Exhibit 99.1
Callon Petroleum Company Announces Fourth Quarter and Full Year 2022 Results
FY22 net cash provided by operating activities and net income set Company records
Increased full year operating margin by nearly 40%
4Q22 and FY22 capital expenditures and production in-line with guidance

HOUSTON, Feb. 22, 2023 /PRNewswire/ - Callon Petroleum Company (NYSE: CPE) (“Callon” or the “Company”) today reported fourth quarter and full year 2022 financial and operating results. In addition, Callon today issued a separate release on its 2023 outlook.
Slides accompanying today’s releases are available at www.callon.com/investors.
2022 Highlights
•Set Company records for full-year net cash provided by operating activities of $1.5 billion and adjusted free cash flow of $622.7 million
•Set Company record for full-year net income of $19.54 per diluted share (all per share amounts are stated on a diluted basis)
•Improved full-year operating margin by 38% year-over-year to $58.04 per barrel of oil equivalent (Boe)
•Grew annual production by nearly 10% to 104.3 MBoe/d, in line with guidance
•Invested $841.5 million in operational capital expenditures, or less than 60% of net cash provided by operating activities
•Year-end total proved reserves of 479.5 MMBoe (57% oil) with a standardized measure of future discounted cash flows of total proved reserves of $9.0 billion; PV-10 of total proved reserves of $10.5 billion
•Increased proved developed reserves by 7% to 293.2 MMBoe (58% oil), representing 61% of total reserve volumes
•Paid down $461.9 million in debt and reduced leverage ratio, as defined by our credit facility, by over 40% over the last 12 months
Fourth Quarter 2022 Highlights
•Generated $372.6 million of net cash provided by operating activities and adjusted free cash flow of $165.4 million
•Net income of $272.5 million, or $4.41 per diluted share, adjusted EBITDA of $412.2 million, and adjusted income of $207.7 million or $3.36 per diluted share
•Fourth quarter 2022 production averaged 106.3 MBoe/d (62% oil)
•Reduced lease operating expense (LOE) to $7.58 per Boe
•Reduced debt by an additional $133.0 million
“Callon’s fourth quarter and full year performance drove new company records in profitability and cash flow,” said Joe Gatto, President and Chief Executive Officer. “Our results demonstrate what our strong operational team plus a quality, oil-weighted asset base can do, profitably growing production while improving margins and investing less than 60% of our cash flow. We believe our business model is sustainable with a deep inventory of high-return oil projects that adhere to our “Life of Field” co-development model. Our cash flow will continue to be allocated to disciplined reinvestment, further debt reduction and eventual returns of capital as we pursue shareholder value creation from multiple sources.”
Financial Results
Callon reported fourth quarter 2022 net income of $272.5 million, or $4.41 per diluted share, and adjusted EBITDA of $412.2 million. The Company’s adjusted income was $207.7 million, or $3.36 per diluted share.
The Company generated $372.6 million of net cash provided by operating activities in the fourth quarter, a 2% year-over-year increase. Net cash provided by operating activities in 2022 was up 54% year-over-year to $1.5 billion.
Total operational capital expenditures for the fourth quarter and full-year 2022 were $191.7 million and $841.5 million, respectively. Callon is committed to not outspending cash flow and had a capital reinvestment rate of less than 60% of net cash provided by operating activities in 2022.
For full-year 2022, debt was reduced by $461.9 million. The year-end balance on the Company’s senior secured revolving credit facility (the “Credit Facility”) was $503.0 million and cash balances were $3.4 million. In mid-October, Callon and its lenders entered into an amendment to the Credit Facility which extended the maturity to October 19, 2027. The Credit Facility has a borrowing base of $2.0 billion with an elected commitment of $1.5 billion.
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Operational Results
Fourth quarter production averaged 106.3 MBoe/d (62% oil and 82% liquids), in line with guidance. Results reflect the negative impact of adverse winter weather, which is estimated at approximately 0.6 MBoe/d.
Average realized commodity prices during the quarter were $84.33 per Bbl for oil (102% of NYMEX WTI), $25.79 per Bbl for natural gas liquids, and $4.06 per MMBtu for natural gas (66% of NYMEX HH). Total average realized price for the period was $62.00 per Boe on an unhedged basis.
LOE, which includes workover expense, for the quarter was $74.1 million or $7.58 per Boe, compared to $7.71 per Boe in the prior quarter of 2022. The sequential decrease in LOE was primarily related to lower operating costs for fuel, power, chemicals and repairs and maintenance.
Year-End Proved Reserves
DeGolyer and MacNaughton prepared the estimates of Callon’s proved reserves as of December 31, 2022. As of December 31, 2022, Callon’s estimated net proved reserves were 479.5 MMBoe and included 275.6 MMBbls of oil, 592.8 Bcf of natural gas, and 105.1 MMBbls of NGLs with a standardized measure of discounted future net cash flows of $9.0 billion using average realized prices for sales of oil, natural gas, and NGLs on the first calendar day of each month during the year of $95.02/Bbl for oil, $5.75/Mcf for natural gas, and $36.40/Bbl for NGLs. PV-10 using the same realized pricing was $10.5 billion for total proved reserves and $7.1 billion for proved developed reserves.
Oil comprised approximately 57% of the estimated total proved reserves. The Company added 68.0 MMBoe of new reserves in extensions and discoveries through development efforts in 2022, with a total of 114 gross (103.0 net) wells drilled and 106 gross (94.5 net) wells completed.
Environmental, Social, and Governance (“ESG”) Updates
The Company is committed to GHG emission reductions and has made significant progress in its 2022 environmental performance. Highlights include:
•On pace to achieve 2024 goal of reducing GHG intensity by 50%
•Exceeded our 2022 target for replacement of pneumatic devices
•Set a safety record, achieving the Company’s lowest recorded incident rate
Earnings Call Information
The Company will host a conference call on Thursday, February 23, 2023, to discuss fourth quarter and full year 2022 financial and operating results, as well as its outlook for 2023 and beyond.
Please join Callon Petroleum Company via the Internet for a webcast of the conference call:
Date/Time:Thursday, February 23, 2022, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time)
Webcast:Select “News and Events” under the “Investors” section of the Company’s website: www.callon.com.
An archive of the conference call webcast will also be available at www.callon.com under the “Investors” section of the website.
About Callon Petroleum
Callon Petroleum Company is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas.
Contact Information
Kevin Smith
Director of Investor Relations
