|
Callon Petroleum Company
(Exact Name of Registrant as Specified in Its Charter)
|
|
Delaware
|
|
64-0844345
|
State or Other Jurisdiction of
Incorporation or Organization
|
|
I.R.S. Employer Identification No.
|
1401 Enclave Parkway, Suite 600
Houston, Texas
|
|
77077
|
Address of Principal Executive Offices
|
|
Zip Code
|
|
(281) 589-5200
|
|
|
Registrant’s Telephone Number, Including Area Code
|
|
|
|
|
|
Not Applicable
|
|
|
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
|
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
|
|
|
|
|
|
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
Title of Each Class
|
|
Trading Symbol(s)
|
|
Name of Each Exchange on Which Registered
|
Common Stock, $0.01 par value
|
|
CPE
|
|
New York Stock Exchange
|
10.0% Series A Cumulative Preferred Stock
|
|
CPE.A
|
|
New York Stock Exchange
|
Part I. Financial Information
|
|
|
|
Item 1. Financial Statements (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Part II. Other Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
ARO
: asset retirement obligation.
|
•
|
ASU
: accounting standards update.
|
•
|
Bbl
or
Bbls
: barrel or barrels of oil or natural gas liquids.
|
•
|
BOE
: barrel of oil equivalent, determined by using the ratio of one Bbl of oil or NGLs to six Mcf of gas. The ratio of one barrel of oil or NGL to six Mcf of natural gas is commonly used in the industry and represents the approximate energy equivalence of oil or NGLs to natural gas, and does not represent the economic equivalency of oil and NGLs to natural gas. The sales price of a barrel of oil or NGLs is considerably higher than the sales price of six Mcf of natural gas.
|
•
|
BOE/d
: BOE per day.
|
•
|
Btu
: a British thermal unit, which is a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit.
|
•
|
Completion
: The process of treating a drilled well followed by the installation of permanent equipment for the production of oil or natural gas or, in the case of a dry hole, the reporting of abandonment to the appropriate agency.
|
•
|
Cushing
: An oil delivery point that serves as the benchmark oil price for West Texas Intermediate.
|
•
|
FASB
: Financial Accounting Standards Board.
|
•
|
GAAP
: Generally Accepted Accounting Principles in the United States.
|
•
|
Henry Hub
: A natural gas pipeline delivery point that serves as the benchmark natural gas price underlying NYMEX natural gas futures contracts.
|
•
|
Horizontal drilling
: A drilling technique used in certain formations where a well is drilled vertically to a certain depth and then drilled at a right angle within a specified interval.
|
•
|
LIBOR
: London Interbank Offered Rate.
|
•
|
LOE
: lease operating expense.
|
•
|
MBbls
: thousand barrels of oil.
|
•
|
MBOE
: thousand BOE.
|
•
|
Mcf
: thousand cubic feet of natural gas.
|
•
|
MMBtu
: million Btu.
|
•
|
MMcf
: million cubic feet of natural gas.
|
•
|
NGL or NGLs
: natural gas liquids, such as ethane, propane, butanes and natural gasoline that are extracted from natural gas production streams.
|
•
|
NYMEX
: New York Mercantile Exchange.
|
•
|
Oil
: includes crude oil and condensate.
|
•
|
Realized price
: The cash market price less all expected quality, transportation and demand adjustments.
|
•
|
Royalty interest
: An interest that gives an owner the right to receive a portion of the resources or revenues without having to carry any costs of development.
|
•
|
RSU
: restricted stock units.
|
•
|
SEC
: United States Securities and Exchange Commission.
|
•
|
Waha
: A natural gas delivery point in West Texas that serves as the benchmark for natural gas.
|
•
|
Working interest
: An operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and receive a share of production and requires the owner to pay a share of the costs of drilling and production operations.
|
•
|
WTI
: West Texas Intermediate grade crude oil, used as a pricing benchmark for sales contracts and NYMEX oil futures contracts.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
Unaudited
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
10,482
|
|
|
$
|
16,051
|
|
Accounts receivable
|
|
137,110
|
|
|
131,720
|
|
||
Fair value of derivatives
|
|
11,372
|
|
|
65,114
|
|
||
Other current assets
|
|
12,034
|
|
|
9,740
|
|
||
Total current assets
|
|
170,998
|
|
|
222,625
|
|
||
Oil and natural gas properties, full cost accounting method:
|
|
|
|
|
||||
Evaluated properties
|
|
4,760,071
|
|
|
4,585,020
|
|
||
Less accumulated depreciation, depletion, amortization and impairment
|
|
(2,333,589
|
)
|
|
(2,270,675
|
)
|
||
Evaluated oil and natural gas properties, net
|
|
2,426,482
|
|
|
2,314,345
|
|
||
Unevaluated properties
|
|
1,432,118
|
|
|
1,404,513
|
|
||
Total oil and natural gas properties, net
|
|
3,858,600
|
|
|
3,718,858
|
|
||
Operating lease right-of-use assets
|
|
40,977
|
|
|
—
|
|
||
Other property and equipment, net
|
|
22,413
|
|
|
21,901
|
|
||
Restricted investments
|
|
3,450
|
|
|
3,424
|
|
||
Deferred financing costs
|
|
5,742
|
|
|
6,087
|
|
||
Fair value of derivatives
|
|
385
|
|
|
—
|
|
||
Other assets, net
