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Callon Petroleum (CPE) Down 6.9% Since Q1 Earnings Beat

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Callon Petroleum Company’s (CPE - Free Report) shares have declined 6.9% since May 5, even though it reported strong quarterly results. The company downwardly revised 2021 production estimate due to divestment of Delaware assets, while maintaining its operational capital expenditure guidance.

It reported first-quarter 2021 adjusted earnings of $1.49 per share, beating the Zacks Consensus Estimate of 90 cents. Moreover, the bottom line rose from earnings of $1.18 per share a year ago.

Operating revenues of $359.9 million beat the Zacks Consensus Estimate of $279 million. Also, the top line increased from the year-ago quarter’s $289.9 million.

The strong quarterly results can be attributed to decreased operating expenses and increased commodity price realizations.

Callon Petroleum Company Price, Consensus and EPS Surprise

Callon Petroleum Company Price, Consensus and EPS Surprise

Callon Petroleum Company price-consensus-eps-surprise-chart | Callon Petroleum Company Quote

Production

For the quarter, net production volumes averaged 80,957 barrels of oil equivalent per day (Boe/d), significantly down from the year-ago period’s 100,955 Boe/d. Production volumes decreased in both Permian Basin and Eagle Ford. Of the total first-quarter production, 64% was oil.

Oil production for the quarter was 4,681 thousand barrels (MBbls), lower than the year-ago level of 5,847 MBbls. Natural gas production declined to 7,835 million cubic feet (MMcf) from 9,793 MMcf in first-quarter 2020. Also, natural gas liquids (NGLs) production for the quarter under review was recorded at 1,299 MBbls, down from the year-ago figure of 1,707 MBbls.

Price Realizations (Without the Impact of Cash-Settled Derivatives)

The average realized price per barrel of oil equivalent was $44.01. The figure increased from the year-ago quarter’s $31.56 a barrel. Average realized price for oil was $57.05 per barrel compared with $45.45 a year ago. Meanwhile, average realized price for natural gas came in at $3.09 per thousand cubic feet, up from 62 cents in the prior-year quarter. Average realized price per barrel for NGLs was $22.60, higher than the year-ago level of $10.62.

Total Expenses

Total operating expenses of $206.5 million declined from the year-ago level of $242.1 million. Lease operating costs also declined to $40.5 million from the year-ago level of $52.4 million.

Notably, per unit lease operating expenses decreased to $5.55 per Boe for the reported quarter from $5.70 a year ago.

Capital Expenditure & Balance Sheet

Capital expenditure for the reported quarter was $101.3 million. It generated adjusted free cash flow of $24.2 million.

As of Mar 31, 2021, the company’s total cash and cash equivalents amounted to $24.4 million, up from $20.2 million at fourth quarter-end. Long-term debt totaled $2,937.2 million, down from $2,969.3 million in the previous quarter. It had a total debt to capitalization of 79.3%.

Guidance

For 2021, Callon Petroleum reduced its production guidance to the range of 89-91 MBoe/d due to the announced divestment of the Delaware assets. The company reiterated total operational capital expenditure view for this year at $430 million. Moreover, the upstream firm expects gross operated completed wells for this year in the band of 90-100.

For the second quarter, it expects production to remain within 88-89.5 MBoe/d, of which 64% will likely be crude oil. Operational capital spending will likely be in the range of $135-$145 million.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include ConocoPhillips (COP - Free Report) , NOW Inc. (DNOW - Free Report) and PHX Minerals Inc. (PHX - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ConocoPhillips’s sales figure for 2021 is expected to rise 97.4% year over year.

NOW’s bottom line for 2021 is expected to rise 86.2% year over year.

PHX Minerals’ bottom line for 2021 is expected to surge 40% year over year.

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