2013-03-14 22:01:48 -
Natchez, MS (March 14, 2013) - Callon Petroleum Company (NYSE: CPE) ("Callon" or
the "Company") today reported results of operations for the three-month and 12-
month periods ended December 31, 2012.
The Company highlighted full-year 2012 and recent operational activity:
* Increased Permian production by 67% and Permian proved reserves by 24% over
2011.
* Replaced 222% of its total 2012 production from additions of Permian
reserves.
* Continued strong performance from its horizontal Wolfcamp B wells in Upton
county, with average production of 390 Boe per day per well over the first
five months of production, excluding downtime.
* Significant improvement in drilling efficiency for long-lateral horizontal
wells, completing the drilling of its last three horizontal Wolfcamp wells
in an average 21 days.
Callon also highlighted financial results for the fourth quarter of 2012:
* Revenue of $28.7 million from daily production of 4,457 barrels of oil
equivalent ("Boe") of production, or $69.94 per Boe produced.
* Fully diluted net loss of $(0.01) per share, which includes a $0.3 million
charge related to a non-cash, mark-to-market of the Company's derivative
positions and a $1.2 million impairment related to acquired assets.
* Discretionary cash flow, a non-GAAP financial measure, of $0.42 per diluted
share. See "Non-GAAP Financial Measures" discussed and reconciled below.
Fred Callon, Chairman and CEO commented, "Our Permian operations continue to
deliver growth in both reserves and production, and are positioned to drive
growth in total Company metrics. We will be focusing on program development of
our de-risked, horizontal locations in the southern Midland basin in 2013 to
deliver repeatable growth following a year of resource capture and evaluation in
2012. In addition, we will be optimizing our vertical drilling program through
the targeting of additional deeper zones that have demonstrated encouraging
production results. Our continued evaluation of our northern Midland assets will
continue in parallel with this base level of activity as we finalize our plans
for additional drilling in this area."
Operational Update
Southern Midland. The Company continues to execute on the horizontal development
of its southern Midland basin acreage position following drilling success in
2012. Callon is building upon the strong production results from its first two
horizontal, Wolfcamp B shale wells at its East Bloxom field and has commenced
program development of the area utilizing pad drilling with planned batch
completions also starting in 2013. The Company drilled three horizontal Wolfcamp
shale wells from a single pad in the first quarter of 2013, with two targeting
the Wolfcamp B and one targeting the Wolfcamp A. These wells were drilled in an
average of 21 days and are expected to carry a total cost of $6.5 million per
well once they are completed.
Callon is extending its horizontal Wolfcamp development program to the Taylor
Draw field in southern Reagan county where it is in the process of flowing back
the Pembrook 9121 #1H. In addition, the Company's horizontal rig is currently
drilling a four-well package from a single pad at this field. All five of these
wells are targeting the Wolfcamp B shale.
The Company's 2013 vertical drilling program is set to resume at the Pecan Acres
field where its three recent wells have produced at an average initial rate of
224 Boe per day and an average 30-day rate of 166 Boe per day. Separately,
Callon's tests of deep zones, below the Atoka to the Woodford, have demonstrated
encouraging results, with incremental initial production rates of approximately
100 Boe per day from these isolated zones. These deeper targets will be included
in Callon's ongoing vertical development efforts in the Pecan Acres and Carpe
Diem fields in Midland county. Given recent reported results from offsetting
horizontal Wolfcamp wells, which confirmed Callon's technical interpretation of
this area, the Company is advancing plans for horizontal development of these
two fields.
Northern Midland. Callon has drilled two horizontal wells and one vertical well
to date in Borden county as part of its initial evaluation of this contiguous
leasehold position of over 14,650 net acres.
The first exploration well targeting the Cline shale, the Vickie Newton 3801
#1H, produced a cumulative 1,232 barrels of oil, with a peak rate of 97 barrels
of oil per day, and has been temporarily abandoned. The Company will continue to
monitor industry activity for new technical data that may benefit future
evaluation efforts before additional exploration drilling of the Cline shale is
pursued. This activity includes two horizontal Cline shale wells in the process
of drilling approximately 10 miles south of the Company's acreage position.
