NATCHEZ, Miss., May 4, 2016 /PRNewswire/ -- Callon Petroleum
Company (NYSE: CPE) ("Callon" or the "Company") today reported
results of operations for the three months ended March 31, 2016.
Presentation slides accompanying this earnings release are
available on the Company's website at www.callon.com located on the
"Events and Presentations" page within the Investors section of the
site.
Financial and operational highlights for the first quarter of
2016 and other recent data points include:
- Net daily production of 12,440 barrels of oil equivalent per
day ("BOE/d"), an increase of 17% compared to the fourth quarter of
2015, comprised of 79% oil volume
- Adjusted Total Revenues of $38.4
million, a non-GAAP financial measure(i)
- Lease operating expense, including workovers, of $6.15 per barrel of oil equivalent ("BOE"), a
decrease of 5% from the fourth quarter of 2015
- Adjusted cash G&A, a non-GAAP financial
measure(i), of $3.55 per
BOE, a decrease of 7% from the previous quarter
- Adjusted EBITDA, a non-GAAP financial measure(i), of
$25.6 million, representing a margin
of approximately 67% of Adjusted Total Revenues, a non-GAAP
financial measure(i)
- Adjusted Income per fully diluted common share, a non-GAAP
financial measure(i), of $0.00 and a GAAP loss per diluted common share of
$0.51
- Announced two Midland Basin transactions and the establishment
of a new core operating area in Howard County
- Raised over $300 million in
common stock through public offerings to fund pending
acquisitions
i.
|
See "Non-GAAP
Financial Measures and Reconciliations" included within this
release for related disclosures and calculations
|
"Callon's performance continues to benefit from the strength of
our core asset position and persistent focus on capital efficiency
and operating costs. Our focus on day-to-day execution and
enhancing our completion designs has positioned us to achieve our
goal of living within cash flow while delivering efficient asset
growth," commented Fred Callon,
Chairman and Chief Executive Officer. "As we look forward into
2016, we are preparing to overlay our operational model across an
expanded footprint, including our pending Howard County
transaction, with an increased level of drilling activity
commencing as early as October 2016.
In the interim, we intend to use the anticipated free cash flow
generation from our base drilling program to solidify our financial
position in anticipation of this acceleration in activity."
Operations Update
At March 31, 2016, Callon had 89
gross (78.3 net) horizontal wells producing in the Midland Basin
from five established zones. Our net daily production for the three
months ended March 31, 2016, grew
approximately 45% to 12,440 BOE/d (approximately 79% oil) as
compared to the same period of 2015. Sequentially, we grew
production more than 17% compared to the fourth quarter of
2015.
The following table summarizes the Company's drilling activity
for the period indicated:
|
|
For the Three
Months Ended March 31, 2016
|
|
|
Drilled
|
|
Completed
(a)
|
|
Placed on
Production
|
|
Awaiting
Completion
|
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
Central Midland Basin
horizontal wells
|
|
5
|
|
4.3
|
|
9
|
|
7.1
|
|
8
|
|
6.1
|
|
2
|
|
1.8
|
|
|
(a)
|
Completions include
wells drilled prior to 2016.
|
During the first quarter, we placed on production 8 gross (6.1
net) Lower Spraberry wells, all in our CaBo area, with an average
lateral length of approximately 5,000'. Since placing our first two
Lower Spraberry wells on production in November 2014, we now have 22 wells producing
from this zone with lateral lengths ranging from 5,000' to 10,000'.
We are currently completing a three-well pad in our Pecan Acres
field targeting the lower section of the Lower Spraberry zone
("LLS") and are drilling a new three-well pad in our Carpe Diem field with two of the wells targeting
the upper section of the Lower Spraberry ("ULS") and the third well
targeting the LLS. This pad will be drilled on a 12 wells per
section spacing and represents our ongoing efforts to evaluate
tighter well density in this zone. In addition to our own planned
tests of tighter spacing in 2016, we will continue to monitor
offsetting activity that is expected to test well spacing density
of up to 20 wells per section in the future.
