Callon Petroleum Company Announces Fourth Quarter 2016 Results

NATCHEZ, Miss., Feb. 27, 2017 /PRNewswire/ — 

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Callon Petroleum Company (NYSE: CPE) (“Callon” or the “Company”) today reported results of operations for the three months and full-year ended December 31, 2016.

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 full-year and fourth quarter 2016, and other recent data points include:

• Full-year 2016 production of 15.2 MBOE/d (77% oil), an increase of 59% over 2015 volumes
• Fourth quarter 2016 production of 18.4 MBOE/d (76% oil), a sequential quarterly increase of 11%
• Year-end proved reserves of 91.6 MMBOE (78% oil), a yearly increase of 69%
• Organic reserve replacement⁽ⁱ⁾ of 311% of 2016 production at a “Drill-Bit” finding and development cost concept⁽ⁱ⁾ of $8.77 per BOE on a two-stream basis
• GAAP loss per diluted common share of $0.02 and Adjusted Income per fully diluted common share, a non-GAAP financial measure⁽ⁱ⁾, of $0.08
• Entered into agreements for multiple acquisitions during 2016, forming two new core operating areas and increasing our total acreage footprint by approximately 41,000 net acres
• Currently operating three horizontal rigs, including two in WildHorse and one in Monarch
• Increased full-year 2017 production guidance to a range of 22.5 – 25.5 MBOE/d, an increase of approximately 60% over 2016 based on the midpoint of guidance

“Callon delivered exceptional growth in our producing assets in 2016, with a nearly 60% increase in daily production and 70% increase in proved reserves,” commented Fred Callon, Chairman and Chief Executive Officer. “The strength of a capital efficient operational base, combined with our solid financial position, allowed us to stay on our front foot throughout the year and ultimately enter into acquisition agreements that tripled our acreage position in the Permian Basin on an accretive basis. We are now entering a period that will be characterized by drill-bit growth, planning to increase our horizontal development program to five rigs in both the Midland and Delaware Basins by early 2018. Our 2017 drilling program will be active in all four of our core operating areas as we prioritize top-tier cash returns in our portfolio, without the need to manage onerous drilling obligations. In the near-term, we are on the cusp of unlocking the value of our newly acquired WildHorse position after investing in facilities for efficient development and adding a second rig to this position last month. We look forward to accelerating the value proposition in a similar manner in the Spur area with a rig starting by mid-year. Overall, we currently expect our operations to produce another year of production growth approaching 60% in 2017 while maintaining the financial strength required to navigate any potential headwinds in 2017 and beyond. With our existing portfolio of delineated locations in core, unconventional shale plays, Callon is well-positioned to deliver leading production and cash flow growth per share, as well as additional upside in emerging zones across the entire Permian Basin.”

Operations Update

At December 31, 2016, we had 148 gross (112.5 net) horizontal wells producing from six established flow units in the Midland Basin. Net daily production for the three months ended December 31, 2016 grew approximately 73% to 18.4 thousand barrels of oil equivalent per day (“MBOE/d”) (approximately 76% oil) as compared to the same period of 2015. Sequentially, we grew production by approximately 11% compared to the third quarter of 2016.

For the three months ended December 31, 2016, we operated two horizontal drilling rigs, drilling 10 gross (7.4 net) horizontal wells in both the Monarch and WildHorse areas. We placed 10 gross (6.9 net) horizontal wells on production in the quarter, all of which were located in our Monarch area.

Well Activity Summary

The following table details well-related activity for the quarter by operating area: