HOUSTON, June 13, 2019 /PRNewswire/ — Callon Petroleum Company (NYSE: CPE) (“Callon” or “we” or “our”) announced today that it closed on the previously announced divestiture of non-core assets in the southern Midland Basin to Sequitur Permian, LLC for net cash proceeds of $245 million, subject to customary post-closing adjustments. Net cash proceeds were adjusted for an effective date of January 1, 2019, and do not include potential contingent consideration payments of up to $60 million based on West Texas Intermediate average annual pricing over a three-year period.
Joe Gatto, President and Chief Executive Officer commented, “We remain on a clear path to attain the various objectives we have outlined for investors. This transaction is a meaningful step forward on our deleveraging goals which will also be advanced by our cash flow generation in coming quarters.”
Updated 2019 Guidance
Callon is updating its full year guidance to account for the impact of this divestiture and a previously announced acreage trade involving producing properties in Midland County. In addition, management is lowering its estimates for operational capital expenditures to reflect realized efficiencies and cost reductions.
Previous Full Year |
Updated Full Year |
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2019 Guidance |
2019 Guidance |
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Total production (Mboe/d) |
39.5 – 41.5 |
38.0 – 39.5 |
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% oil |
77% – 78% |
78% – 79% |
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Income statement expenses (per Boe) |
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LOE, including workovers |
$5.50 – $6.50 |
$5.50 – $6.50 |
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Production taxes, including ad valorem (% unhedged revenue) |
7 % |
7 % |
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Adjusted G&A: cash component (a) |
$2.00 – $2.50 |
$2.00 – $2.50 |
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Adjusted G&A: non-cash component (b) |
$0.50 – $1.00 |
$0.50 – $1.00 |
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Cash interest expense (c) |
$0.00 |
$0.00 |
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Effective income tax rate |
22% |
22% |
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Capital expenditures ($MM, accrual basis) |
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Total operational (d) |
$500 – $525 |
$495 – $520 |
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Capitalized interest and G&A expenses |
$100 – $105 |
$100 – $105 |
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Net operated horizontal wells placed on production |
47 – 49 |
47 – 49 |
a) |
Excludes stock-based compensation and corporate depreciation and amortization. Adjusted G&A is a non-GAAP financial measure; see our most recent earnings release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
b) |
Excludes certain non-recurring expenses and non-cash valuation adjustments. Adjusted G&A is a non-GAAP financial measure; see our most recent earnings release for a reconciliation of G&A expense on a GAAP basis to Adjusted G&A expense. |
c) |
All cash interest expense anticipated to be capitalized. |
d) |
Includes facilities, equipment, seismic, land and other items. Excludes capitalized expenses. |
About Callon Petroleum Company
Callon Petroleum Company is an independent energy company focused on the acquisition and development of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas.
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