For the three months ended March 31,
2016, we accrued $35.0 million
in operational capital expenditures, including facilities
expenditures of $5.4 million,
compared to $36.4 million in the
fourth quarter of 2015. Total capital expenditures, inclusive of
capitalized expenses, are detailed below on an accrual and cash
basis (in thousands):
|
|
Three Months Ended
March 31, 2016
|
|
|
Operational
Capital Expenditures
|
|
Capitalized
Interest
|
|
Capitalized
G&A
|
|
Total Capital
Expenditures
|
Cash basis
|
|
$
|
52,991
|
|
$
|
2,338
|
|
$
|
3,329
|
|
$
|
58,658
|
Timing adjustments
(a)
|
|
|
(18,021)
|
|
|
37
|
|
|
—
|
|
|
(17,984)
|
Non-cash
items
|
|
|
—
|
|
|
—
|
|
|
953
|
|
|
953
|
Accrual
(GAAP) basis
|
|
$
|
34,970
|
|
$
|
2,375
|
|
$
|
4,282
|
|
$
|
41,627
|
|
|
(a)
|
Includes timing
adjustments related to cash disbursements in the current period for
capital expenditures incurred in the prior period.
|
Second Quarter 2016 Guidance
Second quarter guidance assumes that the pending transactions
involving Big Star Oil & Gas, LLC and the western Reagan County
area of mutual interest are completed in late May 2016.
|
|
|
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
|
2016
Actual
|
|
2016
Guidance
|
Total Production
(BOE/d)
|
|
12,440
|
|
13,500 -
14,500
|
%
oil
|
|
79%
|
|
76% - 78%
|
% oil
hedged (a)
|
|
|
|
56%
|
Expenses (per
BOE)
|
|
|
|
|
LOE,
including workovers
|
|
$6.15
|
|
$6.00 -
$6.50
|
Production taxes, including ad valorem
|
|
$1.96
|
|
$2.25 -
$2.50
|
Adjusted
G&A (b)
|
|
$4.10
|
|
$3.75 -
$4.25
|
Adjusted
G&A - cash component (c)
|
|
$3.55
|
|
$3.00 -
$3.50
|
Operational
Capital Expenditures
|
|
|
|
|
Accrual
basis ($MM)
|
|
$35
|
|
$15 - $25
|
|
|
(a)
|
Based on the midpoint
of guidance. Includes swaps, three-way collars and two-way collars
tied to the WTI NYMEX benchmark pricing.
|
(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.
|
Operating and Financial Results
The following table presents summary information for the periods
indicated:
|
|
Three Months
Ended
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
Net
production:
|
|
|
|
|
|
|
|
|
|
Oil
(MBbls)
|
|
|
892
|
|
|
777
|
|
|
638
|
Natural
gas (MMcf)
|
|
|
1,443
|
|
|
1,188
|
|
|
801
|
Total
production (MBOE)
|
|
|
1,132
|
|
|
975
|
|
|
771
|
Average
daily production (BOE/d)
|
|
|
12,440
|
|
|
10,598
|
|
|
8,567
|
% oil
(BOE basis)
|
|
|
79%
|
|
|
80%
|
|
|
83%
|
Oil and natural
gas revenues (in thousands):
|
|
|
|
|
|
|
|
|
|
Oil
revenue
|
|
$
|
27,443
|
|
$
|
30,582
|
|
$
|
27,909
|
Natural
gas revenue
|
|
|
3,255
|
|
|
2,981
|
|
|
2,482
|
Total
revenue
|
|
$
|
30,698
|
|
$
|
33,563
|
|
$
|
30,391
|
Impact
of cash-settled derivatives
|
|
|
7,716
|
|
|
9,918
|
|
|
10,343
|
Adjusted Total Revenue
(i)
|
|
$
|
38,414
|
|
$
|
43,481
|
|
$
|
40,734
|
|
|
Three Months
Ended
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
Additional per BOE
data:
|
|
|
|
|
|
|
|
|
|
Sales
price, excluding impact of cash-settled derivatives
|
|
$
|
27.12
|
|
$
|
34.42
|
|
$
|
39.42
|
Sales