Callon Petroleum Company
ir@callon.com
(281) 589-5200
Cautionary Statement Regarding Forward Looking Information
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding wells anticipated to be drilled and placed on production; future levels of development activity and associated production, capital expenditures and cash flow expectations and expected uses thereof; the Company’s production and expenditure guidance; estimated reserve quantities and the
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present value thereof; future debt levels and leverage; and the implementation of the Company’s business plans and strategy, as well as statements including the words “believe,” “expect,” “plans,” “may,” “will,” “should,” “could,” and words of similar meaning. These statements reflect the Company’s current views with respect to future events and financial performance based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil and natural gas prices; changes in the supply of and demand for oil and natural gas, including as a result general economic conditions or as a result of actions by, or disputes among members of OPEC and other oil and natural gas producing countries with respect to production levels or other matters related to the price of oil; our ability to drill and complete wells; operational, regulatory and environment risks; the cost and availability of equipment and labor; our ability to finance our development activities at expected costs or at expected times or at all; rising interest rates and inflation; our inability to realize the benefits of recent transactions; currently unknown risks and liabilities relating to the newly acquired assets and operations; adverse actions by third parties involved with the transactions; risks that are not yet known or material to us; and other risks more fully discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”), including our most recent Annual Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC’s website at www.sec.gov. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
Non-GAAP Financial Measures
This news release refers to non-GAAP financial measures such as “adjusted free cash flow,” “adjusted EBITDA,” “adjusted income,” “adjusted income per diluted share,” and “PV-10.” These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our filings with the SEC and posted on our website.
•Adjusted free cash flow is a supplemental non-GAAP measure that is defined by the Company as adjusted EBITDA less operational capital expenditures (accrual), capitalized cash interest, capitalized cash G&A (which excludes capitalized expense related to share-based awards), and cash interest expense, net. We believe adjusted free cash flow provides useful information to investors because it is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company’s ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Adjusted free cash flow is not a measure of a company’s financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities, or as a measure of liquidity, or as an alternative to net income (loss).
•Callon calculates adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization, (gains) losses on derivative instruments excluding net settled derivative instruments, impairment of evaluated oil and gas properties, non-cash share-based compensation expense, merger, integration and transaction expense, (gain) loss on extinguishment of debt, and certain other expenses. Adjusted EBITDA is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss), cash flow provided by operating activities or other income or cash flow data prepared in accordance with GAAP. However, the Company believes that adjusted EBITDA provides useful information to investors because it provides additional information with respect to our performance or ability to meet our future debt service, capital expenditures and working capital requirements. Because adjusted EBITDA excludes some, but not all, items that affect net income (loss) and may vary among companies, the adjusted EBITDA presented above may not be comparable to similarly titled measures of other companies.
•Adjusted income and adjusted income per diluted share are supplemental non-GAAP measures that Callon believes are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of these items and non-cash valuation adjustments, which are detailed in the reconciliation provided. Adjusted income and adjusted income per diluted share are not measures of financial performance under GAAP. Accordingly, neither should be considered as a substitute for net income (loss), operating income (loss), or other income data prepared in accordance with GAAP. However, the Company believes that adjusted income and adjusted income per diluted share provide additional information with respect to our performance. Because adjusted income and adjusted income per diluted share exclude some, but not all, items that affect net income (loss) and may vary among companies, the adjusted income and adjusted income per diluted share presented above may not be comparable to similarly titled measures of other companies.
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•Callon believes that the presentation of PV-10 provides greater comparability when evaluating oil and gas companies due to the many factors unique to each individual company that impact the amount and timing of future income taxes. In addition, we believe that PV-10 is widely used by investors and analysts as a basis for comparing the relative size and value of our proved reserves to other oil and gas companies. PV-10 should not be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows or any other measure of a company’s financial or operating performance presented in accordance with GAAP. Neither PV-10 nor the standardized measure of discounted future net cash flows purport to represent the fair value of our proved oil and gas reserves.
Adjusted Income and Adjusted EBITDA. The following tables reconcile the Company’s adjusted income and adjusted EBITDA to net income:
Three Months EndedYear Ended
December 31, 2022September 30, 2022December 31, 2021December 31, 2022
(In thousands except per share data)
Net income$272,467 $549,603 $285,351 $1,209,816 
(Gain) loss on derivative contracts25,855 (134,850)10,145 330,953 
Loss on commodity derivative settlements, net(44,380)(105,006)(149,938)(467,420)
Non-cash expense related to share-based awards1,452 99 939 2,507 
Merger, integration, transaction and other(485)2,861 12,343 3,414 
Loss on extinguishment of debt3,241 — 43,460 45,658 
Tax effect on adjustments above (a)
3,007 49,748 17,441 17,827 
Change in valuation allowance(53,438)(112,640)(60,585)(244,745)
Adjusted income$207,719 $249,815 $159,156 $898,010 
Net income per diluted share$4.41 $8.88 $4.78 $19.54 
Adjusted income per diluted share$3.36 $4.04 $2.66 $14.51 
Basic weighted average common shares outstanding61,610 61,703 59,143 61,620 
Diluted weighted average common shares outstanding (GAAP)61,844 61,870 59,737 61,904 
(a)Calculated using the federal statutory rate of 21%.

