HOUSTON, Aug. 3 ,
2022 /PRNewswire/ -- Callon Petroleum Company (NYSE: CPE)
("Callon" or the "Company") today reported results of operations
for the three and six months ended June 30, 2022.
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 2022 and Recent Highlights
- Delivered production of approximately 100.7 MBoe/d (61% oil and
81% liquids) in the second quarter of 2022
- Increased Delaware Basin well
productivity in 2022 by approximately 20% over 2021 as
co-development offset spacing and completions initiatives are
implemented
- Generated net cash provided by operating activities of
$372.3 million and adjusted free cash
flow of $125.6 million
- Reported net income of $348.0
million, or $5.62 per diluted
share, adjusted EBITDA of $418.5
million, and adjusted income of $227.8 million, or $3.68 per diluted share
- Achieved an operating margin of $67.58 per Boe, a sequential increase of over
15%
- Executed a refinancing transaction that extended maturities and
reduced term balances, with total debt balance of $2.5 billion at June
30 after continued debt reduction
"Callon continues to execute on important steps to solidify a
foundation for durable free cash flow generation" said Joe Gatto, President and Chief Executive
Officer. "In the inflationary environment that we operate in today,
and likely for the foreseeable future, operating margins are
critical to our cash generation objectives. In our most recent
quarter, our operating margins increased to almost $70 per Boe produced, our eighth consecutive
quarterly increase, which drove unhedged adjusted EBITDA of over
$600 million. When our industry
leading margins are combined with demonstrated well productivity
gains in the Delaware and drilling
and completion efficiencies across the portfolio, we expect to
drive more efficient conversion of EBITDA into free cash flow.
These cash flow benefits will be further enhanced in the near-term
with a steadily decreasing impact of financial hedges and a reduced
interest expense burden as debt continues to be
reduced."
Callon Operations Update
At June 30, 2022, Callon had 1,377 gross (1,229.3 net)
wells producing from established flow units in the Permian and
Eagle Ford. Net daily production for the three months ended
June 30, 2022 was 100.7 MBoe/d (61% oil and 81% liquids).
Production volumes for the quarter include the impact of the
following items:
- Increased Workover Activity – Callon experienced a
higher level of well failures than historical trends due to
intermittent power disruptions and the timing of useful equipment
lives. During these outages, Callon accelerated its artificial lift
initiatives, which provide production and runtime benefits,
primarily in Delaware Basin South.
Given the additional time to complete these conversion and repair
projects, which were roughly double the level executed in the first
quarter, downtime was elevated in the second quarter. Portions of
this activity were previously planned to occur later in the year
and, as a result, workovers and associated downtime for this
initiative should be reduced going forward relative to our previous
forecast.
- Conversion of Midland Basin Gathering Contract – Natural
gas and NGL volumes increased from the conversion of a Midland
Basin gathering contract from a percentage of proceeds to fee-based
which resulted in a reduction in oil cut for the quarter.
Operated drilling and completion activity for the three months
ended June 30, 2022 are summarized in
the table below:
|
|
Three Months Ended
June 30, 2022
|
|
|
Drilled
|
|
Completed
|
|
Placed on
Production
|
Region
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
Delaware
Basin
|
|
11
|
|
10.9
|
|
6
|
|
5.9
|
|
11
|
|
10.1
|
Midland
Basin
|
|
16
|
|
14.3
|
|
7
|
|
6.3
|
|
7
|
|
6.0
|
Eagle Ford
Shale
|
|
8
|
|
7.4
|
|
15
|
|
13.0
|
|
15
|
|
13.0
|
Total
|
|
35
|
|
32.6
|
|
28
|
|
25.2
|
|
33
|
|
29.1
|
For the three months ended June 30, 2022, Callon drilled 35
gross (32.6 net) wells and placed a combined 33 gross (29.1 net)
wells on production. Completions operations for the quarter
included 6 gross (5.9 net) wells in the Delaware Basin, 7 gross (6.3 net) wells in the
Midland Basin, and 15 gross (13.0 net) wells in the Eagle Ford
Shale. Callon placed 11 gross (10.1 net) wells on production in the
Delaware Basin, 7 gross (6.0 net)
wells in the Midland Basin, and 15 gross (13.0 net) wells in the
Eagle Ford Shale. The average lateral length for the wells
completed during the second quarter was 8,281 feet. Operated
completions during the second quarter consisted of 4 Upper Wolfcamp
A wells and 2 Lower Wolfcamp A wells in the Delaware Basin; 2 Lower Spraberry wells, 3
Wolfcamp A wells and 2 Wolfcamp B wells in the Midland Basin; and
15 lower Eagle Ford Shale wells.
Leverage and Liquidity Update
On June 9, 2022, Callon priced
$600 million principal amount of
7.50% Senior Notes due 2030 in a private offering. On June 24, 2022, the Company deposited with the
trustee the proceeds from the offering of the 7.50% Senior Notes
due 2030, along with borrowings under the Credit Facility, to
redeem all of its outstanding 6.125% Senior Notes due 2024 and 9.0%
Second Lien Notes due 2025. As of June 30,
2022, the drawn balance on the facility was $779.0 million and cash balances were
$6.1 million. The Company intends to
continue its application of organic free cash flow towards
repayment of debt balances related to the credit facility and other
debt instruments.
Third Quarter Activity Outlook and Guidance
Callon is currently running six rigs, with three rigs in the
Delaware Basin, two rigs in the
Midland Basin and one rig in the Eagle Ford which the Company will
be dropping in the coming days. Callon plans to utilize two to
three completion crews for the third quarter, supporting new
production across the Midland, Delaware and Eagle Ford positions.
