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Rodger W. Smith, 1-800-451-1294
Callon Petroleum Company Reports 25% Increase in Net Income
Natchez, MS (May 7, 2008)—Callon Petroleum Company (NYSE: CPE) today reported results of operations for the quarter ended March 31, 2008.
First Quarter 2008 Net Income. For the quarter ended March 31, 2008, the company reported net income of $7.6 million, or $0.35 per share, a 25% increase over net income of $5.8 million, or $0.27 per share, for the same period in 2007.
First Quarter 2008 Operating Results. First quarter 2008 oil and gas sales totaled $45.0 million from production of 42.1 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $45.5 million from production of 60.3 MMcfe/d during the same period in 2007. The average price received per thousand cubic feet of natural gas in the first quarter of 2008 increased to $9.50, compared to $7.97 during the first quarter of 2007, while the average price received per barrel of oil in the first quarter of 2008 increased to $86.66, compared to $55.53 during the same period in 2007. All average realized price amounts are after the impact of hedging.
First Quarter 2008 Discretionary Cash Flow. Discretionary cash flow for the quarter ended March 31, 2008 totaled $29.0 million compared to $33.5 million during the previous year. Net cash flow provided by operating activities, as defined by GAAP, totaled $35.1 million and $32.9 million during the quarters ended March 31, 2008 and 2007, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow to net cash flow provided by operating activities.)
Non-GAAP Financial Measure - This news release refers to a non-GAAP financial measure as “discretionary cash flow.” Callon believes that the non-GAAP measure of discretionary cash flow is useful as an indicator of an oil and gas exploration and production company’s ability to internally fund exploration and development activities and to service or incur additional debt. The company also has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Discretionary cash flow should not be considered an alternative to net cash provided by operating activities or net income as defined by GAAP.
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Production and Price Information: |
Three Months Ended |
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March 31, |
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2008 |
2007 |
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Production: |
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Oil (MBbls) |
290 |
288 |
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Gas (MMcf) |
2,090 |
3,702 |
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Gas equivalent (MMcfe) |
3,828 |
5,427 |
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Average daily (MMcfe) |
42.1 |
60.3 |
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Average prices: |
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Oil ($/Bbl) (a) |
$86.66 |
$55.53 |
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Gas ($/Mcf) |
$ 9.50 |
$ 7.97 |
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Gas equivalent ($/Mcfe) |
$11.75 |
$ 8.38 |
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Additional per Mcfe data: |
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Sales price
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$11.75 |
$ 8.38 |
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Lease operating expenses |
1.35 |
1.22 |
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Operating margin |
$10.40 |
$ 7.16 |
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Depletion |
$ 3.93 |
$ 4.03 |
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General and administrative (net of management fees) |
$ 0.69 |
$ 0.41 |
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(a) Below is a reconciliation of the average NYMEX price to the |
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average realized sales price per barrel of oil: |
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Average NYMEX oil price |
$97.90 |
$58.27 |
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Basis differentials and quality adjustments
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( 3.65) |
( 5.11) |
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Transportation
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( 1.25) |
( 1.14) |
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Hedging |
( 6.34) |
3.51 |
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Averaged realized oil price |
$86.66 |
$55.53 |
Reconciliation of Non-GAAP Financial Measure: |
Three Months Ended
Three Months Ended |
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(In thousands) |
March 31, |
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2008 2007 |
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Discretionary cash flow |
$29,043 |
$33,506 |
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Net working capital changes and other changes |
6,088 |
( 637) |
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Net cash flow provided by operating activities |
$35,131 |
$32,869 |
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March 31, |
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December 31, |
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2008 |
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2007 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ 42,312 |
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$ 53,250 |
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Accounts receivable |
22,899 |
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22,073 |
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Restricted investments |
141 |
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100 |
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Other current assets |
1,890 |
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6,592 |
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Total current assets |
67,242 |
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82,015 |
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Oil and gas properties, full-cost accounting method: |
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Evaluated properties |
1,391,964 |
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1,349,904 |
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Less accumulated depreciation, depletion and amortization |
(753,403 |
) |
(738,374 |
) |
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638,561 |
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611,530 |
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Unevaluated properties excluded from amortization |
61,347 |
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70,176 |
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Total oil and gas properties |
699,908 |
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681,706 |
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Other property and equipment, net |
2,137 |
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1,986 |
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Restricted investments |
4,525 |
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4,525 |
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Investment in Medusa Spar LLC |
12,740 |
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12,673 |
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Other assets, net |
7,473 |
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9,577 |
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Total assets |
$ 794,025 |
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$ 792,482 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable and accrued liabilities |
$ 25,096 |
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$ 37,698 |
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Asset retirement obligations |
9,470 |
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9,810 |
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Fair market value of derivatives |
8,613 |
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5,205 |
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Total current liabilities |
43,179 |
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52,713 |
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Long-term debt |
392,589 |
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392,012 |
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Asset retirement obligations |
27,849 |
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27,027 |
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Deferred tax liability |
35,094 |
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32,190 |
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Other long-term liabilities |
2,018 |
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1,465 |
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Total liabilities |
500,729 |
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505,407 |
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Stockholders' equity: |
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Preferred Stock, $.01 par value, 2,500,000 shares authorized; |
-- |
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-- |
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Common Stock, $.01 par value, 30,000,000 shares authorized; 20,941,779 and 20,891,145 shares outstanding at March 31, 2008 and December 31, 2007, respectively |
209 |
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209 |
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Capital in excess of par value |
224,140 |
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223,336 |
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Other comprehensive income |
(5,598 |
) |
(3,383 |
) |
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Retained earnings |
74,545 |
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66,913 |
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Total stockholders' equity |
293,296 |
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287,075 |
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Total liabilities and stockholders' equity |
$ 794,025 |
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$ 792,482 |
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Callon Petroleum Company
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended |
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March 31, |
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2008 |
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2007 |
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Operating revenues: |
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Oil sales |
$ 25,096 |
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$ 15,968 |
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Gas sales |
19,864 |
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29,516 |
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Total operating revenues |
44,960 |
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45,484 |
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Operating expenses: |
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Lease operating expenses |
5,178 |
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6,599 |
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Depreciation, depletion and amortization |
15,029 |
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21,847 |
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General and administrative |
2,652 |
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2,221 |
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Accretion expense |
1,032 |
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1,112 |
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Total operating expenses |
23,891 |
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31,779 |
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Income from operations |
21,069 |
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13,705 |
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Other (income) expenses: |
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Interest expense |
9,940 |
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4,585 |
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Other income |
(472) |
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(325) |
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Total other (income) expenses |
9,468 |
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4,260 |
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Income before income taxes |
11,601 |
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9,445 |
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Income tax expense |
4,082 |
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3,803 |
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Income before equity in earnings of Medusa Spar LLC |
7,519 |
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5,642 |
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Equity in earnings of Medusa Spar LLC, net of tax |
113 |
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161 |
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Net income |
$ 7,632 |
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$ 5,803 |
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Net income per share: |
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Basic |
$ 0.37 |
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$ 0.28 |
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Diluted |
$ 0.35 |
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$ 0.27 |
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Shares used in computing net income per share: |
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Basic |
20,871 |
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20,722 |
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Diluted |
21,644 |
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21,193 |
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Callon Petroleum Company
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
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Three Months Ended |
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March 31, |
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March 31, |
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2008 |
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2007 |
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Cash flows from operating activities: |
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