For further information contact
Rodger Smith, 1-800-451-1294
Callon Petroleum Company Reports Results For
Third Quarter, First Nine Months of 2005
September 30, 2005.
Third Quarter 2005 Net Income. Callon reported net income of $3.7 million,
or $0.17 per diluted share, after charges of $3.8 million, or $0.11 per diluted
share, for fourth quarter 2005 ineffective derivatives in accordance with SFAS
No.133 related to production downtime because of tropical storm/hurricane
activity. This compares with net income
of $546,000, or $0.01 per diluted share during the same period of last year,
which included charges of $532,000, or $0.03 per diluted share, attributable to
early extinguishment of debt and $731,000, or $0.04 per diluted share, for
ineffective derivatives as a result of Hurricane
Third Quarter 2005 Operating Results. Oil and gas sales totaled $31.7 million from
production of 41.3 million cubic feet of natural gas equivalent per day (MMcfe/d). This
corresponds to sales of $25.1 million from production of 50.6 MMcfe/d during the same period in 2004. On August 27, 2005 several of the company’s
fields were shut-in due to the approach of Hurricane Katrina and subsequently,
during the next month, due to the approach of Hurricane Rita. Primarily as a result of downtime caused by those
two severe storms to third party transmission lines and downstream facilities
which process Callon’s crude oil and natural gas, the company had to defer
production of approximately 20.3 MMcf/d during the third quarter of 2005. The company
had to defer 9 MMcfe/d during the third quarter of
2004 due to Hurricane Ivan. The average
price, after the impact of hedging, received per thousand cubic feet of natural
gas in the third quarter of 2005 increased to $9.32 compared to $6.11 during
the third quarter of 2004, while the average price, after the impact of
hedging, received per barrel of oil in the third quarter of 2005 increased to
$46.16 compared to $27.83 during the same period a year earlier.
Nine Months 2005 Net Income. For the nine months ended September 30, 2005, the company reported net income of $22.5 million, or $1.09 per diluted share. This compares to a net income of $12.4 million, or $0.74 per share on a diluted basis, for the same period in 2004.
Nine Months 2005 Operating Results. Operating results for the nine-month period ended September 30, 2005 include oil and gas sales of $116.4 million from average production of 59.5 MMcfe/d. This corresponds to sales of $94.7 million from average daily production of 62.2 MMcfe/d during the same period in 2004. The average price, after the impact of hedging, received per thousand cubic feet of natural gas for the nine-month period ended September 30, 2005 increased to $7.65 compared to $6.11 during the first nine months in 2004, while the average price, after the impact of hedging, received per barrel of oil increased to $41.01 compared to $29.63 during the same period a year earlier.
Third Quarter 2005 Discretionary Cash Flow. Discretionary cash flow totaled $20.0 million compared to $13.4 million during the same period of the previous year. Net cash flow provided by operating activities, as defined by GAAP, totaled $32.5 million and $14.9 million during the three-month periods ended September 30, 2005 and 2004, respectively. (See “Non-GAAP Financial Measure” that follows and the accompanying reconciliation of discretionary cash flow to net cash flow provided by operating activities.)
Nine Months 2005 Discretionary Cash Flow. Discretionary cash
flow totaled $81.9 million compared to $56.9 million during the first nine
months of the previous year. Net cash
flow provided by operating activities, as defined by GAAP, totaled $86.1
million and $54.7 million during the nine-month periods ended September 30,
2005 and 2004, 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 this measure is a financial indicator of the company’s ability to fund capital expenditures and service debt. Callon also believes this non-GAAP financial measure of cash flow is useful information to investors because it is widely used by professional research analysts in the valuation, comparison, rating and investment recommendations of companies within the oil and gas exploration and production industry. Many investors use the published research of these analysts in making their investment decisions. 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 |
Nine Months Ended |
||
|
(In thousands)
|
September
30, |
September 30, |
||
|
|
2005 2004 |
2005 2004 |
||
|
Discretionary cash flow |
$20,035 |
$13,407 |
$81,873 |
$56,931 |
|
Net working capital changes and other changes |
12,503 |
1,498 |
4,218 |
(2,262) |
|
Net cash flow provided by operating activities |
$32,538 |
$14,905 |
$86,091 |
$54,669 |
|
Consolidated Condensed Balance Sheets: |
|
||
|
(In thousands) |
|
||
|
|
September 30, |
December 31, |
|
|
|
2005 |
2004 |
|
|
|
(Unaudited) |
|
|
|
Cash and cash equivalents |
$ 25,797 |
$
3,266 |
|
|
Oil and gas properties, net |
424,755 |
406,690 |
|
|
All other assets |
49,978 |
47,567 |
|
|
Total
assets |
$500,530 |
$457,523 |
|
|
|
|
|
|
|
Long-term debt including current maturities |
$188,757 |
$192,927 |
|
|
All other liabilities |
92,751 |
66,284 |
|
|
Stockholders’ equity |
219,022 |
198,312 |
|
|
Total
liabilities and stockholders’ equity |
$500,530 |
$457,523 |
|
|
Production and Price Information: |
Three Months Ended |
Nine Months Ended |
||
|
|
September 30, |
September 30, |
||
|
|
2005 |
2004 |
2005 |
2004 |
|
Production: |
|
|
|
|
|
Oil (MBbls) |
382 |
376 |
1,613 |
1,354 |
|
Gas (MMcf) |
1,510 |
2,405 |
6,570 |
8,924 |
|
Gas equivalent (MMcfe) |
3,804 |
4,659 |
16,246 |
17,050 |
|
Average daily (MMcfe) |
41.3 |
50.6 |
59.5 |
62.2 |
|
|
|
|
|
|
|
Average prices: |
|
|
|
|
|
Oil ($/Bbl) (a) |
$46.16 |
$27.83 |
$41.01 |
$29.63 |
|
Gas ($/Mcf) |
$
9.32 |
$
6.11 |
$
7.65 |
$ 6.11 |
|
Gas equivalent ($/Mcfe) |
$
8.34 |
$
5.40 |
$
7.16 |
$ 5.55 |
|
|
|
|
|
|
|
(a) Below is a reconciliation of the average NYMEX price to the |
|
|
|
|
|
average realized sales
price per barrel of oil: |
|
|
|
|
|
|
|
|
|
|
|
Average NYMEX oil price |
$63.19 |
$43.87 |
$55.40 |
$39.11 |
|
Basis differentials and
quality adjustments |
( 6.98) |
( 4.77) |
( 8.04) |
( 3.40) |
|
Transportation |
( 1.25) |
( 1.27) |
( 1.28) |
( 1.27) |
|
Hedging |
( 8.80) |
( 10.00) |
( 5.07) |
( 4.81) |
|
Averaged realized oil price |
$46.16 |
$27.83 |
$41.01 |
$29.63 |
Callon
Petroleum Company
Consolidated
Statements of Operations
(Unaudited)
(In thousands,
except per share amounts)
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||
|
|
September 30, |
|
September 30, |
|
||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
Oil and gas sales |
$ 31,722 |
|
$ 25,138 |
|
$116,402 |
|
$ 94,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
5,649 |
|
5,771 |
|
18,382 |
|
17,062 |
|
|
|
Depreciation,
depletion and amortization |
9,313 | ||||||||