For the third quarter, the Company expects to produce between
102 and 105 MBoe/d (63% oil) with between 38 and 42 gross wells (33
and 36 net) placed on production. In addition, Callon projects an
operational capital spending level of between $245 and $255
million on an accrual basis.
For full year 2022, Callon is increasing the bottom end of its
production guidance to between 102 and 105 MBoe/d (63% oil) to
reflect underlying Permian well performance that is above
expectations, and an increase in natural gas and NGL volumes from
the Midland Basin gathering contract conversion. The revised
guidance is available in the accompanying presentation.
Capital Expenditures
For the three months ended June 30, 2022, Callon incurred
$237.8 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, 2022
|
|
|
Operational
|
|
Capitalized
|
|
Capitalized
|
|
Total
Capital
|
|
|
Capital
(a)
|
|
Interest
|
|
G&A
|
|
Expenditures
|
|
|
(In
thousands)
|
Cash basis
(b)
|
|
$181,071
|
|
$19,958
|
|
$11,432
|
|
$212,461
|
Timing adjustments
(c)
|
|
65,110
|
|
4,459
|
|
—
|
|
69,569
|
Non-cash
items
|
|
(8,369)
|
|
1,887
|
|
(147)
|
|
(6,629)
|
Accrual
basis
|
|
$237,812
|
|
$26,304
|
|
$11,285
|
|
$275,401
|
|
|
(a)
|
Includes drilling,
completions, facilities and equipment, but excludes land, seismic
and asset retirement costs.
|
(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.
|
Hedge Portfolio Summary
As of July 29, 2022, Callon had
the following outstanding oil and natural gas derivative
contracts:
|
For the
Remainder
|
|
For the Full
Year
|
|
For the Full
Year
|
Oil Contracts
(WTI)
|
2022
|
|
2023
|
|
2024
|
Swap
Contracts
|
|
|
|
|
|
Total volume
(Bbls)
|
3,634,000
|
|
1,538,500
|
|
—
|
Weighted average price
per Bbl
|
$64.83
|
|
$81.04
|
|
$—
|
Collar Contracts
with Short Puts (Three-Way Collars)
|
|
|
|
|
|
Total volume
(Bbls)
|
—
|
|
1,825,000
|
|
—
|
Weighted average price
per Bbl
|
|
|
|
|
|
Ceiling (short
call)
|
$—
|
|
$90.00
|
|
$—
|
Floor (long
put)
|
$—
|
|
$70.00
|
|
$—
|
Floor (short
put)
|
$—
|
|
$50.00
|
|
$—
|
Collar
Contracts
|
|
|
|
|
|
Total volume
(Bbls)
|
2,392,000
|
|
2,730,000
|
|
—
|
Weighted average price
per Bbl
|
|
|
|
|
|
Ceiling (short
call)
|
$70.12
|
|
$87.15
|
|
$—
|
Floor (long
put)
|
$60.00
|
|
$71.92
|
|
$—
|
Short Call Swaption
Contracts (a)
|
|
|
|
|
|
Total volume
(Bbls)
|
—
|
|
—
|
|
1,830,000
|
Weighted average price
per Bbl
|
$—
|
|
$—
|
|
$80.30
|
|
|
|
|
|
|
Oil Contracts
(Midland Basis Differential)
|
|
|
|
|
|
Swap
Contracts
|
|
|
|
|
|
Total volume
(Bbls)
|
1,196,000
|
|
—
|
|
—
|
Weighted average price
per Bbl
|
$0.50
|
|
$—
|
|
$—
|
(a)
The 2024 short call swaption contracts have exercise expiration
dates of December 29, 2023.
|
|
For the
Remainder
|
|
For the Full
Year
|
Natural Gas
Contracts (Henry Hub)
|
2022
|
|
2023
|
Swap
Contracts
|
|
|
|
Total volume
(MMBtu)
|
6,150,000
|
|
—
|
Weighted average price
per MMBtu
|
$3.62
|
|
$—
|
Collar
Contracts
|
|
|
|
Total volume
(MMBtu)
|
5,510,000
|
|
6,640,000
|
Weighted average price
per MMBtu
|
|
|
|
Ceiling (short
call)
|
$5.96
|
|
$6.60
|
Floor (long
put)
|
$4.21
|
|
$4.48
|
|
|
|
|
Natural Gas
Contracts (Waha Basis Differential)
|
|
|
|
Swap
Contracts
|
|
|
|
Total volume
(MMBtu)
|
1,220,000
|
|
6,080,000
|
Weighted average price
per MMBtu
|
($0.75)
|
|
($0.75)
|
Operating and Financial Results
The following table presents summary information for the periods
indicated:
|
|
Three Months
Ended
|
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
Total
production
|
|
|
|
|
|
|
Oil (MBbls)
|
|
|
|
|
|
|
Permian
|
|
4,290
|
|
4,469
|
|
3,232
|
Eagle Ford
|
|
1,299
|
|
1,377
|
|
1,870
|
Total oil
|
|
5,589
|
|
5,846
|
|
5,102
|
|
|
|
|
|
|
|
Natural gas
(MMcf)
|
|
|
|
|
|
|
Permian
|
|
8,875
|
|
8,590
|
|
7,138
|
Eagle Ford
|
|
1,437
|
|
1,525
|
|
1,745
|
Total natural
gas
|
|
10,312
|
|
10,115
|
|
8,883
|
|
|
|
|
|
|
|
NGLs (MBbls)
|
|
|
|
|
|
|
Permian
|
|
1,622
|
|
1,455
|
|
1,216
