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4Q 2022 Earnings Presentation – Callon Petroleum Co.

Callon Petroleum Co. · Feb 28, 2023 · 30 slides

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Slides

  1. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 1
    2023 I N V E S T O R P R E S E N TAT I O N FEBRUARY 2023
  2. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 2
    Why Callon Today HIGH-RETURN ASSET PORTFOLIO 10-year inventory…
  3. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 3
    2023 Value Drivers 2023E PRODUCTION IMPROVING CYCLE TIMES 104 107MBoe/d 60% Oil 80% Liquids 20% Reduction in project cycle times 2023 CAPITAL BUDGET CONTINUED DEBT REDUCTION 1.0B 80% Permian 60% Reinvestment rate1 2.0B…
  4. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 4
    Execution Drove Record Adjusted Free Cash Flow in 2022 DELIVERED COMPANY RECORD 623MM ADJUSTED FCF 1 4Q22 FY22 3 consecutive years of increases in adjusted EBITDA1 per Boe Reinvestment rate2…
  5. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 5
    Track Record of Rapid Deleveraging 715MM 70% 4.5x REDUCTION IN 4.1x LEVERAGE RATIO1 DEBT REDUCTION SINCE 1Q21 Eliminated 3.5x 2ND LIEN NOTES Extended 2.3x 2.0x 1.7x RBL MATURITY TO 2027 1.5x 1.3x 5+ Years WTD.…
  6. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 6
    Disciplined Capital Allocation Framework CASH FLOW FROM OPERATIONS NEAR-TERM PRIORITIES Generate FCF with high-return 23 Invest in deep, differentiated project inventory program Planning modest production growth through disciplined…
  7. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 7
    Progress to Initiate Return of Capital Program Retired Second Lien Notes 2.0B Debt Absolute debt is our financial trigger for Retired Unsecured Notes Due in 2024 initiation of shareholder return program Absolute debt level is…
  8. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 8
    2023 Capital Efficiency: Structural Improvements Similar Levels of D&C Activity TOTAL DRILLED LATERAL TOTAL COMPLETED LATERAL THOUSAND FEET PROGRAM HIGHLIGHTS THOUSAND FEET 962 901 865 909 Increasing use of simultaneous D&C…
  9. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 9
    Life of Field Co-Development Model Improves Long-Term Capital Efficiency 5-YEAR DEVELOPMENT SCENARIOS TOTAL CAPEX / AVERAGE 12-MONTH BOE PER DAY1 LIFE OF FIELD CO-DEVELOPMENT MODEL IMPROVING Multi-zone co-development with parent…
  10. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 10
    Life of Field Co-Development Model Enhances Long-Term Returns & Well Productivity CALLONS INCREASING WELL PRODUCTIVITY 1 INDUSTRYS DEGRADING WELL PRODUCTIVITY 1,2 AVERAGE DELAWARE BASIN CUMULATIVE PRODUCTION BY MONTH AVERAGE DELAWARE…
  11. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 11
    Proven Consolidator: Primexx Case Study 2022 DELAWARE SOUTH DELAWARE SOUTH OPTIMIZATION (AVG. WELLS/PROJECT) ACCOMPLISHMENTS 12.0 50% 11% 26 Y/Y PRODUCTION WELLS BROUGHT INCREASE1 ONLINE POTENTIAL PV-10 5.2 INCREASE 20% 40%…
  12. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 12
    Lower Initial Decline Rates Support Sustainable FCF FIRST YEAR DECLINE RATES 1 DELAWARE BASIN 80% 75% 10% 70% 65% LOWER FIRST YEAR DECLINE 60% RATES Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 CPE 1. Based on data…
  13. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 13
    Deep Inventory of High-Quality Risked Locations EAGLE FORD GROSS LOCATIONS IN CORE ZONES 1,500 Total Avg. Lateral LOWER EF 115 6,259 TOTAL 115 6,259 GROSS LOCATIONS DELAWARE BASIN GROSS LOCATIONS IN CORE ZONES (RISKED / OPERATED)…
  14. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 14
    Peer Leading Sustainability Goals SUSTAINABILITY REPORT ENVIRONMENTAL TARGETS For more information, please refer to: Callon.com/sustainability 50% Reduction in GHG intensity by 20241 SCOPE 1 GHG INTENSITY SINCE 2019 TOTAL…
  15. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 15
    2023 Outlook 2023 GUIDANCE DETAILS 2023 CAPITAL EXPENDITURES 1Q23 FY23 1Q23 FY23 Total (MBoe/d) 97 100 104 107 Capital Expenditures (MM)1 290 300 1,000 Oil (MBbls/d) 59 61 63 65 TILs (wells) 15 17 115 120 CAPITAL ALLOCATION 2023…