Three Months EndedYear Ended
December 31, 2022September 30, 2022December 31, 2021December 31, 2022
(In thousands)
Net income$272,467 $549,603 $285,351 $1,209,816 
(Gain) loss on derivative contracts25,855 (134,850)10,145 330,953 
Loss on commodity derivative settlements, net(44,380)(105,006)(149,938)(467,420)
Non-cash expense related to share-based awards1,452 99 939 2,507 
Merger, integration, transaction and other(485)2,861 12,343 3,414 
Income tax (benefit) expense4,785 3,515 (837)11,793 
Interest expense, net17,950 19,468 25,226 79,667 
Depreciation, depletion and amortization131,296 122,833 112,551 466,517 
Loss on extinguishment of debt3,241 — 43,460 45,658 
Adjusted EBITDA$412,181 $458,523 $339,240 $1,682,905 
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Adjusted Free Cash Flow. The following table reconciles the Company’s adjusted EBITDA to net cash provided by operating activities:
Three Months Ended
December 31, 2022September 30, 2022June 30, 2022March 31, 2022December 31, 2021
(In thousands)
Net cash provided by operating activities$372,647 $475,275 $372,325 $281,270 $366,310 
Changes in working capital and other6,786 (75,748)25,096 123,805 (67,390)
Changes in accrued hedge settlements15,816 40,590 1,839 (31,951)6,781 
Cash interest expense, net16,932 18,406 19,206 19,842 22,268 
Merger, integration and transaction— — — 769 11,271 
Adjusted EBITDA$412,181 $458,523 $418,466 $393,735 $339,240 
Less: Operational capital expenditures (accrual)191,673 254,662 237,812 157,378 159,786 
Less: Capitalized interest27,187 25,964 24,416 23,506 22,591 
Less: Interest expense, net of capitalized amounts16,932 18,406 19,206 19,842 22,268 
Less: Capitalized cash G&A11,035 11,053 11,432 9,703 11,035 
Adjusted free cash flow$165,354 $148,438 $125,600 $183,306 $123,560 
PV-10. PV-10 as of December 31, 2022 is reconciled below to the standardized measure of discounted future net cash flows:
As of December 31, 2022
(In millions)
Standardized measure of discounted future net cash flows$9,004.1 
Add: present value of future income taxes discounted at 10% per annum$1,530.7 
Total proved reserves - PV-10$10,534.8 
Total proved developed reserves - PV-10$7,122.9 
Total proved undeveloped reserves - PV-10$3,411.9 