|
Eagle Ford
|
|
232
|
|
252
|
|
299
|
Total NGLs
|
|
1,854
|
|
1,707
|
|
1,515
|
|
|
|
|
|
|
|
Total production
(MBoe)
|
|
|
|
|
|
|
Permian
|
|
7,391
|
|
7,356
|
|
5,637
|
Eagle Ford
|
|
1,771
|
|
1,883
|
|
2,460
|
Total barrels of
oil equivalent
|
|
9,162
|
|
9,239
|
|
8,097
|
|
|
|
|
|
|
|
Total daily
production (Boe/d)
|
|
|
|
|
|
|
Permian
|
|
81,216
|
|
81,733
|
|
61,948
|
Eagle Ford
|
|
19,469
|
|
20,922
|
|
27,033
|
Total barrels of
oil equivalent
|
|
100,685
|
|
102,655
|
|
88,981
|
Oil as % of total daily
production
|
|
61 %
|
|
63 %
|
|
63 %
|
|
|
|
|
|
|
|
Average realized
sales price (excluding impact of settled
derivatives)
|
|
|
|
|
Oil (per
Bbl)
|
|
|
|
|
|
|
Permian
|
|
$110.71
|
|
$94.52
|
|
$65.08
|
Eagle Ford
|
|
111.53
|
|
95.02
|
|
65.83
|
Total oil
|
|
$110.90
|
|
$94.64
|
|
$65.36
|
|
|
|
|
|
|
|
Natural gas (per
Mcf)
|
|
|
|
|
|
|
Permian
|
|
$6.14
|
|
$4.20
|
|
$2.68
|
Eagle Ford
|
|
7.27
|
|
5.18
|
|
2.82
|
Total natural
gas
|
|
$6.29
|
|
$4.35
|
|
$2.71
|
|
|
|
|
|
|
|
NGLs (per
Bbl)
|
|
|
|
|
|
|
Permian
|
|
$41.06
|
|
$40.25
|
|
$24.71
|
Eagle Ford
|
|
38.53
|
|
35.93
|
|
22.00
|
Total NGLs
|
|
$40.74
|
|
$39.61
|
|
$24.17
|
|
|
|
|
|
|
|
Average realized sales
price (per Boe)
|
|
|
|
|
|
|
Permian
|
|
$80.64
|
|
$70.29
|
|
$46.04
|
Eagle Ford
|
|
92.75
|
|
78.50
|
|
54.72
|
Total average
realized sales price
|
|
$82.98
|
|
$71.97
|
|
$48.68
|
|
|
|
|
|
|
|
Average realized
sales price (including impact of settled
derivatives)
|
|
|
|
|
Oil (per
Bbl)
|
|
$82.27
|
|
$73.78
|
|
$46.82
|
Natural gas (per
Mcf)
|
|
3.91
|
|
3.59
|
|
2.25
|
NGLs (per
Bbl)
|
|
40.74
|
|
37.34
|
|
23.21
|
Total average
realized sales price (per Boe)
|
|
$62.84
|
|
$57.52
|
|
$36.31
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
Revenues (in
thousands) (a)
|
|
|
|
|
|
|
Oil
|
|
|
|
|
|
|
Permian
|
|
$474,936
|
|
$422,404
|
|
$210,340
|
Eagle Ford
|
|
144,876
|
|
130,845
|
|
123,102
|
Total oil
|
|
$619,812
|
|
$553,249
|
|
$333,442
|
|
|
|
|
|
|
|
Natural gas
|
|
|
|
|
|
|
Permian
|
|
$54,469
|
|
$36,069
|
|
$19,152
|
Eagle Ford
|
|
10,444
|
|
7,907
|
|
4,928
|
Total natural
gas
|
|
$64,913
|
|
$43,976
|
|
$24,080
|
|
|
|
|
|
|
|
NGLs
|
|
|
|
|
|
|
Permian
|
|
$66,592
|
|
$58,563
|
|
$30,047
|
Eagle Ford
|
|
8,938
|
|
9,055
|
|
6,578
|
Total NGLs
|
|
$75,530
|
|
$67,618
|
|
$36,625
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
|
|
|
|
Permian
|
|
$595,997
|
|
$517,036
|
|
$259,539
|
Eagle Ford
|
|
164,258
|
|
147,807
|
|
134,608
|
Total
revenues
|
|
$760,255
|
|
$664,843
|
|
$394,147
|
|
|
|
|
|
|
|
Additional per Boe
data
|
|
|
|
|
|
|
Sales price
(b)
|
|
|
|
|
|
|
Permian
|
|
$80.64
|
|
$70.29
|
|
$46.04
|
Eagle Ford
|
|
92.75
|
|
78.50
|
|
54.72
|
Total sales
price
|
|
$82.98
|
|
$71.97
|
|
$48.68
|
|
|
|
|
|
|
|
Lease operating
expense
|
|
|
|
|
|
|
Permian
|
|
$7.33
|
|
$6.85
|
|
$4.60
|
Eagle Ford
|
|
10.59
|
|
8.99
|
|
8.34
|
Total lease operating
expense
|
|
$7.96
|
|
$7.29
|
|
$5.74
|
|
|
|
|
|
|
|
Production and ad
valorem taxes
|
|
|
|
|
|
|
Permian
|
|
$4.66
|
|
$3.89
|
|
$2.53
|
Eagle Ford
|
|
5.89
|
|
4.82
|
|
3.12
|
Total production and
ad valorem taxes
|
|
$4.90
|
|
$4.08
|
|
$2.71
|
|
|
|
|
|
|
|
Gathering,
transportation and processing
|
|
|
|
|
|
|
Permian
|
|
$2.69
|
|
$2.33
|
|
$2.75
|
Eagle Ford
|
|
1.93
|
|
1.92
|
|
1.84
|
Total gathering,
transportation and processing
|
|
$2.54
|
|
$2.25
|
|
$2.47
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
Permian
|
|
$65.96
|
|
$57.22
|
|
$36.16
|
Eagle Ford
|
|
74.34
|
|
62.77
|
|
41.42
|
Total operating
margin
|
|
$67.58
|
|
$58.35
|
|
$37.76
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
$11.94
|
|
$11.15
|
|
$10.27
|
General
and administrative
|
|
$1.19
|
|
$1.85
|
|
$1.37
|
Adjusted
G&A
|
|
|
|
|
|
|
Cash component
(c)
|
|
$1.54
|
|
$1.40
|
|
$0.71
|
Non-cash
component
|
|
$0.20
|
|
$0.14
|
|
$0.21
|
|
(a) Excludes sales of
oil and gas purchased from third parties.