|
|
6,269
|
|
|
6,278
|
|
||
Total assets
|
|
$
|
4,108,834
|
|
|
$
|
3,979,173
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable and accrued liabilities
|
|
$
|
230,990
|
|
|
$
|
261,184
|
|
Operating lease liabilities
|
|
29,134
|
|
|
—
|
|
||
Accrued interest
|
|
25,920
|
|
|
24,665
|
|
||
Cash-settleable restricted stock unit awards
|
|
1,060
|
|
|
1,390
|
|
||
Asset retirement obligations
|
|
3,771
|
|
|
3,887
|
|
||
Fair value of derivatives
|
|
24,550
|
|
|
10,480
|
|
||
Other current liabilities
|
|
8,512
|
|
|
13,310
|
|
||
Total current liabilities
|
|
323,937
|
|
|
314,916
|
|
||
Senior secured revolving credit facility
|
|
330,000
|
|
|
200,000
|
|
||
6.125% senior unsecured notes due 2024
|
|
595,971
|
|
|
595,788
|
|
||
6.375% senior unsecured notes due 2026
|
|
393,896
|
|
|
393,685
|
|
||
Operating lease liabilities
|
|
11,751
|
|
|
—
|
|
||
Asset retirement obligations
|
|
10,189
|
|
|
10,405
|
|
||
Cash-settleable restricted stock unit awards
|
|
2,252
|
|
|
2,067
|
|
||
Deferred tax liability
|
|
4,415
|
|
|
9,564
|
|
||
Fair value of derivatives
|
|
6,983
|
|
|
7,440
|
|
||
Other long-term liabilities
|
|
995
|
|
|
100
|
|
||
Total liabilities
|
|
1,680,389
|
|
|
1,533,965
|
|
||
Commitments and contingencies
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation
preference, 2,500,000 shares authorized; 1,458,948 shares outstanding |
|
15
|
|
|
15
|
|
||
Common stock, $0.01 par value, 300,000,000 shares authorized; 227,884,091 and
227,582,575 shares outstanding, respectively |
|
2,279
|
|
|
2,276
|
|
||
Capital in excess of par value
|
|
2,481,879
|
|
|
2,477,278
|
|
||
Accumulated deficit
|
|
(55,728
|
)
|
|
(34,361
|
)
|
||
Total stockholders’ equity
|
|
2,428,445
|
|
|
2,445,208
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
4,108,834
|
|
|
$
|
3,979,173
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating revenues:
|
|
|
|
||||
Oil sales
|
$
|
141,098
|
|
|
$
|
115,286
|
|
Natural gas sales
|
11,949
|
|
|
12,154
|
|
||
Total operating revenues
|
153,047
|
|
|
127,440
|
|
||
Operating expenses:
|
|
|
|
||||
Lease operating expenses
|
24,067
|
|
|
13,039
|
|
||
Production taxes
|
10,813
|
|
|
8,463
|
|
||
Depreciation, depletion and amortization
|
59,767
|
|
|
35,417
|
|
||
General and administrative
|
11,753
|
|
|
8,769
|
|
||
Settled share-based awards
|
3,024
|
|
|
—
|
|
||
Accretion expense
|
241
|
|
|
218
|
|
||
Acquisition expense
|
157
|
|
|
548
|
|
||
Total operating expenses
|
109,822
|
|
|
66,454
|
|
||
Income from operations
|
43,225
|
|
|
60,986
|
|
||
Other (income) expenses:
|
|
|
|
||||
Interest expense, net of capitalized amounts
|
738
|
|
|
460
|
|
||
Loss on derivative contracts
|
67,260
|
|
|
4,481
|
|
||
Other income
|
(81
|
)
|
|
(211
|
)
|
||
Total other (income) expense
|
67,917
|
|
|
4,730
|
|
||
Income (loss) before income taxes
|
(24,692
|
)
|
|
56,256
|
|
||
Income tax (benefit) expense
|
(5,149
|
)
|
|
495
|
|
||
Net income (loss)
|
(19,543
|
)
|
|
55,761
|
|
||
Preferred stock dividends
|
(1,824
|
)
|
|
(1,824
|
)
|
||
Income (loss) available to common stockholders
|
$
|
(21,367
|
)
|
|
$
|
53,937
|
|
Income per common share:
|
|
|
|
||||
Basic
|
$
|
(0.09
|
)
|
|
$
|
0.27
|
|
Diluted
|
$
|
(0.09
|
)
|
|
$
|
0.27
|
|
Weighted average common shares outstanding:
|
|
|
|
||||
Basic
|
227,784
|
|
|
201,921
|
|
||
Diluted
|
227,784
|
|
|
202,588
|
|
|
Three Months Ended March 31,
|
||||||
Cash flows from operating activities:
|
2019
|
|
2018
|
||||
Net income (loss)
|
$
|
(19,543
|
)
|
|
$
|
55,761
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
60,672
|
|
|
36,066
|
|
||
Accretion expense
|
241
|
|
|
218
|
|
||
Amortization of non-cash debt related items
|
738
|
|
|
453
|
|
||
Deferred income tax (benefit) expense
|
(5,149
|
)
|
|
495
|
|
||
(Gain) loss on derivatives, net of settlements
|
66,970
|
|
|
(3,978
|
)
|
||
Loss on sale of other property and equipment
|
28
|
|
|
—
|
|
||
Non-cash expense related to equity share-based awards
|
4,545
|
|
|
1,131
|
|
||
Change in the fair value of liability share-based awards
|
1,881
|
|
|
1,012
|
|
||
Payments to settle asset retirement obligations
|
(664
|
)
|
|
(366
|
)
|
||
Payments for cash-settled restricted stock unit awards
|
(1,296
|
)
|
|
(3,089
|
)
|
||
Changes in current assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(5,390
|
)
|
|
(8,067
|
)
|
||
Other current assets
|
(2,294
|
)
|
|
61
|
|
||
Current liabilities
|
(26,003
|
)
|
|
12,938
|
|
||
Other
|
(177
|
)
|
|
(420
|
)
|
||
Net cash provided by operating activities
|
74,559
|
|
|
92,215
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(193,211
|
)
|
|
(111,330
|
)
|
||
Acquisitions
|
(27,947
|
)
|
|
(38,923
|
)
|
||
Acquisition deposit
|
—
|
|
|
900
|
|
||
Proceeds from sale of assets
|
13,879
|
|
|
—
|
|
||
Net cash used in investing activities
|
(207,279
|
)
|
|
(149,353
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings on senior secured revolving credit facility
|
220,000
|
|
|
80,000
|
|
||
Payments on senior secured revolving credit facility
|
(90,000
|
)
|
|
(30,000
|
)