Callon's second horizontal exploration well in Borden county targeting the
Mississippian lime, the Shirly Newton 2301 #1H, is currently flowing back after
a delay in the completion process caused by stuck coiled tubing during the
drill-out of plugs after stimulation. The well is producing hydrocarbons and
continues to clean-up during the early stages of flow-back operations. Callon
will continue to evaluate the results of this well and ongoing industry activity
on offsetting acreage as it develops its drilling plans for the Mississippian
lime in the second half of 2013.
The Company is finalizing the completion design for a multi-stage fracture
stimulation of the vertical well that was drilled in late 2012 in Borden County
to test several prospective zones and to provide core data for the area. Based
on the production results from this well, the Shirly Newton 4801, Callon should
be positioned to assess the potential for expanded vertical development of its
Borden county acreage. In addition, the Company has begun the assessment of its
acreage in Lynn County as part of its ongoing drilling and evaluation program in
the northern Midland basin.
Deepwater Gulf of Mexico. Following the closing of the sale of its 11.25%
working interest in the Habanero field, the Company's remaining position in the
deepwater Gulf of Mexico is a 15% working interest in the Medusa field.
Following several months of partner discussions and technical evaluation, the
operator has sanctioned a subsea development program that is targeted to begin
by early 2014. Callon has begun to fund long-lead time items related to the
development and will have the option to participate in all or part of the
program once the drilling schedule is confirmed and total program costs are
finalized.
2012 Estimated Proved Reserves. The Company ended 2012 with estimated net proved
reserves of 14,072 MBoe, representing a 12% decrease over 2011 year-end
estimated net proved reserves of 15,928 MBoe. The decrease is primarily due to
the sale of the Company's interest in the Habanero field (1,372 Mboe) and the
downward revision of Haynesville shale undeveloped reserves at year-end 2012
(1,813 Mboe), which were reduced due to low natural gas prices. These decreases
were partially offset by the Company's development of a portion of its Permian
basin, on which it proved up a total of 26 oil wells during 2012 and added
3,194 MBoe of proved reserves.
MBoe
-------------
Total proved reserves at December 31, 2011 15,928
Less Habanero reserves (1,372 )
-------------
Adjusted proved reserves at December 31, 2011 14,556
Purchase of reserves in place 57
Extensions and discoveries 3,194
Revisions of Haynesville natural gas reserves (1,813 )
Revisions, other (481 )
Production (excluding Habanero production) (1,441 )
-------------
Total proved reserves at December 31, 2012 14,072
-------------
The benchmark prices for 2012, using SEC guidelines, were $94.74 per barrel of
oil and $2.76 per MMBtu of natural gas. After adjusting for basis differentials
and natural gas Btu content, the Company's average realized prices over the
remaining life of the proved reserves were $94.68 per barrel of oil and $4.81
per Mcf of natural gas for year-end 2012, as compared to $98.98 per barrel of
oil and $5.60 per Mcf of natural gas for year-end 2011. The commodity prices
reflected above for 2012 resulted in a present value of pre-tax future net cash
flows discounted at 10% (PV-10) of $250 million for the Company's proved
reserves, compared to $310 million at year-end 2011. PV-10 is a non-GAAP
measure. See "Non-GAAP Financial Measures" below for the Company's
definition
and reconciliation of PV-10 to the Standardized Measure (GAAP).
Financial Update
Total revenue for the fourth quarter of 2012 was $28.7 million compared to $31.8
million for the fourth quarter of 2011, a decrease of 10%. Total revenue for the
full year 2012 was $110.7 million compared to $127.6 million in 2011. This year-
over-year decrease was due to a decrease in commodity prices and production
downtime primarily at our two deepwater fields, Habanero and Medusa, as well as
our Haynesville well. Production declines were offset by production from our
new Permian wells, 22 vertical and two horizontal, brought onto production
during 2012.