|
(b) Excludes the impact of
settled derivatives.
|
(c) Excludes the change
in fair value and amortization of share-based incentive
awards.
|
Revenue. For the quarter ended June 30, 2022,
Callon reported revenue of $760.3
million, which excluded revenue from sales of commodities
purchased from a third party of $153.4
million. Revenues including the loss from the settlement of
derivative contracts ("Adjusted Total Revenue") were $575.7 million, reflecting the impact of a
$184.6 million loss from the
settlement of derivative contracts. Average daily production and
average realized prices, including and excluding the effects of
hedging, are detailed above.
Commodity Derivatives. For the quarter ended
June 30, 2022, the net loss on commodity derivative contracts
includes the following (in thousands):
|
Three Months
Ended
June 30,
2022
|
Loss on oil
derivatives
|
$75,910
|
Loss on natural gas
derivatives
|
5,738
|
Loss on NGL
derivatives
|
—
|
Loss on commodity
derivative contracts
|
$81,648
|
For the quarter ended June 30, 2022, the cash paid for
commodity derivative settlements includes the following (in
thousands):
|
Three Months
Ended
June 30,
2022
|
Cash paid on oil
derivatives, net
|
($162,334)
|
Cash paid on natural
gas derivatives, net
|
(21,808)
|
Cash paid on NGL
derivatives, net
|
(2,255)
|
Cash paid for
commodity derivative settlements, net
|
($186,397)
|
Lease Operating Expenses, including workover
("LOE"). LOE for the three months ended June 30, 2022
was $72.9 million, or $7.96 per Boe, compared to LOE of $67.3 million, or $7.29 per Boe, in the first quarter of 2022. The
sequential increase in LOE was primarily due to increases in
workover costs as well as certain operating costs such as fuel,
power and equipment rentals. The increase in LOE per Boe was due to
the increases in operating costs mentioned above as well as the
distribution of fixed costs spread over lower production
volumes.
Production and Ad Valorem Taxes. Production and ad
valorem taxes for the three months ended June 30, 2022 were
approximately 5.9% of total revenue excluding revenue from sales of
commodities purchased from a third-party and before the impact of
derivative settlements, or $4.90 per
Boe.
Gathering, Transportation and Processing. Gathering,
transportation and processing expense for the three months ended
June 30, 2022 was $23.3 million,
or $2.54 per Boe, as compared to
$20.8 million, or $2.25 per Boe, in the first quarter of 2022. This
increase in gathering, transportation and processing expense was
primarily due to a new contract entered into during the second
quarter of 2022 as well as inflationary cost increases.
Depreciation, Depletion and Amortization
("DD&A"). DD&A for the three months ended
June 30, 2022 was $11.94 per Boe
compared to $11.15 per Boe in the
first quarter of 2022. The increase in DD&A per Boe was
primarily attributable to higher capital expenditures during the
three months ended June 30, 2022 and increases in future
development cost assumptions.
General and Administrative Expense
("G&A"). G&A for the three months ended
June 30, 2022 and March 31, 2022 was $10.9 million and $17.1
million, respectively. G&A, excluding non-cash incentive
share-based compensation valuation adjustments, ("Adjusted
G&A") was $16.0 million for the
three months ended June 30, 2022 compared to $14.3 million for the first quarter of 2022. The
cash component of Adjusted G&A increased to $14.1 million for the three months ended
June 30, 2022 compared to $13.0
million for the first quarter of 2022 primarily as a result
of higher compensation costs during the quarter.
The following table reconciles total G&A to Adjusted G&A
- cash component and full cash G&A (in thousands):
|
Three Months
Ended
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
Total
G&A
|
$10,909
|
|
$17,121
|
|
$11,065
|
Change in the fair
value of liability share-based awards
(non-cash)
|
5,071
|
|
(2,851)
|
|
(3,555)
|
Adjusted G&A –
total
|
15,980
|
|
14,270
|
|
7,510
|
Equity-settled,
share-based compensation (non-cash)
|
(1,861)
|
|
(1,315)
|
|
(1,724)
|
Adjusted G&A – cash
component
|
$14,119
|
|
$12,955
|
|
$5,786
|
|
|
|
|
|
|
Capitalized cash
G&A
|
11,432
|
|
9,703
|
|
7,404
|
Full cash
G&A
|
$25,551
|
|
$22,658
|
|
$13,190
|
Income Tax. Callon provides for income taxes at the
statutory rate of 21% adjusted for permanent differences
expected to be realized. We recorded income tax expense of
$3.0 million and $0.5 million for the three months ended
June 30, 2022 and March 31, 2022, respectively. Since the
second quarter of 2020, we have concluded that it is more likely
than not that the net deferred tax assets will not be realized and
have recorded a full valuation allowance against our deferred tax
assets. As long as we continue to conclude that the valuation
allowance is necessary, we will not have significant deferred tax
expense or benefit.