price, including impact of cash-settled derivatives
|
|
|
33.93
|
|
|
44.60
|
|
|
52.83
|
|
|
|
|
|
|
|
|
|
|
Lease
operating expense
|
|
$
|
6.15
|
|
$
|
6.47
|
|
$
|
9.03
|
Production taxes
|
|
|
1.96
|
|
|
2.04
|
|
|
2.94
|
Depletion, depreciation and amortization
|
|
|
13.89
|
|
|
17.29
|
|
|
23.48
|
Adjusted
G&A - total (a)
|
|
|
4.10
|
|
|
4.45
|
|
|
6.15
|
Adjusted
G&A - cash component (b)
|
|
|
3.55
|
|
|
3.80
|
|
|
5.37
|
|
|
(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 March 31, 2016, Callon reported total revenues
including cash-settled derivatives ("Adjusted Total Revenue," a
non-GAAP financial measure(i)) of $38.4 million, comprised of oil revenues of
$35.0 million, and natural gas
revenues of $3.4 million including
the $7.7 million impact of settled
derivative contracts. The table above reconciles to the related
GAAP measure of the Company's revenue to Adjusted Total Revenue.
Average daily production for the quarter was 12,440 BOE/d compared
to average daily production of 10,598 BOE/d in the fourth quarter
of 2015. Average realized prices, including and excluding the
effects of hedging, are detailed below.
Hedging impacts. For the quarter ended March 31, 2016, Callon recognized the following
hedging-related items:
|
|
|
|
|
|
|
|
|
In
Thousands
|
|
Per
Unit
|
Oil derivatives
contracts
|
|
|
|
|
|
|
Net gain on
settlements
|
|
$
|
7,507
|
|
$
|
8.41
|
Net loss on fair
value adjustments
|
|
|
(9,137)
|
|
|
|
Total
net loss on oil derivatives contracts
|
|
$
|
(1,630)
|
|
|
|
|
|
|
|
|
|
|
Natural gas
derivatives contracts
|
|
|
|
|
|
|
Net gain on
settlements
|
|
$
|
209
|
|
$
|
0.14
|
Net gain on fair
value adjustments
|
|
|
489
|
|
|
|
Total
net gain on natural gas derivatives contracts
|
|
$
|
698
|
|
|
|
|
|
|
|
|
|
|
Total derivatives
contracts
|
|
|
|
|
|
|
Net gain on
settlements
|
|
$
|
7,716
|
|
$
|
6.81
|
Net loss on fair
value adjustments
|
|
|
(8,648)
|
|
|
|
Total
net loss on total derivatives contracts
|
|
$
|
(932)
|
|
|
|
Average realized prices, including and excluding the impact of
cash settled derivatives during the first quarter, were as
follows:
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2016
|
Average realized
sales price:
|
|
|
|
Oil (per
Bbl) (excluding impact of cash-settled derivatives)
|
|
$
|
30.77
|
Impact of cash-settled
derivatives
|
|
|
8.41
|
Oil (per
Bbl) (including impact of cash-settled derivatives)
|
|
$
|
39.18
|
|
|
|
|
Natural
gas (per Mcf) (excluding impact of cash-settled
derivatives)
|
|
$
|
2.26
|
Impact of cash-settled
derivatives
|
|
|
0.14
|
Natural
gas (per Mcf) (including impact of cash-settled
derivatives)
|
|
$
|
2.40
|
|
|
|
|
Total
(per BOE) (excluding impact of cash-settled derivatives)
|
|
$
|
27.12
|
Impact of cash-settled
derivatives
|
|
|
6.81
|
Total
(per BOE) (including impact of cash-settled derivatives)
|
|
$
|
33.93
|
Lease Operating Expenses, including workover expense
("LOE"). LOE per BOE for the three months ended
March 31, 2016 was $6.15 per BOE, compared to LOE of $6.47 per BOE in the fourth quarter of 2015.
