Current CPE Stock Info

Paying down debt, looking at Permian acquisitions

On March 3, 2016, Callon Petroleum (ticker: CPE) announced its intent to issue a total allotment of 15,250,000 shares of common stock including the underwriter’s option, resulting in net proceeds of $86.2 million.

Callon intends to use the proceeds from the offering to pay down the existing balance on their revolving credit facility, a portion of which was used to finance earlier acquisitions.

Callon Petroleum also announced that the company will use any remaining balance to target and assess future acquisitions in the Permian Basin. As several other companies have fallen victim to depleted commodity prices, Callon has positioned itself to grow and potentially acquire any quality assets that may need to be offloaded by companies seeking money for assets.

Earnings Results

Callon Petroleum Company reported results of operations for the fourth quarter and year-end 2015 periods on March 2, 2016.

Financial and operational highlights from the fourth quarter 2015 and year end include:

  • Net daily production of 10,598 barrels of oil equivalent per day (“BOE/d”), an increase of 9% compared to the third quarter of 2015, comprised of 80% oil volume
  • Lease operating expense, including workovers, of $6.47 per barrel of oil equivalent (“BOE”), a decrease of 19% from the third quarter of 2015
  • Adjusted EBITDA of $31.8 million, representing a margin of approximately 73% of Adjusted Total Revenues.
  • Adjusted Income available to common shareholders, of $0.05 per diluted share based on total average diluted shares outstanding of 73.0 million shares
  • “Drill-bit” finding and development costs of $8.98 per BOE for the year ended December 31, 2015 related to a 22 million BOE (“MMBOE”) increase in total proved reserves from extensions and discoveries, net of revisions.
  • Increased total hedging portfolio to 64% and 36% of expected 2016 oil and natural gas volumes, respectively, based on the midpoint of current estimates
  • Exchanged 719,000 common shares for 120,000 shares of Series A cumulative preferred stock with a total liquidation value of $6 million

“We continue to deliver top-line growth while also achieving meaningful reductions in both our operating cost structure and capital expenditures per well,” commented Fred Callon, Chairman and Chief Executive Officer. “We have proactively modified our operational plans over the last year with the goal of living within our means to provide us a high degree of flexibility in the current commodity price environment. As a result of these operational moves, combined with strong well performance and capital efficiency, we believe we are positioned to achieve this goal in the second quarter of 2016, ahead of our previous forecasted timing.”

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