Callon Petroleum (CPE) Q4 Results - Feb 22

[dan_s]

Callon's Adjusted Net Income beat my forecast despite slightly lower production due to weather related issues in December. Lower LOE expense more than made up for the slight production miss. I will update my forecast/valuation model in the morning.
-----------------------------------------
Fourth Quarter 2022 Highlights

Generated $372.6 million of net cash provided by operating activities and adjusted free cash flow of $165.4 million

Net income of $272.5 million, or $4.41 per diluted share, adjusted EBITDA of $412.2 million, and adjusted income of $207.7 million or $3.36 per diluted share

Fourth quarter 2022 production averaged 106.3 MBoe/d (62% oil)

Reduced lease operating expense (LOE) to $7.58 per Boe

Reduced debt by an additional $133.0 million

"Callon's fourth quarter and full year performance drove new company records in profitability and cash flow," said Joe Gatto, President and Chief Executive Officer. "Our results demonstrate what our strong operational team plus a quality, oil-weighted asset base can do, profitably growing production while improving margins and investing less than 60% of our cash flow. We believe our business model is sustainable with a deep inventory of high-return oil projects that adhere to our "Life of Field" co-development model. Our cash flow will continue to be allocated to disciplined reinvestment, further debt reduction and eventual returns of capital as we pursue shareholder value creation from multiple sources."

2022 Highlights

Set Company records for full-year net cash provided by operating activities of $1.5 billion and adjusted free cash flow of $622.7 million

Set Company record for full-year net income of $19.54 per diluted share (all per share amounts are stated on a diluted basis)

Improved full-year operating margin by 38% year-over-year to $58.04 per barrel of oil equivalent (Boe)

Grew annual production by nearly 10% to 104.3 MBoe/d, in line with guidance < A company with 10% YOY production growth that is generating this amount of free cash flow should not be trading at less than 2X operating cash flow per share.

Invested $841.5 million in operational capital expenditures, or less than 60% of net cash provided by operating activities

Year-end total proved reserves of 479.5 MMBoe (57% oil) with a standardized measure of future discounted cash flows of total proved reserves of $9.0 billion; PV-10 of total proved reserves of $10.5 billion

Increased proved developed reserves by 7% to 293.2 MMBoe (58% oil), representing 61% of total reserve volumes

Paid down $461.9 million in debt and reduced leverage ratio, as defined by our credit facility, by over 40% over the last 12 months