Adjusted Income, Adjusted EBITDA and Unhedged Adjusted
EBITDA. The following tables reconcile the Company's net
income (loss) to adjusted income, adjusted EBITDA and unhedged
adjusted EBITDA:
|
Three Months
Ended
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
|
(In thousands,
except per share data)
|
Net income
(loss)
|
$348,009
|
|
$39,737
|
|
($11,695)
|
Loss on derivative
contracts
|
81,648
|
|
358,300
|
|
190,463
|
Loss on commodity
derivative settlements, net
|
(184,558)
|
|
(133,476)
|
|
(100,128)
|
Non-cash (benefit)
expense related to share-based awards
|
(3,210)
|
|
4,166
|
|
5,279
|
Merger, integration,
transaction and other
|
1,051
|
|
(13)
|
|
5,584
|
Loss on extinguishment
of debt
|
42,417
|
|
—
|
|
—
|
Tax effect on
adjustments above (a)
|
13,157
|
|
(48,085)
|
|
(21,252)
|
Change in valuation
allowance
|
(70,704)
|
|
(7,963)
|
|
2,079
|
Adjusted
income
|
$227,810
|
|
$212,666
|
|
$70,330
|
|
|
|
|
|
|
Net income (loss) per
diluted share
|
$5.62
|
|
$0.64
|
|
($0.25)
|
Adjusted income per
diluted share
|
$3.68
|
|
$3.43
|
|
$1.49
|
|
|
|
|
|
|
Basic weighted average
common shares outstanding
|
61,679
|
|
61,487
|
|
46,267
|
Diluted weighted
average common shares outstanding (GAAP)
|
61,909
|
|
62,065
|
|
46,267
|
Effect of potentially
dilutive instruments
|
—
|
|
—
|
|
862
|
Adjusted diluted
weighted average common shares outstanding
|
61,909
|
|
62,065
|
|
47,129
|
|
(a) Calculated
using the federal statutory rate of 21%.
|
|
Three Months
Ended
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
|
(In
thousands)
|
Net income
(loss)
|
$348,009
|
|
$39,737
|
|
($11,695)
|
Loss on derivative
contracts
|
81,648
|
|
358,300
|
|
190,463
|
Loss on commodity
derivative settlements, net
|
(184,558)
|
|
(133,476)
|
|
(100,128)
|
Non-cash (benefit)
expense related to share-based awards
|
(3,210)
|
|
4,166
|
|
5,279
|
Merger, integration,
transaction and other
|
1,051
|
|
(13)
|
|
5,584
|
Income tax (benefit)
expense
|
3,009
|
|
484
|
|
(478)
|
Interest expense,
net
|
20,691
|
|
21,558
|
|
24,634
|
Depreciation, depletion
and amortization
|
109,409
|
|
102,979
|
|
83,128
|
Loss on extinguishment
of debt
|
42,417
|
|
—
|
|
—
|
Adjusted
EBITDA
|
$418,466
|
|
$393,735
|
|
$196,787
|
Add: Loss on commodity
derivative settlements, net
|
184,558
|
|
133,476
|
|
100,128
|
Unhedged adjusted
EBITDA
|
$603,024
|
|
$527,211
|
|
$296,915
|
Adjusted Free Cash Flow. The following table
reconciles the Company's net cash provided by operating activities
to unhedged adjusted EBITDA, adjusted EBITDA and adjusted free cash
flow:
|
Three Months
Ended
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$372,325
|
|
$281,270
|
|
$175,603
|
Changes in working
capital and other
|
25,096
|
|
123,805
|
|
13,520
|
Changes in accrued
hedge settlements
|
1,839
|
|
(31,951)
|
|
(14,719)
|
Loss on commodity
derivative settlements, net
|
184,558
|
|
133,476
|
|
100,128
|
Cash interest expense,
net
|
19,206
|
|
19,842
|
|
22,383
|
Merger, integration and
transaction
|
—
|
|
769
|
|
—
|
Unhedged adjusted
EBITDA
|
$603,024
|
|
$527,211
|
|
$296,915
|
Less: Loss on commodity
derivative settlements, net
|
184,558
|
|
133,476
|
|
100,128
|
Adjusted
EBITDA
|
$418,466
|
|
$393,735
|
|
$196,787
|
Less: Operational
capital expenditures (accrual)
|
237,812
|
|
157,378
|
|
138,321
|
Less: Capitalized cash
interest
|
24,416
|
|
23,506
|
|
21,740
|
Less: Cash interest
expense, net
|
19,206
|
|
19,842
|
|
22,383
|
Less: Capitalized cash
G&A
|
11,432
|
|
9,703
|
|
7,404
|
Adjusted free cash
flow
|
$125,600
|
|
$183,306
|
|
$6,939
|
Adjusted Discretionary Cash Flow. The following
table reconciles the Company's net cash provided by operating
activities to adjusted discretionary cash flow:
|
Three Months
Ended
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$372,325
|
|
$281,270
|
|
$175,603
|
Changes in working
capital
|
23,342
|
|
126,997
|
|
11,709
|
Merger, integration and
transaction
|
—
|
|
769
|
|
—
|
Adjusted
discretionary cash flow
|
$395,667
|
|
$409,036
|
|
$187,312
|
Adjusted Total Revenue. Adjusted total revenue is
reconciled to total operating revenues, which excludes revenue from
sales of commodities purchased from a third party, in the following
table:
|
Three Months