|
||
Payment of preferred stock dividends
|
(1,824
|
)
|
|
(1,824
|
)
|
||
Tax withholdings related to restricted stock units
|
(1,025
|
)
|
|
(560
|
)
|
||
Net cash provided by financing activities
|
127,151
|
|
|
47,616
|
|
||
Net change in cash and cash equivalents
|
(5,569
|
)
|
|
(9,522
|
)
|
||
Balance, beginning of period
|
16,051
|
|
|
27,995
|
|
||
Balance, end of period
|
$
|
10,482
|
|
|
$
|
18,473
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Non-cash investing activities:
|
|
|
|
||||
Change in accrued capital expenditures
|
$
|
(7,854
|
)
|
|
$
|
20,727
|
|
Change in asset retirement costs
|
132
|
|
|
4,358
|
|
||
Operating leases
|
2,022
|
|
|
—
|
|
||
Net cash used in operating activities:
|
|
|
|
||||
Interest paid, net of capitalized amounts
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes paid
|
—
|
|
|
—
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
9,565
|
|
|
—
|
|
|
Preferred
|
|
Common
|
|
Capital in
|
|
|
|
Total
|
||||||||||||||||
|
Stock
|
|
Stock
|
|
Excess
|
|
Accumulated
|
|
Stockholders'
|
||||||||||||||||
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
of Par
|
|
Deficit
|
|
Equity
|
||||||||||||
Balance at 12/31/2018
|
1,459
|
|
|
$
|
15
|
|
|
227,583
|
|
|
$
|
2,276
|
|
|
$
|
2,477,278
|
|
|
$
|
(34,361
|
)
|
|
$
|
2,445,208
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,543
|
)
|
|
(19,543
|
)
|
|||||
Shares issued pursuant to employee benefit plans
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
154
|
|
|||||
Restricted stock
|
—
|
|
|
—
|
|
|
277
|
|
|
3
|
|
|
4,447
|
|
|
—
|
|
|
4,450
|
|
|||||
Preferred stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,824
|
)
|
|
(1,824
|
)
|
|||||
Balance at 03/31/2019
|
1,459
|
|
|
$
|
15
|
|
|
227,884
|
|
|
$
|
2,279
|
|
|
$
|
2,481,879
|
|
|
$
|
(55,728
|
)
|
|
$
|
2,428,445
|
|
|
Preferred
|
|
Common
|
|
Capital in
|
|
|
|
Total
|
||||||||||||||||
|
Stock
|
|
Stock
|
|
Excess
|
|
Accumulated
|
|
Stockholders'
|
||||||||||||||||
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
of Par
|
|
Deficit
|
|
Equity
|
||||||||||||
Balance at 12/31/2017
|
1,459
|
|
|
$
|
15
|
|
|
201,836
|
|
|
$
|
2,018
|
|
|
$
|
2,181,359
|
|
|
$
|
(327,426
|
)
|
|
$
|
1,855,966
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,761
|
|
|
55,761
|
|
|||||
Shares issued pursuant to employee benefit plans
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
88
|
|
|||||
Restricted stock
|
—
|
|
|
—
|
|
|
105
|
|
|
1
|
|
|
1,152
|
|
|
—
|
|
|
1,153
|
|
|||||
Preferred stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,824
|
)
|
|
(1,824
|
)
|
|||||
Balance at 03/31/2018
|
1,459
|
|
|
$
|
15
|
|
|
201,948
|
|
|
$
|
2,019
|
|
|
$
|
2,182,599
|
|
|
$
|
(273,489
|
)
|
|
$
|
1,911,144
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
7.
|
|||
8.
|
|||
3.
|
9.
|
||
4.
|
10.
|
||
5.
|
11.
|
||
6.
|
12.
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
•
|
Whether any expired or existing contracts were or contained leases;
|
•
|
The lease classification for any expired or existing leases; and
|
•
|
Initial direct costs for any existing leases.
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
Evaluated oil and natural gas properties
|
$
|
253,089
|
|
Unevaluated oil and natural gas properties
|
287,000
|
|
|
Asset retirement obligations
|
(570
|
)
|
|
Net assets acquired
|
$
|
539,519
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
(share amounts in thousands)
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income (loss)
|
$
|
(19,543
|
)
|
|
$
|
55,761
|
|
Preferred stock dividends
|
(1,824
|
)
|
|
(1,824
|
)
|
||
Income (loss) available to common stockholders
|
$
|
(21,367
|
)
|
|
$
|
53,937
|
|
|
|
|
|
||||
Weighted average common shares outstanding
|
227,784
|
|
|
201,921
|
|
||
Dilutive impact of restricted stock
|
—
|
|
|
667
|
|
||
Weighted average common shares outstanding for diluted income per share
|
227,784
|
|
|
202,588
|
|
||
|
|
|
|
||||
Basic income per share
|
$
|
(0.09
|
)
|
|
$
|
0.27
|
|
Diluted income per share
|
$
|
(0.09
|
)
|
|
$
|
0.27
|
|
|
|
|
|
||||
Restricted stock
(a)
|
356
|
|
|
3
|
|
(a)
|
Shares excluded from the diluted earnings per share calculation because their effect would be anti-dilutive.
|
|
|
As of
|
||||||
Principal components:
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Senior secured revolving credit facility
|
|
$
|
330,000
|
|
|
$
|
200,000
|
|
6.125% senior unsecured notes due 2024
|
|
600,000
|
|
|
600,000
|
|
||
6.375% senior unsecured notes due 2026
|
|
400,000
|
|
|
400,000
|
|
||
Total principal outstanding
|
|
1,330,000
|
|
|
1,200,000
|
|
||
Premium on 6.125% senior unsecured notes due 2024, net of accumulated amortization
|
|
6,187
|
|
|
6,469
|
|
||
Unamortized deferred financing costs
|
|
(16,320
|
)
|
|
(16,996
|
)
|
||
Total carrying value of borrowings
(a)
|
|
$
|
1,319,867
|
|
|
$
|
1,189,473
|
|
(a)
|
Excludes unamortized deferred financing costs related to the Company’s senior secured revolving credit facility of
$5,742
and
$6,087
as of
March 31, 2019
and
December 31, 2018
, respectively.