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Callon Petroleum Company
Consolidated Balance Sheets
(In thousands, except par and share amounts)

December 31,
20222021
ASSETS
Current assets:
   Cash and cash equivalents$3,395 $9,882 
   Accounts receivable, net237,128 232,436 
   Fair value of derivatives21,332 22,381 
   Other current assets35,783 30,745 
      Total current assets297,638 295,444 
Oil and natural gas properties, full cost accounting method:
   Evaluated properties, net4,023,603 3,352,821 
   Unevaluated properties1,711,306 1,812,827 
      Total oil and natural gas properties, net5,734,909 5,165,648 
Other property and equipment, net26,152 28,128 
Deferred financing costs18,822 18,125 
Other assets, net68,560 40,158 
   Total assets$6,146,081 $5,547,503 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
   Accounts payable and accrued liabilities$536,233 $569,991 
   Fair value of derivatives16,197 185,977 
   Other current liabilities150,384 116,523 
      Total current liabilities702,814 872,491 
Long-term debt2,241,295 2,694,115 
Asset retirement obligations53,892 54,458 
Fair value of derivatives13,415 11,409 
Other long-term liabilities49,243 49,262 
   Total liabilities3,060,659 3,681,735 
Commitments and contingencies
Stockholders’ equity:
   Common stock, $0.01 par value, 130,000,000 and 78,750,000 shares authorized;
   61,621,518 and 61,370,684 shares outstanding, respectively
616 614 
   Capital in excess of par value4,022,194 4,012,358 
   Accumulated deficit(937,388)(2,147,204)
      Total stockholders’ equity3,085,422 1,865,768 
Total liabilities and stockholders’ equity$6,146,081 $5,547,503 


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Callon Petroleum Company
Consolidated Statements of Operations
(In thousands, except per share amounts)

