Callon Petroleum (CPE) Update - June 30

[dan_s]

CPE closed on June 29 at $56.08.
I have updated my forecast/valuation and I am raising my valuation by $15 to $78 per share. My updated model has been posted to the EPG website.

Even though Callon has some "Bad Hedges" that it needs to work off this year, it is going to generate over $350 million of free cash flow from operations that will be used to eliminate any near-term debt problems. It is also selling some non-core assets to accelerate debt reduction.

2022 is set up to be a breakout year for Callon. If their realized prices are $65/bbl of oil and $3.00/mcf of natural gas, Callon should generate over $1.1 Billion of operating cash flow next year, over $23.50 per share.