(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
(Address of principal executive offices, including zip code) |
(Registrant’s telephone number, including area code) |
(Former name or former address, if changed since last report) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit Number | Description | |||||||
4.1 | ||||||||
23.1 | ||||||||
23.2 | ||||||||
99.1 | ||||||||
99.2 | ||||||||
99.3 | ||||||||
99.4 | ||||||||
99.5 | ||||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Callon Petroleum Company | |||||||||||
(Registrant) | |||||||||||
July 7, 2023 | /s/ Joseph C. Gatto, Jr. | ||||||||||
Joseph C. Gatto, Jr. | |||||||||||
President and Chief Executive Officer |
NETHERLAND, SEWELL & ASSOCIATES, INC. | |||||
By: /s/ Richard B. Talley, Jr. | |||||
Richard B. Talley, Jr., P.E. | |||||
Chief Executive Officer | |||||
Houston, Texas | |||||
July 7, 2023 |
Page | |||||
Independent Auditor’s Report | |||||
Consolidated Financial Statements | |||||
Consolidated Balance Sheets | |||||
Consolidated Statements of Operations | |||||
Consolidated Statements of Changes in Members’ Equity | |||||
Consolidated Statements of Cash Flows | |||||
Notes to the Consolidated Financial Statements |
2022 | 2021 | |||||||||||||
ASSETS | ||||||||||||||
CURRENT ASSETS | ||||||||||||||
Cash and cash equivalents | $52,828,210 | $44,389,962 | ||||||||||||
Accounts receivable - oil and gas sales | 32,652,426 | 33,346,039 | ||||||||||||
Accounts receivable - other | 5,063,936 | 6,039,727 | ||||||||||||
Prepaid expenses & other | 734,714 | 501,494 | ||||||||||||
Inventory | 13,456,868 | 152,760 | ||||||||||||
Total current assets | 104,736,154 | 84,429,982 | ||||||||||||
OIL AND GAS PROPERTIES, full cost | ||||||||||||||
Proved and unproved properties | 621,942,573 | 430,200,640 | ||||||||||||
Other property & equipment | 3,325,826 | 2,385,699 | ||||||||||||
Accumulated depreciation, depletion and amortization | (101,440,354) | (24,169,391) | ||||||||||||
Total oil and gas properties, net | 523,828,045 | 408,416,948 | ||||||||||||
OTHER ASSETS | ||||||||||||||
Debt issuance costs, net | 2,985,013 | 2,702,734 | ||||||||||||
Operating lease - right-of-use asset | 2,482,471 | — | ||||||||||||
Total other assets | 5,467,484 | 2,702,734 | ||||||||||||
TOTAL ASSETS | $634,031,683 | $495,549,664 | ||||||||||||
LIABILITIES AND MEMBERS’ EQUITY | ||||||||||||||
CURRENT LIABILITIES | ||||||||||||||
Accounts payable and accrued liabilities | $77,509,820 | $42,029,709 | ||||||||||||
Revenue and taxes payable | 25,007,550 | 33,030,928 | ||||||||||||
Current portion of derivative liabilities, net | 47,917,115 | 38,453,943 | ||||||||||||
S/T operating lease - right-of-use liability | 553,408 | — | ||||||||||||
Total current liabilities | 150,987,893 | 113,514,580 | ||||||||||||
NON-CURRENT LIABILITIES | ||||||||||||||
Asset retirement obligations | 2,968,630 | 2,933,898 | ||||||||||||
Long-term debt | 220,000,000 | 145,000,000 | ||||||||||||
Long-term portion of derivative liabilities | 41,281,685 | 40,254,245 | ||||||||||||
Other non-current liabilities | — | 103,977 | ||||||||||||
L/T operating lease - right-of-use liability | 2,076,610 | — | ||||||||||||
Total non-current liabilities | 266,326,925 | 188,292,120 | ||||||||||||
Total liabilities | 417,314,818 | 301,806,700 | ||||||||||||
MEMBERS’ EQUITY | 216,716,865 | 193,742,964 | ||||||||||||
TOTAL LIABILITIES AND MEMBERS’ EQUITY | $634,031,683 | $495,549,664 |
2022 | 2021 | |||||||||||||
REVENUES | ||||||||||||||
Oil and gas revenue | $372,305,896 | $121,988,251 | ||||||||||||
Realized loss on oil and gas derivatives | (158,824,698) | (14,476,038) | ||||||||||||
Total revenues | 213,481,198 | 107,512,213 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||
Lease operating expense | 51,244,719 | 12,999,230 | ||||||||||||
Production and ad valorem taxes, net | 23,585,010 | 7,408,083 | ||||||||||||
Marketing, transportation, and gathering expenses | 7,563,674 | 4,730,754 | ||||||||||||
Minimum volume commitment deficiency fees | 3,837,319 | 2,010,132 | ||||||||||||
General and administrative expenses | 6,569,599 | 4,564,334 | ||||||||||||
Transaction cost | 700,106 | — | ||||||||||||
Depreciation, depletion, amortization, and accretion | 77,626,266 | 24,333,286 | ||||||||||||
Total operating expenses | 171,126,693 | 56,045,819 | ||||||||||||
Income from operations | 42,354,505 | 51,466,394 | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||
Interest expense, net | (13,206,864) | (3,690,255) | ||||||||||||
Other income | 4,084,720 | 648,092 | ||||||||||||
Net unrealized loss on oil and gas derivatives | (11,136,460) | (76,986,541) | ||||||||||||
Total other expense | (20,258,604) | (80,028,704) | ||||||||||||
NET INCOME/(LOSS) | $22,095,901 | ($28,562,310) |
Members’ Equity | ||||||||
Balance, January 1, 2021 | $405,273 | |||||||
Contributions | 221,900,001 | |||||||
Net (Loss) | (28,562,310) | |||||||
Balance, December 31, 2021 | 193,742,964 | |||||||
Contributions | 878,000 | |||||||
Net income | 22,095,901 | |||||||
Balance, December 31, 2022 | $216,716,865 |
CASH FLOWS FROM OPERATING ACTIVITIES | 2022 | 2021 | ||||||||||||
Net income/(loss) | $22,095,901 | ($28,562,310) | ||||||||||||
Adjustments to reconcile net income/(loss) to cash provided by operating activities | ||||||||||||||
Depreciation, depletion, amortization, and accretion | 77,626,266 | 24,333,286 | ||||||||||||
Amortization of debt issuance costs | 1,024,313 | 339,699 | ||||||||||||
Change in fair value of oil and gas derivatives | 11,136,460 | 76,986,541 | ||||||||||||
ASC 842 - non-cash lease expense | 97,577 | — | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable - oil and gas sales | 1,669,404 | (39,385,766) | ||||||||||||
Inventory | (13,304,108) | (152,760) | ||||||||||||
Prepaid expenses | (287,227) | (445,022) | ||||||||||||
Accounts payable and accrued liabilities | (18,718,286) | 59,180,951 | ||||||||||||
Settlement of ARO | (173,491) | — | ||||||||||||
Net cash provided by operating activities | 81,166,809 | 92,294,619 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||
Acquisitions of oil and gas properties | (10,003,224) | (356,910,245) | ||||||||||||
Capital expenditures | (360,197,133) | (52,834,392) | ||||||||||||
Proceeds from sale of assets | 223,840,515 | — | ||||||||||||
Additions to other property and equipment | (940,127) | (2,349,678) | ||||||||||||
Net cash used in investing activities | (147,299,969) | (412,094,315) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||
