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Callon (CPE) Rises 12% Since Q3 Earnings Beat on Oil Price
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Callon Petroleum Company’s shares have jumped 12% since it reported strong third-quarter results on Nov 3. The company increased its free cash flow estimate for 2021 due to a massive increase in commodity prices. It is also going through with the 2021 divestment plan. High commodity prices denote that the company can receive more money through asset sell-offs.
Callon reported third-quarter 2021 adjusted earnings of $2.93 per share, beating the Zacks Consensus Estimate of $2.49. Further, the bottom line significantly rose from earnings of 64 cents per share a year ago.
Operating revenues of $552.6 million beat the Zacks Consensus Estimate of $418 million. Also, the top line increased from the year-ago quarter’s $290 million.
The strong quarterly results can be attributed to increased commodity price realizations and decreased operating expenses.
Callon Petroleum Company Price, Consensus and EPS Surprise
The massive improvement in oil and gas prices boosted the bottom lines of upstream companies like Callon Petroleum and Centennial Resource Development, Inc. from the year-ago period, despite lower production.
Production
For the quarter, Callon’s net production volumes averaged 99,703 Boe/d, down from the year-ago period’s 102,029 Boe/d. Production volumes decreased in the Permian Basin while the same in Eagle Ford witnessed a marginal rise. Of the total third-quarter production, 64% was oil.
Similarly, Centennial’s overall production for the quarter declined 5.5% year over year. Yet, it managed to report third-quarter 2021 adjusted earnings of 25 cents per share, beating the Zacks Consensus Estimate of 21 cents.
Callon’s oil production for the quarter was 5,875 thousand barrels (MBbls), in line with the year-ago level. Natural gas production declined to 9,395 million cubic feet (MMcf) from 10,261 MMcf in third-quarter 2020. Also, natural gas liquids (NGLs) production for the quarter under review was recorded at 1,732 MBbls, down from the year-ago figure of 1,802 MBbls.
Price Realizations (Without the Impact of Cash-Settled Derivatives)
The average realized price per barrel of oil equivalent was $54.93. The figure increased from the year-ago quarter’s $28.73 a barrel. The average realized price for oil was $69.67 per barrel compared with $39.43 a year ago. Meanwhile, the average realized price for natural gas came in at $3.89 per thousand cubic feet, up from $1.47 in the prior-year quarter. The average realized price per barrel for NGLs was $33.54, higher than the year-ago level of $12.78.
Total Expenses
Callon’s total operating expenses of $241.5 million declined from the year-ago level of $919.7 million. The year-ago figure includes an impairment charge of $685 million.
Total lease operating costs declined to $42.7 million from the year-ago level of $45.9 million. Yet, the Zacks Rank #1 (Strong Buy) company’s per unit lease operating expenses decreased to $4.66 per Boe for the reported quarter from $4.89 a year ago. You can see the complete list of today’s Zacks #1 Rank stocks here.
Capital Expenditure & Balance Sheet
Capital expenditure for the reported quarter was $176.5 million. Callon generated an adjusted free cash flow of $119.5 million, up from $80.3 million a year ago.
As of Sep 30, 2021, the company’s total cash and cash equivalents amounted to $3.7 million, marginally down from $3.8 million at second quarter-end. Long-term debt totaled $2,809.6 million, down from $2,865.2 million in the previous quarter. It had a total debt to capitalization of 75.1%.
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Callon is operating with six rigs and 1.5 completion crews for the fourth quarter. Due to the rise in commodity prices, the company now expects to generate free cash flows of more than $250 million for the year. This is likely to help Callon in reducing its debt burden. For 2021, it had plans of divesting $125-$225 million of assets, of which almost $210 million has been done so far.
Overall Upstream Scenario
After suffering a frightening crash in 2020, the energy space has been uphill since the start of this year, thanks to surging demand from the reopening of the economy. The surge in oil and natural gas prices has allowed the operators to deliver a solid financial performance. In particular, upstream players like ConocoPhillips (COP - Free Report) and EOG Resources (EOG - Free Report) turned in better-than-expected third-quarter bottom-line numbers.
ConocoPhillips reported third-quarter 2021 adjusted earnings per share of $1.77, comfortably beating the Zacks Consensus Estimate of $1.53. The outperformance stemmed from increased production volumes due to the Concho acquisition and rising realized commodity prices.
Based in Houston, TX, one of the world’s largest independent oil and gas producers’ capital expenditures and investments totaled $1.3 billion, and dividend payments grossed $579 million. ConocoPhillips’ net cash provided by operating activities was recorded at $4.8 billion, up from the year-ago figure of $868 million.
EOG Resources reported third-quarter 2021 adjusted earnings per share of $2.16, beating the Zacks Consensus Estimate of $2.01. The strong earnings were driven by increased production volumes and higher realization of commodity prices.
The company announced a quarterly dividend of 75 cents per share, indicating an 82% increase from the previous level. The dividend will be paid out on Jan 28, 2022, to shareholders of record as of Jan 14, 2022. EOG Resources also declared a special dividend of $2 per share. Its board of directors updated the share repurchase authorization to $5 billion.