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
|
|
Balance Sheet Presentation
|
|
Asset Fair Value
|
|
Liability Fair Value
|
|
Net Derivative Fair Value
|
||||||||||||||||||||
Commodity
|
|
Classification
|
|
Line Description
|
|
3/31/2019
|
|
12/31/2018
|
|
3/31/2019
|
|
12/31/2018
|
|
3/31/2019
|
|
12/31/2018
|
||||||||||||
Oil
|
|
Current
|
|
Fair value of derivatives
|
|
$
|
7,473
|
|
|
$
|
60,097
|
|
|
$
|
(24,550
|
)
|
|
$
|
(10,480
|
)
|
|
$
|
(17,077
|
)
|
|
$
|
49,617
|
|
Oil
|
|
Non-current
|
|
Fair value of derivatives
|
|
385
|
|
|
—
|
|
|
(6,190
|
)
|
|
(5,672
|
)
|
|
(5,805
|
)
|
|
(5,672
|
)
|
||||||
Natural gas
|
|
Current
|
|
Fair value of derivatives
|
|
3,899
|
|
|
5,017
|
|
|
—
|
|
|
—
|
|
|
3,899
|
|
|
5,017
|
|
||||||
Natural gas
|
|
Non-current
|
|
Fair value of derivatives
|
|
—
|
|
|
—
|
|
|
(793
|
)
|
|
(1,768
|
)
|
|
(793
|
)
|
|
(1,768
|
)
|
||||||
Totals
|
|
|
|
|
|
$
|
11,757
|
|
|
$
|
65,114
|
|
|
$
|
(31,533
|
)
|
|
$
|
(17,920
|
)
|
|
$
|
(19,776
|
)
|
|
$
|
47,194
|
|
|
As of March 31, 2019
|
||||||||||
|
Presented without
|
|
|
|
As Presented with
|
||||||
|
Effects of Netting
|
|
Effects of Netting
|
|
Effects of Netting
|
||||||
Current assets: Fair value of derivatives
|
$
|
20,540
|
|
|
$
|
(9,168
|
)
|
|
$
|
11,372
|
|
Long-term assets: Fair value of derivatives
|
829
|
|
|
(444
|
)
|
|
385
|
|
|||
|
|
|
|
|
|
||||||
Current liabilities: Fair value of derivatives
|
$
|
(33,718
|
)
|
|
$
|
9,168
|
|
|
$
|
(24,550
|
)
|
Long-term liabilities: Fair value of derivatives
|
(7,427
|
)
|
|
444
|
|
|
(6,983
|
)
|
|
As of December 31, 2018
|
||||||||||
|
Presented without
|
|
|
|
As Presented with
|
||||||
|
Effects of Netting
|
|
Effects of Netting
|
|
Effects of Netting
|
||||||
Current assets: Fair value of derivatives
|
$
|
78,091
|
|
|
$
|
(12,977
|
)
|
|
$
|
65,114
|
|
|
|
|
|
|
|
||||||
Current liabilities: Fair value of derivatives
|
$
|
(23,457
|
)
|
|
$
|
12,977
|
|
|
$
|
(10,480
|
)
|
Long-term liabilities: Fair value of derivatives
|
(7,440
|
)
|
|
—
|
|
|
(7,440
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Oil derivatives
|
|
|
|
|
||||
Net loss on settlements
|
|
$
|
(1,542
|
)
|
|
$
|
(8,916
|
)
|
Net gain (loss) on fair value adjustments
|
|
(66,827
|
)
|
|
4,067
|
|
||
Total loss on oil derivatives
|
|
(68,369
|
)
|
|
(4,849
|
)
|
||
Natural gas derivatives
|
|
|
|
|
||||
Net gain on settlements
|
|
1,252
|
|
|
457
|
|
||
Net loss on fair value adjustments
|
|
(143
|
)
|
|
(89
|
)
|
||
Total gain on natural gas derivatives
|
|
1,109
|
|
|
368
|
|
||
Total loss on oil & natural gas derivatives
|
|
$
|
(67,260
|
)
|
|
$
|
(4,481
|
)
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
|
For the Remainder
|
|
For the Full Year
|
||||
Oil contracts (WTI)
|
of 2019
|
|
of 2020
|
||||
Puts
|
|
|
|
||||
Total volume (Bbls)
|
687,500
|
|
|
—
|
|
||
Weighted average price per Bbl
|
$
|
65.00
|
|
|
$
|
—
|
|
Put spreads
|
|
|
|
||||
Total volume (Bbls)
|
687,500
|
|
|
—
|
|
||
Weighted average price per Bbl
|
|
|
|
||||
Floor (long put)
|
$
|
65.00
|
|
|
$
|
—
|
|
Floor (short put)
|
$
|
42.50
|
|
|
$
|
—
|
|
Collar contracts combined with short puts (three-way collars)
|
|
|
|
||||
Total volume (Bbls)
|
3,484,000
|
|
|
915,000
|
|
||
Weighted average price per Bbl
|
|
|
|
||||
Ceiling (short call)
|
$
|
67.56
|
|
|
$
|
65.02
|
|
Floor (long put)
|
$
|
56.58
|
|
|
$
|
55.00
|
|
Floor (short put)
|
$
|
43.62
|
|
|
$
|
45.00
|
|
Collar contracts (two-way collars)
|
|
|
|
||||
Total volume (Bbls)
|
—
|
|
|
732,000
|
|
||
Weighted average price per Bbl
|
|
|
|
||||
Ceiling (short call)
|
$
|
—
|
|
|
$
|
64.63
|
|
Floor (long put)
|
$
|
—
|
|
|
$
|
55.00
|
|
|
|
|
|
||||
Oil contracts (Midland basis differential)
|
|
|
|
||||
Swap contracts
|
|
|
|
||||
Total volume (Bbls)
|
5,102,000
|
|
|
4,576,000
|
|
||
Weighted average price per Bbl
|
$
|
(3.95
|
)
|
|
$
|
(1.29
|
)
|
|
|
|
|
||||
Natural gas contracts (Henry Hub)
|
|
|
|
||||
Collar contracts (two-way collars)
|
|
|
|
||||
Total volume (MMBtu)
|
2,697,500
|
|
|
—
|
|
||
Weighted average price per MMBtu
|
|
|
|
||||
Ceiling (short call)
|
$
|
3.68
|
|
|
$
|
—
|
|
Floor (long put)
|
$
|
3.09
|
|
|
$
|
—
|
|
Swap contracts
|
|
|
|
||||
Total volume (MMBtu)
|
1,852,000
|
|
|
—
|
|
||
Weighted average price per MMBtu
|
$
|
2.88
|
|
|
—
|
|
|
|
|
|
|
||||
Natural gas contracts (Waha basis differential)
|
|
|
|
||||
Swap contracts
|
|
|
|
||||
Total volume (MMBtu)
|
5,961,000
|
|
|
4,758,000
|
|
||
Weighted average price per MMBtu
|
$
|
(1.19
|
)
|
|
$
|
(1.12
|
)
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Credit Facility
(a)
|
|
$
|
330,000
|
|
|
$
|
330,000
|
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
6.125% Senior Notes
(b)
|
|
595,971
|
|
|
604,008
|
|
|
595,788
|
|
|
558,000
|
|
||||
6.375% Senior Notes
(b)
|
|
393,896
|
|
|
402,264
|
|
|
393,685
|
|
|
372,000
|
|
||||
Total
|
|
$
|
1,319,867
|
|
|
$
|
1,336,272
|
|
|
$
|
1,189,473
|
|
|
$
|
1,130,000
|
|
(a)
|
Floating-rate debt.