Production Taxes, including ad valorem taxes. Production
taxes were $1.96 per BOE in the first
quarter of 2016, representing approximately 7.2% of total revenue
before the impact of derivative settlements.
Depreciation, Depletion and Amortization
("DD&A"). DD&A for the three months ended
March 31, 2016 was $13.89 per BOE compared to $17.29 per BOE in the fourth 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 assumed future development costs related to undeveloped proved
reserves. The decrease in our depreciable base was primarily
related to the write-down of oil and natural gas properties in the
fourth quarter of 2015.
General and Administrative, net of amounts capitalized
("G&A"). G&A excluding certain non-cash incentive
share-based compensation valuation adjustments ("Adjusted G&A",
a non-GAAP measure(i)) was $4.6
million, or $4.10 per BOE, for
the current period compared to $4.3
million, or $4.45 per BOE, for
the fourth quarter of 2015. The cash component of Adjusted G&A
was $4.0 million, or $3.55 per BOE, for the current period compared to
$3.7 million, or $3.80 per BOE, for the fourth quarter of
2015.
For the first quarter of 2016, 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):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
|
|
Non-Recurring
|
|
|
|
|
|
Cash
|
|
Non-Cash
|
|
Cash
|
|
Non-Cash
|
|
Total
|
G&A
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
G&A
|
|
$
|
4,019
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4,019
|
Restricted stock share-based compensation
|
|
|
—
|
|
|
511
|
|
|
—
|
|
|
—
|
|
|
511
|
Change
in the fair value of liability share-based awards
|
|
|
—
|
|
|
698
|
|
|
—
|
|
|
—
|
|
|
698
|
Corporate depreciation & amortization
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
113
|
Threatened proxy contest
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|
—
|
|
|
221
|
Total G&A
expense:
|
|
$
|
4,019
|
|
$
|
1,322
|
|
$
|
221
|
|
$
|
—
|
|
$
|
5,562
|
Adjusted
G&A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
Change in the fair value of liability share-based awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(698)
|
Less:
Threatened proxy contest expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(221)
|
Adjusted G&A –
total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,643
|
Restricted stock share-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(511)
|
Corporate depreciation & amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(113)
|
Adjusted G&A –
cash component
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,019
|
Write-down of Oil and Natural Gas Properties. As a result
of the ceiling test limitation, the Company recognized write-downs
of oil and natural gas properties of $34.8
million in the first quarter of 2016.
Income (Loss) Available to Common Shareholders. The
Company reported a net loss available to common shareholders of
$42.9 million in the first quarter of
2016 and Adjusted Loss available to common shareholders of
$0.2 million, or $0.00 per diluted share.
Hedge Portfolio Summary
The following table summarizes our open derivative positions as
of May 2, 2016:
|
|
|
|
|
|
|
|
|
For the Remainder
of
|
|
For the Full Year
of
|
Oil
contracts
|
|
2016
|
|
2017
|
Swap contracts
(NYMEX)
|
|
|
|
|
|
|
Total
volume (MBbls)