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Callon (CPE) Rises 12% Since Q3 Earnings Beat on Oil Price
Callon Petroleum Company’s shares have jumped 12% since it reported strong third-quarter results on Nov 3. The company increased its free cash flow estimate for 2021 due to a massive increase in commodity prices. It is also going through with the 2021 divestment plan. High commodity prices denote that the company can receive more money through asset sell-offs.
Callon reported third-quarter 2021 adjusted earnings of $2.93 per share, beating the Zacks Consensus Estimate of $2.49. Further, the bottom line significantly rose from earnings of 64 cents per share a year ago.
Operating revenues of $552.6 million beat the Zacks Consensus Estimate of $418 million. Also, the top line increased from the year-ago quarter’s $290 million.
The strong quarterly results can be attributed to increased commodity price realizations and decreased operating expenses.
Callon Petroleum Company Price, Consensus and EPS Surprise
Callon Petroleum Company price-consensus-eps-surprise-chart | Callon Petroleum Company Quote
The massive improvement in oil and gas prices boosted the bottom lines of upstream companies like Callon Petroleum and Centennial Resource Development, Inc. from the year-ago period, despite lower production.
Production
For the quarter, Callon’s net production volumes averaged 99,703 Boe/d, down from the year-ago period’s 102,029 Boe/d. Production volumes decreased in the Permian Basin while the same in Eagle Ford witnessed a marginal rise. Of the total third-quarter production, 64% was oil.
Similarly, Centennial’s overall production for the quarter declined 5.5% year over year. Yet, it managed to report third-quarter 2021 adjusted earnings of 25 cents per share, beating the Zacks Consensus Estimate of 21 cents.
Callon’s oil production for the quarter was 5,875 thousand barrels (MBbls), in line with the year-ago level. Natural gas production declined to 9,395 million cubic feet (MMcf) from 10,261 MMcf in third-quarter 2020. Also, natural gas liquids (NGLs) production for the quarter under review was recorded at 1,732 MBbls, down from the year-ago figure of 1,802 MBbls.
Price Realizations (Without the Impact of Cash-Settled Derivatives)
The average realized price per barrel of oil equivalent was $54.93. The figure increased from the year-ago quarter’s $28.73 a barrel. The average realized price for oil was $69.67 per barrel compared with $39.43 a year ago. Meanwhile, the average realized price for natural gas came in at $3.89 per thousand cubic feet, up from $1.47 in the prior-year quarter. The average realized price per barrel for NGLs was $33.54, higher than the year-ago level of $12.78.
Total Expenses
Callon’s total operating expenses of $241.5 million declined from the year-ago level of $919.7 million. The year-ago figure includes an impairment charge of $685 million.
Total lease operating costs declined to $42.7 million from the year-ago level of $45.9 million. Yet, the Zacks Rank #1 (Strong Buy) company’s per unit lease operating expenses decreased to $4.66 per Boe for the reported quarter from $4.89 a year ago. You can see the complete list of today’s Zacks #1 Rank stocks here.
Capital Expenditure & Balance Sheet
Capital expenditure for the reported quarter was $176.5 million. Callon generated an adjusted free cash flow of $119.5 million, up from $80.3 million a year ago.
As of Sep 30, 2021, the company’s total cash and cash equivalents amounted to $3.7 million, marginally down from $3.8 million at second quarter-end. Long-term debt totaled $2,809.6 million, down from $2,865.2 million in the previous quarter. It had a total debt to capitalization of 75.1%.
View
Callon is operating with six rigs and 1.5 completion crews for the fourth quarter. Due to the rise in commodity prices, the company now expects to generate free cash flows of more than $250 million for the year. This is likely to help Callon in reducing its debt burden. For 2021, it had plans of divesting $125-$225 million of assets, of which almost $210 million has been done so far.
Overall Upstream Scenario
After suffering a frightening crash in 2020, the energy space has been uphill since the start of this year, thanks to surging demand from the reopening of the economy. The surge in oil and natural gas prices has allowed the operators to deliver a solid financial performance. In particular, upstream players like ConocoPhillips (COP - Free Report) and EOG Resources (EOG - Free Report) turned in better-than-expected third-quarter bottom-line numbers.
ConocoPhillips reported third-quarter 2021 adjusted earnings per share of $1.77, comfortably beating the Zacks Consensus Estimate of $1.53. The outperformance stemmed from increased production volumes due to the Concho acquisition and rising realized commodity prices.
Based in Houston, TX, one of the world’s largest independent oil and gas producers’ capital expenditures and investments totaled $1.3 billion, and dividend payments grossed $579 million. ConocoPhillips’ net cash provided by operating activities was recorded at $4.8 billion, up from the year-ago figure of $868 million.
EOG Resources reported third-quarter 2021 adjusted earnings per share of $2.16, beating the Zacks Consensus Estimate of $2.01. The strong earnings were driven by increased production volumes and higher realization of commodity prices.
The company announced a quarterly dividend of 75 cents per share, indicating an 82% increase from the previous level. The dividend will be paid out on Jan 28, 2022, to shareholders of record as of Jan 14, 2022. EOG Resources also declared a special dividend of $2 per share. Its board of directors updated the share repurchase authorization to $5 billion.