Contributions | 878,000 | 221,900,001 | ||||||||||||
Net proceeds from credit agreement | 145,000,000 | 145,000,000 | ||||||||||||
Repayment of debt | (70,000,000) | — | ||||||||||||
Deferred financing costs | (1,306,592) | (3,042,433) | ||||||||||||
Net cash provided by financing activities | 74,571,408 | 363,857,568 | ||||||||||||
Net increase in cash and cash equivalents | 8,438,248 | 44,057,872 | ||||||||||||
CASH AND CASH EQUIVALENTS, beginning of year | 44,389,962 | 332,090 | ||||||||||||
CASH AND CASH EQUIVALENTS, end of year | $52,828,210 | $44,389,962 | ||||||||||||
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||||||||
Change in proved properties for asset retirement obligation activity: | ||||||||||||||
Liabilities incurred upon acquisition and development | $231,650 | $2,761,751 | ||||||||||||
Capital expenditures accrued in accounts payable | $48,397,998 | $17,694,252 | ||||||||||||
OTHER SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||||||
Interest paid | $12,900,251 | $1,600,695 | ||||||||||||
Cash paid for operating leases | $596,577 | $— |
Computers and software | 3-10 years | ||||
Vehicles | 5 years | ||||
Leasehold improvements | Lease term | ||||
Furniture and fixtures | 10 years | ||||
Machinery and equipment | 5-10 years |
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Liability - current | ||||||||||||||||||||||||||
Commodity derivative instruments | $— | $47,917,115 | $— | $47,917,115 | ||||||||||||||||||||||
Liability - non-current | ||||||||||||||||||||||||||
Commodity derivative instruments price swap contracts | — | 41,281,685 | — | 41,281,685 | ||||||||||||||||||||||
Total financial liability | — | 89,198,800 | — | 89,198,800 | ||||||||||||||||||||||
Net financial liability | $— | $89,198,800 | $— | $89,198,800 |
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Liability - current | ||||||||||||||||||||||||||
Commodity derivative instruments | $— | $38,453,943 | $— | $38,453,943 | ||||||||||||||||||||||
Liability - non-current | ||||||||||||||||||||||||||
Commodity derivative instruments price swap contracts | — | 40,254,245 | — | 40,254,245 | ||||||||||||||||||||||
Total financial liability | — | 78,708,188 | — | 78,708,188 | ||||||||||||||||||||||
Net financial liability | $— | $78,708,188 | $— | $78,708,188 |
Oil Contracts | 2023 | 2024 | 2025 | |||||||||||||||||
Collar Contracts (WTI) | ||||||||||||||||||||
Total Volumes | 848,861 | 367,000 | — | |||||||||||||||||
Weighted Average price per barrel | ||||||||||||||||||||
Floor | $60.00 | $60.00 | $— | |||||||||||||||||
Ceiling | $72.40 | $67.25 | $— | |||||||||||||||||
Three-Way Collar Contracts (WTI) | ||||||||||||||||||||
Total Volumes | 2,809,807 | 3,963,023 | — | |||||||||||||||||
Weighted Average price per barrel | ||||||||||||||||||||
Sub-floor | $46.84 | $48.16 | $— | |||||||||||||||||
Floor | $56.84 | $58.16 | $— | |||||||||||||||||
Ceiling | $75.14 | $78.86 | $— | |||||||||||||||||
Roll Swaps (WTI vs. CMA) | ||||||||||||||||||||
Total Volumes | 4,253,383 | — | — | |||||||||||||||||
Weighted Average price per barrel | $0.33 | $— | $— |
Natural Gas Contracts | 2023 | 2024 | 2025 | |||||||||||||||||
HHub Swaps | ||||||||||||||||||||
Total Volumes | 2,152,200 | — | — | |||||||||||||||||
Total Weighted Average Swap | $2.92 | $— | $— | |||||||||||||||||
HHub Collars | ||||||||||||||||||||
Total Volumes | 3,606,321 | 6,778,555 | — | |||||||||||||||||
Total Weighted Average Floor | $2.80 | $3.00 | $— | |||||||||||||||||
Total Weighted Average Ceiling | $3.59 | $3.33 | $— | |||||||||||||||||
Waha Swaps | ||||||||||||||||||||
Total Volumes | 3,650,000 | 3,660,000 | — | |||||||||||||||||
Total Weighted Average Swap | ($1.94) | ($1.06) | $— |
NGL Contracts | 2023 | 2024 | 2025 | |||||||||||||||||
Ethane Swaps | ||||||||||||||||||||
Total Volumes | 15,693,365 | — | — | |||||||||||||||||
Total Weighted Average Swap | $0.24 | $— | $— | |||||||||||||||||
Propane Swaps | ||||||||||||||||||||
Total Volumes | 12,453,188 | — | — | |||||||||||||||||
Total Weighted Average Swap | $0.77 | $— | $— | |||||||||||||||||
iButane Swaps | ||||||||||||||||||||
Total Volumes | 1,704,045 | 985,388 | — | |||||||||||||||||
Total Weighted Average Swap | $0.84 | $0.79 | $— | |||||||||||||||||
nButane Swaps | ||||||||||||||||||||
Total Volumes | 5,222,830 | 3,028,411 | — | |||||||||||||||||
Total Weighted Average Swap | $0.84 | $0.79 | $— | |||||||||||||||||
Gasoline Swaps | ||||||||||||||||||||
Total Volumes | 6,814,687 | — | — | |||||||||||||||||
Total Weighted Average Swap | $1.34 | $— | $— |
2022 | 2021 | |||||||||||||
Derivative liabilities - current | ||||||||||||||
Gross amounts without effects of netting | $60,154,112 | $52,916,279 | ||||||||||||
Effects of netting | (12,236,997) | (14,462,336) | ||||||||||||
Current portion of derivative liabilities, net | $47,917,115 | $38,453,943 | ||||||||||||
Derivative liabilities - non-current | ||||||||||||||
Gross amounts without effects of netting | $74,475,762 | $111,103,293 | ||||||||||||
Effects of netting | (33,194,077) | (70,849,048) | ||||||||||||
Long-term portion of derivative liabilities, net | $41,281,685 | $40,254,245 |
2022 | 2021 | |||||||||||||
Balance, beginning January 1, | $2,933,898 | $— | ||||||||||||
Liability incurred upon acquiring and drilling wells | 231,650 | 2,761,751 | ||||||||||||
Accretion expense | 355,303 | 172,147 | ||||||||||||
Settlement of liabilities | (173,491) | — | ||||||||||||
Liabilities released upon divestiture | (378,730) | — | ||||||||||||
Balance, ending December 31, | $2,968,630 | $2,933,898 | ||||||||||||
Less current portion | — | — | ||||||||||||
Non-current portion | $2,968,630 | $2,933,898 |
Operating Leases (1) | Delivery Commitments (2) | Total | ||||||||||||||||||
2023 | $658,494 | $3,912,462 | $4,570,956 | |||||||||||||||||
2024 | 672,378 | 9,824,495 | 10,496,873 | |||||||||||||||||
2025 | 686,262 | 4,070,525 | 4,756,787 | |||||||||||||||||
2026 | 700,145 | 4,151,936 | 4,852,081 | |||||||||||||||||
2027 | 175,904 | 1,033,817 | 1,209,721 | |||||||||||||||||
Thereafter | — | — | — | |||||||||||||||||
Total | $2,893,183 | $22,993,235 | $25,886,418 |
2022 | ||||||||
Operating lease cost | $201,553 | |||||||
Short-term lease cost | 1,895,367 | |||||||
Total lease cost | $2,096,920 |
Type | Balance Sheet Location | 2022 | ||||||||||||
Assets: | ||||||||||||||
Operating lease right-of-use asset | Other assets | $2,482,471 | ||||||||||||
Liabilities: | ||||||||||||||