|
|
|
703
|
|
|
730
|
Weighted
average price per Bbl
|
|
$
|
58.09
|
|
$
|
44.50
|
Swap contracts
(Midland basis differentials)
|
|
|
|
|
|
|
Volume
(MBbls)
|
|
|
1,100
|
|
|
—
|
Weighted
average price per Bbl
|
|
$
|
0.17
|
|
$
|
—
|
Collar contracts
combined with short puts (WTI, three-way collar)
|
|
|
|
|
|
|
Volume
(MBbls)
|
|
|
397
|
|
|
—
|
Weighted average price per Bbl
|
|
|
|
|
|
|
Ceiling (short
call)
|
|
$
|
63.07
|
|
$
|
—
|
Floor (long
put)
|
|
|
53.07
|
|
|
—
|
Short put
|
|
|
38.52
|
|
|
—
|
Collar
contracts
|
|
|
|
|
|
|
Total
volume (MBbls)
|
|
|
550
|
|
|
—
|
Weighted
average price per Bbl
|
|
|
|
|
|
|
Ceiling (short
call)
|
|
$
|
46.50
|
|
$
|
—
|
Floor (long
put)
|
|
|
37.50
|
|
|
—
|
Put option
contracts (short position)
|
|
|
|
|
|
|
Volume
(MBbls)
|
|
|
—
|
|
|
730
|
Put
strike price
|
|
$
|
—
|
|
$
|
30.00
|
Call option
contracts (short position)
|
|
|
|
|
|
|
Total
volume (MBbls)
|
|
|
—
|
|
|
670
|
Weighted
average price per Bbl
|
|
|
|
|
|
|
Call strike
price
|
|
$
|
—
|
|
$
|
50.00
|
|
|
|
|
|
|
|
Natural gas
contracts
|
|
|
|
|
|
|
Swap
contracts
|
|
|
|
|
|
|
Total
volume (BBtu)
|
|
|
1,650
|
|
|
—
|
Weighted
average price per MMBtu
|
|
$
|
2.52
|
|
$
|
—
|
Non-GAAP Financial Measures and Reconciliations
This news release refers to non-GAAP financial measures such as
"discretionary cash flow," "Adjusted Income," "Adjusted G&A"
and "Adjusted EBITDA," and "Adjusted Total Revenues." 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 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 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.
- We believe that the non-GAAP measure of Adjusted Total Revenues
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 affects in revenue. We
believe Adjusted Total Revenue is also useful to investors as a
measure of the actual cash inflows generated during the
period.
The following tables reconcile to the related GAAP measure the
Company's loss available to common stockholders to Adjusted Income
and the Company's net loss to Adjusted EBITDA (in thousands):
|
|
Three Months
Ended
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
Loss available to
common stockholders
|
|
$
|
(42,933)
|
|
$
|
(115,144)
|
|
$
|
(12,171)
|
Valuation allowance
|
|
|
14,288
|
|
|
40,025
|
|
|
—
|
Write-down of oil and natural gas properties
|
|
|
22,604
|
|
|
78,737
|
|
|
—
|
Net loss
(gain) on derivatives, net of settlements
|
|
|
5,621
|
|
|
(635)
|
|
|
5,144
|
Rig
termination fee
|
|
|
—
|
|
|
(368)
|
|
|
2,367
|
Change
in the fair value of share-based awards
|
|
|
461
|
|
|
1,197
|
|
|
1,676
|
Early
retirement expenses
|
|
|
—
|
|
|
—
|
|
|
3,034
|
Withdrawn proxy contest expenses
|
|
|
144
|
|
|
—
|
|
|
72
|
Adjusted
Income
|
|
$
|
185
|
|
$
|
3,812
|
|
$
|
122
|
Adjusted Income per
fully diluted common share
|
|
$
|
0.00
|
|
$
|
0.05
|
|
$
|
0.00
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
Net loss
|
|
$
|
(41,109)
|
|
$
|
(113,170)
|
|
$
|
(10,197)
|
Write-down of oil and natural gas properties
|
|
|
34,776
|
|
|
121,134
|
|
|
—
|
Net loss
(gain) on derivatives, net of settlements
|
|
|
8,648
|
|
|
(977)
|
|
|
7,914
|
Change
in the fair value of share-based awards
|
|
|
1,225
|
|
|
2,354
|
|
|
3,057
|
Early
retirement expenses
|
|
|
—
|
|
|
—
|
|
|
4,668
|
Rig
termination fee