Lease operating expenses, including production taxes, gathering and ad valorem
taxes, for the fourth quarter of 2012 totaled $6.1 million, or $14.85 per Boe, a
58% increase per Boe over the fourth quarter of 2011 of $9.40 per Boe. Lease
operating expenses for the full year 2012 totaled $26.6 million, or $16.86 per
Boe, a 53% increase per Boe over the full year 2011 of $11.04 per Boe. This
year-over-year increase was primarily due to significant growth in the number of
wells now producing in our Permian basin properties as well as remediation work
performed during 2012 on our Haynesville well as a result of interference from
the fracture stimulation of an offset well.
Depreciation, depletion and amortization for the fourth quarter of 2012 totaled
$13.7 million, or $33.42 per Boe, compared to $13.0 million, or $30.28 per Boe,
in the fourth quarter of 2011. Depreciation, depletion and amortization for the
full year 2012 totaled $49.7 million, or $31.56 per Boe, compared to $48.7
million, or $26.42 per Boe, for the full year 2011. The $1.0 million increase in
DD&A expense for the year ended December 31, 2012 was primarily a result of
planned exploration and development expenditures related to our onshore reserve
development in the Permian basin area.
General and administrative expenses for the fourth quarter of 2012 totaled $4.5
million, or $11.00 per Boe, compared to $5.1 million, or $12.03 per Boe, in the
fourth quarter of 2011. General and administrative expenses for the full year
2012 totaled to $20.4 million, or $12.93 per Boe, as compared to $16.6 million,
or $9.03 per Boe, for the full year 2011. Of this $3.7 million year-over-year
increase, $1.6 million was due to non-recurring employee expenses including
early retirement and severance expense for which we had no expense during
2011. Additionally, we incurred an increase in non-cash charges of $1.2 million
related to incentive compensation share-based instruments awarded during 2012.
The remaining increase relates primarily to higher compensation-related
expenses including the costs associated with hiring staff to support our onshore
growth and 100%-operated Permian position, as well as relocation and related
costs.
As a result of its derivative activities, the Company incurred a net cash
settlement gain of $0.7 million in the fourth quarter of 2012. As a result of
forward oil and natural gas price changes, the Company recognized non-cash
unrealized mark-to-market derivative losses of $0.3 million for the fourth
quarter of 2012. The Company realized a net cash settlement gain of $1.5 million
for the year ended December 31, 2012. In addition, as a result of forward oil
and natural gas price changes, the Company recognized non-cash unrealized mark-
to-market derivative gains of $1.7 million during the year ended December
31, 2012. As previously announced, the Company elected to discontinue hedge
accounting for its derivative contracts beginning with all agreements executed
subsequent to December 31, 2011, resulting in both the realized and unrealized
components of its derivative activity being recognized in current earnings.
Prior to 2012, the Company's unrealized gains and losses associated with its
derivative contracts, which were designated as cash flow hedges, were recorded
as a component of comprehensive income.
Discretionary cash flow (non-GAAP) for the fourth quarter of 2012 was $16.9
million, a decrease of $4.4 million, or 21%, over the fourth quarter of 2011 of
$21.3 million. Discretionary cash flow (non-GAAP) for the full year 2012 was
$55.5 million, a decrease of $22.8 million, or 29%, over the full year 2011 of
$78.3 million. For a definition of discretionary cash flow and reconciliation to
net cash flow provided from operating activities, see "Non-GAAP Financial
Measures" below.
The Company reported a net loss of $0.4 million in the fourth quarter of 2012
compared to net income of $74.0 million in the fourth quarter of 2011. For the
full year 2012, the Company reported net income of $2.7 million compared to net
income of $106.4 million for the full year 2011. The 2011 results benefited from
the full reversal of a $69.3 million deferred tax valuation allowance.
Excluding certain non-cash items and their tax effect in the fourth quarters of
2012 and 2011, adjusted net income (non-GAAP) was $0.5 million, or $0.01 per
diluted share, and $73.9 million, or $1.85 per diluted share, respectively.