|
(b)
|
The fair value was based upon Level 2 inputs. See
Note 5
for additional information about the Company’s
6.125%
and
6.375%
Senior Notes.
|
March 31, 2019
|
|
Classification
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
Fair value of derivatives
|
|
$
|
—
|
|
|
$
|
11,757
|
|
|
$
|
—
|
|
|
$
|
11,757
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
Fair value of derivatives
|
|
—
|
|
|
(31,533
|
)
|
|
—
|
|
|
(31,533
|
)
|
||||
Total net assets (liabilities)
|
|
|
|
$
|
—
|
|
|
$
|
(19,776
|
)
|
|
$
|
—
|
|
|
$
|
(19,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
Classification
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
Fair value of derivatives
|
|
$
|
—
|
|
|
$
|
65,114
|
|
|
$
|
—
|
|
|
$
|
65,114
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
Fair value of derivatives
|
|
—
|
|
|
(17,920
|
)
|
|
—
|
|
|
(17,920
|
)
|
||||
Total net assets
|
|
|
|
$
|
—
|
|
|
$
|
47,194
|
|
|
$
|
—
|
|
|
$
|
47,194
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
|
Three Months Ended
|
||||
Components of income tax rate reconciliation
|
March 31, 2019
|
|
March 31, 2018
|
||
Income tax expense computed at the statutory federal income tax rate
|
21
|
%
|
|
21
|
%
|
State taxes net of federal expense
|
1
|
%
|
|
1
|
%
|
Section 162(m)
|
1
|
%
|
|
—
|
%
|
Valuation allowance
|
—
|
%
|
|
(21
|
)%
|
Effective income tax rate, before discrete items
|
23
|
%
|
|
1
|
%
|
Discrete items
(a)
|
(2
|
)%
|
|
—
|
%
|
Effective income tax rate, after discrete items
|
21
|
%
|
|
1
|
%
|
(a)
|
Accounts for the potential impact of periodic volatility of stock-based compensation tax deductions on future effective tax rates.
|
|
Three Months Ended
|
||
|
March 31, 2019
|
||
Operating lease cost
|
$
|
9,565
|
|
Short-term lease cost
(a)
|
$
|
1,498
|
|
(a)
|
Short-term lease cost excludes expenses related to leases with a contract term of one month or less.
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
|
|
|
As of March 31, 2019
|
||
Operating lease right-of-use assets
|
$
|
40,977
|
|
|
|
||
Current operating lease liabilities
|
29,134
|
|
|
Operating lease liabilities
|
11,751
|
|
|
Total operating lease liabilities
|
$
|
40,885
|
|
|
As of March 31, 2019
|
||
Remainder of 2019
|
$
|
25,505
|
|
2020
|
13,765
|
|
|
2021
|
1,573
|
|
|
2022
|
534
|
|
|
2023
|
517
|
|
|
Thereafter
|
388
|
|
|
Total lease payments
|
42,282
|
|
|
Less imputed interest
|
1,397
|
|
|
Total
|
$
|
40,885
|
|
|
Three Months Ended
|
||
|
March 31, 2019
|
||
Asset retirement obligations at January 1, 2019
|
$
|
14,292
|
|
Accretion expense
|
241
|
|
|
Liabilities incurred
|
111
|
|
|
Liabilities settled
|
(618
|
)
|
|
Dispositions
|
(87
|
)
|
|
Revisions to estimate
|
21
|
|
|
Asset retirement obligations at end of period
|
13,960
|
|
|
Less: Current asset retirement obligations
|
(3,771
|
)
|
|
Long-term asset retirement obligations at March 31, 2019
|
$
|
10,189
|
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(All dollar amounts in thousands, except per share and per unit data)
|
|
•
|
our oil and natural gas reserve quantities, and the discounted present value of these reserves;
|
•
|
the amount and nature of our capital expenditures;
|
•
|
our future drilling and development plans and our potential drilling locations;
|
•
|
the timing and amount of future capital and operating costs;
|
•
|
production decline rates from our wells being greater than expected;
|
•
|
commodity price risk management activities and the impact on our average realized prices;
|
•
|
business strategies and plans of management;
|
•
|
our ability to consummate and efficiently integrate recent acquisitions; and
|
•
|
prospect development and property acquisitions.
|
•
|
general economic conditions including the availability of credit and access to existing lines of credit;
|
•
|
the volatility of oil and natural gas prices;
|
•
|
the uncertainty of estimates of oil and natural gas reserves;
|
•
|
impairments;
|
•
|
the impact of competition;
|
•
|
the availability and cost of seismic, drilling and other equipment, waste and water disposal infrastructure, and personnel;
|
•
|
operating hazards inherent in the exploration for and production of oil and natural gas;
|
•
|
difficulties encountered during the exploration for and production of oil and natural gas;
|
•
|
the potential impact of future drilling on production from existing wells;
|
•
|
difficulties encountered in delivering oil and natural gas to commercial markets;
|
•
|
changes in customer demand and producers’ supply;
|
•
|
the uncertainty of our ability to attract capital and obtain financing on favorable terms;
|
•
|
compliance with, or the effect of changes in, the extensive governmental regulations regarding the oil and natural gas business including those related to climate change and greenhouse gases;
|
•
|
the impact of government regulation, including regulation of hydraulic fracturing and water disposal wells;
|
•
|
any increase in severance or similar taxes;
|
•
|
the financial impact of accounting regulations and critical accounting policies;
|
•
|
the comparative cost of alternative fuels;
|
•
|
credit risk relating to the risk of loss as a result of non-performance by our counterparties;
|
•
|
cyberattacks on the Company or on systems and infrastructure used by the oil and gas industry;
|
•
|
weather conditions; and
|
•
|
any other factors listed in the reports we have filed and may file with the SEC.