|
|
|
—
|
|
|
(566)
|
|
|
3,641
|
Withdrawn proxy contest expenses
|
|
|
221
|
|
|
—
|
|
|
111
|
Acquisition expense
|
|
|
48
|
|
|
27
|
|
|
3
|
Income
tax benefit
|
|
|
—
|
|
|
—
|
|
|
(5,077)
|
Interest
expense
|
|
|
5,491
|
|
|
5,544
|
|
|
4,858
|
Depreciation, depletion and amortization
|
|
|
16,129
|
|
|
17,308
|
|
|
18,546
|
Accretion expense
|
|
|
180
|
|
|
175
|
|
|
209
|
Adjusted
EBITDA
|
|
$
|
25,609
|
|
$
|
31,829
|
|
$
|
27,733
|
Adjusted EBITDA per
diluted share
|
|
$
|
0.31
|
|
$
|
0.44
|
|
$
|
0.48
|
Discretionary Cash Flow. Discretionary cash flow, a
non-GAAP measure(i), for the first quarter of 2016 was
$20.5 million, or $0.25 per diluted share, and is reconciled to
operating cash flow in the following table (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(41,109)
|
|
$
|
(113,170)
|
|
$
|
(10,197)
|
Adjustments to
reconcile net income (loss) to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
16,129
|
|
|
17,308
|
|
|
18,546
|
Write-down of oil and natural gas properties
|
|
|
34,776
|
|
|
121,134
|
|
|
—
|
Accretion expense
|
|
|
180
|
|
|
175
|
|
|
209
|
Amortization of non-cash debt related items
|
|
|
781
|
|
|
781
|
|
|
781
|
Deferred
income tax (benefit) expense
|
|
|
—
|
|
|
—
|
|
|
(5,077)
|
Net loss
(gain) on derivatives, net of settlements
|
|
|
8,648
|
|
|
(977)
|
|
|
7,914
|
Rig
termination fee
|
|
|
—
|
|
|
(566)
|
|
|
3,641
|
Non-cash
expense related to equity share-based awards
|
|
|
392
|
|
|
521
|
|
|
86
|
Change
in the fair value of liability share-based awards
|
|
|
709
|
|
|
1,853
|
|
|
3,088
|
Discretionary cash
flow
|
|
$
|
20,506
|
|
$
|
27,059
|
|
$
|
18,991
|
Discretionary cash
flow per diluted share
|
|
$
|
0.25
|
|
$
|
0.37
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
Changes
in working capital
|
|
|
5,582
|
|
|
4,475
|
|
|
(5,988)
|
Payments
to settle asset retirement obligations
|
|
|
(161)
|
|
|
(211)
|
|
|
258
|
Payments
to settle vested liability share-based awards
|
|
|
|
|
|
|
|
|
|
related
to early retirements
|
|
|
—
|
|
|
—
|
|
|
(3,538)
|
Payments
to settle vested liability share-based awards
|
|
|
(9,807)
|
|
|
—
|
|
|
(3,599)
|
Net cash provided by
operating activities
|
|
$
|
16,120
|
|
$
|
31,323
|
|
$
|
6,124
|
|
|
|
|
|
|
|
|
|
|
Weighted average
dilutive shares outstanding
|
|
|
83,582
|
|
|
73,036
|
|
|
57,479
|
Callon Petroleum
Company
Consolidated
Balance Sheets
(in thousands,
except par and per share values and share data)
|
|
|
|
|
|
|
|
March 31,
2016
|
|
December 31,
2015
|
ASSETS
|
|
Unaudited
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
9,511
|
|
$
|
1,224
|
Accounts
receivable
|
|
33,683
|
|
|
39,624
|
Fair value of
derivatives
|
|
15,585
|
|
|
19,943
|
Other current
assets
|
|
881
|
|
|
1,461
|
Total current
assets
|
|
59,660
|
|
|
62,252
|
Oil and natural gas
properties, full cost accounting method:
|
|
|
|
|
|
Evaluated properties
|
|
2,390,105
|
|
|
2,335,223
|
Less
accumulated depreciation, depletion, amortization and
impairment
|
|
(1,806,509)
|
|
|
(1,756,018)
|
Net oil
and natural gas properties
|
|
583,596
|
|
|
579,205
|
Unevaluated properties
|
|
129,211
|
|
|
132,181
|
Total oil and natural
gas properties
|
|
712,807
|
|
|
711,386
|
Other property and
equipment, net
|
|
9,757
|
|
|
7,700
|
Restricted
investments
|
|
3,315
