) | |||||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net income (loss) |
$ |
17,081 |
$ |
21,139 |
$ |
97,600 |
$ |
(90,067) |
|||||||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||||
|
Depreciation, depletion and amortization |
29,132 |
17,733 |
80,829 |
50,560 |
|||||||||||
|
Write-down of oil and natural gas properties |
— |
— |
— |
95,788 |
|||||||||||
|
Accretion expense |
131 |
187 |
523 |
762 |
|||||||||||
|
Amortization of non-cash debt related items |
441 |
810 |
1,695 |
2,371 |
|||||||||||
|
Deferred income tax (benefit) expense |
237 |
(62) |
1,026 |
(62) |
|||||||||||
|
Net (gain) loss on derivatives, net of settlements |
12,947 |
(1,044) |
(15,608) |
27,105 |
|||||||||||
|
Loss on sale of other property and equipment |
— |
— |
62 |
— |
|||||||||||
|
Non-cash expense related to equity share-based awards |
1,219 |
778 |
7,014 |
1,954 |
|||||||||||
|
Change in the fair value of liability share-based awards |
732 |
3,371 |
2,423 |
6,045 |
|||||||||||
|
Payments to settle asset retirement obligations |
(250) |
(576) |
(1,831) |
(895) |
|||||||||||
|
Changes in current assets and liabilities: |
|||||||||||||||
|
Accounts receivable |
(4,338) |
(11,608) |
(12,148) |
(16,444) |
|||||||||||
|
Other current assets |
(38) |
54 |
(336) |
(251) |
|||||||||||
|
Current liabilities |
1,854 |
15,702 |
7,534 |
19,815 |
|||||||||||
|
Change in other long-term liabilities |
1 |
— |
121 |
86 |
|||||||||||
|
Change in long-term prepaid |
(4,650) |
— |
(4,650) |
— |
|||||||||||
|
Change in other assets, net |
(606) |
(1,221) |
(1,376) |
(1,671) |
|||||||||||
|
Payments to settle vested liability share-based awards |
— |
— |
(13,173) |
(10,300) |
|||||||||||
|
Net cash provided by operating activities |
53,893 |
45,263 |
149,705 |
84,796 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Capital expenditures |
(121,128) |
(47,418) |
(267,218) |
(122,698) |
|||||||||||
|
Acquisitions |
(8,015) |
(18,033) |
(714,504) |
(302,057) |
|||||||||||
|
Acquisition deposit |
— |
(32,700) |
46,138 |
(32,700) |
|||||||||||
|
Proceeds from sales of mineral interests and equipment |
— |
(708) |
— |
22,923 |
|||||||||||
|
Net cash used in investing activities |
(129,143) |
(98,859) |
(935,584) |
(434,532) |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Borrowings on senior secured revolving credit facility |
— |
74,000 |
— |
217,000 |
|||||||||||
|
Payments on senior secured revolving credit facility |
— |
(114,000) |
— |
(257,000) |
|||||||||||
|
Issuance of 6.125% senior unsecured notes due 2024 |
— |
— |
200,000 |
— |
|||||||||||
|
Premium on the issuance of 6.125% senior unsecured notes due 2024 |
— |
— |
8,250 |
— |
|||||||||||
|
Issuance of common stock |
— |
421,908 |
— |
722,715 |
|||||||||||
|
Payment of preferred stock dividends |
(1,824) |
(1,824) |
(5,471) |
(5,471) |
|||||||||||
|
Payment of deferred financing costs |
(401) |
(640) |
(7,166) |
(640) |
|||||||||||
|
Tax withholdings related to restricted stock units |
(65) |
(170) |
(1,118) |
(2,207) |
|||||||||||
|
Net cash provided by financing activities |
(2,290) |
379,274 |
194,495 |
674,397 |
|||||||||||
|
Net change in cash and cash equivalents |
(77,540) |
325,678 |
(591,384) |
324,661 |
|||||||||||
|
Balance, beginning of period |
139,149 |
207 |
652,993 |
1,224 |
|||||||||||
|
Balance, end of period |
$ |
61,609 |
$ |
325,885 |
$ |
61,609 |
$ |
325,885 |
|||||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA," and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Tuesday, November 7, 2017, to discuss third quarter 2017 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Tuesday, November 7, 2017, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Select "IR Calendar" under the "Investors" section of the website: www.callon.com. |
|
Presentation Slides: |
Select "Presentations" under the "Investors" section of the website: www.callon.com. |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
6326656 |
An archive of the conference call webcast will also be available at www.callon.com under the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2017 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-800-451-1294
|
i) |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations | |||
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-third-quarter-2017-results-300550288.html
SOURCE Callon Petroleum Company
Article Date
11/6/201710/11/2017 - Callon Petroleum Company Schedules Third Quarter 2017 Conference Call for November 7, 2017
Callon Petroleum Company Schedules Third Quarter 2017 Conference Call for November 7, 2017
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Oct. 11, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) (the "Company") plans to host a conference call to discuss its third quarter 2017 financial and operating results.
Webcast and Conference Call:
Date: Tuesday, November 7, 2017
Time: 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
|
Webcast: |
|
|
Select "IR Calendar" under the "Investors" section of the website Company's website. |
|
Conference Call: |
||
|
Domestic: |
1-888-317-6003 | |
|
Canada: |
1-866-284-3684 | |
|
International: |
1-412-317-6061 | |
|
Access code: |
6326656 |
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release third quarter 2017 results after market close on Monday, November 6, 2017.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
Contact Information
Mark Brewer
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
1-800-451-1294
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-schedules-third-quarter-2017-conference-call-for-november-7-2017-300535188.html
SOURCE Callon Petroleum Company
Article Date
10/11/201710/10/2017 - Brazos Midstream Acquires Callon Petroleum Company's Natural Gas Gathering System in Southern Delaware Basin
Brazos Midstream Acquires Callon Petroleum Company's Natural Gas Gathering System in Southern Delaware Basin
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
FORT WORTH, Texas, Oct. 10, 2017 /PRNewswire/ -- Brazos Midstream Holdings, LLC ("Brazos") ("The Company") today announced that subsidiaries of The Company have closed on the purchase of a natural gas gathering system from Callon Petroleum Company (NYSE: CPE) ("Callon"). As part of the acquisition, Brazos signed a long-term, fee-based agreement with Callon for gas gathering and processing services for acreage under development in Ward and Pecos counties, one of the premier areas of the Southern Delaware Basin. Including the Callon dedication, Brazos' midstream infrastructure is anchored by long-term acreage dedications covering approximately 240,000 acres with top-tier Permian operators.
"The acquisition of these strategic assets builds upon our existing franchise position and provides a platform for growth in an area we know well," said Stephen Luskey, Chief Commercial Officer of Brazos. "Callon is one of the leading pure-play Permian operators and we are pleased to be able to manage their gas infrastructure needs. We look forward to a long-term partnership with Callon and other producers as we grow in one of the most promising regions in our industry."
Joe Gatto, Chief Executive Officer and President of Callon Petroleum stated, "We are pleased to be entering into a long-term operating partnership with the team at Brazos Midstream, one of the premier gathering and processing firms in the Delaware Basin. We believe this transaction supports our current plans for robust growth across our Delaware Basin footprint."
The strategic acquisition positions Brazos as one of the largest private natural gas and crude oil midstream companies in the Delaware Basin. The acquired natural gas gathering system will connect to Brazos' existing system and the previously announced Comanche II natural gas processing plant. When complete in January 2018, Brazos' total operated processing capacity will be 260 MMcf/d. In addition, Brazos is accelerating plans to build a third natural gas processing plant, Comanche III, to meet continued volume growth in the region. The Company has secured a site for the plant and will begin construction in early 2018.
About Brazos Midstream
Brazos Midstream Holdings LLC is an independent midstream energy company headquartered in Fort Worth, Texas. The Company is focused on crude oil gathering, natural gas gathering and processing, compression, treating, water and condensate handling and stabilization. Brazos currently operates approximately 275 miles of natural gas and crude oil pipeline, a natural gas processing complex, and approximately 50,000 barrels of crude oil storage in the Delaware Basin. The Company is supported by equity commitments from affiliates of Old Ironsides Energy, LLC and a revolving credit facility with multiple banks.
For more information, please visit www.brazosmidstream.com.
|
Media Contact: |
Meggan Morrison |
|
M2 Communications | |
|
972-639-8715 | |
View original content with multimedia:http://www.prnewswire.com/news-releases/brazos-midstream-acquires-callon-petroleum-companys-natural-gas-gathering-system-in-southern-delaware-basin-300531269.html
SOURCE Brazos Midstream
Article Date
10/10/2017Callon Petroleum Company Provides Updated Production Guidance
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Oct. 2, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced a revised production guidance range of 22,450 to 22,600 barrels of oil equivalent per day ("Boe/d") for the third quarter of 2017, reduced from a previous guidance range of 23,000 to 25,000 Boe/d. Prior guidance of 77% oil production and estimates for expenses and operational capital expenditures for the third quarter are unchanged.
The revision is related in part to a heightened level of non-productive time during the completion of wells in the quarter caused by an approximate 20% reduction in average efficiency across all vendors involved with completion operations compared to the second quarter of 2017. As a result, cycle times for wells were extended and associated production contributions were delayed. Moreover, these increased cycle times also lengthened the amount of production downtime from offsetting wells that were shut-in for the completion operation and, hence, delayed the timing of returning wells to production. Over 2,500 net Boe/d of established production from offsetting wells was affected by completion operations in the quarter.
In addition, the short-term, derivative impacts of Hurricane Harvey included:
The Company also revised its full-year 2017 production guidance to a range of 22,000 to 23,000 Boe/d (78% oil). The updated estimates reflect:
Joe Gatto, President and Chief Executive Officer of the Company commented, "The Callon team has been working closely with all of its oil service partners to work through the challenges presented by an increasingly robust level of industry activity. We firmly believe this is a transitory issue for us and our fellow operators, and we expect to return to previous levels of efficiency as we strengthen working relationships with new oil service personnel and additional capacity relieves near term service pressures. Importantly, we have experienced some level of improvement on recent pads and don't expect these short-term issues to have any meaningful impact on our operating plan and outlook for 2018. In addition, we have been pleased with the lease operating expense reductions we have achieved during the year due to our proactive investments in infrastructure that will benefit us even more over the long-term development of our asset base."
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity, oil service costs and associated production and cash flow expectations; the Company's 2017 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Mark Brewer
Callon Petroleum Company
1-800-451-1294
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-provides-updated-production-guidance-300529253.html
SOURCE Callon Petroleum Company
Article Date
10/2/2017Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Sept. 22, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
2017 Johnson Rice Energy Conference
The Company will participate in the 2017 Energy Conference hosted by Johnson Rice Partners in New Orleans, Louisiana on Tuesday, September 26, 2017.
Deutsche Bank 29th Annual Leveraged Finance Conference
The Company will present at the Deutsche Bank 29th Annual Leveraged Finance Conference on Tuesday, October 3rd at 10:40 am Mountain Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300524158.html
SOURCE Callon Petroleum Company
Article Date
9/22/2017Goodnight Midstream Announces Multi-Year Contract With Callon Petroleum Company
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DALLAS, Sept. 13, 2017 /PRNewswire/ -- Goodnight Midstream, the professional fluids management company, announces a multi-year partnership to provide pipeline disposal service for Callon Petroleum Company (NYSE: CPE) in the southern Delaware Basin.
Goodnight will build, own and operate a produced water pipeline connecting Callon's Spur acreage in Ward County, Texas to saltwater disposal wells in the Central Basin Platform. The new system will reliably move produced water volumes out of the Delaware Basin, providing Callon assurance of sufficient disposal capacity at a low cost per barrel.
"We are pleased to continue our expansion in the Permian with this unique partnership with Callon, a leading operator in the basin," said Patrick Walker, Chief Executive Officer of Goodnight Midstream. "By piping produced water out of the Delaware Basin at large scale, we are leading the way in providing a long-term, sustainable outlet for the growing volumes of produced water generated by our producers. The shallow, porous and depleted formations of the Central Basin Platform provide the ideal disposal reservoirs for the millions of barrels of saltwater the Delaware Basin will produce in the decades to come."
Joe Gatto, President and Chief Executive Officer of Callon Petroleum, commented, "We are very pleased to be working with Goodnight Midstream to take this next step forward in our Delaware asset development. This partnership helps to position Callon as a leader in operational logistics in the basin. Our pipeline disposal solution has positive net present value implications for our Spur development and provides substantial capital reduction for Callon beginning in the second half of 2018."
About Goodnight Midstream
Goodnight Midstream provides trusted professional fluids management services to its oil and gas producing customers. The Company owns and operates an extensive network of water gathering pipelines and saltwater disposal wells focused on gathering and disposing of produced saltwater for oil and gas producers. Goodnight's midstream approach minimizes environmental impact and improves health and safety while lowering lease operating expense and improving reliability for its customers. Goodnight is supported by a team of highly experienced engineers and operating professionals. In addition to Goodnight's leading position in North Dakota, Goodnight is rapidly expanding in the Permian Basin of Texas and New Mexico. For more information, please visit www.goodnightmidstream.com.
Contact:
Julie Walter
jwalter@goodnightmidstream.com
Goodnight Midstream, LLC
View original content:http://www.prnewswire.com/news-releases/goodnight-midstream-announces-multi-year-contract-with-callon-petroleum-company-300518856.html
SOURCE Goodnight Midstream
Article Date
9/13/2017Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
NATCHEZ, Miss., Sept. 5, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on September 29, 2017 to stockholders of record as of September 15, 2017. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Mark Brewer
1-800-451-1294
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-declares-series-a-preferred-dividend-300513581.html
SOURCE Callon Petroleum Company
Article Date
9/5/2017Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Aug. 22, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
2017 Heikkinen Energy Conference
The Company will participate in the 2017 Energy Conference hosted by Heikkinen Energy Advisors in Houston, Texas on Wednesday, August 23, 2017.
2017 Barclays CEO Energy-Power Conference
The Company will present at the Barclays CEO Energy-Power Conference on Wednesday, September 6, 2017 at 4:25 pm Eastern Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
2017 Johnson Rice Energy Conference
The Company will participate in the 2017 Energy Conference hosted by Johnson Rice Partners in New Orleans, Louisiana on Tuesday, September 26, 2017.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Mark Brewer
281-589-5200
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-upcoming-investor-events-300507820.html
SOURCE Callon Petroleum Company
Article Date
8/22/2017Callon Petroleum Company Announces Second Quarter 2017 Results
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Aug. 2, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended June 30, 2017.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the second quarter of 2017, and other recent data points include:
"During the quarter we delivered double-digit oil production growth coupled with a double-digit reduction in lease operating expense," commented Joe Gatto, President and Chief Executive Officer. "In addition, we made important strides in the delineation of our asset base, including the extension of our program development into the central portion of Howard County and the completion of successful Lower Spraberry density spacing tests in our Monarch area. We also recently added a dedicated rig to our Spur area in the Delaware Basin in July and are now running four rigs that will be active across all four of our operating areas during the second half of 2017. In keeping with our strategy of sustainable growth and financial discipline, we are well-positioned to add a fifth rig in early 2018 and achieve our 2018 target exit rate goal of 40,000 BOE per day."
Operations Update
At June 30, 2017, we had 205 gross (151.1 net) horizontal wells producing from seven established flow units in the Permian Basin. Net daily production for the three months ended June 30, 2017 grew approximately 65% to 22.2 thousand barrels of oil equivalent per day ("MBOE/d") (approximately 79% oil) as compared to the same period of 2016. Sequentially, we grew production by approximately 9% compared to the first quarter of 2017, with a corresponding 11% sequential increase in our oil volumes.
For the three months ended June 30, 2017, we operated three horizontal drilling rigs, drilling 14 gross (10.7 net) horizontal wells in the Monarch, Ranger and WildHorse areas. We placed a combined 14 gross (9.7 net) horizontal wells on production in the quarter in the Monarch, Spur and WildHorse areas. In July 2017, we moved from a three-rig program to a four-rig program with the arrival of our first operated rig in the Delaware basin allocated to our Spur area. In addition, we recently added a second dedicated completion crew to account for our ramp in activity during the second half of 2017.
In the Midland Basin, we completed delineation of the Wolfcamp A across our Howard County position with recent well results tracking the 1 million barrels of oil equivalent ("MMBOE") type curve. Infrastructure development in the region continues to drive down lease operating expense per BOE and is expected to enhance early time peak fluid capacity, leading to improved de-watering of the formation and early time increases in oil cuts. Recent Lower Spraberry completions in Howard County continue to produce with shallow declines and upcoming wells in the formation are expected to benefit from new completion designs that focus on high density, near-wellbore design.
Production results and pressure data from the Monarch density pilot program support the establishment of a new 13 well per section stack-and-stagger model for the Lower Spraberry. This higher density well pattern increases the Lower Spraberry inventory at Monarch by approximately 15%. The inventory for the Lower Spraberry at Monarch now equates to more than 10 years of drilling inventory for a full-time rig line.
During the second quarter, we fracture stimulated our first two Lower Wolfcamp B wells in Reagan County since 2015. These wells are currently flowing back and are expected to reach peak rate during the third quarter. Additional drilling activity is currently planned during the second half of 2017 at Ranger, inclusive of a Wolfcamp C test well.
In the Delaware basin, the two wells acquired from the previous operator are tracking the respective acquisition type curves (1.6 MMBOE for the Wolfcamp A and 900 MBOE for the Wolfcamp B, both normalized for a 7,500 foot lateral). With a full-time rig now dedicated to Spur, upcoming wells will incorporate changes to both completion design and optimized landing zone for upcoming drilling in multiple intervals within the Wolfcamp formation.
On June 5, 2017, we completed the acquisition of 7,031 gross (2,488 net) acres in the Delaware Basin, contiguous to the Spur operating area, for total cash consideration of $52.5 million, excluding customary purchase price adjustments. The purchase price was funded with available cash-on-hand and the proceeds from the recent $200 million senior notes add-on offering.
Capital Expenditures
For the three months ended June 30, 2017, we incurred $64.0 million in cash operational capital expenditures compared to $55.5 million in the first quarter of 2017. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended June 30, 2017 | ||||||||||||||||||||
|
Operational |
Capitalized |
Capitalized |
Total Capital | |||||||||||||||||
|
Capital |
Other (a) |
Interest |
G&A |
Expenditures | ||||||||||||||||
|
Cash basis (b) |
$ |
63,999 |
$ |
1,382 |
$ |
10,791 |
$ |
3,764 |
$ |
79,936 |
||||||||||
|
Timing adjustments (c) |
18,082 |
— |
(2,858) |
— |
15,224 |
|||||||||||||||
|
Non-cash items |
— |
— |
— |
408 |
408 |
|||||||||||||||
|
Accrual (GAAP) basis |
$ |
82,081 |
$ |
1,382 |
$ |
7,933 |
$ |
4,172 |
$ |
95,568 |
||||||||||
|
(a) |
Includes seismic, land and other items. |
|
(b) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(c) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | ||||||||||||
|
June 30, 2017 |
March 31, 2017 |
June 30, 2016 | ||||||||||
|
Net production: |
||||||||||||
|
Oil (MBbls) |
1,596 |
1,434 |
948 |
|||||||||
|
Natural gas (MMcf) |
2,550 |
2,422 |
1,658 |
|||||||||
|
Total production (MBOE) |
2,021 |
1,838 |
1,224 |
|||||||||
|
Average daily production (BOE/d) |
22,209 |
20,422 |
13,451 |
|||||||||
|
% oil (BOE basis) |
79 |
% |
78 |
% |
77 |
% | ||||||
|
Oil and natural gas revenues (in thousands): |
||||||||||||
|
Oil revenue |
$ |
72,885 |
$ |
72,008 |
$ |
40,555 |
||||||
|
Natural gas revenue |
9,398 |
9,355 |
4,590 |
|||||||||
|
Total revenue |
82,283 |
81,363 |
45,145 |
|||||||||
|
Impact of cash-settled derivatives |
(267) |
(2,491) |
4,017 |
|||||||||
|
Adjusted Total Revenue (i) |
$ |
82,016 |
$ |
78,872 |
$ |
49,162 |
||||||
|
Average realized sales price: |
||||||||||||
|
Oil (Bbl) (excluding impact of cash settled derivatives) |
$ |
45.67 |
$ |
50.21 |
$ |
42.78 |
||||||
|
Oil (Bbl) (including impact of cash settled derivatives) |
45.47 |
48.45 |
46.69 |
|||||||||
|
Natural gas (Mcf) (excluding impact of cash settled derivatives) |
$ |
3.69 |
$ |
3.86 |
$ |
2.77 |
||||||
|
Natural gas (Mcf) (including impact of cash settled derivatives) |
3.70 |
3.88 |
2.96 |
|||||||||
|
Total (BOE) (excluding impact of cash settled derivatives) |
$ |
40.71 |
$ |
44.27 |
$ |
36.88 |
||||||
|
Total (BOE) (including impact of cash settled derivatives) |
40.58 |
42.91 |
40.17 |
|||||||||
|
Additional per BOE data: |
||||||||||||
|
Sales price (excluding impact of cash settled derivatives) |
$ |
40.71 |
$ |
44.27 |
$ |
36.88 |
||||||
|
Lease operating expense (excluding gathering and treating expense) |
5.56 |
6.61 |
5.70 |
|||||||||
|
Gathering and treating expense |
0.45 |
0.43 |
0.27 |
|||||||||
|
Production taxes |
2.38 |
3.21 |
2.01 |
|||||||||
|
Operating margin |
$ |
32.32 |
$ |
34.02 |
$ |
28.90 |
||||||
|
Depletion, depreciation and amortization |
$ |
12.97 |
$ |
13.29 |
$ |
13.31 |
||||||
|
Adjusted G&A (a) |
||||||||||||
|
Cash component (b) |
$ |
2.67 |
$ |
2.43 |
$ |
2.92 |
||||||
|
Non-cash component |
0.53 |
0.57 |
0.63 |
|||||||||
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended June 30, 2017, Callon reported total revenue of $82.3 million and total revenue including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $82.0 million, including the impact of a $0.3 million loss from the settlement of derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's revenue. Average daily production for the quarter was 22.2 MBOE/d compared to average daily production of 20.4 MBOE/d in the first quarter of 2017. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended June 30, 2017, Callon recognized the following hedging-related items (in thousands, except per unit data):
|
In Thousands |
Per Unit | ||||||
|
Oil derivatives |
|||||||
|
Net gain (loss) on settlements |
$ |
(315) |
$ |
(0.20) |
|||
|
Net gain (loss) on fair value adjustments |
10,128 |
||||||
|
Total gain (loss) on oil derivatives |
$ |
9,813 |
|||||
|
Natural gas derivatives |
|||||||
|
Net gain on settlements |
$ |
48 |
$ |
0.01 |
|||
|
Net gain (loss) on fair value adjustments |
633 |
||||||
|
Total gain (loss) on natural gas derivatives |
$ |
681 |
|||||
|
Total oil & natural gas derivatives |
|||||||
|
Net loss on settlements |
$ |
(267) |
$ |
(0.13) |
|||
|
Net gain on fair value adjustments |
10,761 |
||||||
|
Total gain on total oil & natural gas derivatives |
$ |
10,494 |
|||||
Lease Operating Expenses, including workover and gathering expense ("LOE"). LOE per BOE for the three months ended June 30, 2017 was $6.01 per BOE, compared to LOE of $7.04 per BOE in the first quarter of 2017. The decrease in this metric was related to early-day benefits from infrastructure projects materializing throughout the quarter as well as an increase in production volumes.
Production Taxes, including ad valorem taxes. Production taxes were $2.38 per BOE for the three months ended June 30, 2017, representing approximately 5.9% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended June 30, 2017 was $12.97 per BOE compared to $13.29 per BOE in the first quarter of 2017. The decrease on a per unit basis was primarily attributable to greater increases in the estimated total proved reserve base as compared to the increases in our depreciable asset base and assumed future development costs related to undeveloped proved reserves.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $6.5 million, or $3.20 per BOE, for the three months ended June 30, 2017 compared to $5.5 million, or $3.00 per BOE, for the first quarter of 2017. The cash component of Adjusted G&A was $5.4 million, or $2.67 per BOE, for the three months ended June 30, 2017 compared to $4.5 million, or $2.43 per BOE, for the first quarter of 2017.
For the three months ended June 30, 2017, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Three Months | |||
|
Total G&A expense |
$ |
6,430 |
|
|
Less: Early retirement expenses |
(444) |
||
|
Less: Early retirement expenses related to share-based compensation |
(81) |
||
|
Less: Change in the fair value of liability share-based awards (non-cash) |
567 |
||
|
Adjusted G&A – total |
6,472 |
||
|
Less: Restricted stock share-based compensation (non-cash) |
(966) |
||
|
Less: Corporate depreciation & amortization (non-cash) |
(114) |
||
|
Adjusted G&A – cash component |
$ |
5,392 |
|
Settled share-based awards. In June 2017, the Company settled the outstanding share-based award agreements of its former Chief Executive Officer, resulting in a payment of $6.4 million.
Income tax expense. Callon typically provides for income taxes at a statutory rate of 35% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses and state income taxes. We recorded an income tax expense of $0.3 million for the three months ended June 30, 2017. At June 30, 2017 we had a valuation allowance of $115.9 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision of $11.2 million (or $0.06 per diluted share) for the quarter as if the valuation allowance did not exist.
2017 Guidance Update
|
Third Quarter |
Full Year | ||
|
2017 Guidance |
2017 Guidance | ||
|
Total production (BOE/d) |
23,000 - 25,000 |
22,500 - 25,500 | |
|
% oil |
77 % |
78 % | |
|
Income Statement Expenses (per BOE) |
|||
|
LOE, including workovers |
$6.00 - $6.50 |
$5.75 - $6.25 | |
|
Gathering and treating |
$0.40 - $0.50 |
$0.40 - $0.50 | |
|
Production taxes, including ad valorem (% unhedged revenue) |
7% |
7% | |
|
Adjusted G&A: cash component (a) |
$2.25 - $2.50 |
$2.00 - $2.50 | |
|
Adjusted G&A: non-cash component (b) |
$0.50 - $0.75 |
$0.50 - $1.00 | |
|
Interest expense (c) |
$0.00 |
$0.00 | |
|
Effective income tax rate |
0% |
0% | |
|
Capital expenditures ($MM, accrual basis) |
|||
|
Operational (d) |
$110 - $130 |
$350 | |
|
Capitalized expenses (cash component) |
$12 - $17 |
$40 - $45 | |
|
Net operated horizontal well completions |
|||
|
Midland Basin |
~10 |
~39 | |
|
Delaware Basin |
~1 |
~3 |
|
(a) |
Excludes stock-based compensation and corporate depreciation and amortization. See the Non-GAAP related disclosures referenced in the footnote (b) below. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. The reconciliation above provides a reconciliation of second quarter 2017 G&A expense on a GAAP basis to Adjusted G&A expense, a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking non-GAAP financial measure without unreasonable effort because of the number of estimated variables that could affect the final value. Accordingly, investors are cautioned not to place undue reliance on this information. |
|
(c) |
All interest expense anticipated to be capitalized. |
|
(d) |
Includes seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following tables summarize our open derivative positions for the periods indicated:
|
For the Remainder of |
For the Full Year of | ||||||
|
Oil contracts (WTI) |
2017 |
2018 | |||||
|
Swap contracts combined with short puts (enhanced swaps) |
|||||||
|
Total volume (MBbls) |
368 |
— |
|||||
|
Weighted average price per Bbl |
|||||||
|
Swap |
$ |
44.50 |
$ |
— |
|||
|
Short put option |
$ |
30.00 |
$ |
— |
|||
|
Swap contracts |
|||||||
|
Total volume (MBbls) |
368 |
730 |
|||||
|
Weighted average price per Bbl |
$ |
45.74 |
$ |
50.03 |
|||
|
Deferred premium put spread option |
|||||||
|
Total volume (MBbls) |
506 |
— |
|||||
|
Premium per Bbl |
$ |
2.45 |
$ |
— |
|||
|
Weighted average price per Bbl |
|||||||
|
Long put option |
$ |
50.00 |
$ |
— |
|||
|
Short put option |
$ |
40.00 |
$ |
— |
|||
|
Collar contracts (two-way collars) |
|||||||
|
Total volume (MBbls) |
681 |
— |
|||||
|
Weighted average price per Bbl |
|||||||
|
Ceiling (short call) |
$ |
58.19 |
$ |
— |
|||
|
Floor (long put) |
$ |
47.50 |
$ |
— |
|||
|
Call option contracts |
|||||||
|
Total volume (MBbls) |
338 |
— |
|||||
|
Premium per Bbl |
$ |
1.82 |
$ |
— |
|||
|
Weighted average price per Bbl |
|||||||
|
Short call strike price (a) |
$ |
50.00 |
$ |
— |
|||
|
Long call strike price (a) |
$ |
50.00 |
$ |
— |
|||
|
Collar contracts combined with short puts (three-way collars) |
|||||||
|
Total volume (MBbls) |
— |
3,468 |
|||||
|
Weighted average price per Bbl |
|||||||
|
Ceiling (short call option) |
$ |
— |
$ |
60.86 |
|||
|
Floor (long put option) |
$ |
— |
$ |
48.95 |
|||
|
Short put option |
$ |
— |
$ |
39.21 |
|||
|
(a) |
Offsetting contracts. |
|
For the Remainder of |
For the Full Year of | ||||||
|
Oil contracts (Midland basis differential) |
2017 |
2018 | |||||
|
Swap contracts |
|||||||
|
Volume (MBbls) |
1,104 |
2,738 |
|||||
|
Weighted average price per Bbl |
$ |
(0.52) |
$ |
(1.03) |
|||
|
For the Remainder of |
For the Full Year of | ||||||
|
Natural gas contracts (Henry Hub) |
2017 |
2018 | |||||
|
Collar contracts combined with short puts (three-way collars) |
|||||||
|
Total volume (BBtu) |
736 |
— |
|||||
|
Weighted average price per MMBtu |
|||||||
|
Ceiling (short call option) |
$ |
3.71 |
$ |
— |
|||
|
Floor (long put option) |
$ |
3.00 |
$ |
— |
|||
|
Short put option |
$ |
2.50 |
$ |
— |
|||
|
Collar contracts (two-way collars) |
|||||||
|
Total volume (BBtu) |
1,224 |
720 |
|||||
|
Weighted average price per MMBtu |
|||||||
|
Ceiling (short call option) |
$ |
3.74 |
$ |
3.84 |
|||
|
Floor (long put option) |
$ |
3.16 |
$ |
3.40 |
|||
|
Swap contracts |
|||||||
|
Total volume (BBtu) |
492 |
— |
|||||
|
Weighted average price per MMBtu |
$ |
3.39 |
$ |
— |
|||
Income (Loss) Available to Common Shareholders. The Company reported net income available to common shareholders of $31.6 million for the three months ended June 30, 2017 and Adjusted Income available to common shareholders of $17.2 million, or $0.09 per diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income (loss) available to common stockholders to Adjusted Income and the Company's net income (loss) to Adjusted EBITDA (in thousands):
|
Three Months Ended | |||||||||||
|
June 30, 2017 |
March 31, 2017 |
June 30, 2016 | |||||||||
|
Income (loss) available to common stockholders |
$ |
31,566 |
$ |
45,305 |
$ |
(71,920) |
|||||
|
Change in valuation allowance |
(11,194) |
(13,119) |
24,409 |
||||||||
|
Write-down of oil and natural gas properties |
— |
— |
39,658 |
||||||||
|
Net (gain) loss on derivatives, net of settlements |
(6,995) |
(11,566) |
12,676 |
||||||||
|
Change in the fair value of share-based awards |
(315) |
(189) |
1,277 |
||||||||
|
Settled share-based awards |
4,128 |
— |
— |
||||||||
|
Withdrawn proxy contest expenses |
— |
— |
2 |
||||||||
|
Adjusted Income |
$ |
17,190 |
$ |
20,431 |
$ |
6,102 |
|||||
|
Adjusted Income per fully diluted common share |
$ |
0.09 |
$ |
0.10 |
$ |
0.05 |
|||||
|
Three Months Ended | |||||||||||
|
June 30, 2017 |
March 31, 2017 |
June 30, 2016 | |||||||||
|
Net income (loss) |
$ |
33,390 |
$ |
47,129 |
$ |
(70,097) |
|||||
|
Write-down of oil and natural gas properties |
— |
— |
61,012 |
||||||||
|
Net (gain) loss on derivatives, net of settlements |
(10,761) |
(17,794) |
19,501 |
||||||||
|
Non-cash stock-based compensation expense |
499 |
639 |
2,628 |
||||||||
|
Settled share-based awards |
6,351 |
— |
— |
||||||||
|
Withdrawn proxy contest expenses |
— |
— |
3 |
||||||||
|
Acquisition expense |
2,373 |
450 |
1,906 |
||||||||
|
Income tax expense |
322 |
466 |
— |
||||||||
|
Interest expense |
589 |
665 |
4,180 |
||||||||
|
Depreciation, depletion and amortization |
26,765 |
24,932 |
16,698 |
||||||||
|
Accretion expense |
208 |
184 |
395 |
||||||||
|
Adjusted EBITDA |
$ |
59,736 |
$ |
56,671 |
$ |
36,226 |
|||||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the three months ended June 30, 2017 was $57.4 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||||
|
June 30, 2017 |
March 31, 2017 |
June 30, 2016 | |||||||||
|
Cash flows from operating activities: |
|||||||||||
|
Net income (loss) |
$ |
33,390 |
$ |
47,129 |
$ |
(70,097) |
|||||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|||||||||||
|
Depreciation, depletion and amortization |
26,765 |
24,932 |
16,698 |
||||||||
|
Write-down of oil and natural gas properties |
— |
— |
61,012 |
||||||||
|
Accretion expense |
208 |
184 |
395 |
||||||||
|
Amortization of non-cash debt related items |
589 |
665 |
780 |
||||||||
|
Deferred income tax expense |
323 |
466 |
— |
||||||||
|
Net (gain) loss on derivatives, net of settlements |
(10,761) |
(17,794) |
19,501 |
||||||||
|
Loss on sale of other property and equipment |
62 |
— |
— |
||||||||
|
Non-cash expense related to equity share-based awards |
4,865 |
930 |
(1,253) |
||||||||
|
Change in the fair value of liability share-based awards |
1,982 |
(291) |
1,965 |
||||||||
|
Discretionary cash flow |
$ |
57,423 |
$ |
56,221 |
$ |
29,001 |
|||||
|
Changes in working capital |
$ |
(8,968) |
$ |
5,890 |
$ |
(6,974) |
|||||
|
Payments to settle asset retirement obligations |
(816) |
(765) |
(158) |
||||||||
|
Payments to settle vested liability share-based awards |
(4,511) |
(8,662) |
(493) |
||||||||
|
Net cash provided by operating activities |
$ |
43,128 |
$ |
52,684 |
$ |
21,376 |
|||||
|
Callon Petroleum Company | |||||||
|
Consolidated Balance Sheets | |||||||
|
(in thousands, except par and per share values and share data) | |||||||
|
June 30, 2017 |
December 31, 2016 | ||||||
|
ASSETS |
Unaudited |
||||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
139,149 |
$ |
652,993 |
|||
|
Accounts receivable |
77,635 |
69,783 |
|||||
|
Fair value of derivatives |
9,241 |
103 |
|||||
|
Other current assets |
2,545 |
2,247 |
|||||
|
Total current assets |
228,570 |
725,126 |
|||||
|
Oil and natural gas properties, full cost accounting method: |
|||||||
|
Evaluated properties |
3,125,238 |
2,754,353 |
|||||
|
Less accumulated depreciation, depletion, amortization and impairment |
(1,998,294) |
(1,947,673) |
|||||
|
Net evaluated oil and natural gas properties |
1,126,944 |
806,680 |
|||||
|
Unevaluated properties |
1,194,999 |
668,721 |
|||||
|
Total oil and natural gas properties |
2,321,943 |
1,475,401 |
|||||
|
Other property and equipment, net |
18,071 |
14,114 |
|||||
|
Restricted investments |
3,348 |
3,332 |
|||||
|
Deferred financing costs |
5,273 |
3,092 |
|||||
|
Fair value of derivatives |
3,804 |
— |
|||||
|
Acquisition deposit |
— |
46,138 |
|||||
|
Other assets, net |
655 |
384 |
|||||
|
Total assets |
$ |
2,581,664 |
$ |
2,267,587 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable and accrued liabilities |
$ |
144,958 |
$ |
95,577 |
|||
|
Accrued interest |
9,256 |
6,057 |
|||||
|
Cash-settleable restricted stock unit awards |
3,650 |
8,919 |
|||||
|
Asset retirement obligations |
1,767 |
2,729 |
|||||
|
Fair value of derivatives |
2,243 |
18,268 |
|||||
|
Total current liabilities |
161,874 |
131,550 |
|||||
|
Senior secured revolving credit facility |
— |
— |
|||||
|
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs |
595,138 |
390,219 |
|||||
|
Asset retirement obligations |
5,031 |
3,932 |
|||||
|
Cash-settleable restricted stock unit awards |
1,957 |
8,071 |
|||||
|
Deferred tax liability |
921 |
90 |
|||||
|
Fair value of derivatives |
441 |
28 |
|||||
|
Other long-term liabilities |
405 |
295 |
|||||
|
Total liabilities |
765,767 |
534,185 |
|||||
|
Commitments and contingencies |
|||||||
|
Stockholders' equity: |
|||||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized; 1,458,948 and 1,458,948 shares outstanding, respectively |
15 |
15 |
|||||
|
Common stock, $0.01 par value, 300,000,000 and 300,000,000 shares authorized; 201,806,900 and 201,041,320 shares outstanding, respectively |
2,018 |
2,010 |
|||||
|
Capital in excess of par value |
2,177,547 |
2,171,514 |
|||||
|
Accumulated deficit |
(363,683) |
(440,137) |
|||||
|
Total stockholders' equity |
1,815,897 |
1,733,402 |
|||||
|
Total liabilities and stockholders' equity |
$ |
2,581,664 |
$ |
2,267,587 |
|||
|
Callon Petroleum Company | |||||||||||||||
|
Consolidated Statements of Operations | |||||||||||||||
|
(Unaudited; in thousands, except per share data) | |||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Operating revenues: |
|||||||||||||||
|
Oil sales |
$ |
72,885 |
$ |
40,555 |
$ |
144,893 |
$ |
67,998 |
|||||||
|
Natural gas sales |
9,398 |
4,590 |
18,754 |
7,845 |
|||||||||||
|
Total operating revenues |
82,283 |
45,145 |
163,647 |
75,843 |
|||||||||||
|
Operating expenses: |
|||||||||||||||
|
Lease operating expenses |
12,145 |
7,311 |
25,084 |
14,268 |
|||||||||||
|
Production taxes |
4,820 |
2,455 |
10,723 |
4,675 |
|||||||||||
|
Depreciation, depletion and amortization |
26,213 |
16,293 |
50,646 |
32,015 |
|||||||||||
|
General and administrative |
6,430 |
6,302 |
11,636 |
11,864 |
|||||||||||
|
Settled share-based awards |
6,351 |
— |
6,351 |
— |
|||||||||||
|
Accretion expense |
208 |
395 |
392 |
575 |
|||||||||||
|
Write-down of oil and natural gas properties |
— |
61,012 |
— |
95,788 |
|||||||||||
|
Acquisition expense |
2,373 |
1,906 |
2,822 |
1,954 |
|||||||||||
|
Total operating expenses |
58,540 |
95,674 |
107,654 |
161,139 |
|||||||||||
|
Income (loss) from operations |
23,743 |
(50,529) |
55,993 |
(85,296) |
|||||||||||
|
Other (income) expenses: |
|||||||||||||||
|
Interest expense, net of capitalized amounts |
589 |
4,180 |
1,254 |
9,671 |
|||||||||||
|
(Gain) loss on derivative contracts |
(10,494) |
15,484 |
(25,797) |
16,416 |
|||||||||||
|
Other income |
(64) |
(96) |
(772) |
(177) |
|||||||||||
|
Total other (income) expense |
(9,969) |
19,568 |
(25,315) |
25,910 |
|||||||||||
|
Income (loss) before income taxes |
33,712 |
(70,097) |
81,308 |
(111,206) |
|||||||||||
|
Income tax expense |
322 |
— |
789 |
— |
|||||||||||
|
Net income (loss) |
33,390 |
(70,097) |
80,519 |
(111,206) |
|||||||||||
|
Preferred stock dividends |
(1,824) |
(1,823) |
(3,647) |
(3,647) |
|||||||||||
|
Income (loss) available to common stockholders |
$ |
31,566 |
$ |
(71,920) |
$ |
76,872 |
$ |
(114,853) |
|||||||
|
Income (loss) per common share: |
|||||||||||||||
|
Basic |
$ |
0.16 |
$ |
(0.61) |
$ |
0.38 |
$ |
(1.14) |
|||||||
|
Diluted |
$ |
0.16 |
$ |
(0.61) |
$ |
0.38 |
$ |
(1.14) |
|||||||
|
Shares used in computing income (loss) per common share: |
|||||||||||||||
|
Basic |
201,386 |
118,209 |
201,220 |
100,895 |
|||||||||||
|
Diluted |
201,905 |
118,209 |
201,823 |
100,895 |
|||||||||||
|
Callon Petroleum Company | |||||||||||||||
|
Consolidated Statements of Cash Flows | |||||||||||||||
|
(Unaudited; in thousands) | |||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
Cash flows from operating activities: |
|||||||||||||||
|
Net income (loss) |
$ |
33,390 |
$ |
(70,097) |
$ |
80,519 |
$ |
(111,206) |
|||||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
|||||||||||||||
|
Depreciation, depletion and amortization |
26,765 |
16,698 |
51,697 |
32,827 |
|||||||||||
|
Write-down of oil and natural gas properties |
— |
61,012 |
— |
95,788 |
|||||||||||
|
Accretion expense |
208 |
395 |
392 |
575 |
|||||||||||
|
Amortization of non-cash debt related items |
589 |
780 |
1,254 |
1,561 |
|||||||||||
|
Deferred income tax expense |
323 |
— |
789 |
— |
|||||||||||
|
Net (gain) loss on derivatives, net of settlements |
(10,761) |
19,501 |
(28,555) |
28,149 |
|||||||||||
|
Loss on sale of other property and equipment |
62 |
— |
62 |
— |
|||||||||||
|
Non-cash expense related to equity share-based awards |
4,865 |
665 |
5,795 |
1,177 |
|||||||||||
|
Change in the fair value of liability share-based awards |
1,982 |
1,965 |
1,691 |
2,674 |
|||||||||||
|
Payments to settle asset retirement obligations |
(816) |
(158) |
(1,581) |
(319) |
|||||||||||
|
Changes in current assets and liabilities: |
|||||||||||||||
|
Accounts receivable |
(3,744) |
(10,777) |
(7,810) |
(4,836) |
|||||||||||
|
Other current assets |
(874) |
(885) |
(298) |
(305) |
|||||||||||
|
Current liabilities |
(4,223) |
4,830 |
5,680 |
4,113 |
|||||||||||
|
Change in other long-term liabilities |
120 |
75 |
120 |
86 |
|||||||||||
|
Change in other assets, net |
(247) |
(217) |
(770) |
(450) |
|||||||||||
|
Payments to settle vested liability share-based awards |
(4,511) |
(493) |
(13,173) |
(10,300) |
|||||||||||
|
Net cash provided by operating activities |
43,128 |
23,294 |
95,812 |
39,534 |
|||||||||||
|
Cash flows from investing activities: |
|||||||||||||||
|
Capital expenditures |
(79,936) |
(24,505) |
(146,090) |
(75,280) |
|||||||||||
|
Acquisitions |
(58,004) |
(273,841) |
(706,489) |
(284,024) |
|||||||||||
|
Acquisition deposit |
— |
— |
46,138 |
— |
|||||||||||
|
Proceeds from sales of mineral interests and equipment |
— |
23,631 |
— |
23,631 |
|||||||||||
|
Net cash used in investing activities |
(137,940) |
(274,715) |
(806,441) |
(335,673) |
|||||||||||
|
Cash flows from financing activities: |
|||||||||||||||
|
Borrowings on senior secured revolving credit facility |
— |
98,000 |
— |
143,000 |
|||||||||||
|
Payments on senior secured revolving credit facility |
— |
(58,000) |
— |
(143,000) |
|||||||||||
|
Issuance of 6.125% senior unsecured notes due 2024 |
200,000 |
— |
200,000 |
— |
|||||||||||
|
Premium on the issuance of 6.125% senior unsecured notes due 2024 |
8,250 |
— |
8,250 |
— |
|||||||||||
|
Issuance of common stock |
— |
205,858 |
— |
300,807 |
|||||||||||
|
Payment of preferred stock dividends |
(1,823) |
(1,823) |
(3,647) |
(3,647) |
|||||||||||
|
Payment of deferred financing costs |
(6,765) |
— |
(6,765) |
— |
|||||||||||
|
Tax withholdings related to restricted stock units |
(974) |
(1,918) |
(1,053) |
(2,038) |
|||||||||||
|
Net cash provided by financing activities |
198,688 |
242,117 |
196,785 |
295,122 |
|||||||||||
|
Net change in cash and cash equivalents |
103,876 |
(9,304) |
(513,844) |
(1,017) |
|||||||||||
|
Balance, beginning of period |
35,273 |
9,511 |
652,993 |
1,224 |
|||||||||||
|
Balance, end of period |
$ |
139,149 |
$ |
207 |
$ |
139,149 |
$ |
207 |
|||||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income," "Adjusted EBITDA," and "Adjusted Total Revenue." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Thursday, August 3, 2017, to discuss second quarter 2017 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Thursday, August 3, 2017, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
5792667 |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2017 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Mark Brewer
Callon Petroleum Company
1-800-451-1294
|
i) |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations | ||
View original content:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-second-quarter-2017-results-300498678.html
SOURCE Callon Petroleum Company
Article Date
8/2/20176/28/2017 - Callon Petroleum Company Schedules Second Quarter 2017 Conference Call for August 3, 2017
Callon Petroleum Company Schedules Second Quarter 2017 Conference Call for August 3, 2017
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., June 28, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) (the "Company") plans to host a conference call to discuss its second quarter 2017 financial and operating results.