Excluding certain non-cash items and their tax effect for the years ending
December 31, 2012 and 2011, adjusted net income (non-GAAP) was $1.5 million, or
$0.04 per diluted share, and $101.9 million, or $2.64 per diluted share,
respectively. For a definition of adjusted net income and a reconciliation of
net income to adjusted net income, see "Non-GAAP Financial Measures" below.
2012 Capital Expenditures and 2013 Capital Budget
Callon's total capital expenditures for the twelve months ended December
31, 2012 were $146.5 million and included the following amounts (in millions):
Southern Midland basin $ 70.3
Northern Midland basin 21.4
Leasehold acquisitions and seismic 37.2
Plugging and abandonment costs in the Gulf of Mexico 2.3
Capitalized interest 2.0
Capitalized general and administrative costs allocated directly to
exploration and development projects 13.3
----------
Total capital expenditures $ 146.5
----------
The following table summarizes drilled and completed wells through December
31, 2012:
Property Drilling Completion
---------------------------------------- ---------------- ---------------
Gross Net Gross Net
------- -------- ------- -------
Southern Midland basin vertical wells 15 10.7 22 16.0
Southern Midland basin horizontal wells 3 2.8 2 2.0
------- -------- ------- -------
Total 18 13.5 24 18.0
------- -------- ------- -------
Property Drilling Completion
---------------------------------------- ---------------- ---------------
Gross Net Gross Net
------- -------- ------- -------
Northern Midland basin vertical wells 1 0.8 - -
Northern Midland basin horizontal wells 2 1.8 1 1.0
------- -------- ------- -------
Total 3 2.6 1 1.0
------- -------- ------- -------
Our 2013 capital budget has been established at $125 million with over 90% of
our budgeted operating expenditures (including drilling, completion,
infrastructure, and plugging and abandonment) allocated to our Midland basin
operations. The 15% decrease in total capital from 2011 reflects our primary
focus on drilling and completion activities in the Permian basin and reduced
emphasis on acreage acquisitions that were budgeted in 2012 to expand the
Company's presence in the basin. Our budget includes further exploration and
development of our Permian basin properties with plans to complete approximately
26 gross wells including 14 horizontal wells and 12 vertical wells. Components
of the 2013 capital budget include (in millions):
Midland basin $ 97
Gulf of Mexico 10
--------------
Total projected operations budget 107
--------------
Capitalized general and administrative costs 14
Capitalized interest and other 4
--------------
Total projected capital expenditures budget $ 125
--------------
Liquidity and Hedging Update
At December 31, 2012 the Company's liquidity was $56.1 million comprised of a
cash balance of $1.1 million and available borrowing base of $55.0 million under
its revolving credit facility. On June 20, 2012, the credit facility was
increased to $200 million with an associated borrowing base of $60 million and a
maturity of July 31, 2014. Subsequently, in October 2012, the credit facility
was further amended to increase the borrowing base to $80 million and extend the
maturity to March 15, 2016. The lending group was also expanded to five
financial institutions at that time. Following the sale of our interest in the
deepwater Habanero field, the borrowing base was revised to $65 million as of
December 31, 2012. The borrowing base is scheduled to be reviewed and re-
determined in April 2013.
Subsequent to December 31, 2012, the Company restructured its crude oil collars
covering 40,000 barrels per month for the year 2013, starting in February 2013.
As a result of this transaction, the Company has hedged 40,000 barrels per month
for 2013 under a fixed price swap set at $101.30 per barrel (NYMEX). In
addition, the Company has hedged 30,000 barrels per month for 2014 under a fixed
price swap set at $93.35 per barrel (NYMEX). The Company also sold a crude oil
put at $70 per barrel for 30,000 barrels per month for 2014 as part of the oil
hedge program restructuring.
Earnings Call Information
The Company will host a conference call on Friday, March 15, 2013 to discuss
fourth quarter and full year 2012 financial and operating results. Management
will also provide an operational update, and discuss its outlook for 2013 during
the call.
Please join Callon Petroleum Company via the Internet for a webcast of the
conference call:
Date/Time: Friday, March 15, 2013, at 10:00 a. m. Central Time (11:00
a.m. Eastern Time)
Webcast: Live webcast will be available at www.callon.com in the
"Investors" section of the website.
