NATCHEZ, Miss., Aug. 5, 2015 /PRNewswire/ -- Callon
Petroleum Company (NYSE: CPE) ("Callon" or the "Company") today
reported results of operations for the three and six month periods
ended June 30, 2015. Presentation
slides accompanying this earnings release are available on the
Company's website at www.callon.com located within the Investors
(Events and Presentations) section of the site.
Key highlights for the second quarter of 2015 include:
- Net daily production of 9,516 barrels of oil equivalent per day
("BOE/d"), an increase of 11% compared to the first quarter of
2015, comprised of 79% oil volume
- Lease operating costs, including workovers, of $7.59 per barrel of oil equivalent ("BOE"), a
decrease of 16% compared to the first quarter of 2015
- Adjusted EBITDA, a non-GAAP financial measure(i), of
$31.7 million, an increase of 14%
compared to the first quarter of 2015
- Adjusted income available to common shareholders, a non-GAAP
financial measure(i), of $0.04 per diluted share based on total average
diluted shares outstanding of 66.0 million shares
- Increased annual production guidance midpoint by 6% to 9,600
BOE/d and established third quarter 2015 production guidance
midpoint at 9,800 BOE/d
"Our results for the quarter reflected improvements across all
aspects of the business," commented Fred
Callon, Chairman and Chief Executive Officer. "We delivered
double-digit production growth, while posting meaningful decreases
in both our operating cost structure and level of capital
expenditures. In addition to these important contributors to
capital efficiency, the productivity of our drilling program has
benefitted from ongoing completion enhancements and increasing
capital allocation to the Lower Spraberry. We believe that the
strength of our asset base, combined with our liquidity position
and financial discipline, position us to generate continued
production and reserve gains while progressing to a free cash flow
neutral position in 2016."
Recent Well Performance
Callon currently has 70 gross (61.9 net) horizontal wells
located in the Central and Southern Midland Basin, producing from
four established zones including the Lower Spraberry, the Wolfcamp
A, and the Upper and Lower Wolfcamp B. The Company's 2015
production has exceeded expectations primarily due to the extended
time performance of its Lower Spraberry drilling program, and
sustained improvement of Wolfcamp B wells in the Garrison Draw
field.
|
|
|
|
|
|
24-Hour Peak
Rate
(BOE/d;
Two-stream)
|
|
180-Day
Cumulative Production
(BOE;
Two-stream)
|
Well
|
|
County
|
|
Completed
Lateral (ft)
|
|
Production (% oil)
|
|
Per
1,000'
Lateral Feet
|
|
Production
(% oil)
|
|
Per
1,000'
Lateral Feet
|
Lower
Spraberry
|
|
|
|
|
|
|
|
|
|
|
|
|
Pecan Acres 22A1
4SH
|
|
Midland
|
|
4,646
|
|
1,114 (89%)
|
|
240
|
|
T.B.D.
|
|
T.B.D.
|
Casselman 40 4
LS
|
|
Midland
|
|
4,398
|
|
1,035 (89%)
|
|
235
|
|
84,233 (81%)
|
|
19,153
|
Kendra Annie
15SH
|
|
Midland
|
|
4,966
|
|
746 (88%)
|
|
150
|
|
92,332 (83%)
|
|
18,593
|
ST W 701LS
|
|
Midland
|
|
7,102
|
|
1,564 (86%)
|
|
220
|
|
145,507 (88%)
|
|
20,488
|
Neal
6522SH
|
|
Upton
|
|
6,632
|
|
788 (88%)
|
|
119
|
|
T.B.D.
|
|
T.B.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Garrison Draw
Wolfcamp B
|
|
|
|
|
|
|
|
|
|
|
|
|
University 27-34
1LH
|
|
Reagan
|
|
7,482
|
|
1,131 (88%)
|
|
151
|
|
80,107 (89%)
|
|
10,707
|
University 27-34
2LH
|
|
Reagan
|
|
7,366
|
|
795 (82%)
|
|
108
|
|
70,604 (88%)
|
|
9,585
|
University 27-34
3LH
|
|
Reagan
|
|
7,602
|
|
722 (82%)
|
|
95
|
|
73,852 (87%)
|
|
9,715
|
Operating and Financial Results
The following table presents summary information for the periods
indicated, and are followed by the Company's financial
statements.
