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:
- 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
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
production
|
|
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