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Callon's Q3 Production Volumes to Jump Amid Weaker Prices
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Callon Petroleum Company recently provided third-quarter 2019 operational update. The company estimates higher production and lower realized prices than the year-ago respective figures, while capital spending is expected to be in line with the guidance.
In-Depth Analysis:
Higher Production and Lower Prices
Callon expects third-quarter 2019 production in the range of 37.5-37.9 thousand barrels of oil equivalent per day (MBoed), of which around 78% is anticipated to be oil. This indicates an increase from the year-ago period’s 34.9 MBoed.
However, Callon estimates pre-hedge realized price of oil for the third quarter to be $54 per barrel, suggesting a decline from the year-ago quarter’s $56.57. Moreover, the same for natural gas is estimated at $1.55 per thousand cubic feet, implying fall from the year-ago level of $4.49.
Higher production level is expected to partially offset the negative effects of lower commodity prices in the quarter. As such, the Zacks Consensus Estimate for third-quarter revenues stands at $151.3 million, pointing to 6.2% fall from the year-ago reported figure.
Lease Operating Expenses
Callon’s third-quarter 2019 lease operating expenses (LOE) are estimated within $5.60-$5.80 per Boe compared with $5.77 in the year-ago period. This indicates an increase in efficiency from the first and second quarters of 2019, wherein the company reported LOE of $6.63 and $6.18 per Boe, respectively.
Capital Spending
Callon’s capital spending for operational purposes for the to-be-reported quarter is estimated in the range of $114-$118 million, suggesting a decrease from the year-ago level of $159 million. Given the fact that the company reported capital spending of only $289 million in first-half 2019, the estimated figure is expected to add up to its full-year projection of $495-$520 million.
Price Performance
Callon has lost 41.3% year to date compared with 27.7% decline of the industry it belongs to.
Zacks Rank & Stocks to Consider
Currently, Callon has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Matrix Service Company (MTRX - Free Report) , Exterran Corporation and Pembina Pipeline Corp. (PBA - Free Report) . While Matrix Service and Pembina sport a Zacks Rank #1 (Strong Buy), Exterran holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matrix Service’s 2019 earnings per share are expected to rise 58.4% year over year.
Pembina’s 2019 earnings per share are expected to rise 21.5% year over year.
Exterran’s 2019 top line is expected to rise around 5% year over year.
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Callon's Q3 Production Volumes to Jump Amid Weaker Prices
Callon Petroleum Company recently provided third-quarter 2019 operational update. The company estimates higher production and lower realized prices than the year-ago respective figures, while capital spending is expected to be in line with the guidance.
In-Depth Analysis:
Higher Production and Lower Prices
Callon expects third-quarter 2019 production in the range of 37.5-37.9 thousand barrels of oil equivalent per day (MBoed), of which around 78% is anticipated to be oil. This indicates an increase from the year-ago period’s 34.9 MBoed.
However, Callon estimates pre-hedge realized price of oil for the third quarter to be $54 per barrel, suggesting a decline from the year-ago quarter’s $56.57. Moreover, the same for natural gas is estimated at $1.55 per thousand cubic feet, implying fall from the year-ago level of $4.49.
Higher production level is expected to partially offset the negative effects of lower commodity prices in the quarter. As such, the Zacks Consensus Estimate for third-quarter revenues stands at $151.3 million, pointing to 6.2% fall from the year-ago reported figure.
Lease Operating Expenses
Callon’s third-quarter 2019 lease operating expenses (LOE) are estimated within $5.60-$5.80 per Boe compared with $5.77 in the year-ago period. This indicates an increase in efficiency from the first and second quarters of 2019, wherein the company reported LOE of $6.63 and $6.18 per Boe, respectively.
Capital Spending
Callon’s capital spending for operational purposes for the to-be-reported quarter is estimated in the range of $114-$118 million, suggesting a decrease from the year-ago level of $159 million. Given the fact that the company reported capital spending of only $289 million in first-half 2019, the estimated figure is expected to add up to its full-year projection of $495-$520 million.
Price Performance
Callon has lost 41.3% year to date compared with 27.7% decline of the industry it belongs to.
Zacks Rank & Stocks to Consider
Currently, Callon has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Matrix Service Company (MTRX - Free Report) , Exterran Corporation and Pembina Pipeline Corp. (PBA - Free Report) . While Matrix Service and Pembina sport a Zacks Rank #1 (Strong Buy), Exterran holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matrix Service’s 2019 earnings per share are expected to rise 58.4% year over year.
Pembina’s 2019 earnings per share are expected to rise 21.5% year over year.
Exterran’s 2019 top line is expected to rise around 5% year over year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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