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Net production
|
|
|
|
|
|
|
|
|
|||||||
Oil (MBbls)
|
|
2,858
|
|
|
1,851
|
|
|
1,007
|
|
|
54
|
%
|
|||
Natural gas (MMcf)
|
|
4,619
|
|
|
3,240
|
|
|
1,379
|
|
|
43
|
%
|
|||
Total (MBOE)
|
|
3,628
|
|
|
2,391
|
|
|
1,237
|
|
|
52
|
%
|
|||
Average daily production (BOE/d)
|
|
40,311
|
|
|
26,567
|
|
|
13,744
|
|
|
52
|
%
|
|||
% oil (BOE basis)
|
|
79
|
%
|
|
77
|
%
|
|
|
|
|
|||||
Average realized sales price
(excluding impact of settled derivatives) |
|
|
|
|
|
|
|
|
|||||||
Oil (per Bbl)
|
|
$
|
49.37
|
|
|
$
|
62.28
|
|
|
$
|
(12.91
|
)
|
|
(21
|
)%
|
Natural gas (per Mcf)
|
|
2.59
|
|
|
3.75
|
|
|
(1.16
|
)
|
|
(31
|
)%
|
|||
Total (per BOE)
|
|
42.18
|
|
|
53.30
|
|
|
(11.12
|
)
|
|
(21
|
)%
|
|||
Average realized sales price
(including impact of settled derivatives) : |
|
|
|
|
|
|
|
|
|||||||
Oil (per Bbl)
|
|
$
|
48.83
|
|
|
$
|
57.47
|
|
|
$
|
(8.64
|
)
|
|
(15
|
)%
|
Natural gas (per Mcf)
|
|
2.86
|
|
|
3.89
|
|
|
(1.03
|
)
|
|
(26
|
)%
|
|||
Total (per BOE)
|
|
42.11
|
|
|
49.76
|
|
|
(7.65
|
)
|
|
(15
|
)%
|
|||
Oil and natural gas revenues
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Oil revenue
|
|
$
|
141,098
|
|
|
$
|
115,286
|
|
|
$
|
25,812
|
|
|
22
|
%
|
Natural gas revenue
|
|
11,949
|
|
|
12,154
|
|
|
(205
|
)
|
|
(2
|
)%
|
|||
Total
|
|
$
|
153,047
|
|
|
$
|
127,440
|
|
|
$
|
25,607
|
|
|
20
|
%
|
Additional per BOE data
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales price
(a)
|
|
$
|
42.18
|
|
|
$
|
53.30
|
|
|
$
|
(11.12
|
)
|
|
(21
|
)%
|
Lease operating expense
(b)
|
|
6.63
|
|
|
5.45
|
|
|
1.18
|
|
|
22
|
%
|
|||
Production taxes
|
|
2.98
|
|
|
3.54
|
|
|
(0.56
|
)
|
|
(16
|
)%
|
|||
Operating margin
|
|
$
|
32.57
|
|
|
$
|
44.31
|
|
|
$
|
(11.74
|
)
|
|
(26
|
)%
|
Benchmark prices
|
|
|
|
|
|
|
|
|
|||||||
WTI (per Bbl)
|
|
$
|
54.82
|
|
|
$
|
62.91
|
|
|
$
|
(8.09
|
)
|
|
(13
|
)%
|
Henry Hub (per Mcf)
|
|
2.92
|
|
|
3.08
|
|
|
(0.16
|
)
|
|
(5
|
)%
|
(a)
|
Excludes the impact of settled derivatives.
|
(b)
|
Excludes gathering and treating expense.
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
(in thousands)
|
|
Oil
|
|
Natural Gas
|
|
Total
|
||||||
Revenues for the three months ended March 31, 2018
|
|
$
|
115,286
|
|
|
$
|
12,154
|
|
|
$
|
127,440
|
|
Volume increase
|
|
62,716
|
|
|
5,171
|
|
|
67,887
|
|
|||
Price decrease
|
|
(36,904
|
)
|
|
(5,376
|
)
|
|
(42,280
|
)
|
|||
Net increase (decrease)
|
|
25,812
|
|
|
(205
|
)
|
|
25,607
|
|
|||
Revenues for the three months ended March 31, 2019
|
|
$
|
141,098
|
|
|
$
|
11,949
|
|
|
$
|
153,047
|
|
•
|
our revenues, cash flows and earnings;
|
•
|
the amount of oil and natural gas that we are economically able to produce;
|
•
|
our ability to attract capital to finance our operations and cost of the capital;
|
•
|
the amount we are allowed to borrow under our Credit Facility; and
|
•
|
the value of our oil and natural gas properties.
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||||||||
|
|
|
|
Per
|
|
|
|
Per
|
|
Total Change
|
|
BOE Change
|
||||||||||||||||||
(in thousands, except per unit amounts)
|
|
2019
|
|
BOE
|
|
2018
|
|
BOE
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||
Lease operating expenses
|
|
$
|
24,067
|
|
|
$
|
6.63
|
|
|
$
|
13,039
|
|
|
$
|
5.45
|
|
|
$
|
11,028
|
|
|
85
|
%
|
|
$
|
1.18
|
|
|
22
|
%
|
Production taxes
|
|
10,813
|
|
|
2.98
|
|
|
8,463
|
|
|
3.54
|
|
|
2,350
|
|
|
28
|
%
|
|
(0.56
|
)
|
|
(16
|
)%
|
||||||
Depreciation, depletion and amortization
|
|
59,767
|
|
|
16.47
|
|
|
35,417
|
|
|
14.81
|
|
|
24,350
|
|
|
69
|
%
|
|
1.66
|
|
|
11
|
%
|
||||||
General and administrative
|
|
11,753
|
|
|
3.24
|
|
|
8,769
|
|
|
3.67
|
|
|
2,984
|
|
|
34
|
%
|
|
(0.43
|
)
|
|
(12
|
)%
|
||||||
Settled share-based awards
|
|
3,024
|
|
|
0.83
|
|
|
—
|
|
|
—
|
|
|
3,024
|
|
|
100
|
%
|
|
0.83
|
|
|
100
|
%
|
||||||
Accretion expense
|
|
241
|
|
|
0.07
|
|
|
218
|
|
|
0.09
|
|
|
23
|
|
|
11
|
%
|
|
(0.02
|
)
|
|
(22
|
)%
|
||||||
Acquisition expense
|
|
157
|
|
|
0.04
|
|
|
548
|
|
|
0.23
|
|
|
(391
|
)
|
|
(71
|
)%
|
|
(0.19
|
)
|
|
(83
|
)%
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
G&A
|
|
$
|
8,364
|
|
|
$
|
6,673
|
|
|
$
|
1,691
|
|
|
25
|
%
|
Share-based compensation
|
|
1,500
|
|
|
1,105
|
|
|
395
|
|
|
36
|
%
|
|||
Fair value adjustments of cash-settled RSU awards
|
|
1,889
|
|
|
991
|
|
|
898
|
|
|
91
|
%
|
|||
Total G&A expenses
|
|
$
|
11,753
|
|
|