Alternatively, you may join by telephone:
Call-in number: 877-317-6789 (Toll-free)
An archive of the conference call webcast will also be available at
www.callon.com in the "Investors" section of the website.
Presentation slides that will be discussed during the conference call will be
available on the Company's website at www.callon.com in the "Events and
Presentations" section.
Non-GAAP Financial Measures
This news release refers to non-GAAP financial measures as "discretionary cash
flow," "PV-10 value" and "adjusted net income."
* Callon believes that the non-GAAP measure of discretionary cash flow is
useful as an indicator of an oil and gas exploration and production
Company's ability to internally fund exploration and development activities
and to service or incur additional debt. The Company also has included this
information because changes in operating assets and liabilities relate to
the timing of cash receipts and disbursements which the Company may not
control and may not relate to the period in which the operating activities
occurred.
* Adjusted net income and adjusted net income per diluted share, which
excludes (1) impairments, (2) unrealized (gain) loss on commodity
derivatives, (3) loss (gain) on retirement of debt and (4) related income
tax effect. The amounts included in the calculation of adjusted net income
and adjusted net income per diluted share below were computed in accordance
with GAAP. We believe adjusted net income and adjusted net income per
diluted share are useful to investors because they provide readers with a
more meaningful measure of our profitability before recording certain items
whose timing or amount cannot be reasonably determined.
* PV-10 value is the present value of future net pre-tax cash flows
attributable to estimated net proved reserves, discounted at 10% per annum.
PV-10 value is computed on the same basis as standardized measure, a GAAP
financial measure, but does not include a provision for future income
taxes. We believe PV-10 value to be an important measure for evaluating the
relative significance of our oil and gas properties, because it excludes
income taxes which may vary materially among companies. PV-10 is not,
however, a substitute for standardized measure.
These measures are provided in addition to, and not as an alternative for, and
should be read in conjunction with, the information contained in our financial
statements prepared in accordance with GAAP (including the notes), included in
our SEC filings and posted on our website.
Reconciliation of Non-GAAP Financial Measures:
The following table reconciles the PV-10 value to the standardized measure (in
thousands):
%
2012 2011 $ Change Change
------------- ------------- ------------- -------
PV-10 Value $ 250,097 $ 309,890 $ (59,793 ) (19 )%
Future income taxes (18,949 ) (39,533 ) 20,584 52 %
------------- ------------- -------------
Standardized measure $ 231,148 $ 270,357 $ (39,209 ) (15 )%
------------- ------------- -------------
The following table reconciles net cash flow provided by operating activities to
discretionary cash flow (in thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------------------- --------------------------------------
2012 2011 Change 2012 2011
Change
------------ ------------ ------------- ------------ ------------ ------------
Discretionary
cash flow $ 16,891 $ 21,313 $ (4,422 ) $ 55,486 $ 78,309 $
(22,823 )
Net working
capital
changes and
other changes (6,986 ) (75 ) (6,911 ) (4,196 ) 858
(5,054 )
------------ ------------ ------------- ------------ ------------ ------------
Net cash flow
provided by
operating
activities $ 9,905 $ 21,238 $ (11,333 ) $ 51,290 $ 79,167 $
(27,877 )
------------ ------------ ------------- ------------ ------------ ------------
The following table reconciles income available to common shares to adjusted
income (in thousands; reconciling items are reflected net of tax):
For the Three Months
Ended For the Year Ended
December 31, December 31,
----------------------- ------------------------
2012 2011 2012 2011
---------- ------------ ----------- ------------
Net (loss) income available to
common shares $ (435 ) $ 73,951 $ 2,747 $ 106,396
Less: Unrealized derivative
gains 169 - (1,116 ) -
Less: Gain on early redemption
of debt - - (888 ) (1,262 )
Plus: Impairment (gain)
related to acquired assets 765 (10 ) 765 (3,277 )
---------- ------------ ----------- ------------
Adjusted net income $ 499 $ 73,941 $ 1,508 $ 101,857
---------- ------------ ----------- ------------
Adjusted net income fully
diluted earnings per share $ 0.01 $ 1.85 $ 0.04 $ 2.64
---------- ------------ ----------- ------------
The following tables present summary information for the three and twelve-month
periods ended December 31, 2012, and are followed by the Company's financial
statements.