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
Net
production:
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls)
|
|
|
685
|
|
|
638
|
|
|
405
|
Natural
gas (MMcf)
|
|
|
1,084
|
|
|
801
|
|
|
452
|
Total
production (MBOE)
|
|
|
866
|
|
|
771
|
|
|
480
|
Average
daily production (BOE/d)
|
|
|
9,516
|
|
|
8,567
|
|
|
5,275
|
% oil
(BOE basis)
|
|
|
79%
|
|
|
83%
|
|
|
84%
|
Oil and natural
gas revenues (in thousands):
|
|
|
|
|
|
|
|
|
|
Oil
revenue
|
|
$
|
36,093
|
|
$
|
27,909
|
|
$
|
37,710
|
Natural
gas revenue
|
|
|
3,149
|
|
|
2,482
|
|
|
2,792
|
Total, excluding
impact of cash-settled derivatives
|
|
$
|
39,242
|
|
$
|
30,391
|
|
$
|
40,502
|
Impact
of cash-settled derivatives
|
|
|
4,965
|
|
|
10,343
|
|
|
(1,646)
|
Total, including
impact of cash-settled derivatives
|
|
$
|
44,207
|
|
$
|
40,734
|
|
$
|
38,856
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Additional per BOE
data:
|
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
Sales
price, excluding impact of cash-settled derivatives
|
|
$
|
45.31
|
|
$
|
39.42
|
|
$
|
84.38
|
Sales
price, including impact of cash-settled derivatives
|
|
|
51.05
|
|
|
52.83
|
|
|
80.95
|
|
|
|
|
|
|
|
|
|
|
Lease
operating expense
|
|
$
|
7.59
|
|
$
|
9.03
|
|
$
|
9.09
|
Production taxes
|
|
|
3.41
|
|
|
2.94
|
|
|
4.72
|
Depletion, depreciation and amortization
|
|
|
20.31
|
|
|
23.48
|
|
|
24.96
|
Adjusted
G&A - total (a)
|
|
|
4.53
|
|
|
6.15
|
|
|
10.25
|
Adjusted
G&A - cash component (b)
|
|
|
3.85
|
|
|
5.37
|
|
|
8.19
|
|
|
(a)
|
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.
|
(b)
|
Excludes the
amortization of equity-settled share-based incentive awards and
corporate depreciation and amortization.
|
Total Revenue. For the quarter ended June 30, 2015, Callon reported total revenues of
$39.2 million, excluding the
$5.0 million impact of settled
derivative contracts, comprised of oil revenues of $36.1 million and natural gas revenues of
$3.1 million. Average daily
production for the quarter was 9,516 BOE/d compared to average
daily production of 8,567 BOE/d in the first quarter of 2015.
Average realized prices, including and excluding the effects of
hedging, are detailed below.
Hedging impacts. For the quarter ended June 30, 2015, Callon recognized the following
hedging-related items:
|
|
In
Thousands
|
|
Per
Unit
|
Oil
derivatives
|
|
|
|
|
|
|
Net gain on
settlements
|
|
$
|
4,511
|
|
$
|
6.59
|
Net loss on fair
value adjustments
|
|
|
(12,755)
|
|
|
|
Total
loss
|
|
$
|
(8,244)
|
|
|
|
|
|
|
|
|
|
|
Natural gas
derivatives
|
|
|
|
|
|
|
Net gain on
settlements
|
|
$
|
454
|
|
$
|
0.42
|
Net loss on fair
value adjustments
|
|
|
(459)
|
|
|
|
Total
loss
|
|
$
|
(5)
|
|
|
|
|
|
|
|
|
|
|
Total
derivatives
|
|
|
|
|
|
|
Net gain on
settlements
|
|
$
|
4,965
|
|
$
|
5.74
|
Net loss on fair
value adjustments
|
|
|
(13,214)
|
|
|
|
Total
loss on derivative contracts
|
|
$
|
(8,249)
|
|
|
|
Average realized prices, including and excluding the impact of
cash settled derivatives during the second quarter, were as
follows:
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
Average realized
sales price:
|
|
|
|
Oil (per
Bbl) (excluding impact of cash-settled derivatives)
|
|
$
|
52.69
|
Impact of cash-settled
derivatives
|
|
|
6.59
|
Oil (per
Bbl) (including impact of cash-settled derivatives)
|
|
$
|
59.28
|
|
|
|
|
Natural
gas (perMcf) (excluding impact of cash-settled
derivatives)
|
|
$
|
2.90
|
Impact of cash-settled
derivatives
|
|
|
0.42
|
Natural
gas (per Mcf) (including impact of cash-settled
derivatives)
|
|
$
|
3.32
|
|
|
|
|
Total
(per BOE) (excluding impact of cash-settled derivatives)
|
|
$
|
45.31
|
Impact of cash-settled
derivatives
|
|
|
5.74
|
Total
(per BOE) (including impact of cash-settled derivatives)
|
|
$
|
51.05
|
Lease Operating Expenses, including workover expense
("LOE"). LOE for the three months ended June 30, 2015 was $7.59 per BOE, compared to LOE of $9.03 per BOE in the first quarter of 2015.