Conference Call and Webcast
Date: Thursday, August 3, 2017
Time: 9:00 a.m. Central Time (10:00 a.m. Eastern Time)
|
By Phone: |
||
|
Domestic: |
1-888-317-6003 | |
|
Canada: |
1-866-284-3684 | |
|
International: |
1-412-317-6061 | |
|
Access code: |
5792667 | |
|
By Webcast: |
||
|
Select "IR Calendar" under the "Investors" section of the Company's website. | ||
An archive of the conference call webcast will be available at www.callon.com under the "Investors" section of the website.
The Company plans to release second quarter 2017 results after market close on Wednesday, August 2, 2017.
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
Contact Information
Christie McMillan
Callon Petroleum Company
ir@callon.com
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
6/28/2017Callon Petroleum Company Announces Interim Chief Financial Officer
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., June 22, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) announced today that the Company's Board of Directors has appointed Correne S. Loeffler as Interim Chief Financial Officer. Ms. Loeffler assumes this role from Joe Gatto, Callon's Chief Executive Officer and President, and will continue to perform her current duties as the Company's Treasurer.
Mr. Gatto commented, "We are pleased that Correne has agreed to serve as our interim CFO as we take the opportunity to evaluate an expanded pool of candidates for the permanent position. Correne is a seasoned financial professional with a strong understanding of our business and well-suited to seamlessly transition this role for the Company."
Ms. Loeffler joined Callon in April 2017 from JPMorgan Securities, LLC where she spent the past ten years in the Corporate Client Banking Group, including her service as Callon's relationship manager since 2013. Ms. Loeffler graduated from Indiana University with a BA degree and The University of Texas with an MBA.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
6/22/2017Callon Petroleum Company Announces Upcoming Investor Event
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., June 20, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor event:
2017 J.P. Morgan Chase Energy Equity Conference
The Company will present at the J.P. Morgan Chase Energy Equity Conference on Monday, June 26, 2017 at 3:00 pm Eastern Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
6/20/2017Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., June 5, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on June 30, 2017 to stockholders of record as of June 15, 2017. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
6/5/2017Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., June 2, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
2017 RBC Capital Markets' Global Energy and Power Executive Conference
The Company will participate in the Capital Markets Energy and Power Executive Conference hosted by RBC Capital Markets in New York on Tuesday, June 6, 2017.
Bank of America Merrill Lynch 2017 Energy Credit Conference
The Company will present at the Bank of America Merrill Lynch 2017 Energy Credit Conference on Wednesday, June 7, 2017 at 7:30 am Eastern Time. The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
6/2/20175/31/2017 - Callon Petroleum Company Announces New Credit Agreement with Increased Borrowing Base and Commitment Size
Callon Petroleum Company Announces New Credit Agreement with Increased Borrowing Base and Commitment Size
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 31, 2017 /PRNewswire/ -- Callon Petroleum Company ("Callon" or the "Company") (NYSE: CPE) today announced it has entered into an amended and restated credit agreement with respect to the senior secured revolving credit facility (the "Facility"). The agreement extends the maturity date of the Facility until May 25, 2022, increases the borrowing base by 30% to $650 million and increases the maximum commitments of the lenders from $500 million to $2 billion. The 30% increase in the borrowing base amount reflects the significant reserve growth from the Company's existing Midland Basin assets in addition to the contribution from its recently acquired Delaware Basin assets. In addition, the amended and restated credit agreement provides Callon the ability, subject to certain conditions, to elect the amount of the aggregate commitments under the Facility up to the amount of the borrowing base then in effect.
Callon has initially elected an aggregate commitment amount of $500 million. The bank syndicate, co-arranged by JPMorgan Chase Bank, N.A., Capital One, National Association, Citibank, N.A. and The Bank of Nova Scotia, includes four new lending institutions for a total of 17 participating banks. Callon currently has no outstanding borrowings under the Facility.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
5/31/20175/26/2017 - Callon Petroleum Company Announces Extension of Exchange Offer for Its 6.125% Senior Notes due 2024
Callon Petroleum Company Announces Extension of Exchange Offer for Its 6.125% Senior Notes due 2024
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 26, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has extended the deadline with respect to its offer to exchange up to $400 million aggregate principal amount of its outstanding unregistered 6.125% Senior Notes due 2024 (the "Old Notes") for an equivalent amount of its new 6.125% Senior Notes due 2024 registered under the Securities Act of 1933, as amended (the "New Notes"). As a result of the extension, the exchange offer is now scheduled to expire at 5:00 p.m., New York City time, on May 30, 2017, unless further extended.
The exchange offer was scheduled to expire on May 25, 2017 at 5:00 p.m., New York City time. As of 5:00 p.m. on May 25, 2017, $400,000,000 in aggregate principal amount, or 100% of the Old Notes had been validly tendered and not withdrawn. Except for the extension of the expiration date, all of the other terms of the exchange offer remain as set forth in the exchange offer prospectus, dated April 28, 2017, filed with the U.S. Securities and Exchange Commission.
Copies of the prospectus and the other exchange offer materials may be obtained from U.S. Bank National Association, the exchange agent for the offer. Please contact the exchange agent with any questions regarding the exchange offer at escrowexchangepayments@usbank.com or by mail at U.S. Bank National Association, Attn: Specialized Finance, 111 Fillmore Avenue, St. Paul, MN 55107-1402.
No Offer or Solicitation
This press release is for informational purposes only and is neither an offer to buy nor a solicitation of an offer to sell any Old Notes or New Notes. The exchange offer is being made only pursuant to the exchange offer prospectus, which is being distributed to holders of the Old Notes and has been filed with the Securities and Exchange Commission ("SEC") as part of the Company's registration statement on Form S-4 (File No. 333-217287), which was declared effective on April 25, 2017.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements, including regarding the consummation of the pending acquisition and the time frame in which the pending acquisition will occur. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
5/26/2017Callon Petroleum Company Announces Appointment of Joseph Gatto, Jr. as Chief Executive Officer and L. Richard Flury as Chairman following Unexpected Death of Fred Callon
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 25, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) announced today that the Company's Board of Directors has appointed Joseph Gatto Jr. as Chief Executive Officer and L. Richard Flury as non-executive Chairman, succeeding Fred Callon, former Chief Executive Officer and Chairman, following his unexpected death on May 24, 2017. Mr. Gatto will also continue performing his current duties as the Company's President and Chief Financial Officer. The remainder of the Company's leadership team will continue in their present roles. No changes are anticipated in the Company's day-to-day business activities.
Mr. Gatto worked closely alongside Mr. Callon since 2012 as the Company executed an aggressive growth strategy in the Permian Basin that significantly transformed the Company. Since the beginning of 2016, Callon has completed over $1 billion in acquisitions and $2 billion in debt and equity raises, nearly tripling the Company's acreage position and building a solid financial position for the future. Mr. Gatto is well-known in the oil and gas industry and highly respected by the Company's employees and investors, and his intimate knowledge and extensive experience with the Company makes him uniquely qualified to move the Company forward.
Mr. Gatto commented, "I am humbled by the opportunity to continue to build upon Fred's legacy and fulfill his vision for Callon Petroleum. I am honored to have been chosen by the Board to continue my strong partnership with Callon's Chief Operating Officer, Gary Newberry as together we lead our experienced management team in the execution of our growth initiatives that we believe will create differentiated value for our shareholders. We are all committed to ensuring a smooth transition and to honoring Fred's memory through a continued commitment to our core values. We will always be profoundly grateful for his friendship and leadership, and he will be deeply missed by our organization as well as the oil and gas industry. During this time, all of our thoughts are with Fred's family and we will do everything we can to support them."
Prior to joining Callon, Mr. Gatto held various positions in the financial advisory and energy investment banking groups of Merrill Lynch & Co., Barclays Capital, Merrill Lynch Commodities, Inc. and MarchWire Capital, LLC, which he founded. Mr. Gatto graduated from Cornell University with a BS degree and The Wharton School of the University of Pennsylvania with an MBA.
Mr. Flury has served on the Board since 2004 and currently serves on the Company's Audit, Compensation and Strategic Planning and Reserves Committees. Prior to his retirement, Mr. Flury spent over 30 years with Amoco Corporation, and later, BP p.l.c., most recently as Chief Executive, Gas and Power and Renewables. Mr. Flury is also a director and the non-executive Chairman of Chicago Bridge and Iron Company, N.V.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
5/25/20175/25/2017 - Callon Petroleum Company Announces Death of Chairman and Chief Executive Officer, Fred L. Callon
Callon Petroleum Company Announces Death of Chairman and Chief Executive Officer, Fred L. Callon
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 25, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) announced today that Chairman and Chief Executive Officer, Fred L. Callon, died suddenly and unexpectedly on May 24, 2017. Joe Gatto, President and Chief Financial Officer commented, "It is with great sorrow that we announce the untimely passing of our dear friend and esteemed CEO. Fred was, and always will be, the symbol of Callon's core values and dedication to our employees and partners. On behalf of our Board of Directors, management team and employees, we extend our deepest sympathies to Fred's family. Callon's Board of Directors will be convening today to discuss the Company's plan for succession to ensure the continuity of its strategic direction and operations."
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
5/25/2017Callon Petroleum Company Announces First Quarter 2017 Results
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 2, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended March 31, 2017.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the first quarter of 2017, and other recent data points include:
"We are off to a strong start in 2017 with the increasing impact of our WildHorse area that is now in program development mode," commented Fred Callon, Chairman and Chief Executive Officer. "Our activity in this core area has initially focused on northern Howard County where we have demonstrated the repeatability of exceptional Wolfcamp A results from larger completion designs. Our efforts in WildHorse will now move toward the central part of Howard County, focusing on three development zones, and we will be active with two rigs across our entire Howard County position throughout 2017. In parallel, we have been executing our plans to initiate program development in our recently acquired Delaware Basin acreage position which will begin with the arrival of our fourth horizontal drilling rig in July. As we approach this date, we have been refining our completion designs and landing zone concepts based on analysis of core data from our Lower Wolfcamp A well that was placed on production in January 2017 and upgrading the existing infrastructure to support a two rig development program in the future. We have also been successful in expanding our footprint in this core area, increasing our Delaware Basin position by approximately 15% since we closed our initial acquisition in February and, importantly, enhancing our opportunity set with the extension of existing laterals and the addition of additional locations at attractive valuations."
Operations Update
At March 31, 2017, we had 191 gross (142.4 net) horizontal wells producing from six established flow units in the Permian Basin. Net daily production for the three months ended March 31, 2017 grew approximately 64% to 20.4 MBOE/d ("MBOE/d") (approximately 78% oil) as compared to the same period of 2016. Sequentially, we grew production by approximately 11% compared to the fourth quarter of 2016 with a corresponding 14% sequential increase in our oil volumes.
For the three months ended March 31, 2017, we operated three horizontal drilling rigs, drilling nine gross (7.8 net) horizontal wells in both the Monarch and WildHorse areas. We placed a combined nine gross (6.6 net) horizontal wells on production in the quarter in these two areas.
WildHorse
During the first quarter, we completed six wells including three Wolfcamp A wells and three Lower Spraberry wells. Based on production data from our Wolfcamp A wells in the Sidewinder field that were completed with larger proppant loadings (including extended time performance from the Silver City 01AH) and offsetting well results in the area, we are increasing our Wolfcamp A type curve (7,500' drilled lateral) in northern Howard County to 1.3 MMBOE (85% oil), an increase of 85% over the 700 MBOE type curve originally assumed at the time of the Big Star acquisition in April 2016. In addition, following the recent completion of our Garrett-Reed 37-48 #8AH well in the Maverick field and upcoming Wolfcamp A completions in the Fairway field, we will be re-evaluating our current type curve assumptions in central Howard County in the coming months.
The following table highlights the three Wolfcamp A wells in Howard County that achieved peak rates since the beginning of the year, expressed in absolute barrels of oil equivalent per day ("BOE/d") and production rates per 1,000 feet of completed lateral:
|
30-Day Average | ||||||||||||||||||
|
24-Hour Peak IP |
Peak IP | |||||||||||||||||
|
(BOE/d; Two-stream) (a) |
(BOE/d; Two-stream) | |||||||||||||||||
|
24-Hour |
Peak |
Per 1,000' |
Peak |
Per 1,000' | ||||||||||||||
|
IP |
Area |
Completed |
24-Hour |
Production |
Lateral |
30-Day |
Production |
Lateral | ||||||||||
|
Date |
Well |
(Field / Zone) |
Lateral (ft) |
IP |
(% oil) |
Feet |
IP |
(% oil) |
Feet | |||||||||
|
03/16/2017 |
Wright-Adams 31-42 #5AH |
WildHorse (Sidewinder/WCA) |
6,832 |
2,333 |
90% |
341 |
1,976 |
91% |
289 | |||||||||
|
Pending |
Cheek 28-21 #1AH |
WildHorse (Sidewinder/WCA) |
9,720 |
Flowing back |
Flowing back | |||||||||||||
|
03/02/2017 |
Garrett-Reed 37-48 #8AH |
WildHorse (Maverick/WCA) |
6,560 |
1,530 |
92% |
233 |
1,211 |
90% |
184 | |||||||||
|
(a) |
24-Hour Peak IPs correspond to the rates filed with the Railroad Commission of Texas and are captured using well tests on the specified date, which may result in an understated rate as the production typically varies more widely during the early days of production. The 30-Day Average Peak IP is calculated using well tests on dates taken and allocated production for all other dates. |
These wells were completed in individual two-well pads that also included Lower Spraberry wells. The Lower Spraberry wells employed larger completion designs than legacy wells in the area and are in the process of dewatering as they build to peak production rates.
Monarch
During the first quarter, three Lower Spraberry wells were placed on production in two flow units within the zone. In addition, we are in the process of completing a three well pad including two Lower Spraberry wells and one Wolfcamp A well that will be our third test of increased density development in the Lower Spraberry.
Spur
In our newest core operating area, we are in the final stages of preparation for program development. As part of our execution plan, we have been upgrading facilities as well as incorporating the analysis of core data from the Corbets 34-149 02A into the refinement of our completion designs and target landing zones from those utilized by the prior operator in two recent wells that we acquired with our recent transaction. The first of these wells, the Corbets 34-149 02A, targeted the Lower Wolfcamp A and has been flowing under natural pressure since being placed on production in late January. The well has produced in excess of 100 MBOE (90% oil) in the first 90 days since first production and continues to flow under a pressure management program. The second well, the Saratoga 34-161 01WB, was landed in the Wolfcamp B zone and recently placed on production.
Ward County Acquisitions
Since the closing of our Spur acquisition on February 13, 2017, we have signed agreements to acquire 2,626 net acres for $54.3 million, equating to an average purchase price of approximately $20,700 per net surface acre. In total, these acquisitions will: (i) increase our working interest in a meaningful portion of our existing gross operated inventory; (ii) extend the lateral length of 93 gross existing Wolfcamp A and B locations from a prior blended average of 5,000' to a new blended average of approximately 9,200'; and (iii) add an estimated 41 net new Wolfcamp A and B locations (over 90% operated) with an average lateral length of roughly 7,500'. The combined acquisition impact of these three factors is the addition of an estimated equivalent 67 net Wolfcamp locations with an average lateral length of over 8,000' at a purchase price of approximately $800 thousand per location. These acquisitions are expected to be funded with existing cash balances and credit facility borrowings.
Capital Expenditures
For the three months ended March 31, 2017, we incurred $55.5 million in cash operational capital expenditures compared to $53.4 million in the fourth quarter of 2016. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended March 31, 2017 | |||||||||||||||
|
Operational |
Capitalized |
Capitalized |
Total Capital | ||||||||||||
|
Capital |
Other (a) |
Interest |
G&A |
Expenditures | |||||||||||
|
Cash basis (b) |
$ |
55,503 |
$ |
6,230 |
$ |
487 |
$ |
3,934 |
$ |
66,154 | |||||
|
Timing adjustments (c) |
26,011 |
— |
6,057 |
— |
32,068 | ||||||||||
|
Non-cash items |
— |
— |
— |
572 |
572 | ||||||||||
|
Accrual (GAAP) basis |
$ |
81,514 |
$ |
6,230 |
$ |
6,544 |
$ |
4,506 |
$ |
98,794 | |||||
|
(a) |
Includes seismic, land and other items. |
|
(b) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(c) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | |||||||||
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 | |||||||
|
Net production: |
|||||||||
|
Oil (MBbls) |
1,434 |
1,287 |
892 | ||||||
|
Natural gas (MMcf) |
2,422 |
2,413 |
1,443 | ||||||
|
Total production (MBOE) |
1,838 |
1,689 |
1,132 | ||||||
|
Average daily production (BOE/d) |
20,422 |
18,359 |
12,440 | ||||||
|
% oil (BOE basis) |
78% |
76% |
79% | ||||||
|
Oil and natural gas revenues (in thousands): |
|||||||||
|
Oil revenue |
$ |
72,008 |
$ |
60,559 |
$ |
27,443 | |||
|
Natural gas revenue |
9,355 |
8,522 |
3,255 | ||||||
|
Total revenue |
$ |
81,363 |
$ |
69,081 |
$ |
30,698 | |||
|
Impact of cash-settled derivatives |
(2,491) |
2,079 |
7,716 | ||||||
|
Adjusted Total Revenue (i) |
$ |
78,872 |
$ |
71,160 |
$ |
38,414 | |||
Total Revenue. For the quarter ended March 31, 2017, Callon reported total revenues of $81.4 million and total revenues including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $78.9 million, including the negative $2.5 million impact of settled derivative contracts. The table above reconciles Adjusted Total Revenue to the related GAAP measure of the Company's revenue. Average daily production for the quarter was 20,422 BOE/d compared to average daily production of 18,359 BOE/d in the fourth quarter of 2016. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended March 31, 2017, Callon recognized the following hedging-related items (in thousands, except per unit data):
|
In Thousands |
Per Unit | |||||
|
Oil derivatives |
||||||
|
Net loss on settlements |
$ |
(2,524) |
$ |
(1.76) | ||
|
Net gain on fair value adjustments |
17,266 |
|||||
|
Total gain on oil derivatives |
$ |
14,742 |
||||
|
Natural gas derivatives |
||||||
|
Net gain on settlements |
$ |
33 |
$ |
0.02 | ||
|
Net gain on fair value adjustments |
528 |
|||||
|
Total gain on natural gas derivatives |
$ |
561 |
||||
|
Total oil & natural gas derivatives |
||||||
|
Net loss on settlements |
$ |
(2,491) |
$ |
(1.36) | ||
|
Net gain on fair value adjustments |
17,794 |
|||||
|
Total gain on total oil & natural gas derivatives |
$ |
15,303 |
||||
Average realized prices, including and excluding the impact of cash settled derivatives during the first quarter, were as follows:
|
Three Months Ended | |||
|
March 31, 2017 | |||
|
Average realized sales price |
|||
|
Oil (per Bbl) (excluding impact of cash-settled derivatives) |
$ |
50.21 | |
|
Impact of cash-settled derivatives |
(1.76) | ||
|
Oil (per Bbl) (including impact of cash-settled derivatives) |
$ |
48.45 | |
|
Natural gas (per Mcf) (excluding impact of cash-settled derivatives) |
$ |
3.86 | |
|
Impact of cash-settled derivatives |
0.02 | ||
|
Natural gas (per Mcf) (including impact of cash-settled derivatives) |
$ |
3.88 | |
|
Total (per BOE) (excluding impact of cash-settled derivatives) |
$ |
44.27 | |
|
Impact of cash-settled derivatives |
(1.36) | ||
|
Total (per BOE) (including impact of cash-settled derivatives) |
$ |
42.91 | |
|
Three Months Ended | |||||||||
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 | |||||||
|
Additional per BOE data: |
|||||||||
|
Sales price, excluding impact of cash-settled derivatives |
$ |
44.27 |
$ |
40.90 |
$ |
27.12 | |||
|
Sales price, including impact of cash-settled derivatives |
42.91 |
42.13 |
33.93 | ||||||
|
Lease operating expense (excluding gathering and treating expense) |
$ |
6.61 |
$ |
7.96 |
$ |
5.97 | |||
|
Gathering and treating expense |
0.43 |
0.40 |
0.18 | ||||||
|
Production taxes |
3.21 |
2.20 |
1.96 | ||||||
|
Depletion, depreciation and amortization |
13.29 |
13.06 |
13.89 | ||||||
|
Adjusted G&A (a) |
|||||||||
|
Cash component (b) |
2.43 |
2.84 |
3.55 | ||||||
|
Non-cash component |
0.57 |
0.54 |
0.55 | ||||||
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Lease Operating Expenses, including workover and gathering expense ("LOE"). LOE per BOE for the three months ended March 31, 2017 was $7.04 per BOE, compared to LOE of $8.36 per BOE in the fourth quarter of 2016. The decrease in this metric was primarily related to a decrease in the number of workover activities in the quarter and an increase in production volumes.
Production Taxes, including ad valorem taxes. Production taxes were $3.21 per BOE in the first quarter of 2017, representing approximately 7.3% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended March 31, 2017 was $13.29 per BOE compared to $13.06 per BOE in the fourth quarter of 2016, attributable to increases in our depreciable asset base and assumed future development costs related to undeveloped proved reserves relative to the increase in proved reserves as a result of additions made through our horizontal drilling efforts and acquisitions made during the quarter.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $5.5 million, or $3.00 per BOE, for the first quarter of 2017 compared to $5.7 million, or $3.38 per BOE, for the fourth quarter of 2016. The cash component of Adjusted G&A was $4.5 million, or $2.43 per BOE, for the first quarter of 2017 compared to $4.8 million, or $2.84 per BOE, for the fourth quarter of 2016.
For the first quarter of 2017, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
For the Three Months Ended | |||
|
March 31, 2017 | |||
|
Total G&A expense |
5,206 | ||
|
Less: Change in the fair value of liability share-based awards (non-cash) |
$ |
307 | |
|
Adjusted G&A – total |
5,513 | ||
|
Restricted stock share-based compensation (non-cash) |
(921) | ||
|
Corporate depreciation & amortization (non-cash) |
(121) | ||
|
Adjusted G&A – cash component |
$ |
4,471 |
Income tax expense. Callon typically provides for income taxes at a statutory rate of 35% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses and state income taxes. We recorded an income tax expense of $0.5 million for the three months ended March 31, 2017. At March 31, 2017 we had a valuation allowance of $127.1 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist.
2017 Guidance Update
|
Second Quarter |
Full Year | |||
|
2017 Guidance |
2017 Guidance | |||
|
Total production (BOE/d) |
21,500 - 23,500 |
22,500 - 25,500 | ||
|
% oil |
76% - 78% |
75% - 77% | ||
|
Income Statement Expenses (per BOE) |
||||
|
LOE, including workovers |
$6.25 - $7.00 |
$6.00 - $6.50 | ||
|
Gathering and treating |
$0.40 - $0.50 |
$0.40 - $0.50 | ||
|
Production taxes, including ad valorem (% unhedged revenue) |
7% |
7% | ||
|
Adjusted G&A: cash component (a) |
$2.25 - $2.50 |
$2.00 - $2.50 | ||
|
Adjusted G&A: non-cash component (b) |
$0.50 - $0.75 |
$0.50 - $1.00 | ||
|
Interest expense (c) |
$0.00 - $0.00 |
$0.00 - $0.00 | ||
|
Effective income tax rate |
0% |
0% | ||
|
Capital expenditures ($MM, accrual basis) |
||||
|
Drilling and completion |
$55 - $60 |
$240 - $255 | ||
|
Facilities and other (d) |
$35 - $40 |
$85 - $95 | ||
|
Capitalized expenses (cash component) |
$10 - $12 |
$40 - $45 | ||
|
Net operated horizontal well completions |
||||
|
Midland Basin |
9 - 11 |
30 - 32 | ||
|
Delaware Basin |
1 |
3 - 4 |
|
(a) |
Excludes stock-based compensation and corporate depreciation and amortization. See the Non-GAAP related disclosures referenced in the footnote (b) below. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. The reconciliation above provides a reconciliation of first quarter 2017 G&A expense on a GAAP basis to Adjusted G&A expense, a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking non-GAAP financial measure without unreasonable effort because of the number of estimated variables that could affect the final value. Accordingly, investors are cautioned not to place undue reliance on this information. |
|
(c) |
All interest expense anticipated to be capitalized. |
|
(d) |
Includes seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following table summarizes our open derivative positions for the periods indicated:
|
For the Remainder of |
For the Full Year of | |||||
|
Oil contracts |
2017 |
2018 | ||||
|
Swap contracts combined with short puts (WTI, enhanced swaps) |
||||||
|
Total volume (MBbls) |
550 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Swap |
$ |
44.50 |
$ |
— | ||
|
Short put option |
$ |
30.00 |
$ |
— | ||
|
Deferred premium put option |
||||||
|
Total volume (MBbls) |
250 |
— | ||||
|
Premium per Bbl |
$ |
2.05 |
$ |
— | ||
|
Weighted average price per Bbl |
||||||
|
Long put option |
$ |
50.00 |
$ |
— | ||
|
Deferred premium put spread option |
||||||
|
Total volume (MBbls) |
506 |
— | ||||
|
Premium per Bbl |
$ |
2.45 |
$ |
— | ||
|
Weighted average price per Bbl |
||||||
|
Long put option |
$ |
50.00 |
$ |
— | ||
|
Short put option |
$ |
40.00 |
$ |
— | ||
|
Collar contracts (WTI, two-way collars) |
||||||
|
Total volume (MBbls) |
1,018 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call) |
$ |
58.19 |
$ |
— | ||
|
Floor (long put) |
$ |
47.50 |
$ |
— | ||
|
Call option contracts (short position) |
||||||
|
Total volume (MBbls) |
505 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Call strike price |
$ |
50.00 |
$ |
— | ||
|
Swap contracts (Midland basis differential) |
||||||
|
Volume (MBbls) |
1,650 |
2,008 | ||||
|
Weighted average price per Bbl |
$ |
(0.52) |
$ |
(1.02) | ||
|
Collar contracts combined with short puts (WTI, three-way collars) |
||||||
|
Total volume (MBbls) |
— |
2,738 | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call option) |
$ |
— |
$ |
62.84 | ||
|
Floor (long put option) |
$ |
— |
$ |
50.00 | ||
|
Short put option |
$ |
— |
$ |
40.00 | ||
|
For the Remainder of |
For the Full Year of | |||||
|
Natural gas contracts |
2017 |
2018 | ||||
|
Collar contracts combined with short puts (Henry Hub, three-way collars) |
||||||
|
Total volume (BBtu) |
1,100 |
— | ||||
|
Weighted average price per MMBtu |
||||||
|
Ceiling (short call option) |
$ |
3.71 |
$ |
— | ||
|
Floor (long put option) |
$ |
3.00 |
$ |
— | ||
|
Short put option |
$ |
2.50 |
$ |
— | ||
|
Collar contracts (Henry Hub, two-way collars) |
||||||
|
Total volume (BBtu) |
1,588 |
720 | ||||
|
Weighted average price per MMBtu |
||||||
|
Ceiling (short call option) |
$ |
3.72 |
$ |
3.84 | ||
|
Floor (long put option) |
$ |
3.10 |
$ |
3.40 | ||
|
Swap contracts |
||||||
|
Total volume (BBtu) |
736 |
— | ||||
|
Weighted average price per MMBtu |
$ |
3.39 |
$ |
— | ||
Income (Loss) Available to Common Shareholders. The Company reported net income available to common shareholders of $45.3 million in the first quarter of 2017 and Adjusted Income available to common shareholders of $20.4 million, or $0.10 per diluted share. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist. The following tables reconcile to the related GAAP measure the Company's income (loss) available to common stockholders to Adjusted Income and the Company's net income (loss) to Adjusted EBITDA (in thousands):
|
Three Months Ended | |||||||||
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 | |||||||
|
Income (loss) available to common stockholders |
$ |
45,305 |
$ |
(3,570) |
$ |
(42,933) | |||
|
Change in valuation allowance |
(13,119) |
559 |
14,288 | ||||||
|
Write-down of oil and natural gas properties |
— |
— |
22,604 | ||||||
|
Net (gain) loss on derivatives, net of settlements |
(11,566) |
7,170 |
5,621 | ||||||
|
Change in the fair value of share-based awards |
(189) |
590 |
461 | ||||||
|
Withdrawn proxy contest expenses |
— |
— |
144 | ||||||
|
Loss on early extinguishment of debt |
— |
8,374 |
— | ||||||
|
Adjusted Income |
$ |
20,431 |
$ |
13,123 |
$ |
185 | |||
|
Adjusted Income per fully diluted common share |
$ |
0.10 |
$ |
0.08 |
$ |
0.00 | |||
|
Three Months Ended | |||||||||
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 | |||||||
|
Net income (loss) |
$ |
47,129 |
$ |
(1,746) |
$ |
(41,109) | |||
|
Write-down of oil and natural gas properties |
— |
— |
34,776 | ||||||
|
Net (gain) loss on derivatives, net of settlements |
(17,794) |
11,030 |
8,648 | ||||||
|
Non-cash stock-based compensation expense |
639 |
1,718 |
1,225 | ||||||
|
Loss on early extinguishment of debt |
— |
12,883 |
— | ||||||
|
Withdrawn proxy contest expenses |
— |
— |
221 | ||||||
|
Acquisition expense |
450 |
1,263 |
48 | ||||||
|
Income tax (benefit) expense |
466 |
48 |
— | ||||||
|
Interest expense |
665 |
1,369 |
5,491 | ||||||
|
Depreciation, depletion and amortization |
24,932 |
22,512 |
16,129 | ||||||
|
Accretion expense |
184 |
196 |
180 | ||||||
|
Adjusted EBITDA |
$ |
56,671 |
$ |
49,273 |
$ |
25,609 | |||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the first quarter of 2017 was $56.2 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 | |||||||
|
Cash flows from operating activities: |
|||||||||
|
Net income (loss) |
$ |
47,129 |
$ |
(1,746) |
$ |
(41,109) | |||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|||||||||
|
Depreciation, depletion and amortization |
24,932 |
22,512 |
16,129 | ||||||
|
Write-down of oil and natural gas properties |
— |
— |
34,776 | ||||||
|
Accretion expense |
184 |
196 |
180 | ||||||
|
Amortization of non-cash debt related items |
665 |
744 |
781 | ||||||
|
Deferred income tax expense |
466 |
48 |
— | ||||||
|
Net (gain) loss on derivatives, net of settlements |
(17,794) |
11,030 |
8,648 | ||||||
|
Loss on early extinguishment of debt |
— |
9,883 |
— | ||||||
|
Non-cash expense related to equity share-based awards |
930 |
811 |
516 | ||||||
|
Change in the fair value of liability share-based awards |
(291) |
908 |
709 | ||||||
|
Discretionary cash flow |
$ |
56,221 |
$ |
44,386 |
$ |
20,630 | |||
|
Changes in working capital |
5,890 |
(7,832) |
5,582 | ||||||
|
Payments to settle asset retirement obligations |
(765) |
(576) |
(161) | ||||||
|
Payments to settle vested liability share-based awards |
(8,662) |
— |
(9,807) | ||||||
|
Net cash provided by operating activities |
$ |
52,684 |
$ |
35,978 |
$ |
16,244 | |||
|
Callon Petroleum Company | |||||
|
Consolidated Balance Sheets | |||||
|
(in thousands, except par and per share values and share data) | |||||
|
March 31, 2017 |
December 31, 2016 | ||||
|
ASSETS |
Unaudited |
||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$ |
35,273 |
$ |
652,993 | |
|
Accounts receivable |
75,959 |
69,783 | |||
|
Fair value of derivatives |
3,093 |
103 | |||
|
Other current assets |
1,671 |
2,247 | |||
|
Total current assets |
115,996 |
725,126 | |||
|
Oil and natural gas properties, full cost accounting method: |
|||||
|
Evaluated properties |
3,009,059 |
2,754,353 | |||
|
Less accumulated depreciation, depletion, amortization and impairment |
(1,972,091) |
(1,947,673) | |||
|
Net evaluated oil and natural gas properties |
1,036,968 |
806,680 | |||
|
Unevaluated properties |
1,154,850 |
668,721 | |||
|
Total oil and natural gas properties |
2,191,818 |
1,475,401 | |||
|
Other property and equipment, net |
18,067 |
14,114 | |||
|
Restricted investments |
3,339 |
3,332 | |||
|
Deferred financing costs related to the senior secured revolving credit facility |
2,744 |
3,092 | |||
|
Fair value of derivatives |
2,939 |
— | |||
|
Acquisition deposit |
— |
46,138 | |||
|
Other assets, net |
676 |
384 | |||
|
Total assets |
$ |
2,335,579 |
$ |
2,267,587 | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
|
Current liabilities: |
|||||
|
Accounts payable and accrued liabilities |
$ |
131,252 |
$ |
95,577 | |
|
Accrued interest |
12,114 |
6,057 | |||
|
Cash-settleable restricted stock unit awards |
4,025 |
8,919 | |||
|
Asset retirement obligations |
1,588 |
2,729 | |||
|
Fair value of derivatives |
6,430 |
18,268 | |||
|
Total current liabilities |
155,409 |
131,550 | |||
|
Senior secured revolving credit facility |
— |
— | |||
|
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs |
390,536 |
390,219 | |||
|
Asset retirement obligations |
4,652 |
3,932 | |||
|
Cash-settleable restricted stock unit awards |
4,108 |
8,071 | |||
|
Deferred tax liability |
556 |
90 | |||
|
Fair value of derivatives |
— |
28 | |||
|
Other long-term liabilities |
285 |
295 | |||
|
Total liabilities |
555,546 |
534,185 | |||
|
Commitments and contingencies |
|||||
|
Stockholders' equity: |
|||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized: 1,458,948 and 1,458,948 shares outstanding, respectively |
15 |
15 | |||
|
Common stock, $0.01 par value, 300,000,000 and 300,000,000 shares authorized; 201,054,884 and 201,041,320 shares outstanding, respectively |
2,011 |
2,010 | |||
|
Capital in excess of par value |
2,173,243 |
2,171,514 | |||
|
Accumulated deficit |
(395,236) |
(440,137) | |||
|
Total stockholders' equity |
1,780,033 |
1,733,402 | |||
|
Total liabilities and stockholders' equity |
$ |
2,335,579 |
$ |
2,267,587 | |
|
Callon Petroleum Company | ||||||
|
Consolidated Statements of Operations | ||||||
|
(Unaudited; in thousands, except per share data) | ||||||
|
Three Months Ended March 31, | ||||||
|
2017 |
2016 | |||||
|
Operating revenues: |
||||||
|
Oil sales |
$ |
72,008 |
$ |
27,443 | ||
|
Natural gas sales |
9,355 |
3,255 | ||||
|
Total operating revenues |
81,363 |
30,698 | ||||
|
Operating expenses: |
||||||
|
Lease operating expenses |
12,937 |
6,957 | ||||
|
Production taxes |
5,904 |
2,220 | ||||
|
Depreciation, depletion and amortization |
24,433 |
15,722 | ||||
|
General and administrative |
5,206 |
5,562 | ||||
|
Accretion expense |
184 |
180 | ||||
|
Write-down of oil and natural gas properties |
— |
34,776 | ||||
|
Acquisition expense |
450 |
48 | ||||
|
Total operating expenses |
49,114 |
65,465 | ||||
|
Income (loss) from operations |
32,249 |
(34,767) | ||||
|
Other (income) expenses: |
||||||
|
Interest expense, net of capitalized amounts |
665 |
5,491 | ||||
|
(Gain) loss on derivative contracts |
(15,303) |
932 | ||||
|
Other income |
(708) |
(81) | ||||
|
Total other (income) expense |
(15,346) |
6,342 | ||||
|
Income (loss) before income taxes |
47,595 |
(41,109) | ||||
|
Income tax expense |
466 |
— | ||||
|
Net income (loss) |
47,129 |
(41,109) | ||||
|
Preferred stock dividends |
(1,824) |
(1,824) | ||||
|
Income (loss) available to common stockholders |
$ |
45,305 |
$ |
(42,933) | ||
|
Income (loss) per common share: |
||||||
|
Basic |
$ |
0.23 |
$ |
(0.51) | ||
|
Diluted |
$ |
0.22 |
$ |
(0.51) | ||
|
Shares used in computing income (loss) per common share: |
||||||
|
Basic |
201,054 |
83,582 | ||||
|
Diluted |
201,740 |
83,582 | ||||
|
Callon Petroleum Company | ||||||
|
Consolidated Statements of Cash Flows | ||||||
|
(Unaudited; in thousands) | ||||||
|
Three Months Ended March 31, | ||||||
|
2017 |
2016 | |||||
|
Cash flows from operating activities: |
||||||
|
Net income (loss) |
$ |
47,129 |
$ |
(41,109) | ||
|
Adjustments to reconcile net income to cash provided by operating activities: |
||||||
|
Depreciation, depletion and amortization |
24,932 |
16,129 | ||||
|
Write-down of oil and natural gas properties |
— |
34,776 | ||||
|
Accretion expense |
184 |
180 | ||||
|
Amortization of non-cash debt related items |
665 |
781 | ||||
|
Deferred income tax expense |
466 |
— | ||||
|
Net (gain) loss on derivatives, net of settlements |
(17,794) |
8,648 | ||||
|
Non-cash expense related to equity share-based awards |
930 |
516 | ||||
|
Change in the fair value of liability share-based awards |
(291) |
709 | ||||
|
Payments to settle asset retirement obligations |
(765) |
(161) | ||||
|
Changes in current assets and liabilities: |
||||||
|
Accounts receivable |
(4,066) |
5,941 | ||||
|
Other current assets |
576 |
580 | ||||
|
Current liabilities |
9,903 |
(717) | ||||
|
Change in other long-term liabilities |
— |
11 | ||||
|
Change in other assets, net |
(523) |
(233) | ||||
|
Payments to settle vested liability share-based awards |
(8,662) |
(9,807) | ||||
|
Net cash provided by operating activities |
52,684 |
16,244 | ||||
|
Cash flows from investing activities: |
||||||
|
Capital expenditures |
(66,154) |
(50,775) | ||||
|
Acquisitions |
(648,485) |
(10,183) | ||||
|
Acquisition deposit |
46,138 |
— | ||||
|
Net cash used in investing activities |
(668,501) |
(60,958) | ||||
|
Cash flows from financing activities: |
||||||
|
Borrowings on senior secured revolving credit facility |
— |
45,000 | ||||
|
Payments on senior secured revolving credit facility |
— |
(85,000) | ||||
|
Issuance of common stock |
— |
94,949 | ||||
|
Payment of preferred stock dividends |
(1,824) |
(1,824) | ||||
|
Tax withholdings related to restricted stock units |
(79) |
(124) | ||||
|
Net cash provided by (used in) financing activities |
(1,903) |
53,001 | ||||
|
Net change in cash and cash equivalents |
(617,720) |
8,287 | ||||
|
Balance, beginning of period |
652,993 |
1,224 | ||||
|
Balance, end of period |
$ |
35,273 |
$ |
9,511 | ||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted G&A," "Adjusted Income (Loss)," "Adjusted EBITDA," and "Adjusted Total Revenues." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Wednesday, May 3, 2017, to discuss first quarter 2017 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Wednesday, May 3, 2017, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
5057175 |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2017 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
|
i. |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations | |||||||||
SOURCE Callon Petroleum Company
Article Date
5/2/20174/11/2017 - Callon Petroleum Company Announces First Quarter 2017 Earnings Release and Conference Call Schedule
Callon Petroleum Company Announces First Quarter 2017 Earnings Release and Conference Call Schedule
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., April 11, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that it will host a conference call on Wednesday, May 3, 2017, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss first quarter 2017 financial and operating results. The Company plans to release first quarter 2017 results after the close of markets on Tuesday, May 2, 2017.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Wednesday, May 3, 2017, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
|
Alternatively, you may join by telephone using the following numbers: | |
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
5057175 |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Eric Williams
ir@callon.com
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
4/11/2017Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., March 22, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Scotia Howard Weil 45th Annual Energy Conference
The Company will present at the 45th Annual Energy Conference hosted by Scotia Howard Weil in New Orleans, LA on Monday, March 27, 2017 at 1:55 pm Central Time.