|
|
|
3,309
|
Deferred financing
costs
|
|
3,359
|
|
|
3,642
|
Other assets,
net
|
|
366
|
|
|
305
|
Total
assets
|
$
|
789,264
|
|
$
|
788,594
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
62,536
|
|
$
|
70,970
|
Accrued
interest
|
|
5,879
|
|
|
5,989
|
Cash-settleable
restricted stock unit awards
|
|
3,798
|
|
|
10,128
|
Asset retirement
obligations
|
|
833
|
|
|
790
|
Fair value of
derivatives
|
|
688
|
|
|
—
|
Total current
liabilities
|
|
73,734
|
|
|
87,877
|
Senior secured
revolving credit facility
|
|
—
|
|
|
40,000
|
Secured second lien
term loan, net of unamortized deferred financing costs
|
|
289,062
|
|
|
288,565
|
Asset retirement
obligations
|
|
4,427
|
|
|
4,317
|
Cash-settleable
restricted stock unit awards
|
|
2,682
|
|
|
4,877
|
Fair value of
derivatives
|
|
3,602
|
|
|
—
|
Other long-term
liabilities
|
|
211
|
|
|
200
|
Total
liabilities
|
|
373,718
|
|
|
425,836
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock,
series A cumulative, $0.01 par value and $50.00 liquidation
preference, 2,500,000 shares authorized: 1,458,948 and 1,578,948
shares outstanding, respectively
|
|
15
|
|
|
16
|
Common stock, $0.01
par value, 150,000,000 shares authorized; 96,093,938 and 80,087,148
shares outstanding, respectively
|
|
961
|
|
|
801
|
Capital in excess of
par value
|
|
798,532
|
|
|
702,970
|
Accumulated
deficit
|
|
(383,962)
|
|
|
(341,029)
|
Total stockholders'
equity
|
|
415,546
|
|
|
362,758
|
Total liabilities and
stockholders' equity
|
$
|
789,264
|
|
$
|
788,594
|
Callon Petroleum
Company
Consolidated
Statements of Operations
(Unaudited; in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2016
|
|
|
2015
|
Operating
revenues:
|
|
|
|
|
|
|
Oil
sales
|
|
$
|
27,443
|
|
$
|
27,909
|
Natural
gas sales
|
|
|
3,255
|
|
|
2,482
|
Total operating
revenues
|
|
|
30,698
|
|
|
30,391
|
Operating
expenses:
|
|
|
|
|
|
|
Lease
operating expenses
|
|
|
6,957
|
|
|
6,959
|
Production taxes
|
|
|
2,220
|
|
|
2,265
|
Depreciation, depletion and amortization
|
|
|
15,722
|
|
|
18,104
|
General
and administrative
|
|
|
5,562
|
|
|
12,102
|
Accretion expense
|
|
|
180
|
|
|
209
|
Write-down of oil and natural gas properties
|
|
|
34,776
|
|
|
—
|
Rig
termination fee
|
|
|
—
|
|
|
3,641
|
Acquisition expense
|
|
|
48
|
|
|
—
|
Total operating
expenses
|
|
|
65,465
|
|
|
43,280
|
Loss
from operations
|
|
|
(34,767)
|
|
|
(12,889)
|
Other income
(expense):
|
|
|
|
|
|
|
Interest
expense
|
|
|
5,491
|
|
|
4,858
|
Loss
(gain) on derivative contracts
|
|
|
932
|
|
|
(2,429)
|
Other
income, net
|
|
|
(81)
|
|
|
(44)
|
Total other
expense
|
|
|
6,342
|
|
|
2,385
|
Loss
before income taxes
|
|
|
(41,109)
|
|
|
(15,274)
|
Income tax
benefit
|
|
|
—
|
|
|
(5,077)
|
Net loss
|
|
|
(41,109)
|
|
|
(10,197)
|
Preferred stock
dividends
|
|
|
(1,824)
|
|
|
(1,974)
|
Loss available
to common stockholders
|
|
$
|
(42,933)
|
|
$
|
(12,171)
|
Loss per
common share:
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.51)
|
|
$
|
(0.21)
|
Diluted
|
|
$
|
(0.51)
|
|
$
|
(0.21)
|
Shares
used in computing loss per common share:
|
|
|
|
|
|
|
Basic
|
|
|
83,582
|
|
|
57,479
|
Diluted
|
|
|
83,582
|
|
|
57,479
|
Callon Petroleum
Company
Consolidated
Statements of Cash Flows
(Unaudited; in
thousands)
|
|
|
Three Months Ended
March 31,
|
|
|
|
2016