Operating lease liability, current | Current other liabilities | $553,408 | ||||||||||||
Operating lease liability, noncurrent | Noncurrent other liabilities | $2,076,610 |
Operating | ||||||||
Total lease payments | $2,893,183 | |||||||
Less: present value discount | (263,165) | |||||||
Present value of lease liabilities | $2,630,018 |
2022 | ||||||||
Weighted average remaining life - operating leases | 4.33 | |||||||
Weighted average discount rate - operating leases | 3.68 | % |
Crude Oil (Bbls) | Natural Gas (Mcf) | Natural Gas Liquids (Bbls) | (Boe) | |||||||||||||||||||||||
Proved reserves | ||||||||||||||||||||||||||
Beginning of period - January 1, 2022 | 131,160,000 | 158,092,000 | 34,128,000 | 191,636,667 | ||||||||||||||||||||||
Revisions of previous estimates | (45,132,125) | (62,362,878) | (10,929,202) | (66,455,140) | ||||||||||||||||||||||
Extensions | 2,878,720 | 3,597,770 | 893,446 | 4,371,794 | ||||||||||||||||||||||
Divestiture of reserves | (30,227,710) | (38,454,213) | (8,288,425) | (44,925,171) | ||||||||||||||||||||||
Production | (3,401,885) | (3,305,179) | (907,319) | (4,860,067) | ||||||||||||||||||||||
End of period - December 31, 2022 | 55,277,000 | 57,567,500 | 14,896,500 | 79,768,083 |
2022 | ||||||||
Oil and gas properties, full cost | ||||||||
Proved and unproved properties | $621,942,573 | |||||||
Other property & equipment | 3,325,826 | |||||||
Accumulated depreciation, depletion and amortization | (101,440,354) | |||||||
Total oil and gas properties, net | $523,828,045 |
2022 | ||||||||
Acquisition costs | $10,003,224 | |||||||
Development costs | 408,033,330 | |||||||
Exploration costs | 130,000 | |||||||
Total costs incurred | $418,166,554 |
2022 | ||||||||
Oil ($/Bbl) | $95.14 | |||||||
Natural gas ($/Mcf) | $5.00 | |||||||
NGLs ($/Bbl) | $40.02 |
2022 | ||||||||
(in thousands) | ||||||||
Future cash inflows | $6,143,028 | |||||||
Future costs | ||||||||
Production | (1,767,016) | |||||||
Development and net abandonment | (682,836) | |||||||
Future net inflows before income taxes | 3,693,176 | |||||||
Future taxes | (32,252) | |||||||
Future net cash flows | 3,660,924 | |||||||
10% discount factor | (2,046,105) | |||||||
Standardized measure of discounted future net cash flows | $1,614,819 |
2022 | ||||||||
(in thousands) | ||||||||
Standardized measure at the beginning of the period | $2,297,123 | |||||||
Net change in prices and production costs | 791,366 | |||||||
Net change in future development costs | 46,290 | |||||||
Oil & Gas net revenue | (289,891) | |||||||
Extensions | 72,068 | |||||||
Divestiture of reserves | (534,400) | |||||||
Revisions of previous quantity estimates | (788,638) | |||||||
Previously estimated development costs incurred | 197,485 | |||||||
Net change in taxes | 13,279 | |||||||
Accretion of discount | 232,517 | |||||||
Changes in timing and other (1) | (422,380) | |||||||
Standardized measure at the end of period | $1,614,819 |
Page | |||||
Independent Auditor’s Report | |||||
Consolidated Financial Statements | |||||
Consolidated Balance Sheet | |||||
Consolidated Statement of Operations | |||||
Consolidated Statement of Changes in Members’ Equity | |||||
Consolidated Statement of Cash Flows | |||||
Notes to the Consolidated Financial Statements |
March 31, 2023 | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $20,449,217 | |||||||
Accounts receivable - oil and gas sales | 31,508,559 | |||||||
Accounts receivable - other | 5,769,043 | |||||||
Prepaid expenses & other | 374,070 | |||||||
Inventory | 12,766,013 | |||||||
Total current assets | 70,866,902 | |||||||
OIL AND GAS PROPERTIES, full cost | ||||||||
Proved and unproved properties | 676,779,012 | |||||||
Other property & equipment | 3,396,188 | |||||||
Accumulated depreciation, depletion and amortization | (117,631,712) | |||||||
Total oil and gas properties, net | 562,543,488 | |||||||
OTHER ASSETS | ||||||||
Debt issuance costs, net | 2,696,771 | |||||||
Operating lease - right-of-use asset | 2,352,614 | |||||||
Total other assets | 5,049,385 | |||||||
TOTAL ASSETS | $638,459,775 | |||||||
LIABILITIES AND MEMBERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $63,324,957 | |||||||
Revenue and taxes payable | 26,308,841 | |||||||
Current portion of derivative liabilities, net | 25,335,599 | |||||||
Current portion of operating lease liabilities | 563,023 | |||||||
Total current liabilities | 115,532,420 | |||||||
NON-CURRENT LIABILITIES | ||||||||
Long-term debt | 220,000,000 | |||||||
Asset retirement obligations | 3,010,295 | |||||||
Long-term portion of derivative liabilities | 15,972,238 | |||||||
Operating lease liabilities, net of current portion | 1,933,519 | |||||||
Total non-current liabilities | 240,916,052 | |||||||
Total liabilities | 356,448,472 | |||||||
MEMBERS’ EQUITY | 282,011,303 | |||||||
TOTAL LIABILITIES AND MEMBERS’ EQUITY | $638,459,775 |
March 31, 2023 | ||||||||
REVENUES | ||||||||
Oil and gas revenue | $68,978,478 | |||||||
Realized loss on oil and gas derivatives | (7,992,687) | |||||||
Total revenues | 60,985,791 | |||||||
OPERATING EXPENSES | ||||||||
Lease operating expense | 12,037,035 | |||||||
Production and ad valorem taxes, net | 4,588,713 | |||||||
Marketing, transportation, and gathering expenses | 2,077,512 | |||||||
Minimum volume commitment deficiency fees | 955,080 | |||||||
General and administrative expenses | 1,500,851 | |||||||
Transaction cost | 913,363 | |||||||
Depreciation, depletion, amortization, and accretion | 16,279,522 | |||||||
Total operating expenses | 38,352,076 | |||||||
Income from operations | 22,633,715 | |||||||
OTHER INCOME (EXPENSE) | ||||||||
Interest expense, net | (5,168,643) | |||||||
Other income | 142,855 | |||||||
Net unrealized gain on oil and gas derivatives | 47,686,511 | |||||||
Total other expense | 42,660,723 | |||||||
NET INCOME | $65,294,438 |
Members’ Equity | ||||||||
Balance, December 31, 2022 | $216,716,865 | |||||||
Net Income | 65,294,438 | |||||||
Balance, March 31, 2023 | $282,011,303 |
CASH FLOWS FROM OPERATING ACTIVITIES | March 31, 2023 | |||||||
Net income | $65,294,438 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Depreciation, depletion, amortization, and accretion | 16,279,522 | |||||||
Amortization of debt issuance costs | 301,790 | |||||||
Change in fair value of oil and gas derivatives | (47,686,511) | |||||||
Inventory write down | 100,655 | |||||||
ASC 842 - non-cash lease expense | (3,619) | |||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable - oil and gas sales | 438,760 | |||||||
