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:
- 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
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 (excluding impact of cash settled
derivatives)
|
|
|
|
|
|
|
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 (including impact of cash settled
derivatives)
|
|
|
|
|
|
|
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
March 31, 2018
|
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.
- 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.
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