Callon Petroleum (NYSE:CPE) reported Q4 results after the close, posting an earnings miss, guiding production down, and planning for debt repayments throughout 2022:
- Earnings – the Company posted adjusted EPS of $2.66 versus Street expectations for $2.72.
- Production – Management guided to 103kboe/d in 2022 (midpoint) versus Q4 results at 112kboe/d (down ~8% sequentially) (NYSEARCA:USO).
- Capital – the Company will spend $725m on capex in 2022, versus $508m in 2021 (+43% year on year).
Callon (CPE) expects to generate $500m in free cash flow at $75 WTI in 2022; however, management has no plans to return cash to shareholders, as they hope to de-lever the balance sheet to 1.5x EBITDA by year end.
Laredo (NYSE:LPI) announced a similar strategy on Wednesday, and traded very well on the back of the announcement. However, the earnings miss, paired with a more substantial production decline and larger capex increase could give shareholders pause.