Ended
|
|
June 30,
2022
|
|
March 31,
2022
|
|
June 30,
2021
|
|
(In
thousands)
|
Operating
revenues
|
|
|
|
|
|
Oil
|
$619,812
|
|
$553,249
|
|
$333,442
|
Natural gas
|
64,913
|
|
43,976
|
|
24,080
|
NGLs
|
75,530
|
|
67,618
|
|
36,625
|
Total operating
revenues
|
$760,255
|
|
$664,843
|
|
$394,147
|
Impact of settled
derivatives
|
(184,558)
|
|
(133,476)
|
|
(100,128)
|
Adjusted total
revenue
|
$575,697
|
|
$531,367
|
|
$294,019
|
Net Debt. The following table reconciles the Company's
total debt to net debt:
|
June 30,
2022
|
|
March 31,
2022
|
|
December 31,
2021
|
|
September 30,
2021
|
|
June 30,
2021
|
|
(In
thousands)
|
Total debt
|
$2,516,337
|
|
$2,623,282
|
|
$2,694,115
|
|
$2,809,610
|
|
$2,865,154
|
Unamortized premiums,
discount, and deferred loan costs, net
|
20,684
|
|
26,639
|
|
28,806
|
|
48,311
|
|
37,487
|
Adjusted total
debt
|
$2,537,021
|
|
$2,649,921
|
|
$2,722,921
|
|
$2,857,921
|
|
$2,902,641
|
Less: Cash and cash
equivalents
|
6,100
|
|
4,150
|
|
9,882
|
|
3,699
|
|
3,800
|
Net
debt
|
$2,530,921
|
|
$2,645,771
|
|
$2,713,039
|
|
$2,854,222
|
|
$2,898,841
|
Callon Petroleum
Company
Consolidated Balance
Sheets
(In thousands,
except par and share amounts)
(Unaudited)
|
|
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
|
$6,100
|
|
$9,882
|
Accounts
receivable, net
|
|
360,955
|
|
232,436
|
Fair value
of derivatives
|
|
—
|
|
22,381
|
Other
current assets
|
|
37,960
|
|
30,745
|
Total current
assets
|
|
405,015
|
|
295,444
|
Oil and natural gas
properties, full cost accounting method:
|
|
|
|
|
Evaluated
properties, net
|
|
3,573,282
|
|
3,352,821
|
Unevaluated properties
|
|
1,876,531
|
|
1,812,827
|
Total oil and natural
gas properties, net
|
|
5,449,813
|
|
5,165,648
|
Other property and
equipment, net
|
|
26,332
|
|
28,128
|
Deferred financing
costs
|
|
14,961
|
|
18,125
|
Other assets,
net
|
|
52,209
|
|
40,158
|
Total
assets
|
|
$5,948,330
|
|
$5,547,503
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$606,093
|
|
$569,991
|
Fair value
of derivatives
|
|
301,362
|
|
185,977
|
Other
current liabilities
|
|
134,581
|
|
116,523
|
Total current
liabilities
|
|
1,042,036
|
|
872,491
|
Long-term
debt
|
|
2,516,337
|
|
2,694,115
|
Asset retirement
obligations
|
|
57,427
|
|
54,458
|
Fair value of
derivatives
|
|
21,251
|
|
11,409
|
Other long-term
liabilities
|
|
51,942
|
|
49,262
|
Total
liabilities
|
|
3,688,993
|
|
3,681,735
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value, 130,000,000 and 78,750,000 shares authorized; 61,715,672
and 61,370,684 shares outstanding, respectively
|
|
617
|
|
614
|
Capital in
excess of par value
|
|
4,018,178
|
|
4,012,358
|
Accumulated deficit
|
|
(1,759,458)
|
|
(2,147,204)
|
Total stockholders'
equity
|
|
2,259,337
|
|
1,865,768
|
Total liabilities
and stockholders' equity
|
|
$5,948,330
|
|
$5,547,503
|
Callon Petroleum
Company
Consolidated
Statements of Operations
(In thousands,
except per share data)
(Unaudited)
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Operating
Revenues:
|
|
|
|
|
|
|
|
Oil
|
$619,812
|
|
$333,442
|
|
$1,173,061
|
|
$600,487
|
Natural gas
|
64,913
|
|
24,080
|
|
108,889
|
|
48,300
|
Natural gas
liquids
|
75,530
|
|
36,625
|
|
143,148
|
|
65,982
|
Sales of purchased oil
and gas
|
153,365
|
|
46,252
|
|
265,740
|
|
85,511
|
Total operating
revenues
|
913,620
|
|
440,399
|
|
1,690,838
|
|
800,280
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Lease
operating
|
72,940
|
|
46,460
|
|
140,268
|
|
86,913
|
Production and ad
valorem taxes
|
44,873
|
|
21,958
|
|
82,551
|
|
40,397
|
Gathering,
transportation and processing
|
23,267
|
|
20,031
|
|
44,042
|
|
38,012
|
Cost of purchased oil
and gas
|
155,397
|
|
49,249
|
|
266,668
|
|
90,166
|
Depreciation,
depletion and amortization
|
109,409
|
|
83,128
|
|
212,388
|
|
154,115
|
General and
administrative
|
10,909
|
|
11,065
|
|
28,030
|
|
27,864
|
Merger, integration
and transaction
|
—
|
|
—
|
|
769
|
|
—
|
Total operating
expenses
|
416,795
|
|
231,891
|
|
774,716
|
|
437,467
|
Income From
Operations
|
496,825
|
|
208,508
|
|
916,122
|
|
362,813
|
|
|
|
|
|
|
|
|
Other (Income)
Expenses:
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized amounts
|
20,691
|
|
24,634
|
|
42,249
|
|
49,050
|