$
|
8,769
|
|
|
$
|
2,984
|
|
|
34
|
%
|
|
|
Three Months Ended March 31,
|
|||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Interest expense
|
|
$
|
20,582
|
|
|
$
|
10,528
|
|
|
$
|
10,054
|
|
|
95
|
%
|
Capitalized interest
|
|
(19,844
|
)
|
|
(10,068
|
)
|
|
(9,776
|
)
|
|
97
|
%
|
|||
Interest expense, net of capitalized amounts
|
|
738
|
|
|
460
|
|
|
278
|
|
|
60
|
%
|
|||
(Gain) loss on derivative contracts
|
|
67,260
|
|
|
4,481
|
|
|
62,779
|
|
|
1,401
|
%
|
|||
Other income
|
|
(81
|
)
|
|
(211
|
)
|
|
130
|
|
|
(62
|
)%
|
|||
Total other (income) expense
|
|
$
|
67,917
|
|
|
$
|
4,730
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Income tax (benefit) expense
|
|
$
|
(5,149
|
)
|
|
$
|
495
|
|
|
$
|
(5,644
|
)
|
|
(1,140
|
)%
|
Preferred stock dividends
|
|
(1,824
|
)
|
|
(1,824
|
)
|
|
—
|
|
|
—
|
%
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Oil derivatives
|
|
|
|
|
||||
Net loss on settlements
|
|
$
|
(1,542
|
)
|
|
$
|
(8,916
|
)
|
Net gain (loss) on fair value adjustments
|
|
(66,827
|
)
|
|
4,067
|
|
||
Total loss on oil derivatives
|
|
(68,369
|
)
|
|
(4,849
|
)
|
||
Natural gas derivatives
|
|
|
|
|
||||
Net gain on settlements
|
|
1,252
|
|
|
457
|
|
||
Net loss on fair value adjustments
|
|
(143
|
)
|
|
(89
|
)
|
||
Total gain on natural gas derivatives
|
|
1,109
|
|
|
368
|
|
||
Total loss on oil & natural gas derivatives
|
|
$
|
(67,260
|
)
|
|
$
|
(4,481
|
)
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
|
$
|
74,559
|
|
|
$
|
92,215
|
|
Net cash used in investing activities
|
|
(207,279
|
)
|
|
(149,353
|
)
|
||
Net cash provided by financing activities
|
|
127,151
|
|
|
47,616
|
|
||
Net change in cash and cash equivalents
|
|
$
|
(5,569
|
)
|
|
$
|
(9,522
|
)
|
•
|
An increase in revenues from an increase in production volumes, offset by a decrease in realized pricing, and
|
•
|
Changes related to the timing of working capital payments and receipts.
|
•
|
A
$63.7 million
increase in operational expenditures due to increased activity and additional net wells drilled.
|
•
|
An increase in cash interest expense capitalized during the
three
months ended
March 31, 2019
due to the timing of interest payments related to our
$400.0
million
6.375%
Senior Notes that were issued during the second quarter of 2018. See
Note 5
in the Footnotes to the Financial Statements for additional information about the Company’s
6.375%
Senior Notes.
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
||||||
Operational expenditures
|
|
$
|
162,527
|
|
|
$
|
98,849
|
|
|
$
|
63,678
|
|
Seismic, leasehold and other
|
|
1,750
|
|
|
6,481
|
|
|
(4,731
|
)
|
|||
Capitalized general and administrative costs
|
|
10,345
|
|
|
5,187
|
|
|
5,158
|
|
|||
Capitalized interest
|
|
18,589
|
|
|
813
|
|
|
17,776
|
|
|||
Total capital expenditures
(a)
|
|
193,211
|
|
|
111,330
|
|
|
81,881
|
|
|||
Acquisitions
|
|
27,947
|
|
|
38,923
|
|
|
(10,976
|
)
|
|||
Acquisition deposits
|
|
—
|
|
|
(900
|
)
|
|
900
|
|
|||
Proceeds from sale of assets
|
|
(13,879
|
)
|
|
—
|
|
|
(13,879
|
)
|
|||
Total investing activities
|
|
$
|
207,279
|
|
|
$
|
149,353
|
|
|
$
|
57,926
|
|
(a)
|
On an accrual (GAAP) basis, which is the methodology used for establishing our annual capital budget, operational expenditures for the
three
months ended
March 31, 2019
were
$153.4 million
. Inclusive of seismic, leasehold and other, capitalized general and administrative, and capitalized interest costs, total capital expenditures for the
three
months ended
March 31, 2019
were
$185.7 million
.
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
$ Change
|
||||||
Net borrowings on Credit Facility
|
$
|
130,000
|
|
|
$
|
50,000
|
|
|
$
|
80,000
|
|
Payment of preferred stock dividends
|
(1,824
|
)
|
|
(1,824
|
)
|
|
—
|
|
|||
Tax withholdings related to restricted stock units
|
(1,025
|
)
|
|
(560
|
)
|
|
(465
|
)
|
|||
Net cash provided by financing activities
|
$
|
127,151
|
|
|
$
|
47,616
|
|
|
$
|
79,535
|
|
(a)
|
Filed herewith.
|
(b)
|
Furnished herewith. Pursuant to SEC Release No. 33-8212, this certification will be treated as “accompanying” this report and not “filed” as part of such report for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18 of the Exchange Act, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, except to the extent that the registrant specifically incorporates it by reference.
|
†
|
Indicates management compensatory plan, contract, or arrangement.
