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Callon (CPE) Adopts New ESG Initiatives to Reduce Emissions

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Callon Petroleum Company  has undertaken new environmental, social and governance ("ESG") initiatives, which include an upgraded executive compensation program to address a variety of priorities and concerns from investors, such as emission control.

Several energy companies throughout the world have experienced immense pressure from shareholders, governments and activists to combat climate change. Notably, this resulted in several independent oil producers, including Marathon Oil Corporation (MRO - Free Report)  and Occidental Petroleum Corporation (OXY - Free Report) , setting emission-reduction targets and tie those ambitions to executive pay.

Apart from the new emission-reduction targets, Callon’s executive compensation program will align executive compensation with constant delivery of free cash flow, returns, reduced leverage and ESG performance based on the new ESG initiatives adopted by the company.

Moreover, the updated program involves an annual bonus framework, which focuses on financial performance and ESG initiatives. Also, it excludes customary operational and growth metrics, and caps payouts at the target when there are negative returns for shareholders.

Callon intends to reduce greenhouse gas emissions by 40-50% by 2025 compared with pro-forma 2019 results. Further, it plans to lower flared gas to no more than 2% of the gas produced and remove all routine gas flaring at oil production sites.

Notably, Callon aims to generate free cash flow, reduce absolute debt and returns on capital, which is demonstrated in the company’s compensation criteria that will contribute to improving investor returns.

Company Profile & Price Performance

Headquartered in Houston, TX, Callon is an independent exploration and production company.

Shares of the company have outperformed the industry in the past six months. The stock has gained 675.6% compared with the industry’s 116.8% growth.

 

 

Zacks Rank & Another Stock to Consider

The company currently flaunts a Zack Rank #1 (Strong Buy).

Another top-ranked player in the energy space is Valero Energy Corporation (VLO - Free Report) , currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Valero’s 2021 earnings are expected to surge 230% year over year.

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