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Q4 2019 Earnings Report – Callon Petroleum Co.

Callon Petroleum Co. · Feb 26, 2020 · 30 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. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 1
    4th QUARTER 2019 EARNINGS February 27th, 2020
  2. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 2
    RETURNS-FOCUSED, MULTI-BASIN PORTFOLIO WITH SCALE KEY STATISTICS COMPLIMENTARY ASSET PORTFOLIO 4Q19 Total Production (MBoe/d) 46.6 / 105.8 4Q19 PF (1) Midland Basin: 4Q19 Crude Oil Production (MBbls/d) 35.1 / 71.9 4Q19 PF (1) Mid-cycle…
  3. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 3
    DELIVERING SHAREHOLDER VALUE (1) Improving Corporate Returns on Capital Targeting CROCI (2) of 18%, up from 13% in 2019 on stand-alone basis Focus on capital discipline, budget down over 100 million versus pro forma 2019 Scaled 2020…
  4. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 4
    HISTORY OF STRATEGIC EVOLUTION AND EXPANSION Three-year average: 73% CPE EBITDA Margin (1) 100% 75% 50% 25% 0% 120 CPE continues CPE acquires 140k expansion of CRZO Southern Delaware 120k 100 Basin CPE expands…
  5. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 5
    SELF-FUNDED, HIGH-MARGIN OIL GROWTH COMPANY ATTRACTIVE COMBINED ASSET BASE WITH FREE CASH FLOW TO DEVELOP DEEP PERMIAN INVENTORY Accelerated value realization from deep Permian inventory Reflective of recent upspacing 2,800 Eagle Ford…
  6. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 6
    2020 GAME PLAN KEY ELEMENTS Accelerate combination of individual activity plans into an integrated capital efficient development model with consistency and economies of scale ahead of plan Maximize free cash flow generation with…
  7. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 7
    2020 OUTLOOK CAPITAL EFFICIENCY RATE OF CHANGE (1) 2020 GUIDANCE (2) Total production (MBoepd) 115 120 2020 Pro Forma Boepd Oil production 66% Add Per 1MM NGL production 17% Gas production 17% Income statement expenses 2019 Pro…
  8. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 8
    2020 CAPITAL PROGRAM ACHIEVES EFFICIENCIES OF SCALE 2020 OPERATIONAL CAPEX BREAKDOWN (1) 8-9 Operated Rigs 3 Avg. Operated Completion Crews 165 / 160 Gross Wells Drilled / Completed (WI: 80 95%) 2020 TRAJECTORY COMMENTARY…
  9. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 9
    DEVELOPMENT OPTIMIZATION MAXIMIZING RETURNS WHILE PRESERVING ECONOMIC INVENTORY DRIVES SUSTAINABLE FCF GENERATION OPTIMIZED PROGRAM DEVELOPMENT SIGNIFICANT ADVANTAGES ACHIEVED Communicate effectively Lower well costs Plan…
  10. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 10
    DELAWARE SYNERGY VALUE CAPTURE EXCEEDS TARGET (1)(2) IDENTIFIED STRUCTURAL SAVINGS AVERAGE WELL SYNERGY BREAKDOWN (DC&E/1,000 LATERAL) Scaled development model 1,300 45 MM (3) 2020 D&C Synergy Update Consistent crews and equipment 25 -…
  11. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 11
    CONTINUED CAPITAL EFFICIENCY EXECUTION (1)(2) DELAWARE DC&E (000) / 1,000 Scaled development drives lower costs 1,450 Simultaneous operations improves completion cycle 1,100 995 time efficiency and performance consistency Reduced…
  12. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 12
    DURABLE FREE CASH FLOW THROUGH CYCLES 2020 FREE CASH FLOW SENSITIVITIES (1)(2)(3) PF 4Q19 FREE CASH 58 MM FLOW (3) 250 20% 2020 WTI < 50 BREAKEVEN 200 15% 2020 REVENUE < 10% EXPOSURE TO GAS 150 2020 NET CONTINGENT PAYMENTS…
  13. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 13
    DIFFERENTIATED ASSETS AND OPPORTUNITY QUALITY BUSINESS MODEL (1) Operating Margin CPE Pro Forma Industry-leading operating margin and return on capital differentiate asset quality and outperform premium Top 5 Equity Performers…
  14. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 14
    PROTECTING CASH FLOW AND IMPROVING DIVERSIFICATION Focused on total realized price including both benchmark and Robust hedges minimize the impact to oil revenue which is basis; aligning hedges to complement pricing points than 90% of…
  15. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 15
    FINANCIAL STRENGTH ENHANCED CREDIT AND SIMPLIFIED CAP STRUCTURE 4Q19 CAPITALIZATION TABLE No near-term maturities and elected availability of 700 4Q19 million Cash 13 PDP reserves PV-10 in excess of total debt Credit Facility 1,285…
