Comment below are from John White at Roth Capital who covers CPE. The company is a pure play on the Permian Basin. I will soon be increasing the oil price that I use to value all of the Sweet 16, so my valuations for most of the companies will be going up. IMO CPE is a Prime Takeover Target at the current price because it has lots of very good leasehold tied up in the Permian Basin. John's price target for CPE is $16.50. - Dan
CPE: Updating 4Q 2017 and Full Year 2018 Estimates
On 2/1/2018, CPE reported 4Q 2017 actual production of approximately 26,500 BOE per day, topping our estimate of 24,576 BOE per day and the consensus of 24,980 BOE per day. The results marked another strong year for CPE, with production up 51% year over year.
CPE also announced operational capital expenditures for 2018 are expected to be $500 million to $540 million with approximately 40% allocated to the Delaware Basin and 60% to the Midland Basin. CPE expect to spud 47 to 50 net wells and place 43 to 46 net wells on production.
CPE further advised it is forecasting 2018 production growth of approximately 30% to 40%. We have adjusted our 2018 estimates accordingly.
Due to the beat on actual 4Q 2017, our estimates for EPS/CFPS/EBITDA improve from $0.18/$0.32/$69.4 million to $0.21/$0.36/$77.4 million. Our new production estimate for the full year 2018 is 32,072 BOE per day and lowers our EPS/CFPS/EBITDA from $0.81/$0.2.07/$432.7 million to $0.75/$0.1.90/$397.0 million.
Callon Petroleum (CPE) Update Feb 2
Callon Petroleum (CPE) Update Feb 2
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Callon Petroleum (CPE) Update Feb 2
This what TPH had to say:
CPE update – Negative as weak 2018 guide overshadows stellar Q4; load up if <$10/shr ($11.50 – B) – Q4 production of 26.5mboepd / 20.9mbpd oil crushes consensus of 25.0 / 19.2 and guidance midpoint of 24.8 / 19.1 as realized downtime was below expectations (TPHe conservative guidance). Operational capex of $115mm comes in slightly above guidance range of $108-112mm on added WI% in 2018 TILs, while TPHe $125mm / Street $119mm include some level of capitalized expenses (guidance of $15mm). 2018 budget of $500-540mm of operational capex assumes 10% service cost inflation (TPHe $575mm incl. capitalized expenses) and results in 29.5-32mboepd / 22.7-24.6mbpd oil, underwhelming Street expectations of $529mm / 32.6mboepd / 25.2mbpd oil and more conservative TPHe $545mm / 32.2mboepd / 24.7mbpd. 2018 activity will be focused on Spur WC A / Monarch LS / WildHorse WC A with delineation plans for WC C in both the Delaware and Midland along with the 2BS. While we expect underperformance today, in-line with peers who have published weak 2018 guidance vs Street expectations, we believe management may be conservatively guiding once again. Execution will be key to see if the trend holds, but we’d aggressively buy if the equity breaks $10/shr.
CPE update – Negative as weak 2018 guide overshadows stellar Q4; load up if <$10/shr ($11.50 – B) – Q4 production of 26.5mboepd / 20.9mbpd oil crushes consensus of 25.0 / 19.2 and guidance midpoint of 24.8 / 19.1 as realized downtime was below expectations (TPHe conservative guidance). Operational capex of $115mm comes in slightly above guidance range of $108-112mm on added WI% in 2018 TILs, while TPHe $125mm / Street $119mm include some level of capitalized expenses (guidance of $15mm). 2018 budget of $500-540mm of operational capex assumes 10% service cost inflation (TPHe $575mm incl. capitalized expenses) and results in 29.5-32mboepd / 22.7-24.6mbpd oil, underwhelming Street expectations of $529mm / 32.6mboepd / 25.2mbpd oil and more conservative TPHe $545mm / 32.2mboepd / 24.7mbpd. 2018 activity will be focused on Spur WC A / Monarch LS / WildHorse WC A with delineation plans for WC C in both the Delaware and Midland along with the 2BS. While we expect underperformance today, in-line with peers who have published weak 2018 guidance vs Street expectations, we believe management may be conservatively guiding once again. Execution will be key to see if the trend holds, but we’d aggressively buy if the equity breaks $10/shr.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group