Inventory | (1,311,196) | |||||||
Prepaid expenses and other current assets | 122,260 | |||||||
Accounts payable and accrued liabilities | (21,343,381) | |||||||
Settlement of ARO | (57,477) | |||||||
Net cash provided by operating activities | 12,135,241 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Capital expenditures | (43,810,025) | |||||||
Divestment of oil and gas properties | (620,299) | |||||||
Additions to other property and equipment | (70,362) | |||||||
Net cash used in investing activities | (44,500,686) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Deferred financing costs | (13,548) | |||||||
Net cash used in financing activities | (13,548) | |||||||
Net decrease in cash and cash equivalents | (32,378,993) | |||||||
CASH AND CASH EQUIVALENTS, beginning of year | 52,828,210 | |||||||
CASH AND CASH EQUIVALENTS, end of year | $20,449,217 | |||||||
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
Change in capital expenditures accrued in accounts payable | $8,763,879 | |||||||
OTHER SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
Interest paid | $3,729,959 | |||||||
Cash paid for operating leases | $108,014 |
Computers and software | 3-10 years | ||||
Vehicles | 5 years | ||||
Leasehold improvements | Lease term | ||||
Furniture and fixtures | 10 years | ||||
Machinery and equipment | 5-10 years |
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Liability - current | ||||||||||||||||||||||||||
Commodity derivative instruments | $— | $25,335,599 | $— | $25,335,599 | ||||||||||||||||||||||
Liability - non-current | ||||||||||||||||||||||||||
Commodity derivative instruments price swap contracts | — | 15,972,238 | — | 15,972,238 | ||||||||||||||||||||||
Total financial liability | — | 41,307,837 | — | 41,307,837 | ||||||||||||||||||||||
Net financial liability | $— | $41,307,837 | $— | $41,307,837 |
Oil Contracts | For the Remainder 2023 | For the Full Year 2024 | ||||||||||||
Swap Contracts (WTI) | ||||||||||||||
Total Volumes | — | — | ||||||||||||
Weighted Average price per barrel | $— | $— | ||||||||||||
Collar Contracts (WTI) | ||||||||||||||
Total Volumes | 604,955 | — | ||||||||||||
Weighted Average price per barrel | ||||||||||||||
Floor | $60.00 | $— | ||||||||||||
Ceiling | $72.40 | $— | ||||||||||||
Three-Way Collar Contracts (WTI) | ||||||||||||||
Total Volumes | 1,431,444 | 3,963,023 | ||||||||||||
Weighted Average price per barrel | ||||||||||||||
Sub-floor | $45.00 | $48.16 | ||||||||||||
Floor | $55.00 | $58.16 | ||||||||||||
Ceiling | $69.77 | $78.86 | ||||||||||||
Roll Swaps (WTI vs. CMA) | ||||||||||||||
Total Volumes | 1,512,363 | — | ||||||||||||
Weighted Average price per barrel | $0.30 | $— |
Natural Gas Contracts | For the Remainder 2023 | For the Full Year 2024 | ||||||||||||
HHub Swaps | ||||||||||||||
Total Volumes | — | — | ||||||||||||
Total Weighted Average Swap | $— | $— | ||||||||||||
HHub Collars | ||||||||||||||
Total Volumes | 616,675 | 6,778,555 | ||||||||||||
Total Weighted Average Floor | $2.82 | $3.00 | ||||||||||||
Total Weighted Average Ceiling | $3.63 | $3.33 | ||||||||||||
Waha Swaps | ||||||||||||||
Total Volumes | 2,750,000 | 3,660,000 | ||||||||||||
Total Weighted Average Swap | ($1.94) | ($1.06) |
NGL Contracts | For the Remainder 2023 | For the Full Year 2024 | ||||||||||||
Ethane Swaps | ||||||||||||||
Total Volumes | 4,448,226 | — | ||||||||||||
Total Weighted Average Swap | $0.23 | $— | ||||||||||||
Propane Swaps | ||||||||||||||
Total Volumes | 4,537,761 | — | ||||||||||||
Total Weighted Average Swap | $0.74 | $— | ||||||||||||
iButane Swaps | ||||||||||||||
Total Volumes | 1,318,051 | 985,388 | ||||||||||||
Total Weighted Average Swap | $0.84 | $0.79 | ||||||||||||
nButane Swaps | ||||||||||||||
Total Volumes | 4,036,978 | 3,028,411 | ||||||||||||
Total Weighted Average Swap | $0.85 | $0.79 | ||||||||||||
Gasoline Swaps | ||||||||||||||
Total Volumes | 5,254,122 | — | ||||||||||||
Total Weighted Average Swap | $1.34 | $— |
March 31, 2023 | ||||||||
Derivative liabilities - current | ||||||||
Gross amounts without effects of netting | $34,583,592 | |||||||
Effects of netting | (9,247,993) | |||||||
Current portion of derivative liabilities, net | $25,335,599 | |||||||
Derivative liabilities - non-current | ||||||||
Gross amounts without effects of netting | $35,740,510 | |||||||
Effects of netting | (19,768,272) | |||||||
Long-term portion of derivative liabilities, net | $15,972,238 |
March 31, 2023 | ||||||||
Balance, beginning January 1, | $2,968,630 | |||||||
Additions | 10,979 | |||||||
Accretion expense | 88,163 | |||||||
Settlement of liabilities | (57,477) | |||||||
Balance, ending March 31, | $3,010,295 | |||||||
Non-current portion | $3,010,295 |
Historical | Transaction Accounting Adjustments | ||||||||||||||||||||||||||||||||||
Callon - As Reported | Percussion - As Reported | Reclassification & Elimination Adjustments | Disposition | Acquisition | Pro Forma Combined | ||||||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $3,370 | $20,449 | ($20,449) | (a) | $550,981 | (f) | ($248,585) | (l) | $305,766 | ||||||||||||||||||||||||||
Accounts receivable, net | 210,107 | 37,278 | (226) | (a) | — | — | 247,159 | ||||||||||||||||||||||||||||
Fair value of derivatives | 25,761 | — | — | — | — | 25,761 | |||||||||||||||||||||||||||||
Prepaid expenses & other | — | 374 | (374) | (a)(b) | — | — | — | ||||||||||||||||||||||||||||
Inventory | — | 12,766 | (12,766) | (a) | — | — | — | ||||||||||||||||||||||||||||
Other current assets | 35,406 | — | 187 | (b) | (1,247) | (g) | 427 | (m) | 34,773 | ||||||||||||||||||||||||||
Total current assets | 274,644 | 70,867 | (33,628) | 549,734 | (248,158) | 613,459 | |||||||||||||||||||||||||||||
Oil and natural gas properties, successful efforts | |||||||||||||||||||||||||||||||||||
Proved properties, net | 4,999,527 | — | 597,196 | (c)(d) | (923,814) | (h) | (97,667) | (n) | 4,575,242 | ||||||||||||||||||||||||||
Unproved properties | 1,227,575 | — | 1,757 | (c) | (31,315) | (h) | 77,651 | (o) | 1,275,668 | ||||||||||||||||||||||||||
Total oil and natural gas properties, net | 6,227,102 | — | 598,953 | (955,129) | (20,016) | 5,850,910 | |||||||||||||||||||||||||||||
Proved and unproved properties, full cost | — | 676,779 | (676,779) | (c) | — | — | — | ||||||||||||||||||||||||||||
Other property and equipment | — | 3,396 | (3,396) | (a)(e) | — | — | — | ||||||||||||||||||||||||||||