Higher production volumes and lower workover expenses contributed
to the 16% per BOE decrease in the second quarter.
Production Taxes, including ad valorem taxes. Production
taxes were $3.41 per BOE in the
second quarter of 2015, representing approximately 7.5% of total
revenue before the impact of derivative settlements.
Depreciation, Depletion and Amortization
("DD&A"). DD&A for the three months ended
June 30, 2015 was $20.31 per BOE compared to $23.48 per BOE in the first quarter of 2015, with
the decrease in per unit DD&A being attributable to increases
in proved reserves relative to our depreciable asset base and
reductions in assumed future development costs related to
undeveloped proved reserves.
General and Administrative, net of amounts capitalized
("G&A"). G&A excluding certain non-recurring items
and non-cash incentive share-based compensation valuation
adjustments ("Adjusted G&A", a non-GAAP measure(i))
was $3.9 million, or $4.53 per BOE, for the current period compared to
$4.7 million, or $6.15 per BOE, for the first quarter of 2015. The
cash component of Adjusted G&A, which excludes the amortization
of equity-settled share-based incentive awards and corporate
depreciation and amortization, was $3.3
million, or $3.85 per BOE,
compared to $4.1 million or
$5.37 per BOE for the first quarter
of 2015. G&A and Adjusted G&A for the second quarter of
2015 are calculated as follows:
|
|
Recurring
|
|
Non-Recurring
|
|
|
G&A
expenses:
|
|
Cash
|
|
Non-Cash
|
|
Cash
|
|
Non-Cash
|
|
Total
|
Cash
G&A
|
|
$
|
3,332
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,332
|
Restricted stock share-based compensation
|
|
|
—
|
|
|
479
|
|
|
—
|
|
|
—
|
|
|
479
|
Change
in the fair value of liability share-based awards
|
|
|
—
|
|
|
1,607
|
|
|
—
|
|
|
—
|
|
|
1,607
|
Corporate depreciation & amortization
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
—
|
|
|
115
|
Threatened proxy contest
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|
—
|
|
|
230
|
Total G&A
expense:
|
|
$
|
3,332
|
|
$
|
2,201
|
|
$
|
230
|
|
$
|
—
|
|
$
|
5,763
|
Adjusted
G&A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
Change in the fair value of liability share-based awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,607)
|
Less:
Threatened proxy contest expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(230)
|
Adjusted G&A -
total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,926
|
Restricted stock share-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(479)
|
Corporate depreciation & amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(115)
|
Adjusted G&A -
cash component
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,332
|
Income (Loss) Available to Common Shareholders. The
Company reported a net loss available to common shareholders of
$6.9 million in the second quarter of
2015 and Adjusted income available to common shareholders
("Adjusted Income"), a non-GAAP measure(i), of
$2.8 million, or $0.04 per diluted share.