 Three Months Ended December 31,For the Year Ended December 31,
 2022202120222021
Operating Revenues:  
Oil$513,734 $506,445 $2,262,647 $1,516,225 
Natural gas42,774 56,674 232,681 141,493 
Natural gas liquids49,776 69,782 260,472 193,861 
Sales of purchased oil and gas97,965 59,287 475,164 193,451 
Total operating revenues704,249 692,188 3,230,964 2,045,030 
Operating Expenses:  
Lease operating74,097 73,522 290,486 203,141 
Production and ad valorem taxes34,079 33,693 159,920 100,160 
Gathering, transportation and processing25,285 22,083 96,902 80,970 
Cost of purchased oil and gas100,338 61,530 478,445 201,088 
Depreciation, depletion and amortization131,296 112,551 466,517 356,556 
General and administrative15,341 13,116 57,393 50,483 
Merger, integration and transaction— 11,271 769 14,289 
Total operating expenses380,436 327,766 1,550,432 1,006,687 
Income From Operations323,813 364,422 1,680,532 1,038,343 
Other (Income) Expenses:  
Interest expense, net of capitalized amounts17,950 25,226 79,667 102,012 
Loss on derivative contracts25,855 10,145 330,953 522,300 
Loss on extinguishment of debt3,241 43,460 45,658 41,040 
Other (income) expense(485)1,077 2,645 7,660 
Total other (income) expense46,561 79,908 458,923 673,012 
Income Before Income Taxes277,252 284,514 1,221,609 365,331 
Income tax benefit (expense)(4,785)837 (11,793)(180)
Net Income$272,467 $285,351 $1,209,816 $365,151 
Net Income Per Common Share:
Basic$4.42 $4.82 $19.63 $7.51 
Diluted$4.41 $4.78 $19.54 $7.26 
Weighted Average Common Shares Outstanding:
Basic61,610 59,143 61,620 48,612 
Diluted61,844 59,737 61,904 50,311 
















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Callon Petroleum Company
Consolidated Statements of Cash Flows
(In thousands)

 Three Months Ended
December 31,		For the Year Ended
December 31,
 2022202120222021
Cash flows from operating activities:
Net income$272,467 $285,351 $1,209,816 $365,151 
Adjustments to reconcile net income to net cash provided by operating activities:
  Depreciation, depletion and amortization131,296 112,551 466,517 356,556 
  Amortization of non-cash debt related items, net1,017 2,958 5,280 10,124 
  Deferred income tax expense2,653 — 4,279 — 
  Loss on derivative contracts25,855 10,145 330,953 522,300 
  Cash paid for commodity derivative settlements, net(60,196)(156,719)(493,714)(395,097)
  Loss on extinguishment of debt3,241 43,460 45,658 41,040 
  Non-cash expense related to share-based awards1,452 939 2,507 12,923 
  Other, net(1,568)31 7,136 11,037 
  Changes in current assets and liabilities:
    Accounts receivable48,943 (3,175)(3,480)(86,402)
    Other current assets(3,163)(1,698)(15,392)(10,399)
    Accounts payable and accrued liabilities(49,350)72,467 (58,043)146,910 
    Net cash provided by operating activities372,647 366,310 1,501,517 974,143 
Cash flows from investing activities:
Capital expenditures(238,760)(150,935)(992,985)(578,487)
Acquisition of oil and gas properties(10,139)(426,496)(28,253)(493,732)
Proceeds from sales of assets17,780 152,686 27,093 188,101 
Cash paid for settlement of contingent consideration arrangement— — (19,171)— 
Other, net792 3,512 14,289 7,718 
    Net cash used in investing activities(230,327)(421,233)(999,027)(876,400)
Cash flows from financing activities:  
Borrowings on credit facility751,000 904,000 3,286,000 2,140,500 
Payments on credit facility(884,000)(842,000)(3,568,000)(2,340,500)
Issuance of senior notes— — 600,000 650,000 
Redemption of senior notes— — (467,287)(542,755)
Redemption of 9.0% Second Lien Senior Secured Notes due 2025— — (339,507)— 
Payment of deferred financing costs(10,275)(504)(21,898)(12,672)
Other, net— (390)1,715 (2,670)
    Net cash provided by (used in) financing activities(143,275)61,106 (508,977)(108,097)
Net change in cash and cash equivalents(955)6,183 (6,487)(10,354)
  Balance, beginning of period4,350 3,699 9,882 20,236 
  Balance, end of period$3,395 $9,882 $3,395 $9,882 


SOURCE Callon Petroleum Company
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