Three Months Ended December 31,
----------------------------------------------
%
2012 2011 Change Change
------------ ------------ ------------ -------
Net production:
Crude oil (MBbls) 261 250 11 4 %
Natural gas (MMcf) 893 1,067 (174 ) (16 )%
Total production (MBoe) 410 428 (18 ) (4 )%
Average daily production (Boe) 4,457 4,652 (195 ) (4 )%
Average realized sales price:
Crude oil (Bbl) $ 94.63 $ 105.96 $ (11.33 ) (11 )%
Natural gas (Mcf) 4.45 4.95 (0.50 ) (10 )%
Total (Boe) 69.94 74.33 (4.39 ) (6 )%
Crude oil and natural gas revenues
(in thousands):
Crude oil revenue $ 24,701 $ 26,534 $ (1,833 ) (7 )%
Natural gas revenue 3,975 5,278 (1,303 ) (25 )%
------------ ------------ ------------
Total $ 28,676 $ 31,812 $ (3,136 ) (10 )%
------------ ------------ ------------
Additional per Boe data:
Sales price $ 69.94 $ 74.33 $ (4.39 ) (6 )%
Lease operating expense (14.85 ) (9.40 ) (5.45 ) (58 )%
------------ ------------ ------------
Operating margin $ 55.09 $ 64.93 $ (9.84 ) (15 )%
------------ ------------ ------------
Other expenses per Boe:
Depletion, depreciation and
amortization $ 33.42 $ 30.28 $ 3.14 10 %
General and administrative (net of
management fees) 11.00 12.03 (1.03 ) (9 )%
For the Year Ended December 31,
---------------------------------------------------------
2012 2011 Change % Change
------------- ------------- ------------- ---------------
Net production:
Crude oil (MBbls) 977 996 (19 ) (2 )%
Natural gas (MMcf) 3,588 5,081 (1,493 ) (29 )%
Total production (MBoe) 1,575 1,843 (268 ) (15 )%
Average daily
production (Boe/d) 4,303 5,049 (746 ) (15 )%
Average realized sales
price (a):
Crude oil (Bbl) $ 98.86 $ 101.34 $ (2.48 ) (2 )%
Natural gas (Mcf) 3.94 5.25 (1.31 ) (25 )%
Total (Boe) 70.31 69.26 1.05 2 %
Crude oil and natural
gas revenues (in
thousands):
Crude oil revenue $ 96,584 $ 100,962 $ (4,378 ) (4 )%
Natural gas revenue 14,149 26,682 (12,533 ) (47 )%
------------- ------------- -------------
Total $ 110,733 $ 127,644 $ (16,911 ) (13 )%
------------- ------------- -------------
Additional per Boe
data:
Sales price $ 70.31 $ 69.26 $ 1.05 2 %
Lease operating expense (16.86 ) (11.04 ) (5.82 ) (53 )%
------------- ------------- -------------
Operating margin $ 53.45 $ 58.22 $ (4.77 ) (8 )%
------------- ------------- -------------
Other expenses per Boe:
Depletion, depreciation 19 %
and amortization $ 31.56 $ 26.42 $ 5.14
General and
administrative (net of
management fees) 12.93 9.03 3.90 43 %
(a) Below is a reconciliation of the average NYMEX price to the average
realized sales price per Bbl of oil and price per Mcf of natural gas:
Average NYMEX oil price
($/Bbl) $ 94.19 $ 95.14 $ (0.95 ) (1 )%
Basis differential and
quality adjustments 3.97 7.58 (3.61 ) (48 )%
Transportation (0.75 ) (1.00 ) 0.25 25 %
Hedging 1.45 (0.38 ) 1.83 482 %
------------- ------------- -------------
Average realized oil
price ($/Bbl) $ 98.86 $ 101.34 $ (2.48 ) (2 )%
------------- ------------- -------------
Average NYMEX gas price
($/MMBtu) $ 2.82 $ 4.03 $ (1.21 ) (30 )%
Basis differential and
quality adjustments 1.12 1.22 (0.10 ) (8 )%
------------- ------------- -------------
Average realized gas
price ($/Mcf) $ 3.94 $ 5.25 $ (1.31 ) (25 )%
------------- ------------- -------------
CALLON PETROLEUM COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31,
----------------------------
2012 2011
-------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,139 $ 43,795
Accounts receivable 15,608 15,181
Fair market value of derivatives 1,674 2,499
Other current assets 1,502 1,601
-------------- -------------
Total current assets 19,923 63,076
-------------- -------------
Crude oil and natural gas properties, full-cost
accounting method:
Evaluated properties 1,497,010 1,421,640
Less accumulated depreciation, depletion and
amortization (1,296,265 ) (1,208,331 )
