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Imperial Capital See Strong Annual Production Growth At Callon Petroleum Company

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In a report published Tuesday, Imperial Capital analyst Kim Pacanovsky reiterated an Outperform rating on Callon Petroleum Company (NYSE: CPE), and raised the price target from $6.25 to $9.00.

In the report, Imperial Capital noted, "We are maintaining our Outperform rating and raising our one-year price target to $9 from $6.25. Our price target is about 26% above the recent share price. On 2/7/15, CPE provided guidance for its 2015 capital expenditure program, in which the company will spend between $150mn and $165mn during the year, targeting predominantly the Upper Wolfcamp B on its Central and Southern Midland Basin acreage; the capex cut marks a 32% decrease from our 2014 estimate of $230mn."

The report continued, "Despite the capex cut, we still believe that CPE has the capacity to achieve strong annual production growth of 42% and hold production above the firm's 2014 exit rate at 8,021boe/d. Management believes that it can attain 25% IRRs at $55/bbl NYMEX, which incorporates a decrease of 15-25% in service costs. CPE also announced a 121% increase in its 2014 total proved reserves, now estimated at 33mmboe."

Callon Petroleum Company closed on Monday at $7.13.

Latest Ratings for CPE

Oct 2016Mizuho SecuritiesInitiates Coverage onNeutral
Sep 2016Evercore ISI GroupInitiates Coverage onBuy
Sep 2016BMO CapitalInitiates Coverage onOutperform

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