Callon Petroleum Company update Summary
Callon Petroleum Company First Quarter 2021 drilled 18 gross, $95.5 million in operational capital expenditures and expects to produce between 88.0 and 89.5 MBoe per day.
- Delivered production of approximately 81.0 MBoe/d (64% oil) in the first quarter of 2021
- Generated net cash provided by operating activities of $137.7 million and adjusted free cash flow1 of $24.2 million
- Net loss of $80.4 million, or $1.89 per diluted share, driven primarily by a loss on derivative contracts of $214.5 million, adjusted EBITDA1 of $170.6 million, and adjusted income1 of $70.0 million, or $1.49 per diluted share
- Achieved an operating margin of $33.46 per Boe, a 58% increase from the previous quarter
- Entered into purchase and sale agreements for certain non-core Delaware Basin properties for aggregate proceeds of approximately $40 million
- Completed the spring redetermination of Callon’s senior secured credit facility with the borrowing base and elected commitment reaffirmed at $1.6 billion with unanimous lender support
- Executed Callon’s first E-frac of a multi-well, multi-zone pad in the Midland Basin powered by field-produced natural gas
Callon Petroleum Company Message to Shareholders
Joe Gatto, President and Chief Executive Officer commented, “The first quarter showcased our team’s highly efficient resource development model and operating cost management, underpinned by consistent well performance from our multi-zone, life of field development program. We continued to generate positive free cash flow, even with the effects of the extreme winter weather significantly impacting our production for the quarter. In addition to further reducing the outstanding balance on our credit facility, we recently entered into purchase and sale agreements for non-core Western Delaware Basin acreage for estimated proceeds of approximately $40 million as we methodically advance our monetization goals in an improving market environment. We remain steadfast in our commitment to disciplined rates of capital reinvestment and see a clear path to an accelerated pace of absolute debt reduction and credit metric improvements in the coming quarters.” Source Callon Petroleum First Quarter 2021 Update
Callon Petroleum Company Well & Facility Permits Download
Callon Petroleum Company OPERATIONS UPDATE
At March 31, 2021, Callon had 1,510 gross (1,333.9 net) wells producing from established flow units in the Permian and Eagle Ford. Net daily production for the three months ended March 31, 2021 was 81.0 MBoe/d (64% oil) reflecting an estimated 8 MBoe/d impact from winter storm Uri during the quarter.
For the three months ended March 31, 2021, Callon drilled 18 gross (16.4 net) wells and placed a combined 14 gross (13.3 net) wells on production. Wells placed on production during the quarter were completed in the Eagle Ford in South Texas and the Wolfcamp A, B, and C in the Delaware Basin. The Company expects to operate an average of three drilling rigs throughout the remainder of 2021 and will average just over two completion crews through the second quarter before reducing to one completion crew during the third quarter.
During the first quarter, Callon focused early completion activity on the Eagle Ford with ten gross wells completed and placed on production during the quarter, including the Gardendale four-well pad which averaged more than 12,000 feet per lateral. Towards the end of the quarter, the Company initiated its first completion utilizing an all-electric frac fleet. In total, the project deployed more than 160 completion stages across three wells targeting the Lower Spraberry, Wolfcamp A, and Wolfcamp B in the Midland Basin. The fleet was powered using field-produced natural gas from Callon’s local gathering system, resulting in the avoidance of more than 270,000 gallons of diesel fuel usage. Source Callon Petroleum First Quarter 2021 Update
Callon Petroleum Company FINANCIAL UPDATE
For the three months ended March 31, 2021, Callon incurred $95.5 million in operational capital expenditures on an accrual basis. Total capital expenditures, inclusive of capitalized expenses, are detailed below on an accrual and cash basis.
For the second quarter, including the impact of the pending divestitures expected to close by early June, the Company expects to produce between 88.0 and 89.5 MBoe per day (64% oil). In addition, Callon projects an operational capital spending level of between $135 and $145 million on an accrual basis, resulting in approximately 55% of the 2021 annual capital budget allocated to first half activity. Full year 2021 guidance has been updated below, pending the closing of the announced Delaware asset divestitures. Source Callon Petroleum First Quarter 2021 Update
Callon Petroleum Company Well Permits & Wells Spud
The oil and gas industry is highly regulated by Government agencies. One of the responsibilities is to approve well permits. A well permit is the intent of an oil & gas operator to drill a new well. Well permits include oil wells, gas wells, water wells and more..
Spudding is the process of beginning to drill a well in the oil and gas industry. … After the surface hole is completed, the main drill bit—which performs the task of drilling to the total depth—is inserted and this process can also be referred to as “spudding in.” Source Callon Petroleum First Quarter 2021 Update
Callon Petroleum Company Drilling Locations Q1 2021
Eagle Ford in Texas is the most mature tight oil play in the Lower 48 current, oil and natural gas production of 2.5 million barrels of oil equivalent per day. Measuring 400 miles long and 50 miles wide along the Texas Gulf Coast, the Eagle Ford basin is spread over 12,000 square miles in South and central Texas.
Wolfcamp formation extends across the Delaware Basin, Central Basin Platform, and Midland Basin—the three sub-basins that comprise the Permian Basin. The Wolfcamp play has helped drive overall crude oil and natural gas production growth in the Permian Basin during the past decade. Crude oil production in the Wolfcamp accounts for nearly one-third of total Permian crude oil production and more than one-third of Permian natural gas production.
Spraberry Trend covers a large area – around 2,500 square miles. As most often defined, the Spraberry includes portions of Irion, Reagan, Upton, Glasscock, Midland, and Martin Counties. In 2007, the U.S. Department of Energy ranked The Spraberry Trend third in the United States by total proved reserves, and seventh in total production. Estimates have the Spraberry Shale holding up to 10 billion barrels of oil as well as 3 trillion cubic feet of natural gas. Global Hunter estimates the play’s potential recovery resources range from 4.2 to 8.8 billion BOE
Source Callon Petroleum First Quarter 2021 Update
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About Callon Petroleum Company
Callon Petroleum Company is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas. Callon Petroleum our core footprint to approximately 200,000 net acres in the Permian Basin and Eagle Ford Shale.