-------------- -------------
Net oil and natural gas properties 200,745 213,309
Unevaluated properties excluded from amortization 68,776 2,603
-------------- -------------
Total oil and natural gas properties 269,521 215,912
-------------- -------------
Other property and equipment, net 10,058 10,512
Restricted investments 3,798 3,790
Investment in Medusa Spar LLC 8,568 9,956
Deferred tax asset 64,383 65,743
Other assets, net 1,922 718
-------------- -------------
Total assets $ 378,173 $ 369,707
-------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 36,016 $ 26,057
Asset retirement obligations 2,336 1,260
Fair market value of derivatives 125 -
-------------- -------------
Total current liabilities 38,477 27,317
-------------- -------------
13% Senior Notes:
Principal outstanding 96,961 106,961
Deferred credit, net of accumulated amortization of
$17,800 and $13,123, respectively 13,707 18,384
-------------- -------------
Total 13% Senior Notes 110,668 125,345
-------------- -------------
Senior secured revolving credit facility 10,000 -
Asset retirement obligations 10,965 12,678
Other long-term liabilities 2,092 3,165
-------------- -------------
Total liabilities 172,202 168,505
-------------- -------------
Stockholders' equity:
Preferred Stock, $.01 par value, 2,500,000 shares
authorized; - -
Common Stock, $.01 par value, 60,000,000 shares
authorized; 39,800,548 and 39,398,416 shares
outstanding at December 31, 2012 and 2011,
respectively 398 394
Capital in excess of par value 328,116 324,474
Other comprehensive income - 1,624
Retained deficit (122,543 ) (125,290 )
-------------- -------------
Total stockholders' equity 205,971 201,202
-------------- -------------
Total liabilities and stockholders' equity $ 378,173 $ 369,707
-------------- -------------
CALLON PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
For the year ended
December 31,
-------------------------
2012 2011
------------ ------------
Operating revenues:
Crude oil sales $ 96,584 $ 100,962
Natural gas sales 14,149 26,682
------------ ------------
Total operating revenues 110,733 127,644
------------ ------------
Operating expenses:
Lease operating expenses 26,554 20,347
Depreciation, depletion and amortization 49,701 48,701
General and administrative 20,358 16,636
Accretion expense 2,253 2,338
Impairment of other property and equipment 1,177 -
------------ ------------
Total operating expenses 100,043 88,022
------------ ------------
Income from operations 10,690 39,622
------------ ------------
Other (income) expenses:
Interest expense 9,108 11,717
Gain on early extinguishment of debt (1,366 ) (1,942 )
Gain on acquired assets - (5,041 )
Gain on derivative contracts (1,717 ) -
Other income, net (79 ) (1,426 )
------------ ------------
Total other expenses, net 5,946 3,308
------------ ------------
Income before income taxes 4,744 36,314
Income tax expense (benefit) 2,223 (69,283 )
------------ ------------
Income before equity in earnings of Medusa Spar LLC 2,521 105,597
Equity in earnings of Medusa Spar LLC 226 799
------------ ------------
Net income available to common shares $ 2,747 $ 106,396
------------ ------------
Net income per common share:
Basic $ 0.07 $ 2.81
------------ ------------
Diluted $ 0.07 $ 2.76
------------ ------------
Shares used in computing net income per common share:
Basic 39,522 37,908
------------ ------------
Diluted 40,337 38,582
------------ ------------
CALLON PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the year ended
December 31,
--------------------------
2012 2011
------------- ------------
Cash flows from operating activities:
Net income $ 2,747 $ 106,396
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation, depletion and amortization 51,043 49,753
Accretion expense 2,253 2,338
Amortization of non-cash debt related items 402 461