  16. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 16
    ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (1) LONG TERM INCENTIVE PLAN (LTIP) COMPENSATION ALIGNED WITH STAKEHOLDERS 70% of executive compensation weighted to LTIP Performance shares = 60% of LTIP weighting Added an ABSOLUTE TSR modifier…
  17. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 17
    SCALE TO COMPETE IN THE CURRENT ENVIRONMENT (1) 2016 2019 PF 2020E OUR FOCUS: Consistent Execution Total Net Acres (2) 40,000 200,000 Efficient Development Proved Reserves 54 540 (mmboe) (mmboe) Improving Returns FCF…
  18. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 18
    APPENDIX
  19. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 19
    LONG-TERM FOCUS ON CAPITAL ALLOCATION STRATEGY DELAWARE (1) MIDLAND (1) EAGLE FORD (1) 2019 (2) 2020 2019 2020 2019 2020 DC&E / 1,000 1,100 995 DC&E / 1,000 800 700 DC&E / 1,000 550 505 % Drilling 45% 45% % Drilling 45% 45% %…
  20. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 20
    ACHIEVING G&A SYNERGIES EARLY TIME COMPLETE SUBSTANTIALLY COMPLETE IN PROGRESS Executive Leadership Reductions in Non-Payroll Related Reductions Duplicative Groups Corporate Overlap Office consolidation Software licensing…
  21. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 21
    4Q19 CONTRIBUTION DETAIL CPE 4Q19 Stand-alone (1) CRZO 4Q19 11 Days (2) 4Q19 Reported CRZO 4Q19 Stand-alone (1) TOTAL PRODUCTION (Mboe) 3,582 707 4,289 6,151 OIL PERCENTAGE 78% 60% 75% 62% NGL PERCENTAGE N/A 20% 3% 18% GAS…
  22. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 22
    THREE-STREAM CONVERSION PRO FORMA CPE FY19 CRZO FY19 PF FY19 PF FY19 TWO STREAM THREE STREAM COMBINED THREE STREAM TOTAL PRODUCTION (Mboepd) 39.4 66.1 105.5 108.6 OIL PERCENTAGE 78% 65% 70% 68% NGL PERCENTAGE N/A 17% 10% 16% GAS…
  23. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 23
    OIL HEDGE PORTFOLIO (1) 1Q20 2Q20 3Q20 4Q20 FY 2020 FY 2021 WTI NYMEX (Bbls, /Bbl) Sw aps Total Volumes 819,000 919,100 933,800 828,000 3,499,900 - Total Daily Volumes 9,000 10,100 10,150 9,000 9,563 - Avg. Sw ap 55.72 55.82 55.66…
  24. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 24
    GAS HEDGE PORTFOLIO (1) 1Q20 2Q20 3Q20 4Q20 FY 2020 FY 2021 NYMEX HENRY HUB (MMBtu, /MMBtu) Sw aps Total Volumes 910,000 910,000 920,000 920,000 3,660,000 - Total Daily Volumes 10,000 10,000 10,000 10,000 10,000 - Avg. Sw ap Price…
  25. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 25
    QUARTERLY CASH FLOW STATEMENT (1) (000s) 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 (2) Cash flows from operating activities: Net income (loss) 156,194 (19,543) 55,180 55,834 (23,543) Adjustments to reconcile net income (loss) to net cash provided by…
  26. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 26
    NON-GAAP FREE CASH FLOW RECONCILIATION (1) (000s) 4Q19 (2) Net cash provided by operating activities 137,578 Less: Changes in working capital (58,587) Plus: Payments to settle asset retirement obligations 2,723 Plus: Merger and…
  27. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 27
    NON-GAAP ADJUSTED EBITDA RECONCILIATION (1) (000s) FY 2019 (2) Net income 67,928 (Gain) loss on derivatives, net 62,109 Cash paid for commodity derivative settlements, net (3,789) Non-cash stock-based compensation expense 11,364…
  28. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 28
    NON-GAAP PV-10 RECONCILIATION (1) As of December 31, 2019 2018 2017 (in millions) Standardized measure of discounted future net cash flows 4,951 2,941 1,557 Add: present value of future income taxes discounted at 10% per annum 419…
  29. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 29
    NON-GAAP NET DEBT RECONCILIATION (1) As of December 31, 2019 (in millions) Long-term debt 3,186 Gross debt 3,186 Less Cash and cash equivalents 13 Net Debt 3,173 1. See Important Disclosures slide for additional information…
  30. Q4 2019 Earnings Report – Callon Petroleum Co. – slide 30
    NON-GAAP ADJUSTED EBITDA RECONCILIATION (1) (000s) FY 2016 Net Income (91,813) (Gain) loss on derivative contracts, net of settlements 38,135 Non-cash stock-based compensation expense 9,721 Withdrawn proxy contest expenses 224…

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