The following tables reconcile to the related GAAP measure the
Company's income (loss) available to common stockholders to
Adjusted Income and the Company's net income (loss) to Adjusted
EBITDA:
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
Income (loss)
available to common stockholders
|
|
$
|
(6,940)
|
|
$
|
(12,171)
|
|
$
|
2,767
|
Net loss
on derivatives, net of settlements
|
|
|
8,590
|
|
|
5,144
|
|
|
1,975
|
Rig
termination fee
|
|
|
—
|
|
|
2,367
|
|
|
—
|
Change
in the fair value of share-based awards
|
|
|
1,045
|
|
|
1,676
|
|
|
2,982
|
Early
retirement expenses
|
|
|
—
|
|
|
3,034
|
|
|
—
|
Withdrawn proxy contest expenses
|
|
|
150
|
|
|
72
|
|
|
85
|
Gain on
early redemption of debt
|
|
|
—
|
|
|
—
|
|
|
(2,083)
|
Adjusted
income
|
|
$
|
2,844
|
|
$
|
122
|
|
$
|
5,726
|
Adjusted income per
fully diluted common share
|
|
$
|
0.04
|
|
$
|
0.00
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
Net income
(loss)
|
|
$
|
(4,967)
|
|
$
|
(10,197)
|
|
$
|
4,740
|
Net loss
on derivatives, net of settlements
|
|
|
13,214
|
|
|
7,914
|
|
|
3,039
|
Change
in the fair value of share-based awards
|
|
|
2,086
|
|
|
3,058
|
|
|
5,397
|
Early
retirement expenses
|
|
|
—
|
|
|
4,668
|
|
|
—
|
Rig
termination fee
|
|
|
—
|
|
|
3,641
|
|
|
—
|
Gain on
early redemption of debt
|
|
|
—
|
|
|
—
|
|
|
(3,205)
|
Withdrawn proxy contest expenses
|
|
|
230
|
|
|
111
|
|
|
130
|
Acquisition expense
|
|
|
—
|
|
|
3
|
|
|
—
|
Income
tax expense (benefit)
|
|
|
(2,116)
|
|
|
(5,077)
|
|
|
4,128
|
Interest
expense
|
|
|
5,106
|
|
|
4,858
|
|
|
1,825
|
Depreciation, depletion and amortization
|
|
|
18,011
|
|
|
18,546
|
|
|
12,378
|
Accretion expense
|
|
|
134
|
|
|
209
|
|
|
173
|
Adjusted
EBITDA
|
|
$
|
31,698
|
|
$
|
27,734
|
|
$
|
28,605
|
Adjusted EBITDA per
diluted share
|
|
$
|
0.48
|
|
$
|
0.48
|
|
$
|
0.69
|
Discretionary Cash Flow. Discretionary cash flow, a
non-GAAP measure(i), for the second quarter of 2015 was
$25.9 million or $0.39 per diluted share, and is reconciled to
operating cash flow in the following table:
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(4,967)
|
|
$
|
(10,197)
|
|
$
|
4,740
|
Adjustments to
reconcile net income (loss) to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
18,011
|
|
|
18,546
|
|
|
12,378
|
Accretion expense
|
|
|
134
|
|
|
209
|
|
|
173
|
Amortization of non-cash debt related items
|
|
|
780
|
|
|
781
|
|
|
179
|
Amortization of deferred credit
|
|
|
—
|
|
|
—
|
|
|
—
|
Deferred
income tax (benefit) expense
|
|
|
(2,116)
|
|
|
(5,077)
|
|
|
4,128
|
Net loss
on derivatives, net of settlements
|
|
|
13,214
|
|
|
7,914
|
|
|
3,038
|
Gain on
early debt extinguishment
|
|
|
—
|
|
|
—
|
|
|
(3,205)
|
Rig
termination fee
|
|
|
—
|
|
|
3,641
|
|
|
—
|
Non-cash
expense related to equity share-based awards
|
|
|
(754)
|
|
|
86
|
|
|
(1,032)
|
Change
in the fair value of liability share-based awards
|
|
|
1,607
|
|
|
3,088
|
|
|
4,587
|
Discretionary cash
flow
|
|
$
|
25,909
|
|
$
|
18,991
|
|
$
|
24,986
|
|
|
|
|
|
|
|
|
|
|
Discretionary cash
flow per diluted share
|
|
$
|
0.39
|
|
$
|
0.33
|
|
$
|
0.60
|
Weighted average
dilutive shares outstanding
|
|
|
66,038
|
|
|
57,479
|
|
|
41,605
|
|
|
|
|
|
|
|
|
|
|
Changes
in working capital
|
|
|
438
|
|
|
(5,988)
|
|
|
(6,113)
|
Payments
to settle asset retirement obligations
|
|
|
(2,163)
|
|
|
258
|
|
|
(1,443)
|
Payments
to settle vested liability share-based awards
|
|
|
|
|
|
|
|
|
|
related
to early retirements
|
|
|
—
|
|
|
(3,538)
|
|
|
(1,417)
|
Payments
to settle vested liability share-based awards
|
|
|
(326)
|
|
|
(3,599)
|
|
|
(383)
|
Net cash provided by
operating activities
|
|
$
|
23,858
|
|
$
|
6,124
|
|
$
|
15,630
|
Operations Update
The following table summarizes the Company's drilling activity
for the three months ended June 30,
2015:
|
|
For the Three
Months Ended June 30, 2015
|
|
|
Drilled
|
|
Completed
(a)
|
|
Awaiting
Completion
|
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
Southern Midland
Basin
|
|
|
|
|
|
|
|
|
|
|
|
|
Horizontal
wells
|
|
5
|
|
5.0
|
|
5
|
|
5.0
|
|
2
|
|
2.0
|
Total
|
|
5
|
|
5.0
|
|
5
|
|
5.0
|
|
2
|
|
2.0
|
Central Midland
Basin
|
|
|
|
|
|
|
|
|
|
|
|
|
Vertical
wells
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Horizontal
wells
|
|
4
|
|
2.6
|
|
3
|
|
2.0
|
|
2
|
|
1.3
|
Total
|
|
4
|
|
2.6
|
|
3
|
|
2.0
|
|
2
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total vertical
wells
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Total horizontal
wells
|
|
9
|
|
7.6
|
|
8
|
|
7.0
|
|
4
|
|
3.3
|
Total
|
|
9
|
|
7.6
|
|
8
|
|
7.0
|
|
4
|
|
3.3
|
|
|
(a)
|
Completions
include wells drilled prior to the second quarter of
2015.