Amortization of deferred credit (3,086 ) (3,155 )
Equity in earnings of Medusa Spar LLC (226 ) (799 )
Deferred income tax expense 2,223 10,928
Valuation allowance - (80,211 )
Unrealized gain on derivative contracts (1,683 ) -
Impairment of other property and equipment 1,176 -
Gain on acquired assets - (4,995 )
Non-cash gain for early debt extinguishment (1,366 ) (1,942 )
Non-cash expense related to equity share-based awards 1,697 1,337
Change in the fair value of liability share-based
awards 1,620 761
Payments to settle asset retirement obligations (1,314 ) (2,563 )
Changes in current assets and liabilities:
Accounts receivable (883 ) (3,734 )
Other current assets 100 180
Current liabilities 1,753 4,695
Payments to settle vested liability share-based awards (3,383 ) -
Change in natural gas balancing receivable 51 252
Change in natural gas balancing payable (102 ) (115 )
Change in other long-term liabilities 205 100
Change in other assets, net (1,937 ) (520 )
------------- ------------
Cash provided by operating activities $ 51,290 $ 79,167
------------- ------------
Cash flows from investing activities:
Capital expenditures (133,299 ) (100,243 )
Acquisitions (2,075 ) -
Proceeds from sale of mineral interests and equipment 39,936 7,615
Investment in restricted assets related to plugging
and abandonment - (150 )
Distribution from Medusa Spar LLC 1,735 1,267
------------- ------------
Cash used in investing activities $ (93,703 ) $ (91,511 )
------------- ------------
Cash flows from financing activities:
Borrowings on senior secured revolving credit facility 53,000 -
Payments on senior secured revolving credit facility (43,000 ) -
Redemption of 13% senior notes (10,225 ) (35,062 )
Issuance of common stock - 73,765
Taxes paid related to exercise of employee stock
options (18 ) -
------------- ------------
Cash (used in) provided by financing activities $ (243 ) $ 38,703
------------- ------------
Net change in cash and cash equivalents (42,656 ) 26,359
Cash and cash equivalents:
Balance, beginning of period 43,795 17,436
------------- ------------
Balance, end of period $ 1,139 $ 43,795
------------- ------------
Callon Petroleum Company is engaged in the acquisition, development, exploration
and operation of oil and gas properties in Texas, Louisiana and the offshore
waters of the Gulf of Mexico.
This news release is posted on the Company's website at www.callon.com and will
be archived there for subsequent review. It can be accessed from the "News
Releases" link on the top of the homepage.
This news release contains projections forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements include all
statements regarding our reserves as well as statements including the words
"believe," "expect," "plans" and words of similar meaning.
These projections
and statements reflect the Company's current views with respect to future events
and financial performance. No assurances can be given, however, that these
events will occur or that these projections will be achieved, and actual results
could differ materially from those projected as a result of certain factors.
Some of the factors which could affect our future results and could cause
results to differ materially from those expressed in our forward-looking
statements include the volatility of oil and gas prices, ability to drill and
complete wells, operational, regulatory and environment risks, our ability to
finance our activities and other risks more fully discussed in our filings with
the Securities and Exchange Commission, including our Annual Reports on Form 10-
K, available on our website or the SEC's website at www.sec.gov.
For further information contact
Rodger W. Smith, 1-800-451-1294
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Callon Petroleum Company via Thomson Reuters ONE
[HUG#1685482]
