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Acquisition of Carrizo – Callon Petroleum Co.

Callon Petroleum Co. · Nov 18, 2019 · 25 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Acquisition of Carrizo – Callon Petroleum Co. – slide 1
    CALLON ACQUISITION OF CARRIZO: AMENDED MERGER AGREEMENT November 2019
  2. Acquisition of Carrizo – Callon Petroleum Co. – slide 2
    AMENDED AGREEMENT CREATES VALUE FOR BOTH SHAREHOLDERS THE BOARDS OF DIRECTORS OF BOTH CALLON AND CARRIZO HAVE UNANIMOUSLY SUPPORTED THE INDUSTRIAL AND FINANCIAL MERITS OF THE REVISED TRANSACTION Low premium, all-stock consideration of…
  3. Acquisition of Carrizo – Callon Petroleum Co. – slide 3
    CREATING A STRONGER COMBINED COMPANY INCREASED SCALE PERMIAN - DELAWARE 2x Core Delaware Basin Footprint 17 Years Permian Inventory 107 Mboed Production (3Q19) 1.2B Q3 2019 Annualized Adj. EBITDA (1) FINANCIAL STRENGTH…
  4. Acquisition of Carrizo – Callon Petroleum Co. – slide 4
    SELF-FUNDED, HIGH-MARGIN OIL GROWTH COMPANY MORE ATTRACTIVE COMBINED ASSET BASE WITH FREE CASH FLOW TO DEVELOP DEEP PERMIAN INVENTORY Accelerated value realization from deep drilling inventory in the Permian Significant scale…
  5. Acquisition of Carrizo – Callon Petroleum Co. – slide 5
    BETTER POSITIONED FOR THE CHANGING INDUSTRY LANDSCAPE CALLON IS GAINING SIZE AND SCALE TO ENHANCE OPERATING EFFICIENCIES AND IMPROVE FREE CASH FLOW PRO FORMA CALLON SELECTED OBSERVATIONS POSITIONING Increases size and scale to…
  6. Acquisition of Carrizo – Callon Petroleum Co. – slide 6
    IMPROVED FCF OUTLOOK (BEFORE CAPITAL OPTIMIZATION) Over 350% increase in FCF generation relative to Since July proxy presentation, Callon reduced aggregate capex by 15% Callon stand-alone (with an associated reduction in production) in…
  7. Acquisition of Carrizo – Callon Petroleum Co. – slide 7
    FOCUSED ON PROTECTING CASH FLOW Callon has consistently employed a strategic and methodical hedging strategy to protect cash flow Oil volumes have provided the bulk of revenue for both companies over the past two years (90% over the…
  8. Acquisition of Carrizo – Callon Petroleum Co. – slide 8
    SHAREHOLDERS BENEFIT FROM ACHIEVABLE SYNERGIES NPV OF 2 PER CALLON SHARE REPRESENTS 50% OF CALLONS CURRENT SHARE PRICE 10 YR TOTAL (OPERATIONAL AND ANNUAL RUN RATE OPERATIONAL SYNERGIES (2021+) (MM) CAPITAL) NPV OF SYNERGIES (MM)…
  9. Acquisition of Carrizo – Callon Petroleum Co. – slide 9
    SCALED PROGRAM DRIVES TWO DISTINCT SOURCES OF SYNERGIES SIMOPS IMPROVE COST EFFICIENCY MEGA-PAD STRATEGY IMPROVES PERMIAN UPTIME Multiple rigs / frac crews focused on a single project in a During completion of new wells, nearby wells are…
  10. Acquisition of Carrizo – Callon Petroleum Co. – slide 10
    STRUCTURAL BENEFITS FROM SCALE (1) DELAWARE D&C SYNERGIES PERMIAN UPTIME SYNERGIES (2) 1.3 4% Frac Interference Impact % Production 25 - 30 MM 10 MM D&C (MM/ 1,000 Lateral Ft) 1.2 1.2 2020E 3.0% 2020E 1.1 3% 2.6% 1.1…
  11. Acquisition of Carrizo – Callon Petroleum Co. – slide 11
    MEANINGFUL SCHEDULING BENEFITS FROM INTEGRATED PROGRAM PRO FORMA SCHEDULING EFFICIENCIES ENHANCED SCHEDULING INTEGRATION Combined entity cash flow base supports capital program with Illustrative 2019 Stand-Alone Schedules (5 Crews)…
  12. Acquisition of Carrizo – Callon Petroleum Co. – slide 12
    ENHANCES CREDIT TRAJECTORY HIGHLIGHTS PRO FORMA CORPORATE FCF BREAKEVEN (/BBL WTI) Significantly improves flexibility and critical mass added through increased reserves, production and EBITDA Upgraded by Moodys to B1 with stable…
  13. Acquisition of Carrizo – Callon Petroleum Co. – slide 13