Loss on derivative
contracts
|
81,648
|
|
190,463
|
|
439,948
|
|
404,986
|
Loss on extinguishment
of debt
|
42,417
|
|
—
|
|
42,417
|
|
—
|
Other (income)
expense
|
1,051
|
|
5,584
|
|
269
|
|
2,278
|
Total other
expense
|
145,807
|
|
220,681
|
|
524,883
|
|
456,314
|
|
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes
|
351,018
|
|
(12,173)
|
|
391,239
|
|
(93,501)
|
Income tax benefit
(expense)
|
(3,009)
|
|
478
|
|
(3,493)
|
|
1,399
|
Net Income
(Loss)
|
$348,009
|
|
($11,695)
|
|
$387,746
|
|
($92,102)
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Per Common Share:
|
|
|
|
|
|
|
|
Basic
|
$5.64
|
|
($0.25)
|
|
$6.30
|
|
($2.07)
|
Diluted
|
$5.62
|
|
($0.25)
|
|
$6.26
|
|
($2.07)
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
61,679
|
|
46,267
|
|
61,583
|
|
44,439
|
Diluted
|
61,909
|
|
46,267
|
|
61,956
|
|
44,439
|
Callon Petroleum
Company
Consolidated
Statements of Cash Flows
(In
thousands)
(Unaudited)
|
|
Three Months
Ended
June
30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$348,009
|
|
($11,695)
|
|
$387,746
|
|
($92,102)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
109,409
|
|
83,128
|
|
212,388
|
|
154,115
|
Amortization of
non-cash debt related items, net
|
1,485
|
|
2,252
|
|
3,201
|
|
4,508
|
Loss on
derivative contracts
|
81,648
|
|
190,463
|
|
439,948
|
|
404,986
|
Cash paid for
commodity derivative settlements, net
|
(186,397)
|
|
(85,409)
|
|
(287,922)
|
|
(127,571)
|
Loss on
extinguishment of debt
|
42,417
|
|
—
|
|
42,417
|
|
—
|
Non-cash
(benefit) expense related to share-based awards
|
(3,210)
|
|
5,279
|
|
956
|
|
12,887
|
Other,
net
|
2,306
|
|
3,294
|
|
5,200
|
|
4,511
|
Changes in
current assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
(14,072)
|
|
(21,674)
|
|
(130,394)
|
|
(67,357)
|
Other current assets
|
(3,317)
|
|
(4,567)
|
|
(7,497)
|
|
(7,423)
|
Accounts payable and accrued liabilities
|
(5,953)
|
|
14,532
|
|
(18,940)
|
|
26,714
|
Cash received for settlements of contingent consideration
arrangements, net
|
—
|
|
—
|
|
6,492
|
|
—
|
Net cash provided by operating activities
|
372,325
|
|
175,603
|
|
653,595
|
|
313,268
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(212,461)
|
|
(149,662)
|
|
(413,939)
|
|
(251,003)
|
Acquisition of oil and
gas properties
|
(6,536)
|
|
(1,447)
|
|
(15,945)
|
|
(2,215)
|
Proceeds from sales of
assets
|
106
|
|
31,611
|
|
4,590
|
|
31,611
|
Cash paid for
settlement of contingent consideration arrangement
|
—
|
|
—
|
|
(19,171)
|
|
—
|
Other, net
|
5,074
|
|
625
|
|
8,709
|
|
4,220
|
Net cash used in investing activities
|
(213,817)
|
|
(118,873)
|
|
(435,756)
|
|
(217,387)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Borrowings on Credit
Facility
|
1,051,000
|
|
433,500
|
|
1,724,000
|
|
736,500
|
Payments on Credit
Facility
|
(984,000)
|
|
(508,500)
|
|
(1,730,000)
|
|
(846,500)
|
Issuance of 7.50%
Senior Notes due 2030
|
600,000
|
|
—
|
|
600,000
|
|
—
|
Redemption of 6.125%
Senior Notes due 2024
|
(467,287)
|
|
—
|
|
(467,287)
|
|
—
|
Redemption of 9.00%
Second Lien Senior Secured Notes due 2025
|
(339,507)
|
|
—
|
|
(339,507)
|
|
—
|
Cash received for
settlement of contingent consideration arrangement
|
—
|
|
—
|
|
8,512
|
|
—
|
Payment of deferred
financing costs
|
(10,542)
|
|
—
|
|
(10,542)
|
|
—
|
Other, net
|
(6,222)
|
|
(2,280)
|
|
(6,797)
|
|
(2,317)
|
Net cash used in financing activities
|
(156,558)
|
|
(77,280)
|
|
(221,621)
|
|
(112,317)
|
Net change in cash and
cash equivalents
|
1,950
|
|
(20,550)
|
|
(3,782)
|
|
(16,436)
|
Balance,
beginning of period
|
4,150
|
|
24,350
|
|
9,882
|
|
20,236
|
Balance, end
of period
|
$6,100
|
|
$3,800
|
|
$6,100
|
|
$3,800
|
Non-GAAP Financial Measures
This news release refers to non-GAAP financial measures such as
"adjusted free cash flow," "adjusted EBITDA," "unhedged adjusted
EBITDA," "operating margin," "adjusted income," "adjusted income
per diluted share," "adjusted diluted weighted average common
shares outstanding," "adjusted discretionary cash flow," "adjusted
total revenue," "adjusted G&A," "full cash G&A," and "net
debt." 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 filings with the U.S. Securities and Exchange Commission (the
"SEC") and posted on our website.
