Callon Petroleum (CPE)

[catdaddyrt]

Energy | On the Move
Callon Petroleum to cut 2020 capex by 27%
Mar. 17, 2020 8:30 AM ET|About: Callon Petroleum Company (CPE)|By: Carl Surran, SA News Editor

Callon Petroleum (NYSE:CPE) says it is reducing its operational capital plan for 2020 to $700M-$725M from $975M, a 27% cut at the midpoint, while resulting in relatively flat Y/Y production growth.

Callon will cut its current operated rig count of nine to five before the end of Q2 and reduce its frac crew count from five to two upon the completion of currently in-process projects.

The company will shift capital allocation to high return, shorter cash cycle projects in the Midland Basin and Eagle Ford shale while preserving its long-term, co-development strategy in the Delaware Basin.

Callon forecasts free cash flow generation of $75M-$100M for Q2 through year-end, assuming no service cost deflation and flat Nymex prices of $35/Bbl and $2.00/MMBtu for the rest of this year.