Callon Petroleum (CPE)

[eFinanceMarkets]

Callon Petroleum +2% as analyst says Q1 shows prior ops issues "transitory"

Callon Petroleum (CPE +1.9%) is higher after reporting in-line Q1 earnings and a 165% increase in revenues, as daily production rose 11% Q/Q to 20.4K boe/day (78% oil).

FBR analysts say CPE's solid results show the prior quarter's operational issues likely were transitory, and are encouraged by positive incremental data points from the Midland Basin, where CPE is raising type curves, as well as the Delaware Basin, where initial delineation and inventory high-grading have enhanced CPE's position.

Stifel maintains its Buy rating, expecting CPE to be free cash flow positive in 2018 and 2019 and noting that the stock is full of catalysts; the firm believes well productivity and resource are biased higher based on its assessment.