|
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(41,109)
|
|
$
|
(10,197)
|
Adjustments to
reconcile net loss to cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
16,129
|
|
|
18,546
|
Write-down of oil and natural gas properties
|
|
|
34,776
|
|
|
—
|
Accretion expense
|
|
|
180
|
|
|
209
|
Amortization of non-cash debt related items
|
|
|
781
|
|
|
781
|
Deferred
income tax benefit
|
|
|
—
|
|
|
(5,077)
|
Net loss
on derivatives, net of settlements
|
|
|
8,648
|
|
|
7,914
|
Non-cash
expense related to equity share-based awards
|
|
|
392
|
|
|
86
|
Change
in the fair value of liability share-based awards
|
|
|
709
|
|
|
3,088
|
Payments
to settle asset retirement obligations
|
|
|
(161)
|
|
|
258
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
5,941
|
|
|
(2,125)
|
Other current
assets
|
|
|
580
|
|
|
452
|
Current
liabilities
|
|
|
(717)
|
|
|
(355)
|
Change in other
long-term liabilities
|
|
|
11
|
|
|
—
|
Change in other
assets, net
|
|
|
(233)
|
|
|
(319)
|
Payments
to settle vested liability share-based awards related to early
retirements
|
|
|
—
|
|
|
(3,538)
|
Payments
to settle vested liability share-based awards
|
|
|
(9,807)
|
|
|
(3,599)
|
Net cash provided
by operating activities
|
|
|
16,120
|
|
|
6,124
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(50,775)
|
|
|
(70,780)
|
Acquisitions
|
|
|
(10,183)
|
|
|
—
|
Proceeds from sales
of mineral interests and equipment
|
|
|
—
|
|
|
272
|
Net cash used in
investing activities
|
|
|
(60,958)
|
|
|
(70,508)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Borrowings on senior
secured revolving credit facility
|
|
|
45,000
|
|
|
60,000
|
Payments on senior
secured revolving credit facility
|
|
|
(85,000)
|
|
|
(58,000)
|
Payment of deferred
financing costs
|
|
|
—
|
|
|
(12)
|
Issuance of common
stock, net
|
|
|
94,949
|
|
|
65,546
|
Payment of preferred
stock dividends
|
|
|
(1,824)
|
|
|
(1,974)
|
Net cash provided
by financing activities
|
|
|
53,125
|
|
|
65,560
|
Net change in cash
and cash equivalents
|
|
|
8,287
|
|
|
1,176
|
Balance,
beginning of period
|
|
|
1,224
|
|
|
968
|
Balance,
end of period
|
|
$
|
9,511
|
|
$
|
2,144
|
Earnings Call Information
The Company will host a conference call on Thursday, May 5, 2016, to discuss first quarter
2016 financial and operating results.
Please join Callon Petroleum Company via the Internet for a
webcast of the conference call:
Date/Time:
Thursday, May 5, 2016, 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 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 the consummation of the
pending transactions, wells anticipated to be drilled and placed on
production, future levels of drilling activity and associated
production, the Company's 2016 guidance, capital budget amounts and
expected cash flows, reserve quantities and the present value
thereof, 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. Without limiting
the foregoing, forward-looking statements contained in this news
release specifically include the expectation of total reserve
potential and EUR. 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
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.
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-first-quarter-2016-results-300262995.html
SOURCE Callon Petroleum Company