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Joseph C. Gatto, Jr.
|
President and
|
May 6, 2019
|
Joseph C. Gatto, Jr.
|
Chief Executive Officer
|
|
/s/ James P. Ulm, II
|
Senior Vice President and
|
May 6, 2019
|
James P. Ulm, II
|
Chief Financial Officer
|
|
|
(i) Employee shall refrain from making, directly or indirectly, in any public or private communication any criticisms or negative or disparaging
|
(ii)
|
The directors and officers of the Company shall refrain from making, directly or indirectly, in any public or private, any criticisms or negative or disparaging comments about Employee, or about any aspect of the employment relationship between the Company and Employee, including comments relating to Employee’s separation from employment.
|
(iii)
|
Notwithstanding the foregoing, it is understood and agreed that nothing in this Section 3(b) is intended to prevent either party or the Released Parties from (x) testifying truthfully in any legal proceeding brought by any governmental authority or other third party or interfere with any obligation to cooperate with or provide information to any government agency or commission or (y) consulting with legal counsel with respect to the interpretation or enforcement of this Agreement.
|
|
By:
|
/s/ Jerry A. Weant
|
|
|
Jerry A. Weant
|
|
|
|
|
|
|
|
Date
|
|
By:
|
/s/ Joseph C. Gatto, Jr.
|
|
Name:
|
Joseph C. Gatto, Jr.
|
|
Title:
|
President & Chief Executive Officer
|
|
BORROWER:
|
|
CALLON PETROLEUM COMPANY
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ James P. Ulm, II
|
|
|
Name:
|
James P. Ulm, II
|
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
GUARANTOR:
|
|
CALLON PETROLEUM OPERATING COMPANY
|
|
|
|
|
|
|
|
|
|
|
|
By:
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/s/ James P. Ulm, II
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Name:
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James P. Ulm, II
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Title:
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Senior Vice President and Chief Financial Officer
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ADMINISTRATIVE AGENT/ISSUING BANK/LENDER:
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JPMORGAN CHASE BANK, N.A.
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as Administrative Agent, Issuing Bank, and a Lender
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By:
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/s/ Anson Williams
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Name:
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Anson Williams
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Title:
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Authorized Officer
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LENDER:
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REGIONS BANK
, as Lender
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By:
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/s/ Nathalie Huet Rousset
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Name:
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Nathalie Huet Rousset
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Title:
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Director
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LENDER:
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THE BANK OF NOVA SCOTIA, HOUSTON BRANCH
, as a Lender
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|
By:
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/s/ Marc Graham
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Name:
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Marc Graham
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Title:
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Managing Director
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LENDER:
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CAPITAL ONE, NATIONAL ASSOCIATION
, as a Lender
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By:
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/s/ Chris Kuna
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Name:
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Chris Kuna
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Title:
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Director
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LENDER:
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CITIBANK, N.A.
, as a Lender
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By:
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/s/ William McNeely
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Name:
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William McNeely
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Title:
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Senior Vice President
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LENDER:
|
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KEYBANK, NATIONAL ASSOCIATION
, as a Lender
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By:
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/s/ David M. Bornstein
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Name:
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David M. Bornstein
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Title:
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Senior Vice President
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LENDER:
|
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ROYAL BANK OF CANADA
, as a Lender
|
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|
|
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By:
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/s/ Emilee Scott
|
|
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Name:
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Emilee Scott
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|
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Title:
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Authorized Signatory
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LENDER:
|
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SUNTRUST BANK
, as a Lender
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|
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By:
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/s/ Arize Agumadu
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|
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Name:
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Arize Agumadu
|
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Title:
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Vice President
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LENDER:
|
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BOKF, NA DBA BANK OF OKLAHOMA
, as a Lender
|
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By:
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/s/ Paul J. Edmonds
|
|
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Name:
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Paul J. Edmonds
|
|
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Title:
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Senior Vice President
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LENDER:
|
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CIT BANK, N.A.
, as a Lender
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By:
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/s/ Sean M. Murphy
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|
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Name:
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Sean M. Murphy
|
|
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Title:
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Managing Director
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LENDER:
|
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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
, as a Lender
|
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By:
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/s/ Judith E. Smith
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|
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Name:
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Judith E. Smith
|
|
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Title:
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Authorized Signatory
|
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By:
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/s/ Joan Park
|
|
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Name:
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Joan Park
|
|
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Title:
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Authorized Signatory
|
LENDER:
|
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IBERIABANK, N.A.
, as a Lender
|
|
|
|
|
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By:
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/s/ Moni Collins
|
|
|
Name:
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Moni Collins
|
|
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Title:
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Senior Vice President
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LENDER:
|
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HANCOCK WHITNEY BANK
, as a Lender
|
|
|
|
|
|
|
|
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|
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By:
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/s/ William Jochetz
|
|
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Name:
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William Jochetz
|
|
|
Title:
|
Senior Vice President
|
LENDER:
|
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BARCLAYS BANK PLC
, as a Lender
|
|
|
|
|
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|
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By:
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/s/ Sydney G. Dennis
|
|
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Name:
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Sydney G. Dennis
|
|
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Title:
|
Director
|
LENDER:
|
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BANK OF AMERICA, N.A.
, as a Lender
|
|
|
|
|
|
|
|
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|
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By:
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/s/ Kimberly Miller
|
|
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Name:
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Kimberly Miller
|
|
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Title:
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Vice President
|
LENDER:
|
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CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH
, as a Lender
|
|
|
|
|
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|
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By:
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/s/ Donovan C. Broussard
|
|
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Name:
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Donovan C. Broussard
|
|
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Title:
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Authorized Signatory
|
|
|
|
|
|
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By:
|
/s/ Megan Larson
|
|
|
Name:
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Megan Larson
|
|
|
Title:
|
Authorized Signatory
|
LENDER:
|
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COMPASS BANK
, as a Lender
|
|
|
|
|
|
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|
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|
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By:
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/s/ Gabriela Azcarate
|
|
|
Name:
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Gabriela Azcarate
|
|
|
Title:
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Senior Vice President
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1.
|
I have reviewed this Quarterly Report on Form 10-Q of Callon Petroleum Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 6, 2019
|
|
/s/ Joseph C. Gatto, Jr.
|
|
|
|
Joseph C. Gatto, Jr.
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal executive officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Callon Petroleum Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 6, 2019
|
|
/s/ James P. Ulm, II
|
|
|
|
James P. Ulm, II
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal financial officer)
|
Date:
|
May 6, 2019
|
|
/s/ Joseph C. Gatto, Jr.
|
|
|
|
Joseph C. Gatto, Jr.
|
|
|
|
(Principal executive officer)
|
|
|
|
|
|
|
|
|
Date:
|
May 6, 2019
|
|
/s/ James P. Ulm, II
|
|
|
|
James P. Ulm, II
|
|
|
|
(Principal financial officer)
|