IPAA 23rd Annual OGIS New York
The Company will present at the 23rd Annual Oil & Gas Investment Symposium hosted by the Independent Petroleum Association of America New York, NY on Monday, April 3, 2017 at 9:15 am Eastern Time.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
3/22/2017Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., March 3, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on March 31, 2017 to stockholders of record as of March 15, 2017. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
3/3/2017Callon Petroleum Company Announces Fourth Quarter 2016 Results
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Feb. 27, 2017 /PRNewswire/ --
Click here for a PDF version of this release.
Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months and full-year ended December 31, 2016.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the full-year and fourth quarter 2016, and other recent data points include:
"Callon delivered exceptional growth in our producing assets in 2016, with a nearly 60% increase in daily production and 70% increase in proved reserves," commented Fred Callon, Chairman and Chief Executive Officer. "The strength of a capital efficient operational base, combined with our solid financial position, allowed us to stay on our front foot throughout the year and ultimately enter into acquisition agreements that tripled our acreage position in the Permian Basin on an accretive basis. We are now entering a period that will be characterized by drill-bit growth, planning to increase our horizontal development program to five rigs in both the Midland and Delaware Basins by early 2018. Our 2017 drilling program will be active in all four of our core operating areas as we prioritize top-tier cash returns in our portfolio, without the need to manage onerous drilling obligations. In the near-term, we are on the cusp of unlocking the value of our newly acquired WildHorse position after investing in facilities for efficient development and adding a second rig to this position last month. We look forward to accelerating the value proposition in a similar manner in the Spur area with a rig starting by mid-year. Overall, we currently expect our operations to produce another year of production growth approaching 60% in 2017 while maintaining the financial strength required to navigate any potential headwinds in 2017 and beyond. With our existing portfolio of delineated locations in core, unconventional shale plays, Callon is well-positioned to deliver leading production and cash flow growth per share, as well as additional upside in emerging zones across the entire Permian Basin."
Operations Update
At December 31, 2016, we had 148 gross (112.5 net) horizontal wells producing from six established flow units in the Midland Basin. Net daily production for the three months ended December 31, 2016 grew approximately 73% to 18.4 thousand barrels of oil equivalent per day ("MBOE/d") (approximately 76% oil) as compared to the same period of 2015. Sequentially, we grew production by approximately 11% compared to the third quarter of 2016.
For the three months ended December 31, 2016, we operated two horizontal drilling rigs, drilling 10 gross (7.4 net) horizontal wells in both the Monarch and WildHorse areas. We placed 10 gross (6.9 net) horizontal wells on production in the quarter, all of which were located in our Monarch area.
Well Activity Summary
The following table details well-related activity for the quarter by operating area:
|
For the Three Months Ended December 31, 2016 | ||||||||||||
|
Completed/ |
||||||||||||
|
Drilled |
On Production(a) |
Awaiting Completion | ||||||||||
|
Gross |
Net |
Gross |
Net |
Gross |
Net | |||||||
|
Monarch horizontal wells |
5 |
2.9 |
10 |
6.9 |
3 |
1.4 | ||||||
|
WildHorse horizontal wells |
5 |
4.5 |
— |
— |
3 |
2.8 | ||||||
|
Total Midland Basin wells |
10 |
7.4 |
10 |
6.9 |
6 |
4.2 | ||||||
|
(a) |
Wells turned to production batteries. Includes wells drilled prior to the fourth quarter of 2016. |
During the fourth quarter, we continued to focus on the development of two flow units within the Lower Spraberry in the Monarch area, and also expanded our development to include the Wolfcamp A zone which was placed on production in early October 2016. The following table highlights wells that achieved peak rates during the period, expressed in absolute barrels of oil equivalent per day ("BOE/d") and production rates per 1,000 feet of completed lateral:
|
30-Day Average | ||||||||||||||||||
|
24-Hour Peak IP |
Peak IP | |||||||||||||||||
|
(BOE/d; Two-stream) (a) |
(BOE/d; Two-stream) | |||||||||||||||||
|
24-Hour |
Peak |
Per 1,000' |
Peak |
Per 1,000' | ||||||||||||||
|
IP |
Focus Area |
Completed |
24-Hour |
Production |
Lateral |
30-Day |
Production |
Lateral | ||||||||||
|
Date |
Well |
(Zone) |
Lateral (ft) |
IP |
(% oil) |
Feet |
IP |
(% oil) |
Feet | |||||||||
|
11/20/2016 |
Casselman 40-6LL |
Monarch (LLS) |
4,473 |
987 |
76% |
221 |
760 |
78% |
170 | |||||||||
|
11/20/2016 |
Casselman 40-8LL |
Monarch (LLS) |
4,623 |
968 |
78% |
209 |
760 |
82% |
164 | |||||||||
|
11/22/2016 |
Pecan Acres 23 PSA 2 09SH |
Monarch (LLS) |
9,206 |
1,411 |
88% |
153 |
1,142 |
86% |
124 | |||||||||
|
12/01/2016 |
Casselman 40 07UL |
Monarch (ULS) |
4,473 |
1,030 |
86% |
230 |
883 |
86% |
198 | |||||||||
|
12/05/2016 |
Pecan Acres 23 PSA 2 16AH |
Monarch (WCA) |
9,234 |
1,440 |
89% |
156 |
1,352 |
89% |
146 | |||||||||
|
12/06/2016 |
Kendra-Kristen 4 24SH |
Monarch (LLS) |
9,642 |
1,797 |
93% |
186 |
1,255 |
92% |
130 | |||||||||
|
12/16/2016 |
Kendra-Kristen 3 23SH |
Monarch (ULS) |
9,678 |
1,296 |
93% |
134 |
1,101 |
92% |
114 | |||||||||
|
12/25/2016 |
Kendra-Kristen 5 25SH |
Monarch (ULS) |
9,402 |
1,500 |
93% |
160 |
1,167 |
92% |
124 | |||||||||
|
01/05/2017 |
Kendra PSA 1 216LL |
Monarch (LLS) |
10,061 |
1,747 |
90% |
174 |
1,381 |
90% |
137 | |||||||||
|
01/05/2017 |
Kendra PSA 1 218LL |
Monarch (LLS) |
10,343 |
1,517 |
89% |
147 |
1,289 |
90% |
125 | |||||||||
|
(a) |
24-Hour Peak IPs correspond to the rates filed with the Railroad Commission of Texas and are captured using well tests on the specified date, which may result in an understated rate as the production typically varies more widely during the early days of production. The 30-Day Average Peak IP is calculated using allocated production, and is occasionally greater than the reported 24-Hour Peak IP if the well test on that date captured a lower rate than the average for the period. |
We are encouraged with the performance of the first Wolfcamp A well in the Monarch focus area. The Pecan Acres PSA 2 16AH was drilled from a stacked two-well pad with a ULS well and achieved a Peak 30-Day IP of over 1,350 BOE/d (89% oil), further demonstrating the high quality of targeted flow units for multi-zone development in the future. This well represents our fifth producing flow unit in the Monarch area, inclusive of the Upper and Lower benches of the Lower Spraberry (the "ULS" and "LLS", respectively), the Middle Spraberry and the Wolfcamp B. Additionally, we drilled and completed our longest laterals to date in our Carpe Diem field targeting the LLS with drilled laterals averaging nearly 11,500 ft. and average Peak 30-Day IPs of approximately 1,350 BOE (90% oil).
We also drilled five gross wells in WildHorse in the fourth quarter as we commenced our program development of this new core operating unit. We recently completed our first four wells during January 2017, including a two-well, staggered Wolfcamp A and Lower Spraberry pad in the Sidewinder field in northwest Howard County, and a stacked Wolfcamp A and Lower Spraberry pad located approximately 10 miles south of Sidewinder in the Maverick field. These four wells are in various stages of flowback and continue to climb towards peak rates.
Callon is currently operating three horizontal rigs, two of which are running in the WildHorse area. We initiated our pad development program in this area in late 2016 and recently accelerated our activity with the addition of a second rig in January 2017 after making substantial progress on our infrastructure investment plan. Both rigs are currently drilling in the Fairway field located in central Howard County. The rig on the western side of Fairway is drilling a three-well, stacked pad targeting the Lower Spraberry, Wolfcamp A and Wolfcamp B zones, which we expect to complete in March 2017. The rig on the eastern side of Fairway is drilling a two-well pad targeting the Wolfcamp A, which we expect to complete in April 2017. Our third horizontal rig continues to be focused in Monarch before moving to Reagan County in the Ranger unit in the second quarter.
We are also progressing our plans for program development in our recently acquired acreage in the Delaware Basin, which has been named the Spur operating area. We are currently flowing back a recently completed 10,000' lateral well targeting the Lower Wolfcamp A, the Corbets 34-149 2WA, and early time performance is in-line with our type curve expectations. We are also preparing to complete a 10,000' lateral well targeting the Wolfcamp B in an offsetting drilling unit. Following the completion of upgrades to existing infrastructure, we plan to add a dedicated horizontal drilling rig to the Spur operating area by mid-year 2017, with the potential for incremental drilling activity in the Delaware Basin in 2018.
Capital Expenditures
For the three months ended December 31, 2016, we accrued $43.3 million in operational capital expenditures, including facilities expenditures of $11.4 million, equal to $43.3 million accrued in the third quarter of 2016. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended December 31, 2016 | |||||||||||||||
|
Operational |
Seismic & |
Capitalized |
Capitalized |
Total Capital | |||||||||||
|
Cash basis (a) |
$ |
53,358 |
$ |
3,625 |
$ |
6,699 |
$ |
3,652 |
$ |
67,334 | |||||
|
Timing adjustments (b) |
(10,030) |
754 |
1 |
— |
(9,275) | ||||||||||
|
Non-cash items |
— |
— |
— |
1,352 |
1,352 | ||||||||||
|
Accrual (GAAP) basis |
$ |
43,328 |
$ |
4,379 |
$ |
6,700 |
$ |
5,004 |
$ |
59,411 | |||||
|
(a) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(b) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | |||||||||
|
December 31, 2016 |
September 30, 2016 |
December 31, 2015 | |||||||
|
Net production |
|||||||||
|
Oil (MBbls) |
1,287 |
1,153 |
777 | ||||||
|
Natural gas (MMcf) |
2,413 |
2,244 |
1,188 | ||||||
|
Total production (MBOE) |
1,689 |
1,527 |
975 | ||||||
|
Average daily production (BOE/d) |
18,359 |
16,598 |
10,598 | ||||||
|
% oil (BOE basis) |
76% |
76% |
80% | ||||||
|
Oil and natural gas revenues (in thousands) |
|||||||||
|
Oil revenue |
$ |
60,559 |
$ |
49,095 |
$ |
30,582 | |||
|
Natural gas revenue |
8,522 |
6,832 |
2,981 | ||||||
|
Total revenue |
$ |
69,081 |
$ |
55,927 |
$ |
33,563 | |||
|
Impact of cash-settled derivatives |
2,079 |
4,091 |
9,918 | ||||||
|
Adjusted Total Revenue (i) |
$ |
71,160 |
$ |
60,018 |
$ |
43,481 | |||
Total Revenue. For the quarter ended December 31, 2016, Callon reported total revenues of $69.1 million and total revenues including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $71.2 million, including the $2.1 million impact of settled derivative contracts. The table above reconciles to the related GAAP measure of the Company's revenue to Adjusted Total Revenue. Average daily production for the quarter was 18,359 BOE/d compared to average daily production of 16,598 BOE/d in the third quarter of 2016. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended December 31, 2016, Callon recognized the following hedging-related items (in thousands, except per unit data):
|
In Thousands |
Per Unit | |||||
|
Oil derivatives contracts |
||||||
|
Net gain on settlements |
$ |
2,334 |
$ |
1.82 | ||
|
Net loss on fair value adjustments |
(10,639) |
|||||
|
Total net loss on oil derivatives contracts |
$ |
(8,305) |
||||
|
Natural gas derivatives contracts |
||||||
|
Net loss on settlements |
$ |
(255) |
$ |
(0.10) | ||
|
Net loss on fair value adjustments |
(392) |
|||||
|
Total net loss on natural gas derivatives contracts |
$ |
(647) |
||||
|
Total derivatives contracts |
||||||
|
Net gain on settlements |
$ |
2,079 |
$ |
1.23 | ||
|
Net loss on fair value adjustments |
(11,031) |
|||||
|
Total net loss on total derivatives contracts |
$ |
(8,952) |
||||
Average realized prices, including and excluding the impact of cash settled derivatives during the fourth quarter, were as follows:
|
Three Months Ended | |||
|
December 31, 2016 | |||
|
Average realized sales price |
|||
|
Oil (per Bbl) (excluding impact of cash-settled derivatives) |
$ |
47.05 | |
|
Impact of cash-settled derivatives |
1.82 | ||
|
Oil (per Bbl) (including impact of cash-settled derivatives) |
$ |
48.87 | |
|
Natural gas (per Mcf) (excluding impact of cash-settled derivatives) |
$ |
3.53 | |
|
Impact of cash-settled derivatives |
(0.10) | ||
|
Natural gas (per Mcf) (including impact of cash-settled derivatives) |
$ |
3.43 | |
|
Total (per BOE) (excluding impact of cash-settled derivatives) |
$ |
40.90 | |
|
Impact of cash-settled derivatives |
1.23 | ||
|
Total (per BOE) (including impact of cash-settled derivatives) |
$ |
42.13 | |
|
Three Months Ended | |||||||||
|
December 31, 2016 |
September 30, 2016 |
December 31, 2015 | |||||||
|
Additional per BOE data |
|||||||||
|
Sales price, excluding impact of cash-settled derivatives |
$ |
40.90 |
$ |
36.63 |
$ |
34.42 | |||
|
Sales price, including impact of cash-settled derivatives |
42.13 |
39.30 |
44.60 | ||||||
|
Lease operating expense, including workover and gathering |
$ |
8.36 |
$ |
6.52 |
$ |
6.47 | |||
|
Production taxes |
2.20 |
2.28 |
2.04 | ||||||
|
Depletion, depreciation and amortization |
13.06 |
11.33 |
17.29 | ||||||
|
Adjusted G&A(a) |
|||||||||
|
Cash component |
2.84 |
2.38 |
3.80 | ||||||
|
Non-cash component |
0.54 |
0.58 |
0.65 | ||||||
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Lease Operating Expenses, including workover and gathering expense ("LOE"). LOE per BOE for the three months ended December 31, 2016 was $8.36 per BOE, compared to LOE of $6.52 per BOE in the third quarter of 2016. The increase in this metric was primarily related to an increase in the number of workover activities in the quarter and higher fuel and power expenses related to assets acquired during 2016. We continue to make investments in infrastructure in these new operating areas to support our planned increases in drilling activity and expect these investments to reduce our LOE in these areas over time.
Production Taxes, including ad valorem taxes. Production taxes were $2.20 per BOE in the fourth quarter of 2016, representing approximately 5.4% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended December 31, 2016 was $13.06 per BOE compared to $11.33 per BOE in the third quarter of 2016, attributable to increases in our depreciable asset base and assumed future development costs related to undeveloped proved reserves relative to the increase in proved reserves.
General and Administrative ("G&A"). G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $5.7 million, or $3.38 per BOE, for the fourth quarter of 2016 compared to $4.5 million, or $2.96 per BOE, for the third quarter of 2016. The cash component of Adjusted G&A was $4.8 million, or $2.84 per BOE, for the fourth quarter of 2016 compared to $3.6 million, or $2.38 per BOE, for the third quarter of 2016.
For the fourth quarter of 2016, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Recurring |
||||||||||
|
Cash |
Non-Cash |
Total | ||||||||
|
G&A expenses |
||||||||||
|
Cash G&A |
$ |
4,800 |
$ |
— |
$ |
4,800 | ||||
|
Restricted stock share-based compensation |
— |
801 |
801 | |||||||
|
Change in the fair value of liability share-based awards |
— |
857 |
857 | |||||||
|
Corporate depreciation & amortization |
— |
104 |
104 | |||||||
|
Total G&A expense: |
$ |
4,800 |
$ |
1,762 |
$ |
6,562 | ||||
|
Adjusted G&A |
||||||||||
|
Less: Change in the fair value of liability share-based awards |
$ |
(857) | ||||||||
|
Adjusted G&A – total |
5,705 | |||||||||
|
Restricted stock share-based compensation (non-cash) |
(801) | |||||||||
|
Corporate depreciation & amortization (non-cash) |
(104) | |||||||||
|
Adjusted G&A – cash component |
$ |
4,800 | ||||||||
Income tax expense. Callon typically provides for income taxes at a statutory rate of 35% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses and state income taxes. We recorded an income tax benefit of less than $0.1 million for the three months ended December 31, 2016. At December 31, 2016 we had a valuation allowance of $140.2 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist.
A breakdown of the Company's actual 2016 capital expenditures and anticipated 2017 operational plan and associated expenditures is presented below on an accrual, or GAAP, basis:
|
2016 Actual |
2017 Forecast | |||||
|
Net operated horizontal well completions |
||||||
|
Midland Basin |
23.7 |
30 - 32 | ||||
|
Delaware Basin |
— |
3 - 4 | ||||
|
Average lateral length |
6,510 |
~7,500 | ||||
|
Average working interest |
~74% |
~75% | ||||
|
Gross horizontal well costs ($MM) |
||||||
|
Midland Basin (7,500' drilled lateral) |
$ |
5.0 - 5.5 | ||||
|
Delaware Basin (10,000' drilled lateral) |
$ |
8.5 - 9.5 | ||||
|
Non-operated horizontal activity ($MM) |
$ |
7.5 - 10.0 | ||||
|
Capital expenditures ($MM, accrual basis) |
||||||
|
Drilling and completion |
$ |
117.4 |
$ |
240 - 255 | ||
|
Facilities and other |
38.9 |
85 - 95 | ||||
|
Total operational capital expenditures |
$ |
156.3 |
$ |
325 - 350 | ||
Proved Reserves
The Company recently completed the reserve audit for the year ended December 31, 2016 with its independent reserve auditor, DeGolyer and MacNaughton. As of December 31, 2016, Callon's estimated total proved reserves were 91.6 million BOE, a 69% increase over the previous year-end. The proved reserves estimate is comprised of 78% oil of which our total proved developed estimated volumes are comprised of 76% oil. Included in total proved reserve estimates are 105 (gross) horizontal proved undeveloped locations. These estimates do not include the impact of our recently completed acquisition in the Delaware Basin.
The following table presents the progression of our estimated net proved oil and natural gas reserves from December 31, 2015 to 2016, and in each case, prepared in accordance with the rules and regulations of the SEC.
|
Oil |
Natural Gas |
Total | ||||
|
Proved developed and undeveloped reserves |
(MBbls) |
(MMcf) |
(MBOE) | |||
|
As of December 31, 2015 |
43,348 |
65,537 |
54,271 | |||
|
Revisions to previous estimates |
(5,738) |
13,929 |
(3,417) | |||
|
Extensions and discoveries |
14,479 |
17,194 |
17,345 | |||
|
Purchases, net of sales, of reserves in place |
23,336 |
33,709 |
28,954 | |||
|
Production |
(4,280) |
(7,758) |
(5,573) | |||
|
As of December 31, 2016 |
71,145 |
122,611 |
91,580 |
Callon added a total of 17.3 MMBOE in 2016 from horizontal development of a portion of our properties, replacing 311% of 2016 production as calculated by the sum of reserve extensions, discoveries and revisions (including all price-related revisions), divided by annual production ("Organic reserve replacement"). The Company's finding and development from extensions and discoveries "Drill-Bit F&D costs" were $8.77 per BOE calculated as cash costs incurred for exploration and development divided by the sum of extensions and discoveries. See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations.
2017 Guidance Update
|
First Quarter |
Annual | |||
|
2017 |
2017 | |||
|
Total production (BOE/d) |
19,500 - 21,000 |
22,500 - 25,500 | ||
|
% oil |
75% - 77% |
75% - 77% | ||
|
Income Statement Expenses (per BOE) |
||||
|
LOE, including workovers |
$6.75 - $7.50 |
$6.00 - $6.50 | ||
|
Gathering and treating |
$0.40 - $0.50 |
$0.40 - $0.50 | ||
|
Production taxes, including ad valorem (% unhedged revenue) |
7% |
7% | ||
|
Adjusted G&A: cash component (a) |
$2.50 - $3.00 |
$2.00 - $2.50 | ||
|
Adjusted G&A: non-cash component (b) |
$0.75 - $1.25 |
$0.50 - $1.00 | ||
|
Interest expense (c) |
$0.00 - $0.00 |
$0.00 - $0.00 | ||
|
Effective income tax rate |
0.0% |
0.0% | ||
|
Capital expenditures ($MM, accrual basis) |
||||
|
Total operational capital expenditures (d) |
$70 - $75 |
$325 - $350 | ||
|
Capitalized expenses (cash component) |
$10 - $12 |
$40 - $45 |
|
(a) |
Excludes stock-based compensation and corporate depreciation and amortization. See the Non-GAAP related disclosures referenced in the footnote (b) below. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. The reconciliation above provides a reconciliation of fourth quarter 2016 G&A expense on a GAAP basis to Adjusted G&A expense, a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking non-GAAP financial measure without unreasonable effort because of the number of estimated variables that could affect the final value. Accordingly, investors are cautioned not to place undue reliance on this information. |
|
(c) |
All interest expense anticipated to be capitalized. |
|
(d) |
Includes seismic, land and other items. Excludes capitalized expenses. |
Hedge Portfolio Summary
The following table summarizes our open derivative positions as of February 27, 2017:
|
For the Full Year of |
For the Full Year of | |||||
|
Oil contracts |
2017 |
2018 | ||||
|
Swap contracts combined with short puts (WTI, enhanced swaps) |
||||||
|
Total volume (MBbls) |
730 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Swap |
$ |
44.50 |
$ |
— | ||
|
Short put option |
$ |
30.00 |
$ |
— | ||
|
Deferred premium put option |
||||||
|
Total volume (MBbls) |
498 |
— | ||||
|
Premium per Bbl |
$ |
2.05 |
$ |
— | ||
|
Weighted average price per Bbl |
||||||
|
Long put option |
$ |
50.00 |
$ |
— | ||
|
Deferred premium put spread option |
||||||
|
Total volume (MBbls) |
506 |
— | ||||
|
Premium per Bbl |
$ |
2.45 |
$ |
— | ||
|
Weighted average price per Bbl |
||||||
|
Long put option |
$ |
50.00 |
$ |
— | ||
|
Short put option |
$ |
40.00 |
$ |
— | ||
|
Collar contracts (WTI, two-way collars) |
||||||
|
Total volume (MBbls) |
1,351 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call) |
$ |
58.19 |
$ |
— | ||
|
Floor (long put) |
$ |
47.50 |
$ |
— | ||
|
Call option contracts (short position) |
||||||
|
Total volume (MBbls) |
670 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Call strike price |
$ |
50.00 |
$ |
— | ||
|
Swap contracts (Midland basis differential) |
||||||
|
Volume (MBbls) |
2,004 |
1,825 | ||||
|
Weighted average price per Bbl |
$ |
(0.52) |
$ |
(1.02) | ||
|
Collar contracts combined with short puts (WTI, three-way collars) |
||||||
|
Total volume (MBbls) |
— |
2,738 | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call option) |
$ |
— |
$ |
62.84 | ||
|
Floor (long put option) |
$ |
— |
$ |
50.00 | ||
|
Short put option |
$ |
— |
$ |
40.00 | ||
|
Natural gas contracts |
||||||
|
Collar contracts combined with short puts (Henry Hub, three-way collars) |
||||||
|
Total volume (BBtu) |
1,460 |
— | ||||
|
Weighted average price per MMBtu |
||||||
|
Ceiling (short call option) |
$ |
3.71 |
$ |
— | ||
|
Floor (long put option) |
$ |
3.00 |
$ |
— | ||
|
Short put option |
$ |
2.50 |
$ |
— | ||
|
Collar contracts (Henry Hub, two-way collars) |
||||||
|
Total volume (Bbtu) |
1,460 |
— | ||||
|
Weighted average price per MMBtu |
||||||
|
Ceiling (short call option) |
$ |
3.68 |
$ |
— | ||
|
Floor (long put option) |
$ |
3.00 |
$ |
— | ||
Income (Loss) Available to Common Shareholders. The Company reported a net loss available to common shareholders of $3.6 million in the fourth quarter of 2016 and Adjusted Income available to common shareholders of $13.1 million, or $0.08 per diluted share. The following tables reconcile to the related GAAP measure the Company's income (loss) available to common stockholders to Adjusted Income and the Company's net income (loss) to Adjusted EBITDA (in thousands):
|
For the Three Months Ended | |||||||||
|
December 31, 2016 |
September 30, 2016 |
December 31, 2015 | |||||||
|
Income (loss) available to common stockholders |
$ |
(3,570) |
$ |
19,315 |
$ |
(115,144) | |||
|
Change in valuation allowance |
559 |
(7,907) |
40,025 | ||||||
|
Write-down of oil and natural gas properties |
— |
— |
78,737 | ||||||
|
Net loss (gain) on derivatives, net of settlements |
7,170 |
(679) |
(635) | ||||||
|
Rig termination fee |
— |
— |
(368) | ||||||
|
Change in the fair value of share-based awards |
590 |
2,192 |
1,197 | ||||||
|
Loss on early extinguishment of debt |
8,374 |
— |
— | ||||||
|
Adjusted Income |
$ |
13,123 |
$ |
12,921 |
$ |
3,812 | |||
|
Adjusted Income per fully diluted common share |
$ |
0.08 |
$ |
0.09 |
$ |
0.05 | |||
|
For the Three Months Ended | |||||||||
|
December 31, 2016 |
September 30, 2016 |
December 31, 2015 | |||||||
|
Net income (loss) |
$ |
(1,746) |
$ |
21,139 |
$ |
(113,170) | |||
|
Write-down of oil and natural gas properties |
— |
— |
121,134 | ||||||
|
Net loss (gain) on derivatives, net of settlements |
11,030 |
(1,044) |
(977) | ||||||
|
Change in the fair value of share-based awards |
1,718 |
4,150 |
2,354 | ||||||
|
Rig termination fee |
— |
— |
(566) | ||||||
|
Loss on early extinguishment of debt |
12,883 |
— |
— | ||||||
|
Acquisition expense |
1,263 |
456 |
27 | ||||||
|
Income tax (benefit) expense |
48 |
(62) |
— | ||||||
|
Interest expense |
1,369 |
831 |
5,544 | ||||||
|
Depreciation, depletion and amortization |
22,512 |
17,733 |
17,308 | ||||||
|
Accretion expense |
196 |
187 |
175 | ||||||
|
Adjusted EBITDA |
$ |
49,273 |
$ |
43,390 |
$ |
31,829 | |||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the fourth quarter of 2016 was $44.4 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||
|
December 31, 2016 |
September 30, 2016 |
December 31, 2015 | |||||||
|
Cash flows from operating activities: |
|||||||||
|
Net income (loss) |
$ |
(1,746) |
$ |
21,139 |
$ |
(113,170) | |||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|||||||||
|
Depreciation, depletion and amortization |
22,512 |
17,733 |
17,308 | ||||||
|
Write-down of oil and natural gas properties |
— |
— |
121,134 | ||||||
|
Accretion expense |
196 |
187 |
175 | ||||||
|
Amortization of non-cash debt related items |
744 |
810 |
781 | ||||||
|
Deferred income tax (benefit) expense |
48 |
(62) |
— | ||||||
|
Net (gain) loss on derivatives, net of settlements |
11,030 |
(1,044) |
(977) | ||||||
|
Loss on early extinguishment of debt |
9,883 |
— |
— | ||||||
|
Rig termination fee |
— |
— |
(566) | ||||||
|
Non-cash expense related to equity share-based awards |
811 |
608 |
521 | ||||||
|
Change in the fair value of liability share-based awards |
908 |
3,371 |
1,853 | ||||||
|
Discretionary cash flow |
$ |
44,386 |
$ |
42,742 |
$ |
27,059 | |||
|
Changes in working capital |
(7,832) |
2,927 |
4,475 | ||||||
|
Payments to settle asset retirement obligations |
(576) |
(576) |
(211) | ||||||
|
Net cash provided by operating activities |
$ |
35,978 |
$ |
45,093 |
$ |
31,323 | |||
F&D and Reserve Replacement:
|
Calculation Parameters |
2016 Metrics | |||||
|
Production (MBOE) |
(A) |
5,573 | ||||
|
Proved Reserve Data |
||||||
|
Proved reserves (MBOE) |
||||||
|
Total (MBOE) extensions and discoveries |
(B) |
17,345 | ||||
|
PUD additions |
(C) |
12,035 | ||||
|
PUDs transferred to PDP |
(D) |
6,823 | ||||
|
Total annual reserve additions, net of revisions |
(E) |
42,882 | ||||
|
Capital Costs (in thousands) |
||||||
|
Property acquisition costs |
||||||
|
Exploration costs |
$ |
38,612 | ||||
|
Development costs |
151,735 | |||||
|
Unevaluated properties |
||||||
|
Exploration costs |
(F) |
8,631 | ||||
|
Transfers to evaluated properties |
(40,621) | |||||
|
Leasehold and seismic |
(6,220) | |||||
|
Total capital costs incurred |
(G) |
$ |
152,137 | |||
|
Drill-Bit F&D costs per BOE (two-stream) |
(G) / (B) |
$ |
8.77 | |||
|
PD F&D per BOE (two-stream) |
(G - F) / (B - C + D) |
$ |
11.83 | |||
|
Organic reserve replacement ratio |
(B) / (A) |
$ |
311% | |||
|
All-sources reserve replacement ratio |
(E) / (A) |
$ |
769% | |||
|
Callon Petroleum Company | |||||
|
December 31, 2016 |
December 31, 2015 | ||||
|
ASSETS |
|||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$ |
652,993 |
$ |
1,224 | |
|
Accounts receivable |
69,783 |
39,624 | |||
|
Fair value of derivatives |
103 |
19,943 | |||
|
Other current assets |
2,247 |
1,461 | |||
|
Total current assets |
725,126 |
62,252 | |||
|
Oil and natural gas properties, full cost accounting method: |
|||||
|
Evaluated properties |
2,754,353 |
2,335,223 | |||
|
Less accumulated depreciation, depletion, amortization and impairment |
(1,947,673) |
(1,756,018) | |||
|
Net evaluated oil and natural gas properties |
806,680 |
579,205 | |||
|
Unevaluated properties |
668,721 |
132,181 | |||
|
Total oil and natural gas properties |
1,475,401 |
711,386 | |||
|
Other property and equipment, net |
14,114 |
7,700 | |||
|
Restricted investments |
3,332 |
3,309 | |||
|
Deferred financing costs related to the senior secured revolving credit facility |
3,092 |
3,642 | |||
|
Acquisition deposit |
46,138 |
— | |||
|
Other assets, net |
384 |
305 | |||
|
Total assets |
$ |
2,267,587 |
$ |
788,594 | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
|
Current liabilities: |
|||||
|
Accounts payable and accrued liabilities |
$ |
95,577 |
$ |
70,970 | |
|
Accrued interest |
6,057 |
5,989 | |||
|
Cash-settleable restricted stock unit awards |
8,919 |
10,128 | |||
|
Asset retirement obligations |
2,729 |
790 | |||
|
Fair value of derivatives |
18,268 |
— | |||
|
Total current liabilities |
131,550 |
87,877 | |||
|
Senior secured revolving credit facility |
— |
40,000 | |||
|
Secured second lien term loan, net of unamortized deferred financing costs |
— |
288,565 | |||
|
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs |
390,219 |
— | |||
|
Asset retirement obligations |
3,932 |
4,317 | |||
|
Cash-settleable restricted stock unit awards |
8,071 |
4,877 | |||
|
Deferred tax liability |
90 |
— | |||
|
Fair value of derivatives |
28 |
— | |||
|
Other long-term liabilities |
295 |
200 | |||
|
Total liabilities |
534,185 |
425,836 | |||
|
Commitments and contingencies |
|||||
|
Stockholders' equity: |
|||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized: 1,458,948 and 1,578,948 shares outstanding, respectively |
15 |
16 | |||
|
Common stock, $0.01 par value, 300,000,000 and 150,000,000 shares authorized; 201,041,320 and 80,087,148 shares outstanding, respectively |
2,010 |
801 | |||
|
Capital in excess of par value |
2,171,514 |
702,970 | |||
|
Accumulated deficit |
(440,137) |
(341,029) | |||
|
Total stockholders' equity |
1,733,402 |
362,758 | |||
|
Total liabilities and stockholders' equity |
$ |
2,267,587 |
$ |
788,594 | |
|
Callon Petroleum Company | ||||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, | |||||||||||
|
2016 |
2015 |
2016 |
2015 | |||||||||
|
Operating revenues: |
||||||||||||
|
Oil sales |
$ |
60,559 |
$ |
30,582 |
$ |
177,652 |
$ |
125,166 | ||||
|
Natural gas sales |
8,522 |
2,981 |
23,199 |
12,346 | ||||||||
|
Total operating revenues |
69,081 |
33,563 |
200,851 |
137,512 | ||||||||
|
Operating expenses: |
||||||||||||
|
Lease operating expenses |
14,124 |
6,308 |
38,353 |
27,036 | ||||||||
|
Production taxes |
3,717 |
1,993 |
11,870 |
9,793 | ||||||||
|
Depreciation, depletion and amortization |
22,051 |
16,854 |
71,369 |
69,249 | ||||||||
|
General and administrative |
6,562 |
6,180 |
26,317 |
28,347 | ||||||||
|
Accretion expense |
196 |
175 |
958 |
660 | ||||||||
|
Write-down of oil and natural gas properties |
— |
121,134 |
95,788 |
208,435 | ||||||||
|
Rig termination fee |
— |
(566) |
— |
3,075 | ||||||||
|
Acquisition expense |
1,263 |
27 |
3,673 |
27 | ||||||||
|
Total operating expenses |
47,913 |
152,105 |
248,328 |
346,622 | ||||||||
|
Income (loss) from operations |
21,168 |
(118,542) |
(47,477) |
(209,110) | ||||||||
|
Other (income) expenses: |
||||||||||||
|
Interest expense, net of capitalized amounts |
1,369 |
5,544 |
11,871 |
21,111 | ||||||||
|
Loss on early extinguishment of debt |
12,883 |
— |
12,883 |
— | ||||||||
|
(Gain) loss on derivative contracts |
8,952 |
(10,895) |
20,233 |
(28,358) | ||||||||
|
Other income |
(338) |
(21) |
(637) |
(198) | ||||||||
|
Total other (income) expense |
22,866 |
(5,372) |
44,350 |
(7,445) | ||||||||
|
Loss before income taxes |
(1,698) |
(113,170) |
(91,827) |
(201,665) | ||||||||
|
Income tax (benefit) expense |
48 |
— |
(14) |
38,474 | ||||||||
|
Net loss |
(1,746) |
(113,170) |
(91,813) |
(240,139) | ||||||||
|
Preferred stock dividends |
(1,824) |
(1,974) |
(7,295) |
(7,895) | ||||||||
|
Loss available to common stockholders |
$ |
(3,570) |
$ |
(115,144) |
$ |
(99,108) |
$ |
(248,034) | ||||
|
Loss per common share: |
||||||||||||
|
Basic |
$ |
(0.02) |
$ |
(1.58) |
$ |
(0.78) |
$ |
(3.77) | ||||
|
Diluted |
$ |
(0.02) |
$ |
(1.58) |
$ |
(0.78) |
$ |
(3.77) | ||||
|
Shares used in computing loss per common share: |
||||||||||||
|
Basic |
166,258 |
73,036 |
126,258 |
65,708 | ||||||||
|
Diluted |
166,258 |
73,036 |
126,258 |
65,708 | ||||||||
|
Callon Petroleum Company | ||||||||||||
|
Three Months Ended December 31, |
For the Year Ended December 31, | |||||||||||
|
2016 |
2015 |
2016 |
2015 | |||||||||
|
Cash flows from operating activities: |
||||||||||||
|
Net income (loss) |
$ |
(1,746) |
$ |
(113,170) |
$ |
(91,813) |
$ |
(240,139) | ||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
||||||||||||
|
Depreciation, depletion and amortization |
22,512 |
17,308 |
73,072 |
69,891 | ||||||||
|
Write-down of oil and natural gas properties |
— |
121,134 |
95,788 |
208,435 | ||||||||
|
Accretion expense |
196 |
175 |
958 |
660 | ||||||||
|
Amortization of non-cash debt related items |
744 |
781 |
3,115 |
3,123 | ||||||||
|
Deferred income tax expense |
48 |
— |
(14) |
38,474 | ||||||||
|
Net loss (gain) on derivatives, net of settlements |
11,030 |
(977) |
38,135 |
6,658 | ||||||||
|
Non-cash loss on early extinguishment of debt |
9,883 |
— |
9,883 |
— | ||||||||
|
Non-cash expense related to equity share-based awards |
811 |
521 |
558 |
221 | ||||||||
|
Change in the fair value of liability share-based awards |
908 |
1,853 |
6,953 |
6,612 | ||||||||
|
Payments to settle asset retirement obligations |
(576) |
(211) |
(1,471) |
(3,258) | ||||||||
|
Changes in current assets and liabilities: |
||||||||||||
|
Accounts receivable |
(13,611) |
2,517 |
(30,055) |
(4,761) | ||||||||
|
Other current assets |
(535) |
(51) |
(786) |
(20) | ||||||||
|
Current liabilities |
5,473 |
1,546 |
25,288 |
8,001 | ||||||||
|
Change in other long-term liabilities |
10 |
(20) |
96 |
80 | ||||||||
|
Change in other assets, net |
831 |
(83) |
(840) |
338 | ||||||||
|
Payments to settle vested liability share-based awards related to early retirements |
— |
— |
— |
(3,538) | ||||||||
|
Payments to settle vested liability share-based awards |
— |
— |
(10,300) |
(3,925) | ||||||||
|
Net cash provided by operating activities |
35,978 |
31,323 |
118,567 |
86,852 | ||||||||
|
Cash flows from investing activities: |
||||||||||||
|
Capital expenditures |
(67,334) |
(51,593) |
(190,032) |
(227,292) | ||||||||
|
Acquisitions |
(352,622) |
(29,396) |
(654,679) |
(32,245) | ||||||||
|
Acquisition deposit |
(13,438) |
— |
(46,138) |
— | ||||||||
|
Proceeds from sales of mineral interest and equipment |
1,639 |
29 |
24,562 |
377 | ||||||||
|
Net cash used in investing activities |
(431,755) |
(80,960) |
(866,287) |
(259,160) | ||||||||
|
Cash flows from financing activities: |
||||||||||||
|
Borrowings on senior secured revolving credit facility |
— |
51,000 |
217,000 |
181,000 | ||||||||
|
Payments on senior secured revolving credit facility |
— |
(110,000) |
(257,000) |
(176,000) | ||||||||
|
Payment of deferred financing costs |
(10,153) |
— |
(10,793) |
— | ||||||||
|
Issuance of common stock |
634,862 |
109,913 |
1,357,577 |
175,459 | ||||||||
|
Payment of preferred stock dividends |
(1,824) |
(1,974) |
(7,295) |
(7,895) | ||||||||
|
Net cash provided by financing activities |
722,885 |
48,939 |
1,399,489 |
172,564 | ||||||||
|
Net change in cash and cash equivalents |
327,108 |
(698) |
651,769 |
256 | ||||||||
|
Balance, beginning of period |
325,885 |
1,922 |
1,224 |
968 | ||||||||
|
Balance, end of period |
$ |
652,993 |
$ |
1,224 |
$ |
652,993 |
$ |
1,224 | ||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted Income (Loss)," "Adjusted G&A" and "Adjusted EBITDA," "Adjusted Total Revenues", "Drill-Bit F&D costs", "PD F&D costs" and "Organic reserve replacement." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Tuesday, February 28, 2017, to discuss fourth quarter 2016 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Tuesday, February 28, 2017, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-855-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
1632538 |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2017 guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
|
i. See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations | ||
SOURCE Callon Petroleum Company
Article Date
2/27/20172/23/2017 - Callon Petroleum Company Updates its Fourth Quarter 2016 Earnings Release and Conference Call Schedule
Callon Petroleum Company Updates its Fourth Quarter 2016 Earnings Release and Conference Call Schedule
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Mo., Feb. 23, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that it will host its conference call, one hour earlier than originally scheduled, on Tuesday, February 28, 2017, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss fourth quarter 2016 financial and operating results. The Company plans to release fourth quarter 2016 results after the close of markets on Monday, February 27, 2017.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Tuesday, February 28, 2017, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
|
Alternatively, you may join by telephone using the following numbers: | |
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
1632538 |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
2/23/2017Callon Petroleum Company Announces Closing of Core Delaware Basin Acquisition
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Feb. 13, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the closing of its previously announced acquisition of oil and natural gas assets in the southern Delaware Basin from American Resource Development LLC. On February 13, 2017, the Company completed the acquisition of approximately 16,700 net surface acres in Ward and Pecos Counties, Texas, comprised of an initially disclosed amount of 16,098 net acres and an incremental 590 net acres acquired between signing and closing of the transaction that are either within or contiguous to the Ward County footprint. Inclusive of the incremental acreage and the purchase of the midstream assets of Ameredev Midstream Development LLC, total cash consideration paid for the acquisition was $633 million, subject to customary purchase price adjustments.
