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.
- 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%
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
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SOURCE Callon Petroleum Company