|
For the three months ended June 30,
2015, the Company accrued $45.1
million in operational capital expenditures, including
facilities, compared to $57.3 million
in the first quarter of 2015. Total capital expenditures, inclusive
of capitalized expenses, are detailed below on an accrual and cash
basis:
|
|
Three Months Ended
June 30, 2015
|
|
|
Operational
Capital
Expenditures
|
|
Capitalized
Interest
|
|
Capitalized
G&A
|
|
Total Capital
Expenditures
|
Cash basis
|
|
$
|
54,738
|
|
$
|
2,803
|
|
$
|
2,525
|
|
$
|
60,066
|
Timing adjustments
(a)
|
|
|
(9,623)
|
|
|
(89)
|
|
|
—
|
|
|
(9,712)
|
Non-cash
items
|
|
|
—
|
|
|
—
|
|
|
1,523
|
|
|
1,523
|
Accrual (GAAP)
basis
|
|
$
|
45,115
|
|
$
|
2,714
|
|
$
|
4,048
|
|
$
|
51,877
|
|
|
(a)
|
Includes timing
adjustments related to cash disbursements in the current period for
capital expenditures incurred in the prior period.
|
Full-Year 2015 Updated Guidance:
|
|
Full-Year
2015
|
|
|
Previous
|
|
Updated
|
Total production
(BOE/d)
|
|
8,800 -
9,300
|
|
9,450 -
9,750
|
% oil
|
|
79% - 81%
|
|
78% - 80%
|
% oil hedged
(a)
|
|
66%
|
|
64%
|
Weighted average oil
swap price
|
|
$69.04
|
|
$69.05
|
Expenses (per
BOE)
|
|
|
|
|
LOE, including
workovers
|
|
$8.50 -
$9.50
|
|
$8.00 -
$8.50
|
Production taxes,
including ad valorem
|
|
$2.75 -
$3.25
|
|
$2.75 -
$3.25
|
Adjusted G&A
(b)
|
|
$5.50 -
$5.75
|
|
$4.75 -
$5.25
|
Adjusted
G&A - cash component (c)
|
|
$4.00 -
$4.75
|
|
$4.00 -
$4.50
|
Third Quarter 2015 Guidance:
|
|
Second
Quarter
|
|
Third
Quarter
|
|
|
2015
Actual
|
|
2015
Guidance
|
Total production
(BOE/d)
|
|
9,516
|
|
9,600 -
10,000
|
% oil
|
|
79%
|
|
76% - 80%
|
% oil hedged
(a)
|
|
60%
|
|
76%
|
Weighted average oil
swap price
|
|
$70.79
|
|
$67.22
|
Expenses (per
BOE)
|
|
|
|
|
LOE, including
workovers
|
|
$7.59
|
|
$8.00 -
$8.75
|
Production taxes,
including ad valorem
|
|
$3.41
|
|
$2.75 -
$3.25
|
Adjusted G&A
(b)
|
|
$4.53
|
|
$4.50 -
$4.75
|
Adjusted
G&A - cash component (c)
|
|
$3.85
|
|
$3.75 -
$4.00
|
|
|
(a)
|
Based on the midpoint
of guidance.
|
(b)
|
Excludes certain
non-recurring expenses and non-cash valuation adjustments. See the
reconciliation provided within the Non-GAAP financial measures and
reconciliations section of this press release for a reconciliation
of G&A expense on a GAAP basis to Adjusted G&A
expense.
|
(c)
|
Excludes stock-based
compensation and corporate depreciation and
amortization.