The Corbets 34-149 2WA well, with a 10,000' drilled lateral targeting the Lower Wolfcamp A, is currently flowing back in Ward County. In addition, a second 10,000' drilled lateral targeting the Wolfcamp B is awaiting completion in an offsetting drilling unit. After closing of this transaction, Callon's position in the Permian Basin now totals over 56,000 net surface acres.
Fred Callon, Chairman and Chief Executive Officer commented, "Our initial entry into the Delaware Basin represents another important strategic step for Callon in the Permian Basin. The contiguous acreage position resides within a deep, over-pressured region and includes multiple, oil-weighted target intervals. We currently estimate over 480 gross horizontal locations on the acquired Ward County acreage in just the Wolfcamp A and B zones that have been well-delineated in the area, with potential upside locations in the Wolfcamp C and various Bone Spring intervals, in addition to emerging development opportunities in Pecos County. This new development unit, our fourth core operating area in the Permian which we have named Spur, will be an important component of our growing portfolio of investment opportunities that we believe will drive attractive returns on total capital employed as our Permian drilling activity increases. We are preparing to add a dedicated horizontal drilling rig to the Spur operating area by mid-year 2017, which will be our fourth operated rig in the Permian, with the potential for incremental drilling activity in the Delaware Basin in 2018."
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the implementation of the Company's business plans and strategy, including future drilling plans, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the Company's ability to realize the anticipated benefits of the acquisition, the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact:
Eric Williams
Manager, Finance
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
2/13/2017Callon Petroleum Company to Present at the Credit Suisse Energy Conference
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Feb. 8, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor event:
Credit Suisse Energy Conference
The Company will present at the 2017 Energy Conference hosted by Credit Suisse in Vail, CO on Wednesday, February 15, 2017 at 9:15 AM Mountain Time.
The live and archived webcasts for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
2/8/20171/16/2017 - Callon Petroleum Company Announces Fourth Quarter 2016 Earnings Release and Conference Call Schedule
Callon Petroleum Company Announces Fourth Quarter 2016 Earnings Release and Conference Call Schedule
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Jan. 16, 2017 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that it will host a conference call on Tuesday, February 28, 2017, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss fourth quarter 2016 financial and operating results. The Company plans to release fourth quarter 2016 results after the close of markets on Monday, February 27, 2017.
|
Please join Callon Petroleum Company via the Internet for a webcast of the conference call: | |
|
Date/Time: |
Tuesday, February 28, 2017, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
|
Alternatively, you may join by telephone using the following numbers: | |
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Access code: |
1632538 |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
1/16/2017Callon Petroleum Company Announces Closing of Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Dec. 19, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the closing of its previously announced underwritten public offering of 40,000,000 shares of its common stock. Following this issuance, Callon now has 201,041,320 shares of common stock issued and outstanding. Total net proceeds of the offering, after underwriters' discounts and commissions and estimated offering expenses, will be approximately $635.2 million. Proceeds from the offering are expected to be used to fund the pending Ameredev Acquisition as described in the Company's Current Report on Form 8-K previously filed with the Securities and Exchange Commission on December 13, 2016, and the balance for general corporate purposes. If the pending Ameredev Acquisition is not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital. The Company has granted the underwriters a 30-day option to purchase up to an additional 6,000,000 shares of its common stock.
Barclays and J.P. Morgan are acting as joint book-running managers for the offering. Citigroup and Credit Suisse are also acting as joint book-running managers for the offering. Copies of the prospectus supplement and accompanying base prospectus related to the offering may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, copies may be obtained by contacting Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, via telephone at 1-888-603-5847, or by e-mailing barclaysprospectus@broadridge.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 1-866-803-9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements, including regarding the consummation of the pending acquisition and the time frame in which the pending acquisition will occur. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
12/19/2016Callon Petroleum Company Announces Upsizing and Pricing of Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Dec. 13, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has priced an upsized underwritten public offering of 40,000,000 shares of its common stock for total estimated gross proceeds (before the underwriter's discounts and commissions and estimated offering expenses) of $656 million. The underwriters will have an option to purchase up to an additional 6,000,000 shares of common stock from the Company.
Proceeds from the offering are expected to be used to fund the pending Ameredev Acquisition, as described in the Company's Current Report on Form 8-K previously filed with the Securities and Exchange Commission on December 13, 2016, and the balance for general corporate purposes. If the pending Ameredev Acquisition is not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Barclays and J.P. Morgan are acting as joint book-running managers for the offering. The offering is expected to close on December 19, 2016, subject to customary closing conditions.
The offering will be made only by means of a prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, the underwriters will arrange to send you the prospectus supplement and related base prospectus if you request them by contacting Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, via telephone at 1-888-603-5847, or by e-mailing barclaysprospectus@broadridge.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 1-866-803-9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements, including regarding the consummation of the pending acquisition and completion of related financing and the time frame in which these transactions will occur. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
12/14/2016Callon Petroleum Company Announces Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Dec. 13, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has commenced, subject to market and other conditions, an underwritten public offering of 34,000,000 shares of its common stock by the Company. The Company expects to grant the underwriters an option to purchase up to an additional 5,100,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to partially fund the pending Ameredev Acquisition, as described in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 13, 2016. If the pending Ameredev Acquisition is not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Barclays and J.P. Morgan are acting as joint book-running managers for the offering. The offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, the underwriters will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, via telephone at 1-888-603-5847, or by e-mailing barclaysprospectus@broadridge.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 1-866-803-9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
The common stock will be issued and sold pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements, including regarding the consummation of the pending acquisition and completion of related financing and the time frame in which these transactions will occur. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
12/13/2016Callon Petroleum Company Announces Entry Into the Core Southern Delaware Basin
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Dec. 13, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that its wholly owned subsidiary, Callon Petroleum Operating Company, has entered into a definitive agreement to acquire certain undeveloped acreage and producing oil and gas properties for total consideration of $615 million in cash from American Resource Development LLC, American Resource Development Upstream LLC, and American Resource Development Midstream LLC (collectively, "Ameredev"). The Company intends to fund the cash purchase price with the net proceeds of an equity offering announced concurrently with the announcement of this acquisition, and with current cash balances or availability under its revolving credit facility.
Key attributes of the Ameredev acquisition include:
Ameredev currently operates approximately 80% of net surface acreage and has an average working interest in operated properties of approximately 82%. On a pro forma basis, assuming the closing of the acquisition, Callon's aggregate Permian Basin position will include approximately 55,500 net surface acres concentrated in four core operating areas within both the Midland and Delaware sub-Basins.
Fred Callon, Chairman and Chief Executive Officer commented, "Our initial entry into the Delaware Basin caps a transformative year for Callon. The Ameredev acquisition is the result of a patient, concentrated effort to identify the appropriate de-risked, oily acreage position in the Delaware Basin that provides the opportunity to leverage our Permian Basin technical expertise while complementing our deep inventory of high-return well locations and capital efficient operations in the Midland Basin. The position is well-suited for long lateral development and offers the potential for the development of multiple shale and sand intervals in the core of the Southern Delaware Basin's over-pressured oil window. We are looking forward to adding a fourth core operating area to our Permian portfolio and are currently planning to deploy an operated horizontal drilling rig to this acreage by mid-2017, in addition to our plans to be running four horizontal rigs in the Midland Basin by the end of 2017. Overall, we believe that this position is an excellent fit with our broader Permian portfolio and organizational capabilities, and, importantly, accretive to the value proposition for our shareholders."
The pending acquisition is expected to close on or before February 13, 2017, subject to the completion of customary closing conditions.
Investor conference call
Callon will host a conference call on Wednesday, December 14, 2016, to discuss the Ameredev acquisition.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Wednesday, December 14, 2016, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-317-6003 |
|
Canada Toll Free: |
1-866-284-3684 |
|
International: |
1-412-317-6061 |
|
Passcode: |
7720834 |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
Credit facility borrowing base redetermination
Effective November 21, 2016, the borrowing base amount under our revolving credit facility was increased to $500 million as part of a regularly scheduled semi-annual redetermination process. The borrowing base had previously been set at $385 million and Callon has elected to keep total commitments from the bank group unchanged at this amount. The Company currently has no borrowings outstanding under the credit facility.
Incremental hedging activity
Since November 3, 2016, the Company has entered into the following derivative contracts:
|
1st Half |
2nd Half |
Full Year | ||||||
|
2017 |
2017 |
2018 | ||||||
|
Oil contracts – NYMEX WTI |
||||||||
|
Deferred premium put options |
||||||||
|
Total volume (barrels in thousands) |
498 |
|||||||
|
Weighted average price per barrel |
||||||||
|
Floor (long put) |
$ |
50.00 |
||||||
|
Option premium |
$ |
(2.05) |
||||||
|
Deferred premium put spread options |
||||||||
|
Total volume (barrels in thousands) |
506 |
|||||||
|
Weighted average price per barrel |
||||||||
|
Floor (long put) |
$ |
50.00 |
||||||
|
Short put |
$ |
40.00 |
||||||
|
Option premium |
$ |
(2.45) |
||||||
|
Oil contracts – Midland differential |
||||||||
|
Swap contracts |
||||||||
|
Total volume (barrels in thousands) |
724 |
736 |
1,095 | |||||
|
Weighted average price per barrel |
$ |
(0.52) |
$ |
(0.52) |
$ |
(1.01) | ||
|
Natural gas contracts – NYMEX Henry Hub |
||||||||
|
Two-way collar contracts |
||||||||
|
Total volume (Btu in billions) |
724 |
1,460 |
||||||
|
Weighted average price per million Btu |
||||||||
|
Ceiling (short call) |
$ |
3.68 |
$ |
3.68 |
||||
|
Floor (long put) |
$ |
3.00 |
$ |
3.00 |
||||
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
About Ameredev
Ameredev is an Austin-based exploration and production company focused on the acquisition and development of oil and gas properties in the Permian Basin. Ameredev was formed in May 2015 with an equity commitment from EnCap Investments, L.P.
Ameredev's legal counsel for the transaction was Bracewell LLP.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements regarding the consummation of the pending acquisition and completion of related financings and the time frame in which these transactions will occur, the expected benefits to the Company and its shareholders from completing the acquisition, estimates of future drilling locations, the number of drilling rigs deployed, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the Company's ability to realize the anticipated benefits of the pending acquisition, the forfeiture of our deposit under the acquisition agreement, the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov. Any forward-looking statements in this release are based on limited information currently available to the Company, which is subject to change, and the Company will not necessarily update the information.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
12/13/2016Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Dec. 5, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on December 30, 2016 to stockholders of record as of December 15, 2016. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
12/5/2016Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
NATCHEZ, Miss., Nov. 17, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Jefferies 2016 Energy Conference
The Company will present at the 2016 Energy Conference hosted by Jefferies in Houston, TX on Tuesday, November 29, 2016 at 1:30 PM Central Time.
Capital One Securities 11th Annual Energy Conference
The Company will present at the 11th Annual Energy Conference hosted by Capital One Securities in New Orleans, LA on Wednesday, December 7, 2016 at 9:40 AM Central Time.
The live and archived webcasts for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
11/17/2016Callon Petroleum Company Announces Third Quarter 2016 Results
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Nov. 2, 2016 /PRNewswire/ --
PDF of this Release - http://origin-qps.onstreammedia.com/origin/multivu_archive/ENR/3Q16CPEEarningsResults.pdf
Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended September 30, 2016.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the third quarter of 2016 and other recent data points include:
"Our strong recent well results combined with the longer term performance of our production base enable us to continue our track record of sustained production growth within a restrained capital program," commented Fred Callon, Chairman and Chief Executive Officer. "Given our expanded portfolio of drilling opportunities that deliver solid returns on investment at less than $50 per barrel of oil, combined with low leverage metrics and liquidity of almost $500 million, we currently anticipate adding a third horizontal drilling rig in early 2017 and are preparing for a fourth rig in the second half of 2017. We forecast this program would deliver approximately 30,000 BOE/d of annual average production in 2018, while generating free cash flow by mid-year 2018 based on our 2018 planning case assumptions of $50 per barrel and a theoretical increase of 15% in completed well costs to address the impact of evolving completion designs and potential upward pressure on service costs from anticipated increases in core Permian Basin activity."
Operations Update
At September 30, 2016, we had 124 gross (98.0 net) horizontal wells producing from six established flow units. Net daily production for the three months ended September 30, 2016 grew approximately 70% to 16,598 BOE/d (approximately 76% oil) as compared to the same period of 2015. Sequentially, we grew production more than 23% compared to the second quarter of 2016.
For the three months ended September 30, 2016, we operated 1.6 horizontal drilling rigs, drilled 8 gross (5.4 net) horizontal wells, completed 11 gross (6.8 net) horizontal wells, and placed 7 gross (5.2 net) horizontal wells on production. As of September 30, 2016, we had 3 gross (2.8 net) horizontal wells awaiting completion.
Well Activity Summary
The following table details well-related activity for the quarter by focus area:
|
For the Three Months Ended September 30, 2016 | ||||||||||||||||
|
Drilled |
Completed |
Placed on |
Awaiting | |||||||||||||
|
Gross |
Net |
Gross |
Net |
Gross |
Net |
Gross |
Net | |||||||||
|
WildHorse |
— |
— |
— |
— |
1 |
1.0 |
— |
— | ||||||||
|
Monarch |
8 |
5.4 |
9 |
5.7 |
4 |
3.1 |
3 |
2.8 | ||||||||
|
Ranger |
— |
— |
2 |
1.1 |
2 |
1.1 |
— |
— | ||||||||
|
Total |
8 |
5.4 |
11 |
6.8 |
7 |
5.2 |
3 |
2.8 | ||||||||
During the third quarter, we continued to focus on development of two flow units within the Lower Spraberry in the Monarch area while also progressing the infrastructure buildout of WildHorse in preparation for program development with multi-well pads. The following table highlights wells that achieved peak rates during the period:
|
30-Day Average | ||||||||||||||||||
|
24-Hour Peak IP |
Peak IP | |||||||||||||||||
|
(BOE/d; Two-stream) (a) |
(BOE/d; Two-stream) | |||||||||||||||||
|
24-Hour |
Peak |
Per 1,000' |
Peak |
Per 1,000' | ||||||||||||||
|
IP |
Focus Area |
Completed |
24-Hour |
Production |
Lateral |
30-Day |
Production |
Lateral | ||||||||||
|
Date |
Well |
(Zone) |
Lateral (ft) |
IP |
(% oil) |
Feet |
IP |
(% oil) |
Feet | |||||||||
|
07/10/2016 |
Kendra-Annie 11 22SH |
Monarch (LS) |
7,917 |
919 |
89% |
116 |
894 |
88% |
113 | |||||||||
|
07/07/2016 |
Pecan Acres 22A4 11SH |
Monarch (LS) |
4,622 |
719 |
87% |
155 |
768 |
87% |
166 | |||||||||
|
08/03/2016 |
Silver City Unit A 01H |
WildHorse (WCA) |
7,363 |
2,459 |
91% |
334 |
2,148 |
89% |
292 | |||||||||
|
(a) |
24-Hour Peak IPs correspond to the rates filed with the Railroad Commission of Texas and are captured using well tests on the specified date, which may result in an understated rate as the production typically varies more widely during the early days of production. The 30-Day Average Peak IP is calculated using allocated production, and is occasionally greater than the reported 24-Hour Peak IP if the well test on that date captured a lower rate than the average for the period. |
In early October, our first Wolfcamp A well in the Monarch area was placed on production in the Pecan Acres field in close proximity to recent offsetting industry activity in this zone. The Wolfcamp A represents our fifth producing flow unit in the Monarch area, inclusive of the upper and lower benches of the Lower Spraberry, the Middle Spraberry and the Wolfcamp B. This well was drilled from a stacked two-well pad with a Lower Spraberry (upper bench) well. Both wells are cleaning up and have not reached peak rates.
We also completed two drilled, uncompleted wells in the Ranger area that were acquired earlier this year as part of our AMI transaction in western Reagan County. Our development activity in the Ranger area had previously been focused on Lower Wolfcamp B, and these wells expand our efforts to the Upper Wolfcamp B and Wolfcamp A. Importantly, we utilized a new generation completion design on these latest wells, with proppant loading approximating 2,000 pounds per foot combined with tighter stage spacing. Both wells were placed online in late September and have not reached peak rates.
Our first operated completion in the WildHorse area yielded encouraging results with the Silver City Unit A 01H well achieving 24-Hour and 30-Day IP rates of 334 (91% oil) and 292 (89% oil) BOE/d per 1,000 feet of completed lateral, respectively. This Wolfcamp A well has produced over 192 MBOE in the first 110 days since first production. As part of our newly initiated program development of WildHorse, we recently finished drilling two wells in offsetting acreage targeting both the Wolfcamp A and Lower Spraberry zones from a two-well pad. The rig remains active on this acreage, currently drilling two additional wells targeting both the Wolfcamp A and Lower Spraberry zones from a stacked two-well pad.
Capital Expenditures
For the three months ended September 30, 2016, we accrued $43.3 million in operational capital expenditures, including facilities expenditures of $4.5 million, compared to $21.1 million in the second quarter of 2016. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended September 30, 2016 | |||||||||||||||
|
Operational |
Seismic & |
Capitalized |
Capitalized |
Total Capital | |||||||||||
|
Cash basis (a) |
$ |
30,182 |
$ |
7,258 |
$ |
7,133 |
$ |
2,845 |
$ |
47,418 | |||||
|
Timing adjustments (b) |
13,127 |
(535) |
112 |
— |
12,704 | ||||||||||
|
Non-cash items |
— |
— |
— |
3,217 |
3,217 | ||||||||||
|
Accrual (GAAP) basis |
$ |
43,309 |
$ |
6,723 |
$ |
7,245 |
$ |
6,062 |
$ |
63,339 | |||||
|
(a) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(b) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | |||||||||
|
September 30, 2016 |
June 30, 2016 |
September 30, 2015 | |||||||
|
Net production: |
|||||||||
|
Oil (MBbls) |
1,153 |
948 |
689 | ||||||
|
Natural gas (MMcf) |
2,244 |
1,658 |
1,239 | ||||||
|
Total production (MBOE) |
1,527 |
1,224 |
896 | ||||||
|
Average daily production (BOE/d) |
16,598 |
13,451 |
9,739 | ||||||
|
% oil (BOE basis) |
76% |
77% |
77% | ||||||
|
Oil and natural gas revenues (in thousands): |
|||||||||
|
Oil revenue |
$ |
49,095 |
$ |
40,555 |
$ |
30,582 | |||
|
Natural gas revenue |
6,832 |
4,590 |
3,734 | ||||||
|
Total revenue |
$ |
55,927 |
$ |
45,145 |
$ |
34,316 | |||
|
Impact of cash-settled derivatives |
4,091 |
4,017 |
9,789 | ||||||
|
Adjusted Total Revenue (i) |
$ |
60,018 |
$ |
49,162 |
$ |
44,105 | |||
Total Revenue. For the quarter ended September 30, 2016, Callon reported total revenues of $55.9 million and total revenues including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $60 million, including the $4.1 million impact of settled derivative contracts. The table above reconciles to the related GAAP measure of the Company's revenue to Adjusted Total Revenue. Average daily production for the quarter was 16,598 BOE/d compared to average daily production of 13,451 BOE/d in the second quarter of 2016. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended September 30, 2016, Callon recognized the following hedging-related items (in thousands):
|
In Thousands |
Per Unit | |||||
|
Oil derivatives contracts |
||||||
|
Net gain on settlements |
$ |
4,252 |
$ |
3.69 | ||
|
Net gain on fair value adjustments |
699 |
|||||
|
Total net gain on oil derivatives contracts |
$ |
4,951 |
||||
|
Natural gas derivatives contracts |
||||||
|
Net loss on settlements |
$ |
(161) |
$ |
(0.07) | ||
|
Net gain on fair value adjustments |
345 |
|||||
|
Total net gain on natural gas derivatives contracts |
$ |
184 |
||||
|
Total derivatives contracts |
||||||
|
Net gain on settlements |
$ |
4,091 |
$ |
2.67 | ||
|
Net gain on fair value adjustments |
1,044 |
|||||
|
Total net gain on total derivatives contracts |
$ |
5,135 |
||||
Average realized prices, including and excluding the impact of cash settled derivatives during the third quarter, were as follows:
|
Three Months Ended | |||
|
September 30, 2016 | |||
|
Average realized sales price |
|||
|
Oil (per Bbl) (excluding impact of cash-settled derivatives) |
$ |
42.58 | |
|
Impact of cash-settled derivatives |
3.69 | ||
|
Oil (per Bbl) (including impact of cash-settled derivatives) |
$ |
46.27 | |
|
Natural gas (per Mcf) (excluding impact of cash-settled derivatives) |
$ |
3.04 | |
|
Impact of cash-settled derivatives |
(0.07) | ||
|
Natural gas (per Mcf) (including impact of cash-settled derivatives) |
$ |
2.97 | |
|
Total (per BOE) (excluding impact of cash-settled derivatives) |
$ |
36.63 | |
|
Impact of cash-settled derivatives |
2.67 | ||
|
Total (per BOE) (including impact of cash-settled derivatives) |
$ |
39.30 | |
|
Three Months Ended | |||||||||
|
September 30, 2016 |
June 30, 2016 |
September 30, 2015 | |||||||
|
Additional per BOE data: |
|||||||||
|
Sales price, excluding impact of cash-settled derivatives |
$ |
36.63 |
$ |
36.88 |
$ |
38.30 | |||
|
Sales price, including impact of cash-settled derivatives |
39.30 |
40.17 |
49.22 | ||||||
|
Lease operating expense |
$ |
6.52 |
$ |
5.97 |
$ |
8.03 | |||
|
Production taxes |
2.28 |
2.01 |
2.88 | ||||||
|
Depletion, depreciation and amortization |
11.33 |
13.31 |
18.64 | ||||||
|
G&A |
5.17 |
5.15 |
4.80 | ||||||
|
Adjusted G&A - total (a) |
2.96 |
3.55 |
4.63 | ||||||
|
Adjusted G&A - cash component (b) |
2.38 |
2.92 |
3.81 | ||||||
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Lease Operating Expenses, including workover expense ("LOE"). LOE per BOE for the three months ended September 30, 2016 was $6.52 per BOE, compared to LOE of $5.97 per BOE in the second quarter of 2016. The increase in this metric was primarily related to higher saltwater disposal and fuel and power expenses related to assets acquired during 2016. We continue to make investments in infrastructure in these areas to support our planned increases in drilling activity and expect these investments to reduce our LOE in these areas over time.
Production Taxes, including ad valorem taxes. Production taxes were $2.28 per BOE in the third quarter of 2016, representing approximately 6.2% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended September 30, 2016 was $11.33 per BOE compared to $13.31 per BOE in the second quarter of 2016. The write-down of our oil and natural gas properties recorded during the second quarter 2016 reduced the amortizable base, while our underlying reserve base continues to increase as we progress our horizontal development program. Combined, these changes resulted in the $1.98 per BOE reduction in DD&A.
General and Administrative ("G&A"). G&A for the third quarter of 2016 was $7.9 million, or $5.17 per BOE, compared to $6.3 million, or $5.15 per BOE, for the second quarter of 2016. G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $4.5 million, or $2.96 per BOE, for the third quarter of 2016 compared to $4.3 million, or $3.55 per BOE, for the second quarter of 2016. The cash component of Adjusted G&A was $3.6 million, or $2.38 per BOE, for the third quarter of 2016 compared to $3.6 million, or $2.92 per BOE, for the second quarter of 2016.
For the third quarter of 2016, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Cash |
Non-Cash |
Total | |||||||
|
G&A expenses |
|||||||||
|
Cash G&A |
$ |
3,637 |
$ |
— |
$ |
3,637 | |||
|
Restricted stock share-based compensation |
— |
768 |
768 | ||||||
|
Change in the fair value of liability share-based awards |
— |
3,372 |
3,372 | ||||||
|
Corporate depreciation & amortization |
— |
114 |
114 | ||||||
|
Total G&A expense: |
$ |
3,637 |
$ |
4,254 |
$ |
7,891 | |||
|
Adjusted G&A (i) |
|||||||||
|
Less: Change in the fair value of liability share-based awards |
$ |
(3,372) | |||||||
|
Adjusted G&A – total |
4,519 | ||||||||
|
Restricted stock share-based compensation |
(768) | ||||||||
|
Corporate depreciation & amortization |
(114) | ||||||||
|
Adjusted G&A – cash component |
$ |
3,637 | |||||||
Income tax expense. Callon typically provides for income taxes at a statutory rate of 35% adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses and state income taxes. We recorded $0.1 million income tax expense for the three months ended September 30, 2016. At September 30, 2016 we had a valuation allowance of $139.6 million. Adjusted Income per fully diluted common share, a non-GAAP financial measure(i), adjusts our income (loss) available to common stockholders to reflect our theoretical tax provision for the quarter as if the valuation allowance did not exist.
