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3Q 2015 Earnings Presentation – Callon Petroleum Co.

Callon Petroleum Co. · Oct 5, 2015 · 22 slides

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Slides

  1. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 1
    CALLON PETROLEUM COMPANY 3Q 2015 Earnings Presentation November 5, 2015
  2. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 2
    HIGHLIGHTS Acreage is 100% held-by-production; No continuous drilling obligations Optimized Accelerated operational shift in August to sole Central Basin focus Plan Updated 2016 guidance reflects 20% production growth and 40% capex…
  3. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 3
    3Q15 OPERATIONAL UPDATE Four Producing Zones: Carpe Diem/Pecan 74 Gross Hz Producing Wells(b) Garrison Draw Acres/CaBo(a) 10 Gross Wells in Process(b) REAGAN 7 Gross Wells Placed on Production in 3Q15(c) 3Q15 3Q15 Completions:…
  4. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 4
    MIDLAND BASIN RESOURCE BASE Well Locations (20%+ IRR Threshold(a)) at Current D&C Costs 35 years 1,200 2-rig Other(b) pace(c) Southern Other(b) 27 years 1,000 2-rig Jo Mill pace(c) Central Jo Mill 800 WCD/Cline Gross…
  5. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 5
    LOWER SPRABERRY FOUNDATION Central Basin Lower Spraberry Wells(a) Exceptional Returns Oil Rate Only 100% 10.0 180,000 90% 9.0 160,000 80% 1.6 year 8.0 140,000 payout Cumulative Barrels of Oil 70% 50/Bbl 7.0 120,000 NPV…
  6. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 6
    LOWER SPRABERRY ECONOMICS CMB LS Type Curve (7,500) CMB LS Industry Activity Oil (Bbl/d) Gas (Mcf/d) 17 1,000 10,000 9 1,000 100 1 Gas (Mcf/d) 16 Oil (Bbl/d) 100 10 CaBo 6-7 2 Pecan 10 Acres 8 1 1 15 13 0…
  7. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 7
    WOLFCAMP B OPPORTUNITY Strong Southern WCB Performance(a) Improving Returns Over Time 120,000 Oil Rate Only 45% 6.0 Extended Actual Performance 40% 2.7 year 5.0 Tracking Above Type Curve payout 100,000 35% 50/Bbl 4.0 Cumulative…
  8. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 8
    LOWER COSTS / ENHANCED RESULTS Illustrative CWC Trend (7,500 lateral) Cost Initiatives Driving Further Capital Efficiency Pursuing savings on cement, tubing, intermediates, (MM) Drilling and casing 0.0 2.0 4.0 6.0 8.0 Transitioning…
  9. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 9
    OPERATING COSTS Substantial Progress Made in Lowering OpEx versus Both Historicals and Peer Group YTD OpEx Below Revised Guidance Midpoint Midland Basin Peers 3-Stream LOE 12.00 12.00 FY14 Avg: 1Q15 Avg: 2Q15 Avg: FY15 Guidance:…
  10. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 10
    OPERATIONAL CAPEX(a) D&C Evolution (MM) Regional Breakdown D&C Facilities Southern Central 80 8.0 70 7.0 5 0.5 Net Wells Placed on Production 60 6.0 4 3.2 50 5.0 2.4 3.4 6 40 8 4.0 30 64 4 3.0 6.5 53 3.6 20 37 41 2.0…
  11. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 11
    OPERATIONAL CAPEX 2015E Budget Reconciliation Keys to Future Capital Efficiency D&C Facilities FLEXIBILITY is Key for Optimization 200 Advantage 1: Callon is in a unique position of having an acreage position that is 100% HBP 22…
  12. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 12
    FINANCIAL SNAPSHOT Capitalization (MM) at Sept. 30, 2015(a) Adjusted EBITDA Margins (/BOE)(b) Cash Adj. G&A Production Taxes LOE Adj. Revenue 80 75.52 367 300 99 203 67.99 70 60 52.83 51.05 49.22 0 200 400 600 800 1,000 1,200…
  13. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 13
    PRODUCTION MOMENTUM YTD Volumes Tracking Above 2Q15s Increased Production Guidance 12,000 7 Net wells decreasing / 10,000 6 sequential production growth 5 continues 8,000 Net Wells POP 4 Two 9,000 CMB Lower 6,000 Spraberry…
  14. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 14
    UPDATED 2016 OUTLOOK Operational Plan Evolution: Lower Spraberry Focus in Lower for Longer World 2015E Prior 2016E New 2016E Plan modified to create clear 0.2 path for achieving financial 2.7 2.8 1.3 goals 8.4 Lower Spraberry…
  15. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 15
    APPENDIX
  16. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 16
    2015 GUIDANCE Quarterly Annual 10,000 Production (BOE / d) 8,000 6,000 9,516 9,739 10,450 9,550 4,000 8,567 7,270 5,648 2,000 0 4Q14A 1Q15A 2Q15A 3Q15E 4Q15E 2014A 2015E 4Q15 Guidance FY15 Guidance Total Production…
  17. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 17
    WOLFCAMP B ECONOMICS SMB WC B Type Curve (7,500) SMB WC B Industry Activity Oil (Bbl/d) Gas (Mcf/d) 1,000 1,000 East Bloxom Garrison Draw 100 100 Gas Mcf/d Oil (Bbl/d) 10 10 1 1 0 20 40 60 80 100 120 Type Curve…
  18. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 18
    RISK MANAGEMENT Oil Hedges (/Bbl) Midland Differential (/Bbl) Hedge Volumes Swap/Long Put price 4,000 Bbl/d of 2016 Oil Production 6,000 67.22 70 Hedged at +0.17/Bbl Differential to WTI Cushing 64.93 Differential to WTI Cushing…
  19. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 19
    TRANSPORTATION Callon will improve returns on undeveloped inventory in 2015 by putting multiple additional major fields on pipe, including East Bloxom (August), Garrison Draw (November) and Taylor Draw (December) Carpe Diem CaBo East…
  20. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 20
    QUARTERLY CASH FLOW STATEMENT 3Q-2015 Cash flows from operating activities: Net income (loss) (111,805) Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation, depletion and amortization…
  21. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 21
    NON-GAAP RECONCILIATION(a) 3Q-2014 4Q-2014 1Q-2015 2Q-2015 3Q-2015 Income (loss) available to common stockholders 10,227 16,988 (12,171) (6,940) (113,779) Adjustments: Valuation allowance - - - - 68,818 Net loss (gain) on derivatives,…
  22. 3Q 2015 Earnings Presentation – Callon Petroleum Co. – slide 22
    NON-GAAP RECONCILIATION(a) 3Q-2014 4Q-2014 1Q-2015 2Q-2015 3Q-2015 Total G&A expense 3,261 1,402 12,102 5,763 4,302 Adjustments: Change in the fair value of liability share-based awards 1,499 2,635 (2,578) (1,607) (57) Early…

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