|
Hedge Portfolio Summary:
|
|
For the Three
Months Ended
|
|
|
September
30,
|
|
December
31,
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
Oil
contracts
|
|
2015
|
|
2015
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
Swap contracts
(NYMEX):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
volume (MBbls)
|
|
|
520
|
|
|
442
|
|
|
91
|
|
|
91
|
|
|
92
|
|
|
92
|
Weighted
average price per Bbl
|
|
$
|
67.22
|
|
$
|
64.93
|
|
$
|
63.50
|
|
$
|
63.50
|
|
$
|
63.50
|
|
$
|
63.50
|
Swap contracts
(Midland basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Differentials):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MBbls)
|
|
|
382
|
|
|
327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Weighted
average price per Bbl
|
|
$
|
(2.39)
|
|
$
|
(2.38)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Collar contracts
combined with
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
short puts
(three-way collar):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(MBbls)
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|
91
|
|
|
92
|
|
|
92
|
Weighted average price per Bbl
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceiling (short
call)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
70.00
|
|
$
|
70.00
|
|
$
|
70.00
|
|
$
|
70.00
|
Floor (long
put)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
60.00
|
|
$
|
60.00
|
|
$
|
60.00
|
|
$
|
60.00
|
Short put
|
|
$
|
—
|
|
$
|
—
|
|
$
|
45.00
|
|
$
|
45.00
|
|
$
|
45.00
|
|
$
|
45.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
September
30,
|
|
December
31,
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
Natural gas
contracts
|
|
2015
|
|
2015
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
Collar contracts
combined with
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
short puts
(three-way collar):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(BBtu)
|
|
|
207
|
|
|
161
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Weighted
average price per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MMBtu
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceiling (short
call)
|
|
$
|
4.32
|
|
$
|
4.32
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Floor (long
put)
|
|
$
|
3.85
|
|
$
|
3.85
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Short put
|
|
$
|
3.25
|
|
$
|
3.25
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Swap
contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
volume (BBtu)
|
|
|
219
|
|
|
228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Weighted
average price per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MMBtu
|
|
$
|
3.98
|
|
$
|
3.96
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Short call
contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short
call volume (BBtu)
|
|
|
110
|
|
|
111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Short
call price per MMBtu
|
|
$
|
5.00
|
|
$
|
5.00
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
i.
|
See "Non-GAAP
Financial Measures and Reconciliations" included within this
release for related disclosures and calculations
|
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures as
"discretionary cash flow," "Adjusted Income," "Adjusted G&A"
and "Adjusted EBITDA." 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 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 and discretionary cash flow per
diluted share are 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), remaining asset retirement
obligations related to our divested offshore properties,
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
below. Prior to being tax-effected and excluded, the amounts
reflected in the determination of Adjusted Income and Adjusted
Income per diluted share below 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 its 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.
Callon Petroleum
Company
Consolidated
Balance Sheets
(in thousands,
except par and per share values and share data)
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,028
|
|
$
|
968
|
Accounts
receivable
|
|
34,499
|
|
|
30,198
|
Fair value of
derivatives
|
|
6,889