A breakdown of the Company's anticipated 2016 operational plan and associated expenditures is presented below:
|
YTD 2016 |
Estimated 4th Quarter |
Total | |||||||
|
Operational activity (gross / net) |
|||||||||
|
Drilled wells |
19 / 13.4 |
12 / 7.7 |
31 / 21.1 | ||||||
|
Completed wells |
25 / 17.3 |
7 / 6.5 |
32 / 23.8 | ||||||
|
Wells placed on production |
20 / 14.7 |
10 / 6.5 |
30 / 21.2 | ||||||
|
Capital expenditures (in millions, accrual basis) |
|||||||||
|
Drilling and completion |
$ |
84.6 |
$ |
31.7 |
$ |
116.3 | |||
|
Facilities |
14.7 |
9.0 |
23.7 | ||||||
|
Operational capital expenditures |
$ |
99.3 |
$ |
40.7 |
$ |
140.0 | |||
|
Seismic |
3.4 |
0.7 |
4.1 | ||||||
|
Land and other |
5.8 |
0.3 |
6.1 | ||||||
|
Total capital expenditures (excl. capitalized expenses) |
$ |
108.5 |
$ |
41.7 |
$ |
150.2 | |||
2016 Guidance Update
|
Previous Full Year |
Updated Full Year | |||
|
2016 Guidance |
2016 Guidance | |||
|
Total production (BOE/d) |
14,500 - 15,500 |
15,250 - 15,550 | ||
|
% oil |
76% - 80% |
75% - 77% | ||
|
Expenses (per BOE) |
||||
|
LOE, including workovers |
$5.75 - $6.25 |
$6.00 - $6.50 | ||
|
Production taxes, including ad valorem (% unhedged revenue) |
7% |
7% | ||
|
Adjusted G&A (a) |
$3.25 - $3.75 |
$3.15 - $3.40 | ||
|
Adjusted G&A - cash component (b) |
$2.35 - $2.85 |
$2.50 - $2.75 | ||
|
Total capital expenditures |
||||
|
Accrual basis ($MM) |
$140 |
$140 |
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. The reconciliation above provides a reconciliation of second quarter 2016 G&A expense on a GAAP basis to Adjusted G&A expense, a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking non-GAAP financial measure without unreasonable effort because of the number of estimated variables that could affect the final value. Accordingly, investors are cautioned not to place undue reliance on this information. |
|
(b) |
Excludes stock-based compensation and corporate depreciation and amortization. See the Non-GAAP related disclosures referenced in the footnote (c) above. |
Hedge Portfolio Summary
The following table summarizes our open derivative positions as of November 2, 2016:
|
For the Remainder of |
For the Full Year of | |||||
|
Oil contracts |
2016 |
2017 | ||||
|
Swap contracts (WTI) |
||||||
|
Total volume (MBbls) |
184 |
— | ||||
|
Weighted average price per Bbl |
$ |
58.23 |
$ |
— | ||
|
Swap contracts combined with short puts (WTI, enhanced swaps) |
||||||
|
Total volume (MBbls) |
— |
730 | ||||
|
Weighted average price per Bbl |
||||||
|
Swap |
$ |
— |
$ |
44.50 | ||
|
Short put option |
$ |
— |
$ |
30.00 | ||
|
Collar contracts combined with short puts (WTI, three-way collars) |
||||||
|
Volume (MBbls) |
184 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call option) |
$ |
65.00 |
$ |
— | ||
|
Floor (long put option) |
$ |
55.00 |
$ |
— | ||
|
Short put option |
$ |
40.33 |
$ |
— | ||
|
Collar contracts (WTI, two-way collars) |
||||||
|
Total volume (MBbls) |
184 |
1,533 | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call) |
$ |
46.50 |
$ |
58.15 | ||
|
Floor (long put) |
$ |
37.50 |
$ |
47.50 | ||
|
Call option contracts (short position) |
||||||
|
Total volume (MBbls) |
— |
670 | ||||
|
Weighted average price per Bbl |
||||||
|
Call strike price |
$ |
— |
$ |
50.00 | ||
|
Swap contracts (Midland basis differentials) |
||||||
|
Volume (MBbls) |
368 |
— | ||||
|
Weighted average price per Bbl |
$ |
0.17 |
$ |
— | ||
|
Natural gas contracts |
||||||
|
Swap contracts (Henry Hub) |
||||||
|
Total volume (BBtu) |
552 |
— | ||||
|
Weighted average price per MMBtu |
$ |
2.52 |
$ |
— | ||
|
Collar contracts combined with short puts (three-way collars) |
||||||
|
Total volume (BBtu) |
— |
1,460 | ||||
|
Weighted average price per MMBtu |
||||||
|
Ceiling (short call option) |
$ |
— |
$ |
3.71 | ||
|
Floor (long put option) |
$ |
— |
$ |
3.00 | ||
|
Short put option |
$ |
— |
$ |
2.50 | ||
Income (Loss) Available to Common Shareholders. The Company reported a net income available to common shareholders of $19.3 million in the third quarter of 2016 and Adjusted Income available to common shareholders of $12.9 million, or $0.09 per diluted share. The following tables reconcile to the related GAAP measure the Company's income (loss) available to common stockholders to Adjusted Income and the Company's net income (loss) to Adjusted EBITDA (in thousands):
|
Three Months Ended | |||||||||
|
September 30, 2016 |
June 30, 2016 |
September 30, 2015 | |||||||
|
Income (loss) available to common stockholders |
$ |
19,315 |
$ |
(71,920) |
$ |
(113,779) | |||
|
Change in valuation allowance |
(7,907) |
24,409 |
68,818 | ||||||
|
Write-down of oil and natural gas properties |
— |
39,658 |
56,746 | ||||||
|
Net loss (gain) on derivatives, net of settlements |
(679) |
12,676 |
(8,771) | ||||||
|
Change in the fair value of share-based awards |
2,192 |
1,277 |
37 | ||||||
|
Withdrawn proxy contest expenses |
— |
2 |
65 | ||||||
|
Adjusted Income |
$ |
12,921 |
$ |
6,102 |
$ |
3,116 | |||
|
Adjusted Income per fully diluted common share |
$ |
0.09 |
$ |
0.05 |
$ |
0.05 | |||
|
Three Months Ended | |||||||||
|
September 30, 2016 |
June 30, 2016 |
September 30, 2015 | |||||||
|
Net income (loss) |
$ |
21,139 |
$ |
(70,097) |
$ |
(111,805) | |||
|
Write-down of oil and natural gas properties |
— |
61,012 |
87,301 | ||||||
|
Net loss (gain) on derivatives, net of settlements |
(1,044) |
19,501 |
(13,494) | ||||||
|
Change in the fair value of share-based awards |
4,150 |
2,628 |
655 | ||||||
|
Withdrawn proxy contest expenses |
— |
3 |
100 | ||||||
|
Acquisition expense |
456 |
1,906 |
(3) | ||||||
|
Income tax (benefit) expense |
(62) |
— |
45,667 | ||||||
|
Interest expense |
831 |
4,180 |
5,603 | ||||||
|
Depreciation, depletion and amortization |
17,733 |
16,698 |
16,026 | ||||||
|
Accretion expense |
187 |
395 |
142 | ||||||
|
Adjusted EBITDA |
$ |
43,390 |
$ |
36,226 |
$ |
30,192 | |||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the third quarter of 2016 was $42.7 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||
|
September 30, 2016 |
June 30, 2016 |
September 30, 2015 | |||||||
|
Cash flows from operating activities: |
|||||||||
|
Net income (loss) |
$ |
21,139 |
$ |
(70,097) |
$ |
(111,805) | |||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|||||||||
|
Depreciation, depletion and amortization |
17,733 |
16,698 |
16,026 | ||||||
|
Write-down of oil and natural gas properties |
— |
61,012 |
87,301 | ||||||
|
Accretion expense |
187 |
395 |
142 | ||||||
|
Amortization of non-cash debt related items |
810 |
780 |
781 | ||||||
|
Deferred income tax expense |
(62) |
— |
45,667 | ||||||
|
Net loss (gain) on derivatives, net of settlements |
(1,044) |
19,501 |
(13,494) | ||||||
|
Non-cash expense related to equity share-based awards |
608 |
(1,253) |
368 | ||||||
|
Change in the fair value of liability share-based awards |
3,371 |
1,965 |
64 | ||||||
|
Discretionary cash flow |
$ |
42,742 |
$ |
29,001 |
$ |
25,050 | |||
|
Changes in working capital |
2,927 |
(6,974) |
1,639 | ||||||
|
Acquisition deposit |
(32,700) |
— |
— | ||||||
|
Payments to settle asset retirement obligations |
(576) |
(158) |
(1,142) | ||||||
|
Payments to settle vested liability share-based awards |
— |
(493) |
— | ||||||
|
Net cash provided by operating activities |
$ |
12,393 |
$ |
21,376 |
$ |
25,547 | |||
|
Callon Petroleum Company | |||||
|
Consolidated Balance Sheets | |||||
|
(in thousands, except par and per share values and share data) | |||||
|
September 30, 2016 |
December 31, 2015 | ||||
|
ASSETS |
Unaudited |
||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$ |
325,885 |
$ |
1,224 | |
|
Accounts receivable |
56,172 |
39,624 | |||
|
Fair value of derivatives |
3,502 |
19,943 | |||
|
Other current assets |
1,712 |
1,461 | |||
|
Total current assets |
387,271 |
62,252 | |||
|
Oil and natural gas properties, full cost accounting method: |
|||||
|
Evaluated properties |
2,593,798 |
2,335,223 | |||
|
Less accumulated depreciation, depletion, amortization and impairment |
(1,901,102) |
(1,756,018) | |||
|
Net oil and natural gas properties |
692,696 |
579,205 | |||
|
Unevaluated properties |
393,875 |
132,181 | |||
|
Total oil and natural gas properties |
1,086,571 |
711,386 | |||
|
Other property and equipment, net |
12,816 |
7,700 | |||
|
Restricted investments |
3,329 |
3,309 | |||
|
Deferred financing costs |
3,431 |
3,642 | |||
|
Fair value of derivatives |
57 |
— | |||
|
Acquisition deposit |
32,700 |
— | |||
|
Other assets, net |
1,429 |
305 | |||
|
Total assets |
$ |
1,527,604 |
$ |
788,594 | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
|
Current liabilities: |
|||||
|
Accounts payable and accrued liabilities |
$ |
99,026 |
$ |
70,970 | |
|
Accrued interest |
5,950 |
5,989 | |||
|
Cash-settleable restricted stock unit awards |
8,269 |
10,128 | |||
|
Asset retirement obligations |
3,529 |
790 | |||
|
Deferred tax liability |
42 |
— | |||
|
Fair value of derivatives |
7,786 |
— | |||
|
Total current liabilities |
124,602 |
87,877 | |||
|
Senior secured revolving credit facility |
— |
40,000 | |||
|
Secured second lien term loan, net of unamortized deferred financing costs |
290,085 |
288,565 | |||
|
Asset retirement obligations |
1,934 |
4,317 | |||
|
Cash-settleable restricted stock unit awards |
7,042 |
4,877 | |||
|
Fair value of derivatives |
2,936 |
— | |||
|
Other long-term liabilities |
286 |
200 | |||
|
Total liabilities |
426,885 |
425,836 | |||
|
Stockholders' equity: |
|||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 |
15 |
16 | |||
|
Common stock, $0.01 par value, 300,000,000 and 150,000,000 shares authorized, respectively; |
1,610 |
801 | |||
|
Capital in excess of par value |
1,535,661 |
702,970 | |||
|
Accumulated deficit |
(436,567) |
(341,029) | |||
|
Total stockholders' equity |
1,100,719 |
362,758 | |||
|
Total liabilities and stockholders' equity |
$ |
1,527,604 |
$ |
788,594 | |
|
Callon Petroleum Company | ||||||||||||
|
Consolidated Statements of Operations | ||||||||||||
|
(Unaudited; in thousands, except per share data) | ||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||
|
2016 |
2015 |
2016 |
2015 | |||||||||
|
Operating revenues: |
||||||||||||
|
Oil sales |
$ |
49,095 |
$ |
30,582 |
$ |
117,093 |
$ |
94,584 | ||||
|
Natural gas sales |
6,832 |
3,734 |
14,677 |
9,365 | ||||||||
|
Total operating revenues |
55,927 |
34,316 |
131,770 |
103,949 | ||||||||
|
Operating expenses: |
||||||||||||
|
Lease operating expenses |
9,961 |
7,194 |
24,229 |
20,728 | ||||||||
|
Production taxes |
3,478 |
2,583 |
8,153 |
7,800 | ||||||||
|
Depreciation, depletion and amortization |
17,303 |
16,704 |
49,318 |
52,395 | ||||||||
|
General and administrative |
7,891 |
4,302 |
19,755 |
22,167 | ||||||||
|
Accretion expense |
187 |
142 |
762 |
485 | ||||||||
|
Write-down of oil and natural gas properties |
— |
87,301 |
95,788 |
87,301 | ||||||||
|
Rig termination fee |
— |
— |
— |
3,641 | ||||||||
|
Acquisition expense |
456 |
— |
2,410 |
— | ||||||||
|
Total operating expenses |
39,276 |
118,226 |
200,415 |
194,517 | ||||||||
|
Income (loss) from operations |
16,651 |
(83,910) |
(68,645) |
(90,568) | ||||||||
|
Other (income) expense: |
||||||||||||
|
Interest expense, net of capitalized amounts |
831 |
5,603 |
10,502 |
15,567 | ||||||||
|
(Gain) loss on derivative contracts |
(5,135) |
(23,283) |
11,281 |
(17,463) | ||||||||
|
Other income, net |
(122) |
(92) |
(299) |
(177) | ||||||||
|
Total other (income) expense |
(4,426) |
(17,772) |
21,484 |
(2,073) | ||||||||
|
Income (loss) before income taxes |
21,077 |
(66,138) |
(90,129) |
(88,495) | ||||||||
|
Income tax (benefit) expense |
(62) |
45,667 |
(62) |
38,474 | ||||||||
|
Net income (loss) |
21,139 |
(111,805) |
(90,067) |
(126,969) | ||||||||
|
Preferred stock dividends |
(1,824) |
(1,974) |
(5,471) |
(5,921) | ||||||||
|
Income (loss) available to common stockholders |
$ |
19,315 |
$ |
(113,779) |
$ |
(95,538) |
$ |
(132,890) | ||||
|
Income (loss) per common share: |
||||||||||||
|
Basic |
$ |
0.14 |
$ |
(1.72) |
$ |
(0.85) |
$ |
(2.10) | ||||
|
Diluted |
$ |
0.14 |
$ |
(1.72) |
$ |
(0.85) |
$ |
(2.10) | ||||
|
Shares used in computing income (loss) per common share: |
||||||||||||
|
Basic |
136,983 |
66,277 |
112,925 |
63,265 | ||||||||
|
Diluted |
137,483 |
66,277 |
112,925 |
63,265 | ||||||||
|
Callon Petroleum Company | ||||||||||||
|
Consolidated Statements of Cash Flows | ||||||||||||
|
(Unaudited; in thousands) | ||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||
|
2016 |
2015 |
2016 |
2015 | |||||||||
|
Cash flows from operating activities: |
||||||||||||
|
Net income (loss) |
$ |
21,139 |
$ |
(111,805) |
$ |
(90,067) |
$ |
(126,969) | ||||
|
Adjustments to reconcile net loss to cash provided by operating activities: |
||||||||||||
|
Depreciation, depletion and amortization |
17,733 |
16,026 |
50,560 |
52,583 | ||||||||
|
Write-down of oil and natural gas properties |
— |
87,301 |
95,788 |
87,301 | ||||||||
|
Accretion expense |
187 |
142 |
762 |
485 | ||||||||
|
Amortization of non-cash debt related items |
810 |
781 |
2,371 |
2,342 | ||||||||
|
Deferred income tax (benefit) expense |
(62) |
45,667 |
(62) |
38,474 | ||||||||
|
Net loss on derivatives, net of settlements |
(1,044) |
(13,494) |
27,105 |
7,635 | ||||||||
|
Non-cash expense related to equity share-based awards |
608 |
368 |
(253) |
(300) | ||||||||
|
Change in the fair value of liability share-based awards |
3,371 |
64 |
6,045 |
4,759 | ||||||||
|
Payments to settle asset retirement obligations |
(576) |
(1,142) |
(895) |
(3,047) | ||||||||
|
Changes in operating assets and liabilities: |
||||||||||||
|
Accounts receivable |
(11,608) |
(332) |
(16,444) |
(7,278) | ||||||||
|
Other current assets |
54 |
116 |
(251) |
31 | ||||||||
|
Current liabilities |
15,702 |
906 |
19,815 |
6,455 | ||||||||
|
Acquisition deposit |
(32,700) |
— |
(32,700) |
— | ||||||||
|
Change in other long-term liabilities |
— |
— |
86 |
100 | ||||||||
|
Change in other assets, net |
(1,221) |
949 |
(1,671) |
421 | ||||||||
|
Payments to settle vested liability share-based awards related to early |
||||||||||||
|
retirements |
— |
— |
— |
(3,538) | ||||||||
|
Payments to settle vested liability share-based awards |
— |
— |
(10,300) |
(3,925) | ||||||||
|
Net cash provided by operating activities |
12,393 |
25,547 |
49,889 |
55,529 | ||||||||
|
Cash flows from investing activities: |
||||||||||||
|
Capital expenditures |
(47,418) |
(46,649) |
(122,698) |
(175,699) | ||||||||
|
Acquisitions |
(18,033) |
(1,052) |
(302,057) |
(2,849) | ||||||||
|
Proceeds from sales of mineral interests and equipment |
(708) |
22 |
22,923 |
348 | ||||||||
|
Net cash used in investing activities |
(66,159) |
(47,679) |
(401,832) |
(178,200) | ||||||||
|
Cash flows from financing activities: |
||||||||||||
|
Borrowings on senior secured revolving credit facility |
74,000 |
27,000 |
217,000 |
130,000 | ||||||||
|
Payments on senior secured revolving credit facility |
(114,000) |
(3,000) |
(257,000) |
(66,000) | ||||||||
|
Payment of deferred financing costs |
(640) |
— |
(640) |
— | ||||||||
|
Issuance of common stock, net |
421,908 |
— |
722,715 |
65,546 | ||||||||
|
Payment of preferred stock dividends |
(1,824) |
(1,974) |
(5,471) |
(5,921) | ||||||||
|
Net cash provided by financing activities |
379,444 |
22,026 |
676,604 |
123,625 | ||||||||
|
Net change in cash and cash equivalents |
325,678 |
(106) |
324,661 |
954 | ||||||||
|
Balance, beginning of period |
207 |
2,028 |
1,224 |
968 | ||||||||
|
Balance, end of period |
$ |
325,885 |
$ |
1,922 |
$ |
325,885 |
$ |
1,922 | ||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "Discretionary Cash Flow," "Adjusted Income (Loss)," "Adjusted G&A" and "Adjusted EBITDA," and "Adjusted Total Revenues." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Thursday, November 3, 2016, to discuss third quarter 2016 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Thursday, November 3, 2016, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-349-0096 |
|
Canada Toll Free: |
1-855-669-9657 |
|
International: |
1-412-902-0125 |
|
Request to join: |
Callon Petroleum Company Earnings Call |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's 2016 guidance and capital expenditure forecast; reserve quantities and the present value thereof; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Finance
1-800-451-1294
|
i. |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations | |||
SOURCE Callon Petroleum Company
Article Date
11/2/2016Callon Petroleum Company Announces Closing of Midland Basin Acquisition
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Oct. 24, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the closing of its previously announced acquisition of certain assets located in the Midland Basin within its WildHorse operating area. On October 20, 2016, the Company completed the acquisition of 6,904 gross (5,952 net) acres primarily located in Howard County, Texas from Plymouth Petroleum, LLC and additional sellers that exercised their "tag-along" sales rights for total cash consideration of $340 million, subject to customary post-closing adjustments. The acquisition increases Callon's surface acreage position in the Midland Basin to over 40,000 net acres.
Fred Callon, Chairman and Chief Executive Officer commented, "This transaction represents an attractive bolt-on opportunity in our WildHorse area which now comprises over 20,000 net acres focused in Howard County. After building this new core area over the course of 2016, we have quickly transitioned our WildHorse operations to support horizontal program development and currently have one horizontal drilling rig dedicated to the area. Following a completion in the Wolfcamp A zone with our Silver City A1H well immediately offsetting the acquired acreage, we recently commenced drilling two-well pads targeting both the Wolfcamp A and Lower Spraberry zones, and expect to place new wells from this development program on production in late 2016."
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the implementation of the Company's business plans and strategy, including future drilling plans, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the Company's ability to realize the anticipated benefits of the acquisition, the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact:
Eric Williams
Manager, Finance
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
10/24/201610/6/2016 - Callon Petroleum Company Announces Third Quarter 2016 Earnings Release and Conference Call Schedule
Callon Petroleum Company Announces Third Quarter 2016 Earnings Release and Conference Call Schedule
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Oct. 6, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that it will host a conference call on Thursday, November 3, 2016, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss third quarter financial and operating results. The Company plans to release third quarter 2016 results after the close of markets on Wednesday, November 2, 2016.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Thursday, November 3, 2016, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
|
Presentation Slides: |
Available at http://ir.callon.com/presentations in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-349-0096 |
|
Canada Toll Free: |
1-855-669-9657 |
|
International: |
1-412-902-0125 |
|
Request to join: |
Callon Petroleum Company Earnings Call |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
10/6/201610/3/2016 - Callon Petroleum Company Announces Closing of $400 Million Placement of Senior Unsecured Notes Due 2024
Callon Petroleum Company Announces Closing of $400 Million Placement of Senior Unsecured Notes Due 2024
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Oct. 3, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the closing of its offering of $400 million aggregate principal amount of 6.125% senior unsecured notes due 2024 (the "Notes") at an issue price of 100% of the aggregate principal amount of the Notes. The Notes will mature on October 1, 2024, unless redeemed in accordance with their terms prior to such date. The Notes were offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in accordance with Regulations S under the Securities Act.
The net proceeds of the offering, after deducting initial purchasers' discounts and estimated offering expenses, were approximately $391 million. The Company intends to use the net proceeds of the offering to repay amounts borrowed under its second lien term loan and for general corporate purposes, including for a potential increase in drilling activity. The Notes are guaranteed on a senior unsecured basis by the Company's wholly-owned subsidiary, Callon Petroleum Operating Company, and may be guaranteed by certain future subsidiaries. Interest on the Notes is payable semi-annually.
The Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
President, Chief Financial Officer and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
10/3/20169/15/2016 - Callon Petroleum Company Announces Pricing of Upsized $400 Million Placement of Senior Unsecured Notes
Callon Petroleum Company Announces Pricing of Upsized $400 Million Placement of Senior Unsecured Notes
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Sept. 15, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the pricing of its private placement to eligible purchasers under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the "Securities Act"), of $400 million aggregate principal amount of 6.125% senior unsecured notes due 2024 (the "Notes") at par. This represents an increase of $50 million over the aggregate principal amount previously announced. The private placement is expected to close on October 3, 2016, subject to market and other customary closing conditions.
The Company intends to use the net proceeds of the offering to repay amounts borrowed under its second lien term loan and for general corporate purposes, including for a potential increase in drilling activity. The Notes will be initially guaranteed on a senior unsecured basis by the Company's wholly-owned subsidiary, Callon Petroleum Operating Company, and may be guaranteed by certain future subsidiaries.
The securities to be sold have not been registered under the Securities Act or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes are expected to be eligible for trading by qualified institutional buyers in the United States under Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135c under the Securities Act and is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
President, Chief Financial Officer and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
9/15/2016Callon Petroleum Company Announces Closing of Common Stock Offering and Full Exercise of Option to Purchase Additional Shares
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Sept. 12, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the closing of its previously announced underwritten public offering of 29,900,000 shares of its common stock, including 3,900,000 shares sold to the underwriters pursuant to their option to purchase additional shares, which the underwriters exercised on September 7, 2016. Following this issuance, Callon now has 161,036,233 shares of common stock issued and outstanding. Total net proceeds of the offering, after underwriters' discounts and commissions and estimated offering expenses, will be approximately $422.1 million. Proceeds from the offering are expected to be used to fund the pending Plymouth Acquisition as described in the Company's Report on Form 8-K previously filed on September 6, 2016, and the balance for general corporate purposes which may include repayment of debt. If the pending Plymouth Acquisition is not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Credit Suisse and J.P. Morgan are acting as joint book-running managers for the offering. Morgan Stanley, RBC Capital Markets and SunTrust Robinson Humphrey are also acting as joint book-running managers for the offering. Copies of the prospectus supplement and accompanying base prospectus related to the offering may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, copies may be obtained by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, NY 10010, via telephone at 1-800-221-1037, or by emailing newyork.prospectus@credit-suisse.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 1-866-803-9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
9/12/20169/12/2016 - Callon Petroleum Company Announces Launch of $350 Million Placement of Senior Unsecured Notes
Callon Petroleum Company Announces Launch of $350 Million Placement of Senior Unsecured Notes
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Sept. 12, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced, subject to market and other conditions, it intends to offer $350 million aggregate principal amount of senior unsecured notes due 2024 in a private placement to eligible purchasers under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the "Securities Act").
The Company intends to use the net proceeds of the offering to repay amounts borrowed under its second lien term loan and for general corporate purposes, including for a potential increase in drilling activity.
The securities to be offered have not been registered under the Securities Act or any state securities laws and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes are expected to be eligible for trading by qualified institutional buyers in the United States under Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135c under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
President, Chief Financial Officer and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
9/12/2016ArcLight to Sell Element Petroleum II's Remaining Permian Basin Assets
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
BOSTON, Mass., Sept. 7, 2016 /PRNewswire/ -- ArcLight Capital Partners, LLC, one of the leading energy-focused private equity firms, announced today its affiliated portfolio company, Element Petroleum II, has agreed to sell its remaining oil and gas assets in the Permian Basin to a subsidiary of Callon Petroleum Company (NYSE: CPE). This follows Element II's sale of adjacent assets to affiliates of Blue Whale Energy in 2015 and to Diamondback Energy in 2013.
ArcLight partnered with the Element Petroleum management team to form Element II in 2011. Element II was ArcLight's second partnership with the Element team, which is led by Todd Gibson, its Chief Executive Officer. ArcLight recently made its third investment with Element in its most recent fund, committing $186 million to Element Petroleum III in September 2015 to acquire and develop additional oil and associated rich gas properties in the Permian Basin.
Over the past five years, Element II drilled 76 wells across a land position of 21,500 net acres in the Permian Basin, including the first successful horizontal Wolfcamp well in Howard County, Texas in May 2013.
"We could not be happier with Element II's success," said Dan Revers, ArcLight's Co-Founder and Managing Partner. "The Element team has been a tremendous partner and we congratulate them on this terrific outcome. We look forward to working with them on Element III."
Mr. Revers added, "While ArcLight is best known for power and midstream, our portfolio of select upstream assets has been an important contributor of our fund performance, providing key insights and portfolio diversification."
"We continue to see many opportunities in the Permian Basin and are excited to continue to have ArcLight's partnership and support in Element III," said Mr. Gibson.
About ArcLight Capital Partners
ArcLight is one of the leading private equity firms focused on energy infrastructure investments. Founded in 2001, we helped pioneer an asset-based private equity approach to investing in the dynamic energy sector. We have invested approximately $16.8 billion in 99 transactions since inception, generating strong realized returns for our limited partners from 62 exits across diverse market cycles. Based in Boston, our 29-person investment team targets midstream, power and production opportunities with substantial growth potential, significant current income and meaningful downside protection, typically on a proprietary basis. We employ a hands-on value creation strategy that utilizes our in-house technical, operational and commercial specialists as well as our 400-person asset management affiliate. More information about ArcLight, and a complete list of ArcLight's portfolio companies, can be found at www.arclightcapital.com.
About Element Petroleum
Element is an exploration, development, and production company based in Midland, Texas. We were an early entrant into the shale oil plays of the Permian Basin. Management dedicated its efforts to find and develop acreage prospective for vertical Wolfberry exploitation and, more recently, horizontal exploration and development of the Wolfcamp and Spraberry shales. To date, management has drilled approximately 400 wells across 120,000 acres in the Permian Basin, including the first successful horizontal Wolfcamp well in Howard County, Texas, in May 2013. As of September 2016, Element has successfully drilled and completed an additional 37 horizontal wells. Element III was formed in 2015 to find, develop, and acquire oil and gas reserves and production, primarily in the Permian Basin.
SOURCE ArcLight Capital Partners, LLC
Article Date
9/7/2016Callon Petroleum Company Announces Upsizing and Pricing of Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Sept. 6, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has priced an upsized underwritten public offering of 26,000,000 shares of its common stock for total estimated gross proceeds (before the underwriter's discounts and commissions and estimated offering expenses) of $379.6 million. The underwriters will have an option to purchase up to an additional 3,900,000 shares of common stock from the Company.
Proceeds from the offering are expected to be used to fund the pending Plymouth Acquisition, as described in the Company's Report on Form 8-K previously filed with the Securities and Exchange Commission on September 6, 2016. If the pending Plymouth Acquisition is not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Credit Suisse and J.P. Morgan are acting as joint book-running managers for the offering. Morgan Stanley, RBC Capital Markets and SunTrust Robinson Humphrey are also acting as joint book-running managers for the offering. The offering is expected to close on September 12, 2016, subject to customary closing conditions.
The offering will be made only by means of a prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, the underwriters will arrange to send you the prospectus supplement and related base prospectus if you request them by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, via telephone at 1-800-221-1037, or by e-mailing newyork.prospectus@credit-suisse.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 1-866-803-9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
President, Chief Financial Officer and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
9/7/2016Callon Petroleum Company Announces Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Sept. 6, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has commenced, subject to market and other conditions, an underwritten public offering of 23,000,000 shares of its common stock by the Company. The Company expects to grant the underwriters an option to purchase up to an additional 3,450,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to fund substantially all of the pending Plymouth Acquisition, as described in the Company's Report on Form 8-K filed with the Securities and Exchange Commission on September 6, 2016. If the pending Plymouth Acquisition is not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Credit Suisse and J.P. Morgan are acting as joint book-running managers for the offering. The offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, the underwriters will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, via telephone at 1-800-221-1037, or by e-mailing newyork.prospectus@credit-suisse.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 1-866-803-9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
The common stock will be issued and sold pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
President, Chief Financial Officer and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
9/6/2016Callon Petroleum Company Announces Howard County Acquisition and Operational Update
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Sept. 6, 2016 /PRNewswire/ --
PDF of this Release - http://origin-qps.onstreammedia.com/origin/multivu_archive/PRNA/ENR/2016-09Sep-06-CPEHowardCountyAcquisition.pdf
Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced it has entered into a definitive agreement to acquire certain undeveloped acreage and producing oil and gas properties for total consideration of $327 million in cash. The Company intends to fund substantially all of the cash purchase price with the net proceeds of an equity offering announced concurrently with this announcement of the pending acquisition and any remaining amount with availability under its revolving credit facility.
Key attributes of the pending acquisition include:
On a pro forma basis, assuming the closing of the pending acquisition, the Company's Midland Basin position will include approximately 40,000 net surface acres, including approximately 20,000 net surface acres in northwest and central Howard County and immediately adjacent areas comprising Callon's WildHorse operating region.
Fred Callon, Chairman and Chief Executive Officer commented, "Our strong financial position, combined with an operational model proven to deliver capital efficient growth and strong cash margins, has positioned us to capture value-creating acquisitions. We are driven to identify opportunities that are underpinned by solid geology and proven well results, and also offer meaningful upside potential through application of new generation completion designs, increased well density and incremental prospective zones. We believe this acquisition has all of these attributes and its value proposition is further enhanced due to its immediately offsetting footprint within our WildHorse area, which will allow us to extend laterals within the combined well inventory and leverage infrastructure investments for future program development."
Callon is acquiring the assets from Plymouth Petroleum, operated by affiliates of Element Petroleum, based in Midland, Texas. Both entities are indirectly owned by ArcLight Capital Partners, LLC and management. The pending acquisition is expected to close on or before October 20, 2016, subject to the completion of customary due diligence and closing conditions.
RBC Richardson Barr acted as exclusive financial advisor to Callon in connection with the pending acquisition.
Howard County Operational Update
Callon's first operated horizontal well in the WildHorse area was placed on production in early July 2016. The Silver City A #1H was completed in the Wolfcamp A interval with a lateral length of 7,363 feet and is located within five miles of over 75% of the pending acquisition acreage. The well recently attained a 30-day average peak production rate of 2,123 Boe/d (90% oil), or 288 Boe/d per completed lateral foot, and has cumulatively produced in excess of 110,000 Boe (90% oil) over the initial 60 days since the date of first production.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements regarding the consummation of the pending acquisition and completion of related financings, reserve quantities, estimates of future drilling locations, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the Company's ability to realize the anticipated benefits of the pending acquisition, the forfeiture of our deposit under the acquisition agreement, the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact:
Eric Williams
Manager, Investor Relations
1-800-451-1294
Photo - http://photos.prnewswire.com/prnh/20160906/404424
SOURCE Callon Petroleum Company
Article Date
9/6/2016Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Sept. 2, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on September 30, 2016 to stockholders of record as of September 15, 2016. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
9/2/2016Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Aug. 30, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Barclays CEO Energy Power Conference
The Company will present in New York, NY at the CEO Energy Power Conference hosted by Barclays on Wednesday, September 7, 2016 at 3:05 pm Eastern Time.
Johnson Rice Energy Conference
The Company will present at the Energy Conference hosted by Johnson Rice & Company LLC in New Orleans, LA on Wednesday, September 21, 2016 at 12:30 am Central Time.
The live and archived webcasts for these events will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
8/30/2016Callon Petroleum Company Announces Management Appointments
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Aug. 24, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that the Board of Directors has approved the following management promotions:
Mr. Newberry and Mr. Gatto will continue to report to Fred Callon, Chief Executive Officer and Chairman of the Board of Directors. Mr. Callon commented, "I am proud to announce the promotion of these individuals that have guided our company through one of the most turbulent times we've experienced in the global oil markets. We have emerged as a leading operator in the Permian Basin with a proven track record of sustained asset growth combined with leading-edge capital efficiency and operating costs. The strong partnership they have built between our operational and financial organizations has fostered a culture of teamwork and respect that exemplifies Callon's core values. I am confident that this leadership team will continue to drive shareholder value in the years ahead while maintaining our valued reputation amongst all of our business partners."
About Callon Petroleum
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Finance
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
8/24/2016Callon Petroleum Company Announces Second Quarter 2016 Results
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Aug. 8, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended June 30, 2016.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Presentations" page within the Investors section of the site.
Financial and operational highlights for the second quarter of 2016 and other recent data points include:
"It was an important quarter for our organization, demonstrating our ability to manage through periods of commodity price weakness by living within our cash flow while delivering capital efficient production growth. This solid operating and financial position also allowed us to complete two acquisitions that almost doubled our surface acreage in the Midland Basin, expanding our inventory of investments that we expect will deliver solid returns on capital through all phases of commodity cycles." commented Fred Callon, Chairman and Chief Executive Officer. "With a strong balance sheet and low cost operating structure, we have returned our second horizontal rig to service in August 2016 and are planning to add a third horizontal rig in early 2017 with continued signs of rebalancing in the oil markets. A large portion of this increased drilling activity will be focused in Howard County, a rapidly emerging core area which has produced encouraging well results from three delineated zones to date, including our recent Wolfcamp A well."
Operations Update
At June 30, 2016, Callon had 118 gross (93.0 net) horizontal wells producing from five established zones. Our net daily production for the three months ended June 30, 2016, grew approximately 41% to 13,451 BOE/d (approximately 77% oil) as compared to the same period of 2015. Sequentially, we grew production more than 8% compared to the first quarter of 2016.
For the three months ended June 30, 2016, we drilled 6 gross (3.7 net) horizontal wells, completed 5 gross (3.4 net) horizontal wells, and placed 5 gross (3.4 net) horizontal wells on production. As of June 30, 2016, we had 6 gross (4.2 net) horizontal wells awaiting completion, including 2 gross drilled, uncompleted wells recently acquired as part of our western Reagan County transaction.
Monarch
Production from the Monarch areas was adversely impacted during most of the month of June 2016 by production disruptions at our largest producing field, Carpe Diem. Several wells in the field experienced hydraulic interference from two offsetting completions being performed by other operators offsetting the eastern side of Carpe Diem. The situation was compounded by power outages caused by adverse weather conditions which hindered our efforts to de-water the wells in order to restore normalized production levels. We estimate that this unexpected downtime negatively impacted total net production volumes in the quarter by approximately 425 BOE/d.
|
For the Three Months Ended June 30, 2016 | ||||||||||||||||
|
Drilled |
Completed |
Placed on Production |
Awaiting Completion | |||||||||||||
|
Gross |
Net |
Gross |
Net |
Gross |
Net |
Gross |
Net | |||||||||
|
Monarch |
6 |
3.7 |
4 |
2.4 |
5 |
3.4 |
4 |
3.1 | ||||||||
During the second quarter, we continued our focus on development of the Lower Spraberry on our Monarch assets in Midland County. For the three months ended June 30th, we drilled 6 gross (3.7 net) wells, completed 4 gross (2.4 net) wells and placed 5 gross (3.4 net) wells on production. Since placing our first two Lower Spraberry wells on production in November 2014, we now have 28 gross wells producing from two levels of this zone across our asset base, including 25 at Monarch, with drilled lateral lengths ranging from 5,000' to 10,000'.
|
30-Day Average | ||||||||||||||||||
|
24-Hour Peak IP |
Peak IP | |||||||||||||||||
|
(BOE/d; Two-stream) (a) |
(BOE/d; Two-stream) | |||||||||||||||||
|
24-Hour |
Peak |
Per 1,000' |
Peak |
Per 1,000' | ||||||||||||||
|
IP |
Completed |
24-Hour |
Production |
Lateral |
30-Day |
Production |
Lateral | |||||||||||
|
Date |
Well |
County |
Lateral (ft) |
IP |
(% oil) |
Feet |
IP |
(% oil) |
Feet | |||||||||
|
06/21/2016 |
Pecan Acres 22A2 09SH |
Midland |
4,652' |
729 |
87% |
157 |
745 |
85% |
160 | |||||||||
|
06/21/2016 |
Pecan Acres 22A3 10SH |
Midland |
4,432' |
719 |
87% |
162 |
741 |
87% |
167 | |||||||||
|
06/02/2016 |
Casselman 8 18SH |
Midland |
4,675' |
839 |
85% |
180 |
674 |
84% |
144 | |||||||||
|
05/29/2016 |
Casselman 8 16SH |
Midland |
4,671' |
867 |
79% |
186 |
638 |
86% |
137 | |||||||||
|
05/25/2016 |
Kendra-Annie 10 21SH |
Midland |
8,178' |
935 |
89% |
114 |
697 |
89% |
85 | |||||||||
|
05/04/2016 |
Casselman 8 17SH |
Midland |
4,903' |
923 |
83% |
188 |
668 |
87% |
136 | |||||||||
|
04/17/2016 |
Kendra-Amanda 29SH |
Midland |
8,432' |
1,242 |
89% |
147 |
926 |
89% |
110 | |||||||||
|
04/01/2016 |
Casselman 10 09SH |
Midland |
4,182' |
674 |
90% |
161 |
562 |
87% |
134 | |||||||||
|
(a) |
24-Hour Peak IPs correspond to the rates filed with the Railroad Commission of Texas and are captured using well tests on the specified date, which may result in an understated rate as the production typically varies more widely during the early days of production. The 30-Day Average Peak IP is calculated using allocated production, and is occasionally greater than the reported 24-Hour Peak IP if the well test on that date captured a lower rate than the average for the period. |
We continue to deliver strong, consistent well results and capital efficiency from our Monarch development program. As detailed in the table above, eight Lower Spraberry wells, all in the lower bench of the zone (or, "LLS"), achieved 24-hour peak initial production ("IP") rates during the quarter. The LLS wells averaged a 24-hour peak IP of 866 Boe/d (or 162 Boepd per 1,000') and a 30-day average peak IP of 706 Boe/d (or 134 Boepd per 1,000').
At our Pecan Acres field, we placed 3 gross (1.4 net) LLS wells on production. While one of the wells continues to build towards its 30-day average peak IP, the other two wells yielded an average 30-day average peak IP of 743 BOE/d (86% oil) or 164 BOE/d per 1,000' from an average drilled lateral length of approximately 5,000'. We also plan to commence completion operations on our first Wolfcamp A well in the Monarch area in August 2016 which is being developed as a stacked lateral with a LLS well. Each of the wells was drilled to a lateral length of approximately 10,000'.
We are currently completing a three-well pad with an average drilled lateral length of approximately 9,750' in our Carpe Diem field with two of the wells targeting the upper section of the Lower Spraberry ("ULS") and the third well targeting the LLS. This pad was drilled on 11 wells-per-section spacing, supported by long-term production and pressure data from our previous well density tests. In addition, we plan to drill an additional two LLS wells at Carpe Diem in the third quarter with planned drilled lateral lengths of 10,000' that were increased from a previous planned lateral length of 5,000' after a recently completed partnership agreement with an offset operator.
We continue to build upon our well density tests of the Lower Spraberry in the Monarch area which have been focused on the Carpe Diem field to date. The next step in our progression of this initiative will be a 13 wells-per-section test in the CaBo area that was spud in July 2016, with two wells landed in the LLS and the third landed in the ULS.
Callon recently signed a purchase agreement for the acquisition of an incremental 4% working interest in the CaBo area, increasing our working interest in the area to approximately 75%. The purchase price for the acquired interest is $13 million with an effective date of August 1, 2016. Completion of the acquisition is subject to customary closing conditions.
WildHorse
|
For the Three Months Ended June 30, 2016 | ||||||||||||||||
|
Drilled |
Completed |
Placed on Production |
Awaiting Completion | |||||||||||||
|
Gross |
Net |
Gross |
Net |
Gross |
Net |
Gross |
Net | |||||||||
|
WildHorse |
— |
— |
1 |
1.0 |
— |
— |
— |
— | ||||||||
During the second quarter, we began our first operated completion in the recently acquired WildHorse area in Howard County, Texas. The well (Silver City Unit A #1H; 100% WI) was completed in the Wolfcamp A with a lateral length of 7,363'. It is the northernmost Wolfcamp A completion to date on our operated acreage, located in our Sidewinder field in northwest Howard County. After a first oil production date on July 3, 2016, the well has produced approximately 48,600 BOE (90% oil) during the first 30 days of production.
We anticipate initiating our operated drilling program in Howard County during the fourth quarter of 2016 with a dedicated one-rig program. The rig will initially drill two-well pads in the Wolfcamp A at our Fairway acreage in central Howard County, before expanding its scope to include our broader footprint and other prospective zones in 2017, including the Lower Spraberry and Wolfcamp B. We currently expect to place our first two-well pad from this program on production in mid-December 2016. Additionally, we are preparing to further increase our drilling activity in the WildHorse area should commodity prices warrant the addition of a third rig to our operated drilling program.
Ranger
|
30-Day Average | ||||||||||||||||
|
24-Hour Peak IP |
Peak IP | |||||||||||||||
|
(BOE/d; Two-stream) |
(BOE/d; Two-stream) | |||||||||||||||
|
Peak |
Per 1,000' |
Peak |
Per 1,000' | |||||||||||||
|
Completed |
24-Hour |
Production |
Lateral |
30-Day |
Production |
Lateral | ||||||||||
|
Well |
County |
Lateral (ft) |
IP |
(% oil) |
Feet |
IP |
(% oil) |
Feet | ||||||||
|
Turner AR Unit B 08HK |
Reagan |
7,518' |
1,716 |
86% |
228 |
1,279 |
0% |
170 | ||||||||
|
Turner AR Unit C 13HK |
Reagan |
7,430' |
1,758 |
86% |
237 |
1,253 |
0% |
169 | ||||||||
The two wells listed in the table above were completed using a new generation completion design employed by the previous operator of our newly acquired Lonesome Draw field, which included shorter stage lengths and higher proppant volumes. We will continue to evaluate the longer-term performance of wells completed with this enhanced design, but early indications include 30-day average peak IPs trending approximately 50% higher versus older generation completions we used in the Ranger area. We plan to incorporate these enhanced completion techniques in two upcoming completions of drilled, uncompleted wells acquired at Lonesome Draw. These wells will be targeting the Wolfcamp A and Upper Wolfcamp B zones and are planned to commence completion operations in August 2016.
