On November 1, 2023, Callon Petroleum Co (CPE, Financial) released its third quarter 2023 financial and operating results. The company reported a net income of $119.5 million, or $1.75 per share, and adjusted EBITDAX of $342.2 million. Adjusted income was $123.9 million, or $1.82 per share. The company generated $266.8 million of net cash provided by operating activities in the third quarter. Total operational capital expenditures for the quarter were $251 million.
Operational Highlights
Callon's total production for Q3 2023 was in line with expectations, averaging 101.7 MBoe/d (79% liquids), while oil production averaged 58.0 MBbls/d. The company also reported capital expenditures of $251 million, which were at the low end of guidance. During the quarter, Callon repurchased $15 million in common stock and closed the Eagle Ford sale and Percussion acquisition.
Financial Performance
Callon's financial results for Q3 2023 highlight a strong performance with a net income of $119.5 million. The company also reported adjusted EBITDAX of $342.2 million and adjusted income of $123.9 million. The company's focus on reducing debt and generating free cash flow has resulted in a reduced long-term debt to $1.9 billion and 14 consecutive quarters of adjusted free cash flow generation.
Outlook for 2023
Callon has revised its outlook for the fourth quarter and full-year 2023 production, while reiterating guidance for full-year 2023 capital expenditures. For the fourth quarter, the company expects total and oil production to average 100 β 103 MBoe/d (~79% liquids) and 56 β 59 MBbls/d. Full year 2023 total and oil production is now expected to average 102 β 104 MBoe/d and 59 β 61 MBbls/d. Guidance for capital expenditures for full-year 2023 remains unchanged at $960 β $980 million.
Shareholder Returns and Capital Structure
During the third quarter, Callon repurchased 386,719 shares of common stock at a weighted average purchase price of $38.72 per common share for a total cost of approximately $15 million. As of September 30, 2023, the remaining authorized repurchase amount under the Share Repurchase Program was $285 million. Callon intends to use 40% of the fourth quarter adjusted free cash flow to repurchase shares. As of September 30, 2023, Callon has approximately $1.1 billion of liquidity and $1.9 billion of long-term debt.
Conclusion
Callon Petroleum Co (CPE, Financial)'s Q3 2023 earnings report shows a strong financial performance with a net income of $119.5 million and adjusted EBITDAX of $342.2 million. The company's focus on reducing debt and generating free cash flow has resulted in a reduced long-term debt to $1.9 billion and 14 consecutive quarters of adjusted free cash flow generation. Looking forward, Callon has revised its outlook for the fourth quarter and full-year 2023 production, while reiterating guidance for full-year 2023 capital expenditures.
Explore the complete 8-K earnings release (here) from Callon Petroleum Co for further details.
