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Rodger W. Smith, 1-800-451-1294
Callon Petroleum Company Reports Results For Second Quarter, First Six Months of 2006
Natchez, MS (August 7, 2006)—Callon Petroleum Company (NYSE: CPE) today reported results of operations for both the quarter and the six-month period ended June 30, 2006.
Second Quarter 2006 Net Income. Net income for the quarter was $12.3 million, or $0.57 per diluted share. The company reported net income of $9.3 million, or $0.46 per share on a diluted basis, for the same period in 2005.
Second Quarter 2006 Operating Results. Oil and gas sales totaled $47.1 million from average production of 58 million cubic feet of natural gas equivalent per day (MMcfe/d). This corresponds to sales of $41.7 million from average daily production of 64 MMcfe/d during the same period in 2005. During the second quarter of 2006, crude oil represented approximately 51% of the company’s total production. The average price realized per barrel of oil in the second quarter of 2006 increased to $59.99 compared to $41.53 during the same period in 2005, while the average price realized per thousand cubic feet of natural gas in the second quarter of 2006 increased to $7.93 compared to $7.43 during the same period a year earlier.
Six Months 2006 Net Income. Net income increased to $25.1 million, or $1.17 per diluted share, compared to net income of $18.8 million, or $0.92 per share on a diluted basis, for the same period in 2005.
Six Months 2006 Operating Results. Oil and gas sales totaled $92.6 million from average production of 57 MMcfe/d. This corresponds to sales of $84.7 million from average daily production of 69 MMcfe/d during the same period in 2005. Crude oil represented 56% of total production. The average price realized per barrel of oil increased to $56.74 compared to $39.41 during the same period in 2005, while the average price realized per thousand cubic feet of natural gas for the six-month period ended June 30, 2006 increased to $8.44 compared to $7.15 during the same period a year earlier.
Second Quarter 2006 Discretionary Cash Flow. Discretionary cash flow increased by 15% to $35.1 million during the three-month period ended June 30, 2006 compared to $30.4 million for the same period in 2005. Net cash flow provided by operating activities, as defined by GAAP, totaled $34.3 million and $32.2 million during the three-month periods ended June 30, 2006 and 2005, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow to net cash flow provided by operating activities.)
Six Months 2006 Discretionary Cash Flow. Discretionary cash flow totaled $68.9 million during the six-month period ended June 30, 2006 compared to $61.8 million for the same period in 2005. Net cash flow provided by operating activities, as defined by GAAP, totaled $75.3 million and $53.6 million during the six-month periods ended June 30, 2006 and 2005, 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.
Reconciliation of Non-GAAP Financial Measure: |
Three Months Ended |
Six Months Ended |
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(In Thousands) |
June 30, |
June 30, |
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2006 2005 |
2006 2005 |
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Discretionary cash flow |
$35,100 |
$30,424 |
$68,880 |
$61,838 |
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Net working capital changes and other changes |
(774) |
1,798 |
6,462 |
(8,285) |
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Net cash flow provided by operating activities |
$34,326 |
$32,222 |
$75,342 |
$53,553 |
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Consolidated Condensed Balance Sheets: |
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(In thousands) |
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(Unaudited) |
June 30, |
December 31, |
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2006 |
2005 |
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Cash and cash equivalents |
$1,046 |
$2,565 |
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Oil and gas properties, net |
501,924 |
447,364 |
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All other assets |
66,335 |
83,847 |
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Total assets |
$569,305 |
$533,776 |
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Long-term debt excluding current maturities |
$196,641 |
$188,813 |
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All other liabilities |
115,921 |
116,915 |
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Stockholders’ equity |
256,743 |
228,048 |
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Total liabilities and stockholders’ equity |
$569,305 |
$533,776 |
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Production and Price Information: |
Three Months Ended |
Six Months Ended |
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June 30, |
June 30, |
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2006 |
2005 |
2006 |
2005 |
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Production: |
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Oil (MBbls) |
443 |
590 |
958 |
1,230 |
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Gas (MMcf) |
2,581 |
2,313 |
4,530 |
5,060 |
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Gas equivalent (MMcfe) |
5,239 |
5,850 |
10,281 |
12,443 |
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Average daily (MMcfe) |
57.6 |
64.3 |
56.8 |
68.7 |
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Average realized prices: |
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Oil ($/Bbl) (a) |
$59.99 |
$41.53 |
$56.74 |
$39.41 |
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Gas ($/Mcf) |
$ 7.93 |
$ 7.43 |
$ 8.44 |
$ 7.15 |
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Gas equivalent ($/Mcfe) |
$ 8.98 |
$ 7.12 |
$ 9.01 |
$ 6.81 |
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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 |
$70.70 |
$53.17 |
$67.09 |
$51.51 |
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Basis differentials and quality adjustments
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( 7.83) |
( 7.37) |
( 7.93) |
( 6.89) |
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Transportation
|
( 1.29) |
( 1.28) |
( 1.28) |
( 1.30) |
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Hedging |
( 1.59) |
( 2.99) |
( 1.14) |
( 3.91) |
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Averaged realized oil price |
$59.99 |
$41.53 |
$56.74 |
$39.41 |
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Callon Petroleum Company Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2006 |
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2005 |
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2006 |
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2005 |
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Operating revenues: |
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Oil and gas sales |
$ 47,057 |
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$ 41,668 |
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$ 92,638 |
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$ 84,680 |
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Operating expenses: |
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Lease operating expenses |
7,365 |
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6,197 |
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13,270 |
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12,733 |
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Depreciation, depletion and amortization |
14,791 |
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13,671 |
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28,627 |
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29,079 |
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General and administrative |
1,924 |
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2,801 |
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3,650 |
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4,495 |
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Accretion expense |
1,331 |
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770 |
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2,750 |
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1,631 |
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Derivative expense |
30 |
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533 |
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120 |
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912 |
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Total operating expenses |
25,441 |
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23,972 |
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48,417 |
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48,850 |
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Income from operations |
21,616 |
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17,696 |
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44,221 |
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35,830 |
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Other (income) expenses: |
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Interest expense |
4,128 |
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4,265 |
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8,276 |
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8,834 |
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Other (income) |
(670) |
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(96) |
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(1,000) |
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(298) |
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Total other (income) expenses |
3,458 |
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4,169 |
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7,276 |
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8,536 |
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Income before income taxes |
18,158 |
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13,527 |
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36,945 |
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27,294 |
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Income tax expense |
6,294 |
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4,735 |
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12,844 |
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9,553 |
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Income before Medusa Spar LLC |
11,864 |
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8,792 |
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24,101 |
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17,741 |
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Income from Medusa Spar LLC net of tax |
439 |
|
519 |
|
969 |
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1,045 |
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Net income |
12,303 |
|
9,311 |
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25,070 |
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18,786 |
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Preferred stock dividends |
-- |
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-- |
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-- |
|
318 |
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Net income available to common shares |
$ 12,303 |
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$ 9,311 |
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$ 25,070 |
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$ 18,468 |
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Net income per common share: |
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Basic |
$ 0.61 |
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$ 0.52 |
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$ 1.26 |
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$ 1.04 |
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Diluted |
$ 0.57 |
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$ 0.46 |
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$ 1.17 |
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$ 0.92 |
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Shares used in computing net income: |
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Basic |
20,314 |
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17,736 |
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19,855 |
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17,703 |
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Diluted |
21,448 |
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20,345 |
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21,388 |
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20,511 |
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