    SCALE AND FCF ENHANCEMENT IS CREDIT POSITIVE POSITIVE COMMENTARY FROM CREDIT AGENCIES CURRENT NET DEBT / LQA EBITDA (1)(2) The CreditWatch positive placement reflects our expectation that the acquisition of Carrizo will materially…
  14. Acquisition of Carrizo – Callon Petroleum Co. – slide 14
    PRO FORMA MAPS TO HIGHER IMPLIED CREDIT RATING PRO FORMA MOODYS CREDIT RATING MAPPING FOR SIZE Improved Selected Callon Current Indicative Moodys Credit Rating: B1 Credit Rating Credit Factors Indicative Credit Rating Baa Ba B 15x…
  15. Acquisition of Carrizo – Callon Petroleum Co. – slide 15
    TRANSACTION ADVANCES STRATEGIC FINANCIAL OBJECTIVES Achieved by a Callons Stated Strategic Financial Objectives Merger with Carrizo INCREASE CASH Ongoing compensation alignment with shareholder interests RETURN ON Retain…
  16. Acquisition of Carrizo – Callon Petroleum Co. – slide 16
    APPENDIX
  17. Acquisition of Carrizo – Callon Petroleum Co. – slide 17
    ILLUSTRATIVE FREE CASH FLOW RECONCILIATION CPE STANDALONE 2019 2020E 2021E COMBINED (CPE + CRZO) 2019 2020E 2021E Net daily production 39.5 42.4 44.8 Net daily production 105.0 112.8 126.3 Net daily oil production 30.9 33.7 36.1 Net…
  18. Acquisition of Carrizo – Callon Petroleum Co. – slide 18
    CALLON IS A PREMIER OPERATOR OF UPSTREAM ASSETS CALLON HAS DEMONSTRATED ABILITY TO ACHIEVE SIGNIFICANT WELL COST SAVINGS AND PRODUCTIVITY IMPROVEMENT THROUGH LARGER PROJECT DEVELOPMENT HIGHER CUMULATIVE OIL PRODUCTION LOWER COST…
  19. Acquisition of Carrizo – Callon Petroleum Co. – slide 19
    STRONG INTEGRATION TRACK RECORD CALLON HAS MADE SEVERAL SUCCESSFUL VALUE ENHANCING ACQUISITIONS AND DIVESTED NON-CORE ASSETS PREMIER SOUTHERN DELAWARE OPERATOR (1) IMPROVED PERFORMANCE FROM 2018 WARD ACQUISITION 20,000 15 Average 6…
  20. Acquisition of Carrizo – Callon Petroleum Co. – slide 20
    LEADING SOUTHERN DELAWARE WELL PERFORMANCE (1) SOUTHERN DELAWARE WCA WELLS ACROSS PEERS WCA RESULTS BY OPERATOR (2017+) (2) 100% 90% Well Count and Production Distribution Plot P(x) 80% 70% 60% 50% 40% 30% 20%…
  21. Acquisition of Carrizo – Callon Petroleum Co. – slide 21
    CALLON CORPORATE STRATEGY THE EVOLUTION FROM CORE ASSETS TO A SUSTAINABLE OPERATING BUSINESS MODEL Core Permian Evolving to Full Field Sustainable Growth Footprint Established Development and FCF Generation 2014 - 2018 2019 2020 +…
  22. Acquisition of Carrizo – Callon Petroleum Co. – slide 22
    HEDGE PORTFOLIO (1) 4Q19 1Q20 2Q20 3Q20 4Q20 FY 2020 FY 2021 WTI NYMEX (Bbls, /Bbl) Sw aps & Sw aps w ith Puts Total Volumes 276,000 546,000 546,000 552,000 552,000 2,196,000 - Total Daily Volumes 3,000 6,000 6,000 6,000 6,000 6,000…
  23. Acquisition of Carrizo – Callon Petroleum Co. – slide 23
    HEDGE PORTFOLIO (1) 4Q19 1Q20 2Q20 3Q20 4Q20 FY 2020 FY 2021 MIDLAND-CUSHING DIFFERENTIAL (Bbls//Bbl) Sw aps Total Volumes 2,176,000 1,092,000 1,092,000 1,196,000 1,196,000 4,576,000 1,095,000 Total Daily Volumes 23,652 12,000 12,000…
  24. Acquisition of Carrizo – Callon Petroleum Co. – slide 24
    NON-GAAP RECONCILIATION (1) Adjusted EBITDA Reconciliation 3Q18 4Q18 1Q19 2Q19 3Q19 Net income (loss) 37,931 156,194 (19,543) 55,180 55,834 (Gain) loss on derivatives, net of settlements 25,100 (105,512) 66,970 (15,193) (20,798)…
  25. Acquisition of Carrizo – Callon Petroleum Co. – slide 25
    NON-GAAP RECONCILIATION (1) Pro Forma Callon Carrizo Combined COMBINED PRO FORMA LTM ADJUSTED EBITDA 3Q19 3Q19 3Q19 Net income (loss) available to common shareholders 47,180 102,958 150,138 Dividends on preferred stock 350 4,474…

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