|
|
|
27,850
|
Other current
assets
|
|
1,525
|
|
|
1,441
|
Total current
assets
|
|
44,941
|
|
|
60,457
|
Oil and natural gas
properties, full cost accounting method:
|
|
|
|
|
|
Evaluated properties
|
|
2,207,999
|
|
|
2,077,985
|
Less
accumulated depreciation, depletion and amortization
|
|
(1,514,036)
|
|
|
(1,478,355)
|
Net oil
and natural gas properties
|
|
693,963
|
|
|
599,630
|
Unevaluated properties
|
|
131,121
|
|
|
142,525
|
Total oil and natural
gas properties
|
|
825,084
|
|
|
742,155
|
Other property and
equipment, net
|
|
7,874
|
|
|
7,118
|
Restricted
investments
|
|
3,299
|
|
|
3,810
|
Deferred tax
asset
|
|
46,497
|
|
|
44,688
|
Deferred financing
costs
|
|
16,639
|
|
|
18,200
|
Other assets,
net
|
|
658
|
|
|
342
|
Total
assets
|
$
|
944,992
|
|
$
|
876,770
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
65,792
|
|
$
|
76,753
|
Accrued
interest
|
|
5,974
|
|
|
5,993
|
Cash-settled
restricted stock unit awards
|
|
8,172
|
|
|
3,856
|
Asset retirement
obligations
|
|
872
|
|
|
4,747
|
Deferred tax
liability
|
|
830
|
|
|
6,214
|
Fair value of
derivatives
|
|
1,622
|
|
|
1,249
|
Total current
liabilities
|
|
83,262
|
|
|
98,812
|
Senior secured
revolving credit facility
|
|
75,000
|
|
|
35,000
|
Secured second lien
term loan
|
|
300,000
|
|
|
300,000
|
Asset retirement
obligations
|
|
3,249
|
|
|
1,927
|
Cash-settled
restricted stock unit awards
|
|
3,086
|
|
|
7,175
|
Other long-term
liabilities
|
|
219
|
|
|
121
|
Total
liabilities
|
|
464,816
|
|
|
443,035
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock,
series A cumulative, $0.01 par value and $50.00 liquidation
preference, 2,500,000 shares authorized: 1,578,948 and 1,578,948
shares outstanding, respectively
|
|
16
|
|
|
16
|
Common stock, $0.01
par value, 110,000,000 shares authorized; 66,190,660 and 55,225,288
shares outstanding, respectively
|
|
662
|
|
|
552
|
Capital in excess of
par value
|
|
591,604
|
|
|
526,162
|
Accumulated
deficit
|
|
(112,106)
|
|
|
(92,995)
|
Total stockholders'
equity
|
|
480,176
|
|
|
433,735
|
Total liabilities and
stockholders' equity
|
$
|
944,992
|
|
$
|
876,770
|
Callon Petroleum
Company
Consolidated
Statements of Operations
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
sales
|
|
$
|
36,093
|
|
$
|
37,710
|
|
$
|
64,002
|
|
$
|
68,619
|
Natural
gas sales
|
|
|
3,149
|
|
|
2,792
|
|
|
5,631
|
|
|
5,168
|
Total operating
revenues
|
|
|
39,242
|
|
|
40,502
|
|
|
69,633
|
|
|
73,787
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating expenses
|
|
|
6,575
|
|
|
4,363
|
|
|
13,534
|
|
|
8,593
|
Production taxes
|
|
|
2,952
|
|
|
2,265
|
|
|
5,217
|
|
|
4,182
|
Depreciation, depletion and amortization
|
|
|
17,587
|
|
|
11,982
|
|
|
35,691
|
|
|
22,520
|
General
and administrative
|
|
|
5,763
|
|
|
9,639
|
|
|
17,865
|
|
|
20,446
|
Accretion expense
|
|
|
134
|
|
|
173
|
|
|
343
|
|
|
401
|
Rig
termination fee
|
|
|
—
|
|
|
—
|
|
|
3,641
|
|
|
—
|
Gain on
sale of other property and equipment
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,080)
|
Total operating
expenses
|
|
|
33,011
|
|
|
28,422
|
|
|
76,291
|
|
|
55,062
|
Income
(loss) from operations
|
|
|
6,231
|
|
|
12,080
|
|
|
(6,658)
|
|
|
18,725
|
Other (income)
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
5,106
|
|
|
1,825
|
|
|
9,964
|
|
|
2,802
|
Gain on
early extinguishment of debt
|
|
|
—
|
|
|
(3,205)
|
|
|
—
|
|
|
(3,205)
|
Loss on
derivative contracts
|
|
|
8,249
|
|
|
4,685
|
|
|
5,820
|
|
|
7,198
|
Other
income
|
|
|
(41)
|
|
|
(93)
|
|
|
(85)
|
|
|
(142)
|
Total other
expenses
|
|
|
13,314
|
|
|
3,212
|
|
|
15,699
|
|
|
6,653
|
Income
(loss) before income taxes
|
|
|
(7,083)
|
|
|
8,868
|
|
|
(22,357)
|
|
|
12,072
|
Income tax expense
(benefit)
|
|
|
(2,116)
|
|
|
4,128
|
|
|
(7,193)
|
|
|
5,469
|
Net income
(loss)
|
|
|
(4,967)
|
|
|
4,740
|
|
|
(15,164)
|
|
|
6,603
|
Preferred stock
dividends
|
|
|
(1,973)
|
|
|
(1,973)
|
|
|
(3,947)
|
|
|
(3,947)
|
Income (loss)
available to common stockholders
|
|
$
|
(6,940)
|
|
$
|
2,767
|
|
$
|
(19,111)
|
|
$
|
2,656
|
Income (loss)
per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.11)
|
|
$
|
0.07
|
|
$
|
(0.31)
|
|
$