Capital expenditures
For the three months ended June 30, 2016, we accrued $21.3 million in operational capital expenditures, including facilities expenditures of $4.0 million, compared to $35.0 million in the first quarter of 2016. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended June 30, 2016 | ||||||||||||
|
Operational Capital |
Capitalized Interest |
Capitalized G&A |
Total Capital | |||||||||
|
Cash basis (a) |
$ |
17,965 |
$ |
3,687 |
$ |
2,853 |
$ |
24,505 | ||||
|
Timing adjustments (b) |
3,309 |
(150) |
— |
3,159 | ||||||||
|
Non-cash items |
— |
— |
1,854 |
1,854 | ||||||||
|
Accrual (GAAP) basis |
$ |
21,274 |
$ |
3,537 |
$ |
4,707 |
$ |
29,518 | ||||
|
(a) |
Cash basis is a non-GAAP measure that we believe helps users of the financial information reconcile amounts to the cash flow statement and to account for timing related operational changes such as our development pace and rig count. |
|
(b) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | |||||||||
|
June 30, 2016 |
March 31, 2016 |
June 30, 2015 | |||||||
|
Net production: |
|||||||||
|
Oil (MBbls) |
948 |
892 |
685 | ||||||
|
Natural gas (MMcf) |
1,658 |
1,443 |
1,084 | ||||||
|
Total production (MBOE) |
1,224 |
1,132 |
866 | ||||||
|
Average daily production (BOE/d) |
13,451 |
12,440 |
9,516 | ||||||
|
% oil (BOE basis) |
77% |
79% |
79% | ||||||
|
Oil and natural gas revenues (in thousands): |
|||||||||
|
Oil revenue |
$ |
40,555 |
$ |
27,443 |
$ |
36,093 | |||
|
Natural gas revenue |
4,590 |
3,255 |
3,149 | ||||||
|
Total revenue |
$ |
45,145 |
$ |
30,698 |
$ |
39,242 | |||
|
Impact of cash-settled derivatives |
4,017 |
7,716 |
4,965 | ||||||
|
Adjusted Total Revenue (i) |
$ |
49,162 |
$ |
38,414 |
$ |
44,207 | |||
Total Revenue. For the quarter ended June 30, 2016, Callon reported total revenues of $45.2 million and total revenues including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $49.2 million, including the $4.0 million impact of settled derivative contracts. The table above reconciles to the related GAAP measure of the Company's revenue to Adjusted Total Revenue. Average daily production for the quarter was 13,451 BOE/d compared to average daily production of 12,440 BOE/d in the first quarter of 2016. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended June 30, 2016, Callon recognized the following hedging-related items:
|
In Thousands |
Per Unit | |||||
|
Oil derivatives contracts |
||||||
|
Net gain on settlements |
$ |
3,707 |
$ |
3.91 | ||
|
Net loss on fair value adjustments |
(18,466) |
|||||
|
Total net loss on oil derivatives contracts |
$ |
(14,759) |
||||
|
Natural gas derivatives contracts |
||||||
|
Net gain on settlements |
$ |
310 |
$ |
0.19 | ||
|
Net gain on fair value adjustments |
(1,035) |
|||||
|
Total net gain on natural gas derivatives contracts |
$ |
(725) |
||||
|
Total derivatives contracts |
||||||
|
Net gain on settlements |
$ |
4,017 |
$ |
3.29 | ||
|
Net loss on fair value adjustments |
(19,501) |
|||||
|
Total net loss on total derivatives contracts |
$ |
(15,484) |
||||
Average realized prices, including and excluding the impact of cash settled derivatives during the second quarter, were as follows:
|
Three Months Ended | |||
|
June 30, 2016 | |||
|
Average realized sales price |
|||
|
Oil (per Bbl) (excluding impact of cash-settled derivatives) |
$ |
42.78 | |
|
Impact of cash-settled derivatives |
3.91 | ||
|
Oil (per Bbl) (including impact of cash-settled derivatives) |
$ |
46.69 | |
|
Natural gas (per Mcf) (excluding impact of cash-settled derivatives) |
$ |
2.77 | |
|
Impact of cash-settled derivatives |
0.19 | ||
|
Natural gas (per Mcf) (including impact of cash-settled derivatives) |
$ |
2.96 | |
|
Total (per BOE) (excluding impact of cash-settled derivatives) |
$ |
36.88 | |
|
Impact of cash-settled derivatives |
3.29 | ||
|
Total (per BOE) (including impact of cash-settled derivatives) |
$ |
40.17 | |
|
Three Months Ended | |||||||||
|
June 30, 2016 |
March 31, 2016 |
June 30, 2015 | |||||||
|
Additional per BOE data: |
|||||||||
|
Sales price, excluding impact of cash-settled derivatives |
$ |
36.88 |
$ |
27.12 |
$ |
45.31 | |||
|
Sales price, including impact of cash-settled derivatives |
40.17 |
33.93 |
51.05 | ||||||
|
Lease operating expense |
$ |
5.97 |
$ |
6.15 |
$ |
7.59 | |||
|
Production taxes |
2.01 |
1.96 |
3.41 | ||||||
|
Depletion, depreciation and amortization |
13.31 |
13.89 |
20.31 | ||||||
|
G&A |
5.15 |
4.91 |
6.65 | ||||||
|
Adjusted G&A - total (a) |
3.55 |
4.10 |
4.53 | ||||||
|
Adjusted G&A - cash component (b) |
2.92 |
3.55 |
3.85 | ||||||
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Lease Operating Expenses, including workover expense ("LOE"). LOE per BOE for the three months ended June 30, 2016 was $5.97 per BOE, compared to LOE of $6.15 per BOE in the first quarter of 2016.
Production Taxes, including ad valorem taxes. Production taxes were $2.01 per BOE in the second quarter of 2016, representing approximately 5.4% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended June 30, 2016 was $13.31 per BOE compared to $13.89 per BOE in the first quarter of 2016, with the decrease in per unit DD&A being attributable to increases in proved reserves relative to our depreciable asset base and assumed future development costs related to undeveloped proved reserves. The decrease in our depreciable base was primarily related to the write-down of oil and natural gas properties during 2015 and the first half of 2016.
General and Administrative ("G&A"). G&A for the second quarter of 2015 was $6.3 million, or $5.15 per BOE, compared to $5.6 million, or $4.91 per BOE, for the first quarter of 2016. G&A, excluding certain non-cash incentive share-based compensation valuation adjustments, ("Adjusted G&A", a non-GAAP measure(i)) was $4.3 million, or $3.55 per BOE, for the second quarter of 2016 compared to $4.6 million, or $4.10 per BOE, for the first quarter of 2016. The cash component of Adjusted G&A was $3.6 million, or $2.92 per BOE, for the second quarter of 2016 compared to $4.0 million, or $3.55 per BOE, for the first quarter of 2016.
For the second quarter of 2016, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Cash |
Non-Cash |
Total | |||||||
|
G&A expenses |
|||||||||
|
Cash G&A |
$ |
3,578 |
$ |
— |
$ |
3,578 | |||
|
Restricted stock share-based compensation |
— |
655 |
655 | ||||||
|
Change in the fair value of liability share-based awards |
— |
1,954 |
1,954 | ||||||
|
Corporate depreciation & amortization |
— |
115 |
115 | ||||||
|
Total G&A expense: |
$ |
3,578 |
$ |
2,724 |
$ |
6,302 | |||
|
Adjusted G&A (i) |
|||||||||
|
Less: Change in the fair value of liability share-based awards |
$ |
(1,954) | |||||||
|
Adjusted G&A – total |
4,348 | ||||||||
|
Restricted stock share-based compensation |
(655) | ||||||||
|
Corporate depreciation & amortization |
(115) | ||||||||
|
Adjusted G&A – cash component |
$ |
3,578 | |||||||
Write-down of Oil and Natural Gas Properties. As a result of the ceiling test limitation, the Company recognized a write-down of oil and natural gas properties of $61.0 million in the second quarter of 2016.
Income (Loss) Available to Common Shareholders. The Company reported a net loss available to common shareholders of $71.9 million in the second quarter of 2016 and Adjusted Income available to common shareholders of $6.1 million, or $0.05 per diluted share.
Capital Budget Update
Following the closing of its recent Midland Basin acquisitions, the Company has completed a review of its operational plans for the balance of 2016. Callon recently returned a second horizontal rig to service after being idled in the first quarter of 2016. The rig will initially be focused on program development of the Wolfcamp A zone in the WildHorse area after drilling two 10,000' lateral wells targeting the LLS at the Carpe Diem field. In addition, the Company has budgeted for investments in facilities, seismic and land to support the longer-term development plans in each of our focus areas, including the potential addition of a third horizontal rig during the first half of 2017.
A breakdown of the Company's anticipated 2016 operational plan and associated expenditures is presented below:
|
Estimated |
|||||||||
|
1st Half 2016 |
2nd Half 2016 |
Total | |||||||
|
Operational activity (gross / net) |
|||||||||
|
Drill wells |
11 / 8.0 |
15 / 10.2 |
26 / 18.2 | ||||||
|
Completed wells |
14 / 10.5 |
15 / 10.3 |
29 / 20.8 | ||||||
|
Wells placed on production |
13 / 9.5 |
13 / 8.9 |
26 / 18.4 | ||||||
|
Capital expenditures (in millions, accrual basis) |
|||||||||
|
Drilling and completion |
$ |
46.2 |
$ |
58.4 |
$ |
104.6 | |||
|
Facilities |
9.2 |
16.2 |
25.4 | ||||||
|
Operational capital expenditures |
55.4 |
74.6 |
130.0 | ||||||
|
Seismic |
0.8 |
2.5 |
3.3 | ||||||
|
Land and other |
— |
6.7 |
6.7 | ||||||
|
Total capital expenditures (excl. capitalized expenses) |
$ |
56.2 |
$ |
83.8 |
$ |
140.0 | |||
2016 Guidance Update
|
Third Quarter |
Updated Full Year |
Full Year (a) | ||||
|
2016 Guidance |
2016 Guidance |
Guidance Change | ||||
|
Total production (BOE/d) |
16,000 - 17,000 |
14,500 - 15,500 |
500 | |||
|
% oil |
75% - 77% |
76% - 80% |
(1%) | |||
|
% oil hedged (b) |
49% |
48% |
||||
|
Average swap/long-put price (b) |
$48.84 |
$50.04 |
||||
|
Expenses (per BOE) |
||||||
|
LOE, including workovers |
$5.75 - $6.25 |
$5.75 - $6.25 |
$(1.00) | |||
|
Production taxes, including ad valorem (% unhedged revenue) |
7% |
7% |
— | |||
|
Adjusted G&A (c) |
$3.25 - $3.75 |
$3.25 - $3.75 |
$(0.05) | |||
|
Adjusted G&A - cash component (d) |
$2.50 - $3.00 |
$2.35 - $2.85 |
$(0.55) | |||
|
Total capital expenditures |
||||||
|
Accrual basis ($MM) |
$34 - $38 |
$140 |
$40 |
|
(a) |
Based on the midpoint of guidance. |
|
(b) |
Volumes presented in the Updated Full Year 2016 Guidance column include volumes hedged and the average swap/long put price for the remainder of the year only. |
|
(c) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. The reconciliation above provides a reconciliation of second quarter 2016 G&A expense on a GAAP basis to Adjusted G&A expense, a non-GAAP measure. The Company is unable to present a quantitative reconciliation of this forward-looking non-GAAP financial measure without unreasonable effort because of the number of estimated variables that could affect the final value. Accordingly, investors are cautioned not to place undue reliance on this information. |
|
(d) |
Excludes stock-based compensation and corporate depreciation and amortization. See the Non-GAAP related disclosures referenced in the footnote (c) above. |
Hedge Portfolio Summary
The following table summarizes our open derivative positions as of August 8, 2016:
|
For the Remainder of |
For the Full Year of | |||||
|
Oil contracts |
2016 |
2017 | ||||
|
Swap contracts (WTI) |
||||||
|
Total volume (MBbls) |
460 |
— | ||||
|
Weighted average price per Bbl |
$ |
58.10 |
$ |
— | ||
|
Swap contracts combined with short puts (WTI, enhanced swaps) |
||||||
|
Total volume (MBbls) |
730 | |||||
|
Weighted average price per Bbl |
||||||
|
Swap |
$ |
— |
$ |
44.50 | ||
|
Short put option |
$ |
— |
$ |
30.00 | ||
|
Collar contracts combined with short puts (WTI, three-way collars) |
||||||
|
Volume (MBbls) |
276 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call option) |
$ |
63.33 |
$ |
— | ||
|
Floor (long put option) |
$ |
53.33 |
$ |
— | ||
|
Short put option |
$ |
38.77 |
$ |
— | ||
|
Collar contracts (WTI, two-way collars) |
||||||
|
Total volume (MBbls) |
368 |
438 | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call) |
$ |
46.50 |
$ |
59.05 | ||
|
Floor (long put) |
$ |
37.50 |
$ |
47.50 | ||
|
Call option contracts (short position) |
||||||
|
Total volume (MBbls) |
— |
670 | ||||
|
Weighted average price per Bbl |
||||||
|
Call strike price |
$ |
— |
$ |
50.00 | ||
|
Swap contracts (Midland basis differentials) |
||||||
|
Volume (MBbls) |
736 |
— | ||||
|
Weighted average price per Bbl |
$ |
0.17 |
$ |
— | ||
|
Natural gas contracts |
||||||
|
Swap contracts (Henry Hub) |
||||||
|
Total volume (BBtu) |
1,104 |
— | ||||
|
Weighted average price per MMBtu |
$ |
2.52 |
$ |
— | ||
|
Collar contracts combined with short puts (three-way collars) |
||||||
|
Total volume (BBtu) |
1,460 | |||||
|
Weighted average price per MMBtu |
||||||
|
Ceiling (short call option) |
$ |
— |
$ |
3.71 | ||
|
Floor (long put option) |
$ |
— |
$ |
3.00 | ||
|
Short put option |
$ |
— |
$ |
2.50 | ||
The following tables reconcile to the related GAAP measure the Company's loss available to common stockholders to Adjusted Income and the Company's net loss to Adjusted EBITDA (in thousands):
|
Three Months Ended | |||||||||
|
June 30, 2016 |
March 31, 2016 |
June 30, 2015 | |||||||
|
Loss available to common stockholders |
$ |
(71,920) |
$ |
(42,933) |
$ |
(6,940) | |||
|
Valuation allowance |
24,409 |
14,288 |
— | ||||||
|
Write-down of oil and natural gas properties |
39,658 |
22,604 |
— | ||||||
|
Net loss (gain) on derivatives, net of settlements |
12,676 |
5,621 |
8,590 | ||||||
|
Change in the fair value of share-based awards |
1,277 |
461 |
1,045 | ||||||
|
Withdrawn proxy contest expenses |
2 |
144 |
150 | ||||||
|
Adjusted Income |
$ |
6,102 |
$ |
185 |
$ |
2,845 | |||
|
Adjusted Income per fully diluted common share |
$ |
0.05 |
$ |
0.00 |
$ |
0.04 | |||
|
Three Months Ended | |||||||||
|
June 30, 2016 |
March 31, 2016 |
June 30, 2015 | |||||||
|
Net loss |
$ |
(70,097) |
$ |
(41,109) |
$ |
(4,967) | |||
|
Write-down of oil and natural gas properties |
61,012 |
34,776 |
— | ||||||
|
Net loss (gain) on derivatives, net of settlements |
19,501 |
8,648 |
13,214 | ||||||
|
Change in the fair value of share-based awards |
2,628 |
1,225 |
2,086 | ||||||
|
Withdrawn proxy contest expenses |
3 |
221 |
230 | ||||||
|
Acquisition expense |
1,906 |
48 |
— | ||||||
|
Income tax benefit |
— |
— |
(2,116) | ||||||
|
Interest expense |
4,180 |
5,491 |
5,106 | ||||||
|
Depreciation, depletion and amortization |
16,698 |
16,129 |
18,011 | ||||||
|
Accretion expense |
395 |
180 |
134 | ||||||
|
Adjusted EBITDA |
$ |
36,226 |
$ |
25,609 |
$ |
31,698 | |||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the second quarter of 2016 was $29.0 million and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||
|
June 30, 2016 |
March 31, 2016 |
June 30, 2015 | |||||||
|
Cash flows from operating activities: |
|||||||||
|
Net loss |
$ |
(70,097) |
$ |
(41,109) |
$ |
(4,967) | |||
|
Adjustments to reconcile net loss to cash provided by operating activities: |
|||||||||
|
Depreciation, depletion and amortization |
16,698 |
16,129 |
18,011 | ||||||
|
Write-down of oil and natural gas properties |
61,012 |
34,776 |
— | ||||||
|
Accretion expense |
395 |
180 |
134 | ||||||
|
Amortization of non-cash debt related items |
780 |
781 |
780 | ||||||
|
Deferred income tax (benefit) expense |
— |
— |
(2,116) | ||||||
|
Net loss (gain) on derivatives, net of settlements |
19,501 |
8,648 |
13,214 | ||||||
|
Non-cash expense related to equity share-based awards |
(1,253) |
392 |
(754) | ||||||
|
Change in the fair value of liability share-based awards |
1,965 |
709 |
1,607 | ||||||
|
Discretionary cash flow |
$ |
29,001 |
$ |
20,506 |
$ |
25,909 | |||
|
Changes in working capital |
(6,974) |
5,582 |
438 | ||||||
|
Payments to settle asset retirement obligations |
(158) |
(161) |
(2,163) | ||||||
|
Payments to settle vested liability share-based awards |
(493) |
(9,807) |
(326) | ||||||
|
Net cash provided by operating activities |
$ |
21,376 |
$ |
16,120 |
$ |
23,858 | |||
|
Callon Petroleum Company Consolidated Balance Sheets (in thousands, except par and per share values and share data) | |||||
|
June 30, 2016 |
December 31, 2015 | ||||
|
ASSETS |
Unaudited |
||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$ |
207 |
$ |
1,224 | |
|
Accounts receivable |
44,460 |
39,624 | |||
|
Fair value of derivatives |
5,537 |
19,943 | |||
|
Other current assets |
1,766 |
1,461 | |||
|
Total current assets |
51,970 |
62,252 | |||
|
Oil and natural gas properties, full cost accounting method: |
|||||
|
Evaluated properties |
2,530,978 |
2,335,223 | |||
|
Less accumulated depreciation, depletion, amortization and impairment |
(1,883,806) |
(1,756,018) | |||
|
Net oil and natural gas properties |
647,172 |
579,205 | |||
|
Unevaluated properties |
379,605 |
132,181 | |||
|
Total oil and natural gas properties |
1,026,777 |
711,386 | |||
|
Other property and equipment, net |
9,971 |
7,700 | |||
|
Restricted investments |
3,323 |
3,309 | |||
|
Deferred financing costs |
3,076 |
3,642 | |||
|
Fair value of derivatives |
60 |
— | |||
|
Other assets, net |
413 |
305 | |||
|
Total assets |
$ |
1,095,590 |
$ |
788,594 | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
|
Current liabilities: |
|||||
|
Accounts payable and accrued liabilities |
$ |
71,960 |
$ |
70,970 | |
|
Accrued interest |
6,258 |
5,989 | |||
|
Cash-settleable restricted stock unit awards |
5,168 |
10,128 | |||
|
Asset retirement obligations |
3,933 |
790 | |||
|
Fair value of derivatives |
7,491 |
— | |||
|
Total current liabilities |
94,810 |
87,877 | |||
|
Senior secured revolving credit facility |
40,000 |
40,000 | |||
|
Secured second lien term loan, net of unamortized deferred financing costs |
289,559 |
288,565 | |||
|
Asset retirement obligations |
2,164 |
4,317 | |||
|
Cash-settleable restricted stock unit awards |
4,141 |
4,877 | |||
|
Fair value of derivatives |
6,313 |
— | |||
|
Other long-term liabilities |
286 |
200 | |||
|
Total liabilities |
437,273 |
425,836 | |||
|
Stockholders' equity: |
|||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized: 1,458,948 and 1,578,948 shares outstanding, respectively |
15 |
16 | |||
|
Common stock, $0.01 par value, 300,000,000 and 150,000,000 shares authorized, respectively; 131,090,644 and 80,087,148 shares outstanding, respectively |
1,311 |
801 | |||
|
Capital in excess of par value |
1,112,873 |
702,970 | |||
|
Accumulated deficit |
(455,882) |
(341,029) | |||
|
Total stockholders' equity |
658,317 |
362,758 | |||
|
Total liabilities and stockholders' equity |
$ |
1,095,590 |
$ |
788,594 | |
|
Callon Petroleum Company Consolidated Statements of Operations (Unaudited; in thousands, except per share data) | ||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||
|
2016 |
2015 |
2016 |
2015 | |||||||||
|
Operating revenues: |
||||||||||||
|
Oil sales |
$ |
40,555 |
$ |
36,093 |
$ |
67,998 |
$ |
64,002 | ||||
|
Natural gas sales |
4,590 |
3,149 |
7,845 |
5,631 | ||||||||
|
Total operating revenues |
45,145 |
39,242 |
75,843 |
69,633 | ||||||||
|
Operating expenses: |
||||||||||||
|
Lease operating expenses |
7,311 |
6,575 |
14,268 |
13,534 | ||||||||
|
Production taxes |
2,455 |
2,952 |
4,675 |
5,217 | ||||||||
|
Depreciation, depletion and amortization |
16,293 |
17,587 |
32,015 |
35,691 | ||||||||
|
General and administrative |
6,302 |
5,763 |
11,864 |
17,865 | ||||||||
|
Accretion expense |
395 |
134 |
575 |
343 | ||||||||
|
Write-down of oil and natural gas properties |
61,012 |
— |
95,788 |
— | ||||||||
|
Rig termination fee |
— |
— |
— |
3,641 | ||||||||
|
Acquisition expense |
1,906 |
— |
1,954 |
— | ||||||||
|
Total operating expenses |
95,674 |
33,011 |
161,139 |
76,291 | ||||||||
|
Income (loss) from operations |
(50,529) |
6,231 |
(85,296) |
(6,658) | ||||||||
|
Other (income) expense: |
||||||||||||
|
Interest expense, net of capitalized amounts |
4,180 |
5,106 |
9,671 |
9,964 | ||||||||
|
Loss on derivative contracts |
15,484 |
8,249 |
16,416 |
5,820 | ||||||||
|
Other income, net |
(96) |
(41) |
(177) |
(85) | ||||||||
|
Total other expense |
19,568 |
13,314 |
25,910 |
15,699 | ||||||||
|
Loss before income taxes |
(70,097) |
(7,083) |
(111,206) |
(22,357) | ||||||||
|
Income tax benefit |
— |
(2,116) |
— |
(7,193) | ||||||||
|
Net loss |
(70,097) |
(4,967) |
(111,206) |
(15,164) | ||||||||
|
Preferred stock dividends |
(1,823) |
(1,973) |
(3,647) |
(3,947) | ||||||||
|
Loss available to common stockholders |
$ |
(71,920) |
$ |
(6,940) |
$ |
(114,853) |
$ |
(19,111) | ||||
|
Loss per common share: |
||||||||||||
|
Basic |
$ |
(0.61) |
$ |
(0.11) |
$ |
(1.14) |
$ |
(0.31) | ||||
|
Diluted |
$ |
(0.61) |
$ |
(0.11) |
$ |
(1.14) |
$ |
(0.31) | ||||
|
Shares used in computing loss per common share: |
||||||||||||
|
Basic |
118,209 |
66,038 |
100,895 |
61,759 | ||||||||
|
Diluted |
118,209 |
66,038 |
100,895 |
61,759 | ||||||||
|
Callon Petroleum Company Consolidated Statements of Cash Flows (Unaudited; in thousands) | ||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||
|
2016 |
2015 |
2016 |
2015 | |||||||||
|
Cash flows from operating activities: |
||||||||||||
|
Net loss |
$ |
(70,097) |
$ |
(4,967) |
$ |
(111,206) |
$ |
(15,164) | ||||
|
Adjustments to reconcile net loss to cash provided by operating activities: |
||||||||||||
|
Depreciation, depletion and amortization |
16,698 |
18,011 |
32,827 |
36,557 | ||||||||
|
Write-down of oil and natural gas properties |
61,012 |
— |
95,788 |
— | ||||||||
|
Accretion expense |
395 |
134 |
575 |
343 | ||||||||
|
Amortization of non-cash debt related items |
780 |
780 |
1,561 |
1,561 | ||||||||
|
Deferred income tax benefit |
— |
(2,116) |
— |
(7,193) | ||||||||
|
Net loss on derivatives, net of settlements |
19,501 |
13,214 |
28,149 |
21,129 | ||||||||
|
Non-cash expense related to equity share-based awards |
(1,253) |
(754) |
(861) |
(668) | ||||||||
|
Change in the fair value of liability share-based awards |
1,965 |
1,607 |
2,674 |
4,695 | ||||||||
|
Payments to settle asset retirement obligations |
(158) |
(2,163) |
(319) |
(1,905) | ||||||||
|
Changes in operating assets and liabilities: |
— |
— |
||||||||||
|
Accounts receivable |
(10,777) |
(4,821) |
(4,836) |
(6,946) | ||||||||
|
Other current assets |
(885) |
(536) |
(305) |
(85) | ||||||||
|
Current liabilities |
4,830 |
5,904 |
4,113 |
5,549 | ||||||||
|
Change in other long-term liabilities |
75 |
100 |
86 |
100 | ||||||||
|
Change in other assets, net |
(217) |
(209) |
(450) |
(528) | ||||||||
|
Payments to settle vested liability share-based awards related to early |
||||||||||||
|
retirements |
— |
— |
— |
(3,538) | ||||||||
|
Payments to settle vested liability share-based awards |
(493) |
(326) |
(10,300) |
(3,925) | ||||||||
|
Net cash provided by operating activities |
21,376 |
23,858 |
37,496 |
29,982 | ||||||||
|
Cash flows from investing activities: |
||||||||||||
|
Capital expenditures |
(24,505) |
(60,067) |
(75,280) |
(129,050) | ||||||||
|
Acquisitions |
(273,841) |
— |
(284,024) |
(1,797) | ||||||||
|
Proceeds from sales of mineral interests and equipment |
23,631 |
54 |
23,631 |
326 | ||||||||
|
Net cash used in investing activities |
(274,715) |
(60,013) |
(335,673) |
(130,521) | ||||||||
|
Cash flows from financing activities: |
||||||||||||
|
Borrowings on senior secured revolving credit facility |
98,000 |
43,000 |
143,000 |
103,000 | ||||||||
|
Payments on senior secured revolving credit facility |
(58,000) |
(5,000) |
(143,000) |
(63,000) | ||||||||
|
Payment of deferred financing costs |
— |
12 |
— |
— | ||||||||
|
Issuance of common stock, net |
205,858 |
— |
300,807 |
65,546 | ||||||||
|
Payment of preferred stock dividends |
(1,823) |
(1,973) |
(3,647) |
(3,947) | ||||||||
|
Net cash provided by financing activities |
244,035 |
36,039 |
297,160 |
101,599 | ||||||||
|
Net change in cash and cash equivalents |
(9,304) |
(116) |
(1,017) |
1,060 | ||||||||
|
Balance, beginning of period |
9,511 |
2,144 |
1,224 |
968 | ||||||||
|
Balance, end of period |
$ |
207 |
$ |
2,028 |
$ |
207 |
$ |
2,028 | ||||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "discretionary cash flow," "Adjusted Income (Loss)," "Adjusted G&A" and "Adjusted EBITDA," and "Adjusted Total Revenues." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Earnings Call Information
The Company will host a conference call on Tuesday, August 9, 2016, to discuss second quarter 2016 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
Date/Time: Tuesday, August 9, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: Live webcast will be available at www.callon.com in the "Investors" section of the website.
Alternatively, you may join by telephone using the following numbers:
Toll Free: 1-888-349-0096
Canada Toll Free: 1-855-669-9657
International: 1-412-902-0125
Request to join: Callon Petroleum Company Earnings Call
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the consummation of the pending transactions, wells anticipated to be drilled and placed on production, future levels of drilling activity and associated production, the Company's 2016 guidance, capital budget amounts and expected cash flows, reserve quantities and the present value thereof, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. Without limiting the foregoing, forward-looking statements contained in this news release specifically include the expectation of total reserve potential and EUR. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
|
__________________________ | |
|
i. |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
SOURCE Callon Petroleum Company
Article Date
8/8/20167/12/2016 - Callon Petroleum Company Announces Second Quarter 2016 Earnings Release and Conference Call Schedule
Callon Petroleum Company Announces Second Quarter 2016 Earnings Release and Conference Call Schedule
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., July 12, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that it will host a conference call on Tuesday, August 9, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss second quarter financial and operating results. The Company plans to release second quarter 2016 results after the close of markets on Monday, August 8, 2016.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Tuesday, August 9, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-349-0096 |
|
Canada Toll Free: |
1-855-669-9657 |
|
International: |
1-412-902-0125 |
|
Request to join: |
Callon Petroleum Company Earnings Call |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
7/12/2016Callon Petroleum Company Announces Upcoming Investor Event
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., June 21, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor event:
J.P. Morgan Inaugural Energy Equity Conference 2016
The Company will present in New York, NY at the Inaugural Energy Equity Conference 2016 hosted by J.P. Morgan on Monday, June 27, 2016 at 1:40 pm Eastern Time.
The live and archived webcasts for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
6/21/2016Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., June 3, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on June 30, 2016 to stockholders of record as of June 15, 2016. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
6/3/2016Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., June 1, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
RBC's Capital Markets Energy and Power Executive Conference
The Company will present in New York, NY at the Capital Markets Energy and Power Executive Conference hosted by RBC Capital Markets on Tuesday, June 7, 2016 at 1:35 pm Eastern Time.
Citi's 2016 Small and Mid Cap Conference
The Company will present in New York, NY at the 2016 Small and Mid Cap Conference hosted by Citi Global Markets and Banking on Thursday, June 9, 2016 at 9:30 am Eastern Time.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
6/1/2016Callon Petroleum Company Completes Midland Basin Acquisitions
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 31, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the closing of its previously announced acquisition of certain assets in the Midland Basin operated by Big Star Oil and Gas, LLC ("Big Star"), including approximately 17,298 gross (14,089 net) surface acres, primarily located in Howard County, Texas, with additional acreage in Martin, Borden and Dawson counties, Texas. Including the previously announced area of mutual interest transaction in western Reagan County that closed earlier this month, the Big Star acquisition increases Callon's surface acreage position in the Midland Basin to approximately 34,000 net acres and establishes a new core area for development. Total consideration paid for the acquisition was approximately $220 million in cash and 9.3 million shares of Callon common stock, subject to customary post-closing adjustments. Upon closing of the transaction, the Company had approximately 131,090,644 shares of common stock outstanding.
Fred Callon, Chairman and Chief Executive Officer commented, "We are looking forward to advancing our planned development of this important new acreage position centered in Howard County that we have named the WildHorse area. We currently expect to complete our first well on this acreage in mid-June 2016 and are finalizing plans to add a drilling rig to the area in the second half of the year."
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the implementation of the Company's business plans and strategy, including future drilling plans, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the Company's ability to realize the anticipated benefits of the acquisition, the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
5/31/2016Callon Petroleum Company Announces First Quarter 2016 Results
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., May 4, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three months ended March 31, 2016.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located on the "Events and Presentations" page within the Investors section of the site.
Financial and operational highlights for the first quarter of 2016 and other recent data points include:
|
i. |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
"Callon's performance continues to benefit from the strength of our core asset position and persistent focus on capital efficiency and operating costs. Our focus on day-to-day execution and enhancing our completion designs has positioned us to achieve our goal of living within cash flow while delivering efficient asset growth," commented Fred Callon, Chairman and Chief Executive Officer. "As we look forward into 2016, we are preparing to overlay our operational model across an expanded footprint, including our pending Howard County transaction, with an increased level of drilling activity commencing as early as October 2016. In the interim, we intend to use the anticipated free cash flow generation from our base drilling program to solidify our financial position in anticipation of this acceleration in activity."
Operations Update
At March 31, 2016, Callon had 89 gross (78.3 net) horizontal wells producing in the Midland Basin from five established zones. Our net daily production for the three months ended March 31, 2016, grew approximately 45% to 12,440 BOE/d (approximately 79% oil) as compared to the same period of 2015. Sequentially, we grew production more than 17% compared to the fourth quarter of 2015.
The following table summarizes the Company's drilling activity for the period indicated:
|
For the Three Months Ended March 31, 2016 | ||||||||||||||||
|
Drilled |
Completed (a) |
Placed on Production |
Awaiting Completion | |||||||||||||
|
Gross |
Net |
Gross |
Net |
Gross |
Net |
Gross |
Net | |||||||||
|
Central Midland Basin horizontal wells |
5 |
4.3 |
9 |
7.1 |
8 |
6.1 |
2 |
1.8 | ||||||||
|
(a) |
Completions include wells drilled prior to 2016. |
During the first quarter, we placed on production 8 gross (6.1 net) Lower Spraberry wells, all in our CaBo area, with an average lateral length of approximately 5,000'. Since placing our first two Lower Spraberry wells on production in November 2014, we now have 22 wells producing from this zone with lateral lengths ranging from 5,000' to 10,000'. We are currently completing a three-well pad in our Pecan Acres field targeting the lower section of the Lower Spraberry zone ("LLS") and are drilling a new three-well pad in our Carpe Diem field with two of the wells targeting the upper section of the Lower Spraberry ("ULS") and the third well targeting the LLS. This pad will be drilled on a 12 wells per section spacing and represents our ongoing efforts to evaluate tighter well density in this zone. In addition to our own planned tests of tighter spacing in 2016, we will continue to monitor offsetting activity that is expected to test well spacing density of up to 20 wells per section in the future.
For the three months ended March 31, 2016, we accrued $35.0 million in operational capital expenditures, including facilities expenditures of $5.4 million, compared to $36.4 million in the fourth quarter of 2015. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended March 31, 2016 | ||||||||||||
|
Operational Capital Expenditures |
Capitalized Interest |
Capitalized G&A |
Total Capital Expenditures | |||||||||
|
Cash basis |
$ |
52,991 |
$ |
2,338 |
$ |
3,329 |
$ |
58,658 | ||||
|
Timing adjustments (a) |
(18,021) |
37 |
— |
(17,984) | ||||||||
|
Non-cash items |
— |
— |
953 |
953 | ||||||||
|
Accrual (GAAP) basis |
$ |
34,970 |
$ |
2,375 |
$ |
4,282 |
$ |
41,627 | ||||
|
(a) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
Second Quarter 2016 Guidance
Second quarter guidance assumes that the pending transactions involving Big Star Oil & Gas, LLC and the western Reagan County area of mutual interest are completed in late May 2016.
|
First Quarter |
Second Quarter | |||
|
2016 Actual |
2016 Guidance | |||
|
Total Production (BOE/d) |
12,440 |
13,500 - 14,500 | ||
|
% oil |
79% |
76% - 78% | ||
|
% oil hedged (a) |
56% | |||
|
Expenses (per BOE) |
||||
|
LOE, including workovers |
$6.15 |
$6.00 - $6.50 | ||
|
Production taxes, including ad valorem |
$1.96 |
$2.25 - $2.50 | ||
|
Adjusted G&A (b) |
$4.10 |
$3.75 - $4.25 | ||
|
Adjusted G&A - cash component (c) |
$3.55 |
$3.00 - $3.50 | ||
|
Operational Capital Expenditures |
||||
|
Accrual basis ($MM) |
$35 |
$15 - $25 |
|
(a) |
Based on the midpoint of guidance. Includes swaps, three-way collars and two-way collars tied to the WTI NYMEX benchmark pricing. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within the Non-GAAP financial measures and reconciliations section of this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(c) |
Excludes stock-based compensation and corporate depreciation and amortization. |
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | |||||||||
|
March 31, 2016 |
December 31, 2015 |
March 31, 2015 | |||||||
|
Net production: |
|||||||||
|
Oil (MBbls) |
892 |
777 |
638 | ||||||
|
Natural gas (MMcf) |
1,443 |
1,188 |
801 | ||||||
|
Total production (MBOE) |
1,132 |
975 |
771 | ||||||
|
Average daily production (BOE/d) |
12,440 |
10,598 |
8,567 | ||||||
|
% oil (BOE basis) |
79% |
80% |
83% | ||||||
|
Oil and natural gas revenues (in thousands): |
|||||||||
|
Oil revenue |
$ |
27,443 |
$ |
30,582 |
$ |
27,909 | |||
|
Natural gas revenue |
3,255 |
2,981 |
2,482 | ||||||
|
Total revenue |
$ |
30,698 |
$ |
33,563 |
$ |
30,391 | |||
|
Impact of cash-settled derivatives |
7,716 |
9,918 |
10,343 | ||||||
|
Adjusted Total Revenue (i) |
$ |
38,414 |
$ |
43,481 |
$ |
40,734 | |||
|
Three Months Ended | |||||||||
|
March 31, 2016 |
December 31, 2015 |
March 31, 2015 | |||||||
|
Additional per BOE data: |
|||||||||
|
Sales price, excluding impact of cash-settled derivatives |
$ |
27.12 |
$ |
34.42 |
$ |
39.42 | |||
|
Sales price, including impact of cash-settled derivatives |
33.93 |
44.60 |
52.83 | ||||||
|
Lease operating expense |
$ |
6.15 |
$ |
6.47 |
$ |
9.03 | |||
|
Production taxes |
1.96 |
2.04 |
2.94 | ||||||
|
Depletion, depreciation and amortization |
13.89 |
17.29 |
23.48 | ||||||
|
Adjusted G&A - total (a) |
4.10 |
4.45 |
6.15 | ||||||
|
Adjusted G&A - cash component (b) |
3.55 |
3.80 |
5.37 | ||||||
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended March 31, 2016, Callon reported total revenues including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $38.4 million, comprised of oil revenues of $35.0 million, and natural gas revenues of $3.4 million including the $7.7 million impact of settled derivative contracts. The table above reconciles to the related GAAP measure of the Company's revenue to Adjusted Total Revenue. Average daily production for the quarter was 12,440 BOE/d compared to average daily production of 10,598 BOE/d in the fourth quarter of 2015. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended March 31, 2016, Callon recognized the following hedging-related items:
|
In Thousands |
Per Unit | |||||
|
Oil derivatives contracts |
||||||
|
Net gain on settlements |
$ |
7,507 |
$ |
8.41 | ||
|
Net loss on fair value adjustments |
(9,137) |
|||||
|
Total net loss on oil derivatives contracts |
$ |
(1,630) |
||||
|
Natural gas derivatives contracts |
||||||
|
Net gain on settlements |
$ |
209 |
$ |
0.14 | ||
|
Net gain on fair value adjustments |
489 |
|||||
|
Total net gain on natural gas derivatives contracts |
$ |
698 |
||||
|
Total derivatives contracts |
||||||
|
Net gain on settlements |
$ |
7,716 |
$ |
6.81 | ||
|
Net loss on fair value adjustments |
(8,648) |
|||||
|
Total net loss on total derivatives contracts |
$ |
(932) |
||||
Average realized prices, including and excluding the impact of cash settled derivatives during the first quarter, were as follows:
|
Three Months Ended | |||
|
March 31, 2016 | |||
|
Average realized sales price: |
|||
|
Oil (per Bbl) (excluding impact of cash-settled derivatives) |
$ |
30.77 | |
|
Impact of cash-settled derivatives |
8.41 | ||
|
Oil (per Bbl) (including impact of cash-settled derivatives) |
$ |
39.18 | |
|
Natural gas (per Mcf) (excluding impact of cash-settled derivatives) |
$ |
2.26 | |
|
Impact of cash-settled derivatives |
0.14 | ||
|
Natural gas (per Mcf) (including impact of cash-settled derivatives) |
$ |
2.40 | |
|
Total (per BOE) (excluding impact of cash-settled derivatives) |
$ |
27.12 | |
|
Impact of cash-settled derivatives |
6.81 | ||
|
Total (per BOE) (including impact of cash-settled derivatives) |
$ |
33.93 | |
Lease Operating Expenses, including workover expense ("LOE"). LOE per BOE for the three months ended March 31, 2016 was $6.15 per BOE, compared to LOE of $6.47 per BOE in the fourth quarter of 2015.
