Callon Petroleum (CPE) Posts Q1 Loss of $0.09/Share

Callon Petroleum (NYSE: CPE) reported Q1 EPS of ($0.09), versus the analyst estimate of $0.18. Revenue for the quarter came in at $152.76 million versus the consensus estimate of $143.58 million.

• Increased production to 40.3 Mboe/d (79% oil), an increase of 52% year-over-year
• Generated an operating margin of $32.57 per Boe
• Recently completed a five-well pad in the southern portion of WildHorse, developing an entire half section in the Wolfcamp A
• Initial 2nd Bone Spring shale well placed on production in the Delaware and showing positive early performance
• Continued strong production from a Middle Spraberry well drilled at Monarch as part of multi-well, co-development of three flow units
• Improved completion efficiency, measured in stages per day, by more than 25% compared to the same period in 2018
• Reduced average drilling and completion costs by 15% sequentially, resulting in an average cost per lateral foot below $1,000
• Announced the pending sale of certain non-core assets in the southern Midland Basin for estimated gross proceeds of $260 million, with potential contingency payments of up to $60 million based upon average annual commodity prices over a three-year period
• Reaffirmed a borrowing base of $1.1 billion, pro forma for the pending non-core asset sale

"We are ahead of our plan to build out an inventory of drilled, uncompleted wells to extend our usage of a larger pad development model, applying this concept to the Delaware Basin as we continue to build upon our success in the Midland Basin. Capitalizing on the efficiencies of larger development, we delivered a sequential decrease in average drilling and completion cost per lateral foot of 15% in the first quarter. Our drilling plan is quickly progressing to the point where we will decrease to four drilling rigs and start larger Delaware Basin pad completions towards the end of the second quarter." commented Joe Gatto, President and Chief Executive Officer. He continued, "The previously announced sale of our Ranger properties will streamline our operations with a focus on three core operating areas with well-established infrastructure. Since we did not have any planned Ranger activity in 2019, the divestiture will not impact our base 2019 activity levels, but will allow us to optimize our 2020 capital allocation with the removal of Ranger drilling obligations. Upon closing, all cash proceeds will be directed to bolstering our financial position. We remain focused on executing our 2019 plan within our previously announced budget range, with the benefit of incremental cash flow from commodity realizations above our planning case flowing to the bottom line and the benefit our shareholders."

For earnings history and earnings-related data on Callon Petroleum (CPE) click here.

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