|
0.07
|
Diluted
|
|
$
|
(0.11)
|
|
$
|
0.07
|
|
$
|
(0.31)
|
|
$
|
0.06
|
Shares
used in computing income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
66,038
|
|
|
40,606
|
|
|
61,759
|
|
|
40,467
|
Diluted
|
|
|
66,038
|
|
|
41,605
|
|
|
61,759
|
|
|
41,652
|
Callon Petroleum
Company
Consolidated
Statements of Cash Flows
(in
thousands)
|
|
|
|
Six Months Ended
June 30,
|
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(15,164)
|
|
$
|
6,603
|
Adjustments to
reconcile net income (loss) to cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
36,557
|
|
|
22,976
|
Accretion expense
|
|
|
343
|
|
|
401
|
Amortization of non-cash debt related items
|
|
|
1,561
|
|
|
298
|
Amortization of deferred credit
|
|
|
—
|
|
|
(433)
|
Deferred
income tax (benefit) expense
|
|
|
(7,193)
|
|
|
5,469
|
Net loss
on derivatives, net of settlements
|
|
|
21,129
|
|
|
4,677
|
Gain on
sale of other property and equipment
|
|
|
—
|
|
|
(1,080)
|
Non-cash
gain for early debt extinguishment
|
|
|
—
|
|
|
(3,205)
|
Non-cash
expense related to equity share-based awards
|
|
|
(668)
|
|
|
(36)
|
Change
in the fair value of liability share-based awards
|
|
|
4,695
|
|
|
8,070
|
Payments
to settle asset retirement obligations
|
|
|
(1,905)
|
|
|
(1,469)
|
Changes
in current assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(6,946)
|
|
|
(5,268)
|
Other current
assets
|
|
|
(85)
|
|
|
265
|
Current
liabilities
|
|
|
5,549
|
|
|
2,014
|
Payments
to settle vested liability share-based awards related to early
retirements
|
|
|
(3,538)
|
|
|
(1,417)
|
Payments
to settle vested liability share-based awards
|
|
|
(3,925)
|
|
|
(2,052)
|
Change
in other long-term liabilities
|
|
|
100
|
|
|
—
|
Change
in other assets, net
|
|
|
(528)
|
|
|
(216)
|
Net cash provided
by operating activities
|
|
|
29,982
|
|
|
35,597
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(130,847)
|
|
|
(127,219)
|
Proceeds from sales
of mineral interests and equipment
|
|
|
326
|
|
|
2,267
|
Net cash used in
investing activities
|
|
|
(130,521)
|
|
|
(124,952)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Borrowings on credit
facility
|
|
|
103,000
|
|
|
150,000
|
Payments on credit
facility
|
|
|
(63,000)
|
|
|
(55,610)
|
Payment of deferred
financing costs
|
|
|
—
|
|
|
(2,928)
|
Issuance of common
stock
|
|
|
65,546
|
|
|
—
|
Payment of preferred
stock dividends
|
|
|
(3,947)
|
|
|
(3,947)
|
Net cash provided
by financing activities
|
|
|
101,599
|
|
|
87,515
|
Net change in cash
and cash equivalents
|
|
|
1,060
|
|
|
(1,840)
|
Balance,
beginning of period
|
|
|
968
|
|
|
3,012
|
Balance,
end of period
|
|
$
|
2,028
|
|
$
|
1,172
|
Earnings Call Information
The Company will host a conference call on Thursday, August 6, 2015 to discuss second
quarter 2015 financial and operating results.
Please join Callon Petroleum Company via the Internet for a
webcast of the conference call:
Date/Time:
|
Thursday, August 6,
2015, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
|
Webcast:
|
Live webcast will be
available at www.callon.com in the "Investors" section of the
website.
|
Alternatively, you may join by telephone using the following
numbers:
Toll Free:
|
1-888-349-0096
|
Canada Toll
Free:
|
1-855-669-9657
|
International:
|
1-412-902-0125
|
Request to
join:
|
Callon Petroleum
Company Earnings Call
|
An archive of the conference call webcast will also be available
at www.callon.com in 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 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 projections and other forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements include all
statements, as well as statements including the words "believe,"
"expect," "plans" and words of similar meaning. These projections
and 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 are 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:
Joe Gatto
Chief Financial Officer, Senior Vice President and Treasurer
1-800-451-1294
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/callon-petroleum-company-announces-second-quarter-2015-results-and-increases-annual-production-guidance-300124432.html
SOURCE Callon Petroleum Company