Accumulated depreciation, depletion and amortization, full cost accounting method | — | (117,632) | 117,632 | (d) | — | — | — | ||||||||||||||||||||||||||||
Other property and equipment, net | 28,719 | — | 110 | (d)(e) | (1,446) | (h) | — | 27,383 | |||||||||||||||||||||||||||
Deferred income taxes | 45,669 | — | — | — | — | 45,669 | |||||||||||||||||||||||||||||
Deferred financing costs | 17,152 | — | — | — | — | 17,152 | |||||||||||||||||||||||||||||
Debt issuance costs | — | 2,697 | (2,697) | (a) | — | — | — | ||||||||||||||||||||||||||||
Operating lease - right-of-use asset | — | 2,353 | (2,353) | (a) | — | — | — | ||||||||||||||||||||||||||||
Other assets, net | 58,379 | — | — | 7,927 | (i) | — | 66,306 | ||||||||||||||||||||||||||||
Total assets | $6,651,665 | $638,460 | ($2,158) | ($398,914) | ($268,174) | $6,620,879 | |||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $550,923 | $63,325 | ($2,796) | (a) | ($13,498) | (j) | $— | $597,954 | |||||||||||||||||||||||||||
Revenue payable | — | 26,309 | — | — | — | 26,309 | |||||||||||||||||||||||||||||
Fair value of derivatives | 570 | 25,336 | — | — | (3,958) | (p) | 21,948 | ||||||||||||||||||||||||||||
S/T operating lease - right-of-use liability | — | 563 | (563) | (a) | — | — | — | ||||||||||||||||||||||||||||
Other current liabilities | 146,195 | — | — | (5,897) | (h) | 10,728 | (q) | 151,026 | |||||||||||||||||||||||||||
Total current liabilities | 697,688 | 115,533 | (3,359) | (19,395) | 6,770 | 797,237 | |||||||||||||||||||||||||||||
Long-term debt | 2,204,514 | 220,000 | — | — | (220,000) | (r) | 2,204,514 | ||||||||||||||||||||||||||||
Asset retirement obligations | 55,023 | 3,010 | — | (19,312) | (h) | (2,004) | (s) | 36,717 | |||||||||||||||||||||||||||
Fair value of derivatives | 6,594 | 15,972 | — | — | 12,706 | (t) | 35,272 | ||||||||||||||||||||||||||||
L/T operating lease - right-of-use liability | — | 1,934 | (1,934) | (a) | — | — | — | ||||||||||||||||||||||||||||
Other long-term liabilities | 38,088 | — | — | (1,409) | (h) | 9,500 | (q) | 46,179 | |||||||||||||||||||||||||||
Total liabilities | 3,001,907 | 356,449 | (5,293) | (40,116) | (193,028) | 3,119,919 | |||||||||||||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||||||||||||||||||
Stockholders’ equity: | |||||||||||||||||||||||||||||||||||
Common stock | 616 | — | — | — | 63 | (l) | 679 | ||||||||||||||||||||||||||||
Capital in excess of par value | 4,025,533 | — | — | — | 209,937 | (l) | 4,235,470 | ||||||||||||||||||||||||||||
Members’ equity | — | 282,011 | 3,135 | (a) | — | (285,146) | (u) | — | |||||||||||||||||||||||||||
Accumulated deficit | (376,391) | — | — | (358,798) | (k) | — | (735,189) | ||||||||||||||||||||||||||||
Total stockholders’ equity | 3,649,758 | 282,011 | 3,135 | (358,798) | (75,146) | 3,500,960 | |||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $6,651,665 | $638,460 | ($2,158) | ($398,914) | ($268,174) | $6,620,879 |
Historical | Transaction Accounting Adjustments | ||||||||||||||||||||||||||||||||||
Callon - As Reported | Percussion - As Reported | Reclassification & Elimination Adjustments | Disposition | Acquisition | Pro Forma Combined | ||||||||||||||||||||||||||||||
(e) | |||||||||||||||||||||||||||||||||||
Operating Revenues: | |||||||||||||||||||||||||||||||||||
Oil | $409,556 | $— | $61,411 | (a) | ($86,590) | $— | $384,377 | ||||||||||||||||||||||||||||
Natural gas | 23,586 | — | 1,569 | (a) | (4,356) | — | 20,799 | ||||||||||||||||||||||||||||
Oil and gas revenue | — | 68,978 | (68,978) | (a) | — | — | — | ||||||||||||||||||||||||||||
Natural gas liquids | 43,370 | — | 5,998 | (a) | (4,754) | — | 44,614 | ||||||||||||||||||||||||||||
Sales of purchased oil and gas | 83,534 | — | — | — | — | 83,534 | |||||||||||||||||||||||||||||
Realized loss on oil and gas derivatives | — | (7,992) | 7,992 | (a) | — | — | — | ||||||||||||||||||||||||||||
Total operating revenues | 560,046 | 60,986 | 7,992 | (95,700) | — | 533,324 | |||||||||||||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||||||||||||||
Lease operating | 75,102 | 12,037 | — | (16,887) | — | 70,252 | |||||||||||||||||||||||||||||
Production and ad valorem taxes | 32,721 | 4,589 | — | (7,324) | — | 29,986 | |||||||||||||||||||||||||||||
Gathering, transportation and processing | 25,977 | 2,077 | 955 | (a) | (3,270) | — | 25,739 | ||||||||||||||||||||||||||||
Minimum volume commitment deficiency fees | — | 955 | (955) | (a) | — | — | — | ||||||||||||||||||||||||||||
Exploration | 2,232 | — | — | (10) | — | 2,222 | |||||||||||||||||||||||||||||
Cost of purchased oil and gas | 86,061 | — | — | — | — | 86,061 | |||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 125,965 | 16,280 | (7,290) | (b)(d) | (25,266) | (1,970) | (f) | 107,719 | |||||||||||||||||||||||||||
General and administrative | 27,798 | 1,501 | (1,143) | (c)(d) | 852 | — | 29,008 | ||||||||||||||||||||||||||||
Merger, integration and transaction | — | 913 | (913) | (d) | — | — | — | ||||||||||||||||||||||||||||
Total operating expenses | 375,856 | 38,352 | (9,346) | (51,905) | (1,970) | 350,987 | |||||||||||||||||||||||||||||
Income (Loss) From Operations | 184,190 | 22,634 | 17,338 | (43,795) | 1,970 | 182,337 | |||||||||||||||||||||||||||||
Other (Income) Expenses: | |||||||||||||||||||||||||||||||||||
Interest expense | 46,306 | 5,169 | (5,169) | (d) | — | — | 46,306 | ||||||||||||||||||||||||||||
(Gain) loss on derivative contracts | (25,645) | — | (39,695) | (a) | — | — | (65,340) | ||||||||||||||||||||||||||||
Net unrealized gain on oil and gas derivatives | — | (47,687) | 47,687 | (a) | — | — | — | ||||||||||||||||||||||||||||
Other (income) expense | (6,414) | (142) | — | — | — | (6,556) | |||||||||||||||||||||||||||||
Total other (income) expense | 14,247 | (42,660) | 2,823 | — | — | (25,590) | |||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes | 169,943 | 65,294 | 14,515 | (43,795) | 1,970 | 207,927 | |||||||||||||||||||||||||||||
Income tax benefit | 50,695 | — | — | — | — | 50,695 | |||||||||||||||||||||||||||||
Net Income (Loss) | $220,638 | $65,294 | $14,515 | ($43,795) | $1,970 | $258,622 | |||||||||||||||||||||||||||||
Net Income (Loss) Per Common Share: | |||||||||||||||||||||||||||||||||||
Basic | $3.58 | $3.81 | |||||||||||||||||||||||||||||||||
Diluted | $3.57 | $3.79 | |||||||||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||||||||||||||||||||
Basic | 61,625 | 6,276 | (g) | 67,901 | |||||||||||||||||||||||||||||||
Diluted | 61,874 | 6,276 | (g) | 68,150 |
Historical | Transaction Accounting Adjustments | ||||||||||||||||||||||||||||||||||