  16. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 16
    A Compelling Investment Opportunity CALLON 2023E FCF Yield1 Peer Leader 2.75B 20% FCF yield1 20% 24 Cash Flow/sh S&P 500 SECTORS1 in 20231 PROJECTED ADJ. 2023E FCF Yield FREE CASH FLOW 12% 12% THROUGH 20272 13 Net…
  17. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 17
    Key Takeaways PROVEN Life of Field co-development model enhances OPERATOR long-term capital efficiency HIGH-QUALITY 1,500 risked locations in Texas premier oil basins INVENTORY CAPITAL Disciplined reinvestment in high return…
  18. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 18
    APPENDIX
  19. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 19
    2023 Delaware Development Plan 3-4 rig program Gaining efficiencies through larger projects Avg. size increases 65% to 10 wells Simultaneous D&C decreasing cycle times Target three primary formations Wolfcamp A, B & C Organic…
  20. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 20
    2023 Midland Development Plan 1-2 rig program Gaining efficiencies through larger projects Avg. size increases 16% to 9 wells Simultaneous D&C decreasing cycle times Target three primary formations Lower Spraberry & Wolfcamp A &…
  21. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 21
    2023 Eagle Ford Development Plan 1 rig program Avg. project size of 6 wells Focused on Lower Eagle Ford Upside potential from ongoing Austin Chalk delineation 2023E Avg. Lat. Payout1,2 TILs IRR1 Length (in yrs) Eagle Ford…
  22. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 22
    Year-End 2022 Proved Reserves PV-10 VALUE OF PROVED RESERVES PROVED RESERVES VALUE (PV-10)1 10.5B EXTENSIONS & DISCOVERIES2 68 MMBoe PRODUCTION REPLACEMENT3 180% 46% CAGR 10.5 RESERVE LIFE INDEX4 12.6 years 3.4 7.1 5.4 480…
  23. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 23
    Advantageous Debt Maturity Profile Peer1 Leading Weighted Average Maturity Profile Upgrades 6 yrs 5 yrs 4 yrs FROM THREE CREDIT RATING 3 yrs AGENCIES IN 2022 2 yrs 1 yrs 0 yrs 1B CPE Peer 1 Peer 2 Peer 3 Peer 4 Peer 5…
  24. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 24
    Increasing the Value Chain of Our Molecules OIL NATURAL GAS TAKEAWAY CAPACITY TAKEAWAY CAPACITY Portfolio approach employs a combination Take-in-kind optionality in various gas of in-basin sales and transportation gathering…
  25. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 25
    Derivative Positions OIL VOLUMES NATURAL GAS VOLUMES HEDGE GAINS / LOSSES BY QUARTER (MM) 1H 23 2H 23 1H 23 2H 23 WTI Oil1 HEDGING 1Q23 STRATEGY 2Q23 3Q23 4Q23 70 11 13 5 1 80 5 3 4 1 34% Hedged 90 (3) (8) (2) (3) 36% 15%…
  26. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 26
    Oil Hedges1 1Q23 2Q23 3Q23 4Q23 FY 2023 FY 2024 NYMEX WTI (Bbls, /Bbl) Swaps Total Volumes 675,000 682,500 184,000 - 1,541,500 - Total Daily Volumes 7,500 7,500 2,000 - 4,223 - Avg. Swap Price 79.18 79.18 85.00 - 79.87 - Collars…
  27. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 27
    Gas Hedges1 1Q23 2Q23 3Q23 4Q23 FY 2023 FY 2024 NYMEX HENRY HUB (MMBtu, /MMBtu) Swaps Total Volumes - 910,000 920,000 310,000 2,140,000 - Total Daily Volumes - 10,000 10,000 3,370 5,863 - Avg. Swap Price - 5.11 5.11 5.11 5.11 -…
  28. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 28
    Non-GAAP Adjusted EBITDA1 ( thousands, except per Boe) FY 2020 FY 2021 1Q 22 2Q 22 3Q 22 4Q 22 FY 2022 Net income (loss) (2,533,621) 365,151 39,737 348,009 549,603 272,467 1,209,816 (Gain) loss on derivative contracts 27,773 522,300…
  29. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 29
    Non-GAAP Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Discretionary Cash Flow1 ( thousands) FY 2021 1Q 22 2Q 22 3Q 22 4Q 22 FY 2022 Net cash provided by operating activities 974,143 281,270 372,325 475,275 372,647 1,501,517…
  30. 4Q 2022 Earnings Presentation – Callon Petroleum Co. – slide 30
    Non-GAAP Net Debt and PV-10 Reconciliation1 ( millions) 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 Total debt 2,694 2,623 2,516 2,373 2,241 Unamortized premiums, discount, and deferred loan costs, net 29 27 21 21 20 Adjusted total…

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