Production Taxes, including ad valorem taxes. Production taxes were $1.96 per BOE in the first quarter of 2016, representing approximately 7.2% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended March 31, 2016 was $13.89 per BOE compared to $17.29 per BOE in the fourth quarter of 2015, with the decrease in per unit DD&A being attributable to increases in proved reserves relative to our depreciable asset base and assumed future development costs related to undeveloped proved reserves. The decrease in our depreciable base was primarily related to the write-down of oil and natural gas properties in the fourth quarter of 2015.
General and Administrative, net of amounts capitalized ("G&A"). G&A excluding certain non-cash incentive share-based compensation valuation adjustments ("Adjusted G&A", a non-GAAP measure(i)) was $4.6 million, or $4.10 per BOE, for the current period compared to $4.3 million, or $4.45 per BOE, for the fourth quarter of 2015. The cash component of Adjusted G&A was $4.0 million, or $3.55 per BOE, for the current period compared to $3.7 million, or $3.80 per BOE, for the fourth quarter of 2015.
For the first quarter of 2016, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Recurring |
Non-Recurring |
||||||||||||||
|
Cash |
Non-Cash |
Cash |
Non-Cash |
Total | |||||||||||
|
G&A expenses: |
|||||||||||||||
|
Cash G&A |
$ |
4,019 |
$ |
— |
$ |
— |
$ |
— |
$ |
4,019 | |||||
|
Restricted stock share-based compensation |
— |
511 |
— |
— |
511 | ||||||||||
|
Change in the fair value of liability share-based awards |
— |
698 |
— |
— |
698 | ||||||||||
|
Corporate depreciation & amortization |
— |
113 |
— |
— |
113 | ||||||||||
|
Threatened proxy contest |
— |
— |
221 |
— |
221 | ||||||||||
|
Total G&A expense: |
$ |
4,019 |
$ |
1,322 |
$ |
221 |
$ |
— |
$ |
5,562 | |||||
|
Adjusted G&A: |
|||||||||||||||
|
Less: Change in the fair value of liability share-based awards |
$ |
(698) | |||||||||||||
|
Less: Threatened proxy contest expenses |
(221) | ||||||||||||||
|
Adjusted G&A – total |
4,643 | ||||||||||||||
|
Restricted stock share-based compensation |
(511) | ||||||||||||||
|
Corporate depreciation & amortization |
(113) | ||||||||||||||
|
Adjusted G&A – cash component |
$ |
4,019 | |||||||||||||
Write-down of Oil and Natural Gas Properties. As a result of the ceiling test limitation, the Company recognized write-downs of oil and natural gas properties of $34.8 million in the first quarter of 2016.
Income (Loss) Available to Common Shareholders. The Company reported a net loss available to common shareholders of $42.9 million in the first quarter of 2016 and Adjusted Loss available to common shareholders of $0.2 million, or $0.00 per diluted share.
Hedge Portfolio Summary
The following table summarizes our open derivative positions as of May 2, 2016:
|
For the Remainder of |
For the Full Year of | |||||
|
Oil contracts |
2016 |
2017 | ||||
|
Swap contracts (NYMEX) |
||||||
|
Total volume (MBbls) |
703 |
730 | ||||
|
Weighted average price per Bbl |
$ |
58.09 |
$ |
44.50 | ||
|
Swap contracts (Midland basis differentials) |
||||||
|
Volume (MBbls) |
1,100 |
— | ||||
|
Weighted average price per Bbl |
$ |
0.17 |
$ |
— | ||
|
Collar contracts combined with short puts (WTI, three-way collar) |
||||||
|
Volume (MBbls) |
397 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call) |
$ |
63.07 |
$ |
— | ||
|
Floor (long put) |
53.07 |
— | ||||
|
Short put |
38.52 |
— | ||||
|
Collar contracts |
||||||
|
Total volume (MBbls) |
550 |
— | ||||
|
Weighted average price per Bbl |
||||||
|
Ceiling (short call) |
$ |
46.50 |
$ |
— | ||
|
Floor (long put) |
37.50 |
— | ||||
|
Put option contracts (short position) |
||||||
|
Volume (MBbls) |
— |
730 | ||||
|
Put strike price |
$ |
— |
$ |
30.00 | ||
|
Call option contracts (short position) |
||||||
|
Total volume (MBbls) |
— |
670 | ||||
|
Weighted average price per Bbl |
||||||
|
Call strike price |
$ |
— |
$ |
50.00 | ||
|
Natural gas contracts |
||||||
|
Swap contracts |
||||||
|
Total volume (BBtu) |
1,650 |
— | ||||
|
Weighted average price per MMBtu |
$ |
2.52 |
$ |
— | ||
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "discretionary cash flow," "Adjusted Income," "Adjusted G&A" and "Adjusted EBITDA," and "Adjusted Total Revenues." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
The following tables reconcile to the related GAAP measure the Company's loss available to common stockholders to Adjusted Income and the Company's net loss to Adjusted EBITDA (in thousands):
|
Three Months Ended | |||||||||
|
March 31, 2016 |
December 31, 2015 |
March 31, 2015 | |||||||
|
Loss available to common stockholders |
$ |
(42,933) |
$ |
(115,144) |
$ |
(12,171) | |||
|
Valuation allowance |
14,288 |
40,025 |
— | ||||||
|
Write-down of oil and natural gas properties |
22,604 |
78,737 |
— | ||||||
|
Net loss (gain) on derivatives, net of settlements |
5,621 |
(635) |
5,144 | ||||||
|
Rig termination fee |
— |
(368) |
2,367 | ||||||
|
Change in the fair value of share-based awards |
461 |
1,197 |
1,676 | ||||||
|
Early retirement expenses |
— |
— |
3,034 | ||||||
|
Withdrawn proxy contest expenses |
144 |
— |
72 | ||||||
|
Adjusted Income |
$ |
185 |
$ |
3,812 |
$ |
122 | |||
|
Adjusted Income per fully diluted common share |
$ |
0.00 |
$ |
0.05 |
$ |
0.00 | |||
|
Three Months Ended | |||||||||
|
March 31, 2016 |
December 31, 2015 |
March 31, 2015 | |||||||
|
Net loss |
$ |
(41,109) |
$ |
(113,170) |
$ |
(10,197) | |||
|
Write-down of oil and natural gas properties |
34,776 |
121,134 |
— | ||||||
|
Net loss (gain) on derivatives, net of settlements |
8,648 |
(977) |
7,914 | ||||||
|
Change in the fair value of share-based awards |
1,225 |
2,354 |
3,057 | ||||||
|
Early retirement expenses |
— |
— |
4,668 | ||||||
|
Rig termination fee |
— |
(566) |
3,641 | ||||||
|
Withdrawn proxy contest expenses |
221 |
— |
111 | ||||||
|
Acquisition expense |
48 |
27 |
3 | ||||||
|
Income tax benefit |
— |
— |
(5,077) | ||||||
|
Interest expense |
5,491 |
5,544 |
4,858 | ||||||
|
Depreciation, depletion and amortization |
16,129 |
17,308 |
18,546 | ||||||
|
Accretion expense |
180 |
175 |
209 | ||||||
|
Adjusted EBITDA |
$ |
25,609 |
$ |
31,829 |
$ |
27,733 | |||
|
Adjusted EBITDA per diluted share |
$ |
0.31 |
$ |
0.44 |
$ |
0.48 | |||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the first quarter of 2016 was $20.5 million, or $0.25 per diluted share, and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||
|
March 31, 2016 |
December 31, 2015 |
March 31, 2015 | |||||||
|
Cash flows from operating activities: |
|||||||||
|
Net income (loss) |
$ |
(41,109) |
$ |
(113,170) |
$ |
(10,197) | |||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|||||||||
|
Depreciation, depletion and amortization |
16,129 |
17,308 |
18,546 | ||||||
|
Write-down of oil and natural gas properties |
34,776 |
121,134 |
— | ||||||
|
Accretion expense |
180 |
175 |
209 | ||||||
|
Amortization of non-cash debt related items |
781 |
781 |
781 | ||||||
|
Deferred income tax (benefit) expense |
— |
— |
(5,077) | ||||||
|
Net loss (gain) on derivatives, net of settlements |
8,648 |
(977) |
7,914 | ||||||
|
Rig termination fee |
— |
(566) |
3,641 | ||||||
|
Non-cash expense related to equity share-based awards |
392 |
521 |
86 | ||||||
|
Change in the fair value of liability share-based awards |
709 |
1,853 |
3,088 | ||||||
|
Discretionary cash flow |
$ |
20,506 |
$ |
27,059 |
$ |
18,991 | |||
|
Discretionary cash flow per diluted share |
$ |
0.25 |
$ |
0.37 |
$ |
0.33 | |||
|
Changes in working capital |
5,582 |
4,475 |
(5,988) | ||||||
|
Payments to settle asset retirement obligations |
(161) |
(211) |
258 | ||||||
|
Payments to settle vested liability share-based awards |
|||||||||
|
related to early retirements |
— |
— |
(3,538) | ||||||
|
Payments to settle vested liability share-based awards |
(9,807) |
— |
(3,599) | ||||||
|
Net cash provided by operating activities |
$ |
16,120 |
$ |
31,323 |
$ |
6,124 | |||
|
Weighted average dilutive shares outstanding |
83,582 |
73,036 |
57,479 | ||||||
|
Callon Petroleum Company Consolidated Balance Sheets (in thousands, except par and per share values and share data) | |||||
|
March 31, 2016 |
December 31, 2015 | ||||
|
ASSETS |
Unaudited |
||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$ |
9,511 |
$ |
1,224 | |
|
Accounts receivable |
33,683 |
39,624 | |||
|
Fair value of derivatives |
15,585 |
19,943 | |||
|
Other current assets |
881 |
1,461 | |||
|
Total current assets |
59,660 |
62,252 | |||
|
Oil and natural gas properties, full cost accounting method: |
|||||
|
Evaluated properties |
2,390,105 |
2,335,223 | |||
|
Less accumulated depreciation, depletion, amortization and impairment |
(1,806,509) |
(1,756,018) | |||
|
Net oil and natural gas properties |
583,596 |
579,205 | |||
|
Unevaluated properties |
129,211 |
132,181 | |||
|
Total oil and natural gas properties |
712,807 |
711,386 | |||
|
Other property and equipment, net |
9,757 |
7,700 | |||
|
Restricted investments |
3,315 |
3,309 | |||
|
Deferred financing costs |
3,359 |
3,642 | |||
|
Other assets, net |
366 |
305 | |||
|
Total assets |
$ |
789,264 |
$ |
788,594 | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
|
Current liabilities: |
|||||
|
Accounts payable and accrued liabilities |
$ |
62,536 |
$ |
70,970 | |
|
Accrued interest |
5,879 |
5,989 | |||
|
Cash-settleable restricted stock unit awards |
3,798 |
10,128 | |||
|
Asset retirement obligations |
833 |
790 | |||
|
Fair value of derivatives |
688 |
— | |||
|
Total current liabilities |
73,734 |
87,877 | |||
|
Senior secured revolving credit facility |
— |
40,000 | |||
|
Secured second lien term loan, net of unamortized deferred financing costs |
289,062 |
288,565 | |||
|
Asset retirement obligations |
4,427 |
4,317 | |||
|
Cash-settleable restricted stock unit awards |
2,682 |
4,877 | |||
|
Fair value of derivatives |
3,602 |
— | |||
|
Other long-term liabilities |
211 |
200 | |||
|
Total liabilities |
373,718 |
425,836 | |||
|
Stockholders' equity: |
|||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized: 1,458,948 and 1,578,948 shares outstanding, respectively |
15 |
16 | |||
|
Common stock, $0.01 par value, 150,000,000 shares authorized; 96,093,938 and 80,087,148 shares outstanding, respectively |
961 |
801 | |||
|
Capital in excess of par value |
798,532 |
702,970 | |||
|
Accumulated deficit |
(383,962) |
(341,029) | |||
|
Total stockholders' equity |
415,546 |
362,758 | |||
|
Total liabilities and stockholders' equity |
$ |
789,264 |
$ |
788,594 | |
|
Callon Petroleum Company Consolidated Statements of Operations (Unaudited; in thousands, except per share data) | ||||||
|
Three Months Ended March 31, | ||||||
|
2016 |
2015 | |||||
|
Operating revenues: |
||||||
|
Oil sales |
$ |
27,443 |
$ |
27,909 | ||
|
Natural gas sales |
3,255 |
2,482 | ||||
|
Total operating revenues |
30,698 |
30,391 | ||||
|
Operating expenses: |
||||||
|
Lease operating expenses |
6,957 |
6,959 | ||||
|
Production taxes |
2,220 |
2,265 | ||||
|
Depreciation, depletion and amortization |
15,722 |
18,104 | ||||
|
General and administrative |
5,562 |
12,102 | ||||
|
Accretion expense |
180 |
209 | ||||
|
Write-down of oil and natural gas properties |
34,776 |
— | ||||
|
Rig termination fee |
— |
3,641 | ||||
|
Acquisition expense |
48 |
— | ||||
|
Total operating expenses |
65,465 |
43,280 | ||||
|
Loss from operations |
(34,767) |
(12,889) | ||||
|
Other income (expense): |
||||||
|
Interest expense |
5,491 |
4,858 | ||||
|
Loss (gain) on derivative contracts |
932 |
(2,429) | ||||
|
Other income, net |
(81) |
(44) | ||||
|
Total other expense |
6,342 |
2,385 | ||||
|
Loss before income taxes |
(41,109) |
(15,274) | ||||
|
Income tax benefit |
— |
(5,077) | ||||
|
Net loss |
(41,109) |
(10,197) | ||||
|
Preferred stock dividends |
(1,824) |
(1,974) | ||||
|
Loss available to common stockholders |
$ |
(42,933) |
$ |
(12,171) | ||
|
Loss per common share: |
||||||
|
Basic |
$ |
(0.51) |
$ |
(0.21) | ||
|
Diluted |
$ |
(0.51) |
$ |
(0.21) | ||
|
Shares used in computing loss per common share: |
||||||
|
Basic |
83,582 |
57,479 | ||||
|
Diluted |
83,582 |
57,479 | ||||
|
Callon Petroleum Company Consolidated Statements of Cash Flows (Unaudited; in thousands) | ||||||
|
Three Months Ended March 31, | ||||||
|
2016 |
2015 | |||||
|
Cash flows from operating activities: |
||||||
|
Net loss |
$ |
(41,109) |
$ |
(10,197) | ||
|
Adjustments to reconcile net loss to cash provided by operating activities: |
||||||
|
Depreciation, depletion and amortization |
16,129 |
18,546 | ||||
|
Write-down of oil and natural gas properties |
34,776 |
— | ||||
|
Accretion expense |
180 |
209 | ||||
|
Amortization of non-cash debt related items |
781 |
781 | ||||
|
Deferred income tax benefit |
— |
(5,077) | ||||
|
Net loss on derivatives, net of settlements |
8,648 |
7,914 | ||||
|
Non-cash expense related to equity share-based awards |
392 |
86 | ||||
|
Change in the fair value of liability share-based awards |
709 |
3,088 | ||||
|
Payments to settle asset retirement obligations |
(161) |
258 | ||||
|
Changes in operating assets and liabilities: |
||||||
|
Accounts receivable |
5,941 |
(2,125) | ||||
|
Other current assets |
580 |
452 | ||||
|
Current liabilities |
(717) |
(355) | ||||
|
Change in other long-term liabilities |
11 |
— | ||||
|
Change in other assets, net |
(233) |
(319) | ||||
|
Payments to settle vested liability share-based awards related to early retirements |
— |
(3,538) | ||||
|
Payments to settle vested liability share-based awards |
(9,807) |
(3,599) | ||||
|
Net cash provided by operating activities |
16,120 |
6,124 | ||||
|
Cash flows from investing activities: |
||||||
|
Capital expenditures |
(50,775) |
(70,780) | ||||
|
Acquisitions |
(10,183) |
— | ||||
|
Proceeds from sales of mineral interests and equipment |
— |
272 | ||||
|
Net cash used in investing activities |
(60,958) |
(70,508) | ||||
|
Cash flows from financing activities: |
||||||
|
Borrowings on senior secured revolving credit facility |
45,000 |
60,000 | ||||
|
Payments on senior secured revolving credit facility |
(85,000) |
(58,000) | ||||
|
Payment of deferred financing costs |
— |
(12) | ||||
|
Issuance of common stock, net |
94,949 |
65,546 | ||||
|
Payment of preferred stock dividends |
(1,824) |
(1,974) | ||||
|
Net cash provided by financing activities |
53,125 |
65,560 | ||||
|
Net change in cash and cash equivalents |
8,287 |
1,176 | ||||
|
Balance, beginning of period |
1,224 |
968 | ||||
|
Balance, end of period |
$ |
9,511 |
$ |
2,144 | ||
Earnings Call Information
The Company will host a conference call on Thursday, May 5, 2016, to discuss first quarter 2016 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
Date/Time: Thursday, May 5, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast: Live webcast will be available at www.callon.com in the "Investors" section of the website.
Alternatively, you may join by telephone using the following numbers:
Toll Free: 1-888-349-0096
Canada Toll Free: 1-855-669-9657
International: 1-412-902-0125
Request to join: Callon Petroleum Company Earnings Call
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the consummation of the pending transactions, wells anticipated to be drilled and placed on production, future levels of drilling activity and associated production, the Company's 2016 guidance, capital budget amounts and expected cash flows, reserve quantities and the present value thereof, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. Without limiting the foregoing, forward-looking statements contained in this news release specifically include the expectation of total reserve potential and EUR. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
5/4/2016Callon Petroleum Company Announces Closing of Common Stock Offering and Full Exercise of Option to Purchase Additional Shares
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., April 25, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the closing of its previously announced underwritten public offering of 25,300,000 shares of its common stock, including 3,300,000 shares sold to the underwriters pursuant to their option to purchase additional shares, which the underwriters exercised on April 20, 2016. Following this issuance, Callon now has 121,431,181 shares of common stock issued and outstanding. Total net proceeds of the offering, after underwriters' discounts and commissions and estimated offering expenses, will be approximately $206.2 million. Proceeds from the offering are expected to be used to fund the pending Big Star Acquisition and AMI Transaction, both as described in the Company's Report on Form 8-K previously filed on April 19, 2016. If the pending acquisitions are not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Credit Suisse and Scotia Howard Weil acted as joint book-running managers for the offering. Copies of the prospectus supplement and accompanying base prospectus related to the offering may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, copies may be obtained by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, NY 10010, via telephone at 1-800-221-1037, or by emailing newyork.prospectus@credit-suisse.com; or by contacting Scotia Capital (USA) Inc., Prospectus Department, 250 Vesey Street, New York, New York 10281, Attention: Equity Capital Markets, or via telephone (212) 225-6854.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
4/25/2016Callon Petroleum Company Announces Pricing of Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., April 19, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has priced an underwritten public offering of 22,000,000 shares of its common stock for total estimated gross proceeds (before the underwriter's discounts and commissions and estimated offering expenses) of $187 million. The underwriters will have an option to purchase up to an additional 3,300,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to fund the pending Big Star Acquisition and AMI Transaction, both as described in the Company's Report on Form 8-K previously filed on April 19, 2016. If the pending acquisitions are not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Credit Suisse and Scotia Howard Weil are acting as joint book-running managers for the offering. The offering is expected to close on April 25, 2016, subject to customary closing conditions.
The offering will be made only by means of a prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, the underwriters will arrange to send you the prospectus supplement and related base prospectus if you request them by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, via telephone at 1-800-221-1037, or by e-mailing newyork.prospectus@credit-suisse.com; or by contacting Scotia Capital (USA) Inc., Prospectus Department, 250 Vesey Street, New York, New York 10281, Attention: Equity Capital Markets, or via telephone (212) 225-6854.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
4/19/2016Callon Petroleum Company Announces Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., April 19, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has commenced, subject to market and other conditions, an underwritten public offering of 22,000,000 shares of its common stock. The underwriters will have an option to purchase up to an additional 3,300,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to fund the pending Big Star Acquisition and AMI Transaction, both as described in the Company's Report on Form 8-K previously filed on April 19, 2016. If the pending acquisitions are not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Credit Suisse and Scotia Howard Weil are acting as joint book-running managers for the offering. The offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, the underwriters will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, via telephone at 1-800-221-1037, or by e-mailing newyork.prospectus@credit-suisse.com; or by contacting Scotia Capital (USA) Inc., Prospectus Department, 250 Vesey Street, New York, New York 10281, Attention: Equity Capital Markets, or via telephone (212) 225-6854.
The common stock will be issued and sold pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
4/19/20164/19/2016 - Callon Petroleum Company Announces Midland Basin Acquisitions and Establishment of a New Core Operating Area
Callon Petroleum Company Announces Midland Basin Acquisitions and Establishment of a New Core Operating Area
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., April 19, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced it has entered into definitive agreements with three private entities to acquire certain assets operated by Big Star Oil and Gas, LLC ("Big Star") for total consideration of $220 million in cash and approximately 9.3 million shares of Callon common stock, subject to customary purchase price adjustments. In addition, Callon has signed definitive agreements that increase its exposure to an existing core operating area in a separate transaction.
Key attributes of the Big Star transaction include:
Upon closing of the Big Star transaction, Callon will assume operatorship of over 80% of the acquired acreage and own an estimated 81% average working interest (61% average net revenue interest).
Separately, on April 15, 2016, Callon entered into definitive purchase and sale and joint development agreements for the following transactions (collectively, the "AMI Transaction") comprising total net cash consideration of $33 million, subject to customary purchase price adjustments. Key elements of the AMI Transaction include:
Upon closing of the AMI Transaction, our acreage position in western Reagan County will be increased by 1,759 net acres. Assuming the AMI Transaction was completed on January 1, 2016, the AMI Transaction would have contributed net daily production of approximately 953 Boe/d for the first quarter of 2016 primarily from existing horizontal wells targeting the Wolfcamp A and both the upper and lower benches of the Wolfcamp B.
On a pro forma basis assuming the closing of the pending Big Star and AMI transactions, Callon's operational base will include over 30,000 net surface acres in core areas of the Midland Basin that have been de-risked for multi-zone horizontal development within a total Midland Basin position of approximately 34,000 net surface acres. Estimated pro forma net production for the first quarter of 2016 (assuming the closing of the pending transactions on January 1, 2016) would have been approximately 15,300 Boe/d, including production of approximately 12,400 Boe/d (79% oil) from Callon's existing operations.
"These acquisitions are a significant step forward in Callon's continued evolution as a leading operator in the Permian Basin. Our team has proven its ability to consistently deliver capital efficient growth, and we are excited to leverage our capabilities across an expanded footprint in the coming years, including a new core operating area in Howard County. While we expect any near-term increase in operational activity following the acquisitions to be limited in 2016, we anticipate the horizontal development of the Big Star properties to be an important part of an expanded 2017 operational program incorporating a total of two to three horizontal drilling rigs," stated Fred Callon, Chairman and CEO. "Callon has found success in pursuing privately-negotiated transactions in the Midland Basin in recent years and these acquisitions are yet another example. Importantly, the transactions not only deliver high-quality, de-risked asset bases that compete favorably for capital in our combined portfolio, but also present the opportunity to add to our management team with Mr. Bradley Cross, a founding partner of Big Star, who has been offered a senior role in operations with Callon."
The pending Big Star and AMI transactions are expected to close in the second quarter of 2016, subject to the completion of customary due diligence and closing conditions. Neither transaction is contingent on the other. Callon intends to finance the cash purchase price of these acquisitions with cash on hand, borrowings under its revolving credit facility, which was reaffirmed in early April with a borrowing base of $300 million, including related commitments of $300 million, and the proceeds of capital markets transactions, depending on prevailing market conditions.
Jefferies LLC acted as financial advisor to Callon in connection with the pending Big Star transaction. Scotia Waterous acted as financial advisor to Big Star.
Full-Year 2016 Guidance Update
Callon estimates that production from the transactions (following the respective closing dates) will contribute approximately 2,500 – 3,000 Boe/d to full-year 2016 estimates, raising annual production guidance from a previous range of 11,500 – 12,000 Boe/d to 14,000 – 15,000 Boe/d. This increased estimate includes a production contribution from three drilled, uncompleted wells on the properties to be acquired in the pending transactions (one in Howard County and two in Reagan County) that are anticipated to be brought on-line in the second half 2016, in addition to currently producing wells on the acquired properties. Given the increased expenditures related to these incremental completions and infrastructure investment for future development of the acquired properties, the Company now expects operational capital expenditures (including facilities) of $95 – $105 million in 2016.
|
Previous |
Updated | |||
|
2016 |
2016 | |||
|
Total production (Boe/d) |
11,500 - 12,000 |
14,000 - 15,000 | ||
|
% oil |
77% - 79% |
76% - 80% | ||
|
Expenses (per Boe) |
||||
|
LOE, including workovers |
$6.75 - $7.25 |
$6.75 - $7.25 | ||
|
Production taxes, including ad valorem |
$2.00 - $2.50 |
$2.00 - $2.50 | ||
|
Adjusted G&A (a) |
$3.80 - $4.20 |
$3.30 - $3.80 | ||
|
Adjusted G&A - cash component (b) |
$3.30 - $3.70 |
$2.90 - $3.40 | ||
|
Operational capital expenditures |
||||
|
Accrual basis ($MM) |
$75 - $80 |
$95 - $105 |
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within the Non-GAAP financial measures and reconciliations section of this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes stock-based compensation and corporate depreciation and amortization. |
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
About TRP Energy
TRP is a Houston-based oil and gas company focused on identifying, acquiring and developing non-operated working interest positions across the United States. TRP is backed by Trilantic Capital Management L.P. ("Trilantic North America"), a private equity firm focused on control and significant minority investments in North America. To date, Trilantic North America's energy team has committed approximately $3.1 billion in capital across 22 platform energy investments.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding the consummation of the pending acquisition and completion of related financings, reserve quantities, estimates of future drilling locations, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the Company's ability to realize the anticipated benefits of the pending acquisition, the forfeiture of our deposit under the acquisition agreement, the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
4/19/20164/18/2016 - Callon Petroleum Company Announces First Quarter 2016 Earnings Release and Conference Call Schedule
Callon Petroleum Company Announces First Quarter 2016 Earnings Release and Conference Call Schedule
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., April 18, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that it will host a conference call on Thursday, May 5, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss first quarter financial and operating results. The Company plans to release first quarter 2016 results after the close of markets on Wednesday, May 4, 2016.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Thursday, May 5, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-349-0096 |
|
Canada Toll Free: |
1-855-669-9657 |
|
International: |
1-412-902-0125 |
|
Request to join: |
Callon Petroleum Company Earnings Call |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
4/18/2016Callon Petroleum Company Announces Reaffirmation of Borrowing Base
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., April 11, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that its lending group unanimously approved the reaffirmation of the Company's existing $300 million borrowing base under its senior secured revolving credit facility, including $300 million of related commitments, following the semi-annual redetermination process. All terms governing the credit facility remained unchanged.
"We believe that the outcome of our redetermination is a testament not only to the performance of our Midland Basin assets, but also to the achieved capital and operating cost reductions that have enabled us to continue a measured pace of development and efficiently grow our proved reserve base," said Joe Gatto, Chief Financial Officer of Callon. "We are appreciative of the ongoing support of our lending group and their contributions to our financial position and the execution of our growth strategy."
About Callon Petroleum
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Eric Williams
Manager, Finance
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
4/11/2016Callon Petroleum Company Announces Upcoming Investor Events
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., March 15, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor events:
Scotia Howard Weil 2016 Energy Conference
The Company will present at the 2016 Energy Conference hosted by Scotia Howard Weil in New Orleans, LA on Monday, March 21, 2016 at 1:40 pm Central Time.
OGIS New York
The Company will present at the Annual Oil & Gas Investment Symposium, hosted by the Independent Petroleum Association of America New York, NY on Monday, April 11, 2016 at 4:05 pm Eastern Time.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
3/15/2016Callon Petroleum Company Announces Closing of Common Stock Offering and Full Exercise of Option to Purchase Additional Shares
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., March 9, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced the closing of its previously announced underwritten public offering of 15,250,000 shares of its common stock, including 1,985,000 shares sold to the underwriters pursuant to their option to purchase additional shares, which the underwriters exercised on March 4, 2016. Following this issuance, Callon now has 96,122,341 shares of common stock issued and outstanding. Total net proceeds of the offering, after underwriters' discounts and commissions and estimated offering expenses, will be approximately $94.9 million. Proceeds from the offering are expected to be used to repay amounts outstanding under Callon's senior secured revolving credit facility, which were used in part to finance recent acquisitions, with any remainder being used for general corporate purposes, including future potential acquisitions with a primary focus in the Permian Basin.
Credit Suisse and J.P. Morgan acted as joint book-running managers for the offering. Copies of the prospectus supplement and accompanying base prospectus related to the offering may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, copies may be obtained by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, NY 10010, via telephone at 1-800-221-1037, or by emailing newyork.prospectus@credit-suisse.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 866.803.9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
3/9/2016Callon Petroleum Declares Series A Preferred Dividend
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., March 4, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has declared a cash dividend of $1.25 per share, on its 10.0% Series A Cumulative Preferred Stock ("Series A Preferred Stock"). The dividend will be paid on March 31, 2016 to stockholders of record as of March 15, 2016. The Series A Preferred Stock is currently listed on the New York Stock Exchange under the symbol "CPE.A."
Callon is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com, will be archived there for subsequent review, and can be accessed from the "News" link on the top of the homepage.
It should be noted that this news release contains projections and other 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. These projections and statements reflect Callon's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements are discussed in our filings with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
3/4/2016Callon Petroleum Company Announces Upsizing and Pricing of Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., March 3, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has priced an upsized underwritten public offering of 13,265,000 shares of its common stock for total estimated gross proceeds (before the underwriter's discounts and commissions and estimated offering expenses) of approximately $86.2 million. The underwriters will have an option for 30 days to purchase up to an additional 1,985,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to repay amounts outstanding under Callon's senior secured revolving credit facility, which were used in part to finance recent acquisitions, with any remainder being used for general corporate purposes, including future potential acquisitions with a primary focus in the Permian Basin.
Credit Suisse and J.P. Morgan are acting as joint book-running managers for the offering. The offering is expected to close on March 9, 2016, subject to customary closing conditions.
The offering will be made only by means of a prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, the underwriters will arrange to send you the prospectus supplement and related base prospectus if you request them by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, via telephone at 1-800-221-1037, or by e-mailing newyork.prospectus@credit-suisse.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 866.803.9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
3/4/2016Callon Petroleum Company Announces Common Stock Offering
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., March 3, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has commenced, subject to market and other conditions, an underwritten public offering of 12,500,000 shares of its common stock. The underwriters will have an option to purchase up to an additional 1,875,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to repay amounts outstanding under Callon's senior secured revolving credit facility, which were used in part to finance recent acquisitions, with any remainder being used for general corporate purposes, including future potential acquisitions with a primary focus in the Permian Basin.
Credit Suisse and J.P. Morgan are acting as joint book-running managers for the offering. The offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission's website at www.sec.gov. Alternatively, the underwriters will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, via telephone at 1-800-221-1037, or by e-mailing newyork.prospectus@credit-suisse.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 866.803.9204, or by e-mailing prospectus-eq_fi@jpmchase.com.
The common stock will be issued and sold pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.
About Callon Petroleum Company
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
3/3/2016Callon Petroleum Company Announces Fourth Quarter and Full-Year 2015 Results
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., March 2, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today reported results of operations for the three and twelve month periods ended December 31, 2015.
Presentation slides accompanying this earnings release are available on the Company's website at www.callon.com located within the Investors (Events and Presentations) section of the site.
Financial and operational highlights for the fourth quarter of 2015 and other recent datapoints include:
|
(i) |
See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations |
"We continue to deliver top-line growth while also achieving meaningful reductions in both our operating cost structure and capital expenditures per well," commented Fred Callon, Chairman and Chief Executive Officer. "We have proactively modified our operational plans over the last year with the goal of living within our means to provide us a high degree of flexibility in the current commodity price environment. As a result of these operational moves, combined with strong well performance and capital efficiency, we believe we are positioned to achieve this goal in the second quarter of 2016, ahead of our previous forecasted timing."
Operations Update
At December 31, 2015, Callon had 83 gross (73 net) horizontal wells located in the Central and Southern Midland Basin, producing from five established zones, including a Middle Spraberry well placed on production in late October 2015. Our net daily production for calendar year 2015 grew approximately 70% year-over-year to 9,610 BOE/d (approximately 80% oil).
The following table summarizes the Company's drilling activity for the period indicated:
|
For the Three Months Ended December 31, 2015 | ||||||||||||
|
Drilled |
Completed (a) |
Awaiting Completion | ||||||||||
|
Gross |
Net |
Gross |
Net |
Gross |
Net | |||||||
|
Southern Midland Basin horizontal wells |
— |
— |
1 |
1.0 |
— |
— | ||||||
|
Central Midland Basin horizontal wells |
9 |
6.6 |
5 |
2.7 |
6 |
4.3 | ||||||
|
Total Midland Basin wells |
9 |
6.6 |
6 |
3.7 |
6 |
4.3 | ||||||
|
(a) |
Completions include wells drilled prior to the fourth quarter of 2015. |
Capital Expenditures
For the three months ended December 31, 2015, we accrued $36.4 million in operational capital expenditures, including facilities, compared to $47.1 million in the third quarter of 2015. Approximately $2 million of the operational capital expenditures accrued in the fourth quarter of 2015 was attributed to incremental operational capital expenditures related to our working interest acquisition in November 2015. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis (in thousands):
|
Three Months Ended December 31, 2015 | ||||||||||||
|
Operational Capital |
Capitalized Interest |
Capitalized G&A |
Total Capital | |||||||||
|
Cash basis |
$ |
42,718 |
$ |
2,456 |
$ |
3,221 |
$ |
48,395 | ||||
|
Timing adjustments (a) |
(6,328) |
34 |
— |
(6,294) | ||||||||
|
Non-cash items |
— |
— |
2,027 |
2,027 | ||||||||
|
Accrual (GAAP) basis |
$ |
36,390 |
$ |
2,490 |
$ |
5,248 |
$ |
44,128 | ||||
|
(a) |
Includes timing adjustments related to cash disbursements in the current period for capital expenditures incurred in the prior period. |
For the year ended December 31, 2015, we accrued a total of $186 million for operational capital expenditures.
In January 2016, we announced an operational capital budget for 2016 in the range of $75 to $80 million, a reduction of over 50% from the 2015 level noted above, both on an accrual basis. The current budget reflects the transition from a two-rig to a one-rig program starting in March 2016. The following table details the 2016 horizontal wells we expect to place on production, all of which are located in the Central Midland Basin and planned to be completed from two to three well pads:
|
Lateral |
Horizontal Wells | |||||
|
Target Zones |
Lengths |
Gross |
Net | |||
|
Lower Spraberry |
5,000' - 10,000' |
20 |
13.9 | |||
|
Wolfcamp A |
10,000' |
1 |
0.2 | |||
|
21 |
14.1 | |||||
Proved Reserves
The Company recently completed the reserve audit for the year ended December 31, 2015 with its independent reserve auditor, DeGolyer and MacNaughton. As of December 31, 2015, Callon's estimated total proved reserves were 54.3 million BOE, a 65% increase over the previous year-end. The proved reserves estimate is comprised of 80% oil and 53% proved developed volumes. Included in total proved reserve estimates are 60 (gross) horizontal proved undeveloped locations.
The following table presents the progression of our estimated net proved oil and natural gas reserves from December 31, 2014 to 2015, and in each case, prepared in accordance with the rules and regulations of the SEC.
|
Oil |
Natural Gas |
Total | ||||
|
Proved developed and undeveloped reserves |
(MBbls) |
(MMcf) |
(MBOE) | |||
|
As of December 31, 2014 |
25,733 |
42,548 |
32,824 | |||
|
Revisions to previous estimates |
(1,632) |
4,870 |
(820) | |||
|
Extensions and discoveries |
19,127 |
19,621 |
22,397 | |||
|
Purchases, net of sale, of reserves in place |
2,909 |
2,810 |
3,377 | |||
|
Production |
(2,789) |
(4,312) |
(3,508) | |||
|
As of December 31, 2015 |
43,348 |
65,537 |
54,271 |
Callon added a total of 25 MMBOE in 2015 from drilling activity and acquisitions, replacing 711% of 2015 production as calculated by the sum of reserve extensions, discoveries, net purchases and revisions (including all price-related revisions), divided by annual production ("All-sources reserve replacement"). The Company's finding and development from extensions and discoveries ("Drill-bit F&D") costs were $8.98 per BOE calculated as cash costs incurred for exploration and development divided by the sum of extensions and discoveries, and revisions to previous estimates. See "Non-GAAP Financial Measures and Reconciliations" included within this release for related disclosures and calculations.
First Quarter and Annual 2016 Guidance
|
First Quarter |
Annual | |||
|
2016 |
2016 | |||
|
Total production (BOE/d) |
11,600 - 11,800 |
11,500 - 12,000 | ||
|
% oil |
77% - 79% |
77% - 79% | ||
|
% oil hedged (a) |
58% |
64% | ||
|
Expenses (per BOE) |
||||
|
LOE, including workovers |
$7.00 - $7.50 |
$6.75 - $7.25 | ||
|
Production taxes, including ad valorem |
$2.00 - $2.25 |
$2.00 - $2.50 | ||
|
Adjusted G&A (b) |
$4.35 - $4.65 |
$3.80 - $4.20 | ||
|
Adjusted G&A - cash component (c) |
$3.85 - $4.15 |
$3.30 - $3.70 | ||
|
Operational Capital Expenditures |
||||
|
Accrual basis ($MM) |
$75 - $80 |
|
(a) |
Based on the midpoint of guidance. Includes swaps, three-way collars and two-way collars tied to the WTI NYMEX benchmark pricing. |
|
(b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within the Non-GAAP financial measures and reconciliations section of this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(c) |
Excludes stock-based compensation and corporate depreciation and amortization. |
Liquidity
As of December 31, 2015, Callon had $40 million of outstanding borrowings under its credit facility.
Based on current commodity strip prices, Callon projects that its incremental borrowing requirements under the facility will be approximately $50 to $55 million for 2016, with almost all of those borrowings expected to be incurred in the first quarter of 2016, including amounts paid for the working interest acquisitions in the Cassleman-Bohannon fields completed in January 2016. This estimated borrowing amount excludes the net impact of any potential acquisitions. Following the reduction in drilling activity that recently occurred in March 2016, Callon believes it will essentially be net cash flow neutral beginning in the second quarter of 2016 based on current estimates, including commodity price levels.