Callon - As Reported * | Percussion - As Reported | Reclassification & Elimination Adjustments | Disposition | Acquisition | Pro Forma Combined | ||||||||||||||||||||||||||||||
(f) | |||||||||||||||||||||||||||||||||||
Operating Revenues: | |||||||||||||||||||||||||||||||||||
Oil | $2,262,647 | $— | $327,106 | (a) | ($538,222) | $— | $2,051,531 | ||||||||||||||||||||||||||||
Natural gas | 232,681 | — | 17,296 | (a) | (39,527) | — | 210,450 | ||||||||||||||||||||||||||||
Oil and gas revenue | — | 372,306 | (372,306) | (a) | — | — | — | ||||||||||||||||||||||||||||
Natural gas liquids | 260,472 | — | 27,904 | (a) | (34,502) | — | 253,874 | ||||||||||||||||||||||||||||
Sales of purchased oil and gas | 475,164 | — | — | — | — | 475,164 | |||||||||||||||||||||||||||||
Realized loss on oil and gas derivatives | — | (158,825) | 158,825 | (a) | — | — | — | ||||||||||||||||||||||||||||
Total operating revenues | 3,230,964 | 213,481 | 158,825 | (612,251) | — | 2,991,019 | |||||||||||||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||||||||||||||
Lease operating | 290,486 | 51,245 | — | (72,446) | — | 269,285 | |||||||||||||||||||||||||||||
Production and ad valorem taxes | 159,920 | 23,585 | — | (36,963) | — | 146,542 | |||||||||||||||||||||||||||||
Gathering, transportation and processing | 96,902 | 7,564 | 3,837 | (a) | (14,443) | — | 93,860 | ||||||||||||||||||||||||||||
Minimum volume commitment deficiency fees | — | 3,837 | (3,837) | (a) | — | — | — | ||||||||||||||||||||||||||||
Exploration | 9,703 | — | 130 | (b) | (520) | — | 9,313 | ||||||||||||||||||||||||||||
Cost of purchased oil and gas | 478,445 | — | — | — | — | 478,445 | |||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 494,229 | 77,626 | (32,740) | (c)(e) | (106,437) | (15,397) | (g) | 417,281 | |||||||||||||||||||||||||||
Impairment of oil and gas properties | 2,201 | — | — | — | — | 2,201 | |||||||||||||||||||||||||||||
Loss on sale of oil and gas properties | — | — | — | 358,798 | — | 358,798 | |||||||||||||||||||||||||||||
General and administrative | 97,996 | 6,570 | (4,414) | (d)(e) | 3,407 | — | 103,559 | ||||||||||||||||||||||||||||
Merger, integration and transaction | 769 | 700 | (700) | (e) | — | — | 769 | ||||||||||||||||||||||||||||
Total operating expenses | 1,630,651 | 171,127 | (37,724) | 131,396 | (15,397) | 1,880,053 | |||||||||||||||||||||||||||||
Income (Loss) From Operations | 1,600,313 | 42,354 | 196,549 | (743,647) | 15,397 | 1,110,966 | |||||||||||||||||||||||||||||
Other (Income) Expenses: | |||||||||||||||||||||||||||||||||||
Interest expense | 187,792 | 13,207 | (13,207) | (e) | — | — | 187,792 | ||||||||||||||||||||||||||||
(Gain) loss on derivative contracts | 330,953 | — | 169,961 | (a) | — | 500,914 | |||||||||||||||||||||||||||||
Net unrealized loss on oil and gas derivatives | — | 11,136 | (11,136) | (a) | — | — | — | ||||||||||||||||||||||||||||
(Gain) loss on extinguishment of debt | 45,658 | — | — | — | — | 45,658 | |||||||||||||||||||||||||||||
Other (income) expense | 2,645 | (4,085) | (82) | (e) | — | — | (1,522) | ||||||||||||||||||||||||||||
Total other (income) expense | 567,048 | 20,258 | 145,536 | — | — | 732,842 | |||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes | 1,033,265 | 22,096 | 51,013 | (743,647) | 15,397 | 378,124 | |||||||||||||||||||||||||||||
Income tax benefit (expense) | (13,822) | — | — | — | — | (13,822) | |||||||||||||||||||||||||||||
Net Income (Loss) | $1,019,443 | $22,096 | $51,013 | ($743,647) | $15,397 | $364,302 | |||||||||||||||||||||||||||||
Net Income (Loss) Per Common Share: | |||||||||||||||||||||||||||||||||||
Basic | $16.54 | $5.37 | |||||||||||||||||||||||||||||||||
Diluted | $16.47 | $5.34 | |||||||||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||||||||||||||||||||
Basic | 61,620 | 6,276 | (h) | 67,896 | |||||||||||||||||||||||||||||||
Diluted | 61,904 | 6,276 | (h) | 68,180 |
Year Ended December 31, 2022 | ||||||||||||||||||||
Under Full Cost | Changes | Under Successful Efforts | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||
Exploration | $— | $9,703 | $9,703 | |||||||||||||||||
Depreciation, depletion and amortization | 466,517 | 27,712 | 494,229 | |||||||||||||||||
Impairment of oil and gas properties | — | 2,201 | 2,201 | |||||||||||||||||
General and administrative | 57,393 | 40,603 | 97,996 | |||||||||||||||||
Income From Operations | 1,680,532 | (80,219) | 1,600,313 | |||||||||||||||||
Other Expenses: | ||||||||||||||||||||
Interest expense | 79,667 | 108,125 | 187,792 | |||||||||||||||||
Income Before Income Taxes | 1,221,609 | (188,344) | 1,033,265 | |||||||||||||||||
Income tax benefit (expense) | (11,793) | (2,029) | (13,822) | |||||||||||||||||
Net Income | $1,209,816 | ($190,373) | $1,019,443 | |||||||||||||||||
Net Income Per Common Share: | ||||||||||||||||||||
Basic | $19.63 | $16.54 | ||||||||||||||||||
Diluted | $19.54 | $16.47 |
Historical | ||||||||||||||||||||||||||
Callon - As Reported | Percussion - As Reported | Callon (Eagle Ford) - As Reported | Pro Forma Combined | |||||||||||||||||||||||
Total proved reserves | ||||||||||||||||||||||||||
Oil (MBbls) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 290,296 | 131,160 | (54,846) | 366,610 | ||||||||||||||||||||||
Extensions and discoveries | 41,064 | 2,879 | (117) | 43,826 | ||||||||||||||||||||||
Revisions to previous estimates | (31,163) | (45,132) | 1,004 | (75,291) | ||||||||||||||||||||||
Sales of reserves in place | (949) | (30,228) | 44 | (31,133) | ||||||||||||||||||||||
Production | (23,639) | (3,402) | 5,598 | (21,443) | ||||||||||||||||||||||
Balance as of December 31, 2022 | 275,609 | 55,277 | (48,317) | 282,569 | ||||||||||||||||||||||
Natural Gas (MMcf) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 577,327 | 158,092 | (53,892) | 681,527 | ||||||||||||||||||||||
Extensions and discoveries | 75,801 | 3,598 | (7) | 79,392 | ||||||||||||||||||||||
Revisions to previous estimates | (11,155) | (62,363) | (7,446) | (80,964) | ||||||||||||||||||||||
Sales of reserves in place | (7,503) | (38,454) | 175 | (45,782) | ||||||||||||||||||||||
Production | (41,627) | (3,305) | 6,107 | (38,825) | ||||||||||||||||||||||
Balance as of December 31, 2022 | 592,843 | 57,568 | (55,063) | 595,348 | ||||||||||||||||||||||
NGLs (MBbls) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 98,104 | 34,128 | (9,397) | 122,835 | ||||||||||||||||||||||
Extensions and discoveries | 14,264 | 893 | (2) | 15,155 | ||||||||||||||||||||||
