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1Q 2020 Earnings Presentation – Callon Petroleum Co.

Callon Petroleum Co. · May 11, 2020 · 23 slides

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Slides

  1. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 1
    1st QUARTER 2020 EARNINGS May 11, 2020
  2. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 2
    STRONG PERFORMANCE IN A TUMULTUOUS MARKET HITTING THE NUMBERS IN 1Q20 REACTING QUICKLY TO MARKET CONDITIONS 2020 Capital Program Reduced 1Q20 Versus Metric Result Guidance 975 million drops to 600 million (or less) Total…
  3. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 3
    STRONG INTEGRATION EXECUTION(1) LOE REDUCED VERSUS PRO FORMA STRONG PRO FORMA NET CASH G&A REDUCTIONS(4) 60 35 30 58 25 56 20 MM MM 54 15 52 10 50 5 48 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20…
  4. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 4
    CONTINUOUS DRILLING IMPROVEMENTS(1) SCALED DEVELOPMENT IS DRIVING EFFICIENCY GAINS DELAWARE PERFORMANCE MIDLAND PERFORMANCE EAGLE FORD PERFORMANCE 0 0 0 5,000 5,000 5,000 10,000 10,000 10,000 15,000 15,000 15,000…
  5. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 5
    SCALE, LEARNINGS DRIVING COMPLETION EFFICIENCY(1) MIDLAND COMPLETION EFFICIENCY MIDLAND COMPLETION COSTS 2,500 800 SIMOPS2 and design changes driving Completion cost dropping by 67% meaningful efficiency increase of combined with…
  6. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 6
    SCALED DEVELOPMENT IMPROVES COST PROFILE (1)(2) DELAWARE DC&E (000) / 1,000 1,450 Scaled development drives lower costs 1,100 995 Simultaneous operations improves completion cycle time 950 efficiency and performance consistency…
  7. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 7
    KEY LEASE OPERATING EXPENSE REDUCTIONS KEY CAPITAL PROJECTS BENEFITTING LOE AND FLOW ASSURANCE Eagle Ford: electrification project will eliminate 40 diesel generators Lowering monthly LOE and reducing emissions for the remainder of the…
  8. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 8
    AGGRESSIVE G&A CUTS UNDERWAY(1)(2) 200 40% REDUCTION FROM PF FY19 Synergy Capture: 27.5% cost reduction Represents 15% reduction from from PF FY19 initial 2020 cash G&A budget 35% reduction in board member 150 compensation 35%…
  9. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 9
    RAPIDLY SHIFTING TO PRESERVE OPTIONALITY Quickly reduced development activity and cost structure Re-directing future capital spend to shorter cash conversion Immediate Actions cycle projects Implemented additional G&A reductions…
  10. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 10
    DEVELOPMENT PROGRAM CRITICAL ELEMENTS DEVELOPMENT PHILOSOPHY UNCHANGED Validation of larger scale development via cycle time improvements and cost savings Preserve inventory value, avoid cherry-picking individual locations to the…
  11. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 11
    CAPITAL ALLOCATION FLEXIBILITY INITIAL 2020 BUDGET MARCH 17, 2020 CURRENT ACTIVITY Significant Flexibility in Operational Capital With Minimum 975 MM 712 MM 40%Further - 45% FY2020 25% Reduction in Spend Reduction Deceleration…
  12. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 12
    BALANCED PORTFOLIO PROVIDES OPTIONALITY PIVOTING DEVELOPMENT COMPLIMENTARY ASSET PORTFOLIO Balanced allocation across areas as activity resumes Comparable IRRs Midland Basin: Optimization of NPV vs initial capital intensity depending…
  13. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 13
    SUSTAINABLE RESERVE BASE HIGH QUALITY RETURNS ACROSS THE PORTFOLIO PROVED RESERVE FOUNDATION (SEC ESTIMATES)1 600 PDP reserve base increased by 10% since year end 2019 Proved Reserves (MMBoe) based on SEC pricing 500 Strength of…
  14. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 14
    MARKETING AND RISK MANAGEMENT PROTECTING CASH FLOW 2020 CRUDE PRICING POINTS 2020 GAS PRICING POINTS Coordinated marketing efforts and hedging program support free cash flow Recognizing benefits of pricing point diversification…
  15. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 15
    SIGNIFICANT CASH FLOW PROTECTION BALANCED HEDGE PORTFOLIO(1) ENSURES BASES ARE COVERED Restructured hedges for greater cash flow certainty 2020 Hedge Book Value 16.5 MMBbls of oil hedged for the balance of 2020 (60,000 Bbl/d) 100%…
  16. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 16
    FINANCIAL POSITION SPRING 2020 BORROWING BASE REDETERMINATION COMPLETED CAPITALIZATION TABLE Borrowing base commitment level redetermined at 1.7 billion 1Q 2020 Significant flexibility moving forward Cash 15 Total leverage ratio test…
  17. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 17
    ADAPTING TO AN EVOLVING ENERGY LANDSCAPE Short Term Medium Term Long Term Take immediate actions Focus on strategic Ensure the sustainability to reduce cost, preserve priority to decrease of our company and liquidity, and…
  18. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 18
    APPENDIX
  19. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 19
    OIL HEDGE PORTFOLIO (1) 2Q20 3Q20 4Q20 2Q-4Q 2020 FY 2021 WTI NYMEX (Bbls, /Bbl) Sw aps Total Volumes 5,177,900 5,400,400 5,072,420 15,650,720 - Total Daily Volumes 56,900 58,700 55,135 56,912 - Avg. Sw ap 41.78 42.65 44.18 42.87…
  20. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 20
    GAS HEDGE PORTFOLIO (1) 2Q20 3Q20 4Q20 2Q-4Q 2020 FY 2021 NYMEX HENRY HUB (MMBtu, /MMBtu) Sw aps Total Volumes 3,640,000 3,680,000 1,850,000 9,170,000 8,675,000 Total Daily Volumes 40,000 40,000 20,109 33,345 23,767 Avg. Sw ap Price…
  21. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 21
    NON-GAAP ADJUSTED EBITDA RECONCILIATION (1) (000s) 1Q 2020 Net income 216,565 (Gain) loss on derivatives contracts (251,969) Gain (loss) on commodity derivative settlements, net 25,126 Non-cash stock-based compensation expense…
  22. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 22
    QUARTERLY CASH FLOW STATEMENT (1) (000s) 1Q'19 2Q'19 3Q'19 4Q'19 (2) 1Q20 Cash flows from operating activities: Net income (loss) (19,543) 55,180 55,834 (23,543) 216,565 Adjustments to reconcile net income (loss) to net cash provided by…
  23. 1Q 2020 Earnings Presentation – Callon Petroleum Co. – slide 23
    NON-GAAP NET DEBT RECONCILIATION (1) As of March 31, 2020 (in millions) Long-term debt 3,250 Less Cash and cash equivalents 15 Net Debt 3,235 1. See Important Disclosures slide for additional information related to…

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