Operating and Financial Results
The following table presents summary information for the periods indicated:
|
Three Months Ended | |||||||||
|
December 31, 2015 |
September 30, 2015 |
December 31, 2014 | |||||||
|
Net production |
|||||||||
|
Oil (MBbls) |
777 |
689 |
529 | ||||||
|
Natural gas (MMcf) |
1,188 |
1,239 |
839 | ||||||
|
Total production (MBOE) |
975 |
896 |
669 | ||||||
|
Average daily production (BOE/d) |
10,598 |
9,739 |
7,272 | ||||||
|
% oil (BOE basis) |
80% |
77% |
79% | ||||||
|
Oil and natural gas revenues (in thousands) |
|||||||||
|
Oil revenue |
$ |
30,582 |
$ |
30,582 |
$ |
34,409 | |||
|
Natural gas revenue |
2,981 |
3,734 |
4,009 | ||||||
|
Total revenue |
$ |
33,563 |
$ |
34,316 |
$ |
38,418 | |||
|
Impact of cash-settled derivatives |
9,918 |
9,789 |
7,068 | ||||||
|
Adjusted Total Revenue (i) |
$ |
43,481 |
$ |
44,105 |
$ |
45,486 | |||
|
Three Months Ended | |||||||||
|
December 31, 2015 |
September 30, 2015 |
December 31, 2014 | |||||||
|
Additional per BOE data |
|||||||||
|
Sales price, excluding impact of cash-settled derivatives |
$ |
34.42 |
$ |
38.30 |
$ |
57.43 | |||
|
Sales price, including impact of cash-settled derivatives |
44.60 |
49.22 |
67.99 | ||||||
|
Lease operating expense |
$ |
6.47 |
$ |
8.03 |
$ |
11.22 | |||
|
Production taxes |
2.04 |
2.88 |
3.80 | ||||||
|
Depletion, depreciation and amortization |
17.29 |
18.64 |
27.04 | ||||||
|
Adjusted G&A - total (a) |
4.45 |
4.63 |
5.88 | ||||||
|
Adjusted G&A - cash component (b) |
3.80 |
3.81 |
4.34 | ||||||
|
(a) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. See the reconciliation provided within this press release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
|
(b) |
Excludes the amortization of equity-settled share-based incentive awards and corporate depreciation and amortization. |
Total Revenue. For the quarter ended December 31, 2015, Callon reported total revenues including cash-settled derivatives ("Adjusted Total Revenue," a non-GAAP financial measure(i)) of $43.5 million, comprised of oil revenues of $40.0 million, and natural gas revenues of $3.5 million including the $9.9 million impact of settled derivative contracts. The table above reconciles to the related GAAP measure the Company's revenue to Adjusted Total Revenue. Average daily production for the quarter was 10,598 BOE/d compared to average daily production of 9,739 BOE/d in the third quarter of 2015. Average realized prices, including and excluding the effects of hedging, are detailed below.
Hedging impacts. For the quarter ended December 31, 2015, Callon recognized the following hedging-related items:
|
In Thousands |
Per Unit | |||||
|
Oil derivatives contracts |
||||||
|
Net gain on settlements |
$ |
9,436 |
$ |
12.14 | ||
|
Net gain on fair value adjustments |
1,384 |
|||||
|
Total net gain on oil derivatives contracts |
$ |
10,820 |
||||
|
Natural gas derivatives contracts |
||||||
|
Net gain on settlements |
$ |
482 |
$ |
0.41 | ||
|
Net loss on fair value adjustments |
(407) |
|||||
|
Total net gain on natural gas derivatives contracts |
$ |
75 |
||||
|
Total derivatives contracts |
||||||
|
Net gain on settlements |
$ |
9,918 |
$ |
10.17 | ||
|
Net gain on fair value adjustments |
977 |
|||||
|
Total net gain on total derivatives contracts |
$ |
10,895 |
||||
Average realized prices, including and excluding the impact of cash settled derivatives during the fourth quarter, were as follows:
|
Three Months Ended | |||
|
December 31, 2015 | |||
|
Average realized sales price |
|||
|
Oil (per Bbl) (excluding impact of cash-settled derivatives) |
$ |
39.36 | |
|
Impact of cash-settled derivatives |
12.14 | ||
|
Oil (per Bbl) (including impact of cash-settled derivatives) |
$ |
51.50 | |
|
Natural gas (per Mcf) (excluding impact of cash-settled derivatives) |
$ |
2.51 | |
|
Impact of cash-settled derivatives |
0.41 | ||
|
Natural gas (per Mcf) (including impact of cash-settled derivatives) |
$ |
2.91 | |
|
Total (per BOE) (excluding impact of cash-settled derivatives) |
$ |
34.42 | |
|
Impact of cash-settled derivatives |
10.17 | ||
|
Total (per BOE) (including impact of cash-settled derivatives) |
$ |
44.60 | |
Lease Operating Expenses, including workover expense ("LOE"). LOE for the three months ended December 31, 2015 was $6.47 per BOE, compared to LOE of $8.03 per BOE in the third quarter of 2015.
Production Taxes, including ad valorem taxes. Production taxes were $2.04 per BOE in the fourth quarter of 2015, representing approximately 5.9% of total revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization ("DD&A"). DD&A for the three months ended December 31, 2015 was $17.29 per BOE compared to $18.64 per BOE in the third quarter of 2015, with the decrease in per unit DD&A being attributable to increases in proved reserves relative to our depreciable asset base and assumed future development costs related to undeveloped proved reserves. The increase in our depreciable base was offset by a decrease related to the write-down of oil and natural gas properties in the third quarter of 2015.
General and Administrative, net of amounts capitalized ("G&A"). G&A excluding certain non-cash incentive share-based compensation valuation adjustments ("Adjusted G&A", a non-GAAP measure(i)) was $4.3 million, or $4.45 per BOE, for the current period compared to $4.1 million, or $4.63 per BOE, for the third quarter of 2015. The cash component of Adjusted G&A was $3.7 million, or $3.80 per BOE, for the current period compared to $3.4 million, or $3.81 per BOE, for the third quarter of 2015.
For the fourth quarter of 2015, G&A and Adjusted G&A, which excludes the amortization of equity-settled, share-based incentive awards and corporate depreciation and amortization, are calculated as follows (in thousands):
|
Recurring |
||||||||||
|
Cash |
Non-Cash |
Total | ||||||||
|
G&A expenses |
||||||||||
|
Cash G&A |
$ |
3,709 |
$ |
— |
$ |
3,709 | ||||
|
Restricted stock share-based compensation |
— |
512 |
512 | |||||||
|
Change in the fair value of liability share-based awards |
— |
1,842 |
1,842 | |||||||
|
Corporate depreciation & amortization |
— |
117 |
117 | |||||||
|
Total G&A expense: |
$ |
3,709 |
$ |
2,471 |
$ |
6,180 | ||||
|
Adjusted G&A |
||||||||||
|
Less: Change in the fair value of liability share-based awards |
$ |
(1,842) | ||||||||
|
Adjusted G&A – total |
4,338 | |||||||||
|
Restricted stock share-based compensation |
(512) | |||||||||
|
Corporate depreciation & amortization |
(117) | |||||||||
|
Adjusted G&A – cash component |
$ |
3,709 | ||||||||
Write-down of Oil and Natural Gas Properties. During the fourth quarter of 2015, the Company recognized a write-down of its oil and natural gas properties for a total of $121 million as a result of the ceiling test limitation and the impact of lower commodity prices. No write-down of oil and natural gas properties was recognized during the comparable prior year period.
Income (Loss) Available to Common Shareholders. The Company reported a net loss available to common shareholders of $115.1 million in the fourth quarter of 2015 and adjusted income available to common shareholders ("Adjusted Income"), a non-GAAP measure(i), of $3.8 million, or $0.05 per diluted share.
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as "discretionary cash flow," "Adjusted Income," "Adjusted G&A," "Adjusted EBITDA," "Adjusted Total Revenues," "Drill-bit F&D costs" and "All-sources reserve replacement." These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
The following tables reconcile to the related GAAP measure the Company's income (loss) available to common stockholders to Adjusted Income and the Company's net income (loss) to Adjusted EBITDA (in thousands):
|
Three Months Ended | |||||||||
|
December 31, 2015 |
September 30, 2015 |
December 31, 2014 | |||||||
|
Income (loss) available to common stockholders |
$ |
(115,144) |
$ |
(113,779) |
$ |
16,988 | |||
|
Valuation allowance |
40,025 |
68,818 |
— | ||||||
|
Write-down of oil and natural gas properties |
78,737 |
56,746 |
— | ||||||
|
Net gain on derivatives, net of settlements |
(635) |
(8,771) |
(14,249) | ||||||
|
Rig termination fee |
(368) |
— |
— | ||||||
|
Change in the fair value of share-based awards |
1,197 |
37 |
(1,713) | ||||||
|
Early retirement expenses |
— |
— |
— | ||||||
|
Withdrawn proxy contest expenses |
— |
65 |
65 | ||||||
|
Gain on early redemption of debt |
— |
— |
1,985 | ||||||
|
Adjusted Income |
$ |
3,812 |
$ |
3,116 |
$ |
3,076 | |||
|
Adjusted Income per fully diluted common share |
$ |
0.05 |
$ |
0.05 |
$ |
0.05 | |||
|
Three Months Ended | |||||||||
|
December 31, 2015 |
September 30, 2015 |
December 31, 2014 | |||||||
|
Net income (loss) |
$ |
(113,170) |
$ |
(111,805) |
$ |
18,962 | |||
|
Write-down of oil and natural gas properties |
121,134 |
87,301 |
— | ||||||
|
Net gain on derivatives, net of settlements |
(977) |
(13,494) |
(21,921) | ||||||
|
Change in the fair value of share-based awards |
2,354 |
655 |
(1,941) | ||||||
|
Rig termination fee |
(566) |
— |
— | ||||||
|
Gain on early redemption of debt |
— |
— |
3,054 | ||||||
|
Withdrawn proxy contest expenses |
— |
100 |
100 | ||||||
|
Acquisition expense |
27 |
(3) |
668 | ||||||
|
Income tax expense |
— |
45,667 |
10,504 | ||||||
|
Interest expense |
5,544 |
5,603 |
4,765 | ||||||
|
Depreciation, depletion and amortization |
17,308 |
16,026 |
18,521 | ||||||
|
Accretion expense |
175 |
142 |
223 | ||||||
|
Adjusted EBITDA |
$ |
31,829 |
$ |
30,192 |
$ |
32,935 | |||
|
Adjusted EBITDA per diluted share |
$ |
0.44 |
$ |
0.46 |
$ |
0.59 | |||
Discretionary Cash Flow. Discretionary cash flow, a non-GAAP measure(i), for the fourth quarter of 2015 was $27.1 million, or $0.37 per diluted share, and is reconciled to operating cash flow in the following table (in thousands):
|
Three Months Ended | |||||||||
|
December 31, 2015 |
September 30, 2015 |
December 31, 2014 | |||||||
|
Cash flows from operating activities: |
|||||||||
|
Net income (loss) |
$ |
(113,170) |
$ |
(111,805) |
$ |
18,962 | |||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|||||||||
|
Depreciation, depletion and amortization |
17,308 |
16,026 |
18,521 | ||||||
|
Write-down of oil and natural gas properties |
121,134 |
87,301 |
— | ||||||
|
Accretion expense |
175 |
142 |
223 | ||||||
|
Amortization of non-cash debt related items |
781 |
781 |
778 | ||||||
|
Amortization of deferred credit |
— |
— |
(54) | ||||||
|
Deferred income tax expense |
— |
45,667 |
10,504 | ||||||
|
Net gain on derivatives, net of settlements |
(977) |
(13,494) |
(21,922) | ||||||
|
Gain on early debt extinguishment |
— |
— |
3,054 | ||||||
|
Rig termination fee |
(566) |
— |
— | ||||||
|
Non-cash expense related to equity share-based awards |
521 |
368 |
694 | ||||||
|
Change in the fair value of liability share-based awards |
1,853 |
64 |
(2,635) | ||||||
|
Discretionary cash flow |
$ |
27,059 |
$ |
25,050 |
$ |
28,125 | |||
|
Discretionary cash flow per diluted share |
$ |
0.37 |
$ |
0.38 |
$ |
0.50 | |||
|
Changes in working capital |
4,475 |
1,639 |
9,090 | ||||||
|
Payments to settle asset retirement obligations |
(211) |
(1,142) |
(525) | ||||||
|
Net cash provided by operating activities |
$ |
31,323 |
$ |
25,547 |
$ |
36,690 | |||
|
Weighted average dilutive shares outstanding |
73,036 |
66,277 |
56,257 | ||||||
Drill-bit F&D and Reserve Replacement
|
Calculation Parameters |
2015 Metrics | |||||
|
Production (MBOE) |
(A) |
3,508 | ||||
|
Proved reserves (MBOE) |
||||||
|
Revisions to previous estimates (including price-related) |
(B) |
(820) | ||||
|
Purchases, net of sale, of reserves in place |
(C) |
3,377 | ||||
|
Extensions and discoveries |
(D) |
22,397 | ||||
|
Total additions, net of sale |
(E) |
24,954 | ||||
|
Capital costs incurred (in thousands) |
||||||
|
Property acquisition costs |
$ |
32,246 | ||||
|
Exploration and development costs (a) |
(F) |
193,660 | ||||
|
Total capital costs incurred |
(G) |
$ |
225,906 | |||
|
Drill-bit F&D per BOE |
(F) / (B + D) |
$ |
8.98 | |||
|
All-sources F&D per BOE |
(G) / (E ) |
$ |
9.05 | |||
|
Organic reserve replacement ratio |
(B + D) / (A) |
615% | ||||
|
All-sources reserve replacement ratio |
(E) / (A) |
711% | ||||
|
(a) |
Includes $200 million in costs related to proved properties and $15 million related to unproved properties. |
|
Callon Petroleum Company | |||||
|
Consolidated Balance Sheets | |||||
|
(in thousands, except par and per share values and share data) | |||||
|
December 31, 2015 |
December 31, 2014 | ||||
|
ASSETS |
|||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$ |
1,224 |
$ |
968 | |
|
Accounts receivable |
39,624 |
30,198 | |||
|
Fair value of derivatives |
19,943 |
27,850 | |||
|
Other current assets |
1,461 |
1,441 | |||
|
Total current assets |
62,252 |
60,457 | |||
|
Oil and natural gas properties, full cost accounting method: |
|||||
|
Evaluated properties |
2,335,223 |
2,077,985 | |||
|
Less accumulated depreciation, depletion and amortization |
(1,756,018) |
(1,478,355) | |||
|
Net oil and natural gas properties |
579,205 |
599,630 | |||
|
Unevaluated properties |
132,181 |
142,525 | |||
|
Total oil and natural gas properties |
711,386 |
742,155 | |||
|
Other property and equipment, net |
7,700 |
7,118 | |||
|
Restricted investments |
3,309 |
3,810 | |||
|
Deferred tax asset |
— |
44,688 | |||
|
Deferred financing costs |
3,642 |
4,776 | |||
|
Other assets, net |
305 |
342 | |||
|
Total assets |
$ |
788,594 |
$ |
863,346 | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
|
Current liabilities: |
|||||
|
Accounts payable and accrued liabilities |
$ |
70,970 |
$ |
76,753 | |
|
Accrued interest |
5,989 |
5,993 | |||
|
Cash-settled restricted stock unit awards |
10,128 |
3,856 | |||
|
Asset retirement obligations |
790 |
4,747 | |||
|
Deferred tax liability |
— |
6,214 | |||
|
Fair value of derivatives |
— |
1,249 | |||
|
Total current liabilities |
87,877 |
98,812 | |||
|
Senior secured revolving credit facility |
40,000 |
35,000 | |||
|
Secured second lien term loan, net of unamortized deferred financing costs |
288,565 |
286,576 | |||
|
Asset retirement obligations |
4,317 |
1,927 | |||
|
Cash-settled restricted stock unit awards |
4,877 |
7,175 | |||
|
Other long-term liabilities |
200 |
121 | |||
|
Total liabilities |
425,836 |
429,611 | |||
|
Stockholders' equity: |
|||||
|
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized: 1,578,948 and 1,578,948 shares outstanding, respectively |
16 |
16 | |||
|
Common stock, $0.01 par value, 150,000,000 and 110,000,000 shares authorized; 80,087,148 and 55,225,288 shares outstanding, respectively |
801 |
552 | |||
|
Capital in excess of par value |
702,970 |
526,162 | |||
|
Accumulated deficit |
(341,029) |
(92,995) | |||
|
Total stockholders' equity |
362,758 |
433,735 | |||
|
Total liabilities and stockholders' equity |
$ |
788,594 |
$ |
863,346 | |
|
Callon Petroleum Company | ||||||||||||
|
Consolidated Statements of Operations | ||||||||||||
|
(in thousands, except per share data) | ||||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, | |||||||||||
|
2015 |
2014 |
2015 |
2014 | |||||||||
|
Operating revenues: |
||||||||||||
|
Oil sales |
$ |
30,582 |
$ |
34,409 |
$ |
125,166 |
$ |
139,374 | ||||
|
Natural gas sales |
2,981 |
4,009 |
12,346 |
12,488 | ||||||||
|
Total operating revenues |
33,563 |
38,418 |
137,512 |
151,862 | ||||||||
|
Operating expenses: |
||||||||||||
|
Lease operating expenses |
6,308 |
7,509 |
27,036 |
22,372 | ||||||||
|
Production taxes |
1,993 |
2,544 |
9,793 |
8,973 | ||||||||
|
Depreciation, depletion and amortization |
16,854 |
18,089 |
69,249 |
56,724 | ||||||||
|
General and administrative |
6,180 |
1,402 |
28,347 |
25,109 | ||||||||
|
Accretion expense |
175 |
223 |
660 |
826 | ||||||||
|
Write-down of oil and natural gas properties |
121,134 |
— |
208,435 |
— | ||||||||
|
Rig termination fee |
(566) |
— |
3,075 |
— | ||||||||
|
Gain on sale of other property and equipment |
— |
— |
— |
(1,080) | ||||||||
|
Acquisition expense |
27 |
668 |
27 |
668 | ||||||||
|
Total operating expenses |
152,105 |
30,435 |
346,622 |
113,592 | ||||||||
|
Income (loss) from operations |
(118,542) |
7,983 |
(209,110) |
38,270 | ||||||||
|
Other (income) expenses: |
||||||||||||
|
Interest expense |
5,544 |
4,765 |
21,111 |
9,772 | ||||||||
|
Gain on early extinguishment of debt |
— |
3,054 |
— |
(151) | ||||||||
|
Gain on derivative contracts |
(10,895) |
(28,990) |
(28,358) |
(31,736) | ||||||||
|
Other income |
(21) |
(312) |
(198) |
(515) | ||||||||
|
Total other income |
(5,372) |
(21,483) |
(7,445) |
(22,630) | ||||||||
|
Income (loss) before income taxes |
(113,170) |
29,466 |
(201,665) |
60,900 | ||||||||
|
Income tax expense |
— |
10,504 |
38,474 |
23,134 | ||||||||
|
Net income (loss) |
(113,170) |
18,962 |
(240,139) |
37,766 | ||||||||
|
Preferred stock dividends |
(1,974) |
(1,974) |
(7,895) |
(7,895) | ||||||||
|
Income (loss) available to common stockholders |
$ |
(115,144) |
$ |
16,988 |
$ |
(248,034) |
$ |
29,871 | ||||
|
Income (loss) per common share: |
||||||||||||
|
Basic |
$ |
(1.58) |
$ |
0.31 |
$ |
(3.77) |
$ |
0.67 | ||||
|
Diluted |
$ |
(1.58) |
$ |
0.30 |
$ |
(3.77) |
$ |
0.65 | ||||
|
Shares used in computing income (loss) per common share: |
||||||||||||
|
Basic |
73,036 |
55,225 |
65,708 |
44,848 | ||||||||
|
Diluted |
73,036 |
56,257 |
65,708 |
45,961 | ||||||||
|
Callon Petroleum Company | ||||||
|
Consolidated Statements of Cash Flows | ||||||
|
(in thousands) | ||||||
|
For the Year Ended December 31, | ||||||
|
2015 |
2014 | |||||
|
Cash flows from operating activities: |
||||||
|
Net income (loss) |
$ |
(240,139) |
$ |
37,766 | ||
|
Adjustments to reconcile net income to cash provided by operating activities: |
||||||
|
Depreciation, depletion and amortization |
69,891 |
58,014 | ||||
|
Write-down of oil and natural gas properties |
208,435 |
— | ||||
|
Accretion expense |
660 |
826 | ||||
|
Amortization of non-cash debt related items |
3,123 |
1,272 | ||||
|
Amortization of deferred credit |
— |
(487) | ||||
|
Deferred income tax expense |
38,474 |
23,134 | ||||
|
Net loss (gain) on derivatives, net of settlements |
6,658 |
(27,650) | ||||
|
Gain on sale of other property and equipment |
— |
(1,080) | ||||
|
Non-cash gain on early debt extinguishment |
— |
(151) | ||||
|
Non-cash expense related to equity share-based awards |
221 |
1,126 | ||||
|
Change in the fair value of liability share-based awards |
6,612 |
3,936 | ||||
|
Payments to settle asset retirement obligations |
(3,258) |
(3,808) | ||||
|
Changes in current assets and liabilities: |
||||||
|
Accounts receivable |
(4,761) |
(7,915) | ||||
|
Other current assets |
(20) |
622 | ||||
|
Current liabilities |
8,001 |
12,805 | ||||
|
Payments to settle vested liability share-based awards related to early retirements |
(3,538) |
(1,417) | ||||
|
Payments to settle vested liability share-based awards |
(3,925) |
(2,052) | ||||
|
Change in other long-term liabilities |
80 |
(106) | ||||
|
Change in other assets, net |
338 |
(448) | ||||
|
Net cash provided by operating activities |
86,852 |
94,387 | ||||
|
Cash flows from investing activities: |
||||||
|
Capital expenditures |
(227,292) |
(232,596) | ||||
|
Acquisitions |
(32,245) |
(222,883) | ||||
|
Proceeds from sales of mineral interest and equipment |
377 |
2,978 | ||||
|
Net cash used in investing activities |
(259,160) |
(452,501) | ||||
|
Cash flows from financing activities: |
||||||
|
Borrowings on senior secured revolving credit facility |
181,000 |
132,500 | ||||
|
Payments on senior secured revolving credit facility |
(176,000) |
(119,500) | ||||
|
Borrowings on term loans |
— |
382,500 | ||||
|
Payments on term loans |
— |
(84,149) | ||||
|
Payment of deferred financing costs |
— |
(19,779) | ||||
|
Redemption of 13% senior notes |
— |
(50,057) | ||||
|
Issuance of common stock |
175,459 |
122,450 | ||||
|
Payment of preferred stock dividends |
(7,895) |
(7,895) | ||||
|
Net cash provided by financing activities |
172,564 |
356,070 | ||||
|
Net change in cash and cash equivalents |
256 |
(2,044) | ||||
|
Balance, beginning of period |
968 |
3,012 | ||||
|
Balance, end of period |
$ |
1,224 |
$ |
968 | ||
Earnings Call Information
The Company will host a conference call on Thursday, March 3, 2016, to discuss fourth quarter 2015 financial and operating results.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Thursday, March 3, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website. |
|
Alternatively, you may join by telephone using the following numbers: | |
|
Toll Free: |
1-888-349-0096 |
|
Canada Toll Free: |
1-855-669-9657 |
|
International: |
1-412-902-0125 |
|
Request to join: |
Callon Petroleum Company Earnings and Results Call |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration, and operation of oil and natural gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review under the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production, future levels of production, the Company's 2016 guidance, capital budget amounts and expected cash flows, capital expenditure and other spending plans, ratios and other metrics, liquidity, commodity prices, reserve quantities and the present value thereof, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
3/2/2016Callon Petroleum Announces Agreement with Lone Star Value
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Feb. 26, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that it has entered into an agreement with Lone Star Value Management, LLC ("Lone Star Value"), pursuant to which the Board of Directors has agreed to nominate for re-election to the Board at the 2016 Annual Meeting Michael L. Finch, Larry D. McVay and John C. Wallace for three year terms. Mr. Wallace has indicated his intent to resign upon completion of the first two years of such three year term. Lone Star Value has agreed to vote in favor of the Company's nominees for election to the Board.
The agreement will be filed on a Form 8-K with the Securities and Exchange Commission.
About Callon Petroleum
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News Releases" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than historical facts, that address activities (including about the Pending Acquisition) that the Company assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company's management. Information concerning these risks and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, available on the Company's website or the SEC's website at www.sec.gov.
For further information contact:
Joe Gatto
Callon Petroleum, Senior Vice President and Treasurer
800-451-1294
SOURCE Callon Petroleum Company
Article Date
2/26/2016Callon Petroleum Company Announces Upcoming Investor Event
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Feb. 15, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced that senior management plans to participate in the upcoming investor event:
Credit Suisse 21st Annual Energy Summit
The Company will present at the 21st Annual Energy Summit hosted by Credit Suisse in Vail, CO on Tuesday, February 23, 2016 at 10:55 AM Mountain Time.
The live and archived webcast for this event will be accessible on Callon's website at www.callon.com in the "Investors" section.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the company's website at www.callon.com, and will be archived for subsequent review under the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
2/15/2016Callon Petroleum Company Announces Fourth Quarter and Full-Year 2015 Earnings Release and Conference Call Schedule
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Feb. 1, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) today announced that it will host a conference call on Thursday, March 3, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss fourth quarter and full-year financial and operating results. The Company plans to release fourth quarter and full-year 2015 results in addition to posting updated investor materials to its website after the close of markets on Wednesday, March 2, 2016.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
|
Date/Time: |
Thursday, March 3, 2016, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) |
|
Webcast: |
Live webcast will be available at www.callon.com in the "Investors" section of the website |
Alternatively, you may join by telephone using the following numbers:
|
Toll Free: |
1-888-349-0096 |
|
Canada Toll Free: |
1-855-669-9657 |
|
International: |
1-412-902-0125 |
|
Request to join: |
Callon Petroleum Company Earnings and Results Call |
An archive of the conference call webcast will also be available at www.callon.com in the "Investors" section of the website.
Callon Petroleum Company is an independent energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
For further information contact
Eric Williams
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
2/1/2016Callon Petroleum Company Announces Operational Update and 2015 Year-End Reserves
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NATCHEZ, Miss., Feb. 1, 2016 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today announced its outlook for 2016 activity and an operational update, including revised fourth quarter 2015 guidance estimates and proved reserve estimates for the year ended December 31, 2015.
Fred Callon, Chairman and CEO, commented "We delivered exceptional operational results in 2015 while pivoting our focus to our highest return investment opportunities in a difficult commodity environment. Achieved reductions in operating cost structure and well costs, combined with sustained performance from our Lower Spraberry program that has exceeded expectations, have positioned us to deliver returns on invested capital per well in excess of 30% at current strip pricing. As a result, Callon continues to generate capital efficient production growth while adding reserves at less than $10 per BOE based on our achieved cost to date. While these resilient returns support continued capital allocation, we also remain committed to achieving our goal of aligning corporate net cash flows with our capital spending in 2016. As a result, we plan to use the operational flexibility embedded in the business by transitioning to a one-rig drilling program, retaining the option to quickly redeploy the second rig to either our existing acreage or new acreage related to an acquisition opportunity. Based on current strip pricing and operational assumptions, we believe that Callon is on target to achieve our goal of being net cash flow neutral by mid-year 2016 while delivering economic growth above our fourth quarter 2015 production rate."
Central Midland Basin Acquisition
Callon recently completed the acquisition of an additional 4.9% working interest (3.7% net revenue interest) in its Casselman and Bohannon ("CaBo") fields for total cash consideration of $9.3 million, excluding customary purchase price adjustments. Highlights of the acquisition include:
The Company currently owns a 71.3% working interest (53.5% net revenue interest) in the CaBo area following the completion of this recent acquisition.
Operations Update
Recent Well Performance
Callon is currently producing from 83 horizontal wells that have been developed in five established zones: the Lower Spraberry, Upper and Lower Wolfcamp B, the Wolfcamp A and, most recently, the Middle Spraberry. The following table summarizes initial production ("IP") data from wells that reached peak producing in the fourth quarter of 2015:
|
24-Hour Peak Rate (BOE/d; Two-stream) |
30-Day Average Peak Rate (BOE/d; Two-stream) | |||||||||||||||
|
Well |
County |
Completed Lateral (ft) |
Peak 24-Hour IP |
Production (% oil) |
Per 1,000' |
Peak 30-Day IP |
Production (% oil) |
Per 1,000' | ||||||||
|
Lower Spraberry |
||||||||||||||||
|
Casselman 8 PSA 1 14 LS |
Midland |
4,930 |
989 |
91% |
201 |
736 |
89% |
149 | ||||||||
|
Casselman 8 PSA 2 15 SH |
Midland |
4,930 |
872 |
88% |
177 |
720 |
87% |
146 | ||||||||
|
Kendra-Annie 16SH |
Midland |
8,395 |
1,051 |
91% |
125 |
845 |
91% |
101 | ||||||||
|
Kendra-Annie 17SH |
Midland |
7,612 |
1,088 |
91% |
143 |
825 |
91% |
108 | ||||||||
|
Middle Spraberry |
||||||||||||||||
|
Casselman 8 PSA 1 22MS |
Midland |
4,930 |
1078 |
86% |
219 |
587 |
88% |
119 | ||||||||
|
Lower Wolfcamp B |
||||||||||||||||
|
University 27-34 04LH |
Reagan |
7,552 |
1,197 |
84% |
197 |
807 |
83% |
107 | ||||||||
With the recent Lower Spraberry activity, Callon continues to add to its portfolio of wells producing from this horizontal zone and refine its projections of estimated ultimate recoveries (EURs). Based on observations to date, the performance of Lower Spraberry wells in the Central Midland Basin has been tracking a type curve (normalized for 7,500' drilled lateral length) that is in excess of one million barrels of oil equivalent of gross production over the life of the well. As a result of this well performance, combined with an almost exclusive focus on the Lower Spraberry program for operated activity in the near-term, Callon expects full-year 2016 production growth of 20% - 25% compared to 2015 while reducing operational capital spending by over 50% relative to 2015.
2015 Proved Reserve Estimates
The Company recently completed the reserve audit for the year ended December 31, 2015 with its independent reserve auditor, DeGolyer and MacNaughton. As of December 31, 2015, Callon's estimated total proved reserves were 54.3 million BOE, a 65% increase over the previous year-end. The proved reserves estimate is comprised of 80% oil and 53% proved developed volumes. Included in total proved reserve estimates are 60 (gross) horizontal proved undeveloped locations. Estimates of the Company's year-end 2015 proved reserves used NYMEX prices of $50.28 per barrel ("Bbl") for crude oil and $2.59 per million British Thermal Units ("MMBtu") for natural gas, before adjustments for energy content, quality, midstream fees, and basis differentials, in accordance with Securities and Exchange Commission guidelines.
The present value of the Company's proved reserves, on a pre-tax basis and discounted at ten percent ("PV10"), decreased approximately 9% to $570.9 million as of December 31, 2015, resulting from 45% and 57% decreases in assumed oil and gas prices, respectively, offset in part by growth in total proved reserve volumes.
|
December 31, | ||||||
|
2014 |
2015 | |||||
|
Proved developed |
||||||
|
Oil (thousand barrels, "MBbls") |
14,006 |
22,257 | ||||
|
Natural gas (million cubic feet, "MMcf") |
25,171 |
38,157 | ||||
|
Thousand BOE ("MBOE") |
18,201 |
28,617 | ||||
|
Proved undeveloped |
||||||
|
Oil (MBbls) |
11,727 |
21,091 | ||||
|
Natural gas (MMcf) |
17,377 |
27,380 | ||||
|
MBOE |
14,623 |
25,654 | ||||
|
Total proved |
||||||
|
Oil (MBbls) |
25,733 |
43,348 | ||||
|
Natural gas (MMcf) |
42,548 |
65,537 | ||||
|
MBOE |
32,824 |
54,271 | ||||
|
Financial information |
||||||
|
Estimated pre-tax future net cash flows (a) |
$ |
1,330,628 |
$ |
1,160,808 | ||
|
Pre-tax discounted present value (PV-10) (a) (b) |
$ |
629,680 |
$ |
570,906 | ||
|
Standardized measure of discounted future net cash flows (a) (b) |
$ |
579,542 |
||||
|
(a) |
Includes a reduction for estimated plugging and abandonment costs that is reflected as a liability on the Company's balance sheet, in accordance with accounting for asset retirement obligations rules. | ||||
|
(b) |
The Company uses the financial measure "pre-tax discounted present value" which is a non-GAAP financial measure. The Company believes that pre-tax discounted present value, while not a financial measure in accordance with GAAP, is an important financial measure used by investors and independent oil and gas producers for evaluating the relative value of oil and natural gas properties and acquisitions because the tax characteristics of comparable companies can differ materially. Callon's pre-tax discounted present value may be reconciled to its standardized measure of discounted future net cash flows by reducing Callon's pre-tax discounted present value by the discounted future income taxes associated with such reserves. This reconciliation is not currently available for year-end 2015 and will be included, along with additional reserve disclosure, in the Company's 2015 Annual Report on Form 10-K. The total standardized measure calculated in accordance with the guidance issued by the FASB for disclosures about oil and gas producing activities for our proved reserves are calculated using the following input assumptions: | ||||
|
2014 |
2015 | ||||
|
Estimated discounted future income taxes relating to such future net revenues (millions) |
$ |
50.1 |
|||
|
Oil prices (per Bbl; adjusted to reflect all field-specific deductions and premiums including transportation, location differentials and crude quality) |
$ |
86.30 |
$ |
47.25 | |
|
Natural gas prices (per Mcf; adjusted to reflect Btu content, transportation and field-specific fees) |
$ |
6.38 |
$ |
2.73 | |
The table below illustrates the impact of crude oil and natural gas price assumptions on our estimated total proved reserve volumes for the year ended December 31, 2015. The volumes resulting from the sensitivity analysis, which are for illustrative purposes only, incorporate a number of assumptions and have not been audited by the Company's third-party engineer.
|
12-Month Average Prices |
Estimated Total | ||||||||
|
Pricing Scenarios |
Oil ($/Bbl) |
Natural gas ($/Mcf) |
(MBOE) | ||||||
|
December 31, 2015 reserve report |
$ |
$50.16 |
$ |
2.64 |
54,271 | ||||
|
Combined price sensitivity |
|||||||||
|
Oil and natural gas +10% |
$ |
55.18 |
$ |
2.90 |
54,778 | ||||
|
Oil and natural gas -10% |
$ |
45.14 |
$ |
2.38 |
53,623 | ||||
|
Oil price sensitivity |
|||||||||
|
Oil +10% |
$ |
55.18 |
$ |
2.64 |
54,718 | ||||
|
Oil -10% |
$ |
45.14 |
$ |
2.64 |
53,716 | ||||
|
Natural gas sensitivity |
|||||||||
|
Natural gas +10% |
$ |
50.16 |
$ |
2.90 |
54,339 | ||||
|
Natural gas -10% |
$ |
50.16 |
$ |
2.38 |
54,191 | ||||
2016 Outlook
Importantly, Callon has continued to secure well cost reductions over the last several months which, combined with current Lower Spraberry type curve estimates, contribute to internal rates of return in excess of 30% for 5,000' laterals and in excess of 35% for 9,000' laterals at current strip prices. These are the two horizontal lateral lengths that are planned for operated activity in 2016. Callon's operational activity is scheduled to focus almost exclusively on the Lower Spraberry in 2016 as the Company transitions from a two-rig to a one-rig program in the first quarter of 2016.
Key elements of the 2016 operational plan include:
Callon will retain the option to return the second drilling rig to service, with the ability to increase activity in its core properties within 30 - 45 days depending on capital allocation decisions and achievement of cash flow goals as the year progresses. Moreover, the retention of the second drilling rig positions Callon to maintain its quality crews and leading edge day-rate, and promptly direct activity to potential acquisition or joint venture opportunities that may require drilling operations to retain acreage in the near-term. Alternatively, the Company also has the option to terminate the rig contract subject to a declining payment schedule which would currently be calculated at approximately $4.5 million.
Liquidity
As of December 31, 2015, Callon had an outstanding balance of $40 million under its revolving credit facility which currently has a borrowing base of $300 million following an increase of $50 million in October 2015.
Commodity Risk Management
Callon's hedging portfolio currently includes the following contracts, representing approximately 63% of the midpoint of forecasted 2016 oil volumes for NYMEX WTI price contracts, 43% of the midpoint of forecasted 2016 oil volumes for Midland Basin basis differential price contracts and 37% of the midpoint of forecasted natural gas volumes for NYMEX Henry Hub price contracts.
|
2016 Average Daily Volumes | ||||||||
|
1Q |
2Q |
3Q |
4Q | |||||
|
Oil |
||||||||
|
Swap contracts |
||||||||
|
Volume (Bbl per day) |
2,000 |
2,000 |
2,000 |
2,000 | ||||
|
Average NYMEX swap price |
$58.23 |
$58.23 |
$58.23 |
$58.23 | ||||
|
Collar contracts with short puts ("three-way" collar) |
||||||||
|
Volume (Bbl per day) |
2,000 |
2,000 |
2,000 |
2,000 | ||||
|
Average NYMEX price |
||||||||
|
Ceiling |
$65.00 |
$65.00 |
$65.00 |
$65.00 | ||||
|
Floor (long put) |
$55.00 |
$55.00 |
$55.00 |
$55.00 | ||||
|
Short put |
$40.33 |
$40.33 |
$40.33 |
$40.33 | ||||
|
Collar contracts ("two-way" collar)(a) |
||||||||
|
Volume (Bbl per day) |
1,319 |
2,000 |
2,000 |
2,000 | ||||
|
Average NYMEX price |
||||||||
|
Ceiling |
$46.50 |
$46.50 |
$46.50 |
$46.50 | ||||
|
Floor |
$37.50 |
$37.50 |
$37.50 |
$37.50 | ||||
|
a) Contracts executed in conjunction with the sale of call options with a strike price of $50 on 1,836 barrels of oil per day in 2017. | ||||||||
|
Midland Basin Oil Differential |
||||||||
|
Swap contracts |
||||||||
|
Volume (Bbl per day) |
4,000 |
4,000 |
4,000 |
4,000 | ||||
|
Swap price spread to NYMEX |
$0.17 |
$0.17 |
$0.17 |
$0.17 | ||||
|
Natural Gas |
||||||||
|
Swap contracts |
||||||||
|
Volume (MMBtu per day) |
6,000 |
6,000 |
6,000 |
6,000 | ||||
|
Average NYMEX swap price |
$2.52 |
$2.52 |
$2.52 |
$2.52 | ||||
About Callon Petroleum
Callon is an independent energy company focused on the acquisition, development, exploration, and operation of oil and gas properties in the Permian Basin in West Texas.
This news release is posted on the Company's website at www.callon.com and will be archived there for subsequent review. It can be accessed from the "News" link on the top of the homepage.
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production, and associated returns on capital, future increases in production, the Company's 2015 and 2016 guidance, capital budget amounts, reserve quantities and the present value thereof, the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "plans" and words of similar meaning. Without limiting the foregoing, forward-looking statements contained in this news release specifically include the expectation of total reserve potential and EUR. These statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and gas prices, ability to drill and complete wells, operational, regulatory and environment risks, our ability to finance our activities and other risks more fully discussed in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K, available on our website or the SEC's website at www.sec.gov.
Other than 2015 year-end reserve estimates, the information in this release is unaudited and subject to revision. Audited and final results will be provided in the press release announcing fourth quarter and full year results ahead of the Company's earnings conference call scheduled for March 3, 2016. The Company's Annual Report on Form 10-K for the year ended December 31, 2015 is currently planned to be filed with the Securities and Exchange Commission on or about March 2, 2016.
Cautionary Note to Investors -- The SEC prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than "reserves," as that term is defined by the SEC. In this news release, Callon includes estimates of quantities of oil and gas using certain terms, such as "estimated ultimate recovery," "type curves," "EUR," or other descriptions of volumes of reserves, which terms include quantities of oil and gas that may not meet the SEC's definitions of proved, probable and possible reserves, and which the SEC's guidelines strictly prohibit Callon from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by Callon.
For further information contact:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
SOURCE Callon Petroleum Company
Article Date
2/1/2016Projects & Assets
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