- Adjusted free cash flow is a supplemental non-GAAP measure that
is defined by the Company as adjusted EBITDA less operational
capital expenditures (accrual), capitalized cash interest,
capitalized cash G&A (which excludes capitalized expense
related to share-based awards), and cash interest expense, net. We
believe adjusted free cash flow provides useful information to
investors because it 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 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 calculates 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,
impairment of evaluated oil and gas properties, non-cash
share-based compensation expense, merger, integration and
transaction expense, (gain) loss on extinguishment of debt, and
certain other 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 useful information
to investors because it 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 above may not be comparable to similarly titled
measures of other companies.
- Callon calculates unhedged adjusted EBITDA as adjusted EBITDA,
as defined above, excluding the impact of net settled derivative
instruments. Unhedged 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 unhedged adjusted EBITDA provides useful information
to investors because it provides additional information with
respect to our performance without the impact of our settled
derivative instruments. Because unhedged adjusted EBITDA excludes
some, but not all, items that affect net income (loss) and may vary
among companies, the unhedged adjusted EBITDA presented above may
not be comparable to similarly titled measures of other
companies.
- Callon believes that operating margin is a comparable metric
against other companies in the industry and is useful to investors
because it is an indicator of an oil and natural gas company's
operating profitability per unit of production. Operating margin is
a supplemental non-GAAP measure that is defined by the Company as
oil, natural gas, and NGL revenues sales price less lease operating
expense; production and ad valorem taxes; and gathering,
transportation and processing fees divided by total production for
the period.
- Adjusted income and adjusted income per diluted 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 income and adjusted income per diluted share are not
measures of financial performance under GAAP. Accordingly, neither
should be considered as a substitute for net income (loss),
operating income (loss), or other income data prepared in
accordance with GAAP. However, the Company believes that adjusted
income and adjusted income per diluted share provide additional
information with respect to our performance. Because adjusted
income and adjusted income per diluted share exclude some, but not
all, items that affect net income (loss) and may vary among
companies, the adjusted income and adjusted income per diluted
share presented above may not be comparable to similarly titled
measures of other companies.
- Adjusted diluted weighted average common shares outstanding 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, the most directly comparable GAAP financial
measure. When a net loss exists, all potentially dilutive
instruments are anti-dilutive to the net loss per common share and
therefore excluded from the computation of diluted weighted average
common shares outstanding. The effect of potentially dilutive
instruments are included in the computation of adjusted diluted
weighted average common shares outstanding for purposes of
computing adjusted income per diluted share.
- Adjusted discretionary cash flow is a supplemental non-GAAP
measure that Callon believes provides useful information to
investors because it 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 merger, integration and transaction
expenses. 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, or as a measure of liquidity, or as an
alternative to net income (loss).
- Callon believes that the non-GAAP measure of adjusted total
revenue (which is revenue including the gain or loss from the
settlement of derivative contracts) 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.
- Adjusted G&A is a supplemental non-GAAP financial measure
that excludes non-cash incentive share-based compensation valuation
adjustments and adjusted G&A - cash component further excludes
equity-settled, share-based compensation expenses. Callon believes
that the non-GAAP measure of adjusted G&A and adjusted G&A
- cash component are useful to investors because they provide for
greater comparability period-over-period. In addition, adjusted
G&A - cash component provides a meaningful measure of our
recurring G&A expense.
- Full cash G&A 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 is useful to investors because it provides 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.
- Net debt is a supplemental non-GAAP measure that is defined by
the Company as total debt excluding unamortized premiums, discount,
and deferred loan costs, less cash and cash equivalents. Net debt
should not be considered an alternative to, or more meaningful
than, total debt, the most directly comparable GAAP measure.
Management uses net debt to determine the Company's outstanding
debt obligations that would not be readily satisfied by its cash
and cash equivalents on hand. We believe this metric is useful to
analysts and investors in determining the Company's leverage
position since the Company has the ability to, and may decide to,
use a portion of its cash and cash equivalents to reduce debt. This
metric is sometimes presented as a ratio with Adjusted EBITDA in
order to provide investors with another means of evaluating the
Company's ability to service its existing debt obligations as well
as any future increase in the amount of such obligations. This
ratio is referred to by the Company as its leverage ratio.
Earnings Call Information
The Company will host a conference call on Thursday,
August 4, 2022, to discuss second quarter 2022 financial and
operating results, outlook and guidance for the remainder of 2022,
and current corporate strategy and initiatives.
Please join Callon Petroleum Company via the Internet for a
webcast of the conference call:
Date/Time:
Thursday, August 4, 2022, at 8:00 a.m.
Central Time (9:00 a.m. Eastern
Time)
Webcast:
Select "News and Events" under the "Investors" section of the
Company's website: www.callon.com.
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 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 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 wells anticipated to be
drilled and placed on production; future levels of development
activity and associated production, capital expenditures and cash
flow expectations; the Company's production and expenditure
guidance; estimated reserve quantities and the present value
thereof; future debt levels and leverage; 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; changes in
the supply of and demand for oil and natural gas, including as a
result of the COVID-19 pandemic and various governmental actions
taken to mitigate its impact or actions by, or disputes among
members of OPEC and other oil and natural gas producing countries
with respect to production levels or other matters related to the
price of oil; 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 development
activities at expected costs or at expected times or at all; our
inability to realize the benefits of recent transactions; currently
unknown risks and liabilities relating to the newly acquired assets
and operations; adverse actions by third parties involved with the
transactions; risks that are not yet known or material to us; and
other risks more fully discussed in our filings with 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. 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.
Contact Information
Kevin Smith
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
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SOURCE Callon Petroleum Company