Revisions to previous estimates | 1,376 | (10,929) | (1,433) | (10,986) | ||||||||||||||||||||||
Sales of reserves in place | (1,159) | (8,288) | 34 | (9,413) | ||||||||||||||||||||||
Production | (7,476) | (907) | 1,052 | (7,331) | ||||||||||||||||||||||
Balance as of December 31, 2022 | 105,109 | 14,897 | (9,746) | 110,260 | ||||||||||||||||||||||
Total (MBoe) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 484,621 | 191,637 | (73,225) | 603,033 | ||||||||||||||||||||||
Extensions and discoveries | 67,961 | 4,372 | (120) | 72,213 | ||||||||||||||||||||||
Revisions to previous estimates | (31,645) | (66,456) | (1,670) | (99,771) | ||||||||||||||||||||||
Sales of reserves in place | (3,359) | (44,925) | 107 | (48,177) | ||||||||||||||||||||||
Production | (38,053) | (4,860) | 7,668 | (35,245) | ||||||||||||||||||||||
Balance as of December 31, 2022 | 479,525 | 79,768 | (67,240) | 492,053 |
Historical | ||||||||||||||||||||||||||
Callon - As Reported | Percussion - As Reported | Callon (Eagle Ford) - As Reported | Pro Forma Combined | |||||||||||||||||||||||
Proved developed reserves | ||||||||||||||||||||||||||
Oil (MBbls) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 162,886 | 30,628 | (38,044) | 155,470 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 170,866 | 22,481 | (36,008) | 157,339 | ||||||||||||||||||||||
Natural gas (MMcf) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 332,266 | 36,289 | (41,257) | 327,298 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 351,278 | 22,718 | (46,414) | 327,582 | ||||||||||||||||||||||
NGLs (MBbls) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 55,720 | 7,834 | (6,958) | 56,596 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 63,788 | 5,729 | (8,027) | 61,490 | ||||||||||||||||||||||
Total proved developed reserves (MBoe) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 273,983 | 44,510 | (51,878) | 266,615 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 293,200 | 31,996 | (51,771) | 273,425 | ||||||||||||||||||||||
Proved undeveloped reserves | ||||||||||||||||||||||||||
Oil (MBbls) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 127,410 | 100,532 | (16,802) | 211,140 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 104,743 | 32,796 | (12,309) | 125,230 | ||||||||||||||||||||||
Natural gas (MMcf) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 245,061 | 121,803 | (12,635) | 354,229 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 241,565 | 34,850 | (8,649) | 267,766 | ||||||||||||||||||||||
NGLs (MBbls) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 42,384 | 26,294 | (2,439) | 66,239 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 41,321 | 9,168 | (1,719) | 48,770 | ||||||||||||||||||||||
Total proved undeveloped reserves (MBoe) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 210,638 | 147,127 | (21,347) | 336,418 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 186,325 | 47,772 | (15,470) | 218,627 | ||||||||||||||||||||||
Total proved reserves | ||||||||||||||||||||||||||
Oil (MBbls) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 290,296 | 131,160 | (54,846) | 366,610 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 275,609 | 55,277 | (48,317) | 282,569 | ||||||||||||||||||||||
Natural gas (MMcf) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 577,327 | 158,092 | (53,892) | 681,527 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 592,843 | 57,568 | (55,063) | 595,348 | ||||||||||||||||||||||
NGLs (MBbls) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 98,104 | 34,128 | (9,397) | 122,835 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 105,109 | 14,897 | (9,746) | 110,260 | ||||||||||||||||||||||
Total proved reserves (MBoe) | ||||||||||||||||||||||||||
Balance as of January 1, 2022 | 484,621 | 191,637 | (73,225) | 603,033 | ||||||||||||||||||||||
Balance as of December 31, 2022 | 479,525 | 79,768 | (67,240) | 492,053 |
Historical | ||||||||||||||||||||||||||
Callon - As Reported | Percussion - As Reported | Callon (Eagle Ford) - As Reported | Pro Forma Combined | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Future cash inflows | $33,424,190 | $6,143,028 | ($5,328,464) | $34,238,754 | ||||||||||||||||||||||
Future costs | ||||||||||||||||||||||||||
Production | (10,702,897) | (1,767,016) | 1,914,106 | (10,555,807) | ||||||||||||||||||||||
Development and net abandonment | (2,326,789) | (682,836) | 390,234 | (2,619,391) | ||||||||||||||||||||||
Future net inflows before income taxes | 20,394,504 | 3,693,176 | (3,024,124) | 21,063,556 | ||||||||||||||||||||||
Future income taxes | (3,000,300) | (32,252) | 434,282 | (2,598,270) | ||||||||||||||||||||||
Future net cash flows | 17,394,204 | 3,660,924 | (2,589,842) | 18,465,286 | ||||||||||||||||||||||
10% discount factor | (8,390,068) | (2,046,105) | 1,058,219 | (9,377,954) | ||||||||||||||||||||||
Standardized measure of discounted future net cash flows | $9,004,136 | $1,614,819 | ($1,531,623) | $9,087,332 |
Historical | ||||||||||||||||||||||||||
Callon - As Reported | Percussion - As Reported | Callon (Eagle Ford) - As Reported | Pro Forma Combined | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Standardized measure at the beginning of the period | $6,250,755 | $2,297,123 | ($1,212,658) | $7,335,220 | ||||||||||||||||||||||
Sales and transfers, net of production costs | (2,208,492) | (289,891) | 488,400 | (2,009,983) | ||||||||||||||||||||||
Net change in sales and transfer prices, net of production costs | 4,168,425 | 791,366 | (871,010) | 4,088,781 | ||||||||||||||||||||||
Net change due to sales of in place reserves | (36,389) | (534,400) | 741 | (570,048) | ||||||||||||||||||||||
Extensions, discoveries, and improved recovery, net of future production and development costs incurred | 1,338,286 | 72,068 | (5,624) | 1,404,730 | ||||||||||||||||||||||
Changes in future development cost | (257,344) | 46,290 | 82,259 | (128,795) | ||||||||||||||||||||||
Previously estimated development costs incurred | 289,207 | 197,485 | (66,613) | 420,079 | ||||||||||||||||||||||
Revisions of quantity estimates | (215,828) | (788,638) | (63,816) | (1,068,282) | ||||||||||||||||||||||
Accretion of discount | 705,127 | 232,517 | (132,955) | 804,689 | ||||||||||||||||||||||
Net change in income taxes | (730,185) | 13,279 | 153,203 | (563,703) | ||||||||||||||||||||||
Changes in production rates, timing and other | (299,426) | (422,380) | (a) | 96,450 | (625,356) | |||||||||||||||||||||
Aggregate change | 2,753,381 | (682,304) | (318,965) | 1,752,112 | ||||||||||||||||||||||
Standardized measure at the end of the period | $9,004,136 | $1,614,819 | ($1,531,623) | $9,087,332 |
Net Reserves | Future Net Revenue (M$) | |||||||||||||||||||||||||||||||
Oil | NGL | Gas | Present Worth | |||||||||||||||||||||||||||||
Category | (MBBL) | (MBBL) | (MMCF) | Total | at 10% | |||||||||||||||||||||||||||
Proved Developed Producing | 20,945.8 | 5,235.0 | 20,898.9 | 1,529,007.5 | 824,041.1 | |||||||||||||||||||||||||||
Proved Developed Non-Producing | 1,535.4 | 493.6 | 1,819.1 | 125,962.5 | 77,230.5 | |||||||||||||||||||||||||||
Proved Undeveloped | 32,795.8 | 9,167.9 | 34,849.5 | 2,038,205.3 | 728,313.5 | |||||||||||||||||||||||||||
Total Proved | 55,277.0 | 14,896.5 | 57,567.5 | 3,693,176.3 | 1,629,585.3 |
Supplemental definitions from the 2018 Petroleum Resources Management System: Developed Producing Reserves – Expected quantities to be recovered from completion intervals that are open and producing at the effective date of the estimate. Improved recovery Reserves are considered producing only after the improved recovery project is in operation. Developed Non-Producing Reserves – Shut-in and behind-pipe Reserves. Shut-in Reserves are expected to be recovered from (1) completion intervals that are open at the time of the estimate but which have not yet started producing, (2) wells which were shut-in for market conditions or pipeline connections, or (3) wells not capable of production for mechanical reasons. Behind-pipe Reserves are expected to be recovered from zones in existing wells that will require additional completion work or future re-completion before start of production with minor cost to access these reserves. In all cases, production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well. |
Excerpted from the FASB Accounting Standards Codification Topic 932, Extractive Activities—Oil and Gas: 932-235-50-30 A standardized measure of discounted future net cash flows relating to an entity's interests in both of the following shall be disclosed as of the end of the year: a. Proved oil and gas reserves (see paragraphs 932-235-50-3 through 50-11B) b. Oil and gas subject to purchase under long-term supply, purchase, or similar agreements and contracts in which the entity participates in the operation of the properties on which the oil or gas is located or otherwise serves as the producer of those reserves (see paragraph 932-235-50-7). The standardized measure of discounted future net cash flows relating to those two types of interests in reserves may be combined for reporting purposes. 932-235-50-31 All of the following information shall be disclosed in the aggregate and for each geographic area for which reserve quantities are disclosed in accordance with paragraphs 932-235-50-3 through 50-11B: a. Future cash inflows. These shall be computed by applying prices used in estimating the entity's proved oil and gas reserves to the year-end quantities of those reserves. Future price changes shall be considered only to the extent provided by contractual arrangements in existence at year-end. b. Future development and production costs. These costs shall be computed by estimating the expenditures to be incurred in developing and producing the proved oil and gas reserves at the end of the year, based on year-end costs and assuming continuation of existing economic conditions. If estimated development expenditures are significant, they shall be presented separately from estimated production costs. c. Future income tax expenses. These expenses shall be computed by applying the appropriate year-end statutory tax rates, with consideration of future tax rates already legislated, to the future pretax net cash flows relating to the entity's proved oil and gas reserves, less the tax basis of the properties involved. The future income tax expenses shall give effect to tax deductions and tax credits and allowances relating to the entity's proved oil and gas reserves. d. Future net cash flows. These amounts are the result of subtracting future development and production costs and future income tax expenses from future cash inflows. e. Discount. This amount shall be derived from using a discount rate of 10 percent a year to reflect the timing of the future net cash flows relating to proved oil and gas reserves. f. Standardized measure of discounted future net cash flows. This amount is the future net cash flows less the computed discount. |
From the SEC's Compliance and Disclosure Interpretations (October 26, 2009): Although several types of projects — such as constructing offshore platforms and development in urban areas, remote locations or environmentally sensitive locations — by their nature customarily take a longer time to develop and therefore often do justify longer time periods, this determination must always take into consideration all of the facts and circumstances. No particular type of project per se justifies a longer time period, and any extension beyond five years should be the exception, and not the rule. Factors that a company should consider in determining whether or not circumstances justify recognizing reserves even though development may extend past five years include, but are not limited to, the following: The company's level of ongoing significant development activities in the area to be developed (for example, drilling only the minimum number of wells necessary to maintain the lease generally would not constitute significant development activities); The company's historical record at completing development of comparable long-term projects; The amount of time in which the company has maintained the leases, or booked the reserves, without significant development activities; The extent to which the company has followed a previously adopted development plan (for example, if a company has changed its development plan several times without taking significant steps to implement any of those plans, recognizing proved undeveloped reserves typically would not be appropriate); and The extent to which delays in development are caused by external factors related to the physical operating environment (for example, restrictions on development on Federal lands, but not obtaining government permits), rather than by internal factors (for example, shifting resources to develop properties with higher priority). |
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